Opinion ID: 1483125
Heading Depth: 1
Heading Rank: 4

Heading: Has the Commission Found the Combination Alleged in Its Complaint.

Text: This brings us to the highly controverted issue as to whether the findings sustain the charge of combination alleged in the complaint and therefore the order under review. Closely related is the further issue as to whether the findings, even though sufficient, are supported by substantial evidence. In connection with the combination charged it is important to keep in mind that the Commission no longer relies upon a combination existing for more than eight years last past, but upon a combination which had its inception in August 1929 when the Institute was organized. As already noted, the findings are extremely lengthy, and we might add complicated, and difficult to comprehend. It is asserted and reasserted by respondents that the findings are vague, ambiguous, indefinite, uncertain, that there is no finding of the combination relied upon, and further that many of the findings are predicated upon incompetent testimony. It is especially emphasized by many of the respondents that assuming the combination charged to have been found, there is no finding which discloses how or in what manner they became or were members thereof. After a long and careful study of the situation, we are very definitely of the view that there is much merit in the criticism directed at the findings, notwithstanding the vigorous defense interposed by the Commission. As already shown, it is the Commission's contention that the Institute was the chief common bond which united them, and the fact of membership alone is sufficient to make them responsible for the Institute's program. As already shown, the Institute was organized in 1929, and findings 1(a) to (z), (2a) to (2z), (3a) to (3z), and (4a) fix the dates when each corporate respondent became a member. We have already shown the number of members at the beginning, as well as the increase and decline in such membership up to the time of the filing of the complaint. From what has been shown, it definitely appears that of the respondents who were members when the complaint was filed, thirty-nine had never been members prior to the N.I.R.A. period, and fifty-nine had not been members for at least two years prior thereto. Numerous of the findings are predicated upon statements and activities of the Institute and its members during the N.I.R.A. period, as well as testimony of what happened in the industry long prior to the organization of the Institute, now referred to as background testimony, which together with certain other testimony respondents challenge as incompetent. Some of this alleged incompetent testimony upon which the findings, in part at least, are predicated will be subsequently considered. The Commission states: Only by evidence that an individual member was unaware of what objectives were being pursued by the Institute, and that his own policy and practice were completely at variance with that objective, can there be any ground for contention that particular corporate petitioners [respondents] were not properly found to have been partners with the others. This is a novel and dangerous rule to be followed in the establishment of a conspiracy. It would place the burden upon the one charged to prove that he was not a member. The assertion is not supported by any authority, so far as we are aware, and must be rejected. Neither do we think that mere membership in the Institute, especially in view of the fact that a large majority of the instant respondents were persuaded or induced to become members for the purpose of enabling the industry to cooperate with the Federal government in the time of emergency, creates the slightest inference that they were members of an unlawful combination or conspiracy. Finding 7(o), strongly relied upon by the Commission in support of its thesis that the Institute was the vehicle employed by the alleged combination, states: When the Institute was organized in August 1929, the statement of purposes contained in the articles of association included these provisions: To adopt and promulgate a Code of Ethics for the government of the members. To establish and maintain all such lawful trade customs and usages [italics ours] for the protection of the members as the Institute may deem advisable. The multiple basing-point delivered-price system was one of the `customs and usages' to be maintained. The Commission contends that the Institute by its express purpose to maintain all such lawful trade customs and usages actually embraced and made the multiple basing point price system a part of its program. We think such contention is palpably untenable. If the system was lawful at that time, as the Institute and everybody else for that matter thought by reason of the decision in the old Cement case which had been decided only a few years previously, then it was included in the language quoted. If, however, it was unlawful, there certainly can be no inference from the language quoted that it was the express purpose of the Institute to maintain it. Finding 7(o) continues by quoting from the Code of Ethics adopted by the Institute, which was in effect only until the beginning of the N.I.R.A. Code period. One declaration from this Code labels as an unfair trade practice the diversion of carload shipments of cement from their original destination to some other for the purpose of enabling the purchaser to obtain cement at less than the market price at the point of final delivery. Other statements from the Code have to do with provisions which should be included in a contract for the sale of cement, and a recommendation that prices be made f.o.b. a specific destination or destinations. Finding 7(p) relates in the main to activities in connection with the N.R.A., and concludes: The multiple basing-point delivered-price system was continued in full operation during the NRA Code period. Finding 12(c) refers to a recommendation by the Institute that no freight allowances be shown on invoices, and that receipted freight bills be accepted as part of payment of invoices. The finding goes on, however, to state that the recommendation was rejected by respondents. Finding 8(d) has to do with rate books published by the Institute in order to provide common freight rate factors for pricing purposes. Findings 8(h), (m) and (n) refer to the dissemination by the Institute of land grant freight rates. Finding 13(a) refers to the services rendered by the Institute in connection with specific job contracts. Without a detailed discussion of these various activities of the Institute as found, it is sufficient to state that they are all within the legal sphere of a trade association, as held in the old Cement case. It is also material to note some of the things the Institute did not do. Except for open price filing under the N.R.A. Code and for three months thereafter, there was no exchange of prices or price data among the members through the Institute or otherwise, and the Institute did not receive from members or send out to them any reports as to prices, either daily or otherwise. Even in the specific job contract reports, prices were omitted, although the old Cement case held that inclusion of prices in such transactions was lawful. The Institute did not receive or send out any information as to basing points, base prices, change of mills from non-base to base, or vice versa. Even the freight rate books were not limited to rates from basing points, although under the old Cement case they might have been so limited. The Commission does not find that any pricing practice of the industry generally or that any pricing practice or policy of any respondent was developed or changed by or through membership in the Institute or by or through any act of the Institute. Most important of all perhaps is that there is no finding that the Institute either had or exercised any power or authority or could or did impose any restriction upon the activities of its members. Findings 5 and 6 have to do with what is now asserted to be background testimony. In the former, it is stated that the Association of American Portland Cement Manufacturers was organized in 1902 and that in 1916 its name was changed to Portland Cement Association. Between 1907 and 1911, several members of the Association of American Portland Cement Manufacturers were also members of the Association of Licensed Cement Manufacturers. The Cement Manufacturers Protective Association was organized in 1916, and remained active until shortly before the decision of the Supreme Court in 1925 in the old Cement case. Finding 6(a) states that cement producers from 1902 to the present time have evidenced a strong aversion to free competition and that its members have by understandings and agreements, developed and maintained substantial uniformity of action among themselves with respect to practically every marketing procedure which involves price or other competition. It goes on to point out that many of the current practices of the industry originated in agreements as long as 20 to 30 years ago. The finding then contains this remarkable statement as applicable to the instant situation: Some of the respondents have been parties to substantially all of these activities; other respondents have participated in a lesser degree, or fully or partially for shorter periods of time; other respondents have been mere followers, adopting and supporting the practices of their more active associates; and a few respondents have from time to time, for various reasons, participated only reluctantly in some of the practices, and have occasionally opposed for a time particular instances of group action. It will thus be noted that the respondents are divided into four classes, some who have been active, some less active, some mere followers, and some who only participated in some of the practices some of the time. No attempt is made here or elsewhere to classify the various respondents or the particular practices in which they have participated or the period of such participation. Finding 6(a) states that the cooperative activity among cement producers commenced with the A.A.P.C.M. in 1902 and continued to the present time. Finding 7(i) refers to the period of time during which the multiple basing point price system evolved and quotes from the minutes of a meeting of the A.A.P.C.M. held in December 1904. A resolution was adopted at that meeting and statements were made by representatives of certain cement producers. Also is quoted a statement by a representative of Lehigh made at an association meeting in Philadelphia in 1905, and also statements made by certain other representatives of the industry. Further, extracts are quoted from a report made by a chairman of the committee on trade and from a letter written in 1908. Finding 7(j) relates to certain patent litigation which resulted in a decision in 1906 and which was compromised by the issuance of a license to certain named cement manufacturers. Finding 7(k) is an excerpt from minutes of an A.A.P.C.M. meeting in 1910 designed to show that certain Michigan mills had agreed to follow the prices fixed by Lehigh. Finding 8(b) states that members of the industry commenced the preparation and publication of special freight rate books in 1914, which was continued until 1922 in much the same form as was subsequently supplied by the Institute. Finding 8(d) contains extracts from three letters written in 1916 and 1918 relating to the C.M.P.A. freight rate books. Finding 13(c) contains excerpts from reports relating to specific job contracts of A.A.P.C.M. in 1915 and of P.C.A. in 1919. Finding 14(b) contains numerous excerpts from meetings of the A.A.P.C.M. in 1905, 1906, and 1915, relating in the main to the conditions of sale and agreement to standardize the customs and usages of the cement trade and certain other trade policies, which it is asserted demonstrate collective action. Finding 14 (c) has to do with a pamphlet adopted by the P.C.A. in 1919, containing various recommendations adopted by that association. It is pertinent to note that this finding states that the P.C.A. was largely composed of respondents herein, without designation as to which respondents are referred to. Finding 15(b) contains excerpts from minutes of A.A.P.C.M. meetings in 1903, 1904, 1910 and 1911, relating to overproduction of cement resulting in lower prices. Finding 17(b) contains excerpts from reports issued by A.A.P.C.M. in 1915 and P.C.A. in 1919, dealing with recommendations as to the definition of a dealer, which it is asserted shows concerted action which began many years ago. Finding 20(a) refers to minutes of a meeting of the A.A.P.C.M. in 1904, recommendations of the same association in 1915, and recommendations by the P.C.A. in 1919, concerning the standardization of cement which it is asserted shows collective action by the cement industry. Finding 20(c) contains a statement made by a cement manufacturer in 1904, designed to show that cement was to be sold according to agreed specifications. The Commission contends that the propriety of this background testimony is sustained by substantial judicial precedents, and cites American Tobacco Co. v. United States, 6 Cir., 147 F.2d 93, which was a criminal conspiracy case. The court held that historical evidence of the relation of defendant corporations to the old American Tobacco Company, which had been dissolved as an unlawful combination, was admissible (147 F.2d at page 119) for the purpose of throwing light upon the subsequent offenses, acts, and practices charged against the defendants, and whether such evidence did throw any light upon them was properly a question for the jury. It will be noted the defendants in that case were the same as those connected with the old company, concerning which the background testimony was held admissible. In the instant proceeding the situation is quite different. Thirty-one of the present respondents against whom this evidence was offered were not even in existence prior to 1916. Twenty-five of the present respondents were not in existence during the life of C.M.P.A. Between 1902 and 1929, when the present conspiracy is asserted to have had its inception, there are wide gaps of time during which no proof was offered that the cement industry were members of any trade association or engaged in any cooperative activity. Thus between 1922 when the C.M.P.A. was dissolved and August 1929 when the Institute was organized, there was no association in existence. The evidence relating to the old A.A.P.C.M. extends no later than 1915. Thus there is a gap of fourteen years between that time and the organization of the Institute. The evidence relating to the old A.L.C.M. is prior to 1911. In the evidence relating to it there is a gap of eighteen years prior to the organization of the Institute. Much of this background testimony was before the Supreme Court in the old Cement case, and we know of no reason why it all could not have been used if deemed material. The Commission, in referring to the successful contention of the cement industry in that case states: That same contention was successfully made in Cement Mfrs. Protective Association v. U. S., but it is obvious that it would not have prevailed had the historical facts disclosed by the evidence here in question been before the Court and had it been relied on by the Government. As already stated, some of this background testimony was before the court, but whether so or not, it ill behooves the Commission at this late date to infer that government counsel at that time was so incompetent as to fail either to offer or rely upon evidence material to its case. The Commission also states: Petitioners thus had every opportunity to meet this evidence long before they closed their defense   . We doubt the accuracy of such an assertion in view of the fact that some of this testimony antedated the hearing by 35 or 40 years, but in any event it is a lame excuse for the use now sought to be made of it. Again the Commission reiterates: The conspiracy charged was against the Institute and its members. It is what they did during the existence of the Institute that constituted the conspiracy and the order to cease and desist is directed only against those things. The Commission accuses respondents of using this old evidence as the beginning of a continuing conspiracy as the basis for their argument on res adjudicata and estoppel, that is, it is the same alleged conspiracy which had its origin before 1925, the year the old Cement case was decided by the Supreme Court. There is no basis, however, for the inference or accusation that this theory of continuous conspiracy was conceived by respondents. The record discloses indisputably that it was promulgated and fostered by the Commission. The complaint charged a combination for more than eight years last past. The complaint was filed July 2, 1937, and the Institute organized in August 1929. More than eight years, of course, placed its inception prior to the organization of the Institute. Just how long before was not disclosed. The record shows unmistakably, however, that the case was tried by the Commission on the theory that the conspiracy had its origin some 25 or 30 years prior to the filing of the complaint and that it was in continuous operation up to that time. Moreover, the findings themselves strongly indicate that at the time they were drawn the Commission was still proceeding on such theory. It was only when the Commission's brief was filed in this court that it first planted its position upon the ground that the conspiracy here alleged originated in 1929. From what we have said it is perfectly plain that this background testimony was not used for the purpose of throwing light upon the subsequent offenses, acts, and practices charged, but that it was used as a part of the foundation upon which the finding of combination was predicated. We now come to the findings based upon respondents' activities during the N.R.A. Code period from 1933 to May 27, 1935. As already shown, the Institute was a trade association that applied to the President of the United States, under the provisions of the National Industrial Recovery Act of June 16, 1933, for the approval of a Code of Fair Competition for the cement industry. Some 57 of the corporate respondents became members of the Institute at that time for the express purpose of participating in the formation of and compliance with such Code. It is the contention of the respondents that all evidence as to activities of the Institute and its members in the preparation and submission to the N.R.A. of proposals for a Code of Fair Competition and amendments thereto for the industry, and all evidence as to the terms of the Code itself and its amendments, and as to activities in complying with its provisions and its administration by the Code authority, is incompetent, and that findings predicated upon such evidence are improper. This contention arises from the provision of the N.I.R.A. exempting certain activities performed in compliance with the provisions of the Act from the provisions of the anti-trust laws. The findings covering this period, like those referring to the background, are numerous and strongly relied upon by the Commission in support of its asserted finding of the combination charged. We shall refer to only a few of the many, findings which come within this category. Finding 7(p) recites a proposal by the Institute for the proposed Code, which was never approved, that all cement should be sold f.o.b. point of delivery except that quotations to the Federal government should be f.o.b. mill where land grant rates are involved. Finding 11(g) recites a provision of the Code, declaring it an unfair method of competition by any transportation agency which makes concessions by rebate or otherwise. Finding 12(b) recites a provision in the Code making it a violation to divert shipments of cement from one destination to another. Finding 13(f) contains a Code provision relating to the terms and conditions of sale. Finding 14(f) contains a provision concerning cash discount. Finding 17(d) relates to a provision of the Code having to do with dealers and various classes of buyers. Finding 20(a) refers to a Code provision as to standard specifications for cement. Numerous other findings incorporate correspondence between the Institute and the Code authorities, correspondence between members of the industry relative to Code provisions and those proposed, as well as other statements made by representatives of some of the respondents relative to the same subject matter. We have read all this evidence as it appears in respondents' appendix and if it reveals anything it is the great divergence of opinion which existed between members of this industry. It was with difficulty that many of them were persuaded to agree to what was proposed and done in connection with the Code. In fact, some never did agree. They were a queer lot of conspirators. The Commission contends that all this evidence as to their activities and Code agreements is competent to show the continuity of their objectives and methods before, during, and after such period. The Commission, referring to respondents' contention as to this evidence, asserts: From a logical standpoint it is a preposterous proposition and from the standpoint of judicial precedent it has no support. The Commission further argues in support of its contention that it cannot be rationally contended that respondents can be protected by a statute unanimously held unconstitutional and therefore void ab initio. Both respondents and the Commission rely upon the same cases in support of their respective contentions, namely Dietzgen Co. v. Federal Trade Commission, 7 Cir., 142 F.2d 321, and United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129. We do not see how the Commission derives any comfort from the decision of this court in the Dietzgen case. The price fixing combination charged in that case was based upon what happened subsequent to the invalidation of the N.I.R.A. The court states (142 F.2d at page 324): It [the Commission] also found that petitioners complied with the N.R.A. Code prices from November, 1933, to May 27, 1935, when the Supreme Court declared the pertinent part of the Act unconstitutional. In June of that year, the petitioners' representatives again met and agreed to keep the N.R.A. Code prices in effect   . The opinion then goes on to recite the agreements which were made concerning the price structure. The court (142 F.2d at page 329) made this pertinent observation:    the N.R.A. permitted price fixing. In fact, it decreed price fixing. It is true, it was allegedly enacted to meet a temporary condition, an emergency, but even so, price stabilization was its objective and its result. The opinion proceeds to state what was done by the defendant after the death of the Code and that thereafter the defendant was not protected by its provisions. In a footnote (142 F.2d at page 329), this court made another pertinent observation: We are convinced that notwithstanding this fact [the unconstitutionality of the Act], the Government was estopped to prosecute citizens who complied with N.R.A. codes    because the N.R.A. was presumably valid until by judicial pronouncement it was declared to be invalid   . In the Socony case, the defendants were charged with having engaged in two concerted buying programs, from February 1935 to December 1936. The defense interposed in that case was not that the buying programs gained immunity under the N.I. R.A. but rather that the programs were undertaken and carried out with the knowledge and acquiescence of officers of the government charged with responsibility in the administration of the Code, and that proof of those facts should be taken into consideration in order to judge the purpose, effect and reasonableness of their activities in connection with the buying program. That defense was rejected. In short, since the buying programs were admittedly not authorized under the Code, proof of knowledge and acquiescence by the government gave no immunity under the N.I.R.A. The court stated (310 U.S. at page 228, 60 S.Ct. at page 847, 84 L.Ed. 1129): The offers of proof covering the background and operation of the National Industrial Recovery Act and the Petroleum Code    were properly excluded, insofar as they bore on the nature of the restraint and the purpose or end sought to be attained. If the defendants were not entitled to rely upon their activities during the Code period as an explanation for what they did subsequently, we think the Commission in the instant case is not entitled to rely upon what happened during the Code period to show a conspiracy either during that period or any other time. Assuming this evidence might be proper for the purpose of illumination on the same theory that the Commission seeks to justify the admission of background testimony, it certainly is not admissible for the purpose of showing a conspiracy prior or subsequent to the N.I.R.A. period or a continuity of such conspiracy during such period. To hold that members of an industry can be invited and perhaps required by the government to participate in a program for the general welfare under a promise of immunity and that evidence of their doings and activities in connection therewith can be used to hold them for a conspiracy would constitute a fraud, or perhaps confidence game would be a more appropriate designation. There is a great volume of other evidence which respondents assert was improperly considered by the Commission. We shall not go into it any further except as to one incident and we only mention this for the reason that the Commission has, in our judgment, exaggerated its importance beyond all reason. A part of finding 7 (r) and a part of finding 21 (f) are predicated upon a letter dated May 17, 1934, written by John Treanor, president of respondent Riverside, to B. H. Rader, chairman of the Code Authority for the cement industry. We need not detail that portion of the letter contained in 7 (r). It appears that Rader as chairman of the Code Authority had been in negotiation with Barton W. Murray, Deputy Administrator of the National Recovery Administration, concerning the request of the latter for a provision in the Code permitting cement to be sold to the Federal government on an f. o. b. mill price. Treanor expressed the view in this letter that the request should be granted. In finding 21(f) a portion of this same letter, apparently directed at some of the advertising indulged in by the Institute in defense of the basing point system, is quoted as follows: `Do you think any of the arguments for the basing-point system, which we have thus far advanced, will arouse anything but derision in and out of the government? I have read them all recently. Some of them are very clever and ingenious. They amount to this however: that we price this way in order to discourage monopolistic practices and to preserve free competition, etc. This is sheer bunk and hypocrisy [italics ours]. The truth is of course  and there can be no serious, 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   .' Rader in his capacity as chairman of the Code Authority replied to this letter on May 21, 1934, in which he said among other things: The Code Authority members feel that they sent the proper kind of a telegram. It is not arbitrary, but it is not giving everything they ask for without a chance to explain it. Treanor sent copies of his letter to eight other individuals who were associated with him on a recently appointed group to study the industry's public relations and to the president of the P.C.A. who also was participating in that work. It was not sent by Treanor or Rader to the other twenty-two members of the board of trustees of the Institute. The Commission states: The relation of the Institute to the basing point system and of the system to price competition was never more clearly and frankly stated than by John Treanor, one of the trustees of the Institute and at the time president of petitioner Riverside. The Commission quotes in its brief the phrase from Treanor's letter, sheer bunk and hypocrisy, on at least twelve different occasions. It commences and concludes its brief on that thesis. Treanor had died prior to the hearing. At the time his letter was offered, counsel for the Commission in arguing for its admissibility stated: It is a part of the acts of the industry, of the Code Authority of the industry, of the Cement Institute, of which this man was a high official; and to argue that it is merely his personal expression  of course, everybody's expression is personal, but it frequently goes beyond a personal responsibility and makes his associates responsible, if he is engaged with them in a common activity. We think the letter was incompetent. In the first place, it was written to an official of the Code Authority during the N.R.A. period concerning a provision of the Code under consideration. In the next place, it contained no statement of fact but was clearly the expression of the opinion of the writer upon a question that was more legal than factual. It could hardly be classified as an act or statement in the execution or perpetuation of a conspiracy even though it be conceded one was in existence. In Bridges v. Wixon, 326 U.S. 135, 65 S.Ct. 1443, 89 L.Ed. 2103, the court held that in an administrative proceeding a written statement made by a person not a party to the proceeding was inadmissible, and on page 153 of 326 U.S. on page 1452 of 65 S.Ct., 89 L.Ed. 2103, stated: We may assume they would be admissible for purposes of impeachment. But they certainly would not be admissible in any criminal case as substantive evidence. [Citing cases.] So to hold would allow men to be convicted on unsworn testimony of witnesses  a practice which runs counter to the notions of fairness on which our legal system is founded. Another pertinent observation is found in United States v. International Harvester Company, 274 U.S. 693, 703, 47 S.Ct. 748, 752, 71 L.Ed. 1302, where the court stated: But it is entirely plain that to treat the statements in this report  based upon an ex parte investigation and formulated in the manner hereinabove set forth  as constituting in themselves substantive evidence upon the questions of fact here involved, violates the fundamental rules of evidence entitling the parties to a trial of issues of fact, not upon hearsay, but upon the testimony of persons having first-hand knowledge of the facts, who are produced as witnesses and are subject to the test of cross-examination. If Treanor had been living and called as a witness by the Commission, we think he would not have been permitted to express the opinion contained in this letter. We know no reason why its competency would be enhanced by the fact that it was recorded in writing long prior to the hearing and his death. We have labeled finding 7 as the heart of the Commission's case, which we afterward consider in detail. At this point we refer to it only in connection with its bearing upon the combination alleged. It contains a hypothetical illustration of the operation of the pricing system involved. Finding 7(h) in part states: It is equally plain that this formula, once put into operation, is self-perpetuating in the sense that renewed understandings or agreements are not needed to maintain identical delivered prices over an indefinite period of time. So we are informed by this finding that the multiple basing point price system is self-perpetuating and that renewed understandings or agreements are not needed. Certainly this is no finding of the combination or agreement here asserted. If it has any significance it is that when the Institute was organized in 1929 it was unnecessary to have an agreement or understanding because the system which had been in use by the industry long prior to that time was self-perpetuating. This finding, rather than furnishing support for the alleged combination, is in reality a recognition of respondents' contention that the pricing system was one of the trade practices long followed in the industry and that it was continued after 1929 without combination, conspiracy or agreement. Finding 7(h) continues: This formula was not evolved and put into operation at one stroke. It came into existence and its territorial application was extended from time to time as a result of understandings and agreements among cement manufacturers. By whom such understandings and agreements were had is not disclosed, but it is evident that the finding refers to cement manufacturers long prior to 1929 for the reason that there follows, in finding 7(h), (i), (j), (k) and (1) a recitation of documentary and other evidence designed to show how the system was originated and practiced from 1901 to 1915. Finding 7(m) states: In southern California the basing-point system of pricing is modified by an elaborate system of zone prices applicable in certain areas.    The limited number of points at which sales are made makes it possible for each respondent to publish, and each has published, complete price lists showing the delivered prices at substantially all delivery points. Again we are left in the dark as to which of the respondents used this so-called elaborate system of zone prices, but it is evident from this finding that such respondents did not use the system alleged in the complaint. Again, 7(n) states: The multiple basing-point delivered-price system was extended to western Washington in 1931. Its introduction there followed a price war which commenced when two new mills began operating in that territory, one in 1928 and the other in 1929, and was approximately coincident with the leasing of one of these new mills by Superior Portland. It is to be noted that the finding does not disclose by whom the system was extended to Washington or for what purpose, or by which, if any, of the respondents it was used. Certainly there is not even an inference that the system was used either in California or in Washington in connection with any combination or conspiracy. The entire findings are permeated with uncertain and indefinite terms, such as 8(b) some of the present respondents, 8(g) by most of the corporate respondents, 8 (i) respondents interested in particular bids, 8(i) groups of respondents concerned in the same bid, 8(o) certain respondents on the Pacific Coast, 12(c) with a few exceptions respondents did not continue to require, 13(d) a number of the corporate respondents, 13(g) one of the corporate respondents, 15(b) a number of the respondents herein, 15(c) some 50 of the corporate respondents herein, 15(f) among many respondents, 15(g) Some respondents, 15(i) A few members of the Institute, 17(e) by various of the corporate respondents, 19(a) corporate respondents who sell cement in some of the larger seaport cities, and 19(b) participating respondents. Up to this point there is no finding of the combination charged. The Commission, however, places its chief reliance in this respect upon findings 22 and 26. Finding 22 is based upon the opinion testimony of numerous economists who testified in the proceedings concerning the application of the principles and theories of economics in hypothetical situations. The Commission stresses the following statement from finding 22(c): When  as in the sale of cement  the price is established by the seller, the price leadership of the governing base mill is accepted by other sellers and there is no bargaining between buyers and sellers, fundamental requirements of a true market in the economic sense are lacking, and prices are not the result of market action in a true economic sense but merely expressions of a noncompetitive or monopolistic price structure. We afterward discuss this finding in connection with the uniformity of delivery prices. At this point, it is sufficient to observe that in our judgment it neither proves nor tends to prove the combination alleged. Perhaps it could be treated as an indictment of the basing point system, but even so the finding does not show that such use was by conspiracy in contrast to individual action. Furthermore, we are of the view that in the absence of actual fact proof, direct or circumstantial, the combination charged cannot be shown by opinion evidence. The Minnesota Rate Cases (Simpon v. Shepard), 230 U.S. 352, 465, 33 S.Ct. 729, 57 L.Ed. 1511, 48 L.R.A., N.S., 1151, Ann.Cas.1916A, 18; The Missouri Rate Cases (Knox v. Chicago, B. & Q. R. Co.), 230 U.S. 474, 507, 33 S.Ct. 975, 57 L.Ed. 1571; and Baltimore and Ohio R. Co. v. United States, 298 U.S. 349, 378, 56 S.Ct. 797, 80 L.Ed. 1209. Finding 26 is the last of the long and complicated findings made by the Commission. It states: The Commission concludes from the evidence of record and therefore finds that the capacity, tendency, and effect of the combination maintained by the respondents herein in the manner aforesaid and the acts and practices performed thereunder and in connection therewith by said respondents, as set out herein, has been and is to hinder, lessen, restrain, and suppress competition in the sale and distribution of cement   ; to deprive purchasers of cement, both private and governmental, of the benefits of competition in price; to systematically maintain artificial and monopolistic methods and prices in the sale and distribution of cement    and otherwise to promote and maintain their multiple basing-point delivered-price system and obstruct and defeat any form of competition which threatens or tends to threaten the continued use and maintenance of said system and the uniformity of prices created and maintained by its use. It is argued by respondents that this is no finding of combination, that it only has reference to the effect of the combination maintained by the respondents. We think there is merit to this criticism. It is difficult to comprehend why the Commission failed or neglected to make a forthright finding as to the combination charged, together with findings which would disclose in no uncertain terms how and in what manner each of the respondents became a member thereof. Assuming, however, that it is a finding of combination, a reading discloses that it is predicated upon the acts and practices performed thereunder and in connection therewith by said respondents, as set out herein. This means, so we think, that the finding of combination, if such it be, is predicated upon all previous findings, many of which, as heretofore shown, are applicable to only some of the respondents without naming them. It also must be predicated in part upon findings based on background testimony, upon findings based on testimony relative to the N.I.R.A. period, and upon other testimony which we hold to be incompetent. We have no way of knowing, of course, the extent to which the incompetent testimony and findings entered into the ultimate finding, but it is evident that they played no small part. The Commission apparently recognizes the weakness of its finding of a combination and states: Besides the general finding of combination above quoted from Paragraphs Twenty-two and Twenty-six of the findings and applicable to all petitioners [respondents], there are similar findings in the following paragraphs applicable to some or all petitioners [respondents] [italics ours] in their collective capacity   . Then follow extracts from some thirty findings, covering more than three pages of the Commission's brief which, as the Commission states, are applicable to some or all petitioners [respondents]. Such findings, however, cannot in our opinion form the basis for the combination found in finding 26. In many of such findings it is plainly disclosed that some of the petitioners were pursuing one course and others a directly opposite course. In fact, the Commission does not seriously contend that the innumerable findings applicable to some or all petitioners [respondents] form any basis for the general finding of combination but revert to their original position that membership in the Institute alone is sufficient. It states: We submit that such membership would, though it stood alone, make them all responsible for the acts and policies of the Institute as their joint agent. The argument continues: After voluntary affiliation with the combination through membership in the Institute, and after having been apprised of its purpose to maintain the basing point system as above outlined, each has participated in the combination through its own use of a pricing system consonant with that for which the Institute was formed and which it has undertaken to preserve. If the Commission thought that membership in the Institute alone, in connection with the use of the basing point system, was sufficient upon which a finding of combination could be predicated, the question naturally arises as to why such a finding was not made. We doubt if such a finding could be sustained, but whether so or not is now immaterial. The Commission further argues: We submit that after the Commission had decided that all the petitioners [respondents] were parties to and participants in the combination it was proper to treat the declarations and acts of the respective petitioners [respondents] as the declarations and acts of all and to ignore in its conclusions the nice distinctions between the exact nature and degree of their respective participations. This perhaps would be a sound argument if it were predicated upon what happened. Of course, we have no way of knowing at what point the Commission decided that all the respondents were parties to the combination except as disclosed by its findings. As already shown, it made voluminous findings as to what might be termed overt acts in the law of conspiracy and then predicated its finding of combination or conspiracy upon such overt acts. It placed the cart before the horse. If this were an ordinary proceeding we would return it to the Commission for the purpose of revising its findings if it could and so desired in the light of what we have said. However, we are confronted with what might be termed an extraordinary situation. As already observed, it will soon be ten years since this proceeding was initiated. After all, the status of the basing point price system is not to be determined merely from the factual situation. It involves a question of law which ultimately, and the sooner the better, must be decided by the Supreme Court. We think the case should be on its way up and not down. For this reason we shall not return it to the Commission but shall proceed to decide the legal issues involved.