Price Fixing
Kefauver, Senator Estes
Price Fixing The Great Price Conspiracy, by John Herling. Robert B. Luce, Inc. 366 pp. $5.50. Reviewed by Senator Estes Kefauver Qince the "Pie-Powder" courts of *^ the Middle Ages, men have...
...The legal questions involved in the great price conspiracy were relatively clear and guilt was certain...
...The author emphasizes that the conspiracies have resulted in a changed public feeling toward the rulers of industry...
...I urge every man and woman who believes in competition and free enterprise and capitalism to read it...
...In a very real sense, the responsibility for enacting these measures into law rests with the people of America...
...The fines levied in the electrical cases were the biggest in the history of the anti-trust laws...
...Legislation has been introduced in the Congress...
...What kind of men would risk jail sentences in order to be party to such a criminal act...
...He edited one: "Ambrose Bierce's America...
...A man who fixes prices realizes full well that he is violating the law...
...In the electrical cases, it now appears certain that the customers of the conspirators—the companies and municipalities which have purchased electrical equipment—will be inadequately recompensed for the financial injury they have endured for literally decades...
...But when men neither believe in the law, nor fear apprehension, what chances can there be for the citizens (in this case consumers) whom the law is designed to protect...
...Reviewed by Senator Estes Kefauver Qince the "Pie-Powder" courts of *^ the Middle Ages, men have conspired to fix prices in an attempt to avoid the unseen hand of free market competition...
...Violating the anti-trust laws must be made unprofitable for businessmen...
...Herling's book puts the facts squarely before the people...
...In its most recent annual report, General Electric boasts that it will successfully settle all its damage suits for no more than $50,000,000...
...In the morass of litigation, with batteries of high-priced Wall Street lawyers representing the convicted corporations, it is doubtful if many little fellows will obtain just compensation for their loss...
...The great price conspiracy" in the electrical industry, brilliantly chronicled in John Herling's book, is surely the most flagrant price-fixing theft in the history of modern anti-trust investigation...
...As he puts it, "The fact that the leaders of the great electrical corporations—until now self-styled exemplars of the business community—found understandably hard to face was the necessity of learning how to live in a new social climate...
...ESTES KEFAUVER, Democratic Senator from Tennessee, is chairman of the Subcommittee on Anti-trust and Monopoly of the Senate Committee on the Judiciary...
...If the cases brought by the Department of Justice are any indication, price fixing goes on unabated...
...The few facts brought out in the court in Philadelphia, and the hearings conducted by our Subcommittee, hold only slight hope that price-fixing will be substantially diminished as a result of the electrical cases...
...It is an important book and one which deserves most careful study...
...How did such a conspiracy come into being...
...and, I am afraid we must admit, a fundamental disrespect for competition on the part of at least some businessmen in our economy today...
...The greater importance of these cases lies in their dramatic demonstration of the effectiveness of existing anti-trust sanctions...
...But just as certainly as they stood awaiting sentence judgment in the Federal court in Philadelphia, in February, 1961, they were henceforth required to stand and be judged before the national forum of accountability...
...Literally millions upon millions of dollars were "stolen" from the American people by this now infamous conspiracy...
...Laws are more effective when men believe in them than those which depend on fear of apprehension alone for their enforcement...
...GERMAINE BREE is a member of the University of Wisconsin's Institute of Humanities and French department...
...Such conspiracies are inherently anti-competitive...
...While all witnesses before our Subcommittee indicated that "they would never do it again," Herling reports that two out of three young businessmen recently questioned in a Wharton School inquiry indicated that they would not have resigned from a company in which they knew price-fixing was going on, and two out of three would not have discharged the convicted price fixers from management...
...These are but a few of the fundamental and dramatic questions which Herling attempts to answer...
...On the other hand, the fines and damages resulting from these cases may well prove to be matters of life and death for General Electric's small competitors who were in the conspiracy, thereby further jeopardizing the fragile competition in this highly concentrated industry...
...Only through their interest and concern can this be done...
...Clear responsibility must be placed on all levels of management to see that price fixing does not occur...
...WILtlAM McCANN reviews paperbacks regularly for The Progressive...
...the inability of management to control the practices of their own executives...
...These simple facts notwithstanding, the pernicious, unjustifiable practice of price fixing continues in our American economy...
...THE REVIEWERS HORACE M. GRAY is a professor of economics at the University of Illinois...
...Was there any justification for it in the minds of the conspirators...
...the lack of communication within these giant corporations...
...She is the author of a biography of Camus and "Marcel Proust and Deliverance from Time...
...If the chairman or president of a major industrial corporation can escape responsibility by simply saying, "I did not know," the antitrust laws are fundamentally defective...
...But no question can exist with respect to conspiracies to fix prices...
...He is co-author, with Walter Adams, of "Monopoly in America...
...New legislation is needed...
...Yet to a company like General Electric, with annual profits of $265,000,000, they are a mere drop in the bucket, a tiny cost of doing business (the maximum fine is only $50,000 per count...
...But the effects of "the great price conspiracy" are far from conclusive, as Herling points out...
...In our complex modern economy, respectable men of good will may sincerely disagree on the anti-trust legality of a given merger or a given contract...
Vol. 27 • August 1963 • No. 8
