New-York tribune., 1921-12-20
Price Trading
Hardwood Plan
Held Unlawful
Supreme Court Rules, e to
5, That |s0pen Competi-
tion'' Of Association l.
Violation of Sherman Act
Leads to Higher Charges
Decision Basis for Federal
Action Against Hundreds
of Similar Organizations

WASHINGTON, Dec. t9.-Thc open
competition plan of the American Hard
wood Manufacturers Association was
declared by the Supreme Court to-day
a restraint upon trade in violation of
the Sherman antitrust law
The government in carrying it's case
to the Supreme Court had charged that
the association, consisting of 603 per-
sons and corporations engaged in the
production and sale of hardwood lum-
Der, combined and conspired to elimi-
nate competition among themselves and
to enhance their selling prices in re
straint Of trade, and that they did this
by comparing and exchanging under
an open competition plan" the reports
and bulletins concerning prices, stocks
and production.
Department of Justice officials said
that the decision would form the basis
for the governments policy toward
hundreds Of associations maintained
by various industries to exchange price
ana Otner trade information.
Three Dissent From Decision
In rendering its decision the court
divided, six to three, Justices McKenna.
Holmes and Brandeis dissenting 1t
sustained the United States District
Court of Western Tennessee, which in
April, 1920, granted an injunction per-
petually restraining the association
from entering into further agreements
under the plan forbidding the further
distribution Of statistical information
under the plan and directing the ahan-
donment of all "efforts whatsoever
having the purpose or tendency to en-
nance OF MAINTAIN prices
The opinion of the court was deliv-
cred by Justice Clarke, who described
the organization of the association and
asserted that it was a clear combna-
tion TO restrict production and to in
crease prices.
The meetings of the members re-
suited in concerted action, Justice
Clarke said, to raise prices regardless
Of conditions, and the plan was termed
by him "misleading and a misnomer'
and IAN old evil in a new dress and a
new name He added that instead of
plan to promote open competition it
operated to restrict competition 1t
was futile. he said to argue that the
plan was merely to furnish informa-
tlon which could not be otherwise OBJ
tanned.
Justice Holmes, in dissenting, said
that the methods of the association
could not be objected to in this coun-
try of free speech" as combination
N restraint of trade; that while it was
a combination among sellers it was not
unlawful, that its meetings and in
formation circulating through its
bureau were onen to the public, that
combination. before it can be termed
unlawful must engage in an unreason-
able restraint of trade and overreach
normal market conditions. In the prac-
tices of the association he saw nothing
that was different from the results
produced by the government in the dis
tribution of market reports and other
information for producers, except that
the association sought to reach mem
hers ain the backwoods" to whom was
not available much of the government
informa ton
Brandeis Points to Divergence
Justice Brandes declared it to be
AN extraordinary fact that the Su
preme Court should alter its decision
in the United States Steel Corpora
tion case, where so per cent of the
industry is controlled, and in the
United Shoe Machinery case, where
nearly all the shoe industry of the
country was controlled, holding them
not in violation of the Sherman law.
and should hold in the present case
that 603 out of many thousand hard
wood operators Cannot exchange in
formation without running counter to
the provisions of the Sherman law"
With respect to the government
policy towards the open price associa-
tions, in some instances it was be-
lieved to-day that additional prosecu-
tions will be brought, while in others
where the activities of associations do
not conc within the terms OF the de-
cision q definite outline of the appllca-
ton OF the Sherman act could be made