Salt Producers Association

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IN THE MATTER OF SALT PRODUCERSI ASSOCIATION ET AL COMPLAINT, FINDINGS, AND ORDER IN REGARD '1'0 THE ALLEGED VIOLATION OF SEC, 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4320. Complaint, Sept, 18, 1940-Decision, Nov. 10, 1941 'Where a salt producers' association; twenty salt producers, mf'mbers thereof with one exception, manufacturing, selling, and distributing a large percentage of all the salt produced in the United States, and In active and substantial competition with each other and with other members of the industt·y prior to and but for the practices below described; and a corpot·ation which they employed for the purposes below set forth, together with Its president and treasurer- ,li:entered Into and 'Carried out certain agreements, combination~, and conspiracies • with intent and effect of restraining, monopolizing, and suppressing and eliminating competition in the intf'rstate sale of salt; and pmsuant thereto and In furtherance thereof- (a) Concert€dly fixed and maintained uniform prices, tenns, and couclltlons in the. sale of salt; set up a system of 11rke zones throughout the United- States and agreed to and did cooperate in the maintenance of delivered prices which they fixed and established within each of such zones; (b) Agreed to and did exchange pricf' lists ard information for use ln fixing dPiiV· ered zone prices, discounts, and terms and conditions of sale; (c) Agreed to and did curtail production of salt; and (d) Agreed to and did file invoices and other reports with said ai<sociatlon to secure enforcement of such agreements; and Where said association, pursuant to such understandings, etc.,- ( e) Collected from and distributed among such producers anll othc>r pat'tlclpants In said agreements useful statl:stics, lists showing the cunent delivered prices, terms, and conditions of sale, names of dealers and distributors to be allow~d special discounts, and other Information; and Where corporation above referred to, employed by prorlucers h{'r£>1n from about November 1935 to about August l!l39, and its president and trf'af:ur£>r ~ Following their preliminary survey of the bnsin{'ss concerned and distribution among producers herein of composite figures (and to each separate producer, corresponding figures pertaining to it alone) covering volume of sales and average ylf'ld f. o. b. plant for dPlivet·ed price 7.0I1{'S established, plant capacity, marketing expense, and financial retnros; report of its conclu!'lon that there was a large excess productive capacity, that composite nft Parnings were t:mall ln rdatlon to investment, that composite fi~ure of sniPs expPnsPS wns Inordinate In rt'iation to prices receiVt'd, and that such corHlltiuns were caused by etrorts of each participant to obtain an Increased pottlon of the total vol· ume ot business without due regard to net return and t:nlf's expPtu;e: and advice that the con-:equPnPP'! of continuance of snl'h practiC'P would lncvltnblY be an inadpqunte rf'turn upon lll\"t'!'Ctment to the inrllvidunl part!Pfpnnt, and exce!"slve and unpconomlc markPtlng costs; (f) Cullt'l'led and tll~semlnall'd afort·~aid bush•t>~'~ fl~tnrPs mottthly with !<HIPS flg· ures rt>dueed to conuuon lleuomluator terms fut• the i't•vernl ~rnllP" of snit Jn· SALT PRODUCERS ASSOCIATION ET AL. 39· Syllabus volved; prepat·ed and disti·ibuted to participants a colllJJOSite annual tluancial statement; at monthly meetings Qf the association explained current statistic!( prepared by them and submitted charts indicating current volume and net dollar realization for the various zones, along with opinion as to the treud of demand and the volume of consumption to be expected; sent a separate monthly chart to each participant showing relation of his cun·ent volume to total expected demand, In comparison with relation of his prior volume to past total Volume; audited participants' statistical data at their offices advising each individual management that, in sale of a homogenous product such as salt, they could Increase their normal volume relationship only by taldng some of another producer's volume at lowered prices which would inevitably be met by other participants, with result of further reducing return upon investment;' and urged any participating management producing at a greater rate than its Past production to consi(ler the Injurious consequences to It if it continued to Produce at such higher ratio; and 'Where said producer members, lnddent to aforesaid surveys and pt·ogrnm; as. stated- ( g) Cooperatively reported and submitted the Intimate details of their business!:'s the analysis of experts jointly employed, and obtained from them a l::armonized estimate of current and future market conditlom~, and thereby, and through use of ~ther methods us above set forth, acted in concert to preserve a static condition of their respective businesses with regard to production, sales, and delivery-d prices, and to maintain price zones within which they made' 'Wh eti,ctlve such prices from their widely separated produciug plants; und (h ere aforesaid non-member participant- ) Cooperated with the members of said association In cal'l'ylng out the WI agreements, combinations and conspiracie>s herein set forth; th the result that the normal conflict of contending competitive forc(IS engendered by an honest desit·e for ga:n wns thereby restrained and suppt·esEed, nnd that competition In price and otherwise to which the PUblic had long looked for })protection WM uesti·oyed, and with the effect or unduly restricting and restraining the sale of salt In trade In commerce; ot eliminating competition as aforesaid; and of substantially enhancing Prices to the consuming public and maintaining prices at artificial levels, find Otherwise de>privlng the public of the benefits that would !low from Ilcl normal competition:

d, That the acts and practices above drscriboo, under the circumstances set !orth, were all to the prPjndice of the public, had a dangerous tendency and diu actually hinder and pren~nt price competition between and 8° among said prodncPrs In the sale of salt In commerce, placed ln them the PO\\er to control and £>nhance prices, created in them a monopoly In ths sale of salt In commrrce, unreasonably restralnell such commerce, and constituted unfair methods of competition. m·JJ~. Floyd 0. Collins und !lfr. Dewitt T. Pucl.·ett for the Com- lRSion. duJ.Iiller, Gorlwrn, lresrot & Admns, of Chicago, Ill., for Salt Pro. lli:~~ Association, Darton Salt Co., Cayuga Hock Salt Co., Colo- Sao-· a]t Co., Myles Salt Co., Ltd., Mulltey Salt Co., Ohio Salt Co., .,Inaw Salt Prolluets Co., Union Salt Co. und 'Yntkins Salt Co. 40 FEDERAL TRADE COMMrSSION' DE'ClSIIONS Complaint 34F. T. 0.

Putney, TwomlJly & Hall, of New York City, for Avery Salt Co., Detroit Rock Salt Co., and International Salt Co. Williams, Martindell, Carey & Brown, of Hutchinson, l{ans., for Carey Salt Co.

Mr. Lester E. Waterbury, of New York City, for Diamond Crystal Salt Co., Inc.

OarroU, McElwain & Ballantine, of Louisville, Ky., for Jefferson Island Salt Co., Inc.

Hennings, Green, Henry & Evans, of St. Louis, Mo., for Hardy Salt Co.

Stearns & M eBride, of Chicago, Ill., for Morton Salt Co. and Ruggles & Rademaker Salt Co.

Mandeville, Wmrman, Buck, Teeter & Harpending, of Elmira, N.Y., for 'Vorcester Salt Co.

Mr. Tlw17Ul8 Creigh, of Chicago, Ill., and Mr. Gilbert H. Montague, of New York City, for American Salt Corp. Wise, Corlett & Canfield, of New York City, for Stevenson, Jordan & Harrison, Inc., nnd various officers and employees of said corporation.

ColiPLAINT Pursuant to the provisions of the Federal Trade Commission Aet, and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that the association, corporations, firms, and individuals, hereinafter described and named as respondents, have violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public intere!it, hereby is!iues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Salt Producers Association, is a corporation organized, existing, and doing business under and by virtue of the Jaws of the State of Delaware, having its principal office at 2137 Book Building, Detroit, Mich. It was organized and for ~he past several years has acted as a trade association for the promoti~n and protection of the interests of its members who are engaged In the manufacture and sale of salt. . d PAR. 2. Respondent, Avery Salt Co., is a corporation orgamzc t and existing under and by virtue of the laws of the State of 'yes Virginia, with its principal office and place of business at A~en~an Dank Building, New Orleans, La. Said respondent corporation IS a whoJiy owned subsidiary of respondent International Snit Co., hereinafter mentioned.

SALT PRODUCERS ASSOCIATION ET AL. 41 38 Complaint PAB. 3. Respondent, Darton Salt Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Kansas, with its principal office and place of business in Hutchinson, Kans. · PAR. 4. Respondent, Carey Salt Co., is a corporation organized, €Existing, and doing business under and by virtue Qf the laws of th& State of Kansas, with its principal office and place of business in liute~inson, Kans. . PAR. 5. Respondent, Cayuga Uock Salt Co., is a corporation ·organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business in Myers, N. Y.

PAB. 6. Respondent, Colonial Salt Co., is a corporation organized, ~existing, and doing business under and by virtue of the laws of the State of Ohio, with its principal office and place of business at 2065 Manchester Road, Akron, Ohio .

• PAR. 7. Respondent, Detroit Roek Salt Co., is a corporation organ- IZed, existing, and doing business under and by virtue of the laws of the State of Michigan, with its principal office and place of business at 12811 Saunders Street, Detroit, Mich .

• PAR. 8. Uespondent, Diamond Crystal Salt Co., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its princiral office at St. ~lair, 1\Iich., and its principal place of business at 250 Park Avenue, ew York, N. Y .

• PAR. 9. Respondent, International Salt Co., is a corporation organ- Ized, existing, and doing business under and by virtue of the laws bf !he State of New Jersey, with its principal office and place of Usiness in Scranton, Pa.

~AR. 10. Respondent, Jefferson Island Salt Co., Inc., is a corpor~hon organized, existing, and doing business under and by virtue the laws of the State of Kentucky, with its principal office and 1 l> ace of business at 401 "'est Main Street, Louisville, Ky. ~~R. 11. Respondent, Hardy Salt Co., is a corporation organized, ~~Istlllg, and doing business under and by virtue of the laws of the 80~te of Missouri, with its principal oflice and place of business at p South VandeventH Strl'et, St. Louis, Mo. e . A.R. 12. Respondent, Morton Salt Co., is a corporation organized, S~lSbng, and doing business under and by Virtue of the laws of the ~O~t~ of Illinois, with its principal office and place of business at WE>st Washington Stn•et, Chicago, Ill.

42 FEDERAL TRADE COMMr.SSION' DECISIONS Complaint 34F.T.C.

PAR. 13. Respondent, Myles Salt Co., Ltd., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Louisiana, with its principal office and place of business at 1048 Constance Street, New Orleans, La. PAR. 14. Respondent, Mulkey Salt Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Michigan, with its principal office and place of business at 154 Bagley Avenue, Detroit, Mich, PAR. 15. Respondent, Ohio Salt Co., is a corporation organizl'd, existing, and doing business under and by virtue of the laws of the State of Ohio, with its principal office and place of business in 'Vadsworth, Ohio.

PAR. 16. Respondent, Ruggles & Rademaker Salt Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business at 208 'Vest Washington Street, Chicago, Ill. Said re· spondent corporation is a wholly owned subsidiary of respondent Morton Salt Co., hereinbefore mentioned.

PAn. 17. Respondent, Saginaw Salt Products Co., is a corporation organized, existing, and doing business under and by virtue of the ]aws of the State of Michigan, with its principal office and place of business in Saginaw, l\Iich.

PAR. 18. Req>onclent, Union Salt Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Ohio, with its principal office and place of business at Sixty-fifth Street and New York Central R. R., Cleveland, Ohio. PAR. 19. Respondent, ·watkins Salt Co., is a corporation organiz!'d, existing, and doing business under and by virtue of the laws of the State of New York, with its principal office and place of business in 'Vatkins Glen, N. Y.

PAR. 20. Respondent, 'Vorcester Salt Co., is a corporation organ· ized, existing, and doing business under and by virtue of the Jaws of the State of New York, with its principal office and place of business at 40 'Vorth Street, New York, N.Y. PAR. 21. Respondent, American Salt Corporation, is a corporation organized, existing, and doing business under and by virtue of th~ Jaws of the State of Delaware, with its principal office and place 0 business in the New York Life Building, Kansas City, Mo. PAR. 22. Respondent, Stevenson Corporation, a corporation or!Xanized, existing and doing business under the laws of the State of :Ne1 York, and Charles R. Stevenson, T. M. Harrison, C. II. Ferris, N. ~· Perris, E. G. Ackerman, A. H. Dyer, R. E. Cas~:', F. L. Sweetser, W. · SALT PRODUCERS ASSOCIATION ET AL. 43 38 Complaint Guthrie, A. P. Nonweiler, S. M. Hudson, R. R. Bliss, L. ll. Platt, Howard Marvin, and D. l\f. Metzger are partners doing business under the firm name of Stevenson, Jordan and Harrison, with their principal Place of business at 19 'Vest Forty-fourth Street, New York, N. Y. The said respondents are engaged in business management and business engineering .

. Par. 23. Respondents described in paragraphs 2 to 20, inclusive, hereinafter referred to as member respondents, are members of the respondent association named in paragraph 1, and respondent American Salt Corporation, hereinbefore described in paragraph 21, in the course and conduct of their business, manufacture, sell, and distribute 8 ~arge percentage of all the salt produced in the United States. The srud member respondents and respondent American Salt Corporation sell their products to wholesalers, dealers and consumers located at Various points throughout the United States and when sales are made, and as a part thereof, regularly have shipped, and do ship, sai.d prod- ~cts to the purchasers thereof at their respective points of location In the several States of the United States other than in the States of ~igi~ of the shipments. Said member respondents and respondent . mencan Salt Corporation maintain a current of trade in commerce ~said products between and among the several States of the United states and in the District of Columbia.

Prior to the adoption of the practices hereinafter described, said ~member respondents and respondent American Salt Corporation were ~ active and substantial competition with each other and with other etnbers of the industry in making and seeking to make sales of their P;oducts in trade in commerce between and among the several States ~· the United States and in the District of Columbia; but for the prac· ~ces hereinafter described such active and substantial competition would have continued until the present and said member respondents a o~lld .now be in active and substantial competition with each other 1~3 With other members of the industry. Beginning about Octoberb· 5' .all the respondents entered into understandings, agreements, com· b~nat~ons and conspiracies. Said understandings. agreements, como~~ahons and conspiracies were entered into, and thereafter carried tn ' for the purpose and with the effect of restricting, restraining, ofonopo~izing, suppressing, and eliminating competition in the sale of t~lt In. trade in commerce between and among the several States P e Untted States and in the District of Columbia. and AP.. 24 .. Pursuant to said understandings, agreements, combinations, \\>itl conspiracies and in furtherance thereof, said member respondents, ha" 1 ~he active cooperation of the other respondents named herein, and etl ?11e and performed, and still do and perform, the following acts nngs:

44 FEDERAL TRADE COMMISSION' DE'CIS'ION'S Complalnt S4F.T.O.

( 1) Said member respondents and respondent American Salt Cor· poration agreed to fix and maintain, and have fixed and maintained, uniform prices, terms, and conditions in the sale of salt. (2) Said member respondents and respondent American Salt Cor· poration have agreed to establish and have established, a system of zones throughout the United States to aid in the establishment and fixing of prices of salt.

( 3) Said member respondents and respondent American Salt Corporation have agreed to cooperate, and have cooperated, in the maintenance of the various prices determined for particular zones. ( 4) Said member respondents and respondent American Salt Corporation have agreed to curtail, and have curtailed, the production of salt, and for the purpose of securing enforcement of the agreement to curtail production member respondents artd respondent American Salt Corporation have filed, and do file with said respondent association, in,voices and other reports.

( 5) Said member respondents and respondent American Salt Corporation have agreed to exchange, and have exchanged, through the medium of said respondent association, price lists in order to establish the prices at which salt is to be sold. . (6) Said member respondents and respondent American Salt Corporation have agreed to exchange, and have exchanged, information to be used in connection with the fixing of prices, discounts, terms, and conditions of sale of salt.

(7) Said respondent association collects from and distributes among member respondents and .other participants in said agreements statistical information used and useful in carrying out said agreements, nnd they distribute from time to time among said member respondents and non-members participating in said agreements, lists show· ing the current prices, terms and conditions of sale, dealers and distributors to be allowed special discounts and other information used ·and useful in carrying out said agreements. (8) Respondent Stevenson Corporation and the individual respondents doing business under the firm name Stevenson, Jordan and Harrison, heretofore specifically named in paragraph 22 hereof, in the course and conduct of their business, as afore~aid, have actively par· ticipated in by directing, recommending, and supervising the fore· going acts and things done by said respondents in furtherance of said understandings, agreements, combinations, and conspiracies. (9) Said member respondents and respondent American Salt Cor· poration have used, and are now using, other methods and means designed to suppress and prevent competition and restrict and restrain the sale of salt in said commerce.

SALT PRODUCERS ASSOCIATION ET AL. 45 Findings PAR. 25. Each of the said respondents at the times herein mentioned acted in concert with one or more of the other respondents in doing and performing the acts and things hereinabove alleged in furtherance of said understandings, agreements, combinations, and conspiracies.

PAR. 26. Said understandings, agreements, combinations, and con- ~iracies, and the things done thereunder and pursuant thereto, and In furtherance thereof, as hereinabove alleged, have had, and do have, !he effect of unduly restricting and restraining the sale of said salt In trade in commerce between and among the several States of the United States and in the District of Columbia; of substantially en· hancing prices to the consuming public and maintaining prices at attificiallevels and otherwise depriving the public of the benefits that Would flow from normal competition between and among the respondents in said commerce, and of eliminating competition between and atnong said respondents.

The acts and practices of the respondents as herein alleged are all to the prejudice of the public; have a dangerous tendency to and have actually hindered and prevented price competition between and among respondents in the sale of salt in commerce within the intent and meaning of the Federal Trade Commission Act; have placed in :respondents the power to control and enhance prices; have created ~n the respondents a monopoly in the sale of salt in such commerce; ave unreasonably restrained such commerce in salt, and constitute Unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGs As TO THE FACTs, AND ORDER • th Pursuant to the provisions of the Federal Trade Commission Act, e Federal Trade Commission on September 18, 1940, issued and subsequently served its complaint in this proceeding upon the res~ondents named in the caption hereof, charging them with the use ; u~~air methods of competition in commerce in violation of the t{0" 1s.Ions of said act. After the issuance of said complaint and h e ~hng of respondents' answers, the Commission by orders entered /~':In granted the motions of said respondents Salt Producers Assos1a{Ion, a corporation, Avery Salt Co., Darton Salt Co., The Carey S \t Co., Cayuga Rock Salt Co., Colonial Salt Co., Detroit Rock J afft Co., Diamond Crystal Salt Co., Inc., International Salt Co., A-: 1erson Island Salt Co., Inc., Hardy Salt Co., Morton Snit Co.,1/d es Salt Co., Ltd., :Mulkey Salt Co., Ohio Salt Co., Ruggles & a emaker Salt Co., Saginaw Salt Products Co., Union Salt Co., 46 FEDERAL TRADE C01.1MI'SSION DE'CISIJONS Findings 34F.T.C.

Watkins Salt Co., and ·worcester Salt Co., to withdraw their answers and to substitute therefor answers admitting all the material allegations of fact set forth in said complaint and waiving all inter· vening procedure and further hearing as to said facts; granted the motion of respondent American Salt Corporation to withdraw its motion to dismiss the complaint and its answer and to substitute there- .for and accept as its answer a statement of facts including an ad· mission of all the material allegations of fact set forth in said com· plaint and waiving all intervening procedure and hearings as to said facts; and granted the motion of respondents Stevenson Cor· poration, a corporation, and its officers, Charles R. Stevenson, T. 1\f. Harrison, C. H. Ferris, N. l\f. Perris, E. G. Ackerman, A. H. Dyer, R. E. Case, F. L. Sweetser, "\V. R. Guthrie, A. P. Nonweiler, S. l\1. Hudson, R. R. Bliss, L. B. Platt, Howard Marvin, and D. M. Metzger, a partnership doing business under the firm name of Stevenson, J or· dan & Harrison, to make a part of the record and receive in lieu of taking testimony or further hearings in this proceeding a statement of admitted facts submitted by them; which substitute answers and admissions of facts were duly filed in the office of the Commission. Thereafter this proceeding regularly came on for final hearing be· fore the Commission on the said complaint, substitute answers and nnswers and statements of admitted facts; and the Commission, hav· ing duly considered the matter and being now fully advised i.n the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Salt Producers Association, hereinafter referred to as respondent association, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, having its principal office at 2137 Book Building, Detroit, Mich. It was organized and for the past several years has acted as a trade association for the promotion and protection of the interests of its members who are engaged in the manufacture and sale of salt.

Respondents whose names appear in the following tabulation are members of the Salt Producers Association, and each is organ~ze~ and exists by virtue of the laws of the State and has its princip11 office or place of business at the address shown: A very Salt Co., State of 'Vest Virginia, American Dank Building, New Orleans, La.;

Barton Salt Co., State or Kansas, Hutchinson, Kans.; SALT PRODUCERS ASSOCIATION ET AL. 47 38 Findings · The Carey Salt Co., State of Kansas, Hutchinson, Kans.; Cayuga Rock Salt Co., State of Delaware, l\Iyers, N. Y.; Colonial Salt Co., State of Ohio, 2065 Manchester Road, Akron, Ohio· ' - Detroit Rock Salt Co., State of Michigan, 12841 Saunders Street, Detroit, Mich.;

Diamond Crystal Salt Co., State of Delaware, St. Clair, Mich.; International Salt Co., State of New Jersey, Scranton, Pa.; Jefferson Island Salt Co., State of Kentucky, 401 South Main. Street, Louisville, Ky.; . Hardy Salt Co., State of Missouri, 800 South Vandeventer Street, St. Louis, l\Io. ;

Morton Salt Co., State of Illinois, 208 "\-Vest 1Vashington Street, Chicago, Ill. ;

Myles Salt Co., Ltd., State of Louisiana, 1048 Constance Street, New Orleans, La.;

Mulkey Salt Co., State of Michigan, 154 Bagley A venue, Detroit, Mich.; . . Ohio Salt Co., State of Ohio, Wadsworth, Ohio; . Ruggles & Rademaker Salt Co., State of Michigan, 208 West Wash~ Ington Street Chicaao Ill · Saginaw Salt' Products1::> ' Co.,., State of Michigan, Saginaw, Mich.; . Union Salt Co., State of Ohio, Sixty-fifth Street and New York Central R. R, Cleveland, Ohio;

Watkins Salt Co., State of Delaware, "\-Vatkins Glen, N.Y.; ,,. Worcester Salt Co., State of New York, 40 \Vorth Street, New .1.ork, N.Y .

. Respondent, American Salt Corporation, is a corporation organl~ed, existing, and doing business under and by virtue of the laws of ~ e State of Delaware, with its principal office and place o£ business ln the New York Life Building, Kansas City, Mo. Respondent, Stevenson, Jordan & Harrison, Inc. (the corporate ~;rne of which was Stevenson Corporation until about August 6, 4.0, and which was referred to in the complaint under its said former 11 t~rne) is a corporation organized, existing, and doing business under b e _laws of the State of New York, having its principal place of i~~n:ss at 19 1Vest Forty-fourth Street, New York, N. Y. The ]' 1~Idual respondents Charles R. Stevenson, T. 1\L Harrison, C. H. Qerris~ N. 1\f. Perris, A. H. Dyer, R. E. Case, F. L. Sweetser, W. R. lillthne, A. P. Nonweiler, S. 1\L Hudson, R. R. Bliss, L. ll. Platt, :tn award 1\Iarvin, and D. 1\I. Metzger (referred to in the complaint as l~ "nber~ of a partnership trading under the name Stevenson, Jordan arr1son) are, with the exception of Charles R. Stevenson and 48 FEDERAL TRADE COMMTS'SlON' DECISION'S Findings 84F.T.C.

D. M. Metzger, employees of respondent Stevenson, Jordan & Harri-· son, Inc., the said Charles R. Stevenson and D. M:. Metzger being, respectively, president and treasurer of said corporation. R~spond­ ent E. G. Ackerman (referred to in the complaint as a member of said partnership) was an employee of Stevenson, Jordan & Harrison, Inc., until about December 31, 1940, at which time he terminated his connection with said corporation.

PAn. 2. 'fhe respondents, A very Salt Co., Barton Salt Co., The Carey Salt Co., Cayuga Rock Salt Co., Colonial Salt Co., Detroit Rock Salt Co., Diamond Crystal Salt Co., Inc., In~ernational Salt Co., Jefferson Island Salt Co., Inc., Hardy Salt Co., Morton Salt Co., .Myles Salt Co., Ltd., M~lkey Salt Co., Ohio Salt Co., Ruggles & Trademaker Salt Co., Saginaw Salt Products Co., Union Salt Co., 1Vatkins Salt Co., '\Vorcester Salt Co., and American Salt Corporation, hereinafter referred to as respondent producers, in the course and conduct of their business manufacture, sell, and distribute a large percentage of all the salt produ~ed in the United States. S:tid producers sell their products to wholesalers, dealers, and consumers located at various points throughout the United States and when sales are made, and as a part thereof, regularly have shipped, and do ship, said products to the purchasers thereof at their respective points of location in the several States of the United States other than in the States of origin of the shipments. Said respondent producers maintain a current of trade in commerce in said products between and among the several States of the United States and in the District of Columbia.

PAR. 3. Prior to the adoption of the practices hereinafter described said respondent producers were in active and substantial competition with each other and with other members of the industry in making, and seeking to make, sales of their products in trade in commerce between and among the several States of the United States and in the District of Columbia. But for the practices hereinafter described such active and substantial competition would have continued until the present and said respondent producers would now be in active and substantial competition with each other and with other members of the industry. Beginninoo0 about October 1035 all• the respondents except T. l\f. Harrison, C. H. Ferris, N. l\I. Perris, E. G. Ackerman, -:\-· II. Dyer, R. E. Case, F. L. Sweetser, W. It Guthrie, A.~· Nonweiler, S.l\I. Hudson, R. R. Dliss, L. n. Platt, a~d Howard Marvin entered into, and thereafter carried out, certall1 understandings, agreements, combinations, and conspiracies for the Purpose and with the effect of restrictin(lol restraininoool monopolizing, SALT PRODUCERS ASSOCIATION ET AL. 49 Findings ~uppressing, and eliminating <:ompetition in the sale of salt in trade In commerce between and among the several States of the United States and in the District of Columbia.

P .AR, 4. Pursuant to said understandings, agreements, combinations, and conspiracies, and in furtherance thereof, said respondent pro~ ducers, with the active cooperation of respondents, Salt Producers Association, Stevenson, Jordan & Han-ison, Inc., Charles R. Stevenson, and D. :M, Metzger, have done and performed the following acts and thinO's0 ·• 1. Said respondent producers agreed to fix and maintain, and have fixed and maintained, uniform prices and terms and conditions in the sale of salt.

2. Said respondent producers have agreed to establish, ·and have established, a system of zones throughout the United States to aid in the establishment and fixing of delivered prices of salt within each of such zones, 3· Said respondent producers have agreed to cooperate, and have eo?r>erated, in the maintenance of the various delivered prices deterlllrned for particular zones.

4· Said respondent producers have agreed to exchange, and have ~~ch~nged, through the medium of said respondent association, price order to establish the delivered prices at which sailt is to be sodls1ts In "th' zone~. WI Ill the various 5 s. · aid respondent producers have agreed to exchange, and have ~:x~~anged, information to be used in connection with the fixing of c:nll;~~ed prices within the various zones, discounts, and terms, and dih~ns in the sale of salt. . 6 t .1· Said respondent producers have agreed to curtail, and have cur- ~~ ed, the production of salt, and for the purpose of securing enforcefi.le~t of the agreement to curtail production respondent dealers have tee ' and do file, with said respondent association invoices and other Ports. th 7· Said respondent association collects from and .distributes among · st:/-e.~po~dent producers and other participants in said agreements and I~_lcal_ mformation used sm.d useful in carrying out said agreements, and Istributes from time to time among said respondent producers list o~her. members of the industry participating in said agreements ll.a~ s owmg the current delivered prices, terms, and conditions of sale, Oth es. of dealers and distributors to be allowed special discounts, and Information used and useful in carrying out said agreements. 8eh said. respondent, Stevenson, Jordan & Harrison, Inc., was employed by re\';n d '1'on ent producers from about November Hl35 to about August 466~06'"-42-voi. 8-!-4 Findings 34F.T. C.

1939. As an employee of respondent producers Stevenson, Jordan & Harrison, Inc., and Charles R. Stevenson and D. l\L Metzger, as president and treasurer thereof, respectively, in the course and conduct of their business as aforesaid, have actively participated in directing, recommending, and supervising the foregoing acts and things done Ly said respondent producers in furtherance of said understandings, agreements, combinations, and conspiracies. In that connection they were employed by each of the respondent producers in November 1935, to make a survey of all the business of the production, sale, and distribution of salt which had been conducted by said respondent producers during the previous period of four years and ten months. Stevenson, Jordan & Harrison, Inc., through said survey developed figures for various kinds of salt covering production, sales (both by volume and dollar realization), plant capacities, marketing expenses; and financial returns. There were established in the United States certain marketin""g territories or delivered price zones and the survey developed for each of the yrars covered by it, among other things, the volume of salt sold in each of said territories or zones and the average yield f. o. b. plant from said sales. Figures obtained from the respondent producers were combined in the survey to make composite figures. Each of said respondent producers was furnished these composite figures, together with it8 own individual figures, for each of the years covered by the survey, but no respondent participating in the survey was given any figures of any other respondent. The survey further covered a study of the plant capacity to manufacture salt of each of the respondents participating in the survey, which likewise was combined into a composite figure, a study of marketing expenses combined into a composite figure, and a compilation of the financial returns likewise combined il}.to a composite figure. Each respondent participating in the survey was given his plant capacity as compared with the total capacity qf all of the respondents, his marketing expenses as compared with the composite marketing expense figure, and his financial return as compared with. the composite financial return figure. No respondent was given the figures , of any other respondent participating in the survey with respect to the plant capacity, the marketing expenses, or the financial return of any other respondent.

Said survey was completed in April 1936 and was presented to the individual respondent producers at a meeting in Chicago, Ill., in thltt month. At said meeting the facts developed by said survey were discussed by representatives of Stevenson, Jordan & Harrison, Inc., and it was pointed out that the composite figures developed by said survey indicated two things: First, that there was a large excess of SALT PRODUCERS ASSOCIATION ET AL. 51 38 Findings capacity to produce salt over the demand therefor, and that the composite net earnings of the respondents participating in the survey were small in relation to the investment in plants and properties; and, second, that the composite figure of sales expenses was inordinate in relation to the sales price received for the product. The representatives of Stevenson, Jordan & Harrison, Inc., further expressed the view that the conditions discl9sed by these composite figures were caused by unremitting efforts of each individual respondent participating in the survey to obtain for himself an increased portion of the total volume of business obtainable without due regard to the net return on sales of the product and without due consideration to the sales expense involved.

For a period qf some 30 days after said meeting in Chicago, rep· resentatives of Stevenson, Jordan & Harrison, Inc., visited the offices of the respondents who had participated in sajd survey and discus~ed with officials of said respondents the details of said survey as applied to the individual business of said respondents. On said visits representatives of Stevenson, Jordan & Harrison, Inc., advised the indi- -vidual managements of the responderits participating in said survey that if each said individual management should continue in the endeavor to secure a volume of business entirely ·disproportionate to that obtained in the past and as indicated by the survey, the consequences of such action would inevitably be an inadequate return to the individual respondent upon investment and excessive and uneconomic cost of marketing the product, and that it was the opinion of Stevenson, Jordan & Harrison,. Inc., that these were the fundamental economic truths developed by the survey. After this work was completed another meeting of representatives of the respondent producers was held with representatives of Stevenson, Jordan & Harrison, Inc., and at this meeting said respondent producers employed Stevenson, Jordan & Harrison, Inc., to collect monthly from each participating respondent its business figures for each marketing territory or zone covering production, Bales (both by volume and dollar realization), and marketing ex- Penses, and to disseminate to each participating respondent com~ Posite figures of production, sales (both by volume and dollar realization), and marketing expenses, and likewise to set out against such composite figures for each participating respondent its own individual figures. As the figures were to deal with several classes ?r grades of salt differing substantially in value, all figures cover· Ing sales were to be reduced to common denominator terms. It Was also understood that Stevenson, Jordan & Harrison, Inc., would ~ollect annually financial statements from those of the participating 52 FEDERAL TRADE COMMrs:Slon' DECISIONS Findings 34F.T.C.

respondents who were willing to furnish the same and from these figures would prepare a composite financial statement which would be distributed to those of the respondents who gave their individual financial statements. It :was understood further that Stevensont Jordan & Harrison, Inc., would from time to time send its representntives to the offices of the participating respondents to audit the figures submitted to it by .said participating respondents so that there could be an assurance of the accuracy of all figures collected and disseminated by Stevenson, Jordan & Harrison, Inc. No participating respondent was to be given, nor was any such respondent actually given, the individual figures of any other participating respondent with respect to production, sales (both by volume and dollar realization), marketing expenses, or financial figures. The respondent Salt Producers Association held meetings of its members monthly, and after the .employment of Stevenson, Jordan & Harrison, Inc., by said respondent producers one or more repre· sentatives of Stevenson, ,Jordan & Harrison, Inc., attended these meetings. At these meetings such representative or representatives explained the current statistics· prepared and submitted charts indicating for various delivered price zones current volume and net dollar realization, and at times indicated their opinions of the trend of demand for salt and the volume of consumption to be expected in the various marketing territories or delivered price zones, and sent a separate chart each month to each participating respondent showing its current volume and the relation thereof to the total expected demand in comparison with its actual prior volume and the actual past total volume.

From time to time Stevenson, J"ordan & Harrison, Inc., sent rep- J'esentatives to the offices of the participating respondents to audit the statistical data submitted to Stevenson, Jordan & Harrison, Inc., Bnd to impress upon the management of each individual participat· ing respondent the necessity of considering the consequences to each individual business of any substantial variance from its ratio of actual past production as shown by the survey. The managements of the participating respondents were told by these representatives of Stevenson, Jordan & Harrison, Inc., that they could increase their normal volume relationship with respect to current business only by taking some of another producer's volume; that in the sale of a homogenous product such as salt any attempt to secure such increased volume could only be made by lowering price; that if lower prices were offered by one participating respondent they would inevitably be met by other participating respondents, so that the SALT PRODUCERS ASSOCIATION ET AL. 53 38 Findings final result would not be to obtain any substantial increased volume of business but merely to lower the entire price structure and thus further to reduce the return upon investment. 'Vhen current statistical data disclosed that one of the participating respondents was producing at a rate substantially greater than its past production as disclosed by the survey, a representative of Stevenson, Jordan & Harrison, Inc., urged such respondent's management to consider the injurious consequences to the company if it continued to produce at this higher ratio and did not relate its production to the volume relationship between its past production and the total production as disclosed by the survey figures. The surveys and program as above described were made and carried out in every particular. Respondent members thereby cooperatively reported and submitted the intimate details of their respective businesses for the analysis of experts and interpreters jointly employed and obtained from them a harmonized estimate of current and future market conditions. Respondent members thereby, and through the Use of the other methods set forth in paragraphs 3 and 4 of these findings, have acted in concert and in cooperation to preserve a static condition of their respective businesses with regard to production, sales~ and delivered prices and in the maintenance of price zones within which they made effective the same delivered prices from their respec- . tive and widely separated producing plants. The normal conflict of ~ontending competitive forces engendered by an honest desire for gain Wa:; thereby restrained and suppressed. Dy the substitution of such concerted action for such conflict respondents destroyed that competition in price, and otherwise, to which the public has long looked for protection.

9. The respond~nt, .American Salt Corporation, is not, and has not been at any time mentioned herein, a member of respondent Salt Producers Association, but has cooperated· and acted in concert with the niembers of respondent association in carrying out the agreements, . i combination, and conspiracies herein found. PAR. 5. Each of the respondents herein except T. M. Harrison, C. H. Ferris, N. M. Perris, E. G. Ackerman, A. H. Dyer, R. E. Case, F. L. Sweetser, 1Y. R. Guthrie, A. P. Nonweiler, S . .M. Hudson, R. R. llliss, L. B. Platt, and Howard Marvin, at the times herein mentioned acted . in concert with one or more of the other respondents in doing and Performing the acts and things hereinabove found in furtherance of said understandings, agreements, combination, and con!>piracies. PAR. 6. The aforesaid understandings, agreements, combinations, ~nd conspiracies, and the thin~ done thereunder and pursuant there- 54 FEDERAL TRADE COMMIS'SION DE'CIS'lONS Order 34F. 'T. C.

to, and in furth~rance thereof, as hereinabove found, have had, and do have, the effect of unduly restricting and restraining the sale of said salt in trade in commerce between and among the several State::; of the United States and in the District of Columbia; of substantially enhancing prices to the consuming public and maintaining prices, at artificial levels and otherwise depriving the public of the benefits that would flow from normal competition between and among the respondents in said commerce, and of eliminating competition between and among said respondents.

- CONCLUSION The acts and practices of the respondents as herein found are all to the prejudice of the public, have a dangerous tendency to, and haver actually hindered and prevented price competition between and among respondents in the sale of .suit in commerce, as "commerce" is defined in the Federal Trade Commission Act, have placed in respondents the power to control and enhance prices, have created in the respondents a monopoly in the sale of salt in such commerce, have unreasonably restrained such commerce in salt, and constitute unfair methods of competition in commerce within the intent and mea.ning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission on the complaint of the Commission and the answers of the corporate respondents Salt Producers Association, Avery Salt Co., Darton Salt Co., The Carey Salt Co., Cayuga Rock Salt Co., Colonial Salt Co., Detroit Rock Salt Co., Diamond Crytal Salt Co., Inc., International Salt Co., Jefferson Island Salt Co., Inc., Hardy Salt Co.t Morton Salt Co., Myles Salt Co., Ltd., Mulkey Salt· Co., Ohio Salt Co., Ruggles & Rademaker Salt Co., Saginaw Salt Products C?., Union Salt Co., Watkins Salt Co., and Worcester Salt Co., admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts; the answer of American Salt Corporation, a corporation, admitting all the material allegations' of fact set forth in said com~ plaint, certain additional facts, and waiving all intervening procedure and further bearing as to said facts; and the answer and statement of admitted facts filed by respondents Stevenson, Jordan & Harrisonr Inc. (referred to in the complaint under its former name, Stevenson Corporation), a corporation, and its officers Charles R. Stevenr,on and D. M. l\Ietzger, president and treasurer, respectively, and its employees, T. 1\I. Harrison, C. H. Ferris, N. M. Perris, E. G. Acker- SALT PRODUCERS ASSOCIATION ET AL. 55 38 Order man, A. H. Dyer, R. E. Case, F. L. Sweetser, \V. R. Guthrie, A. P. Nonweiler, S.M. Hudson, R. R. Bliss, L. B. Platt, and Howard Marvin (referred to in the complaint as members of a partnership trading under the name Stevenson, Jordan and Harrison), and the order of the Commission granting the motion of respondents Stevenson, J ordan & Harrison, Inc., and its said officers and employees that the Commission receive said statement of admitted facts in lieu of taking testimony or further hearing and that the statement of admitted facts be made a part of the record in this proceeding; and the Commission having made its findings as to the facts and its conclusion that the aforesaid respondents, except T. M. Harrison, C. H. Ferris, N. M. Perris, E. G. Ackerman, A. H. Dyer, R. E. Case, F. L. Sweetzer, W. R. Guthrie, A. P. Nonweiler, S. l\1. Hudson, R. R. Bliss, L. D. Platt, and Howard Marvin, have violated the provisions of section 5 of the Federal Trade Commission Act.

It is ordered, 'rhat the respondents, Salt Producers Association, a corporation, Avery Salt Co., a corporation, Barton Salt Co., a corporation, The Carey Salt Co., a corporation, Cayuga Uock Salt Co., a corporation, Colonial Salt Co., a corporation, Detroit Rock Salt Co., a corporation, Diamond Crystal Salt Co., Inc., a corporation, International Salt Company, a corporation, Jefferson Island Salt Co., Inc., a corporation, Hardy Salt Co., a corporation, Morton Salt Co., a corporation, Myles Salt Co., Ltd., a corporation, l\Iulkey Salt Co., a corporation, Ohio Salt Co., a corporation, Ruggles & Rademaker Salt Co., a corporation, Saginaw Salt Products Co., a corporation, Union Salt Co., a corporation, ·watkins Salt Co., a corporation, \Vorcester Salt Co., a corporation, American Salt Corporation, a corporation, their officers, servants, agents, and employees, and Stevenson, Jordan & liarrison, Inc., Charles R. Stevenson and D ..M. Metzger, respectively President and treasurer of said Stevenson, Jordan & Harrison, Inc., and their agents, servants, and employees, or any two or more of said respondents, with or without the cooperation of others not parties hereto, in connection with the offering for sale, sale, and distribution of salt in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from entering into, ~continuing, or carrying out, or directing, instigating, or cooperating ln, any common course of action, mutual agreement, combination, or .conspiracy, to fix or maintain the prices of salt or curtail, restrict, or regulate the production or sale thereof, and from doing any of the following acts or things pursuant thereto: 1. Establishing or maintaining uniform prices for salt, or uniform terms and conditions in the sale thereof, or in any manner agreeing 56 FEDERAL TRADE COMMIS'SION' DE'CISIIONS Order 34F.T.C.

upon, fixing, or maintaining any prices, including terms and conditions of sale, at which salt is to be sold. 2. Adhering, or pr_omising to adhere, to filed or published prices or terms and conditions of sale for salt pending the filing of changes therein with respondent Salt Producers Association, or with any other agency, or with each other.

3. Establishing or maintaining delivered price zones, or making quotations and sales of salt upon a delivered price basis under a zona system whereby the cost of salt delivered to buyers within each respective zone is made identical at all destinations within such zone. 4. Exchanging, directly or through the Salt Producers Association, or any other agency, or clearing house, price lists, invoices, and other records of sale showing the quantity, current prices and terms and conditions of sale allowed by respondent corporations to dealers and distributors; provided, however, that nothing herein shall prevent the respondent association from collecting and disseminating to the respective respondent manufacturers figures showing the total volume of sales of salt without disclosing the sales volume of. individual producers.

5. Exchanging, directly or through the medium of the Salt Producers Association, or any other agency, the names of distributors or dealers who receive special discounts.

6. Curtailing, restricting, or regulating the quantity of salt to be produced and sold by any respondent corporation by any method or means during any given period of time.

7. Doing, or causing to be done, any of the things forbidden by this order through the medium of respondents, Stevenson, Jordan & Harrison, Inc., Charles R. Stewnson, or D. M. Metzger, or any other corporation, firm, or individual.

It is further ordered, That respondents, Stevenson, Jordan & Hatrison, Inc., and Charles R. Stevenson and D. M. Metzger as officers thereof, and their agents, servants, and employees, do forthwith cease and desist from doing or performing any of the things forbidden by this order, or aiding, assisting, or cooperating in the performance thereof.

It is further ordered, That the respondents shall, within 60 days after service upon them pf this order, file with the Commission a report in writing setting forth in detail the manner a.nd form in which they ha.ve complied with this order. · It is further ordered, That nothing in this order is to be construed as prohibiting the respondents from entering into such contracts or agreements relating to the maintenance of resale prices as are not pro- SALT PRODUCERS ASSOCIATION ET AL. 57 Ord~r hibited by the provisions of an act entitled "An Act to protect trade and commerce against unlawful restraints and monopolies," approved July 2,1890 (the Sherman Act), as amended. It is further ordered, That for the reasons appearing in the findings .as to the facts the complaint herein be, and hereby is, dismissed as to the following respondents: T. M. Harrison, C. H. Ferris, N. M. Perris, E. G. Ackerman, A. H. Dyer, R. E. Case, F. L. Sweetser, W. R. Guthrie, A. P. Nonweiler, S.M. Hudson, R. R. Bliss, L. B. Platt, and Howard Marvin. .

' I • 58 FEDERAL TRADE COMMT5Slon' DE'CI:SIJON"& Syllabus 34 F. T. C.