Vitrified China Association, Inc.

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Docket 5719. Complaint, December 9, 1949. Order, March 6, 1953. Charge: Entering into and carrying out an unlawful understanding and conspiracy to hinder and limit competition in price and otherwise in the manufacture, sale, and distribution of vitrified china hotel ware, and aiding and abetting said undertakings and practices through (a) cooperatively formulating, agreeing upon, and revising a list of base prices to be used; (b) agreeing upon amounts to be added to and deducted from such base list prices; and (c) agreeing upon terms and conditions upon which sales of said chinaware were to be made; on the part of respondent association (the members of which embrace substantially all manufacturers of vitrified chinaware in the United States and occupy a dominant and controlling position in the industry) ; 8 officers thereof; 12 manufacturer members; and 2 manufacturer nonmembers, who cooperated in said practices and activities; with the effect of substantially lessening and suppressing competition involved, and with other prejudicial effects and tendencies.

By decision of the Commission, appeals by respondents from initial decision of hearing examiner, which held that respondents, with the exception of one individual, had entered into agreements affecting the price of such hotel ware in violation of section 5 of the Federal Trade Commission Act, were granted without ruling individually on each appeal; appeal by counsel supporting the complaint from the initial decision on the ground that the order therein was too narrow in scope to provide effective relief, was denied; and the complaint was dismissed as not sustained by the evidence of record, for the reasons stated in the Commission’s opinion by Commissioner Mead, as follows:

OPINION OF THE COMMISSION By Mean, Commnvissioner:

This proceeding is before the Federal Trade Commission upon appeals from an initial decision of a hearing examiner of the Commission holding that respondents, with exception of Frederic J. Grant, have entered into agreements affecting the price of a type of china known as hotel ware, in violation of section 5 of the Federal Trade Commission Act. These respondents have appealed to the Commission contending that this initial decision is not supported by the evidence of record. Counsel supporting the complaint in this proceeding also has appealed contending that the order, contained in the initial decision, is too narrow in scope to provide effective relief from respondents’ practices found to be illegal. This proceeding is limited to respondents’ acts in connection with the manufacture, sale and distribution of hotel ware. Hotel ware is heavyweight vitrified china made for hotels, restaurants and other commercial establishments. There are approximately 1,700 different sizes and shapes of hotel ware, three different body colors, and a large number of different decorations available. Thus, there are practically innumerable items of hotel ware of different combinations of shape, color and decoration which can be purchased from respondents. Respondents sell their hotel ware f. o. b. the place of manufacture. Shipping costs are paid by the purchaser. A respondent's f. o. b. price on a particular item can be determined by combining the amount set out for the item in respondent’s “basic list” with his current discount or plusage for that item as set out in his latest “discount sheet” plus any price increase which may have been announced by respondent applicable to the item plus respondent’s packing charge for the items ordered.

There are two “basic lists’—the “white list” and the “decorated list.” The “white list” shows a dollar and cents figure for each item or shape of hotel ware which is to be sold without decoration. The “decorated list” shows a dollar and cents figure for each item or shape of hotel ware which is to be sold with a decoration on it. The amounts set out on these basic lists are, with a few exceptions, the same for each listed item for each respondent manufacturer. Each respondent manufacturer of hotel ware publishes lists of discounts and plusages to be used in connection with the basic lists in calculating its current price on the items listed. These discounts and plusages are designed to allow for differences in cost between items with different decorations, etc.

In addition, respondent manufacturers have made general price changes from time to time. In certain cases a respondent manufacturer’s price change has applied to all of the items of hotel ware sold by it. In other cases such a price change has been applied only to certain classes of hotel ware. Such price changes are made known to the customers by means of price announcements issued by the particular company making the change. General price changes are rarely, if ever, reflected in the “basic lists” which have remained unchanged since 1946. After the applicable discount or plusage and price change has been applied to the amount set out for the item in the basic list, ' the packing charge is computed and included in the bill. Hotel ware may be shipped in barrels, casks or cartons, and the charge made to the purchaser varies with the method of packing. Thus, the total amount paid by a purchaser for a particular item of hotel ware can only be calculated by combining the applicable amount in the basic list with the applicable discount or plusage, plus the DISMISSALS—VITRIFIED CHINA ASSO., ETC. ET AL.—OPINION 1573 amount of price increase announced, if any, plus the packing charge and the actual cost of shipping from the point of manufacture to the place of delivery. Only if all of these factors are the same for each respondent manufacturer will the total price paid by a purchaser of a particular item of hotel ware regularly be the same regardless of which respondent manufacturer he buys from. . The record shows that only in their basic lists are the factors used by the respondent manufacturers in calculating their prices substantially the same. Due to differences in the locations of respondents’ potteries, the weight of the product and the absence of the absorption of any part of the shipping charges by respondents, there exists a substantial difference in the shipping charges paid by a purchaser on identical purchases of hotel ware from the various respondent manufacturers. There is little or no uniformity in packing charges among respondent manufacturers. The announced price increases have varied from respondent to respondent; and while there has been uniformity on certain items in respondents’ published discounts and plusages, there has also been a great amount of nonuniformity. As a result the total price paid at any given location for the same item of hotel ware has varied greatly depending wpon from which of the respondents the item was purchased.

The only evidence of record as to any concert of action among respondents as to any of these pricing factors is in connection with the basic lists. It shows that in 1946 the respondent association employed a cost accountant to make the necessary cost studies to enable him to submit new white and decorated lists based upon actual cost figures of members of the association. The purpose of the study was to bring up the items which were priced too low and to bring down the items too high in relation to the actual costs of production. A study of 76 standard items was made which showed a wide divergence in the cost of individual items as between the seven plants studied. However, a revision of the basic lists as to certain of the items manufactured was prepared on the basis of the average of the costs in these seven plants. This revision was approved unanimously by a vote of the members present at a meeting of the respondent Association held May 22, 1946. The same or substantially similar revisions were made by each of the respondent manufacturers in their own published basic lists shortly thereafter.

Thus, the principal issue raised in this matter is: Do respondents’ acts and practices, as above described, constitute a combination in unreasonable restraint of trade? It is well settled that any agreement between competitors to fix their prices is per se an unreasonable restraint of trade and is unlawful under the Sherman Act. Respondents herein have cooperatively caused a cost study to be made for the purpose and with the effect of revising basic lists used as one of several factors in calculating their individual prices. However, the record does not show that there was any intent to establish or fix in any manner the price at which the products were to be sold; nor does the record show that any uniformity or any fixed re- Jationship was established as to the prices at which respondents sold their products. Also, there is no indication that this cooperative action was the first step toward an arrangement fixing in any manner the prices at which the products were to be sold or could grow into such an arrangement. The Commission, therefore, is of the opinion that respondents’ cooperative action in revising their basic lists, which, if carried on as a part of a price fixing plan, would constitute illegal tampering with their price structures, under the circumstances of this case does not constitute price fixing or a combination in unreasonable restraint of trade.

The Commission being of the opinion that no violation of law has been established by this record, there is no necessity for considering the contention of counsel supporting the complaint that the hearing examiner’s order was not adequate. Similarly, it is not believed necessary to rule individually on each of respondent’s exceptions to the hearing examiner's initial decision, as it is being set aside. Before Mr. Abner E. Lipscomb, hearing examiner. Mr. Floyd O. Collins for the Commission.

Kittelle & Lamb, of Washington, D. C., for Vitrified China Association, Inc., its officers, The Walker China Co., Mayer China Co., Sterling China Co., Wallace China Co., and along with— Mr. Lynne Anderson Warren, of New York City, for The Shenango Pottery Co.;

Mr. Martin A. Jacobs, of New York City, for Jackson Vitrified Co., Inc.;

Magavern, Magavern, Lowe & Gorman, of Buffalo, N. Y., for Buffalo Pottery, Inc. ;

Estabrook, Estabrook, Burns & Hancock, of Syracuse, N. Y., for Iroquois China Co.;

Bond, Schoeneck & King, of Syracuse, N. Y., for Onondaga Pottery Co.;

Gerdes & Montgomery, of New York City, for American Limoges China, Inc.; and Mr. John Scammell and Mr. John Hall Forbes, of New York City, for Scammell China Co.

Mr. John N. Sawyer, of Beaver, Pa., for Wellsville China Co. Wyckof & Wyckoff’, of Gratton, W. Va., for Carr China Co. DISMISSALS—METROPOLITAN PASS BOOK CO. ET AL. 1575 Lever Brottters Co., New York, N. Y., Docket 6020. Complaint, July 31, 1952. Order, March 13, 1953.

Charge: Advertising falsely or misleadingly as to nature of product and competitive products, in connection with the sale and distribution of respondent’s Good Luck Oleomargarine, through the use in advertising of such expressions as “country-fresh” and “dairy department”, long associated in the minds of many members of the purchasing public with dairy products, and through the use of such expressions as “the table margarine,” “expressly for the table,” “only new Good Luck (margarine) is pressure blended for table flavor,” whereby respondent falsely represented that oleomargarine manufactured by respondent’s competitors was not suitable for table use. Dismissed without prejudice, pursuant to the hearing examiner’s recommendation and following the tender and acceptance by the Commission of a proposed stipulation of facts and agreement to cease and desist, whereby respondent agreed not to use or disseminate any advertisement of its product, “Good Luck Margarine,” containing any statements representing directly or by implication: (a) that said product was a dairy product, and (b) that competitors’ products were not suitable for table use, the Commission being of the opinion that in the circumstances the public interest did not require a continuation of the proceeding at that time.

Before Mr. James A. Purcell, hearing examiner. Mr, A. 8. Scott, Jr. for the Commission.

Mr. Martin J. Pendergast, of New York City, and Arnold Fortas & Porter, of Washington, D. C., for respondent. D. Pump Rosinson and Larur Wrieur doing business as Merro- POLITAN Pass Boox Co., and Harry ScHoorer, Genpran Manacer, New York City, Docket 5996. Complaint, May 23, 1952. Order, April 8, 1958.

Charge: Advertising falsely or misleadingly as to offer involved, free product, money-back guarantee or refund, prices and value; in connection with the sale in commerce of pass books of coupons, as an advertising scheme designed to bring new customers into the business establishments of participating advertisers, mostly small businessmen, through the honoring by them of coupons with promised goods or services.

Proceeding closed without prejudice, pursuant to motion of counsel supporting complaint, which set forth that service of complaint upon respondent general manager, the real party in interest, had not been made in spite of every effort to do so, and that practices in question were short-lived promotions in various cities; and for lack of public interest in proceeding further at the time. Before Mr. Everett F. Haycraft, hearing examiner. Mr. J.J. McNally for the Commission.

Mr, Eugene L: Wolver, of Los Angeles, Calif., for D. Phillip Robinson.

Master Lasoratorres, Ixc., Omaha, Nebr., Docket 4908. Complaint, February 12, 1948. Order, June 17, 1953. Charge: Advertising falsely as to qualities or properties of product, in connection with the compounding, selling and distributing of hog and poultry medicinal preparations designated as “Master Liquid Hog Medicine,” “One-Shot Hog Wormer,” “Master Florescine,” “Master Fluid,” “Master Liquid Poultry Medicine,” and “Masterol.” Dismissed without prejudice, it appearing from facts developed during a supplemental informal investigation that the present operators of the business formerly conducted by corporate respondent have not, for more than 2 years, used any of the representations challenged in the complaint, and there is no reason to believe that they will resume use thereof; and the Commission being of the opinion that in the circumstances the public interest does not require further corrective action at this time.

Before Mr. J. Earl Cox, hearing examiner. Mr. 8. F. Rose, Mr. Edward L. Smith, Mr. George M. Martin and Mr. R. P. Bellinger for the Commission.

Mr. John E. von Dorn, of Omaha, Nebr., for respondent. Henry A. Dreer, Inc., Philadelphia, Pa., Docket 6035. Complaint, August 29, 1952. Order, June 28, 1953. Charge: Advertising falsely or misleadingly as to soil condition- ing properties, comparative merits and cost, tests and use of product, and time in business, in connection with the interstate sale and distribution of a liquid soil conditioner—basically an aqueous sodium polyacrylate solution—designated “Fluffium.” Dismissed for the reason that, since issuance of the complaint, respondent upon its own petition was adjudged a bankrupt, and all stocks of “Fluffium,” and its trade name, were acquired by the corporate intervenor herein, which has expressed its intention of avoiding and misrepresentation in the advertising of the product, and of participating in the pending trade practice conference for the chemical soil conditioner industry; it appearing, consequently, that trial of the issues raised by the complaint would serve no useful purpose and would not be in the public interest.

Before Mr. William L. Pack, hearing examiner. Mr. William L. Pencke for the Commission. DISMISSALS—-MARINE TOBACCO CO. ET AL. 1577 Montgomery, McCracken, Walker & Rhoads, of Philadelphia, Pa., and Davies, Richberg, Tydings, Beebe & Landa, of Washington, D. C., for respondent.

Clark, Ladner, Fortenbaugh & Young, of Philadelphia, Pa., for Supplee-Biddle-Steltz Co., intervenor.

Martine Topacco Co. et au., New York, N. Y., Docket 5747. Complaint, March 1, 1950. Order, June 30, 1953. Charge: Restraining and monopolizing trade and price fixing, in connection with the sale and distribution of tax-free cigarettes to sea stores or “slop chests” of merchant ships engaged in foreign trade, as well as certain limited coastal trade, and on the part of corporate respondent, which, with a dominant position in said activity in the port of New York for at least 10 years (and the only distributor in said port generally so engaged excepting the New Jersey sector, as compared with ports other than Boston, where there are generally two or more authorized distributors) , sold about 95 percent of the taxfree cigarettes there sold.

Various means, methods, acts, and practices employed by corporate respondent, joined with three individuals, its officers, to effect such suppression of competition and maintain its virtual monopoly included the following:

(1) Exerting pressure on manufacturers of said cigarettes, based on its power and good will with the shipping trade and its potential power to injure them, to induce them to refrain from supplying competitors with their said products;

(2) Threatening to contact sources of supply of distributors in neighboring ports, such as Baltimore and Philadelphia, for the purpose of having their supplies cut off; or to enter their distribution territory with competition that would probably eventually eliminate them from business, if they sold directly in the port of New York or to competitors in said port;

(3) Securing from distributors in the ports of Baltimore and Philadelphia, through coercion and pressure, an understanding that they would not sell said products in the trading area of the port of New York, in consideration of which it agreed that it would not compete with them in their said trading areas; and (4) Similarly securing from said distributors in the ports of Baltimore and Philadelphia agreements that sales of tax-free cigarettes to a ship in a particular port when that ship had usually been supplied in the trading area of another port, would be for the account of the distributor operating in the port in which the ship was usually supplied. Dismissed without prejudice, following denial of appeal of counsel for respondents from an order of the hearing examiner rejecting an “Amended Stipulation as to the Facts,” taken also as including a motion that the Commission dismiss the complaint in the event that the appeal was denied; the Commission being of the opinion that the facts as set forth in said “Amended Stipulation,” or if modified as suggested by respondents, did not sustain the allegations of the complaint, that it was highly unlikely that further facts could be elicited were hearings held for that purpose, and that the public interest did not require such hearings to be held; and vacating the order of the hearing examiner setting the matter down for trial. Before Mr. Frank Hier, hearing examiner.

Mr. George W. Williams and Mr, Rufus E'. Wilson for the Commission.

Mr. Harold A. Taft, of Brooklyn, N. Y., and Mr. John J. Halpin, of New York City, for respondents.

Wuroor Co., Inc., Buffalo, N. Y., Docket 5928. Complaint, October 9,1951. Order and opinion, June 30, 1953. Charge: Paying, or contracting to pay, money, goods, etc., in consideration for services and facilities furnished or contracted to be furnished by some customers, including chain and independent retail drug stores, while not making such payments available on proportionally equal terms, or on any terms at all, to other competing customers, in connection with the processing, handling, interstate offer and sale of “Wildroot” hair preparations, including hair tonic, shampoo and hair net, in violation of the provisions of section 2 (d) of the Clayton Act, as amended, through such practices as— (1) Paying money amounting up to 5 percent of purchases of “Wildroot Cream-Oil Hair Tonic” and “Wildroot Liquid Cream Shampoo” in consideration of the customer paying said money to its sales clerks in the form of “push money” to promote the sale of said products;

(2) Paying an amount of money equal to 5 percent of net purchases in consideration of the customer maintaining a permanent daily counter and window display and a feature window display once each quarter of aforesaid “Hair Tonic” and/or “Cream Shampoo”; (83) Making available to some customers a cooperative newspaper advertising agreement under which the customer was reimbursed for the entire cost of newspaper advertising of “Wildroot Liquid Cream Shampoo,” such advertising to be run as a listing with the customer’s own advertisement, the customer being required to display the shampoo on its counters or in its windows, or both, when the advertising was running, and under said agreement paying different amounts DISMISSALS—WILDROOT CO., INC.—COMPLAINT 1579 of money to competing purchasers, arbitrarily determined in negotiations with individual customers;

(4) Making available to some customers a cooperative newspaper advertising agreement under which the customer was reimbursed for the entire cost of newspaper advertising of said “Hair Tonic” and “Cream Shampoo,” the advertising to be alternated between the two products and to be run as a listing with the customer’s own advertisement, and to be accompanied by counter or window displays, and under said agreement paying money limited to 10 percent of purchases of “Wildroot” products during the preceding year, with the suggestion that the customer spend the money in equal portions during each of the four quarters of the year during which the agreement was effective; ;

(5) Paying money to certain customers in consideration of advertising “Wildroot” products on radio and/or television programs sponsored by them, the amounts in each case being arbitrarily determined in ‘negotiations with individual customers, as were also the services or facilities required to be furnished in each case; (6) Paying money to certain customers in consideration of advertising respondent’s products in connection with a special promotional sale conducted by the customer, for example, making such a payment to a chain retail drug store to cover the cost of circulars sent by direct mail to consumers by the customer—the amount of money and the services and facilities required to be furnished being arbitrarily determined in each case in negotiations with individual customers. As further alleged in the complaint, respondent, in 1950, made one or more of such types of payments “to each of certain of its customers, a substantial number of which were chain retail drugstores. Said customers comprised approximately one-half of 1 percent of respondent’s customers and their total dollar volume of purchases accounted for approximately 20 percent of the total sales of respondent’s products. The total of said payments.to said customers in 1950 was approximately $184,000.

Said payments were not available in any amount to thousands of independent retail drugstores, comprising approximately 9914 percent of respondent’s customers, many of which compete in the resale of respondent’s products with said customers that received payments. During 1950 the total dollar volume of purchases by these customers accounted for approximately 80 percent of the total sales of respondent’s products.

Complaint dismissed without prejudice by the following order: This matter came on to be heard by the Federal Trade Commission upon respondent’s petition for an order recalling the matter from the hearing examiner and dismissing the complaint herein, and briefs in support of and in opposition to said petition. This petition in effect is a motion for reconsideration of the Commission’s orders of August 28, 1952, and September 26, 1952, denying respondent’s request for leave to appeal from the decision of the hearing examiner herein denying respondent’s motion to dismiss. Further consideration is requested on the merits and especially in the light of the Commission’s -action of January 9, 1953 dismissing six complaints alleging violation of section 2 (e) of the Clayton Act because of a change in Commission’s interpretation of section 2 (d) and 2 (e) of that Act. The Commission, upon a reconsideration of the entire record herein, having decided, for the reasons stated in the written opinion of the Commission which is being issued simultaneously herewith, that the public interest would not be served by further proceedings in this matter at this time:

It is ordered, That the complaint herein be and it hereby is, dismissed without prejudice.

Commissioners Mead and Spingarn not concurring. Before Mr. J. Hari Cox, hearing examiner. Mr, Rice EF. Schrimsher and Mr. John H. Bass, Jr., for the Commission.

Moot, Sprague, Marcy & Gulick, of Buffalo, N. Y., for respondent. OPINION OF THE COMMISSION By Howrey, Chairman:

This is a petition, filed directly with the Commission, to dismiss the complaint. We have treated such petition as an appeal from the ruling of the hearing examiner denying respondent’s motion to dismiss. Respondent Wildroot Co., Inc, moved the hearing examiner to dismiss the complaint upon the grounds: (1) that the matters and practices complained of are adequately covered by the Trade Practice Conference Rules for the Cosmetic and Toilet Preparations Industry, and (2) that respondent has subscribed to such rules, is now in compliance therewith, and intends to continue to comply. In its petition to the Commission respondent included two further grounds: (1) that no useful purpose can be served by further prosecution of the action in that every result possible to be obtained has already been obtained, and (2) that all practices charged in the complaint have long since been abandoned.

The complaint charges that respondent violated section 2 (d) of the Clayton Act, as amended by the Robinson-Patman Act, by paying advertising and other promotional allowances to certain of its customers in the drug trade while failing to make such allowances avail- DISMISSALS—WILDROOT CO., INC.—OPINION 1581 able on proportionally equal terms to all of its other customers competing in the sale and distribution of Wildroot hair preparations. . Respondent contends that the practices complained of were discontinued prior to the effective date of the trade practice rules for the industry. There is also in the record the declaration of respondent’s vice president and general manager, made under oath, that respondent has no intention of resuming such practices. Counsel in support of the complaint take the position that the fact the questioned practices have been discontinued “gives no assurance they will not be resumed in the future.”

On this point we agree with the hearing examiner who said, “There is no reason to doubt respondent’s sincerity in its declaration that it has already ceased and will permanently refrain from use of the practices complained of by the Commission.” The sole question therefore seems to be whether it is in the public interest to continue the proceedings for the purpose of imposing upon respondent a cease and desist order requiring it to discontinue practices which it has already stopped and which it does not intend to resume. .

In Eugene Dietegen Co. v. Federal Trade Commission, 142 F. (2d) 821 (C. A. 7 1944), the court said:

The propriety of the order to cease and desist and the inclusion of a respondent therein must depend on all the facts which include the attitude of the respondent toward the proceedings, the sincerity of its practices and desire to respect the law in the future and all other facts. Ordinarily the Commission should enter no order where none is necessary. This practice should include cases where the unfair practice has been discontinued. The object of the proceedings is to stop the unfair practice. If the practice has been surely stopped and by the act of the party offending, the object of the proceedings having been attained, no order is necessary, nor should one be entered. If, however, the action of the wrongdoer does not insure a cessation of the practice in the future, the order to desist is appropriate.® The ruling of the hearing examiner clearly shows that he believed the motion to dismiss should have been granted for lack of public interest. However, he felt compelled to deny the motion because of the Commission’s policy against settlement of Clayton Act cases by trade practice procedures.

5In a recent opinion of the Supreme Court dealing in part with the abandonment of a practice questioned under another section of the Clayton Act, the Court said: ‘‘The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive. * * * To be considered are the bona fides of the expressed intent to comply, the effectiveness of the discontinuance and, in some cases, the character of the past violations.” United States v. W. T. Grant Co. et al., 345 U. S. 629, decided May 25, 1958. See also Oregon-Washington Plywood Co. v. Federal Trade Commission, 194 F. (2d) 48 (C. A. 9, 1952) ; New Standard Publishing Company, Ine., v. Federal Trade Commission, 194 F. (2d) 181 (C. A. 4, 1952) ; Celanese Corp. of America, 46 F. T. C. 1170 (1950) ; and N. Erlanger, Blumgart & Co., Inc., 46 F. T. C. 1189 (1950).

260133—55——103 The Commission is not under the same compulsion,’ nor can such policy infringe on the Commission’s discretion to dismiss in cases where the alleged improper practices have been abandoned. The fact that the issuance of trade practice rules interpreting section 2 (d) of the Clayton Act was a factor in respondent’s decision to discontinue, is no reason for refusing to consider the case on the same basis as any other case of discontinuance. Respondent has stopped the practices. The circumstances do not indicate a likelihood of resumption. Everything that can be accomplished by a cease and desist order has already been accomplished by cooperative effort. In this situation the Commission is of the opinion that the present public interest will be adequately served by dismissing the complaint, without prejudice. Commissioners Mason and Carretta concur.

Commissioners Mead and Spingarn dissent.

Inrertocxine Directorate Cases (Waitin Macuinr Works Et AL., AND Turee Oruers). On Juné 30, 1953, following denial of appeals of counsel supporting the complaints from the initial decisions of the hearing examiners dismissing the complaints, and briefs in support of and in opposition thereto, the Commission dismissed four complaints, issued August 7, 1952, in which respondents were charged with violations of section 8 of the Clayton Act, through the having cf or serving by the same individual as a director in two or more corporations, competitively engaged, in whole or in part, in interstate commerce, with capital, surplus, and undivided profits, in the case of any one of them, aggregating more than $1,000,000, and otherwise within the prohibitions of said section; it appearing that in all cases the common directors had given up one of their directorships. Said cases, in each of which it was alleged, among other things, that for many years respondent corporations, by virtue of their business and location of operation, had been and were competitors, so that the elimination of competition by agreement between them would constitute a violation of a provision of the antitrust laws, follow: ®©On January 9, 1958, the Commission dismissed six complaints involving alleged violations by several cosmetic firms of section 2 (e) of the Clayton Act, as amended, by reason of discrimination between purchasers in the supplying of ‘‘demonstrator service” (Dockets Nos. 2978, 2974, 83017, 3089, 4485, and 4436). In dismissing the complaints the Commission said:

“Subsequent to the issuance of the complaint and the conclusion of the reception of evidence, the Commission promulgated trade practice rules for the Cosmetic and Toilet Preparations Industry * * *.

* * * The rules * * * specifically provide that one type of service may be offered to some customers and an alternate trpe to others, and further set out some of the methods by which it may be determined whether a course of conduct results in ‘proportionally equal terms’ to all customers. None of these provisions were in existence in any form at the time this proceeding was tried.

In making any final decision of this case the Commission would of necessity take into consideration the trade practice rules. The injustice of entering an order to cease and desist upon a state of facts permitted by the rules is apparent.” DISMISSALS—INTERLOCKING DIRECTORATE CASES 1583 Whitin Machine Works, Whitinsville, Mass.; Draper Corp., Hopedale, Mass.; and Phillips Ketchum, South Natick, Mass., Docket 6023, in which respondent corporations, were engaged in the manufacture and competitive interstate sale and distribution of textile machinery supplies, and in which, as charged, respondent individual was at the same time director of both.

Vick Chemical Co., New York, N. Y.; Colgate-Palmolive-Peet Co., Jersey City, N. J.; and William R. Basset, Greenwich, Conn., Docket 6024, in which respondent corporations, as the case might be, manufactured, shipped, and sold in interstate commerce, among other things, household medicinal products, pharmaceuticals and chemicals, cosmetics and toiletries, biologicals, soap, dentifrices, and glycerin; made, shipped, and sold in interstate commerce many of the same classes of products; and were in competition among themselves in the offer, sale, and distribution of such products in commerce, and in which, as charged, respondent individual was at the same time director of both.

Nesco, Lne., Milwaukee, Wis.; The Ekeo Products Co., [nc., Chicago ; David G. Baird, Montclair, N. J.; and Arthur Keating, Chicago, Docket 6026, in which respondent corporations were engaged in the manufacture and shipment and competitive interstate sale and distribution of house wares and cooking utensils in interstate commerce, and in which respondent individuals were at the same time directors of both.

Allis-Chalmers Manufacturing Co.,and Chain Belt Co., both of Milwaukee, Wis.; Bucyrus-E'rie Co., Inc., South Milwaukee; and Edmund ategerald,5 1 2 5 1 2 730 1851 214 42 95.771797 Milwaukee,5 1 2 5 1 3 965 1852 132 32 96.262405 Dockets 1 2 5 1 4 1119 1852 91 42 96.403015 6027,5 1 2 5 1 5 1232 1852 37 32 96.440651 in5 1 2 5 1 6 1291 1852 111 32 96.507309 which5 1 2 5 1 7 1425 1852 206 42 93.299667 respondents 1 2 5 1 8 1654 1861 157 31 91.395874 corpora-4 1 2 5 2 0 497 1900 1314 45 -1 5 1 2 5 2 1 497 1902 102 41 96.777161 tions,5 1 2 5 2 2 616 1912 35 22 96.963676 as5 1 2 5 2 3 664 1902 60 32 97.007889 thes 1 2 5 2 4 738 1912 74 22 96.686737 cases 1 2 5 2 5 826 1902 112 42 96.668571 might5 1 2 5 2 6 952 1902 50 41 96.521652 be,5 1 2 5 2 7 1018 1902 273 43 96.534187 manufactured,5 1 2 5 2 8 1307 1902 156 42 96.938271 shipped,5 1 2 5 2 9 1480 1902 67 31 96.688423 ands 1 2 5 2 10 1564 1902 74 31 96.936516 sold5 1 2 5 2 11 1655 1901 37 32 93.255424 in5 1 2 5 2 12 1708 1900 103 32 93.176338 inter-4 1 2 5 3 0 499 1950 1314 44 -1 5 1 2 5 3 1 499 1956 87 28 96.748573 states 1 2 5 3 2 607 1962 192 31 96.546776 commerce,5 1 2 5 3 3 820 1963 125 31 96.231728 among5 1 2 5 3 4 964 1953 97 31 96.231728 others 1 2 5 3 5 1081 1952 127 42 96.706444 things,5 1 2 5 3 6 1230 1953 92 31 96.951965 farms 1 2 5 3 7 1343 1956 147 28 96.009712 tractors5 1 2 5 3 8 1511 1952 69 32 96.806725 ands 1 2 5 3 9 1601 1951 98 33 96.567551 others 1 2 5 3 10 1720 1950 93 33 96.764511 farm4 1 2 5 4 0 499 2001 1315 44 -1 5 1 2 5 4 1 499 2003 205 42 93.233963 equipment,5 1 2 5 4 2 725 2002 226 43 92.463997 dirt-moving5 1 2 5 4 3 970 2003 208 42 95.850639 machinery,5 1 2 5 4 4 1198 2002 170 33 96.568192 electrical5 1 2 5 4 5 1387 2001 209 43 96.677383 machinery,5 1 2 5 4 6 1617 2001 197 43 96.807114 processing4 1 2 5 5 0 498 2052 1315 43 -1 5 1 2 5 5 1 498 2053 207 42 96.676750 machinery,5 1 2 5 5 2 725 2054 100 32 96.620789 chains 1 2 5 5 3 843 2053 96 41 96.677704 belts,5 1 2 5 5 4 959 2052 184 43 96.939049 sprockets,5 1 2 5 5 5 1162 2053 232 33 96.629341 construction5 1 2 5 5 6 1413 2052 207 41 96.672272 machinery,5 1 2 5 5 7 1641 2052 172 41 96.154427 elevating4 1 2 5 6 0 499 2102 1313 44 -1 5 1 2 5 6 1 499 2103 68 33 96.424164 ands 1 2 5 6 2 589 2103 190 43 95.248512 conveying5 1 2 5 6 3 801 2103 207 43 96.390739 machinery,5 1 2 5 6 4 1030 2114 115 32 96.268570 powers 1 2 5 6 5 1168 2103 237 33 96.513176 transmissions 1 2 5 6 6 1429 2102 205 43 93.300095 equipment,5 1 2 5 6 7 1657 2104 155 31 92.650887 excavat-4 1 2 5 7 0 498 2153 1315 44 -1 5 1 2 5 7 1 498 2154 61 42 96.721886 ings 1 2 5 7 2 570 2154 208 42 96.362808 machinery,5 1 2 5 7 3 790 2153 143 44 96.455849 floating5 1 2 5 7 4 947 2154 153 41 96.116638 dredges,5 1 2 5 7 5 1112 2154 149 32 96.558350 internal5 1 2 5 7 6 1275 2154 211 31 96.694206 combustion5 1 2 5 7 7 1499 2153 68 32 96.716728 ands 1 2 5 7 8 1582 2153 103 32 96.707359 diesel5 1 2 5 7 9 1699 2163 114 31 96.783035 power4 1 2 5 8 0 498 2202 1315 43 -1 5 1 2 5 8 1 498 2205 94 31 96.894699 units5 1 2 5 8 2 610 2204 68 32 96.895515 ands 1 2 5 8 3 696 2214 127 31 96.859962 cranes,5 1 2 5 8 4 839 2208 130 28 96.876823 tractors 1 2 5 8 5 987 2204 205 41 96.613197 equipment,5 1 2 5 8 6 1208 2203 202 41 93.299370 bulldozers,5 1 2 5 8 7 1429 2206 79 37 89.096298 etc.;5 1 2 5 8 8 1528 2203 109 41 96.746376 made,5 1 2 5 8 9 1656 2202 157 42 96.740761 shipped,4 1 2 5 9 0 499 2251 1314 45 -1 5 1 2 5 9 1 499 2255 69 32 96.339188 ands 1 2 5 9 2 583 2254 73 33 96.653603 sold5 1 2 5 9 3 671 2253 36 33 95.784096 in5 1 2 5 9 4 722 2254 81 32 95.784096 such5 1 2 5 9 5 818 2265 183 21 96.155647 commerce5 1 2 5 9 6 1015 2264 103 32 96.634102 many5 1 2 5 9 7 1133 2254 39 32 96.634102 of5 1 2 5 9 8 1186 2254 58 31 96.886078 thes 1 2 5 9 9 1258 2264 91 22 96.965240 same5 1 2 5 9 10 1364 2253 120 32 96.702042 classes5 1 2 5 9 11 1500 2252 38 33 97.014931 of5 1 2 5 9 12 1554 2253 173 41 96.565216 products,5 1 2 5 9 13 1745 2251 68 33 96.883484 anda 1 2 5 10 0 499 2302 1312 45 -1 5 1 2 5 10 1 499 2315 88 22 96.945465 were5 1 2 5 10 2 600 2304 36 32 96.751541 in5 1 2 5 10 3 651 2304 221 42 96.607857 competitions 1 2 5 10 4 886 2314 124 33 96.924065 among5 1 2 5 10 5 1023 2304 199 32 96.237473 themselves5 1 2 5 10 6 1237 2304 37 32 96.676285 in5 1 2 5 10 7 1288 2304 58 32 96.701500 thes 1 2 5 10 8 1360 2302 95 42 93.813515 offer,5 1 2 5 10 9 1471 2303 79 40 96.673958 sale,5 1 2 5 10 10 1566 2302 69 33 93.260727 ands 1 2 5 10 11 1650 2302 161 33 93.064880 distribu-4 1 2 5 11 0 499 2352 1312 43 -1 5 1 2 5 11 1 499 2355 73 31 95.615669 tions 1 2 5 11 2 595 2355 40 31 96.621101 of5 1 2 5 11 3 657 2355 81 31 96.728157 such5 1 2 5 11 4 761 2354 162 41 96.016533 products5 1 2 5 11 5 946 2355 36 31 96.531639 in5 1 2 5 11 6 1005 2364 193 31 95.967628 commerce,5 1 2 5 11 7 1222 2354 68 32 95.652168 ands 1 2 5 11 8 1313 2354 37 32 95.652168 in5 1 2 5 11 9 1373 2353 123 41 96.607269 which,5 1 2 5 11 10 1519 2364 37 21 96.607269 as5 1 2 5 11 11 1579 2352 159 41 93.261703 charged,5 1 2 5 11 12 1761 2363 50 22 92.603752 re-4 1 2 5 12 0 499 2402 1313 43 -1 5 1 2 5 12 1 499 2403 169 42 92.590340 spondents 1 2 5 12 2 684 2403 194 32 96.280411 individuals 1 2 5 12 3 895 2414 69 21 96.220467 was5 1 2 5 12 4 982 2408 35 28 96.420898 at5 1 2 5 12 5 1033 2404 58 32 96.361946 thes 1 2 5 12 6 1109 2414 90 22 96.367928 same5 1 2 5 12 7 1216 2403 83 33 96.567070 times 1 2 5 12 8 1316 2414 20 21 96.541077 a5 1 2 5 12 9 1353 2403 148 32 96.443130 directors 1 2 5 12 10 1518 2402 38 32 96.591949 in5 1 2 5 12 11 1573 2403 59 31 96.423683 thes 1 2 5 12 12 1648 2402 97 32 93.290710 three5 1 2 5 12 13 1761 2412 51 22 92.477547 re-4 1 2 5 13 0 498 2454 440 42 -1 5 1 2 5 13 1 498 2454 169 42 92.720093 spondents 1 2 5 13 2 681 2454 257 42 90.281319 corporations.’2 1 3 0 0 0 495 2551 1323 229 -1 3 1 3 1 0 0 495 2551 1323 229 -1 4 1 3 1 1 0 529 2551 1285 28 -1 5 1 3 1 1 1 529 2555 163 24 12.570351 TComplaint5 1 3 1 1 2 706 2554 28 21 96.056427 in5 1 3 1 1 3 748 2554 97 21 96.494301 Dockets 1 3 1 1 4 861 2553 71 25 96.692719 6025,5 1 3 1 1 5 949 2554 91 24 96.049881 Purity5 1 3 1 1 6 1054 2554 97 21 93.291374 Bakers5 1 3 1 1 7 1167 2554 80 25 92.420288 Corp.,5 1 3 1 1 8 1263 2553 133 22 95.706810 Americans 1 3 1 1 9 1411 2553 121 22 93.297409 Bakeries5 1 3 1 1 10 1546 2553 51 25 92.011749 Co.,5 1 3 1 1 11 1612 2552 61 25 90.231567 Inc.,5 1 3 1 1 12 1688 2551 82 21 96.266273 Lewis5 1 3 1 1 13 1784 2551 30 21 95.272774 A.4 1 3 1 2 0 495 2584 1323 30 -1 5 1 3 1 2 1 495 2588 136 26 96.558731 Cushman,5 1 3 1 2 2 649 2588 49 21 95.791649 ands 1 3 1 2 3 717 2587 93 25 93.302536 Georges 1 3 1 2 4 828 2587 27 21 87.898735 L.5 1 3 1 2 5 874 2587 73 25 96.466354 Burr,5 1 3 1 2 6 964 2588 27 20 96.386642 in5 1 3 1 2 7 1007 2587 84 21 96.491394 which5 1 3 1 2 8 1107 2593 15 15 95.849724 a5 1 3 1 2 9 1138 2587 98 21 96.260262 similar5 1 3 1 2 10 1252 2587 125 21 96.339134 violations 1 3 1 2 11 1394 2587 27 21 96.705154 of5 1 3 1 2 12 1436 2587 49 21 96.705154 laws 1 3 1 2 13 1501 2591 52 17 96.888481 was5 1 3 1 2 14 1571 2586 116 25 96.442261 charged,5 1 3 1 2 15 1705 2584 113 27 95.808243 pending4 1 3 1 3 0 495 2618 1319 27 -1 5 1 3 1 3 1 495 2623 29 19 95.662430 at5 1 3 1 3 2 541 2622 43 21 95.662430 thes 1 3 1 3 3 601 2622 61 21 96.036659 times 1 3 1 3 4 679 2622 28 20 96.036659 of5 1 3 1 3 5 722 2622 43 20 96.444580 thes 1 3 1 3 6 783 2621 141 21 96.257225 dismissals5 1 3 1 3 7 941 2621 28 20 96.583023 of5 1 3 1 3 8 985 2621 43 21 96.760231 thes 1 3 1 3 9 1045 2621 154 24 96.257126 complaints5 1 3 1 3 10 1213 2621 26 20 96.088188 in5 1 3 1 3 11 1255 2621 44 21 96.088188 thes 1 3 1 3 12 1315 2621 58 20 96.564407 four5 1 3 1 3 13 1389 2620 78 21 96.719933 above5 1 3 1 3 14 1483 2620 115 24 96.419418 matters,5 1 3 1 3 15 1615 2625 52 16 96.601456 was5 1 3 1 3 16 1683 2619 66 21 93.284325 later5 1 3 1 3 17 1765 2618 49 21 92.767876 dis-4 1 3 1 4 0 495 2652 1320 27 -1 5 1 3 1 4 1 495 2655 92 21 96.381416 missed5 1 3 1 4 2 606 2656 30 23 96.689064 by5 1 3 1 4 3 652 2655 45 21 96.595001 thes 1 3 1 4 4 713 2653 165 23 96.214264 Commissions 1 3 1 4 5 895 2659 31 15 96.610352 on5 1 3 1 4 6 943 2654 107 21 96.784027 October5 1 3 1 4 7 1067 2655 21 23 96.832443 6,5 1 3 1 4 8 1105 2654 71 25 95.425034 1958,5 1 3 1 4 9 1192 2654 132 25 96.707748 following5 1 3 1 4 10 1338 2659 104 20 96.476173 merger,5 1 3 1 4 11 1458 2653 110 25 96.821320 pending5 1 3 1 4 12 1583 2653 90 25 96.918060 appeals 1 3 1 4 13 1688 2653 66 21 96.581116 from5 1 3 1 4 14 1771 2652 44 20 96.694237 thea 1 3 1 5 0 495 2685 1321 28 -1 5 1 3 1 5 1 495 2689 86 20 96.198845 initials 1 3 1 5 2 598 2689 119 24 96.642815 decision,5 1 3 1 5 3 735 2688 43 21 96.642815 thes 1 3 1 5 4 796 2687 166 22 96.458305 Commissions 1 3 1 5 5 979 2688 61 21 96.159134 then5 1 3 1 5 6 1056 2689 96 24 96.771294 noting,5 1 3 1 5 7 1168 2689 124 24 96.404877 however,5 1 3 1 5 8 1309 2688 58 21 96.031303 that5 1 3 1 5 9 1383 2688 61 20 96.031303 such5 1 3 1 5 10 1460 2692 98 20 96.339836 mergers 1 3 1 5 11 1573 2687 82 25 96.216850 might5 1 3 1 5 12 1671 2687 29 20 96.930107 be5 1 3 1 5 13 1715 2685 101 25 96.578773 subject4 1 3 1 6 0 495 2720 1322 27 -1 5 1 3 1 6 1 495 2723 27 20 96.924644 to5 1 3 1 6 2 541 2722 117 24 96.110916 questions 1 3 1 6 3 676 2722 79 21 96.110916 under5 1 3 1 6 4 774 2722 98 21 96.684410 sections 1 3 1 6 5 890 2722 13 20 95.542137 75 1 3 1 6 6 922 2722 27 20 96.814842 of5 1 3 1 6 7 966 2722 44 21 96.057755 thes 1 3 1 6 8 1027 2722 108 25 96.957054 Clayton5 1 3 1 6 9 1153 2722 55 24 96.729820 Act,5 1 3 1 6 10 1228 2722 50 21 96.903008 ands 1 3 1 6 11 1295 2722 57 21 96.730721 that5 1 3 1 6 12 1369 2721 62 21 96.102631 such5 1 3 1 6 13 1449 2721 78 24 96.102631 phases 1 3 1 6 14 1544 2721 27 20 96.652565 of5 1 3 1 6 15 1588 2721 44 20 96.652565 thes 1 3 1 6 16 1648 2720 97 21 96.840561 matters 1 3 1 6 17 1760 2724 57 16 95.776535 was4 1 3 1 7 0 496 2755 285 25 -1 5 1 3 1 7 1 496 2755 63 21 96.614967 then5 1 3 1 7 2 571 2756 73 24 96.142914 beings 1 3 1 7 3 656 2755 125 25 96.245766 explored. The Commission was represented by Mr. Paul Rand Dixon in this group of cases in which hearings were held and respondents represented as follows, to wit:

In the case of Whitin Machine Works et al., before Mr. J. Earl Cow, hearing examiner, by Herrich, Smith, Donald, Farley & Ketchum, of Boston, Mass. :

In the case of Vick Chemical Co. et al., before Mr. Abner E. Lipscomb, hearing examiner, by Mr. Sherwood F. Silliman, of New York City, for Vick Chemical Co. and William R. Basset, and by Wr. H. W. Reynolds, of Jersey City, N. J., for Colgate-Palmolive-Peet Co. In the case of Nesco, Inc., et al., before Mr. Karl J. Kolb, hearing examiner, by Mayer, Meyer, Austrian & Platt, of Chicago, Il. In the case of Allis-Chalmers Manufacturing Co. et al., before Mr. Frank Hier, hearing examiner, by Lines, Spooner & Quarles, of Milwaukee, Wis., for Allis-Chalmers Manufacturing Co., by Wood, Warner, Tyrrell & Bruce, of Milwaukee, Wis., for Chain Belt Co., by Williams, Myers & Quiggle, of Washington, D. C., and Mr. Roger Sherman Hoar, of Milwaukee, Wis., for Bucyrus-Erie Co., Inc., and by Porter, McIntyre, Johnson & Cutler, of Milwaukee, Wis., for Edmund Fitzgerald.

Netute C. Carney, trading and doing business as Buinp Satzs Co., Washington, D. C., Docket 6058. Complaint, November 18, 1952. Order, June 30, 1953.

Charge: Using misleading trade name and misrepresenting businesg status or nature; in that respondent, engaged in the interstate offer, sale and distribution of rugs, brooms, mops, leather goods and various household articles, in competition with eleemosynary and charitable institutions, and others, engaged in the sale and distribution of similar goods in commerce, represented through the use of the trade name “Blind Sales Company”, and the statement “Giving work to the blind” on sales slips and similar statements made by her agents, that she was engaged in a charitable or eleemosynary enterprise for the benefit of the blind; that the profits derived from the sale of her products were used for the benefit of the blind; and that she gave work to the blind; when in fact none of the profits from such sales were thus used, she did not give work to the blind; and her business was a commercial enterprise operated solely for her profit. Dismissed, following appeals by respondent and by counsel supporting the complaint, from the initial decision, and upon briefs and oral arguments; it appearing that respondent bought her products from workshops employing the blind, that there was no contention that the products so sold were not actually made by blind persons, and that respondent’s gross profit on the business during the year 1952 DISMISSALS—BLIND SALES CO. 1585 was $1,300; and the Commission being of the opinion that the record as a whole did not establish sufficient public interest to warrant the issuance of an order to cease and desist, and that under the circumstances the complaint should be dismissed; thus making unnecessary more specific ruling on respondent’s exceptions. Before Mr. Webster Ballinger, hearing examiner. Mr. J. W. Brookfield, Jr., for the Commission. Mr. Carl L. Shipley, of Washington, D. C., for respondent. -