PRICE FIXING IN A COMPETITIVE INDUSTRY: A PIONEER CASE.

The article examines price fixing in the print paper manufacturing industry in the U.S. In 1916, the Federal Trade Commission conducted an investigation of the news print paper manufacturing industry. As one result of that investigation, the commission was convinced of the desirability of establishing reasonable and stable prices for news print paper, and endeavored to arrange for such prices by agreement with the manufacturers. While negotiations looking toward voluntary cooperation were under way, however, the Federal Grand Jury for the Second District of New York brought indictments against several leading manufacturers, whereupon negotiations with the commission were broken off. It is submitted that in a business in which there are numerous competitors, each subject to the ups and downs of competition, the principles applied in the valuation of public utilities cannot be used. A public utility, by its very nature, is a monopoly and furnishes a product which has a special and vital essentiality to the people of the community served. These characteristics do not apply to the manufacture of news print paper.