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ANNUAL REPORT
OF THE

FEDERAL

TRADE COMMISSION
FOR THE

FISCAL YEAR ENDED JUNE 30, 1918

WASHINGTON
GOVERNMENT PRINTING OFFICE
1918

FEDERAL TRADE COMMISSION.
WILLIAM B COLVER, Chairman.
JOHN FRANKLIN FORT.
VICTOR MURDOCK.

LEONIDAS L. BRACKEN, Secretary.

JOSEPH E. DAVIES,
Resigned March 18, 1918.
WILLIAM J. HARRIS,
Resigned May 31, 1918.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
WASHINGTON, D. C., November 15, 1918.
To the Senate and House of Representatives:
In compliance with statute the Federal Trade Commission herewith submits
to Congress its annual report for the fiscal year ending June 30, 1918.
On account of the war and the industrial conditions developed thereby the work
of the Federal Trade Commission was largely increased during the fiscal year. Not
only was the economic and legal work greatly extended along lines already
developed by the Commission but also certain entirely new duties were imposed
upon the Commission by recent legislation, namely, with respect to alien enemy
patents and to export associations (under the Webb Act).
ECONOMIC INVESTIGATION.
The increase in the work of economic investigation was chiefly the result of the
war necessity of regulating prices. In order that such regulation could be
intelligently done by the constituted authorities, information with regard to
production, costs, and investments was indispensable.
The President having regard to this fact and the statutory powers of this
Commission directed that where cost information was needed the various branches
of Government requiring such information should obtain it through this
Commission.
Another important cause for the increase in the economic work of the
Commission was the undertaking of an extensive food investigation which was
directed by the President and for which Congress made a special appropriation of
$250,000. The information obtained through this investigation also was made
available to other branches of the Government in connection with the special
regulation of industry made necessary by the war and the cooperation of the
Commission in this direction has been frequently sought and given.
PRODUCTION COSTS OF COMMODITIES.
Among the various branches of the Government to which reports have been
rendered on production costs of commodities or other economic and industrial
problems of immediate importance in the conduct of the war may be mentioned the
War Department, the Navy Department, the War Industries Board, the Fuel
Administration, the Food Administration, the Shipping Board and the Emergency
Fleet Corporation, the Railroad Administration, the Department of Agriculture, the
Department of Justice, the Post Office Department, and the Government Printing
Office.
The broadest possible contact has been established between the Commission
amid the various branches of the Government which are
3

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

concerned either with the immediate conduct of the war or with the mobilization
and conservation of the economic forces and resources of the country which insure
its effective prosecution.
Probably the most conspicuous feature of the work of the Commission during
the past year has been in the ascertainment of the costs of production of
commodities for the War and Navy Departments, the War Industries Board, and
various other branches of the Government mentioned above. A mere enumeration
of the products, the costs of which have been reported on, would be too tedious for
this report, but among the principal groups of products may be mentioned
particularly those of the following industries: Coal, iron and steel, petroleum,
nonferrous metals (such as copper, lead, and aluminum), brick, cement, and similar
building materials, lumber, textiles, paper, leather, cottonseed products, flour,
bread, meat, canned vegetables, and fruits.
Numerous reports on costs and related information on these various classes of
commodities have been submitted to the respective branches of the Government
which are concerned in making purchases for the Government and its allies or in
fixing maximum prices for their sale to the Government and the public (see p. 10).
The conduct of this work by the Commission was directed by the President not
merely on account of its statutory powers to make effective investigation and its
experience in such work, but also because by such concentration it was possible
to obtain greater uniformity of method and economy and convenience in execution.
It prevented a great wasted effort by duplication of work on the part of the Government, and for the same reason also greatly reduced the inconvenience to the
various industries affected by such investigations.
In obtaining such cost information the Commission found it necessary to enlarge
its staff and to reorganize it. The number of accountants employed was increased
about tenfold and amounted at the end of the year to nearly two hundred, including
all grades.
Much difficulty has been found in ascertaining costs in several industries
because of the deficient accounting methods in use, but the Commission has been
greatly aided on the other hand by the attitude of the business concerns visited or
from whom reports were required, which was generally cooperative and patriotic.
The cost principles recognized and applied by the Commission have received
almost universal assent, being based on the best accounting practice. Indeed the
Commission's aid in revising or installing cost systems has often been sought by
representative organizations in various industries, but the Commission has limited
its activities in this direction to such steps as were necessary in order to perform
its own immediate duties.
In conjunction with representatives of numerous other branches of the
Government service in Washington, efforts have been made to standardize
Government accounting methods particularly with relation to the cost accounting
problems raised by war activities and the purchase of commodities by the
Government.
FIXING PAPER PRICES.
A peculiar duty was imposed on the Commission as the result of an agreement
between the Attorney General and certain paper manufacturers who had been
prosecuted in the courts for violation of the

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

5

antitrust laws. By this agreement the Commission was made an arbitrator to
decide on a fair selling price for newsprint paper sold by the 10 manufacturers in
question. The Commission undertook this unsought duty and after extensive direct
investigation and full hearings of the testimony of experts and of the arguments of
counsel for the manufactures and the consumers of newsprint, the Commission
made decision as to prices.
Under the terms of the agreement a reopening of the case could be made under
certain conditions and the manufactures have filed requests for revision of the
decision (see p. 17). The matter was pending at the close of the fiscal year.
FOOD INVESTIGATION.
During the fiscal year under report, but before the United States entered the war,
the President directed the Commission to undertake a general food investigation
Congress made a special appropriation for the purpose. The investigation was
directed to be made in cooperation with the Department of Agriculture.
Four principal subdivisions were made of the Commission’s part of the
investigation, namely, the meat industry, the grain trade, the flour industry, and the
canning industry.
The flour and vegetable canning industry investigations were essentially costfinding operations.
While an extensive investigation has been made of the grain trade, including the
grain exchanges, the work has not been completed.
MEAT INVESTIGATION.
The meat industry was the most important part of this investigation and
presented complex problems. Members of the Commission gave this work their
personal attention and direction in an unusual degree, especially in matters that
indicated unfair competition, attempts to monopolize or other violations of the law.
In this aspect of the work they were assisted by Mr. Francis J. Heney, as special
counsel.
In spite of all difficulties encountered, the Commission found evidence that
unlawful combination and conspiracy were practiced by the five largest meat
packers, and that collectively they held a dominating or monopolistic power in the
meat business.
Furthermore, it was made evident that the meat packers were using their
enormous power and wealth to extend their control into many branches of the food
business wholly unrelated to the business of meat and its by-products.
A summary of the report of the meat investigation was issued just after the close
of the fiscal year and the recommendations made therein are given below (see p.
25).
WORK DISCONTINUED.
Certain other economic investigations or parts of investigations which had been
projected or initiated, were dropped or discontinued after the outbreak of the war,
because of the diversion of the Commission’s activities to pressing war work. The

delay was

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

not serious, however, because the industrial and commercial conditions were too
abnormal to make such investigations profitable.
Among such parts of investigations may be mentioned certain fundamental
problems of the coal industry, apart from the war work as to cost of production
which could only be satisfactorily studied under more normal conditions.
A general investigation of trade associations, an extension of cost educational
work previously undertaken and the development of more comprehensive
corporation and industry reports were set aside or not undertaken because the
Commission’s resources and strength were fully absorbed in more immediate
tasks.
UNFAIR METHODS OF COMPETITION.
The work of the Commission in enforcing the law against unfair methods of
competition has grown as the country has become more familiar with the duties
laid upon the Commission by its organic act. Business men have invoked the
Commission's process and applications for complaints, alleging unfair practices
were filed during the fiscal year ended June 30,1918, resulting in the issuance of
154 complaints in the public interest as against the issuance of 9 formal complaints
the preceding fiscal year. To these 154 complaints should be added 10 cases
which were pending at the beginning of the fiscal year, a total of 164. Of these
complaints, 78 were disposed of during the fiscal year; 71 resulted in orders to
cease and desist from the unfair methods of competition complained of; 68 being
the result of consent decrees; 7 were dismissed after further investigation or
hearing as provided by law; in 3 cases orders to cease and desist were issued
without the consent of the respondents; and 86 were still pending on June 30,
1918.
The law requires the Commission to issue formal complaint in all cases if it has
“reason to believe” that the party complained against “has been or is using any
unfair method of competition in commerce, and if it shall appear to the
Commission that a proceeding by it in respect thereof would be to the interest of
the public.” The law provides further that a hearing shall be had after the
complaint has been issued and not before. The work of the Commission under this
provision of the law, together with its enforcement of other provisions of law
vested in it, in early suppressing practices, often minor, which, if unrestrained,
later grow into major restraints of trade and into monopoly, is actually and
potentially resulting in more freedom of trade and in a definite arrest of
monopolistic concentration of control in industry and commerce.
While it is difficult among the great variety of cases to single out any particular
group as the most important, nevertheless the Commission calls especial attention
to two kinds of unfair methods of competition, namely, commercial bribery and
resale price maintenance.
COMMERCIAL BRIBERY.
A wide-spread and insidious unfair method of competition is commercial bribery
which takes various forms, but chiefly the secret payment of money or the giving
of things of value to employees of competitor’s customers or prospective
customers to cause them to in-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

7

fluence their employers in buying goods, or the lavish entertainment of such
employees or the loaning of money to them for the same purpose.
Such practices have frequently been made the subject of penal legislation, both
in this country and in foreign countries but there are no such penal Federal laws.
The Commission is empowered to meet such practices only with an order to cease
and desist. Punishment for the violation of such orders rests with the courts.
This duty has been discharged by the Commission in the case of commercial
bribery in numerous instances and with beneficial results. In one industry, for
example, the action of the Commission resulted in extensive cooperation with the
part of many concerns engaged therein to extirpate this practice in which they
themselves had participated but in which they claimed they had been practically
compelled to engage by reason of the practices of unscrupulous competitors.
RESALE PRICE MAINTENANCE.
Another unfair method of competition of great interest at this time is that known
as resale price maintenance, that is, acts relating to attempts by the seller to control
the price at which the buyer resells the same goods, either by contract,
understanding, or refusal to sell to parties who do not maintain the resale prices
insisted upon.
In the Cudahy case the Commission found that resale price maintenance was
unfair to competing manufacturers not maintaining prices, to competing dealers
not maintaining prices and to the public generally. Such attempts have been held
by the Supreme Court of the United States to be in violation of the antitrust laws.
The Federal Trade Commission regards a method of competition violative of the
law as being, per se, an unfair method of competition.
This does not preclude the Commission from holding certain forms of price
cutting as unfair methods of competition, especially where such price cutting has
as its aim, either a malicious injury to others, or an attempt to monopolize any
branch of trade.
Normal competition in prices, whether in cases of resale or otherwise, is, in
general, a healthy condition of trade and in the dealings in many commodities,
even marked reductions in prices are proper where it is necessary to dispose of
stocks, as for instance, by reason of seasonal conditions of the trade. In connection
with these cases, special reference is made to the findings of fact and the order in
the case of the Commission v. Cudahy Packing Co. (Exhibit 8.)
ALIEN ENEMY PATENTS.
Under the trading with the enemy act approved October 6, 1917 the Commission
was designated by the President to perform certain duties prescribed in the said
law. Among other things, the Commission was thus authorized to license citizens
of the United States and corporations organized under the laws of this country to
make and sell articles controlled by an enemy or ally of an enemy patent,
copyright, or trade-mark, and further to order that an invention made in this
country should be kept secret and grant of

8

ANNUAL REPORT OF THE FEDERAL TRADE Commission.

patent withheld until the end of the war, where publication of the invention might
be detrimental to the safety of the country.
The Commission has performed these duties in active cooperation with other
branches of the Government and especially the War Trade Board, the Military
Intelligence Division of the General Staff of the Army, the Naval Intelligence
Section of the Navy, the Alien Property Custodian, and the Commissioner of
Patents.
In connection with this work a great deal of information was obtained regarding
enemy control of domestic corporations, and various investigations were also made
with respect thereto. Reports were required from 628 corporations, and reports
were received from 1,736 stockholders therein. This information which disclosed
the fact that many corporations were secretly controlled by alien enemies was
placed at the disposal of the Alien Property Custodian.
As a result of the work of the Commission with regard to enemy patents many
valuable commodities were made available to the people and to the military forces
of this country. A striking example is found in the case of the medicament known
as “Salvarsan” or “606.” This important medicament was licensed for
manufacture in adequate quantities in this country and with resulting prices much
below those previously prevailing. In the industrial field another important
illustration of the results of this work is found in the licensing of manufacturers to
produce aniline or coal-tar dyes under numerous enemy patents.
Certain defects in the present laws relating to these matters have been suggested
by the Commission and have been embodied in a bill now before Congress.
(Senate No.3523.)
EXPORT ASSOCIATIONS.
Comparatively few associations filed such reports during time fiscal year ended
June 30, 1918, the total number being 48. Of these only a few apparently are
associations of much importance from the point of view of the magnitude of the
business involved. It is probable that the war, with the enormous demand for goods
of all kinds and the difficulty of getting cargo space, has made the formation and
operation of such associations at this time either superfluous or impracticable.
In conducting this work the Commission has cooperate especially with the
Bureau of Foreign and Domestic Commerce of the Department of Commerce.
There are important legal questions which may arise in the interpretation of this
law, the judicial decision of which will greatly affect its operation, both with
regard to the efficacy of such associations in achieving the purposes apparently
intended by Congress, and with respect to the ultimate effect of such associations
on conditions of domestic competition. There are also important questions of
international policy involved.
Some criticism of this law has been made in South American countries,
particularly in the Argentine Republic, both as to questions of international comity
and as to the justice of making one rule regarding combinations in restraint of
foreign trade and another rule for combinations in domestic trade.
Attention will be given to the fact that, while the law’s benefits are strictly
limited to corporations or associations solely engaged in

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

9

export trade, a great majority of concerns incorporated to operate under the law
have asked for charter powers for a great many other activities some extremely
removed from any relation to foreign trade.
THE COMMISSION.
By reason of the resignation of William J. Harris, chairman, on May 31, 1918,
and of Joseph E. Davies, on March 18, 1918, two vacancies were created in the
Commission which were not filled during the fiscal year. William B. Colver
succeeded to Mr. Harris as chairman of the Commission. John Franklin Fort,
whose first commission expired on September 26, 1917, was renominated by the
President, and his appointment was duly confirmed by the Senate. Victor Murdock
was nominated by the President and confirmed by the Senate as commissioner to
fill the vacancy created by the death of Will H. Parry, who died in the preceding
fiscal year.
The personnel of the Commission was increased during the fiscal year from 193
on July 1, 1917, to 689 on June 30, 1918. Many resignations occurred on account
of the entry into military service, the total number during the fiscal year amounting
to 49. In order to expedite the greatly increased work of the Commission and to
take general care of new functions imposed by law on the Commission, a
reorganization of the staff was effected, and small branch offices were established
in New York, Chicago, and San Francisco.
The Commission desires to give public commendation to its staff for the
diligence shown in the performance of its duties. The pressing nature of much of
the Commission’s work, notably that of cost determination, has been required by
the war-making and emergency agencies of the Government at unavoidably short
notice. The staff of the Commission has patiently and cheerfully responded to
demands for night work, holiday work and a vast majority have voluntarily
surrendered all or a greater part of their annual leaves.
ECONOMIC DIVISION.
On account of the industrial problems developed by time war the work of the
Economic Division during the fiscal year ended June 30, 1918, was of increased
importance.
This was due primarily to the determination of the costs of production of a great
variety of commodities and also in part to the investigation of the chief food
industries of the country, directed by the President and authorized by Congress.
In the ascertainment of costs of production, the Commission responded to calls
for essential information, not only on costs, but also on investment, profits, and
various other economic factors in the industries examined.
Investigations and reports have been requested by the President, the Senate, and
various executive departments and offices, including the War Department, the
Navy Department, the War Industries Board, the Fuel Administration, the Food
Administration, the Shipping Board and Emergency Fleet Corporation, the
Railroad Administration, the Post Office Department, and the Government Printing
Office. Moreover, a Federal court imposed upon the Commission the duty of
determining the costs of production of news-print paper for certain companies and
fixing their selling prices.

10

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

The extensive cost-finding work made necessary a sudden and large increase in
the accounting personnel of the Commission, for which only a nucleus existed at
the beginning of the fiscal year. While an exact classification and comparison is
impossible, it may be said that the accounting, as distinguished from the clerical
force, was increased tenfold during the year.
A relatively brief statement is given below regarding the origin, character, and
scope of these tasks. A list of the more important reports made to other branches
of the Government is given on page 29. In most cases these reports are not
published and are for the confidential use of Government agencies.
COST DETERMINATIONS.
The cost determinations described below were required by various governmental
authorities as specifically indicated. Most of them re now being conducted for the
War Industries Board and in that case are so stated, whether they were originally
requested by the War Industries Board or by the National Council of Defense, to
whose duties in this connection the War Industries Board succeeded.
In some cases an inquiry has been begun in one connection and subsequently
continued in another. Thus, the leather investigation was originally initiated by the
Commission, but later the main part of the work on leather was done for the War
Industries Board. The work on flour, originally a part of the food investigation,
became a form of cooperative work with the Food Administration. So also the
meat investigation has involved in certain matters a considerable degree of
cooperation with the current administrative work of the Food Administration.
In many cases the cost determination originated in requests for the costs of
particular companies for a specific period, but for most of the important industries
the cost work has gradually assumed the character of continuous work with
periodic reports.
A list of the chief cost findings follows. Some of the larger ones embrace a
number of important subdivisions:
Coal, including anthracite and bituminous.
Petroleum, including crude oil and refined products.
Nonferrous metals including copper, lead, zinc nickel, and aluminum.
Mineral building materials, including sand and gravel, cement, fire brick hollow building tile, and
common brick.
Lumber, including ship timbers, aircraft timber, other specialties, and ordinary lumber.
Steel, including iron ore, coke, pig iron, crude steel, rolled steel, and other steel products.
Farm operating equipment, including various kinds of farm machinery.
Textiles, including cotton goods and trading in woolens.
Paper, including newsprint, book, chip board, and Government stationery.
Leather and shoes, including sole, upper, and harness leather and various kinds of shoes.
Cotton seed, including ginning and crushing.
Lard substitutes.
Military food supplies, including canned and dried rood.
Chestnut tanning extract,
Boxes and containers.
Bread.
Sisal binder twine.
Locomotives.
Sulphur.

Sulphuric acid.
Shipbuilding.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

11

COAL.
Investigation by the Commission into the coal industry was began during the
preceding fiscal year. During the fiscal year ending June 30, 1918, various
important developments in the work have taken place.
Anthracite.--In the last annual report a description was given of the measures
taken by the Commission to control the anthracite price situation. This was a
system of quasi-regulation, carried on through cooperation with the mine
operators and the distributors. It was effected through the exercise of the
Commission’s legal powers in requiring reports to be filed with it at stated
intervals, setting forth certain details of their transactions.
This cooperation was so effective that up to August 23rd, when anthracite prices
were fixed by Executive order, less than one-fourth of l per cent of the anthracite
output was sold at prices in excess of those indicated or suggested by the
Commission.
Shortly after the passage of the Lever Act in August, 1917, the Commission was
called upon by the President to furnish information to be used by him in the first
fixing of anthracite coal prices under the said act on August 23, 1917.
At its request the Fuel Administration has been furnished from time to time with
cost data and other information bearing on anthracite production. The cost
information has been collected through a system of cost reports made by the
operators to the Commission. The reports are on detailed forms prescribed and
furnished by the Commission. The Commission has records showing the costs in
detail, from January, 1917, through June, 1918, of 146 companies which produce
all of the anthracite tonnage in Pennsylvania.
Bituminous coal.--In the last annual report of the Commission mention was
made of several special inquiries then underway into the cost of production of
bituminous coal. Agents of the Commission examined the books of the mine
operators. During the early part of the past fiscal year this field work was
extended to cover producers in Illinois, Wisconsin, Kentucky, Montana, and
Michigan. The Commission secured directly from the books of the companies cost
information concerning 280 companies which produce about 85,000,000 tons
annually.
While this work was in progress, the Commission was called upon by the
President to furnish information to be used as a basis for the fixing of bituminous
coal prices under the Lever Act. Several conferences were held between the
President and the Commission. A table of prices was promulgated by Executive
order August 21, 1918. These prices were made provisional only, with a view to
subsequent revision. After its organization, the Fuel Administration made, from
time to time, certain revisions. These revisions were generally to take care of
exceptional local conditions, and the tonnage involved was relatively small. The
prices fixed on August 21 by Executive order remained substantially unchanged
1 (except for the addition of 45 cents based on a wage increase Nov. 1, 1917) until
early in April, 1918, when a general revision of prices of
1 Dr. Garfield testified on Dec. 26 before the Senate Committee on
Manufactures that up to that time there had been 40 revisions in bituminous coal
prices and that only 3 ½ per cent of the total value of the tonnage had been

affected by such changes. (Shortage of Coal Hearings, S. Rept. 163, p. 60)

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

bituminous coal was put into effect by the Fuel Administration. This general
revision was based on cost information collected by the Federal Trade
Commission from mine operators, through a system of monthly coal reports
similar to that used for determining anthracite cost of production This revision
was made necessary by radically changed conditions of production not existing
prior to August 21, 1917.
The principal producing districts of Pennsylvania, West Virginia, Ohio, Indiana,
Illinois, Kentucky and 11 other States are represented. The Commission has
reports from about 3,200 companies (inclusive of the foregoing) showing their
claimed costs by months continuously from August, 1917, through May, 1918.
The tonnage covered by such reports comprises over 530,000,000 tons of annual
production, or about 95 per cent of the total annual bituminous coal production,
and include all bituminous coal producing districts.
Coal docks.--Agents of the Commission, at the request of the Fuel
Administration, also secured from the books of 23 Great Lake dock companies
cost information on the basis of which dock charges were revised by the Fuel
Administration.
Trade regulation.--In the last annual report mention was made of the system of
reports through which the Commission’s quasi-regulation of anthracite prices was
made effective. At the request of the Fuel Administration this work of collecting
information necessary for the regulation of distribution was not only continued but
was enlarged to include the collection of similar information covering the jobbing
and retailing of bituminous coal. Some time after the organization of the system
of State Fuel Administrators, the part of the work relating to retail distribution was
placed in their hands.
Transfer of activities to Fuel Administration.--At the request of the Fuel
Administration Commission agents were assigned to the various State Fuel
Administrators, under whose direction they investigated alleged violations of the
Fuel Administration’s regulations, and cooperated in every way.
It was desirable that all enforcement of regulation should be under the direct
control of the Fund Administration, and this was made possible by the Overman
Act, under which, by Executive order, that part of the Commission’s force engaged
in enforcement work was transferred to the Fuel Administration.
The work of collecting cost information both for anthracite and bituminous coal
continues under the Federal Trade Commission, and the work of the Commission
in aid of the Fuel Administration has constantly grown in volume and importance.
A further account of the work of the Federal Trade Commission concerning coal
may be found in testimony before the Senate Committee on Manufactures.1
PETROLEUM.
The petroleum investigation previously undertaken by the Commission was
practically suspended on account of work made necessary by the war.
1 Coal hearings, Senate R. 163, 65th Cong., pp. 82-164, 283, 288, 822-861,
881-901, 907-938, 940-948.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

13

Refined products.--The Navy Department, being unable to secure satisfactory
bids for supplying fuel oil for the fiscal year 1917-18, required from the Federal
Trade Commission information of the cost of producing fuel oil and gasoline, as
a basis for determining reasonable prices.
This work was first carried on by agents in the field, being supplemented later
by both schedules and field work. Costs were obtained from 162 refiners whose
production comprised about 85 per cent of the total for the entire country As
obtaining the cost of refined products on a strict cost accounting basis would not
be useful for fixing prices, because some of the most valuable products normally
cost the least to produce, the Commission followed the method of allocating the
total cost of refining to the different products on the basis of the yield and value
of each at the refinery. Costs were determined in this manner for June, August,
September, October, and December, 1917, and the first quarter of 1918.
From time to time the results of the Commission’s cost determination have been
furnished to the Navy Department and to the War Industries Board.
Crude petroleum.--This work has been conducted with a view to securing
complete data on the cost of producing crude petroleum in the different oil fields
during 1917, and in this connection all the principal producing companies have
been canvassed. The work was performed by the Commission’s agents, who
visited the producing companies and in most instances secured the data directly.
Costs were secured from 58 companies having about 60 per cent of the total
production. Owing to the agitation incident to the advance in the price of crude
at the wells during the fiscal year, special effort was made to secure precise data
concerning the prices of all principal oil-field materials and supplies from leading
manufacturers.
NONFERROUS METALS.
The Commission’s cost finding of nonferrous metals was originally undertaken
partly at the request of the Navy and partly at the request of the War Industries
Board, but subsequently all the work was consolidated and reports made to the
War Industries Board. The metals covered were copper, lead, zinc, nickel, and
monel metal and aluminum. In each case the cost of producing the metal was
determined, together with the cost of the main semi-finished products
manufactured from the metal, and this information was supplemented by the
ascertainment of investment and average price realized.
The War Industries Board in making agreements with the producers of the
several metals concerning the maximum prices at which they would sell either to
the Government or the public, proceeded upon the basis of the Commission’s cost
and investment figures. The facts were generally obtained by direct audit of the
companies’ books, such audits being supplemented by cost schedules to be filled
in and certified by the companies.
Copper.--The Commission is now covering 101 copper companies producing
over 2,000,000,000 pounds of refined copper, or approximately 88 per cent of the
total refinery output of the United

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

States. The costs cover mining, smelting, and refining. A report was also made
concerning the differential to be allowed for the casting of copper in different
shapes.
Lead.--But one report was made concerning lead costs, as the conditions in the
industry did not require price fixing. This report covered 18 companies producing
approximately 75 per cent of the total lead output of the United States.
Zinc.--Several reports concerning the cost of zinc were made to the War
Industries Board, covering not only zinc smelter, but also high-grade zinc, and zinc
plates and sheets. On the basis of the cost and investment figures contained in
these reports, the War Industries Board entered into a price fixing agreement with
the industry covering all these different commodities. The Commission, at the
request of zinc ore mine owners, made an examination of the cost of producing
zinc, especially in the Joplin, Mo., district. Nickel.--One company produces over
90 per cent of the nickel and all of the monel metal in the United States. The
Commission re-ported to the War Industries Board on the costs of this company
from time to time.
Aluminum.--This metal is practically all produced by one company, the
Aluminum Co. of America, which is also the largest producer of the semifinished
material. Its operations extend from the mining of bauxite to the manufacture of
finished wares and costs were ascertained and reported for the various stages of
production.
Adjustments between miners and smelters.--On account of numerous complaints
received from western mine owners, and particularly those received from small
copper miners in Arizona, the Commission inquired into the relation between
miners and smelting companies. The Commission by conference with
representatives of the largest copper smelting companies secured revisions in aid
of the complaining producers. A like situation as to the smelting of silver was
similarly solved. These matters involved the confusing mass of penalties, bonuses,
deductions and treatment charges, and substituting therefor, in so far as
practicable, a straight treatment charge made with due regard to cost.
MINERAL BUILDING MATERIALS.
Cost determinations were requested by the War Industries Board with regard
to various mineral building materials, especially sand and gravel, cement, and
various forms of brick and tile.
Sand and gravel.--The marketing of sand and gravel is essentially a local
question, and cost findings were made in several centers, such as Washington,
Baltimore, and New York, by special audit.
Towing.--In this connection also the question of towing charges is often of
great importance, so that the Commission has sometimes had to determine the cost
of these operations.
Cement.--The costs of cement production have been found in all the principal
districts from the Atlantic to the Pacific coast, involving 97 companies and about
95 per cent of the total output, and reported to the War Industries Board.
Fire brick.--Information on the cost of fire brick, an important material used
in furnace construction, was requested by the War Industries Board with a view
of fixing maximum prices costs were obtained for about 80 per cent of the total
production.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

15

Hollow building tile --The costs of hollow building tile were found for the use
of the War Department and later for the War Industries Board in fixing prices.
About 90 per cent of the total output was covered.
Common brick.--Just at the close of the fiscal year the War Industries Board
requested information on the costs of common brick.
LUMBER.
The first investigation into lumber costs was made at the direction of the
President with a view especially to material for shipbuilding, and at the request of
the Shipping Board.
Ship timbers.--This investigation covered chiefly yellow-pine ship timbers in the
South and fir on the Pacific coast.
Lumber.--At the request of the War Industries Board, for price-fixing purposes,
various investigations were made into the cost of lumber. The costs were generally
obtained for each month together with data as to the investment. Thus yellow-pine
costs were ascertained in 10 Southern States covering about 136 mills with an
annual output of about three one-half million feet. Fir, spruce, and hemlock costs
for loggers were obtained on the Pacific coast for about 40 companies having an
annual output of about one one-half billion feet. Hemlock costs were secured from
Pennsylvania mills with an annual output of about 200,000,000 feet. Spruce costs
in New England were obtained from about 25 companies with an output of
250,000,000 feet. Retail yards.--A special investigation was also made of the
costs of handling lumber in retail yards in or near New York City, Boston,
Philadelphia, Newark, and Baltimore. About 60 companies were examined,
handling some 600,000,000 feet per annum.
STEEL.
The steel involved the costs of production of iron ore, coke, pig iron, crude steel,
rolled steel products, and certain other more highly manufactured products. There
are more than 100 subdivisions of products included in the classification.
The work was initiated at the direction of the President in the preceding fiscal
year, attention being directed at first to steel used for shipbuilding, namely, plates
and shapes. This involved the determination of the costs of the raw materials and
semifinished products. Later the number of products was increased.
The work at first was conducted by direct audit of the books of the chief steel
manufacturers by the accountants of the Commission.
During the month of August, 1917, examiners were sent to Cleveland to find the
cost of iron ore. On August 10 the Commission sent out a request for coke cost
reports for 1916 and 1917. These, together with iron ore and various important
steel products, were compiled and the first report was presented to the War
Industries Board on September 8, 1917, covering ore, coke, pig iron, crude steel,
and certain steel products for the year 1916, and either May or June, 1917. The
month shown for 1917 was the latest for which data could be obtained.

16

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

On November 20 the Commission sent out a request to approximately 400 iron,
steel, and coke companies directing them to send in monthly copies of their cost
sheets for all commodities produced, beginning with the month of October. These
data for the month of October were compiled and reports submitted to the War
Industries Board on December 21, covering ore, coke, pig iron, crude steel, and
numerous steel products.
The compilation of monthly costs has been continued and further general reports
were rendered to the War Industries Board on March 18, 1918, and June 18, 1918.
The costs of production were thus determined for a very large proportion of all
the principal products, often in excess of 90 per cent of the total output. Inquiry
has been made furthermore into time prices actually received for different
products, because within each commodity group for which average costs only are
generally ascertainable there are numerous different grades, sizes or specifications,
and corresponding differentiation of prices. It sometimes happens that while the
average cost is below the base price the actual prices received (which include
extras on account of the particular specifications of material) average more than
the costs, and sometimes much more.
Special investigation.--In addition to the monthly cost referred to above the
Commission has undertaken the investigation of the costs of special products of
particular companies for various branches of the Government. Among these may
be mentioned the following:
Shell steel, for the War Industries Board.
Shell steel, for the Navy Department.
Forging, for the Navy Department.
Wire rope, for time Navy Department.
Special alloy steel, for the Navy Department.
A number of other special audits of individual companies have been made for
use in compiling the quarterly report to the War Industries Board. At the end of the
fiscal year the following special inquiries were in progress:
Cast-steel slugs.
Agricultural steel.
High-speed tool steel.
Lake iron ore.
The steel investigation is one of special difficulty on account of the large
number of products and the complex organization of the industry. On the other
hand, the fact that the leading steel companies have very generally adopted
approved cost-accounting methods has facilitated the performance of the work
FARM OPERATING EQUIPMENT.
Just at the close of the fiscal year by a resolution of the Senate (Senate
resolution No. 223, 1918) the Commission was directed to investigate the causes
of the high prices of farm machinery, whether such prices prevented the farmers
from making a fair profit, and whether the manufacturers were resorting to any
unfair methods of competition. This work is in progress and includes (a)
schedules upon which prices paid by farmers should be entered; (b) schedules
upon which

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

17
retail dealers should report the prices paid and received and their expenses of
doing business; and (c) questionnaires and forms for manufacturers to ascertain
their costs of production and selling expenses for particular machines and their
investments and profits in the farm machinery business as a whole.
TEXTILES.
In accordance with requests from War Industries Board certain investigations
have been made with regard to textiles.
Cotton gauze.--The first matter related to the cost of production of cotton gauze
cloth for which an order had been placed with the mills of a certain locality. These
mills were not willing to undertake the manufacture at the prices suggested by the
Government. After preliminary examination certain suggestions were made
regarding the distribution of the order which resulted in an adjustment of the price
question, and with evident saving in the expense of production. Subsequently, a
special arrangement was made with gauze cloth mills in another locality by which
the prices were made contingent on the costs of production. In this case the
Commission prepared a form of cost report to be made by the mills working on
this order.
Cotton duck.--An examination was also made of the costs of cotton duck or
canvas at a number of typical mills in different sections of the country. The
information was obtained partly from cost statements submitted by the companies
and partly by a direct audit of the books of certain companies. A report thereon
was submitted to the War Industries Board in April.
Cotton textiles in general.--It was found, however, that the cost-keeping methods
of a considerable proportion of cotton mills was so deficient that could not readily
supply the desired information, especially regarding fabrics of particular
constructions or specifications. Inasmuch as the War Industries Board found such
information indispensable, the Commission proceeded to organize a system of
cost reports for cotton textiles in general with instructions as to the manner in
which they should be prepared.
Woolen piece goods.--Owing to evidence of injurious speculation in and
hoarding of woolen piece goods, especially by concerns which previously had not
been engaged in that trade, the War Industries Board requested the Commission
to investigate the transactions of a large number of such dealers. The initiation of
this investigation reduced the speculative hoarding of woolen piece goods.
PAPER.
Trade reports.--During the last half of 1917 the Commission undertook the
collection and compilation of statistics for the newsprint and book-paper
industries, partly in order to supply certain trade information formerly furnished
by a trade association which had been dissolved by judicial decree. In 1918 this
service was extended to cover all paper and pulp mills in the United States.
Summaries of the statistics are issued monthly for the information of various
branches of the Government as well as for manufactures distributors, and
consumers.

18

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Price fixing.--In December, 1917, the matter of fixing the price of newsprint
paper for 10 companies in the United States and Canada was referred to the
Commission by the Department of Justice. These companies, in settlement of a
suit against them for alleged violation of the Sherman Law, entered into an
agreement with the Attorney General dated November 26, 1917, which provided
that the Federal Trade Commission should fix the price and terms of sale of their
output of newsprint paper sold to publishers in the United States beginning April
1, 1918, for the duration of the war and three months thereafter. In the case of one
company and its subsidiary the price was to be fixed as of January 1, 1918. The
Commission, after making a through investigation of the costs of these companies
and holding extensive hearings, on June 18, 1918, announced the following prices
effective as of April 1, 1918:
Roll news in car lots, $3.10 per 100 pounds, f. o. b mill.
Roll news in less than car lots, $3.225 per 100 pounds. f. o. b. mill.
Sheet news in car lots, $3.50 per. 100 pounds, f. o. b. mill.
Sheet news in less than car lots, $3.625 per 100 pounds, f. o. b. mill.
The agreement which these 10 manufacturers made with the Attorney General
provided that they might appeal the findings of the Commission to the Circuit
Court for the Second District of New York for review. This they did. The
agreement also provided that either the manufacturers or the publishers might ask
the Commission for a readjustment of the price if conditions warranted. The
manufactures availed themselves of this privilege and asked for a readjustment of
the price as of May 1, June 1, and July 1, 1918, on account of the increase in
wages granted by the National War Labor Board effective May 1, the increase in
freight rates ordered by the United States Railroad Administration effective June
26, and claimed increase in wood costs. Evidence has been taken regarding these
increases but the Commission’s decisions had not been rendered at the close of the
fiscal year June 30, 1918. It should be noted that in this case the Commission
acted as the arbitrator named in the agreement and not unclear any of the powers
conferred upon it by law. The Commission has no price-fixing powers and,
therefore, its finding ran only to the parties to the agreement.
Special paper inquiries.--During the first half of 1918 the Commission
undertook a number of special paper investigations for various branches of the
Government. These included:
1. General survey of paper industry for the Fuel Administration.
2. Investigations of the changes in prices and costs of certain manufacturers
under contract with the Government Printing Office.
3. Investigations of the changes in costs of various manufactures of envelopes
and other supplies furnished the Post Office Department under contract.
4.Investigation of the costs of chip-board containers for the War Department.
5.Various inquiries for the pulp and paper section of the War Industries Board.
LEATHER AND SHOES.
General investigation.--The investigation of the meat industry, directed by the
President (see p.22), led to a general inquiry into conditions in the hide market, in
the production of leather, and in the manufacture and sale of shoes. The
Commission made an extensive inquiry into the manner in which hides are bought
and

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 19
sold, the cost of producing leather, the cost of manufacturing shoes, and condition
in the distribution of shoes, both wholesale and retail.
Conditions in the hide business, especially in the purchase and sale of the socalled country hides, have been investigated in practically all parts of the country.
Representative shoe dealers, both wholesale and retail, have been interviewed in
many of the principal cities of the United States, and data relative to the conditions
in their business, particularly with reference to profits they have made in recent
years, have been secured from their books. In addition to this, the accountants of
the Commission have obtained from the books of a representative number of shoe
manufactures the cost of manufacturing and selling shoes, particularly staple
styles, and also considerable data showing the profits in the shoe-manufacturing
business during the past four or five years.
Specific leather costs.--In the latter part of the fiscal year under consideration the
War Industries Board requested time Commission to ascertain the cost of
producing leather. This work involved the covering of 11 classes of groups. The
War Industries Board selected what it considered representative tanneries in each
group. By the end of the year the field work on the harness-leather and sole-leather
groups was completed and the results of the investigation of the harness-leather
group were reported to the price-fixing committee of the War Industries Board.
The tanneries covered for harness leather had an average monthly production of
about 1,500,000 pounds, and the tanneries covered in the sole-leather group
represented a monthly production of nearly 17,000,000 pounds. In addition to
covering these two groups, considerable progress was made in the three principle
upper-leather groups.
COTTON SEED AND LARD SUBSTITUTES.
In February, 1918, the Food Administration requested the Commission too
ascertain the cost of ginning cotton, the cost of crushing cotton seed and the cost
of producing lard substitutes.
Ginning and crushing cotton seed.--The cost of ginning cotton was ascertained
for 262 mills ginning about 360,000 bales of cotton. The cost of crushing cotton
seed was determined for 148 mills crushing 1,230,000 tons of cotton seed.
Lard Substitutes.--This work covered time cost of converting vegetable oils
mainly cotton seed oil, into lard substitutes. The books of 14 representative
factories having a production of about 260,000,000 pounds of product were
examined.
MILITARY FOOD SUPPLIES.
Since this country entered the war the demands for certain food commodities by
the Army and Navy, neutrals, allies, and civilian populations have been greater
than time supply of such commodities. In certain commodities purchases were
made by allocation among sellers at fixed “fair and just” prices.
The President directed departments of the Government that, when in need of
assistance in the determination of costs, they should call upon the Federal Trade
Commission for aid. Consequently when-

20

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

ever the bid and contract plan is abandoned, and the allocation plan adopted in
obtaining food products, the Commission is called upon to ascertain costs by the
Quartermaster’s Department, Subsistence Division, United States Army; the
Bureau of Supplies and Accounts, Navy Department; Quartermaster’s Department,
United States Marine Corps; and the Division of Coordination of Purchase, United
States Food Administration (which handles allotments for the allies). After cost
investigations have been made, the cost findings of the Commission are used by
the Food Purchase Board, made up of representatives from the Army, Navy, Food
Administration, and the Commission, as a basis for recommending for approval
"fair and just” prices to the Secretary of War and the Secretary of the Navy.
Among the commodities for which costs have been determined are canned foods,
including tomatoes, peas, corn, beans, cabbage, pork and beans, salmon, apples,
peaches, apricots, cherries, pineapples, and catsup; dried fruits and vegetables,
including prunes, peaches, apricots and raisins, and beans.
CHESTNUT TANNING EXTRACT.
At the request of the War Industries Board the cost of chestnut tanning extract
was determined. An examination of the books and records of six companies was
made.
BREAD.
The Food Administration requested the Federal Trade Commission to make an
investigation into the cost of baking wheat bread in the United States.
The Commission obtained the costs from 209 companies in various parts of the
United States.
The Commission submitted its report to the Food Administration and this was
published by the Baking Division, United States Food Administration in
November, 1917. The retail price of a 16-ounce loaf of wheat bread was reduced
in many sections, and the Food Administration regulated prices charged for wheat
bread throughout the country.
BOXES AND BOX SHOOKS.
At the request of the Food Administration and of the Quartermaster General, the
Federal Trade Commission, in February, 1918, undertook an investigation of the
cost of producing wooden box shooks and boxes, and fiber boxes. In March, 1918,
reports were made covering the costs of production of wooden box shooks and
various types of wooden and fiber boxes as produced by 11 companies
manufacturing wooden boxes, and 10 companies manufacturing fiber boxes,
together with the investments of these companies.
SHIPBUILDING ACCOUNTING.
The Commission has investigated the accounting methods of six shipbuilding
companies for the Compensation Board of the Navy Department and rendered
reports thereon.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

21

As a result of these investigations, certain errors in cost accounting principles
were corrected with a consequent saving of money to the Navy Department.
SISAL BINDER TWINE.
On December 21, 1917 , the United States Food Administration requested the
Commission to ascertain the cost of converting sisal hemp into sisal binder twine.
An examination was made with reference to the matter at seven manufacturing
plants. Inasmuch as the State prisons are also large producers of sisal binder
twine, the conversion costs of the Minnesota State Prison and the Michigan State
Prison were also found. The Food Administration fixed binder twine prices on the
basis of the raw material prices and the costs of conversion.
LOCOMOTIVES.
At the request of the Director General of Military Railways, the Commission
investigated the costs of certain types of locomotives made by the two largest
locomotive builders in this country. At the request of the Railway Administration
a general investigation of locomotive costs was made for its information in
contracting for the purchase of locomotives for use in this country.
SULPHUR.
At the request of the War Industries Board, the costs of production of sulphur
were reported.
SULPHURIC ACID.
On April 16, 1918, the Commission made a report on the cost of producing
sulphuric acid, covering the year 1917 and January, 1918, requested by the War
Industries Board.
This report covered the costs and investments of the five chief producers
covering approximately 50 per cent of the total for the United States.
FOOD INVESTIGATION.
The President of the United States in a letter dated February 7, 1917, directed the
Federal Trade Commission to “investigate and report facts relating to the
production, ownership, manufacture, storage, and distribution of foodstuffs and the
products or by-products arising from or in connection with their preparation and
manufacture; to ascertain the facts bearing on alleged violations of the antitrust
acts, and particularly upon the question whether there are manipulations, controls,
trusts, combinations, conspiracies, or restraints of trade out of harmony with the
law or public interest,” to the end that “proper remedies, legislative or
administrative, may be applied.” The President also directed the Commission and
the Department of Agriculture to cooperate in making this investigation. A special
appropriation was made by Congress for this investigation which became available
on July 1, 1917.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

This food investigation covered primarily four branches of industry, namely,
meat, flour, canned foods, and the trading in grain.
MEAT.
The investigation of the meat industry was a part of the general food
investigation, and the purpose of it has been indicated by the foregoing quotation
from the President’s letter, directing that it be made.
Two general methods were followed. Facts as to production or distribution and
storage were secured in large measure by schedule, supplemented by extensive
work by accountants and agents in the field, examining the records of the
companies and compiling data therefrom. Facts as to competitive conditions in the
meat industry and some of the other food industries in which the meat packers are
engaged were secured through interviews by field agents and through the
examination of correspondence files and other corporate records.
The other method was by public hearings; such hearings being held in Boston,
Philadelphia, Chicago, St. Paul, Omaha, Kansas City, and Washington.
These hearings were held to supplement, connect up, and make clear the facts
recited in some of the documentary evidence found in the files.
The taking of this oral testimony under subpoena was not an adversary
proceeding like a trial in court, but was only an additional means of finding facts
germane to the inquiry imposed upon the Commission by the letter of the President
of February 7,1917. That letter directed the Commission to investigate, “to
ascertain the facts bearing on the alleged violation of the antitrust acts, and
particularly upon the question whether there are manipulations, controls, trusts,
combinations, conspiracies, or restraints of trade out of harmony with the law or
the public interests.”
That order cast no duty upon the Commission, to examine, require of or even
request any one, who might possibly be guilty of such alleged violations to testify
or appear before the Commission on the inquiry. To have done so would have been
improper; this for two reasons:
(a) If the Commission subpoenaed any person whom it believed might be guilty,
it would give such person immunity from prosecution, which defeat one of the
purposes of the inquiry.
(b) It would place the person who, later, might be found to have violated the law,
in possession of information, which the Government might wish to use in its civil
or criminal proceedings, before the Government had opportunity to examine or use
it, and thus defeat the public interests. It should also be said that no request was
ever made of the Commission by any one who was under investigation, for a
hearing where he agreed to waive immunity if permitted to testify.
Among the facts developed by the investigation was the extensive control
exercised by the five principal packing companies--Swift & Co., Armour & Co.,
Morris & Co., Wilson & Co., Inc. and Cudahy Packing Co.--over several of the
food industries and by-product

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

23
industries in which they are factors, and over facilities used in connection
therewith. The various percentages of control, which shows the complexity of their
business, are given in the following table, most of the statistics being for 1916:
Industry and facilities.

Percentage
of control
by Big
Five

Interstate slaughter 1
Number of cattle ---------------------------------------Number of calves --------------------------------------Number of sheep ---------------------------------------Number of swine ---------------------------------------Lard production by interstate slaughters 1-------------Average monthly stocks held by interstate slaughterers: 1
Frozen beef ---------------------------------------------Smoked ham and bacon -------------------------------Dry salt pork --------------------------------------------Pickled pork ---------------------------------------------Lard -------------------------------------------------------Receipts of cattle at stockyards controlled by the Big Five as compared with2
receipt of all yards -------------------------------------3
Beef refrigerator cars --------------------------------------Number of domestic branch houses operated by interstate slaughterers: 1
Branch house sales of meats by interstate slaughterers: 1
Fresh meats -----------------------------------------------Cured meat -----------------------------------------------Beef exports from Argentina a and Uruguay ----------4
Stocks of hides held by interstate slaughterers --------5

Year
or other
period.

82.4
79.4
86.6
63.3
75.5

1916
1916
1916
1916
1916

95.0
64.1
69.8
71.5
75.17
64.9
83.1
91.0
89.0

1916
1916
1916
1916
1916
1916
1916
1917
1916

94.9
86.5
60.4
88.0-90.8

1916
1916
1916
1916

1 Butchers not shipping their products in interstate trade are not considered in this connection.
2 Not counting Chicago yards as controlled.
3 Counting Chicago yards as controlled.
4 Includes swift Armour Morris and Wilson. Cudahy not engaged in slaughtering in South America.
5 Range of percentages

Data as to such industries as poultry, eggs, butter , cheese, canned goods, including
fish, vegetables, fruit, and milk, indicate that the control of distribution in all these
lines is already considerable and is growing. As to combination, controls,
conspiracies and restraints out of harmony with the law and the public interest, the
inquiry traced developments from 1890, when a committee of the United States
Senate found and reported agreements between Armour, Swift, Morris, and Hammond
to refrain from competition, with collusive prices and divided territory. From 1893
to 1896 there was a pool of the same companies with the Cudahy Packing Co. and one
other, meeting every Tuesday afternoon, Henry Veeder acting as secretary. This was
testified by Veeder in 1912. Territory was divided, volume of business apportioned,
penalties assessed for violation. From 1898 to 1902 there was a new pool, to which
Schwarzschild & Sulzberger was an added party.
In 1902 the Department of Justice filed charges of conspiracy and restraint against
the big packers, and in 1903 a permanent injunction was issued against them.
Meanwhile a $60,000,000 merger of these companies was planned. It was abandoned
because of the panic of 1903, but a number of the independent plants which had been
secretly bought for the merger were turned over to the National Packing Co., a
$15,000,000 corporation owned by Armour, Swift, and Morris. Veeder was secretary,
and the directors met at the same hour on Tuesday afternoon, is in the old pool.

24

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

This effective plan continued till 1912, when, after failure of a criminal suit,
threat of a civil suit caused dissolution of the National Packing Co., its plants
being apportioned among Armour, Swift, and Morris.
The old pool of meat shipments has now been replaced by a simpler, more
effective “live-stock pool” or division, on agreed percentages, of all live stock
coming to market, the cattle percentage being approximately: Swift, 34 per cent;
Armour, 27 per cent; Morris, 18; Wilson, 11; and Cudahay, 9.Since 1913 these
percentages have held year by year, with scarcely 1 per cent variation. This
agreement is an automatic regulation of the relative volume of packing-house
products of these companies. It avoids actual competition, either in buying stock
or selling meats. Each market has its own agreed percentages, but these are so
adjusted as to give each packer his agreed share of the total of all markets. Thus,
even without any collusion beyond the agreement to divide purchases, the price to
the producer is bound in the long run to be the lowest price which will keep the
producers raising cattle, hogs, and sheep and sending them to the stockyard. A
personal memorandum book kept by German E. Sulzberger is a prime source of
evidence of a domestic combination. Sulzberger’s memorandum of a meeting of
White (vice president of Armour & Co.), Wilson, Edward Swift, and himself on
June 4, 1914, at Armour’s office, is evidence also of an international 1)001 with
other Argentine companies for the shipment of meat from Argentina and Uruguay
both to Europe and the United States. In the vault of Henry Veeder were found
documents relating to joint funds maintained by the big packers and oleomargarine
manufacturers, to employ lobbyists and pay their unaudited expenses; to influence
legislative bodies; to elect candidates who would wink at violations of law and
defeat those pledged to fair enforcement . to control tax officials and thereby evade
just taxation; to secure modifications of governmental rules and regulations by
devious methods; to bias public opinion by attempting to influence editorial policy
through advertising, loans, and subsidies, and by the publication and distribution
at large expense of false and misleading statements. Henry Veeder, the manager
of the Veeder pools of the nineties, was the assessor, collector, and paymaster of
these joint funds.
Among the methods of unfair competition used by the big packers of which the
Commission found evidence may be mentioned the following: Bogus
independents, local price discriminations, short weighting, acquiring stock in
competing companies, shutting competitors out of live-stock markets, and
manipulation of live-stock prices.
It should be noted also, that there were found to be no less than 108 companies
in which one or more of the great packers were jointly interested and most of
which they controlled.
The mass of facts and evidence secured in the investigation was compiled and
digested, and a summary thereof was prepared by the end of the fiscal year. The
summary of the report with the Commission’s letter of submittal embodying its
conclusions and recommendations, was sent to the President on July 3, 1918.
The recommendations of the Commission as submitted to the President were as
follows :

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

25
1. That the Government acquire, through the Railroad Administration, all
rolling stock used for the transportation of meat animals and that such ownership
be declared a Government monopoly.
2. That the Government acquire, through the Railroad Administration, the
principal and necessary stockyards of the country, to be treated as freight depots
and to be operated under such conditions as will insure open, competitive markets,
with uniform scale of charges for all services performed and time acquisition or
establishment of such additional yards from time to time as the future development
of live-stock production in the United States may require. This to include
customary adjuncts of stockyards.
3. That the Government acquire, through the Railroad Administration, all
privately owned refrigerator cars and all necessary equipment for their proper
operation and that such ownership be declared a Government monopoly.
4. That the Federal Government acquire such of the branch houses, cold-storage
plants, and warehouses as are necessary to provide facilities for the competitive
marketing and storage of food products in the principal centers of distribution and
consumption. The same to be operated by the Government is public markets
and storage places under such conditions is will afford an outlet for all
manufactures and handlers of food products on equal terms. Supplementing the
marketing and storage facilities thus acquired the Federal Government establish,
through the Railroad Administration, at the terminals of all principal points of
distribution and consumption, central wholesale markets and storage plants, with
facilities open to all upon payment of just and fair charges.
Near the close of the fiscal year, a special committee appointed by the President
made certain recommendations regarding the meat industry, among which was that
a uniform system of accounting be devised by the Federal Trade Commission and
that time packers should be required to make reports oil this basis as to their costs
and profits to the Food Administration. This work was in progress at the end of
the fiscal year, in so far as it was not dependent upon the promulgation of new
regulations by the Food Administration. At the suggestion of the Food
Administration, and on the recommendation of time special committee referred to,
the Commission was directed by the President to report to him regarding the
adequacy of the regulations of the Food Administration of time profits of the
packers during the war, as an indirect method of controlling the prices of food
products. The Commission reported recommending certain changes in the
regulations.
GRAIN TRADE.
The grain-trade investigation was undertaken by the Commission in cooperation
with the Department of Agriculture, and has covered practically the entire field of
grain marketing and distribution. Up to the close of the fiscal year, the agents of
the Commission and of the Department of Agriculture had covered about 400
country elevators, and warehouses of different types, studying their marketing
methods, costs, profits and margins on grain, and about 5,000 additional elevators
were reached by schedule.
Terminal markets were studied, including Chicago, Minneapolis, Kansas City,
St. Louis, Omaha, Duluth, Milwaukee, Peoria, Cincinnati, Louisville, Buffalo,

New York, and Philadelphia, particularly at Chicago and Minneapolis, the two
chief grain centers. The accounts of more than 100 terminal market concerns were
obtained covering all branches of marketing, and including terminal elevators,
Commission houses brokerage and shipping concerns, news information, service
companies and “wire houses.” All classes of persons

26

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

or concerns engaged in the grain trade were interviewed. A particular study was
made of the future trading business in Chicago and Minneapolis, and schedules
calling for extensive statistical information on future trading were sent to all
members of the Chicago and Minneapolis grain exchanges. A special study was
also made of the results of future trading to the individual speculator.
Comprehensive statistical information was gathered for the purpose of
determining the flow of grain from the farm to the various markets and to the
various classes of purchasers.
Price statistics were collected both from published and unpublished sources
together with statistics of receipts and shipments, and other data for the study of
the price determining factors.
Investigation was also made into various particular practices and problems of the
grain trade such as scalping, the milling value of wheat, terminal elevator mixing,
information services, grain trade, and financing.
This report had not been completed at the end of the fiscal year.
FLOUR.
A determination of the costs and profits of flour millers and flour jobbers was
undertaken in the last half of 1917 as a part of the general food investigation.
The Commission’s report on flour milling and jobbing included the cost and
profits of 130 mills. Many other mills were visited but their records were not in
such condition as to yield satisfactory cost figures. The aggregate production
covered as to cost amounted to 51,560,000 barrels in the crop year 1915-16 and
43,146,000 barrels in the crop year 1916-17, representing about 40 per cent of the
total domestic output of wheat flour and about 75 per cent of the quantity sold in
interstate and foreign commerce.
The Commission 's report included the cost and profits of typical car-lot jobbers
and of 30 of the most important small-lot jobbers. These jobbers were located in
Boston, Providence, New York, Philadelphia, Baltimore, Cleveland, and Chicago.
The jobbers examined handled the bulk of the flour not distributed by the branch
houses of milling companies. A summary of the report was issued on April 4,
1918, showing the costs and profits of millers and jobbers for the years 1913 to
1917, inclusive, which was prior to the time w hen the regulations of the United
States Food Administration took effect. The investigation has been continued to
cover the 10 months’ period September 1, 1917, to June 30, 1918, and another
report is contemplated showing the results of United States Food Administration
regulations before they were revised.
The Commission was represented on a committee, which was appointed by the
President to make recommendations for the revision of the milling regulations and
has also assisted the Enforcement Division of the United States Food
Administration checking up the profits of millers and to prevent infractions of the
regulations.
CANNED FOODS.
As a part of the food investigation the canned foods industry has been covered,
and on May 15, the Commission issued a report on the

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

27

general canned foods industry and canned vegetables and fruits. This report was
based on an examination of the books of canning companies which produced
about 25 per cent of the total output of the chief kinds of vegetables covered. The
Commission also examined the operations and profits of certain representative
brokers and jobbers. Information is made available in the Commission’s report
covering the cost of producing and marketing the chief canned vegetables and
fruits, and the profits made by the canners and distributors.
The Commission made certain recommendations in the canned foods industry,
chief of which were as follows:
1. That the use of future contracts in the sale of canned foods be limited, both
as to the period during which they may be made, and the percentage of the pack
which may be sold under such contracts.
2. That unnecessary reselling be restricted in order to keep the product of the
cannery moving along as directly as possible until it reaches the consumer.
3. That the use of labels by packers and distributors be regulated to prevent
deception and encourage reasonable competition.
4. That associations of canners take steps to limit their activities in accord with
law and public policy, particularly with regard to price-fixing activities.
5. That more adequate in formation concerning supply and demand factors be
collected and made public.
Particular attention was also called to the need of better credit organizations in
the industry and to the danger of abuse through exclusive sales agents handling the
output of several canning companies.
In February, 1918. the Commission began the inquiry as to the canned salmon
industry, and the work was in progress at the close of the fiscal year. The report
will cover 79 canning companies, which packed more than 4,000,000 cases in
1917. The books of 20 companies, operating 62 plants, and packing 51 per cent
of that year’s total production, were examined. In June, 1918, the Commission
prepared for the Food Administration a memorandum concerning the costs and
profits of Oregon Salmon Canners, and the Commissions accountants have
examined and reported on numerous salmon packing companies in aid of the
Food Administration in adjusting prices.
Cans and containers.--In connection with its investigation of canned foods, the
Commission has ascertained the cost of producing the tin cans used for packing the
canned foods, covering the operations of the largest producers. This information,
together with that concerning the costs and profits of the producers of canned food
boxes of various kinds will be published as a part of the general food investigation
report.
CORPORATION REPORTS AND STATISTICS OF INDUSTRIES.
General corporation reports.--In previous annual reports the desirability of
organizing the work of securing reports from industrial corporations generally,
under the provisions of section 6 of the organic act of the Commission, has been
pointed out. This has been postponed on account of war work.
Reports by industries.--On account of the war, also, the Commission has
suspended projected plans for securing and combining more specific and current
data regarding the most important industries of

28

ANNUAL REPORT OF THE FEDERAL TRADE Commission.

the country referred to in the last annual report. It should be noted, however, that
in the cost finding work now being performed by the Commission in connection
with the regulation of prices by other branches of the Government a substantial
foundation has already been laid for securing current information regarding
production, shipments, costs, prices, earnings, investment etc from numerous and
important industries.
Current trade statistics.--The current reports to the paper trade which are
compiled by the Commission from returns made by the producers was continued
during the year (see p. 17). This work has covered the data formerly compiled by
paper trade associations and, according to the statements of the trade, has been
much more satisfactory. Where the Government does such work the statistics can
be secured from the whole industry instead of from association members only, and
is therefore more comprehensive ve and satisfactory. This suggests the expansion
of such work by the Commission. The experience of the Commission has shown
that one of the principal causes for abnormal price movements is the lack of
sufficient current trade information regarding production , stocks, shipments, and
similar data regarding market conditions. Improvement of cost-accounting
methods.--The Commission has rendered considerable assistance to a number of
industries in connection with its ascertainment of the cost of production of various
commodities. While the Commission has not undertaken to install cost-accounting
systems, it has often been expedient in order to obtain more accurate reports to
cooperate with various associations. In the manufacture of hollow building tile,
for example, the Commission’s accountants found inadequate cost-accounting
systems. In devising its schedule for collecting cost data for the War Industries
Board, therefore, the Commission took into consideration the needs of the industry
and in cooperation with the industry has been instrumental in introducing better
cost-accounting methods. Apart from such instances of definite cooperation, the
cost-finding work of the Commission has exercised a strong influence on
numerous branches of industry, whether the information sought was obtained by
direct audit or by costs returned on detailed forms prepared by the Commission.
LIBRARY.
The library was transferred from the Administrative to the Economic Division
during the fiscal year. It has a collection of 4,410 books and pamphlets. It
receives about 200 trade periodicals, and maintains a technical clipping file
representing several thousand pieces. The number of trade periodicals is to be
reduced as much as the work of the Commission will permit. The files of
corporation reports and trade-association material have been added to largely.
ORGANIZATION AND PERSONNEL.
The work of the Economic Division during the fiscal year, as increased in
response to requirements in aid of war agencies, necessitated a great increase in
personnel. The total personnel amounted to 96 on July 1, 1917, or about 51 per
cent of the total personnel of the Commission, and on June, 1918, to 421, or about
70 per cent of the total personnel.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

29
The number of accountants, including junior accountants, increased from 18 to
180. The clerical staff increased from 45 to 170. The remainder in each case
comprised economists and field agents. In April, 1918, the Economic Division
was reorganized. Prior to that time the direction of the economic work was
intrusted to an advisory economic board consisting of three members of time staff,
each investigation being conducted by an examiner in charge, and each member
of the advisory economic board having immediate supervision of a group of these
investigations. A chief economist was substituted for time advisory economic
board, who should have sole responsibility for the work performed by the
Economic Division. The chief economist is aided by a number of assistants and by
a chief accountant, under whose immediate supervision the accountants and clerks
are assigned. The chief accountant is also responsible for maintaining consistency
of methods in accounting matters. Each of the assistant chief economists has the
general supervision of a group of inquiries.
REPORTS.
The reports on economic investigations which were published by the
Commission during the fiscal year ending June 30, 1918, are shown in the list on
page 37.
The greater part of time economic work of the Commission was not done,
however, with a view to issuing printed reports. This is especially true of the cost
work which was done for various branches of the Government. A list of these
unpublished reports is given below.
Date.
made.
Sept. 7,1917
Do
Sept. 8,1917
Industries Board.
Sept.18, 1917
President.
Sept. 20,1917
Do
Do
Oct. 11,1917
President,

Reports submitted during year.
Subject.

Cost of producing gasoline and fuel oil for June, 1917
Cost of producing lumber
Preliminary report on steel costs
Cost of iron ore, coke, pig iron, and other steel products
Cost of producing Portland cement in 1916 and first 6 months
in 1917.
Cost of producing yellow pine mill-run lumber, and timbers
Cost of producing Douglas fir, spruce, and hemlock mill-run
timber.
Cost of producing lead and zinc of companies supplying Navy,
covering June, 1917

Navy.
Do
Oct. 23,1917
Board.
Oct. 30, 1917
President.
Oct. 31, 1917
President; Navy.
Nov. 17,1918
Industries Board.
Nov.30, 1917

To whom

The President.
Do.
W a r
T h e

Do.
Do.
Do.
T h e
for

Cost of producing lead and zinc in month of June, 1917
Cost of producing yellow pine lumber (supplemental)

Shipping

Supplemental report on cost of producing cement

T h e

Cost of producing nickel and monel metal

T h e

Cost of producing sheet steel

W a r

Cost of producing aluminum ingots, sheets, tubes, canteens,
meat cans, and cups.

Dec. 10, 1917
Do
President

Dec. 14, 1917
Corps Air
Dec. 17,1917
President.
Jan. 5, 1918
Feb. 7, 1918
Mar. 8, 1918
Mar.19, 1918
Administration
Mar. 23,1918

Cost of lead covering 76 per cent of United States production,
June, July, and August, 1917.
Cost of producing gasoline, naphtha, fuel oil, gas oil, and

T h e

kerosene covering 80 per cent of the refining industry (June,
July, and August, 1917).
No. 1 castor oil

Signal

Service.
Report on cost of steel (second report)

T h e

Supplemental report on copper.
Report on wages in the iron and steel industry.
Costs of Boston lumber dealers
Actual yields from refining companies using large percentage
of Gulf coast crude oil.

Navy.
F u e l

Data on the quantities of crude oil consumed by refineries located
on the Atlantic seaboard for months of September and October, Shipping

Board.
1917.
Mar.25, 1918
Do
Do.
Administration;
Mar. 26, 1918
Board; Fuel

Sand and gravel (tentative report).
Cost of southern pine for January, 1918.
Cost of boxes in 1917 (boxes, shooks, wooden boxes, and
corrugated and fiber board boxes).
Stocks of crude oil held in storage and in transit by eastern
refiners for October, 1917.
Administration

F o o d
Nv.
ay
Shipping

30

ANNUAL REPORT OF THE FEDERAL TRADE Commission.
Reports submitted during yea r--Continued.

Date.
Subject.
whom made.
Mar. 30, 1918 Data on oil-producing companies operating in Mexico and Peru.
Do
Cost of producing gasoline and fuel oil for certain companies supplying the Navy, June 1917
Apr. 4, 1918 Cost of producing ingots, billets, and slabs for October, November,
and December, 1917, January, 1918.
Apr. 15,1918 Preliminary report on cotton duck
Apr. 16, 1918 Cost of producing sulphuric acid; supplemental report Apr. 19, 1918
Apr. 22, 1918 Cost of producing Portland cement during last half of 1917
Apr. 25, 1918 Cost of producing gasoline and fuel oil by representative
Administration;
during December, 1917
Navy.
May 10, 1918 Cost of production of aviation gasoline Fuel Administration;
Army.
May 15, 1918 Cost of producing grade A zinc during year 1917 and JanuaryMarch, 1918.
May 16, 1918 Cost of producing zinc sheets and plates, 1917, and January-March,
1918
May 18,1918 Cost of producing nickel and monel metal for February, 1918
June 8, 1918 Supplementary report on cost of producing grade A zinc and sheet
and plate zinc.
Do
Statistics report cost of producing copper in order of 1918 figures:
1917 and March, 1918.
June 13, 1918 Cost of producing kerosene during December, 1917
June 25, 1918 Steel wire rope costs
Do
Sand and gravel, crushed stone in New York City and vicinity
Trade Board.
(supplementary memorandum).
June 28, 1918 Virginia-Carolina lumber, February, March, and April, 1918
June 29, 1918 Estimates regarding reasonable deduction from list price of
companies supplying automatic sprinklers.
Do
Cost of producing hollow building the during 1917 and first quarter
of 1918.

To

Nv.
ay
Do.

Do.
Do.
Fuel

Nv;
ay
Nv
ay

Do

Do.
Do.

Do.
War

Do.
Do.
Do.

ADMINISTRATIVE DIVISION.
The additional work of the Commission has required a corresponding increase
in the force of the Administration Division, to care for which an assistant secretary
was appointed.
In the Administrative Division are: Auditor’s office and disbursing clerk, in
charge of the fiscal affairs of the Commission.
Custodian’s office and chief clerk, in charge of the buildings and quarters of the
Commission, the purchase of supplies and equipment, and the distribution of the
same; supervision and charge of the watch force, messenger force, mechanics,
laborers, char force, and telephone and elevator service. Personnel Section, in
charge of all matters relating to appointments, promotions demotions, transfers,
changes in designation, resignations, terminations of service, and dismissals; the
keeping of the records concerning these matters, together with miscellaneous data
relating to personnel; matters affecting time and leaves of absence; preparation and
certification of pay rolls, and the general correspondence relating to the functions
of such a division.
Section of Mail and Files receives and distributes the mail; indexes and files all
papers and records of the Commission except those of the Docket Division and

those relating to appointments and personal records of employees; is responsible
for the care and custody of files . and for the purposes of efficiency in the several
locations, has charge of the decentralized files distributed among the Several
divisions of the Commission, all of the files being kept according to a standardized
system, thus making them interchangeable able and interlocking.
Section of Publications and Printing, in charge of matters which have the Public
Printer and the superintendent of

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

31
documents; the distribution of publications; the maintenance of mailing lists; and
the charge of multigraph and mimeograph duplicating work and the machinery and
equipment necessary thereto.
Stenographic Section from which is supplied to the legal and economic divisions
needed stenographic and typewriting assistance.
Reportorial Section in charge of official reporting; necessary correspondence
with the official reporters, their assignment to cases, the keeping and distribution
of the official transcripts of hearings, and the reporting of informal matters in the
Commission. Docket Section is the repository of all applications for the issuance
of complaints; assigns such applications in rotation to the several Commissioners
for supervision, unless otherwise directed by the Commission; files all
correspondence, exhibits, notices of assignment to attorneys, and field and office
reports in connection with such applications; maintains complete indexes of the
names of applicants and respondents, the unfair method of competition alleged,
and the commodity involved, also a current record showing the complete history
of all applications for the issuance of complaints from their receipt by the
Commission until their final disposition by dismissal or issuance of formal
complaint. Upon dismissal of applications, the division advises interested parties
of such action, and transmits files and other material to other departments of the
Government, when so directed by the Commission. This division assigns docket
numbers to formal complaints as they are issued, determines the return day, and
attends to the service; indexes and files all papers in connection with such formal
complaints, including testimony in adversary proceedings; certifies copies of
formal records to the different circuit courts of appeals, when required; and keeps
a current docket record for the inspection of the public, showing, among other
things, the date of issuance, names and addresses of the respondents and their
attorneys, the commodity, allegations of unfair competition, petitions for
intervention, continuances and extensions of time, date of filing answers, nature
of motions, petitions and orders, dates and places of hearings, and final
disposition. Service of all findings as to the facts, conclusions of law, and orders
to cease and desist, in formal proceedings, is made by this division. The division
answers inquiries from the general public and interested parties with reference to
the status of formal proceedings, and furnishes for the use of tine Commission
statistical matter of various kinds pertaining to its activities.
Reference and Research Section systematically collects and arranges material
bearing on current matters likely to become the subject of action by the
Commission.
QUARTERS.
At the beginning of the fiscal year the Commission occupied quarters in the
Department of Commerce Building. In the latter part of August it moved to the
building at Fifteenth and K Streets NW which it now occupies as its main office.
The available floor space in this building is 35,790 feet. Temporary additional
space in the Building to 9,688 square feet was also occupied by cost accountants
and clerks engaged in war work.

32

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
PERSONNEL.

During the fiscal year ending June 30, 1918, the number of new employees
entering the service of the Commission was 895, while 399 employees left the
Commission during the same period, making a net increase for the year of 496.
This made the number of employees in the Commission on June 30, 1918, as
follows :
Employees.
Total salary.
Statutory -------------------------------------------115
$147,400
Lump sum -----------------------------------------574
1,083,476
Grand total -----------------------------------------689
1,230,878
A more detailed analysis of. the personnel is shown in the following statement:
Analysis of the personnel of the Federal Trade Commission and its Staff at the
close of June 30, 1918.
3 Commissioners
$10,000
l secretary
5,000
3 clerks to Commissioners
1,500
l chief clerk
2,000
l disbursing clerk
2,000
l clerk 1
2,000
2 clerks
1,980
9 clerks, class 4 2
1,800
l clerk 1
1,740
l Do
1,620
14 clerks, class 3 3
1,600
l clerk 1
1,560
15 clerks, class 2
1,400
3 clerks 1
1,320
63 clerks, class 1
1,200
l clerk
1,100
112 clerks
1,000
20 clerks 7
900
l messenger
840
l assistant messenger
840
3 assistant messengers
720
19 messenger boys 8
480
4 watchmen 7
720
6 laborers 9
660
l laborer
600
l general mechanic 1
1,000
1 Do
840
2 elevator conductors
720
l telephone operator
720

l forewoman (charwoman)
6 charwomen

300
240
----------- $355.280
Paid on lump-sum roll.
5 paid on lump-sum roll.
3 9 paid on lump-sum roll.
4 5 paid on lump-sum roll.
5 46 paid on lump-sum roll.
6 91 paid on lump-sum roll.
7 l paid on lump-sum roll.
8 10 paid on lump-sum roll,
9 3 paid on lump-sum roll.
1
2

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
2 special attorneys -----------------------------------------------------1 special attorney ------------------------------------------------------Do --------------------------------------------------------------------4 special attorneys ----------------------------------------------------l special attorney -------------------------------------------------------

$5,000
4,000
3,600
2,800
2,400
---------- $34,200
l attorney and examiner ----------------------------------------------5,000
7 attorneys and examiners -------------------------------------------4,000
l attorney and examiner ----------------------------------------------3,300
2 attorneys and examiners -------------------------------------------3,000
3 attorneys and examiners -------------------------------------------2,800
l attorney and examiner ----------------------------------------------2,500
3 attorneys and examiners -------------------------------------------2,400
2 attorneys and examiners -------------------------------------------2,100
---------- 64,600
l special expert ---------------------------------------------------------4,800
Do ---------------------------------------------------------------------- 4,000
Do ---------------------------------------------------------------------- 2,500
Do ---------------------------------------------------------------------- 2,400
---------- 13,700
2 special examiners ---------------------------------------------------5,000
l special examiner ------------------------------------------------------4,500
Do ----------------------------------------------------------------------- 4,000
Do ----------------------------------------------------------------------- 2,520
Do ----------------------------------------------------------------------- 2,220
---------- 23,240
1 special agent -----------------------------------------------------------4,500
Do ----------------------------------------------------------------------- 4,200
Do ----------------------------------------------------------------------- 3,600
Do ----------------------------------------------------------------------- 3,300
3 special agents ----------------------------------------------------------- 3,000
l special agent ------------------------------------------------------------- 2,750
Do ----------------------------------------------------------------------- 2,500
6 special agents ----------------------------------------------------------- 2,400
l special agent ------------------------------------------------------------- 2,280
Do ----------------------------------------------------------------------- 2,220
7 special agents ----------------------------------------------------------- 2,100
4 special agents ----------------------------------------------------------- 2,000
2 special agents ----------------------------------------------------------- 1,920
Do ----------------------------------------------------------------------- 1,800
3 special agents ----------------------------------------------------------- 1,620
2 special agents ----------------------------------------------------------- 1,500
3 special agents ----------------------------------------------------------- 1,440
----------- 91,070
l examiner ----------------------------------------------------------------6,000
5 examiners --------------------------------------------------------------5,000
3 examiners --------------------------------------------------------------4,500
4 examiners --------------------------------------------------------------4,000
15 examiners -------------------------------------------------------------- 3,600
2 examiners --------------------------------------------------------------3,500
Do ----------------------------------------------------------------------- 3,300
16 examiners -------------------------------------------------------------- 3,000
3 examiners --------------------------------------------------------------2,800
Do ----------------------------------------------------------------------- 2,750
12 examiners -------------------------------------------------------------- 2,700
2
examiners -------------------------------------------------------------- 2,600
10 examiners -------------------------------------------------------------- 2,500
32 examiners -------------------------------------------------------------- 2,400
1 examiner --------------------------------------------------------------2,340
2 examiners --------------------------------------------------------------2,280

33

4 examiners --------------------------------------------------------------13 examiners -------------------------------------------------------------1 examiner ----------------------------------------------------------------20 examiners -------------------------------------------------------------1 examiners ---------------------------------------------------------------

2,200
2,100
2,040
2,000
1,920

34

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

24 examiners -------------------------------------------------------------- $1,800
l examiner ----------------------------------------------------------------1,700
Do ----------------------------------------------------------------------- 1,620
11 examiners -------------------------------------------------------------1,600
21 examiners -------------------------------------------------------------1,500
3 examiners --------------------------------------------------------------1,440
5 examiners --------------------------------------------------------------1,400
8 examiners --------------------------------------------------------------1,320
11 examiners --------------------------------------------------------------1,200
3 examiners --------------------------------------------------------------1,080
7 examiners --------------------------------------------------------------1,000
l examiner ----------------------------------------------------------------900
Do ----------------------------------------------------------------------1
Do ----------------------------------------------------------------------- 115
Do ----------------------------------------------------------------------- 110
Do ----------------------------------------------------------------------- 210
Do ----------------------------------------------------------------------18
Do ----------------------------------------------------------------------28
2 examiners --------------------------------------------------------------25
Do ----------------------------------------------------------------------23
---------- $585,406

APPROPRIATIONS AND EXPENDITURES.
The appropriations of the Commission for the fiscal year ended June 30, 1918,
under the sundry civil appropriation act approved June 12, 1918, were $802,920.
In addition to this amount the Commission had the sum of $35,945.92, which was
allowed by the ruling of the Comptroller of the Treasury under the second
paragraph of section 3 of the act creating the Commission, said amount
representing the unexpended balance of the appropriations for the Bureau of
Corporations for the fiscal years ended June 30, 1913 and 1914. The Commission
also had, in addition to the above, allotments from the President aggregating
$750,000 from the national security and defense fund provided for in the
deficiency bills approved April 17, 1917, and December 31, 1917, and $20,000
from the appropriation provided for by the trading with the enemy act approved
October 6, 1917.
The expenditures of the Commission for the fiscal year ended June 30, 1918,
were $1,423,394.25. The appropriations, allotments, and expenditures are
tabulated below :
Appropriated
and allotted
Expended.
Salaries, Commissioners, secretary, etc
$157,146.43
Compensation, travel expenses, and per diem in lieu of
subsistence
265,253.71
Expense--foodstuff investigation
250,000.00
Contingent expenses
17,226.62
Witness fees and mileage
3,338.54

$172,920.00

300,000.00
250,000.00
20,000.00
15,000.00

Rental of quarters
13,636.35
Printing and binding
11,114.06
Federal Trade Commission-without year
84,703.58
National security and defense fund
687,071.18
Expenses--trading with the enemy act
13,903.78
Total
1,423,394.25

15,000.00
30,000.00
35,945.92
750,000.00
20,000.00
1,608,865.92

Per day when actually employed.
Per day. Including Sundays and holidays.
3 Expenditures from the appropriation “Federal Trade Commission--without year”
covered settlement of vouchers for contingent expenses incurred during the fiscal
year ended June 30, 1917, the appropriation for contingent expenses for the said
fiscal year being insufficient.
l

2

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

35

Expenditures from allotments made by the President from the national security
and defense fund covered the following:
Salaries ----------------------------------------------------------------------------$490,775.39
Travel expenses and per diem in lieu of subsistence -----------------------140,986.00
Contingent expenses -------------------------------------------------------------37,239.66
Rental of quarters -----------------------------------------------------------------11,966.20
Printing and binding -------------------------------------------------------------6,193.93
Total ----------------------------------------------------------------------------687,071.18
Expenditures from allotments made by the President from the appropriation
provided for by the trading with the enemy act covered the following:
Salaries ----------------------------------------------------------------------------$11,085.33
Travel expenses and per diem in lieu of subsistence -----------------------140.66
Contingent expenses -------------------------------------------------------------2,414.39
Printing and binding -------------------------------------------------------------263.40
Total ----------------------------------------------------------------------------13,903.78
A detailed analysis of the expenditures of the Commission is given in the
following statement:
Detailed statement of expenditures of tile Federal Trade Commission for the
fiscal year ended June 30, 1918.
ADMINISTRATIVE DIVISION.
Office.
Annual leave -----------------------------------------------$42,073.36
Sick leave --------------------------------------------------12,023.00
Administration, general ----------------------------------107,587.28
Mail and Files section ------------------------------------23,762.26
Disbursements and Accounts section ------------------8,501.56
Purchases and Supplies Section -------------------------5,475.59
Docket Section ---------------------------------------------5,540.84
Library ------------------------------------------------------6,949.39
Publications and Printing Section -----------------------4,681.50
Stenographic Section --------------------------------------18,577.98
Personnel Section -----------------------------------------8,567.18
Messengers -------------------------------------------------9,474.90
Labor (watchmen, charwomen etc.) --------------------9,905.23
Detail --------------------------------------------------------241.35
Contingent expenses --------------------------------------61,584.25
Rental of quarters -----------------------------------------25,602.55
Printing and binding -------------------------------------6,367.33
Total ------------------------------------------------------ 356,916.43
ECONOMIC DIVISION.

Field.

$1,966.69

1,966.69

Corporation reports ---------------------------------------Print paper, ne s -------------------------------------------Coal, bituminous ------------------------------------------Oil, Oklahoma ---------------------------------------------Lumber -----------------------------------------------------Resale prices -----------------------------------------------Study of food conditions -----------------------------------

$737.57
206.34
3,700.92
3,438.93

Coal, anthracite --------------------------------------------Print paper, book ------------------------------------------Flags --------------------------------------------------------Alleged combination of salmon canners ---------------Miscellaneous economic ---------------------------------Coal ---------------------------------------------------------Steel ---------------------------------------------------------Oil -----------------------------------------------------------Lumber -----------------------------------------------------Cement -----------------------------------------------------Copper, lead, and zinc ------------------------------------Aluminum --------------------------------------------------Canned goods -----------------------------------------------

1,454.13
895.72
11.97
2,488.12
6.70
115,700.00
57,671.88
22,566.53
18,004.44
4,410.98
12,549.44

$160.88
420.17
1,667.57
267.46

40.88
302.30

9,407.37

2,132.49

349.69
91.32
77,089.28
13,177.73
32,153.18
60,709.79
15,005.96
59,316.84
4,055.10
37,914.96

36

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
Detailed statement of expenditures of the Federal Trade Commission for the
fiscal year ended June 30, 1918--Continued.

ECONOMIC DIVISION--Continued
Office.
Field.
Navy yards ------------------------------------------------------$17.22
$194.97
Bread
------------------------------------------------------------- 1,310.92
6,458.57
Sulphur ----------------------------------------------------------55.49
93.51
Sisal, twine
-----------------------------------------------------127.74
1,830.70
Box shooks
-----------------------------------------------------595.98
4,817.66
Lard substitutes
-------------------------------------------------- 1,009.23
7,690.03
Sulphuric acid
-------------------------------------------------296.25
1,212.45
Cotton textiles tile ---------------------------------------------929.59
847.38
Hollow building
------------------------------------------------528.25
523.30
Sand and gravel
------------------------------------------------864.77
3,709.02
Beans
-----------------------------------------------------------42.96
317.81
Locomotives ----------------------------------------------------342.66
3,132.75
Cost system for packers
-------------------------------------- 1,787.53
Chestnut extract
-----------------------------------------------55.87
771.81
Fire brick
-------------------------------------------------------- 1,798.81 3,497.92
Meat packers’ profits
-----------------------------------------96.79
163.86
Leather costs --------------------------------------------------3.62
842.73
Common brick
------------------------------------------------7.16
59.82
Government paper contracts --------------------------------57.27
92.58
Livestock and its products ------------------------------------65,525.16 107,480.50
Grain products
------------------------------------------------9,957.48
18,258.28
Grain and produce exchanges
------------------------------2,743.72 31,200.00
Paper schedules
-----------------------------------------------7,269.57 8.23
Paper prices --------------------------------------------------4,309.24 60,622.14
Leather and shoes --------------------------------------------3,364.69 15,593.06
Farm operating equipment -----------------------------------327.81
Formal complaints -------------------------------------------1,687.38
224.03
Informal complaints. ------------------------------------------603.22 3,762.09
Witness fees and mileage
-----------------------------------272.30
Total
--------------------------------------------------------- 354,523.13 579,887.50
LEGAL DIVISION.
Print paper, news --------------------------------------------Oil, Oklahoma
-----------------------------------------------$9.62
Print paper book ----------------------------------------------178.83
Trading with the enemy -------------------------------------- 10,333.21
Oil ---------------------------------------------------------------10.05
Cement ------------------------------------------------------5.98
Live stock and its products -------------------------------1,360.40
Grain products
----------------------------------------------Grain and produce exchanges
----------------------------626.83
Canned goods ----------------------------------------------73.78
Export trade -------------------------------------------------121.72
Paper prices ------------------------------------------------152.15
Leather and shoes -------------------------------------------29.19
Independent Harvester Co
--------------------------------33.73
Farm operating equipment ---------------------------------Lumber ------------------------------------------------------Briefs ---------------------------------------------------------1,391.03
Formal complaints ------------------------------------------10,703.86
Informal complaints
---------------------------------------29,476.83
Advice requests
----------------------------------------------156.58
Miscellaneous legal
---------------------------------------4,391.50
Witness fees and mileage
------------------------------Total
------------------------------------------------------59,055.29
SUMMARY OF EXPENDITURES.
Office.

$394.99

486.67

6,197.63
13.49
20,259.26
199.70
137.94
295.68
157.14
20.10
10.05
13,533.32
26,101.04
73.74
594.51
2,569.95
71,045.21
Field.

Total.
Administrative division
$356,916. 43
$1,966.69
1
$358,883.12
Economic division
354,523.13
579,887.50
934,410.63
Legal division
59,055.29
71,045.21
130,100.50
Total
770,494.85
652,899.40
1,423,394.25
1 Includes all charges for salaries of the Commissioners and secretary and for economic and legal
supervision; annual and sick leave, contingent expenses, rental of quarters, printing and binding, etc.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 37
The appropriations for the Federal Trade Commission for the fiscal year ended
June 30, 1918, were as follows :
For five Commissioners, at $10,000 each; secretary, $5,000; five clerks to
Commissioners, at $1,500 each; chief clerk, $2,000; disbursing clerk, $2,000;
clerks-four of class 4, five of class 3, ten of class 2, seventeen of class 1, twentyone at $1,000 each; messenger; four assistant messengers; nine messenger boys,
at $480 each; general mechanic, $840; three watchmen ; two elevator conductors,
at $720 each; three laborers, at $660 each; telephone operator, $720; forewoman,
$300; six charwomen, at $240 each; in all, $172,920.
For all expenses necessary to carry out the order of the President of the United
States to investigate within the scope of its powers and to report the facts relating
to any alleged violations of the antitrust acts by any corporation in the production,
ownership manufacture, storage, and distribution of foodstuffs and the products
or the by-products arising from or in connection with the preparation and
manufacture, $250,000.
For compensation, travel expense, and per diem in lieu of subsistence at time
rate of $4 of such special attorneys, special experts, special examiners, special
agents, clerks, and other employees as may be necessary for the purpose of
carrying on the work of said Commission; no salary shall be paid hereunder
exceeding the rate of $5,000 per annum, $300,000.
For contingent and miscellaneous expenses, including the purchase of
professional and scientific books, law books, books of reference, periodicals,
pamphlets, maps stationery, furniture and repairs to same, carpets, matting,
oilcloth filling cases, towels, ice, brooms, soap, fuel, lighting and heating, freight
and express charges, street car tickets, postage to foreign countries, telegraph and
telephone service, typewriters and calculating machines, including their exchange,
mind for a 11 necessary miscellaneous supplies not otherwise provided, $20,000.
For rental of building or quarters, $15,000.
For witness fees, and mileage, as provided in section 9 of the Federal Trade
Commission act, $15,000.
For printing and binding, $30,000.
In all, for the Federal Trade Commission, $802,920. Sunday civil act June 12,
1917.
PUBLICATIONS ISSUED.
The following publications were issued by the Commission during the fiscal year
ended June 30, 1918:
Annual Report of the Federal Trade Commission. December 12, 1917. 74 pages.
The Book Paper Industry. August 21, 1917. 123 pages. l
Canned Foods; General Report and Canned vegetables and Fruits. May 15,
1918. 103 pages.
Commercial Bribery. May 15, 1918. 3 pages. 2
Flour Milling and Jobbing. April 4, 1918. 27 pages.
Profiteering (letter in responses to a Senate resolution of June 10, 1918). June
29, 1918. 20 pages.3
Rules of Practice (Revised). December 21, 1917. 8 pages.
Instructions, Rules, and Forms Concerning Patents, Trade-Marks, Prints, Labels,
Designs, and Copyrights. November 3, 1917. 22 pages. 4

EXPORT TRADE DIVISION
Summary of the Law.--Under the export trade act, approved April 10, 1918, the
Federal Trade Commission is authorized to receive, and “associations” now, or
hereafter, solely engaged in export trade are required to file statements in the form
specified by the act.
S. Doc. No.79, 65th Cong., 1st sess.
H. Doc. No. 1107, 65th Cong.. 2nd. sess.
3 S. Doc. No.248, 65th Cong. , 2nd. sess.
4 Contains extracts from the trading-with-the-enemy act and Executive order of
Oct.12, 1917.
1
2

38

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

The Commission is given authority to investigate all instances where it has reason
to believe that an export trade “association” has committed an act, or made an
agreement, which is in restraint of trade within the United States, or which is in
restraint 0£ the export trade of any domestic competitor of such “association.”
This applies also where such an “association’ has entered into any agreement,
understanding, conspiracy, or done any act in the United States or else-where,
which artificially enhances or depresses prices within the United States of
commodities exported by such association, or where the same substantially lessens
competition within the United States, or otherwise restrains trade therein. In such
event the offending “association,” its officers, and agents may be summoned
before the Commission, and it is thereupon required to conduct an investigation
into the alleged violation of law. If upon investigation the Commission concludes
that the law has been violated it may recommend to the “association” readjustment
of its business in order that it may thereafter maintain its organization,
management, and the conduct of its business in accordance with the law.
Where an association fails to comply with the recommendation of the
Commission, the Commission is required to re£er its findings and
recommendations to the Attorney General of the United States for such action
thereon as he may deem proper.
By section 4 of the export trade act the prohibition in the Federal Trade
Commission act against unfair methods of competition, and the remedies provided
for enforcing said prohibition, are directed to be construed as extending to unfair
methods of competition used in export trade against competitors engaged in such
trade, even though the acts constituting such unfair methods are done without the
territorial jurisdiction of the United States.
The act defines the term “export trade” wherever used in the act as follows:
The words “export trade” wherever used in this act mean solely trade or commerce in
goods, wares, or merchandise exported, or in the course of being exported from the United
States or any Territory thereof, to any foreign nation; but the words “export trade” shall not
be deemed to include the production, manufacture, or selling for consumption or for resale,
within the United States or any Territory thereof, of such goods, wares, or merchandise, or
any act in the course of such production, manufacture, or selling for consumption or for
resale.

The words “trade within the United States” wherever used in the act are defined
to mean trade or commerce among the several States or in any Territory of the
United States, or in the District of Columbia, or between any such Territory and
another, or between any such Territory or Territories and any State or States or the
District of Columbia, or between the District of Columbia and any State or States.
The word “association” wherever used in the act is defined to mean:
Any corporation or combination, by contract or otherwise, of two or more persons,
partnerships. or corporations.

Under section 5 of the act a penalty is imposed upon any association which shall
fail to make the statement and furnish the statements required to be filed, and also
furnish the Commission with such information as it may require, as to the
organization, business,

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

39

conduct, practices, management, and relation to other associations, corporations,
partnerships, and individuals of such associations. The penalty imposed for failure
to comply with section 5 of this act is that the association shall not have the benefit
of the provisions of sections 2 and 3 of the act. and shall forfeit to the United
States $100 per day during the continuance of such failure to comply with its
terms. This forfeiture is payable into the Treasury of the United States, and is
recoverable in a civil suit in the name of the United States, in the district where the
association has its principal office, or in any district in which it shall do business,
by the district attorney under the direction of the Attorney General of the United
States, and the costs and expenses of such prosecutions are payable out of the
appropriation for the expense of the courts of the United States.
Under section 2 of the export trade act the provisions of the Sherman law,
approved July 2,1890, are directed to be construed in such a way that nothing
therein contained shall declare to be illegal “associations,” entered into for the sole
purpose of engaging in export trade and actually engaged solely in such export
trade, nor any agreement made, or act done in the course of such export trade by
such an association, provided such agreement or act is not in restraint of trade
within the United States, and is not in restraint of the export trade of any domestic
competitor of such an association, provided, however, that such association does
not either in the United States or elsewhere enter into any agreement,
understanding, or conspiracy, or do any act, which artificially or intentionally
enhances or depresses prices within the United States of commodities of the class
exported by such association, or which substantially lessens competition within the
United States or otherwise restrains trade therein.
By section 3 of the act it is directed that section 7 of the Clayton Act, approved
October 15, 1914, shall not be construed to forbid the acquisition or ownership by
any corporation of the whole or any part of the stock or other capital of any
corporation organized solely for the purpose of engaging in export trade, and
actually engaged solely in such export trade, unless the effect of such acquisition
or ownership may be to restrain trade or substantially lessen competition within
the United States.
Form of statement.--For the convenience of those who desire to file the
statement required by section 5 of the act there have been prepared and printed
forms of statement, which are available upon application.
Applications for construct ion of the act.--Numerous requests have been received
by the Commission for rulings upon the construction of the export-trade act. It has
been deemed inadvisable to attempt at this time to officially construe any of the
provisions of the law upon informal applications. This is especially true, as the
penalty for the violation of section 5 of the act is enforceable by the district
attorneys of the United States under the direction of the Attorney General, and not
by the Federal Trade Commission, and the enforcement of the Sherman Law is a
duty of the Federal courts upon proceedings instituted by the Department of
Justice.
It is exceedingly important that export associations in process of formation
should give careful consideration to the wording of

40

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

sections 2 and 3 of the export-trade act. As to the statements which have been filed
with the Export Trade Division under section 5 of this act, it has been noted that
practically every corporation formed has been organized for the transaction of
some business other than that of solely engaging in exporting from the United
States to foreign nations as defined in the act.
Most of the articles of association filed have also contemplated the transaction
of business other than that of exporting to foreign nations. It is apparent under the
law that the provisions of the Sherman law and section 7 of the Clayton law
remain applicable as to all combinations which are not organized solely for the
business of ex porting to foreign nations. The business of exporting to the
Philippine Islands, to Porto Rico, or to Hawaii seems clearly to be domestic and
not foreign trade, and the provisions of the Sherman law and section 7 of the
Clayton law seem to continue in force as to any association or export corporation
which engages in such business.
One of the difficulties which exporting houses seem to find with the law is that
export companies usually both export and import, while the law provides that its
protection is given to associations entered into for the sole purpose of engaging in
export trade and actually engaged solely in such export trade.
Due to the facts that the business of the country is devoting its thought to war
production, and that there is a lack of shipping facilities, general plans for
cooperation in export trade are probably now in suspense or only in a formative
state. This is indicated by the very small number of association papers which have
been filed with the Commission since the passage of the act on April 10, 1918.
Statements filed.--Below is a list of all organizations that have filed papers
purporting to be under section 5 of the export trade act (April 10, 1918, to June
30,1918, inclusive).
In listing them the Commission does not indicate that those who have filed these
papers are qualified under the act, or entitled to the benefits of sections 2 and 3 of
the law. Undoubtedly many export houses have felt it was necessary to file
statements to avoid any question as to the penalty imposed by section 5 for failure
so to do. It is also probable that other export houses considered, without a
thorough consideration of the law, that they could obtain some advantage thereby.
The list follows :
Allied Sugar Machinery Corporation, 120 Broadway, New York, N. Y.
Allied Construction Machinery Corporation, 120 Broadway, New York, N. Y.
Allied Machinery Co. of America, 120 Broadway, New York, N. Y.
American International Steel Corporation, 120 Broadway, New York, N. Y.
American Steel Export Co., Woolworth Building, New York, N. Y.
American Steel Export Co’s Brazilian Corporation, Woolworth Building, New
York, N. Y.
Automotive Products Corporation, Woolworth Building, New York, N. Y.
Cranz (Inc.), F., 2 Stone Street, New York, N. Y.
Cranz Importing Co., F. E., 2 Stone Street, New York, N. Y.
Deco Co., 51-53 White Street, New York, N. Y.
Dodge & Seymour, 12 Hudson Place, Hoboken, N. J., and
Dodge & Seymour (China, Ltd.), 12 Hudson Place, Hoboken, N. J., a subsidiary

company.
Douglas Fir Exploitation & Export Co., 260 California Street, San Francisco, Cal.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

41

Dunnellon Phosphate Co. (The), 106 East Bay Street, Savannah, Ga.
European & Far-Eastern Sales Co. (Inc.), 27 William Street, New York, N. Y.
Export Trade Association ( Inc.), Borough of Manhattan, New York, N. Y.
Factory Products Export Corporation, 61 Broadway, New York, N. Y.
Fajardo Bros. & Co. (Inc.), 27 William Street, New York, N. Y.
Galban Noecker & Co. (Inc.), 82-92 Beaver Street, New York, N. Y.
Galena Signal Oil Co. of Brazil, Franklin, Pa.
Holsam Co. (Inc.), IS Broadway, New York, N. Y.
International Cleaning House of New York (Inc.), 748 Broadway, New York, N.
Y.
Manufacturers Agents Co. (Inc.), Virginia Railway & Power Building, Richmond,
Va.
Markt & Hammacher Co., 193 West Street, New York, N. Y.
Mexican Importing & Exporting Corporation, 29 Broadway, New York, N. Y.
Muller, Maclean & Co. (Inc.), 11 Broadway, New York, N. Y.
Parsons & Whittemore (Inc.). 174 Fulton Street, New York, N. Y.
Redwood Export Co., 260 California Street, San Francisco, Cal.
Semtec (Ltd.), 90 West Street New York, N. Y.
Simmons Co., Thomas W., 240 California Street, San Francisco, Cal.
Southern Products Co., Interurban Building, Dallas, Tex.
Sparks & Co., W. J., 17 Battery Place, New York, N. Y.
Sydney Ross Co., 147-153 Waverley Place, New York, N. Y.
Texas Co. (South America) (Ltd.) , The, 17 Battery Place, New York, N. Y.
United States Paper Export Association. 30 Broad Street, New York, N. Y.
Zoccola Co. (Inc.), 60 South Street, Boston, Mass.
Some fear has been expressed in South American countries that the effect of the
export trade act will be disadvantageous to the consuming public of foreign nations
by strengthening the hands of American trusts, monopolies, and combinations of
capital in these markets. The Commission has pointed out the fact that the law
permits the cooperation of manufacturers who would perhaps not otherwise be
able to compete in foreign fields and who, without the law might hesitate to form
cooperative export associations, which will in all probability increase the buying
opportunities of the consuming public in foreign countries.
The Commission has been cooperating with the Bureau of Foreign and Domestic
Commerce, and has availed itself of the privilege of publishing in Commerce
Reports, statements from time to time.
The Commission is keeping informed as to the export needs of the country in
order to be of assistance so that American producers may cooperate to the fullest
extent in export fields, without injuriously affecting domestic commerce, or the
foreign commerce of those exporters who are associated with export trade
associations.
Progress has been made in the preparation of an additional report on foreign
trade conditions under section 6, clause H, of the Federal Trade Commission act,
reading as follows:
SEC. 6 That the Commission shall also have power-(h) To investigate, from time to time, trade conditions in and with foreign
countries where associations, combinations, or practices of manufacturers,

merchants, or trader’s, or other conditions, may affect the foreign trade of the
United States, and to report to Congress thereon, with such recommendations as
it deems advisable.
The world-wide dislocation of trade and industry incident to the war is
creating new conditions which may vitally affect American business in the future.
The Commission is closely following new developments in international trade, as
they arise, with a view to ascertaining the bearing they may have on the foreign
trade of the United States.

42

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

ADMINISTRATION OF PATENT AND TRADE-MARK MATTERS UNDER
THE TRADING WITH THE ENEMY ACT.
Section 10 of the trading with the enemy act, approved October 6, 1917, granted
to the President authority, which he delegated to the Federal Trade Commission
by an Executive order issued October 12,1917:
(a) To license citizens and corporations of the United States to file and prosecute
in the country of an enemy or ally of enemy applications for patents or for
registration of trade-marks, prints, labels, or copyrights, or to pay any taxes,
annuities , or fees relating thereto.
(b) To license citizens and corporations of the United States to make use, and
vend any machine, manufacture, composition of matter or design, or to use any
process trade-marks, print, label, or copyright owned or controlled by an enemy
or ally of enemy.
(c) To order that an invention be kept secret and the grant of a patent withheld
until the end of the war, whenever the publication of an invention by the granting
of a patent may be detrimental to the public safety or defense, or may assist the
enemy, or endanger the successful prosecution of the war.
The Enemy Trade Division, which was established by the Commission to
administer these provisions, has carried on its work in active cooperation with
other governmental agencies. especially with the War Trade Board, the Censorship
Board, the Military Intelligence Division of the General Staff of the Army, the
Naval Intelligence Section of the Bureau of Naval Operations of the Navy, the
Alien Property Custodian, and the Commissioner of Pa tents, and apparently
valuable assistance has been given to these agencies. In addition to the
administration of the trading with the enemy act, the division, under the authority
of the creative act of the Commission, has carried on an extensive investigation of
the ownership or control of United States corporations by enemies or allies of
enemies, and the results have been very illuminating and highly useful to the
Government. The authority to license the filing and prosecution of applications in
enemy countries stated in paragraph (a) above was revoked by the President, at the
suggestion of this Commission, in an Executive order issued April 11, 1918, and
since that date no such license have been issued and very few applications
received.
Each branch of the division’s activity will be reviewed somewhat at length , but
the following statistical summary will be of interest:
Applications to file or prosecute or to pay taxes concerning patents and
trademarks in enemy counties.
Applications granted to file and prosecute ---------------------------------- 248
Applications denied
------------------------------------------------------------- 14
Informal applications ------------------------------------------------------------- 10
Applications pending and returned on Apr. 11, 1918 ------------------------ 578
Total applications to file and prosecute ----------------------------------------------- 850
Applications granted to pay taxes -------------------------------------------- 1,015
Informal applications -------------------------------------------------------15
Applications pending and returned on Apr. 11, 1918
-------------------20
7
Total applications to pay taxes --------------------------------------------------------1,300

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

43
Applications for licenses under enemy patents, trade-marks and copyrights.
Applications granted under patents --------------------------------Applications denied --------------------------------------------------Applications pending ------------------------------------------------Total applications under patents --------------------------------Exclusive licenses issued --------------------------------------------Nonexclusive licenses issued ---------------------------------------Total licenses issued under patents -----------------------------Licenses canceled ------------------------------------------------------

128
7
10
----- 145
5
29
----- 34
2

Of the applications granted, eight have not matured into licenses. The
discrepancy between the number of applications and the number of licenses is
caused by the fact that each application covers a single patent, while in some
instances several patents have been included in a single license.
Applications granted under trade-marks --------------------------3
Applications denied --------------------------------------------------- 2
Applications pending ------------------------------------------------- 5
Total applications under trade-marks ----------------------------------- 10
Exclusive licenses issued --------------------------------------------- 9
Nonexclusive licenses issued under trade-marks ------------------ 1
Total licenses issued under trade-marks --------------------------------- 3
Applications granted under copyrights ----------------------------- 10
Applications denied --------------------------------------------------1
Total applications under copyrights ------------------------------------- 11
Nonexclusive licenses issued ------------------------------------------------- 10
Orders enjoining secrecy of invention.
Inventions disclosed in patent applications regarding which secrecy has been
enjoined --- 1,640
Persons and corporations enjoined to secrecy regarding time foregoing inventions
------- 2,977
Inventions regarding which orders have been vacated or modified --------------------------- 750
Investigation of enemy control of corporations.
Corporations which have reported ----------------------------------------------------------------- 470
Corporations to report ------------------------------------------------------------------------------- 158
Stockholders who have reported ------------------------------------------------------------------- 1,736
Licenses to file and prosecute applications and pay fees in enemy countries.--

After sufficient the had elapsed to allow the Commission thoroughly to appreciate
the dangerous possibilities in the transmittal to enemy countries of patent and
trademark applications and correspondence and payments with respect thereto, the
conclusion was reached that there was every reason why the ban on commercial
intercourse generally should be extended to patent matters. Many documents
which were sought to be transmitted by license from the Commission consisted of
many sheets of descriptive matter and of drawings, and there could be no definite
assurance that these communications were not the means of transmitting to the
enemy both industrial information valuable in the prosecution of the war and
secret code intelligence, despite the careful scrutiny of this Commission and the
War Trade Board and the Censorship Board. The subject was fully considered
with representatives of these boards and of the Military

44

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

and Naval Intelligence Sections, and, as a result a recommendation was made to
the President that the authority to license the transmittal of such documents which
was being exercised by this Com-mission, and by the War Trade Board under the
delegation of authority of the Secretary of the Treasury, be revoked. The President
issued an Executive order on April 11, 1918, in accordance with this
recommendation, and since that date no further licenses have been issued to
correspond in any way whatever with enemy countries regarding patents, trademarks, prints, labels, or copyrights.
Prior to the issuance of this Executive order, the situation had become chaotic.
Some attorneys and industrial concerns had adopted the policy of not filing or
prosecuting patent applications in enemy countries during the continuance of the
war; others who were continuing to file and prosecute such applications found that
in many instances their communications did not reach the intended destination,
because of the sinking of ships or the withholding action by some censor through
whose hands the papers passed. In view of the many uncertainties attending the
transmittal of papers and documents generally, and in view of the potentially very
dangerous character of the patent documents which were being transmitted, it was
deemed best to stop the transmittal of such documents entirely, which was done
by the Executive order of April 11. All the citizens and corporations of the United
States are thus placed in one class, so that the status of their patent and trade-mark
rights in enemy countries and the corresponding rights of enemies in this country,
can be determined definitely and uniformly at the termination of the war.
It is interesting to observe that there has been substantially no objection from
attorneys or industrial concerns to the enforced cessation of patent and trade-mark
communication with enemy countries , although it has effected serious curtailment
of the business of some attorneys, especially those who specialize in foreign work,
and temporarily withholds or destroys patent and trade-mark protection of our own
industrial concerns in enemy countries. The opinion seems to be the most
unanimous that the end justified any means, however vigorous the latter might be.
Licenses under enemy patents, trade-marks, and copyrights.--When the
Commission received its authority to grant licenses under enemy patents in the fall
of 1917, it found an acute condition as to certain synthetic drugs which had
formerly been entirely of German manufacture and importation. The drug which
presented the gravest and most pressing problem was that introduced as
“Salvarsan,” or “606,” for the available supply in this country was almost
exhausted, and the demand from the Army, the Navy and the medical profession
at large was very extensive, so that in many instances the price demanded for this
product rendered its use prohibitive. The situation was carefully studied in
conference with the Surgeon Generals of the Army, the Navy and Public Health
Service and with the representatives of the subcommittee on synthetic drugs of the
National Research Council, and of the American Medical Association. As one
result of this conference and of further investigation following it, it was
determined to prescribe new names in licenses, not only for “Salvarsan,” but for
other synthetic drugs, because the German patent owners or their American agents
generally possessed trade-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

45
mark rights for the only names by which the drugs had heretofore been known. On
November 27, 1917, licenses to manufacture and sell “arsphenamine,” which is the
new name prescribed by the Commission in its licenses for “Salvarsan,” were
granted to the Dermatological Research Laboratories, the Takamine Laboratory
(Inc:), and the Farbwerke-Hoeschst Co.--subsequently canceled and reissued to H.
A. Metz Laboratories (Inc.)--and on January 12, 1918, a fourth license was issued
to the Diarsenol Co. (Inc.). On March 4, 1918, licenses were issued to each of
these concerns to manufacture and sell “neo-arsphenamine,” which is a related and
substitute drug introduced under the trade name “neosalvarsan.” Difficulty was
encountered in the determination of the patents under which these licenses should
be granted, but they were finally issued under five patents, covering respectively
the product “arsphenamine,” the product “neoarsphenamine,” the process for
making these products, the packaging of the products in glass ampules in an
atmosphere of inert gas, and the method of administration by the physician.
Each of the licensees for “arsphenamine” and “neo-arsphenamine” is obliged to
submit a specimen from each lot of its product to the Hygienic Laboratory of the
United States Public Health Service, by whom it must be approved before the lot
is released for sale.
The result of the issuance of these licenses has been a very decided alleviation
of the distressing condition which previously existed, and the market now seems
to be fairly supplied at a reasonable price.
After the apparent solution of the “Salvarsan” problem, the Commission
considered the situation involving the drug introduced as “novocain,” a local
anaesthetic extensively used as a substitute for cocaine, and after investigation and
consideration with the subcommittee on synthetic drugs of the National Research
Council, licenses were issued on December 17, 1917, to the Farbwerke-Hoechst
Co.-subsequently canceled and reissued to H. A. Metz Laboratories ( Inc.)--and the
Rector Chemical Co. (Inc.), and further licenses were issued to the Abbott
Laboratories on January 10, 1918, and to the Calco Chemical Co., on February 18,
1918. These licenses prescribed the name “procaine” for this drug introduced as
“novocain.”
A third drug in great demand was a widely used hypnotic known under the trade
name “veronal,” and the manufacture and sale of this drug under the name
“barbital” was licensed to the Abbott Laboratories on December 17, 1917, and to
Antoine Chiris Co. on March 11, 1918.
The only other drug for the manufacture of which a license has been issued is
phenylcinchoninic acid, formerly sold under the name “atophan.” This drug is
valuable in the treatment of rheumatism and gout, but the demand for it is not
nearly so pressing as for the other licensed drugs, and a license has been issued
only to the Abbott Laboratories, on March 23, 1918.
While each drug licensee must use the new name prescribed by the Commission,
it may also use its own trade name under certain restrictions. The Commission
retains control over the licensees to the extent necessary to assure the production
of drugs in sufficient quantities and of satisfactory quality at reasonable prices.
The licensees for the manufacture of these various drugs were very seriously
handicapped by lack of knowledge in the United

46

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

States of the manufacturing processes and by the difficulty of securing the
necessary equipment and materials, but they have attacked these obstacles
willingly and successfully. The Army, the Navy, and the Red Cross in addition to
the medical profession are calling for vast quantities of these and other drugs and
the manufacture of those quantities within the requisite time necessitates the
installation of equipment which will be useless after these quantities have been
supplied and normal conditions are again approached. It seems to be the fact that
where the selling price of these drugs is undesirably high, it is due to enhanced
cost of materials and equipment and to difficulties in unfamiliar processes rather
than to any undue profit charged by the licensee, but reductions in prices may be
expected as manufacturing processes become more nearly standardized. The
Commission is inclined to be patient with its licensees, in view of the difficulties
which they have encountered, and not only to stimulate production for the
fulfillment of current needs, but also be develop a sound and enduring industry.
While the drug licenses have been the most important issued from a
humanitarian viewpoint, the licenses for the production of coal-tar dyes have been
the most important from the industrial viewpoint, and vast sums are being invested
in the United States for the carrying on of this peculiarly German industry. E. I. du
Pont de Nemours & Co. and the National Aniline & Chemical Co. (Inc.) , as well
as certain other concerns, are developing amid carrying on the coal-tar dye
industry in the United States on a very large scale, but they have not been free to
produce many of the colors covered by unexpired patents owned by German
companies. Both the E. I. du Pont de Nemours & Co. and the National Aniline &
Chemical Co. have quickly accepted the present opportunity to commence the
manufacture of German-controlled colors, and have recognized the expediency of
obtaining legal protection for such activity by license from the Commission.
The research work in identifying the processes of manufacturing these various
colors, and their production in commercial quantities, was not materially aided by
the disclosures of the patents, and it was an especially difficult task both for the
applicants and for the Commission to determine under what patents these dye
licenses should be granted to protect the licensees in what they desired to do. In
many instances it was found that the disclosure in the patent was entirely
inadequate. In other instances the disclosure was sufficient for laboratory practice,
but entirely impracticable for commercial production. Again, one patent might
disclose an incomplete process, while an essential step in the complete process
would be covered by another patent, the title to which was in a different owner.
Persistent investigation and experimentation by the applicants for license, together
with extensive consideration by the Commission, finally resulted in a fairly
satisfactory grouping of the necessary patents under which licenses were issued.
Four licenses have been issued to the E. I. du Pont de Nemours & Co. under 22
patents to manufacture, use, and sell, respectively, anthracene dyes, synthetic
indigo, and its derivatives, sulphur dyes, and azo dyes. Licenses for the same four
groups have been issued to the National Aniline & Chemical Co. under 46 patents.
Licenses

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

47

have also been issued to E. C. Klipstein & Sons Co., Merimac Chemical Co., and
to E. I. du Pont de Nemours & Co. to manufacture and sell solid hydro sulfites,
which are necessarily used in the application of certain dyes.
It is an interesting fact that some of these patents cover products which are sold
by the dye manufacturer, and that other patented process must be used by the
textile manufacturer in applying the product to dye his goods. The Germans used
this condition to force the purchase of products, both patented and unpatented,
from the owner of the patent covering the process of application, but the Commission’s licensees have granted each manufacturer the right to authorize textile
workers to employ these application processes.
Applications for further dye licenses will probably be made as the manufacturers
determine other patented colors which they wish to produce.
The Pacific Flush Tank Co. was granted a license under which it is authorized
to permit the use of the Imhoff process of sewage disposal. Lemboke, von Bernuth
Co. (Inc.), has a license authorizing it to permit the use of the Rueping process for
treating timber. The Hoevel Manufacturing Co. has a license to manufacture and
sell certain sand blast machines. The American Parlograph Corporation is licensed
to make and sell a certain diaphragm head for dictating machines.
Each of these four licenses is in terms exclusive, and they were so ordered by the
Commission because of conditions continuously existing since long prior to the
war, and to have licensed others would have seriously disrupted relations existing
between the licensees and many concerns in the United States. Although these
licenses are in terms exclusive, the public is entirely protected by the provision
that the licenses are terminable in the absolute discretion of the Commission.
Licenses have been issued to Pfanstiehl Co. (Inc.), and to the New Process
Metals Co. to manufacture, use, and sell pyrophoric alloy, which is a so-called
“sparking metal” especially useful to the armies in star shells, and also extensively
used in cigar lighters, miners’ lamps, and gas lighters.
Licenses also have been issued to the French Battery & Carbon Co. to
manufacture and sell certain flashlight batteries; to Albert B. Moses for the
production of artificial milk; to F. L. Smith & Co. for grinding mills; to Robert
Refiner Importing Co. for embroidering machines; to Stearns-Rogers
Manufacturing Co. for drying apparatus; and to General Ceramics Co. for acid
towers.
Only 10 applications have been filed for licenses under trade-marks, and only
three of these have been allowed and licenses issued, while five applications are
still pending. One of these licenses was issued to the Abbott Laboratories to use
the trade-mark “Veronal” in order to identify the drug named “barbital” made
under a patent license. Another was granted to Lehn & Fink to continued to use the
trade-mark “Pebeco” on tooth paste made by a secret process known in the United
States only to the licensee and formerly imported from Germany under contract
with the trade-mark owner. The third was issued to the Anchor Packing Co. to use
the trade-mark “Tauril” on packing, also made by a secret process known in this
country only to the licensee. Licenses under trade-marks have been denied where

48 ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
it was evident that to grant a license would permit misrepresentation or confusion.
Under copyrights, one license has been issued to Houghton Mifflin Co. to
publish a German officer's description of submarine warfare; another to David
McKay, of Philadelphia, to publish an English and Greek dictionary; and a third
to the John Crearar Library, of Chicago, to reproduce certain pages of a German
treatise on dyes. The remaining licenses under copyrights have been for the
production of grand operas. The San Carlo Grand Opera Co. is licensed to
produce “The Jewels of the Madonna,” “The Secret of Suzanne,” “Sahome,” and
“Hansel and Gretel.” The Philadelphia Operatic Society is licensed to produce
“The Secret of Suzanne,” and the Ravinia Co., of Chicago, is licensed to perform
“The Secret of Suzanne” and the second act of “The Jewels of the Madonna.”
In all of the licenses issued by the Commission, a royalty is stipulated which is
payable periodically to the Alien Property Custodian and the right is reserved in
the Commission to investigate the licensee’s business and to cancel a license at
any time in its discretion , if in its opinion the licensee has failed to satisfy the
reasonable requirements of the public with satisfactory articles at reasonable
prices, or under any circumstances which in the opinion of the Commission make
it advisable that the license be canceled in whole or in part.
Despite the complete control which the Commission thus retains over the
licensee, in order to protect the interests of the public, the licensee is subject under
the “trading with the enemy act” to a contingent liability which seems inadvisable
and unnecessary. The act provides that the licensee shall be required to deposit
with the Alien Property Custodian not to exceed 5 per cent of the gross sums
received by the licensee, or not to exceed 5 per cent of the value of the use of the
licensee. The act further provides that within one year after the war the enemy
owner may bring suit against the Commission’s licensee for recovery for all use
and enjoyment of the subject matter and that the court may decree to the owner
payment of a reasonable royalty, and may terminate the license and enjoin the
licensee from infringement thereafter or continue the license for such period and
upon such terms as it may find to be reasonable.
These provisions as to royalty and termination of the license have caused a
decided feeling of uneasiness and uncertainty among the Commission's licensees,
and many competent counsel are advising clients not to apply for licenses of such
inconclusive character, but to take their chances of being sued for infringement
after the war in the ordinary course.
Every license issued by the Commission has been granted, not for the duration
of the war, but for the life of the right under which it is granted, and the
Commission is firmly of the opinion that equity demands that the royalty
prescribed in the license be fixed with more definiteness, and that the power of the
courts to terminate the licenses be abrogated. In some instances 5 per cent of the
gross sums received by the licensee is not a sufficiently high royalty to be
reasonable and in other instances it is entirely too high, and the other provision as
to the deposit of 5 per cent of the value of the use of the licensed subject matter
apparently has no relation to what may be a reasonable royalty. Furthermore, after
the war a court may establish what it considers a reasonable royalty without any
relation to the

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

49

investigation by the Commission or the rate establishment by it in the license.
Finally, in view of the fact that these licenses are designed to protect the United
States concerns in establishing and carrying on industries which heretofore have
been monopolized unfairly by German and Austrian interests to the very great
disadvantage of the American public, it seems inequitable in high degree to have
the Commission’s licenses terminable by the courts at the suit of the enemy
owners.
It is earnestly urged that these serious defects of the present act should be cured,
to the end that the business license by the Commission may rest on a firm
foundation. Senate Bill No.3523, which was introduced on January 16, 1918, at
the request of the Commission, and another bill which was recently transmitted
with a request for its introduction, together will remedy the present uncertainties.
In substance they provide that the Commission in its license may pre-scribe a
reasonable royalty and that at the suit of the enemy owner after the war, the court,
although it may also establish a reasonable royalty, shall accept that prescribed in
the license as prima facie reasonable, while the powers of the courts to terminate
the licenses is entirely cut off. The enactment of these bills will certainly enable
the Commission to do much more effective work in the establishment of industries
which have heretofore been monopolized by our present enemies.
Orders of secrecy regarding inventions.--Section 10 (I) of the trading with the
enemy act authorizes the President, whose power has been delegated to the Federal
Trade Commission, to order that an invention be kept secret and the grant of a
patent withheld until the end of the war, whenever in his opinion the publication
of an invention by the granting of a patent may be detrimental to the public safety
or defense, or may assist the enemy or endanger the successful prosecution of the
war. If the invention be published in violation of the order without the consent of
the Commissioner of Patents, or the Federal Trade Commission (acting for the
President), the penalty is the abandonment of the invention and a fine of not to
exceed $10,000 or imprisonment for not to exceed 10 years, or both.
Coincident with the approval of the trading with the enemy act, on October 6,
1917, another act was approved which causes an anomalous situation. The second
act is in substantially the same phraseology as section 10 (I) of the trading with the
enemy act, except the authority to issue orders is vested in the Commissioner of
Patents instead of in the President; that the modification of the order may be made
by time Commissioner of Patents or the Secretary of Commerce, instead of by the
Commissioner of Patents or the President; and that the penalty for violation of the
order is merely abandonment of the invention and does not include either fine or
imprisonment. The Secretary of Commerce has issued no licenses under this act
modifying issued orders, and it may be that his inclusion in the terms of the act
was inadvertent.
Considerable difficulty was encountered at the commencement of the
administration of these two acts, because of the concurrent jurisdiction of time
Federal Trade Commission and the Commissioner of Patents, but a workable plan
of procedure was soon determined.

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ANNUAL REPORT THE FEDERAL TRADE COMMISSION.

The Commissioner of Patents has appointed a committee of primary examiners
to whom the members of the examining corps of the Patent Office report patent
applications involving war inventions as they are filed or as they are subsequently
reached for Patent Office action in the regular course. This committee
recommends whether or not an order of secrecy should be issued with respect to
the invention disclosed in a specific application. There is also a board composed
of members appointed by the Secretaries of War and the Navy, whose duty it is to
investigate patent applications pending in the Patent Office, for the purpose of
bringing to the attention of the military authorities any inventions useful in the
prosecution of the war. This board frequently suggests to the committee of
primary examiners certain applications which in its opinion should be placed under
orders of secrecy.
On the recommendation of the committee of primary examiners an order is
issued by the Commissioner of Patents to time inventor, his attorney and assignee,
enjoining them to maintain secrecy concerning the invention disclosed in the
instant application, and withholding the grant of a patent thereon. This
Commission is promptly informed of all orders issued by time Commissioner of
Patents, where-upon orders of secrecy are issued by the Commission to each
inventor, his attorney and assignee, and to all others having knowledge of the
invention. The order of the Commissioner of Patents not only enjoins secrecy, but
withholds the grant of a patent. The order of the Commission is subject to
modification by the Commissioner of Patents or this Commission, and enjoins any
disclosure of the invention except to the Secretary of War, the Secretary of the
Navy, and such other persons as they may officially designate in writing. It would
be impossible for this Commission without a material increase of personnel and
facilities, to may the necessary investigation to determine whether or not an
application for the modification of an issued order should be granted. The
Commissioner of Patents, on the other hand, has the assistance of the technically
trained examining corps, and intimate association with the Army and Navy Patent
Board, so that as a general rule, applications for the revocation or modification of
orders are referred to him. On the issuance of a vacating or modifying order by the
Commissioner of Patents, the order previously issued by this Commission is
automatically vacated or modified to the same extent.
Peculiar situations occur infrequently, in which it seems necessary and advisable
to depart from the foregoing customary procedure and to have this Commission
issue an order independently of the Commissioner of Patents. Such orders have
been issued with respect to only about 15 inventions, and they were prompted by
the special requests of the Army or the Navy, or by the necessity of exceedingly
prompt action.
Orders maintaining secrecy and withholding patents are issued with respect to
practically all inventions relating to submarine devices, airplanes, wireless
apparatus, ordnance, gyroscopes, camouflage, gas and gas protective devices, and
other strictly military inventions, while selected inventions in other lines of
endeavor are ordered kept secret.
The present laws are seriously defective, because both the trading with the
enemy act and the other similar act limit the issuances of in-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

51

junctions to instances in which the publication of an invention by the granting of
a patent may be detrimental. There are many instances in which it is highly
desirable to forbid any disclosure of an invention for which no patent application
has been filed and for which none is contemplated. Time reasonable interpretation
of the act does not seem to authorize the issuance of injunctions maintaining the
secrecy of such inventions, and Senate bill 3523 now pending includes an
amendment to section 10 (I) of the trading with the enemy the phase, “the
publication of an invention act by changing by the granting g of a patent,” to “the
publication of an invention or the granting of a patent,” which obviously will
remedy the situation. In the meantime, at the suggestion of this division, a plan
has been formulated with the Commissioner of Patents whereby an application
may be prepared with knowledge of time invention limited to the inventor and
an authorized officer of the Army or Navy who will present the application to the
Commissioner of Patents personally for the purpose of having it properly filed, bu
with any knowledge of the invention limited to the invention to the fewest persons
practicable and yet will furnish a legally filed application on which orders of
secrecy may be issued under the present acts.
Investigation of enemy control of corporations.--Some months ago it was
appreciated that under the authority of the creative act of the Commission,
corporations could be required to the reports which could be made to disclose
ownership or control by enemies. A comprehensive questionnaire was formulated
which is sent to the corporation under suspicion, and the latter is required to
disclose among other things stockholders for the years 1915, 1916 , and 1917. On
receipt of this list a questionnaire is sent to each stock-holder. The answers from
the corporation and its stockholders reveal the real owner of the beneficial interest
in the corporation and any relations it may have with other concerns.
The great value of the information obtained in this manner by the Commission
and the usefulness of its power to obtain information which might otherwise
remain unknown, are well evidenced by the numerous requests from the Alien
Property Custodian, the War Trade Board, and the Intelligence Sections of the
Army and Navy that the division send its questionnaires to specified concerns.
When the answers to a questionnaire show any enemy interest in concerns under
investigation, time facts are promptly reported to the Alien Property Custodian
amid the War Trade Board, amid any other department is notified of facts that
might peculiarly interest it.
The Commission informed that among the 470 companies and 1,736
stockholders who have filed answers to its questionnaires, there are included many
enemy interests in American industries which were before unknown to the Alien
Property Custodian. Many otherwise unsuspicious persons have been found to be
intimately connected with enemy interests, amid such information has been
welcomed by the Intelligence Sections of the Army amid Navy.
Of the 470 companies investigated, over 100 have been found to be controlled
by enemies, who in a majority of cases are Germans. Some of the most important
corporations in the United States have been found to be “outposts of Kultur.”

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

In many instances, subsequent to the taking over of a corporation by the Alien
Property Custodian, this Commission has been requested to make an investigation
in its unique way, and we have been able to disclose stock held by or for enemies
which it has been impossible to discover in any other manner.
CONCLUSIONS.
The results accomplished under the trading with the enemy act seem to be
divisible into three general classes.
The work connected with the issuance of orders to maintain secrecy regarding
inventions and the investigation and censorship of patent matters destined for
enemy countries prior to the revocation of authority to do so, have been of
immediate importance and value in protecting the military endeavors of the
Nation, and the utility and scope of this work will certainly be increased if the
trading with the enemy act be amended in accordance with pending legislation.
The extensive investigation to uncover enemy ownership or control of American
industries has been and continues to be of especial value, both from the industrial
and the military aspects. The information gathered by this investigation in many
instances has disclosed ramifying enemy interests that had been otherwise
undiscovered, and has been a powerful aid in nullifying the attempts of German
and Austrian financial interests to dominate many American industries. At the
same time this investigation, primarily designed to acquire industrial and economic
information, has frequently disclosed information of a personal nature which has
been of immediate value to the Military and Naval Intelligence Sections in
apprehending individuals whose activities were inimical to the interests of the
Nation.
The issuance of licenses under enemy-owned or controlled patents trade-marks,
and copyrights is of high value in affording legal protection to those corporations
and individuals who have been so licensed.
LEGAL DIVISION.
The work of the legal division during the fiscal year ending June 30, 1918, has
been characterized by a very marked increase, not only in the number of
proceedings instituted and disposed of but also in the scope and range of its
activities over that of previous years.
By the provisions of the Federal Trade Commission act the Commission is
required to prevent the use of unfair methods of competition in interstate
commerce, in violation of section 5, and it is also charged with the duty of
enforcing sections 2, 3, 7, and 8 of the Clayton Act, designed to prevent certain
price discriminations, tying contracts, intercorporate stockholders, and interlocking
directories. The jurisdiction of the Commission has been greatly enlarged during
the past year by the enactment by Congress of the Webb Act, approved April 10,
1918, extending the powers of the Commission to embrace certain-phases of
export trade. of the United States. This act and the Commission 's relation thereto,
is referred to more fully elsewhere in this report.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

53

There have been presented to the Commission during the year 332 applications
for the issuance of complaints and for the institution of proceedings charging
unfair methods of competition or violations of those sections of the Clayton Act
which the Commission is required to enforce. In the applications involving unfair
methods of competition the practices complained of, which were alleged to be
unfair methods of competition, include:
Advertising: False and misleading. Refusal to accept.
Bogus independents.
Commission’s letter, misuse of.
Commission’s order, disobedience of.
Combination of buyers to force down prices by refusal to purchase.
Conspiracy: To injure competitor. Black lists. To eliminate competition and maintain exorbitant
prices.
Contracts: Abrogation of Exclusive agency. Exclusive dealing (full line forcing). Inducing breach
of.
Defamation: Libel. Slander.
Division of territory.
Direct selling to consumers by producers and wholesalers.
Discounts: Quality or grade. Quantity.
Discrimination, price.
Disparagement of: Goods. Business.
Employees : Bribery of. Enticement of.
Espionage.
Fraudulent marking of goods.
Impairment of competitive power of other concerns by stock control.
Intimidation: Threats. Boycott. Molestation or obstruction.
Joint selling agencies.
Holding back shipments to increase price of product.
Limitation of outputs, agreements.
Misbranding.
Misrepresentations.
Mergers.
Making up cost sheets “in reckless disregard of true cost.”
Monopoly.
Nondelivery of goods on bona fide orders.
Open price exchanges.
Organization of “trust” to increase prices.
Passing off: Of goods. Of name.
Patents and copyrights, infringement of.
Price agreements.
Price cutting: General. Local. Free goods or premiums (trading in).
Price enhancement of product.
Price enhancement of products, combinations.
Price enhancement of raw material.
Price fixing : By associations and combinations. By individuals and corporations.
Prices, charging excessive for necessary supplies.
Prosecution and persecution of alleged infringers of patents.
Rebates.
Refusal to sell.
Refusal to furnish repair parts.
Refusal to furnish service, at instigation of competitor.
Restraint of trade.
Restraint of trade, combinations.
Resale price maintenance.
Selling certain products at a loss and recouping on others.
Suits, malicious and wrongful.

Spurious inquiries for estimates.
Simulation of slogans.
Supplies, cutting off of competitors.
Unauthorized use of trade-mark.
Using cars obtained for Government purposes for private purposes.

To make accurate determination of the facts involved in many of the
application for the issuance of complaints, long and skillful

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

investigations are required of the industries involved and the trade practices and
regulations of such industries. These investigations are made by attorneys and
examiners of the Commission various sections of the country. In the making of
such investigations, intricate questions of both law and fact very often arise which
require the services of the Commission’s attorneys in preparing briefs and opinions
thereon which are, with reports of such investigations, submitted to the Board of
Review for its consideration. This board, which is composed of two lawyers and
one economist, after a complete review of the facts ascertained from such
investigations, and the law applicable thereto, submits the matter to the
Commission, with its opinion, either dismissal of the application or the issuance
of a complaint in a proceeding authorized by law. With this report and opinion
before it, the Commission then proceeds to a consideration of the matter to
determine whether or not it has reason to believe that the facts developed from
such investigations constitute a violation of any of the laws which the Commission
is required to enforce, and in cases of unfair methods of competition, further,
whether a proceeding by it would be to the interest of the public. If such situation
affirmatively appears, then the Commission authorizes the issuance of a complaint
and institution of proceedings, but if it does not so appear, then the matter is
disposed of by dismissal or discontinuance of further consideration. Upon the
ordering of the issuance of a complaint and the institution of proceedings, the
matter is transmitted to time chief counsel, who prepares the Commission’s
complaint and conducts the proceedings and hearings thereon to final conclusion.
The method of practice is substantially as follows:
Although the complaints, in compliance with the statutes, have, when served, a
notice that on a certain date fixed therein, not less than 30 days from the service
thereof, the respondent show cause before the Commission why an order should
not be entered requiring such respondent to cease and desist from the violations
of law therein charged, the Commission has assumed that the burden of proof is
upon it to establish, by proof, the allegations of the complaint. Therefore, the
respondent is not required to bring its witnesses before the Commission on the
return day; neither can the Commission, with its multitudinous other, generally sit
at the taking of testimony in proceedings requiring many days of hearing.
Therefore, on the return day, the usual practice is to fix a time and place for the
beginning of the taking of the testimony, which place is usually a place most
convenient and inexpensive for the parties and witnesses. The testimony is usually
taken before an examiner of the Commission who has had experience in trials in
the courts. He passes upon the admissibility of the evidence presented at the hearin g before him. Before the taking of the testimony is finally closed before the
examiner parties objecting to the ruling of the examiner upon the introduction of
evidence may have such ruling reviewed by the Commission. The Commission
has not furnished bills of particulars to respondents in any proceeding and it is
careful that no injustice shall be done by reason of such refusal. The Commission
is particularly desirous that all the facts in reference to the matter involved and
within the scope of the investigation be brought out if respondents are surprised
or unprepared for the cross-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

55
examination of witnesses who testify in support of the Commission’s complaint,
the Commission will recall such witnesses at a later date for cross-examination by
the respondents, or the Commission will give the respondents time to give
consideration to the matter presented in evidence which causes such surprise.
Besides this, after the testimony to support the Commission’s complaint has all
been presented ' the respondents are given a reasonable length of time to prepare
evidence to be given in support of their answer or in rebuttal of the testimony
presented in support of the complaint. In the proceedings, the Commission is
represented, and the evidence is offered, by attorneys for the Commission who are
designated as trial counsel. When the evidence has all been introduced before the
examiner, the trial counsel and counsel for respondents present to the examiner
briefs of the law and facts and arc allowed to make oral argument before the
examiner. The pleadings, evidence, and summary thereof, are then presented to
the Commission and counsel, if desired, may make oral argument before the
Commission. The Commission then makes its findings as to the facts and issues
its order either to cease and desist or dismissal. The Commission’s findings and
the order based on such findings, conclude the disposition of the matter by the
Commission.
On June 30, 1917, there were pending before the Commission 191 applications
for complaints, and these, together with the 332 received up to June 30, 1918,
make a total of 523. Of this number 240 were disposed of during the fiscal year
ending June 30, 1918, either with or without formal proceedings, by conference
rulings or by resolutions of the Commission, leaving undisposed of at the end of
the fiscal year, 283 applications which are now under investigation.
Comparative summary of applications.
1918
Applications received ----------------------------------------- 332
Applications disposed of ------------------------------------- 240
Applications pending ----------------------------------------- 283

1917
154
106
191

In June, 1918, the Commission established branch offices at New York City, 421
Post office Building, Eighth Avenue and Thirty-fourth Street; Chicago, Laden
Building, 14 East Jackson Boulevard; at San Francisco Appraisers Store Building.
Each office is in charge of an examiner of the legal department and it is expected
that his work will decrease the expense incident to the investigation of applications
and the preparation of the various proceedings for hearing. However, owing to the
limited length of time which these offices have been in actual operation, it is not
thought advisable to attempt to make a separate review of their activities in this
report.
It has been time policy of the legal department, consistently adhered to
throughout the fiscal year, to bring, whenever possible, formal proceedings to a
conclusion by stipulation or agreement as to the facts, thereby reducing the volume
of litigation, resulting in a saving of time and expense, both to the Commission and
the respondents. This has been accomplished by submitting cases to the

Commission for its consideration and determination upon agreed state-

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

ments of facts wherein it is stipulated between the counsel for the Commission and
the respondents, that the Commission shall proceed forthwith upon such agreed
statements of facts to make and enter its findings and order to cease and desist
from the practices charged without the introduction of evidence. The chief counsel
has prepared a form of answer to complaints in proceedings where such agreement
may be arranged, which, in itself, accomplishes the same purpose by virtually
making the charges in the complaint and the answer an agreed statement of facts.
This form of answer has been used by numerous respondents during the last fiscal
year, thus eliminating the burden of lengthy and expensive trials. The many
settlements of proceedings by agreed statements of fact is an indication of the
thorough and impartial manner in which the attorneys and examiners of the
Commission have made investigations of the facts involved.
The Commission takes modest pride in the achievements of the legal division
during the past year. The orders issued by the Commission requiring respondents
to cease and desist from unfair methods of competition is patently doing much to
establish higher ethics of competition in industry, protecting the public from
restraints of trade and monopoly, and appears to be an entire justification for the
enactment of section 5 of the Federal Trade Commission act which requires the
Commission to prevent unfair methods of competition in interstate commerce.
Appended hereto is a copy of a complaint of the Commission in a proceeding
which is typical of the complaints issued by it (Exhibit 6), and likewise a copy of
the findings as to the facts, conclusions of law, and an order to cease and desist
(Exhibit 7).
A brief resume of the adversary proceedings under consideration by the
Commission during the year ending June 30, 1918, is as follows:
PROCEEDINGS INSTITUTED SINCE JULY 1, 1917.
(June 30, 1918.)
Complaint No. 15 (July 5, 1917, amended complaint Apr. 8, 1918).--Federal
Trade Commission v. The Curtis Publishing Co. Cause: Stifling and suppressing
competition by refusal to sell its publications to dealers who will not agree to sell
or distribute the publications of certain of its competitors in alleged violation of
section 5 of the Federal Trade Commission act; and further, attempting to create
a monopoly by means of price fixing conditioned on the non-sale of competitors’
publications in alleged violation of section 3 of the Clayton Act.
Complaint No 16 (Aug. 1, 1917).--Federal Trade Commission v. The Whole-sale
Saddlery Association of the United States and National Harness Manufacturers’
Association of the United States. Cause: The complaint is in three parts, viz, (l)
against the Wholesale Saddlery Association; (2) against both; and (3) against the
National Harness Manufactures’ Association. (l) Stifling and suppressing
competition in the wholesale harness and saddlery trade by unfairly hampering and
obstructing certain competitors who are not members of the association by
inducing and compelling manufacturers of saddlery accessories to refuse to
recognize such competitors as legitimate jobbers or wholesalers and entitled to

prices and terms as such; (2) stifling and suppressing competition in the combined
or closely affiliated wholesale and retail harness amid saddlery goods business by
Inducing and compelling manufacturers of saddlery accessories to refuse to
recognize such competitors as legitimate jobbers entitled to prices and terms as
such; and (3) stifling and suppressing competition by hampering and obstructing
competition by inducing and compelling manufacturers by various means not to
sell to certain competitors, among

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

57
which are mail-order houses, general stores, hardware stores, etc.: all in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.17 (Aug. 7, 1917).--Federal Trade Commission v. Bureau of
Statistics of the Book Paper Manufacturers, Charles F. Moore, the bureau’s
secretary, and 23 paper manufacturers. Ca use: Unfair methods of competition by
engaging In a concerted movement to enhance prices and bring about a uniformity
of such enhanced prices in the book-paper Industry in alleged violation of section
5 of the Federal Trade Commission act.
Complaint No. 18 ( Sept. 14, 1918).--Federal Trade Commission v. Association
of Flag Manufacturers of America, et al. Cause : Engaging in a concerted
movement to unduly enhance the prices of American flags and to maintain such
prices, and to bring about a general uniformity In such prices by meetings,
correspondence, and other means of intercommunication, in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No.19 (Nov.15, 1917).--Federal Trade Commission v. Mishmawaka
Woolen Manufacturing Co. Cause: (l) Unfair methods of competition by fixing a
schedule of resale prices, by requiring purchasers to agree to maintain such prices,
by refusing to sell unless such agreement is entered into, and by refusing to sell if
agreement is violated, in alleged violation of section 5 of the Federal Trade
Commission act; (2) price discrimination, the effect of which may be to
substantially lessen competition or tend to credit a monopoly in alleged violation
of section 2 of the Clayton Act.
Complaint No.20 (Nov.15, 1917).--Federal Trade Commission v. The Cudahy
Packing Co. Cause: (l) Price discrimination, the effect of which may be to
substantially lessen competition or tend to create a monopoly in alleged violation
of section 2 of the Clayton Act; (2) unfair methods of competition by fixing a
schedule of resale prices and by making a price to those who do not adhere to time
schedule so high that they can not make a fair and reasonable profit on resale, in
alleged violation of section 5 of time Federal Trade Commission act.
Complaint No.21 (Nov.21, 1917).--Federal Trade Commission v. Ward Baking
Co. Cause: Stifling and suppressing competition in the manufacture and sale of
bread by supplying gratis to each customer in certain localities daily a quantity of
bread equal to the amount of bread daily bought and paid for by such customer, in
alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 22 (Nov. 27, 1917).--Federal Trade Commission v. Chicago
Flexible Shaft Co. Cause: Attempting to lessen competition and create a
monopoly by selling and making contracts for sale of sheep-shearing and horseclipping machines at prices, or discounts, or with rebates dependent on agreement
that the purchaser shall not use or deal in the sheep-shearing or horse-clipping
machines, or parts thereof of competitors, In alleged violation of section 3 of the
Clayton Act.
Complaint No. 23 (Dec. 6, 1917).--Federal Trade Commission v. Chicago LinoTabler Co. Cause: Unfair methods of competition in connection with the
manufacture, sale, and leasing of a device to produce printed ruled lines for
tabulation, by attempting to stifle and suppress competition by publishing an

Incorrect quotation of a patent claim, by threats, not made in good faith, to sue
competitor’s customers for infringement of patents, by endeavoring to persuade
or force certain trade journals to refuse competitor’s advertising during the
pendency of a suit against a certain competitor’s customer by making false and
misleading statements, concerning the devices and apparatus and financial
condition of this competitor, and by making false and misleading statements in
trade journals and to certain customers of the competitor, etc., in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 24 (Jan. 10, 1918).--Federal Trade Commission v. Galena-Signal
Oil Co. Cause: Stifling and suppressing competition in the manufacture and sale
of lubricants, etc., by price discrimination in alleged violation of section 2 of time
Clayton Act; and by fixing its sales price or discount or rebate thereof, on the
condition that the purchaser shall not use the goods of competitors, In alleged
violation of section 3 of the Clayton Act; the effect of both practices being to
substantially lesson competition or to tend to create a monopoly.
Complaint No. 25 (Dec. 11, 1917).--Federal Trade Commission v. J. F. Hillerich
& Son Co. Cause: Unfair methods of competition in connection with the
manufacture, marketing, and sale of baseball bats by fixing resale prices amid
refusing to supply those who do not agree to maintain such selling prices or who
do not sell at the prices fixed, iii alleged violation of section 5 of the

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Federal Trade Commission act; price discrimination, the effect of which may be
to substantially lessen competition or tend to create a monopoly in alleged
violation of section 2 of the Clayton Act.
Complaint No. 26 (Dec. 11, 1917).--Federal Trade Commission v. National
Distilling Co. Cause: Stifling or suppressing competition in the manufacture and
sale of yeast by sampling in large quantities, by gratuities to bakers and their
employees, by providing entertainment to bakers and their employees, etc., by
supplying yeast without any immediate charge therefor, by making payments of
cash to customers, which cash payments are included and distributed in the price
of yeast delivered under a contract entered into at the time of said payment, in
alleged violation of section 5 of the Federal Trade Commission act; price
discrimination and fixing its sale prices, rebates and discounts conditioned that the
purchaser shall not use or deal with the Goods of competitors, the effect of which
may be to substantially lessen competition or tend to create a monopoly, in alleged
violation of sections 2 amid 3 of the Clayton Act.
Complaint No. 27 (Dec. 6, 1917).--Federal Trade Commission v. Chester Kent
& Co. Cause: Attempting to eliminate competition in time sale of certain
proprietary medicines by ti xing resale prices and refusing to sell to those who fail
to maintain such prices, in alleged violation of section 5 of the Federal Trade
Commission act; price discrimination the effect of which may be to substantially
lessen competition or tend to create a monopoly, in alleged violation of section 2
of time Clayton Act.
Complaint No.28 (Dec. 11, 1917).--Federal Trade Commission v. Ward Baking
Co. (complaint No 21). Cause: Stilling and suppressing competition by fixing
resale prices and refusing to sell to those who will not agree to maintain such
standard resale prices or who do not resell at such standard selling prices, in
alleged violation of section 5 of the Federal Trade Commission act.
Complaint No.29 (Dec.18, 1917).--Federal Trade Commission v. Nulomoline Co.
Cause: Stifling and suppressing competition in the manufacture and sale of
inverted sugar sirup by claiming the exclusive right to, and monopoly of, the
manufacture of inverted sugar sirup and of the process of manufacture; threatening
suit against competitors for infringement of letters patent alleged to have been
obtained originally by false and misleading statements ; threatening to institute suit
against customers; false and misleading advertisements; all in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 30 (Dec. 24, 1917).--Federal Trade Commission v. Western
Chock Co. Cause: Attempting to eliminate competition in the sale of certain alarm
clocks by fixing resale prices and refusing to sell to those who fail to maintain
such prices, in alleged violation of section 5 of the Federal Trade Commission act;
price discrimination, the effect of which may be to substantially lessen competition
or tend to create a monopoly in alleged violation of section 2 of the Clayton Act.
Complaint No. 31 (Jan. 10, 1918).--Federal Trade Commission v. National
Biscuit Co. Cause: Stifling and suppressing competition in certain bakery products
by means of a system of rebates and discounts calculated to cause time trade to
purchase its goods either largely or exclusively; and by making contracts with
advertising agencies which tend to stifle and suppress competition; all in alleged
violation of section 5 of the Federal Trade Commission act.

Complaint No. 32 (Jan. 29, 1918).--Federal Trade Commission v. United Drug
Co. Cause: Stifling and suppressing competition in the manufacture and sale of
patent and proprietary medicines, tobacco in different forms, candy, foodstuffs,
motions, etc., by selling and offering for sale certain of such merchandise through
its various local retail stores at prices less than cost of which do not yield a fair
return of profit in alleged violation of section 5 of the Federal Trade Commission
act.
Complaint No. 33 (Feb. 1, 1918).--Federal Trade Commission v. American
Radiator Co. Cause: Stilling and suppressing competition in the manufacture amid
smile of radiators by offering to the trade certain rebates or discounts In alleged
violation of section 5 of time Federal Trade Commission act.
Complaint No. 34 (Feb. 1, 1918).--Federal Trade Commission v. Dearborn
Typewriter Co. Cause: Stifling and suppressing competition in the sale or
typewriters by publishing and causing to be published false and misleading
advertisements designed and calculated to cause customers and prospective
customers to believe that the repaired amid rebuilt typewriters of standard makes

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 59
offered for sale at a price of less than one-half that charged by the makers of such
machines are new typewriters in alleged violation of section 5 of the Federal Trade
Commission act.
Complaint No. 35 (Feb. 1, 1918).--Federal Trade Commission v. Metro Type
writer Co. Cause: Stifling and suppressing competition in the sale of type-writers
by publishing and causing to be punished false and misleading advertisements
designed and calculated to cause customers and prospective customers to believe
that the repaired and rebuilt typewriters of standard makes offered for sale at a
price of less than one-half of that charged by the makers of such machines are new
typewriters in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 36 (Feb. 1, 1918).--Federal Trade Commission v. Harry A. Smith.
Causes: Stifling and suppressing competition in the sale of typewriters by
publishing and causing to be published false and misleading advertisements
designed and calculated to cause customers and prospective customers to believe
that the repaired and rebuilt typewriters of standard makes offered for sale at a
price of less than one-half of what charged by the makers of such machines are
new typewriters in alleged violation of section 5 of the Federal Trade Commission
act.
Complaint No. 38 (Feb. 11, 1918).--Federal Trade Commission v. Block &
Emporium. Cause: Stifling and suppressing competition in the sale of type-writers
by publishing and causing to be published false and misleading advertisements
designed and calculated to cause customers and prospective customers to believe
that the repaired and rebuilt typewriters of standard makers offered for sale at a
price of less than one-half of that charged by the makers of such machines are new
typewriters in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 38, (Feb. 11, 1918).--Federal Trade Commission v. Block & Co.
Cause: Stifling and suppressing competition in the manufacture and sale of certain
preparations for the treatment of diseases of the skin, tissues, and muscles by
adopting the trade name Mentholanum for its preparation and advertising the
name, whereas for years past a preparation, bearing the trade name of
Mentholanum, adapted for the use of treating such ailments, has been on the
market, in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No.39 (Feb.15, 1918).--Federal Trade Commission v. The Coco Cola
Co. Cause: Stifling and suppressing competition in the sale and distribution of
sirups similar to Coco Cola by a system of espionage on the business of its
competitors; refusing to sell to wholesalers who will not agree not to sell
competitors’ goods; fixing resale prices under threat to refuse to sell to those who
fail to maintain the resale prices, and by a system of contracts by which jobbers
and wholesalers are obligated to pay certain fixed rebates to the fountain dealers;
rebates to wholesaler and jobbers; rebates to retailers or fountain dispensers either
direct or through jobbers, etc.; all in alleged violation of section 5 of the Federal
Trade Commission act ; and making contracts for the sale of Coco Cola sirup on
condition that goods of similar color of competitors be not handled, or on
condition that goods of competitors that are a substitute or imitation of Coco Cola
sirup be not dealt in, the effect of which Is to substantially lessen competition and
tend to create a monopoly in alleged violation of section 3 of the Clayton Act.
Complaint No. 40 (Feb. 15, 1918).--Federal Trade Commission v. Time

Colorado Milling & Elevator Co. Cause: Attempting to eliminate competition by
fixing resale prices and by refusing to sell to those who will not agree to maintain
such prices in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 41 (Feb. 19, 1918).--Federal Trade Commission v. Rockford
Varnish Co. Cause: Stifling and suppressing competition in connection with time
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 42 (Feb. 19, 1918).--Federal Trade Commission v. Columbus
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, thorough lavish
entertainment of competitors’ employees secret payment of money to employees
of customers who might otherwise by goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Complaint No. 43 (Feb. 19, 1918).--Federal Trade Commission v. Flood &
Conklin Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 44 (Feb.19, 1918).--Federal Trade Commission v. Warren Soap
Manufacturing Co. Cause: Stifling and suppressing competition in connection
with time manufacture and sale of soap and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.45 (Feb.19, 1918).--Federal Trade Commission v. Eagle Printing
Ink Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of printing inks, through lavish entertainment of competitor’s
employees, secret payment of money to employees of customers who might
otherwise buy goods from competing concerns in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 46 (Feb. 19, 1918).--Federal Trade Commission v. Sigmund
Ullman Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of printing inks, through lavish entertainment of competitor’s
employees, secret payment of money to employees of customers who might
otherwise buy goods from competing concerns in alleged violation of section 5 of
time Federal Trade Commission act.
Complaint No. 47 (Feb.19, 1918).--Federal Trade Commission v. J. M. Huber.
Cause: Stifling and suppressing competition in connection with the manufacture
and sale of printing inks, through lavish entertainment of competitors’ employees,
secret payment of money to employees of customers who might other-wise buy
goods from competing concerns in alleged violation of section 5 of time Federal
Trade Commission act.
Complaint No.48 (Feb.19, 1918).--Federal Trade Commission v. Walter L.
Trainer Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paints, varnish, and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No 49 (Feb.19, 1918).--Federal Trade Commission v. N. Z. Graves
Corporation. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paints, varnish, and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 50 (Feb. 19, 1918).--Federal Trade Commission v. Van Camp
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paints, varnish, and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of time Federal Trade Commission act.
Complaint No. 51 (Feb. 19, 1918).--Federal Trade Commission m. Sun Varnish

Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.52 (Feb. 19, 1918).--Federal Trade Commission v. Lilly Varnish
Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 53 (Feb. 19, 1918).--Federal Trade Commission v. McCloskey
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
61
Complaint No.54 (Feb.19, 1918).--Federal Trade Commission v. Lindemann
Wood Finishing Co. Cause: Stifling and suppressing competition in connection
with the manufacture and sale of paints, stains, and kindred products, through
lavish entertainment of competitors' employees, secret payment of money to
employees of customers who might otherwise buy goods from competing concerns, in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 55 (Feb.19, 1918).--Federal Trade Commission v. Adams &
Elting Co. Cause : Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 53 (Feb. 19, 1918).--Federal Trade Commission v. Valentine &
Co. Cause: Stifling and suppressing competition in collection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 57 (Feb.19, 1918).--Federal Trade Commission v. Bridgeport
Wood Finishing Co. Cause: Stifling and suppressing competition in connection
with the manufacture and smile of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of costumers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 58 (Feb. 19, 1918).--Federal Trade Commission v. George D.
Wetherill & Co. (Inc.). Cause: Stifling and suppressing competition in connection
with the manufacture and sale of varnish and kindred products through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 59 (Feb. 19, 1918).--Federal Trade Commission v. Reliance
Varnish Works. Cause: Stifling and suppressing competition in connection with

the manufacture and sale of varnish and kindred products thorough lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 60 (Feb.19, 1918).--Federal Trade Commission v. Blackburn
Varnish Co. Cause : Stifling and suppressing competition In connection with the
manufacture and sale of varnish and kindred products through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 61 (Feb. 19, 1918).--Federal Trade Commission v. F. W.
Thurston Varnish Company. Cause : Stifling and suppressing competition in
connection with the manufacture and sale of varnish and kindred products through
lavish entertainment of competitors' employees, secret payment of money to
employees of customers who might otherwise buy goods from competing concerns
in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 62 (Feb.19, 1918).--Federal Trade Commission v. Grand Rapids
Varnish Co. Cause: Stifling and suppressing competition in connection with time
manufacture and sale of varnish and kindred products through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns in alleged violation of
section 5 of time Federal Trade Commission act.
Complaint No. 63 (Feb. 19, 1918).--Federal Trade Commission v. National
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 64 (Feb.19, 1918).--Federal Trade Commission v. Standard
Varnish Works. Cause: Stifling and suppressing competition in connection with
the manufacture and sale of varnish and kindred products through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise but goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
62
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
Complaint No. 65 (Feb. 19, 1918).--Federal Trade Commission v. Mayer &
Loewenstein. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns in alleged violation of
section 5 of the federal Trade Commission act.
Complaint No. 66 (Feb.19, 1918).--Federal Trade Commission v. Boston
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 67 (Feb. 19, 1918).--Federal Trade Commission v. Louisville
Varnish Co. Cause: Stilling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish enter-

tainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 68 (Feb. 19, 1918).--Federal Trade Commission v. Murphy
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 69 (Feb. 19, 1918) .--Federal Trade Commission v. Marietta Pa
int & Color Co. Cause: Stifling and suppressing competition in connection with
the manufacture and sale of paints, stains, amid kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of time Federal Trade Commission act.
Complaint No. 70 (Feb. 19, 1918).--Federal Trade Commission v. O'Neil Oil &
Paint Co. Cause: Stifling and suppressing competition in connection with time
manufacture and sail of paints, oils, and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 71 (Feb. 19, 1918).--Federal Trade Commission v. Grand Rapids
Wood Finishing Co. Cause: Stifling amid suppressing competition in connection
with the manufacture mind sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.72 (Feb. 19, 1918).--Federal Trade Commission v. The Forbes
Varnish Co. Cause: Stilling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 73 (Feb. 19, 1918).--Federal Trade Commission v. The
Lawrence-McFadden Co. Cause: Stifling and suppressing competition in connection with time manufacture and sale of varnish and kindred products, through
lavish entertainment of competitors' employees, secret payment of money to
employees of customers who might otherwise buy goods from competing concerns
in alleged violation of section 5 of the Federal Trade Commission act.
Compliant No. 74 (Feb. 19, 1918).--Federal Trade Commission v. Pratt &
Lambert (Inc.). Cause: Stifling and suppressing competition in connection with
the manufacture and smile of varnish and kindred products, through lavish
entertainment of competitors' employees, secret payment of money to employees
of customers who might otherwise by goods from competing concerns in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 75 (Feb. 19, 1918) .--Federal Trade Commission v. Essex Varnish Co. Cause: Stifling and suppressing competition ii connection with time
manufacture and sale of varnish, lacquers, and japans through lavish entertainment
of competitors' employees, secret payment of money to employees of costumers
who might otherwise buy goods from competing concerns, and by secretly and
surreptitiously paying and offering to pay employees of its cus-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

63

tomers, prospective customers, and competitors’ customers “large sums of money
to adulterate and spoil for their proper uses varnish, lacquers, and japans sold or
offered for sale by its competitors to such customers” in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 76 (Feb. 19, 1918).--Federal Trade Commission v. The Glidden
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 77 (Feb. 19, 19 18).--Federal Trade Commission v. The Ault &
Wiborg Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish entertainment of competitors’ employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 78 ( Feb. 19, 1918) .--Federal Trade Commission v. Chas. R.
Long, jr., Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paints and kindred products, through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns, in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 79 (Feb.. 26. 1918).--Federal Trade Commission v. American
Agricultural Chemical Co. and Time Brown Co. Cause: Stilling and suppressing
competition in the manufacture of fertilizer and in the refining of animal fats and
the sale of the products by purchasing and offering to purchase raw materials in
certain local areas at prices unwarranted by trade conditions and so high as to be
prohibitive to small competitors, such prices being designed to punish certain
competitors who had refused to enter into a working agreement to eliminate
competitive bidding for raw materials; willfully causing their trucks to collide with
automobiles owned and operated by competitors, in alleged violation of section 5
of the Federal Trade Commission act; acquiring all of the stock of The Brown Co.
by the American Agricultural Chemical Co., the effect of which may be to
substantially lessen competition between the two or to tend to create a monopoly
in alleged violation of section 7 of the Clayton Act.
Complaint No. 80 ( Feb. 26, 1918).--Federal Trade Commission v. Sears, Roebuck & Co. Cause: Stifling and suppressing competition by means of false and
misleading advertising offering sugar and other commodities for sale at prices
lower than offered by competitors and actually below cost, but conditioned on the
purchase of other goods on which the profit is made, and by false and misleading
advertisements relative to competitors, and all in alleged violation of section 5 of
the Federal Trade Commission act; price discrimination, the effect of which may
be to substantially lessen competition or tend to create a monopoly in alleged
violation of section 2 of the Clayton Act.
Complaint No. 81 (Mar. 6, 1918.)--Federal Trade Commission v. The Moller &
Schumann Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods of competing concerns in alleged

violation of section 5 of the Federal Trade Commission act.
Complaint No. 82 (Mar. 13, 1918.)--Federal Trade Commission v. PhotoEngravers’ Club of Chicago. Cause: Adopting a standard scale or uniform price
at which they sell their products and with the intent of stifling and suppressing
competition in the manufacture and sale of photo-engravings, having entered into
an agreement with the Chicago Photo-Engravers’ Union No. 5, I.P.E.U., by the
terms of which the respondents employ only union labor in their manufacturing
plants, and the members of the unions do not do not accept employment from any
manufacturing photo-engraver not a member of the respondent club, and in
furtherance of such agreement the union has adopted a rule whereby union labor
is to cease working in photo-engraving plants which do not maintain such standard
scale of prices; and by fines and threats to withdraw labor, compelling members
to maintain such prices against their will; in alleged violation of section 5 of the
Federal Trade Commission act.
Complaint No. 83 (Mar. 28, 1918).--Federal Trade Commission v. American
Mailing Device Corporation. Cause : Sting tiling and suppressing competition
on the part of its sole and only competitor, the Cutler Mail Chute Co., in the
manufacture, sale, and installation of its product in interstate commerce, has

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sold, and is now selling tho same at and for a price which is at or less than the cost
of producing the same in alleged violation of section 5 of the Federal Trade
Commission act
Complaint No. 84 (Mar. 28, 1918) .--Federal Trade Commission v. Cutler Mail
Chute Co. Cause: Stifling and suppressing competition on the part of its sole and
only competitor, the American Mailing Device Corporation, in the manufacture,
sale, and installation of its product in interstate commerce, has sold, and is now
selling, the same at and for a price which is at or less than the cost of producing
the same in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 85 (Apr. 15, 1918).--Federal Trade Commission v. Standard Oil
Co. of Indiana. Cause: Unfair methods of competition in the manufacture sale, and
distribution of petroleum products by refusing to sell in quantity lots outside of its
territory except to other Standard companies, by selling its surplus to other
Standard companies at prices below the tank-wagon prices maintained by it in its
own territory, selling at tank-wagon prices direct to customers in certain local
competitive areas, etc., in alleged violation of section 5 of the Federal Trade
Commission act; price discrimination and price fixing contingent on the nonuse
of competitors’ products by the purchaser tending to create a monopoly and
substantially lessen competition in alleged violation of sections 2 and 3 of the
Clayton Act.
Complaint No. 86 (Apr. 15 1918).--Federal Trade Commission v. F. E. Atteaux
& Co. Cause: Unfair methods of competition in the manufacture and sale of
dyestuffs and chemicals by giving gratuities and making gifts to employees of its
own and its competitors’ customers and by loaning and offering to loan money to
such employees, all with the intent of inducing the respective employees to
purchase materials from the respondents or to influence such employees to refrain
from dealing or contracting to deal with its competitor, in alleged violation of
section of the Federal Trade Commission act.
Complaint No. 87 ( Apr 15, 1918).--Federal Trade Commission v. Crescent
Manufacturing Co. Cause: Stifling and suppressing competition in the
manufacture, marketing, and sale of baking powder, spices, teas, coffees, and
flavoring extracts by fixing resale prices and refusing to sell to those who will not
agree to maintain such specified standard resale prices in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 88 (Apr. 15, 1918).--Federal Trade Commission v. Beech-Nut
Packing Co. Cause: Stifling and suppressing competition in the manufacture,
marketing, and sale of chewing gum by fixing specified standard resale prices and
refusing to sell to those who will not agree to maintain such prices in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 89 (Apr. 15, 1918).--Federal Trade Commission v. L.E.
Waterman Co. Cause: Stifling and suppressing competition in the manufacture,
marketing, and sale of fountain pens by fixing specified standard resale prices and
refusing to sell to those who will not agree to maintain such prices in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 90 (Apr. 15, 1918).--Federal Trade Commission v. Cluett,
Peabody & Co (Inc.). Cause: Stifling and suppressing competition in the
manufacture, marketing, and sale of men’s collars by fixing and maintaining resale
prices, requiring its purchasers to maintain such prices, and refusing to sell to
those who refuse so to maintain such prices in alleged violation of section 5 of the

Federal Trade Commission act.
Complaint No. 91 (Apr. 15, 1918).--Federal Trade Commission v. Massachusetts
Chocolate Co. Cause: Stifling and suppressing competition in the manufacture,
marketing, and sale of candy by fixing resale prices and refusing to sell to those
who will not agree to maintain such specified standard resale prices in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 92 (Apr.- 15, 1918).--Federal Trade Commission v. Standard Oil
Co. of Now York. Cause: Acquiring a large part of the stock of the Magnolia
Petroleum Co., the effect of which may be to substantially lessen competition
between the two companies and to restrain commerce in petroleum or tend to
create a monopoly in that business in alleged violation of section 7 of the Clayton
Act.
Complaint No. 93 (Apr. 15, 1918).--Federal Trade Commission v. Atlantic Ice
& Coal Corporation. Cause: Unfair methods of competition in the sale of coal and
the manufacture and sale of ice by dividing territory with ostensible competitors,
by intimidating competitors, threatening customers of a competitor by obtaining
secrets of competitors’ business through interests ostensi-

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65

bly Independent but actually affiliated, etc., in alleged violation of section 5 of the
Federal Trade Commission act; by price discrimination, by price fixing on the
condition that the buyer buy not elsewhere, by acquiring stock of other
corporations engaged in like commerce, the effect of all of which may be to
substantially lessen competition or tend to create a monopoly in alleged violation
of sections 2 and 7 of the Clayton Act.
Complaint No. 94 (Apr. 15, 1918).--Federal Trade Commission v. The American
Tobacco Co. Cause: Attempting to eliminate competition by adopting and
maintaining a system of fixing resale prices for jobbers and wholesalers in tobacco
products, entering into agreements with such jobbers and wholesalers for the
maintaining of such prices, threatening to refuse to sell to those who fail to
maintain such prices, selling to those who agree at lower prices than to others,
inducing jobbers who maintain prices not to sell to those who do not, and causing
diverting of retailers’ orders, etc., in alleged violation of section 5 of the Federal
Trade Commission act.
Complaint No. 95 (Apr. 15, 1918).--Federal Trade Commission v. United States
Gold Leaf Manufactures' Association and the individuals, firms, and corporations,
the members thereof. Cause: Unfair methods of competition in connection with
the manufacture and sale of gold leaf by engaging in a concerted movement to
unduly enhance the prices of gold leaf and to maintain such prices, through
meetings, correspondence, etc., and by pooling their surplus products and selling
the same abroad at a less price than such products are being sold in the United
States at the same time, assessments being made to cover losses on foreign sales
when made below cost, the effect being to curtail supply, restrain competition, and
enhance prices, in alleged violation of section 5 of the Federal Trade Commission
act.
Complaint No. 96 (Apr. 15, 1918).--Federal Trade Commission v. Ringwalt
Linoleum Works (Inc.). Cause: Stifling and suppressing competition in the
manufacture and sale of floor covering by advertising, holding out, and selling its
product to the public as linoleum, whereas its product is composed of a felt base
impregnated with asphaltum with a paint backing and facing which simulation is
designated and calculated to deceive and mislead the public and cause purchasers
to believe that the products is linoleum, in alleged violation of section 5 of the
Federal Trade Commission act.
Complaint No. 97 (Apr. 15, 1918).--Federal Trade Commission v. S. M. Hexter
& Co. Cause: Stifling and suppressing competition in the sale of cotton fabrics by
offering its cotton fabric to the public under the trade name of “Sol Satin,” which
simulation is designed and calculated to, and does, deceive the public and cause
purchasers to believe that respondents’ fabric is composed of silk, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 98 (Apr. 19, 1918).--Federal Trade Commission v. J. H. Allen
& Co. Cause: Unfair methods of competition in the business of roasting coffee
and packing tea and selling the same by giving to its customers and prospective
customers as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were, and are, redeemable in various prizes or
premiums, consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 99 (Apr. 19, 1918) .--Federal Trade Commission v. C. F. Bonsor

& Co. (Inc.). Cause: Unfair methods of competition in the business of roasting
coffee and packing tea and selling the same by giving to its customers and
prospective costumers, as an inducements to secure their trade and patronage,
certain papers, coupons, or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 100 (Apr. 19, 1918).--Federal Trade Commission v. Buddha Tea
Co. Cause: Unfair methods of competition in the business of roasting coffee and
packing tea and selling the same by giving to its customers and prospective
customers, as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes or
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 101 (Apr. 19, 1918).--Federal Trade Commission v. The Climax
Coffee & Baking Powder Co. Cause: Unfair methods of competition in the
business of roasting coffee and packing tea and selling the same by

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giving to its customers and prospective customers, as an inducement to secure
trade and patronage, certain papers, coupons or certificates which were and are
redeemable in various prizes and premiums consisting of personal property of
unequal values, the distribution of which was and is determined by chance or lot,
in alleged violation of sections 5 of the Federal Trade Commission act.
Complaint No. 102 (Apr. 19, 1918).--Federal Trade Commission v. The
Dannemiller Grocery Co. Cause: Unfair methods of competition in the business
of roasting coffee and packing tea and selling the same by giving to its customers
and prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 103 (Apr. 19, 1918) .--Federal Trade Commission v. J. S. Elliott
Coffee Co. Cause: Unfair methods of competition in the business of roasting
coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or hot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 104 (Apr. 19, 1918).--Federal Trade Commission v. Enterprise
Coffee Co. Cause: Unfair methods of competition, in time business of roasting
coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No.105 (Apr.19, 1918).--Federal Trade Commission v. A Ethridge &
Co. Cause: Unfair methods of competition in the business of roasting coffee and
packing tea and selling the same by giving to its customers and prospective
customers, as an inducements to secure their trade and patronage, certain papers,
coupons or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No.106 (Apr.19, 1918).--Federal Trade Commission v. B L. Gerhart
& Co. Cause: Unfair methods of competition in the business of roasting coffee
amid packing tea and selling time same by giving to its customers and prospective
customers, as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or hot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No.107 (Apr.19, 1918).--Federal Trade Commission v. The Grocers
Coffee Co. Cause: Unfair methods of competition in the business of roasting
coffee and packing tea amid selling the same by giving to its customers and

prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which wore amid are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was amid is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act
Complaint No. 108 (Apr. 19, 1918).--Federal Trade Commission v. F. W. Hinz
& Sons. Cause: Unfair methods of competition in the business of roasting coffee
and packing tea and selling the same by giving to its customers and prospective
customers, as an inducements to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, time distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 109 (Apr.19, 1918).--Federal Trade Commission v. Thomas C.
Jenkins. Cause: Unfair methods of competition in the business of roasting coffee
and packing tea and selling the same by giving to its customers and prospective
customers, as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates, which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values,

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67

the distribution of which was and is determined by chance or lot, in alleged
violation of section 5 of the Federal Trade Commission acts.
Complaint No.110 (Apr. 19, 1918).--Federal Trade Commission v. The Johnson
Layne Coffee Co. Cause: Unfair methods of competition in the business of
roasting coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 111 (Apr. 19, 1918).--Federal Trade Commission v. G D. -Kenny
Co. Cause: Unfair methods of competition in the business of roasting coffee and
packing tea amid selling the same by giving to its customers and prospective
customers, is an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes amid
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No.112 (Apr. 19, 1918).--Federal Trade Commission v. Levering
Coffee Co. Cause: Unfair methods of competition in the business of roasting
coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, time
distribution of which was amid is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 113 (Apr. 19, 1918).--Federal Trade Commission v. A L. Mars
& Co. Cause: Unfair methods of competition in the business of roasting coffee
and packing tea and selling time same by giving to its customers and prospective
customers, as an inducements to secure their trade amid patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 114 (Apr. 19, 1918).--Federal Trade Commission v. M. S. Miller
Co. Cause: Unfair methods of competition in the business of roasting coffee and
packing tea and selling the same by giving to its customers and prospective
customers, as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission acts.
Complaint No. 115 (Apr. 19, 1918).--Federal Trade Commission v. Rice Bros.
Cause: Unfair methods of competition in the business of roasting coffee and
packing tea amid selling the same by giving to its customers and prospective
customers, as an inducements to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of

which was and is determined by chance or lot, in alleged violation of section 5 of
time Federal Trade Commission act.
Complaint No. 116 (Apr. 19, 1918).--Federal Trade Commission v. RothHomeyer Coffee Co. Cause: Unfair methods of competition in the business of
roasting coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of time Federal Trade Commission act.
Complaint No.117 (Apr.19, 1918).--Federal Trade Commission v. William S.
Scull Co. Cause: Unfair methods of competition in the business of roasting coffee
and packing tea and selling the same by giving to its customers and prospective
customers, as an inducement to secure their trade and patronage, certain papers,
coupons, or certificates which were and are redeemable in various prizes and
premiums consisting of personal property of unequal values, the distribution of
which was and is determined by chance or lot, in alleged violation of section 5 of
the Federal Trade Commission act.
Complaint No. 118 (Apr. 19, 1918).--Federal Trade Commission v. Sioux Falls
Coffee & Spice Co. Cause: Unfair methods of competition in the busi-

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ness or roasting coffee and packing tea and selling the same by giving to its
customers and prospective customers, as an inducements to secure their trade and
patronage, certain papers, coupons, or certificates which were and are redeemable
in various prizes and premiums consisting of personal property of or unequal
values, the distribution of which was and is determined by chance lots, alleged
violation of section 5 Federal Trade Commission acts.
Complaint No. 119 (Apr. 19, 1918).--Federal Trade Commission v. Valley City
Coffee & Spice Mills. Cause: Unfair methods of competition in the business of
roasting coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which were amid are redeemable In various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lots, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No 120 (Apr.19, 1918).--Federal Trade Commission v. The E. R
Webster Co. Cause: Unfair methods of competition in the business of roasting
coffee and packing tea and selling the same by giving to its customers and
prospective customers, as an inducement to secure their trade and patronage,
certain papers, coupons, or certificates which were and are redeemable in various
prizes and premiums consisting of personal property of unequal values, the
distribution of which was and is determined by chance or lot, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 121 (Apr. 30, 1918).--Federal Trade Commission v. E. J. Brach
& Sons. Cause: Stifling and suppressing competition in the sale of candy by
falsely advertising that its was selling and offering to sell candy at cost or at less
than costs in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 122 (Apr. 30, 1918).--Federal Trade Commission v. George
Muench. Cause: Unfair methods of competition in the manufacture and sale of
machinery of various kinds by making gifts of liquor, cigars, etc., to employees of
customers and prospective customers and by paying and loaning money to
employees of customers and prospective customers in an effort to influence such
customers to refrain from dealing with competitors in alleged violation of section
5 of the Federal Trade Commission acts.
Complaint No.- 123 (May 1, 1918) .--Federal Trade Commission v. American
Can Co. Cause: Price discrimination and price fixing on condition that the
purchasers shall not use or deal in the product of competitors, the effect of which
is to substantially lessen competition and to tend to create a monopoly in the tin
can business in alleged violation of sections 2 and 3 of the Clayton Act; stifling
and suppressing competition in the manufacture and sale of tin cans by attempting
to induce customers to enter into long term contracts, by giving certain customers
more favorable terms than others in reference to allowances for leaky cans, and
storage privileges by rebating if prices are lowered and by other discriminations
in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 124 (May 3, 1918).--Federal Trade Commission v. Pennsylvania
Specialty Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paints, varnish, and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns in alleged

violation of section 5 of the Federal Trade Commission act.
Complaint No. 125 (May 3, 1918).--Federal Trade Commission v. Advance Paint
Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paint and kindred products, through lavish entertainment
of competitors’ employees, secret payment of money to employees of customers
who might otherwise buy goods from competing concerns in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No.126 (May 7, 1918).--Federal Trade Commission v. Ironite Co.,
Master Builders Co., and United Products Co. Cause: Stifling and suppressing
competition in connection with the manufacture and sale of cement amid concrete
hardener containing crushed iron particles by entering Into an agreements by
which a consent decree was obtained with the intent and purpose of securing a
patents monopoly, by threatening suits for alleged infringement against those who
refuse to enter into license agreements, by misleading statements as to the extent
and effect of the consent decree, by concealing the true agreement by which the
suit was settled, by misleading statements as to the scope of their patent, by false
and disparaging statements regarding competitors, and by re-

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69

sale price fixing in alleged violation of section 5 of the Federal Trade Commission
acts.
Complaint No. 127 (May 7, 1918).--Federal Trade Commission v. Meccano
(Ltd.) and The Meccano Co. (Inc.). Cause: Unfair methods of competition in the
sale of “Meccano” mechanical toys by vague and indefinite threats, not made in
good faith, to institute legal proceedings against their competitors and their
competitors’ customers for alleged unfair and unlawful competition with the
Meccano outfits and books of instruction in alleged violation of section 5 of the
Federal Trade Commission act.
Complaint No. 128 (May 7, 1918).--Federal Trade Commission v. The
Vaudeville Managers Protective Association, The National Vaudeville Artists
(Inc.), The United Booking Office et al. Cause: Combining in restraints of trade
and creating a monopoly of the vaudeville theater, burlesque theater, and circus
business by insisting, except in isolated cases, that performers be members of time
National Vaudeville Artists (Inc.); that they be not members of the White Rats
Actors Union and Associated Actresses of America, by circumventing the law
relative to maximum fees to be paid by performers to secure engagements, by
controlling and domination the vaudeville industry, by requiring actors to advertise
in “Variety,” by publishing blacklists, etc., in alleged violation of section 5 of the
Federal Trade Commission act.
Complaint No. 129 (May 13, 1918).--Federal Trade Commission v. Wayne Oil
Tank & Pump Co. Cause: Stifling and suppressing competition in the manufacture
amid sale of automatic-measuring oil pumps, etc.; by circulating a clipping
purporting to be a copy of a newspaper item relative to an injunctive decree against
a competitor, inducing its customers and its competitors’ customers to cancel
orders for its competitors’ product, inducing its competitors’ employees to leave
their employment, making false statements relative to its own and its competitor’s
business and product, and by mutilating its competitors’ outfits in alleged violation
of section 5 of time Federal Trade Commission act; price discrimination, the effect
of which may be to substantially lessen competition or tend to create a monopoly
in alleged violation of section 2 of the Clayton Acts.
Complaint No. 130 (May 13, 1918).--Federal Trade Commission v. Gilbert &
Barker Manufacturing Co. Cause: Unfair methods of competition in the
manufacture and sale of automatic measuring oil pumps, tanks, etc., by falsely
representing the product of certain of their competitors to be unsatisfactory,
defective, and that such would not operate and was being sold at exorbitant prices,
by inducing competitors’ customers to cancel orders, and by holding itself out to
be the agent of its competitors, quoting exorbitant prices, in alleged violation of
section 5 of the Federal Trade Commission act ; price discrimination, the effect of
which may be to substantially lessen competition or tend to create a monopoly, in
alleged violation of section 2 of the Clayton Act.
Complaint No. 131 (May 13, 1918).--Federal Trade Commission v. Atlantic
Refining Co. Cause: Unfair methods of competition in the sale of petroleum and
in the sale of automatic measuring oil pumps, tanks, etc., the product of the Gilbert
& Barker Manufacturing Co. (see Complaint No. 130), by falsely representing the
product of certain of their competitors to be unsatisfactory, defective, and that such
would not operate and was being sold at exorbitant prices, by inducing
competitors’ customers to cancel orders, selling and lending pumps, etc., without

adequate consideration, threatening to sell oil direct by retail unless dealers used
the Gilbert & Barker product, and by holding itself outs to be the agent of its
competitors as well as of the Gilbert & Barker Manufacturing Co., quoting
exorbitant prices, in alleged violation of section 5 of the Federal Trade
Commission act; price discrimination, the effect of which may be to substantially
competition or tend to create a monopoly, in alleged violation of section 2 of the
Clayton Act.
Complaint No.132 (May 13, 1918).--Federal Trade Commission v. Standard Oil
Co. of Ohio. Cause: Unfair methods of competition in the sale of petroleum and
In the sale of automatic measuring oil pumps, tanks, etc., the product of the Gilbert
& Barker Manufacturing Co. (see Complaint No 130), by falsely representing the
product of certain of their competitors to be unsatisfactory, defective, and that such
would not operate and was being sold at exorbitant prices, by inducing
competitors’ customers to cancel orders, selling and lending pumps, etc., without
adequate consideration, threatening to sell oil directs by retail unless dealers used
the Gilbert & Barker product, and by holding itself out to be the agent of its
competitors as well as of the Gilbert & Barker Manufacturing Co., quoting
exorbitant prices, in alleged violation of section 5 of the Federal Trade
Commission act; price discrimination, the effect of

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which may be to substantially lessen competition or tend to create a monopoly, in
alleged violation of section 2 of the Clayton Act.
Complaint No. 133 (May 13, 1918).--Federal Trade Commission v. Standard Oil
Co. of Indiana. Cause: Unfair methods of competition in the sale of petroleum and
in the sale of automatic measuring oil pumps, tanks, etc., the product of the Gilbert
& Barker Manufacturing Co. (see Complaints No. 130), by falsely representing the
product of certain of their competitors to be unsatisfactory, defective, and that such
would nots operate and was being sold at exorbitant prices, by inducing
competitors’ customers to cancel orders, selling and lending pumps, etc., without
adequate consideration, threatening to sell oil direct by retail unless dealers used
the Gilberts & Barker product, anti by holding itself omit to be the agent of its
competitors as well as of the Gilberts & Barker Manufacturing Co., quoting
exorbitant prices in alleged violation of section 5 of the Federal Trade Commission
act; price discrimination, the effect of which may be to substantially lessen
competition or tend to create a monopoly, in alleged violation of section 2 of the
Clayton Act.
Complaint No 134. ( May 13, 1918) .--Federal Trade Commission v. Standard
Oil Co. of New York. Cause: Unfair methods of competition in the sale of
petroleum and in the sale of automatic measuring pumps, tanks, etc., the products
of the Gilbert & Barker Manufacturing Co. (see Complaint No. 130) by falsely
representing the product of certain of their competitors to be unsatisfactory,
defective, and that such would not operate and was being sold at exorbitant prices,
by inducing competitors’ customers to cancel orders, selling and lending pumps,
etc., without adequate consideration, threatening to sell oil direct by retail unless
dealers used the Gilbert & Barker product, and by holding itself outs to be the
agent of its competitors as well as of the Gilbert & Barker Manufacturing Co.,
quoting exorbitant prices, in alleged violation of section 5 of the Federal Trade
Commission act; price discrimination, the effects of which may be to substantially
lessen competition or tend to create a monopoly in alleged violation of section 2
of the Clayton Act.
Complaint No. 135 (May 13, 1918).--Federal Trade Commission v. Standard Oil
Co. of Louisiana. Cause: Unfair methods of competition in the sale of petroleum
and in the sale of automatic measuring pumps, tanks, etc., the product of the
Gilbert & Barker Manufacturing Co. (see Complaint No. 130) by falsely
representing the product of certain of their competitors to be unsatisfactory,
defective, and that such would not operate and was being sold at exorbitant prices,
by inducing competitors’ customers to cancel orders, selling and lending pumps,
etc., without adequate consideration threatening to sell oil direct by retail unless
dealers used the Gilbert & Barker product and by holding itself out to be the agent
of its competitors as well as of the Gilbert & Barker Manufacturing Co., quoting
exorbitant prices, in alleged violation of section 5 of the Federal Trade
Commission act ; price discrimination, the effect of which may be to substantially
lessen competition or tend to create a monopoly in alleged violation of section 2
of the Clayton Act.
Complaint No. 136. (May 13, 1918).--Federal Trade Commission v. American
Tank & Pump Co. Cause: Unfair methods of competition in the manufacture and
sale of automatic measuring oil pumps, etc., by inducing and attempting to induce,
by divers means and methods, its customers and the customers of its competitors

to cancel and rescind orders and contracts for the purchase of the products of its
competitors with the intent and effect of stifling and suppressing competition in
alleged violation of section 5 of the Federal Trade Commission act.
Complaint No.137. (May 13, 1918).--Federal Trade Commission v. Milwaukee
Tank Co. Cause: Unfair methods of competition in the sale of automatic
measuring oil pumps, etc., by inducing and attempting to induce, by divers means
and methods, its customers and the customers of its competitors to cancel and
rescind orders and contracts for the purchase of the product of its competitors with
the intent and effect of stifling and suppressing competition in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 138. (May 13, 1918).--Federal Trade Commission v. Tokheim
Manufacturing Co. Cause: Unfair methods of competition in the manufacture and
sale of automatic measuring oil pumps, etc., by inducing and attempting to induce,
by divers means and methods, its customers and the customers of its competitors
to cancel and rescind orders and contracts for the purchase of the products of its
competitors with the intent and effect of stifling and suppressing competition in
alleged violation of section 5 of the Federal Trade Commission act.

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71

Complaint No. 139. (May 13, 1918).--Federal Trade Commission v. Guarantee
Liquid Measure Co. Cause: Unfair methods of competition in the manufacture and
sale of automatic measuring oil pumps, etc., by inducing and attempting to induce,
by divers means and methods, its customers and the customers of its competitors,
to cancel and rescind orders and contracts for the purchase of the product of its
competitors and by falsely representing certain products of its competitors to be
old style and to have been or to be about to be condemned by public officials, with
the intent and effect of stifling and suppressing competition, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No. 140 (May 15, 1918).--Federal Trade Commission v. Stanley
Booking Corporation. Cause: Stifling and suppressing competition in the sale and
leasing of moving-picture films by causing contracts entered into between
producers and certain of its competitors to be broken, exhibiting films in theaters
in close proximity to those of competitors in advance of production by competitors
and at a less price, but after contemplated exhibition of the same pictures had been
advertised by competitors selling and leasing films on condition that films of
competitor’s be not exhibited, by compelling certain theaters to pay to it 10 per
cent of time cost of films of other producers booked direct, by compelling certain
theaters to book their films through respondent and by threats of withdrawing
patronage, etc., compelling producers to cease supplying its competitors with
films, in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 141 (May 15, 1918).--Federal Trade Commission v. The Evans
Dollar Pen Co. Cause: Stifling and suppressing competition in the manufacture,
marketing, and sale of its fountain pens, as a means of securing the trade of dealers
and with the purpose of eliminating competition in the selling price of its fountain
pens by fixing certain specified standard resale prices and by refusing to sell to
those who will not agree to maintain such resale prices, in alleged violation of
section 5 of the Federal Trade Commission act.
Complaint No. 142 (May 17, 1918).--Federal Trade Commission v. Wilson &
Co. Cause: Unfair methods of competition in the sale of meats, chickens, and
other similar products by selling meat, chickens, etc., to the United States with the
knowledge that such food products were to be used by the United States is food for
its soldiers and that such food products were spoiled and unfit for human
consumption, in allege violation of section 5 of the Federal Trade Commission act.
Complaint No 143 ( (May 17, 1918).--Federal Trade Commission v. Morris &
Co. Cause: Unfair methods of competition in the sale of meats, chickens, and
other similar products by selling meat chicken, etc., to the United States with the
knowledge that such food products were to be used by the United States as food
for its soldiers and that such food products were spoiled and unfit for human
consumption, in alleged violation of section 5 of the Federal Trade Commission
act.
Complaint No. 144 (May 17, 1918).--Federal Trade Commission v. WeylZuckerman Co. Cause: Stifling and suppressing competition in the sale and
distribution of farm products and foodstuffs by obtaining the use of freight cars by
means of an preferential order secured through statements made that such cars
were to be employed in the transportation of farm products, foodstuffs, and
perishable commodities to be used by the Government in persecution of the war,
and then diverting certain of such cars to its private muse, in alleged violation of

section 5 of the Federal Trade Commission act.
Complaint No. 145 (May 24, 1918).--Federal Trade Commission v. Consolidated
Rendering Co., New Haven Rendering Co., Atlantic Packing Co., and L.T. Frisbie
Co. Cause: Stifling and suppressing competition in the rendering business by
purchasing and offering to purchase in certain local areas raw materials necessary
in the manufacture of their products at and for prices unwarranted by trade
conditions and so high as to be prohibitive to small competitors in such areas, in
alleged violation of section 5 of time Federal Trade Commission act.
Complaint No.146 (June 6, 1918).--Federal Trade Commission v. The Acme
White Lead & Color Works. Cause: Stifling and suppressing competition in
connection with the manufacture and sale of paint and kindred products, through
lavish entertainment of competitors’ employees, secret payment of money to
employees of customers who might otherwise buy goods from competing
concerns, in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 147 (June 6, 1918).--Federal Trade Commission v. American
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish en-

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tertainment of competitors employees, secret payment of money to employees of
customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No. 148 (June 6, 1918).--Federal Trade Commission v. Chicago
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payments of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission acts.
Complaint No. 149 (June 6, 1918).--Federal Trade Commission v. James B. Day
& Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitor’s employees, secret payments of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.150 (June 6, 1918).--Federal Trade Commission v. S. G Johnson
& Sons. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of stains, fillers and other wood finishing products, through
lavish entertainment of competitors’ employees, secret payment of money to
employees of customers who might otherwise buy goods from competing
concerns, in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No.151 (June 6, 1918).--Federal Trade Commission v. G. J. Liebich
Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of paint, varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.152 (June 6, 1918).--Federal Trade Commission v. The Royal
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payment of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission acts.
Complaint No.153 (June 6, 1918.)--Federal Trade Commission v. Twin City
Varnish Co. Cause: Stifling and suppressing competition in connection with the
manufacture and sale of varnish and kindred products, through secret payment of
money to employees of customers who might otherwise buy goods from competing
concerns, in alleged violation of section 5 of the Federal Trade Com-mission act.
Complaint No. 154 (June 6, 1918).--Federal Trade Commission v. The Wheeler
Varnish Works. Cause: Stifling and suppressing competition in connection with
the manufacture and sale of varnish and kindred products, through lavish
entertainment of competitors’ employees, secret payments of money to employees
of customers who might otherwise buy goods from competing concerns, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.155 (June 6, 1918).--Federal Trade Commission v. Eli Lilly & Co.
Cause: Stifling and suppressing competition in the manufacture and sale of drugs,
as a means of securing the trade of jobbers and wholesalers and with the purpose
of eliminating competition, by fixing resale prices and refusing to sell to those who

refuse to maintain such fixed resale prices, in alleged violation of section 5 of the
Federal Trade Commission act; price discrimination and granting discounts and
rebates contingent on purchaser not using goods of competitors, in alleged
violation of section 2 of the Clayton Act.
Complaint No.156 (June 6, 1918) .--Federal Trade Commission v. Purity Preserving Co. and R J. McGuiar Co. Cause: The same interests are alleged to control
and directs the two companies: The Purity Preserving Co. between January and
September, 1917, entered into a large number of contracts for sale of tomato
catsup; during September, October, and November a sharp rise in price occurred
in the catsup market; the company made no effort to fill contracts; the McGuiar
Co. took over the Purity Co. plants and during November and December offered
for sale, in open market, catsup manufactured in the Purity plant by the employees
of said company and under the direction and supervision of the officers of the
Purity Co. at prices higher than the prices at which the Purity Co. Agreed to sell
said catsup, in alleged violation of section 5 of the Federal Trade Commission act.

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73

Complaint No. 157 (June 6, 1918).--Federal Trade Commission v. Saenger
Amusement Co. Cause: Stifling and suppressing competition in the purchase and
sale, leasing and exhibition of moving-picture films by forcing exchanges to accept
its terms on threat to cause exhibitors to refuse to handle otherwise; causing
contracts between exhibitors and exchanges to be broken by divers means and
methods, including prior exhibition of films in neighboring theaters after “first
exhibition” had been advertised by the other, threatening withdrawal of patronage
if exchanges continued to supply exchanges, threatening curtailing supply unless
exhibitors dealt with respondent, inducing employees of competitors to leave their
employment, all in alleged violation of section 5 of the Federal Trade Commission
act.
Complaint No. 158 (June 6, 1918).--Federal Trade Commission v. Clayton F,.
Summy Co. Cause: Unfair methods of competition in the publishing aud sale of
sheet music, by fixing resale prices and refusing to sell to those who fail to
maintain such fixed resale prices, in alleged violation of section 5 of the Federal
Trade Commission act.
Complaint No.159 (June 10, 1918).--Federal Trade Commission v. The United
Rendering Co., M. L. Shoemaker & Co. (Inc.), the Berg Co., The D. B. Martin Co.,
Consolidated Dressed Beef Co., Baugh & Sons Co., Winfield S. Alien, Nathan
Berg, F. W. English, Christopher Offenhauser. Cause: Stifling and suppressing
competition in the business of refining animal fats and the manufacture and sale
of products therefrom by engaging in a combination or conspiracy to purchase and
offer to purchase raw materials in certain local areas at prices unwarranted by
trade conditions and prohibitive to small competitors thus punishing the latter for
refusing to enter into a working arrangement to eliminate competitive bidding, and
by interfering with competitors’ business by causing their trucks to be followed for
the purpose of spying on competitors’ business and customers, in alleged violation
of section 5 of the Federal Trade Commission act.
Complaint No.160 (June 10, 1918).--Federal Trade Commission v. Time Victor
Electric Corporation. Cause : Stifling and suppressing competition in the
manufacture and sale of X-ray machines by making false and misleading
statements concerning machines of competitors and concerning financial
responsibility of competitors and by suggesting tests for competitors’ machines
with knowledge that such tests would be destructive of the machines, in alleged
violation of section 5 of the Federal Trade Commission act; and acquiring all of
the stock of other companies engaged in the same business or using such stock for
voting purposes, the effect of which may be to substantially lessen competition or
tend to create a monopoly, in alleged violation of section 7 of the Clayton Acts.
Complaint No.161 (June 28, 1918).--Federal Trade Commission v. Dearborn
Chemical Co. Cause: Unfair methods of competition in the business of
manufacturing and selling boiler compounds, chemicals, and other preparations,
namely, the giving of gratuities to the employees of certain railroads and other
customers and prospective customers and the making of secret payments of money
to such employees who might otherwise buy goods from competing concerns, in
alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 162 (June 28, 1918).--Federal Trade Commission v. Henry O
Shepard Co. Cause: Stifling and suppressing competition in connection with the
printing and selling of railway tariffs, schedules, and other printed matter through

lavish entertainment of competitors’ employees, secret payment of money to
employees of customers who might otherwise purchase goods from competing
concerns, in alleged violations of section 5 of the Federal Trade Commission act.
Complaint No.163 (June 28, 1918).--Federal Trade Commission v. Armour &
Co. Cause: Stifling and suppressing competition in the manufacture and sale of
dairy products by concerning its control of and affiliation with Beyer Bros. Co.,
a creamery company, while directing the efforts and business of said company;
discriminating in prices paid for butter fat or cream; and by purchasing and
offering to purchase butter fats or cream in certain localities at prices unwarranted
by trade conditions and so high as to be prohibitive to small competitors, in alleged
violation of section 5 of the Federal Trade Commission act.
Complaint No.164 (June 29, 1918).--Federal Trade Commission v. Federal Rope
Co. (Inc.). Cause: Stifling and suppressing competition in the manufacture and
sale of rope by representing by letterheads, price lists, tags, stencils, ect., certain
of its product to be “manila” rope, that is, composed of new manila fiber entirely
and exclusively, whereas it is in fact composed of fiber

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

taken from old and used rope, in alleged violation of section 5 of the Federal Trade
Commission act.
Complaint No. 165 (June 29, 1918).--Federal Trade Commission v. The Esterbrook Steel Pen Manufacturing Co. Cause: Stifling and suppressing competition
in the manufacture, marketing, selling, and reselling of its pens by fixing standard
resale prices and refusing to sell their products to those who fail to maintain such
resale prices and by price discrimination in alleged violation of section 5 of the
Federal Trade Commission act.
Complaint No. 166 (June 29, 1918).--Federal Trade Commission v. E. E. Gray
Co. Cause: Stifling and suppressing competition in the sale of Mocha and Java
coffees by selling and offering for sale Santos and Columbia coffees under the
trade-brand “M & J” coffee, the natural result of which is to confuse, mislead, and
deceive purchasers and the public into the belief that said coffee is Mocha and
Java coffee in alleged violation of section 5 of the Federal Trade Commission act.
Complaint No. 167 (June 29, 1918).--Federal Trade Commission v. United
Electric Co. Cause: Stifling a and suppressing competition in the manufacture,
marketing, selling, and reselling of its vacuum cleaning machines by fixing
standard resale prices and refusing to sell to those who fail to maintain such prices.
in alleged violation of section 5 of the Federal Trade Commission act; price fixing
and establishing discounts or rebates on condition that the purchaser shall not use
or deal in the goods of competitors, the effect of which is to substantially lessen
competition or to tend to create a monopoly, in alleged violation of section 3 of the
Clayton Act.
Complaint No.168 (June 29, 1918).--Federal Trade Commission v. The National
Wholesale Druggists Association et al. Cause: Wrongfully and unlawfully
engaged in a combination or conspiracy among themselves with the intent, purpose
and effect of discouraging, stifling and suppressing competition in the wholesale
drug trade and of unfairly hampering and obstructing certain of their competitors,
by inducing or compelling manufacturers to refuse to recognize competitors as
jobbers and as entitled to the benefits such competitors, as jobbers, would receive,
by means of oral and written notices, to manufacturers to the effect that certain
competitors, not eligible to membership in the association, were not entitled to
recognition as jobbers, the appointment of committees to confer with
manufacturers to the end that they adopt sales methods in harmony with the
policies of the association, written and oral notices by the secretary of the
association to manufacturers to effect that competitors are selling below the
manufacturers’ established resale price or that such competitors are persistent
price cutters, the compilation and distribution among manufacturers and
wholesalers of lists of so-called legitimate jobbers. and by bringing influence to
bear on various local associations of drug jobbers and wholesalers to adopt
policies in harmony with the policies of the association, in alleged violation of
section 5 of the Federal Trade Commission act.
PROCEEDINGS DISPOSED OF.

Complaint No. 6 (Apr. 8, 1918).--Federal Trade Commission v. Fleischmann Co.
of Ohio. Cause: Stifling and suppressing competition by undue sampling, by

distribution of gratuities, by making contributions to associations and conventions,
by extensive entertainment, by making deliveries of yeast without any immediate
charge therefor, by cash payments, substituting competitors’ samples and
deliveries, trailing competitors’ agents, misrepresenting competitors’ methods, by
concealing its control of a supposed independent yeast company, etc., in alleged
violation of section 5 of the Federal Trade Commission act; and further, attempting
to create a monopoly by price fixing conditioned on the nonuse of competitors’
goods in alleged violation of section 3 of the Clayton Act. Disposition: A portion
of the evidence having been introduced, the case, by stipulation, was submitted to
the Commission upon an agreed statement of facts and an order was entered
requiring the respondent to cease and desist from the practices complained of.
Complaint No. 7 (July 14, 1917).--Federal Trade Commission v. Muenzen
Specialty Co. of Now York. Cause: Unfair methods of competition in connection
with sale of vacuum cleaners by misrepresentation in advertising, by injurious
statements relative to competitors’ cleaners, and competitors’ financial standing,
ect., in alleged violation of section 5 of the Federal Trade Commission act.
Disposition : Upon the answer of respondent admitting the charges alleged in the
complaint, an order was entered requiring it to cease and desist from the practices
complained of.

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75

Complaint No 8 (Dec.15, 1917).--Federal Trade Commission v. Victor Talking
Machine Co. of New Jersey. Cause: Attempting to create a monopoly by price
fixing In connection with leasing, selling, and contracting to sell talking machines,
sound records, sound boxes, and needles conditioned on nonuse of competitors’
goods, in alleged violation of section 3 of the Clayton Act. Disposition: Upon the
filing of certain stipulations as to facts by the respondent, the complaint was
withdrawn and further proceedings ordered discontinued without prejudice.
Complaint No. 9 (Apr. 16, 1918).--Federal Trade Commission v. Standard Car
Equipment Co. and Standard Construction Co. Cause: Unfair methods of
competition in connection with leasing and selling tank cars by inducing
employees of competitors to heave, by making false representations that it Is
closely affiliated with one of its competitors, by acquiring trade secrets of competitor from former employees, etc., in alleged violation of section 5 of the
Federal Trade Commission act. Disposition: After the submission of the evidence
and arguments of counsel an order was entered by the Commission requiring the
respondent to cease and desist from the practices complained of.
Complaint No.10 ( Dec. 31, 1917).--Federal Trade Commission v. National
Binding Machine Co. of Now York. Cause: Stifling and suppressing competition
by purchasing gummed sealing tape in large quantities on condition that the
manufacturers thereof do not sell to others, by interference with customers of
competitors, by “license agreement,” by threats of suit for infringement against
users of tape on machines other than the National binding machine in alleged
violation of section 5 of the Federal Trade Commission act; and attempting to
create a monopoly in connection with leasing, sale, and contracting to sell gummed
sealing tape and binding machines conditioned on nonuse of either with goods of
competitors, in alleged violation of section 3 of the Clayton Act. Disposition:
Upon the filing of certain findings as to time facts, an order was entered requiring
the respondent to cease and desist from the practices complained of.
Complaint No.13 (Jan. 9, 1918).--Federal Trade Commission v. C. L. Colman
Lumber Co. Cause: Selling and delivering lumber and building material at
different prices to purchasers in certain cities and communities than those made
to other purchasers in the same or other cities and communities, in alleged
violation of section 2 of the Clayton Act. Disposition: Dismissed by resolution of
the Commission, it appearing that the price discriminations complained of were
made in good faith to meet competition.
Complaint No. 14 (Jan. 9, 1918).--Federal Trade Commission v. Interior Lumber
Co. Cause: Selling and delivering lumber and building material at different prices
to purchasers in certain cities and communities than those made to other
purchasers in the same or other cities and communities, in alleged violation of
section 2 of the Clayton Act. Disposition: Dismissed by resolution of the
Commission, it appearing that the price discriminations complained of were made
in good faith to meet competition.
Complaint No.17 (Nov. 8, 1917).--Federal Trade Commission v. Bureau of
Statistics of the Book Paper Manufacturers, Charles F. Moore, the bureau’s
secretary, and 23 paper manufactures. Cause: (Ante.) Disposition: By stipulation
an order was entered requiring the respondent to cease and desist from the
practices complained of.

Complaint No. 18 (Jan. 29, 1918).--Federal Trade Commission v. Association
of Flag Manufactures or America et al. Cause: (Ante.) Disposition: An order to
cease and desist entered against certain of the respondents, findings of fact abating
the cause as to the Association of Flag Manufacturers of America, and cause
dismissed as to National Flag Co. and R. J. Patton Co.
Complaint No.23 (Apr. 4, 1918).--Federal Trade Commission v. Chicago LinoTabler Co. Cause: (Ante.) Disposition: By stipulation submitted upon an agreed
statement of facts, and an order thereupon issued requiring respondent to cease and
desist from time practices complained of.
Complaint No. 26 (Feb. 15, 1918).--Federal Trade Commission v. National
Distilling Co. Cause: (Ante.) Disposition: By stipulation submitted upon an
agreed statement of facts, and an order thereupon issued requiring respondent to
cease and desist from the practices complained of.
Complaint No. 27 (Apr. 30, 1918).--Federal Trade Commission v. Chester Kent
& Co. Cause : (Ante.) Disposition: By stipulation submitted upon an agreed
statement of facts, and an order there upon issued requiring respondent to cease
and desist from the practices complained of.
Complaint No. 34 (Apr. 30, 1918).--Federal Trade Commission v. Dearborn
Typewriter Co. Cause: (Ante.) Disposition: Upon respondent’s answer, ad-

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

mitting the charges in the complaint, an order was issued requiring it to cease and
desist from the practices complained of.
Complaint No.35 (June 6, 1918).--Federal Trade Commission v. Metro
Typewriter Co. Cause: (Ante.) Disposition: Upon respondent’s answer, admitting
the charges in the complaint, an order was issued requiring it to cease and desist
from the practices complained of.
Complaint No. 36 (May 24, 1918).--Federal Trade Commission v. Harry A.
Smith. Cause: (Ante.) Disposition: Upon respondent’s answer, admitting the
charges in the complaint, an order was issued requiring it to cease and desist from
the practices complained of.
Complaint No.37 (Mar. 26, 1918).--Federal Trade Commission v. Typewriter
Emporium. Cause: (Ante.) Disposition: Upon respondent’s answer, admitting the
charges in the complaint, an order was issued requiring it to cease and desist from
the practices complained of.
Complaint No. 38 (June 6, 1918).--Federal Trade Commission v. Block & Co.
Cause: (Ante.) Disposition: Upon respondent’s answer admitting the charges in
the complaint, an order was issued requiring it to cease and desist from the
practices complained of.
Complaint No.42 (Apr.15, 1918).--Federal Trade Commission v. Columbus
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 43 (Apr. 15, 1918).--Federal Trade Commission v. Flood &
Conklin Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 44 (Apr. 26, 1918).--Federal Trade Commission v. Warren Soap
Manufacturing Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 45 (June 6, 1918).--Federal Trade Commission v. Eagle Printing
Ink Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 46 (June 6, 1918).--Federal Trade Commission v. Sigmund
Ullman Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No.47 (June 6, 1918).--Federal Trade Commission v. J. M. Huber.
Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring It to cease and desist
from the practices complained of
Complaint No.48 (Apr.15, 1918).--Federal Trade Commission v. Walter L.
Trainer Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No.49 (May 3, 1918).--Federal Trade Commission v. N. Z. Graves

Corporation. Cause: (Ante.) Disposition: It appearing that the respondent
corporation had dissolved and ceased to exist, the complaint was dismissed.
Complaint No. 50 (Apr. 15, 1918).--Federal Trade Commission v. Van Camp
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No.51 (Apr.15, 1918).--Federal Trade Commission v. Sun Varnish
Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No.52 (Apr.15, 1918).--Federal Trade Commission v. Lilly Varnish
Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No.54 (Apr.15, 1918).--Federal Trade Commission v. Llndemann
Wood Finishing Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring It to
cease and desist from the practices complained of.
Complaint No. 55 (Apr. 15, 1918).--Federal Trade Commission v. Adams &
Elting Co. Cause: (Ante.) Disposition: Upon the answer of respondent ad-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

77

mitting the allegations in the complaint, an order was entered requiring it to cease
and desist from the practices complained of.
Complaint No.56 (Apr. 15, 1918).--Federal Trade Commission v. Valentine &
Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 57 (June 18, 1918).--Federal Trade Commission v. Bridgeport
Wood Finishing Co. Cause: (Ante.) Disposition: It appearing that the business of
the respondent corporation had been sold prior to the filing of the complaint, the
same was dismissed.
Complaint No.58 (Apr. 15, 1918).--Federal Trade Commission v. George D.
Wetherill & Co. (Inc.). Cause: (Ante.) Disposition: Upon the answer of
respondent admitting the allegations in the complaint, an order was entered
requiring it to cease and desist from the practices complained of.
Complaint No. 59 (Mar. 13, 1918).--Federal Trade Commission v. Reliance
Varnish Works. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 60 (Apr. 15, 1918).--Federal Trade Commission v. Blackburn
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 61 (Apr. 15, 1918) .--Federal Trade Commission v. F. W.
Thurston Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 62 (Apr. 15, 1918).--Federal Trade Commission v. Grand Rapids
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease amid desist from the practices complained of.
Complaint No. 63 (Apr. 15, 1918).--Federal Trade Commission v. National
Varnish Co. Cause: (Ante.) Disposition : Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 64 (Apr. 24, 1918) .--Federal Trade Commission v. Standard
Varnish Works. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 65 (Apr. 15, 1918).--Federal Trade Commission v. Mayer &
Loewenstein. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 66 (Apr. 15, 1918).--Federal Trade Commission v. Boston
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the allegations in the complaint, an order was entered requiring it to cease
and desist from the practices complained of.
Complaint No. 67 (Apr. 15, 1918) .--Federal Trade Commission v. Louisville

Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease amid desist from the practices complained of.
Complaint No. 68 (Apr. 15, 1918) .--Federal Trade Commission v Murphy
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 69 (Apr.15, 1918).--Federal Trade Commission v. Marietta Paint
& Color Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring It to cease and
desist from the practices complained of.
Complaint No.70 (Mar.13, 1918).--Federal Trade Commission v. O’Neil Oil &
Paint Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No. 71 (Apr. 30, 1918).--Federal Trade Commission v. Grand Rapids
Wood Finishing Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 72 (Apr. 15, 1918).--Federal Trade Commission v. The Forbes
Varnish Co. Cause: (Ante) Disposition: Upon the answer of respondent

78

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

admitting the allegations complaint, in order was entered requiring it to cease and
desist from the complained of.
Complaint No. 73 (Apr. 15 1918).--Federal Trade Commission v. The LawrenceMcFadden Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 74 (Apr. 15, 1918).--Federal Trade Commission v. Pratt &
Lambert (Inc.). Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 75 (Apr. 15, 1918).--Federal Trade Commission v. Essex Varnish
Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 76 (Apr. 15, 1918).--Federal Trade Commission v. The Glidden
Varnish Co. Cause: (Ante.) Disposition: Upon the answer or respondent admitting
the allegations in the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No. 77 (Apr. 15, 1918).--Federal Trade Commission v. The Ault &
Wiborg Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No. 78 (Mar. 13, 1918).--Federal Trade Commission v. Chas. R Long,
Jr., Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting the
allegations in the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 80 (June 24, 1918).--Federal Trade Commission v. Sears,
Roebuck & Co. Cause: (Ante.) Disposition: Submitted to the Commission on
agreed statement of facts, upon which an order was entered requiring the
respondent to cease and desist from the practices complained of.
Complaint No.81 (Apr. 15, 1918).--Federal Trade Commission v. The Moller &
Schuman Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, order was entered requiring it to cease
and desist from the practices complained of.
Complaint No. 94 (June 28, 1918).--Federal Trade Commission v. The American
Tobacco Co. Cause: (Ante.) Disposition: Complaint and proceedings dismissed
and discontinued, it appearing to the Commission that there was not sufficient
evidence to support the allegations of the said complaint.
Complaint No. 95 (June 28, 1918).--Federal Trade Commission v. United States
Gold Leaf Manufacturers’ Association and the individuals, firms, and
corporations, the members thereof. Cause: (Ante.) Disposition: Upon the answers
of the respondents admitting the allegations of the complaint, an order was entered
requiring them to cease and desist from the practices complained of.
Com plaint No.98 (May 17, 1918).--Federal Trade Commission v. J. H. Allen &
Co. Cause: (Ante.) Disposition: It appearing to the Commission that the
respondent had entered into a written agreement with the Commission to cease and
desist the practices complained of prior to the filing of the complaint herein, this

case was dismissed.
Complaint No. 99 (July 22, 1918).--Federal Trade Commission v. C. F. Bonsor
& Co. (Inc.). Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 100 (June 6, 1918).--Federal Trade Commission v. Buddha Tea
Co. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting the
allegation of the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 102 (June 6, 1918).--Federal Trade Commission v. The Dannemiller Grocery Co. Cause: (Ante.) Disposition: Upon the answer of the
respondent admitting the allegations of the complaint, an order was entered
requiring it to cease and desist from the practices complained of.
Complaint No.105 (June 6, 1918).--Federal Trade Commission v. A. Ethridge &
Co. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting the
allegations of the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No.108 (June 6, 1918).--Federal Trade Commission v. F. W. Himmz
& Sons. Cause: (Ante.) Disposition: Upon the answer of the respondent ad-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

79

mitting the allegations of the complaint, an order was entered requiring it to cease
and desist from the practices complained of.
Complaint No. 109 (June 6, 1918).--Federal Trade Commission v. Thomas C.
Jenkins. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting
the allegations of the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No. 110 (June 6, 1918).--Federal Trade Commission v. The Johnson
Layne Coffee Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 112 (June 6, 1918) .--Federal Trade Commission v. Levering
Coffee Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 113 (June 6, 1918) .--Federal Trade Commission v. A. L. Mars
& Co. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting
the allegations of the complaint, an order was entered requiring it to cease and
desist from the practices complained of.
Complaint No. 114 (June 6, 1918).--Federal Trade Commission v. M. S. Miller
Co. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting the
allegations of the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complain No.115 (June 6, 1918).--Federal Trade Commission v. Rice Bros.
Cause: (Ante.) Disposition: Upon the answer of the respondent admitting the
allegations of the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 116 (June 6, 1918).--Federal Trade Commission v. Roth-Homyer
Coffee Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 117 (June 6, 1918) .--Federal Trade Commission v. William S.
Scull Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 118 (June 6, 1918).--Federal Trade Commission v. Sioux Falls
Coffee & Spice Co. Cause: (Ante.) Disposition: Upon the answer of the
respondent admitting the allegations of the complaint, an order was entered
requiring it to cease and desist from the practices complained of.
Complaint in t No. 119 (June 6, 1918) .--Federal Trade Commission v. Valley
City Coffee & Spice Mills. Cause: (Ante.) Disposition : Upon the answer of the
respondent admitting the allegations of the complaint, an order was entered
requiring it to cease and desist from the practices complained of.
Complaint No.120 (June 6, 1918).--Federal Trade Commission v. Tue E. It.
Webster Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 124 (June 28, 1918).--Federal Trade Commission v. Pennsylvania

Specialty Co. Cause: (Ante.) Disposition: Upon the answer of the respondent
admitting the allegations of the complaint, an order was entered requiring it to
cease and desist from the practices complaint of.
Complaint No. 125 (June 6, 1918).--Federal Trade Commission v. Advance Paint
Co. Cause: (Ante.) Disposition: Upon the answer of the respondent admitting the
allegations of the complaint, an order was entered requiring it to cease and desist
from the practices complained of.
Complaint No. 147 (June 28, 1918).--Federal Trade Commission v. American
Varnish Co. Cause: (Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.
Complaint No. 149 (June 29, 1918).--Federal Trade Commission v. James B.
Day & Co. Cause: (Ante.) Disposition: Upon the answer of respondent admitting
the allegations in the complaint, an order was entered requiring it to cease amid
desist from the practices complained of.
Complaint No. 150 (June 24, 1918) .--Federal Trade Commission v. S. C.
Johnson & Son. Cause: ( Ante.) Disposition: Upon the answer of respondent
admitting the allegations in the complaint, an order was entered requiring it to
cease and desist from the practices complained of.

80

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
PROCEEDINGS PENDING.
(June 30, 1918.)

Complaint No. 5.--Federal Trade Commission v. The Shredded Wheat Co.
Cause: Unfair methods of competition against the Ross Food Co., in alleged
violation of section 5 of the Federal Trade Commission act. Status: This
proceeding is at issue upon the complaint of the Commission and the answer of the
respondent and negotiations are pending for a settlement of the same by
stipulation.
Complaint No. 11.--Federal Trade Commission v. Botsford Lumber Co. et al.
Cause: Stifling and suppressing competition on the part of mail order houses in the
lumber and building material trade by bogus and spurious requests for estimates,
quotations, printed matter, etc.; by influencing credit reporting houses: by inducing
manufacturers to refrain from furnishing materials; by surreptitiously obtaining
trade secrets and by trailing salesman, in alleged violation of section 5 of the
Federal Trade Commission act. Status: By stipulation order to cease and desist the
practices complained of in the complaint, has been issued against a large number
of the respondents, and negotiations are now pending for the issuance by
stipulation of similar orders against the remaining respondents.
Complaint No. 12.--Federal Trade Commission v. Anderson Gratz and Benjamin
Gratz, doing business under the name of Warren, Jones & Gratz, and others.
Cause: Discouraging and stifling competition in the sale of jute bagging by
refusing to sell steel ties for binding bales of cotton unless jute bagging is ordered
at the same time, in alleged violation of section 3 of the Clayton Act. Status: The
evidence in this proceeding has all been introduced and the Commission’s brief
filed with the Examiner. Upon the filing of the respondent’s brief time
proceedings will be finally disposed of.
Complaint No. 15.--Federal Trade Commission v. The Curtis Publishing Co.
Cause: (Ante.) Status: All of the evidence in this proceeding has been introduced
and the briefs for both the Commission and the respondent are in preparation.
Upon their completion there will be a final disposition of the matter.
Complaint No. 16.--Federal Trade Commission v. The Wholesale Saddlery
Association of the United States and National Harness Manufacturers’ Association
of the United States. Cause: (Ante.) Status: The Commission has introduced a
large portion of its evidence herein. Time proceeding now stands pending
negotiations for a settlement by stipulation without the introduction of further
evidence.
Complaint No. 19.--Federal Trade Commission v. Mishawaka Woolen
Manufacturing Co. Cause: (Ante.) Status: Thus proceeding is at issue upon the
complaint of the Commission and the answer of the respondent and is awaiting
trial and determination along with similar resale price maintenance cases pending
before the Commission.
Complaint No. 20.--Federal Trade Commission v. The Cudahy Packing Co.
Cause: (Ante.) Status: The Commission has introduced all of its evidence in this
proceeding and the matter is awaiting the outcome of pending negotiations for the
entering of an order upon the testimony introduced mind without the introduction

of any further testimony.
Complaint No. 21.--Federal Trade Commission v. Ward Baking Co. Cause:
(Ante.) Status: All of the evidence has been introduced in this proceeding and the
briefs of both the Commission and the respondent are now in preparation. Upon
the filing of same the matter will be finally terminated.
Compliant No. 22.--Federal Trade Commission v. Chicago Flexible Simaft Co.
Cause: (Ante.) Status: This proceeding is now in the course of trial, the
Commission having introduced a part of its evidence.
Complaint No 24.--Federal Trade Commission v. Galena-Signal Oil Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the answer of the respondent and is now being prepared for trial.
Complaint No 25.--Federal Trade Commission v. J. F. Hillerich & Son Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the answer of the respondent, and is awaiting trail and
determination along with similar resale price maintenance eases pending before
the Commission.
Complaint No. 28.--Federal Trade Commission v. Ward Baking Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Com-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

81

mission and the answer of the respondent, and is awaiting trail and determination
along with similar resale price maintenance cases pending before the Commission.
Complaint No. 29.--Federal Trade Commission v. Nulomoline Co. Cause:
(Ante.) Status: This proceeding is now in the course of trail, the Commission
having introduced a part of its evidence.
Complaint No 30.--Federal Trade Commission v. Western Clock Co. Cause:
(Ante.) Status: The proceeding is at issue upon complaint of the Commission and
the answer of the respondent, and is awaiting trial and determination along with
similar resale price maintenance proceedings pending before the Commission.
Complaint No. 31.--Federal Trade Commission v. National Biscuit Co. Cause:
(Ante.) Status: This proceeding is at issue on the complaint of the Commission
and the answer of the respondent, and is being prepared for trial.
Complaint No. 32.--Federal Trade Commission v. United Drug Co. Cause:
(Ante. ) Status: This proceeding is at issue of the complaint of the Commission
and the answer of the respondent and is being prepared for trial.
Complaint No. 33.--Federal Trade Commission v. American Radiator Co.
Cause: ( Ante.) Status: This proceeding is at issue on the complaint of the
Commission and the answer of the respondent, and is being prepared for trail.
Complaint No. 39.--Federal Trade Commission v. The Coco Cola Co. Cause:
(Ante.) Status: This proceeding is at issue on the complaint of the Commission and
the answer of the respondent, and is being prepared for trial.
Complaint No 40.--Federal Trade Commission v. The Colorado Milling &
Elevator Co. Cause: (Ante.) Status: The proceeding is at issue upon the complaint
of the Commission and the answer of the respondent, and is awaiting trial and
determination along with similar resale price maintenance cases pending before
the Commission.
Complaint No. 41.--Federal Trade Commission v. Rockford Varnish Co. Cause:
(Ante.) Status: Negotiations pending for settlement by stipulation upon answer
filed by the respondent.
Complaint No. 53.--Federal Trade Commission v. McCloskey Varnish Co.
Cause: (Ante.) Status: Negotiations pending for settlement by stipulation upon
answer filed by the respondents.
Complaint No. 79.--Federal Trade Commission v. American Agricultural
Chemical Co. and The Brown Co. Cause: (Ante.) Status: Negotiations are
pending for settlement of the proceeding by stipulation and agreement.
Complaint No. 82.--Federal Trade Commission v. Photo-Engravers' Club of
Chicago. Cause: (Ante.) Status: Respondent has presented to the Commission its
argument in support of a motion filed by it to dismiss the complaint and the
proceeding is now awaiting the presentation of time Commission’s argument upon
the said motion.
Complaint No 83.--Federal Trade Commission v. American Mailing Device
Corporation. Cause: (Ante.) Status: Negotiations are pending for a settlement of
the proceeding by stipulation and agreement.
Complaint No. 84.--Federal Trade Commission v. Cutler Mail Chute Co. Cause:
(Ante.) Status: The proceeding is at issue upon the complaint of the Commission
and the answer of the respondent and is ready for trial.
Complaint No. 85.--Federal Trade Commission v. Standard Oil Co. of Indiana.
Cause: (Ante.) Status: Negotiations are pending for an adjustment of the
proceeding by stipulation and agreement.

Complaint No. 86.-Federal Trade Commission v. F. E. Atteaux & Co. Cause:
(Ante.) Status: This proceeding is at issue on the complaint of the Commission
and the answer of the respondent and is ready for trial.
Complaint No. 87.--Federal Trade Commission v. Crescent Manufacturing Co.
Cause: (Ante.) Status: The proceeding is at issue upon the complaint of the
Commission and answer of the respondent and is awaiting trial and determination
along with similar resale price maintenance proceedings pending before the
Commission.
Complaint No. 88.--Federal Trade Commission v. Beech-nut Packing Co.
Cause: (Ante.) Status: The proceeding is at issue upon the complaint of the
Commission and answer of time respondent and is awaiting trail and
determination along with similar resale price maintenance proceedings pending
before the Commission.
Complaint No. 89.--Federal Trade Commission v. L. E. Waterman Co. Cause:
(Ante.) Status: The proceeding is at issue upon the complaint of the Com82
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
mission and the answer of the respondent and is awaiting trial and determination
along with similar resale price maintenance proceedings pending before the
Commission.
Complaint No 90.--Federal Trade Commission v. Cluett, Peabody & Co. (Inc.).
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the answer of the respondent, and is awaiting trial and
determination along with similar resale price maintenance cases pending before
the Commission.
Complaint No. 91.--Federal Trade Commission v. Massachusetts Chocolate Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the answer of the respondent, and is awaiting trial and
determination along with similar resale price maintenance cases pending before
the Commission.
Complaint No. 92.--Federal Trade Commission v. Standard Oil Co. of New
York. Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and answer of the respondent, and is ready for trial.
Complaint No. 93.--Federal Trade Commission v. Atlantic Ice & Coal Corporation. Cause: (Ante.) Status: This proceeding is at issue upon the com-plaint
of the Commission and answer of the respondent, and is now being prepared for
trial.
Complaint No. 96.--Federal Trade Commission v. Ringwalt Linoleum Works
(Inc.). Cause: (Ante.) Status: The proceeding is at issue on the complaint of the
Commission and answer of the respondent, and is being prepared for trial.
Complaint No. 97.--Federal Trade Commission v. S. M. Hex ter & Co. Cause:
(Ante.) Status: This proceeding is at issue on the complaint of the Commission
and the answer of the respondent, and is being prepared for trial.
Complaint No. 101.--Federal Trade Commission v. The Climax Coffee & Baking
Powder Co. Cause: (Ante.) Status: Negotiations are pending for the dismissal of
this proceeding upon the showing by the respondent that it had discontinued the
practices complained of prior to the filing of the complaint.
Complaint No. 103.--Federal Trade Commission v. J.S. Elliott Coffee Co. Cause:
(Ante.) Status: Negotiations are pending for the determination of this proceeding
by stipulation and agreement.
Complaint No. 104.--Federal Trade Commission v. Enterprise Coffee Co. Cause:

(Ante.) Status: Negotiations are pending for the determination of this proceeding
by stipulation and agreement.
Complaint No. 106.--Federal Trade Commission v. B L. Gerhart & Co. Cause:
(Ante.) Status: Negotiations are pending for the determination of this proceeding
by stipulation and agreement.
Complaint No. 107.--Federal Trade Commission v. The Grocers Coffee Co.
Cause: (Ante.) Status: Negotiations pending for the determination of this
proceeding by stipulation and agreement.
Complaint No. 111.--Federal Trade Commission v. C. D. Kenny Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the answer of the respondent denying the allegations in the complaint.
Complaint No. 121.--Federal Trade Commission v. E. J. Brach & Sons. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the answer of the respondent and negotiations are pending for a settlement of
the same by stipulation and agreement.
Complaint No. 122.--Federal Trade Commission v. George Muench. Cause:
(Ante.) Status: This proceeding is pending on the respondent’s answer and motion
to dismiss.
Complaint No. 123.--Federal Trade Commission v. American Can Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the answer of the respondent and is now being prepared for trial.
Complaint No. 126.--Federal Trade Commission v. Ironite Co., Master Builders
Co., and United Products Co. Cause : (Ante.) Status : This proceeding is at issue
upon the complaint of the Commission and the respondent's answer and Is being
prepared for trial.
Complaint No. 127--Federal Trade Commission v. Mecanno (Ltd.) and The
Mecanno Co. (Inc.). Cause: (Ante.) Status: This proceeding Is at Issue upon the
complaint of the Commission and the respondent's answer and is being prepared
for trial.
Complaint No. 128.--Federal trade Commission v. The Vaudeville Managers
Protective Association, The Vaudeville Artists (Inc.), The United

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

83

Booking Office, et al. Cause: (Ante.) Status: This proceeding is being prepared
for trial.
Complaint No. 129.--Federal Trade Commission v. Wayne Oil Tank & Pump Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer, and is being prepared for trial and final
determination.
Complaint No. 130.--Federal Trade Commission v. Gilbert & Barker Manufacturing Co. Cause: (Ante.) Status: This proceeding is at issue upon the
complaint of the Commission and the respondent’s answer, and is being prepared
for trial and final determination.
Complaint No. 131.--Federal Trade Commission v. Atlantic Refining Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No. 132.--Federal Trade Commission v. Standard Oil Co. of Ohio.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No. 133.--Federal Trade Commission v. Standard Oil Co. of Indiana.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No. 134.--Federal Trade Commission v. Standard Oil Co. of New
York. Cause: (Ante.) Status: Thus proceeding is at issue upon the complaint of
the Commission and the respondent’s answer and is being prepared for trial and
final determination.
Complaint No. 135.--Federal Trade Commission v. Standard Oil Co. of
Louisiana. Cause: (Ante.) Status: This proceeding is at issue upon the complaint
of the Commission and the respondent’s answer and is being prepared for trial and
final determination.
Com plaint No. 136.--Federal Trade Commission v. American Tank & Pump Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent's answer and is being prepared for trial and final
determination.
Complaint No. 137.--Federal Trade Commission v. Milwaukee Tank Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No. 188.--Federal Trade Commission v. Tokheim Manufacturing Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No. 139.--Federal Trade Commission v. Guarantee Liquid Measure
Co. Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer and is being prepared for trial and final
determination.
Complaint No 140.--Federal Trade Commission v. Stanley Booking Corporation.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the respondent’s answer and is being prepared for trial and final

determination.
Complaint No. 141.--Federal Trade Commission v. The Evans Dollar Pen Co.
Cause: (Ante.) Status: This proceeding is at issue upon the complaint of the
Commission and the answer of the respondent and is awaiting trial and
determination along with similar resale price maintenance proceedings pending
before the Commission.
Complaint No. 142.--Federal Trade Commission v. Wilson & Co. Cause: (Ante.)
Status: This proceeding is in course of trial, the greater part of the evidence having
been introduced.
Compliant No. 143.--Federal Trade Commission v. Morris & Co. Cause: (Ante.)
Status : This proceeding is at issue upon the complaint of the Commission and the
answer of the respondent and is awaiting trial.
Complaint No. 144.--Federal Trade Commission v. Weyl-Zuckerman Co. Cause:
(Ante.) Status: This proceeding is at issue upon time complaint of the Commission
and the answer of the respondent and is awaiting trial.
Complaint No. 145.--Federal Trade Commission v. Consolidated Rendering Co.,
New Haven Rendering Co., Atlantic Packing Co., and L. T Frisbie Co. Cause:
(Ante.) Status: This proceeding is at issue upon the complaint of the Commission
and the answer of the respondent and is awaiting trail.

84 ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
Complaint No. 146--Federal Trade Commission v. The Acme White Lead & Color
Works. Cause: (Ante.) Status: Answer not due.
Complaint No. 148.--Federal Trade Commission v. Chicago Varnish Co. Cause:
(Ante.) Status: Answer not due.
Complaint int No. 151.--Federal Trade Commission v. G. J. Liebich Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 152.--Federal Trade Commission v. The Royal Varnish Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 153.--Federal Trade Commission v. Twin City Varnish Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 154.--Federal Trade Commission v. The Wheeler Varnish Works.
Cause: (Ante.) Status: Answer not due.
Complaint No. 155.--Federal Trade Commission v. Eli Lilly & Co. Cause: (Ante.)
Status: Answer not due.
Complaint No. 156.--Federal Trade Commission v. Purity Preserving Co. and R. J.
McGuiar Co. Cause: (Ante.) Status : Answer not due.
Complaint No. 157.--Federal Trade Commission v. Saenger Amusement Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 158.--Federal Trade Commission v. Clayton F. Summy Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 159.--Federal Trade Commission v. United Rendering Co., M. L.
Shoemaker & Co. (Inc.), Time Berg Co., The D. B. Martin Co., Consolidated Dressed
Beef Co., Baugh & Sons Co., Winfield S. Allen, Nathan Berg, F. W. English,
Christopher Offenhauser. Cause: (Ante.) Status: Answer not due.
Complaint No. 160.--Federal Trade Commission v. The Victor Electric Corporation.
Cause: (Ante.) Status: Answer not due.
Complaint No 161.--Federal Trade Commission v. Dearborn Chemical Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 162.--Federal Trade Commission v. Henry O. Shepard Co. Cause:
(Ante.) Status: Answer not due.
Complaint No. 163.--Federal Trade Commission v. Armour & Co. Cause: (Ante.)
Status: Answer not due.
Complaint No. 164.--Federal Trade Commission v. Federal Rope Co. (Inc.). Cause:
(Ante.) Status: Answer not due.
Complaint No. 165.--Federal Trade Commission v. The Esterbrook Steel Pen
Manufacturing Co. Cause: (Ante.) Status: Answer not due.
Complaint No. 166.--Federal Trade Commission v. E. E. Gray Co. Cause: (Ante.)
Status: Answer not due.
Complaint No 167.--Federal Trade Commission v. United Electric Co. Cause: (Ante)
Status: Answer not due.
Complaint No. 168.--Federal Trade Commission v. The National Wholesale Druggists
Association et al. Cause: (Ante.) Status: Answer not due.
Comparative summary of adversary proceedings.
1918
Adversary proceedings instituted ----------------------154
Adversary proceedings disposed of -------------------79
Adversary proceedings pending:
In preparation for trial -------------------------------Answers not due -------------------------------------Resale price -------------------------------------------Pending negotiations for settlement ----------------

24
20
14
13

1917
9
4

Ready for trial ----------------------------------------In course of trial ---------------------------------------

8
6
85

10
10

MISCELLANEOUS LEGAL WORK.
In addition to the formal and informal proceedings heretofore reviewed, the legal
department has taken an active and prominent part in many of the matters which
have arisen under the jurisdiction of the Commission.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

85

In the various investigations and surveys of tirade and industrial conditions,
corporate affairs, and economic questions, conducted during the fiscal year,
members of the legal department have rendered service not only in ascertaining
and determining the exact conditions and surrounding facts, but also have assisted
in the preparation of the various reports made by the Commission to the public and
to different branches of the Government, by briefing the legal propositions arising
from the facts ascertained, conducting the examination of witnesses called in the
various investigations, compelling returns to demands of the Commission for
information in the determination of costs of production of materials used for war
purposes, giving opinions as to the legal effect of the documentary evidence
obtained, and, in general, rendering a involving legal advice upon all matters and
questions propositions which have arisen. Much of the work of this character has
arisen from the effect of the war upon commerce gene rally, a notable example of
which was in the inquiry by the Commission as to the cost of news print paper. By
agreement between the Attorney General and certain news-print manufacturers,
this matter was referred to the Commission to determine and fix, after due hearing
and investigation, subject to review by the judges of the United States Circuit
Court of Appeals for the Second Circuit, the just and reasonable maximum prices
and terms of contracts for the sale of news print paper by such manufacturers after
April 1, 1918, during the period of the war and for three months thereafter. The
legal department assisted the Commission in conducting the hearings in this
matter, which covered a period of 36 days, during which time many witnesses from
different parts of the United States and Canada gave testimony and a large amount
of documentary evidence was introduced.
At the suggestion of the United States Food Administrator, Mr. Herbert C.
Hoover, the Federal Trade Commission conducted an investigation of food
profiteering. Eighty-three applications for the issuance of complaints were
docketed and three cases were investigated under section 6 of the Federal Trade
Commission act. Numerous hearings were held. The legal department conducted
these investigations and represented the public at the hearings. As a result of the
activities of the Commission in this respect, licenses were revoked by the United
States Food Administrator on recommendation of the Commission. The
investigation was particularly directed to the vegetable bottling and canning
industries, in which inadequate crops and rising prices caused the withholding of
con-tract deliveries and the selling of spots on the market at a higher price.
The legal department also investigated cases in which the Government fixed a
definite margin of profit above cost, as in the case of flour, where there was a
considerable incentive to a fictitious enhancement of the cost of goods by account
juggling.
From the evidence adduced in the investigation and carrying on of the
proceedings involving commercial bribery, the legal department is of the opinion
that the only manner in which this evil can be effectively stopped is by legislation
of the character heretofore reported by the Commission to Congress, and it
therefore recommends that the passage of this legislation be strongly urged upon
the members of that body.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Under section 6 of the Federal Trade Commission act the Commission is only
authorized to gather and compile information and to investigate the organization,
business, conduct, practices, and management of corporations engaged in interstate
commerce, except banks and common carriers, and their relations to other
corporations and to individuals, associations, and partnerships. Under section 5 of
the Federal Trade Commission act the Commission may proceed against
individuals and partnerships for using unfair methods of competition; but it can
not, under section 6, make an investigation of the business and practices of
individuals and partnerships engaged in interstate commerce. The Commission can
not make a full economic investigation into industries under section 6 for the
reason that many individuals and partnerships are engaged in such industries and
the Commission is without legal authority to investigate the business of such
individuals or partnerships. The Commission cam not require reports from such
individuals and partnerships for the purpose of determining the cost of production
of war materials for time purpose of the determination of a fair price, nor can it
make a report on general conditions in such industries without an investigation or
report on the business of individuals engaged in such industries.
Therefore the legal department urgently requests that the Commission
recommend to Congress an amendment to section 6 of time Federal Trade
Commission act to meet the difficulties here pointed out. This the Commission
does.
All of which is respectfully submitted.
WILLIAM B. COLVER, Chairman.
JOHN FRANKLIN FORT,
VICTOR MURDOCK.

EXHIBIT l.

FEDERAL TRADE COMMISSION ACT.
AN ACT To create a Federal Trade Commission, to define its powers and
duties, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled, That a Commission Is hereby created and
established, to be known as the Federal Trade Commission (hereinafter referred
to as the Commission), which shall be composed of five Commissioners, who shall
be appointed by the President, by and with the advice and consent of the Senate.
Not more than three of the Commissioners shall be members of the same political
party. The first Commissioners appointed shall continue in office for terms of
three, four, five, six, and seven years, respectively, from the late of the taking
effect of this act, the term of each to be designated by the President, but their
successors shall be appointed for terms of seven years, except that any person
chosen to fill a vacancy shall be appointed only for the unexpired term of the
Commissioner whom he shall succeed. The Commission shall choose a chairman
from its own membership. No Commissioner shall engage In any other business,
vocation, or employment. Any Commissioner may be removed by the President
for inefficiency, neglect of duty, or malfeasance in office. A vacancy in the
Commission shall not impair the right of the remaining Commissioners to exercise
all the powers of the Commission.
The Commission shall have an official seal, which shall be judicially noticed.
SEC. 2. That each Commissioner shall receive a salary of $10,000 a year, payable in the same manner as the salaries of the judges of the courts of the United
States. The Commission shall appoint a secretary, who shall receive a salary of
$5,000 a year, payable in like manner, and it shall have authority to employ and
fix the compensation of such attorneys, special experts, examiners, clerks, and
other employees as it may from time to time find necessary for the proper
performance of its duties and as may be from time to time appropriated for by
Congress.
With the exception of the secretary, a clerk to each Commissioner, the attorneys,
and such special experts and examiners as the Commission may from time to time
find necessary for the conduct of its work, all employees of the Commission shall
be a part of the classified civil service, and shall enter the service under such rules
and regulations as may be prescribed by the Commission and by the Civil Service
Commission.
All of the expenses of the Commission, including, all necessary expenses for
transportation incurred by the Commissioners or by their employees under their
orders, in making any investigation, or upon official business in any other places
than in the city of Washington, shall be allowed and paid on the presentation of
itemized vouchers therefor approved by the Commission.
Until otherwise provided by law, the Commission may rent suitable offices for
Its use.

The Auditor for the State and Other Departments shall receive and examine all
accounts of expenditures of the Commission.
SEC. 3. That upon the organization of the Commission and election of its
chairman, the Bureau of Corporations and the offices of Commissioner and Deputy
Commissioner of Corporations shall cease to exist; and all pending investigations
and proceedings of the Bureau of Corporations shall be continued by the
Commission.
All clerks and employees of the said bureau shall be transferred to and become
clerks and employees of the Commission at their present grades and salaries. All
records, papers, and property of the said bureau shall become records, papers, and
property of the Commission, and all unexpended funds and appropriations for the
use and maintenance of the said bureau, including any allotment already made to
it by the Secretary of Commerce from the contingent
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

appropriation for the Department of Commerce for the fiscal year nineteen
hundred and fifteen, or from the departmental printing fund for the fiscal year
nineteen hundred and fifteen, shall become funds and appropriations available to
be expended by the Commission in the exercise of the powers, authority, and
duties conferred on it by this act.
The principal office of the Commission shall be in the city of Washington, but
it may meet and exercise all its powers at any other place. The Commission may,
by one or more of its members, or by such examiners as it may designate,
prosecute any inquiry necessary to its duties in any part of the United States.
SEC. 4. That the words defined in this section shall have the following meaning
when found in this act, to wit:
“Commerce” means commerce among the several States or with foreign nations,
or in any Territory of the United States or in the District of Columbia, or between
any such Territory and another, or between any such Territories and any State or
foreign nation, or between the District of Columbia and any State or Territory or
foreign nation.
“Corporation” means any company or association incorporated or unincorporated, which is organized to carry on business for profit and has shares of capital
or capital stock, and any company or association, incorporated or unincorporated,
without shares of capital or capital stock, except partnerships, which is organized
to carry on business for its own profit or that of its members.
“Documentary evidence” means all documents, papers, and correspondence in
existence at and after the passage of this act.
“Acts to regulate commerce” means the act entitled “An act to regulate commerce,” approved February fourteenth, eighteen hundred and eighty-seven, and all
acts amendatory thereof and supplementary thereto.
“Antitrust acts” means the act entitled “An act to protect trade and commerce
against unlawful restraints and monopolies,” approved July second, eighteen
hundred and ninety; also the sections seventy-three to seventy-seven, inclusive, of
an act entitled “An act to reduce taxation, to provide revenue for the Government,
and for other purposes,” approved August twenty-seventh, eighteen hundred and
ninety-four; and also the act entitled “An act to amend sections seventy-three and
seventy-six of the act of August twenty-seventh, eighteen hundred and ninety-four,
entitled ‘An act to reduce taxation, to provide revenue for the Government, and for
other purposes,’” approved February twelfth, nineteen hundred and thirteen.
SEC. 5. That unfair methods of competition in commerce are hereby declared
unlawful.
The Commission is Hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the acts
to regulate commerce, from using unfair methods of competition in commerce.
Whenever the Commission shall have reason to believe that any such person,
partnership, or corporation has been or is using any unfair method of competition
in commerce, and if it shall appear to the Commission that a proceeding by it in
respect thereof would be to the interest of the public, it shall issue and serve upon
such person, partnerships or corporation a complaint starting its charges in their
respect, and containing a notice of a hearing upon a day and at a place therein
fixed at least thirty days after the service of said complaint. The person,

partnership, or corporation so complained of shall have the right to appear at the
place and time so fixed and show cause why an order should not be entered by the
Commission requiring such person, partnership, or corporation to cease and desist
from the violation of the law so charged in said complaint. Any person,
partnership, or corporation may make application, and upon good cause shown
may be allowed by the Commission, to intervene and appear in said proceeding by
counsel or in person. The testimony in any such proceeding shall be reduced to
writing and filed in the office of the Commission. If upon such hearing the
Commission shall be of the opinion that the method of competition in question is
prohibited by this act, it shall make a report in writing in which it shall state its
findings as to the facts, and shall issue and cause to be served on such person,
partnership, or corporation an order requiring such person, partnership, or
corporation to cease and desist from using such method of competition. Until a
transcript of the record in such hearing shall have been filed in a circuit court of
appears of the United States, as hereinafter provided, the Commission may at any
time, upon such notice and in such manner as it shall deem proper, modify or set
aside, in whole or in part, any report or any order made or issued by It under this
section.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

89

If such person, partnership, or corporation fails or neglects to obey such order of
the Commission while this same is in effect, the Commission may apply to the
circuit court of appeals of the United States, within any circuit where the method
of competition in question was used or where such person, partnership, or
corporation resides or carries on business, for the enforcement of its order, and
shall certify and file application transcript of the entire record in the proceeding,
including all testimony taken and the report and order of the Commission. Upon
such filing of the application and transcript the court shall cause notice thereof to
be served upon such person, partnership, or corporation and thereupon shall have
jurisdiction of the proceeding and of the question determined therein, and Shall
have power to make and enter upon the pleadings, testimony, and proceedings set
forth in such transcript a decree affirming, modifying, or setting aside the order of
the Commission. The findings of the Commission as to the facts, if supported by
testimony, shall be conclusive. If either party shall apply to the court for leave to
adduce additional evidence, and shall show to the satisfaction of the court that
such additional evidence is material, and that there were reasonable grounds for
the failure to adduce such evidence in the proceeding before the Commission, the
court may order such additional evidence to be taken before the Commission and
to be adduced upon the hearing in such manner and upon such terms and
conditions as to the court may seem proper. The Commission may modify its
findings as to the fact, or make new findings, by reason of the additional evidence
so threat, and it shall file such modified or new findings, which, If supported by
testimony, shall be conclusive, and its recommendation, If any, for the
modification or setting aside of its original order, with the return of such additional
evidence. The judgment and decree of the court shall be final, except that the
same shall be subject to review by the Supreme Court upon certiorari as provided
in section two hundred and forty of the Judicial Code.
Any party required by such order of the Commission to cease and desist from
using such method of competition may obtain a review of such order in said circuit
court of appeals by filing in the court a written petition praying that the order of
the Commission be set beside. A copy of such petition Shall be forthwith served
upon the Commission, and thereupon the Commission forthwith shall certify and
file in the court a transcript of the record as hereinbefore provided. Upon the filing
of the transcript the court shut have the same jurisdiction to affirm, set aside, or
modify the order of the Commission as in the case of an application by the
Commission for the enforcement of its order, and the findings of the Commission
as to the facts, if supported by testimony, shall in like manner be conclusive.
The jurisdiction of the circuit court of appeals of the United States to enforce,
set aside, or modify orders of the Commission Shall be exclusive.
Such proceedings in the circuit court of appeals Shall be given precedence over
other cases pending therein, and shall be in every way expedited. No order of the
Commission or judgment of the court to enforce the same shall In any wise relieve
or absolve any person, partnership, or corporation from any liability under the
antitrust acts.
Complaints, orders, and other processes of the Commission under this section
may be served by anyone duly authorized by the Commission, either (a) by
delivering a copy thereof to the person to be served, or to a member of the

partnership to be served, or to the president, secretary, or other executive officer
or a director of the corporation to he Served ; or (b) by leaving a copy thereof at
the principal office or place of business of such person, partnerships or
corporation; or (c) by registering and mailing a copy thereof addressed to such
person, partnership, or corporation at his or its principal office or place of
business. The verified return by the person so serving said complaint, order, or
other process setting forth the manner of said service shelf be proof of the same,
and the return post-office receipt for said complaint, order, or other process
registered and mailed as aforesaid ,hall be proof of the service of the same.
SEC. 6. That the Commission shall also have power-(a) To gather and compile information concerning, and to investigate front time
to time the organization, business, conduct, practices, tied management of any
corporation engaged in commerce, excepting, banks and common carriers and it
subject to the act to regulate commerce, relation to other corporations and to
Individuals, associations, and in partnerships.
(b) To require, by general or Special orders, corporations engaged in commerce,
excepting, banks, and common carriers subject to the act to regulate

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

commerce, or any class of them, or any of them, respectively, to file with the
Commission in such form as the Commission may prescribe annual or special, or
both annual and special, reports or answers in writing to specific questions,
furnishing to the Commission such information as it may require as to the
organization, business, conduct, practices, management, and relation to other
corporations, partnerships, and individuals of the respective corporations filing
such reports or answers in writing. Such reports and answers shall be made under
oath, or otherwise, as the Commission may prescribe, and shall be filed with the
Commission within such reasonable period as the Commission may prescribe,
unless additional time be granted in any case by tile Commission.
(c) Whenever a final decree has been entered against any defendant corporation
in any suit brought by the United States to prevent and restrain any violation of the
antitrust acts, to make investigation, upon its own initiative, of the manner in
which the decree has been or is being carried out, and upon the application of the
Attorney General it shall be its duty to make such investigation. It shall transmit
to the Attorney General a report embodying its findings and recommendations as
a result of any such investigation, and the report shall be made public in the
discretion of the Commission.
(d) Upon the direction of the President or either House of Congress to investigate and report the facts relating to any alleged violations of the antitrust acts
by any corporation.
(e) Upon the application of the Attorney General to investigate and make
recommendation for the readjustment of the business of any corporation alleged
to be violating the antitrust acts in order that the corporation may thereafter
maintain its Organization, management, and conduct of business in accordance
with law.
(f) To make public from time to time such portions of the information obtained
by it hereunder, except trade secrets and names of customers, as it shall deem
expedient in the public interest; and to make annual and special reports to the
Congress and to submit therewith recommendations for additional legislation; and
to provide for the publication of its reports and decisions in such form and manner
as may be best adapted for public information and use.
(g) From time to time to classify corporations and to make, rules and regulations
for the purpose of carrying out the provisions of this act.
(h) To investigate, from time to time, trade conditions in and with foreign
countries where associations, combinations, or practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United
States, mid to report to Congress thereon, with such recommendations as it deems
advisable.
SEC. 7. That in any suit in equity brought by or under the direction of the
Attorney General as provided in the antitrust acts, the court may, upon the
conclusion of the testimony therein, if it shall be then of opinion that the complainant is entitled to relief, refer said suit to the Commission, as a master in
chancery, to ascertain and report an appropriate form of decree therein. The
Commission shall proceed upon such notice to the parties and under such rules of
procedure as tile court may prescribe, and upon the coming in of such report such
exceptions may be filed and such proceedings had in relation thereto as upon the

report of a master in other equity causes, but the court may adopt or reject such
report, in whole or in part, and enter such decree as the nature of the case may in
its judgment require.
SEC. 8. That the several departments and bureaus of the Government when
directed by the President shall furnish the Commission, upon its request, all
records, papers, and information in their possession relating to any corporation
subject to any of the provisions of this act, and shall detail from time to time such
officials and employees to the Commission as he may direct.
SEC. 9. That for the purposes of this act tile Commission, or its duly authorized
agent or agents, shall at all reasonable times have access to, for the purpose of
examination, and the right to copy any documentary evidence of any corporation
being investigated or proceeded against; and the Commission shall naive power
to require by subpena the attendance and testimony of witnesses and the
production of all such documentary evidence relating to any matter under
investigation. Any member of the Commission may sign subpoenas, and members
and examiners of the Commission may administer oaths and affirmations, examine
witnesses, and receive evidence.
Such attendance of witnesses, and the production of such documentary evidence,
may be required
from any place in the United States, at any designated place of hearing. And in
case of disobedience to a subpoena the Commission
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 91
may invoke the aid of any court of the United States in requiring the attendance
and testimony of witnesses and the protection of documentary evidence.
Any of the district courts of the United States within the jurisdiction of which
such inquiry is carried on may, in case of contumacy or refusal to obey a subpoena
issued to any corporation or other person, issue an order requiring such
corporation or other person to appear before the Commission, or to produce
documentary evidence if so ordered, or to give evidence touching the matter in
question; and any failure to obey such order of the court may be punished by such
court is a contempt thereof.
Upon the application of the Attorney General of the United States, at the request
of the Commission, the district courts of the United States shall have jurisdiction
to issue writs of mandamus commanding any person or corporation to comply with
the provisions of this act or any order of the Commission made in pursuance
thereof.
The Commission may order testimony to be taken by deposition in any proceeding or investigation pending under this act at any stage of such proceeding or
investigation. Such depositions may be taken before any person designated by the
Commission and having power to administer oaths. Such testimony shall be
reduced to writing by the person taking the deposition, or under his direction, and
shall then be subscribed by the deponent. Any person may be compelled to appear
and depose and to produce documentary evidence In the same manner as witnesses
may be compelled to appear and testify and produce documentary evidence before
the Commission as hereinbefore provided.
Witnesses summoned before the Commission shall be paid the same fees and
mileage that are paid
witnesses in the courts of the United States, and witnesses whose depositions are

taken and the persons taking the same shall severally be entitled to the same fees
as are paid for like services in the courts of the United States.
No person shall be excused from attending and testifying or from producing
documentary evidence before the Commission or in obedience to the subpoena. of
the Commission on the ground or for the reason that the testimony or evidence,
documentary or otherwise, required of him may tend to criminate him or subject
him to a penalty or forfeiture. But no natural person shall be prosecuted or
subjected to any penalty or forfeiture for or on account of any transaction, matter,
or thing concerning which he may testify, or produce evidence, documentary or
otherwise, before the Commission in obedience to a subpoena issued by it:
Provided, That no natural person so testifying shall be exempt from prosecution
and punishment for perjury committed in so testifying
SEC. 10. That any person who shall neglect or refuse to attend and testify, or
to answer any lawful inquiry, or to produce documentary evidence, if in his power
to do so, in obedience to the subpoena or lawful requirement of the Commission,
shall be guilty of an offense and upon conviction thereof by a court of competent
jurisdiction shall be punished by a fine of not less than $1,000 nor more than
$5,000, or by imprisonment for not more than one year, or by both such fine and
imprisonment.
Any person who shall willfully make, or cause to be made, any false entry or
statement of fact in any report required to be made under this act, or who shall
willfully make, or cause to be made, any false entry in any account, record, or
memorandum kept by any corporation subject to this act, or who shall willfully
neglect or fail to make, or to cause to be made, full, true, and correct entries In
such accounts, records, or memoranda of all facts and transactions appertaining to
the business of such corporation, or who shall willfully remove out of the
jurisdiction of the United States, or willfully mutilate, alter, or by ally other means
falsify any documentary evidence of such corporation, or who, shall willfully
refuse to submit to the Commission or to any of its authorized agents, for the
purpose of inspection and taking copies, any documentary evidence of such
corporation in his possession or within his control, shall be deemed guilty of an
offense against the United States, and shall be subject, upon conviction in any
court of the United States of competent jurisdiction, to a fine of not less than
$1,000 nor more than $5,000, or to imprisonment for a term of not more than three
years, or to both such fine and imprisonment.
If any corporation required by this act to file any annual or special report shall
fail so to do within the time fixed by the Commission for filing the same, and such
future shall continue for thirty days after notice of such default, the corporation
shall forfeit to the United States the sum of $100 for each and every day of the
continuance of such failure, which forfeiture shall be payable

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

into the Treasury of the United States and shall be recoverable in a civil suit in the
name of the United States brought in the district where the corporation has its
principal office or in any district in which it shall do business. It shall be the duty
of the various district attorneys, under the direction of the Attorney General of the
United States, to prosecute for the recovery of forfeitures. The costs and expenses
of such prosecution shall be paid out of the appropriation for the expenses of the
courts of the United States.
Any officer or employee of the Commission who shall make public any information obtained by the Commission, without its authority, unless directed by a court,
shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be
punished by a fine not exceeding $5,000, or by imprisonment not exceeding one
year, or by fine and imprisonment, in the discretion of the court.
SEC. 11. Nothing contained in this act shall be construed to prevent or interfere
with the enforcement of the provisions of the antitrust acts or the acts to regulate
commerce, nor shall anything contained In the act be construed to, alter, modify,
or repeal the said antitrust acts or the acts to regulate commerce or any part or
parts thereof.
Approved, September 26, 1914.

EXHIBIT 2.
PROVISIONS OF THE CLAYTON ACT WHICH CONCERN THE FEDERAL
TRADE COMMISSION.
“Commerce,” as used herein, means trade or commerce among the Several States
and with foreign nations, or between the District of Columbia or any Territory of
the United States and any State, Territory, or foreign nation, or between any
insular possessions or other places under the jurisdiction of the United States, or
between any such possession or place and any State or Territory of the United
States or the District of Columbia or any foreign nation, or within the District of
Columbia or any Territory or any insular possession or other place under the
jurisdiction of the United States: Provided, That nothing in this act contained shall
apply to the Philippine Islands.
The word “person” or “persons” wherever used in this act shall be deemed to
include corporations and associations existing under or authorized by the laws of
either the United States, the laws of any of the Territories, the laws of any State,
or the laws of any foreign country.
SEC. 2. That it shall he unlawful for any person engaged In commerce, in the
course of such commerce, either directly or indirectly to discriminate in price
between different purchasers of commodities, which commodities are sold for use,
consumption, or resale within the United States or any Territory thereof or the
District of Columbia or any insular possession or other place under the jurisdiction
of the United States, where the effect of such discrimination may be to
substantially lessen competition or tend to create a monopoly in any line of
commerce: Provided, That nothing herein contained shall prevent discrimination
in price between purchasers, of commodities, on account of differences in the
grade, quality, or quantity of the commodity sold, or that makes only due
allowance for difference in the cost of Selling or transportation, or discrimination
in price in the same or different communities made in good faith to meet
competition: And provided further, That nothing herein contained shall prevent
persons engaged in selling goods, wares, or merchandise in commerce from
.selecting their own customers in bona fide transactions and not in restraint of
trade.
SEC. 3. That it shall be unlawful for any person engaged in commerce, in the
course of such commerce, to lease or make a sale. or contract for sale of goods,
wares, merchandise, machinery, supplies or other commodities, whether patented
or unpatented, for use, consumption, or resale within the United States or any
Territory thereof or the District of Columbia or any insular possession or other
place under the jurisdiction of the United States, or fix a price charged therefore
or discount front, or rebate upon, such price, on the condition, agreement or
understanding that the lessee or purchaser thereof shall not use or deal in the
goods, wares, merchandise, machinery, supplies, or other commodities of a
competitor or competitors of the lessor or seller, where the effect of such lease,
sale, or contract for sale or such condition, agreement or understanding may be to
substantially lesson competition or tend to, create a monopoly in any line of
commerce.
SEC. 7. That no corporation engaged in commerce shall acquire, directly or
indirectly, the whole or any part of the stock or other share capital of another

corporation engaged also in commerce, where the effect of such acquisition maybe
to substantially lessen competition between the corporation whose stock is so
acquired and the corporation making the acquisition, or to restrain such commerce
in any section or community, or tend to create a monopoly of any line of
commerce.
No corporation shall acquire, directly or indirectly the whole or any part of the
stock or other share capital of two or more corporations engaged in commerce
where the effect of such acquisition, or the use of such stock by the voting or
granting of proxies or otherwise, may be to substantially lessen competition
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

between such corporations, or any of them, whose stock or other share capital is
so acquired, or to restrain such commerce in any section or community, or tend to
create a monopoly of any line of commerce.
This section shall not apply to corporations purchasing such stock solely for
Investment and not using the same by voting or otherwise to bring about, or in
attempting to bring about, the substantial lessening of competition. Nor shall
anything contained in this section prevent a corporation engaged in commerce
from causing the formation of subsidiary corporations for the actual carrying on
of their immediate lawful business, or the natural and legitimate branches or
extensions thereof, or from owning and holding all or a part of tile stock of such
subsidiary corporations, when the effect of such formation is not to substantially
lessen competition.
Nor shall anything herein contained be construed to prohibit any common carrier
subject to the laws to regulate commerce from aiding in the construction of
branches or short lines so located as to become feeders to the main line of the
company so aiding in such construction or from acquiring or owning all or any part
of the stock of such branch lines, nor to prevent any such common carrier from
acquiring and owning all or any part of the stock of a branch or short line
constructed by an independent company where there is no substantial competition
between the company owning the branch line so constructed land the company
owning the main line acquiring the property or an interest therein, nor to prevent
such common carrier from extending any of its lines through the medium of the
acquisition of stock or otherwise of any other such common carrier where there is
no substantial competition between the company extending its lines and tile
company whose stock, property, or an interest therein is so acquired.
Nothing contained. in this section shall be held to affect or impair any right
heretofore legally acquired: Provided, That nothing in this section shall be held or
construed to authorize or make lawful anything heretofore prohibited or made
illegal by the antitrust laws, nor to exempt any person from the penal provisions
thereof or the civil remedies therein provided.
SEC. 8. That from and after two years from the date of the approval of this act
no person at the same time shall be a director in any two or more corporations, any
one of which has capital, surplus, and undivided profits aggregating more than
$1,000,000, engaged in whole or in part in commerce, other than banks, banking
associations, trust companies and common carriers subject to the act to regulate
commerce, approved February fourth, eighteen hundred and eighty-seven, if such
corporations are or shall have been theretofore, by virtue of their business and
location of operation, competitors, so that the elimination of competition by
agreement between them would constitute a violation of any of the provisions of
any of the antitrust laws. The eligibility of a director under the foregoing
provision shall be determined by the aggregate amount of the capital, surplus, and
undivided profits, exclusive of dividends declared but not paid to stockholders, at
the end of the fiscal year of said corporation next preceding the election of
directors, and when a director has been elected in accordance with the provisions
of this act it shall be lawful for him to continue as such for one year thereafter.
When any person elected or chosen as a director or officer or selected as an
employee of any bank or other corporation subject to the provisions of this act is

eligible at the time of his election or selection to act for such bank or other
corporation in such capacity his eligibility to act in such capacity shall not be
affected and lie shall not become or be deemed amenable to ally of the provisions
hereof by reason of any crime in the affairs of such bank or other corporation from
whatsoever cause, whether specifically excepted by any of the provisions hereof
or not, until the expiration of one year from the date of his election or employment.
SEC. 11. That authority to enforce compliance with sections two, three, seven
and eight of this act by the persons respectively subject thereto is hereby vested in
the Interstate Commerce Commission where applicable to common carriers, in the
Federal Reserve Board where applicable to banks, banking associates and trust
companies, and in the Federal trade Commission where applicable to all other
character of commerce, to be exercised as follows:
Whenever the Commission or Board vested with jurisdiction thereof shall have
reason to believe that any person is violating or has violated any of the provisions
of sections two, three, seven and eight of this act, it shall issue and serve upon such
person a complaint stating its charges in that respect, and containing a notice of a
hearing upon a day and at a place therein fixed at

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

95

least thirty days after the service of said complaint. The person so complained of
shall have the right to appear at the place and time so fixed and show cause why
an order should not be entered by the Commission or board requiring such person
to cease and desist from the violation of the law so charged in said complaint. Any
person may make application, and upon good cause spoken may be allowed by the
Commission or board, to intervene and appear in said proceeding by counsel or in
person. The testimony in any such proceeding shall be reduced to writing and
filed in the office of the Commission or board. If upon such hearing the
Commission or board, as the case may be, shall be of the option that any of the
provisions of said sections have been or ire being violated, it shall make a report
in writing in which it shall state its findings as to the facts, and shall issue and
cause to be served on such person an order requiring such person to cease and
desist from such violations, and divest itself of the stock held or rid itself of the
directors chosen contrary to the provisions of sections seven and eight of this act,
if any there be, in the manner and within the time fixed by said order. Until a
transcript of the record in such notice shall have been filed in a circuit court of
appeals of the United States, as hereinafter provided, the Commission or board
may at any time, upon such notice and in such manner as it shall deem proper,
modify or set aside, in whole or in part, any report or any order made or issued by
it under this section.
If such person fails or neglects to obey such order of the Commission or board
while the same is in effect, the Commission or board may apply to the circuit
Court of appeals of the United States, within any circuit where the violation
complained or was or is being committed or where such person resides or carries
on business, for the enforcement of its order, and shall certify and file with its
application a transcript of the entire record in the proceeding including all the
testimony taken and the report and order of the Commission or board. Upon such
filling of the application and transcript the court shall cause notice thereof to be
served upon such person and thereupon shall have jurisdiction of the proceeding
and of the question determined therein, and shall have power to make and enter
upon the pleading’s, testimony, and proceedings set forth in such transcript a
decree affirming, modifying, or setting aside the order of the Commission or
board. The findings of the Commission or board as to the facts, if supported by
testimony, shall be conclusive. If either party shall apply to the court for leave to
adduce additional evidence, and shall show to the satisfaction of the court that
such additional evidence is material and thwart there were reasonable grounds for
the failure to adduce such evidence In the proceeding before the Commission or
board, the court may order such additional evidence. to be taken before the
Commission or board and to be adduced upon the hearing In such manner and
upon such terms and conditions as to the court may seem proper. The Commission
or board may modify its findings as to the facts, or make new findings, by reason
of the additional evidence so taken, and it shall file such modified or new findings,
which, if supported by testimony, shall be conclusive, and its recommendation, if
any, for the modification or setting aside of its original order, with the return of
such additional evidence. The judgment and decree of the court shall be final,
except that the same shall be subject to review by the Supreme Court upon
certiorari as provided in section two hundred laid forty of the Judicial Code.

Any party required by such order of the Commission or board to cease and desist
from a violation charged may obtain a review of such order In said circuit court of
appears by finite in the court a written petition praying that the order of the
Commission or board be set aside. A copy of such petition shall be forthwith
served upon the Commission or board, and thereupon the Commission or board
forthwith shall certify and file in the court a transcript of the record as
hereinbefore provided. Upon the filing of the transcript the court shall have the
same jurisdiction to affirm, set aside, or modify the order of the Commission or
board as in the case of an application by the Commission or board for the
enforcement of its order, and the finding of the Commission or board as to the
facts, if supported by testimony, shall in like manner be conclusive.
The jurisdiction of the circuit court of appeals of the United States to enforce,
set aside, or modify orders of the Commission or board shall be exclusive.
Such proceedings in the circuit court of appeals shall be given precedence. over
other cases pending therein, and shall be in every way expedited. No order of the
Commission or board or the judgment of the court to enforce the same shall in any
wise relieve or absolve any person from any liability under the antitrust acts.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Complaints, orders, and other processes of tile Commission or board under this
section may be served by anyone duly authorized by the Commission or board,
either (a) by delivering a copy thereof to the person to be served. or to a member
of the partnership to be served, or to the president, secretary, or other executive
officer or a director of the corporation to be served; or (b) by leaving a copy
thereof at the principal office or place of business of such person; or (c) by
registering and mailing a copy thereof addressed to such person at his principal
office or place of business. The verified return by tile person so serving said
complaint, order, or other process setting forth the manner of said service shall be
proof of the same, and the return post-office receipt for said complaint, order, or
other process registered and mailed as aforesaid shall be proof of tile service of the
same.
Approved, October 15, 1914.

EXHIBIT 3.

RULES OF PRACTICE BEFORE THE FEDERAL TRADE COMMISSION.
I. SESSIONS.
The principal office of the Commission at Washington, D. C., is open each
business day from 9 a.m. to 4:30 p.m. The Commission may meet and exercise all
its powers at any other place, and may, by one or more of Us members, or by such
examiners as it may designate, prosecute any inquiry necessary to its duties in any
part of the United States.
Sessions of the Commission for hearing contested proceedings will be held as
ordered by the Commission.
Sessions of the Commission for the purpose of making orders and for the
transaction of other business, unless otherwise ordered, Will be held at the office
of the Commission at Washington, D. C., on each business day at 10.30 a. in.
Three members of the Commission shall constitute a quorum for the transaction
of business.
All orders of the Commission shall be signed by the Secretary.
II. COMPLAINTS.
Any person partnership, corporation, or association may apply to the
Commission to institute a proceeding in respect to any violation of law over which
the Commission has jurisdiction.
Such application shall be in Writing, signed by or in behalf of the applicant, and
shall contain a short and simple statement of the facts constituting the alleged
violation of law and the name and address of the applicant and of the party
complained of.
The Commission shall investigate the matters complained of in such application,
and if upon investigation the Commission shall have reason to believe that there
is a violation of law over which the Commission has jurisdiction, tile Commission
shall issue and serve upon the party complained of a complaint, stating its charges
and containing a notice of a hearing -upon a day and at a place therein fixed at
least 40 days after the service of said complaint.
III. ANSWERS.
Within 30 days from the service of the complaint, unless such time be extended
by order of the Commission, the defendant shall file with the Commission an
answer to the complaint. Such answer shall contain a short and simple statement
of the facts which constitute the ground of defense. It shall specifically admit or
deny or explain each of the facts alleged in the complaint, unless the defendant is
without knowledge, in which case lie shall so state, such statement operating as a
denial. Answers in typewriting must be on one side of the paper only, on paper not

more then 8 ½ inches wide and not more than 11 inches long, and weighing not
less then 16 pounds to the ream, folio base, 17 by 22 Inches, with left-hand
margins not less than 1 ½ inches wide, or they may be printed in 10 or 12 point
type on good unglazed paper 8 inches wide by 10 ½ inches long, with inside
margins not less than 1 inch wide.
IV. SERVICE.
Complaints, orders, and other processes of the Commission may be served by
anyone duly authorized by the Commission, either (a) by delivering a copy thereof
to the person to be served, or to a member of the partnership to be served, or to the
president, secretary, or other executive officer, or a director of the corporation or
association to be served; or (b) by leaving a copy thereof at
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

the principal office or place of business of such person, partnership, corporation,
or association; or (c) by registering and mailing a copy thereof addressed to such
person, partnership, corporation, or association at his or its principal office or
place of business. The verified return by the person so serving said complaint,
order, or other process, setting forth the manner of said service, shall be proof of
the same, and the return post-office receipt for said complaint, order, or other
process, registered and wailed as aforesaid, shall be proof of the service of the
same.
V. INTERVENTION.
Any person, partnership, corporation, or association desiring to intervene in a
contested proceeding shall make application in writing, setting out the grounds on
which lie or it claims to be interested. The Commission may, by order, permit
intervention by counsel or in person to such extent and upon such terms as it shall
deem just.
Applications to intervene must be on one side of the paper only, on paper not
more than 8 ½ inches wide and not more than 11 inches long, and weighing not
less than 16 pounds to the ream, folio base, 17 by 22 inches, with left-hand margin
not less than 1 ½ inches wide, or they may be printed in 10 or 12 point type on
good unglazed paper 8 inches wide by 10 ½ inches long, with inside margins not
less than 1 inch wide.
VI. CONTINUANCES AND EXTENSIONS OF TIME.
Continuances and extensions of time will be granted at the discretion of the
Commission.
VII. WITNESSES AND SUBPOENAS:
Witnesses shall be examined orally, except that for good and exceptional cause
for departing from the general rule the Commission may permit their testimony to
be taken by deposition.
Subpoenas requiring the attendance of witnesses from any place in the United
States at any designated place of hearing may be issued by any member of the
Commission.
Subpoenas for the production of documentary evidence (unless directed to issue
by a Commissioner upon his own motion) will issue only upon application in
writing, which must be verified and must specify, as near as may be, the
documents desired and the facts to be proved by them.
Witnesses summoned before the Commission shall be paid the same fees and
mileage that are paid witnesses in the courts of the United States, and witnesses
whose depositions are taken, and the persons taking the same, shall severally be
entitled to the same fees as are paid for like services in the courts of the United
States.
VIII. TIME FOR TAKING TESTIMONY.

Upon the joining of issue in a proceeding by the Commission the examination
of witnesses therein shall proceed with all reasonable diligence and with the least
practicable delay. Not less than 5 nor more than 10 days’ notice shall be given by
the Commission to counsel or parties of the time and place of examination of
witnesses before the Commission, a Commissioner, or an examiner.
IX. OBJECTIONS TO EVIDENCE.
Objections to the evidence before the Commission, a Commissioner, or an
examiner shall, in any proceeding, be in short form. starting the grounds of objections relied upon, and no transcript filed shall include argument or debate.
X. MOTIONS.
A motion in a proceeding by the Commission shall briefly state the nature of the
order applied for, and all affidavits, records, and other helpers upon which the
same is founded, except such as have been previously filed or served in the same
proceeding, shall be filed with such motion and plainly referred to therein.
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
99
XI. HEARINGS ON INVESTIGATIONS.
When a matter for investigation is referred to a single Commissioner for examination or report, such Commissioner may conduct or hold conferences or hearings
thereon, either alone or with other Commissioners who may sit with him, and
reasonable notice of the time and place of such hearings shall be given to parties
in interest and posted.
The general counsel or one of his assistants, or such other attorney as shall be
designated by the Commission, shall attend and conduct such hearings, anti such
hearings way, in the discretion of the Commissioner holding same, be public.
VIII. DEPOSITIONS IN CONTESTED PROCEEDINGS.
The Commission may order testimony to be taken by deposition in a contested
proceeding.
Depositions may be taken before any person designated by the Commission and
having power to
administer oaths.
Any party desiring to take the deposition of a witness shall make application in
writing, setting out the reasons why such deposition should be taken, and stating
the time when, the place where, and the name and post-office address of the person
before whom it is desired the deposition be taken, the name and post-office address
of the witness, and the subject matter or matters concerning which the witness is
expected to testify. if good cause be shown, the Commission will make and serve
upon the parties of their attorneys an order wherein the Commission shall name the
witness whose deposition is to be taken, and specify the time when, the place
where, and the person before whom the witness is to testify, but such time and
place, and the person before whom the deposition is to be taken, so specified in the
Commission’s order, may or may not be the same as those named in said
application to the Commission.
The testimony of the witness shall be reduced to writing by the officer before

whom the deposition is taken, or under his direction, after which the deposition
shall be subscribed by the witness and certified in usual form by the officer. After
the deposition has been so certified it shall, together with a copy thereof made by
such officer or under his direction, be forwarded by such officer under seal in an
envelope addressed to the Commission at its office in Washington, D. C. Upon
receipt of the deposition and copy the Commission shall file in the record in said
proceeding such deposition and forward the copy to the defendant or the
defendant’s attorney.
Such depositions shall be typewritten on one side only of the paper, which shall
be not more than 8 ½ inches wide and not more than 11 inches long and weighing
not less than 16 pounds to the ream, folio base, 17 by 22 inches, with left-hand
margin not less than 1 ½ inches wide.
No deposition shall be taken except after at least 6 days’ notice to the parties,
and where the deposition is taken in a foreign country such notice shall be at least
15 days.
No deposition shall be taken either before the proceeding is at issue, or, unless
under special circumstances and for good cause shown, within 10 days prior to the
date of the hearing thereof assigned by the Commission, and where the deposition
is taken in a foreign country it shall not be taken after 30 days prior to such date
of hearing.
IX. DOCUMENTARY EVIDENCE.
Where relevant and material matter offered in evidence is embraced In a
document containing other matter not material or relevant and not. intended to be
put in evidence, such document will not be filed, but a copy only of such relevant
and material matter shall be filed.
X. BRIEFS.
Unless otherwise ordered, briefs may be filed at the close of the testimony In
each contested proceeding. The presiding Commissioner or examiner shall fix the
time within which briefs shall be filed and service thereof shall be made upon the
adverse parties.
All briefs must be filed with tile secretary and be accompanied by proof of
service upon the adverse parties. Fifteen copies of each brief shall be furnished
for the use of the Commission, unless otherwise ordered.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Application for extension of time in which to file any brief shall be by petition
in writing, Stating the facts upon which tile application rests, which must be filed
with the Commission at least 5 days before the time for filing the brief.
Every brief shall contain, in the order here stated(1) A concise abstract, or statement of the case.
(2) A brief of the argument, exhibiting, a clear statement of the points of fact or
law to be discussed, with the reference to the pages of the record and the
authorities relied upon in support of each point.
Every brief of more than 10 pages shall contain on its top fly leaves a subject
index with page references, the subject index to be supplemented by a list of all
cases referred to, alphabetically arranged, together with references to pages where
the cases are cited.
Briefs must be printed in 10 or 12 point type on good unglazed paper 8 inches
by 101 inches, with inside margins not less than 1 inch wide, and with double
leaded text and single-leaded citations.
Oral arguments will be had only as ordered by the Commission.
XI. ADDRESS OF THE Commission.
All communications to the Commission must be addressed to Federal Trade
Commission, Washington, D. C., unless otherwise specifically directed.

EXHIBIT 4.
[PUBLIC--NO. 126--65TH CONGRESS.]
[H. R 2316.]
An Act To promote export trade, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States
Of America in Congress assembled, That the words “export trade” wherever used
in this act mean solely trade or commerce in goods, wares, or merchandise
exported, or in the course of being exported from the United States or any
Territory thereof to any foreign nation; but the words “export trade” shall not be
deemed to include the production, manufacture, or selling for consumption or for
resale, within the United States or any Territory thereof, of such goods, wares, or
merchandise, or any act in the course of such production, manufacture, or selling
for consumption or for resale.
That the words “trade within the United States” wherever used in this act mean
trade or commerce among the several States or in any Territory of the United
States, or in the District of Columbia, or between any such Territory and another,
or between any such Territory or Territories and any State or States or the District
of Columbia, or between the District of Columbia and any State or States.
That the word “association” wherever used in this act means any corporation or
combination, by contract or otherwise, of two or more persons, partnerships, or
corporations.
SEC. 2. That nothing contained in the act entitled “An act to protect trade and
commerce against unlawful restraints and monopolies,” approved July second,
eighteen hundred and ninety, shall be construed as declaring to be illegal an
association entered into for the sole purpose of engaging in export trade and
actually engaged solely in such export trade, or an agreement made or act done in
the course of export trade by such association, provided such association,
agreement, or act is not in restraint of trade within the United States, and is not in
restraint of the export trade of any domestic competitor of such association: And
provided further, That such association does not, either in the United States or
elsewhere, enter into any agreement, understanding, or conspiracy, or do any act
which artificially or intentionally enhances or depresses prices within the United
States of commodities of the class exported by such association, or which
substantially lessens competition within the United States or otherwise restrains
trade therein.
SEC. 3. That nothing contained in section seven of the act entitled “An act to
supplement existing laws against unlawful restraints and monopolies, and for other
purposes,” approved October fifteenth, nineteen hundred and fourteen, shall be
construed to forbid the
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

acquisition or ownership by any corporation of the whole or any part of the stock
or other capital of any corporation organized solely for the purpose of engaging in
export trade, and actually engaged solely in such export trade, unless the effect of
such acquisition or ownership may be to restrain trade or substantially lessen
competition within the United States.
SEC. 4. That the prohibition against “unfair methods of competition” and the
remedies provided for enforcing said prohibition contained in the act entitled “An
act to create a Federal trade Commission, to define its powers and duties, and for
other purposes,” approved September twenty-sixth, nineteen hundred and fourteen,
shall be construed as extending to unfair methods of competition used in export
trade against competitors engaged in export trade, even though the acts
constituting such unfair methods are done without the territorial jurisdiction of the
United States.
SEC 5. That every association now engaged solely in export trade, within sixty
days after the passage of this act, and every association entered into hereafter
which engages solely in export trade, within thirty days after its creation, shall file
with the Federal Trade Commission a verified written statement setting forth the
location of its offices or places of business and the names and addresses of all its
officers and of all its stockholders or members, and if a corporation, a copy of its
certificate or articles of incorporation and by-laws, and if unincorporated a copy
of its articles or contract of association, and on the first day of January of each
year thereafter it shall make a like statement of the location of its offices or places
of business and the names and addresses of all its officers and of all its
stockholders or members and of all amendments to and changes in its articles or
certificate of incorporation or in its articles or contract of association. It shall also
furnish to the Commission such information as the Commission may require as to
its organization, business, conduct, practices, management, and relation to other
associations, corporations, partnerships, and individuals. Any association which
shall fail so to do shall not have the benefit of the provisions of section two and
section three of this act, and it shall also forfeit to the United States the sum of
$100 for each and every day of the continuance of such failure, which forfeiture
shall be payable into the Treasury of the United States, and shall be recoverable
in a civil suit in the name of the United States brought in the district where the
association has its principal office, or in any district in which it shall do business.
It shall be the duty of the various district attorneys, under the direction of the
Attorney General of the United States, to prosecute for the recovery of the
forfeiture. The costs and expenses of such prosecution shall be paid out of the
appropriation for the expenses of the courts of the United States.
Whenever the Federal Trade Commission shall have reason to believe that an
association or any agreement made or act done by such association is in restraint
of trade within the United States or in restraint of the export trade of any domestic
competitor of such association, or that an association either in the United States
or elsewhere has entered into any agreement, understanding, or conspiracy, or
done any act which artificially or intentionally enhances or depresses prices within
the United States of commodities of the

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

103

class exported by such association, or which substantially lessens competition
within the United States or otherwise restrains trade therein it shall summon such
association, its officers, and agents to appear Therefore it, and thereafter conduct
an investigation into the alleged violations of law. Upon investigation, if it shall
conclude that the law has been violated, it may make to such association
recommendations for the readjustment of its business, in order that it may thereafter maintain its organization and management and conduct its business in
accordance with law.
If such association fails to comply with the
recommendations of the Federal Trade Commission , said Commission shall refer
its findings and recommendations to the Attorney General of the United States for
such action thereon as he may deem proper.
For the purpose of enforcing these provisions the Federal Trade Commission
shall have all the powers, so far as applicable, given it in “An act to create a
Federal Trade Commission, to define its powers and duties, and for other
purposes.”
Approved, April 10, 1918.

EXHIBIT 5.
EXTRACTS FROM THE TRADING WITH THE ENEMY ACT AND
EXECUTIVE ORDER OCTOBER 12, 1917
The act of Congress approved October 6, 1917, known as the trading with the
enemy act, contains the following provisions:
*

*

*

*

*

*

*

*

(b) Any citizen of the United States, or any corporation organized within the
United States, may, when duly authorized by the President, pay to an enemy or ally
of enemy any tax, annuity, or fee which may be required by the laws of much
enemy or ally of enemy nation in relation to patents and trademarks, prints, labels,
and copyrights; and any such citizen or corporation may file and prosecute an
application for letters patent or for registration of trademark, print, label, or
copyrights in the country of an enemy, or of an ally of enemy, after first submitting
such application to the President and receiving license so to file and prosecute, and
to pay the fees required by law and customary agents’ fees, the maximum amount
of which in each case shall be subject to the control of the President.
(c) Any citizen of the United States or any corporation organized within the
United States desiring to manufacture, or cause to be manufactured, a machine,
manufacture, composition of matters or design, or to carry on, or to use any
trademark, print, label, or cause to be carried on a process under any patent or
copyrighted matter owned or controlled by an enemy or ally of enemy at any time
during the existence of a state of war may apply to the President for a license; and
the President is hereby authorized to grant such a license, nonexclusive or
exclusive as he shall deem best, provided lie shall be of the opinion that such grant
is for the public welfare, and that the applicant is able and intends in good faith to
manufacture, or cause to be manufactured, the machine, manufacture, composition
of matter, or design, or to carry on, or cause to be carried on, the process or to use
the trademark, print, label, or copyrighted matter. The President may prescribe the
conditions of this license, including the fixing of prices of articles and products
necessary to the health of the military and naval forces of the United States or the
successful prosecution of the war, and the rules and regulations under which such
license may be granted and the fee which shall be charged therefore not exceeding
$100, and not exceeding one per cent of the fund deposited as hereinafter
provided. Such license shall be a complete defense to any suit at law or in equity
instituted by the enemy or ally of enemy owners of the letters patent, trade-mark,
print, label, or copyright, or otherwise, against the licensee for infringement or for
damages, royalty, or other money award on account of anything done by the
licensee under such license, except as provided in subsection (f ) hereof.
(d) The licensee shall file with the President a full statement of the extent of the
use and enjoyment of the license, and of the prices received in such form and at
such stated periods (at least annually) as the President may prescribe; and the
licensee shall pay at such times as many be required to the alien property custodian
not to exceed five per cent of the gross sums received by the licensee from the sale
of said inventions or use of the trademark, print, label, or copyrighted matter or,
if the President shall so order, five per cent of the value of the use of such
inventions, trademarks, prints, labels, or copyrighted matter to the licensee as

established by the President; and sums so paid shall be deposited by said alien
property custodian forthwith in the Treasury of the United States as a trust fund
for the said licensee and for the owner of the said patent, trade-mark, print, label,
or copyright registration as hereinafter provided, to be paid from the Treasury
upon order of the court, as provided in sub104

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105

division (f) of this section, or upon the direction of the alien property custodian.
(e) Unless surrendered or terminated is provided in this act, any license, granted
hereunder shall continue during the term fixed in the license or in the absence of
any such limitation during the term of the patent, trademark, print, label, or
copyright registration under which it is granted. Upon violation by the licensee of
any of the provisions of this act, or of the conditions of the license, the President
may, after due notice and hearing, cancel any license granted by him.
(f) The owner of any patent, trade-mark, print, label, or copyright under which
a license is granted hereunder may, after the end of the war and until the expiration
of one year thereafter, file a bill ill equity against the licensee in the, district court
of the United States for the district in which the said licensee resides, or, if a
corporation, in which it has its principal place of business (to which suit the
Treasurer of the United States shall be made a party), for recovery from the said
licensee for all use and enjoyment of the said patented Invention, trade-mark, print,
label, or copyrighted matter: Provided, however, That whenever suit is brought,
as above, notice shall be filed with the alien property custodian within thirty days
after date of entry of suit: Provided further, That the licensee may make any and
all defenses which would be available were no license granted. The court on due
proceedings had may adjudge and decree to the said owner payment of a
reasonable royalty. The amount of said judgment and decree, when final, shall be
paid on order of the court to the owner of the patent from the fund deposited by the
licensee, so far as such deposit will satisfy said judgment and decree; and the said
payment shall be in full or partial satisfaction of said judgment and decree, as the
all such judgments and decrees, facts may appear; and if, after payment of, there
shall remain any balance of said deposit, such balance shall be repaid to the
licensee on order of the alien property custodian. If no suit is brought within one
year after the end of the war, or no notice is filed as above required, then the
licensee shall not be liable to make any further deposits, and all funds deposited
by him shall be repaid to him on order of the alien property custodian. Upon entry
of suit and notice filed as above required, or upon repayment of funds as above
provided, the liability of the licensee to make further reports to the President shall
cease.
If suit is brought, as above provided, the court may, at any time, terminate the
license, and may, in such event, issue an injunction to restrain the licensee from
infringement thereafter, or the court, in case the licensee, prior to suit, shall have
made investment of capital based on possession of the license, may continue the
license for such period and upon such terms and with much royalties as it shall
find to be just and reasonable.
(g) Any enemy, or ally of enemy, may institute and prosecute suits in equity
against any person other than a licensee under this act to enjoin Infringement of
letter patent, trade-mark, print. label, and copyrights ill the United States, owned
or controlled by said enemy or ally of enemy in the same manner and to the extent
that he would be entitled so to do if the United States was not at war: Provided,
That no final judgment or decree shall be entered in favor of such enemy or ally
of enemy by any court except after thirty days’ notice to the alien property
custodian. Such notice shall be in writing and shall be served in the same manner
as civil process of Federal Court.
(h) All powers of attorney Heretofore or hereafter granted by an enemy or ally
of enemy to any person within the United States, in so far as they may be requisite

to the performance of acts authorized in subsections (a) and (g) of this section,
shall be valid.
(i) Whenever the publication of an invention by the granting of a patent may,
in the opinion of the President, be detrimental to the public safety or defense, or
may assist the enemy or endanger the successful prosecution of the war, lie may
order that the invention be kept secret and withhold the grant of a patent until the
end of the war: Provided, That the invention disclosed in the application for said
patent may be held abandoned upon it being established before or by the
Commissioner of Patents that, in violation of said order, said invention has been
published or that ,in application for a patent therefor has been filed in any other
country, by the inventor or his assigns or legal representatives without the consent
or approval of the Commissioner or under a license of the President.
When an applicant whose patent is withheld as herein provided, and who
faithfully obeys the order of the President above referred to shall tender his

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

invention to the Government of the United States for its use, the shall, if the
ultimately receives a patent, have the right to sue for compensation in the Court of
claims, such right to compensation to begin from the date of the use of the,
invention by the Government.
By the Executive order of October 12, 1917, the power and authority to
administer the above section was vested in the Federal trade Commission, as
follows:
XVII. I further hereby vest in the Federal Trade Commission the power and
authority to issue licenses under such terms and conditions as are not inconsistent
with law or to withhold or refuse the same, to any citizen of the United States or
any corporation organized within the United States to file and prosecute
applications in the country of an enemy or ally of enemy for letters patent or for
registration of trademark, print, label, or copyright, and to pay the fees required by
law and the customary agents’ fees, the maximum amount of which in each case
shall be subject to the control of such Commission ; or to pay to any enemy or ally
of enemy any tax, annuity, or fee which may be required by the laws of such
enemy or ally of enemy nation In relation to patents, trademarks, prints, labels, and
copyrights.
XVIII. I hereby vest in the Federal Trade Commission the power and authority
to issue, pursuant to the provisions of section 10 (c) of the trading-with-the-enemy
act, upon such terms and conditions as are not inconsistent with law, or to
withhold or refuse a license to any citizen of the United States or any corporation
organized within the United States, to manufacture or cause to be manufactured
a machine, manufacture, composition of matter, or design, or to carry on or cause
to be carried on a process under any patent, or to use any trade-mark, print, label,
or copyrighted matter owned or controlled by all enemy or ally of enemy, at any
time during the present war; and also to fix the prices of articles and products
manufactured under such licenses necessary to the health of the military and the
naval forces of the United States, or the successful prosecution of the war; and to
prescribe the fee which may be charged for such license, not exceeding $100 and
not exceeding 1 percent of the fund deposited by the licensee with the alien
property custodian as provided by law.
XIX. I hereby further vest in the said Federal Trade Commission the executive
administration of the provisions of section 10 (d) of the trading-with-the-enemy
act, the power and authority to prescribe the form of, and time and manner of filing
statements of the extent of the use and enjoyment of the license and of the prices
received and the times at which the licensee shall make payments to the alien
property custodian, and the amounts of said payments, in accordance with the
trading-with-the-enemy act.
XX. I further hereby vest in the Federal Trade Commission the power and
authority, whenever in its opinion the publication of an invention or the granting
of a patent may be detrimental to the public safety or defense or may assist the
enemy, or endanger the successful prosecuting of the war, to order that the
invention be kept secret and the grant letters patent withheld until the end of the
war.
XXI. The said Federal Trade Commission is hereby authorized to take all such
measures as may be necessary or expedient to administer the powers hereby
conferred.

By the Executive order of April 11, 1918, the power an authority vested in the
Federal Trade Commission under section 10 (b) of the Trading with the Enemy
Act ans Section XVII of the Executive order of October 12, 1917, was revoked as
follows:
I hereby revoke the power and authority vested in the Federal Trade Commission
by section XVII of the Executive order of October 12, 1917, to issue license to any
citizen of the United States or any corporation organized within the United States,
to file or prosecute application in the country of an enemy or ally of enemy for
letters patent or for registration of trade-mark, print, label, or copyright, and to pay
any fees or agent’s fees in connection therewith or to pay to any enemy or ally of
enemy any tax, annuity, or fee in relation to patents, trade-marks, prints, labels,
and copyrights, and no such license shall be granted until further order.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

107

APPLICATIONS FOR LICENSES UNDER PATENTS AND COPYRIGHTS
OWNED OR CONTROLLED BY AN ENEMY OR ALLY OF ENEMY.
Applicants for a license under patents or copyrights owned or controlled by an
enemy or an ally of an enemy are required to file a verified statement with the
Federal Trade Commission in concise and nontechnical language, covering the
following points, stating in each instance the facts upon which any conclusion may
be based:
(a) If an individual, that he is a citizen of the United States. If a corporation,
that it is organized within the United States.
(b) That the patent or copyright desired to be licensed is owned or controlled by
an enemy or an ally of an enemy. (For definitions of “enemy” and “ally of an
enemy,” see footnote.)
If it is claimed that the patent or copyright is controlled by an enemy or ally of
an enemy, the nature and origin of the control should be plainly stated, whether by
contract, agency, stock ownership, or otherwise.
(c) There shall be attached to the application a Patent Office copy of the patent
and a certified abstract of title to it, or a specimen of the copyright article and a
certified copy of the copyright entries and, in the case of a patent, of a certified
copy of the petition and all powers of attorney in the file of the application.
DEFINITIONS OF “ENEMY” AND “ALLY OF ENEMY” IN THE TRADING
WITH THE ENEMY ACT
SEC. 2. That the word “enemy” as, used herein shall be deemed to mean, for the
purpose of such traditions and of this act(a) Any individual, partnership, or other body of individuals, of any nationality,
resident within the territory (including that occupied by their military and naval
forces) of any nation with which the United States is at war, or resident outside the
United States and doing business within such territory, and any corporation
incorporated within such territory of any nation with which the United States is at
war or incorporated within any country other then the United States and doing
business within such territory.
(b) The government of any nation with which the United States is at war, or any
political or municipal subdivision thereof, or any officer, official, agent, or agency
thereof.
(c) Such other individual, or body or class of individuals, as may be natives,
citizens, or subjects of any nation with which the United States is at war, other
than citizens of the United States, wherever resident or wherever doing business,
as the President, if he shall find the safety of the United States or the successful
prosecution of the war shall so require, may, by proclamation, include within the
term “enemy.”
The words “ally of enemy,” as used herein, shall he deemed to mean(a) Any individual, partnership, or other body of individuals of any nationality,
resident within the territory (including that occupied by the military and naval
forces) of any nation which is an ally of a nation with which the United States is
at and doing business within such territory, and any incorporated within any
country other than the United States and doing business within such territory, and
any corporation incorporated within such territory of such ally nation, or
incorporated within such territory of such ally nations or incorporated within any
country other than the United States and doing business within such territory.

(b) The government of any nation which is ally of a nation with which the united
states is at war, or any political or municipal subdivision of such ally nation, or any
officer, official, agent, or agency thereof.
(c) Such other individuals, or body or class of individuals as may be natives,
citizens, or subjects of any nation which is an ally of a nation with which the
United States is at war, other than citizens of the United States, wherever resident
or wherever doing business, as the President, if he shall find the safety of the
United States or the successful prosecution of the war shall so require, may, by
proclamation include within the term “ally of the enemy.”

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

(d) That licensing the applicant is for the public welfare. Specifically, that there
is a demand for the patented or copyrighted article or the product of the patented
process which is not being met.
(e) That the applicant is able to make or cause to be made the patented or
copyrighted article or exercise the patented process. Specifically, that the
applicant is technically and otherwise, equipped to undertake or procure the
manufacture or operate the process and is in fact able to do so.
(f) That the applicant intends to do so in good faith.
(g) The application must be verified by the person applying for the license, and
in the case of a, corporation by an officer thereof acquainted with the facts recited.
Each application shall be accompanied with a remittance of one hundred dollars.
A suggested form of application is appended.
A separate application is required for each patent or copyright.
The application should be prepared in duplicate and, for convenience in filing,
on good unglazed paper 8 inches by 10 ½ inches, directed to the Federal Trade
Commission, Patent, Trade-mark, and Copyright Division, and may be transmitted
by mail or delivered personally. Personal attendance at the outset is not necessary.
If any hearings are desired, notice of them will be given.
In every case where practicable notice of applications for license will be given
to the attorney of the patentee or copyright proprietor whose name appears in the
file of the application in the Patent Office. or the office of the Register of
Copyrights.
The burden of establishing affirmatively the facts upon which under the terms
of the act, license may be granted is placed upon the applicant for license.
THE TERMS OF THE LICENSE.
The act provides and the Executive order vests in the Federal Trade Commission
the duty of prescribing the conditions of the license.
The form of licenses proposed to be issued is appended.
Only nonexclusive licenses will be issued unless the public interest shall
otherwise require.
DURATION OF LICENSE.
The act provides (sec. 10 [e]) that licenses shall continue during the terms fixed
in the license, or, in the absence of any such limitation, during the term of the
patent * * * or copyright registration under which it is granted, and that upon
violation by the licensee of any of the provisions of the act, or of the conditions of
the license, after due notice and hearing, the license may be canceled.
LICENSES UNDER TRADE-MARKS, PRINTS AND LABELS OWNED OR
CONTROLLED BY AN ENEMY OR ALLY OF AN ENEMY.
Licenses for the use, of trade-marks, prints, and labels will be granted only under
exceptional circumstances. Applications for licenses tinder the following
conditions will be entertained:

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

109

(1) Where the alleged trademark is the, name of a patented or copyrighted
article and a license is granted tinder the patent or copyright.
(2) Where the alleged trade-mark is the name of an article manufactured tinder
tin expired patent or copyright.
THE LICENSE FEE.
The act provides that the license fee shall not exceed $100, and not exceeding 1
per cent of the sum deposited with the alien property custodian. This fund is an
amount not to exceed (a) 5 per cent of the gross sums received by the licensee
from the sale of the licensed subject matter, or (b) 5 per cent of the value of the use
of the licensed subject matter as established by the Federal Trade Commission.
ACCOUNTING AND PAYMENT TO THE ALIEN PROPERTY
CUSTODIAN.
The licensee shall file with the Federal Trade Commission, semiannually on
January 1 and July 1 of each year and oftener if required, a full statement of the
extent of the use and enjoyment of the license, and of the prices received from the
sale or use of the subject matter of it, and within 30 days thereafter the licensee
shall pay to the alien property custodian not to exceed 5 per cent of the gross sums
received from the sale of the licensed subject matter, or if the Federal Trade
Commission so order not to exceed 5 per cent of the value of the use of the
licensed subject matter as established by the Federal Trade Commission.
FORM OF LICENSE UNDER PATENT.
Patent licenses issued by the Federal Trade Commission under the provisions of
the “Trading with the enemy act” will be in substantially the following form:
Patent No ------------------, dated ------------------------------- to -------------------------- for -------------------------------.
The Federal Trade Commission, under the authority of and in conformity with
the “Trading with the enemy act,” and of the Executive order of October 12, 1917,
hereby licenses ------------------------------------------- to make, use, and vend within
the United States the invention described and claimed in United States letters
patent to ------------------------------------- No - ------------- dated ----------------------------- (copy annexed hereto) for the period of -------------------------------- unless
sooner terminated.
The licensee during the continuance of this license shall pay to the alien property
custodian, semiannually, within 30 days after the 1st day of January and the 1st
day of July, respectively, of each year, a royalty at the rate of -------------- per cent
of the gross sums received by the licensee from the sale of the invention so herein
licensed (or ---------- per cent of the value of the use thereof to the licensee as
established by the Federal Trade Commission).
The licensee shall, during the continuance of this license, keep proper accounts
and separate books containing full particulars of:
(a) All articles made or caused to be made by the licensee under the said letters
patent and of the price or prices charged therefore;
(b) All items of cost incurred in the use of such invention and the manufacture
and sale of articles inside thereunder; and
(c) All other matters and things which in the opinion of the Federal Trade

Commission may be material for the purpose of showing the amounts from time
to time payable by the licensee concerning such royalty and what is a fair and
reasonable price to the public for such article.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

The licensee shall, within 10 days after each of the semiannual days aforesaid,
deliver a sworn statement to the Federal Trade Commission in writing showing the
aforesaid particulars.
The licensee shall, during the continuance of this license, give al such information as the Federal Trade Commission may consider to be material for the
purpose of ascertaining the amount of royalty payable by the licensee under this
license, the cost of the use of such invention, the cost of producing and the price
or prices charged by the licensee for the said article, and for that purpose shall, if
requested by the Federal Trade Commission, permit such person or persons as
shall be authorized in that behalf by the Federal Trade Commission at any time or
times to enter upon and inspect any factory or place of bus in which the use of the
said invention or the manufacture shall be carried on and all books, papers, and
documents of such licensee relating to such use, manufacture, and sale.
If any payment under this license shall not be made, within one month after the
same shall have become due under the provisions herein contained (whether
demand therefor shall have been inside or not), or if the licensee shall or shall
attempt to assign or part with the benefit of or grant any sublicense under this
license, or shall make default in the performance or observance of any obligations
on his part herein contained, or shall have violated any of the conditions of this
license or any of the provisions of the statute under which it is granted, and if, after
10 days' notice in writing, shall have failed to comply with the aforesaid, then the
Federal Trade Commission may, by notice in writing, and after a hearing, cancel
and terminate this license as from the date of such notice, but without prejudice to
and so as not in any annular to affect any liability hereunder on the part of the
licensee which may then be subsisting of have accrued.
If in the opinion of the Federal Trade Commission the licensee has failed to use
this license so as to satisfy the reasonable requirement of the public with regard
to the subject matter thereof; or
If in the opinion of the Federal Trade Commission the licensee has failed to
supply to thin public tire articles made under this license at reasonable prices; or
If in the opinion of the Federal Trade Commission the licensee has charged
unreasonable or excessive prices for articles made under this license; or
If in the opinion of the Federal Trade Commission the articles made under this
license are of unsatisfactory quality (and the licensee shall furnish to the Federal
Trade Commission in the manner prescribed by it and when and as often as
required, samples and specimens for inspection, analysis, and test); or
Circumstances have arisen which, in the opinion of the Federal Trade
Commission, make it just and equitable that this license be canceled in whole or
in part ;
The Federal Trade Commission may, in its discretion, give notice In writing to
the licensee to terminate and cancer this license in whole or in part, and, if
canceled and terminated, the same shall be without prejudice to and so as not in
any manner to affect any liability hereunder on the part of the licensee which may
then be subsisting or have accrued.
Any sums which may at any time be payable by the licensee under the provisions
of this license shall be a debt due from the licensee to the people of the United
States and shall be recovered in an appropriate action in the name of the people of
the United States against the licensee.
Dated ____________ 191__
Accepted and agreed to.
______________________________________,
Licensee.

A copy of the patent is to be attached.
If the licensee is not to be the actual manufacturer, the licensee will be held

accountable to the Federal Trade Commission for the observance of the terms of
his license by the actual manufacturer of the article, and the license will contain
the following addendum, naming the actual manufacturer who shall sign:
__________________,
manufacturer
for
__________________________________, the licensee _____________________
of the article herein licensed, separately agrees to keep separate books containing
full particulars of all articles manufactured, and the cost thereof, sold to
_______________________ the licensee, and the price or prices

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 111
charged therefore and his books and plant shall be open to inspection in the same
manner as provided for the licensee. The licensee and the undersigned, during the
continuance of the license, shall furnish or procure to be furnished all such
information as the Federal Trade Commission may consider to be material for the
purpose of ascertaining the amount of royalty payable by the licensee, the cost of
producing or procuring the patented article, the price or prices charged for said
article, and shall permit or procure permission to be given to such person or
persons as shall be authorized in that behalf by the Federal Trade Commission at
any time or times to enter upon and inspect any factory or place of business in
which the manufacture of the patented article shall be carried on by the
undersigned for the licensee, and all books, papers, and documents relating to such
manufacture and sale.
The undersigned, manufacturer, is not authorized to make, use, or vend - the
Invention of the patent except for ______________________, the licensee, and
not further or otherwise, and the undersigned undertakes to observe and perform
the terms and conditions of the license to ____________________ to which this
is attached.
Dated ____________, 191__.
Accepted and agreed to.
___________________________________,
Manufacturer.
FORM OF LICENSE UNDER COPYRIGHT.
Copyright licenses issued by the Federal Trade Commission under the provisions
of the “Trading with the enemy act” will be in substantially the following form:
Copyright No. ______, dated _____ to _____ for the (book, etc., as the case may
be; see copyright act of March 4, 1909, sec. 5, for classification) entitled (Insert
title of work).
The Federal Trade Commission, under the authority of and in conformity with
the “Trading with the enemy act” and of the Executive order of October 12, 1917,
hereby licenses _____ to exercise within the United States all the rights created by
the copyright laws of the United States of America, being the act of March 4,
1909, as amended with respect to the subject matter of copyright to ______, No.
_____, dated _____ for the (book, etc., as the case may be; see copyright act of
March 4, 1909, see. 5, for classification) entitled (insert title of work), a copy of
which is annexed hereto, for the period of ________, unless sooner terminated.
The licensee, during the continuance of this license, shall pay to the alien
property custodian, semiannually, within 30 days after the 1st day of January, and
the 1st day of July, respectively, of each year, a royalty at the rate of ___ per cent
of the gross sums received by the licensee front the sale of the copyright work so
herein licensed (or ___ per cent of the value of the use thereof to the licensee as
established by the Federal Trade Commission).
The licensee shall, during the continuance of this license, keep proper accounts
and separate books containing full particulars of(a) All copies of said copyright work made or caused to be inside by the
licensee under the said copyright and of the price or prices charged therefor;
(b) All items of cost incurred in the use of said copyright work and in the
manufacture and sale of such copyright work; and
(c) All other matters and things which, in the opinion of the Federal Trade
Commission, may be material for the purpose of slowing the amounts from there
to time payable by the licensee concerning such royalty and what is a fair and
reasonable price to the public for such copyright work.

The licensee shall, within 10 days after each of the semiannual days aforesaid,
deliver a sworn statement to the Federal Trade Commission in writing showing the
aforesaid particulars.
The licensee shall the continuance of this license give all such information as the
Federal Trade Commission may consider to be material for the purpose of
ascertaining the amount of royalty payable by the licensee under this license, the
cost of producing, and the price or prices charged by the licensee for the said
copyright work, and for that purpose shall, if requested by the Federal Trade
Commission, permit such person or persons as shall be authorized in that behalf
by the Federal Trade Commission at any time or times to enter upon and inspect
any factory or place of business of the licensee

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

in which the use or manufacture of the said copyright work shall be carried on, and
all books, papers, and documents of such licensee relating to such use,
manufacture, and sale.
If any payment under this license shall not be made within one month after the
same shall have become due under the provisions herein contained (whether
demand therefor shall have been made or not), or if the licensee shall or shall
attempt to assign or part with the benefit of or grant any sublicense under this
license, or shall make default in the performance or observance of any obligation
on his part herein continued, or shall have violated any of the conditions of this
license or any of the provisions of the statute under which it is granted, and if after
10 days’ notice, in writing, shall have failed to comply with the aforesaid, then the
Federal Trade Commission may, by notice in writing, and after a hearing, cancel,
and terminate this license as from the date of such notice, but without prejudice to
and so as not in any manner to affect any liability hereunder on part of the licensee
which may be subsisting of have accrued.
If in the opinion of the Federal Trade Commission the licensee has failed to use
this license so as to satisfy the reasonable requirement of the public with regard
to the copyright work; or
If in the opinion of the Federal Trade Commission the licensee has failed to
supply to the public the copyright work at reasonable prices; or if in the opinion
of the Federal Trade Commission the licensee has charged unreasonable or
excessive prices for said copyright work; or
Circumstances have arisen which in the opinion of the Federal Trade
Commission make it just and equitable that this license be canceled in whole or in
part;
The Federal Trade Commission may, in its discretion, give notice in writing o the
licensee to terminate this licensee in whole or in part, and if canceled and
terminated the same shall be without prejudice to and so as not in any manner to
affect any liability hereunder on the part of the licensee which may then be
subsisting or have accrued.
Any sums which may at any time be payable by the licensee under the
provisions of this license shall be a debt due from the licensee to the people of the
United States and shall be recovered in an appropriate action In the name of the
people of the United States against the licensee.
Dated____________, 191___
Accepted and agreed to.
__________________________________,
Licensee.
If the licensee is not to be the actual manufacturer or producer of the copyright
work, the licensee will be held accountable to the Federal Trade Commission for
the observance of the terms of his license by the actual manufacturer or producer
of the article, and the license will contain the, following addendum, naming the
actual manufacturer or producer of the article, who shall sign:
_____________________ , the manufacturer for _____________ the licensee
of the copyright work herein licensed, separately agrees to keep separate books
containing full particulars of all of such copyright works manufactured and the
cost thereof, sold to________ _____________, the licensee, and the price or
prices charged therefor, and his books and plant shall be open to inspection in the
same manner as provided for the licensee. The licensee and the undersigned,
during the continuance of the license, shall furnish or procure to be furnished till
such information as the Federal Trade Commission may consider to be material for
the purpose of ascertaining the amount of royalty payable by the licensee, the cost
of producing or procuring the copyright work, the price or prices charged therefor,

and shall permit or procure permission to be given to such person or persons as
shall be authorized in that behalf by the Federal Trade Commission at any time or
times to enter upon and inspect any factory or place of business in which the
manufacture of the copyright work shall be carried oil by the undersigned for the
licensee, and all books, papers, and documents relating to such manufacture and
sale.
The undersigned, manufacturer, is not authorized to exercise any right conferred
by the. copyright statutes with respect to the copyright work here in-

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

113

volved except for __________ _________________, the licensee, and not further
or otherwise, and the undersigned undertakes to observe and perform the terms and
conditions of the license to ____________________ to which this is attached.
Dated _______, 191__.
Accepted and agreed to.
________________________________,
Manufacturer.
A surety company bond may be required of the licensee, if, in the opinion of the
Federal Trade Commission, it is necessary to safeguard the public interest.
FORM OF APPLICATION FOR LICENSE.
TRADING WITH THE ENEMY ACT.
To the FEDERAL TRADE Commission:
Application of _____ for a license under patent to ____, date
_______No.______.
(If under copyright, state title of work, name of copyright proprietor, and date
of copyright registration.)
The undersigned, for the purpose of securing a license, represents to the Federal
Trade Commission as follows:
(a) The undersigned is a citizen of the United States, residing at street, in the
city of ____, State of _____, United States of America. (If a corporation, state
under the laws of what State it is organized;
the location of its corporate offices, its business offices, and plants or factories.)
(b) The undersigned is desirous of being licensed hinder the patent (or
copyright) above United, which is owned or controlled by a citizen or subject of
_____. (State the enemy country or the ally of the enemy of which the patentee or
copyright proprietor is a citizen or subject, or if a corporation where it is
incorporated, and if the patent or copyright is not owned but is claimed to be
controlled state fully the facts which establish the nature and origin of the enemy
or ally of enemy control, whether it is means of an agency, by contract, by stock
ownership in corporations, or otherwise.)
(c) Attached here is a Patent copy of the letters patent and a certified abstract
of its title, from the Patent Office and a certified copy of the petition and all
powers of attorney in the file of the application (or, in the ease of a copyright, a
specimen of the copyrighted work, and a certified copy of the copyright entries
from the office of the Register of Copyrights).
(d) It is for the public welfare that the license applied for be granted because-(Here state briefly but completely and in nontechnical language the reason why it
is for the public benefit that the license be granted and specifically the demand for
the article prior to the war, the demand for the article at the present time whether
or not this demand is being met or can be met, prices obtained prior to the war and
prices at the present time.)
(e) Applicant is able to make or cause to be made the patented or copyrighted
article because (Here state specifically the applicant’s experience in the production
of articles of the kind covered by the patent or copyright, his technical equipment
for manufacturing and selling such articles and his ability to do so, the estimated
cost of manufacture and price proposed to be charged if the license is granted.)
(If the applicant does not intend to manufacture but to procure the manufacture
of the article, state specifically what arrangements have been made or proposed to

this end and their terms and conditional. State the name and address of the
manufacturer proposed to be employed and his technical equipment,. etc., and
article copies of any contracts or proposals.)
(f) The license desired is exclusive or nonexclusive for the following reasons:
(Here state
reasons why, in the opinion of the applicants the license be exclusive or
nonexclusive.)
(g) The license is desired(1) For the term of the patent or copyright, (2) the duration of the war, or (3) any
other period,
stating reasons in each case.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

(h) The application is also to contain the following: “The undersigned intends
in good faith to manufacture or cause to be manufactured the article licensed and
understands that the license, if granted, may not be assigned and may be canceled
by the Federal Trade Commission, after due notice of hearing upon violation by
the undermined of any of the provisions of the “Trading with the enemy act ' or of
any of the conditions of the license.”
(Signed)________________,
Applicant.
OATH FOR AN INDIVIDUAL.
STATE OF __________________
County of ________________, ss:
__________________________, being duly sworn, deposes and states that the
is the same person whose name is signed to the foregoing statement; that lie has
read this statement and' knows and understands its contents; and that it is true.
_____________________
Subscribed and sworn to before me this ___________ day of _______ , 191__.
_________________________,
Notary Public.
OATH FOR A CORPORATION.
STATE OF _______________
County of ________________, ss:
___________________________, being duly sworn, deposes and states that he
is the _________________________ of __________________________, the
corporation whose name is signed to the foregoing statement; that the is duly
,authorized to swear to such statement on behalf of such corporation; that the has
read this statement and knows and understands its contents; and that it is true.
____________________________
Subscribed and sworn to before me this ____________ day of __________, 19__.
________
_________
Notary
Public.

EXHIBIT 6.
FEDERAL TRADE COMMISSION v. BOTSFORD LUMBER CO. ET AL.
UNITED STATES OF AMERICA,
Before Federal Trade Commission, ss:
At a regular session of the Federal Trade Commission, held at its office in the city
of Washington, D. C., on the 31st day of May, A. D. 1917.
Present: William J. Harris, chairman; Joseph E. Davies, William B. Colver, J.
Franklin Fort, Commissioners.
Federal Trade Commission v. Botsford Lumber Company et al. Docket No. 11.
COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF
SECTION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26,
1914.
The Federal Trade Commission having reason to believe from a preliminary
investigation made by it that the Botsford Lumber Co, Winona Minn.; HayesLucas Lumber Co., Winona, Minn.; C. M. Younians Lumber Co., Winona, Minn.;
Wilcox Lumber Co., Detroit, Minn. ; Hubbard & Palmer Lumber Co., Garden
City, Minn.; Mora Lumber Co., Mora, Minn.; Rudd Lumber Co., Milaca, Minn.;
Koenig & Lambert Lumber Co., Lamberton, Minn.; J. Borgerding & Co., Melrose,
Minn.; Dower Lumber Co., Wadena, Minn.; Stenerson Bros. Lumber Co., Felton,
Minn.; Johnson & Larson Lumber Co., Atwater, Minn.; Morrison Country Lumber
Co., Little Falls, Minn.; Nortz Lumber Co., Breckenridge, Minn.; Kensington
Hardware & Lumber Co., Kensington, Minn.; International Lumber Co.,
International Falls, Minn.; Lowry Lumber Co., Lowry, Minn.; Frank Underwood,
Eyota, Minn.; Anton Roseth, Boyd, Minn.; Standard Lumber Co., Winona, Minn.;
St. Anthony & Dakota Elevator Co., Minneapolis, Minn.; Atlas Lumber Co.,
Minneapolis, Minn.; J. H. Queal & Co., Minneapolis, Minn.; Langworthy Lumber
Co., Minneapolis, Minn.; Bertram-Wright Lumber Co., Minneapolis, Minn.;
Bovey-Shute Lumber Co., Minneapolis, Minn.; S. H. Bowman Lumber Co.,
Minneapolis, Minn.; L. P. Dolliff & Co., Minneapolis, Minn.; Fullerton Lumber
Co., Minneapolis, Minn.; Imperial Elevator Co., Minneapolis, Minn.; Mandan
Mercantile Co., Minneapolis, Minn.; Midland Lumber Co., Minneapolis, Minn.;
Rogers Lumber Co., Minneapolis, Minn.; H. W. Ross Lumber Co., Minneapolis,
Minn.; Superior Lumber & Coal Co., Minneapolis, Minn.; Winnor-Torgersen
Lumber Co., Minneapolis, Minn.; Interior Lumber Co., Minneapolis, Minn.;
Lamport Lumber Co., Minneapolis, Minn.; Salzer Lumber Co., Minneapolis,
Minn.; John W. Tuthill Lumber Co., Minneapolis, Minn.; Powers Elevator Co.,
Minneapolis, Minn.; Libby Lumber Co., Minneapolis, Minn.; Midland Lumber &
Coal Co., Minneapolis, Minn.; Central Lumber Co., Minneapolis, Minn.; E. A
Bartlett & Co., Farmingdale, S. Dak.; A. E. Clough & Co., Canova, S. Dak.; C. W.
Darr, Mitchell, S. Dak.; Hamilton Lumber Co., Britton, S. Dak.; Bartlett & Co.,

Edgemont, S. Dak.; J. J. Stehly, Hecla, S. Dak.; C. A. Finch Lumber Co., La
Moure, N. Dak.; Bond Lumber Co., Minot, N. Dak.; Piper-Howe Lumber Co.,
Minot, N. Dak.; Crane-Johnson Lumber Co., Cooperstown, N. Dak.; Dunham
Lumber Co., Bismarck, N. Dak.; Valley Lumber Co., Hillsboro, N. Dak.;
Washburn-Merrick Lumber Co., Bismarck, N. Dak.; Robertson Lumber Co., Grand
Forks, N. Dak.; Jones Lumber & Implement Co., Lisbon, N. Dak.; Wisconsin
Lumber Co., Des Moines, Iowa; Central Lumber & Coal Co., Dubuque, Iowa;
Biddick-Holman Lumber Co., Collins, Iowa ; W. J. Dixon Lumber Co., Sac City,
Iowa; Eclipse Lumber Co., Clinton, Iowa ; Joyce Lumber Co., Clinton, Iowa;
Floete Lumber Co., Spencer, Iowa; Schoenennan Bros. Co., Hawarden, Iowa ; E.
M. Slagle & Co., Alton, Iowa; James A. Smith Lumber Co., Osage, Iowa; SmithHovelson Lumber Co., Sioux City, Iowa ; F. I. Gardner & Co., Cherokee, Iowa; C.
A.
115

116

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

Grant & Son, Rolfe, Iowa; Jasper Lumber Co., Newton, Iowa; P. Schertz & Co.,
Gibson City, Ill.; Alexander Lumber Co., Chicago, Ill. ; Chicago Lumber & Coal
Co., East St. Louis, Ill.; Miner & Frees, Ridgeway, Mo.; Leidigh & Havens
Lumber Co., Kansas City, Mo.; Noll Welty Lumber Co, Kansas City, Mo.;
Chicago Lumber Co. of Omaha, Omaha, Nebr.; F. H. Gilcrest Lumber Co.,
Kearney, Nebr.; W. L. Stickel Lumber Co., Kearney, Nebr.; Nye-Schneider-Fowler
Co., Fremont, Nebr.; Walrath & Sherwood Lumber Co., Omaha, Nebr.; Welpton
Lumber Co., Ogallala, Nebr.; L. W. Cox & Co., McCook, Nebr.; Dierks Lumber
& Coal Co., Lincoln, Nebr.; J. A. Gardner & Co., Orleans, Nebr.; Albert Caughey,
Deshler, Nebr.; S. W. Lightner, St. Edward, Nebr.; Pawnee Lumber Co., Pawnee
City, Nebr.; H. Petersen & Sons, Dannenbrog, Nebr.; Seward Lumber & Fuel Co.,
Seward. Nebr.; Westrup & Kohler Lumber Co., Woodbine, Kans.; Humburg
Lumber Co., Bison, Kans.; G. E. Miller & Son, Stroh, Ind.; E. A. Chapman &
Bros., South Wayne, Wis.; William Dukelow, Wilton, Wis.; C. L. Colman Lumber
Co., La Crosse, Wis.; John D. Young Co., La Crosse, Wis.; Deacon Lumber Co.,
Le Moore, Cal.; Santa Barbara Lumber Co., Santa Barbara, Cal.; Potlatch Lumber
Co., Potlatch, Idaho; Standard Lumber Co., Moscow, Idaho; E. R. Woodbury
Lumber Co., Spokane, Wash.; Lamb Davis Lumber Co., Leavenworth, Wash.;
Reliance Lumber & Timber Co., Seattle, Wash.; J. C. Starkey, Pine City, Wash.;
Goodridge Call Lumber Co., Great Falls, Mont.; A. W. Miles Lumber & Coal Co.,
Livingston, Mont.; H. M. Allen & Co., Billings, Mont.; Gibson-Faw Lumber &
Mercantile Co., Colona, Colo.; B. S. Lewis, Nashville, Tenn.; Mayhew & Isbell
Lumber Co., Uvalde, Tex.; Pioneer Lumber Co., Sheridan, Wyo.; Lumberman
Publishing Co., Minneapolis, Minn.; Platt B. Walker Minneapolis, Minn.; and
Luke W. Boyce, Minneapolis, Minn., hereinafter referred to as respondents, have
been and are using unfair methods of competition in interstate commerce, in
violation of the provisions of section 5 of an act of Congress approved September
26, 1914, entitled "An act to create a Federal Trade Commission, to define its
powers and duties, and for other purposes," and it appearing that a proceeding by
it in respect thereof would be in the interest of the public, issues this complaint,
stating its charges in that respect on information and belief, as follows:
PARAGRAPH ONE. That all of the respondents, except those specifically
named in the next succeeding two paragraphs, are now, and for several years last
past have been, engaged in selling, at retail, lumber and building materials in yards
located in many towns, villages, and cities, principally in the States of Illinois,
Wisconsin, Minnesota, North Dakota, South Dakota, Iowa, and Montana, each
operating from one to one hundred retail yards in said States, and they are called
by themselves, and hereinafter referred to, as regular dealers; that each of said
respondents referred to in this paragraph has its principal office in the city and
State mentioned immediately after the name of such resident; that all of the
respondents referred to in this paragraph are corporations except C. W. Derr,
Mitchell, S. Dak.; William Dukelow, Wilton, Wis.; B. S. Lewis, Nashville, Tenn.;
J. J. Stehly, Hecla, S. Dak.; J. C. Starkey, Pine City, Wash.; Albert Caughey,
Deshler, Nebr.; S. W. Lightner, St. Edward, Nebr.; Frank Underwood, Eyota,

Minn.; Anton Roseth, Boyd, Minn.; Miner & Frees, Ridgeway, Mo. (a
copartnership, the members of which are at this time unknown to the
Commission); Westrup & Kohler Lumber Co., Woodbine, Kans. (a copartnership,
the members of which are at this time unknown to the Commission); Humburg
Lumber Co., Bison, Kans. (a copartnership, the members of which are at this time
unknown to the Commission); Pawnee Lumber Co., Pawnee City, Nebr. (a
copartnership, the members of which are at this time unknown to the
Commission); H. Petersen & Sons, Dannebrog, Nebr. (a copartnership, the
members of which are at this time unknown to the Commission); C. A. Grant &
Son, Rolfe, Iowa (a copartnership, the members of which are at this time unknown
to the Commission); and the Jasper Lumber Co., Newton, Iowa (a copartnership,
the members of which are at this time unknown to the Commission).
PARAGRAPH TWO. That time respondent, Lumberman Publishing Co., is a
corporation organized under and by virtue of the laws of the State of Minnesota,
having its principal office and place of business at the city of Minneapolis, in the
State of Minnesota, and is the owner and publisher of a periodical or lumber-trade
paper known as the Mississippi Valley Lumberman, published at said city of
Minneapolis, State of Minnesota, and generally circulated throughout the Middle
Western States and received and read by lumber dealers therein, including said
regular dealers and their agents and employees, and the respondent, Platt B.
Walker, residing at Minneapolis, State of Minnesota, is

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 117
the manager of said Lumberman Publishing Co. and the editor of said Mississippi
Valley Lumberman, and the said respondent, Platt B. Walker and the Lumberman
Publishing Co., hold out said periodical to be the official organ and representative
of said regular dealers in the various States where they are located and do business,
and said regular dealers receive and accept such trade journal as their official
organ and representative.
PARAGRAPH THREE. That the respondent, Luke W. Boyce, residing at
Minneapolis, Minn., is a detective, doing business under the trade name and style
of “Northern Information Bureau,” which bureau is conducted and operated by the
said Luke W. Boyce under a plan or system of subscription contracts, whereby
subscribers are entitled to the services of said bureau, its agents, and detectives,
at cost, in securing information desired, by said subscribers, among whom are the
respondent, Platt B. Walker, and many of the respondent regular dealers.
PARAGRAPH FOUR. That a branch or form of retail lumber trade In the United
States is carried on by so-called “mail-order houses,” which sell, generally through
the medium of mail orders, lumber and building materials, in interstate commerce,
direct to the consumer in nearly all of the States of the United States; that such
mail-order houses are ether manufacturers of lumber or commercial
establishments, located in many cities of the United States; that said commercial
establishments generally purchase their supplies of lumber and lumber products
from the manufacturer and wholesale dealer without the Intervention of the retail
dealer; and that said mail-order houses are engaged iii competition with such of
said respondents who conduct retail lumber yards for the sale, at retail, of lumber
and building materials.
PARAGRAPH FIVE. That all of the respondents are, and for more than two
years last past have been, wrongfully and unlawfully engaged In a combination or
conspiracy, entered into, carried out, and continued by said respondents with the
intent, purpose, and effect of discouraging, stifling, and suppressing competition
in interstate commerce In the retail lumber amid building material trade in the
United States on the part of said mail-order houses, amid to force the ultimate
consumer to buy his required supply of lumber and building materials from the
regular and recognized retail merchants operating retail yards where such lumber
or building materials are used, and who conduct and carry on their business after
the manner of the respondent regular dealers.
PARAGRAPH SIX. That such conspiracy is carried on by means of verbal and
written communications between the respondents, by articles published in said
Mississippi Valley Lumberman by exchange and publication of information
through the medium of said Mississippi Valley Lumberman to the various
respondent regular retailers, and by means of information procured by and through
the said respondent, Luke W. Boyce.
PARAGRAPH SEVEN. That the specific acts of the respondents, consummated
through and pursuant to such conspiracy, are the following:
(a) Said respondents, who are regular dealers, largely through the urging,
encouragement, and suggestion of the respondent, Platt B. Walker, by published
articles in the Mississippi Valley Lumberman and otherwise, and acting thereon
and pursuant to such conspiracy, systematically, and on a large scale, write and
send, and cause to be written and sent, and procure others to write and send, to
said mail-order houses, letters containing requests for statements or estimates of

the quantity and quality of lumber or building material required for certain
building purposes, and the prices therefor, and also containing requests for the
printed matter, advertisements, and other special In-formation furnished bona fide
customers and prospective customers by such mail-order houses; that the writers
and senders of such letters have no purpose or intention of buying any lumber or
building material from such mail-order houses, but write and send such letters to
cause such mail-order houses annoyance and delay in the transaction of their
business and damage and expense, and for the purpose, among other things, of
furnishing time information thus secured to time respondent, Platt B. Walker, for
publication, and said respondent, Platt B. Walker, does publish in said trade
journal a large amount of the information thus obtained, and thereby, and by other
means, the said respondent regular dealers acquaint the said respondent, Platt B
Walker, and each other, of their activities amid participation in such scheme of
making such bogus and spurious requests of said mail-order houses, and thus
encourage time continued participation in such scheme on the part of the
respondents, and thereby cause an increase in the amount of such correspondence
with mail-order houses.
118
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
(b) That the respondents, who are regular dealers, largely through the urging,
encouragement, and suggestion of the respondent, Platt B. Walker, by published
articles in the Mississippi Valley Lumberman and otherwise, and acting thereon
and pursuant to such Conspiracy, systematically urge, and use their Influence with,
banks, credit-reporting agencies, and others who are called upon by said mail-order
houses to make reports as to the identity and occupation of the persons from whom
they receive such bogus and spurious requests, to fail to make such reports or to
make misleading reports thereon, with the result that such mail-order houses do
not, in many cases, receive such reports or receive misleading reports In reference
thereto.
(c) That said respondents have endeavored to induce, and in some instances
have induced, manufacturers to refrain from and to discontinue furnishing supplies
of lumber and building material to some of said mail-order houses, and the said
respondents, who are regular dealers, acting with said respondents, Platt B. Walker
and Luke W. Boyce, and pursuant to such conspiracy, have, by threats of
withdrawal or actual withdrawal, of patronage, compelled certain manufacturers
to discontinue selling to mail-order houses, and by the well-known attitude of
intolerant hostility of said regular dealers toward the competition of mail-order
houses, have deterred and do deter manufactures from selling supplies to such
mall-order houses, the same being accomplished (l) by means of Information
surreptitiously obtained by the respondent, Luke W. Boyce, as to the names and
methods of manufacturers selling to mail-order houses and communicated by said
respondent, Luke W. Boyce, to said respondent, Platt B. Walker; (2) by means of
correspondence carried on by said respondent, Platt B. Walker, with such
manufacturers; (3) by the publication in the Mississippi Valley Lumberman by
said respondent, Platt B. Walker, of the names of manufacturers who supply mailorder houses; (4) by publication in said trade journal by said respondent, Platt B.
Walker, of articles Containing direct or implied threats that the regular dealers will
withdraw their patronage from such manufacturers if they sell to the mail-order
houses; (5) by articles published in said trade journal by the respondent, Platt B.
Walker, advising the regular dealers to withdraw their patronage from such

manufacturers; and (6) by publication in said trade journal by the respondent, Platt
B. Walker, of a false report to the effect that an Investigation had been instituted
by detectives of the Northern Information Bureau, conducted by the respondent,
Luke W. Boyce, to ascertain the names of all manufacturers selling to mail-order
houses.
(d) That the respondents, Platt B. Walker and Luke W. Boyce, have
surreptitiously sought and obtained from employees of mail-order houses
confidential information as to the business of mail-order houses, and, in particular,
in reference to their source of supplies, financial condition, internal affairs, amid
business secrets; and said respondent, Platt B. Walker, has published much of such
Information so obtained in the Mississippi Valley Lumberman, together with
numerous false and disparaging statements concerning the business methods,
financial condition, and internal affairs of such mail-order houses, for the use and
benefit of the regular dealers in their competition with mail-order houses, and such
information so published is used by such regular dealers in their competition with
mail-order houses.
(e) That some of the respondents, or their employees, acting with the
respondent, Luke W. Boyce, or his agents or employees, have followed and trailed
salesmen of mail-order houses from place to place, with the object and effect of
hindering and embarrassing such salesmen in the making of sales and in the
transaction of their business.
II.
And the Federal Trade Commission, further stating separate and distinct charges
in respect to the violation of said section 5 on the part of the above-named
respondents, on information and belief alleges:
PARAGRAPH EIGHT. That with the effect of stifling and suppressing competition in interstate commerce in time retail lumber and building-material trade in the
United States on the part of said mall-order houses, and to force the ultimate
consumer to buy his required supply of lumber and building materials from the
regular and recognized retail merchants operating retail yards where such lumber
or building materials are used, and who conduct and carry on their business after
the manner of the respondent regular dealers, all of said respondent regular
dealers, systematically and on a large scale, write and send, and cause to be written
and sent, and procure others to write and send, to said mail-order houses letters
containing requests for statements of estimates of the

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

119

quantity and quality of lumber or building material for certain building purposes,
and the prices therefor, and also containing requests for the printed matter,
advertisements, and other special information furnished bona fide customers and
prospective customers by such mail-order houses ; that the writers and senders of
such letters have no purpose or intention of buying any lumber or building material
from such mall-order houses, but write and send such letters to cause such mailorder houses annoyance and delay in the transaction of their business and damage
and expense, and for the purpose, among other things, of furnishing the
information thus secured to the respondent, Platt B. Walker, for publication in the
Mississippi Valley Lumberman.
PARAGRAPH NINE. That for the purpose of stifling and suppressing
competition in interstate commerce in the retail lumber and building material trade
in the United States on the part of the mail-order houses, the said respondents, who
are regular dealers, systematically and on a large scale urge upon and use their
influence with banks, credit reporting agencies, and others who are called upon by
said mail-order houses to make reports as to the identity and occupation of the
persons from whom they receive such bogus and spurious requests, to fail to make
such reports, or make misleading reports thereon with time result that such mailorder houses do not, in many cases, receive such reports or receive misleading
reports in reference thereto.
PARAGRAPH TEN. That for the purpose of stifling and suppressing
competition in interstate commerce in the retail lumber and building material trade
in the United States on the part of said mail-order houses, the said respondents,
who are regular dealers, have endeavored to induce, and in many instances have
induced, manufacturers to refrain from and to discontinue furnishing supplies of
lumber amid building material to some of said mail-order houses by threats of
withdrawal or actual withdrawal of patronage from such manufacturers.
PARAGRAPH ELEVEN. That said respondents, who are regular dealers, have
followed and trailed salesmen of mail-order houses with the object and effect of
hindering and embarrassing such salesmen in the making of sales and the
transaction of their business.
Therefore, notice is hereby given you, the said respondents, and to each of you,
that the charges of thus complaint will be heard by the Federal Trade Commission
at its office in the Commerce Building, in the city of Washington, D. C., on the
31st day of July, A. D. 1917, at 10:30 o’clock in the forenoon of said day, or as
soon thereafter as the same may be reached, at which time and place you, and each
of you, shall have the right to appear and show cause why an order should not be
entered by the Federal Trade Commission requiring you, and each of you, to cease
and desist from the violations of law charged in this complaint.
And you, and each of you, will further take notice that within 30 days after
service of this complaint you are required to file with the Commission an answer
in conformity with Rule III of the Rules of Practice before the Commission.
In witness whereof the Federal Trade Commission has caused this complaint
to be issued, signed by its secretary, and its official seal to be affixed hereto at the
city of Washington, D. C., this 31st day of May, A. D. 1917.
By the Commission.

[SEAL.]
BRACKEN,
Secretary.
JOHN WALSH,
Chief Counsel for the Commission.

LEONIDAS L.

EXHIBIT 7.
FEDERAL TRADE COMMISSION v. THE FLEISCHMANN CO.
UNITED STATES OF AMERICA
Before Federal Trade Commission, ss:
At a regular meeting of the Federal Trade Commission held at its office in the city
o
f
W
a
s
h
i
n
g
t
o
n
,
D. C., the 8th day of April, A. D. 1918.
Present: William J. Harris, chairman; William B. Colver, John Franklin Fort,
Victor Murdock, Commissioners.
Federal Trade Commission v. The Flieschmann Co. Docket No. 6.
FINDINGS AS TO THE FACTS AND CONCLUSIONS OF LAW.
The Federal Trade Commission having issued and served its complaints herein,
wherein it is alleged that it had reason to believe that the above-named respondent,
the Fleischmann Co., has been, and now is, using unfair methods of competition
in interstate commerce in violation of the provisions of section 5 of an act of
Congress approved September 26, 1914, entitled “An act to create a Federal Trade
Commission, to define its powers and duties, and for other purposes,” and has
been, and now is, discriminating in prices in the course of inter-state commerce
between different purchasers of compressed yeast in the same or different
localities, and has been, and now is, making contracts in the course of interstate
commerce, for the sale of compressed yeast to operative bakers on the condition,
agreement, or understanding that said operative bakers shall not purchase
compressed yeast from competitors or respondent, in violation of sections 2 and
3, respectively, of an act of Congress approved October 15, 1914, entitled “An act
to supplement existing laws against unlawful restraints and monopolies, and for
other purposes,” and that a proceeding by it in respect to he allegations herein set
forth would be to the interest of the public and fully stating its charges in this
respect, and the respondent having entered its appearance, by Henry A. Wise, its
attorney, and having stipulated of record that the Commission might forthwith
proceed to make its findings and order disposing of these proceedings, the
Commission makes this report and findings as to the facts and conclusions of law.
FINDINGS AS TO THE FACTS.
I.
PARAGRAPH ONE. That the Fleischmann Co. is a corporation, Organized,
existing, and doing business under and by virtue of the laws of the State of Ohio,
having its principal office and place of business at the city of Cincinnati, in said
State, and is now, and was at all times hereinafter mentioned, engaged in
manufacturing and selling compressed yeast, hereinafter referred to as yeast, in

commerce among the several States and Territories of the United States.
PARAGRAPH TWO. That the respondent has, for more than a year last past,
systematically given and offered to give to operative bakers using compressed
yeast, both its customers and prospective customers and its competitors’ customers
and prospective customers, as an inducement to purchase or contract to purchase
from respondent yeast, without other consideration therefor, in quantities larger
than required under the particular circumstances for proper sample or
demonstration purposes.
PARAGRAPH THREE. That the respondent has, for more than a year last past,
made a systematic practice of giving and offering to give to operative bakers using
compressed yeast, both its customers and prospective costumers and its
competitors’ customers and prospective customers, as an inducement to pur120

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 121
chase or contract to purchase yeast from the respondent, and to employees of such
users or yeast as an inducement to said employees to influence their respective
employers to purchase or contract to purchase yeast from the respondent, gratuities
such as liquors, cigars, meals, and other personal property and, in some instances,
money.
PARAGRAPH FOUR. That the respondent has, for more than a year last past,
systematically given and offered to give to operative bakers using compressed
yeasts, both its customers and prospective customers and its competitors’ customers and prospective customers, as an inducement to purchase or contract to
purchase yeast from the respondent, and to employees of such users of yeast, as an
inducement to said employees to influence their respective employers to purchase
or contract to purchase yeast from the respondent, Christmas presents and special
holiday presents, such as liquors, cigars, silverware, and, in some instances,
money.
PARAGRAPH FIVE. That the respondent has, for more than a year last past,
systematically provided entertainment for operative bakers using compressed
yeast, both its customers and prospective customers, as an inducement to purchase
or contract to purchase yeast from the respondent, and to employees or such users
of yeast, as an inducement to said employees to influence their respective
employers to purchase or contract to purchase yeast from the respondent, and that
such entertainment includes, among other things, meals, drinks, cigars, theater
tickets, other articles of personal property, and, in some instances, money.
PARAGRAPH SIX. That the respondent has, for more than a year last past,
systematically made contributions of sums of money to funds raised by numerous
associations known as “Bakers’ Associations,” composed of operative and boss
bakers, both its customers and prospective customers, ranging from $10 to $1,800,
depending on the relative size and importance of the association, to defray
expenses of periodic conventions held by said associations in various parts of the
United States; that such contributions were, and have been, made for the purpose
of obtaining and retaining the patronage of said operative bakers; that in the year
1915 the aggregate amount of such contributions was $26,601.45; that in the year
1916 the aggregate amount of such contributions was $26,456.43; that in the year
1917 the aggregate amount of such contributions was $17,034.67; that such sums
were distributed throughout the various States and Territories of the United States;
and that such contributions have operated in the interest of the good will of
respondent’s business.
PARAGRAPH SEVEN. That time respondent is now, and for more than a year
last past has been, systematically providing entertainment to operative and boss
bakers using compressed yeast, both its customers and prospective customers,
attending the association conventions referred to in paragraph 6 above; that said
entertainment is furnished by agents of respondent sent to said conventions ; that
the expense thereof is charged on the books of respondent as “convention
expenses,” and is provided to obtain and retain the patronage of said operative and
boss bakers, and includes, among other things, cigars, drinks, meals, theater
tickets, and automobile rides.
PARAGRAPH EIGHT. That the respondent has, for more than a year last past
systematically hy provided entertainment to operative bakers using compressed
yeast, both its customers and prospective customers; that such entertainment was

furnished to said users of yeast at the respondent’s principal distributing centers
by its representatives known as “sales agents”; that the expense of such
entertainments is charged on the books of account of the respondent as “sales
agent’s expenses,” and is made to obtain and retain the patronage of said operative
bakers, and includes, among other things, cigars, drinks, meals, theater tickets, and
automobile rides.
PARAGRAPH NINE. That the respondent has, for more than a year last past,
systematically delivered, and offered to deliver, to operative bakers, using
compressed yeast, as an inducement for said users of yeast to continue or to enter
into contracts of purchase of yeast from the respondent, yeast for various periods
without any immediate charge therefor, the price of such compressed yeast, so
delivered, being included and distributed in the price of yeast delivered during the
term of a contract them in existence or made subsequent to the period of such
delivery of yeast for which no immediate charge is made.
PARAGRAPH TEN. That time respondent has for more than a year last past
systematically made and offered to make to operative bakers using yeast, as an
inducement for said users of yeast to continue, or to enter, contracts of purchase
of yeast from the respondent, payments of cash, the amount of said

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

cash payments being included and distributed in the price of yeast delivered under
a contract entered at the time of said payment of cash.
PARAGRAPH ELEVEN. (a) That occasionally respondent’s representatives
have removed, or attempted to remove, competitors’ trial samples of compressed
yeast from the possession of operative bakers using yeast by substituting or
attempting to substitute respondent’s yeast therefor, or by purchasing or attempting
to purchase from said operative bakers such competitors’ trial samples.
(b) That occasionally respondent’s representatives have purchased or offered to
purchase, or have substituted or offered to substitute, respondent’s compressed
yeast for competitors’ compressed yeast in the hands of competitors’ customers.
(c) That occasionally respondent’s representatives have followed up competitors’ representatives as the latter made the rounds of competitors’ customers
and prospective customers, with the object of hindering and embarrassing
competitor’s agents in the sale and delivery of yeast and the transaction or business
incident thereto.
PARAGRAPH TWELVE. That at divers times certain agents and
representatives or the respondent have made misrepresentations to the trade as to
time methods pursued by its competitors lim time transaction of said competitors’
business.
PARAGRAPH THIRTEEN. That the respondent for more than a year last past
has concealed its control of and affiliation with a yeast company, to wit, the
Bakers & Consumers’ Compressed Yeast Co., a corporation organized and existing
under and by virtue of the laws of the State of New Jersey, having its principal
office and place of business in the city of New York, State of New York; that the
respondent has permitted the said Bakers & Consumers’ Compressed Yeast Co.
to be held out and advertised as wholly independent and without connection with
the respondent and has directed the efforts and business of said Bakers &
Consumers’ Compressed Yeast Co. to the acquisition of certain trade which
respondent was in danger of losing.
II.
PAR. 1. That from October 1, 1915, until the present time the respondent has
sold practically 90 per cent of the compressed yeast used by commercial bakers,
including hotels, restaurants, and institutions, in the United States, and that upward
of 30 per cent of such bakers have been under contract with respondent for the
purchase of compressed yeast, which amounts to approximately 75 per cent of the
bakers’ yeast sold by the respondent, and that from October 1, 1905, until May 1,
1917, the contract used by respondent was in time form as follows:
The undersigned purchaser hereby agrees, in consideration of the reduced price
at which the goods named herein are sold, to buy of the Fleischmann Co., which
agrees to sell to the undersigned purchaser upon the terms and conditions
hereinafter stipulated, all the compressed yeast required to be used for ____ own
and sole use at the baking establishment of the undersigned purchaser for and
during the term of ____ year ending ____ 191__, at time rate of 35 cents per pound
delivered by the seller on terms of cash, the Fleischmann Co., on the faithful
performance of the above condition on the part of the purchaser, agreeing to give
a discount of ____ cents per pound on every pound of yeast bought by them under
and pursuant to the terms and conditions of this contract, such discount to be paid
to the undersigned purchaser about once a month.
And it is further mutually agreed that the Fleischmann Co., shall not be held

responsible for any failure to sell or deliver said compressed yeast, if such failure
be occasioned by strikes or by any other cause beyond their control.
Dated ____________, 191__.
_________
_________Purchaser.
In the presence of:
Agreed to this ______ day of _________, 191__.
THE
FLEISCHMANN Co., Seller.
that approximately 8,032 of such contracts are still in force; that on May 1, 1917,
the respondent adopted a new form of contract, which is as follows:
Form 883. (10 ‘17 6M.)
The undersigned purchaser hereby agree , in consideration of the price at which
the goods named herein are sold, to buy of the Fleischmann Co., which agrees to
sell to the undersigned purchaser upon the terms and conditions hereinafter
stipulated such quantities of Fleischmann’s compressed yeast as ____ may require
____ for ____ own and sole use at the baking establishment ____ of the
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 123
undersigned purchaser for and during the term of ____ year ending ______,191__,
at the rate of 35 cents per pound delivered by the seller on terms of cash, the
Fleischmann Co., on the faithful performance of the above condition on the part
of the purchaser, agreeing to give a discount of ___ cents per pound on every
pound of yeast bought of then under and pursuant to the terms and conditions of
this contract, such discount to be paid to the undersigned purchaser about once a
month.
And it is further mutually agreed that the Fleischmann Co. shall not be held
responsible for any failure to sell or deliver said compressed yeast if such failure
be occasioned by strikes or by any other cause beyond their control.
Dated at __________, 191__.
_________________,
Purchaser.
In presence of:
Agreed to this ________ day of ________, 191__.
THE FLEISCHMANN
CO., Seller.
that such contracts were entered into for a period of from one to five years; that
since May 1, 1917, contracts entered into are of the form of contract last
mentioned, and represent 3,147 commercial bakers, hotels, restaurants, and
institution; that in making all of such contracts respondent has entered into the
same in the hope and with the expectation that the baker making such contract
would live up to the same, and it is the fact that 90 per cent of such bakers entering
into both forms of such contracts have lived up to the same and have taken their
entire requirements of yeast from the respondent; that there are approximately
4,000 of respondent’s customers who are now under contract in the form adopted
May 1, 1917, as aforesaid; that of respondent’s customer’s east of the Mississippi
River under contract with respondent as aforesaid, substantially all of them have
been solicited by agents of competitors for the purpose of having said customers
disregard their contracts and purchase compressed yeast from respondent’s
competitors; that in a large number of instances where customers under contract
have been so solicited they have declined to purchase yeast from competitors of

respondent, giving as their reason that they were under contract with respondent.
III.
PAR. 1. That for more than one year last past respondent has sold compressed
yeast to operative bakers on time basis of :
Bakers using 500 pounds or more per week, 10 cents per pound (which price is
called time wholesale price; there have been and are a few customers who used or
use from 4,000 to 12,000 pounds per week who have received or are receiving a
discount of from 2 per cent to 5 per cent from this price for cash payment of
monthly bills within 10 days); bakers using from approximately 300 to 500 pounds
per week, 17 cents per pound; bakers using approximately from 200 to 300 pounds
per week, 18 to 19 cents per pound; bakers using approximately from 100 to 200
pounds per week, 19 to 20 cents per pound; bakers using approximately from 60
to 100 pounds per week, 21 to 22 ½ cents per pound; bakers using approximately
from 30 to 60 pounds per week, 25 cents per pound; bakers using under 25 pounds
per week, 25 ½ to 25 cents per pound, largely depending on remoteness of point
of delivery. The above figures are the figures applying in the territory of the
United States east of the Rocky Mountains.
That owing to competition in various localities it has deviated from such basic
prices in order to retain the patronage of its customers by reducing its prices to
them to meet the price of its competitors, and in the event that such reduction in
price did not result in the retention of the business of said customers it has in a
number of cases reduced its prices to a price below that offered to such customers
by such competitors; and in many cases where, as a result of such competition, its
customers have abandoned their contracts with respondent it has reduced its prices
to such customers to meet time price of such competitors to obtain said customers’
business.
CONCLUSIONS OF LAW.
That the methods of competition, as set forth in the foregoing findings as to the
facts in Division I, paragraph 2 to 13, inclusive, and each and all of them are, in
the circumstances therein set forth, unfair methods of competition

124

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

in interstate commerce in violation of the provisions of section 5 of an act of
Congress approved September 26, 1914, entitled “An act to create a Federal Trade
Commission, to define its powers and duties, and for other purpose.”
That the contracts for sale used by the respondent, is set forth in the foregoing
findings as to the facts, in Division II, paragraph 1, are made on the condition,
agreement, or understanding that the purchaser shall purchase his entire
requirement of compressed yeast from respondent and shall not purchase
compressed yeast from a competitor, and the effect thereof may be to substantially
lessen competition or tend to create a monopoly in the sale of compressed yeast;
that the use of such contracts is in violation of section 3 of an act of Congress
approved October 15, 1914, entitled “An act to supplement existing laws against
unlawful restraints and monopolies, and for other purpose.”
That the discriminations in prices in so far as they are admitted by respondent
to be below the prices offered by its competitors, as set forth in the foregoing
findings as to the facts in Division III, paragraph 1, are not made oil account of
differences in the grade, quality, or quantity of the commodity sold, nor do such
discriminations make due allowance for difference in the cost of selling or
transportation, and are not made in good faith to meet competition, and the effect
of such discriminations may be to substantially lessen competition or tend to create
a monopoly in the sale of compressed yeast; that such discriminations are made in
violation of section 2 of an act of Congress approved October 15, 1914, entitled
“An act to supplement existing laws against unlawful restraints and monopolies,
and for other purposes.”
(Signed)
WM. J HARRIS,
Chairman.
[SEAL.]
WILLIAM B COLVER,
JOHN FRANKLIN
FORT,
VICTOR MURDOCK,
Commissioners.
UNITED STATES OF AMERICA,
Before Federal Trade Com mission, ss:
At a regular meeting of the Federal Trade Commission held at its office in the city
o
f
W
a
s
h
i
n
g
t
o
n
,
D. C., on the 8th day of April, A. D., 1918.
Present: William J. Harris, chairman; William B. Colver, J. Franklin Fort, Victor
Murdock, Commissioners.
Federal Trade Commission v. The Fleischmann Company. Docket No. 6.
ORDER TO CEASE AND DESIST.
The Federal Trade Commission, having issued and served its complaints herein,
and the respondent, the Fleischmann Co., having entered its appearance by Henry
A. Wise, its attorney, and having stipulated of record that the Commission may
forthwith proceed to make its findings as to the facts in these proceedings, and
issue its order disposing of the same, and the Commission, on the date hereof,

having made and filed a report containing its findings as to the facts, and its
conclusions that the respondent has violated section 5 of an act of Congress
approved September 26, 1914, entitled, “An act to create a Federal Trade
Commission, to define its powers and duties, and for other purposes,” and has
violated sections 2 and 3, respectively, of an act of Congress approved October 15,
1914, entitled, “An act to supplement existing laws against unlawful restraints and
monopolies, and for other purposes,” which said report is hereby referred to and
made a part hereof:
Therefore it is ordered that the respondent, the Fleischmann Co., its officers and
agents, cease and desist from:
1. Giving, or offering to give, compressed yeast without any consideration
therefor, to operative bakers, both its customers and prospective customers, and
its competitors’ customers and prospective customers, in quantities larger than
required under the particular circumstances for proper sample or demonstration
purposes.
2. Giving, or offering to give, operative bakers using compressed yeast, both its
customers and prospective customers, and its competitors’ customers and
prospective customers, their agents, servants, and employees, as an inducement for
such operative bakers to purchase or contract to purchase yeast from the
respondent, gratuities such as liquors, cigars, meals, and other personal property,
or money.
ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 125
3. Giving, or offering to give, operative bakers using compressed yeast, both its
customers, prospective customers, and its competitors’ customers and prospective
customers, their agents, servants, and employees, as an inducement for said
operative bakers to purchase or contract to purchase yeast from the respondent,
Christmas presents and special holiday presents, such as liquor, cigars, silverware,
or money.
4. Providing entertainment, including among other things, meals, drinks, cigars,
theater tickets, or money, for operative bakers using compressed yeast, both its
customers and prospective customers, their agents, servants, and employees, as an
inducement for said operative bakers to purchase, or contract to purchase, yeast
from the respondent.
5. Making contributions of sums of money to funds raised by associations known
as “bakers’ associations,” composed of operative and boss bakers, both its
customers and prospective customers, for the purpose of obtaining and retaining
the patronage of said operative bakers: Provided, however, That nothing in this
paragraph shall be construed to prevent respondent from making reasonable
contributions to such associations for educational and scientific purposes as relates
to the use of compressed yeast.
6. Providing entertainment, including, among other things, cigars, drinks, meals,
theater tickets, and automobile rides, to operative and boss bakers using
compressed yeast, both its customers and prospective customers, attending the
association conventions referred to in paragraph 5 above, for the purpose of
obtaining and retaining the patronage of said operative and boss bakers.
7. Providing entertainment, including among other things, cigars, drinks, meals,
theater tickets, and automobile rides to operative bakers using compressed yeast,
both its customers and prospective customers, at the respondent’s principal

distribution centers by its representatives known a “sales agents,” for the purpose
of obtaining and retaining the patronage of said operative bakers. Provided,
however, That nothing in this paragraph shall be construed to prohibit respondents
from furnishing reasonable entertainment to operative bakers visiting its
manufacturing plants and laboratories.
8. Delivering, or offering to deliver, as an inducement to operative bakers using
a compressed yeast to continue or to enter into contracts of purchase of yeast from
respondent, quantities of such yeast to said operative bakers without making any
immediate charge therefor, and including distributing the price for the same in the
price of yeast delivered during the term of a contract then in existence or made
subsequent to the period of delivery of yeast for which no immediate charge is
made.
9. Making, or offering to make, as an inducement for operative bakers using
compressed yeast to continue or to enter into contracts of purchase of yeasts from
the respondent, payments of cash, the amount of said cash payments being
included and distributed in the price of yeast delivered under a contract entered
into at the time of said payment of cash.
10. (a) Removing, or attempting to remove, competitors’ trial samples of
compressed yeast from the possession of operative bakers using yeast by
substituting, or attempting to substitute, respondent’s yeast therefor, or by purchasing or attempting to purchase from said operative bakers such competitors’ trial
sampler; (b) purchasing, or offering to purchase, or substituting or offering to
substitute respondent’s compressed yeast for competitors’ compressed yeast for
the possession of competitors’ customers; (c) following up competitors’
representatives as the latter make the rounds of their customers and prospective
customers with the object of hindering and embarrassing competitors’ agents in the
sale or delivery of compressed yeast and the transaction of business incident
thereto.
11. Making misrepresentations to the trade as to the methods pursued by
respondent’s competitors in the transactions of said competitors’ business.
12. Concealing its control of and affiliation with a yeast company known as the
Bakers’ & Consumers’ Compressed Yeast Co., a corporation organized and
existing under and by virtue of the laws of the State of New Jersey, having its
principal office and place of business in the city of New York, State of New York,
and permitting said Bakers’ & Consumers’ Compressed Yeast Co. to be held out
and advertised as wholly independent and without connection with the respondent,
or, directing the efforts and business of said Bakers’ & Consumers’ Compressed
Yeast Co. to the acquisition of certain trade which respondent is in danger of
losing.
13. Making a sale or contract for sale of compressed yeast for use, consumption,
or resale within the United States, or any Territory thereof, or the

126

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

District of Columbia, or any insular possession, or other place under the
jurisdiction of the United States, or fix a price charged therefor, or discount from.
or rebate upon, such price on the condition, agreement, or understanding that the
purchaser thereof shall purchase his entire requirement of compressed yeast from
the Fleischmann Co. and shall not purchase compressed yeast from a competitor
or competitors of said Fleischmann Co.
14. Discriminating, either directly or indirectly, in territories were the
Fleischman Co. and its competitors are doing business, in price between different
purchasers of compressed yeast which commodity is sold for use, consumption, or
resale with the United States, or any Territory thereof, or the District of Columbia,
or any insular possession or other place insular the jurisdiction of the United
States, where such discriminations in prices, if made, would be below the price or
prices of a competitor or competitors of the Fleischman Co. in such competitive
territory.
By time Commission.
LEONIDAS L.
BRACKEN,
Secretary.
JOHN WALSH,
Chief Counsel for the Commission.

EXHIBIT 8.
FEDERAL TRADE COMMISSION v. THE CUDAHY PACKING
COMPANY.
UNITED STATES OF AMERICA,
Before Federal Trade Commission, ss:
At a regular session of the Federal Trade Commission, held at its office in the city
o
f
W
a
s
h
i
n
g
t
o
n
,
D. C., on the 26th day of July, A. D. 1918.
Present: William B. Colver, chairman; John Franklin Fort, Victor Murdock,
Commissioners.
Federal Trade Commission v. The Cudahy Packing Company. Docket No.20.
REPORT AND FINDINGS.
The Federal Trade Commission, having issued and served its complaint herein,
wherein it alleged that it had reason to believe that the above-named respondent,
the Cudahy Packing Company, has been and now is using unfair methods of
competition in interstate commerce in violation of the provisions of section 5 of
an act of Congress approved September 26, 1914, entitled “An act to create a
Federal Trade Commission, to define its powers and duties, and for other
purposes,” and has been and is violating the provisions of section 2 of an act of
Congress approved October 15, 1914, entitled “An act to supplement existing laws
against unlawful restraints and monopolies, and for other purposes, “and that a
proceeding by it in respect of such alleged violation of section 5 of the act of
September 26, 1914, would be to the interest of the public, and fully stating its
charges in that respect, and the respondent having entered its appearance by
Thomas Creigh and Gilbert H. Montague, its attorneys, and having dully flied its
answer admitting certain of the allegations of said complaint and denying certain
other thereof, and particularly denying that respondent has ever violated any of the
provisions of the acts of Congress above mentioned or of any other law, and the
Commission having offered testimony in support of the charges of said complaint,
and respondent having rested its case at the close of the Commission’s case, and
counsel for both parties having waived the filing of briefs or the hearing of
argument on the exceptions and on the merits, the Commission, having duly
considered the record and being fully advised in the premises, now makes this its
report and findings as to the facts and conclusions of law :
FINDINGS AS TO THE FACTS.
(l) That respondent, the Cudahy Packing Company, is a corporation organized,
existing, and holding business under and by virtue of the laws of the State of

Maine, having its principal office and place of business at the city of Chicago, in
the State of Illinois, and is the successor to the Cudahy Packing Company of
Illinois.
(2) That respondent, the Cudahy Packing Company, is now and for more than
two years last past has been engaged in commerce among the several States,
Territories, and the District of Columbia of the United States, in the manufacture,
sale, and distribution of a powdered cleanser known as “Old Dutch Cleanser.”
(3) That respondent, the Cudahy Packing Company, sells “Old Dutch Cleanser”
principally to jobbers, but also, to a limited extent, to certain other selected
dealers, both being known as distributing agents, at prices hereinafter referred to
as distributing agents’ prices, and that it also sells to concerns other than those
classified or designated as distributing agents in the same quantities at higher
prices, hereinafter referred to as general sales list prices.
127

128

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

(4) That the amount of “Old Dutch Cleanser” manufactured, sold, and
distributed by respondent, the Cudahy Packing Company, has been and is substantial; that the same forms an important item of commerce among the several States,
Territories, and the District of Columbia of the United States, and that in such
distribution respondent utilizes the services of about 4,000 of the so-called
distributing agents.
(5) That, in pursuance of its price-maintenance plan, respondent discriminates,
and for more than two years last past has discriminated, between customers in the
prices at which it sells “Old Dutch Cleanser,” in the course of such commerce, in
that it has
(a) Made sales to jobbers and other wholesalers at both general sales list prices
and distributing agents’ prices;
(b) Made sales to cooperative organizations at both general sales list prices and
distributing agents’ prices;
(e) Made sales among retail organizations at distributing agents’ prices and at
general sales list prices and at special prices.
That none of the aforesaid discriminations comes within any of the exceptions
or provisions of section 2 of the act approved October 15, 1914, entitled “An act
to supplement existing laws against unlawful restraints and monopolies, and for
other purposes,” and that in so far as said discriminations accomplish their
purpose, their effect may be and is to eliminate competition price among jobbers
and other dealers in a line of commerce, to wit, in the sale of powdered cleansers
and especially in the sale of “Old Dutch Cleanser.”
(6) That respondent causes and for more than two years last past has caused, its
so-called distributing agents to resell “Old Dutch Cleanser” at general sales-list
prices:
(a) By repeatedly setting forth in its distributing agents’ price list its resale
prices, and by stating that distributing agents must conform to the selling policy
of the company;
(b) By repeatedly withdrawing, as distributing agents, jobbers, wholesalers, and
other dealers classed as distributing agents who fail to maintain the general saleslist prices of respondent, and by quoting and in some instances selling jobbers so
withdrawn at the general sales list price;
(c) By repeatedly reinstating as distributing agents, jobbers, wholesalers, and
other dealers withdrawn as aforesaid for failing to maintain the resale price:
1. Upon the basis of letters from such jobbers, wholesalers, and other dealers
to respondent specifically stating that they will agree to maintain the general
sales-list price of respondent;
2. Upon the basis of letters stating in effect, that such jobbers, wholesalers,
and other dealers understand the selling policy of respondent and will act in
harmony therewith; and
3. Upon the basis of reports from salesmen to the effect that they have
interviewed jobbers, wholesalers, and other dealers withdrawn as distributing
agents and explained to them respondent’s selling policy and that the said
jobbers and dealers are in harmony therewith and will conform thereto.
(d) By requiring its salesmen to investigate applications for distributing agents
terms and to report to the home office whether the applicant understands and is in

harmony with the selling policy of respondent;
(e) By repeatedly adding to its so-called distributing agents, concerns reported
as aforesaid by its salesmen as being in harmony with its selling policy;
(f) By refusing in occasional instances to sell to jobbers, wholesalers, and other
dealers withdrawn as aforesaid for failing to resell its product at general sales list
prices.
(7) That respondents maintains a large force of specialty salesmen, numbering
over 100, whose duty it is to solicit from retailer’s orders to be turned over to and
filled through jobbers or other wholesalers, which orders are customarily
designated and known as “turn-over orders”; that said salesmen are instructed in
soliciting turn-over orders to refuse to accept such orders where the retailer desires
the same filled through a jobber or other wholesaler who sells at less than the
general sales list prices of respondent, and to state to the retailer that they can not
take an order for delivery through that jobber or other wholesaler and to request
him to name another; and that said salesmen in soliciting such orders, in pursuance
of these instructions, refuse and have refused orders where retailers desired the
same filled through jobbers

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.

129

or other wholesalers selling at less than general sales list prices, and request and
have requested such retailers to name other jobbers or wholesalers.
(8) That respondent, in frequent instances, withdraws, and for more than two
years last past has withdrawn, distributing agents’ prices from jobbers and other
wholesales who have:
(a) Sold to other jobbers or wholesalers at less than general sales-list prices;
(b) Filled orders pooled by several retailers, when the jobbers or wholesalers
have sold the same at quantity prices set; out in the general sales list;
(c) Filled orders at quantity prices set out; in the general sales list, where the
retailers require more than one delivery upon the quantity specified in the order.
(9) That respondent utilizes, and for more than two years last; past has utilized,
a system of key-symbols for identifying the cases containing “Old Dutch
Cleanser”; that repeatedly, when instances of price cutting are reported to it,
respondent instructs its salesmen to investigate; that in pursuance of these
instructions, the salesmen aforesaid frequently trace the jobber or other wholesaler
making the cut; price by means of the key-symbols which enable the identity of
said jobber or other wholesaler to be ascertained; that in occasional instances
respondent’s salesmen, in tracing price cutting, have examined the stocks in the
warehouses of retail dealers; have taken key-symbols from cases on the wagons of
jobbers and other wholesalers delivering goods; have impersonated retailers
sometimes with their permission, in order to ascertain from jobbers and other
wholesalers the prices at which they sell “Old Dutch Cleanser,” and have
impersonated retailers for the purpose of obtaining the key-symbols from cases
containing “Old Dutch Cleanser.”
(10) That individual jobbers and wholesalers, as shown by their letters,
voluntarily state and have stated that they will support and cooperate with
respondent in pushing its goods and that they desire to deal with respondent on
account of its policy in maintaining resale prices, and that jobbing and wholesale
grocery trade associations have adopted resolutions endorsing price-maintained
goods, which endorsements would include the goods of respondent company.
(11) That grocery jobbers and wholesalers handling respondent’s goods
repeatedly report and have reported to respondent price cutting in their respective
localities, and in many such instances report and have reported specifically the
names of such price cutters.
(12) That jobbers’ and other wholesalers’ costs show great divergences, owing
to different methods in selling, and also great divergences in the case of different
concerns using the same methods of selling, owing to differences in selling
expense, turnover, efficiency of management, and other factors;
That the costs of grocery jobbers and wholesalers selling by mail are in some
instances as low as 4 ½ per cent, expressed as a percentage of the cost of goods to
the jobber, and the costs of cooperative grocery jobbing and wholesaling concerns
are in some instances as low as 3 to 3 ½ per cent, expressed in the form of a
percentage of the selling price of the goods;

That, expressed in the form of a percentage of the net sales, the total costs or
expense of jobbers and wholesalers selling according to customary jobbing
methods range from 6.3 per cent to 10.71 per cent, and that the common figure (I.
e., time predominant, typical, and most frequent figure and the one around which
the figures of all wholesalers center) is 8 per cent; that some of such concerns have
interest charges which range from 0.4 per cent to 3.03 per cent on net sales, and
that the common figure is 1.5 per cent.
That time gross profits of concerns selling according to customary jobbing
methods show at least as great variations as from 7.7 to 17.2 per cent on net
sales; and in the majority of instances their gross profit is between 10.5 per cent
and 13.4 per cent; that the rate of stock turn of grocery jobbers and other
wholesalers selling according to customary jobbing methods varies from about one
to twelve times a year.
(13) That for more than two years prior to January 1, 1918, the gross-profit
margins (I. e., the difference between the cost of “Old Dutch Cleanser” from
respondent and the price at which jobbers or other wholesalers were required in
which the jobber or wholesaler bought, from 11.1 to 13.9 per cent on the said
resale price fixed by respondent for sales of less than five cases.

130 ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION.
That retailers’ orders and purchases of “Old Dutch Cleanser” are in the great
majority of instances for less than five cases, and that large orders by them are
comparatively exceptional.
(14) That the gross profit margins of jobbers and other wholesalers handling
respondent’s goods are adjusted as aforesaid in order to secure a large number of
jobbers and other wholesalers to handle its product, and that the margins aforesaid
are greater than necessary to enable many relatively low-cost and efficient jobbers
and wholesalers to resell and make a profit.
(15) That respondent, by its policy of maintaining prices and discriminating and
refusing to sell to jobbers and other wholesalers failing to adhere to such prices,
endeavors to protect and has protected the relatively higher cost and less efficient
jobbers and other wholesalers, constituting the bulk of the jobbing and wholesale
trade, in the gross profit margins fixed as aforesaid against the competition of
relatively lower cost and more efficient jobbers and other wholesalers.
(16) That the effect of the price fixing aforesaid has been and is:
(a) To secure for respondent, The Cudahy Packing Company, on its “Old Dutch
Cleanser,” the trade of jobber’s and other wholesalers, and especially the relatively
higher cost and more inefficient jobbers and other wholesalers, constituting the
bulk of the jobbing and wholesale trade, and to enlist their active support and
cooperation in enlarging the sale of its price-maintained cleanser, to the prejudice
of competing manufactures who do not fix, require, or enforce the maintenance of
resale prices upon their cleaners, thereby protecting such jobber’s and other
wholesalers against the price competition of other jobbers and wholesalers, and
especially the relatively lower cost and more efficient establishments;
(b) To tend to force manufacturer’s who do not fix, require, or enforce the
maintenance of resale prices and who compete with respondent in the sale of
powdered cleansers, also to inaugurate and enforce a system of maintenance of
resale prices upon their powdered cleansers, in order to offset the preference of
jobbers and other wholesalers for respondent’s price-maintained cleanser arid to
enable manufacturers who do not maintain resale prices upon powdered cleansers
to compete upon more equal terms with respondent;
(c) To eliminate competition in prices among jobbers and wholesalers handling
“Old Dutch Cleanser,” thereby interfering with many such jobbers and other
wholesalers, and especially the relatively lower cost and more efficient establishments in their sales of such cleanser at such prices as they may deem adequate and
as are warranted by their costs, selling efficiency, and existing trade conditions;
(d) To compel the public, or such portion thereof as require or prefer “Old
Dutch Cleanser,” to pay prices therefor based on a gross-profit margin fixed, as
aforesaid, according to the costs of the relatively higher cost and less efficient
establishments, constituting the bulk of the jobbing and wholesale trade, instead
of a price based upon the competition of jobbers and other wholesalers with widely
varying stock turns, costs, and efficiency.
CONCLUSIONS OF LAW.
That the acts and conduct set forth in paragraph (5) of the foregoing findings,

are, and each of them is, under the circumstances therein set forth, in violation of
the provisions of section 2 of an act of Congress approved October 15, 1914,
entitled “An act to supplement existing laws against unlawful restraints and
monopolies, and for other purposes”; and that the methods of competition set forth
in the findings, are, and each of them is, under the circumstances therein set forth,
unfair methods of competition in interstate commerce, in violation of the
provisions of an act of Congress approved September 26, 1914, entitled “An act
to create a Federal Trade Commission, to define its powers and duties, and for
other purposes.”
[SEAL.]
(Signed)
WILLIAM B. COLVER,
JOHN FRANKLIN FORT,
VICTOR MURDOCK,
Commissioners.

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION. 131
UNITED STATES OF AMERICA,
Before Federal Trade Corn mission, ss:
At a regular meeting of the Federal Trade Commission, held at its office in the
city of Washington,
D. C., On the 26th day of July, 1918.
Present: William B. Colver, chairman; John Franklin Fort, Victor Murdock,
Commissioners.
Federal Trade Commission v. The Cudahy Packing Company. Docket No.20.
ORDER TO CEASE AND DESIST.
The Federal Trade Commission having issued and served its complaint herein,
and the respondent having entered its appearance by Thomas Creigh and Gilbert
H. Montague, its attorneys, and having duly filed its answer admitting certain of
the allegations of said complaint and denying certain other allegations thereof, and
particularly denying that respondent has ever violated any of the provisions of the
acts of Congress mentioned in said complaint or any of the provisions of any other
law; and the Commission having offered testimony in support of the charges of
said complaint, and respondent having rested its case at the close of the
Commission’s case, and the Commission on the date hereof having made and filed
its report containing its findings as to the facts and its conclusions that respondent
has violated section 5 of an act of Congress approved September 26, 1914, entitled
“An act to create a Federal Trade Commission, to define its powers and duties, and
for other purposes,” and section 2 of an act of Congress approved October 15,
1914, entitled “An act to supplement existing laws against unlawful restraints and
monopolies, and for other purposes,” which said report is hereby referred to and
made a part hereof;
Now, therefore, it is ordered, That respondent, The Cudahy Packing Company,
and its officers, directors, agents, servants, and employees, cease and desist from
directly or indirectly recommending, requiring, or by any means whatsoever
bringing about the resale by dealers of “Old Dutch Cleanser” according to any
system of prices fixed or established by respondent, and more particularly by any
or all of the following means:
1. Entering into contracts, agreements, or understandings with such dealers to
the effect that such dealers, in reselling “Old Dutch Cleanser,” will adhere to any
system of prices fixed or established by respondent;
2. Securing from such dealers contracts, agreements, or understandings that they
will adhere to any such system of prices;
3. Refusing to sell to any such dealers because they fail to adhere to any such
system of prices;
4. Discriminating in prices against such dealers because they fail to adhere to
any such system of prices;
5. Discriminating in prices in favor of such dealers because they adhere to any
such system of prices.

Provided, That nothing herein contained, shall prohibit respondent from issuing
price lists, or printing prices in its advertising or upon containers of “Old Dutch
Cleanser,” so long as respondent shall refrain from directly or in directly
recommending, requiring, or by any means whatsoever bringing about the resale
of “Old Dutch Cleanser” at such prices; and
Provided, further, That nothing herein contained shall prohibit respondent from
selling to or soliciting order’s from dealers directly at such prices, or at any other
prices fixed by the party through whom such orders are filled.
(SEAL.)
(Signed)
L. L. BRACKEN,
Secretary.