Los Angeles herald., 1907-06-12
INSURANCE MEN
TO FEEL HEAVY
HAND OF LAW
District Attorney to
Prosecute
Bishop G. Company May Have to Dis
continue Fixing Prices at Which
Their Products May
Be Sold

the trick.
There are probably many business
men in Los Angeles who will be sur
prised at this statement, and many who
will be unable to discover any reduc-
tion in the sale price Of commodities
which formerly were admittedly trust
controlled. These men, very likely, may
attribute the maintenance Of prices to
"gentlemen's agreement" Unless, in
deed, they go farther and express their
belief that the district attorney is being
hoodwinked.
Capt. Fredericks is entirely frank in
saying that before the law went into
effect the prices of by far the larger
number Of commodities sold in this city
were regulated absolutely by local COM
binations.
Some of the trusts, he admits, died
hard, notably the plumbers trust, which
fought to the last minute but finally in
formed the district attorney that its
members would obey the law without
compelling him to fight it out in the
courts.
Eliminate Price Clauses
When this law went into effect" said
Capt. Fredericks last night, there were
so many of these local trusts that If we
had been compelled to proceed againss
them in the courts we would scarcely
have known where to begin. They were
ell notified, however, that they would
be held to a strict account, and one by
one they effected such changes as were
necessary in their organizations.
Some of them went out of existence.
Others removed from their bylaws
everything having any bearing on the
price to be asked for the commodities
two minor points that / am working
on now. One of them involves the life
| of the local insurance trust, which so
far has made no change in it's methods
From Sacramento yesterday came the
statement that Los Angeles county
would be expected to institute the first
prosecutions under the Cartwright law.
The law, 1t was said, was to be tried
out here, and the dispatch declared that
District Attorney Fredericks and Sena-
tor Cartwright had held numerous con-
ferences recently regarding the methods
to be pursued.
Denies Holding Conference
Capt. Fredericks, however, denies
this. He says there have been no con-
ferences. He says, Furthermore, that he
does not know Senator Cartwright, and
that If he ever met him he has for
gotten it. Moreover, he says there are
no trusts now operating in Los Angeles,
with the exception of the insurance
trust, and 1t is not at all certain that
this organization can be brought within
the scope of the Cartwright law.
Upon the courts answer to what is
a commodity depends the future of the
local insurance trust, an organization
of insurance men which frankly fixes
the prices to be paid by Los Angeles
business men and householders for in
Surance.
District Attorney Fredericks is
looking into the matter and if he de-
cides that insurance is a commodity"
within the letter of the Cartwright law
he will proceed against the trust and
attempt to compel it's dissolution.
Other local trusts have, the district
attorney declares, promised to be good.
Many of them, he says, already have
disbanded, while others have told the
district attorney that they will no
longer seek to regulate prices of the
commodities In which they deal.
The plumbers trust, the bakers
trust, the furniture trust and the hum
dred and one other trusts which -four
ished locally up to few weeks ago,
according to Captain Fredericks, no
longer dictate prices. But the insur-
ance men have refused to be good.
They take the stand that they are
without the pale of the Cartwright law
and that they can combine to establish
a fixed scale of rates If they wish to
do so. In fact that Is just what they
have been doing for some time past
and what they are doing today.
Awaits Eastern Decision
"There are court decisions holding
both ways on this matter" said Cap
tain Fredericks, in speaking of the
insurance trust last night. The So
called Cartwright law is practically
identical with the antitrust laws of
Ohio. Texas and Iowa. They are all
alike. In fact the Cartwright measure
is so like the Ohio law that it may
be difficult to use in California because
of differences in our legal machinery.
"The other states have had their
laws for several years and hence we
have numerous decisions to work un-
der. This insurance matter, for in
stance: The Texas court held that in
surance is not a commodity. Later an
Ohio court, tribunal that corresponds
to our superior court, held the exact
reverse, and mentioned the Texas rul-
ing IN lIS Q6ClSlOIl llCliB q Low ICY
ago. I read that the appellate court in
Ohio had reversed that decision. I
have written for copy of the ap-
pellate courts decision, and until it
arrives no further steps will be taken
against the local insurance organiza-
tion."
Questions Provisional Contract
Webster defines commodity as ian
article of trade or convenience; NOV
able article of value; something that
is bought and sold" Does insurance
come within the scope of this defini-
tion, and even if it does, does the legal
definition Of commodity conform to the
Webster definition? They are not al
ways alike and they may not be alike
in this instance Commodity, however,
is the word used in the Cartwright
law, and unless insurance may be con-
(COntinued on Page Two.)