New-York tribune., 1920-06-12
VIM. M. w Wood
Escapes Trial
AS Profiteer
Federal Indictment Against
2 Wool Firms and Their
+. President Is Dismissed
ON Demurrer of Hughes
Lever Act Not Violated
Contention Sustained That
Raw Cloth Does Not Com
prise Wearing Apparel

The Federal indictment charging
the American Woolen Company, Of
Massachusetts,; the American Woolen
Company, of New York, and William
NJ. Wood, president Of both corpora
tions with violating the Lever act by
profiteering in the sale Of woolen cloth
was quashed yesterday by Federal
Judge Julian Mack.
The quashing of the indictment sus-
tains the demurrer of Charles E..
Hughes, counsel for Wood and the two
corporations. Mr.. Hughes contended
that piece Of woolen cloth is not an
article of wearing apparel, and there
fore is not subject to price control, as
provided in the Lever act.
The indictment charged the defend
ants, individually and collectively, with
obtaining excessive prices for woo1en
cloth. 1t was returned by the Federal
Grand Jury in May. Frederick W..
Bisgood, special Attorney General ap-
pointed with Herbert c. Smythe to
prosecute the case, announced that an
appeal will be taken.
New Indictments Planned
The government, according to Mr..
Bisgood. is prepared to take the case
to the United States Supreme Court, if
necessary. 1t was pointed out yester-
day, however. that in event the prose
cution did not care to appeal from
Judge Mack's decision the defendants
erhf ka c%o %oI
tion Of the act. 1t was argued by Mr..
Smythe in his brief that the obvious
intent of the Lever act was to prevent
profiteering in all necessaries of life.
In his decision Judge Mack said:
"The substantial question in this case
is whether the piece of cloth is neces-
sary within Section of the Lever
act or is wearing apparel or a neces-
sary as defined in section Of that act
as amended by the act of October %,
1919"
After citing the original and amend
ed sections, Judge Mack continued:
"The indictment is based upon that
provision of Section making it un-
lawful to make any unjust or unreas-
enable rate or charge in handling or
dealing in or with necessaries.
Section cannot be read inde-
pendently Of Section /. If Section 4
had forbidden unreasonable rates as
to any necessaries, wearing apparel,
clearly necessary in TIE general
sense of the word, would have been
embraced therein even before the
amendment of 1919.
"The amendment would therefore
have been unnecessary, Congress did
not so consider it and therefore by
the amendment of 1919 expressly in
cluded it in the class of necessaries
that were to become subject to the
prohibition of the act.
Limitations Defined
EITHER the word 'necessaries,' as used
in Section 4, is free from any limita-
tion by reason of the definition in Sec
tion /, in which case, even before the
amendment of 1919, it would have in
cluded wearing apparel, or it is to be
limited to those articles expressly
stated in Section l as hereafter in this
act called 'necessaries.'
at is practically conceded, and if it
were not conceded it must be held, es-
pecially in view of the appointment, that
amy necessaries' as used in Section
does not include 'all necessaries.'
When then is the limitation? Evil
IDENTIFY it is to such articles as are
stated in Section to be called 'neces-
saries' in the later sections.
"If Section 1 had merely mentioned
specific articles, without stating that
they we're hereafter called 'necessaries,'
such limitation in Section would be
more accurately expressed by the
phrase amy such necessaries.'
The government contends, however,
that under the ejusdem generis rule
necessaries rule-as used in Sections
and 4, included not only those speci-
ffically defined as such, but others of
the same nature" Reference is made
to Section 10, providing for the re-
QUESTION of foods, feeds, fuels and
other supplies necessary to the support
of the army or the maintenance of the
navy or any other proper use connected
with the common defense.
Regardless of the ejusdem generis
rule, the ordinary and reasonable in
depreciation of other supplies Is any
supplies of any kind necessary for the
purpose designated.
at would, therefore, include both
wearing apparel and its ingredients
The word necessaries, subsequently
used in Section 10, of course. refers to
any and all articles which the Presi
dent is empowered by this very section
to requisition for the purposes stated.
"But the language of neither Sec
ton l nor Section 4 affords any scope
for the application of this rule of con
Struction."
Other Indictments Quashed
Judge Augustus N. Hand, in the Fed
eral District Court, sustained yester-
day the demurrers interposed to indict
ments obtained by agents of the De-
partment Of Justice charging the
Eugene A. Sullivan Company Inc. and
Andrew Spada, a produce merchant,
with violation of the Lever act by
proflteering in the sale of potatoes.
The indictments charging the de-
PENDANTS with making an unreasonable
profit In handling potatoes" Judge
Hand explained, specify the price paid
for them and the price at which thew
were sold, but 1t is impossible from
these factors alone to ascertain
whether the potatoes were sold above
the market price or whether the de-
PENDANTS made any profit.
"Of course, realize that what may
be reasonable or negligent or in re-
Straint Of trade, or what may be done
with inten. to defraud, is a matter OF
degree and is determined in the ordi-
nary case by the opinion Of a jury.
I'm other words, enough ought TO be
spparent to enable the court to say
whether the charge is based on ten
able legal theory. Less than this is a
statement of mere claim of a pleader.
unsupported by sufficient surroundings
to give IL legal Significance"
II az $fan in, L.