Trade Associations and the Law

June 6, 1925

Report Outline
History of Trade Associations
Activities of Trade Associations
Questioned Activities of Trade Associations

Rapid extension of trade association activity in every branch of commerce and industry, involving important modifications in the application of the competitive theory, is expected to result from the decisions of the Supreme Court, May 30, 1925, overruling the Government's contentions in the Maple Flooring and Cement Association cases.

The main questions presented in these cases concerned the legality under the Sherman act of certain statistical activities of trade associations principally the gathering and dissemination of data relating to production, stocks and prices of merchandise. These activities were represented on the one hand as being in the public interest, in that such statistics were essential under modern conditions to the intelligent conduct of industry and the mitigation of evils arising from alternate under and over-production. They were alleged on the other hand to serve as a medium for regulating production by concerted action and maintaining uniform prices at unjustified levels in violation of law.

The Supreme Court's decisions upheld the legality of trade association activities which had seemed to be condemned in its decisions in the American Column & Lumber case in 1931, and the Linseed Oil case in 1923, a undue restraints of trade. The effect of the last two decisions has been to clarify a confused situation in the presence of which many trade associations had found it difficult to maintain their existence.

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