United States Hoffman Machinery Corporation

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COJIIPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF SECTION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914. Docket 923-February 6, 1923.

SYLLABUS.

Where a corporation engaged in the manufacture and sale of 85 per cent of the garment-pressing machines made In the United States; in continuing through the same officers the competitive methods of Its predecessor, (a) Caused Its employees to keep a check upon salesmen and employees of competitors In order to secure the names of concerns to whom said com- Jetitors had sold machines; and (b) For the purpose of Inducing purchasers of competitors' machines on the installme~t plan to violate th~lr contracts and to Install and use Its own machines in place of said competitors';

(1) Olfered to, and did, allow p-Jrchasers to apply on the purchase price of Its machines such sums as had theretofore been paid by them on such competing machines;

(2) Agreed to, and did, furnish purchasers with the services of attorneys to defend suits brought or anticipated on account of breaches of contract which It Induced;

(3) Offered to, and did, furnish legal advice to purchasers as to ways ln which their contracts might be rescinded or evaded; and ( 4) Otrered to, and did, frame for purchasers letters to competitors rescinding their installment contracts;

Held, That such spying on the business of competitors, and such inducing of the ;:,reach of contract, under the circumstances set forth, constituted unfair methods of competition.

COMPLAINT.

Acting in the public interest pursuant to the provisions of the Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission charges that the United States Hoil'man Machinery Corporation, hereinafter referred to as the respondent corporation, B. A. Brennan, \Villiam l\1. Talbott, Eugene D. Stocker, William II. North, James n. Spencer, Michael J. ·white, L. Frankel, F. M. Kling, A. N. Haas, S. S. Lesser, F. ,V, Hart, A. Bellinger, hereinafter referred to as the respondent individuals, have been and are using unfair methods of competition a --= 440 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 5F.T.C.

in commerce in violation of the provisions of Section 5 of the said Act, and states its charges in that respect as follows: PARAGRAPII 1. Respondent corporation is a corporation organized January 19, 1922, under and by virtue of the laws of the State of Delaware with its principal offire and place of business located at 105 Fourth Avenue in the City of New York, New York. It was organized for the purpose, among others, of acquiring or taking over by merger, purchase or otherwise as a going concern the business then carried on by the Uni"ted States Hoffman Machinery Company, a Delaware corporation organized in 1913, from which time, until its merger with the respondent corporation, it was ·engaged in the business of manufacturing and selling garment-pressing machines throughout the United States, shipping such machines when manufactured at its factory in Syracuse, New York, to purchasers thereof in the various States and Territories of the United States and the District of Columbia. At the time its business was taken over by the respondent corporation, as hereinafter described, the said United States Hoffman Machinery Company had a substantial monopoly in the United States in the business of manufacturing and selling garment-pressing machines, the volume of its business being approximately 85 per cent of the total business then done in the United States in the manufacture and sale of such machines. It marketeu its machines by means of orders therefor secured by its salesmen, transmitted to its executive offices at Syracuse, New York, and there accepted or rejected. Upon the acceptance of orders the machines were shipped from Syracuse, New York, to purchasers thereof located in the various States and Territories of the United States and the, District of Colu~bia, who paid for the same in cash or by means of promissory notes, agreeing by written contracts with the said United States Hoffman Machinery Company that title and ownership of said machines would remain in the United States Hoffman Machinery Company until the full purchase price represented by the notes would be paid in cash.

PAn. 2. In the period from May 11, 1021, until the business of the said United States Hoffman Machinery Company was tak£'n over by the United States Hoffman Machinery Corporation, as hereinafter described, the following-named respondent individuals held the following respective offices in the said United States Hoffman Machinery Company, viz:

D. A. DrPunan, Chairman Doard of Dh·ectors. Wllllam M. Talbott, VIce Chairman Doard of Dlrt>ctors and Treasurer. Eugene D. Stocker, President.

James D. Speucer, VIce President.

UNITED STATES HOFFMAN MACHINERY CORP. ET AL. 441 43!) Complaint. llllchael J. White, Assistant Treasurer.

L. Frankel, Assistant Treasurer.

F. M:. Kling, Assistant Treasurer.

S. S. Lesser, Assistant Secretary.

A. N. Ilaas, Assistant Secretary.

William H. North, Comptroller.

A. Dellinger, Assistant Comptroller.

F. W. Hart, Assistant Comptroller.

The said respondent individuals adopted and carried out in behalf of the said United States Hoffman Machinery Company the following methods of competition used by the said company from May 11, 1921, to and until the acquisition of the business of that company by the respondent corporation as hereinafter described, which said methods of competition had, however, been used by the said United States Hoffman Machinery Company for several years prior to May 11, 1921:

(1) Caused the salesmen and other employees of the United· States Hoffman Machinery Company to spy upon the salesmen and employees of its competitors for the purpose of securing the names of persons, firms and individuals to whom such competitors had sold either for cash or on installment payment contracts, garment-pressing machines.

(2) For the purpose of inducing and attempting to induce purchasers of garment-pressing machines of competitors of said company, which machines were known by the officers, salesmen and employees of the said company to have been purchased from such competitors, installed and in use in the places of business of such purchasers on installment payment contracts, wrongfully and unlawfully to breach their contracts, with such competitors and to install and use in the place and stead of such machines purchased from the competitors of said company machines purchased from said The United States Hoffman Machinery Company:

(a) Offered to allow, and did allow such purchasers under contract with such competitors as part payment of the purchase price. of its own machines such sums as had been paid on contracts for the purcha~ of such competing machines.

(b) Agreed to furnish, and did furnish such purchasers under contract with such competitors, the services of attorneys to defend suits brought, or expected to be brought by such competitors for the purchase price of such competing machines. (c) Furnished, and offered to furnish legal adv;ce to such purchasers under contract with such competitors as to ways in which such contracts might be rescinded and/or evaded. . - 442 FEDERAL TRADE COMMISSION DECISIONS. Complaint. .~F.T.C.

(d) 0 ffered to frame, and did frame letters for such purchasers under contract with such competitors, letters to be addressed to such competitors for the purpose of rescinding such installment contracts. PAn. 3. On or about January 27, 1922, the respondent corporation and the United States Hofl'man Machinery Company entered into an agreement by which the United States Hoffman Machinery Company was consolidated and merged into and with the respondent corporation, the corporate existence of the respondent corporation as a single corporation continuing as theretofore, the separate existence of the said United States Hoffman Machinery Company by the said agreement ceasing, and the said respondent corporation by the said agreement acquiring all the rights, privileges, powers and franchises and becoming subject to all the restrictions, disabilities and duties of the said United States Hoffman Machinery Company. On January 25, 1922, the respondent individuals were elected to, and have since held the following offices in respondent corporation, which offices are the same offices held by the said individual respondents re· specti very in the United States Hoffman Machinery Company: B. A. Brennan, Chairman Board ot Directors. William l\1. Talbott, Vice Chairman Board ot Directors and Treasurer. Eugene D. Stocker, President.

James B. Spencer, Vice President.

Michael J. White, Assistant Treasurer.

L. Frankel, Assistant Treasurer.

F. M. Kling, Assistant Treasurer.

S. S. Lesser, Assistant Secretary.

A. N. Haas, Assistant Secretary.

Wllliam II. North, Comptroller.

A. Bellinger, Assistant Comptroller.

F. W. Hart, Assistant Comptroller.

PAR. 4. The respondent corporation since the merger, consolidation and acquisition aforesaid, has been engaged in the business of manufacturing and selling garment-pressing machines throughout the United States, shipping such machines when manufactured at its factory in Syracuse, New York, to the purchasers thereof in the various States of the United States and the District of CQJumbia. · At the time it commenced busine"ss it had, and still has a substantial monopoly in the United States in the business of manufacturing and selling garment-pressing machines, the volume of its business being approximately 85 per cent of the total business done in the manufacture and sale of such machines in the United States. It has at all times since its organization marketed its machines by means of orders therefor secured by its salesmen and transmitted UNITED STATES HOFF.M:AN MACHINERY CORP. ET AL. 443 439 Complaint. to its executive offices in the City of New York, and there accepted or rejected. Upon the acceptance of orders, the machines called for by such orders are and have beewshipped from Syracuse, New York, to the purchasers thereof located in the various States and Territories of the United States and the District of Columbia who have paid, and who do pay for the same in cash, or by means of promissory notes, agre:'eing by written contracts with the respondent corporation that the title and ownership of said machines shall remain in respondent corporation until the whole purchase price represented by the notes is paid in full. PAR. 5. Since the respondent corporation commenced business it has continued to use the methods of competition pursued by the United States Hoffman :Machinery Company described in Paragraph 2 hereof, which methods of competition used by respondent corporation were put into operation and have since been continu~ed by the officers of the respondent corporation named in Paragraph 3 hereof, who respectively held similar offices as described in Paragraph 2 hereof in the United States Hoffman Machinery Company, and now and since the merger, consolidation and acquisition, hereinbefore mentioned, the said respondent corporation has used the following methods of competition, to wit: (1) Causes the salesmen and other employees of the respondent corporation to spy upon the salesmen and employees of its competitors for the purpose of securing the names of persons, firms and individuals to whom such competitors had sold either for cash or on installment payment contracts, garment-pressing machines. (2) For the purpose of inducing and attempting to induce purchasers of garment-pressing machines of competitors of said respondent corporation, which machines were known by the officers, salesmen and employees of the said respondent corporation to have been purchased from such competitors, installed and in use in the places .of business of such purchasers on installment payment contracts, wrongfully and unlawfully to breach their contracts with such competitors and to install and use in the place and stead of such machines purchased from the competitors of said respondent corporation machines purchased from said respondent corporation: (a) Offers to allow, and does allow such purchasers under contract with such competitors as part payment of the purchase price of its own machines such sums as have been paid on contracts for the purchase of such competing machines.

(b) Agrees to furnish, and does furnish such purchasers under contract with ·such competitors, the services of attorneys to defend 444 FEDERAL TRADE COMMISSION DECISIONS. Findings. 5F.T.C.

suits brought, or expected to be brought by such competitors for the:> purchase price of such competing machines. (c) Furnishes, and offers to furnish legal advice to such purchasers under contract with such competitors as to ways in which such contracts might be rescinded and/or evaded. (d) Offers to frame, and does frame letters for such purchasers under contract'with such competitors, letters to be addressed to such competitors for the purpose of rescinding such installment contracts. PAR. 6. The above-alleged acts and things done by respondents are all to the prejudice of the public and competitors of the respondent corporation, and constitute unfair methods of competition in commerce, within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

REPORT, FINDINGS AS TO THE FACTS, AND ORDER. Pursuant to the provisions of an Act of Congress, approved September 26, 1914, the Federal Trade Commission issued and served its complaint upon the respondents, U. S. Hoffman Machinery Corporation, B. A. Drennan, William M. Talbott, Eugene D. Stocker, "William H. North, James B. Spencer, Michael J. 'White, L. Frankel, F. M. Kling, A. N. Haas, S. S. Lesser, F. ,V. Hart, A. Dellinger, charging them with the use of unfair methods of competition in violation of the provisions of said Act.

The respondents having entered their appearance and filed their answer herein, a statement of facts was agreed upon by counsel for the Commission and counsel for respondent, to be taken in lieu of evidence.

And thereupon this proceeding came on for final hearing, and the Commission having duly considered the record and being now fully advised in the premises makes this its findings as to the facts and conclusion:

FINDINGS AS TO THE FACTS.

PARAGRAPH 1. Respondent corporation is a corporation organized January 19, 1922, under and by virtue of the laws of the State of Delaware with its principal office and place of business located at 105 Fourth Avenue in the City of New York, New York. It was organized for the purpose, among others, of acquiring or taking over by merger, purchase or otherwise as a going concern the business then carried on by the United States Hoffman Machinery UNITED STATES HOFFMAN MACHINERY CORP. ET AL. 445 439 Findings. Company, a Delaware corporation organized in 1913, from which time, until its merger with the respondent corporation, it was engaged in the business of manufacturing and selling garment-pressing machines throughout the United States, shipping such machines when manufactured at its factory in Syracuse, New York, to purchasers thereof in the various States and Territories of the United States and the District of Columbia. At the time its business was taken over by the respondent corporation, as hereinafter described, the said United States Hoffman Machinery Company did approximately 85 per cent of the total business then done in the United States in the manufacture and sale of such machines. It marketed its machines by means of orders therefor secured by its salesmen, transmitted to its executive offices at Syracuse, New York, and there accepted or rejected. Upon the acceptance of orders the machines were shipped from Syracuse, New York, to purchasers thereof located in the various States and Territories of the United States and the District of Columbia, who paid for the same in cash or by means of promissory notes, agreeing by written contracts with the said United States Hoffman Machinery Company that title and ownership of said machines would remain in the United States Hoffman Machinery Company until the full purchase price represented by the notes would be paid in cash.

PAn. 2. In the period from May 11, 1921, until the business of the said United States Hoffman Machinery Company was taken over by the United States Hoffman Machinery Corporation, as hereinafter described, the following-named respondent individuals held the following respective offices in the said United States Hoffman Machinery Company, viz:

B. A. Brennan, Chairman Board ot Directors. William :M. Talbott, VIce chairman Board ot Directors and Treasurer. Eugene D. Stocker, President.

James D. Spencer, Vlre President.

1\lichael J. White, Assistant Treasurer.

L. Frankel, Assistant Treasurer.

F. M. Kling, Assistant Treasurer, S. S. Lesser, Assistant Secretary.

A. N. IIaas, Assistant Secretary.

William II. North, Comptroller.

A. Dellinger, Assistant Comptroller.

F. W. Hart, Assistant Comptroller.

The said respondent corporation adopted and carried out in behalf· ·of the said United States Hoffman Machinery Company the following methods of competition used by the said company from May 11, 1921, t? and until the acquisition of the business of that company 446 FEDERAL TP..ADE COMMISSION DECISIONS, Findings. 5F.T.C.

by the respondent corporation as hereinafter described, which said methods of competition had, however, been used by the said United States Hoffman Machinery Company for several years prior to May 11, 1921-:

(1) Caused the salesmen· and other employees of the United States Hoffman Machinery Company to watch and keep a closo check upon the salesmen and employees of its competitors for the purpose of securing the names of persons, firms, and individuals to whom such competitors had sold either for cash or on installment payment contracts, garment-pressing machines. (2) For the purpose of inducing and attempting to induce purchasers of garment-pressing machines of competitors of said com· pany, which machines were known by the officers, salesmen and em.. ployees of the said company to have been purchased from such competitors, installed and in use in the places of business of such purchasers on installment payment contracts, to breach their contracts with such competitors and to install and use in the place and stead of such machines purchased from the competitors of said "company machines purchased from said The United States Hoffman Machinery Company:

(a) Offered to allow, and did allow certain purchasers under contract with such competitors as part payment of the purchase price of its own machines such sums as had been paid on contracts for the purchase of such competing machines. (b} .Agreed to furnish and did furnish certain purchasers under contract with such competitors, the services of attorneys to defend suits broughf, or expected to be brought, by such competitors for the purchase price of such competing machines. · (c) Furnished, and offered to furnish legal advice to certain purchasers under contract with such competitors as to ways in which such contracts might be rescinded and/or evaded. (d) Offered to frame, and did frame letters for certain purchasers under contract with such competitors, letters to be addressed to such competitors for the purpose of rescinding such installment contracts.

PAR. 3. On or about January 27, 1922, the respondent corporation and the United States Hoffman Machinery Company entered into an agreement by which the United States Hoffman Machinery Company was consolidated and merged into and with the respondent corporation, the corporate existence of the respondent corporation as a single corporation continuing as theretofore, the separate existence of the said United States Hoffman Machinery Company by the said UNITED STATES HOFFMAN MACHINERY CORP. ET AL. 44 7 439 Findings. agreement ceasing, and the said respondent corporation by the said agreement acquiring all the rights, privileges, powers and franchises and becoming subject to all the restrictions, disabilities and duties of the said United States Hoffman Machinery Company. On January 25, 1922, the respondent individuals were elected to, and have · since held the following offices in respondent corporation, which offices are the same offices held by the said individual respondents respectively in the United States Hoffman Machinery Company: B. A. Brennan, Chairman Board of Directors. Wllllam M. Talbott, Vice Chairman Board of Directors and Treasurer. Eugene D. Stocker, President.

James B. Spencer, Vice President.

Michael J. White, Assistant Treasurer.

L. Frankel, Assistant Treasurer.

F. M. Kling, Assistant Treasurer.

S. S. Lesser, Assistant Secretary.

A. N. Haas, Assistant Secretary.

William II. North, Comptroller.

A. Bellinger, Assistant Comptroller.

F. W. Hart, Assistant Comptroller.

Since June 25, 1922, respondent 'Villiam M. Talbott has severed his connection with the respondent corporation and a partial reorganization has taken place, so that the Board of Directors as of August 17, 1922, is as follows:

DIRECTORS.

B. A. Brennan, Chairman Board of Directors. Henry W. Wllllams, Secretary and General Counsel Eugene D. Stocker, President.

Richard D. Morris, of F. B. Keech & Co., New York City. John F. B. Mitchell, of Redmond & Co., New York City. Charles II. Hampton, of Hanover National Bank, New York City. PAn. 4. The respondent corporation since the merger, consolidation and acquisition, aforesaid, has been engaged in the business of manufacturing and selling garment-pres.sing machines throughout the United States, shipping such machines throughout the United States, shipping such machines when manufactured at its factory in Syracuse, New York, to the purchasers thereof in the various States of the United States and the District of Columbia. At the time it commenced business it did, and still does approximately 85 per cent of the total business done in the manufacture and sale of such machines in the United States. It has at all times since its organization marketed its machines by means of orders therefor secured by its salesmen and transmitted to its executive offices in the City of New 80044 °-24-VOL 5-30 448 FEDERAL TRADE COMMISSION DECISIONS. Findings. ri F .. T. C. York, and there accepted or rejected. Upon the acceptance of orders, the machines called for by such orders are and have been shipped from Syracuse, New York, to the purchasers thereof located in the various States and. Territories of the United States and the District of Columbia who ha.ve paid, and who do pay for the same in cash, or by means of promissory notes, agreeing by written con-· tracts with the respondent corporation that the title and ownership of said machines shall remain in respondent corporation until the whole purchase price represented by the notes is paid in full. PAR. 5. Since the respondent corporation commenced business it has continued to use the methods of competition pursued by the United States Hoffman Machinery Company described in Paragraph 2 hereof, which methods of competition used by respondent corporation were put into operation and have since been continued by the officers of the respondent corporation named in Paragraph 3 hereof, who respectively held similar offices as described in Paragraph 2 hereof in the United States Hoffman Machinery Company, and now and since the merger, consolidation and acquisition, hereinbefore mentioned, the said respondent corporation has used the following methods of competition, to wit:

(1) Causes the salesmen and other employees of the respondent corporation to watch and keep a close check upon the salesmen and employees of its competitors for t~e purpose of securing the names of persons, firms and individuals to whom such competitors had sold either for cash or on installment payment contracts, garment-pressing machines. ~ (2) For the purpose of inducing and attempting to induce purchasers of garment-pressing machines of competitors of said respondent corporation, which machines were known by the officers, salesmen, and employees of the said respondent corporation'to have been purcliased from such competitors, installed and in use in the places of business of such purchasers on installment payment contracts, to breach their contracts with such competitors and to install and. use in the place and stead of such machines purchased from the competitors of said. respondent corporation machines purchased from said. respondent corporation:

(a) Offered to allow, and <lid allow certain purchasers under contract with such competitors as part payment of the purchase price of its own machines such sums as had been paid on contracts for the purchase of such competing machines.

(b) Agreed to furnish, and did furnish certain purchasers under contract with such competitors, the services of attorneys to defend UNITED STATES HOFFMAN MACHINERY CORP. ET AL. 449 439 Order. suits brought, or expected to be brought by such competitors for the purchase price of such competing machines. (c) Furnished, and offered to furnish legal ad vice to certain purchasers under contract with such competitors as to ways in which such contracts might be rescindt::d and 1 or evaded. (d) Offered to frame, and did frame letters for certain purchasers under contract with such competitors, letters to be addressed to such competitors for the purpose of rescinding such installment contracts. CONCLUSION.

The practices of the said respondents under the conditions and circumstances described in the foregoing findings are unfair methods of competition in interstate commerce and constitute a violation of the Act of Congress approved September 26, 1914, entitled " An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Commission, upon the complaint of the Commission, the answers of the re- ~·pondents, and the statement of facts agreed upon by the respondents and counsel for the Commission, and the Commission having made its findings as to the facts with its conclusion, that the respondents have violated the provisions of the Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,"

Now, therefore, it is ordered, That the respondent corporation, United States Hoffman Machinery Corporation, its agents and employees, and the respondent individuals, B. A. Brennan, 'William M. Talbott, Eugene D. Stocker, Wm. H. North, James B. Spencer, Michael J. White, L. Frankel, F. M. Kling, A. N. Haas, S. S. Lesser, F. 1V. Hart and A. Bellinger, their agents and employees, cease and uesist from directly or indirectly:

1. Employing or using any system of espionage whereby salesmen or other employees of respondent corporation obtain or seek to obtain the names of persons, firms, or corporations to whom competitors have sold, either for cash or on installment contracts, garmentpressing machines.

2. Inducing, or attempting to induce purchasers of garment-pressing machines of competitors to breach their contracts with such com- . ___..

450 FEDERAL TRADE ·COMMISSION DECISIONS. Order. 5F.T.O.

petitors and to install and use machines purchased from said re- Eipondent corporation, by any of the following means: (a) Allowing or offering to allow such purchasers as part payment of the purchase price .of its own machines, such sums as have been paid on contracts for the purchase of such competing machines.

(b) Framing, or offering to frame for such purchasers letters to be addressed to such competitors for .the purpose of rescinding such contracts.

(c) Furnishing, offering to furnish, or agreeing to furnish legal advice to such purchasers as to ways in which such contracts may be evaded or rescinded.

(d) Furnishing, offering to furnish, or agreeing to. furnish such purchasers the services of attorneys to defend suits brought by such competitors for the purchase price .of such competing machines. (e) Giving or offering to give to such purchasers special terms of payment, or other considerations, as an inducement to secure a breach of such contracts with competitors.

And it is furtlwr ordered, That the r0sponuent corporation, United States Hoffman Machinery Corporation, shall file with the Federal Trade Commission within thirty (30) days from the date of the service of this oruer its report in writin~r setting forth in detail the manner and form in which it has complied with the order of the Commission herein set forth.

THE CHAM~ER OF COMMERCE OF MISSOULA, MONT., ET AL. 451 Complaint.

FEDERAL TRADE COMMISSION v.

THE CHAMBER OF COMMERCE OF MISSOULA, UON- TANA, ITS OFFICERS, DIRECTORS, AND MEMBERS, AND THE NORTHWEST THEATRES COMPANY.

COJIIPLAINT IN Tile 1\IATTER OF TIIE ALLEGED VIOLATION OF SECTION C1 OF AN AC't OF CONGltESS APPROVED SEPTEUBER 26 7 1014. Docket 841-February 7, 1923.

SYLLAB~S. . Where a local chamber of commerce, which Included In Its membership concerns engaged, both within and without the State, In competition with mail Older houses; for the purpose and with the effect of depriving said mall order houses of the use and benefit of the catalogues through which they sold their merchandise and of thereby obstructing and preventing them from selling goods in the territory involved, and with a capacity and tendency thereby to obstruct, hinder, lessen and prevent competition In interstate commerce;

(a) Combined and conspired with an amusement company to remove such catalogues from the custody of the customers or prospective customers in said territory of said mail order houses, by having a local moving picture bouse accept from children, in lleu of price of admission, such catalogues, and by olferlng and giving prizes for the newest catalogue, oldest catalogue, and most used catalogue;

(b) By such means secured, destroyed and caused to be destroyed a large number of such catalogues:

Held, That such practices, under the circumstances set forth, constituted unfair methods of competition.

COMPLAINT.

The Federal Trade Commission having reason to believe from a preliminary investigation made by it, that the Chamber of Commerce of Missoula, Montana, its officers, directors and members, and The Northwest Theatres Company, hereinafter referred to as respondents, have been and are using unfair methods of competition in commerce, in violation of the provisions of Section 5 of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and it appearing that a proceeding by it in respect thereof would be in the interest of the public, issues this complaint, stating its charges in that respect on information and belief, as follows:

PARAGRAPH 1. That the respondent, the Chamber of Commerce of Missoula, Montana, hereinafter referred to as the Chamber of Com- 452 "FEDERAL TRADE COMMISSION DECISIONS. Complaint. 5F.T.C.

merce, is a voluntary unincorporated Association, composed of persons, partnerships and corporations engaged in or carrying on business, or engaged in the various industrial and professional pursuits, in the City of :Missoula, :Montana, and territory adjacent thereto; that more than a majority of such members have been and are engaged in the business of selling goods, wares and merchandise at retail or wholesale in said city and the territory tributary thereto, and such members carry on their respective businesses in direct, active competition with other persons, partnerships and corporations who carry on said business outside of the City of Missoula and State of Montana, and sell goods, wares and merchandise to customers in said State of Montana. That the announced purpose, or object of said Chamber of Commerce is and.has been to foster and promote the commercial welfare of said City, the territory tributary thereto, and its members.

PAR. 2. That the following members are representative of members of the Chamber of Commerce described in paragraph 1 hereof, and are the duly selected, qualified and acting officers and directors of said Chamber of Commerce for the year 1921, viz: George F. '\Veisel .J. E. Early Alex. Peterson W. 0. Dickinson Chas. H. Roberts Harry 0. Bell Ruel Cosner J. M. Keith E. S. Holmes L. N. Simons '\V. E. Dixon L. J. Croonenberg H. A. Chaney.

That the members of said Chamber of Commerce aggregate approximately seven hundred and fifty (750) in number, and constitute a class so numerous as to make it impracticable to designate each of them as a party respondent herein; that the charges herein set out are of common or general interest to the whole of said membership, and especially to those engaged in the sale of goods, wares and merchandise, which class constitutes more than a majority of said members, and the officers and directors of said Chamber of Commerce above named are fairly representative of the wholo of said membership, and are charged with the duty of formulating and Pxecuting its policies and carrying out any line of activity engaged in by said Chamber of Commerce.

PAR. 3. That the respondent, The Northwest Theatres Company, hereinafter reft-rred to as the Theater Company, is a corporation organized undt>r the laws of the State of Montana, with its principal place of business nt 1\Iissoula, in said State, and is engaged in the business of operating motion picture theaters at Missoula and at other points. That the said Theater Company and its manager is THE CHAMBER OF COMMERCE OF MISSOULA, MONT., ET AL. 453 451 Complaint. and has been a member of the Chamber of Commerce described in paragraph 1 hereof.

PAR 4. That on or about January 1, 1919, the respondents herein conspired and confederated together to hinder or prevent persons, partnerships and corporations carrying on business other than in the State of Montana, from selling upon mail orders goods, wares and merchandise to customers or prospective customers residing in Missoula, Montana, or adjacent thereto; that pursuant to said conspiracy, and to carry out the object thereof, respondents advertised in newspapers of general circulation, published in Missoula, Montana, and announc.ed by other means, that thereafter, on the date or dates named, a catalogue published and distributed by merchants carrying on business in States other than Montana, and soliciting business. on mail ·orders at points in Montana, would be accepted at a theater operated by the Theater Company, when presented by persons under fifteen years of age with one cent to pay the federal tax, in lieu of the usual price of admission, and that certain cash prizes would be awarded to those presenting the oldest catalogues, most used, and the newest and latest catalogues, and as a result thereof there was presented at said theater, and accepted in lieu of the usual admission fe(', several hundred catalogues pi.1blished and distributed by persons, partnerships and corporations carrying on business in States other than the State of Montana, which catalogues had been sent by the respective publishers thereof to their customers or prospective customers residing in or adjacent to Missoula, 1\fon~ana, as a means of soliciting their patronage; that respondents caused to be destroyed, by burning or by other means, the catalogues obtained in the manner and by the means aforesaid; that such catalogues have been collected and destroyed by respondents pursuant to said conspiracy, at intervals of about one year, b('ginning in January, 1!>19. PAR. 5. That the business of the interstate sale of commodities upon mail orders from catalogues, has been of rapid growth in recent years, and the volume of such sales has reached such proportions that a substantial part of the commerce among the several States is the result of sales of commodities made in this manner; that the principal means of effecting such sales is the distribution of catalogues in which the commodities offered for sale are described; that the practices of the respondents in the collection and destruction of catalogues us set out in paragraph 4 hereof has had the effect of unduly hindering merchants who carry on business outside the State of Montana, and are engaged in the sale of commodities upon mail orders to customers in 1\fontana, :from competing in the sale of such commodities with those of the merchants who are engaged in the mt-4 454 FEDERAL TRADE COMMISSION DECISIONS. Findings. 5F.T.C.

business of selling like commodities, at :Missoula, Montana, and in the territory tributary thereto, and such practices have unreasonably and wrongfully burdened commerce among the States. PAR. 6. By reason of the facts set forth in the foregoing paragraphs of this complaint, the respondents, and each and all of them are and have been using unfair methods of competition in commerce, within the intent and meaning of the aforesaid Act of Congress, approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

REPORT,. FINDINGS AS TO THE FACTS, AND ORDER. Pursuant to an Act of Congress approved September 2G, 1914, the Federal Trade Commission issued and served its complaint upon the respondents, The Chamber of Commerce of Missoula, l\Iontana, a voluntary, unincorporated association, its officers, directors and members, and upon The Northwest Theatres Company, a corporation, charging them with unfair methods of competition in commerce, in violation of the provisions of said Act. Respondents having entered their .appearance by their attorneys and having filed their answers therein, hearings were had before an Examiner of the Federal Trade Commission and a Commissioner of said Commission, theretofore duly appointed, and testimony and documentary evidence were thereupon offered and received in support of the allegations of said complaint and in support of the allegations of said answers of respondents, which evidence was duly certified, duly recorded and duly forwarded to the Commission; and the Commission having carefully examined and fully considered the testimony and documentary evidence offered and received as hereinabove set forth, hereby makes this its findings as to the facts and conclusion:

FINDINGS AS '1'0 THE FACTS.

PARAGRAPH 1. Respondent, The Chamber of Commerce of 1\Iissoula, 1\Iontana, is a voluntary, unincorporated association composed of persons, partnerships and corporations engaged in carrying on business, or engaged in the various industrial and professional pursuits in the City of l\Iissoula, l\Iontana, and the territory adjacent thereto.

(a) l\Iany of said members are engaged in the business of selling goods, wares and merchandise either at wholesale or at retail or both, in the City and County of l\Iissoula, :Montana and the territory tribn· tary thereto, the majority being retailers, and some being wholesalers. T~E CHAMBER OF COMMERCE OF MISSOULA, MONT., ET AL. 455 451 Findings. (b) Said respondent Chamber of Commerce is a commercial organization, in which the members are business and professional men, and the purpose of which is doing everything possible for the betterment of general conditions in the City of :Missoula and surrounding territory; a"nd the promotion of the commercial welfare of the City and territory adjacent thereto. .

(c) 'lhe directors of said respondent Chamber of Commerce for the year 191!) included Grorge A. Rice, editor of Daily :Missoulan; H. 0. Bell, Ford representative; Ruell Cosner, hardware; A. N. Whitlock, attorney; ,V. 1\I. Dixon, shoes; Alex Peterson, druggist; F. A. Schlick, real estate and insurance; R. M. Barr, Great Western Sugar Company; Tom Edwards, occupation not known by witness; John R. Daily, meat dealer; J. I). Lansing, Polley's Lumber Company.

(d) The officers of.said respondent, Chamber of Commerce in 1919 were George A. Rice, president; Tom Edwards, vice-president; R. C. Giddings, treasurer; and D. D. Richards, Secretary. (e) The Board of Directors of respondent, Chamber of Commerce, for the year 1920 were Newell Gough, cashier, ·western l\fontana National Dank; 'Villiam L. :Murphy, attorney; E. S. Holmes, meat dealer; John R. Daily, meat dealer; J. 1\f. Keith, president Missoula Trust & Savings l~ank; Ruell Cosner; F. A. Schlick, real estate and insurance; L. N. Simons, paints, groceries and hardware; II. 0. Bell, Ford representative; ,V, l\L Dixon, shoes; L. J. Croonenberg, garageman; ,V. 0. Dickinson, music store; Alex Peterson, druggist. (/) The officers of said respondent, Chamber of Com~erce for the year 1920 were II. 0. Dell, president; F. A. Schlick, first vice-president; E. S. Holmes, second vice-president; Newell Gough, treasurer; subsequent to the meeting in January, 1920, when the officers and directors were elected, Charles II. Roberts was elected secretary and manager of said respondent Chamber of Commerce. (g) The directors of said respondent, Chamber of Commerce for · the year 1921 were George F. Weisel, ,V, 0. Dickinson, Ruell Cosner, L. N. Simons, II. A. Chaney, J. E. Early, J. 1\f. Keith, ,V, E. Dixon, Alex Peterson, Harry 0. Dell, E. S. Holmes and L. J. Croonenberg. Charles II. Roberts was secretary.

(h) Representative members of respondent, Chamber of Commerce engaged in the selling oi clothing, d.ry goods, shoes, stockings and the like commodities were as follows:

l\Iissoula l\Ierc~ntile Company. l\fatt Lucy. D. J. Donohue Company. Fred ,V, Hartkorn. Abbon Lucy. II. ,V. Weston. John J. Lucy. Alfred Sterner. ........... -- 456 FEDERAL TRADE COMMISSION DECISIONS, Findings. 5li'.T.C. Barney's Fashion Shop Dixon & Hoon L. N. Simons (i) From July 27, 1916 to April 1, 1920, except from 1\{ay 13, 1918 to December 1, 1918, Dudley D. ·Richards of Missoula, Montana, was secretary of respondent, Chamber of Commerce and subsequent to April1, 1920, up to and including the time of said hearing, Charles H. Roberts, of Missoula, Montana, was secretary of said respondent, Chamber of Commerce. Both said Richards and said Roberts while holding said position of secretary of said respondent, Chamber of Commerce, were salaried officers of said respondent, and as such, authorized to represent said respondent in its activities, having discretion as to the initiation of activities not requiring any great amount of money.

PAR. 2. Uespondent, Northwest Theatres Company, is a corporation organized under and existing by virtue of the laws of the State of Montana, whose principal place of business is Missoula, Montana, where it owns, controls and operates several motion picture theatres, including the Wilma, the Liberty and Empress theaters. Said respondent, Northwest Theatres Company, operated the Isis Theater, a motion picture theater in Missoula, Montana, from March 1920 until about May 1, 1921, soon after which said theater was dismantled.

(a) That the Missoula Amusement Company, a corporation, is a fifty per cent stockholder in the said respondent Northwest Theatres Company and that the said Amusement Company controlled and operated the said Isis Theater in Missoula, Montana, during the whole of the year 1!)19 and during the year 1920 up to or about ])[arch 1, 1920, at which time it ceased to operate and control the said Isis Theater and became a stockholder in the respondent Northwest Theatres Company; that on or about said March 1, 1920, the Northwest Theatres Company acquired and exercised control over and operated the said Isis Theater as aforesaid. (b) About January 1, 1919, Henry Turner of Missoula, Montana, became manager for the Missoula Amusement Company, which had then a lease upon said Isis Theater and in that way at that time controlled and operated said Isis Theater until about March 1920, when it fell under the control of the respondent, Northwest Theatres Company, successor to said Missoula Amusement Company. Said Turner became manager of respondent, Northwest Theatres Company about that time and as such manager continued to control and operate said Isis Theater throughout the year 1920. THE CHAMBER OF COMMERCE OF MISSOULA1 MONT.1 ET AL. 457 451 . Findings. PAR. 3. The National Cloak & Suit Company, domiciled in New York, New York, with a branch house in Kansas City, Missouri, is a mercantile establishment engaged in business in all the States of the United States of America, in the sale of wearing apparel, dry goods and many other articles of merchandise, by means of catalogs circulated among customers and prospective customers, and by means of correspondence with customers and prospective customers through the mails. Said National Cloak & Suit Company is known as a mail order house or catalog house. It has been in business for about 34 years.

(a) Said National Cloak & Suit Company in the course of its business in the year 1919 circulated in the United States of America, about 11 millions of copies of printed catalogs and booklets, describing its goods to customers and prospective customers, and giving the prices of such goods at a cost to it of about $3,155,479. Said National Cloak & Suit Company distributed in the year 1919 in the ~tate of Montana, about 196,000 such catalogs at a cost of about $48,500, and did business that year with about 53,000 customers in the State of Montana, whose business aggregated $675,000. About $11,500 of said business done in said State of Montana was done in Missoula County, l\Iontana., and about $5,400 of said business was done in the City of Missoula, Montana. 'Within a radius of 50 miles of Missoula, Montana, said National Cloak & Suit Company had about 3,200 customers in 1919.

(b) :Many other mail order or catalog houses engaged in interstate commerce by methods similar to said National Cloak. & Suit Company's circulated in the years 1!)19 and 1920 and still circulate their catalogs in the State of Montana and in and about the City of .Missoula, Montana, among such mail order or catalog houses. being, Sears, Roebuck & Company and Montgomery Ward & Company of Chicago. . ( o) In the course of its said business said National Cloak & Suit Company through the mail, places its catalogs of merchandise in the hands of its customers and prospective customers in the various states of the United States. Said customers note descriptions, prices, etc., of goods therein listed and described, and also the catalong numbers of said goods and after having done so, send to said National Cloak & Snit Company through the mails, orders in writing tor the purcha,se of said goods. 'When said orders are received by said National Cloak & Suit Company, the goods ordered are packed and shipped from the New York or the Kansas City warehouses of said company, in and through the several states of the United States, 458 FEDERAL TRADE COM:l\HSSION DECISIONS, Findings. lif.T.C. to the customers in Montana and elsewhere so ordering said goods and the sale and delivery of said goods are thus completed. Access to a catalog of said National Cloak & Suit Company is necessary in order that customers may send said company orders for its goods and so that it may make sales thereof.

(d) In the sale of said merchandise by means of catalogs, as hereinabove described, said National Cloak & Suit Company and other mail order houses located outside of the State of Montana and engaged in interstate commerce in Montana, are in direct competition in interstate commerce with several members of respondent, Chamber of Commerce. That some representatlve members of the respondent, the said Chamber of Commerce of Missoula, Montana, were, at all the times mentioned herein and now are doing business outside of the State of Montana, as well as within the State of Montana, in competition in interstate commerce with the said mail order catalog houses; that among these members were the Missoula Mercantile Company, The Smith Drug Store and D. J. Donohue Company.

PAR. 4. In the month of January 1919 and prior to January 23, 1919, Dudley D. Richards of Missoula, Montana, then secretary of respondent, Chamber of Commerce, as such secretary, acting for and on behalf of said respondent, Chamber of Commerce, conspired with said Henry Turner of Missoula, l\Iontana, the manager of the l\Iissoula Amusement Company, predecessor of respondent, Northwest Theatres Company, acting as such manager for and on behalf of said Missoula Amusement Company to remove from the residences or the custody of customers and prospective customers of said mail order houses in the City of l\Iissoula, l\fontana and the adjacent territory, the catalogs of said mail order houses and thus to obstruct, hinder and prevent said mail order houses from engaging in commerce in said City of Missoula, Montana and in the territory adjacent thereto. Said conspiracy so entered into between said Dudley D. Uichards and said Henry Turner was subsequently approved by respondent, Chamber of Commerce through the directors thereof. Subsequently, to-wit, upon dates in.cluding January 23, 24: and· 25, 191V, said Dudley D. Uichards and said Henry Turner, acting respectively for and on behalf of respondent, Chamber of Commerce, and of the Missoula Amusement Company, caused to be brought to said Isis Theater, a motion picture theater in 1\Iissoula, Montana, then controlled and operated by said Missoula Amusement Company, three to four hundred of said catalogs of mail order houses, including catalogs of said National Cloak & Suit Company and other THE CHAMBER OF COMMERCE OF MISSOULA, MONT., ET AL. 459 451 Findings. mail order houses located outside the State of Montana, from various residences in the City of Missoula, Montana, and in the territory adjacent thereto and said catalogs were there collected and received and thereafter destroyed, thus depriving said National Cloak & Suit Company and many other mail order houses of the use and benefit of said catalogs in the sale of their goods, wares and merchandise and thus obstructing, lessening, hindering and preventing mail order houses from selling their goods in interstate commerce in the City of Missoula and the territory adjacent thereto. The details of said conspiracy are in substance as follows: (a) In January 1919 and prior to January 23, 1919, said Dudley D. Richards, then secretary of respondent, Chamber of Commerce, approached said Henry Turner, then manager of 'Missoula Amusement Company, which then controlled and operated said Isis Theater and said Richards proposed and suggested to said Turner that when the next "serial " picture was to appear in said Isis Theater said Turner would admit children to the theater upon the presentation at the door of the theater of a mail order catalog in lieu of admittance fee, the object being to eliminate mail order house catalogs from the city of Missoula and the territory adjacent thereto, and to prevent mail order houses which issued these catalogs from competing with local merchants or members of respondent, Chamber of Commerce. Said Richards urged upon said Turner that this plan of procedure would also be a means of securing publicity for said Isis Theater and also for said Chamber ·of Commerce.

(b) Said Turner at once accepted the suggestion of said Richards for the acceptance of mail order house catalogs from children in lieu of cash admittance fees, and named the " serial" "Eddie Polo, The Circus King" to be exhibited first at said Isis Theater, January 25, 191V, as the occasion for putting the plan into execution. (c) After said Turner had agreed to said proposition of said Richards as to accepting mail order house catalogs from children in lieu of cash admittance fees, said Richards submitted said proposition, said plan and said agreement with said Turner, through its Board of Directors to respondent, Chamber of Commerce and said Chamber of Commerce, through its Board of Directors, approved and adopted said plan thus agreed to between said Richards and said Turner. (d) Subsequently, upon dates including January 23, and 24, Hl19, Slid respondent, Chamber of Commerce, through said Richards, as its secretary, and said Missoula Amusement Company, through its manager, said Turner, caused reading matter and advertising matter to be printed and published in daily papers of general circulation in --------- --=- .:::·--= - --.. ....-;:::;....=-:'"..--... -- .. -.- 460 FEDERAL TRADE COMMISSION DECISIONS. Findings. 5F.T.C.

the City of Missoula, 1\[ontana and the territory adjacent thereto, to wit, in the Missoula Sentinel and in the Daily l\Iissoulan, soliciting the children residing in said City of Missoula and territory adjacent thereto, to procure and collect mail order house catalogs and bring them to said Isis Theater upon a certain day and secure therefor, in lieu of cash admittance fees, admittance to the Isis Theater to see " Eddie Polo, The Circus King," a serial then beginning. In some of these notices children were asked to bring one cent in order to pay the amusement tax. In connection with said announcements and said advertisements a cash prize of $3 was offered to the child who brought the oldest and most thumbed mail order house catalog. (e) In answer to said announcements and said advertisements so caused to be printed by said respondent, Chamber of Commerce and by said Missoula Amusement Company through said Richards and said Turner, as secretary and as manager respectively, children residing in Missoula, Montana and the territory adjacent thereto brought to said Isis Theater on or about January 25, 1V19, mail order house catalogs numbering 300 to 400 and said catalogs were received by said Turner in lieu of admittance fees, were turned over to said respondent, Chamber of Commerce and by it destroyed, and said Chamber of Commerce cause"cl to be paid to a child, Pearl Somers, a cash prize of $3 for presenting the oldest and most thumbed catalog.

PAR. 5. Henry Turner, the manager of respondent, Northwest Theatres Company of Missoula, Montana, which then controlled and operated said Isis Theater of Missoula, Montana, acting as such manager for and on behalf of said Theatres Company, conspired with Charles II. Roberts, then secretary of respondent, Chamber of Commerce, acting as such secretary for said respondent, Chamber of Commerce, in September, 1920, prior to September 14, 1920, to remove from the residences or the custody of customers or prospective customers of said mail-order houses, residing in the City of Missoula, Montana and in the territory adjacent thereto, the·catalo~s of said mail order houses and thus hinder, obstruct and prevent said mail order houses from selling their goods in the City of Missoula, Montana and the territory adjacent thereto. Said conspiracy so entered into between said Henry Turner and said Charles H. Roberts was subsequently approved by respondent, Chamber of Commerce, through the directors thereof, September 14 and 21, 1920. Subsequently, to wit, upon dates including September 17, 18, and 19, 1920, said Turner, manager of said Northwest Theatres Company, acting for and on behalf of respondents, Northwest Theatres Company and with the sanction and consent and the aid of respondent, Chamber THE CHAMBER OF COMMERCE OF MISSOULA, MONT., ET AL. 461 451 Findings. of Commerce of Missoula, and its secretary, said Roberts, acting as secretary for and on behalf of said respondent, Chamber of Com. merce, caused to be brought to said Isis Theater in Missoula, Montana, about 262 catalogs of mail order houses, including catalogs of said National Cloak & Suit Company, from various residences in the City of Missoula, :Montana, and the territory adjacent thereto, and there collected and received and thereafter destroyed said catalogs, thus depriving said N ationa] Cloak & Suit Company and other •mail order houses of the use and benefit of such catalogs in the sale of their goods, wares and merchandise and thus obstructing, hindering, lessening and preventing the sale of goods, wares and merchandise by said mail order houses in interstate commerce. The details of said conspiracy are in substance as follows: • (a) Sometime in September 1920, prior to September 14, said Turner, then manager of respondent, Northwest Theatres Company, acting as such manager for and on behalf of said respondent, Northwest Theatres Company, which company controlled and operated said Isis Theater in Missoula, Montana, called upon Charles H. Roberts, then secretary of respondent, Chamber of Commerce, and asked the cooperation of said respondent, Chamber of Commerce, in a second mail order catalog day, mentioning at that time that there had been a previous mail order catalog day in Missoula and stating its purpose and its results. Said Hoberts thereafter, as secretary of respondent, ,Phamber of Commerce, submitted said Turner's proposition to said respondent, Chamber of Commerce, through its board of directors, at a regular meeting of said board on or about September 14, 1020 and said board of directors, for and on behalf of said respondent, Chamber of Commerce, accepted and adopted .said Turner's proposition for a second mail order catalog day and authorized said Turner to use the name of said respondent, Chamber of Commerce, in arranging for and having a seconq mail order house catalog day at said Isis Theater, then under the control and operation of said Turner as manager of said respondent, Northwest Theatres Company, the object, aim and purpose of said second mail order house catalog day, so far as respondent, Chamber of Commerce, was concerned, being the collection from residences in the City of Missoula, Montana, and the territory adjacent thereto, of mail order house catalogs and their subsequent destruction so as to hinder and prevent mail order houses issuing and circulating said catalogs from selling their goods, wares and merchandise to customers and prospective customers residing in and about Missoula, 1\lontana, and thus prevent, their competing with the members of 462 FEDERAL TRADE COMMISSION DECISIONS. Findings. I'>F.T.C. respondent, Chamber of Commerce, in said territory. Subsequently, on or about September 21, 1020, said action of respondent, Chamber of Commerce, was approve~ by said board by approving the minut€s setting forth such action. · (b) Subsequently and upon several dates, including September 17, 18, 19 and 25, 1020, in carrying out said conspiracy, said m spondent, Chamber of Commerce and said Northwest Theatres Company, through said Turner, caused to be inserted in daily papers of general circulation in Missoula, Montana, and the territory adjacent thereto, to-wit, the Missoula Sentinel and the ·Daily Mi~ soulan, notices and advertisements soliciting and importuning chil· dren residing in Missoula, Montana, and the territory adjacent thereto t~secure and collect mail order house catalogs and offer them at the door of said Isis Theater in lieu of cash admittance fees between 11 o'clock A. M. and 6 o'clock P. M. on September 18 and between 4 o'clock P. l\I. and 11 o'clock P. M. on September 25, 1920, where the "serial," "The Vanishing Dagger" by Eddie Polo was to be exhibited. In addition to the catalog presented each child was to bring one penny to pay war tax. In addition to the inducement of admittance to the motion picture exhibition, said Turner in said notices, offered two cash prizes of $3 and $2 respectively, to the child bringing to the theater the " newest and latest and the next newest;' mail order house catalogs.

(c) In answer to said notices and advertisements so caused to be printed and circulated by said respondent, Chamber of Commerce und said Northwest Theatres Company through said Turner, chilrlren residing in Missoula, Montana, and the territory adjacent thereto collected and brought to said Isis Theater or. or about September 18, 1020, and September 25, 1920, mail order house catalogs numbering about 2G2, and said Turner caused said catalogs to be n~ceived at the doors of said Isis Theater in lieu of cash admittance fees. Subsequently said Turner caused said catalogs to be destroyed, said mail order houses issuing said catalogs being thus deprived by respondents of the use and benefit of said catalogs in the transaction of their business and having been harassed and interfered with in the sale of their goods, wares, and merchandise in interstate commerce. · PAR. 6. That customers of and former purchasers from the said mail order Cl\talog houses were, by reason of the afcresaid destruction of said mail order house catalogs, unable for a time to carry out their purposes and intcmtions to purchase from the said mail order catalog houses and were hindered a.nd delayed in making purchases from said houses.

----- ------- THE CHAMBER OF COMMERCE OF MISSOULA, MO:NT., ET AL. 463 451 Order. PAR. 7. Commercial concerns known as mail ord~r or catalog houses, do a large merchandising business in the United States, having business houses or branches in many States and serving customers throughout all the States of the United States. Catalogs and circulars are the means by which mail order houses make their &ales. Destruction of such catalogs eliminates the means of mer- <'handising of such mail order catalog houses until such catalogs have been replaced. Collection and destruction of mail order house catalogs has had, and has, a capacity and tendency to obstruct, hinder, lessen, and prevent competition in interstate commerce. CONCLUSION.

The practices and activities of respondent herein, under the conditions and in the circumstances set forth in the foregomg report upon the facts, are unfair methods of competition in commerce and conf.;titute a violation of Section 5 of the Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and-duties, and for other purposes." ORDER TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, the testimony and documentary evidence offered and received, and the arguments of counsel for the respective parties hereto, and the Commission having made its fmdings as to the facts and its conclusion that the respondents have violated the provisions of the Act of Congress approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to de.fine its powers and duties, and for other purposes," therefore It is now ordered, That respondents, The Chamber of Commerce of Missoula, a voluntary organization, its members, officers, directors, agents, servants and employees and respondent, Northwest Theatres Company, a corporation organized under and existing by virtue of the laws of the State of l\Iontana, its officers, directors, agents, servants and employees, do cease and desist.

PARAGRAru 1. From inducing persons in possession of the catalog or catalogs of mail order houses, to divert said catalogs from their former and customary use by such persons for the purpoi>e of purchasing goods from said mail order houses, and to use them as an exchange for admission to a moving picture theater for the purpose of eliminating or hindering competition between such mail order h<>uses and local merchants.

80044 °-24-VOL 5--31 464 FEDERAL TRADE COMMISSION DECISIONS. Order. 5F.T.C.

PAR. 2. From collecting, securing or procuring Ol' from causing to be collected, secured or procured from residents in the City of Missoula, Montana, or the territory adjacent thereto, any catalog ur circular of any mail order or catalog house .located outside the State of Montana and doing business in said State, for the purpose of depriving such mail order or catalog house or its customers or prospective customers of the use and benefit of such catalogs in the sale and purchase of merchandise in interstate commerce. PAR. 3. From destroying or causing to be destroyed, such catalog or catalogs of such mail order or catalog houses secured or procured from any customer or prospective customer of such mail order house in the City of :Missoula, Montana, or in the territory adjacent thereto, for the purpose of depriving such mail order or catalog house or its customers or prospective customers of the use and benefit of such catalogs in the sale and purchase of merchandise in interstate commerce.

It is further ordered, That each respondent herein, within sixty (60} days from and after the elate of the service upon it or him of such order, shall file with the Commission a report in writing setting forth in detail the manner and form in which he or it has complied with the order to cease and desist hereinbefore set forth. MUSIC PUBLISHERS' ASS'N OF THE UNITED STATES ET AL. 465 Complaint.

FEDERAL TRADE COMMISSION v.

THE MUSIC PUBLISHERS' ASSOCIATION OF THE UNITED STATES ET AL.