18 



HARDWOOD RECORD 



February 25. 1922 



men to acquire or secure all possible knowledge at one time. Its acquisi- 

 tion Is a growth resulting from continuous, intelligent inquiry. The knowl- 

 edge of an industry that is necessary and essential to its success must 

 embrace all facts and circumstances that will in any way influence that 

 industry. These facts and circumstances must include economic conditions 

 as well as scientific facts to the extent that science is called into play in its 

 operation and all commercial conditions that make for eflScient production, 

 merchandising and distribution. No one will dispute the foregoing state- 

 ments ; they are fundamental and necessary to the life of trade and com- 

 merce. 



The diflSculty seems to lie in the determination of the means and methods 

 that may be adopted to secure this necessary information. Little, if any, 

 trouble is experienced in securing the admission that an individual may 

 secure knowledge of these facts by any menng that would not constitute 

 an Individual crime, and that he may use the information in such manner 

 as his best judgment may tell him will bring him the greatest benefit. 



But when two Individuals engaged in the same line of industry under- 

 take to provide a means for securing facts necessary and essential to the 

 economic and efficient conduct of their respective organizations, this form 

 of endeavor seems to at once assume an aspect of difficulty that, in my 

 Judgment, is in no way justified by a proper consideration of the underly- 

 ing necessities therefor. 



The individual sets up some form of instrumentality to secure the infor- 

 mation without which, in the management of his business, he would be 

 groping In the dark. Ills competitor across the street does the same thing, 

 and each, securing his information In his own way, uses It as he sees fit, 

 and the action of either one has not offended the majesty of the law. Yet, 

 If the two seek to join the instrumentality each has used for information 

 purposes and the same Information is received through one Instrumentality 

 and the information given to each, and It Is used in the same way that It 

 was before, It is suggested that the collective activity in the use of the 

 coneoUdated Instrumentality should not be permitted because of the greater 

 ease and facility thereby afforded for the two individuals to make Improper 

 use of the information so acquired. In other words, the objection docs not 

 go to the instrumentality, but to the abuse of the information that may be 

 secured through the collective means. 



Abuse Does Not Outlaw a Lawful Thing 



The principle Is the same whether two or two hundred join together in 

 securing the information. 



No form of legislation has ever yet been devised, nor has man, with all 

 of his genius for invention, even been able to devise a rule or regulation 

 that would prevent men from committing crimes If they are so minded. 

 The best that can be done is to forbid the doing of certain acts or to com- 

 mand the doing of others, prescribing proper punishments in the case of 

 the commission on the one hand and the omission on the other; and when 

 legislation takes that form, rules and regulations and administrative con- 

 structions which have for their objective the making of the prohibited 

 thing more difficult will always include within their terms the law-abiding 

 citizen as well as the prospective criminal. 



We have had criminals since the beginning of time, and human nature 

 can not be changed by legislation. The criminally Inclined represent a 

 small minority, and It may be said In a general way that, excepting offenses 

 against persons and property, most of the criminal statutes regulating 

 trade and commerce and forbidding acts that seem against sound public 

 policy have been made necessary for the control of the minority. None of 

 these statutes, however, has undertaken to prevent the doing of a thing 

 that would result in benefit to the public, but the restriction has been 

 against the doing of the thing In an unlawful way. These statutes have 

 not condemned lawful institutions or instrumentalities for the carrying on 

 of comnurce mereln because someone might possibly abuse their use. The 

 laws have condemned the abuse, and punishments have been prescribed 

 for those who may be found guilty of the abuse. Therefore, the fact that 

 the minority may be known to violate given laws does not establish a prin- 

 ciple that the primary means, lawful in Itself, which they have adopted for 

 the purpose of performing the unlawful acts, should be entirely al>ollahed 

 and Its use forbidden by law-abiding citizens. Each unlawful use of the 

 means is merely an individual case of the violation of a law. 



Trade associations have been in existence for many years. The great 

 majority are legitimate, both In form of organization and in activity. The 

 minority, while lawfully organized under articles expressing lawful pur- 

 poses, may engage in activities that are evidence of purpose contrary to and 

 outside of the declared purposes In the articles of organization. 



Again, Q trade association may have lawful form of organization, and 

 the activities of Its officers may be clearly within the purposes declared in 

 the association charter, and yet members of the organization may, by 

 unlawful confederation, use the information lawfully secured for unlawful 

 purposes. It may, therefore, truthfully be said that the line dividing the 

 good association and the bad, the proper activity from the improper one, 

 and the lawful activities of the officers of an association from the unlaw- 

 ful acts of the membership, can not be determined, In every instance, with 

 singular ease. /( is my belief, however, that it is more easy to determine 

 the forms of organizations and activities that arc generally recognized as 

 good than to determine in advance those that may be bad, because, in the 

 latter instance, the peculiar facts relating to each association the subject 

 of inquiry may determine whether the organization or its members are 

 operating in violation of law. 



Believes in the General Propriety of Trade Bodies 



It is with much earnestness that I claim there is propriety, generally 

 speaking, in trade associations. Their lawful field of endeavor is large, 

 and their activities work for promotion and advancement of the public 

 welfare and for progressive economic organization. In making this state- 

 ment, I am not unmindful of the fact that the impression exists with a 

 small minority that individual prohibited acts may be accomplished by 

 organization under the disguise of a trade association. However, to make 

 my position clear regarding the trade associations, the existence of which 

 I advocate, I desire to say that I have always taken the view that no body 

 of men could combine in the form of a trade organization and do any act 

 or thing forbidden by law if they were undertaken by them outside of a 

 trade organization. The character of trade organization the existence of 

 which should be preserved is one that carries lawful purposes only In its 

 articles of association ; its activities must be in harmony with Its declared 

 purposes. The articles of association, with their lawful, declared purposes, 

 must not be used as a mask to hide unlawful purposes. In other words, 

 the organization can not be used to conceal or disguise any contract, com- 

 binatioti, conspiracy, agreement, or understanding, secret or othcrieisc, on 

 the part of the officers of the arga/nization or on the part of the member- 

 ship or any part thereof to engage in activities in i-estraint of trade or 

 otherwise i7i violation of the antitrust law. 



There has been much information collected by legitimate trade associa- 

 tions In which the general public has no interest whatsoever, yet informa- 

 tion of this class has aways been freely offered to the dally and the trade 

 press, as well as to any governmental agency that might desire the infor- 

 mation as a matter of statistical record. On the other hand, certain statis- 

 tical data are collected by trade organizations that would be of vast value 

 to the public generally if published In practical, available form. 



Many of the trade associations securing and disseminating the statistical 

 data mentioned have restricted the same to Its membership, while others 

 have undertaken to give the same to the public through the daily and the 

 trade press concurrently with its members. The trade associations of the 

 latter class are in the minority. 



Information Should Be Open to AH 



Information lawfully secured regarding trade and economic conditions 

 made public for the Information of everyone can not be harmful. Informa- 

 tion secured solely for the benefit of members and of a character that puts 

 the membership, by reason of the information, in a position of advantage 

 as compared with the public without such Information can not be sanc- 

 tioned by sound public policy. The act of securing the information and the 

 use of it by the members of a particular organization may be perfectly 

 lawful in Itself, but It is my belief that good morals and a sense of fair 

 dealing require the giving of the Information secured in this collective 

 manner to the public generally, to the end that all persons engaged in com- 

 mercial transactions involving the Information In question will be on an 

 even footing. 



The activities of trade associations that have received the greatest 

 criticism Involve the collection of statistics relating to volume of produc- 

 tion, capacity to produce by districts of production, wages, consumption 

 of products in domestic and foreign trade, distribution thereof, Including 

 volume of distribution by districts, together with figures as to stocks on 

 hand, wholesale and retail, by districts, coupled with information as to 

 price, either in the form of Individual reports of each member distributed 

 to every other member or the Individual prices reported to the association 

 and by the latter compiled and averaged by districts for certain specified 

 periods. 



If Information regarding production, capacity and distribution by dis- 

 tricts, with average prices for grades, brands, sizes, styles or qualities sold 

 in the respective districts for specified periods of time coulil be given to 

 the public at the same time that such Information is available to the mem- 

 bers of an association, in my Judgment, great public good would result. 

 With this Information available, everyone dealing In the products of a 

 given industry, whether buyer or seller, would have the same Information 

 regarding conditions and. In dealing with one another, would have knowl- 

 edge of the same facts upon which to form their judgments as to the proper 

 course to pursue. 



A majority of the associations collecting data of the nature indicated 

 have distributed same only to members of the association, while others 

 have undertaken to give the information to the public through the dally 

 and trade papers. Publication of the information by these associations 

 in the daily press has not been general, and Its availability to the public has 

 been largely through the medium of trade papers, and through the dally 

 press to the extent that the latter may have been utilized. When pub- 

 lished through trade papers this Information should be released to mem- 

 bers only after such publication. 



It should be borne in mind that the criticism aimed at this form of 

 activity has not involved the Instrumentality for securing it or the subject 

 matter of the Information, but has been directed to the use or possible use 

 that might be made of the information, an<l the fact that no means existed 

 for distributing the information to the public at the same time that It was 

 received by the members of the association. These observations likewise 

 apply to the criticisms directed to the furnishing of average price of given 

 commodities according to grade, size, brand or quality by districts for 

 specified periods of time, based on past and closed transactions. 

 (Continued on page 20) 



