Evening star., 1949-02-01
System Of Voluntary
Point Pricing Up for
Supreme Court Review

The Supreme Courts decision to
review o case involving the contro-
versial basing point method of
pricing may result, according to op-
posing counsel, in q decision either
hamstringing the Federal Trade
Commission or dealing a staggering
blow to the economy Of the country.
The court yesterday agreed to re-
view q Court Of Appeals decision in
the Rigid Steel Conduit case that
it Is illegal to use the basing point
system, arriving at uniform prices,
although 1t Is done independently
and without agreement with other
sellers.
In the basing point system the
manufacturer or distributor sets
prices at one or more points and
the buyer pays the freight from
those points. Where various COM
panies use the same basing point
and meet competitors prices there,
1t means that more distant COM
panies must absorb at least part Of
the freight charges, resulting In a
lower net price.
In the Rigid Steel Conduit case
a group Of manufacturers and dis
tributors Of the conduit for electric
wiring were charged in two counts
in a complaint alleging uniformity
of prices, filed by the FrC in 1941.
A cease and desist" order was
issued by the commission in June,
1914.
Conspiracy Charged.
This was upheld by the Seventh
Circuit Court Of Appeals last Au-
gust. The first count alleged q
conspiracy. The appeal to the
Supreme Court concerns the second
count in the charge. which did not
allege conspiracy but did charge
that the basing point formula was
used, resulting in uniformity Of de-
livered prices at any given des-
tination
The trade commission. in q
memorandum fled by Solicitor
General Perlman. said the Supreme
Court had not ruled on the appli-
cation Of the FTC Act under cir
cumstances similar to those
presented by the ruling upholding
the second count in the complaint
1t asked the court to grant the
review
Walter B. Wooden, associate gen.
eral counsel of the FTC, told the
Senate Trade Policies Subcom-
n ttee last November that the
prevention of price conspiracies is
endangered, unless the commission
has available such remedies as the
second count of the conduit case
or the price discrimination sections
of the Clayton Act.
"Otherwise," he said, I'VE shall be
attempting to correct the noncom-
petitive conditions of 1850 with the
legal remedies of 1890"
Attorneys for the companies ap-
pealing to the Supreme Court argued
that the Appeals Court erred in
assuming that the questions before
it had been decided by the Supreme
Court in the Cement Institute case,
decided last spring. In that deci-
sion, the Supreme Court knocked out
the hasing point pricing system in
the cement industry.
Bill Pending In Senate.
The appellants attorneys also
argued that the independent use of
the basing point system of pricing.
where conspiracy and unlawful price
discrimination are not involved, has
never been prohibited by Congress
or the courts. They argued, also,
that If the earlier decision stands,
there will be destructive dislocstion
of all industry In which the cost of
delivery represents a significant
proportion of the cost of products
and that consequences to the Ma
tons economy will be drastic.
The cement case decision and the
appeals court ruling in the conduit
case gave rise to widespread fear
among businessmen that the only
legal and safe method Of pricing Is
that of uniform prices at the mill.
The Senate subcommittee held ex-
tended hearings on the subject and
a bill to legalize freight absorption
to meet competitive prices, 70 long