Evening star., 1919-05-11

The abandoned price stabilizing
plan of the Department of Commerces
industrial board was declared ''un
authorized by law" in an opinion of
Attorney General Palmer to Secre-
tary Redfield dated April I. previous
to the resignation of the board, and
made public yesterday.
Called Price Fixing.
The plan was held to be illegal by
the Attorney General on the ground
that il constituted price fixing among
producers in violation of antitrust
acts. a situation which was not
changed in legal aspect by partici
patton of the industrial board. an
agency not created by statute. The
Attorney General also held purchase
by the government must be on the
basis of competitive bids.
The opinion. which was requested by
Secretary Redfield March 26, was in the
commerce Secretary's hands during
the latter phases of the controversy be-
tween Director General Hines and the
industrial board over steel prices. Mr..
Redfield yesterday accepted the resig-
nation of members of the board which
had been in this hands for several
weeks.
Would Ameliorate Conditions.
'T need not say that l approach the
question in full sympathy with your de-
sire to ameliorate the conditions at
fendant upon the transition of industry
from a war to peace footing" said
Mr.. Palmer in his opinion.
Whatever differences Of opinion may
exist as to the wisdom of the estab-
Eshed policy, said the Attorney Gen.
eral, Congress by various antitrust
acts has ordained the competitive sys-
80 sv1, 60
and within the last year in authorizing
associations in foreign trade Congress
expressly reaffirmed that policy.
Only Congress Can Set Aside.
What Congress thus has established
as the law of trade only Congress can
set aside.
'.of all forms of restraint of trade
price-hxing agreements have been the
most common. No rule of law is bet
ter established than that such agree
ments are illegal and void. To
bring price fixing agreement with
in the condemnation of the law 1t is
not necessary that it be in writing or
that 1t be an express agreement, for
the law prohibits combinations as we'll
as contracts and it is elementary that
a combination may be brought about
through an informal meeting of the
minds as we'll as through formal con-
tract.
Nor Is it necessary to make such an
agreement unlawful that the parties
should be under compulsion by penalty
or otherwise to observe it.
Good Intentions No Defense.
Finally it is no defense that such
m agreement was induced by good in
tenttons and may have some good ef-
feet The theory of the law is that on
the whole the evil effects of such
agreements outweigh their possible
good. ~
Tho foregoing considerations lead ir-
resistib1y to the conclusion that the
proposed plan, viewed simply az an ar
rangement' 'hetween private producers.
would be ID violation Of the antitrust
Taxing UP the question Of the effect
of q government agency's sanction of
standard prices. the Attorney General
said that. although this was done on
action was taken under specific au-
thority of the food control act.
Board Not Creature Of Statute.
The Industrial board" he said.
mot being a cerature of statute. has
not been clothed by Congress with
any powers which would remove con-
tracts made by it from the operation
of the Sherman act. 1t follows,
therefore. that the legal defect Of the
proposed plan is not altered by the
fact that it would be carried out
through the industrial board.
Lastly" said the Attorney General,
''in no less than thirty statutory pro-
visions Congress has announced its
purpose that the purchase of govern
ment supplies shall be governed by
the competitive system.
Il am of opinion, therefore, that
the proposed plan of the industrial
board Of the Department of Commerce.
viewed in any aspect. is unauthorized
by law"
Director General Hines. who had
been furnished a copy of the opinion
to Mr.. Redfield, announced Friday
night that the railroad administration
would purchase steel on competitive
bids. The Attorney Generals opinion
is expected by officials to serve as
warning against submission OF uni
form bids by steel producers.
REDS RELEASE FIVE