The sun., 1917-01-05
PAPER TRUST
WILL FACE LAW
Facts Are to Be Put Up to
Department of
Justice.
PROSECUTION is LIKELY
Legal Steps to Follow Investi-
CATION by Government
Authorities.
PROSECUTION is LIKELY

WASHINGTON, Jan. 4.-Attorney-Gen-
eral Gregory took over to-day the yield
of the Federal Trade Commissions in
quiry into the print paper market with
a view to determining whether there is
a paper trust and to instituting civil and
criminal proceedings against manufac-
turers or others who may have violated
the antitrust laws.
President Wilson is actively interested
in recent disclosures Of practices pur-
sued in the production and distribution
of print paper and Is understood TO De
following the inquiry closely.
A mass Of complaints and testimony
and a large number of secret reports
from the commissions field force Of in
vestigators have been placed In the At
torney Generals hands.
For several weeks past Department of
Justice officials have been in frequent
consultation with the Trade Commission
on the situation and are understood to
have under serious consideration the
early institution of Grand Jury proceed
ings at which indictments charging vio-
lation of the criminal section of the law
will be asked.
Calls in Justice Department.
The formal taking over Of the inquiry
by the Department to-day was in re-
sponse to the following letter sent the
Attorney General by Secretary Bracken
Of the commission
"As YOU know, the Federal Trade
Commission. pursuant TO resolutions OF
the Senate. has been conducting an IN
aulry into conditions in the print paper
market The commission is OF the opin-
ion that the inquiry has now reached
a stage where the further cooperation
of the Department of Justice would be
advantageous" The Attorney-General
replied:
1.-The Department will at once take
up the matter and to that end ! VIII
have attorneys OF the Department meet
with the commission or with attorneys
of the commission as may nc desired,
and go over the data already collected
as a basis for determining what further
steps TO take.
"I know, of course, from what has
already been brought out. that a serious
condition exists in this trade, and that
anv remedy which the law may az
ford should he applied at once"
Beyond asserting that the investiga-
tion and anv action the Department
might take would be FASTENED as much
as possible. Mr.. Gregory declined 10
comment on the situation.
watching for Evidence.
It is understood. however, that De-
partment officials are prepared to in
stitute speedily a dissolution suit against
any manufacturers within Federal juris-
dlction who are believed to have con-
spired in restraint of trade or to erect
a monopoly At the same time II was
made clear that the evidence adduced
hy the commission would be thoroughly
digested so that no injustice might be
done manufacturers innocent or Illegal
practices.
In addition, Department officials are
understood to be preparing to ask for
criminal indictments. should analysis OF
the evidence warrant such action, and II
is believed the criminal proceedings II
undertaken would be pressed ahead oi
the civil proceedings. Where such pro-
ceedings might be conducted Is said tc
be under consideration.
The Trade Commissions investigation
was conducted in response TO a Congress
| s!onal resolution and a report to Con
gress will be made within a few days
| The investigators went into American
and Canadian paper mills for cost o.
| production and profit figures, and at oper
| hearings the commission sought 10 as
| certain II combination had beer
| formed to control prices.
! Combination Charged.
Publishers charged at the hearing.
! that the manufacturers had combined
! both to control prices and to restric
! production. Some testified that manu-
| facturers had refused to sell to then
because OF their activity In exposing
| the manufacturers methods. Other
! declared they had been threatened will
such refusal by manufacturers.
North Carolina publishers filed recent
ly with the Department OF Justice
complaint charging that manufacturer
had refused to sell to a buying or
ganization publishers had formed. al
though manufacturers previously ha'
advised organizations to eliminate tn
| jobber. Other organizations OF publish
ers filed with the Trade Commission let
ters and kilograms to support their ale
cations OF an Illegal combination.
Paper manufacturers terminated tn
final Trade Commission hearing sudden
ly a little more than week ago whel
they refused to discuss figures gathere,
by the commission bearing on costs an,
profits. They explained they had no
had time TO study the statistics an
probably would .,ot have for severa
months.
The commission still has under con
sideration a plan proposed by manufac
turers for distribution Of the availabl
PAPER stock.
NAVY WAITS ON WAR PROFITS