Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1917-04-13
INDICTMENTS FOR
NEWSPRINT MEN
Six Accused of Controlling 55
Per Cent. of the Entire
Output

New York, April 13. - Charged
with controlling SO per cent. of the
news-p print paper production of the
country and using their power in re-
straint of trade in violation of the
Sherman antitrust law, six paper
manufacturers and a banker promi-
nent in financing news-print paper
companies were indicted by the Fed
eral grand jury here yesterday. Five
of the manufacturers constitute the
active committee of the News-print
Paper Manufacturers Association,
whose secretary, George f. Steele, the
indictment says, was not named as
defendant in view of the fact that he
appeared as a witness before the
grand jury.
The men indicted are: George H.
Mead, Philip T. Dodge, Edward Back
us, George Chahoon, Jr., G.. II. p.
Gould, Frank ]. Sensenbrenner and
Alexander Smith, a Chicago banker.
All but the last two are members
of the Newsprint Manufacturers AS
sociation'S Exec utive Committee.
Bench warrants for the defendants
were issued and bail fixed at $4,000.
The investigation, it was stated by
cambridge Colby, who served as spe-
cial assistant to the United States At
torney General in association with
Mark Lyman, Assistant Attorney Cen
eral, was undertaken by the Depart
ment of Justice in February lat the
request of the Federal Trade Commits
sion." Subsequently the commission
and the manufacturers reached an
agreemen in respect to prices.
Statement by Mr.. Colby
Mr.. Colby added:
1.-The Federal Trade Commission in
it's preliminary report to Congress de-
clared that there existed in the news
print industry a combination in re-
straint of trade and that while there
was no actual shortage in news print
paper, a very delicate equilibrium be-
tween the available supply and the
demand had been brought about
artificially in the trade. The grand
jury as the result of it's Independent
investigation, has in effect reached the
same conclusion and has indicated the
men whom it regards as responsible
for these conditions, brought about, in
its opinion, through violation of the
Federal antitrust laws.
THE grand jury has not sought to
include in it's arraignment the cor
respondents and individuals consti-
tuting the entire membership of the
industry, but has charged specifically
the individuals regarded as the origin
ators and directors of the alleged il
legal combination and conspiracy.
'The prices charged by members of
the association are greatly in excess
of prices which independent producers
even under war conditions, are con-
tent to receive. There has been a
relatively slight advance in the cost
of materials entering into the manu-
facture of news-p print-paper, but moth
ing comparable to the advance in
prices which has been made through
the concerted action of the members
of this combination and under re-
stricted competitive co d I'll o n 8
brought by the association whose pur-
poses and methods are now directly
challenged by the action of the Fed
eral grand jury"
The indictment states the inquiry
covered the period since December,
1914.
The total daily output of news-print
paper, chiefly used by newspapers. is
put at $500 tons in Canada and the
United States. with a value of $780,
900. OF this amount, it is alleged, s.
600 tons were controlled by 40 speci-
fed companies, whose trade the de-
PENDANTS are accused of engaging in
to restrain.
The association is described in the
as a voluntary trade asso-
citation, composed of As firms and hav-
ing mo constitution, bylaws nor
of proceedings" The defend
ants and Steele, the association secre-
tary, it is alleged. through the asso-
citation and the firms they controlled,
carry on 55 per cent. of the news
print trade and having facilities to
carry on So per cent, were able to
l.. -,