Evening star., 1938-01-16
Reforms in Anti Trust Laws
Drawn by New Deal Advisers
Manufacturing Is Target for Guns of Administra.
tion-Recovery Peril Is Seen in Rigid
Manufacturers Goods Prices.
BY HERBERT M. BRATTER,

BY HERBERT M. BRATTER.
y UAR-REACHING proposals to stream
T line our Model-T antitrust laws
are in the ofing. Busy New Deal
advisers in and out of the Govern
ment are working on the matter There
Is some difference of opinion among them
as to the specific obiectives to be sought
through such legislation and as to the
most advisable methods of approach.
Some compromising will be necessary, but
an early decision and recommendation by
the President is to be expected. There
will follow a long period of congressional
and public discussion.
Monopoly attack has been popular is
Sue for half a century. The concentra-
tions now aimed at by the New Deal
are nothing new. Why, then, this sud-
den, concerted administration barrage?
Various explanations are offered. One is
that the New Deal fears that rigid manu-
factured-goods prices are imperiling the
recovery process, notably in the vital build
ing industry; and that recession" may be-
come depression" unless prices can be re-
duced enough to stimulate consumer buy
ing. Big business should speedily resume
high-volume production, low prices, and
the highest wage scale possible.
Roosevelt Gave Cue.
The Governments present attitude has
been long brewing President Roosevelt
gave the cue as early as last spring, when
he announced that steel and copper prices
were too high. He did it again in No
hn tod IN E-oIo
Trade Commission to investigate marked
increase in living costs attributable in
part to monopoistic practices.
The New Deal claims that big business
has failed to keep its promise to take up
~the slack when Government expenditures
were reduced. It says that America faces
general strike of capital" that the
marked trend toward concentration is
very real threat against the individual
competitive system, and that the economic
oligarchy," self-constituted and self-per-
petuating, constitutes dangerous menace
to political as we'll as economic freedom.
To forbid monopoly, to preserve free
competition, to insure fair trade practices,
= to prevent commodity prices from soaring
beyond the consumers reach-these are
termed worthy objectives. yet our anti
trust laws :" have failed of their major
objective They may have checked the
growth OF monopoly, but they have not
prevented it, The trend toward an undue
concentration of wealth and economic con-
troll Is unmistakable,' Attorney General
Cummings reports. Citing numerous ex-
amples of collusive bids on Government
contracts, he finds private action
producing frozen price levels = = as offen-
sive as trbitrary price fixing by a private
monopoly" Thus, SO companies bid ex-
actly s160ol.83 for a steel pipe order, 40
companies precisely S1714S.60 for cement,
ETC. Substantially the same experience has
recurred In bids for a long list of materials.
Statutes Do Not Contain Law.
Such situation cannot be eliminated
without revision of the present statutes,
' officials emphasize, for the present statutes
do not contain the law. The law must be
searched out because the courts have inter-
preted and reinterpreted it, and laid down
doctrines of a modifying and even self
recognize monopoly.
Theoretically, monopoly is unified or
concentrated discretionary control of the
price at which purchasers In general can
obtain commodity or service and of the
supply which they can secure, or the con-
troll OF price through supply, as distinct
from the lack of such control which marks
the ideal situation Of perfect competition.
The principle applies mutatis mutandi to
buyers monopoly
The principle of competition represents
. condition in which no individual, group
or bargaining unit has any discretionary
control over general supply or price. Pure
monopoly is not frequent Similarly, close
approximations to pure competition in the
strict sense are extremely rare Most
actual situations represent something in
termediate.
Lack Of Standards.
A chief difficulty in the eyes OF the Gov
eminent Is that the basic anti trust statute
did not lay down detailed standards of vio-
1ations to guide the courts and the Depart
ment OF Justice The Government must
demonstrate actual restraint of trade, not
merely the capacity to restrain trade. Be-
cause the law is not clear it is often
necessary to go to court to decide whether
given practice is lawful or not. But
legislation by court Interpretation is slow
and cumbersome. A big case costs the
Government from 100000 to $3.50, 900.
The Justice Departments appropriation
does not permit the prosecution of more
than three or four such cases in year.
To remedy the situation described, off,
cials are advocating serious and extensive
study, this year. with representation by
every interested element Of our national
life. The range of the inquiry will cover
such subjects as mergers, holding COM
panies, financial control, Federal incorpora-
ton or licensing, base-point bidding, price
leaders, identical bids. patents and taxa
ton. Also 1t should determine how far
wrongful intent is to be taken as criterion
when actual restraint of trade has been
shown, and whether the rule Of reason"
requires redefinition.
The administration views the rule Of
reason as the rule of uncertainty" Agree
ment among competitors to fix prices is
regarded as unreasonable, but there are
today all sorts of borderline cases leaving
the public in general doubt as to what the
antitrust laws as interpreted mean.
Clearer defin{tio,, Ia peeded