Milk Cap Statistical Bureau, the

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IN THE MATTER OF THE MILK CAP STATISTICAL BUREAU ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATIOI'i" OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4448. Complai1it, Jan. 16, 1941.:._Decision, July 8, 1942 Where an unincorporated trade association, which h~d been the code authorlt)' . ' for the paper disc milk bottle cap industry under the National Industrial Recovery Act and which, following the invalidation of said Act and tb6 manager's suggestlol'l to the members that they should not give up "ad· vantages such as cooperative action and good will" which they bad "been able to develop," was continued for the purpose of cooperating in the maintenance of uniform trade practices in the sale and distribution of paper disc bott16 caps; and the eleven member-manufacturers of said association or Bureallr engaged in the manufacture and interstate sale of products In question t" jobbers and dairies, with a combined business amounting to about 75 percent of that of the entire industry; acting under the supervision and regu11,1t1oil of said Bureau- . (a) Entered into and actively cooperated In agreements and combinatl0n9 directed to the establishment of uniform prices, discounts, terms and coil" dltions of sale and freight charges, uniform and simultaneous changes of prices, and uniform classifications and rating of customers, in connect!Oil with the sale and distribution of paper disc m1Ik bottle caps In commerce; and Where said ''Bureau," in pursuance of such agreements- ( b) Rated and classified the approximately 50,000 dairies located tbroughOil! the United States according to the number of caps used annually, and distributed such ratings and classifications among the member-manufacturer who agreed to, and did, adhere thereto In determining prices and discount at which dairies should be sold; and (c) Confined sale of the products in question exclusively to jobbers and daft) consumers, and prevented sales to "super-jobbers," mill agents, cooperativt buying agencies, bottle exchanges, and other consumers; and Where said manufacturer-members, to make more effective the operatipn of sucl agreements- ( d) Filed with said "Bureau" price lists, copies of Invoices containing naiJlC of purchasers, quantities purchased and prices therefor, customer lists, 1101 copies of contracts and conditions of sale; and Where said "Bureau"- ( e) Checked data filed by manufacturer-members 1~ accordance with Its poJic; and practice of policing the Industry to determine whether said manuf:l1 turers carried out said agreements ;

With the result that price competition among manufacturers concerned in tb sale of paper disc milk bottle caps in commerce was practically eliminated Held, That such agreements and combinations and things done pursuant thereto under the circumstances set forth, were all to the prejudice of the public bad a dangerous tendency to, and did, hinder and prevent price competiti° among said member manufacturers In the sale of products in questio. placed in said association and members the power to control and enhail1 THE MILK CAP STATIS.TICAL BUREAU ET AL. 89 88. Complaint prices; unreasonably restrained commerce in said paper disc milk bottle caps; and constituted unfair methods of competition in commerce. Mr. Daniel J.lJ!urphy for the Commission.

Mr. Joseph J. Brown, of Philadelphia, Pa., for respondents, with the exception of Standard Cap & Seal Corporation, represented by .Sullivan& Cromwell, of New York City. . Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal ~trade Commission, having reason to believe that the parties m1med ln the caption hereof, a,nd more particularly hereinafter described a~d referred to as respondents, have violated the provisions of the ~a~d act, ahd it appearing to the Commission that a proceeding by lt ln .respect 'thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: ~ARAGRAPH·l. Respondent, The Milk Cap Statistical Bureau, is an lln1ncorporated trade association with its principal office and place business located at 1532 Lincoln-Liberty Building, Philadelphia,;f a. The said respondent Association. was organized prior to 1932, and existed under the name of National Association of Bottle Cap :Manufacturers until May 1937, when the name of said respondent .t\.association was changed to The Milk Cap Statistical Bureau. The ~e:rnbership of said respondent Association, hereinafter referred to as e "respondent Bureau," is composed of 11 individuals, firms or corporations engaged in the manufacture, sale and distribution of t>aper disc milk bottle caps. - 'I'he respondent Bureau operates through its officers who consist bf a chairman and a manager and an executive committee. The mem· thrs of the respondent Bureau, at each regular meeting, elect .one of e three members, who compose the executive committee, to serve as chairman of the Bureau and chairman of the executive committee ~until the next regular meeting. The manager of the respondent Ureau is also the executive secretary. . _ 'I'he executive committee of the respondent Bureau ~nsists of: () llespondent, Ray W. Blodgett, President of Mid. 1Vest Bottle Cap o., Belvidere, Ill.

ll llespondent, George ·w. Rohrbeck, President of Great Lakes ottle Cap Co., 2950 ·west Davison Street, Detroit, Mich. t llespondent, Robert~· Schulz, cjo Piqua Cap Co., 704 1Vashing. on Avenue, Piqua, Ohio.

' - FEDERAL TRADE COMMISSION DE1CUSIONS 90 Complaint 35F.T.C· The manager and executive secretary of the respondent Bureau is respondent, George J. 'Lincoln, Jr., 153~ Lincoln-Liberty Building, Philadelphia, Pa. . · PAR. 2. Respondent, Atlas Paper Box Co., is a corporation organ· ized and existing under the laws of the State of Tennessee and en· gaged in business under the trade name Atlas Bottle Cap Co., having its principal place of business at 1300 Central A venue, Chattanooga, Tenn.

Respondent, Great Lakes Bottle Cap Co., is a corporation organ· ized and existing under the laws of the State of Michigan, having its principal place of business at 2950 'Vest Davison Street, Detroit, Mich.

Respondent, Robert S. Leonard Co., is a corporation organized and existing under the laws of the State of Missouri, having its principal place of business at 405 East Eighth Street, Kansas City,· Mo. Respondent, L. Levingston Co., is a corporation organized and ~:s:­ isting under the laws of the State of Califomia, having its principal place of business at 383 Fourth Street, San Frandsco, Calif. · Respondents, Fowls)r E. Macy and Edna B. Macy, are· copartner~ doing b.usiness under the trade name Fowler E. Macy Co., having ll principal place of business in .Converse, Ind. Respondent; .M:id-1Vest Bottle Cap Co., is a corporation organized · and existing under the laws of the State of Illinois, having its prin· cipal pla~e of business in Belvidere, I~l. · Respondent, National Manufacturing Co., is a corporation organized and existing under the laws of the St~te of Missouri, having' ·its principal place of business at 2800 Mercier Street, Kansas City, Mo.

· Respondent, Ohio Bottle Cap Co., is a corporation organized and existing under the laws of the State of Ohio, having its principo.l place of business at 411 South College Street, Piqua, Ohio. Respondent, Piqua Cap Co., is a corporation organized and exist· ing under the laws of the State of Ohio, having its principal-place of business at 704: ·washington Avenue, Piqua, Ohio; Respondent, Sealright Co., Inc., is a corporation organized and et· isting under the laws of the State of New York having its principal place of business in Fulton, N. Y. . Respondent, Smith-Lee Co., Inc., is a corporation organized anc' existing under the laws of the State of New York, having its principal pl,ace of business in Oneida, N.-Y. . · . · · Respondent, Standard Cap & Seal Corporation, is a corporatioll organized and existing under the laws of the State of Virginia, THE MILK CAP STATIIS.TICAL BUREAU Err AL. 91 88 Complaint having its principal place o£ business at 1200 Fullert'!n Avenue, Chicago, Ill., . · }{Respondents, Atlas Paper Box Co., Great Lakes Bottle Cap Co., robert S. Leonard Co., L. Levingston Co., Fowler E. Macy and ~dna B. Macy, a copartnership doing business under the firm name f 0\Vle~ E. Macy Co.,· Mid-West Bottle Cap Co., National l\1anu- 1rtcturmg Co., Ohio Bottle Cap Co., Piqua Cap Co., Seu.lright Co., nc., Smith-Lee Co., Inc., are all respectively respondent members _of the respondent Bureau. Said respondent members, together with respondent Standard Cap & Seal Corporation, a nonmember of said respondent Bureau, will hereafter be referred to as respondent ~anuf~cturers. • t Jl.A.n. 3. Respondent manufacturers are q.ll respe~tively manufac- Utei·s of paper disc milk bottle caps an<l in the regular course and :?duct of their respective businesses sell and distribute paper disc . llk bottle caps manufactured by them to the purchasers thereof, and In connection with said sales ship and transport, or cause to be shipped und transported, said paper disc milk bottle caps, in commerce, to the ll~rchasers thereof, located in the various States of the United States 0 ~ er than the States of origin of said shipments, and in the District 0 • Columbia. All respondent manufacturers have maintained, and ~till do maintain, a regular current of trade in paper disc milk bottle ~aps in commerce between and among the various States of the United states and in the District of Columbia.

Jl.A.n. 4. Respondent Bureau, and its respondent officers and respondettt lllembers of its· Executive Committee are not, in their official eupacities, engaged in commerce, but all aided, abetted, furthered, l?erated wfth, and were instrumentalities of, and parties to, some, or h 'of the understandings, agreements, combinations, and conspiracies el'einafter set out and actively cooperated and participated in the ihtformance of some or all of the acts and practices done in pursuance ~>reto and in furtherance thereof.

l).A.n, 5. There are in. the United States approximately 21 individuals, 6 bl'ltts, or corporations engaged in the manufacture of paper disc milk 1\;tt]e cap.s which are made to fit inside the tops of milk bottles. Eleven ~ 13aiu individuals, firms, or corporations are members of the re- ~lldent Bureau and are all named respectively as respondents herein. i le total annual sales of paper disc milk bottle caps by the entire 11dllstry in the United States amount to approximately ~o,ooo,ooo,ooo s, the dollar sales of which amount ta approximately $4,500,000. he sales of said caps are made by the said manufacturers to jobbers and dairies. The combined business of the 11 members, respondents 92 FEDERAL TRADE COMMISSION DIDCISIONS Complaint 35 F. T. C.

herein, of r.respondent Bureau, amounts to about 75 percent of the total business of the entire industry. · "' PAn. 6. Respondent manufacturers in the regular course and conduct of their respective business have been and are in active and substantia,] competition with each other and with other manufacturers and seller: of paper disc milk bottle caps in the sale thereof to purchasers fo~ shipment in commerce between and among the several States of the United States and in the District of Columbia, except to the extent to which such competition has been restrained, lessened, injured, and suppressed by the understandings, agreements, combinations, and con· spiracies her~inafter set forth.

PAR. 7. Respondents, namely said Bureau, hereinabove described, its officers, members, and its executive committee and its members, named and included as respondents herein, and respondent, Standard Cap & Seal Corporation, during and in the period of more than 3 years last past have entered into and thereafter carried out understandings~ agreements, combinations, and conspiracies, for the purpose of restrict· ing, restraining, suppressing, and eliminating competition and creatin( n monopoly in the sale of paper disc milk bottle caps in trade anc commerce between and among the several States of the United States and in the District of Columbia. · PAR. 8. Pursuant to said understandings, agreemmts, combinations, nnd conspiracies, and in furtherance thereof,the said respondents have engaged in and performed and are now engaging in and performing the following acts and practices :

1. Respondent manufac.turers have agreed to fix and have fiset minimum prices for the sale of p~per disc milk bottle caps sold and dis tributed by them. · 2. Respondent manufacturers have agreed to maintain and hav· maintained uniform prices for the sale of paper disc milk bottle cap sold and distributed by them.

3. Respondent manufacturers have agreed to fix and mainfain a!l' have fixed and maintained uniform discounts and other conditiofl~ for the sale of paper disc milk bottle caps sold and distributed by thej1 4. Respondent manufacturers have agreed to fix and maintain n.Jl have fixed and maintained, with dairies, uniform contract te~ms which. ·provided for the dairies' actual yearly requirements of paper disc mil bottle caps to be sold to said dairies and delivered thereto, in accord ance with the~r needs, at different times of the year, at a price dependel upon the quantity contracted for. · 5. Respondent manufacturers agreed to furnish and have furnishe the respondent Bureau with lists of dairies under contract with tf· THE MILK CAP STAT11S.TICAL BUREAU E,T AL. 93 88 Complaint ba~d respondent manufacturers for the sale and delivery of paper disc :rrnlk bottle caps.

6. Respondent Bureau from time to time issued a "Joober Rating nook," for the pse of said respondent manufacturers which classified find rated all jobbers of paper disc milk bottle caps who purchased 350,000 or more of ~uch caps annually. · · . 7. Respondent manufacturers agreed to abide by and did abide by said "Jobber Rating Books" in determining prices and discounts to be allowed jobbers of paper disc :milk bottle caps. 8. Respondent Bureau from time to time issued a "Dairy Rating Book," and supplements thereto, which classified and rated the ap- Proximately 50,000 dairies located throughout the United States, e. g.: "A" rated dairy uses 25,000,000 or more paper disc milk bottle caps 11nnually. . "B" rated dairy uses 12,000,000 to 25,000,000 paper disc milk bottle Caps annually. · b "C" rated dairy uses from 5,000,000 to 12,000,000 paper disc milk 0title caps annually, etc.

,, 9,. Re~pondent manufacturers agreed to abide and did abide by said Datry Rating Books" in determining the prices at which a dairy "'0.Uld be sold 1 sales \were made by the respondent manufacturers to dairies at an agreed price based upon the quantity listed for such customer in the dairy rationing book and sales were not made by respondent manufacturers to dairies at a price based upon a greater qbuantity than the quantity listed for such customer in the dairy rating Ook, . 10. Respondent manufacturers agreed to furnish and have furlltshed the respondent Bureau with copies of all invoices covering the Sales·of paper disc milk bottle caps; each invoice to.contain the name of the purchaser, the quantity sold, and the price. 11. Respondent manufacturers have agreed to change1 and, have changed, simultaneously, the prices and discounts at which respondent lllnnufacturers sell paper disc milk bottle caps. 12. Respondent manufacturers, in the event of a price advance) agreed that each respondent manufacturer would have the privilege Of. shipping customers under contract the same number of.paper disc llltlk bottle caps in the succeeding 2 months as that customer purchased from the same respondent manufacturer in the prior 2 months lit the prior price. · 13. Respondent manufacturers agreed to furnish and did furnish the respondent Bureau, at the time of each price advance, their lists Of, customers under contract with them and records showing the quan- M!l749m-43-vol. 35-9 Fiudings 35F. T.C.

tity of paper disc milk bottle cups which ha~ been shipped to such customer in the prior 60 days .

. 14. Said respondents have used, and are- now using other methods and means designed to suppress and prevent competition and restrict and restrain the sale of paper disc milk. bottle caps in said commerce. PAR. 9. Each of the said respondents herein acted in concert and cooperation 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. 10. Said understandings, agreements, combinations, and conspiracies, and the things. done thereunder and pursuant thereto and furtherance thereof, as hereinabove allPgecl, have had ancl do have in the effect of unduly and unlawfully restricting, restraining, hindering, and preventing price competition between and among respondents in the sale of paper disc milk bottle caps in commerce within the intent and meaning of the Federal Trade Commission Act; of unduly and. unlawfully restricting and restraining trade and commerce in said products in said commerce; of eliminating •competition, with· the tenclency and capacity of creating a monopoly, in the sale of said products in said commerce; of placing in respondents the power to control and enhance prices; of unreasonably restraining sw;h commerce in said products. .

Said understandings, agr!:'ements, combinations, and conspiracies, and the things done thereunder and pursuant thereto and in furtherance thereof, as above alleged, constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

REI'ORT, FINDINGS AS TO THE FACTS, AND 0JIDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on the 1Gth day of January. i941, issued its complaint in this proceeding against the respondents named in the above caption and caused such complaint to be served as required by law, charging the respondents with the u~e of t1nfair methods of competition in commerce in violation of the provisions of said act. On February 25, 194:1, the respondents filed their answer in this pro~eeding. Thereafter a stipulation wns ~entered into whereby it was. stipulated and agreed that a statement o£ facts signed and executed by counsel for the respondents, excepting respond:>nt, Stand-' ard Cap & 'Seal Corporation, and ,V. T. Kelley, Chief Counsel :for the Federal Trade Commission, subject to the -app~oval of the Co·m; l~~u of mission may be taken as the. facts in this proceeding. and in THE MILK CAP STATISTICAL BUREAU Ell' AL. 95 88 Findings testimony in .support of the charges stated in the complaint, or in opposition thereto, and that the said Commission may proceed upon said statement of facts to make its report, stating its findings as to to the facts and its conclusion based the.reon and enter its order dis- Posing of the proceeding, excepting in respect to respondent Standard Cap & Seal Corporation, without the presentation of argument or the filing of briefs. Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint, answer\> and stipulation, said stipulation having been approved, occepted, and. filed, and the Commission having duly considered the same and being ~ow fully advised in the premises, finds that this proceeding is "in the lnterest of the public and makes its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, The l\Iilk Cap Statistical Bureau, is an Unincorporated trade association with its principal office and place of business located at 1532 Lincoln-Liberty Building, Philadelphia, Pa. 1'he said respondent Association was organized prior to 1932, and e::tisted under the name of National Association of Bottle Cap Manuf~cturers until May 1937 when the name of said respondent Association was changed to The Milk Cap' Statis.tical Bureau. The member- ~hip of said respondent Association, hereinafter referred to as the respondent Bureau," is composed of eleven individuals, firms, or cor- P?rations engaged in the manufacture, sale, and distribution of paper disc milk bottle caps.

The respondent Bureau operates through its officers who consist of a chairman and a manager and an executive committee. The membel·s of t}le respondent Bureau, at each regular meeting, elect one of the three members, who compose the executive committee,'to serve as chairman of the Bureau and chair.·mnn of the executive committee until the next regular meeting. The manager of the respondent Bureau is also the executive secretary. · The executive committee of the respondent Bureau consists of: · Respondent, Ray W. Blodgett, president of Mid-West Bottle Cap Co., Belvidere, Ill. · . nespondent, George ·w. Rohrbeck, president of Great,Lakes Bottle Cap Co., 2950 West Davison Street, Detroit, Mich. · Uespondent, Robert ·n. Schulz, c/o Piqua Cap Co., 704 Washington. A venue, p·1qua, Oh'10. • 'fhe manager nnd executive s~cretary of the respondent Bureau is ~spondent, George J. Lincoln, Jr., 1532 Lincoln-Liberty Building, philadelphia, Pa. · . .96 FE.DERAL TRADE COMMISSION DECJSIONS Findings 35F.T.C.

PAR. 2. Respondent, Atlas Paper Box Co., is a ~orporation organ· .?zed and existing under the laws of the State of Tennessee and engaged in business under the trade name Atlas Bottle Cap Co., having its principal place of business at 1300 Central Avenue, Chat· · tanooga, Tenn.

Respondent, Great Lakes Bottle Cap Co., is a corporation organ· ized and existing under the laws of the State of Michigan having its principal place of business at 2950 'Vest Davison Street, Detroit, :Mich.

Respondent, Robert S. Leonard Co., is a corporation organized and -:existing under the laws of the State of Missouri, having its principal place of business at 405 East Eighth Street, Kansas City, Mo. Respondent, L. Levingston Co., is a corporation organized and existing' under the laws of the State of California, having its principal place of business at 383 Fourth Street, San Francisco, Calif. Respondent, Fowler E. Macy and Edna B. J\hcy, are copartners doing business under the tr_ade name Fowler E. J\facy Co., having a principal place of business in Converse, Ind. Respondent, Mid-,Vest Bottle Cap Co., is a corporation organized and existing under the laws of the State of Illinois, having its principal place of business in Belvidere, Ill. ' . Respondent, National Manufacturing Co., is a corporation organ· ized and existing under the laws of the State of Missouri, having its principal place of business at 2800 Mercier Street, Kansas City, Mo. Uespondent, Ohio Bottle Cap Co., is a ·corporation organized and existing under the laws. of the State of Ohio, having its principal place of business at 411 South College Street, Piqua, Ohio. · Respondent, Piqua Cap Co., is a corporation organized and existing under the laws of the State of Ohio, having its prinr:pal plac~ of business at 704 'Vashington Avenue, Piqua, Ohio. . Responden"t, Sealright Co., I~c., is a corporation organized and existing under the laws of the State of New York having its principal place of business in Fulton, N.Y.

Respondent, Smith-Lee Co., Inc., is a corporation and organized and existing under the laws of the State of New York, having its principal place of business in Oneida, N.Y.

Uespondent, Standard Cap & Seal Corporation, is a corporation organized andexisting under the laws of the State of Virginia, having its. principal place of business at 1200 Fullerton Avenue, Chicago, Ill. ltesponuents, Atlas Paper Box Co., Grea.t Lakes Bottle Cap Co., Robert S. Leonard Co., L. Levingston Co., Fowler E. Macy and Edna B. Macy, a copartnership doing business under the firm name Fowler E. Macy Co., Mid-West Bottle Cap Co., National Mail:ufactur- THE MILK CAP STATI'STICAL BUREAU E,T AL. 97· 88 Findings ing Co., Ohio Bottle Cap Co., Piqua. Cap Co,, Sealright Co., Inc., Smith-Lee Co., Inc., are all respectively respondent members of the respondent Bureau. Said respondent members, together with respondent Standard Cap & Seal Corporation, a nonmemb~ of said respondent Bureau, will hereafter be referred to· as respondent :manufacturers.

PAR. 3. Respondent manufacturers are all respectively manufacturers of paper disc milk bottle caps and in the regular course and conduct of their respective businesses sell and distribute paper disc tnilk~ bottle caps manufactured by them to the purchasers thereof, and in connection with said sales ship and transport. or cause to be shipped and transported, said paper disc milk bottle caps, in commerce, to the purchasers thereof,· located in the various States of the United States other than the States of origin of said shipments, and in the District of 'Columbia. All respondent manufacturers have mainta~ned, and still do l!laintain, a regular current of trade in paper disc tn1lk bottle caps in commerce between and among the various States of the United States and in the District of Columbia. . · PAR. 4. There are' a number of different types of coverin~:?;s used for :milk bottles-the flat or disc caps which fit inside the tops of milk bottle!> and various kinds of closure or hood caps which cover a part or all of the pouring lips of the bottles. The manufacturing of flat or disc paper milk bottle caps is considered us a separate industry from the :manufacturing of variou~ types of closure or hood caps. PAn. 5. There are in the United States approximately 21 individ- Uals, firms, or corporations engaged in the manufacture of paper disc tnilk bottle caps which are made to fit inside the tops of milk bottles. Eleven of said individuals, firms, or corporations are members of the respondent Bureau and are all named respectively as respondents herein. The total annual sales of paper disc milk bottle caps by the entire industry in the United States amount to approximately 10,000,- 000,000 caps, the dollar sales of which amount to approximately $4,500,000. The ·sales of said caps are made by the said manufacturers to jobbers and dairies. The combined business of the 11 members, respondents herein, of respondent Bureau, amounts to about 75 percent of the total business of the entire industry. PAR. 6. Approximately 99 percent of all the disc caps sold are special brand caps. The remaining 1 percent are stock print caps or caps Which do not have the names of dairies printed on them. The methods of selling, including published prices, terms, 11nd other conditions of sale, are practically the. same for all of the companies in the industry. Practically all of the manufacturers sell to jobbers and 98 FE.DERAL TRADE COMMISSION DECISIONS Findings 35F. T.C.

dairies. The dairies enter into contracts with the manufacturers for a certain quantity of a specified kind of cap to be delivered during the year as needed by the dairies. It has been a custom of long standing in the i!Wustry for manufacturers to allow lower prices for greater quantities contracted for.

PAR. 7. Respondent Bureau was the code authority for the paper disc milk bottle cap industry when the N""ational Recovery Act was in force. After the National Recovery Act was declared unconstitu· tional on May 28,1935, the manager of said respondent Bureau advised the industry in a memorandum that they should not "give up a lot of the advantages such as cooperative action and good will which the members have been able to develop." The following excerpt is taken from said memorandum :

Tl!ere is no Law ogainst, and In fact there fs a law supporting tbe Trade Practice of publishing a pri~e and selling in accordance with that published price. ·n Is also proper that you should continue to file copies of your invoices which represrnt past transactions, and continue the statistical reports that we have been doing, except as to the Labor Reports. ' P.AR. 8. At a meeting on June 7, 1935, called by the respondent man· ager of the respondent Bureau, the members of the industry agreed that they would continue to cooperate 'in the maintenance and observance of trade practices in the sale and distribution of paper disc milk bottle caps.

PAR. 9. From 1935 up to the time of the institution of these pro· ceedings in January 1941 the members of the industry under the super· vision and regulation of the respondent Bureau and its officers have actively and consistently cooperated in the establishment and main·· tenlince of uniform prices, uniform discounts, uniform terms and con· ditions of sale, uniform contracts, uniform and simultaneous changes of prices, and uniform classifications and ratings of customers in con· nection with the sale and distribution of paper disc milk bottle caps. PAR: 10. There have been only four industry price changes since August 1933. The said price changes were made effective on Decem· ber 20, 1935, on February 1, 1937, on November 17, 1937, and on Ap;il 6, 1938. These price changes were uniform and simultaneous as :affecting the sale of paper disc milk bottle caps by the members of the industry.

PAR. 11. One week prior to the effective date of the industry price .. chan~e on December 20, 1935, the respondent manager of the respond· ent Dureau in a memorandum to the respondent manufacturers an· nounced several agreed changes in Trade Practices in relation to .discounts and classification of customers. The following excerpt is quoted. from said memorandum:

THE MILK CAP STATISTICAL BUREAU E.T AL. 99 Findings The ni!w price list has been woi·ked out with great thought and care. You can lldvise your Jobber that on the actual operntion of the Jobber's business his gross 'flrotlt on the new basis is within t,{ of 1% of what H formerly was, taking into tousitlet·ation the tmde discounts and everything. PAn. 12. A week following the effective date of said industry price thunge on December 20, 1035, the respondent manager o£ the respondent Bureau in another communication to respondent manufacturers stated in part as :follows:

• • • In the recent ~l1auges made Dece>mher 20, 1!)3::1, there are certain llolnts that we would lil{e to ·clarify so that they will be interpreted by aU thf' manufacturers in the smne manner.

In tl>e consuml'r's price Jist the customer•·s buying up to and Including one mil; lion caps either pay the same price or a lower prlce, and in this case the consunwrs llle given the benefit of the decrease lmmetliatcly, which Is In JlCcordance 'With your contmct terms. Consumers purchasing 3:-301\1 and less per year on contract, the prices were raif'ed. In accordanee with your contract terms, these ~nstomerf:l are given a protection of 00 days for the same quuntity of cups that they pu~chnsed in the prior 90 tluys at the old price. In effect this means that the _old prices are to be Invoiced up to March 20, 1036. PAn. 13. On Fepruary 1, 1937, the effective date of the second above teferrcd to industry price change, the :following ·memornndum was forwarded by the respondent manager of the respondent Bureau to the respondent manufacturers: . In co"nnectlon with the New Dottle Cap prices fled by a manufacturer, effective February 1, 1037, please note the following po;nts: 1. Do not publish National Duyer or carload lists . . 2. Standard packing Is a 1ibre or corrugated case of 2[)1\1 caps. Wootlen cases holding :301\1 caps take a 1¢ M upchurge:

3. There will be no contmcts on stock caps but these wlll be sold at 3¢ M less than the same quantity special prints.

. 4. Minimum printing to secure contt·act price 25M caps. 5. ·The new price lists are effective February 1, 1037, subject to the. new Trade l>practice on contracts. (See Memorandum No. 389, dated D2cember 29, 1036, ~ttached. Your attention Is particularly called to· {he third paragraph regard· lng lists.) 6. bnportant.-There are no longer any Preferred Joubers. The old 1¢ .1\1 l:•rererred Jobber Discount has.been taken into consideration on the new jobber llrice list. We think that to avoid misunderstanding you should cover thil! with Sour jobbers and we su~gest you serd a bulletin at once to each one on your books. · PAn. 14. A day prior to November 17, 1937t the effective date of the third above referred to industry price change, the respondent manager of the respondent Dureau in a memorandum to the respondent l11anufacturers reminded the said manufacturers of the approved Trade Practice, which was effective since December 1936, that. in the m·ent of a price advance, each respondent manufacturer could sell to nny · of its contract customers the same number o:f caps in the next 6G days 100 FE-DERAL TRADE COMMISSION DECISIONS Findings 35F. T.C.

at the same price as was sold such customers in the 60 days prior to the price advance. . - The memorandum in part was as £allow,s:

• In order to do this In an orderly way, we ask that you list your .contracts with the recot·ds that you have of quantities due them, send them to the office or' the Statistical Bureau so that they may be checked with our records, and also keep on file to check shipments against. them In accordance with your contract terms. This must be done immediately not only for your own records, but tor ours, and we ask that you send us this data without delay . . PAR. 15. On the effective date, to wit November 17, 1937, o£ the said third industry price change a memorandum £rom the respondent man- ~ger to the respondent manufacturers stated as follows: We are enclosing herewith new price lists #34 and #34-A published bY Sealrlght Co., Inc., Fulton, N. Y.

We would appreciate your notifying us If you will file your prices In accordance with these, sending us about twenty-five (23), copies of your new price list. PAR. 16. On April 5, 1938, the day before the effective date o£ the fourth and last above referred to industry price change, a resolution was adopted at a meeting of the members of the r.respondent llnreau terminating a special assessment of 1 cent per thousand bottle caps theretofore levied against the members as a contribution to the National Dairy Council.

PAR. 17. From time t~ time the respondent members o£ the respondent Bureau communicated, by letter and by telephone, with the authorized officials of the respondent Bureau relative to prices, discounts, and other terms of sale of pa,per disc milk bottle caps. A member would desire and seek information from the respondent Bureau as to whether ''any change was to he made in the current price structure in the near future."

·PAR. 18·. The respondent members of the respondent Bureau entered into mutual agreements as to identical contract terms and other conditions in the sale of paper· disc milk bottle caps. Contracts were. entered into with dairies for a year's supply of caps to be delivered at different times during the year as needed by the dairy. The price paid by the dairies was dependent upon the quantity contracted for rather than upon the quantity of each printing. The contract terms and other conditions of sale for all of the respondent members were substantially the same. Some of the agreed contract order terms included the following:

· The seller will not be obligated to supply u larger quuntlty of milk bo~tle cups than Is contracted for.

In the event of price decline, the purchaser will receive ·Immediate benefit of the lower prices applicable to the quantity contracted for. THE MILK CAP· STATISTICAL BUREAU Ell' AL. lo"l &s:. Findings: Any contract against which no shipments ha'"e been made ·over a period of three months from the effective date then'of will become null and void. A contract becomes etrective on date· of first shipment provided shipments start within 60 days after the contract Is written. Otherwise effective date is 60 days after the date the contr·nct Is written, . Smau printlllgs. Items of. l~ss than 2;; l\1 caps of a printing will be billed at list Prices for quantities so ordet·ed. Miscellaneous printing of less than 25M may not be combined for the purchaser to gain- the co11trnct price. ' Terms of payment. The condition of this.contract Is that seller's regular terms of r>ayrnent be· observed by purchaser; otherwise, seller shall have the prh·llege of treating each quantity shipped as a separate order and to collect for the same at his regular published. price list.

No contract shall be accepted for a greater· quantity of disc milk bottle caps than Is given In the. offielal rating book of the Industry or subsequent revisions. '·Any situation not !lpecitlcally co,·ered by this agreement will be treated in accot'dance with sell~t·'s normal practice as set forth In his regular published Price list.

l3 PAR. 19. The respondent members ut the meetings of the respondent P ureau discussed, agreed upon- and made effective various Trade l. ractices such as :

(a) The membets would not accept contracts from dairies using l ess than 100,000 caps per year.

(b) The members would strictly adhere to the practice of not uccel)ting or shipping any orders at contract prices without actually having a contract from the customer.

(a) The m~mbers, at the time of a price advance, would forward to the Bureau their lists of contract customers with the quantity of ('aps their records· show had been shipped iri the prior 60 days for checking and approval by the Bureau.

(d) The members could not sell to super-jobbers or mill agents or consumers.

(e) The membc~~ would not recognize cooperative buying. (/) The members could not sell to bottle exchanges. {g) The sale of stock printed caps shall be governed by the sume classifications us special printed caps and all the Trade Practices governing special printed caps will include stock printed cups. PAn. 20. Several other Trade Practices in reference to prices mutually and concertedly agreed tlpon.by the respondent manufacturers are noted in the following excerpts taken from official memoranda and bulletins issued by the response.ent Bureau to the respondent manufacturers:

1. Combination pull and straw drink cap-1 cent up charge. 2. Straw drink cap OJJly-2 cents less than pull cap with staple. 3. ll'Jat cap-0.04 less than regular pull cap. · 4. Stock print cap-2 ('ents less than special print. 5. Plain cap (no printlng)-4 cents less than special print. t'02 FE.DERAL TRADE COMMISSION DEGtSIONS Findings 35F. T. 0.

6:' Tinted board-1 cent higher than list price. 7. Snow white board-1 cent higher than list prices (single lined). 8. Snow white board-2 cents higher than list prices (double lined). 9. Electrotype charges-same as previous.

10. Prices on other than No.2 size milk cap-same as before. 11. Sour cream-cottage cheese-electrotypes-same as previous. 12. 1\HJk can caps-changed-see enclosed list. 13. Full freight allowed everywhere--actual weight times actual rate. 14. Packing of caps-same-price differentials same. 15. Contract terms-will be the sRme except for the following changes: The paragraph dealing with PRICE ADVANCE will be· changed as follows: "All orders for future delivery will be billed at the effective price as of date of shipment-.-ln cases of price advance, buyer niay have the option of cancelling balance of contract." ' · The paragraph in r~gard to ELECTROTYPE CHARGES will be changed ·as follows: · "The purchaser will be charged for electrotype plates under the terms and conditions set forth in OUL' price lists current at time of shipment." ,10 .. l\USPRINT PRICES-10 cents per 1,000 f. o. b. plant (memorandu!ll December 14, 1935). · 17. The next procedure that we request is that no manufacturer quote or . grant any dairy a special price without taking lt up with this office to see what the present competitive situation is. The effect of this wlll be that every manufacturer can, if he so wn.nts to, .be competitive on any account but no manufacturer need make the situation worse than it is. This is Important and I am going to ask that you give this matter your immediate ttttention and strictly a!lbeL·e to the practice of comnmn!cating with this office prior to quoting anything different than your published price In this market (meruo· randum, February 15, 1936), PAn, 21. Additional excerpts taken from. numerous memoranda and bulletins issued by the respondent Bureau and showing~ further concerted efforts of the respondents in the matter of prices, discounts, terms of sale and classification of customers in connection with the sale of paper disc milk bottle caps are as follows: In the consumer's price list the customers buying up to rmd inch'J!ling one million caps either ·pay the same price or a lower price, and In this case the consumers are given the benefit of the decrease imm~iately, which is in nc• cordnnce with your contract terms., Consumers purchasing 350 1\I and Jess per year on contract, the prices were raised. !n accordance with your con· tract terms, these customers are gl.ven a protection of 90 days for the same quantity of caps that they purchased in the prior !lO days at the old price. Iu effect this means that the old prices are to be Invoiced up to March 20, 1036 (memorandum, December 26, 1935). ·.

Several manufacturers have notified the Association Office that all their billings to jobbers since December· 20, 103:3, take the new jobber ))rices and are subject to the new jobber term:'!. · The 6 percent and 4 'percent cash discounts have been withdrawn, and all blllings are subject to the new 2 per· cent cash discount only.

THE MILK CAP STATIISTICAL BUREAU Err AL. 1Q3 88 Findings In other words, the jobber bills consumers at the old prices for D() days ot• ;ntu the contract expires, whichever happens: first, while he receives billings rom the manufacturer at the new jobber prices and terms. _ New contracts are taken at the n~w prices and terms. 'We are sending this memorandum to you In .duplicate and If It meets with ~our lipproval, we ask that you sign one copy and return to us so that we may now that you accept the above suggestion and that you will function In the :have manner. We ask that you do this promptly because it is important for the reason .that if all.members do not approve of the sugge~tlon, we will have 0 notify all other members of the Industry so that they may be guided ae-cordingly (memorandum, December 31, 1935).

Anot.her point has arisen ,In .our. new price, structure .that we think needs clarifying. · . ' b ·Our present Trade Practice Is that all National Buyers must be sold and Hied direct. This Trade Practice' includes 5 and 10 M printings, even though they are r,wt subject to contract and contract prices. This means that ~ll caps, no matter what size printing, are sold and bllled direct to National, t Uyers, the 5 and 10 l\I being invoiced at your published consumer's price 01' the quantity ordered.

i In regard to the commission that may be paid jobbers, this commission is cent per l\1 on all caps, irrespective of the size of the· printing. In other '1\rord!l, they receive 1 cent per M on 5 and 10 M printings just the same ns thpy do on larger quantities. While on the subject of this 1 cent per l\I c°0llllissiou to jobbers, let me remind you. that although this is permitted, it111 not being generally done, and is, in fact, the. rare case. 'r We will also state that this above Trade Practice has been concurred in by Oledo Bottle Cap Co., Sealright Co., Smith-Lee Co., as well ns several other manufacturers (memorandum, January 13, 1936). You have heard a good deal from me, particularly recently, stating that I ~ 0 not think our present Trade Practice In selling stock printed caps and !auks is a good one. I am not going to approach this question from n standpoint of cost as much as I am from a standpoint of selling, which means stability in the market.

I think that in the first place there is too much difference 'in selling price between stock printed caps and special printed caps. 'this is primarily occasioned by the fact that we have no control over the quantity of contract jobbers have, and when that Is the case it very soon devdops that the Jobbers secured contracts for greater quantities than their purchasing power \Vnrrantil. The present situation is that any number of jobbers have five lnill!on or more quantity contracts when their actual purchases are a fraction Of this. This Is the major reason for the wide spread between sto<;k printed caps and special printed, but this is a<!centunted by the 2-cent reduction of stock lltlnted over special printed caps, and a further 2 cents of blanks over special Drlnted caps.

Now the whole stock printed business is, in fact, a small percentage of the total Industry, and the blank cnp business is rather insignificant, and I think ' e ore making a mistake in j~)opardizing the stability of our ·whole 1i1dustry O\'er this division of. it. l\Iy suggestion is that e,·et·y D;lanufncturer have an entirely separate sheet for stock printed cups and sell those without contract and on a spot order basis only. I think this suggestion has a good deal ot merit because it is a distinct division of our business and certainly very little can be said for our present price list. on stock caps, because I. doubt if there Findings. 35F. T.C.

Is one person in ten In the Industry who can properly figure down the stock printed prices on account of starting with a base that Is. subject to all kinds of deductions.

Now, my suggestion would have the advantage that If any jobber or customer wanted to know the price on stock printed cups they would just pick up your price list for stock printed caps, and the price would be all figured out' for hi Ill and it woulu be definite. However, before sending this price form out or discussing it any more, I would appreciate your comments (memorandum, June 26, 1936).

There are several radical changes that you made In your Trade Practices recently that we think should be emphasized to your jobbers so that they wlll not be overlooked. We would suggest your htmdling this with either a Gpecial letter or bulletin.

1. On stock capR.-The change of Trad\! Practices emphasizing the fact that· there are no longer contracts on stock caps.

2. That there is no longer any 1 cent per M deduction for Preferred Jobbers to which they are accustomed.

3. It should be called to their· attention that blank caps are now sold at the same price as stock print caps (memorandum, February 5, 10:17). Another Trade Practice on can caps Is tha·t stock print and plain can caps in quantities less tlian 25,000 carry the snme price as special pt·int can caps. For quantities of 25,000 and more, deduct 10 cents per thousand from the special print price for stock print or plltin. can caps. Likewise, there are no contracts for ~;stock print or plain can caps (lnPmoranclum, February 5, 1037). In order to clarify the new Trade Practice In selling Stock Printed Caps. we would like to emphasize the following points: To define first a Stock Printed Cap, we will state that Stock Printed Cups and Blank Caps are considered one and the same thing, and are subject to Identically the same Trade Pt·actlces. That·e is no d<'dncllon for Blank Caps over Stock Printed Caps: The points that we want to emphasize are: 1. There are absolutely no Stock Printed Caps sold on a contract. This even prohibits the selling of Stock Printed Caps on Consumers' special print contracts. In order to keep It clear In your mind, just remember that an··stock PrlntPd Caps are sold on a spot order basis.

2. Stock Printed Caps are invoiced for the quantity of the one ord~r for minimum printings of 25 M. This practice Is identical with the practice in effect on Special Printed Caps. The following are some lllustrations: (a.) Or·der for 100 M Stork Printed Caps Four (4) printings of 25 l\1 each, 100 l\I price effective-53e l\I.

\b) Or·der tor 100 1Jf Stock Printed Caps 2:i l\1 prin1lng "l\Iilk"@ 53¢ l\1. 251\1 printing "Cream" @ G3¢ l\1. Five (5) printings of 10 l\1 each, two colors@ 81¢ l\1. The 100 l\f price is effective for the 2tl' l\I prlnt!ng-3, and the 10 l\I price is effective on the 10 l\I printings (memorandum, Februat•y 23, 1037). We beg to call your attention to the Trade Practice confirmed ut the Industry meeting held In Chicago on July 21, 1937. All e~port lates made to foreign countries !>hall be on the basis of consumer's price list C. I. F. port of destination, Jpss 10% export brokerage comml·.;slon. · It this Is not entirely clear to you, kindly write us so that there will be no mlsunderliltandlng ot the Trade Practice.

We· are sending this memorandum to you In duplicate, asking that you keep one copy for your files, and sign the other copy and return to u·.3, so that we will know the matter bas had proper attention (memorandum, July 28, 1937). THE MILK C~P STATIISTICAL BUREAU E·T AL. 105 88 Findings Supplementing our Memorandum No. 502 regarding Trade Practice for sales on Export Caps, beg to advise that this mentions export salrs are to be made on the basis of Consumer's price list, C. I. F. port of destination, less 10o/o export brokerage commission. . · We beg to advise that the above Includes Stock Prints the same as Special • Prints, as there is no difference on your own present publh~hed Consumer's Price list (memorandum, August 24, 1037). · The following trade practice super!'edes our Memorandum No. 'il4 of February 24th, 1939, and Memorandum No. 748 of l\Iay 9th, 1939, on the same subject. 'lhe Interpretation of charges on electrotypes, wlwn changing from one size cup to another, from the above date, shall be a·.3 follows: · When interchanging from No. 1, 2, 3, and 4 size milk bottle cap to another Size, either ~n Pisc Cap or Closure type of cap, there shall be no electrotype charge; but, when changing from the above sizes of milk bottle caps to the Sour Cream size cap or the Can caps, or from the Sour Cream or the' Can Caps to liiilk Caps, the published price for tile electrotype charges shall be made. I 'there has been confusion over the interpretation of this trade practice. We· !· \Voulq therefore ask lt you would please sign the duplicate copy of this mrmornnllulll and return it to our office advising whether or not the ubove Is in accord· ance with your Interpretation. 1 We should appreciate receiving your, reply If Promptly, so that this matter can be clarified (memorandum, lllny 15, 1939). I . We beg to remind you of your trade practice that you do not recognize i. bottle exchanges as jobbers (memorandum, August 2fl, 1039). . I'! PAR. 22. That respondent members agreed upon a trade practice on freight allowance in the sale of paper disc milk bottle caps. Officials of the respondent llureau·forwarded the following memorandum on 1'ebruary 17, 1940, in relation to the trade practice of freight allowance: 'that·e seems to be some little confusion on the part of one m11nufuctnre1' of the interpretation of our trade pl'llctice of freight allowance. For this reason \Ve would like to be sure that the trade pmctlce is unclerAtood by all. · The trade practice reads that freight allowance Is the weight times the rate. 'lhe interpretation of this Is that the above is the published rail rate nncl is J:he ·D!aximum freight allowance made. As an illustration, 1f the caps are shipped by express the difference between the express charges and the ahove rail allowance .\Vould be the expense of the customer. The same holds true if the trucking rate Would be higher thnn the rnil rntr. In othet· words, the trade pructlce Is not free tt·ansportation at the discretion of the customer. no mutter what such chm·ges Day be.

Now another point that we want to raise. Is that In no way dor~ the enRtomel' ever make a profit on the transportation. If the possible rail allowance should be greater than the actual trucldng cost, the customer Is allowed only the lower trucking charge. . We think this important enough that we are going to ask that you reply to this memorlllldum, advising whether or not the above Interpretation is In accordance with your own trade practice. • . . • PAn, 23. Shortly after the enactment of the NRA the idea was conceived of rating dairies according to the number of caps used unnually. 1'he respondent Dureau .undertook the task of collecting data as to the number of caJ)S used annually by dairies and publishing Rating Books. 106 FE,DERAL TRADE COMMISSION DE,OISIONS Findings 35F. T.C.

The first set of such books was published in 1933. The Eleventh edi· -tion was published in October 1939. In such books the approximately 50,000 dairies in the United States are rated according to the number • of caps they used during the year preceding the issuance of the books. All the respondent manufacturers sent to the respondent Bureau copies of all invoices covering sales of paper disc milk bottle caps. The re· spondent Bureau maintains a card index for every dairy in the United 1 States and each sale made by a manufacturer is entered on such card. ! The price, as well as the quantity, is entered on the card. As a dairy's i purchases increase or decrease, its rating changes and each month the l respondent Bureau issues supplements to the Rating Books. The t :Rating Books are furnished by the respondent Bureau to its members. f .It also sells the Rating Book to nonmembers and outsiders at a price -of $50 per set.. .

PAR. 24. The respondent manufacturers used said Rating Books to ascertain the price at which a particular dairy should be sold and said respondents strictly adhered by agreement to said ratings in determining the prices at which dairies should be sold. The manager and executive secretary of the respondent Bureau and other author· ized representatives of the respondent Bureau policed the industry to see that the respondent manufacturers observed and carried out in their sales the ratings of said Rating Books. . The following excerpt is taken from a communication dated October 21, 1936, by Robert S. Leonard, now the president of the respondent, Roberts. Leonard Co.:

• • • we are spending hundreds of dollars ourselves and the cap inuustry thousands of dollars to furnish Rating Books which are more than 90% correct in the ratings the dairies should have. If these Rating Books are not kept up then jobbers and manufacturers will have no way of telling what pt•ice to quote the dairy.

·par. 25. If a respondent man~facturer sold a customer in accord· ance with a higher rating than that accorded such customer in the ~ating Book, the authorized officials of the respondent Bureau would contact such respondent manufacturer and call the fact to his atten· tion with the request that "you kindly solicit * • · * business ac· cording to the present listings in the Rating Books." PAR. 26. The respondent manager in a communication to a respond· ent manufacturer on August 29, 1939, stated in part as follows: • • • we check every invoice that comes Into this office and challenge those that are not in accordance with the manufacturer's own published price. It may be that there nre some Irregularities going on, but lf'there are, we cau tell _you that they must be from members not reporting to·this office. THE .MILK CAP STATIISTICAL BUREAU E!l' AL. 107 88 Findings . PAn. 27. The respondent Bureau rated and clasified the dairies as follows: · · · · . · - . "A"-A grade dairy was one that used 25 million or more paper disc milk bottle caps annually. . . . · · "B"-B grade dairy was one that used from 12 million to 25 million or more paper disc milk bottle caps annually. ' ''C"-C grade dairy was one that used from 5 million to 12 million or more paper disc milk bottle caps annually, etc. ' . PAn. 28. The respol'ident Bureau also published a Rating Book for Jobbers in which jobbers are rated according to whether they purchase annually from 350 l\f to 1,000 l\f caps. The following excerpt was taken from the minutes of a meeting of respondent Bureau held January 21,1037:

'lhe following Trade Practice was unanimously adopted concerning the selllng Of ·stock Pt·inted Caps; Stadt Printed caps shall now be classified Identically the • i. home us special-pt·tnted caps anti all the Trade Practices. governing speciul- ~ Dt·inted cups will Include stocl;: printed. ~'he basis of selling sto<"k printed caps I to .Jobbers shall be on contract basis in accord:mce with individual manufuc- I llll·er's published price, and the Individual jobber's. official rating. Note: ~'his I '"ill ·require the Statistical Durcnu to issue n Rating nook !!:Overnlng purchases for jobbers. The Statistical nurenu will rate all jobbers 350 l\I and over. All I! jobbt~rs less than 3SO 1\[ will be sold on the spot order basis. This Jobber R'lting i nook will be kept distinct from the Dairy Rating Book and will be Issued f. Only for the confidential use of all manufacturers. I PAn. 29. The Jobber Rating Tiook was issued and is used by the 'i respondent maufactnrers in the sale of stock print caps or caps \which do not have any special printing on them which nre sold to jobbers for resale to retail stores for customers who use exceptionally small quantities. Mail order houses such as Sears, Roebuck and Montgomery 'Vard purchase·large quantities of stock print caps. PAn. 30. The industry prices which were uniformly observed by respondent manufacturers during 19t0 on standard pull caps No. 2 -size for jobbers and dairies are as follows: Price perm Jobber's list Consumer's list I One Two One Two l.! color colors__ rolor colors --------------------i--~----------- ~0~1 ~o1 ~lif:::: ::: ;:::: ::::::::::::::::::::: :::~:::: ::::::::: $0.. n59 . $0.81-62 $1.02.83 $1.16.87 i---~---1---~----Onp or two colors One or two colors o. 49 O.fifl .40 ,fil • 45'-'o • ~8 .44,1-~ .M ,44 • 62 • 43),1 .49 • 43 • 47 ,421o'o .4-11/a Findings 35 F. T. C.

PAR. 31. The respondent m:!nufacturers and some nonmembers of respondent Bureau filed identical prices with the respondent Bureau. Such filing was referred to as "official filing." All of the respondent manufacturers sent copies of each invoice covering the sale of paper disc bottle caps to the respondent Bureau. Each of the member manufacturers also furnishes the Bureau with a list of contract customers. , . PAR. 32. Excerpts from official memoranda and bulletins issued by the respondent Bureau relative to the Rating Books are as follows: At the present time, It Is the practice of the Statistical Bureau to send out rating supplements once a month. In oruer to make their work more accurate ·and mort: efficient, we are going to ask that you send us copies of your invoices more promptly than :;orne manufacturers have been accustomed to. Some 'manufacturers have been sending us their copies dally. 'Ve ask tbose to continue to do so, but irrespective of what your past performnnce has been, we ask that you send your lnvoiees to m! at least twice a week. \Ve uppenl to you for this additional cooperation to l1elp us In our wot·k (memorandum, l\!aY 29, l!l3GJ.

Every manufacturer Is urgeu to adhere strictly to the existing Trade Practices, with particular emphusis on the observance of the Rating Books. and their own filed prices (memorandum, November 16, 1!135) .. PAR. 3?. Price lists filed by the re&pondent manufact~rers with the respondent Bureau were identical; Hating Books were used by the Ii I respondent manufacturers in determining the ratings and classifica- I tions of jobbers and dairies and ascertaining the prices at which job· hers and dair·ies should be sold; the respondent mn-nufacturers by so II doing practically eliminated price competition among themselves in I the sale of paper disc milk bottle caps. '' '" PAR. 34. The Commission finds that the acts and practices hereinabove described, and the circumstances herein set forth, constitute II agreem0nts and combinations on the part of the respondents to fix and maintain uniform prices, discounts, contract terms, and other conditi<.ns for the sale and distribution, in commerce, of paper disc I milk Lottie caps. That in pursuance to said agreements and combinations the respondent Bureau and its· representatives have rated and chssified the approximately 50,000 dairies located throughout the United States according to the number of caps used annually;· said ratings and classifications have been distributed among the respondent manufacturers who agreed to adhere, aiid did. adhere, to said ratings in determining prices and discounts at which dairies should Le sold. To make more effective the operation and carrying out of said agreements and combinations, the respondent manufacturers filed, "'ith the respondent Bureau, price lists; copies of invoices containing names of purchasers, quantities purchased, and prices there- , - THE MILK CAP STATI,STICAL BUREAU E·T AL. 109 88 Order . for ;"customer lists; copies of contracts and conditions of sale. These data fil~d by the respondent manufacturers wee checked by the repre- B!lntatives of the respondent Bureau in accordance with the policy and practice of said Bureau to police the industry and thus to determine whether the respondent manufacturers observed and carried out the aforementioned agreements and combinations. As a result 0.f the effectiveness of the operations of said agreements and combinations, price competition among the respondent manufacturers, in the sn.le of paper disc milk bottle caps in commerce, was practically elllninated.

· PAn. 35. All the respondent manufacturers are members of the re- Sr>ondent Bureau excepting respondent, Standard Cap and Seal Corl>oration. These proceedings are concerned with paper disc milk bottle car>s and not with closure or hood milk bottle caps; <the manufacture of Paper disc milk bottle caps is considered a separate industry fromn Sle manufacture of closure or hood caps. Although the respondent~ t.andard Cap & Seal Corporation, does manufacture ~orne paper disc ~Ilk bottle caps, it is primarily engaged in the manufacture of closure or hooJ caps. All of the respondent manufacturers herein, excepting respondent, Standard Cap & Seal Corporation, through counsel, as- S!\~lted and were parties to a formal' stipulation as to the facts, which st~pulation has been approved nnd entered of record herein. The said st1lmlation contains admissions of the material allegatioh:> of the coml>laint herein with reference to the acts of the respondent Bureau, its respondent officers and its respondent members in connection with the sale and distribution of paper disc milk bottle caps. · CONCLUSION . The said understandings, agreements, combinations, and conspira- Cl(>s and the things done thereunder and pursuant ther(>to, and in furtherance thereof, as herein found, are all to the prejudice of the l>Ublic; have a dangerous tendency to and have actually hindered and Prevented price competition between nnd among respondents in the Sale of paper disc milk bottle caps in commerce within the intent and nleaning of the Federal Trade Commission Act; have placed in re: ~tx>ndents the power to control and enhance prices; have unreasonably restrained such commerce in paper disc milk bottle caps; and constitu_te ubfair methods of competition in commerce within the intent ll.nd meaning of the Federal Trade Commission Act . .. , ORDER TO CEASE AND DESIST . This proceeding having been heard by the Federal Trade Commis- Blon upon the complaint of the Commission,· the answer of the re- 509749'"-43-vol. 35-10 110 · FEDERAL TRADE COMMISSION DEOISIONS Order 35F.'!'.C· spondents, and a stipulation as to the fatts entered into between. counsel representing all the respondents, excepting Standard Cap & Seal Corporation, and W. T. Kelley, Chief Counsel for the Commi:· sion, which provides among other things, that without further evl· dence or other intervening procedure, the Commission may issue and serve upon the respondents herein, excepting Standard Cap & Seal Corporation, findings as to the facts and conclusion based thereon and an order disposing of the proceeding, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Traue Commission Act.· It is ordered, That the respondents, The :Milk Cap Statistical Bureau i its manager and executive secretary, George J. Lincoln, Jr.; the mern· lJCrs of its executive commit tee, Hay W. Blodgett, George W. Rohrbeclt, and Robert ·n. Schulz; and its members, Atlas Paper Box Co., a cor· Jloration; Great Lakes Bottle Cap Co., a corporation; Robert S. Leonmd Co., a corporation; L. Levingston, Co., a corporation; Fowler E. Macy and Edna B. :Macy, copartners doing busin1ess under the fir!ll name Fowler-E. Uacy Co.; Mid-West Bottle Cap Co., a corporatio~; National Manufacturing Co., a· corporation; Ohio Dottle Cap Co., a corporation; Piqua Cap Co., a corporation; and Seal right Co., Inc., and Smith;Lee Co., Inc., and their agents, representatives, and em· ployees, in connection with the offering for sale, sale and distribution of paper elise milk bottle caps, in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from entering into, carrying out, or aiding or abetting the carrying out of any agreement, understanding, combination,' conspiracy, or concert of action between and. among any two or more of said respond· .ents, with or without the cooperation of others not parties hereto, for the purpose or with the capacity,.tendency, or effect of restricting, restraining, monopolizing, or eliminating competition, in the sale in commerce of said paper disc milk bottle caps and from doing any of the following acts and practices pursuant thereto: .. 1. Fixing .or maintaining prices for the sale of various types. of paper disc milk bottle caps in said commerce. 2. Fixing or maintaining uniform discounts, terms, conditions of sale or freight charges to be observed in the sale of paper disc millt bottle caps in said commerce.

3. Fixing or maintaining uniform quantity prices or price diiferen· tials on quantity purchases based upof]. quantity purchases from all sources as are fixed and determinecl by jobber rating books· or dairy rating books or other similar devices.

4. Consulting, or communicating in any manner, with the respond· ent Dureau, or any of its officials, for the purpose of obtaining con· THE MILK CAP STATJ::STICAL BUREAU Err AL. 111 Order II' sent or agreement relative to price~ at which paper disc milk bottle I -caps should be sold. I 5.: Limiting the number or quantity of paper disc milk bottle caps J!I Winch jobber customers or dairy customers may contract for, with, or .])urchase from, the respondent manufacturer~. Ij,i " G. Prev~nting the sale of paper disc milk bottle caps to so-called II ll super-jobbers" or mill agents or cooperative buying agencies and . r,, confining the sale of such products exclusively to jobbers and dairy I" 'Consumers. j: 7. Forwarding, by the respondent manufacturers, to the respond- !. j: ent Bureau, invoices, or copies thereof, showing the details in respect to .Prices, discounts and terms of sale at which paper disc milk bottle I! -caps are being' sold. I',I "' • 1: 8· Compiling, publishing, or distributing a Jobber llating Book !· I· 'Or other similar device, for the use of respondent manufa~turers, which I states or classifies jobbers of paper disc milk bottle caps according to ! the total number of paper disc milk bottle caps purchased annually. 9. Compiling, publishing, or distributing a· Dairy Rating Dook 'Or other similar device, for the use of respondent manufacturers, ~which rates or classifies dairies accor~ing to the total number of paper ~lsc milk bottle caps used annually, provided, however, that nothing . erein contained shall be construed to prevent respondents, or any of them, from compiling, publishing, or distributing for the use of respondent manufacturers and others, such information as to the ~annual paper disc milk bottle cap requirements of the respective dairles as may enable each manufacturer to check or determine the pro- Priety of any orders or contracts which may be received by i,t, if and When such information is not used for the purpose or with the effect of establishing corresponding ratings or classifications of dairies, 'Or corresponding price differentials, that are uniform among .respondents.

10, Holding and sponsoring meetings of the respondent manufacturers for the discussion and interchange of information relative to Prices, discounts, conditi~ns, charges, or terms to be fixed for the sale 'Of paper disc milk bottle caps. · · · . It is further ordered, That this proceeding be, and the same hereby ls, dismissed as to respondent, Standard Cap & Seal Corporation. · It is {'wrther ordered, That the respondents shall, within 60 days ~after service upon them of this order, file with the Commission a report ln wr.iting, setting forth in detail the manner nnd form in which they have complied with this order.

112 FE.DERAL- TRADE COMMISSION DE>CISION.S · Complaint 35 F. T. C.