24 



HARDWOOD RECORD 



March 25, 1921 



(Continued from page 22) 

 the woods to rot was a serious matter and one which would not escape 

 his attention. He counseled patience, however, and told the lumbermen 

 ' ' to stand the gaff a little longer ' ' just as the railroads were having 

 to do. 



Just Ahead of the Sheriff 



Vice-President Periins of the Missouri Pacific said that if the lum- 

 bermen wanted a real "hard luck" story, the railroads could teU it, 

 for the reason that they are "only a few jumps ahead of the sheriff. " 

 He approved the conference idea but he did not believe that reduction 

 in freight rates would solve the problem of the lumbermen but would, 

 rather, have the opposite effect. He said that freight rates were based 

 on the peali movement of last year and that the falling off in business 



had made the railroads earn less than was contemplated. He insisted 

 that, because of this fact, the problem of the railroads was bigger than 

 that of the lumbermen. " I do not mean to say, ' ' he continued, ' ' that 

 we will not take action on your proposition. We must give it consid- 

 eration, but I do not see how we can start any general reductions in 

 rates now. If we make reductions in the South and Southwest, the 

 lines in the North will make reductions and we will be just where we 

 are now, except that we will be working on a lower rate basis. The 

 problem is too big for immediate solution. Freight rates are not the 

 controlling .factor. We realize that freight rates must be adjusted, 

 but this will come when wages and other costs have been reduced, 

 when traffic is moving in larger volume and when there is something 

 in the tills of the railroads. Any other course would but hasten 

 bankruptcy. ' ' 



News from the National Capital 



Hardwood Case Is Most Important Before 

 Supreme Court 



The case of the United States against the American hardwood 

 association, -which will be re-argued on April 11, has attained the 

 distinction of being probably the most important case that has come 

 before the United States Supreme Court this year, and is being 

 closely watched nqt only by the lumber interests but by every 

 national organization that eomes under the head of ' ' trade associa- 

 tion." 



From present indications, one of the most difficult and important 

 legal questions in the Harding Administration will spring from the 

 activities of trade associations. It has been the contention of the 

 attorneys of the last Administration that the successor to the old- 

 fashioned pre-war trust is the voluntary trade association of the 

 present. They have been attacked by the Federal Trade Commission 

 on the one hand and the Department of Justice on the other as 

 carrying into practical effect many of the evils of the old combination 

 in restraint of trade so repugnant to the Sherman and Clayton 

 Anti-Trust laws. This policy of the commission and the Department 

 of Justice clashes with the ideas of Secretary of Commerce Herbert 

 Hoover. 



Secretary of Commerce Hoover is known to entertain the idea that 

 American industry must work in concert and that there must be the 

 closest harmony, both as to foreign and domestic trade, if American 

 business is to reach a level of efficiency which will enable it to com- 

 pete on favorable terms with the industrial nations of Europe. Mr. 

 Hoover believes that the various trades must standardize practices 

 and pull together as they did during the war. That efficiency would 

 result from such combinations generally is granted, but concomi- 

 tantly the bugbear of monopoly is raised. 



The basis of the old complaint against the Steel Trust, the Stan- 

 dard Oil and other famous combinations was concerted action as to 

 prices and trade practices which had the effect of monopoly. The 

 basis of the new complaint against the trade associations is prac- 

 tically that the same ills are worked by the circulation among mem- 

 bers of an association of data on prices, supplies, markets and similar 

 information which would benefit all members and encourage con- 

 certed action of the majority of manufacturers or dealers in the 

 same line of business. 



The American hardwood ease is considered a typical trade asso- 

 ciation case, although it may be assumed that this association was 

 selected the object ®f Government prosecution because its activities 

 in the direction of concerted action were thought to have been car- 

 ried further than some other trade associations. Should the Supreme 

 Court decide that the lumber manufacturers are unauthorized to 



exchange and carry on the concerted actions charged, their associa- 

 tion would be robbed of one of its chief functions and a precedent 

 would be set up which, presumably, would be subversive to the inter- 

 ests of all the other national trade organizations. 



Mr. Dougherty, the new attorney-general, has stated that his gen- 

 eral policy will look toward minimizing of new litigation and he has 

 intimated that he expects to be able to dispense with the services 

 .of several special assistant trust hunters. But should the Supreme 

 Court decide that trade associations exist for the purpose of fixing 

 prices and maintaining them, it may be difficult for the attorney- 

 general to keep his hands off, even should he be so inclined. 



It is not unlikely that some modus vivendi may be reached between 

 the Department of Justice, the Federal Trade Commission, the sec- 

 retary of commerce and the trade associations, as a result of which 

 the great industries will be able to work out constructive programs 

 by proceeding in the most economical manner, with no prosecutions 

 resulting, unless abuses make themselves manifest. 



The terms of the decision of the Supreme Court in the hardwood 

 lumber case will be of the utmost importance in the preparation of 

 a foundation on which business may proceed. 



Realizing that the high lumber rates authorized by the Interstate 

 Commerce Commission last summer have practically stopped trans- 

 continental movement of lumber, the principal carriers have volun- 

 tarily applied to the commission for permission to reduce the charges 

 and have received permission to file new tariffs on five days' notice. 



The traffic involved is that from Pacific Coast points via Omaha 

 and the lower Missouri River crossings to Eastern destinations. The 

 rates on this route have been 73% cents per 100 pounds. The new 

 rate will be the same as the rate via St. Paul, which is 66% cents. 



This is apparently the first substantial break in the high scale of 

 raUroad rates by voluntary action of the carriers. Ever since the 

 Interstate Commerce Commission last summer increased railroad 

 rates all over the country on an average of 34 percent, certain classes 

 of traffic have been falling off, the rates having passed the point 

 which the traffic would bear and resulting, in some instances, in less 

 revenue to the roads than would have been received under lower rates. 



Observers have been convinced that if the rates remained at the 

 high level authorized by the commission in Ex Parte 74, a radical 

 readjustment of industry and transportation in the United States 

 would result. The long haul especially was made prohibitive as to 

 many products. The recession of prices emphasized the situation, 

 bringing the selling price of some products to a point below the 

 freight rates charged for their delivery. It has been foreseen that 

 much traffic would be lulled off and that an adjustment would have 

 to be made to revive industry and lessen the cost of living. 



