The sun., 1919-05-11
j. 5, PRICE FIXING !
DECLARED ILLEGAL
Palmer Declares Plan Of In
dustrial Board Is Unau-
thorized by Law. =.
RULING IS DATED APRIL 1
Director Of Railroads An
nounces He viii Buy Steel
on Competitive Bids.

WARRINGTON, May 10.-The aban-
doned price establishing plan Of the De-
partsnent OF Commences Industrial
Board was declared Unauthorized by
law" in an opinion of Attorney-Gen-
eral Palmer to Secretary Redheid. dated
April 1, previous to the resignation Of
the board. and made public to-day.
Tho plan was held to be illegal by
me Attorney-Genersl on the ground
that It constituted price fixing among
producers in violation Of antitrust acts,
situation which was not changed in
legal aspect by participation Of the In
dustrisl Board. an agency not created
By statute. The Attorney General also
held purchases by the Government must
be on the basis of competitive bids.
Tho opinion. which was requested by
Secretary Redheld March 20, was in the
secretary's hands during the latter
phases Of the controversy between Dr.
rector-General Hines and the Industrial
Board over steel prices. Mr.. Redfield
has accepted the resignations OF men,
bers of the board which had been in his
hands for several weeks,
need not say that I approach the
question In full sympathy with your de-
sire to ameliorate the conditions atten-
dant upon the transition Of industry
from war to peace footing" said Mr..
Palmer in his opinion.
Congress Back OF Policy.
whatever differences Of opinion may
exist as to the wisdom OF the estab-
nshed policy, said the Attorney General,
Congress by various antitrust acts has
ordained the competitive system Of In
dustry for the United States, and within
the last year In authorizing associa tions
IN foreign trade Congress expressly re-
affirmed that policy.
What Congress thus has established
as the law Of trade only Congress can
got aside.
"Of all forms OF restraint Of trade
price fixing agreements have been the
most common. No rule Of law 10 better
established than that such, agreements
are Illegal and void. To bring a
price fixing agreement within the con-
domination OF the law II is not neces-
sary that II be in writing or that It
be an express agreement. for the law
prohibits combinations as well as con-
tracts and It Is elementary that a COM
bination may be brought about through
m informal meeting of the minds as
well as through formal contract.
Nor 10 1t necessary to make such an
agreement unlawful that the parties
should be under compulsion by penalty
Or otherwise to observe 4.
Not Like Food Price Fixing.
FINALLY. It is no defence that such an
agreement was induced by good inten-
lions and may have some good effect.
The theory of the law Is that on the
whole the evil effects OF such agree
ments outweigh their possible good. re-.
THE foregoing considerations lead ir-
reoistibly to the conclusion that the
proposed plan. viewed simply as an ar
rangement between private producers,
would be In violation of the antitrust
laws"
Taking up the question Of the effect of
g Government agency's sanction of
standard prices. the Attorney General
said that although this was done on food
products during the war the action was
taken under specific authority of the
Food Control Act.
The Industrial Board" he said, mot
being q creature of statute. has not been
clothed by Congress with any powers
which would remove contracts made by
u from the operation Of the Sherman
act. II follows, therefore. that the legal
defect Of the proposed plan is not altered
by the fact that 1t would be carried out
through the Industrial Board.H
lastly" said the Attorney General,
'fn no less than thirty statutory provi-
sions Congress has announced its pur-
pure that the purchase OF government
supplies shall be governed by the oom-
petitive system.
Il am of opinion. therefore, that
the proposed plan OF the Industrial board
OF the Department OF Commerce, viewed