Thomas Watt Gregory to Woodrow Wilson
Title
Creator
Identifier
Date
Description
Source
Text
I have considered the letter of Mr. Hoover, United States Food Administrator, dated the 22nd instant, transmitted through you, in which he makes inquiry as to his powers in certain respects under the Food Control Act approved August 10, 1917.
Among the enumerated purposes of this Act are these: To assure an adequate supply and equitable distribution of certain enumerated necessaries, and to establish and maintain governmental control of such necessaries during the war. (Section 1. )In carrying out these purposes the President is authorizedto enter into any voluntary arrangements or agreements, to create and use any agency or agencies, * * * to cooperate with any agency or person * * *. ( Section 2. )
Under this authority the President has created the office of United States Food Administrator.
The present inquiry in substance is whether under this authority the Food Administrator by direction of the President may enter into agreements with persons in the various trades or industries within the scope of the Act which have the effect of fixing prices or of pooling output in short, agreements which if made between private traders would violate the Sherman AntiTrust Law.
Since no specific agreement or arrangement is before me, I can only speak generally. I am of the opinion that any agreement made with producers or traders by the Government itself (through the Food Administrator acting by direction of the President), under authority of Section 2 of the Act, and having a reasonable relation to the objects enumerated in Section 1, for example, to assure an adequate supply and equitable distribution of necessaries and to establish and maintain governmental control of necessaries during the war, would not fall within the operation of the Sherman AntiTrust Law, even though the effect of the agreement or agreements were to fix a uniform price or to accomplish a pooling of output. This, because governmental action with respect to prices or methods of distribution is obviously not within the mischief at which the Sherman Law was aimed. On the contrary, when natural laws of trade break down, governmental action in this regard may become essential to prevent the private control of markets. For, when natural laws of trade can no longer be depended upon to regulate markets, the only choice is between artificial control imposed by private interests and artificial control imposed by public agencies. In these circumstances, therefore, such governmental action, so far from running counter to the purpose of the Sherman Law, is directly in line with it. I am equally clear that the President has no power under the Food Control Act to authorize price fixing or pooling agreements between the producers or traders themselves.
Attorney General.
The President,
The White House.
To
Files
