July 25, 1915. 



Powers of the Trade Commission 



Charles S. Keith of the Southern Pine Association, as a supple- 

 ment to his address before the Federal Trade Commission in Chicago, 

 July 19, filed a brief which was prepared by L. C. Boyle, counsel for 

 the association. It presented the legal pha.se of those industrial 

 combinations which are not formed for the purpose of restraining 

 trade, and it discussed the power conferred by law on the Federal 

 Trade Commission, and interpreted the law as authorizing the com- 

 mission to advise and direct business men who wish to go forward 

 without running counter of vague and nebulous laws which are hard to 

 understand yet serve in thoir penalties. 



Mr. Boyle proceeds with the discussion on the assumption that the 

 Federal Trade Commission was created to assist industrial develop- 

 ment, and not as the old Bureau of Corporations, whose activities 

 were ' ' largely inquisitorial and of no help to business. ' ' 



Having thus defined the purposes of the creation of the commis- 

 sion, as he understands those purposes, Mr. Boyle takes up the subject 

 of the help which lumbermen hope to receive from the work of the 

 commission. Speaking particularly for the yellow pine interests 

 the brief declares that the peril lies in overproduction, and it is from 

 this menace that lumbermen want to save themselves, and they ask 

 the commission to advise them how to do it without incurring the 

 penalties of laws already on the statute books and which have been 

 interpreted to forbid combinations intended only to limit output. 



Evils of Overproduction 



Overproduction works its evil by throwing too much lumber on the 

 market; and yet the lumbermen must not, because of fear of law 

 penalties, agree among themselves to curtail their output. Among 

 the hardships which follow this unnatural condition are the follow- 

 ing: The investors suffer, and in the end the weak must go to the 

 wall. Labor suffers because of disorganized business. If business 

 operates at a loss, labor must carry part of the burden. The forest 

 resources are wasted, because when too much lumber is cut, and every 

 operator is taking part in a struggle to sell what he has, the tendency 

 is to cut the best only and abandon the rest. 



The lumbermen ask the right to agree among themselves, under a 

 plan .fully presented to the Federal Trade Commission, to curtail their 

 output so as to avoid accumulation of surplus stock. 



Open and Aboveboakd 



There is no purpose to hamper, or in the slightest degree interfere 

 with, competitive conditions; no purpose to attempt to fix prices; 

 no thought of dividing territory ; no j)ooling arrangement, nor trust 

 agreement; no scheme involving monopoly or tendency thereto. In 

 brief, no suggestion of doing anything that could be construed as 

 restraining the free flow of commerce. The volume of output always 

 to measure up to the needs of consumption. 



The sole factor to be eliminated is the destructive feature of over- 

 production. A result, which, in its ultimate analysis, will be of value 

 to the public and at the same time give to the producer a living mar- 

 gin of profit — for, with competition free, prices must and will range 

 with the demand. 



After a somewhat careful study of the riilings of our courts on the 

 Sherman Law, the writer of the brief says he is convinced that an 

 agreement, having for its object the solo result here indicated, does 

 not impinge on the anti-trust statute. 



The query may suggest itself that if the plau is not violative of 

 law, why not go forward and operate under it? 



To this Mr. Boyle makes answer that the trouble is the lawyer so 

 advising has not the last guess. Another lawyer, who has been 

 elevated to the bench, may hold a different opinion. It was to meet 

 this very condition that the commission was created. 



The situation is one of urgent need. Common sense, the public 

 good, the principles of justice all unite in urging the relief here 

 suggested. 



The brief further says that it is true the curtailment of output, 



I 



to the limited extent suggested, would have the natural tendency of 

 steadying prices, but this result in no way restrains commerce, nor 

 in any view of the situation can it be argued that such a plan works 

 for monopoly. 



One should not be led into error in considering the suggested 

 relief. It is not the object to curtail output for the purpose of fixing 

 prices, and thereby dictating to the consumer. On the contrary,, 

 competition is left absolutely free and commerce is thereby unim- 

 peded. 



Court Rulings Do Not Forbid 



It is declared that no ruling in any decided case runs counter to 

 the relief here urged. The common need of business men runs parallel 

 with the good of the public, and the question is asked whether the 

 commission will come to the aid of the business men in that partic- 

 ular, and by doing so, come to the aid of the public at the same time. 

 However, if the commission should hold that its sole power, touching 

 matters here at issue, is to investigate, and can authorize no relief, 

 regardless of its findings, then indeed must business men go forth the 

 victims of the nebulous uncertainties of the law. 



It is idle to suggest that they seek relief through their own initia- 

 tive, and this without the protecting assurance of the commission, 

 for indeed the ' ' rule of reason, " as to be found by some judge or 

 jury, has more terrors for them than the unjust burdens they now 

 carrv. 



Baltimore Exports for June 



Much satisfaction is to be derived from the latest statement of 

 exports from Baltimore, the total constituting evidence of steady 

 gains toward what might be called normal conditions. As a matter 

 of fact, nothing like normal conditions can be restored until after 

 the end of the war, the shipments made now being the result of 

 extraordinary needs concentrated upon a part of the foreign market 

 only, with the rest of it shut out from the American shipper. The 

 extent of these restricted needs, however, is strikingly shown in the 

 figures for June, which constitute a very considerable advance over 

 any previous month, and suggest a return to something like normal 

 proportions. The total for the corresponding month of 1914 ia far 

 ahead, to be sure, but it will be noted that almost the entire excess 

 over June of this year is represented by spruce shipments, of which 

 none were made last month. Practically all of the spruce goes to 

 South America, so that the decrease cannot be attributed to the war 

 except indirectly. Some of the items last month show an actual gain 

 over June of 1914, the exhibit on the whole indicating that the needs 

 of the foreign buyers have become very urgent, and that some woods 

 are being called for which formerly received little attention. For 

 one thing, the extensive accumulations of poplar in the foreign mar- 

 kets appears to have been worked off, and it is much the same with 

 oak. The comparative statement of exports is as follows: 



-June, 1915- 



-June, 1914- 



I.ogs, Hickory 



Logs, Oak 



Logs, Walnut 



Logs, all others 



Lumber, Cypress 32,000 



Lumber, Oak 1,122,000 



Lumber, White Pine 16,000 



Lumber, Sbort Leaf Pine... 252,000 



Lumber, Poplar 275,000 



Lumber, Spruce 



Lumber, all others 275,000 



Lumber, Staves 15,781 



Lumber, Headiogs 



Lumber, all others 



Furniture 



All other manufactures of 



of wood 



Quantity, Ft. Value Quantity, Ft. Value 



. 40,000 .$ 1,280 19,000 % 574 



... 8,000 30O 



70,000 3,680 75,000 4.600 

 10,000 310 



Total 



