New-York tribune., 1922-02-16
Attorney Generals Position
More Clearly Defined in
Letter to Secretary of
u o III III cree Hoover

WASHINGTON, Feb. 10. Approval
Oh the normal activities of most trado
associations is indicated in a letter
from Attorney General Daughcrtv To
secretary of Commerce Hoover, made
ruo''o today by the Department Of
wvn.".lce; me Attorney General
wrote to Secretary Hoover in rcsnonse
to letter in which certain actjyit;cs
were outlined by the Secretary Of Com
mefcc and an opinion on them rc-
ques'ed. The Attorney General. how
cNcr' stated that he could sec noth,rg
H'ega' IN the exercise of tho activities
mentioned in MIR. Hoovcr's letter. "nro-
Vlded' always, that whatever is done is
hoI used as scheme or device to cur
taii production or enhance prices. and
competitions" 9''"s
Secretary Hoovcr's position on Tho
proper activities of trade assoc;at;oms i ,ms
is contained in the FOLLOWING nara.
graphs Of letter written TO the At-
'onney General on February 3:
MAKE my position clear regard
ing the trade associations The Exist
e"ce OF winch | advocate. I desire To
say that have always taken the yjcw
that no body OF men could combine IN
'he form Of a trade organization and
90 any act or thing forbidden by law If
'ney were undertaken by them outside
oi d trade organization. The charactor
VI 'Iaoc organization the existence of
"h'ch should be preserved is one that
carries lawful purposes on,v in - '.@'
''cles OF association; its activities must
De IN harmony with its declared MR.
poses. The articles Of association. With
ohelr lawful declared purposes. must
nov be used as a mask to hide unlavful
purposes. ~
IN other words, the organization cam
not be used to conceal or dispuisc
any contract, combination. consniracv
agreement or understanding, secret or
otherwise. or the part of the officers of
1ne organization or on the part of the
hle"ocrsh1p or any part thereof to en-
gage IN activities in restraint of trade
or otherwise in violation of tho aNt;-
trust laws" "
Asks Specific Opinions
Mr. Hoover asked for specific opin-
IONS upon association activities cover
ing uniform cost accounting, uniform
''aoe 'ermlnology, standardization of
qualty and grades Of products, the col
iec'lon OF credit information concern
ing customers OF members, the placing
OF insurance for members, cooperative
Advertising. welfare work in member
pants, the handling of Legislative cues
Iiohs' the promotion os closer relations
between the industry and govern
mental bodies, and the collection of
productions, wage, consumption, prices.
etc
The Attorney Generals reply of
teblnary 8, follows in part:
mere is no apparent OBJ lection to
STANDARD system OF cost accounting,
out think associations should be
warned to guard against uniform cost
as to any item Of expense. For illus
tlation, strong effort has been made
by some lumber associations 10 take as
a basis for estimating costs Of pro-
duction uniform charge for stump
age. OF course, The cost Of the timber
IN the tree TO the different manufac-
turcrs who own their timber in the
woods rrcatly varies, and as to each it
should DC charged at its actual cost.
1t IS IS clearly q violation or The law
TO agree upon tho cost or an item that
constitutes substantial part Of the
total cost price when It's cost actually
varies, as to agree upon the sales
price, because the sales price is sub
stantially affected by such agreement
1t has been ascertaired that the mem
bers Of one association 90 so far as to
FIX uniform cost price, leaving to
each member to determine what per
cent profit he will adG. thus eliminat
ing entirely competition in so far as
affected By the cost of production.
"Furthermore, I have serious doubts
about the advisability Of the latter part
Of the sixth paragraph. | can see nc
objection to cooperative advertising
designed to extend the markets of the
particular article produced or handled
by the members Of an association, but
when the several producers or dealers
use uniform trade labels. designs and
trademarks it seems to me the inevi