never be at a loss to supply other credible evidence. It is common practice for the Trade Commission to employ its attorney investigators in assembling what it refers to as evidence and to permit these attorneys in the course of actual trial proceedings to leave the counsel table long enough to testify as witnesses. The general conditions are made worse by the fact that here for the first time the Congress declares that charging delivered prices for goods of like grade and quality and averaging of transportation charges for delivery of such goods, with the result that delivered prices at a given time and place are identical for two or more sellers, is credible evidence of agreement, combination, or conspiracy. Section 2 (b) of the proposed amendments to the FTC Act in S. 236 provides that when the Commission enters an order based upon its finding of existence "of an unlawful agreement, combination, or conspiracy * * to employ any pricing system involving any form of delivered price, or * * averaging of transportation costs, the Commission may, in addition to the other remedits available to it, include in its order a requirement that each such seller" shall establish an f. o. b. factory or shipping-point price. It allows the Commission to impose this penalty for such time as the Commission may deem proper "to dissipate the effects of any such unlawful combination, etc." One of the declared purposes of S. 236 is to prohibit the requirement that industry be compelled to adopt uniform plant prices, for the purpose of protecting buyers as well as sellers and also employees of sellers who might be disturbed in their jobs as a result of interference by the Trade Commission with the right of sellers to sell at delivered prices and to meet the lower prices of a competitor. This proposed amendment of the Trade Commission Act is completely contrary to the declared purposes of the bill. COMMENT Section 2 of S. 236, as amended, should be deleted en toto. Clayton Act Amendments Section 3 amends section 2 of the Clayton Act as amended by the RobinsonPatman Act. The amendments clarify section 2 (a) of the Clayton Act by providing that there must be "a reasonable probability that the effect of discrimination will substantially lessen competition or tend to create a monopoly or materially injure competition." It further clarifies the present law by allowing differentials in price which "make not more than due allowance for differences in the cost of manufacture, sale, or delivery, etc." * * Section 2 (b) of the Clayton Act, as amended by the Robinson-Patman Act, is clarified and improved to some extent in that, before a prima facie case has been made, proof is required "that there has been unlawful discrimination in prices or services or facilities furnished," and there is a further improvement in that "a seller may establish that his price, or prices, practice, or practices, are lawful by showing that his lower price or the furnishing of services or facilities was made in good faith to meet the price of a competitor or the services or facilities furnished by such competitor." There is a further provision under which competition to be met is not limited to the lower price of a competitor. The amended bill provides that "the meeting of competition in good faith shall include meeting the prices of any competitors regularly and customarily, with not only a like price, but also a higher price or, when not unduly oppressive, a lower price" * * * Lastly, the amended bill gives a definition of the word "price" as "the delivered cost paid by the buyer for the commodity or product at the time and place such commodity or product is accepted by him, without deduction on account of any transportation or delivery charge incidental thereto." COMMENT This provision partially overcomes the ill effect of the Federal Trade Commission's application of its own definition of price as the amount remaining after deducting the cost of delivery from the delivered price. This was the definition which the Trade Commission attempted to induce Congress to include in the Robinson-Patman Act, but without success. Referring to this unsuccessful effort of the Trade Commission, the late Mr. Chief Justice Stone said that if it had been adopted by Congress, it would have outlawed all delivered prices and all basingpoint systems. In other words, it would have compelled uniform f. o. b. plant pricing, for which the Trade Commission has crusaded for 25 years. There is one objection to this definition of price which may be serious. In the instance where two or more buyers are competing against one another in any given market area and one accepts delivery f. o. b. plant, or shipping point and other buyers purchase on the basis of delivered price, there may be confusion in determining how and when the lower price of a competitor is to be met. This objection might be met by adding to section 4 of the bill a proviso: "Provided, That the 'price' which in good faith may be met shall include the total cost of the product offered by a competitor after delivery to the buyer's destination of place of use." CONCLUSION With the additions to section 1 herein above recited, with the deletion of section 2 en toto, and with the substance of the suggested addition to the definition of price, the Johnson-Capehart amended bill, S. 236, is approved and should be actively supported. X INTERSTATE COMMERCE COMMISSIONER HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE EIGHTY-FIRST CONGRESS FIRST SESSION ON REAPPOINTMENT OF JOHN MONROE JOHNSON TO BE MAR 9 '49 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE EDWIN C. JOHNSON, Colorado, Chairman ERNEST W. MCFARLAND, Arizona WARREN G. MAGNUSON, Washington HERBERT R. O'CONOR, Maryland CHARLES W. TOBEY, New Hampshire HOMER E. CAPEHART, Indiana JOHN W. BRICKER, Ohio EDWARD S. JARRETT, Clerk |