Evening star., 1950-06-12
'Basing Point Bill
Called Crossroads 10
Stability or Chaos
Veto Would Set OFF
Wuve of Disturbance,
Advocates Insist
. By David Laurence

This is a crucial week for Amer
lean business and industry. 1t car
be the turning point toward ;
period Of stability or it can NEAR
chaos in the channels Of distribu
ton in this country from coast II
coast.
Everything hinges on whethel
President Truman signs or vetoei
the so-called "basing point" bill
passed by Congress which permits
producers to absorb freight charges
In whole or in part in making theil
prices to buyers.
The measure affects practically
every commodity shipped nova.
days in interstate commerce.
It has been estimated, for ex.
ample, that if Mr.. Truman make.
the bill into law. the price of stee
paid by the buyer will Immediately
drop In some instances by SITE
per ton, and in certain favorable
locations, due to nearness of raw
materials, it will be as much a.
o. q ton under what is being paio
today when the freight cost is
added to the mill price.
Conference Report Held Up.
Ever since the Federal Trade
Commissions attack on the "bas-
Ing point" system was upheld by
the Supreme Court two years ago
there have been efforts made to
persuade Congress to pass RENE
dial legislation. A conference re-
port of both houses has been held
up for almost a year by opponents
who have charged that the cor
rective proposal would encourage
monopolies and price-fixing. This
has been denied by its sponsors.
The bill has had the hearty sup
port Of such men as Chairman
Celler Of the House judiciary
Committee and Chairman O'Ma-
honey Of the Joint Economic
Committee.
If anybody in Congress knows
what a monopoly or price, fixing
bill is, 1t certainly must be Messrs.
Celler and O'Mahoney. In addi-
ton, the bill has received the
support Of Democratic Senators,
like Senator Myers of Pennsylva-
mia. as we'll as of Republicans.
The pressure upon President
Truman to veto the bill is never
theless strong. If he were to dc
so. he would start a wave of eco
nomic disturbance which would be
felt for a long time to come in
America. During the last year OF
50 there has been a virtual truce
as business men have assumed that
conditions would soon be remedied
by legislation. But If the issue is
decided adversely, all sorts Of per-
manent changes may be expected
in the price structure-in fact, an
upward and inflationary rise may
well be anticipated.
Sawyer Urges Approval.
II. on the other hand, the Pres
ident signs the bill-as he is being
urged to do by Attorney General
McGrath and Secretary of Com
merce Sawyer and by his Director
of the Budget and by two mem
bers Of his Council Of Economic
AdviSers-consumerS look for re-
lief on the price side.
Objections have been raised on
the ground that some businesses
will not be able to compete
against larger companies because
the powers in the new law would
enable freight charges to be alb
sorbed and prices to be cut in one
section Of the country as these
losses were made up elsewhere.
But 1t is argued in rebuttal that,
inasmuch as existing antitrust
laws and the on-Patman
Act-which forbids price discrim-
ination-would still be enforce
able, there can be no manipula-
tion Of prices in that manner.
Signature Expected.
Sellers of commodities would
have to justify to the Federal
Trade Commission any prices
they make when they include the
freight charges, taking into &C
count only the differences in
transportation cost and giving the
same prices or discounts to all
who buy the same quantity or buy
within o particular category de-
fined by the present law as q
reasonable classification" Busi-
ness cannot arbitrarily set up its
own classes or discounts and an.
ply them unequally within groups
The President has summoned
representatives from all Govern.
ment agencies concerned with the
new legislation for a conference
Tuesday afternoon to advise with
him, after which he will come to 6
decision. He has until Friday tt
make up his mind whether to sigr
or veto or let the measure become
law without signature. The gen.
eral impression here is that Mr.
Truman will sign the bill and in.
dicate to business that he has M
desire to engage in a campaign
OF harasSment against bushes.
men who have been paying tn,
freight as a convenience to Gus.
toners and as a method of meet.
ing competition in different geo.
graphical areas.
Reproduction Rights Reserved,)
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