Circular Loom Company of Boston, Massachusetts, as an example (Resp. Ex. 257-A), 2-inch conduit was quoted at 82 cents per foot; the Pittsburgh basing discount on jobbers' carloads of galvanized conduit was 60 percent, so that the price delivered in Pittsburgh was $3.30 per hundred feet. At any destination other than Pittsburgh the discount was reduced at the rate of one-tenth of a point per one cent of railroad tariff rate per hundred pounds. Thus, at a destination having a freight rate of 34 cents from Pittsburgh, the discount would be reduced 3.4 points to 56.6 percent, and the delivered price at such destination would therefore be $3.69 per hundred feet. This formula does not produce a price difference between Pittsburgh and other points exactly equal to the freight rate.

(b) In 1924, at about the time the steel companies added Chicago, Illinois, as a basing point in the sale of pipe, Youngstown, which had a conduit plant at Evanston, Illinois, announced an Evanston base price for conduit $4 per ton higher than the Pittsburgh base, and all other conduit sellers announced identical Evanston base prices. Clayton Mark, which established a conduit plant in Chicago in 1924 and began the distribution of conduit therefrom early in 1925, used a Chicago base price instead of an Evanston base. This did not amount to the general establishment of a third basing point, however, because the freight rates from Evanston and Chicago are the same to all points except locations within the Chicago switching district. The discounts from the Evanston and Chicago base prices quoted by all conduit sellers were two points lower than those applicable to the Pittsburgh base and the same provisions for determining delivered prices at other points according to the freight rates were applied as had previously existed with respect to the Pittsburgh base. The formula used also provided that at any given location the delivered price quotation of a conduit seller should be based upon Pittsburgh or Evanston, depending upon which base price and accompanying discount produced the lower figure at the purchaser's destination.

(c) Respondent conduit sellers followed the above-described list-and-discount method of determining delivered prices pursuant to their basing-point system until June 1930, when certain alterations cooperatively determined upon were made in the method of calculating such prices. The minutes of a meeting of the Rigid Steel Conduit Section of the National Electrical Manufacturers Association on June 4, 1930, attended by representatives of American Circular Loom Company, Central Tube, Enameled Metals, Fretz-Moon, Garland, General Electric, Mohawk Conduit Company, National Electric, Triangle, Walker Brothers, and Youngstown show the following action:

The matter of simplified billing of Rigid Conduit along the lines of the plan submitted to Mr. Neagle by Mr. Sicard was discussed and it was the consensus of opinion of the meeting that it is to the best interests of the public and the electrical trade that some such simplified method of net billing be followed (Comm. Ex. 692-Z84).

National Electric issued a booklet dated June 10, 1930 (Comm. Ex. 80-R), entitled "Freight Adders and Terms" containing various tables by the use of which a sum to be added to the base price as a delivery charge per thousand feet of conduit could be determined for a large number of destinations. These sums called "delivery charges" did not represent the exact amount of the freight rate from the controlling basing point to the destination specified, in part because of the manner in which fractions were treated in the calculations and in part because 5. percent was added to and included in such sum. Purchasers who took the discount for payment within the cash discount period were permitted to take such discount upon the delivered price, which included the socalled delivery charge. National Electric also issued price card No. 61 (Resp. Ex. 139-B), dated June 16, 1930, which was prepared for use in connection with the freight adders described above. Other conduit sellers made a similar change from the list-and-discount method of quoting prices. Price card No. 61 of Laclede Tube (Resp. Ex. 306-A to D), effective June 16, 1930, is in all substantial features and in almost all nonessential features a duplicate of the National Electric card. Beginning with card No. 1, all price cards issued by each of the respondent conduit sellers have borne numbers identical with those of the corresponding cards of the other conduit sellers, and the cards of all conduit sellers of any given number have been identical in all material particulars. In some instances individual conduit sellers have not issued a card of a given number and instead have announced a percentage discount from a previous card. Where the issuance of a card was thus omitted, however, the next card issued bore a number coinciding with that borne by corresponding cards of the other conduit sellers.

(d) The modification in pricing method described in the preceding subparagraph was followed by a further change made in the same year. Youngstown prepared a delivery charge booklet dated November 15, 1930 (Comm. Ex. 89), which was more comprehensive and somewhat easier to use than the one devised by National Electric. This booklet, instead of using arbitrary key numbers, set out the delivery charges per thousand feet of each size of conduit according to any railroad tariff rate from one-half cent to $2.241⁄2 per hundred pounds, in steps of one-half cent each. These delivery charges also included an additional 5 percent, as had been the case with those devised by National Electric. Upon the request of other conduit sellers, Youngstown had copies of its publication printed without covers and sold numbers of them to respondents Cohoes, Triangle, Walker Brothers, Enameled Metals, Steelduct, Steel and Tubes, Inc., Fretz-Moon, Garland, and Clifton. Upon the basis of circumstances shown in the record and a comparison of the pamphlets, it is concluded that Clayton Mark also secured copies of the Youngstown pamphlet. Respondent conduit sellers distributed these pamphlets to their salesmen, sales agents, wholesalers, and other customers, for use by such parties in calculating delivered prices for conduit. At about this time Clayton Mark abandoned the use of a Chicago base and adopted the Evanston base, so that all respondent conduit sellers were then using only Pittsburgh and Evanston as basing points.

(e) The use of the Pittsburgh and Evanston bases exclusively continued until late in 1934, when Clayton Mark again instituted a Chicago base and ceased using Evanston. As heretofore stated, the rates from Chicago and Evanston are the same to all points except a few locations adjacent to these bases. Effective January 2, 1935, Youngstown instituted Chicago as a base and continued the Evanston base (Resp. Ex. 182). The situation thus created had prompt collective consideration. The minutes of a meeting of RSCA on January 17, 1935, recite in part:

(c) The Board of Directors recommends to the Association that the Evanston basing point be eliminated, leaving the two basing points-Pittsburgh, Pa., and Chicago, Ill.

After considerable discussion this recommendation was laid upon the table pending the report of the Special Committee on zoning (Comm. Ex. 3-B).

At the time of this meeting respondent conduit sellers' price cards No. 70, issued in July 1934, were in effect. The next price cards (No. 71) were issued by respondent conduit sellers in January 1936 and were limited to the Pittsburgh and Chicago bases, the Evanston base being eliminated. With the exception of a minor change by which freight adders were shown in terms of hundred feet of conduit instead of thousand feet, respondent conduit sellers have continued their basing-point system without further change. The last proposed change as shown by the record was one considered at a meeting of RSCA on November 16, 1939: The minutes of this meeting do not show that any consideration was given to basing points, but H. H. Benfield, who was present at the meeting as a representative of Fretz-Moon, addressed a memorandum marked "Confidential" to certain of his associates under date of November 20, 1939, in which he described various occurrences at the meeting. He said in part:

Please note this memorandum and destroy.

There was a meeting of the various manufacturers of conduit in New York on November 16th at which all major manufacturers were represented except Triangle.

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The fact that neither Youngstown nor Clayton-Marks manufacture conduit in Chicago any more, the dropping of the Chicago base was briefly discussed but it was decided not to do anything about it for the time being because of the possibility of investigation (Comm. Ex. 622-A).

PARAGRAPH FIVE: (a) In the establishment and maintenance through collective action of the basing-point, delivered-price system in its present form, respondent conduit sellers had the purpose of limiting and restraining the normal forces of competition. They recognized that by virtue of location, some conduit sellers could, by reflecting such advantage of location in their prices, exclude others from selling in certain markets; that their basing-point, delivered-price system offered compensations in the form of higher profits to the favorably located seller on sales made in his natural territory in return for refraining from pressing his advantage of location; that in order to maintain a price level high enough to permit each seller to sell in the natural territories of other conduit se

mrice

competition must be restrained; and that the operation of their formula system of pricing enables each seller to quote to a prospective purchaser at any location the same price as that quoted by other sellers, through the use of the same formula, and thus bring about a condition of matched prices. Examples of the knowledge and purpose of these respondents appear in the record in various ways. For example, the president of Garland, in his testimony concerning the basingpoint system and the location of Walker Brothers' plant at Conshohocken, only a few miles from Philadelphia, stated:

If we didn't have our present practice, why, Walker would walk away with all the Philadelphia business (T. 1487).

Another example appears in the testimony of the president of Walker Brothers, who, when asked if he knew of any method other than the basing-point, deliveredprice system which would afford a similar degree of uniformity in price, stated:

A. Oh, I am not willing to admit that the Pittsburgh basic method of selling is the only way by which uniform prices can be put together. It is one. Q. Well, can you name other ways in which you could have reached the same degree of identity and uniformity as you did here, through the use of any other method?

A. I imagine that there are a great many other ways of figuring uniform prices outside of the Pittsburgh basic method of selling, but I can't answer your question without distorting the picture. This is one method by which it is done. There must be others (T. 883-84).

(b) Certain aspects of respondent sellers' desire and purpose to restrain competition in the sale and distribution of conduit were openly revealed during the negotiations for and the administration of their Code promulgated under the National Industrial ecovery Act and through various activities claimed to be pursuant to such Code. For example, respondent conduit sellers' Code (Resp. Ex. 259) provided for the filing of prices, discounts, and terms of payment, for the relaying thereof to competitors, and for adherence thereto so long as the filing was not changed. Respondent F. C. Hodkinson who was appointed by the board of directors of the National Electrical Manufacturers Association as supervisory agency for the division of the electrical manufacturing industry which included conduit, in his capacity as such supervisory agency, called upon Garland by letter dated November 29, 1933, for an explanation of an apparent departure from its filed prices in a bid to The Panama Canal. In replying, Garland explained that:

* * * our own price .1547 was in error, inasmuch as we used the 67¢ freight adder which at that time we thought was correct but now find that the less carload freight adder is 70¢, which hereafter will be used by us.

In the prices as quoted some confusion evidently exists as to the proper freight adder as several of the prices are slightly different from the correct which we figure should be .1554 (Comm. Ex. 247).

In replying to Garland, Mr. Hodkinson stated in part:

The filing of price lists, if these lists happen to be uniform, will assure all uniform quotations made on any inquiry, whether from the Government or a private individual, but with the matter of the delivery charges left up in the air as it has been, there is room for differences. I am therefore calling for the filing of these delivery charge schedules (Comm. Ex. 248).

The basis for pricing delayed deliveries of conduit on specific building contracts was determined as shown by the minutes of a meeting of RSCA on January 17, 1935, which read in part:

Upon motion made, seconded, and carried, it was resolved that it is the understanding of each member of the Rigid Steel Conduit Association that any delivery of conduit upon any specific building contract, or order, after its six months expiration, shall be billed on the basis of current filed Card with NRA Supervisory Agency, unless previously an extension has been granted by the Supervisory Agency under the prescribed method of investigation and substantiation of the requirement of extension. And to eliminate confusion, each member shall file a list of all existing contracts on January 25th and February 25th, 1935 (Comm. Ex. 3–B).

In their efforts to maintain identical prices and prevent purchasers from finding any advantage in dealing with one seller as against another, respondent

conduit sellers did not stay within the provisions of their Code.

An example

of this appears in connection with bids made in February 1935 to the United States for supplying certain conduit for use in the Canal Zone. There were 30 bids submitted: 28 of these were each in the amount of $3,080; one bid was at a higher figure; and one bid, that of Home Lighting Company, a jobber located in Baltimore, was low at $3,075. Home Lighting Company received the award and sought to purchase the conduit from Cohoes, which was its regular source of supply. Before the order was shipped Mr. Hodkinson, in his capacity as supervisory agency under the Code, telegraphed Cohoes under date of March 28, 1935, in part:

REFERRING TO YOUR TELEPHONE MESSAGE WISH TO INFORM YOU THAT AS SUPERVISORY AGENCY I PROTESTED TO WASHINGTON BID SUBMITTED BY HOME LIGHTING COMPANY * * * I HAVE HAD NO REPLY AND BEFORE YOU SHIP THIS SPECIFICATION ON HOME LIGHTING ORDER THE MATTER SHOULD BE ADJUDICATED AT WASHINGTON (COMM. EX. 287).

Under date of March 30, 1935, Cohoes advised Home Lighting Company in part:

We are in receipt of your letter of March 27th, and while we fully appreciate your situation, we are powerless to ship this specification until we have authority to do so from the Supervisory Code Authority (Comm. Ex. 289).

Home Lighting Company sought to purchase the conduit needed to fulfill its obligation under the bid from other conduit sellers. On April 5, 1935, it telegraphed Austin, as follows:

ADVISE WESTERN UNION CAN YOU MAKE SHIPMENT IN FIVE DAYS FIFTY THOUSAND FEET HALF INCH HOT DIPPED CONDUIT (Comm. Ex. 291).

On the same day Austin replied to Home Lighting Company that it could make the shipment, and added:

We sincerely hope to be favored with your order (Comm. Ex. 291).

On the next day, April 6, 1935, Austin advised Home Lighting Company that upon receipt of shipping instructions the order was identified as a Panama Canal bid, that evidently Austin conduit was not specified in the bid and it would be difficult to change the brand with the Government, and concluded by saying:

In view of this being for the Panama Canal I believe it will be very essential that you furnish the brand of conduit nominated in your proposal to avoid complications with the governmental authorities.

We, therefore, regret exceeding that we are unable to handle the order and beg to remain (Comm. Ex. 292).

Home Lighting Company had secured an authorization from the Government purchasing agency on March 23, 1935, to supply Clayton Mark conduit "provided it complies with the specifications" (Comm. Ex. 332). However, Home Lighting Company was unable to purchase the conduit necessary to fulfill its bid. It secured some conduit from other jobbers and the Government purchased the remainder in the open market and charged the difference in cost to Home Lighting Company.

It was impossible for the bid by Home Lighting Company to be in violation of the Code administered by Mr. Hodkinson because that company was not subject to that Code. In addition, at the time these events occurred, Executive Order No. 6767, dated June 29, 1934, was in effect and provided that in sales to instrumentalities of the Government a price as much as 15 percent below filed prices would not violate Code provisions concerning filed prices.

PARAGRAPH SIX: (a) The use of the same base prices and uniform delivery charge factors by the several respondent conduit sellers will, as a matter of simple mathematics, enable all such sellers to quote identical delivered prices to any given destination, provided the same railroad tariff rate is used by each seller in selecting the applicable delivery charge factor. Frequently, however, it is difficult to exactly determine the tariff rate and even experts sometimes differ as to the applicable rate. Mistakes by conduit sellers in the selection of the railroad tariff rate to be used in a particular instance were a fruitful source of differences in the delivered prices quoted.

(b) The record does not disclose the details of various steps taken by the despondent conduit sellers with respect to railroad tariff rates prior to 1936. In the beginning of the industry the conduit manufacturers who acted as converting and selling agents for pipe manufacturers used a freight bulletin on standard

pipe prepared by National Tube Company. Apparently such rates on pipe were used generally by conduit sellers and no freight bulletin on conduit was published until sometime after the organization of RSCA. During the Code period the problem of price differences resulting from variations in delivery charges was handled by the action of Mr. Hodkinson requiring the filing of delivery charge schedules in connection with the price-filing provisions of the Code. This was supplemented by the action of George A. Sicard, secretary of RSCA, in furnishing a tariff rate for the common use of members of RSCA in cases involving unusual destinations or rates. An example of this appears in the bulletin dated January 31, 1935, addressed by Mr. Sicard to members of the association, concerning bids to be opened February 11, 1935, for 50,000 feet of 1⁄2-inch galvanized conduit for The Panama Canal. He wrote:

The published freight rate to Cristobal, Canal Zone, is 471⁄2¢ per hundred pounds (Comm. Ex. 419).

The results on this bid have been heretofore set out in subparagraph (b) of Paragraph Five.

(c) Sometime after its organization and before September 10, 1936, RSCA began the publication of freight rate bulletins for the common use of respondent conduit sellers in conjunction with the delivery charge pamphlets in ascertaining delivered prices to be quoted at the various destinations set out in the rate bulletins. Under date of September 10, 1936, RSCA published a rate bulletin entitled:

SUPPLEMENT TO RIGID CONDUIT FREIGHT RATE BULLETIN, DATED APRIL 25, 1935, TO BE USED AS A BASIS IN DETERMINING DELIVERED PRICES ON RIGID CONDUIT, LESS CARLOAD, FOR RAIL-STATION DELIVERY ALSO STORE-DOOR DELIVERY, INCLUDING ALL TRUCK DELIVERIES FROM PITTSBURGH OR CHICAGO AND EVANSTON TO VARIOUS DESTINATIONS IN WESTERN AND CONTRAL UNITED STATES

(Comm. Ex. 74-Z26)

On October 9, 1936, I. A. Bennett, vice president of National Electric, addressed his sales representatives:

We are in receipt of a copy of letter, dated September 26th, sent out by the Triangle Conduit Company to their Sales Offices in which they enclose copy of the Rigid Steel Conduit Association Supplement on Freight, which takes care of store-door delivery at the rates shown.

This company wants to follow these rates, and charge will be made on all shipments on Pittsburgh or Chicago base where Rigid Conduit is shipped by truck to a job site, or to the store door of jobber.

It is difficult to put into effect any new program as each customer naturally resists paying for something he has been getting for nothing. Therefore, you will unquestionably run up against the story that someone is not doing this or doing that, and therefore, we should not do it.

It certainly seems logical to equalize on freight and transportation service, and therefore, we sent you on October 6th, copies of the Rigid Steel Conduit Association Supplement, and ask that you use this to familiarize your customers, where effective, with this tariff, and endeavor to standardize it (Comm. Ex. 392).

The minutes of a meeting of RSCA on December 8, 1936, recite in part:

Chairman Bennett introduced the subject of the recently published freight supplement for discussion, and certain discrepancies were brought to light in the rates as published.

It was suggested that Mr. Kim confer with Mr. Donely, who compiled the supplement, with a view to having corrected certain errors which had been noted.

Further, it was voted to employ Mr. Donley to keep the supplement up to date in the light of such changes in existing rates as may be made from time to time (Comm. Ex. 9-D).

The last rate bulletin issued directly by RSCA was dated January 1, 1937. Supplements to this rate bulletin, however, were issued directly by the association until the RSCA meeting of September 27, 1937, the minutes of which recite in part: