Consolidated Companies, Inc., et al.

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Lx THg 1\1A TIER OF CO'-SOLIDATED CO:YIPANIES, INC., ET AL.

COMPLAINT, FI DINGS, AKD ORDERS IN REGARD TO THE ALLEGED VIOLA' lO:" OF SUB SEC. (c) OF SEC. 2 CF L1\ ACT DE' CO GRESS APPROVED OC'I'. 15, 1914 . AS .A..IE DED BY AN ACT APT'ROVED JL' E 19, 1936 Docket .58";'9. Compl,dnt, May 1951-Dccision, Sept. , 19.11 Where a corporate broker or )!1allufactl!rpr agent, D.osocintec1 with two corporations which were engage(l in the wholesale and retail grocc.ry businvss in Louisiana and elsewhere, were, lij;;:c it, um1er the control and management, through stock ownership, of four families, and members of tbe families of offcers, directors anel otlwr key employees; included one of the largest wholesalers of food pro(iUcts in the state, owner and operator of tl1irty branch whole ale houses, aml operator of associnted companies in which certain of its stockbolden: had a substantial financial interest, and of ,wholesale and retail grocery co:nponies owned in whole or in part by family membel's: anel included, as th'; second, a lnrge corporate operator of six branch wholesale grocery houses in sai(l s(:nte, and, to a certain extent, of ,,-wholesale grocery or::anizations in Texas alll in Mississippi, with controlling interests in t,,'o chains of nineteen and ten relnil gTocen' stores in Baton Houge and .:ew Orleans, resJJecliyely, and \with a large stock interest in said first named wholesaler- Acting as the agent or repre, elltative of said two corvorations, able subject to their control and that of JiJell1)ers of said foul' families and that of members of the familes of their offcers, directors and key emplo,yees- (a) Received and accepted(l com1li sioJJs or brokerage fees on vun:hases of fnod products made through by said two corporations and associated companies, from many .endOe'S in other states, anll transmitted ano paid said fees to members of sflid fflmilies ami of families of offcers and dir,:ctors and other key employees ,jf the three corporations, in the fornl of dividends on their stock in it; and \Vhere sa ill two corporations, alll variau:, individuals, includlng their otfcers and directors, joined individually and cnllect:n'I \' n;: the owners or as repre eIltatjye, agent or lither 1iducinry of the O\\'ners of a substantial majority of the capital stock of the t11ree- (b) HeceiYed and acccptc(l cc,mmissions or brokerage fees c1il'ectl - 01' indirectly upon the IHll' chf1.'f's of ,1 sllustal1tial portiuI) of said two corporations requirements of food l'Jo'lucts:

Held That such acts and prflctjces of said re,"pondcnts, corporate, individlHllly and collectively, and each of them, in accevting and recei,- ing commissioj1 or bJ'okerflge fees, dircctl ' ,)1' indirectly, under the cirCllmstmH' s set fol' constituted a violftion of subsection (c) of section 2 of the Clayton Ad as amended by the Hobinson-Patrnan Act.

&, SOLIDATED COMPANIES, INC., ET AL. 255 254 Complaint Before 3fr. Frank Hier trial examiner. Ah. George W. Wiliams and Afr. RlIf1l8 E. Wilson for the Commission.

iJfilier Chevalier of Washington, D. for respondents. C01.IPLAINT The Federal Trade Commission, having reason to beJieyc that the corporations and individuals named in the caption hereof (hereinafter designated respondents), individually and collectively, since June 19 1036 have violated and are now violatinr", the provisions of subsection (c) of section 2 of the Clayton Act (D. S. C. , title 15, sec. 13), as amended by the Robinson-Patman Aet, approved June, 1D36 hereby issues its complaint, stating its charge2 with respect thereto as follows: PARAGRAPH 1. Respondent, Consolidated Cas., Inc., hereinafter 1'efelTcd to as Consolidated, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of 1.ouisinhl, with its principal offce and place of business located at 7,1-3 South Cortez Street, in thc city of New Orleans, State of Louisiana. Said respondent is now and since seve,ral years prior to June 19, 1936, has been engaged in thebl1siness of buying and selling food and other products at "holesale within the united States. Such products inelude a complete line of fancy and staple. groceries, such as fruits vegetables, canned goods, sugar, salt, milk, tobacco, soap, flour, candy, and produce, as \vell as various items of hardware. Consolidated has three private brands or labels) namely, Hed Ball, Autocrat and Conco. It is one of the largest wholesalers or food prod nets in the State of Louisiana. Saicll respondent OI\'11S and operates some 30 branch \yho1esale hOllses in Louisiana, ns \\-ell as operating others designated as associated companies. These latter companies are separate legal entities in which certain of the stockholders of Consolidated have a substantial financial .interest. Such designation also includes respondent United ancl those companies in \which United has a financial interest. The follo"ing-named individuals are now, or have been during the time me.ntioncd herein, oflicel's of said respondent Consolidated, and as such, and individually, arc named as respondents herein: Victor J. Kurzweg, J r. , presidenc. Paul H. K1lzweg, .Yr., ill. D., vice president. Charles J. KUfzweg, secretary-treasurer. 213840-54- 256 FEDERAL 'rhode COMMISSION DECISIONS Complaint 48F. T. C. The following-named :cncliviclllals are or have been during the time hereinafter mentioned, members of the board of directors of Consolidated, and as such, a.nd individually, arc named as respondents herein: Victor J. Km'zweg, Sr., chairman of the board. Victor J. Kurzweg, Jr. James I. Lipscomb.

Peull I-I . J(llrZ\fcg, J:" , 1\1. D. Henry J. \Vagl1cspack. Charles J. Kurzweg Henry J. Le Blanc.

PAn. 2. R'espondcnt U listed Investment Corp., hereinafter referred to as United, is a corporation organized, existing and doing business under and by virtue of ehe laws of the State of Louisiana, with its principal oIrce and pla(3c of business locat.ed at 743 South Cortez Street, in the city of Nc"\Y Orleans, Stite of Louisiana. Said respondent is now, and since several years prior to June 19 , 1036, has been engaged in the business (,f buying and selling food and other products at wholesale within the 'Gnited State,s. Such products include fruit vegetables, c.canned goocb sLigar, salt, milk, tobacco, soap, flour, and candy. It is one, among others, or a group of large wholesalers of food products in the State of Louisiana. Said respondent controls and operates a total of some six branch wholesale groc.ery houses located in the State of J oulsiana, and in addition thereto, partially owns, operates, and c.onlrols certain wholesa-Ie grocery organizations located in Orange, Tex., and Pascagonla., 1\liss. Said respondent United is also engaged in the retail grocery business through its ownership 01 the majority of stnek in Capital Stores, Inc. a Louisiana corporation, Baton ROllge, La. There are 19 retail stores in this chain. In addition thereto, Cnpital Stores, Inc., owns the entire capital stock of the Orleans Capital Stores, Inc. The latter also a Louisiana corporation and operates 10 retail grocery stores under this name in IS ew Orleans.

In addition to the wholesale and retail stores hereinabove listed as being o\Vncd, controllee, and operated by linited, said respondent corporation also o\\"ns and controls through its offcers and directors 000 shares of stock in respondent Consolidated. The following-named individuals are, or have been during the time hereinafter mentioned, offcers of said respondent United, and as such and individually, are named as respondents herein: Frank T. Knrzweg, :1\1. D., prcsjdent.

Colquitt O. Dupuy, executive vice president. Clarence R. Caster, secretary.

George T. Vicknair, Treasurer.

COXSOLIDATED COMPANIES , INC., ET AL. 257 254 Complaint The following-named individuals are, or have been during the time hereinafter mentioned, members of the board of directors of respondent United, and as such, a,nd individually, are named as respondents herein:

Frank T. Kurzweg, M. D. l'Iargaret L. Kurzweg. Colquitt O. Dupuy. George T. Vicknair. Clarence R. Caster.

PAR. 3. In addition to the wholesale and retail grocery companies hereinabove referred to as being owned, operated, and controned by respondents Consolidated and United, there are a number of other wholesale and retail grocery compa.nies owned in 'v hole or in part by members of the I(urzweg family ,which are operated as associated companies under the direction and control of respondent Consolidated. P AU. 4. Respondent Progressive Brokerage Co. , Inc., hereinafter referred to as Progressive, is a corporation organized, existing, and doing business under' the laws of the State of Louisiana, with its principal offce and place of business located at 208 210 Cigali Building, 107 Camp Street, city of K ew Orleans, State of Louisiana. Said respondent was incorporated some years prior to June 19, 193G, and since its inc.orporation and continuing to the present time, has been, and is now, engaged in operating as a broker or manufacturer s agent, dealing primarily in food products.

Said respondent maintains a branch offee at 318 Railroad A venue Lake Charles, La. This branch is managed by Arthur G. Waguespack (not a respondent herein), a relative of respondent Henry J. Waguespack, director of Consolidated.

The following-named individuals are, or have been during the time hereinafter mentioned, offcers of said respondent Progressive and as such, and individually, are named as respondents herein: James M. Kinberger, Jr., president.

Eugene Holloway, M. D., vi"" president.

Edmund Kinberger, secretary-treasurer.

The above-named individuals also serve as directors of said respondent Progressive, and as such, and individually, are named as respondents herein.

PAR. 5. Respondent Consolidated, prior to March 1929, owned all of the capital stock of respondent Progressive Brokerage Co., Inc. In :Vlarch 1929, Consolidated declared a stock dividend consisting, among other stocks, of the entire capital stock of Progressive. At this time a committee of three individuals was appointed as trustees to receive the stock dividends for the then stockholders of Consolidated and for 258 FEDERAL TRADE CO:\1.:\IISSION DECISIO:KS Complaint 48F. '1. C. the purpose of organizing a holding company. United Investment Corp. was thus formed, to which corporation the said trustees transferred title to alj stodrs they were then holding in trust, including that of Progressive Brokerage Co. , Inc. All stock of respondent United was thereafter di"tributed to the then shareholders in Consolidated and subsequently transferred by the offcers and directors to their children. On or about July 1936, respondent United distributed to its stockholders the entire capital stock of Progressive consisting of 18 033 shares.

PAR. G. Kll1'Zweg, Le Inane, 'Vagl1cspack and Lipscomb, among others, are family names. At an times mentioned herein a substantial majority of the capit:tl stock of said corporate respondents was and is owned by individuds who were and are nmv members of such families, by blood or marciage. Furthermore, there is a substantial number of branch managers or key employees of the corporate respondents, who, together \I"jth their families, by blood or marriage own stock in the respective respondent corporations and who, because of their position or connection with said respondent corporations, are now and have been for the period of time mentioned herein, under the control, authority, direction, management, and domination of tho Kurzweg, Le Blanc, "\Vagllcspack, and Lipscomb group who, through these individuals and the:.r families, and in combination with their own holdings, exercise control and ownership over a substantial majority of the capital stock 0 E the three corporations as hereinafter set forth.

For some time, and at the pl'p.sent, respondent Consolidated has had issued and outstandirg approximately 64 000 shares of common stock. The ICurz.weg, Le :Blanc, "\Vagllcspack, and Lipscomb families together with the fami1ie of other officers anel directors of the threo corporate respondents, m"l n and thus control, approximately 37 900 shares, or 59.2, percent of Consolidated stock. This includes the 8 000 shares of Consolidated steck owned by respondent United and which is under control of this group. Furthermore, the stockholdings in the three respondent corporations of the managers of branch stores of respondents Consolidatedll1d United, as well as other key employees together with their families, by blood or marriage, amount to an additional holding of approximately 6 280 shares, or 9.8 percent of Consolidated stock.

For some time: and at tle present, respondent L:united has had issued and outstanding smne 18 0:33 shares of stock. The Kurzweg, Le Blanc "\Vagllespack, and Lipscomb families, together \with the families of other offcers and directnl's of the three respondent corporations own, and thus control, apfJl'oximately 12 631 shares, or 70 percent of SOLIDATED COMPAXIES, IKC., ET AL. 259 254 Complaint United stock. Furthermore, the stockholdings in the three respondent corporations of thb managers of branch stores of respondents Consolidated and United, as well as other key employees, together with their families, by blood or marriage, as hereinbefore set forth amount to an additional holding of approximately 756 shares, or 4. percent of United stock.

For some time, and at the present, respondent Progressive has had issued and outstanding some J 8 033 shares of stock. The Kurzweg, Lc F3lane, 1Vaguespack, and Lipscomb families, together with the families of other offcers and directors of the three respondent cor porations own, and thus control, approximately 11 504 or 63.8 percent of Progressive stock. Furthermore, the stockholdings in the three respondent corporations of the managers of branch stores of respondents Consolidated and United, as well as other key employees together with their families, by blood and marriage, as hereinbefore set forth, amount to an additional holding of approximately 1 724 shares, or 9.6 percent of Progressive stock. PAR. 7. At all times mentioned herein, including the present, individuals who \were or are members of the Kurzweg, Le Blanc 'Vaguespack, or Lipscomb families, by blood or marriage, together with individual representatives of the families of other ofIeers and directors of the three respondent corporations, and each of them directly or indirectly, and acting collectively as owners or as representative, agent or other fiduciary of the owners of a ubstantial majority of the capital stock of the respondent corpomtions, have controlled, regulated, directed, managed, and dominated, and do now control, regulate, direct manage, and dominate all of said corporate respondents, including respond-ent Progressive formulating, authorizing, mana.ging, and directing all of their policies, practices, and acts as herein alleged.

PAR. 8. In the course and conduct of their wholesale food business since on or about June 19j 1936, said respondents, as aforesaid, continuously purchaseu, through respondent Progre sive, food products from many vendors with places of busine,ss located in several States of the United States; and said respondents, individually and collectively, and each of them, callsed such food products to be transported when purchased from said States to destinations in other States. PAR. 9. In the eOUTSe of said business in commerce, as aforesaid beginning on or about June 19 , 1936, and continuing to the present time, said respondents Consolidat.ed and United, as weJ! as those associated companies operating under Consolidated, as aforesaid purchased through re.spondent Progressive Brokerage Co., Inc. and still continue to purchase, a substan6aJ portion of their , Decisions 48 F. T. C.

requirements of food products from vendors, all, or substantially all of whom paid said Progressive Brokerage Co., Inc., commissions or brokerage fees on said purchases.

Progressive Brokerage ( , Inc. , received and accepted such fees and transmitted and paid then to, and a substantial amount thereof was received and accepted by, members of the Kurzweg, Le Blanc, Waguespack, and Lipscomb families and members of the families of other offcers and directors of t 1C three respondent corporations, as well as other key employees, together with their families, in the form of dividends on the capital stock of Progressive Brokerage Co. , Inc. owned by them.

In making said purchases and (a) in receiving and accepting and (b) in transmitting and paying said fees, directly or indirectly, as above alleged, Progressivn Brokerage Co., Inc. , was, and is now, acting as agent or representative of respondents Consolidated and United oubject to the direct or indirect control of Consolidated and United and of those individuals -ivho were and are members of the Kurzweg, Lc Blanc, yVagncspack, and Lipscomb families by blood or marriage together with members of the families of other offcers and directors of respondents Consolidated and United, and other key employees and their families, who, together, own a substantial majority of its capital stock, as aforesaid.

PAll. 10. The acts and practices of respondents, corporate, individually and collectively, ar,d each of them, since June 19, 1936 , in accepting and receiving commissions or brokerage fees, directly or indirectly, as above alleged, are in violation of subsection (c) of section 2 of the Clayton Act, as amended by the Robinson-Patman Act. DECIGION OF THE COMMISSION Pursuant to rule XXII of the Commission s rules of practice, and as set forth in the Com,nission s "Decision of the Commission and Order to File Report of Compliance " dated September 1 , 1951, the initial decision in the in3tant matter of trial examiner Frank Hier as set out as follows became on that date the decision of the Commission.

INl'rIAL DECISIO BY :FRANK HIER, TRIAL EXAMINER Pursuant to the provi:;ions of the Clayton Act as amended by the Robinson-Patman Act, approved June 19 , 1936 (U. S. title 15 sec. 1:3), the Federal Trde Commission on May 7, 1951 , issued and subsequently servecl its complaint in this proceeding upon Consolidated Cas., Inc., a corporation; United Investment Corp., a corpora- CONSOLIDATED COMPANIES , INC. , ET AL. 261 2.\4 li' indings tion; Progressive Brokerage Co. , Inc. , a corporation; Victor Kurzweg, Sr., Victor J. Kurzweg, Jr., Paul H. Kurzweg, Jr. (M. D. Charles J. Kurzweg, Frank T. Kl1rzweg (M. D. ), James 1. Lipscomb Henry T. Waguespack, Henry J. Le Blanc, Colquitt O. Dupuy, Clarence R. Caster, George T. Vicknair fargaret L. ICurzweg, ames M. Kinberger, Jr., Eugene Holloway (M. D. ), and Erlml1nd Kinberger as individuals, individually and co11ecLively as the owners or as repre sentative, agent, or other fiduciary of the owners of a substantial majority of the capital stock of the corporate respondents, charging them with violation or subsection (c) or section 2 or said act, as amended. On June 1, 1951, counsel for all respondents filed answer thereto which answer solely for the purpose of this proceeding, the enforcement or review thereor in the court or appeals and for any review thereof in the Supreme Court of the United States and for any court proceeding brought or instituted by or on behalf of the Federal Trade Commission or other department 01' agency or the Federal Government for the enforcement or for any violation or the order issued herein and not to be taken as admissions or prima facie evidence, for any purpose in any other of difierent proceedings by other parties admitted all the material allegations of fact set forth in the complaint and waived a11 intervening procedure and further hearing as to the said facts. Thereupon, the trial examiner, theretorore duly designated by the Commission, closed the proceeding, and, it coming on for final consideration upon said complaint and answer thereto, the said trial examiner, having duly considered the record herein, makes the following findings as to the racts, conclusion drawn therefrom and order:

FINDINGS AS '10 THE FACTS P ARAGR.'\l H 1. Respondent Consolidated Cos., Inc., hereinafter referred to as Consolidated, is a corporation organized, existing, and doing business under and by virtue of the Jaws of the State of Louisiana, with its principal offce and place of business Joeated at 743 Sonth Cortez Street, in the city of New Orleans, StlLte of Louisiana. Said respondent is now and since several years prior to June 19, 1936, has been engaged in the business of buying and selling food and other products at wholesale within the United States. Such products include a complete line or fancy and staple groceries, such as fruits vegetables, canned goods, sugar, salt, milk, tobacco, soap, flour, candy and produce, a,s well as various items of hardware. Consolidated has three private brands or labels, namely, Hed Ball, Autocrat and Conco. It is one of the largest wholesalers of food products in the StlLte of Louisiana. Said respondent owns and operates some 30 branch whole- 262 FEDERAL TRADE co"r:YlISSION DECISIO);S Findings 48 F. T. C.

sale houses in Louisiana, as well as operating others designated as associated companies. These latter companies are separate legal entities in which certain of the stockholders of Consolidated have a substantial financial interest. Such designation also includes respondent United and those companies in which United has a financial interest. The following-named individuals are now, or have been during the time mentioned herein, offcers of said respondent Consolidated, and as such, and individually, are named as respondents herein: Victor T. Kurzweg, ,Jr., president. Paul H. I(urzweg, Jr. 1. D., vice president. Charles J. !(urz,veg, secretary-treasurer. The following named individuals are or have been during the time hereinafter mentioned, members of the board of directors of Consolidated, and as such, and individually, are named as respondents herein:

Victor J. Kmzweg, Sr., chairman of the board. Victor .J. Kurzweg, Jr. James 1. Lipscomb. Paul H. Kurzweg, HenryJ. Waguespack. Jr., M. D. Henry J. 1.e Blane. Charles J. Kurzweg, PAR. 2. Respondent United Investment Corp., hereinafter referred to as United, is L corporation organized, existing and doing business under and by virtue 01 the laws of the State 01 Louisiana, with its principal office and plaee of business located "t 748 South Cortez Street, in the city of 1, ew Or1cans, State of Louisiana. Said respondent is nmv, and since several years prior to June 19, 1936, has been, engaged in the business of buying and selling food and other products at wholesale "within the United States. Such products include fruit, vegetables, canned goods, suga.r, salt, milk, tobacco, soap, flour, and candy. It is one, among others, of a group of large wholesalers of food products in the State of Louisiana. Said respondent controls a.nd operates a total of some six branch wholesale grocery houses iocated in the Stete of Louisialm, and in addition thereto, partially owns, operates and controls certain wholesale grocery organizations located in Orange, Tex" and Pascagoula, Miss. Said respondent United is also engaged in the retail grocery business through its ownership of the nmjority of stock in Capital Stores Inc., a Louisiana corporation, Baton Rouge, La. There are 19 retail stores in this chain. In addition thereto, Capital Stores, Inc., owns the entire capital stock of the Orleans Capital Stores, Inc. The latter js also a Louisiana corporation and operates 10 reta,il grocery stores under this name in ew Or leans.

CO:\SOLIDATED COMPANIES , INC. ) ET AL. 263 254 Findings In addition to the wholesale and retail stores hereinabove Jisted as being owned, controlled, and operated by United, said respondent corporation also o\vns and controls through its offcers a.nd directors 000 shares of stock in respondent Consolidated. The following-named individuals are, or have been during the time hereinafter mentioned, oIncers of said respondent United, and as such and individually, are named as respondents herein. Frank T. Kurz,vcg, M. D., president.

Colquitt O. Dupuy, executive vice president. Clarence R. Castel', secretary.

George T. Vicknair, treasurer.

The following-nmned individuals are, or have been during the time hereinafter mentioned, members of the board of directors of respondent -Cnited, and as such, and individually, are named as respondents herein:

Frank T. Kurzweg, M. b. George T. Vicknair. Colquitt O. Dupuy. :Margaret L. Kurzweg. Clarence R. Caster.

PAR 3. In addition to the wholesale and retail grocery companies hereinabove referred to as being owned, operated, and controlled by respondents Consolidated and United, there ate a number of other wholesale and -retail grocery companies owned ill whole or in part by members of the Kurzweg family which arc operated a,s associated companies under' the direction and control of respondent Consolidated. PAH. 4. Respondent Progressive Brokerage Co. , Inc. , hereimLfter referred to as Progressive, is a corporation organize, , existing and doing business under the laws of the State of Louisi:llfl \ with its principal ofjice and place of business located at 208-210 Cigali Building, 107 Camp Street, city of New Orleans, State of Louisiana. Said respondent was incorporated some years prior to June 19, 1936, and since its incorporation and continuing to the present time, has been and is now, engaged in operating as a broker or manufacturer s agent dealing primarily in food products.

Said respondent maintains it bra,nch offce at 318 Railroad Avenue Lake Charles, La. This branch is managed by Arthur G. vVaguespack (not a respondent herein), a relative of respondent Henry J. 'Vaguespack, director of Consolidated.

The following-named individuals are, or have, been during the time hereinafter mentioned, offcers of said respondent Progressive, and as such, and individually, are named as respondents herein: Findings 48 F. T. C.

James M. Kinberger. Jr., president.

Eugene Holloway, J. D., vice president. Edmund I\.nberger, secret.ary-treasurer.

The above-named individuals also serve as directors of said respondent Progressive, and as such, and individually, are named as respondents herein.

PAR 5. Respondent Consolidated, prior to farch 1929, owned all of the capital stock of respondent Progressive Brokerage Co. , Inc. In March 1929, Conso1iclatecl declared a stock dividend consisting, among other stocks, of the entire capital stock of Progressive. At this tjme a committee of three individuals "as appointed as trustees to receive the stock dividends for the then stockholders of Consolidated and for the purpose of organizing a holding company. United Investment Corp. was thus formed, to which corporation the said trustees transferred title to an stocks they were then holding in trust, including that of Progressive Brokerage Co. , Inc. All stock of respondent United was thereafter distributed to the then shareholders in Consolidated ;ulCI subsequently transferred by the offcers and directors to their children. On or about .J uly 1936, respondent United distributed to its stockholders the entire capital stock of Progressive, consisting of 18 033 shares.

PAR. 6. H.:urzweg Le :Blanc, 'Vaguespack, and Lipscomb, among others, are family names. At aD times mentioned herein a substantial majority of the capital swck of said corporate respondents was and is owned by individuals ,yho \Ycre and arc now me,mbers of slich families, by blood or marriage. Furthermore, there is a suhstantial num. bel' of branch managers or key employees of the corporate respondents who, together with their families, by blood or marriage, own stock in the respective respondent corporations and who, because of their position or connection v"ith said respondent corporations, are now and have been for the period of time mentioned herein, under the control, authority, direction, management, and domination of the Kurz\Yeg, Le Blanc, Waguespack, and Lipscomb group who, through these individuals and tlh ir iamilies, and in combination with their own holdings, exercise, control and ownership ov('r fl substantial majority of the capital stock of the three corporations as hereinafter set forth.

For some time, and as the present, respondent Consolidated has had issued and outstanding, approximately 64 000 shares of common stock. The Kurzwcg, Le Blanc: '\Vaguespack, and Lipscomb families together \with the famili('s of other officers and directors of the three corporate respondents, own and thus control, approximately 37 900 , .

CONSOLIDATED COMPANIES , INC., ET AL. 265 254 Findings shares, or 59.2 percent of Consolidated stock. This includes the 8,000 shares of Consolidated stock owned by respondent United and which is under control of this group. Furthermore, the stockholdings in the three respondent corporations of the managers of branch stores .of respondents Consolidated and United, as well as other key employees, together with their families, by blood or marriage, amount to an additional holding of approximately 6 280 shares, or 9.8 percent of Consolidated stock.

For some time, and at the present: respondent l::nitecl has 11ad issued and outsta.nding some 18 033 shares of stock. The Kurzweg, Le Blanc 1Vaguespack, and Lipscomb families, together with the families of other officers and directors of the three respondent corporations, own and thus control, approximately 12 631 shares, or 70 percent of United stock. Furthermore, the stockholders in the three respondent corporations of the manogers of branch stores of respondents Consolidated and United, as wen as other key employees, together with their families, by blood or marriage, as hereinbefore set forth, amount to an additional holding of approximately 756 shares, or 4.2 percent of U ni ted stock.

For sonie time, and at the present, respondent Progressive has had issued and outstanding some 18 033 shares or stock. The KUI'zweg, Le Blanc Waguespack, and Lipscomb families, together with the families of their offcers and directors of the three respondent corporations own, and thus control, approximately 11 504, or 63.8 percent of Progressive stock. Furthermore, the stockholdings in the three respondent corporations of the managers or branch stores of respondents Consolidated and United, as well as other key employees, together with their families, by b100d or marriage, as he.reinabeiore set forth, amount to an additional holding of approximately 1 724 shares or 9.6 percent of Progressive stock.

PAR. 7. At all times mentioned herein, including the present, individuals who were. or are members of the Kurzweg, Le Blanc Waguespac.k, or Lipscomb families, by blood or marriage, together with individual l'epreEcntative.s of the farnilies of other offcers and directors of the three respondent corporations, and each of them directly 01' indirectly and acting collectively as owne.rs or as represent.ative, agent or other fiduciary of the owners of a substa,ntial majority of the capital stock of the respondent corporations, have controlled, regulated, directed, managed, and dominated, and do now control, regulate, direct, manage, and dominate an or said corporate respondents, including respondent Progressive, formulating, authorizing, managing, and directing all of their policies, practices, and acts' as herein alleged.

266 FEDERAL 'l' \DE COMMISSION DECISIONS Conclusion 48 F. T. C. PAR. 8. In the course and conduct of their wholesale food business since on or about June H\ 1986, said respondents, as aforesaid, continuously purchased, through respondent Progressive, food products from many vendors with places of buslless located in several States of the United States; and said respondents, individually and collectively, and each of them, c:tused such food products to be transported when purchased from said States to destinations in other States. PAIL 9. In the Course oJ said busi2-less in commerce, as aforesaid beginning on or about June 19 , 193G, and continuing to the present time, said respondents Consolidated and United, as well as those associated companies operating under Conso1iclated, as aforesaid purchased through respondent Progressive Brokerage Co., Inc., and still continue to purchase, 1 substantial portion of their requirements of food products from vendors, all, or substantially all, of whom paid said Progressive Brokerage Co., Inc., commissions or brokerage fees on said purchases.

Progressive Brokerage Co., Inc., :receive.d and accepted such fees Rnd transmitted and paid them to, and a sllustanticll amount thereof was received and accepteci by, members of the Kurzweg, Le Bla, Waguespack, and Lipscomb families and members of the families of other offcers and directors of the throe respondent corporations as well as other key employees, together with their families, in the form of dividends on the capital stock of Progressive Brokerage Co. Inc., owned by them.

In making said purchases and (a) in receiving and accepting and (b) in transmitting and paying sai,! fees, directly or indirectly, as above found, Progressive, Brokerage Co., Inc. , was, and is now, acting as agent or representative of respondents Consolidated and United subject to the direct or indirect cont.rol of Consolidated and United and of those individuals who were and are members of the ICurzweg, Le Blanc, vVaguespack, and Lipscomb families by blood or marriage together with members of the families of other offcers and directors of respondents Consolidal ed and United, and other key employees and their families, who, tDgcther, own a substantial majority of its capital stock, as aforesaid.

CONCLUSION The acts and practices of l'eSpOndcllts: corporate, individually and collectively, and each of them, since June 19, 1936, in accepting and receiving commissions or brokcra,ge fees, dire.ctly or indirectly, above found, are in violation of subsection (c) of section 2 of tho Clayton Act, as amended by the Robinson Patman Act. CONSOLIDATED CO:\1PANIES , INC. , ET AL. 267 254 Order ORDER 1. It is ordered That the respondent, Progressive Brokerage Co. Inc., a corporation, its offcers, directors, agents, representatives, and employees, directly or through any corporate or other device, in COIlnect.ion with the purchase of fruits, vegetables, produce, groceries household and other products of whatsoever nature in commerce, as commerce" is defined in the aforesaid Clayton Act, as amended, do forthwith cease and desist from:

(a) Receiving or accepting, directly or indirectly, from any seller anything of value as a commission, brokerage, or other compem;ation or any alloTIance or discount in lieu thereof, upon any purchase in connection \with which respondent Progressive Brokerage Co., Inc. , is the buyer or is the agent, representative, or other intermediary acting for, or in behalf of, or subject to the direct or indirect control of any buyer exercised through the ownership or control of capital stock of Progressive Brokerage Co., Inc., by any stockholder or cooperating group of stockholders iu such buyer who directly or indirectly controls such buyer.

(b) Transmitting, paying, or granting, directly or indirectly, any part of any commission, brokerage, compensation, alloTIance or discount, which is referred to in paragraph I (a) above, to any buyer or to any stockholder in any buyer, who is referred to in paragraph I (a) above, in the form of money, dividends, credits, services, facilities or in any other form.

II. It 18 further ordered That the respondents Consolidated Cas. Inc., and United Investment Corp., and their respective offcers, directors, agents, representatives, and employees, directly or through any intermediary (including Progressive Brokerage Co. , Inc. ) in connection with the purchase of fruits, vegetables, produce, groceries household and other products of whatsoever nature in commerce, as commerce" is defined in the Chlyton Act, as amended, do forthwith cease and desist from:

Receiving or accepting from any seller, or from any agent, representative, or other intermediary acting for, or in behalf of, or subject to the direct or indirect control of respondents Consolidated Cos. Inc. , and United Invest.ment Corp., including such control by said respondents exercised through the ownership or control of capital stock of any such agent, representative, or other intermediary by any stoekhoJder or cooperating group of stockholders of respondents Consolidated Cos., lnc. and United Invesbnent Corp. , or either of them who directly or indirect.ly controls saiel respondents or either of them, anything of value as a. commission, brokerage, or other corn 268 FEDERAL TRADE COMMISSION DECISI01\ Order 48 F, pensation, or any discount or allowance in lieu thereof, in the form of money, dividends, c.reciits, or in any other form, upon purchases for their own accounts.

III. It i8 further ordered That the respondents, Vietor J. Kurzweg, Sr., Victor J. Knrzweg, .Jr., Paul H. Kurzweg, Jr. (M. D. ), Charles J. Kurzweg, Frank T. Kurzweg (M. D. ), James 1. Lipscomb, Henry J. Waguespack, Henry J. Le Blanc, Colquitt O. Dupuy, Clarence R. Castcr, George T. Vicknair, J\Iargaret L. Kurzweg, James ?\L leinberger, Jr., Eugene Holloway (M. D. ), Edmund Kinberger, either in their individual or other representative capacities, in connection with the purchase of frui1s, vegetables, produce, groceries, household and other products of whatsoever nature in commerce, as "commerce is defined in the aforesaid Clayton Act, as amended, do forthwith cease and desist from:

R.e,ceiving or accepting any part of any commission, brokerage compensation, allowance, or discount which, in paragraphs I (a) and I (b) above, respondent Progressive Brokerage Co. , Inc. , is ordered to cease and desist from receiving or accepting and from transmitting, paying or tuting: and which, in paragraph II above respondents Consolidated Cos. , Inc., and United Investment Corp. are ordered to cease and desist from receiving or accepting. GIllEH TO FILE REPORT OF COMPLIANCE It i8 ordered That the respondents herein shall, within 60 days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist (as required by said declaratory decision and order of September 1, 1951). MARLBORO TOBACCO BOARD OF TRADE ET AL. 269 Syllabus