Out on Base

Like the blind men who tried to describe an elephant, few agreed on the meaning of Congress' bill to legalize a form of basing point pricing system for U.S. industry (TIME, June 12). The bill's author, Democratic Senator Joseph C. O'Mahoney, no friend of big business, insisted that it would permit U.S. industries to absorb freight charges (if done "without collusion") and thus help competition and the consumer. Other Administration supporters, notably Illinois' Senator Paul Douglas, denounced the bill as a scheme to stifle competition.

Last week, while President Truman studied the bill, the Federal Trade Commission suggested a helpful way to settle the family fight. FTC asserted, as it had before, that it was already perfectly legal for businesses to absorb freight charges and quote delivered prices as long as they did not conspire to fix prices. Seizing this argument, President Truman at week's end vetoed the bill. "It is quite clear," he wrote, "that there is no bar [at present] to freight absorption or delivered prices as such . . ." Though his bill was killed, Senator O'Mahoney, a master of political agility, greeted the President's message as a victory. "[The veto message] says," he stated, " 'fear not when acting individually, you can sell at delivered prices and you may absorb freight.' "

But U.S. industry, which has been prosecuted before on other matters after taking such assurances at face value, would probably think twice before testing Truman's promise. And such industries as steel, cement, etc., which were most affected by the 1948 Supreme Court decision outlawing the basing point system, had no need to absorb freight. They could sell all they produce f.o.b. the mill.

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