legality of such acts. Any association engaging in such action must know it is unlawful. If cost data is compiled and published by an association for helpful comparative purposes to enable members to increase their efficiency rather than to increase prices, such action is lawful. But only the naked cost data can be compiled. There must be no meetings of members for the joint consideration of this data; there must be no analysis by an expert cost accountant with suggestions of the adoption of cost accounting methods designed to increase the general level of price; there must be no interchange of views between the members which have in them any suggestions or recommendations intended to bring about an inflation of prices through increased estimates of costs; in fact there must be no coöperative action looking toward any limitation of price competition in any way.43 43 This statement is based on the premise that the courts will adopt the same conclusion as to association distribution of cost data that they have adopted with reference to circulation of prices. See American Column & Lumber Co. et al. (American Hardwood Mfrs'. Assn.) vs United States, 42 Sup. Ct. 114 (1921). CHAPTER VI STANDARDIZATION THE steady development of industries and the social agencies which serve them are constantly creating new conditions requiring readjustment. Improved methods of transportation, lowered costs resulting from more efficient manufacturing processes, bettered methods of distribution, and so on, have brought commodities originally produced in response to peculiar demands into many new markets. While competition has been thus greatly increased through a vast enlargement of the field of distribution of every seller, the variety of commodities offered to the consumer has been multiplied in every market. The great number of non-standardized and sometimes nondescript articles offered for sale directly in competition with each other has created a condition of great confusion and economic waste. The manufacturer has felt himself compelled to enlarge his line to meet the competition of similar articles delivered to his territory and has been burdened with heavy inventories, increased costs, and more difficult conditions, both in production and distribution. The dealer has been compelled to carry larger stocks, assume larger risks and conduct his business at a greater expense. The consuming public confronted with a confusion of trade terms for the same commodity and a lack of anything approaching uniformity in the product offered for sale, has been an easy victim of fraud and deception, and has not only received inferior service, but paid a high price for it. The lack even of a common trade terminology has hampered trade and scientific advancement. Such conditions are obviously wrong. But no individual manufacturer can overcome them. Either the industry itself or the law must afford the relief. If the evil exists, and every one recognizes its existence, should not every industry itself at least attempt to correct it in a practical way, rather than wait for legislation which may stifle progress and work against the best interests of the industry? A number of trade associations have vigorously attacked this situation, attempting to work out reasonable standards, around which the entire industry may center its efforts in order that the conduct of business may be simplified and needless waste avoided. There are few industries which cannot secure large returns from a carefully considered plan of standardization in some of its forms. Classification of Standards.-Standardization takes many forms. In each industry the problems may be different, varying with the nature of the commodity, the character of the business, and other factors. In most industries there will be found a need for united action in standardization along one or more of the following lines: (a) Nomenclature, (b) Quantity, (c) Quality, (d) Performance, (e) Practice, (f) Types, (g) Dimensions. Nomenclature.-A standardization of the exact meaning of trade and technical terms, words and phrases is of great importance. It makes possible the carrying on of trade with a minimum of misunderstanding; it makes it easier to develop a body of useful trade and technical literature; and it enables young men entering business to acquire an understanding of the business more rapidly, with a consequent increase in their value to their employers. Some associations determined to eliminate the ill will, errors and expense resulting from lack of standard terminology on which the minds of traders can meet in all their transactions, have acted to remedy such conditions. Four associations have jointly worked out standard definitions of trade terms in use in the fruit and vegetable industry.2 The American Association of Nurserymen and the Society of American Florists have a joint committee which, working with the Bureau of Plant Industry of the United States Department of 1 Statement, H. F. Stratton, Electric Controller & Mfg. Co. Proceedings, Assn. of Iron and Steel Electrical Engineers, January, 1921, p. 12. 2 "Standard Rules and Definitions of Trade Terms for the Fruit and Vegetable Industry," approved by National League of Commission Merchants of U. S., International Apple Shippers' Assn., Western Fruit Jobbers' Assn., American Fruit and Vegetable Assn. Agriculture, in order to make buying easy has developed a code of scientific names and is developing a code of standard common names to replace the two to a dozen names now often applied to a single shrub or plant. The drug manufacturers, for much the same reason, are working for a standard nomenclature on drugs. The Society of Automotive Engineers has, within the past few years, worked out definitions and nomenclature dealing with storage batteries, in coöperation with the United States Bureau of Standards. The American Concrete Institute has also been working several years to limit the technical meaning of words in order to avoid conflicting usage and errors in specifications. There are many industries which have done nothing in developing a precise business vocabulary and it is usually in these industries that one finds distrust and suspicion rampant. When, for example, in the lumber industry we find one product, long leaf pine, known by at least twenty-nine local or generally used names, there is surely need for a standardization of terms." Standardization of Quantity.-Technical and scientific in its nature, but of great value to industries, is the fixation of standards of quantity. This involves the fixing of units of measurement, which is basic and essential to the progress of the industry. We naturally assume that the experience of the centuries has long since solved such questions. It is somewhat of a surprise to know there are 23 different bushels in use in the United States. The rapid development of new industries also demands the creation of new standards. The Bureau of Standards is steadily evolving working standards of wave lengths, candle power, color, radio-activity and what not, in coöperation with 8 8 "Report of Committee on Nomenclature," Proceedings, American Assn. of Nurserymen, 1918, p. 74. 4 "Report of Committee on Standardization," Seventh Annual Meeting, American Drug Mfrs'. Assn., p. 85. 5 "Annual Report," Bureau of Standards, 1920, p. 87. 7 "The Present Lumber Standardization Movement," David G. White, Forest Products Laboratory, Southern Lumberman, Dec. 17, 1921, p. 114. 8 "Industrial Standardization," C. A. Adams, Annals of the American Academy, p. 290, vol. 82; "The Work of the Bureau of Standards," P. G. Agnew, ibid., pp. 280, 282. the various technical organizations and associations and the national laboratories of other countries. Color standards alone are of real interest to railroad officials, oil ripeners, paint and varnish manufacturers, illuminating engineers, dealers in dyes, lithographers, and many other interests. Standardization of Quality.-The fixing of standards of quality is usually effected through the adoption of standard specifications, either by the buyer or seller. In some instances, because of the nature of the commodity, the adoption of standard tests is also required. Sometimes the test is the standard. Many of the lumber associations have adopted standard specifications, fixing the quality of the various grades of lumber. Approximately 90 per cent of the yellow pine lumber of the states of Texas, Arkansas, Missouri, Louisiana, Mississippi, Alabama, Georgia and Florida is graded and classified according to the rules and specifications of the Southern Pine Association. In fact most of the lumber sold in the United States is sold under association grades and specifications. The Clay Products Association found it necessary to standardize their products because products of an inferior quality reacted severely against the industry in its competition with brick manufacturers, iron manufacturers and others.10 Standard specifications and tests for cement have been adopted after several years' work by the American Society for Testing Materials, in coöperation with a special committee from the government departments and the American Society of Civil Engineers. Those specifications have been widely circulated by the Portand Cement Association. The cotton seed crushers have carefully worked out uniform grades and tests to place their buying on an efficient basis.11 The silk manufacturers, working with the technical experts of China and Japan, have worked out some specifications for raw silk, and are gradually evolving an international standard.12 9 "Standard Specifications for Grading of Southern Yellow Pine," Copyright, 1920, Southern Pine Assn. 10 Printers' Ink, July 22, 1920, p. 116. 11 "Rules Governing Transactions in Cotton Seed and Its Products," Interstate Cotton Seed Crushers' Assn., Thirty-third Annual Session, 1919. 12 "Forty-sixth Annual Report," Silk Assn. of America, 1918, pp. 21, 81 and 83. |