Clearing the Air

Wyoming's slender, shaggy-browed Joseph C. O'Mahoney stood up on the Senate floor last week and exclaimed: "It is clear to me that someone has to straighten it out . . . [with] plain language." The "it" was the confusion over prices caused by the U.S. Supreme Court's outlawing of the cement industry's basing point system (TIME, May 10, 1948 et seq.).

Joe O'Mahoney's method of setting things straight was quite senatorial. He introduced a bill. The bill would permit manufacturers to absorb freight charges and quote delivered prices, provided they were "acting independently," i.e., without collusion. The Senate, which has been trying to draft a bill for months to end the confusion, gave a sigh of relief at these plain words. It quickly passed the bill.

Businessmen were pleased--and surprised--that Joe O'Mahoney, an old trustbuster and friend of the Federal Trade Commission, wanted to permit freight absorption, a mainstay of the basing point system. But O'Mahoney said that the bill would only put into law what FTC has been saying ever since the Supreme Court decision, namely, that any manufacturer could absorb freight charges to meet a competitor's prices at distant points so long as there was no conspiracy to fix prices. What FTC had objected to was collusive freight absorption. Much of the confusion, he thought, had been caused not so much by the decision as by those who wanted to pressure Congress into legalizing basing points.

The proposed legislation, said O'Mahoney, would provide no "loophole fof monopolistic practices." But it would require FTC to provide clear proof whenever it suspected that freight absorption had lessened competition. (At present the FTC can cite businessmen for conspiracy and then put the burden of proof on them to show that the absorption of freight charges has not hurt competition.)

Joe O'Mahoney's bill still needed approval of the House and President Truman, but the chances for passage looked good. Both FTC and the Department of Justice had indicated their approval.

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