Charles S. Keith, member of the committee on values, market Committee of Thirty, and one of George K. Smith's correspondents, was general manager of the Central Coal & Coke Company, with an authorized capital of $7,000,000, manufacturing about 85,000,000 feet of lumber per year; the capital of his company being employed, however, in both the coal and lumber business. An examination of the record will show that the affairs of the association were dominated by men of the character mentioned, few in number, but having large interests and controlling large business and trade. It readily appears, if the figures in the record are correct, that the few names mentioned produce and handle a large part of the output of the mills of the association. R. A. Long had been a member of the as-ent of George K. Smith as to yellow pine sociation for 15 years; was its president in values, was president of the Grayson-McLeod the years 1904 and 1905; was from time to Lumber Company, with an authorized capital time a member of its board of directors; and of $1,000,000. was influential in establishing the policies of the association, being in the habit of attending the meetings of the association, delivering addresses as its president, and likewise as a lay member. He was, with Mr. White, a frequent member of the committee on values of the association until 1906, and became and continued one of the correspondents of the secretary, George K. Smith, concerning prices of yellow pine lumber. Mr. Long was connected with the Long-Bell Lumber Company of Kansas City since 1884, and was for a number of years its general manager. The Long-Bell Lumber Company has an authorized capital of $2,000,000, and manufactured about 275,000,000 feet of lumber annually in 1906, 1907, and 1908, and for a number of years prior thereto had annually manufactured about 200,000,000 feet. The Long-Bell Lumber Company likewise operated about 62 retail yards at points in Kansas. Mr. Long was also interested in the Calcasieu Long Leaf Lumber Company and in the Lufkin Land & Lumber Company; both of said companies being engaged in the yellow pine in dustry along with the Long-Bell Company. The extent of the business of neither the Calcasieu Company nor the Lufkin Company ap pears in the record; the authorized capital of the one, however, is $1,200,000, and for the other for Missouri is $8,000. Price List. From its organization the association issued a price list to its members, and to the trade. This was designated as the flat rate sheet price list, or in booklet form as the Yellow Pine Price Current, as published and circulated down to the year 1906, and subsequent to that time as a market rethe association's established classifications, port. This price list was made up by taking grades, and sizes, and quoting prices for the respective items thereon, for sale and delivS. H. Fullerton, likewise the president of ery by manufacturers and wholesalers at the association for one or more years, a mem-tain territory to be reached upon certain points from places of shipment within cerber of its board of directors at times, promi- freight rates; the freight rate being includnent in discussions upon the floor of the as- ed in the price quoted. No quotations were sociation, a member of the committee on val- made for delivery at points where the freight ues and of the market Committee of Thirty rate was in excess of 45 cents from place of of 1906, and correspondent of George K. shipment, and the minimum freight rate Smith as to prices of yellow pine lumber, employed was 10 cents. The work of preinfluential in the affairs and policies of the paring this list, including the naming of the association, was largely interested in the prices to be quoted, was committed to a comlumber trade. He was president of the Chi- mittee of the association at first called the cago Lumber & Coal Company, a wholesaler price list committee, and afterwards called of yellow pine, with annual sales of about the committee on values down until the year 200,000,000 feet, and with an authorized cap- of 1906. ital stock of $350,000. The Chicago Lumber It seems that in the latter part of the year & Coal Company also operated a large num- 1905 or the early part of the year 1906 cerber of retail yards, about 62, in the state of tain investigations of the operations of the Illinois, but had its chief business office in association or certain of its members alleged the city of St. Louis. Mr. Fullerton was also to be in violation of the laws of the state of president of the Bradley Lumber Company, a Mississippi leveled against combinations and manufacturing concern which manufactured conspiracies in restraint of trade were inabout 200,000,000 feet of lumber per annum, augurated by that state, and the board of diand which companies he ordinarily represent-rectors of the association early in 1906, in ed in the meetings of the association. He also sold for smaller companies and mills to whom he made loans. He also owned stock in the Colonial Lumber & Timber Company. Nelson McLeod, at one time president of the association, member of the board of directors at times, member of the committee on values for the association, member of the market Committee of Thirty, and correspond view thereof, adopted the following resolution upon the part of the association and entered the same upon the record of their proceedings: "Resolved, that neither the committee on values nor any other committee or officer of this association shall make to the association of existing conditions applicable to the trade or any member thereof any report other than and of existing prices; nor shall this associa tion, nor any officer or committee thereof, make | trade. The members of this committee in either to the association as a whole or to any the aggregate usually represented interests member thereof, any recommendation affecting prices to be charged for lumber or the amount largely predominant in the business repreof the product or output thereof." The minutes of the board also made reference to the Mississippi investigation and a proposal for an early meeting in St. Louis, at which attorneys from various states were to be present and furnish opinions as to the proper handling of all questions coming before the association which could in any way conflict with the state or federal statutes governing trusts or combinations. The date of the meeting was reserved. At the annual meeting of the association in January, 1906, following the adoption of the above-quoted resolution by the board of directors, no report was made by the price list committee or the committee on values. The proposed meeting of the board of directors was had on the 27th and 28th days of February, 1906, at which various counsel were present, and a new arrangement was made for the formulation of the price list. Section 5, providing for the appointment of a Committee of Thirty by the president, to be known as a "Market Report Committee," was added to the by-laws, and the committee was appointed, and the work of preparing and getting up the price list was assigned to it. The list of members of this committee is found in the record and embraces many whose names have frequently been connected with the price list committee and the commitee on values, and all of whom had large interests in the lumber trade. This committee, however, failed to take up the work assigned it. This failure seems to have been under the advice of counsel. It met, however, in October, 1906, in connection with the board of directors, but issued no report, and thereupon the board of directors authorized and directed George K. Smith, secretary, to take the matter in hand, and to make and prepare the price list or "market report," as they at that time termed it. Thereafter the same was gotten up by the said George K. Smith, secretary, and the prices quoted were named by him, with the aid of a list of correspondents, hereinafter referred to, and was to the time of the institution of this suit published and promulgated by him to the members in the trade under the name of the "Market Report." The old price list committee and the committee on values as well were usually appointed at annual or semiannual meetings of the association upon motion; the number thereof being provided in the motion. The members usually served until the next meeting of the association, or for a year, and were either reappointed or others in their stead. The list of those reported in the record from time to time as members of this committee embrace members of large interests as J. B. White, R. A. Long, Nelson McLeod, S. H. Fullerton, Charles Keith, Isaac Enoch, and men of like standing and interest in the lumber sented in the association. These committees from the very beginning made reports to the open meetings of the association down until the year 1906, and since which time no reports have been made direct to the association; but George K. Smith, under the authority of the board of directors and his list of correspondents, has had complete control, and has issued the report direct, without submitting it to the members in the association meetings. The reports of these committees were frequently discussed by various members in open meeting, and were either adopted as submitted or as amended, and were then recorded by the secretary and promulgated by him. A copy of the report of this committee is found in the record, and, except as to prices quoted and named and new grades and sizes added, is substantially the same as all other reports of the committee. When George K. Smith, under the direction of the board of directors, took charge of the report in 1906, he appointed a list of correspondents for the association, 63 in number, known as "Correspondents of the Yellow Pine Manufacturers' Association." This list was appointed under the authority of the board of directors. The members were manufacturers of yellow pine, and practically all were members of the association. Each member was given a number, and correspondence was carried on by that number. In the number are found many who were at various times associated on the price list, values, and market report committees of the association. One of the purposes of this list of correspondents was to furnish information when requested by George K. Smith as to prices at which they were selling lumber. This information served a double purpose, for it also disclosed to George K. Smith, secretary, whether or not they were observing the association price list. Secretary Smith, in undertaking the correspondence, inclosed a sheet which was a copy of the price list in force with a blank column at the right of the column of prices quoted, with a request to the correspondent to indicate any items quoted thereon which he was selling or offering at a different price from that named in the list. The correspondent, in answering the inquiry, if he was selling or offering at the price list, would make no change upon the slip, but would simply check the blank spaces opposite in the blank column. If there were items which he sold lower than the list, he would insert the price at which he had sold or was offering in the space in the blank column opposite the item; if higher than the price list, the same method was employed. That Secretary Smith, in making up the market report, was not at all times governed by the replies received is illustrated by the | May 11th. The advance is on finishing boards said report for February 25, 1908. From the and some length of dimension. Now I will read the entire list, so that all may know what it compilation above shown, it appears that of is." those replying to the secretary's inquiry as to "Heart Face Flooring, Grade 'B' and Bet ter,” 25 answered that they were making the same price as the January list, 6 that they were quoting lower, and one that he was quoting higher; the price was advanced by the secretary in the new report 50 cents over the report for January. He added this 50 cents, according to his statement, from knowledge he had of the conditions of the market, and from stocks on hand by different dealers in this particular line. On "Edge Grain Flooring" 92 correspondents replied that they were quoting the same price as the January list, 5 that they were quoting higher, and 13 that they were quoting lower. The secretary advanced the price above the list 50 cents. In all instances the replies showed that a greater number were selling at less price than the prices quoted in the January list than were selling for a greater price; but, in each instance where the price was changed at all, it was advanced for the February list. It was never the policy of the secretary to quote a lower price if an equal number quoted the list and any above. An investigation of the official proceedings and meetings of the association shows that the matter of selling prices of lumber was one of the chief matters to which the association gave its attention. In fact, all the work of the association seemed to tend in In 1903 the committee made a report through the chairman, R. A. Long, which, among others, contained the following ob servations: "In view of the extraordinary conditions we believe that the trade should stand an advance of 50 cents per M on all items on the righthand side of the list and some items on the lefthand side. If err we must, we desire to be on the side of conservatism, and so we recommend the reaffirmation of the list adopted May 2d, and of requesting our members to adhere to these prices. By so doing for a period of 20 days they will be able to secure all the business wanted at said prices. We also believe that by adhering to this condition that by August 15th a good liberal advance can be made." In January, 1904, in an address entitled "Marketing of Yellow Pine," delivered before the association at New Orleans, Captain J. B. White, among others, made the following observations: "Until lately the jobber and the lumber merchant were the only ones to be consulted in the marketing and selling of the lumber product. This individual, as already mentioned, had become largely a manufacturer, and the time has now come when we should fix a fair and reasonable price for our yellow pine lumber in all competition with other woods used for like purmarkets, governed only by its just merits in poses. There is no competition at anywhere near present prices except among ourselves. The lumber should go to the retailer at certain just and fixed prices." In 1905, at the July meeting, when the committee report on values was before the house, the following, among other remarks, were made: Mr. White: "The committee on values met this direction, and to keep the central body of the association in touch with and in control of all the matters touching the trade by which prices were affected. In the various and reported an advance in prices, on account discussions of the report of the market re- of the pressure brought to bear by a large port committee by members upon the floor of number here who are not on that committee. the association, it seemed that the general When it came to a question of voting on the desire expressed was to maintain a uniformi-mittee voted very enthusiastically, but not so price list, it looked to me as though the comty of prices among the dealers generally and very many 'ayes' from the back of the hall. It have higher prices upon the market. In has been customary to inquire how many pro1901 the committee reported through N. W. pose to issue the list; we want to see how it strikes every one, and would suggest that the McLeod that it was impracticable at that chair call for a rising vote of those who are time to recommend a uniform list, as stocks willing to issue the list, and separately of those were very much broken, and trade was good, who use the list as a basis for their prices." and many members found it necessary to make prices on some items considerably higher than would be satisfactory to others, and therefore a list as a basis of minimum market values was recommended. It was moved that this report be adopted, and that all members be urged to have the list sent out to the trade. In 1892 the report of the price list committee was made, and the secretary said, in offering the same: "I will say for the benefit of those who may not have seen the list adopted by the Arkansas State Association that our price list committee has paid the gentlemen the compliment of considering their judgment as perfect, as they have made no changes whatever in the list adopted by the Arkansas Association at Little Rock on the 13th day of July, considering that that was a fair expression of the market and no changes have been made. This is a slight advance over our association price list that was adopted April 13th and readopted at Memphis, Tennessee, Twenty-two responded that they would issue the list, and nine that they would not issue it, but would use it as a basis. S. H. Fullerton: "I think the issuing of this list should be universal. I think the time is stuff is worth. Every one should issue the list; ripe to get the prices. We have said what the it causes a great deal of confusion when all do not do it. I would like to see everybody issue the list. It is due to the trade. If the prices are not legitimate and equitable, let them stand up and say so now. There is no use in entering into this thing in a half-hearted way. go out of this room feeling that we are all going to do the same thing. If any one feels that the prices are too high, let him say so now. It is not too late to rectify them. Let them stand up and be a man. We want uniformity of prices." Let us J. A. Freeman: "I am glad to hear that we have such an urgent appeal to stand by the prices. I did not myself vote that our company would issue the list, although we would base our prices on it." J. A. Freeman: "I believe Mr. Fullerton is right. The uniform issue of a list would certainly be beneficial to the trade, and would not interfere with any one who is going to ask fifty cents above the list." C. S. Keith: "What date does the list become effective?" S. H. Fullerton: "The list should be uniform | a flat rate sheet, and published for the asin adoption. There is coming a time when the sociation by E. J. Schuster Printing Comorders will be coming in very rapidly, and we need a uniform schedule. The effect will be pany, under the direction and supervision of good upon the trade." George K. Smith, secretary. This was known as the association official price list. The addressograph department maintained by the association collected the names and addresses of all dealers in the trade territory to which from 10 to 45 cent freight rates were applicable, and had them arranged accordingly, and these extracts were addressed to each of these dealers through this agency. The association also issued a long leaf f. o. b. list and a short leaf f. o. b. list (distinctions growing out of different weights of different lumber) containing quotations for delivery at the mills, which were the same as the official flat rate sheet less the freight. From 600 to The Chair: "The committee's report provides for the 19th." At the January meeting, 1905, the committee on values reported: "That, while present conditions would warrant an advance in prices, it is thought best to reaffirm the January 10th list, with a view to early action toward an advance later on. B. White, Chairman." J. The same was adopted on motion of J. A. Freeman. In an address to the convention in January, 1904, Mr. J. B. White again said: "There is nothing now in competition with yellow pine-we are simply in competition with ourselves. Let us get together, and any reasonable price will be sustained.' N. W. McLeod, upon the same occasion, said: "There is this to say, however: I am satisfied the trade of 1904 will be of good volume, and it rests with the producers themselves-and particularly with those of this association-as to how many bulwarks they shall throw about the trade to protect it from the folly of undue competition between the manufacturers themselves, for yellow pine has no competition to fear in other wood." Upon another occasion J. B. White sent a telegram to the association, as follows: "Greetings to all. Hold to the list. We are advancing as follows: All items above January 4th list.' 1,500 each of these were mailed out each time a new list was issued by the association, and bearing the same date as the official list, and extracts therefrom. Not only did the association order and print for its own use and circulation a great number of these lists in the various forms referred to, but the individual members of the association ordered and purchased from the Lumbermen's Printing Company, upon their own account, or made special orders for the same through the association of many additional copies. These special orders of the individual members were under special covers which bore the name of the member for whom printed, and the orders run ordinarily for from 25 to 200 copies, though in some instances exceeding that number. A number of these special covers were identified and introduced in evidence. After George K. Smith undertook the prep In his evidence in this case S. H. Fuller- aration of the so-called market report in ton, at page 2080, says: "Well, I believe in higher prices. I do not think that lumber is selling at anything like its value. I am very well satisfied of that." J. A. Freeman says: "I think that about the only reasonable course in the matter of finish, for instance, in order to protect ourselves, would be to advance prices 50 cents every time we meet together; my motive in suggesting this is that there are certain people who will always cut prices 50 cents, no matter what it is, so, if we advance it each time, we may in time get the price up to its proper level." In 1904 Mr. Freeman stated that he thought the adoption of the report of the committee would serve the best possible purpose. The report was adopted. In January, 1905, the committee on values was made permanent and charged not only with the duty of carefully studying all market conditions and conditions of stock, but was also given authority to take such action to secure a curtailment of the manufactured product as seemed necessary when deemed needful by the committee. Adopted. The price list, or so-called market report, was published and issued in various forms to the trade by the association, and by the individual members. It was first issued as the place of the former committee on values and the market committee, he made his orders for a new price list or market report in writing, referring to the date of the last effective list at the time, and indicating such changes as he desired therein, giving the date which it should bear, to be issued upon and become effective; giving also the number to be printed and the number to be reserved for special covers. These orders were written upon stationery of the association; were signed by Smith, as secretary. The printer, in complying with the order, used the old forms, which were continuously kept in type, and would make only such changes thereon as were indicated in the order. The Lumbermen's Printing Company ceased the printing of the Price Current under that name for the association in December, 1905, and about the time of the alleged sale of the stock therein by Smith (which it will also be noted was about the time of the movement against the association by the state of Mississippi) Smith announced that the association was going out of the price list business, and that it was up to the printing company to print the Price Current in booklet form upon its own responsibility, un country in periods of active business; but in periods of general activity lumber prices, with a few variations downward now and then, continued upon the whole to advance and grow higher. The prices named by the price list committee and named in the printed market reports, were usually boosting prices; all the witnesses for the respondents agree upon that proposition, while the respondents themselves say that such prices were taken as a basis, and that they either sold at the same or at so much less, that is, in making a sale, their proposition would be that they would sell so much stuff at the market report of a certain date, or at so much off that report. The witnesses for the state testified that with the issuance of a market report the dealers had to pay the prices mentioned therein; if the new market report quoted advanced prices, the advanced prices had to be paid upon the market in order to get the material, and, where material advances were made by the wholesalers, the retailers also had to advance the price on stocks on hand. der its own name, from that time forward. | some extent from the general activity of the Although George K. Smith announced that the association had gone out of the price list business in December, 1905, yet it appears from the record that he steadily continued the publication of the official flat rate sheets. On the 27th day of March, 1906, he issued the same on the 23 cent basis. On the 18th of July, 1906, he again got out a 23 cent flat rate sheet and called it a market report. The Lumbermen's Printing Company, in the meantime, issued three Price Currents under its own name, one of date March 2, 1906, and one of date March 28, 1906, and one of date July 18, 1906. These three were printed from association forms (it appearing that the forms were at all times the property of the association), and were compiled from association form price lists and lists being made up by George K. Smith. The issue of March 2d was upon the price list of the association handed the printer by Mr. Smith | and other members of the association. The issue of March 28th was based upon list issued by Smith on March 27th, and contained the same prices. The issue of July 18th was based on figures given by Smith; a market report being also issued by him upon that date. Subsequent to July 18, 1906, the printing company did not undertake or claim to issue a Price Current in its own name, but thereafter, and continuously to the time of the filing of this suit, printed the same under the name of the association, and took its orders, as hereinafter stated, from George K. Smith, secretary, issuing also the f. o. b. lists and the extracts from the market report for the addressograph. Shortly afterwards, and doubtless in view of the fact of Schuster's publication, the association market Committee of Thirty met in conference with the board of directors of the association, and the board authorized George K. Smith to take charge of the market report and price list matters, with the result that on the 10th day of November a new list was published through the Lumbermen's Printing Company as formerly, and from such time forward price lists and mar ket report publications were kept securely within the control of the association; Mr. Schuster getting along the best he could. Prices. From 1896 to 1908 the increase in yellow pine lumber prices has been approximately 100 per cent. on various items; on some, more than 100 per cent.; on some, a little less; and this in spite of the fact of vastly improved methods of manufacture during that period from former periods which tend in the aggregate to cheapen the cost of production, and demands for new uses which tended to lessen the waste of the native product. Certain portions of that period of time were characterized by great business activity in all lines, but not all. The prices of lumber may have received an impetus to Curtailment. In the early part of 1904 a movement took form in the association looking to the curtailment of the production of yellow pine lumber among members of the association. The reasons assigned for such action were based upon unsatisfactory conditions as to prices prevailing at that time among dealers. Prices at that time seemed to be upon the decline, and this was attributed to the fact of the large production of lumber. It was sought by concerted curtailment through the association to arrest this decline and make conditions more favorable for stable and advancing values. It seems as early as January of that year the secretary, George K. Smith, had become alarmed about the production and its consequent effect upon prices and called the association's attention thereto at the January meeting of that year. As early as March of that year an attempt seems to have been made to regulate the amount of production by united action; but the required number to make the undertaking feasible failed to enlist. At the semiannual meeting of June, 1904, which was held at St. Louis, Mo., the secretary, George K. Smith, made his official report to the association, in which he called attention to the excess in amounts of lumber being manufactured in excess of sales, and the excess in amount of stocks on hand June 1st over the amount of the same on hand June 1, 1904, and other matters. President Long's Address, January, 1904, Mr. Long, in depicting the situation at that time, among other things, said: "To obtain full advantage of these favorable conditions, it will be necessary to obviate ruin |