The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-15
The Hardwood Conspiracy Case.

The HARDWOOD Conspiracy Case.
A case Of enormous Importance to
all persons interested in the hardwood
industry in this country was argued.
before the Supreme Court of the
United States the other day and taken
under advlsement by that tribunal.
The action Is a suit in equity brought
by the United States against the
American Column and Lumber Com
pany and $50 other defendants in the
United States District Court for the
Western District of Tennessee. 1t Is
based on an alleged violation of the
Sherman antitrust act. and Judge
JOHN Il. MCCALL, the District Judge.
after full hearing on the pleadings
and on affidavits, granted an iniunc-
ton restraining the defendants from
certain practices which he held con-
stituted a conspiracy to suppress COM
petition and to enhance the selling
prices for hardwood lumber in re-
stralnt Of Interstate commerce.
The defendants are mostly c6rpora-
tons situated In sixteen different
States and comprise the most i'm
portant manufacturers of hardwood
lumber in the United States. 1t an
peared on the hearing that at the be-
ginning OF the year 1919 they were
demanding for their lumber nearly
the same prices which had prevailed
before the signing Of the armistice in
the war with Germany. The effect OF
this maintenance Of high prices was to
prevent manufacturers and dealers
in lumber from buying any but small
quantities, inasmuch as they regarded
the prices demanded as exorbitant
and hoped for q reduction in the
early future.
In this condition Of the market the
bin of complaint fled by the Govern
ment alleged that the defendants I'M
lawfully combined and conspired to
gether to maintain such high prices
for their lumber, and indeed to double
and treble the same, in violation Il
the Sherman antitrust act, by sup
pressing competition In prices among
themselves and by substituting there
for cooperation and agreements. the
purpose and effect Of which was to
maintain and Increase the prices re-
ceived by them for their lumber. To
this end Ii was alleged that the de-
PENDANTS established suite of statls-
teal offices at Memphis, Tennessee,
TO collect from the several defendants
information showing the stock of lum-
her each corporation had on hand
the unsold stock, the normal monthly
production, the actual monthly pro-
ductlon and the estimated future pro-
IductiOn of each corporation, and to dis
seminate this information among the
several lumber companies which Ind
entered into the combination. Reports
on actual sales by each corporation
were also made.
In addition to the dissemination Of
this Information by the manager Of
statistics at Memphis It was his prac-
tice to distribute among the partici-
pants in the enterprise printed recon-
mendations in regard to the conduct
of their business based upon bis rea-
sonng from the facts stated in hi
monthly report showing the condition
OF the trade. The defendants con
tended that their purpose In gathering
and circulating this information was
simply 20 prevent ruinous competl-
ton: but District Judge MCCALL
reached the conclusion that "the pur.
pose and intention OF the plan was To
suppress competition among its mem
bers and create and perpetuate con.
,lition in the hardwood lumber manu-.
featuring business wherein the pro
duction of hardwood lumber was to be
kept low enough TO maintain prices
on an ascending scale. but not so low
F, as to drive prices TO such heights that
consumers would he induced TO usp
substitutes" As matter OF fact
within the period Of twelve months
after the Institution Of the plan the
prices Of hardwood lumber increased
100 TO $50 per cent Judge MCCALL
said he did not doubt that some Of tho
defendants. II not all Of them were al
vised that the plan was lawful. but he
felt their conduct must he considered
in the light Of its results.
Accordingly he granted the injunc-