The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-04-10
TRADE REFORM
limited AFTER
SUGAR RULING
Lawyers View Decision as
Forerunner of Change
in Policy.
Copyright. 1885. BY United Press,

Copyright. 1895, By United Press,
WASHINGTON, April 10.-Law-
yers saw the Supreme Courts Sugar
Institute antitrust decision today
as possibly foreshadowing far
reaching court reform of trade
practices in the steel and other
large industrial segments of bus
ness.
Best legal minds of the govern
ment and industry, it was learned,
have been giving the decision in
tense study since it was handed
down last week. The courts i'm
piled condemnation of the basing
point system of prices was seen as
indicating official action in steel's
Pittsburgh plus" and other similar
business systems.
The Supreme Court did not pass
directly on the 5asing point system,
fatty condemned in the lower
courts, but the phraseology of the
decision left little doubt in minds
of some lawyers that it was objec-
tionable to the court. The lower
court decree was approved after
minor notifications.
How 1t Is Interpreted
Those making the study believe
| the court intended to give a dur
able Interpretation of the antitrust
laws-as major industries had asked
them to do. One lawyer remarked:
The Chief Justice doesn't often
decide just the case before him. He
generally decides the law"
The case was remarkable as con-
shutting the, first instance of the
Court having the basing point sys-
tenn of price quotations before it.
In the sugar case it was held vio-
| lation of the Sherman Act.
The government commended,
through Assistant United States
Attorney Walter L. Rice, that the
Sugar Institute, by concerted action,
instituted delivered price system
including zone" prices
Judge Julian w. Mack. finding
this to be the case, entered in the
decree against the Institute. pro-
vision enjoining the Institute MEM
bers from, by concerted action,
selling only on delivered prices or
any system of delivered prices. in
Guiding zone prices, or refusing to
sell +. o. b. refinery"
Town Lost Industry
Prices F. o. B. refinery were in
effect, Mr.. Rice said, prior to the
Institutes adoption of the 1923
code" against which the antitrust
law suit was directed Adoption of
the basing point system and other
practices, it was said, resulted in
Middle Western town losing an in
dustry which found it could buy
sugar cheaper in Chicago, $50 miles
from the source of supply. than it
could in its original location, only
$50 miles from the supply.
Under the code, Mr.. Rice said,
those who bought sugar at New
York were obliged to pay the re-
f1nery price plus the rail or high
freight and water rate from the re-
finery regardless of the method
used by the refiner to transport the
sugar. A Chicago buyer he said,
might pay Sc cents a hundred
! pounds on freight which moved
over a route where the rate was %
cents hundred
The difference, Mr. Rice said, was
added to the refiners profit in an
industry where profit of S cents
a hundred pounds was considered
fair.
Under the decree, buyer may
purchase his sugar at the refinery
and, by any means at his disposal,
transport it to the place of con-
sumption, benefitting himself by
any saving in freight.
Others Use Same System
In addition to the steel industry,
many others have employed the
base point system. The Pittsburgh
plus" system means simply that
the buyer of steel pays the price at
| Pittsburgh plus delivery charges re-
CARELESS of where the steel origin
ates.
Many years ago the Federal
Trade Commission condemned the
practice after study. but no action
was taken. Under NRA an attempt
was made to establish a number of
basing points, in order to remedy
what NRA considered an evil. This,
too, was condemned by the Trade
Commission.
Now that the courts have spoken
on the subject of the basing price
system-and condemned tin
formed observers believe that other
industries will be scrutinized to de-
termine whether their activities are
likely to be subject to the same
criticism.