Harlan F. Stone

“ We realize that such information, gathered and disseminated among the members of a trade or business, may be the basis of agreement or concerted action to lessen production arbitrarily or to raise prices beyond the levels of production and price which would prevail if no such agreement or concerted action ensued, and those engaged in commerce were left free to base individual initiative on full information of the essential elements of their business. ”

“ Sellers of any commodity who guide the daily conduct of their business on the basis of market reports would hardly be deemed to be conspirators engaged in restraint of interstate commerce. They would not be any the more so merely because they became stockholders in a corporation or joint owners of a trade journal, engaged in the business of compiling and publishing such reports. ”

“ It is not contended that there was the compulsion of any agreement fixing prices, restraining production or competition, or otherwise restraining interstate commerce. In our view, therefore, the sole question presented by this record for our consideration is whether the combination of the defendants in their existing association as actually conducted by them has a necessary tendency to cause direct and undue restraint of competition in commerce falling within the condemnation of the act. ”

“ Competition does not become less free merely because the conduct of commercial operations becomes more intelligent through the free distribution of knowledge of all the essential factors entering into the commercial transaction. ”

“ There are three principal elements which enter into the computation of the cost of finished flooring. They are the cost of raw material, manufacturing cost, and the percentage of waste in converting rough lumber into flooring. The information as to the cost of rough lumber was procured by the secretary from reports of actual sales of lumber by members in the open market. From five to ten ascertained sales were taken as standard and the average was taken as the estimated cost of raw material. ”

“ The defendants have engaged in many activities to which no exception is taken by the government and which are admittedly beneficial to the industry and to consumers; such as co-operative advertising and the standardization and improvement of its product. The activities, however, of the present association of which the government complains may be summarized as follows:
(1) The computation and distribution among the members of the association of the average cost to association members of all dimensions and grades of flooring. ”

“ The gathering of statistics which at frequent intervals are supplied by each member of the association to the secretary of the association given complete information as to the quantity and kind of flooring sold and prices received by the reporting members, and the amount of stock on hand, which information is summarized by the secretary and transmitted to members without, however, revealing the identity of the members in connection with any specific information thus transmitted. ”

“ The other defendants purchase rough flooring lumber in the open market and manufacture it into finished flooring which is sold and shipped in interstate commerce. In 1922 there were in the states of Illinois, Michigan, Minnesota, and Wisconsin, 17 nonmember manufacturers of maple, beech, and birch flooring, and there were 58 nonmember manufacturers of maple, beech, and birch flooring in the United States who reported to the government. ”

“ All reports of sales and prices dealt exclusively with past and closed transactions. The statistics gathered by the defendant association are given wide publicity. They are published in trade journals which are read by from 90 to 95 per cent. of the persons who purchase the products of association members. They are sent to the Department of Commerce, which publishes a monthly survey of current business. They are forwarded to the Federal Reserve and other banks and are available to any one at any time desiring to use them. ”

“ Members agreed, under heavy penalties for violation, to furnish to the bureau a 'schedule of prices and terms and adhere thereto unless more onerous ones were obtained-until prepared to give immediate notice of departure therefrom for relay by the bureau to members.' Members were required by the agreement to report by telegraph all variations of prices; the names of prospective buyers; the point of shipment; the exact prices, terms, and discounts; whether sales were made to jobber, or dealer or consumer ”