Evening star., 1950-02-02
Insists That Basing Point Bill
Is Vital to Free Enterprise System

To the Editor of The STAR
The business community perhaps could
render as great contribution to the solu-
ton of present domestic problems by giving
a full and candid reconsideration to the
basing point system as by anything which
its members could do. The present is
especially timely for such suggestion in
view of the impossibility, experienced June
20, of getting favorable United States Sem
ate action on the conference report on the
basing- point bill IS. 1008) and re-refer-
ence of the bill to conference.
There is danger that members of many
industries, which have used one or another
of the various types of delivered price sys-
TENS known generically as basing- point
systems, may fall into the frame of mind,
as to competition in their respective in
dustries, exemplifled by letter quoted in
part by the United States Supreme Court
in its opinion 1888 United States 706) in the
Cement Institute case.
The letter was written by leader of the
Cement Institute and confidentially circu-
lated to other top-fight cement men, The
question was asked, "Do you think any of
the arguments for the basing- point system,
which we have thus far advanced will arouse
anything but derision?", He called these
arguments "clever and ingenious and said
they amounted to an assertion that 1--WE
price this way in order to discourage mo-
nopolistic practices and to preserve price
competition, ETC." This he stigmatized as
sheer bunk and hypocrisy on the ground
that there can be no respectable discussion
of Our case unless this is acknowledged
that ours is an industry above all others
that cannot stand free competition, that
must Systematically restrain competition or
be ruined :"
Discounts "Ruin Fears"
The alarms about prospective ruin"
doubtless are greatly exaggerated. AS Junior
trial counsel for the Federal Trade Commits
sion in the first basing point suit known as
the Pittsburgh plus" case, the writer recalls
the clamor made in 1928 that to terminate
the steel pricing system then used, highly
discriminatory against Middlewestern and
Southern steel consumers would ruin Pitts
burgh. In spite of the termination of the
discrimination against those sections which
resulted from the case, that city seems to
have retained its place on the map to this
very hour.
1t would be strange indeed to expect en-
forcement of the Sherman Act against con-
spiracies to fix prices in certain industries
which may not find 1t feasible to use basing
point systems, if other industries which do
employ them are enabled, by mutual pur-
suit of these systems, to secure the same
price-fixing goals.
Price is the fundamental thing in compe-
tition, and competition is the fundamental
thing in the American free enterprise econ
omy. If we do not restore and preserve
price competition, we inexorably shall follow
our present trend toward higher and higher
prices and greater and greater Government
control over prices, wages and business.
trend directly toward authoritarianism
Have members of industry as great stake
in the preservation of the American system
of free enterprise as the consumers, the
farmers and the workers? If they have and
if their loyalty to it is what they always
have professed it to be, they perhaps may be
willing to give careful reconsideration to the
trend from the basing point systems and to
this legislation. which if enacted would
render it more difficult for antitrust en-
forcement agencies to act against those who
use these systems.
The influence Of America in support of
free enterprise, as contrasted with the world
drift toward authoritarianism, is at hazard
in this matter. We cannot play fast and
loose with our competitive economy at home
and hope to do much in it's defense abroad.
EUGENE w. BURR