Evening star., 1940-05-06
BY j. A, FOX.

A business combine that has the
purpose and the power of fixing
prices is illegal under the Sherman
Antitrust Act even though the
price control is designed to improve.
conditions within an industry, the
Supreme Court said today.
The 5-to-2 decision affirmed the
conviction in the Federal District
Court at Madison, Wis, of IL ma jor
Oil companies and officers who
were charged with participation in
stabilization program in the Middle
west flve years ago to bolster the
price OF gasoline when a surplus
threatened the market.
The decision was read by Justice
Douglas with Justices Roberts and
McReynolds dissenting. The Chief
Justice and Justice Murphy did not
participate, the case having been
handled in the Justice Department.
when Mr.. Murphy was attorney
general.
The Supreme Court ruling re-
versed a decision of the United
States Court of Appeals for the
7th circuit, which had upheld a
defense appeal that the restraint
alleged by the Government was rea-
sonable.
Roberts Favors New Trial.
Under the Sherman Act" the
Supreme Court said, ANY combina-
tion formed for the purpose and
with the effect of raising, depress-
ing, fixing, pegging or stabilizing
the price of commodity in inter-
state or foreign commerce is illegal
per Sc"
In their dissent, Justices Roberts
and McReynolds declared:
mo case decided by this court
has held a combination illegal sole
ly because its purpose or effect was
to raise prices. The criterion of
legality has always been the purpose
or effect of the combination unduly
to restrain commerce"
Justice Roberts expressed the
opinion that Government counsel
argument in the case was highly
prejudicial" to the defense and for
that reason a new trial should have
been granted
Il do not think the court took
proper means to counter-act the
impp priety and prejudice thus
created and I think the only remedy
available is to set aside a verdict
ensuing upon such misconduct"
Justice Roberts said.
The Court of Appeals has based
its reversal in part on the ground
that Government counsel had used
the transcript of grand jury pro-
ceedings to refresh the recollection
OF certain hostile witnesses.
Hanging Fire Since 1896.
The case has been hanging fire
since December. 1886. when in Dis
trict Court for the Western District
for Wisconsin at Madison q cor
porations and Sc individuals were
indicted under section one of the
Sherman Act which prohibits re-
straints of commerce.
Since then one group has been
dismissed: three corporations and
Is individuals who were found guilty
were granted new trials which have
been held up awaiting disposition
OF the present case. involving the
II corporations and five individuals
who also were to get new trials.
Involved in the present case are
the following companies: Socony-
Vacuum, Wadhams, Empire, Con.
tinental, Pure, Shell. Sinclair, Mid
Continent, Phillips, Skelly and Globe
of Oklahoma and Globe of Illinois.
The individuals are c. N. Arnott,
vice president; H. T. Ashton. man.
ager of division for Socony-
Vacuum; r. H. McElroy, jr., Of
Pure; P. E. Lakin of Shell and r.
w. Mcdowell of Continent.
Conviction carries fine of 5000 or
a year in jail. or both.
The combination of the oil COM
panies was designed to remove what
was known as distress gasoline
from the market. The Court Of
Appeals said the trial court errone.
ously had charged the jury that II
it found the defendants combined
Tor the purpose Of raising and fixing
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