Quantity Discounts and the Morton Salt Case

Abstract

HE requirements of the RobinsonPatman Act should be seriously I considered in the formulation of many pricing policies. These requirements are in such a state of flux that any exposition of recent developments in the administration of the act seems desirable. The Morton Salt case presents an excellent opportunity for such an inquiry. It is an obvious and yet significant fact that any antitrust case is at the same time a legal and a business matter and that it is not wise or possible to divorce the two points of view. This makes it necessary to straddle the areas of interest of the legal technician and the businessman. The difficulty of this task is somewhat imposing, since what is superficial treatment to the antitrust lawyer may be considered overbearing legal technicalities by the business practitioner. It is hoped that sufficient attention to both points of view has been achieved in this paper.2 Within the past few years there has been unusual activity in the antitrust field. The surprising number and variety of cases seem to have resulted in a considerable degree of on the part of lawyers, businessmen, and legislators. Some have gone so far as to suggest that a state of chaos exists. In fact, nearly everyone except the Federal Trade Commission says he is confused. Corwin Edwards, chief economist of the FTC, has characterized this widely proclaimed state of confusion on the legality of pricing practices as mere ghosties and ghoulies and six legged beasties and things that go hump in the night.' It is probably safe to say that much of the is less imaginary than Mr. Edwards would suggest. Some substantial among members of the Commission itself is found in a Senate committee report which documents statements made by various Commission members on particular pricing practices that are considered illegal. That some of these statements are inconsistent is made quite obvious.4 If it can be assumed that the antitrust situation is characterized by something less than complete clarity, the cause probably rests on some recent antitrust cases. Two of them are the Cement Institute case and the Rigid Steel Conduit case, both dealing with the broad prob1 Associate director, Market Facts, Inc.