(The syllabus, with substituted captions, is taken from 168 F. (2d) 9

On petition for review of order of Commission, order vacated n the Consolidated Water Power and Paper Company, and othervie enforced as to the remaining petitioners.

[603] Mr. Wm. W. Corlett, Mr. Robert E. Canfield and Mr. Abd McCormack, all of New York City, Mr. T. W. Brazeau and Br Graves, all of Wisconsin Rapids, Wis., and Mr. F. Harold Murte of Chicago, Ill. (Mr. Murray W. McEniry and Mr. Allen F. Mas, both of New York City, of counsel), for petitioner.

Mr. Walter B. Wooden, Associate Gen. Counsel, and Mr. T ' Kelley, Gen. Counsel, Attys. Federal Trade Commission, both Washington, D. C., for respondent.

Before MAJOR and MINTON, Circuit Judges, and LINDLEY, Dist Judge.

MINTON, Circuit Judge:

This is a petition to review a cease and desist order of the Fein Trade Commission and to set aside the Commission's findings & the facts and conclusions upon which the order is based. In 2 alternative, we are asked to modify the order and such findings as unsupported by the evidence or by the law.

The petitioners are some forty-two corporations engaged in manufacture, sale, and distribution of book paper, the Book Paper Manufacturers Association, and the Association's officers and repe sentatives. The Book Paper Manufacturers Association, hereafte referred to as the Association, is a voluntary, unincorporated bot composed of manufacturers of book paper. It was organized in J 1933, in connection with the National Industrial Recovery Act, its executive committee in substance as the executive authority of N. R. A. code for book paper manufacture. Each corporate petitio is a member of the Association and each is engaged in interstate o merce. No single corporate petitioner produces more than 10% the industry's output.

The complaint against the petitioners charged them with engag in unfair methods of competition in violation of Section 5 of th Federal Trade Commission Act, 15 U. S. C. Sec. 45 (a), by enter into among themselves since June 16, 1933, and for more than 7 years last past, a combination to suppress or restrict price competit and to fix prices. After extensive hearings, the Commission for against the petitioners and issued its order directing them to and desist from price fixing and from certain specified activities i the purpose of price fixing.

Broadly speaking, book paper is any paper which contains n more than 25% groundwood and which is customarily used for pr

urposes. The more important kinds of book paper are those used oks, magazines, and pamphlets, offset paper used in the offset ing process, envelope paper, and tablet paper. Other types in› paper used in adding machines, for calendars, menus, posters, Imonia, and transfer printing. Book paper may be divided on her basis into coated and uncoated paper, the former being paper h after manufacture is coated on one or both sides to improve rinting surface. There are several grades of coated and uncoated

r.

anufacturers of book paper sell variously to paper merchants, 3, or both in varying degrees. Approximately 55% of the book r production is sold by the mills to the users, principally magaand book publishers, converters, and printers. The remaining is sold to merchants for resale. Approximately 55% of the total age sales, both to users and merchants, is made on the basis of tiated contracts. "Spot transactions" comprise the other 45% of otal tonnage sales; a "spot transaction" is a sale resulting from rder for a stated kind and quantity of paper to be delivered on a ified date or dates at an agreed price. Of the spot transactions, a ority are between the mill and the merchant. Paper merchants lly buy and sell book papers produced by more than one ufacturer.

me manufacturers produce both coated and uncoated papers, rs produce only one kind; some produce coated paper only and uncoated paper from other producers; some produce only a few Hes of either coated or uncoated paper, while others produce many; e concentrate largely upon offset papers or envelope or tablet ers, while many have specialized papers not closely related to of the standard grades. Book papers are made in many types, 3, weights, and colors, and with many different special characters for particular uses. Paper of any designated grade produced by manu [604] facturer is not necessarily identical with that classified he same grade but produced by another manufacturer. All papers sified in one grade compete primarily with one another and are idered equivalent by petitioners for pricing purposes. However, e is also competition between adjoining grades because it is uently possible to substitute one for another.

etitioner Consolidated Water Power and Paper Company, of consin, hereafter referred to as Consolidated, has separately cked the Commission's order. For reasons that will be developed, leem it necessary to detail the facts of its operation since they are the same as those of the other corporate petitioners. The Commishere has acknowledged Consolidated's unique situation, but it not make any separate findings as to it.

Ninety-five per cent of Consolidated's production within the se of this proceeding is coated book paper, comparable in quality not meeting the specifications of the so-called standard grades ‹coated papers manufactured by other mills. This departure fro standard specifications results from the groundwood content of Car solidated's product. This coated paper is the exclusive produr af Consolidated by virtue of its patent which manufactures and paper in a single process at great speeds as compared with the corporate petitioners' separate and slow coating process after facture. Because of its patented process and inexpensive pulp. ( solidated is able to sell its coated papers at prices substantially k than the published list prices of the standard grades of coated paper In fact, Consolidated sells its coated paper within the lower pris range of the uncoated (and, of course, inferior for printing purpees› paper of the other corporate petitioners. In the five-year perc: beginning in January 1935, the date of Consolidated's manufactur by the patented process, it has developed an annual market in costsi papers of 80,000 tons, a substantial portion of which business m formerly held by the other corporate petitioners. At no time Consolidated submit a bid for Government business, but it is a merix of the Association.

Essentially, the combination and conspiracy charged against the petitioners was to fix prices to customers located throughout the United States, including the United States Government as a customer. by the following means. Certain of the corporate petitioners organized the Association in June 1933; all others have joined it since anc have used it since its organization as a clearinghouse and means of exchange for information submitted to it by the members, inclu sales reports, prices, discounts, and terms of sale. Regular meeting of the Association are held from time to time at which the corper and individual petitioners discuss trade and competitive condit and agree upon and fix trade policies and prices to be charged.

It is further alleged that the petitioners have formulated and adop uniform finishing differentials which they use without regard to actual cost of the finishing operations to the respective petitiones, The petitioners have promulgated and compiled so-called trade toms in the form of rules and regulations dealing with allocat and classification of grades, grading, quotations and sales, and ot similar matters, and including a pricing guide containing a 2074 map of the United States with price differentials according to zo It is alleged that the petitioners generally use these rules regulations.

The individual petitioners are alleged to have been and to be t officers and members of the Association executive committee, and such, have complete charge of its activities and meetings, the collect

ilation, and dissemination of information, and the formulation ade policies. The corporate petitioners have adopted and maind an identical zoning system for price fixing purposes by means ich the United States is divided into four zones. The corporate ioners all sell at fixed and identical delivered prices within these 3. The price for Zone 1 constitutes the base price; the prices for ther zones are the Zone 1 base price plus a fixed and uniform rential for each zone. A single delivered price applies at each every destination within the re[605]spective zones, no matter place of shipment or place of delivery is involved.1

e Commission found the facts substantially as charged in the laint. We shall discuss the findings below insofar as it is necy to decide the case. We do not set the findings out in full, but may be found in the record of these proceedings before the Com

Vol. 40 Federal Trade Commission decisions, 696.

the outset, it is well to decide the extent of our jurisdiction to w these proceedings. There can be no doubt of its limited char. The Federal Trade Commission Act provides: "The findings e Commission as to the facts, if supported by evidence, shall be lusive." 15 U. S. C. Sec. 45 (c). This statute as interpreted by Supreme Court gives finality to the Commission's findings of fact ey are supported by substantial evidence. F. T. C. v. Algoma ber Co. et al., 291 U. S. 67, 73, 54 S. Ct. 315, 78 L. Ed. 655 [18 . C. 669, 2 S. & D. 247]; F. T. C. v. Pacific States Paper Trade ciation, 273 U. S. 52, 63, 47 S. Ct. 255, 71 L. Ed. 534 [11 F. T. C. 1 S. & D. 583]. We do not weigh the evidence or consider the ibility of the witnesses. Triangle Conduit & Cable Co., Inc., et al. . T. C., decided by this Court on May 12, 1948. All reasonable ences from the facts are likewise for the Commission. F. T. C. v. dard Educational Society et al., 302 U. S. 112, 117, 58 S. Ct. 113, . Ed. 141 [25 F. T. C. 1715, 2 S. & D. 429]; Triangle Conduit & le Co., Inc., et al., supra; Fort Howard Paper Co. et al. v. F. T. C., F. (2d) 899, 907 [43 F. T. C. 1087]. If there is substantial evie, though it be conflicting, the findings cannot be disturbed. Fioret 8 Co., Inc., et al. v. F. T. C., 100 F. (2d) 358, 359 [27 F. T. C. 1702, 2 D. 481]. In view of this, we cannot sustain the petitioners' conion that where two contradictory and reasonable inferences may rawn from the same evidence, the reasonable inference of guilt d by the Commission is not supported by substantial evidence. he Commission's inference from the facts is reasonable, our inquiry

es.

he N. R. A., which was terminated May 27, 1935, granted immunity during its existence le activities charged herein.

Section 5 of the Federal Trade Commission Act (15 U. S. C. 45 (a)) which petitioners are found to have violated prohibits m methods of competition in commerce. A price fixing combins: or agreement is clearly an unfair method of competition with Act and is illegal. F. T. C. v. The Cement Institute et al., de by the Supreme Court April 26, 1948 [333 U. S. 683; ante, p. 14 seq.]. Any similar combination or agreement which tampers with price structive is an unlawful activity. U. S. v. Socony-Vacys: * Co., Inc. et al., 310 U. S. 150, 221, 60 S. Ct. 811, 84 L. Ed. 1129: T Conduit & Cable Co., Inc., et al. v. F. T. C., supra.

The petitioners here contend that the scope of the procee against them has been limited to spot transactions to merchants, & does not include contract sales, or spot transactions with nea chants. They base their contention on objections to certain eviden made by the Commission in the trial, and they argue that the firs and evidence do not expressly relate to other than this limited The Commission denies such a limitation of issues and explaits objections to this evidence on other and satisfactory grounds. Fartier the Commission points out that the very fact of its not hav: expressly limited its findings argues against such a limitation! contends also that the evidence is not so limited-as, for example. uniform contracts prepared and distributed to the petitioners by Association, and the bids for Government business, which sales at contract sales. In view of this, we hold that the issues are not limits. as contended by the petitioners, and if the findings are otherwise ser quate and the evidence substantial, they must be upheld as to t; several types of sales.

With these preliminary questions decided, there remain but issues in the case. The first is that of the adequacy of the findings to the facts. The petitioners have sharply and extensively argued the findings are insufficient as a matter of law to support the or to cease and desist. The remaining question is whether there s substantial evidence to support the finding as to the facts. A dicated above in the résumé of the complaint, the petitioners s charged with concertedly adopt [606] ing and using several de as the means of their total conspiracy. For purposes of this opi we shall refer to the concerted means that formed parts of the conspiracy, and to the total conspiracy itself.

As to the adequacy of the findings as to the facts. In considera the petitioners' contentions in this respect, it is well to keep in that findings are to be construed liberally in support of a judgment order. Triangle Conduit & Cable Co., Inc. et al. v. F. T. C. Reasonable inferences which may be based on facts found will deemed drawn; and words fairly importing a concerted activity conniving together to restrain trade are sufficient to charge such s