(d) In effect, this pricing pattern amounts to each seller inviting other sellers to share in the available business in his freight-advantage territory in return for the privilege of sharing in the available business in the freight-advantage territory of other sellers. It thus promotes the cross-shipping of conduit with the attendant costs, without tending to increase the total consumption of conduit. It requires the maintenance of a higher price level than would otherwise be necessary, in order that each seller may secure an additional margin on some sales to counterbalance the lower mill nets recovered on other sales, or, in other words, to permit sellers to distribute conduit, a heavy commodity upon which freight charges are substantial, upon a national scale. By denying to some purchasers the advantages of their location with respect to points at which conduit is produced, sellers are enabled to subsidize their own sales to other purchasers who are not so favorably located.

(e) Under the conditions which have existed in the industry each conduit seller has necessarily known that the other conduit sellers used the basing-point delivered-price system in the sale and distribution of conduit. Aside from the conditions which have existed, it is inevitable that the use of such system by any conduit seller in quoting prices on conduit would come to the knowledge of the other conduit sellers through ordinary trade channels. As a practical matter, it would be impossible for one conduit seller to quote prices in accordance with the basing-point, delivered-price system and conceal that fact from the other conduit sellers.

PARAGRAPH EIGHTEEN: (a) In addition to knowledge of the use of the basingpoint, delivered-price formula by others, each conduit seller knows that by its use each will be able to quote a price at any given destination identical with the prices quoted by others pursuant to such formula, and thus all users of the formula will be enabled to present to a prospective purchaser a condition of matched prices in which such purchaser is isolated and deprived of any choice on the basis of price. Respondent conduit sellers assert that in matching price quotations with other sellers at any given destination they are "meeting competition." In order to produce such matched prices sellers must, at numerous destinations, increase their mill nets or real prices and at numerous destinations concurrently reduce their mill nets. Such systematic price variations according to the pattern described do not represent competition in the ordinary meaning of that term. Each participant in the use of this pricing formula consciously intends that no attempt be made to exclude any seller from the natural freightadvantage territory of another and by the use of the formula in effect invites others to share the available business in his natural market in return for a reciprocal invitation.

(b) Respondents' basing-point, delivered-price formula is a pricing system recognized by economists as a controlled price or monopolistic price system and does not in its operation or results conform to the recognized economic principles which indicate the existence of free or effective competition. One of the characteristics of effective competition is that prices readily respond to changing conditions of supply and demand, whereas respondents' system has produced a high degree of price rigidity and at times prices have even moved contrary to what would be expected in a market amenable to the law of supply and demand. The use of the pricing formula produces a condition of mutual dumping inconsistent with the existence of effective competition. The systematic pattern of discriminations among purchasers of conduit would not exist concurrently with effective competition and the use of a formula which produces a condition of matched delivered-price quotations indicates the absence of effective competition.

(c) The economic principle that in a truly competitive market the unit price of a homogenous commodity tends to become approximately uniform does not serve to explain the results of the use of respondents' pricing formula. The tendency toward price uniformity in a free market results from the fact that in the purchase and sale of units of a homogenous commodity in such market, sellers are indifferent as to whose money they get for their commodity and buyers are indifferent as to whose commodity they get for their money. The systematic differences in mill nets accepted by respondent conduit sellers violate the principle of indifference. It is also true that the law of uniform price is limited in its application to prices which eventuate from actual sales and has no application to and cannot explain uniformity of price quotations.

PARAGRAPH NINETEEN: (a) Pursuant to Count I of the complaint herein, the Commission concludes from the evidence of record, and therefore finds, that the capacity, tendency, and effect of the combination and conspiracy maintained by the respondents named therein 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 conduit in, among, and between the several States of the United States; to deprive purchasers of conduit of the benefits of competition in price; to maintain artificial and monopolistic methods and prices in the sale and distribution of conduit; to prepare and maintain common rate factors and common delivery charge factors or "freight adders" used and useful in determining and establishing price quotations and prices for conduit; to classify purchasers of conduit and determine the treatment to be accorded them; to establish and maintain uniform discounts, terms, and conditions of sale; to determine and control the use of warehouses in the distribution of conduit; to prepare, adopt, and use for the purpose of aiding in price maintenance and control, uniform contracts for distributors and for contractors buying for specific projects, and to enforce the terms of such contracts through investigations and reports thereon; to support and maintain their price structure through the conduct of investigations of sales and offers to sell, and the circulation of reports thereon; and otherwise to maintain and promote the purposes of their combination and conspiracy to hinder, lessen, and restrain competition in the sale and distribution of conduit.

(b) Pursuant to Count II of the complaint herein, the Commission concludes from the evidence of record, and therefore finds, that the capacity, tendency, and effect of the use by each respondent named therein of the basing-point delivered-price formula to determine price quotations and prices which will be made to conduit purchasers at any given destination concurrently with similar use of the same pricing formula by other of the said respondents has been, and is, to hinder, lessen, and restrain competition in price in the sale and distribution of conduit; to deprive purchasers of the benefits of competition in price; to unfairly discriminate among purchasers; and to create in each of said respondents a dangerous tendency toward a monopolistic control over price in the sale and distribution of conduit.

CONCLUSION

The aforesaid acts and practices of respondents constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of the Federal Trade Commission Act.

UNITED STATES OF AMERICA BEFORE FEDERAL TRADE COMMISSION

At a regular session of the Federal Trade Commission, held at its office in the city of Washington, D. C., on the 6th day of June, A. D. 1944 Commissioners: Robert E. Freer, Chairman; Garland S. Ferguson; Charles H. March; Ewin L. Davis; William A. Ayres.

Docket No. 4452

IN THE MATTER OF RIGID STEEL CONDUIT ASSOCIATION, AN UNINCORPORATED AssoCIATION; ITS OFFICERS: HERBERT S. BLAKE, PRESIDENT; LAWRENCE R. QUINN, TREASURER; PAUL WEISS, ASSISTANT TREASURER; ROBERT S. BOOTH, EXECUTIVE SECRETARY; ITS BOARD OF DIRECTORS: I. A. BENNETT, CHAIRMAN; J. M. BARTON, H. G. MORROW, LAWRENCE R. QUINN, H. S. WALKER, A. E. NEWMAN; AND ITS MEMBERS: CENTRAL TUBE COMPANY, CLAYTON MARK & COMPANY, COHOES ROLLING MILL COMPANY, ENAMELED METALS COMPANY, FRETZ-MOON TUBE COMPANY, INC., GARLAND MANUFACTURING COMPANY, GENERAL ELECTRIC COMPANY, LACLEDE STEEL COMPANY, LACLEDE TUBE COMPANY, NATIONAL ELECTRIC PRODUCTS CORPORATION, STEELDUCT COMPANY, TRIANGLE CONDUIT & CABLE COMPANY, INC., WALKER BROTHERS, YOUNGSTOWN SHEET AND TUBE COMPANY, CORPORATIONS, INDIVIDUALLY AND AS REPRESENTATIVE OF THE MEMBERS OF THE RIGID STEEL CONDUIT ASSOCIATION; GENERAL ELECTRIC SUPPLY CORPORATION, SPANG CHALFANT, INC., STEEL AND TUBES, INC., REPUBLIC STEEL CORPORATION, THE M. B. AUSTIN COMPANY, GEORGE L. HATHEWAY, REGINA G. HATHEWAY, KATHERINE R. HATHEWAY, AND JANE HATHEWAY, PARTNERS, TRADING AS CLIFTON CONDUIT COMPANY; CHARLES DONLEY; FRANK C. HODKINSON; ORGANIZATION SERVICE CORPORATION, A CORPORATION, AND ITS OFFICERS: HERBERT S. BLAKE, PRESIDENT, HERBERT S. BLAKE, JR., VICE PRESIDENT, N. MYLES BROWN, VICE PRESIDENT, THOMAS B. JORDAN, VICE PRESIDENT, PAUL WEISS, TREASURER, C. C. GREGORY, SECRETARY, INDIVIDUALLY AND AS REPRESENTATIVES OF THE ORGANIZATION SERVICE CORPORATION; THE NATIONAL ELECTRICAL WHOLESALERS ASSOCIATION, AN UNINCORPORATED ASSOCIATION, ITS OFFICERS: J. G. JOHANNESEN, CHAIRMAN, D. L. FIFE, VICE CHAIRMAN, ALFRED BYERS, SECRETARY; THE MEMBERS OF ITS CONDUIT COMMITTEE; D. L. FIFE, W. S. BLUE, W. J. DRURY, A. H. KAHN, C. H. MCCULLOUGH, H. E. RASMUSSEN, H. O. SMITH, L. E. LATHAM, F. R. EISEMAN, W. R. KIEFER, H. B. TOMPKINS, A. L. HALLSTROM, A. S. RIECHMAN, D. M. SMITH; AND ITS MEMBERS: GENERAL ELECTRIC SUPPLY CORPORATION, E. B. LATHAM & COMPANY, FIFE ELECTRIC SUPPLY COMPANY, COLUMBIAN ELECTRICAL COMPANY, GRAYBAR ELECTRIC COMPANY, INC., W. T. MCCOLLOUGH ELECTRIC COMPANY, PEERLESS ELECTRIC SUPPLY COMPANY, THE HARDWARE AND SUPPLY COMPANY, REVERE ELECTRIC COMPANY, KIEFER ELECTRICAL SUPPLY COMPANY, WESTINGHOUSE ELECTRIC SUPPLY COMPANY, F. D. LAWRENCE ELECTRIC COMPANY, THE C. S. MERSICH AND COMPANY, INDIVIDUALLY AND AS REPRESENTATIVE OF ALL THE MEMBERS OF THE NATIONAL ELECTRICAL WHOLESALERS ASSOCIATION

ORDER TO CEASE AND DESIST

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answers of respondents, testimony, and other evidence in support of and in opposition to the allegations of said complaint taken before an examiner of the Commission theretofore duly designated by it, report of the trial examiner and exceptions thereto, briefs in support of the complaint and in opposition thereto, and oral arguments of counsel, and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act:

IT IS ORDERED that respondent Rigid Steel Conduit Association, an unincorporated voluntary association, its officers, directors, representatives, agents, and employees, the corporate respondents Clayton Mark & Company, Cohoes Rolling Mill Company, Enameled Metals Company, Fretz-Moon Tube Company, Inc., General Electric Company, Laclede Steel Company, National Electric Products Corporation, Steelduct Company, Triangle Conduit & Cable Company, Inc., Walker Brothers, Youngstown Sheet and Tube Company, Republic Steel Corporation, M. B. Austin Company, their respective officers, representatives, agents, and employees, in or in connection with the offering for sale, sale, and distribution of rigid steel conduit in commerce, as "commerce" is defined in the Federal Trade

Commission Act, do forthwith cease and desist from entering into, continuing, cooperating in, or carrying out any planned common course of action, understanding, agreement, combination, or conspiracy between any two or more of said respondents, or between any one or more of said respondents and others not parties hereto, to do or perform any of the following things:

1. Quoting or selling rigid steel conduit at prices calculated or determined pursuant to or in accordance with the basing-point, delivered-price system; or quoting or selling rigid steel conduit at prices calculated or determined pursuant to or in accordance with any other plan, system, or formula which produces identical price quotations or prices for rigid steel conduit by respondents using such plan, system, or formula at points of quotation or sale, or to particular purchasers, or which prevents purchasers from finding any advantage in price in dealing with one or more of the respondents as against any of the other respondents.

2. Establishing, fixing, or maintaining prices, terms, or conditions of sale for rigid steel conduit, or adhering to any prices, terms, or conditions of sale so fixed or maintained.

3. Collecting, compiling, circulating, or exchanging information concerning common-carrier transportation charges used or to be used as a factor in computing the price of rigid steel conduit; or using, directly or indirectly, any such information so collected, compiled, or received as a factor in computing the price of rigid steel conduit.

4. Collecting, compiling, circulating, or exchanging "freight adders," delivery charge booklets, or other information concerning delivery charges on rigid steel conduit used or to be used as a factor in computing the price of such conduit; or using, directly or indirectly, any such information so collected, compiled, or received as a factor in computing the price of rigid steel conduit.

5. Circulating or exchanging information concerning the classification granted or to be granted to any specific purchaser of rigid steel conduit; or determining upon any basis for the selection or classification of customers, or using any basis so determined for selecting or classifying customers.

6. Determining upon the location, establishment, maintenance, or discontinuance of warehouses or other places for the stocking of supplies of rigid steel conduit.

7. Formulating or adopting consigned stock, specific building, or any other forms of contracts or agreements concerning the sale or distribution of rigid steel conduit, or using any contracts or agreements so formulated or adopted, for the purpose or with the effect of aiding or assisting in arriving at or maintaining uniform prices, terms, or conditions in the sale or distribution of such conduit.

8. Directly or indirectly investigating or checking the prices, quantities, terms, or conditions of any sale or offer to sell rigid steel conduit to any buyer or prospective buyer for the purpose or with the effect of aiding or assisting in maintaining uniform prices, terms, or conditions in the sale of such conduit.

9. Doing or causing any of the things forbidded in the preceding paragraphs of this order to be done through respondents Charles Donley, Herbert S. Blake, Organization Service Corporation, or any other individual, corporation, or organization.

IT IS FURTHER ORDERED that respondent Charles Donley, an individual, his representatives, agents, and employees, do forthwith cease and desist from knowingly, advising, assisting, or cooperating with the aforesaid respondents, or any of them, in doing any of the things forbidden by paragraph numbered 3 above.

IT IS FURTHER ORDERED that respondent Herbert S. Blake, an individual, his representatives, agents, and employees, and respondent Organization Service Corporation, a corporation, its officers, representatives, agents, and employees, do forthwith cease and desist from advising, aiding, assisting, or directing the aforesaid respondents in any manner in doing any of the things forbidden by paragraphs numbered 1 to 8, inclusive, of this order.

IT IS FURTHER ORDERED that respondent The National Electrical Wholesalers Association, an unincorporated association, its officers and members, the officers and members of its conduit committee, and respondents General Electric Supply Corporation, a corporation, E. B. Latham & Company, a corporation, Graybar

Electric Company, Inc, a corporation, Revere Electric Supply Company, a corporation, Kiefer Electric Supply Company, a corporation, Westinghouse Electric Supply Company, a corporation, Fife Electric Supply Company, Columbian Electrical Company, W. T. McCullough Electric Company, Peerless Electric Supply ompany, The Hardware and Supply Company, F. D. Lawrence Electric Company, and The C. S. Mersick and Company, individually and as such members, their respective officers, representatives, agents, and employees, do forthwith cease and desist from aiding, assisting, or cooperating in any manner with the respondents subject to the provisions of paragraphs numbered 1 to 8, inclusive, of this order, or any of them, in doing any of the things forbidden in said paragraphs.

IT IS FURTHER ORDERED that each of the corporate respondents Clayton Mark & Company, Cohoes Rolling Mill Company, Enameled Metals Company, Fretz-Moon Tube Company, Inc., General Electric Company, Laclede Steel Company, National Electric Products orporation, Steelduct Company, Triangle Conduit & Cable Company, Inc., Walker Brothers, Youngstown Sheet and Tube Company, Spang Chalfant, Inc., Republic Steel Company, and M. B. Austin Company, their respective officers, representatives, agents, and employees, and respondents George L. Hatheway, Regina G. Hatheway, Katherine R. Hatheway, and Jane Hatheway, copartners trading as Clifton Conduit Company, their representatives, agents, and employees, in or in connection with the offering for sale, sale, and distribution of rigid steel conduit in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from doing any of the following things for the purpose or with the effect of systematically matching deliveredprice quotations with other of said respondents or producing the equivalent of such matched delivered prices through systematic discriminations in the mill nets received on sales to different purchasers:

(a) Quoting or selling rigid steel conduit at prices calculated or determined pursuant to, or in accordance with, the basing-point, delivered-price system. (b) Quoting or selling rigid steel conduit at delivered prices calculated as, or systematically equivalent to, the sum of the price in effect at, plus a transportation charge factor from, any point other than the actual shipping point.

(c) Quoting or selling rigid steel conduit at delivered prices which systematically reflect the inclusion of a transportation factor greater or less than the actual cost of transportation from point of shipment to destination.

(d) Discriminating among purchasers by quoting or selling rigid steel conduit at prices which systematically differ in terms of mill nets according to the location of purchasers, and which mill nets, plus common carrier transportation charges to the respective locations of such purchasers, produce delivered costs identical with those to such purchasers from differently located respondents.

IT IS FURTHER ORDERED that, for reasons appearing in the findings as to the facts, the complaint herein be, and the same hereby is, dismissed as to Central Tube Company, Garland Manufacturing Company, Laclede Tube Company (Missouri), Steel and Tubes, Inc., and F. C. Hodkinson; that Count I of the complaint be, and the same hereby is, dismissed as to respondents George L. Hatheway, Regina G. Hatheway, Katherine R. Hatheway, and Jane Hatheway, copartners trading as Clifton Conduit Company, and respondent Spang Chalfant, Inc.; and that Count II of the complaint be, and the same hereby is, dismissed as to respondent General Electric Supply Corporation.

IT IS FURTHER ORDERED that the respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

By the Commission. [SEAL]

OTIS B. JOHNSON, Secretary.

Mr. DAVIS. There was criticism submitted that the Commission does not render written opinions.

I submit that the findings of facts, which the Commission is required to submit, it must always submit a finding of facts which will support any order that it gives, and if it does not, it would be reversed for that alone, which is unlike a court. A court can render a decision without rendering any opinion if it wants to, but neither the Commission nor any other administrative body can; they must set out the