26 



HARDWOOD RECORD 



January 10. 1922 



News from the National Capital 



Government Is Still in Doubt as to Attitude on Open Price Practices 



Tlie Guveiinneiit has not yet. determined its pusition witli respeet 

 to the open price practices of certain trade associations. A confer- 

 ence between Attorney-General Daugherty and Secretary of Com- 

 merce Hoover and Secretary of Agriculture Wallace on January 6 

 broke up before agreement was reached. Mr. Hoover stated on 

 leaving the conference that the statement previously prepared but 

 never made public, will have to be entirely rewritten in view of the 

 decision of the Supreme Court in the American Hardwood Manu- 

 facturers' Associntidii case, in which tlie "open jiricc" plan was 

 declared illegal. 



The attorney-general is unwilling to permit the trade associations 

 to engage in certain practices and is inclined to give bi-oad scope to 

 the decision of the Supreme Court. Some confusion and misunder- 

 standing has arisen with respect to a verbal statement he made 

 earlier in the week in which lie declared that trade associations 

 cannot fix prices, apportion sales territory, or limit jiroduction. 



"My purpose in making that statement," said Mr. Daugherty, 

 "was not to limit the scope of the decision, but only to outline some 

 of the ordinary ]iractices of trade as.soeiations wliicli <leiirly .-ire 

 unlawful. Tlie decision obviously has a much bro.-ider cftect than 

 to condemn the three practices mentioned. It extends to the circu- 

 lation by trade associations, under such circumstances, of informa- 

 tion which would enable the members to emidoy unified tactics in 

 respect to jirices, iirodiiction, etc., even in llie alisence of contracts 

 or agreements to do so. 



The attorney-generul auiioiiiicc'] on .hiiiuary '■> tliat arrangements 

 are being made by tlie Department of Justice to meet representa- 

 tives of trade a.ssociations to discuss the CTOverniiuiit 's pl;iiis for 

 the enfiircenient of tlio Sherman law against open |«rice methoils. 

 The conferences are lo begin soon, he .said. 



Legitimate business, the attorne.v-general said, need have no fear 

 of Government prosecution or other action as a result of the na- 

 tinii;il in\'estigatioii into juices and tijule jiractii'cs. 



The Department of Justice holds the view that it is not unlawful 

 per se for ojien associations or similar, organizations to gather statis- 

 tics or other data. It only is unlawful to collect and compile essen- 

 tial trade ;iiid industrial information, he said, when it is used for 

 unlawful purposes. In the collection and interchange of important 

 trade information, he said, business organizations must keep within 

 four points enumerated by the Department of Justice for the guid- 

 ance of business interests. Otherwise, a plain violation of the .-Vnti- 

 Trust Laws results and Government prosecution is warranted. 



What the trade associations cannot do under the law, according 

 to the attorney-general, may be summed up as follows: 



They cannot fix prices. 



They cannot apportion territory for sales purposes. 



They cannot limit jiroduction. 



They cannot Control competition. 



The attorney-general refused to discuss the inquiry into retail 

 prices. He declared that the investigation is being pushed in all 

 parts of the country, that satisfactory progress is being made and 

 that a report might be expected within the next two weeks. He 

 refused to divulge any facts ascertained by Government agents as 

 to profiteering or the likelihood of legal action. 



A. H. M. A. Will Map Out Future Course 



James E. Stark, chairman of the executive committee of tlie 

 American Hardwood Manufacturers' Association, set Saturday, Jan- 

 nary the 14, for the meeting of the board of directors of th^t organ- 

 ization, for the purjiose of deciding upon the future scope and 

 activities of this body. The meeting will take place in Louisville, Ky. 



Mr. Stark considers that the statement of .Vttoniey-lieueral 

 Daugherty, as carried by Associated Press dispatches from Wash- 

 ington, to the effect that there is nothing wrong about the gather- 

 ing, compilation and distribution of the vital statisics of an indus- 

 ry, provided that there is no attemjit to fi.x prices, control produc- 

 tion or divide territory, will have most important bearing on the 

 future activities of the association. 



"The statement of Mr. Daugherty,'' lie said January .'i, "clari- 

 fies the situation arising from the decision of the Supreme Court 

 in the "ojieii coniiietition plan case, to ap appreciable degree. 

 Members of the open competition plan, who were defendants in 

 that case, are under injunction restraining them from furnishing 

 any information regarding production, stocks or past prices and 

 from all other activities under the open competition plan, for the 

 reason that the Supreme Court held that they used the information, 

 tlie group meetings and other facilities of the jdaii for wrongful 

 jiurjioses. 



"There is, however, no means of restraining members of this 

 or .-iny other organization from the gathering, couiiiilation and dis 

 Iriliiilioii of the basic statistics of the industry so long as these 

 .ire used for jiroper purposes. .Xttorney-General Daugherty has de- 

 liiieil, in his statement, what is unlawful and improper under the 

 Khernian law, and, since he holds that the gathering, compilation 

 and distribution of statistics is lawful, there is not the slightest 

 chance that .'in iiijiniction may restrain us from doiny what is 

 l.-iwful." 



(Cuitthntvd from pa;;!- i2) 

 I siiicfiely hep,' tli;i1 the existence of the associatjnii w\\\ nut ln' jcoitnr 

 ilized as :i result of this opinion. Tliere is niucii th.-it cim tie dniie and 

 should be done that is not involved in tlie Siun-ciiic Cmirfs decision and 

 even as to tlK' matters that are so involved time slioiild lie civell so thai 

 wi- may kiKiw wltli iiinr,- detiniteness .(list wliere we stand. 



Hoover's Statistical Plans 



111 this Kciieial ciiiiiicitioii it will lie 1 ailed that Secretary II.mivci- 



some time hack initiated a moiitlily Imlletin where lie arranged to gather 

 statistics dealing; witii current market prohlems. this involving tlie price 

 current, produrtldn and stocks. In the nature of things this data .iiiild 



only lip gatliereil throimh the niedil f associated elTorf. It would lie 



utterly impractical and impossllde for the Department of I'ommeree to 

 depend on pithering comparable <lata from individual units. Mr. Hoover 

 recnsnized this situation and has nrped the ('(Mijicration el" associated 

 uronps. 



'I'lie very practii-al ([uestieii will arise for determination as t<i wlietlier 

 iir not our group will be permitted to gather tlie information that the 

 seiietary is anxious to have gatlwred. If the Supreme Court does not 

 grant tlie rehearing and this decision stands it is possible that a way ina.v 

 be found wherein the small bardwond mill operators may. within the law. 

 secure such publicity nf essential industrial facts that they will not lie 

 compelled to transact their liusiness in utter ignorance cif tlie market. II 

 is inconceivable that tlie Supreme Court would finally and nltimately pru- 

 liibit the gathering of Indtistrial facts that are essential to the intelligent 

 I'onduct of business. There Is language in the decision that squints at the 

 suggestion that if market facts as gathereil were made available tn the 

 public as well as the industry then the law would not he ofTeiided. 



Heretofore there has been no way open to us to get the piiblieity of tlie 

 data we gathered. Secretary Hoover has set up a medlnni whereby this 

 ra n now he done. 



IJiflicuit and discouraging as tlie sitiiation now looks. I licg of the mem 

 bers to be patient until all avenues of approach to this all important sub- 

 ject have been exhausted. .\s suggested, a way surely will be found that 

 is not only moral, but legal. No one knows better than the men to whom 

 I am addressing this eoinmnnication that tlierc never was a thought nl :i 

 selfish conspiracy involved in the so-called "open compelition plan" nl' the 

 American Hardwood Manufacturers' .Vssociatlon. The court, liowevor. has 

 interpreted the record as flisclosing such a conspiracy anil ns good citizens 



we will how 1.1 Ibe ile.Nioii iiiilH it is eorreeted liy the e.ilirt itself or by I lle 

 I 'oni;re^s. 



