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ANNUAL REPORT
OF THE

FEDERAL

TRADE COMMISSION
FOR THE

FISCAL YEAR ENDED JUNE 30

1930

UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1930
For sale by the Superintendent of Documents, Washington, D. C. - - - - - - - - Price 25 cents

FEDERAL TRADE COMMISSION
GARLAND S. FERGUSON, Jr., Chairman.
CHARLES W. HUNT.
WILLIAM E HUMPHREY.
CHARLES H. MARCH
EDGAR A. MCCULLOCH.
OTIS B. JOHNSON, Secretary.

FEDERAL TRADE COMMISSIONER--1915-1930
Name
Joseph E Davies
William J. Harris
Edward N. Hurley
Will H. Parry
George Rublee
William B. Colver
John Franklin Fort
Victor Murdock
Huston Thompson
Nelson B. Gaskill
John Garland Pollard
John F. Nugent
Vernon W. Van Fleet
C. W. Hunt
William E Humphrey
Abram F. Myers
Edgar A. MCCULLOCH
G. S. Ferguson, Jr
Charles H. March

II

State from which appointed
Wisconsin
Georgia
Illinois
Washington
New Hampshire
Minnesota
New Jersey
Kansas
Colorado
New Jersey
Virginia
Idaho
Indiana
Iowa
Washington
Iowa
Arkansas
North Carolina
Minnesota

Period of service
Mar. 16, 1915-Mar. 18, 1918.
Mar. 16, 1915-May 31, 1918.
Mar.16, 1915-Jan. 31, 1917.
Mar.16, 1915-Apr. 21, 1917.
Mar.16, 1915-May 14, 1916.
Mar.16, 1917-Sept. 25, 1920.
Mar.16, 1917-Nov. 30, 1919.
Sept. 4, 1917-Jan. 31, 1924.
Jan.17, 1919-Sept. 25, 1926.
Feb. 1, 1920-Feb. 24, 1925.
Mar. 6, 1925-Sept. 25,1921.
Jan.15, 1921-Sept. 25, 1927
June 26, 1922-July 31, 1926.
June 16, 1924.
Feb.25, 1925.
Aug. 2, 1926-Jan. 15, 1929.
Feb.11, 1927.
Nov.14, 1927.
Feb. 1, 1929.

CONTENTS
PART 1. INTRODUCTION
Page
4
6
11
15

The fire of August 30, 1930
The year’s activities
Public utilities investigation
Background and procedure
PART II. DIVISIONAL REPORTS
Divisional organization
Chart
Administrative division
Publications of the commission
Economic division
Trade practice conferences
Chief examiner
Board of review
Special board of investigation
Trial examiners’ division
Chief counsel
Representative complaints
Orders to cease and desist
Court cases
Methods of competition condemned
Tabular summary of legal work
Export trade section

Facing p.

22
22
24
28
32
38
47
53
55
58
60
64
74
84
112
117
125

PART III. DOCUMENTS AND SUMMARIES
Sherman Antitrust Act
Federal Trade Commission act
Sections of Clayton Act
Export trade act
Procedure and policy
Rules of practice
Trade practice conferences
Proceedings disposed of
Complaints pending
Stipulations
Resolutions directing inquiries
Investigations, 1913-1930

145
147
153
157
159
161
166
167
182
220
233
239
ALPHABETICAL INDEX

Advertising, false and misleading
Agreements In restraint of trade, cases of
Agreements to suppress competition, cases of
Albany Billiard Ball Co., order to cease and desist
American Gas & Electric Co., public utilities inquiry
American Power & Light Co., public utilities
American School of Home Economics, order to cease and desist
American Snuff Co., court case
Baltimore Paint & Color Works, court case
Bayuk Cigars (Inc.), court case

55
81
69, 71, 75
81
12
12
79
94
86
92
III

IV

CONTENTS

Blue sky case
provisions in foreign laws
securities, general inquiry
Bread and flour industry, general inquiry
Breakstone, Samuel, court case
Burton Bros. & Co. (Inc.), court case
order to cease and desist
Cassoff, L. F., court case
Chain-store investigation
Chipman Knitting Mills, court case
Clayton Act, text of
functions of
Clarkson, David B., Co., order to cease and desist
Coercion of customers, cases of
manufacturers, cases of
Competition, agreements to suppress, cases of
methods of condemned
Complaint, answer, and trial of cases
Complaints, applications for, tabular summary
digests of
representative
Congressional and other inquiries 1913-1930
Consolidated Book Publishers (Inc.), court case
order to cease and desist
Cottonseed price inquiry
Court cases
Dismissals, orders of, digest of
Electric Bond & Share Co., court case
public utilities inquiry
Electric Power & Light Corporation, public utilities inquiry
Export Trade Act, text of
investigations, tabular summary of
section, work of
Federal Trade Commission:
Administrative functions of
Appropriations for work of
Background of
Board of review of
Branch offices of
Chief counsel of
Chief examiner of
Commissioners, work of
Economic division of
Export trade section of
Headquarters, new location of, since fire
Legal work of, tabular summary
Organization of
Personnel of
Policy of
Procedure of
Publications of
Rules of practice before
Special board of investigation of
Trade practice conference division of
Trial examiners of
Federal Trade Commission Act, text of
functions of
amendment to suggested
Fire wrecks commission’s building

Page
78
140
37, 238
238
97
97
76
85
34, 234
99
153
17
71
71
69, 75
69, 71, 75
112
18-19, 61-62
118
182
64
239
88
83
7, 49, 236
9, 84, 120-124
175
14, 105
12
12
157
117
125
24
25
15
53
52
60
47
22
32
125
15
117
22
24
159
17, 159
28
161
55
38
58
147
16
14
4

Fluegelman, N., & Co., court case
Foshay, W. B., Co., public utilities
Good Grape Co., court case
Grand Rapids furniture cases
Grand Rapids Varnish Co., court case
International Shoe Co., court case
Interstate movement of electric energy

104
13
100
98
95
93
34, 234

CONTENTS
Investigations, 1913-1930
Kay, Abbott E. (Dr.), court case
Kirk, James S., & Co., court case
Kohlberg, Alfred (Inc.), court case
Light House Rug Co., court case
Lomax Rug Mills, court case
Lottery cases
McCafferty, James A., & Sons, Manufacturing Co., court case
Macfadden Publications (Inc.), court case
Marietta Manufacturing Co., court case
Masland Duraleather Co., court case
Millers’ National Federation, court case
Misrepresentation, typical cases of
Morrissey, Charles T., court case
National Power & Light Co., public utilities inquiry
Newsprint paper inquiry
Northwest The & Mantel Contractors’ Association, order to cease and desist
Ohio Leather Co., court case
Orders to cease and desist
representative cases
Paramount Famous-Lasky Corporation, court case
Peanut prices inquiry
Preliminary inquiries
Price bases inquiry
Price discrimination, cases of
Procedure:
Clayton Act
Export trade act
Federal Trade Commission act
Stipulation
Trade Practice Conference
Public utilities investigation
Raladam Co., court case
Resale price maintenance, general business inquiry
cases of
Resolutions directing inquiries
Royal Baking Powder Co., court cases
Shade Shop, court
Shakespeare Co., court case
Sherman Antitrust Act, text of
Stipulations
Stock acquisitions
Tailor-Made Shoe System, order to cease and desist
Temple Anthracite Coal Co., court case
order to cease and desist
Trade practice conferences
Trade, agreements In restraint of, cases
Trust laws in foreign countries
Tying and exclusive contracts, cases of
Universal Lock-Tip Co., order to cease and desist
Vivaudon, V. (Inc.), court case
Webb-Pomerene law (export trade act)
Western Meat Co., court case
“White Pine” lumber cases, typical complaint, No. 1620

V
Page
239
97
100
102
96
89
73
86
108
89
101
106
67-70, 77-79, 83
86
13
6, 47
75
101
167
74
96
48, 237
49, 117
36, 238
65, 69, 75
17
129
17
58
38
6, 11, 33, 60, 233
9, 102
7, 34, 235
65, 67, 76
233
109-110
91
87
145
58, 220
50, 64, 82
78
87
82
38, 166
81
130
66
78
88
157
89
197

ANNUAL REPORT OF THE FEDERAL TRADE
COMMISSION, 1929-30
The Senate and House of Representatives,
The Federal Trade Commission herewith submits to the Congress its annual report
for the fiscal year July 1, 1929, to June 30, 1930.
1

PART I. INTRODUCTION
THE FIRE OF AUGUST 30, 1930
THE YEAR’S ACTIVITIES
UTILITIES INVESTIGATION
BACKGROUND AND PROCEDURE

3

THE FIRE OF AUGUST 30, 1930
Although the fire of Saturday, August 30, 1930, which wrecked the building then
housing the Federal Trade Commission in Washington occurred subsequent to the
close of the fiscal year reported on herein, it was an event of far-reaching significance
and has an important bearing on the current work of this commission.
No other event has served so strikingly to call attention to the inadequacy of the
temporary buildings housing many of the Government establishments, as depositories
of priceless records. In a recent letter to the director of the Office of Public Buildings
and Public Parks of the National Capital the chairman of the commission stressed the
“urgent need for fireproof quarters so that our employees and records shall not be
again subject to the serious fire as recently demonstrated.”
It is with a growing satisfaction that this commission contemplates the day when its
official home will be within a permanent structure such as that at present proposed to
domicile the independent offices of the Government.
Immediately after the fire those men and women whose offices had been wiped out
or most severely damaged were moved, under an emergency order, from the wrecked
structure at 2000 D Street NW to a near-by temporary building at 2000 C Street. They
are still housed there, although members of the commission and the larger part of the
staff are now quartered at 1800 Virginia Avenue NW., in another temporary building.
Fortunately, the commission’s personnel had left the building more than an hour
before the fire, so that no one was burned or otherwise injured, and it is doubtful if
serious mishaps would have resulted even had the fire started during working hours,
because the alarms would have been sounded and the employees would have
responded as they had been trained to do at the frequent intervals at which fire drills
had been held. Several firemen were temporarily overcome.
One side of the structure, escaping the brunt of the flames, housed most of the
invaluable records which had been filed in their accustomed cabinets and were saved;
but a number of documents in the course of preperation, some designed for later use
in such investigations as that relating to public utilities, were left temporarily in offices
which lay in the path of the flames and were destroyed.
Most of the lost documents are being successfully replaced, although at a sacrifice
of much time and consequently at some expense.
The extent in terms of dollars of the commission’s actual loss in records, furniture,
and other physical property has not been arrived at, but it is expected to be
considerably in excess of $100,000. The amount will not be determined until the
estimates are completed.
4

THE FIRE OF AUGUST 30, 1930

5

The amount of damage to the building proper is not to be estimated by the
commission as this property, like other Government buildings, is controlled by the
Public Buildings Commission.
Every branch of the commission has suffered a set-back in its work through loss of
time. For more than one month the force was engaged in moving into habitable offices
while a number of employees were detailed to the task of having salvable equipment
restored and replacing that which was destroyed. A corps of extra laborers was
employed.
While several theories have been advanced as to origin, the director of the Office of
Public Buildings and Public Parks of the National Capital appointed a committee
which investigated the circumstances surrounding the fire, and reported the cause
undetermined.

THE YEAR’S ACTIVITIES
Among major activities of the Federal Trade Commission during the fiscal year
1929-30 were:
Examination in Public hearings of the financial structure of several large utility
holding company groups. (See pp.11, 33, and 60.)
Investigation of the amount of electric power transmitted over State boundaries,
indicating a much larger total interstate movement of electric energy in 1929 than in
1928. (See pp.34 and 234.)
Comprehensive comparison of chain and independent store prices in three cities,
with greater progress in the chain-store inquiry than shown for the previous year
because of having for the first time sufficient field and office force. (See pp.34 and
234.)
Holding of 57 trade-practice conferences with that many industries, establishing a
record in number of such meetings, and revision of certain rules adopted by industries
at trade-practice conferences held with the commission. (See pp.38 and 166.)
EXPORT TRADE TOTALS $724,100,000 IN 1929
The commission’s report on its administration of the export trade act, page 125,
shows that associations operating under the act exported goods to the extent of
$724,100,000 in 1929, which was far in excess of the totals for the previous years,
namely, $476,200,000 in 1928 and $371,500,000 in 1927.
Fifty-seven export associations at the close of the fiscal year were filing papers with
the commission for operation under the export trade act.
NEWSPRINT INQUIRY IS COMPLETED
The newsprint paper situation relative to Canadian-American price-fixing
agreements and as to whether practices of newsprint manufacturers tended to create
a monopoly in the supply to publishers of small newspapers, was comprehensively
covered in the commission’s report to the Senate at the close of the fiscal year.1
Recommendations of the commission were to the effect that these publishers of
small papers wherever possible should purchase their new sprint requirements on a
cooperative basis in order to get the benefit of contract prices on carload lots; that the
Government attempt to relieve the shortage of newsprint by continuing its experiments
in manufacture of paper from farm waste products; that Government-owned
timberlands and water-power sites in Alaska be made available to domestically owned
companies on liberal terms for development of the paper industry; and that future
activities of the
1 Printed copies of the newsprint report are now available by purchase from the Superintendent of
Documents, Washington, D. C. This inquiry was conducted under authority of S. Res. 337, 70th Cong.,
2d sess, for full text of which see p.237.

6

THE YEAR’S ACTIVITIES

7

Newsprint Institute of Canada in relation to the sale of newsprint paper and the fixing
of market prices in the United States be watched closely.
A complete account of this inquiry may be read on page 47.
COTTONSEED PRICE SURVEY
Public hearings were begun in Washington in June for taking testimony regarding
an alleged combination in violation of the antitrust laws with respect to prices as to
cottonseed and cottonseed meal, and concerning ownership and control of cotton gins
by corporations operating cottonseed oil mills. This inquiry is the result of two Senate
resolutions, (S. Res. 136 and 147, 71st Cong., 1st sess.), full texts of which may be
read beginning on page 236. Examination was continued through the summer and early
fall in Atlanta, Montgomery, Raleigh, and Columbia. While no findings have been
issued by the commission, a progress report upon the inquiry may be read on page 49.
PEANUT PRICES
The two foregoing investigations relating to alleged violation of the antitrust laws,
were conducted by the chief examiner, who is in charge of legal investigations.
Another survey assigned to this official is that on prices of peanuts. This is also
conducted at the direction of the Senate, whose resolution (S. Res. 139, 71st Cong., 1st
sess.) requested the commission to ascertain all facts relating to “the alleged
combination in violation of the antitrust laws with respect to prices for peanuts by
corporations operating peanut crushers and mills.” Public hearings are not being held,
but examiners are at work in the peanut-producing States obtaining facts to be
incorporated in the final report.
Besides the six investigations already mentioned, others conducted by the
commission include those on resale price maintenance, geographic bases of price
making, and blue-sky securities. These latter are general business inquiries, differing
in scope and treatment from those administered by the chief examiner, and are
conducted on the commission’s own initiative, with the chief economist in charge. No
public hearings are being held.
RESALE PRICE AND OTHER INQUIRIES
The second part of the commission’s report on resale price maintenance was in an
advanced stage of preparation at the close of the fiscal year, the first part having been
transmitted to Congress in January, 1929, and subsequently printed for public
distribution.
The second and final part will discuss quantitative statistical data as to prices,
margins, investments, and profits of various groups of manufacturers and distributors,
embodying results of a study of the economic aspects of resale price maintenance,
while the first book of the report dealt with the legal status of the subject and with the
experience and opinions of interested business classes and of consumers. See pages

36 and 235.

8

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Involved in the inquiry on geographic bases of price making are economic problems
similar to those in the commission’s “Pittsburgh plus” case of a few years ago in the
steel industry in which the single basing point method of merchandising g was in
question. Other industries have identical or similar merchandising practices, the effects
of which it is desired to ascertain.
A draft report on blue-sky securities, with reference to various methods of evading
this evil, is now in the hands of the commission for consideration.
FALSE AND MISLEADING ADVERTISING
Jurisdiction over fraudulent advertising matter broadcast over the radio was added
during the fiscal year to the functions of the special board, of investigation charged
with carrying out the coin-mission’s policy of dealing with false, misleading, and
fraudulent advertising.
The board continued its work in the field of published periodicals. More than 500
cases in which complaint had been ordered based on unethical advertising copy in
periodicals, were referred to the board by the commission.
Having entered its second year of existence last May, the board is taking over an
increasingly larger volume of work and its procedure has been well established. See
page 55.
COMPLAINTS AND ORDERS TO DESIST
The commission carried on a large volume of work in connection with the
administration of its central legal procedure which involves preliminary inquiry into
application for complaint of unfair methods of competition or other violations,
issuance of complaint and order to cease and desist, and the trial of cases in court.
A total of 1,505 preliminary inquiries was instituted during the year, which figure
is only surpassed by that of 1,568 in 1924 and 1,612 in 1925.
Eleven investigations concerning alleged violations of the export trade act were
begun.
Five hundred and thirty-five cases were docketed as applications for complaint while
172 formal complaints were docketed, which was the largest number of complaints so
handled since 1921.
Forty-eight orders to cease and desist were issued during the year, bringing the total
of such orders issued in the commission’s history to 972.
Representative complaints are presented in summary form beginning on page 64
while there are digests in summary form beginning on page 182. Representative cases
resulting in orders to cease and desist are outlined beginning on page 74 while all
proceedings disposed of by this method during the year are digested, beginning on
page 167.
In a majority of cases the respondents endeavor to comply with the commission’s
orders to cease and desist, so that only a minority of the cases are taken to court. Many
of the matters in which deci-

THE YEAR’S ACTIVITIES

9

sions were handed down by the courts during the fiscal year had been instituted in
previous years.
OUTSTANDING COURT CASES
Several of the commission’s cases in the courts involve interesting applications of
principles concerned with administration of the acts under which the commission
operates.
In the case of Raladam Co., page 102, the sale by a Detroit drug concern of an
alleged cure for obesity, is the subject of the commission’s order. The lower court
asserts that “the general law of unfair competition uses the misleading of the ultimate
retail purchaser as evidence of the primarily vital fact--injury to the lawful dealer,”
declaring that the commission “uses this ultimate presumed injury to the final user (the
public) as itself the vital fact.”
The court also assumes that the commission came into being as an aid to
enforcement of the antitrust laws and that its lawful jurisdiction does not go beyond
the limits of fair relationship to that policy.
The commission applied to the Supreme Court for a writ of certiorari. The petition
was granted November 8. The review will be limited to the question of the jurisdiction
of the commission.
Section 7 of the Clayton Act, barring acquisition of capital stock in a competing
company, where the effect is to substantially lessen competition or tend to create a
monopoly, received further interpretation in the International Shoe Co. case, page 93,
in which the court held that where a shoe manufacturing company, acquiring
substantially all common stock of another such concern sold about 95 per cent of its
shoes in small towns, while the acquired company’s trade was largely metropolitan and
among a different class of dealers, such acquisition was not in violation of the Clayton
Act, even though both manufacturers produced articles comparable in price and quality
and adapted to the same need.
In Temple Anthracite Coal Co., another Clayton Act, section 7, case, page 87, there
is the question of a holding corporation acquiring stock of two competitive
corporations and being directed by the commission to divest itself of the stock of one
of these companies.
The public interest element in the commission’s cases is brought out in the Shade
Shop case, page 91, in which the court held that although the commission exercises a
broad discretion in determining whether a proceeding would be in the public interest,
“The mere fact that it is to the interest of the community that private rights shall be
respected is not enough to support a finding of public interests.”
Two cases in the courts concern opposition to the efforts of the commission to obtain
information deemed necessary to the conduct of its special business investigations.
The Electric Bond & Share Co. case, involving records desired for the investigation
of public utilities, is covered on pages 14 and 105.
In the Millers’ National Federation case, page 106, in which the commission seeks
the right to certain records in its inquiry on bread and flour, a stipulation of facts,
signed by counsel for both sides, contains the agreement that all of the letters and

documents included in the subpoenas issued by the commission and directed to the
Millers’

10

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

National Federation “are pertinent, relevant, and material to some one or more of the
subjects of inquiry* * *,” and that “none of said documents are private or confidential
in the sense that they would be privileged from production as evidence if lawfully
required in a trial before a court.”
Several cases before the commission involving the proper labeling of cigars may be
affected by an ultimate decision in the Bayuk Cigars case. See page 92.
Summaries of all the commission’s cases in the United States Circuit Courts of
Appeals and the Supreme Court of the United States are to be found beginning on page
84.

PUBLIC-UTILITIES INVESTIGATION
During the fiscal year ending June 30, 1930, the commission continued its
investigation pursuant to Senate Resolution 83, Seventieth Congress, first session,1 and
reported, as directed, monthly to the Senate. The testimony has been printed by the
Senate as parts 17 to 25, inclusive, and the exhibits as parts 17 to 25, inclusive, to
accompany the testimony. The transmission and printing of the exhibits was in
response to Senate Resolution 112, dated September 9. 1
The hearings on the propaganda or publicity phase so far as covered by association
activities has been substantially completed. The direct publicity activities of various
companies and groups will be put on record in connection with the financial hearings
of such groups and companies.
Beginning January 8, 1930, the utilities presented their defense to the publicity and
propaganda activities, which had been disclosed by exhibits from their files and
records and by witnesses, who for the most part, were officers and employees of the
several associations. This defense, including the exhibits offered, are printed in parts
18 and 19 of the Senate print of the record and exhibits.
Hearings on the American Gas & Electric Co. group, covering all phases of the
Senate resolution, but dealing chiefly with financial structure, were begun February
24, 1930. At that time the commission’s staff of experts, examiners, and accountants
began the presentation of the facts, and certain conclusions, covering that group.
Counsel for each company were advised that they were at liberty to cross-examine the
commission’s witnesses, and to offer witnesses of their own.
Before the summer recess of this year testimony, exhibits, and reports, devoted
largely to the financial phases of the inquiry, and covering the following companies
and groups, had been placed on record:
Name of company
American Gas & Electric Co
Appalachian Electric Power Co
Ohio Power Co
Indiana & Michigan Electric Co
Scranton Electric Co
Electric Bond & Share Co
Two Rector Street Corporation
American Power & Light Corporation
Electric Power & Light corporation
National Power & Light Co
Electric Investors (Inc.)
W. B. Foshay Co
Public Utilities Consolidated corporation
Investors National corporation
Foshay Building corporation
1

Hearings
beganFeb.24, 1930
Feb. 27,1930
Do.
Mar. 4,1930
Mar. 5,1930
Apr. 16,1930
Do
Apr. 30, 1930
May 6,1930
June 23, 1930
June 25, 1930
June 13, 1930
June 12, 1930
June 16, 1930
June 17, 1930

Full text of these resolutions may be read on pp. 233 and 234.

18131---30-----2

11

12

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

The testimony and essential exhibits have now been printed as part 22 to 25 of the
record and exhibits, as transmitted to the Senate.
The hearings on the financial structure and other phases of additional companies and
groups will be resumed this fall and presented during the coming season as rapidly as
they are ready for presentation.2
THE AMERICAN GAS & ELECTRIC CO. GROUP
On the American Gas & Electric Co. group, 12 days’ hearings were held, the first
on February 24, 1930, and the last on March 14, 1930. The American Gas & Electric
Co. is a management as well as holding company, and its system embraces 10
subsidiary operating utility companies operating in 9 States. Separate reports were
made and put into the record on four of these, that is, Appalachian Electric Power Co.,
Ohio Power Co., Indiana & Michigan Electric Co and Scranton Electric Co.
The operation of eight of these utility companies is connected by a main
transmission line running northwest from the southern line of Virginia to points in
southern Michigan, with branch lines into Tennessee and Kentucky, and with two
detached operations in Pennsylvania and New Jersey.
The hearings covered chiefly the financial and management aspects of the American
Gas & Electric group, including (1) growth of capital assets and capital liabilities, (2)
the issues of securities and the proceeds and expenses of such issues, (3) the extent of
interest of the holding company in subsidiary public utilities and other companies and
their relations with each other, (4) the services furnished to the public utility
companies by the holding company or associated companies, and the earnings and
expenses connected therewith, (5) the advantages or disadvantages of holding
companies, (6) their activities with respect to municipal ownership, and other matters
specified in Senate Resolution 83.
ELECTRIC BOND & SHARE Co. GROUP
From April 16, 1930, to June 26, 1930, 15 days’ hearings were held on the Electric
Bond & Share Co. group, which included Electric Bond & Share Co., Two Rector
Street Corporation, American Power & Light Co., Electric Power & Light Corporation,
and National Power & Light Co. groups. The matters covered were organization
capital structure, assets, liabilities, supervision agreements, and publicity activities.
These and other items were put in evidence.
Consideration of these groups was not completed due to inability to procure full
access to records. Determination of the commission’s right to such access is now
pending in the case as referred to on page 105.
AMERICAN POWER & LIGHT CO.
On the American Power & Light Co. group, four days’ hearings were held, the first
on April 30 and the final on May 6, 1930.
2 On Sept.29 to Oct. 2 hearings were held on Carolina Power & Light co. and Minnesota Power & Light

Co.

PUBLIC-UTILITIES INVESTIGATION

13

The American Power & Light Co. is a holding company. It occupies offices at No.
2 Rector Street., New York, the home of the Electric Bond & Share Co. Its officers and
employees are officers and employees of the Electric Bond & Share Co., and their
salaries are paid by it.
In 1929 subsidiary operating companies in the American Power & Light Co. group,
operated in 13 states in widely separated parts of the country. Ten of these operating
companies were extensively engaged in interstate transmission of electric energy.
The chief points covered by these hearings were the organization, control, and
financial aspects of the American Power & Light Co., including (1) the growth of its
capital assets and capital liabilities, (2) the issue of its securities and the proceeds and
expenses of such issues, (3) its financial transactions with its subsidiaries, and (4) the
rates of return on its investments in operating companies.
ELECTRIC POWER & LIGHT CORPORATION
About four days’ hearings were held on the Electric Power & Light Corporation
beginning May 6 and ending May 9, 1930. This company is a subholding company in
the Electric Bond & Share Co. group and controls 9 operating electric and gas
companies operating in 10 States. In the case of 6 of these companies a large proportion of the electric energy transmitted by them crossed State lines. It is staffed and
officered by employees and officers of the Electric Bond & Share Co. and their
salaries and expenses are paid by Bond & Share.
The chief points covered were similar to those stated as to the American Power, &
Light Co. group above.
NATIONAL POWER & LIGHT CO.
Two days’ hearings were held on the National Power & Light Co., June 23 and 24,
1930. The National Power & Light Co. is also a subholding company in the Electric
Bond & Share Co. It’s officers and employees are all officers or employees of Bond
& Share Co. and their salaries and expenses are paid by the latter company. In 1929
the National Power & Light Co. had 15 active operating electric and gas subsidiaries
which operated in 6 States.
Four of the subsidiaries of the National Power & Light Co. transmitted electric
energy across state lines in 1929, and one of these companies distributed electric
energy directly to consumers in 2 States, while 11 companies each transmitted and
distributed electric energy within a single State.
The chief points covered were as stated for the American Power & Light Co.
W. B. FOSHAY COMPANIES
Hearings were held on the w. B. Foshay companies, June 12, 13, 16, and 17, 1930.
Operating companies’ in this group operated in 13 States and in Alaska, Canada, and
Central America. The Foshay Co. sold stock directly to the public through its own
selling organizations in 26 States. W. B. Foshay Co., its subholding company, the

14

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Public Utilities Consolidated Corporation, and the Foshay Building Corporation went
into receivers’ hands October 31, 1929.
The hearings covered the organization and development of W. B. Foshay Co. and
associated companies and dealt extensively with the financial aspects of the group,
including (1) growth of capital assets and capital liabilities, (2) the issues of securities
and the proceeds and expenses of such issues, (3) methods employed in selling its
securities directly to the public and the volume of such sales, (4) the extent of interest
of the holding company in subsidiary public utilities and other companies and their
relations with each other, (5) the services furnished to the public utility companies by
the holding company or associated companies, and the earnings and expenses connected therewith, and (6) publicity activities.
THE ELECTRIC BOND & SHARE Co. CASE
As was stated in the last annual report, the Electric Bond & Share Co. refused to
produce certain records, and its officers and employees refused to answer certain
questions which the commission deemed essential to the proper conduct of the
investigation under Senate Resolution 83. In a suit commenced by the commission in
the Federal district court for the Southern District of New York to compel such
production and answers, Judge Knox handed down an opinion July 18, 1929, in which
he sustained the right of the commission to require answers to the questions but denied
its claim for production of the records.
Judge Knox gave permission to take additional proof before a master, in the event
either party was not satisfied with certain assumptions of fact on which he based his
opinion. All parties consenting, a master was a p pointed January 7, 1930. It is anticipated that the hearings before the master will be held in the fall of 1930 on those facts
as to which agreements can not be reached.
In the meantime the commission has proceeded under Senate Resolution 83 with the
examination of those records, to which the company granted access, with the
preparation of reports and public hearings thereon as to the Electric Bond & Share Co.
and its principal holding and operating companies.
AMENDMENT OF ORGANIC ACT AGAIN SUGGESTED
Renewal is made of the suggestion in the last annual report for an amendment to the
commission’s organic act to put beyond question the grant of specific authority to the
commission to make investigations, upon the request of either House of the Congress
in aid of its legislative function; and it is suggested that such an amendment might also
set at rest any doubt as to the applicability of the provisions of section 9 of the act to
such investigations and those authorized under section 6 (d) of the act (providing for
investigations of alleged violations of the antitrust acts, upon direction of the President
or either house of Congress).

BACKGROUND AND PROCEDURE
The Federal Trade Commission is one of the “independent establishments” of the
Government whose control is lodged, not in a cabinet officer, but in five
commissioners appointed by the President. Not more than three of these members shall
belong to the same political party, it is provided in the law, in order to make the
commission nonpolitical and bipartisan.
The term of office of a commissioner is seven years, as provided in the Federal
Trade Commission act. The first commissioners were designated to continue in office
for periods of 3, 4, 5, 6, and 7 years, respectively, from the date the act became
effective, but their successors were to be appointed for terms of seven years.
Therefore, the term of each commissioner dates from the twenty-sixth of September
preceding the time of his appointment, September 26 marking the day of passage of
the act in 1914.
Personnel of the commission at the close of the recent fiscal year included the 5
commissioners and 445 employees, with a total pay-roll of $1,298,400.
Appropriations available to the commission for the fiscal year 1930 totaled
$1,495,821.69.1 This sum was made up of three items: (1) $50,000 for commissioners’
salaries, (2) $1,390,971.82 for the general work of the commission, and (3) $54,849.87
for printing and binding.
Expenditures and liabilities for the year amounted to $1,465,447.75. Since the fire
of August 30, 1930, the commission’s principal offices in Washington have been at
1800 Virginia Avenue NW. Branch offices are maintained in New York, Chicago, San
Francisco, and Seattle.
COMMISSION IS ORGANIZED IN 1915
The commission was organized March 16, 1915, as a result of the passage of the
Federal Trade Commission act, which became a law September 26, 1914. The nucleus
of the new agency was the old Bureau of Corporations of the Department of
Commerce, which ceased to exist as such upon formation of the commission although
its work was taken over by the commission under what is now the economic division.
The legal functions of the commission were brought into being by the act.
The Federal Trade Commission act is the foundation of the commission’s activities,
although there are two other acts which the commission administers, namely, several
sections of the Clayton (antitrust) Act and the export trade act.
For years prior to passage of the Federal Trade Commission act there was
widespread demand on the part of the public, especially through the medium of
business men, commercial organizations and trade associations, for creation of an
administrative agency of
1

A detailed financial statement may be found on pages 25 and 26.

15

16

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

quasijudicial character to administer rules of business conduct so as to prevent unfair
methods of competition in the channels of interstate trade.
With the increase of business and industrial activities situations were arising with
such complications that owing to the fixed precedents the courts could not give such
relief as would meet the public interest. The inflexibility of the law was illustrated in
many important decisions of the Supreme Court and inferior courts of the United
States subsequent to passage of the Sherman Antitrust Act in 1890, and prior to
passage of the Federal Trade Commission act.
The courts appear to have had jurisdiction of an action for unfair competition only
when a property right of the complainant was invaded. But the Federal Trade
Commission act gave authority to the commission itself, when it had reason to believe
that any person, partnership, or corporation was using unfair methods of competition
in commerce, providing it appeared that a proceeding in respect thereof would be in
the public interest, to institute a proceeding by complaint against such party. After a
hearing the commission could, or good cause shown, require the party to cease and
desist from the unlawful methods.
Before passage of the Federal Trade Commission act, unfair methods of competition
were enjoined or damages procured through individual actions in the courts; a person
claiming monetary damages as a result of another’s “passing off” merchandise by
simulation or misrepresentation, sought relief in a private action. After passage of the
act additional relief was afforded the injured competitor, who could avail himself of
the authority vested in the Federal Trade Commission under this organic act.
The Federal Trade Commission act supplements the Sherman Antitrust Act. The
Sherman Act, the antitrust measure, commands business to complete and compels free
competition, while the Federal Trade Commission act commands business to compete
fairly, and compels that form of fair competition without which there can be no free
competition.
FUNCTIONS OF THE TRADE COMMISSION ACT
The trade commission act is aimed not at persons but at methods. Its function is
remedial, not punitive, as no authority is vested in the commission to impose penalties
Its object is to protect the public, not to punish the offender. Its final function is an
order to cease and desist. This carries no penalty but if the respondent to whom it is
directed does not comply, then the commission has the right to petition the Federal
courts for enforcement.
The important provision of the Federal Trade Commission act is that “unfair
methods of competition in commerce are hereby declared unlawful.” These words are
the very essence of the act.
Discretion is given the commission in determining in the first instance what is or
what is not an unfair method of competition in accordance with the practices, usages,
and customs peculiar to a particular industry or business. The act provides that the
findings of the commission as to the facts in any case, if supported by testimony, shall
be conclusive, but such decisions of the commission, as

BACKGROUND AND PROCEDURE

17

set forth in its findings and orders, are subject on appeal to review by the United States
circuit courts of appeals.
In section 6 of the act the commission is given power “to gather and compile
information concerning, and to investigate from time to time the organization,
business, conduct, practices, and management of any corporation engaged in
commerce, excepting banks and common carriers, * * * and its relation to other
corporations and to individuals, associations, and partnerships.”
The Clayton Act (approved October 15, 1914) is a part of the antitrust laws. It does
not amend the Sherman Act, but supplements it. The sections assigned to the
commission for administration are those relating to (sec. 2) price discrimination, (sec.
3) tying and exclusive contracts, (sec. 7 acquisitions of stock in a competing company,
and (sec. 8) interlocking directorates. The remaining sections are in the jurisdiction of
the Department of Justice, Interstate Commerce Commission, and the Federal Reserve
Board.
The export trade act (Webb-Pomerene law), enacted in April, 1918, “to promote
export trade,” offers exemption from antitrust laws to an association “entered into for
the sole purpose of engaging in export trade and actually engaged solely in such export
trade.”
Although the preponderance of cases continually before the commission relate to
violations of the Federal Trade Commission act, the administration of both this act and
the Clayton Act involve essentially the same procedure, 2 which, in general, may be
described as follows:
DESCRIPTION OF PROCEDURE
A case before the Federal Trade Commission may originate in several ways.
The most common origin is through application for complaint on the part of a
competitor or from other public sources. Another way in which a case may begin is by
direction of the commission.
No formality is required for anyone to make an application for a complaint. A letter
setting forth the facts in detail is sufficient, but it should be accompanied by all
evidence in possession of the complaining party in support of the charges being made.
When such an application is received, the commission, through its chief examiner,
considers the essential jurisdictional elements. Is the practice complained of being
carried on in interstate commerce? Does it come under jurisdiction of the Federal
Trade Commission act prohibiting unfair methods of competition?3 Would the
prosecution of a complaint in this instance be in the public interest
It is essential that these three questions be capable of answer in the affirmative.
Frequently it is necessary to obtain additional data either by further correspondence
or by a preliminary investigation before deciding whether to docket an “application for
issuance of complaint.”
2 For procedure under the export trade act see p.129, and for trade practice conference procedure, which
is based on the procedure for the Federal Trade Commission Act1 see p.38.

3 Or of one or more of those sections of the Clayton Act administered by the commission?

18

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

INTERVIEWING THE RESPONDENT
Once an application is docketed it is assigned by the chief examiner to an examining
attorney or a branch office of the commission for investigation. It is the duty of either
to obtain all facts regarding the matter from both the applicant and the proposed
respondent.
Without disclosing the name of the applicant, the examiner may interview the party
complained against, advising of the charges and requesting submission of such
evidence as is desired in defense or explanation.
After developing the facts from all available sources, the examining attorney
summarizes the evidence in a final report, reviews the law applicable thereto, and
makes a recommendation as to action.
The entire record is then reviewable by the chief examiner. If it appears to be
complete, it is submitted with recommendation to the board of review or to the
commission for consideration.
If submitted to the board of review, all records, including statements made by
witnesses interviewed by the examiners, are reviewed and passed on to the commission
with a detailed summary of the facts developed, an opinion based on the facts and the
law, and the board’s recommendation.
The board may recommend: (1) Dismissal of the application for lack of evidence in
support of the charge or on the grounds that the charge indicated does not violate any
law over which the commission has jurisdiction, or (2) dismissal of the application
upon the signing by the proposed respondent of a stipulation of the facts and an
agreement to cease and desist the unlawful practice charged, and (3) issuance of a
complaint without further procedure.
Usually if the board believes that complaint should issue it grants the proposed
respondent a hearing. Such hearing is informal, involving no taking of testimony.
COMPLAINT IS ISSUED
The foregoing procedure is applied to all cases except those involving false and
misleading advertising, the preliminary investigations of which are conducted by the
special board of investigation. Up to the present point the procedure is informal and
for the purpose of furnishing information to the commission. Nothing in regard to a
case in the application stage is ever given out or made public. This is done for
protection of the proposed respondent against whom a formal complaint has not been
served.
In cases that have been settled by means of stipulation prior to issuance of formal
complaint the name of the respondent is not revealed although the commission issues
a publicity release setting forth only the facts for the information of the public and
benefit of the industry involved.
Only after most careful scrutiny does the commission issue a complaint. Unlike the
preliminary inquiries and application for complaint, which are informal, the complaint
and the answer of respondent thereto are a public record.
A complaint is issued in the name of the commission in the public interest. It names
a respondent and charges a violation of law, with a statement of the charges. The party

first complaining to the com-

BACKGROUND AND PROCEDURE

19

mission is not a party to the complaint when issued by the commission, nor does the
complaint seek to adjust matters between parties. It is to prevent unfair methods of
competition for the protection of commission’s rules of practice and procedure provide
that in case the respondent desires to contest the proceeding he shall, within 30 days
from service of the complaint, unless such time be extended by order of the
commission, file with the commission an answer to the complaint. The rules of
practice also specify a form of answer for use should the respondent decide to waive
hearing on the charges.
Failure to file an answer within the time specified “shall be deemed to be an
admission of all allegations of the complaint and to authorize the commission to find
them to be true and to waive hearing on the charges set forth in the complaint.”
THE CASE GOES TO TRIAL
In a contested case the matter is set down for taking of testimony before a trial
examiner. This may occupy varying lengths of time according to the seriousness of the
charge or the availability and number of witnesses to be examined. Hearings may be
held bef ore a commission trial examiner, who may sit in various parts of the country,
the commission and the respondent each being represented by its own attorneys.
After the taking of testimony and the submission of evidence on behalf of the
commission in support of the complaint, and on behalf of the respondent, the trial
examiner prepares a report of the facts for the information of the commission, counsel
for the commission, and counsel for the respondent. Exceptions to the trial examiner’s
report may be taken by either counsel for the commission or counsel for the
respondent, and if no exceptions are filed the trial examiner’s findings of fact are
accepted by the commission as final.
Within a stated time after receipt of the trial examiner’s report briefs are filed and
the case comes on for final argument before the full commission. Thereafter the
commission reaches a decision either sustaining the charges of the complaint or
dismissing the complaint.
If the complaint is sustained, the commission makes a report in which it states its
findings as to the facts and conclusion that the law has been violated, and thereupon
an order is issued requiring the respondent to cease and desist from such practices.
If the complaint is dismissed, an order of dismissal is entered.
These orders are the final functions of the commission as far as its own procedure
is concerned. No direct penalty is attached to an order to cease and desist. but a
respondent against whom it is directed is required within a specified time, usually 60
days, to report in writing the manner in which he is complying with the order. If he
fails or neglects to obey an order while it is in effect, the commission may apply to a
United States circuit court of appeals for enforcement. A respondent likewise may
apply to such court of appeals for review of the commission’s order, and these
proceedings may be carried by either party on certiorari to the Supreme Court of the
United States for final determination.

PART II. DIVISIONAL REPORTS
ORGANIZATION
ADMINISTRATION
PUBLICATIONS
ECONOMIC DIVISION
TRADE PRACTICE CONFERENCES
CHIEF EXAMINER
BOARD OF REVIEW
SPECIAL BOARD OF INVESTIGATION
CHIEF TRIAL EXAMINER
CHIEF COUNSEL
COMPLAINTS
ORDERS
COURT CASES
TYPES OF UNFAIR COMPETITION
SUMMARY OF LEGAL WORK
EXPORT TRADE

21

DIVISIONAL ORGANIZATION
WORK OF THE COMMISSIONERS

Each January one of the five members of the Federal Trade Commission is
designated to serve as chairman for the succeeding year. The position rotates, so that
each commissioner serves at least one year during his term of office.
Duties of the chairman are necessarily more varied and numerous than are those of
his colleagues. He signs the many official papers that go out daily, and confers with
individuals and organizations who have matters to take up with the commission.
Official activities of the commissioners are generally similar in character, although
each assumes broad supervisory charge of a different division of work. One
commissioner maintains contact with the chief counsel and his staff; another keeps in
touch with administrative functions and with the board of review, while trade-practice
conferences, the trial examiners’ division, and the special board of investigation make
up the field of a third commissioner. A fourth and fifth commissioner have assigned
to them, respectively, the economic division and the chief examiner.
However, all matters scheduled to be acted upon by the commission are dealt with
by the board as a whole or a quorum thereof; consequently, the facts in all cases to
come before the whole body are previously placed before the commissioners
individually for their consideration.
The commissioners meet regularly for transaction of official business Mondays,
Wednesdays, and Fridays, except in July and August when sessions are held only on
call. They also conduct oral hearings, such as final arguments in cases before the
commission and hearings on motion of the attorneys for either the commission or
respondents. Besides these duties and their conferences with persons discussing
official business, the members have a large amount of reading and study in connection
with the numerous cases before them for decision.
The commissioners also attend the commission’s trade-practice conferences held
with industries in various parts of the country. One of them usually presides at such
a conference.
The commission as a secretary, who is its executive officer.
HOW THE COMMISSION’S WORK IS DELEGATED

The work of the commission is organized into the following general divisions:
Administrative, legal, and economic.
The administrative division conducts the business affairs of the commission and is
made up of units usually found in Government establishments, the functions of such
units being governed largely by general statutes. These units are personnel, fiscal
affairs, publi22

DIVISIONAL ORGANIZATION

23

cations, editorial service (public information), dockets, mails and files, supplies,
stenographic, and library.
The legal division is charged with investigation of unfair methods of competition
and other practices condemned in the organic acts, and with trial of cases before the
commission and in the courts. For convenience of procedure the general legal staff is
subdivided into several agencies, which are also commonly called divisions. They are:
The chief examiner’s division, the board of review, the special board of investigation,
the chief trial examiner’s division, the chief counsel’s division, trade-practice
conference division, and the export-trade section.
The trade-practice conference division conducts preliminary inquiries to determine
the feasibility of holding a conference for a given industry, and when such a
conference is authorized by the commission it is arranged for by this division.
The economic division is delegated to carry out the general inquiries of the
commission, whether directed by the President, by either House of Congress, or by the
commission itself. Such general investigations are distinguished from investigations
under the chief examiner which relate to specific acts or practices of particular persons
or organizations.
REPORTS ARE GROUPED ACCORDING TO FUNCTIONS

Reports of the foregoing divisions follow in the succeeding pages. First come those
relating to general functions of the commission; namely, administration, publications,
and general business inquiries (economic division).
Then follow the chapters devoted to the commission’s central legal procedure,
beginning with an application for complaint as covered in the chief examiner’s report
an continuing through to complaint, trial, order, and review in court. Finally, the
export-trade work, based on a special act of Congress, completes the list.

ADMINISTRATIVE DIVISION
Carrying out the general orders of the commission relating to all administrative
matters in connection with any part of the commission’s work, the administrative
division, among other things, performs the service of complaints, of orders to cease
and desist and of other official papers, and has charge of all fiscal affairs and financial
appropriations, the docketing of cases, administration of personnel, purchase of
supplies and equipment, issuance of publications and public information, and the
commission’s library.
The division is responsible directly to the assistant secretary.
Reports of the various sections of the administrative division are as follows:
PERSONNEL OF THE COMMISSION

Commissioner Ferguson was elected chairman of the commission for the calendar
year 1930, succeeding Commissioner MCCULLOCH.
Members of the commission are as follows: Garland S. Ferguson, jr., of North
Carolina; C. W. Hunt Iowa; William E Humphrey, Washington; Charles H. March,
Minnesota; and Edgar A. MCCULLOCH, Arkansas.
The personnel of the commission at the close of the fiscal year consisted of 5
commissioners and 445 employees, with a total pay roll of $1,298,400, which included
$50,000 for salaries of the commissioners, leaving a pay roll of $1,248,400 for the 445
employees.
During the year 116 employees entered the service and 46 left the service of the
commission. Of the total personnel, or 450, including the commissioners, at the close
of June 30, 1930, 201 were under civil-service appointment and 244 employees and
5 commissioners held excepted positions.
At the close of the fiscal year the commission had 80 employees who have military
preference on account of United States naval or military service. The total number of
women employees was 138. The total number of employees coming under the
provisions and benefits of the retirement law at the close of the fiscal year was 225.
The amount of money deducted during the fiscal year from salaries of employees
subject to provisions of the United States civil service retirement law was $17,620.10.
Of the grand total personnel of 450, including commissioners, 223 were
administrative employees, 104 attorneys, 44 economists, and 79 accountants.
FISCAL AFFAIRS

Appropriations available to the commission for the fiscal year 1930, under the
executive and independent offices act approved February 20, 1929, amounted to
$1,255,821.69; under the deficiency act approved March 26, 1930, $240,000; in all,
$1,495,821.69. This sum was made up of three separate items: (1) $50,000 for salaries
of the commissioners, (2) $1,390,971.82 for the general work of the commission, and
(3) $54,849.87 for printing and binding.
24

25

ADMINISTRATIVE DIVISION

Expenditures and liabilities for the year amounted to $1,465,447.75, which leaves
a balance of $30,373.94. This represents a balance (1) of $10,887.65 in the lump-sum
appropriation and (2) $19,486.29 in the printing and binding appropriation.
Appropriations, expenditures, liabilities, and balances
Item

Amount
available

Amount
expended

Liabilities

Federal Trade Commission, 1930:
Salaries, commissioners
$50,000.00
$50,000.00
Printing and binding
54,849.87
25,509.30
$9,854.28
All other authorized
expenses
1,390,971.82
1,349,000.52
31,083.65
Total, fiscal year 1930
1,495,821.69
1,424,509.82
40,937.93
Unexpended balances:
1929
26,472.77
22,740.00
1928
11,733.85
349.69
1927
Cr. 50.91
Total
1,534,028.11
1,447,548.60

Expenditures and
liabilities

Balances

$50,000.00
35,363.58

$19,486.29

1,350,084.17
10,887.65
1,465,447.75
30,373.94
3,732.77
11,383.96
45,490.67

Statement of costs for the fiscal year ended June 30, 1930
Division
Administrative
Economic
Legal:
Chief counsel
Chief examiner
Board of review
Board of review No. 2
Special board of investigation
Trial examiner
Trade practice conference
Grand total

Office
$344,396.88
428,898.19

Field

Total
$344,396.88
544,457.55

$115,581.36

149,059.21
208,074.31
24,922.77
8,212.40
10,086.05
58,253.32
37,733.98
1,267,615.11

19,521.26
38,319.51

188,580.47
244,393.82
24,922.77
8,212.40
10,066.05
64,403.05
43,570.53
1,453,003.52

8,149.73
5,836.55
185,388.41

Detailed statement of costs for the fiscal year ended June 30, 1930
Item
Annual leave
Application for complaints
Blue-sky securities
Board of review
Bread inquiry Senate Resolution No.163
Chain stores inquiry, Senate Resolution No.224
Communications
Complaints, formal
Cottonseed inquiry, Senate Resolutions, Nos. 136 and 147
Court leave
Docket section
Economic supervision
Equipment
Export trade
Fiscal affairs
General administration, commissioners, etc
Heat and light
Interstate power, Senate Resolution No.151
Labor
Legal supervision
Library section
Mails and file section
Medical attendant
Messengers
Military leave
Miscellaneous

Office
$87. 982.01
48,443.94
1,053.26
28,618.37
1,314.08
95,831.23
4,762.71
103,412.03
13,339.28
2.71
20,680.18
30,516.47
18,889.80
5,639.83
11,433.88
86,362.34
135.20
6,324.77
4,180.95
67,828.44
7,529.54
13,602.00
1,558.17
13,300.56
1,212.93
311.87

Field
$9,189.50

50.00
22,571.32
26,712.91
6,885.36

393.33

211.37
904.41

Miscellaneous, economic
Miscellaneous, legal
Newsprint paper, Senate Resolution No. 337

3,188.07
1,697.01
12,116.18

3,228.71

26 ANNUAL REPORT OP THE FEDERAL TRADE COMMISSION
Detailed statement of costs for the fiscal year ended June 30, 1930--Continued
Item
Peanut investigation, senate Resolution No.139
Personnel section
Power and gas inquiry, Senate Resolution No.83
Preliminary inquiries
Price bases
Printing and binding
Publication section
Purchases and supplies
Rents
Repairs
Resale price maintenance
Sick leave
Special board of investigation
Stenographic
Stipulations
Study of procedure
Supplies
Time excused by the Executive or commission’s order
Trade practice conference
Transportation of things
Witness fees
Witness subsistence

Office
$5,000.37
10,957.89
216,737.43
44,150.75
28,480.82
25,858.93
20,415.89
6,097.55
9,064.30
395.52
26,777.00
21,739.35
12,540.49
82,692.23
11,419.99
202.79
12,980.67
13,807.13
30,979.10
210.10
1,085.00
684.00
1,267,615.11

Total office expenses
Total cost

Field
$2, 610.00
92,146.82
11,031.32
2,896.65

1,021.99

1 14.14

5,748.86

185,388.41
1,267, 615.11
1,453,003.52

1 Red entry figures.

Adjustments.--The following adjustments are made to account for the difference
between costs and expenditures:
Total cost for the year ended June 30, 1930
Less transportation Issued
New total
Plus transportation paid
Expenditures for the year ended June 30, 1930

$1,453,003.52
47,072.69
1,405,930.83
41,617.77
1,447,548.60

Appropriations available to the commission since its organization and expenditures
for the same period, together with the unexpended balances, are shown in the
following table:
Year
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930

Appropriations
$184,016.23
430,964.08
567,025.92
1,608,865.92
1,753,530.75
1,305, 708.82
1,032,005.67
1,026,150.54
974,480.32
1,010, 000.00
1,010,000.00
1,008,000.00
997,000.00
984,350.00
1,163,192.52
1,495,821.69

Expenditures
$90,442.05
379,927.41
472, 501.20
1,452, 187.32
1,522,331.95
1,120,301.32
938,664.69
956,116.50
970,119.66
977,018.28
1,008,998.80
996,745.58
960,704.21
972,966.04
1,159,459.75
1,465,447.75

DOCKET SECTION

Balance
$93,574.18
51,036.67
94,524.72
156,678.60
231,198.50
185,407.80
93,340.89
70,034.04
4,360.66
32,981.72
1,001.20
11,254.42
36,295.79
11,383.96
3,732.77
30,373.94

The docket section is comparable to the office of a clerk of court, has responsible
custody of records and files of pleadings, testimony, exhibits, correspondence, and
related material in public legal proceedings, in investigations of applications for the
issuance of

ADMINISTRATIVE DIVISION

27

plaints, and general legal investigations; classifying, recording, assigning, and
forwarding material, and performing related duties.
It serves all legal processes of the commission. It maintains the public docket, and
furnishes information as to proceedings and procedure, and copies of papers to the
public.
It prepares records for certification to United States circuit courts of appeals and for
the use of the public. It maintains statistical records of legal work by the commission,
its units, and of court proceedings; prepares text and statistics for monthly, special ,
and annual reports of legal work; and performs miscellaneous service in connection
with the legal work of the commission.
EDITORIAL SERVICE

The public information or editorial service of the commission prepares statements
relating to the commission’s action in its various cases and investigations and
maintains contacts with that part of the public who follow the work of the commission
from day to day. This office acts as a clearing house for information on commission
activities, especially as a service to persons who desire this material for use in
published form.
LIBRARY OF THE COMMISSION

The library has a collection of more than 25,000 books, pamphlets, and bound
periodicals devoted largely to law, economics, and industries. In addition are extensive
files of clippings and leaflets.
Distinctive features of the economic collection are the files relating to corporation
and trade association data and files of trade periodicals for the more important
industries. There is a function peculiar to the commission’s library in the character of
work it performs, and that is in the material it gathers in the form of pamphlets,
corporation reports, association records, current financial and statistical services, and
trade lists which are not ordinarily found in libraries of even a technical character.
The greater amount is furnished gratuitously. This material provides a valuable
adjunct to the investigatory work and is adapted to furnish leads to examinations rather
than to complete and substantive information on the subject matter.
The law collection consists chiefly of the various national and regional reporter
systems and the more important encyclopedias and reference books that are commonly
found in law libraries. The distinctive feature is a file of records and briefs of antitrust
cases which were acquired without expenditure.
Care is exercised to limit the purchase of books and periodicals to supply only those
needed constantly and immediately in the commission’s work. The commission is far
removed from other Government libraries and must have available sufficient volumes
to answer the ordinary requirements of the legal and economic force. The Library of
Congress and the department libraries are freely drawn upon to supplement the

commission’s limited collection.

PUBLICATIONS OF THE COMMISSION
[Continuation of administrative division report]

Publications of the commission, reflecting the character and scope of the
commission’s work, vary in content and treatment from year to year, especially those
documents covering general business inquiries. These reports are sometimes printed
as commission publications and often as Senate or House documents, depending on
which division of Congress directed the investigations from which they resulted, or
whether these inquiries were made at the instance of the commission itself.
These studies are illustrated by appropriate charts, tables , and statistics. They deal
not only with current developments in an industry but contain a wealth of scientific
and historical background that proves valuable not only to members of the industry
under consideration but to the student and the writer.
The findings and orders of the commission as published contain a mass of interesting
material regarding business and industry. Written with legal exactitude, they tell, case
by ease, the story of unfair competition in commerce and of the efforts put forth by the
commission to correct and eliminate it.
Wide discretion in issuing publications is given the commission by law. The statute
says the commission shall have power-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.

Publications sold by the Superintendent of Documents during the fiscal year ending
June 30, 1929 totaled 17,224 copies, sales amounting to $1,017.54.
Many commission publications are out of print, while others are purchase from the
Superintendent of Documents.
LIST OF PUBLICATIONS FOR CURRENT FISCAL YEAR

The following publications were issued during the year:

Annual Report for the Fiscal Year Ended June 30, 1929; issued December 9, 1929; 234 pages.
Decisions, Findings, and Orders of the Federal Trade Commission: Volume X (November 28, 1925,
to November 4, 1920, Inclusive); Issued October 10, 1929; 791 pages. Volume XI (November 5, 1926,
to January 29, 1928, inclusive); issued March 18, 1930; 783 pages.
Trade Practice Conferences; issued July 1, 1929; 218 pages.
Rules of Practice and Procedure, amended; Issued October 15, 1929; 17 pages.
Utility Corporations No. 16.--A monthly report on the electric power and gas utilities Inquiry (in
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc 92); Issued July 15, 1929; 99 pages.
Utility Corporations No. 17.--A monthly report on the electric power and gas utilities Inquiry (In
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc. 92); Issued October 15, 1929; 46 pages.

28

PUBLICATIONS OF THE COMMISSION

29

Utility Corporations Nos. 18 and 19.--Monthly reports on the electric power and gas utilities inquiry
(In response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc. 92); issued December 16, 1929, and
January 20, 1930; 359 pages.
Utility Corporations No. 20.--A monthly report on the electric power and gas utilities inquiry (in
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc. 92); issued February 15, 1930; 1 page.
Utility Corporations No. 21.--A monthly report on the electric power and gas utilities Inquiry (in
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc. 92); issued March 15, 1930; 2 pages.
Utility Corporation No. 22.--A monthly report on the electric power and gas utilities inquiry (in
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc. 92); issued April 17, 1930; 1,216 pages.
Utility Corporations No. 23.--A monthly report on the electric power and gas utilities inquiry (in
response to S. Res. 83, 70th Cong., 1st sess.; printed as S. Doc 92); issued May 15, 1930; 4 pages.
Exhibits 1 to 126 (to accompany part 1, S. Doc. 92, in response to S. Res. 83, 70th Cong., 1st sess.;
printed as S. Doc. 1)2); Issued October 7, 1929; 570 pages.
Exhibits 127 to 717 (to accompany part 2, S. Doc. 92, in response to S. Res. 83, 70th Cong., 1st sess.;
printed as S. Doc. 92); issued October 21, 1929; 804 pages.
Exhibits 718 to 1,434 (to) accompany part 3, S. Doc. 92, In response to S. Res. 83, 70th Cong., 1st
sess. ; printed as S. Doc. 92) ; issued November 12, 1929, 1,267 pages.
Exhibits 1,435 to 2,575 (to accompany part 4, S. Doc. 92, In response to S. Res. 83, 70th Cong., 1st
sess. ; printed as S. Doc. 92); issued December 14, 1929; 952 pages.
Exhibits 2576 to 3,670 (to accompany parts 5 and 6, S. Doc. 92, in response to S. Res. 83, 70th Cong.,
1st sess. ; printed as S. Doc. 92); Issued January 30, 1930 ; 1,123 pages.
Exhibits 3,671 to 4,047 (to accompany parts 7 to 9, inclusive, S. Doc. 92, in response to S. Res. 83,
70th Cong., 1st sess. ; printed as S. Doc. 02); Issued February 14, 1930; 507 pages.
Exhibits 4,048 to 4,489 (to accompany parts 10 to 16, inclusive, S. Doc. 92, in response to S. Res. 83,
70th Cong.; 1st sess. ; printed as S. Doc. 92); issued March 5, 1930; 1,028 pages.
Interstate Movement of Electric Power, interim report (in response to S. Res. 151, 71st Cong., 1st sess.)
; issued December 9, 1929; 1 page.
Interstate Movement of Electric Power, first quarterly interim report (in response to S. Res. 151, 71st
Cong., 1st sess.) ; issued March 10, 1930; 3 pages.
Interstate Movement of Electric Power, second quarterly interim report (in response to S. Res. 151, 71st
Cong., 1st sess.) ; Issued June 11, 1930; 2 pages.
Cottonseed Industry, interim report (in response to S. Res. 136 and S. Res. 147, 71st Cong., 1st sess.
; printed as S. Doc. 91); issued February 28, 1930; 4 pages.
Chain-Store System of Marketing and Distribution, interim report (in response to S. Res. 224, 70th
Cong., 1st sess. ; printed as S. Doc, 146); issued May 12, 1930 ; 6 pages.

[Copies of the foregoing publications may be purchased from the Superintendent of
Documents, Washington, D. C., for nominal sums.]
PUBLICATIONS, 1915-1930

The complete list of publications issued from 1915 to 1930 is as follows:
Acts from which the commission derives its powers, with annotations, February, 1922; American Flags,
Prices of, July 26, 1917; Annual Reports, 1915-1929.
Bakery Combines and Profits, February 9, 1927 ; Beet Sugar Industry, May 24, 1917; Book Paper
Industry, August 15, 1917.
Calcium Arsenate Industry, March 3, 1923 ; Canned Foods, 1918, November 21, 1921; Canned Salmon,
December 27, 1918 ; Canned Vegetables and Fruits, May 15,1918.
Coal-Anthracite Prices, May 4, 1917; Anthracite and Bituminous, June 20, 1917; No.1 (PennsylvaniaBituminous), June 30, 1919 ; No.2 (Pennsylvania-Anthracite), June 30, 1919; No.3 (Illinois-Bituminous),
June 30, 1919; No.4

30

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

(Alabama, Tennessee, and Kentucky-Bituminous) , June 30, 1919; No.5 (Ohio, Indiana, and MichiganBituminous) , June 30, 1919; No. 6 (Maryland, Virginia, and West Virginia-Bituminous) , June 30, 1919
; No. 7 (Trans-Mississippi-Bituminous) , June 30, 1919; Investment and Profits In Soft Coal Mining, May
31, 1922 ; Premium Prices of Anthracite, July 6, 1925.
Combed Cotton Yarns, April 14, 1921; Commercial Feeds, March 29, 1921; Commercial Wheat Flour
Milling, September 15, 1920; Competition and Profits in Bread and Flour, January 11, 1928 ; Cooperation
in American Export Trade, Parts 1 and 2, June 30, 1916; Cooperation in Foreign Countries, December 2,
1924; Cooperative Marketing, May 2, 1928; Copper, Cost of Production, June 30, 1919; Cottonseed
Industry, March 5, 1928; Cotton Trade, Preliminary, February 23, 1923; Parts 1 and 2, April 28, 1924;
Cotton Merchandising Practices, June 7, 1924; and Commercial Bribery, March 18, 1920.
Decisions, volume 1 (1915-1919) ; volume 2 (1919-20); volume 3 (1920--21); volume 4 (1921-22);
volume 5 (1922-23); volume 6 (1923); volume 7 (1924); volume 8 (1924-25); volume 9 (MarchNovember, 1925); and volume 10 (November, 1925- November, 1926).
Electric Power Industry-Control of Power Companies, February 22, 1927; supply of Electrical
Equipment and Competitive Condition”, January 12, 1928; Empire Cotton Growing Corporation, January
27, 1925 ; Export Grain, volume 1, May 16, 1922 ; volume 2, June 18, 1923.
Farm Implements, Causes of High Prices 0£, May 4, 1920 ; Fertilizer Industry, August 19, 1910 ; March
3, 1923 ; Flour Milling-Competitive Conditions In, May 3, 1926 ; Flour Milling and Jobbing, April 4,
1918 ; Foreign Trade Series, No.1, 1919 ; Functions of Federal Trade Commission, July 1, 1922 ; Fundamentals of a Cost System for Manufacturers, July, 1916.
Gasoline, Price of, in 1915, April 11, 1917; Grain Trade, volume 1 (Country Grain Marketing) ,
September 15, 1920 ; volume 2 (Terminal Grain Markets), September 15, 1920; volume 3 (Terminal Grain
Marketing), December 21, 1921; volume 4 (Middlemen’s Profits), September 26, 1923; volume 5 (Future
Trading Operations), September 15, 1920; volume 6 (Prices of Grain and Grain Futures), September 10,
1924; volume 7 (Effects of Future Trading), June 25, 1926; Guarantee Against Price Decline, May 27,
1920.
High Cost of Living, April 30-May 1, 1917; House Furnishings, volume 1 (Household Furniture).
January 17, 1923 ; volume 2 (Stoves), October 11, 1923; volume 3 (Kitchen Equipment and Domestic
Appliances) , October 6, 1924.
Index Digest of Decisions, volumes 1, 2, and 3.
Leather and Shoe Industries, August 21, 1919 ; Lumber-Southern Pine Companies, May 1, 1922 ;
Lumber Manufacturers’ Trade Associations, March 29, 1922.
Meat Packing Industry, Maximum Profit Limitations on, September 25, 1919; Summary and Part 1,
June 24, 1919 ; Part 2, November 25, 1918 ; Part 3, June 28, 1919; Part 4, June 30, 1919; Part 5, June 28,
1919 ; Part 6, December, 1919; Milk and Milk Products, June 6, 1921.
National Wealth and Income, May 25, 1926 ; Newsprint Paper Industry, June 13, 1917 ; Northern
Hemlock and Hardwood Manufacturers, May 7, 1923.
Open-Price Trade Associations, February 13, 1929.
Packers’ Consent Decree, December 8, 1924 ; Petroleum Industry, Foreign Ownership in, February 12,
1923 ; Pacific Coast, Part 1, April 7, 1921 ; Part 2, November 28, 1921; Prices, Profits, and Competition,
December 12, 1927; Petroleum Industry of Wyoming, January 3, 1921 ; Petroleum Panhandle Crude,
February 3, 1928 ; Petroleum, Pipe Line Transportation of, February 28, 1916; Petroleum Products,
Advance In Prices of, June 1, 1920 ; Petroleum Trade in Wyoming and Montana, July 13, 1922 ; Price
Associations, Letter to President, 1921 ; Private Car Lines, June 27, 1919 ; Profiteering, June 29, 1918.
Radio Industry, December 1,1923 ; Resale Price Maintenance, June 30, 1919; January 30, 1929 (Part
I) ; Rules of Practice, with amendments, February 1, 1924 ; Rules of Practice and Procedure, June 30,
1927 ; January 1, 1928 ; October 1, 1928 ; October 15, 1929; July 15, 1930.
Shoe and Leather Costs and Prices, June 10, 1921; Southern Livestock Prices, February 2, 1920 ; SteelPittsburgh Basing Point for, October 15, 1919 ; Steel-War-Time Costs and Profits, February 18, 1925 ;
Stock Dividends, December 5, 1927: Sugar Supply and Prices, November 15, 1920 ; System of Accounts
for Retail Merchants, July, 1916.
Taxation and Tax Exempt Income, June 6, 1924 ; Tobacco Industry, December 11, 1920 ; TobaccoPrices of Tobacco Products, January 17, 1922 ; Tobacco---

PUBLICATIONS OF THE COMMISSION

31

Report on American Tobacco Co. and Imperial Tobacco Co. (S. Doc. 34), December 23, 1925; Trade
Marks, Patents, Etc.; Extracts from the Trading with the Enemy Act and Executive Order of October 12,
1917; Trade Practice Submittals, July 1, 1925 ; Trade Practice Conferences, September 15, 1927; March
15, 1928; July 1, 1929; Trade and Tariffs in South American Countries, June 30, 1916; Trust Laws and
Unfair Competition, March 15, 1915.
Uniform Contracts and Cost Accounting Definitions, July, 1917 ; Utility Corporations (testimony) , 21
volumes, March 15, 1928, to March 17, 1930 (exhibits) , 7 volumes, October 7, 1929, to March 5, 1930.
Western Red Cedar Association, January 24, 1923 ; Wheat Flour Milling Industry, May 16, 1924 ;
Wheat Prices for 1920 Crop, December 13, 1920; Wholesale Marketing of Food, June 30, 1919 ; and
Woolen Rag Trade, June 30, 1919.

ECONOMIC DIVISION
GENERAL INQUIRIES OF THE COMMISSION

The general inquiries of the commission, whether directed by the President, by either
House of Congress, or by the commission itself, are usually assigned to the economic
division.
Such general inquiries, or “investigations,” to use the language of the Federal Trade
Commission act, are distinguished from “proceedings “ which relate to specific acts
or practices of particular persons, companies, or organizations, with respect to which
the commission has administrative power to exercise some degree of regulation.
Where the investigation is general the method of inquiry is of a less formal character
and has been conducted with the full cooperation of the private business concerns
interested.
The purposes of such general inquiries are usually to discover if something is amiss
in a given industry and with a view to determining how conditions might be remedied.
This applies particularly to the need for further legislation and the form of legislation
which might be recommended to Congress.
Many of these inquiries have been made by the economic division and in several
important instances they have led to constructive legislation by Congress .
During the fiscal year ending June 30, 1930, the following inquiries were in
progress:
Power and gas utilities.--Inquiry directed by Senate Resolution 83 (70th Cong., 1st sess.), February 13
(calendar day, February 15), 1928.
Interstate power.--Inquiry directed by Senate Resolution 151 (71st Cong., 1st sess.), November 8, 1929.
Chain stores--Inquiry directed by Senate Resolution 224 (70th Cong., 1st sess.), May 3 (calendar day,
May 12), 1928.
Resale price maintenance.--Inquiry directed by the commission, July 25, 1927.
Price bases.--Inquiry directed by the commission, July 27, 1927.
Blue-sky securities.--Inquiry directed by the commission, July 27, 1927.

The principal published results of the inquiries made by the economic division
during the fiscal year are contained in the reports and other materials put into the
record of proceedings in the hearings on power and gas utilities. These reports deal
with the physical plants, corporate organization, company interrelations, capital structure, earnings, expenses, and management of certain groups of holding companies,
service companies, and operating utilities, especially of the American Gas & Electric
Co, and of the Electric Bond & Share Co.
Other publications prepared by the economic division and issued during the year
were three quarterly interim reports with regard to the interstate power inquiry (dated
December 8, 1929, March 8 and June 8, 1930) and monthly interim reports regarding
the power and gas inquiry, prepared jointly with the chief counsel’s division. These
interim reports, however, are naturally more important as statements

32

ECONOMIC DIVISION

33

of progress of work than as informative of the results of these inquiries.
Subsequent to the close of the fiscal year, the offices of the Federal Trade
Commission were wrecked by fire, and serious losses were sustained with respect to
accounting and statistical data collected and reports in the course of preparation. The
inquiry into power and gas utilities was the one most seriously affected.
Inquiries conducted during the year are summarized as follows:
POWER AND GAS UTILITIES

Hearings on the financial phases, company interrelations, , and service organization
of power and gas utilities , directed by Senate Resolution 83, Seventieth Congress, first
session, were begun in February, 1929, following completion of the general hearings
on public-utility methods of publicity and on public-utility ownership interests in
newspapers. Before the close of the fiscal year, hearings were held on the following
companies:
American Gas & Electric Co., Appalachian Electric Power Co., Indiana & Michigan
Electric Co., Ohio Power Co., and the Scranton Electric Co.
Electric Bond and Share Securities Co., Electric Bond & Share Co., American Power
& Light Co., Electric Power & Light Corp oration, Electric Investors (Inc.), National
Power & Light Co., Phoenix Utility Co., and Two Rector Street.
W. B. Foshay Co., Public Utilities Consolidated Corporation, investors National
Corporation, aud Foshay Building Corporation.
The output of electric energy produced by operating companies controlled by the
American Gas & Electric Co., American Power & Light Co., Electric Power & Light
Corporation, and National Power & Light Co. constitutes approximately 15 per cent
of the total output for the United States. The output for the Foshay company is small.
The economic division of the commission obtained the accounting and financial data
presented in these hearings and prepared the reports and exhibits introduced therein.
The facts have been secured by the division’s accountants and examiners through a
detailed examination of the books of account, original vouchers, agreements and
supporting papers in the offices of the various companies. Reports setting forth the
facts developed were prepared, and the companies were allowed to check the figure
and other statements of fact. Conferences were held with representatives of the companics prior to hearings at which any dispute as to facts was carefully considered.
Great difficulty has been experienced in some cases in obtaining access to the books
of account and supporting records in connection with reorganizations and mergers.
However, in many cases of refusal of access the more important facts have been
gleaned from other sources, such as reports made to State utility commissions and
State tax commissions.
The hearings already have developed a vast amount of information respecting the
business methods of holding, service construction, and operating companies.

34

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
INTERSTATE POWER INQUIRY

The interstate power inquiry was initiated by Senate Resolution 151, Seventy-first
Congress , first session, adopted November 8, 1929. The resolution directs that interim
reports of progress be made 30 days after the passage of the resolution and quarterly
thereafter until the completion of the task. The first report dealt with the preparation
of a questionnaire and with other plans. The first quarterly report stated that returns
then received indicated a much larger total of interstate movement of electric energy
in 1929 than figures compiled by a private agency for 1928. The second quarterly
report gave a preliminary round-number total of outward movement from the States
during the calendar year 1929 of 14,500,000,000 kilowatt-hours.
In the third quarterly report, prepared September 8, and made at a time when the
final report had been substantially completed, the definite figure for exports of the 49
States (including the District of Columbia) was given as 14,505,190,623, and for
imports, similarly, as 15,906, 132,127. Ratios of exports to generated and of imports
to consumed were stated at 15.31 and 19.65 per cent, for electric energy generated
during the calendar year 1929 of 94,703,518,938 kilowatt-h ours was obtained. After
taking account of the fact that this excludes energy devoted to company uses as well
as that generated by industrial plants for their own use-in order thus to arrive at the
quantity generated for public use-it appears that this figure is comprehensive and
adequate as the 100 per cent end of the above ratio.
Movement across State boundaries that are also international boundaries has been
included in exports and imports. The difference between the total quantities exported
and imported is substantially all due to imports across the Canadian boundary. But the
larger ratio of imports to consumed is in part also due to the quantity consumed being
much smaller than the quantity generated, owing to losses between points of
generation and of consumption.
Quantities of energy recrossing the same State boundary back into the State of origin
or crossing a second boundary were compiled. Upon deduction of these from the
interstate-movement data, the ratio of exports to generated becomes 13.54 per cent and
that of imports to consumed 17.57 per cent.
The final report will present details for the individual States, the ratios for which are
in some cases of great interest.
CHAIN STORES

The chain store inquiry was begun in response to Senate Resolution . 224, Seventieth
Congress, first session. During the first year of the work on the inquiry, the schedules
for chain stores and for wholesale dealers were mailed out and the organization and
operating methods of several chains studied. Pressure of work on other inquiries and
limited funds, however, made it impracticable to assign an adequate force to the
inquiry. Owing to the smallness of the staff, therefore, comparatively little progress
was made during the first year in

ECONOMIC DIVISION

35

addition to that described above, except in elaborate planning for future work.
During the recent fiscal year, much better progress has been made, owing largely to
the increase in the available personnel. A comprehensive study of comparative prices
of chains and individual retailers was undertaken. This had been carefully planned
many months previously and is one of the most difficult and important parts of the
inquiry. It involves the gathering in various cities of the selling prices of several
hundred grocery, drug. and tobacco items for both chain-store and individual
merchants. The field work was begun in Washington, D.C., and subsequently
continued in Cincinnati, Ohio, and Des Moines, Iowa.1
The field work for the first two cities mentioned was completed in January, when it
became necessary to use the field force in the office to assist in tabulating the material
gathered. In late March, additional employees were assigned to the inquiry and field
work was resumed at Des Moines with a larger crew than had been employed in the
first two cities. The Des Moines work was practically completed at the end of the
fiscal year.
Further additions to the personnel of the inquiry late in the year made it possible to
provide not only for continuing the gathering of information at a greater speed than
formerly but also made it practicable to begin active work on the preparation of
material for tabulation and analysis.
At the close of the fiscal year, schedules had been received from 1,663 chain systems
operating 65,367 stores. Of the total chains thus reporting, 371 were grocery chains
with 42,751 stores; 219 were shoe chains with 5,242 store’s; 171 were drug chains
with 1,904 stores; 223 were department, general, and dry-goods chains with 2,914
stores; 410 were clothing chains with 3,689 stores; 110 were variety chains with 4,035
stores; 42 were furniture and musical instrument chains with 277 stores; 38 were
confectionery chains with 677 stores; 23 were tobacco chains with 3,394 stores; and
56 were hardware, lumber, and implement chains with 484 stores.
While no accurate statistics are available, these chains probably represent a majority
of the chain-store business measured by the number of stores operated and an even
larger proportion of such business measured in terms of volume as they include reports
from nearly all of the larger chains.
Of the chains reporting 19 companies owning 500 stores or more operated a total of
38,605 stores, while 686 chains in the group owning 5 stores or less operated a total
of only 2,008 stores.
In addition to the schedules received from chains, as outlined above, approximately
2,000 schedules were obtained from wholesalers, some 5,000 from individual retailers,
and 325 from cooperative or “voluntary" groups. Only by persistently following up
these schedules has it been possible to obtain as large a response as that shown above.
Additional chain store and other schedules continue to be received each week as a
result of this follow-up work. It is estimated that more than 160,000 pieces of outgoing
mail have been handled by
1

In October, 1930, a comparison of chain and independent store prices was begun In a fourth city,

Memphis, Tenn.

36

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

the inquiry during the year in addition to the thousands of incoming schedules and
letters. As the returns to these schedules will furnish the basis for an important part of
the report, a large number of replies is regarded as essential.
RESALE PRICE MAINTENANCE

Part II of the commission’s report, embodying results of the study of economic
aspects of resale price maintenance, undertaken on the commission’s own initiative
under general powers outlined in the Federal Trade Commission act, was in an
advanced stage of preparation at the end of the fiscal year ended June 30, 1930.
The first part of this report was transmitted to Congress in January, 1929, and dealt
chiefly with the legal status of price maintenance and the experience and opinions of
interested business classes aud of consumers.
The second and final part of the report will discuss quantitative statistical data as to
prices, margins, investments, and profits of various groups of manufacturers and
distributors. So far as it is possible, in the absence of definite experience in this
country under effective price maintenance, an effort will be made to relate such
statistical data to the effects of “price cutting” and price maintenance. The results of
field inquiries made by agents of the commission, in some cases covering phases of
the subject that are not susceptible of definite statistical measurement, will also be
discussed. Such conclusions and recommendations regarding the enactment of
legislation respecting price maintenance as the commission deems warranted, will also
be presented in this final part of the report.
GEOGRAPHIC BASES OF PRICE MAKING

In accordance with a resolution of the commission adopted July 27, 1927, an inquiry
was undertaken to develop the methods used by various industries in making the prices
of commodities with respect to location, the reasons for adopting these methods , and
their influences on prices and competitive conditions, and to formulate “any
constructive measures which might be employed to promote greater efficiency,
economy, or fairness in the methods of quoting or charging prices.” The common
variations in these methods are the making of prices effective at point of origin and at
point of destination. The latter include the zoning system of price-making and single
and multiple basing-point systems.
Involved in this inquiry are economic questions similar to those made in the
commission’s “Pittsburgh plus” case of a few years ago in the steel industry in which
the single basing-point method of merchandising was in question. Other industries
have identical or similar merchandising practices, the effects of which it is desired to
ascertain.
Only a small staff has been available for the work of this inquiry and progress has
necessarily been slow. Organization of the schedule material furnished by industries
generally has continued through the year. The large, part of the work, however, has

been devoted, to specific industries, in regard to which information has been secured

ECONOMIC DIVISION

37

through schedule, correspondence, and interview, and from office records of dealers
and manufacturers and from trade organizations and certain governmental agencies.
This information is being compiled and studied with reference to the principles
involved and the effects of the practices in question. No report has been issued on this
subject.
BLUE-SKY SECURITIES

The commission initiated an inquiry into the practice of selling so-called blue-sky
securities. A draft report was submitted to the commission during the fiscal year and
is now being considered.

TRADE-PRACTICE CONFERENCE DIVISION
FIFTY-SEVEN CONFERENCES HELD IN FISCAL YEAR

During the present fiscal year, trade-practice conferences have been held for 57
industries. This is nearly double the number held during the previous fiscal year and
almost half the total number (125) held since the proceeding was originated in 1919.
Eight conferences previously authorized had not been held prior to the close of the
fiscal year and applications from 23 industries were in various stages of completion
at that time.
Results to the public from trade-practice conferences have proven incalculable in the
form of voluntary elimination of methods of unfair competition which probably would
otherwise remain undiscovered and in use; in the speedier benefits derived from such
elimination as compared with the time required in accomplishing the same objective
by other methods of procedure; and in the economies effected through the saying of
expense to the public by obviating the necessity for investigations and trials of
complaints.
TREND IS TOWARD HIGHER STANDARDS

Results to industries, while incidental to the main purpose of the commission in
holding trade-practice conferences, are shown by a generally recognized and clearly
marked trend toward the use of higher standards of business conduct, superinduced
largely through the cooperative nature of the trade-practice conference, bringing into
closer relationship industries and the commission. Some suggestion of the financial
benefits to industries which have held trade-practice conferences was expressed in
dollars and cents in the last annual report, and the educational value is attested by the
fact that many engaged in business and industry were not aware, until a trade-practice
conference was held, that competitive methods commonly used by them constituted
actual violations of law; or that the unnecessary cost of indulging in unfair competition
and wasteful practices if abandoned at one and the same time by voluntary agreement
of all in the industry may be transformed from an item of expense to an increase in
profit without adding to the price paid by the ultimate purchasers other products.
TRADE-PRACTICE CONFERENCE PROCEDURE

For the information of those previously unfamiliar with the system, it may be noted
that the trade-practice conference affords a means through which representatives of an
industry voluntarily assemble under auspices of the commission to consider unfair
practices in their industry and collectively agree upon and provide for their
abandonment in cooperation with and with the support of the commission
It is a procedure whereby business or industry may take the initiative in establishing
self-government through making its own rules of business conduct, subject, of course,
to sanction or acceptance by the commission.

38

TRADE-PRACTICE CONFERENCE DIVISION

39

The procedure deals with an industry as a unit. It is concerned solely with practices
and methods, not with individual offenders. It regards the industry as occupying a
position comparable to that of “friend of the court” and not as that of the accused. It
tends to wipe out on a given date all unfair methods condemned at the conference and
thus places all competitors on an equally fair competitive basis. It performs the same
function as a formal complaint without bringing charges, prosecuting trials, or
employing a compulsory process, but multiplies results by as many times as there are
members in the industry who formerly practiced the methods condemned and
voluntarily abandoned.
When a trade-practice conference is applied for, a preliminary inquiry is made by the
trade-practice conference division, the result of which serves as a basis for determining
whet her the practices or methods used are unfair to competitors or against the public
interest and whether the interest of the public is best served by calling a trade-practice
conference for the particular industry. The commission is then advised as to the facts
and the law and is given a recommendation as to the action to be taken with reference
thereto. If the commission determines on a trade-practice conference, the industry is
assembled at a place and time specified.
Such a conference may be called on the application of a representative group in an
industry, such as a trade association. In every case the consensus of opinion of the
entire industry is sought, and if a desire for such a conference is shown on the part of
a sufficiently representative number the entire industry is invited to assemble at a time
and place designated by the commission. A commissioner of the Federal Trade
Commission presides, but in order to give the widest possible range to the discussion
of practices which may be proposed and to preserve the voluntary character of the
conference, those present are encouraged to organize by electing their own secretary
for the conference.
After the industry has examined and freely discussed practices or methods,
elimination of which would be beneficial and fair to all in the industry and to the
public, resolutions are framed which, in the judgment of its representatives, are
workable, and they are separately voted on.
Following the conference the proceedings are reported to the full commission
through the division of trade-practice conferences. After consideration, such
resolutions as are accepted and affirmatively approved by the commission are
resubmitted to the industry with the understanding that they are to be returned within
30 days, along with suggestions for amendment, if any. If amendments are offered by
the industry and approved by the commission, they are then incorporated in the
resolutions, which become the final rules of the trade practice conference.
The procedure is predicated on the theory that the primary interest of the Federal
Trade Commission is the interest of the public. The public is entitled to the benefits
which flow from competition, and each competitor is entitled to fair competition. The
legitimate interests of business are in perfect harmony with the true interest of the
public. That which injures one undoubtedly injures the other, and the commission, in
the trade-practice conference procedure, provides a medium through which, in

appropriate situa-

40

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

tions, the interests of both may be mutually protected in matters of competitive
practices. It also offers, in the conferences, a common ground upon which competitors
can meet, lay aside personal charges, jealousies, and misunderstandings, freely discuss
practices of an unfair or harmful nature or otherwise not in the public interest, reach
a basis of mutual understanding and confidence, and provide for the abandonment of
such practices.
LIST OF TRADE-PRACTICE CONFERENCES
Trade-practice conferences, held during the fiscal year 1929-30, are listed in the
following pages.
AMMUNITION MANUFACTURERS

Conference held April 15, 1930, in New York, Commissioner Humphrey presiding.
ATHLETIC GOODS INDUSTRIES

Conference held May 7, 1930, in White Sulphur Springs, W. Va., Chairman
Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
BANK AND COMMERCIAL STATIONERY TRADE

Conference held June 12, 1930, in Washington, Chairman Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
BITUMINOUS-COAL INDUSTRY, UTAH

Conference held December 3, 1929, in Salt Lake City, Commissioner William E
Humphrey presiding.
Commission’s statement of action on rules released January 22, 1930.
BOTTLE-CAP MANUFACTURERS

Conference held May 27, 1930, in Chicago, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
CLOTHING COTTON CONVERTERS

Conference held March 13, 1930, in New York, Commissioner MCCULLOCH
presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
COMMERCIAL COLD-STORAGE INDUSTRY

Conference held July 2, 1929, at Radisson Hotel, Minneapolis, Commissioner March

presiding. Commission’s statement of action

TRADE-PRACTICE CONFERENCE DIVISION

41

on rules released November 9, 1929. Rules became effective December 9, 1929.
COMMON-BRICK MANUFACTURERS

Conference held February 3, 1930, in Memphis, Commissioner Humphrey presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
CONCRETE MIXER AND PAVER INDUSTRY

Conference held September 5, 1929, in French Lick, Ind., Commissioner
MCCULLOCH presiding.
Commission’s statement of action on rules released November 21, 1929.
CRUSHED-STONE INDUSTRY

Conference held January 23, 1930, in Cincinnati. Commissioner MCCULLOCH
presided.
Commission’s announcement of action on rules published April 15, 1930.
DIRECT-SELLING COMPANIES

Conference held October 11, 1929, in Dayton, Ohio, Commissioner Humphrey
presiding.
Commission’s official statement of action on rules released December 18, 1929.
Commission’s statement of acceptance of definitions of rules released February 10,
1930.
ELECTRICAL INDUSTRY
(Carbon group)

Conference held October 10, 1929, in Washington, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released March 6, 1930.
(Flexible-cord and heater-cord group)

Conference held October 10, 1929, in Washington, Commissioner Edgar A.
McCulloch presiding.
Commission’s statement of action on rules released March 10, 1930.
(Manufactured electrical mica)

Conference held October 10, 1929, in Washington, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released March 4, 1930.
(Molded-products group)

Conference held October 10, 1929, in Washington, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released March 5, 1930.
(Outlet boxes and conduit fittings)

Conference held October 10, 1929, in Washington, Commissioner Edgar A.

McCulloch presiding.
Commission‘s statement of action on rules released March 3, 1930.

42

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
(Vulcanized-fiber group)

Conference held October 10, 1929, in Washington, Commissioner Edgar A.
McCulloch presiding.
Commission’s statement of action on rules released March 7, 1930.
FIELD AND GRASS SEED INDUSTRY

Conference held December 20, 1929, in Chicago, Commissioner Charles H. March
presiding.
Commission’s statement of action on rules released May 24, 1930.
FLOOR AND WALL CLAY THE INDUSTRY

Conference held in St. Louis, October 21, 1929, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released January 18, 1930.
FURNACE PIPE AND FITTINGS MANUFACTURERS

Conference held April 11, 1930, in Chicago, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its Statement thereon.
GREETING-CARD INDUSTRY

Conference held September 10, 1929, in Washington, Commissioner C. W. Hunt
presiding.
Commission’s statement of action on rules released January 25, 1930.
HARDWARE JOBBERS
(Southern States)

Conference held October 18, 1929, in Washington, Commissioner Ferguson
presiding.
Commission’s statement of action on rules released Thursday, May 1, 1930.
ICE CREAM
(District of Columbia)

Conference held December 10, 1930, in Washington, Commissioner March
presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
JEWELRY INDUSTRY

Conference held June 5, 1929, in Chicago, Commissioner March presiding.
Commission’s first official statement of action on rules released October 28, 1929.
Second official statement of action creating one new rule and modifying four others,
released December 23, 1929.
JEWELRY

(School and college)

Conference held June 27, 1930, in Chicago, Commissioner Hunt presiding.

TRADE-PRACTICE CONFERENCE DIVISION

43

Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
KNITTED OUTERWEAR INDUSTRY

Conference held November 21, 1929, in Chicago, Commissioner March presiding.
Commission’s statement of action on rules released April 17, 1930.
KNIT-UNDERWEAR INDUSTRY

Conference held May 26, 1930, at Utica, N. Y., Commissioner McCulloch presiding.
Commission’s statement of its action on rules released July 7, 1930.
LAKE SUPERIOR COAL-DOCK DEALERS

Conference held January 4, 1930, in Chicago, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
LEATHER BOARD INDUSTRY

Conference held December 19, 1929, in Boston, Commissioner Humphrey presiding.
Commission’s statement of action on rules released April 25, 1930.
MARBLE INDUSTRY

Conference held June 18, 1930, in Chicago, Commissioner McCulloch presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
MEDICAL-GAS INDUSTRY

Conference held November 25, 1929, in Indianapolis, Commissioner Humphrey
presiding.
Commission’s statement of action on rules released April 19, 1930.
METAL-LATH INDUSTRY

Conference held June 27, 1929, in Washington. Commissioner Humphrey presided.
Commission’s statement of action on rules released April 18, 1930.
MILK AND ICE-CREAM CAN MAKERS

Conference held March 21, 1930, in New York, Commissioner Humphrey presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
MIXED-FEED MANUFACTURERS
(Southern States)

Conference held May 19, 1930, in Louisville, Commissioner March presiding.
18131---30-----4

44

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
NAIL AND TACK INDUSTRY

Conference held June 26, 1930, in New York, Chairman Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
NAVAL-STORES INDUSTRY

Conference held June 11, 1929, in Washington, Commissioner Ferguson presiding.
Commission’s statement of action on rules released January 20, 1930.
NONFERROUS INGOT METAL INDUSTRY

Conference held February 6, 1930, in Washington, Chairman Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
PAPER-BAG INDUSTRY

Conference held December 3, 1929, in Washington, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
PIN MANUFACTURERS

Conference held May 27, 1930, in New York, Commissioner Hunt presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its Statement thereon.
PIPE-NIPPLE MANUFACTURERS

Conference held January 28, 1930, in Pittsburgh, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
PLUMBERS’ AND POTTERS’ CAST BRASS GOODS

Conference held June 12, 1930, in New York, Commissioner Humphrey presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
PORTABLE FIRE EXTINGUISHERS TRADE

Conference held May 28, 1930, in Cleveland, M. Markham Flannery, Director of
Trade Practice Conferences, presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its Statement thereon.

TRADE-PRACTICE CONFERENCE DIVISION

45

PRISON-EQUIPMENT INDUSTRY

Conference held January 31, 1930, in Oklahoma City, Okla., Commissioner March
presiding.
Resolutions adopted were Submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
PUBLIC-SEATING INDUSTRY

Conference held December 19, 1929, in Washington, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released February 12, 1930.
ROLL AND MACHINE TICKETS

Conference held February 25, 1930, in Washington, Chairman Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
SADDLERY-HARDWARE MANUFACTURERS

Conference held April 15, 1930, in Washington, Chairman Ferguson presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
SARDINE PACKERS
(Maine)

Conference held May 1, 1930, in Bangor, Commissioner Hunt presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
SCHIFFLI-EMBROIDERY INDUSTRY
(New Jersey)

Conference held May 24, 1930, in West New York, N. J., Commissioner McCulloch
presiding.
Resolutions adopted were Submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
SET-UP PAPER BOX AND PAPER CAN, TUBE, AND DRUM INDUSTRIES

Conference held February 27, 1930, in Cleveland, Commissioner McCulloch
presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
SLED INDUSTRY

Conference held October 31, 1929, in Buffalo, Commissioner C. W. Hunt presiding.
Commission’s statement of action on rules released January 21, 1930.

46

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
SOLE AND BELTING LEATHER

Conference held December 7, 1929, in New York, Chairman Ferguson presiding.
SOLID-SECTION STEEL-WINDOW INDUSTRY

Conference held November 18, 1929, in Washington. Commissioner March
presided.
Commission’s statement of action on rules released April 28, 1930.
SOLVENTS INDUSTRY

Conference held March 18, 1930, in New York, Commissioner March presiding.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.
STRUCTURAL-CLAY TILE

Conference held March 31, 1930, in St. Louis. Commissioner McCulloch presided.
Commission’s statement of action on rules released June 11,1930.
STRUCTURAL-STEEL FABRICATING INDUSTRY

Conference held in Biloxi, Miss., November 11, 1929, Commissioner Humphrey
presiding.
Commission’s statement of action on rules released January 24, 1930.
VENEER FRUIT AND VEGETABLE PACKAGE INDUSTRY

Conference held in Memphis, November 22, 1929, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released January 23, 1930.
WALL-PAPER INDUSTRY

Conference held in New York February 11, 1930, Commissioner Hunt presiding.
Commission’s statement of action on rules released May 22, 1930.
WALNUT-WOODS INDUSTRY

Conference held October 10, 1929, in Chicago, Commissioner Hunt presiding.
Commission’s statement of action on rules released January 27,1930.
WARM-AIR FURNACE INDUSTRY

Conference held October 23, 1929 in Cleveland, Commissioner McCulloch
presiding.
Commission’s statement of action on rules released January 19, 1930.
WATCH-CASE INDUSTRY
(Third conference)

Conference held February 21, 1930, in New York, Commissioner March p residing.
Resolutions adopted were submitted to the commission for consideration and action,
but the commission has not yet released its statement thereon.

CHIEF EXAMINER
[Beginning with the chief examiner’s report, the remainder of Part II Is devoted to
the commission’s legal procedure, including preliminary investigations and review,
complaint, trial, order to cease and desist, review in the courts, and, finally, the
separate procedure of the export trade act.]

The chief examiner supervises legal investigating work of the commission. This
includes investigation of applications for complaints preliminary to the correction of
unfair methods of competition under the laws administered by the commission. To this
division are also referred special inquiries, primarily of a legal nature, which the
commission may be directed to do by the President, either House of Congress, or the
Attorney General.
COTTONSEED AND PEANUT PRICES INVESTIGATED

Three special inquiries authorized by Congress and referred to the commission for
investigation and report were carried on by the chief examiner’s force during the year.
These were (1) the investigation of the newsprint situation, final report on which was
submitted at the close of the fiscal year, (2) the cottonseed price inquiry and (3) the
peanut price survey.
These are extensive inquiries and involve, within the terms of the resolution, the
investigation of an entire industry. In June, 1930, 11 attorneys or practically 25 per
cent of the legal investigating force were engaged on such investigations. In one, the
cottonseed investigation, a lengthy series of hearings is being held which adds
materially to the work of the division. It is evident, therefore, that an increase in the
regular force should be made so as to handle these investigations more expeditiously.
The scope of each inquiry is described in some detail below.
NEWSPRINT-PAPER INQUIRY

Certain phases of the newsprint industry were investigated by the commission in
accordance with the terms of Senate Resolution 337, Seventieth Congress, second
session. The resolution directed the commission to ascertain whether the practices of
the manufacturers and distributors of newsprint paper tended to create a monopoly in
the supplying of newsprint paper to publishers of small daily and weekly newspapers
and whether such practices constituted a violation of the antitrust laws. During the year
this inquiry was completed and on June 30, 1930, a report to the Senate was submitted.
As a result of the above investigation, the following conclusions were reached:
1. There is no company selling newsprint paper in the eastern part of the United States with a sufficient
proportion of the business to constitute a monopoly.
2. The possible monopoly, or tendency toward monopoly, by the Crown Zellerbach Corporation of the
newsprint paper business in the Pacific Coast

47

48

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

States and the acquisition by the Crown Zellerbach Corporation of the capital stock of the Crown
Willamette Paper Co., while controlling the Washington Pulp & Pa per Co., are subject matters of a case
now being further investigated by the commission.
3. No evidence was found of any practices of the domestic manufacturers and distributors of newsprint
paper showing unlawful discriminations against the publishers of small daily and weekly newspapers, or
that constitute violations of the antitrust laws.
4. While the International Paper Co. sells only about 20 per cent of the news-print paper consumed In
the United States, other domestic manufacturers generally follow its lead in making newsprint prices.
5. The contracts entered Into on February 26, 1929, between the International Paper Co. and the
Newspaper and Magazine Paper Corporation, purchasing organization for the Hearst newspapers, and
between the Hearst organization and each of the two Canadian companies, viz, the Anglo-Canadian Pulp
& Paper Mills (Ltd.), and the Brompton Pulp & Paper Co. (Ltd.), resulted from the several agreements
and understandings, reached at various conferences, between and/or among representatives of the Hearst
organization, the International Paper Co., the Hon. L. A. Taschereau, prime minister of the Province of
Quebec, and the Hon. G. Howard Ferguson, prime minister of the Province of Ontario. The two prime
ministers were acting on behalf of the newspaper manufacturers of their respective Provinces. The purpose
and the effect of the several agreements and understandings were to fix and establish the contract price
of newsprint paper. The International Paper Co. was induced to agree to an increase in the price of
newspaper to the Hearst papers by threats of disciplinary action on the part of the prime ministers.
6. It is believed that the Newsprint Institute of Canada, if formed and existing in the United States,
would be in violation of the antitrust laws, including the antitrust provisions of the Wilson Tariff Act.
The Newsprint Institute of Canada is, however, a foreign combination and is not under the jurisdiction
of the United States, unless it creates an agency in this country over which the Federal Government could
have jurisdiction. No such agency has been found to exist in this country.
7. The International Paper Co. is the only manufacturer of newsprint paper which aided publishers to
any appreciable extent in financing newspaper publications. The evidence gathered in this investigation
tends to show that financial assistance was given in consideration of securing long-term contracts to
supply the publishers so financed with newsprint paper by the International Paper Co. Since the beginning
of this investigation the International Paper Co. has disposed of practically all of its stock and other
securities in publishing companies.

The following recommendations were also made:
l. That publishers of small daily and weekly newspapers, wherever possible, “ set up machinery” for
purchasing their requirements of newsprint on a cooperative basis in order to get the benefit of the
manufacturers’ contract prices for paper in shipments of carload lots.
2. That the United States Government, through the appropriate departments, continue its experiments
with the manufacture of paper from farm-waste products.
3. That the Government-owned timberlands and water-power sites in Alaska be made available to
domestic-owned companies on liberal terms for the development of the paper industry in Alaska, having
in mind, of course, the conserving and perpetuating of these natural resources.
4. That the future activities of the Newsprint Institute of Canada in relation to the sale of newsprint
paper and the fixing of the market prices in the United States be watched closely with a view to remedial
action if any agency is found to exist or is created within the United States for the enforcement of such
activities as may be contrary to the antitrust laws of the United States.

PEANUT-PRICE INQUIRY

The United States Senate, October 22, 1929, adopted the following resolution:
Resolved, That the Federal Trade Commission is hereby requested to make an immediate and thorough
investigation of all facts relating to the alleged

CHIEF EXAMINER

49

combination in violation of the antitrust laws with respect to prices for peanuts by corporations operating
peanut crushers and mills The commission shall report to the Senate as soon as practicable the results of
its investigation

The above resolution was referred to the chief examiner for inquiry. The
investigation is now in progress. The records of the important companies are being
examined and as soon as completed a report will be drawn summarizing the facts
disclosed.
COTTONSEED-PRICE INQUIRY

Two resolutions involving an investigation of the cottonseed industry were adopted
by the Seventy-first Congress at its first session, namely, resolutions 136 and 147.1
Senate Resolution 136 provided for an investigation of the facts relating to an alleged
combination in violation of the antitrust laws with respect to prices as to cotton seed
and cottonseed meal. Senate Resolution 147 provided for investigation of the
ownership and control of cotton gins by corporations operating cottonseed-oil mills
and also for public hearings in connection with the investigation authorized by the two
resolutions.
As a result, an extensive inquiry of the industry was begun in December, 1929. This
included an examination of the records and correspondence files of all trade
associations in the industry as well as many of the companies operating cottonseed-oil
mills.
Public hearings were begun in Washington June 2, 1930, and will be continued at
various points throughout the cotton-growing States. In accordance with a later Senate
resolution, the record of these hearings is being transmitted to the Senate and printed
for distribution.
PROGRESS SHOWN IN LEGAL INVESTIGATIONS

Tables showing the number of matters handled by this division will be found on
pages 117 and 118. During the year a total of 1,505 preliminary inquiries was
instituted, of which 296 were docketed as formal applications. The total number of
applications for complaints docketed for the year ending June 30, 1930, was 535. Six
hundred and thirty-five applications were disposed of during the year, the largest
number in any year of the commission’s history. There were pending, however, at the
close of the year, 754 applications, which do not include the undocketed inquiries
under investigation.
A special effort has been made to eliminate from the active calendar those
applications of long standing. Considerable progress has been made in the last two
years and it is not believed that with the present force the average length of time of
applications pending can be reduced much below that shown in the statement below.
1

May be read in full text on pp.236 and 237.

50

Date

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
Docketed
applications
on hand 6
months or
more

Average length of
time all docketed
applications on
hand

Months

Date

Docketed
applications
on hand 6
months or
more

Days

1927
Feb. 15
Apr. 15
June 15
Aug. 15
Oct. 15
Dec. 15

84
70
74
74
85
101

10
7
7
7
7
8

21
21
25
29
26

1928
Feb. 15
Apr. 15
June 15
Aug. 15
Oct. 15
Dec. 15

97
95
86
78
70
66

9
8
8
7
7
6

16
26
13
26
21
15

Average length of
time all docketed
applications on
hand

Months

Days

1929
Feb. 15
Apr. 15
June 15
Aug. 15
Oct. 15
Dec. 15

61
62
49
47
52
44

5
5
5
5
4
4

21
17
13
16
25
23

1930
Feb. 15
Apr. 15
June 15

41
42
46

4
4
4

22
21
4

It will be noted from the above that Since 1927 there has been practically a steady
decrease in the number of
applications pending more than six months and the
average length of time each docketed application has been on the calendar. On
February 15, 1927, 84 applications had been on hand six months or more and the
average age of all applications on the calendar was 10 months, while on June 15, 1930,
there were only 46 applications of that age on hand and the average age of all
applications was only four months and four days.
STOCK ACQUISITIONS, CONSOLIDATIONS, AND MERGERS
The commission and the Department of Justice have concurrent jurisdiction in the
enforcement of section 7 of the Clayton Act. The difficulty of effective enforcement
of this section was pointed out in preceding annual reports, particularly in the report
of June 30, 1929. T he decision of the United States Supreme Court in the cases
against Western Meat Co., Swift & Co., and Thatcher Manufacturing Co. have limited
and in a large measure nullified the application of the act.
The Clayton Act, as construed by the courts, applies only to the acquisition of stock
and not assets. Because of the court’s interpretation, it is possible for a corporation to
substantially lessen or wholly eliminate competition between itself and its competitor
or between two or more competing corporations engaged in commerce through
acquisition of assets. Acquisition of assets, therefore, is now the usual procedure in
effecting acquisitions, consolidations and mergers.
The commission is also without corrective power in any situation here a corporation
has unlawfully purchased the stock of a competitor and before a complaint issues has
voted or used such stock to complete the acquisition of physical assets. In situations
of this kind it is the aim of the commission to issue complaint immediately upon
completion of preliminary inquiry, but as considerable time is necessary in making
such inquiry, jurisdiction is often lost. The effectiveness of the Clayton Act, therefore,
has been considerably lessened by the above-referred-to decisions.
The effectiveness of section 7 of the Clayton Act was further weakened by the
United States Supreme Court decision in the Interna-

CHIEF EXAMINER

51

tional Shoe Co. case, decided January 6, 1930, reversing judgment of the Circuit Court
of Appeals for the First Circuit (29 Fed. (2d) 518). The court held that where a shoe
company acquiring substantially all of the common stock of another shoe
manufacturing company sold about 95 per cent of its shoes in towns having a
population of 6,000 or less, while the company whose stock it acquired had made 95
per cent of its sales in larger towns or cities, and sold to different class of dealers, and
found the ir way to separate markets, such acquisition was not in violation of the
Clayton Act, even though both manufacturers were engaged in producing and selling
men’s dress shoes comparable in price and quality and adapted to the same need.
It was also held in that case that where, at the time of a stock acquisition the
financial condition of the acquired company is such as to necessitate liquidation or sale
and therefore the prospect for future competition or restraint is entirely eliminated,
such stock acquisition is not in violation of the Clayton Act.
In conformity with the decision the commission is apparently obliged to produce
evidence that competing interests sold their products in commerce through identical
channels of distribution; must give due recognition to differences in style or design of
products, and further can not accept mere evidence of solicitation of business in the
same communities as evidence of competition.
The court has in effect also held that where 5 per cent or less of the competing
products of each of the two or more competitors is sold in competitive markets, such
competition is not substantial within the meaning of the Clayton Act. In view of court
interpretations of the Clayton Act and attending difficulties, the commission has had
occasion to issue only seven complaints involving section 7 during the year.
During the year 98 inquiries were instituted as possible violations of the Clayton
Act; 71 such inquiries were pending at the beginning of the year and 43 at the close
of the year, indicating the disposition of 126 matters during the year. Eleven of these
matters were docketed, as applications for complaint five of which were still pending
at the end of the year.
Of the preliminary inquiries disposed of during the year 49, or over a third involved
acquisition of assets, so did not fall within the provisions of the act; 42 inquiries were
filed without docketing because of lack of competition (or substantial competition)
either because of territory served or because products involved were not competitive;
6 were filed because only intrastate sales were involved; 12 were filed because the
acquisition, merger, or consolidation was not consummated; 1 was filed because the
acquisition was for investment purposes; and 1 suspended because of Department of
Justice action. As a result, only 11 indicated violation of law.
The year ending June 30, 1930, indicated a decrease in the number of acquisitions,
consolidations, and mergers as compared with 1929. No official record is maintained
or is practical to indicate the total number of acquisitions, consolidations, and mergers
effected through out the country. However, the commission’s observation of activity
along this line has indicated a general let-up since the depression of November, 1929.

52

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
CHIEF EXAMINER’S PROCEDURE DESCRIBED

That part of the commission’s central procedure administered by the chief
examiner’s division relates to investigations preliminary to the possible issuance of
complaint. These inquiries originate in Several ways, namely, (1) by direction of the
commission, (2) by information obtained in other investigations, and (3) in the great
majority of cases by direct application to the commission from competitors or the
public, which may be affected by alleged unfair practices.
No formality is required in making an application for a complaint, a letter setting
forth the facts in detail being sufficient, but it should be accompanied by all evidence
in possession of the complaining party in support of the charges made. Such matters
may be discussed with the chief examiner or the attorney in charge of a branch office
of the commission prior to or at the time of filing.
When an application is received, the jurisdictional elements, such as interstate
commerce, methods of competition involved, and public interest, are considered. In
many cases it is necessary to supplement the data submitted by correspondence or by
a preliminary investigation before deciding whether to docket an “application for the
issuance of complaint.” A much smaller percentage of the total inquiries received are
now docketed than formerly due to the fact that precedents with respect to many
practices have been established by the courts and the commission.
After an application is docketed it is assigned by the chief examiner to an examining
attorney or a branch office for investigation. It is the duty of either to obtain all the
facts regarding the matter from both the applicant and the respondent. Without
disclosing the name of the applicant, the party complained against is approached,
devised of the charges, and requested to submit such evidence as it desires in defense
or explanation of its position. The examining attorney, after developing the facts from
all available sources, summarizes the evidence in a final report, reviewing the law
applicable thereto, and making a recommendation as to action. The entire record is
then reviewed by the chief examiner, and, if it appears to be complete, is submitted
with recommendation to the commission’s board of review or the commissioners for
their consideration.
The chief examiner also conducts, by direction of the commission or upon requests
of other units, supplemental investigation of applications for complaints, of formal
complaints where additional information is desired by the chief counsel, or suspected
violations of the commission’s orders to cease and desist. This includes the alleged
violation of stipulations to cease from unfair practices entered into between
respondents and the commission, the violation of resolutions subscribed to at tradepractice conferences or investigational work which may arise in connection with cases
considered b the special board of investigation (concerning false an misleading or
fraudulent advertising).
The investigating work of the commission is carried on from its main office at
Washington, D. C., through its four branch offices located at 45 Broadway, New York
City; 608 South Dearborn Street, Chicago; 544 Market Street, San Francisco; and 431
Lyon Building, Seattle. Business men may confer at these places with qualified
representatives of the commission regarding cases and with reference to rulings made

by the commission.

BOARD OF REVIEW
OUTLINE OF PROCEDURE

Four lawyers at present constitute the board of review. Its chief duty is to review the
entire record of a case after completion of the field investigation by the chief
examiner’s staff and before consideration by the commission.
When the chief examiner’s division has completed an investigation, and the
examining attorney has written a final report, opinion, and recommendation, and these
have been reviewed by the chief examiner, the entire records goes to this board for
review, opinion, and recommendation.
Two classes of cases are excepted from this procedure. First, those clearly involving
practices previously held by the commission to be unlawful and which the respondent
has expressed a willingness to abandon, such cases being sent to the chief trial
examiner for stipulation to “cease and desist”; and, second, those cases in which both
the examining attorney and the chief examiner have recommended dismissal, which
go directly to the commission for consideration, but may thereafter be referred to the
board for an opinion.
Statements of all witnesses interviewed by the commission’s investigators, and all
documentary evidence and exhibits obtained, as well as decisions cited in the reports
of investigators, are considered by a member of the board to whom a case has been
assigned for study, and his report is presented to the entire board for its consideration.
When deemed necessary, the board may recommend that further investigation be made
under direction of the chief examiner.
Ordinarily, if the board believes that complaint should issue it affords the proposed
respondent a hearing, upon three weeks’ notice by the secretary of the commission, to
show cause why com plaint should not issue. Such hearing is informal in character and
does not involve the taking of testimony. The proposed respondent is permitted to
appear in person or by counsel and to make or submit such statements of fact or law
as he may desire.
However, when the board is of the opinion that a hearing is not required because (a)
the respondent has been fully interviewed and has given to the examiner every fact or
argument that could be offered as a defense, or (b) the practice has been fully
established and is of such character that in the nature of the case nothing could be
adduced in mitigation, or (c) to delay the issuance of a complaint to afford a hearing
might result in a loss of jurisdiction, or (d) otherwise unnecessary or incompatible with
the public interest, the board may then forego a hearing, and, with its conclusion and
recommendation, transmit the case to the commission.
53

54

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

After full consideration of a case, either with or without a hearing, the board
transmits its report to the commission. This report consists of (1) a summary of the
facts developed, (2) an opinion based upon the facts and the law, and (3) the board’s
recommendation. The board may make one of three recommendations in any case;
first, it may recommend dismissal of the application for lack of evidence in support
of the charge or on the ground that the charge indicated does not violate any law over
which the commission has jurisdiction; second, the board may recommend dismissal
of the application upon the signing by the proposed respondent of a stipulation of the
facts and an agreement to cease and desist the alleged unfair practice charged, to be
prepared by the chief trial examiner, with the alternative recommendation of issuance
of a complaint if the proposed respondent will not sign a suitable stipulation and
agreement; and, third, the board may recommend issuance of a complaint without
further procedure.
Whenever it appears to the board that a trade practice unfair to the public or
competitors is prevalent in an industry, it is its duty to report such fact to the
commission for reference to the trade practice conference division;
The full record in a case with the board’s recommendation, is forwarded to
individual commissioners in rotation. After study by each commissioner the case, with
a memorandum embodying his recommendation, is presented by him to the full
commission for its consideration.
SUMMARY OF WORK, 1929-30

The work of the board of review upon applications for complaint is presented in
statistical form on page 118. During the current year the board was called upon to
review 152 applications for complaint, of which 135 were forwarded during the year
and 17 pending at the end. Of this number 33 applications were recommended for
dismissal, 27 for complaint, 60 for stipulation, 4 were sent to the chief examiner for
further investigation, while 9 were disposed of through other procedures. In connection
with these applications 32 hearings were held.

SPECIAL BOARD OF INVESTIGATION
RADIO ADVERTISING IS NOW IN BOARD’S JURISDICTION

Jurisdiction over fraudulent advertising disseminated by means of radio broadcast
was added during the fiscal year to the functions of the special board of investigation.
The same general standards as applied to published advertising are employed in
considering the radio field.
The board had referred to it 535 cases in which complaint had been ordered based
on false and misleading or fraudulent advertising appearing in various publications.
Hearings were held in 115 cases, 90 of which were definitely dis-posed of on
recommendation of the board. Action was taken in 138 other complaints pending
although final disposition had not been effected. A number of these cases have been
handled by correspondence but this method has not proved satisfactory.
The special board of investigation was created by order of the commission May 6,
1929, following adoption of a definite policy of dealing with false, misleading, and
fraudulent advertising published in magazines, newspapers, and periodicals.
Composed of three of the commission’s attorneys, the board was given general
power to take jurisdiction over all matters referred to it, to carry out investigations,
hold hearings and submit reports and recommendations directly to the commission.
Prior to creation of the board a large number of applications for complaints were
filed charging publication of false and misleading advertisements, resulting in an order
for issuance of complaints against numerous advertisers in many magazines,
newspapers, and other publications.
AGENCY AND PUBLISHER ARE JOINED AS CORESPONDENTS

The commission deemed it advisable in the proper prosecution of such complaints
to join the advertising agency and the publisher involved in each case as corespondents
with the advertiser. To give publishers and advertising agencies an opportunity and
option to stipulate and abide by the action of the commission without becoming or
being made respondents to complaints, was one reason for creation of the new tribunal.
Hearings conducted by the board are informal. They have proven to be most
effective in the development of the commission’s policy. Many informal hearings have
been held and publishers and advertising agencies uniformly elected to abide the
action of the commission without becoming or being made parties respondent to the
commission’s complaints.
As an aid to immediate correction of the evils complained of, and to facilitate
elimination of the objectionable matter against which

55

56

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

such complaints had been ordered to issue, the publishers and advertising agencies
requested that the advertisers be given the option of like informal hearings to be
granted on their petitions therefor.
The commission broadened the jurisdiction of the board giving to it the discretionary
power to grant an informal hearing, upon his petition, to any advertiser against whom
a complaint had been ordered to be issued. Petitions for a hearing before the board are
usually granted, the advertiser being given the opportunity to appear in person or by
counsel, and to submit or make such statements of fact or law as he may desire. These
hearings are participated in not only by the advertiser but quite often by the agency
that carries his account and assists in preparation of his advertising copy.
The advertiser and his advertising agency, as a result of these hearings, are engaged
in so modifying their advertising copy as to bring it in conformity with the law,
eliminating all matter to be charged as unlawful and unfair in such complaints.
In any case, the special board, if the advertiser, agency, and publisher so elect
prepares tentative stipulations against future use of the objectionable matter, causes
them to be executed by the proposed respondents, and submits them for such action
as the commission may deem best in the premises.
In every case in which the special board shall be compelled to report that the
advertiser, his agency, and the publisher have so elected, complaints are to issue under
such former orders therefor and proceed to service.
The board, upon full consideration of the facts and law, may also prepare and submit
direct to the commission its report containing a summary of the facts developed,
together with its opinion based on the facts and law and its recommendation that the
order for complaint be vacated where the evidence does not disclose a violation of law
over which the commission has jurisdiction.
MEDICAL ADVERTISING PREDOMINATES IN COPY REVIEWED

A large percentage of the cases before the board pertain to alleged cure-alls, devices
for therapeutic treatments, and drug and toilet preparations, and it is significant to note
that the total amount of newspaper space devoted to advertisements of medical
products and toilet articles in 1929, according to a survey conducted by a department
of the Government in 50 representative cities was 81,146,000 lines. Foods and
beverages were advertised to the extent of 74,241,000 lines, bringing the grand total
of advertising of articles or services directly affecting the health of the consumer in
these 50 cities to 155,387,000 lines.
A survey including leading monthly and weekly magazines, representative farm
magazines and advertising by radio, discloses that during 1929 there was expended for
national advertising $231,629,-270, of which total $64,260,218 or 27.7 per cent was
to advertise products which directly affect the health of the consumer; namely, drugs
and toilet articles, $35,987,386; and foods and food beverages, $28,272,832.
These are minimum figures, as the survey embraced only a number of leading
periodicals. The amount listed for broadcasting covered

SPECIAL BOARD OF INVESTIGATION

57

only two leading chains. All local advertising and advertisements of less than 14 agate
lines were excluded.
The work of the special board has expedited the work of the commission and it can
be stated that generally the publishers and advertising agencies have expressed
approval of the commission’s campaign against false and misleading and fraudulent
advertising and have offered to cooperate to prevent the methods denounced by the
commission, as well as to aid advertisers in so modifying their copy as to bring it at
all times in conformity with the law.
The cooperation accorded the special board by the advertiser, publisher, and agency
is a complete Vindication of the commission’s policy in respect to its new method of
procedure in cases dealing with false, misleading, and fraudulent advertising in
newspapers, magazines, and periodicals. A continued vigorous prosecution of this
work will be necessary to give to the commission and the public the full benefit of this
cooperation.

TRIAL EXAMINERS’ DIVISION
NEW FUNCTION IS ADDED TO DUTIES OF STAFF

The trial examiners’ division, established by the commission December 1, 1925,
functions under direct supervision of the commission. Duties of this division are
subdivided as follows: (1) Presiding at the trial of formal complaints issued by the
commission, (2) settlement of application for complaint by stipulation, and (3)
presiding as a special master in taking testimony in connection with investigations
under congressional resolutions.
The last-named duty was assigned to the division during the recent fiscal year and
as the first result of it a member of the trial examiners’ staff was detailed to act as
presiding officer in hearings now being held in the South in connection with the
commission’s investigation of cottonseed prices as called for in two Senate resolutions. (For details of this inquiry see pages 49 and 236.
The two functions first listed, namely, presiding at the trial of formal complaints and
settlement of applications for complaint by stipulation, will be considered separately,
as follows:
TRIAL EXAMINER PRESIDES AT TRIAL OF FORMAL CASES

Under the procedure ad opted by the commission, a trial examiner presides at the
trial of all formal cases, and in the conduct of such proceedings rules on all motions
of counsel and the admissibility of evidence and continues the hearing as necessity
may require. At the close of a proceeding the trial examiner makes up the record and
prepares a report upon the facts, which report he serves upon counsel for the
commission and attorney for the respondent. The report, with exceptions taken thereto
by counsel for the commission and attorney for the respondent, is the basis for
argument at the final hearing before the commission.
STIPULATION PROCEDURE IS APPLIED IN CERTAIN CASES

In addition to presiding at hearings in formal cases, the trial examiners’ division is
also charged by the commission with settlement of applications for complaint by
stipulation, except in cases where the practice is so fraudulent or so vicious that
protection of the public demands the regular procedure of complaint. The question of
whether a respondent shall be permitted to sign a stipulation is entirely within the
discretion of the commission, as the disposition of a case by stipulation is not a right,
but a privilege extended by the commission.
This division of the commission affords an agency to administer the commission’s
present policy providing for settlement of certain informal cases by stipulation.
58

TRIAL EXAMINERS’ DIVISION

59

The stipulation procedure provides an opportunity for the respondent to enter into
a stipulation of the facts and voluntarily agree to cease and desist forever from the
alleged unfair methods set forth therein. Such stipulation is subject to the final review
and approval of the commission.
The procedure is simple. A potential respondent decides he would rather quit the
practice of which complaint is made than go through with trial of a formal complaint.
If the commission approves such course, he signs an agreement to “cease and desist
forever” from the unfair practice with the understanding that should he ever resume
it the facts as stipulated may be used in evidence against him in the trial of a complaint
which the commission may issue.
FACTS ARE MADE PUBLIC--NAMES WITHHELD

The facts in each stipulation are made public to show methods of competition
condemned by the commission as unfair, for the guidance of industry and protection
of the public. However, names of respondents signing the agreements are usually
deleted from the publicity although occasionally there is an exception to this rule and
the facts of a stipulation are made a part of the public record.
Publicity regarding stipulations is especially valuable to the other members of an
industry to which a signer of such an agreement belongs. With this in mind the
commission, in releasing for publication the facts surrounding a given stipulation,
emphasizes the name of the commodity or industry involved so that newspaper or trade
pa p er representatives, trade association secretaries, and members of the industries
concerned, may make note thereof.
Commodities mentioned in stipulations are of an infinite variety. Taken at random
there would be such a list as follows: Hats, shoes, suit goods, fly-catching devices,
tombstones, toy airplanes, perfumes, cigars, automobile accessories, malt extracts,
hollow ware, Indian blankets, electrotherapeutic instruments, synthetic beverages,
horseshoes, radio cabinets, sea food, and tooth paste.
The commission believes that its stipulation procedure is protecting the American
consumer from numerous unfair methods of competition, which, in the aggregate, are
an important consideration. It is apparent also that large sums of money that otherwise
would be spent in litigation are being saved the public.
During the five years in which the stipulation system has been in effect, or as of June
30, 1930, a total of 672 stipulations had been approved and accepted by the
commission.
A summary of all stipulation proceedings made public in the fiscal year may be
found on page 220.
18131---30-----5

CHIEF COUNSEL
The chief counsel is legal adviser to the commission and is charged with the duty of
supervising preparation of complaints and other legal process directed by the
commission, the prosecution and defense of all cases before the commission and in the
courts, and the work of the export-trade section. He is also specifically charged at
present with the duty of conducting the public hearings and certain other phases of the
public utilities (electric power and gas) investigation under Senate Resolution No.83.
PUBLIC-UTILITIES INVESTIGATION

By direction of the commission, the chief counsel’s division was made responsible
for that part of the public-utilities investigation relating to publicity or propaganda.
During the fiscal year that branch of the inquiry was practically concluded so far as
activities of associations are concerned, including the defense presented by counsel for
the utilities associations.
The propaganda or publicity of the various companies, so far as not already
developed under the association phase, will be picked up and made part of the
examination of the affairs of the various companies when their financial structures are
being put on record.
The chief counsel was directed by the commission to cooperate with the economic
division and to conduct all public hearings. This has been done.
Due to the chief counsel’s illness, there was some delay in the fall of 1929 in the
resumption of the hearings. However, after the conclusion of the propaganda hearings,
including the defense by the utilities, hearings were begun on February 24, 1930, as
to various companies on all phases of the resolution and principally as to financial
structure and capital matters. From that time until the end of the fiscal year, the
hearings were conducted covering the following companies and groups:
American Gas & Electric Co.-Appalachian Electric Power Co.
Ohio Power Co.
Indiana & Michigan Electric Co.
Scranton Electric Co.
Electric Bond & Share Co.-Two Rector Street Corporation.
American Power & Light Co.
Electric Power & Light Corporation.
National Power & Light Co.
W. B. Foshay Co.-Public Utilities Consolidated Corporation.

(On September 29 to October 2, 1929, hearings were held on Carolina Power &
Light Co. and Minnesota Power & Light Co.)

60

CHIEF COUNSEL

61

The hearings on the American Gas & Electric Co. group and the Foshay group
covered all phases directed by the Senate resolution and are and have been practically
completed. The hearings on the Electric Bond & Share Co. also covered all phases, but
they are not complete in all respects, due to the failure of the company to permit
complete access to its records. The commission brought action in court to establish its
right and this case is still pending. Effort will be made to expedite it by stipulating
facts as far as possible.
A more detailed description of the public utilities investigation appears at page 11.
COTTONSEED PRICES

One of the attorneys on the chief counsel’s staff has been temporarily assigned to the
chief examiner’s division for the purpose of conducting public hearings authorized by
Senate Resolution 136, Seventieth Congress, special session, and by Senate Resolution
147, Seventy-first Congress, first session, relating, respectively, to an alleged
combination in violation of the antitrust laws with respect to prices for cottonseed and
cottonseed meal by corporations operating cottonseed-oil mills; and to the charge that
certain corporations operating cottonseed-oil mills have acquired control of cotton gins
in order to destroy the competitive market for cottonseed and to depress the price paid
to farmers for this commodity. Such hearings have been held at Washington D. C.,
Atlanta, Ga., Montgomery, Ala., and Raleigh, N. C.
CHIEF COUNSEL’S PROCEDURE IS DESCRIBED

That part of the commission’s central procedure administered by the chief counsel,
is described as follows:
ISSUANCE OF A COMPLAINT

It is only after the most careful scrutiny of the record that the commission issues a
complaint. The commission must have, in the language of the statute, reason to believe
that the law has been violated and that the public interest is involved before complaint
issues The complaint is the statutory means provided to bring before the commission
a party charged with violation of laws within its jurisdiction. Unlike the preliminary
inquiries and applications for complaint, which are held strictly confidential, the
complaint and answer are a public record, and with the issuance of a complaint there
is set up the formal docket, which, unless otherwise specifically directed by the
commission, is open for public inspection after the complaint has been served upon the
respondent.
A complaint is issued in the name of the commission in the public interest. It names
a respondent and charges a violation of law, with a statement of the charges. The party
first complaining to the commission is not a party to the complaint when issued by the
commission; nor does the complaint seek to adjust matters between parties. It is to

prevent unfair methods of competition for the protection of the public.

62

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
ANSWER TO A COMPLAINT

The commission’s rules, of practice and procedure provide-(1) In ease of desire to contest the proceeding the respondent shall, within such time as the commission
shall allow (not less than 30 days from the service of the complaint) 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. Respondent shall specifically admit or deny or explain each of the facts alleged in the
complaint, unless respondent is without knowledge, in which case respondent shall so state, such
statement operating as a denial. Any allegation of the complaint not specifically denied In the answer,
unless respondent shall state in the answer that respondent is without knowledge, shall be deemed to be
admitted to be true and may be so found by the commission.
(2) In case respondent desires to waive hearing on the charges set forth in the complaint and not to
contest the proceeding, the answer may consist of a statement that respondent refrains from contesting the
proceeding or that respondent consents that the commission may make, enter, and serve upon respondent
an order to cease and desist from the violations of the law alleged in the complaint, or that respondent
admits all the allegations of the complaint to be true. Any such answer shall be deemed to be an admission
of all the allegations of the complaint, to waive a hearing thereon, and to authorize the commission,
without a trial, without evidence, and without findings as to the facts or other intervening procedure, to
make, enter, issue, and serve upon respondent an order to cease and desist from the method or methods
of com petition charged in the complaint.
(3) Failure of the respondent to appear or to file answer within the time as above provided for shall
be deemed to be an admission of all allegations of the complaint and to authorize the commission to find
them to be true and to waive hearing on the charges set forth in the complaint.

TRIAL OF A CASE

After complaints are issued the chief counsel is charged with the trial or other proper
disposition of all cases. In a contested case the matter is set down for the taking of
testimony before a trial examiner upon due notice to all parties respondent. After the
taking of testimony and the submission of evidence on behalf of the commission, in
support of the complaint, and on behalf of the respondent the trial examiner prepares
a report of the facts for the information of the commission, counsel for the
commission, and counsel for the respondent. The trial examiner’s report is informative
only and is not binding on the commission.
Within a stated time after receipt of the trial examiner’s report briefs are filed and
then the case comes on for final argument before the full commission. Thereafter the
commission reaches a decision either sustaining the charges of the complaint or
dismissing the complaint. If the complaint is sustained, the commission makes a report
in which it states its findings as to the facts and conclusion that the law has been
violated, and there upon an order is issued requiring the respondent to cease and desist
from such practices. If the com plaint is dismissed, an order of dismissal is entered.
Respondents against whom orders to cease and desist have been directed are
required within a specified time, usually 60 days, to report in writing the manner in
which they are complying with the provisions of the commission’s order. If a
respondent fails or neglects to obey the order while it is in effect, the commission may
apply to a United States Circuit Court of Appeals for enforcement thereof.
Respondents may likewise apply to a United States Cir-

CHIEF COUNSEL

63

cuit Court of Appeals for review of the commission’s orders. Either party may apply
for certiorari to the Supreme Court of the United States, which, if granted, brings the
case before it for final determination.
All court proceedings are supervised by the chief counsel through the assistant chief
counsel in charge of appellate work.
SUMMARY OF WORK, 1930

The work of the export-trade section is reported at pages 125 to 141. That of the
public-utilities investigation is described at page 11. The volume of other work of the
chief counsel’s office is concisely expressed in the statistical tables to be found on
pages 117 to 124 of this report. Complete synopses of complaints disposed of by
orders of dismissal or orders to cease and desist entered during the year and all cases
pending at its close will be found on pages 167 to 181, and pages 182 to 219.

REPRESENTATIVE COMPLAINTS
[Continuation of chief counsel’s report]

In the course of the performance of its duties, the commission is called upon to
protect the public from unfair and monopolistic business practices.
All but nine of the 172 complaints issued during the year charged unfair methods of
competition violative of section 5 of the Federal Trade Commission act.
Violations of section 7 of the Clayton Act by acquisition of capital Stock of
competing concerns were charged in 7 complaints. There was one complaint alleging
violation of section 3 of the Clay-ton Act (tying contracts) and one complaint under
section 2 of the same statute (price discrimination) which also included a charge of
violation of section 5 of the Federal Trade Commission act. No complaint under
section 8 of the Clayton Act (interlocking directors) was issued during the fiscal year.
Herewith are presented brief summaries of the charges contained in a few of the
complaints issued by the commission during the fiscal year. These complaints are
fairly representative.1
Acquisition of competitors’ capital stock.--Seven complaints were issued by the
commission charging violations of section 7 of the Clayton Act.
In one of these it was alleged that a holding corporation acquired all or a majority
of the issued and outstanding capital stocks of 28 separate corporations, all of which
were, at the time their stocks were acquired, engaged in selling, at wholesale, drugs,
proprietary medicines, and other articles usual to the wholesale drug business and each
in competition with the others, with the effect of substantially lessening competition
between the acquired corporations, or between some of them, or to restrain commerce
in drugs, proprietary medicines, etc., in the several sections or communities in which
these corporations were engaged in commerce , or to tend to create in the respondent
a monopoly of drugs, proprietary medicines, and other articles usual to the drug
business.
In another complaint it was charged that a corporation manufacturing and selling
alloy and other forms of steels acquired and now owns the entire capital stock of
another corporation manufacturing alloy and other forms of steels , with the alleged
effect of substantially lessening competition between the respondent and the corporation whose stock was so acquired and with the alleged effect of restraining
commerce in the sale of alloy and other forms of steels in certain sections or
communities of the United States, and of tending to create a monopoly in the
respondent in alloy and other forms of steels.
1

Attention is especially invited to the fact that most of these complaints are pending, and consequently
the commission has reached no determination as to whether the law has been violated as charged therein.

64

REPRESENTATIVE COMPLAINTS

65

Another complaint charged that a corporation engaged in the manufacture and sale
of radio receiving sets and parts had acquired directly 831/3 per cent of the capital
stock of a competing corporation engaged in the manufacture and sale of radio
receiving sets and parts, with the alleged effect of substantially lessening competition
between the two corporations.
The commission charged in another complaint that a corporation engaged in
manufacturing ice-cream cones and other pastry products acquired the stock and share
capital of six corporations independently engaged in the manufacture and sale of icecream cones and other food products, with the alleged effect of substantially lessening
competition between the acquired corporations or some of them or of restraining
commerce in certain sections and communities in said business or tending to create a
monopoly therein.
It was also charged that a corporation engaged in the manufacture and sale of
printing and lithographing inks, print rollers, varnishes dry colors, and other
miscellaneous allied products, acquired all of the outstanding capital stock of a
corporation manufacturing and selling photo-engraving, printing, and lithographing
inks, rollers, lamps, etching, and newspaper machinery, and other miscellaneous allied
products, with the alleged effect of substantially lessening competition between the
respondent and the corporation whose stock was acquired and of restraining commerce
between the two, and tending sale to create a monopoly in the respondent in the
manufacture and sale of printing and lithographing inks, printing rollers, and other
miscellaneous allied products, particularly in the western part of the United States.
The commission charged that a holding corporation acquired the capital stock of four
separate corporations operating ostensibly as independent and competing companies
and engaged in the manufacture and sale of wrapped and unwrapped drinking straws
and wrapped toothpicks, with the alleged effect of establishing a monopoly in the
drinking-straw trade and the alleged effect of substantially lessening and restraining
competition in the toothpick trade.
In another complaint under section 7 of the Clayton Act the commission charged that
a corporation engaged in the business of selling cigarettes acquired a substantial part
of the capital stock of two other corporations engaged in the same business, with the
alleged effect of substantially lessening competition between the corporations so
acquired.
Price discrimination and resale price maintenance.--Complaint was brought in
September, 1929, against a corporation engaged in the manufacture of insecticides,
fungicides, and like products in which it is charged that respondent has allowed trade
discounts in the marketing of its products and has classified its customers into groups
according to an arbitrary basis of selection, other than as to whether they are wholesale
or retail dealers, and has allowed to purchasers of the same quantity and quality of its
products different discount rates according to said arbitrary classification of such
purchasers by respondent.
It is further charged that the varying discount rates allowed by respondent are a
discrimination in price between purchasers of re-

66

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

spondent’s commodities for use, the alleged effect of which may be to substantially
lessen competition in the distribution of said products between distributors thereof or
dealers therein; and that such discrimination is not founded on difference in the grade,
quality, or quantity of the commodity sold, and does not make only due allowance for
difference in the cost of selling or transportation and is not made in good faith to meet
competition in violation of section 2, Clayton Act.
The same respondent is also charged with having adopted and maintained a policy
of resale price maintenance under which it has established and made known to the
trade certain uniform minimum resale prices at which dealers handling certain
products shall resell the same, in violation of section 5 of the Federal Trade
Commission act.
In furtherance of this price-maintenance policy, it is charged that respondent
arbitrarily classifies the purchasers of its products into two groups, to one of which it
allows a trade discount materially less than is allowed to the others; and that the basis
for this discrimination is in many instances the maintenance of or failure to maintain
respondent’s suggested minimum resale prices, and that the purchasers failing to
maintain the suggested minimum resale prices are allowed only the smaller trade
discount.
The alleged effect of said practices of respondent is to suppress competition among
dealers in the distribution of its products and to constrain said dealers to sell the
products at prices fixed by respondent and to deprive the public of the benefits of the
free play of competition in price, in violation of section 5 of the Federal Trade
Commission act.
Tying and exclusive contracts.--The commission issued a complaint in May, 1930,
against a corporation engaged in leasing or licensing machinery, apparatus, or
implements for the manufacture of ice-cream cones and cup pastry to the lessees,
licensees or users thereof on the condition, agreement, or understanding that the lessees, licensees, or users thereof shall not purchase, lease, license or use the machinery,
apparatus, or implements for making ice-cream cones or cup pastry of a competitor or
competitors of the respondent, and it is alleged that the respondent has compelled its
said licensees or lessees of its machinery, apparatus, or implements to use only the
machinery, apparatus, or implements for making ice-cream cones or cup pastry leased
or licensed by itself, and to refrain from using the machinery, apparatus, or implements
for making ice-cream cones or cup pastry sold, leased, or licensed by a competitor or
competitors of respondent; and has prevented any other manufacturer of machinery,
apparatus, or implements for making ice-cream cones or cup pastry from selling,
leasing, or licensing same to any jobbers of confectionery, baking companies, or other
dealers in ice-cream cones or cup pastry who lease or license from respondent
machinery, apparatus, or other implements used of” making ice-cream cones or cup
pastry.
The alleged effect of such contracts, agreements, or understandings is to
substantially lessen competition between respondent and its competitors, or tend to
create a monopoly in respondent in the aforesaid line of commerce in violation of the

provisions of section 3 of the Clayton Act.

REPRESENTATIVE COMPLAINTS

67

Resale price maintenance.--Eight complaints were issued by the commission during
the fiscal year in which respondents are charged with maintaining resale prices in
violation of the law (sec. 5, Federal Trade Commission Act) .
A representative complaint on this subject was issued in February, 1930. A
manufacturer of men’s clothing was charged with practicing unfair methods of
competition by enforcing a merchandising system of established uniform prices and
maintaining specified uniform prices at which said clothing should be resold by retail
dealers to the consuming public throughout the country.
In order to enforce said system and prevent sales at less than the resale prices so
designated by respondent, it is alleged that respondent employed the following means:
Established and announced uniform prices at which retail dealers should resell said
products to the consuming public; sought and secured assurances from retail dealers
that they would not sell said products at prices other than specified by the respondent;
refused to sell retail dealers direct who had cut prices on said products unless and until
the dealers gave their assurances that they would not again cut respondent’s suggested
resale price; traced, by means of identifying numbers, the source of supply of retail
dealers who were cutting the price on respondent’s goods and after such tracing
refused to sell to the dealer supplying the price-cutting dealer unless said dealer
supplying the price-cutting dealer agreed to cease supplying the said price cutter; in
some instances, required dealers to furnish it with the names of parties to whom goods
afterwards offered at cut prices had been originally sold.
It is alleged in the complaint that the effect of these practices is to substantially
lessen and suppress competition, to constrain dealers to sell respondent’s products at
prices fixed and established by it and to prevent them from reducing the price of said
products as they may desire and to deprive the purchasing public of those advantages
which they would obtain from the natura and unobstructed flow of commerce in said
products under conditions of free competition.
Misrepresentation, paints and roof coating.--Complaint was issued against two
respondents engaged in the business of advertising and selling paints and roof coating,
charging them with unfair methods of competition (sec. 5, Federal Trade Commission
act) in causing the roof coating or paints sold and distributed by them to be represented
as “Liquid Asbestos Roofing” or as “Asbestos” and as “ the finest indestructible rock
asbestos,” and that “It is fully guaranteed to wear for ten years and is one of the few
. genuine liquid asbestos roofings offered today,” when the products so branded and
described were not and are not made, in whole or in predominant part, of asbestos, do
not contain the finest indestructible rock asbestos, and will not wear for 10 years.
The complaint further alleges that the respondents represented themselves to their
purchasers and prospective purchasers as manufacturers, when they do not either
manufacture, make, or fabricate the products offered for sale and sold by them, or own,
control, operate, or manage any mill, factory, plant, or other place wherein said
products have been or are being manufactured, made, or fabricated.

68

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

The complaint charges that such practices are unfair methods of competition because
they have the capacity and tendency to mislead and deceive purchasers and prospective
purchasers into the belief that respondents are bona fide manufacturers and that the
products sold by them are made in whole or in predominant part of asbestos and will
wear for 10 years.
In the answers to the complaint the respondents admit the use of the word
“Asbestos” and the representations of their products as charged and admit that said
products are not made of asbestos and that they are not made from the finest
indestructible asbestos rock, and that they will not last for a period of 10 years; state
that they are without knowledge as to whether the representations and practices
complained of have the capacity and tendency to mislead and deceive prospective
purchasers, but deny that their acts have been to the prejudice of the public or their
competitors.
Misrepresentation and misbranding.--In March, 1930, the commission issued its
complaint against a manufacturer and seller of blankets, charging it with unfair
methods of competition (sec. 5, Federal Trade Commission act) in labeling and
describing blankets manufactured by it composed partly of wool and partly of cotton,
the wool content ranging approximately from 5 per cent to 75 per cent of the whole,
and being for the most part less than 50 per cent, the remainder consisting of a cotton
warp and a filler, as “Part Wool,” “Wool and Cotton,” or “Wool Mixed.”
The complaint further alleges that nothing is included in the labels used, or in any
other form descriptive of respondent’s said products, which states or indicates the
proportion of wool contained in the particular blankets to which said labels are
attached respectively; that the trade-mark used by respondent consists of a picture of
three sheep in an oval , which appears on some of its labels above described and on its
stationery and billheads, together with the legend “Fine Wool Blankets”; and that
respondent manufactures and sells also blankets which it labels “All Wool,” of which
the filler consists entirely of wool.
The complaint charges that owing to said practices, dealers and retailers sell
respondent’s said products without, in many cases, knowing or stating or indicating
accurately to purchasers thereof the proportion of wool contained therein, whether they
contain 5 per cent or 25 per cent of wool, or any other proportion thereof; and that said
dealers and retailers represent to purchasers, in many cases, that said blankets contain
a larger proportion of wool than they actually do contain, and that they are composed
principally of wool or contain a substantial proportion thereof , when the wool content
is less than 50 per cent and is, in some instances, not more than 10 per cent.
Such practices are alleged to be unfair methods of competition because they have the
capacity and tendency to deceive customers of respondent, retailers, and the
purchasing public as to the composition of respondent’s product in respect of wool
contents , and to cause them to believe that many of respondent’s blankets contain a
greater amount of wool than they do in fact contain.
In its answer the respondent admits using labels entitled “Part Wool” on blankets
containing from 5 per cent to 75 per cent wool and that it had been using billheads

with the words “ Fine Wool

REPRESENTATIVE COMPLAINTS

69

Blankets” but has given orders to stop the use of this phrase and to substitute the
phrase “All-Wool and Part-Wool Blankets.”
Respondent further answers that it would be perfectly willing to indicate the exact
percentage of wool contained in all of its blankets provided the balance of the industry
was forced to do likewise.
Agreements to suppress competition--Price discrimination--Coercion of
manufacturers.--In February, 1930, the commission issued a complaint (under sec. 5,
Federal Trade Commission act) against a the and mantel contractors ‘ association and
the individual members thereof charging respondents with undertakings and
agreements with each other to prevent manufacturers of the from selling and ship-ping
or causing to be shipped the to other the and mantel contractors engaged in the
business of purchasing, laying, and placing the who were not members of the
respondent association; or to prevent manufacturers of the from selling or shipping or
causing to be shipped the to other the and mantel contractors engaged in the business
of purchasing, laying, and placing the same, except at prices substantially higher than
the prices at which said the is sold to the members of respondent association.
In order to carry out said undertakings and agreements it is alleged that respondent
association and the members thereof employed the following means:
Notified the manufacturers or their representatives that if said manufacturers sell and
supply the and mantel contractors not members of respondent association with the that
respondents will cease purchasing the from such manufacturers; refused to admit to
membership in respondent association other tile and mantel contractors who are
desirous of joining said association in order that they may obtain tile at substantially
the same price at which respondents obtain it.
In their answers to the complaints respondents make a general and specific denial
of the allegations and thereafter, in May, 1930, filed a plea of nolo contendere.2
Misrepresentation.--The commission issued complaint (under sec. 5, Federal Trade
Commission act) in January, 1930, against a corporation, and certain individuals as
agents thereof, engaged in the sale of electric-lamp fixtures and parts in which the
respondents are charged with obtaining exorbitant prices for their products, which are
sold by traveling salesmen or canvassers employed by them to solicit orders or sales
principally from the proprietors or managers of the smaller stores, shops, an d business
or professional offices, by the use of the following means:
Falsely representing by direct and indirect statements that the said salesmen and
canvassers were employees of the electric-light company which was serving the local
community with electric-light current and fixtures; falsely representing that the
respondent corporation was in some way or other connected with sponsored, or
controlled by said local electric-light company; falsely representing that the electriclight bulb or lamp of respondent corporation’s fixtures was a bulb of lesser watt
capacity than the bulb in use in the prospective purchaser’s fixture and that the
respondent corporation’s
2

The commission, June 26, 1930, issued findings as to the facts and order to cease and desist.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

fixture, if purchased and installed would, notwithstanding its lesser watt capacity,
furnish the same or a greater illumination than the bulb or lamp in use by the
prospective purchaser, would use less electric current, and so reduce the purchaser’s
expense for light, when in fact the bulb or lamp furnished with respondent
corporation’s fixture was of a greater watt capacity than represented or of the same
watt capacity as used in the prospective purchaser’s fixture, and would not use less
electric current than the bulb or lamp then in use in the prospective purchaser’s fixture
and would not reduce the prospective purchaser’s expense for light; falsely
representing that they were leaving the respondent corporation’s said fixture on trial
and obtaining the prospective purchaser’s signature to an alleged contract of sale for
the fixtures by trick, or the false pretense that the prospective purchaser was signing
a receipt showing merely a delivery of the fixtures represented to be left on trial; using
and abusing the process of the law by placing attachments on the property of persons
alleged to be purchasers of the said fixtures on such alleged contracts, fraudulently
obtained to the knowledge of the respondents as above set forth, causing keepers to be
put in charge of places of business of alleged purchasers on such attachments, and in
other ways to extort payment from alleged purchasers of sd fixtures on said fraudulent
alleged contracts of sale, to the great annoyance, expense, and distress of said alleged
purchasers.
The alleged effect of the fraudulent methods and practices used by respondents has
been to mislead and deceive the purchasing public into accepting deliveries of
respondents’ products in the belief that respondents’ representations are true and to
induce prospective purchasers to sign alleged contracts of purchase and sale of
respondent corporation’s said fixtures in the belief that they were signing receipts for
delivery of the same for trial purposes and in the belief that they were not buying or
obligating themselves to purchase the same to the injury and prejudice of the public
and of the respondents competitors, and in violation of section 5 of the Federal Trade
Commission act.
In their answers to the complaint the respondents make a general and specific denial
of the allegations or deny that the practices are in violation of law as charged.
Misrepresentation of woods.--In December, 1929 the commission issued complaint
(under see. 5, Federal Trade Commission act) against a partnership engaged in the
manufacture and sale of household and office furniture to wholesale and retail dealers
located at various points of the United States, charging it with unfair methods of
competition in advertising and representing the said household and office furniture as
being “mahogany,” “Philippine mahogany,” and other purported species and kinds of
mahogany, when said furniture is made of woods other than mahogany but resembling
mahogany in general appearance.
The complaint further alleges that the representations made by respondent have had,
and have the capacity and tendency to cause, many wholesale and retail dealers of
household and office furniture to purchase same from respondent in the belief that the
same are made of mahogany wood and have had, and have the capacity and tendency
to cause, said wholesale and retail dealers to resell such household an d office furniture

as and for furniture made of mahogany

REPRESENTATIVE COMPLAINTS

71

wood and thus to cause the purchasing public to purchase such furniture made of said
woods other than mahogany in the belief that the articles so purchased are made of
mahogany wood.
It is alleged that the above acts and practices are to the prejudice of the public and
respondent’s competitors and in violation of section 5 of the Federal Trade
Commission act.
Respondent in its answer to the complaint makes a general denial of the allegations
and requests strict proof thereof.
Complaints involving substantially similar charges were issued during the year
against 12 other concerns. The same question was before the commission in the
Indiana Quartered Oak Co. case, in which its decision was sustained by the Circuit
Court of Appeals (26 F. (2d) 340), certiorari being subsequently denied by the
Supreme Court (278 U. S. 623).
Agreements to maintain uniform prices and suppress competition in cotton flour,
meal, and feed bags.--During February, 1930 the commission issued a complaint
(under sec. 5, Federal Trade Commission act) against a bag manufacturers’
association, its officers and members, and 19 separate bag companies said companies
all being engaged in the manufacture and sale of cotton and burlap flour, meal, and
feed bags and the distribution of the same to flour and feed mills and to jobbers and
wholesalers of said bags.
The respondents were charged with entering into an understanding, combination, and
conspiracy among themselves, and with and through the respondent association, to
restrict, restrain, and suppress competition in the sale and distribution in interstate
commerce of said bags by fixing uniform prices, terms, and discounts, including
arbitrary freight allowances and printing charges to be observed in the sale of said
. by agreeing to maintain said uniform prices, terms, and discounts in the sale thereof;
and by cooperating with each other in different ways in the maintenance of said prices,
terms, discounts, allowances, and charges by exchanging directly or indirectly, through
the secretary of respondent association, information as to prices and charges quoted
and received for said cotton bags.
In February, 1930, the commission issued a complaint similar to the above complaint
against an association and the officers and members thereof, said members being
engaged in the business of manufacturing, mercerizing, and processing, including
dyeing, tinting, bleaching, and gassing of plied cotton yarns, and in the sale and
distribution of their finished products, generally known as mercerized plied cotton
yarns to manufacturers of hosiery, underwear, and other garments throughout the
United States. Respondents filed answers making a general denial of the allegations
and averring specially that respondents have been and now are in active, normal
competition with each other.
Intimidation and coercion of customers and unlawful agreements to secure
business.-In April, 1930, the commission issued complaint (under sec. 5, Federal Trade
Commission Act) against a corporation engaged in the manufacture of railway
equipment, appliances, and supplies, particularly draft gears and centering devices, and
in the sale of said products, directly or indirectly through sales agents, to railway
companies, freight and passenger car builders, and other concerns, and against several
individuals, who were and are large stockholders in said respondent corporation and

are also officials of

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

one of the large packers and distributors of meat products and by-products owning and
operating refrigerator and other cars for that purpose, charging said respondents or
understanding whereby said with entering into an agreement individual respondents
agreed and promised to use the volume of traffic of said packing company and its
subsidiary companies in the solicitation of draft gear business from certain railway
companies in behalf of respondent corporation, and charging further that in
consideration of said agreement or understanding the promoters or officials of
respondent corporation assigned and transferred to the individual respondents a
considerable number of shares of common stock of the respondent corporation and that
said understanding or agreement was entered into by said individual respondents
without the knowledge of the packing company and its stockholders.
The complaint also charges that the individual respondents, as traffic department and
executive officials of the packing company, have sought to induce and compel, and
have induced and compelled, various railway companies to purchase draft gears and
other railway equipment manufactured and/or sold by respondent corporation, in
preference to draft gears and other equipment of equal or higher quality manufactured
and sold by competitors by the following methods: (a) By promises and assurances of
freight traffic to be shipped over the lines of said railway companies by said packing
company and its subsidiary corporations, (b) by promises and assurances of an
increased volume of freight traffic to be shipped over the lines of said railway
companies by said packing company and its subsidiary corporations, and (c) by threats
of withdrawal of freight traffic from the lines of said railway companies by said
packing company and its subsidiary corporations , if said railway companies would not
purchase the said draft gears and other railway equipment manufactured, and/or sold
by said respondent corporation.
It is further charged that the individual respondents, pursuant to the agreement or
understanding aforesaid and at the request of the officials and promoters of respondent
corporation, have cooperated with and assisted the respondent corporation in the sale
and distribution of its draft gears and/or other railway equipment to various railway
companies, particularly by utilizing their official positions in the said packing
company to induce and compel the officials of railway companies to give undue
preference to draft gears and/or other railway equipment manufactured and/or sold by
the respondent corporation by means of promises of freight traffic from the packing
company and its subsidiary corporations, and threats of withdrawal of said traffic if
the said railway companies would not purchase draft gears and/or other railway
equipment manufactured and/or sold by respondent corporation. The complaint
charges that such practices are unfair methods of competition to the prejudice and
injury of the public and competitors of respondent corporation and unduly tend to
suppress competition between respondent corporation and competing manufacturers
of draft gears and other railway equipment, and to create a monopoly in respondent
corporation in the sale and distribution of draft gears and other railway equipment in
violation of section 5 of the Federal Trade Commission act.

REPRESENTATIVE COMPLAINTS

73

Respondents make a general and specific denial of the allegations of the complaint
in their answers.
Lottery cases.--During the fiscal year the commission issued 46 complaints charging
a violation, by the concerns named therein, of Section 5 of its organic act, by the use
of various lottery methods in promoting the sale of their products--candy and chewing
gum.
In a typical case , the respondent sells to wholesalers and jobbers packages or
assortments of candy. One of these packages is composed of chocolate covered candy
in pieces of uniform size, shape, and quality, together with a smaller number of larger
pieces or articles of merchandise, or both, the larger pieces and merchandise to be
given as prizes to purchasers of the smaller candies in the following manner: The
majority of the smaller pieces, which retail for 1 cent, have centers of the same color,
a smaller number having centers of a different color--the plan being that the purchaser
who procures one of the latter description is entitled to receive free of charge one of
the larger pieces or an article of merchandise, or both.
The purchaser of the last of the smaller pieces receives a similar reward. Another
assortment consists of 40 candy bars of a uniform size, shape, and quality, each within
a wrapper. Within the wrapper is a piece of paper which has printed thereon the retail
price of the particular piece of candy, which may be 1 cent, 3 cents 4 cents , 5 cents,
or free. The printed slip is effectually concealed from the consumer until he has
removed the wrapper.
Still another assortment is composed of a number of pieces of candy of uniform size,
shape, and quality, retailing for 1 cent each , a small number of which have concealed
within them pieces of money.
Display cards, to be used by retailers in offering such candies to the public and
describing the method of sale, are furnished the jobbers and wholesalers. It is alleged
that the respondent by the practices above described, places in the hands of others a
means of conducting lotteries in the sale of its products, and that these practices tend
to and do induce many of the consuming public to purchase its candies in preference
to those of its competitors.
In another typical case the respondent sells to wholesalers and jobbers an assortment
consisting of 17 jars of candy, 1 being of a size which ordinarily retails for $2, 4
usually selling at a retail price of 75 cents, and 12 for 50 cents--furnishing with each
assortment a punchboard containing 200 holes and divided into four sections. Into each
of the holes has been inserted a small slip of paper bearing a printed number, the
numbers running from 1 to 200, inclusive. The slips are so placed in the punchboard
that they can not be seen by the customer except when they are punched from the
board.
The board bears the following legend: “5 cents per sale--Nos. 10, 20, 30, 40, 50, 60,
70, 80, 90, 100, 110, and 120 receive a 50-cent jar. Last punch in each section receives
a 75-cent jar. Last sale on the boar& receives a $2 jar.” Each customer pays 5 cents for
each punch, and those receiving numbers other than those above enumerated or who
do not qualify by purchasing the last punch in each section or on the board, receive
nothing for their money. It is alleged in this case also that the acts and practices of the

respondent are to the prejudice of the public and respondent’s competitors.

ORDERS TO CEASE AND DESIST
[Continuation of chief counsel’s report]

FORTY-EIGHT ORDERS ARE ISSUED IN FISCAL YEAR

The final expression of the Commission in a case where it finds the respondent to
have violated the law, as alleged, is an order upon such respondent to cease and desist
from the particular practices alleged in the complaint. The commission, during the year
here reported upon, issued orders to cease and desist in 48 cases. All of these orders,
except two, which covered violations of section 7 of the Clayton Act, covered
violations of section 5 of the Federal Trade Corn-mission act relating to unfair
methods of competition. As in past years, respondents upon whom the commission
served orders to cease and desist have in a great many cases accepted their terms and
filed reports with the commission signifying compliance therewith.
The orders to cease and desist issued during the year are as follows:
Orders to cease and desist during the year
[For details see page 167]
Respondent
Location
Method of competition
Abraham Co., N. & Warehouse San Francisco
False and misleading advertising.
Albany Billiard Bali Co
Albany
Combination in restraint of trade.
American School of Correspond- Chicago
False and misleading advertising; falsely claimence.
ing giving of gratuities, operating without
profit and quotation of reduced prices; in
inserting fictitious want ads.
American School of Home Ecodo
Using fictitious indorsement; falsely claiming
nomics.
giving of gratuities and quotation of reduced
prices.
Anita Institute
Newark
Misrepresenting therapeutic value.
Boal’s Rolls Corporation
Chicago
Misbranding; misrepresenting therapeutic value.
Burton Brothers & Co., Inc
New York
Resale price maintenance; refusal to sell.
Bush, David V
Chicago
Misrepresenting therapeutic value; false and
misleading advertising.
Cherry Blossoms ManufacturSt. Louis
Misbranding; false and misleading advertising.
ing Co.
Clarkson Co., David B
Chicago
Falsely claiming quotation of reduced prices;
false and misleading advertising.
Clear Sight Spectacle Co
do
Falsely claiming giving of gratuities and quotation of reduced prices.
Consolidated Book Publishers
do
Selling one publication under two names;
(Inc.).
falsely claiming giving of gratuities and
quotation of reduced prices.
Dixie Pecan Growers Exchange Barnesville, Ga
False and misleading advertising.
(Inc.).
Enterprise Furniture Factory
Reading., Pa
Falsely claiming to be manufacturers; misrepresenting equipment.
Espositer Varni, Co
New York
Passing off of goods; false and misleading
advertising.
Ethyl Gas Co
Dallas
Passing off of name and goods; simulating trade
name, signs, and advertising. of competitor.
Ethylene sales Co
do
Passing off of name and goods; simulating trade
name, signs. and advertising. of competitor;
falsely claiming to be a manufacturer,
Everitt & Graf (Inc.)
Milwaukee
Misbranding; false and misleading advertising.
Gibbors Knitting Mills (Inc.)
St. Louis
False and misleading advertising.
Glover, L
Chicago
False and misleading advertising.; using fictitious
endorsements.

74

ORDERS TO CEASE AND DESIST

75

Orders to cease and desist during the year
Respondent
Griswold Lumber Co
Hamilton Garmet Co
Health Violet Products
Houze Convex Glass Co., L. J.
Kelley, James

Klimate-Pruf Manufacturing Co
Knit-Firm (Inc.)
Marietta Manufacturing Co
Merchants’ Cooperative Advertising Service

Morris, Charles E
Northwest The & Mantel Contractors’ Association
Pan American Manufacturing
Co. (Inc.).
Powell Co., J. A
Roaring Spring Blank Book Co.
Roberts Tailoring Co. (Inc.)

Reckwood Corporation of St.
Louis.
Selick (Inc.), C. H
Shakespeare Co.
Shlansky & Co. (Inc.), Philip
Shure Co., N
Stransky Manufacturing Co.,
J. A.
Tailor-Made Shoe System
Temple Anthracite Coal Co
Trilety, M
United Remedies (Inc.)
Universal Lock-Tip Co

Val Blats Brewing Co
Vivaudou (inc.), V

[For details see page 167]
Location
Method of competition
Portland, Oreg
Misrepresenting. size and quantity; collecting
refund in excess of freight charges prepaid.
New York
False and misleading advertising; falsely claim
ing to be importers and manufacturer.
Chicago
Misrepresenting therapeutic value; falsely
claiming quoting of reduced prices.
Point Marion, Pa Misbranding; passing off of goods.
New York
Misbranding; falsely claiming to be manufacturer and to be quoting reduced prices;
simulation of trade name misrepresentation
of equipment.
do
Falsely claiming to be manufacturer.
do
Falsely claiming to be manufacturer and importer; false and misleading advertising.
Indianapolis
False and misleading advertising.
Dallas
False and misleading advertising; falsely claiming to be affiliated with competitor; misrepresenting value of premiums; simulating trade
name of competitor.
New York
Falsely claiming to be manufacturer and wholesaler and to be quoting reduced prices.
Seattle
Combination to induce manufacturers to refuse
to sell except to members of trade associations
refusal to buy.
New Orleans
False and misleading advertising.
Chicago

False and misleading advertising; falsely claiming quotation of reduced prices.
Roaring Spring, Pa Misrepresenting quantity.
New York
Falsely claiming to be manufacturer; falsely
claiming that clothing is made to measure.
and is made of woolen cloth.
St. Louis
False and misleading advertising.
New York
Misbranding.; falsely claiming to be importer.
Kalamazoo, Mich Resale price maintenance; refusal to sell.
New York
Misbranding; false and misleading advertising.
Chicago
False and misleading advertising; misbranding.
Pukwana, S. Dak False and misleading advertising.
Chicago

Falsely claiming to be manufacturer; falsely
claiming that clothing is made to measure.
Scranton, Pa
Acquisition of stock tending to create a monopoly.
Binghamton, N.Y. Misrepresenting therapeutic value; false and
misleading advertising.
Chicago
False and misleading advertising
Boston
Falsely claiming ownership of patents and giving
of gratuities; misrepresenting value of purported
gratuities.
Milwaukee
Falsely claiming to be importer; misbranding;
false and misleading advertising.
New York
Acquisition of stock tending to create a monopoly.

REPRESENTATIVE; CASES RESULTING IN ORDERS

A number of representative Cases resulting in orders to cease and desist issued
during the fiscal year are described below. Unless otherwise indicated, these orders
pertain to violations of the Federal Trade Commission act. Violations of the Clayton
Act are so designated.

AGREEMENTS TO SUPPRESS COMPETITION

The Northwest The and Mantel Contractors’ Association .--Respondents, a
voluntary unincorporated organization, and the individual members thereof, being
persons, partnerships, and cor p orations engaged in purchasing, placing, and laying
the in various States, and in shipping and transporting and/or Causing to be shipped
or transported said the and other materials or supplies in
18131--30-----6

76

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

cident to the placing or laying of the Same, were ordered to cease and desist from (1)
agreeing, undertaking, and cooperating with each other to prevent manufacturers of tile
from selling and shipping or causing to be shipped the to the and mantel contractors
not members of respondent association, or to prevent manufacturers of the from selling
same to the and mantel contractors other than respondents except at prices
substantially higher than those at which said the is sold to the members of respondent
association, or to prevent nonassociation the contractors from securing contracts , or
to prevent them from laying and placing the by interfering with the procuring of the
necessary labor by cooperating with labor union the setters or their representatives; (2)
agreeing, undertaking, and cooperating with each other to prevent the purchase ,
placing, and laying of the in the Northwest Pacific States by non-association members,
or those the contractors not members of respondent association; (3) agreeing,
undertaking, and cooperating with each other to coerce the manufacturers into refusing
to supply nonassociation members with the except at prices substantially higher than
the prices at which said manufacturers sell their products to the respondents who are
members of respondent association; (4) agreeing, undertaking, and cooperating with
each other to prevent those contractors who are not members of respondent association
from securing contracts; (5) agreeing, undertaking, and cooperating with each other
to prevent nonassociation the contractors from laying and placing the by interfering
with the procuring of the necessary labor incident thereto by cooperation with laborunion the setters or their representatives ; (6) agreeing, under-taking, and cooperating
with each other to and notifying the manufacturers or their representatives that if said
manufacturers sell and supply the and mantel contractors not members of respondent
association with the, that the respondents will cease purchasing the from such the
manufacturers; or (7) agreeing, undertaking, and cooperating with each other, with the
purpose and intent of restricting the purchase, laying, or placing of the to present
members of respondent association in refusing further membership in said association.
RESALE PRICE MAINTENANCE

Burton Bros. & Co. (Inc.) --Respondent, engaged in buying cotton goods from mills,
having same converted, and selling the converted goods to manufacturers, jobbers, and
retailers, had for many years widely advertised a specially woven cotton cloth which
was first sold as “Irish Poplin” and later as “Burton’s Irish Poplin.”
The respondent sold this cloth to a number of manufacturers throughout the country
who made shirts out of it and sold same labeled Burton’s Irish Poplin” to retail dealers
located throughout the United States for resale to the purchasing public.
The respondent was charged with requiring the shirt manufacturers to whom it sold
this cloth to maintain suggested resale prices. It was alleged that respondent decided
to allow its label “Burton’s Irish Poplin” to be used by retailers only upon condition
that a shirt bearing said label be sold at a price specified by respondent, leaving the
retailer free to sell the shirt at any price after first removing the label, and that in
pursuance of this policy respondent sent to each

ORDERS TO CEASE AND DESIST

77

of the shirt manufacturers with whom it did business a “Notice to Trade” to be
attached to each shirt manufactured and sold by the manufacturer.
This “Notice to Trade” explained to the retailer that respondent allowed its label to
be attached to the shirt only upon condition that title to the label remained in
respondent, and that while the retailer was at full liberty to remove the label and sell
the shirt at any price he pleased, by accepting the invoice and shirt with label attached
he agreed not to sell the shirt with the label for less than a suggested price. This
“Notice to Trade” also stated that each shirt with respondent’s label attached carried
a guarantee by respondent.
Testimony was taken, briefs submitted, and oral argument heard by the
commission, which thereupon held the allegations proved and issued an order directing
the respondent to cease and desist from: (1) Requesting shirt manufacturers to attach
to invoices of shirts, or to boxes, or other containers of shirts, respondent’s “ Notice
to Trade” set out and referred to in the findings of fact; (2) publishing or making use
of said notice or an y notice or statement which asserts to retail dealers, directly or in
effect, (a) that such shirts are sold them subject to resale price restrictions or on
condition that they be not sold for less than prices fixed by respondent, or (b) that any
retail dealer who sells such shirts at a price less than the resale price thereof fixed by
respondent, then and there becomes legally liable to respondent; (3) making,
publishing, or otherwise . using any threat, express or implied, to bring a suit or action
in any court against any retail dealer who sells such shirts at prices less than the resale
p rice thereof fixed by respondent, or (4) utilizing any other equivalent methods or
means of accomplishing the maintenance or control of retail dealer resale prices of
shirts.
The respondent, July 10, 1930, petitioned the Circuit Court of Appeals for the
Second Circuit (New York City) to set aside the commission’s order. Afterwards it
filed a report with the commission showing a revision of its practice. This was
accepted by the commission as a compliance with its order, and the petition for review
was subsequently dismissed.
TYPES OF MISREPRESENTATION

David B. Clarkson Co.--Respondent is a corporation engaged in the sale and
distribution of books of all kinds at retail. In its advertising circulars, circular letters,
and other literature it represented that certain books which it sold were being offered
at a special and introductory price, considerably less than the regular price at which
said books were ordinarily and customarily sold, and that the publisher’s price of
certain of said books was greatly in excess of the price at which the publisher actually
sold them. A stipulation as to the facts was agreed upon between respondent and
counsel for the commission, in lieu of testimony before the commission in support of
the charges stated in the complaint or in opposition thereto; and the commission, after
receiving said stipulation and duly considering the record, issued its order requiring
the respondent to cease and desist from (1) making or causing to be made any

representations, statements, or assertions in any way or manner whatsoever to the
effect that (a) the prices at which it is selling its

78

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

books are special, introductory offers, (b) the prices at which it is selling its books are
less than the prices at which said books are regularly and customarily sold or (2)
misrepresenting in any way or manner whatsoever the publisher’s price of any book
or books which it sells.
Tailor-made Shoe System.--Respondent, engaged in the business of selling shoes
direct to the wearer thereof, and in the distribution thereof from its principal place of
business throughout the various States of the United States, does not manufacture the
shoes sold and distributed by it nor have any interest in any shoe factory.
It depicted, upon the covers of its catalogues, a large building and also a workman
cutting leather while looking at an order for “Tailor-made Shoes;” represented that it
had many times more customers than it actually had, that the shoes sold by it were
made to order for the customer upon his individual measurements, and other representations to the effect that the middleman’s profit was eliminated and that purchasers
of its shoes were able to obtain them at a special advantage in price.
After the introduction of testimony and the submission of briefs and oral argument,
the commission issued its order requiring respondent and certain individual officers
to cease and desist from (a) in any manner the corporate name “Tailor-made Shoe
System” (b) designating or describing in any manner the shoes offered for sale by
respondent as “Tailor-made” shoes, (c) representing in any manner that the cor p orate
respondent is the largest of its kind in the world or that it has 800,000 customers, or
(d) representing in advertisements, pictures, or otherwise, that the corporate
respondent is a manufacturer of shoes.
“BLUE--SKY” OPERATIONS ORDERED STOPPED

Universal Lock-Tip Co.--Respondent, Emile W. S. Gay, is the owner of a patent
granted by the United States Patent Office for a string fastener adapted for use as a tip
on the ends of shoe laces to keep the ends in a fixed point. Katherine Gay is his wife
and is not engaged in business, and respondent corporation has never done business
and has no assets of any substantial value.
Emile W. S. Gay, otherwise known as William S. Gay, has been and is engaged in
the business of the sale of shoes, shoe laces, and other products in connection with
which he has circularized members of the public throughout the country offering to
sell shoes, shoe laces, shirts, and stockings at stated prices and offering to give with
said sales shares of the preferred and common capital stock of respondent corporation,
in connection with which he has made numerous false and misleading representations
concerning the property, resources, assets , production, or financial condition, etc., of
the said corporation.
The Department of Public Utilities of the Commonwealth of Massachusetts has
received many letters or complaints with respect to the operations of respondents from
practically the entire country during the last four or five years and has investigated the
financial standing and method of the respondent corporation in disposing of its shares
of stock and has been refused pertinent information

ORDERS TO CEASE AND DESIST

79

respecting the subject of its inquiry by Emile W. S. Gay, other wise known as William
S. Gay, respondent herein.
After full consideration, the commission issued its order requiring respondent
corporation and respondents Katherine Gay and Emile W. S. Gay to cease and desist
from representing (1) that the respondent corporation is engaged in the business of
selling shoes or shoe laces or other merchandise, or that the said corporation has any
asset, as good will, by reason thereof, unless and until such is the fact; (2) that in
connection with such business aforesaid the respondent corporation is the assignee of
the patent rights of respondent William S. Gay for a patented string fastener or shoelace tip, unless and until such is the fact.
The commission further ordered that respondents, William S. Gay and Katherine
Gay, cease and desist from doing business on their separate individual accounts under
the name Universal Lock-Tip Company or Universal Lock-Tip Co. while the
respondent corporation is in existence under said name; (2) making statements in
letters or circulars addressed to members of the public, or otherwise, concerning the
respondents or any of them in connection with such business aforesaid, in which banks
or mercantile agencies are given as references unless and until such bank or agency has
given, in writing, to said respondents its consent to the use of such statement; (3) using
the certificates of stock of respondent corporation or other corporation in connection
with such business aforesaid and falsely representing that such shares represent an
undivided or other interest in or under any patent rights not belonging to such corporation; (4) making and publishing statements or representations in letters to members of
the public, or otherwise in connection with such business, that the shares of capital
stock of respondent corporation will be or may be listed on the New York, Boston, or
other stock exchanges unless and until such statements or representations are duly
authorized by the officials thereof; or (5) representing in statements published in
letters or otherwise that respondent corporation has, in connection with such business,
orders on hand for the sale of shoes or other merchandise or that dividends have been
earned by it on its shares of capital stock unless and until such statements or
representations are true, and from making any other such false or misleading statement
as a statement of fact or as to the happening of any future event concerning such of the
respondent corporation or its said capital shares or of the said business of the
respondents Gay, or either of them, unless and until the said statement of fact is true,
or the happening of such future event is reasonably based upon facts set forth by
respondents in connection therewith and such future event is clearly and unmistakably
shown not to be an already accomplished fact.
American School of Home Economics.--Respondent, engaged in the business of
giving courses of instruction in home economics and related subjects by
correspondence, has since its organization enrolled from 40,000 to 50,000 pupils and
its graduates number about 2,000.
In consideration of its instruction and other services respondent’s pupils contract to
pay and remit to respondent agreed sums of money, and respondent sells, to such
pupils as desire to purchase the same,

80

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

supplies for use in its cooking and candy-making courses, and ships such supplies from
its place of business to its pupils at their places of residence in various States of the
United States.
After full hearing the commission issued its order requiring the respondent to cease
and desist from (a) advertising or otherwise representing that respondent does not
conduct its business for profit; (b) advertising, representing, or describing as
“instructors” or teachers,” or by a like designation, persons, whether they were
authors of textbooks used by respondent or not, who are not actually engaged in the
giving of instruction by correspondence at the time such representation or description
be made; (c) advertising or other-wise offering to the public or to prospective pupils
special class. rates, club rates, and/or tuition charges otherwise designated as reduced
or special rates whether or not the same be advertised or otherwise offered as
obtainable by pupils applying to respondent during a limited time only, when, in fact,
the said class rates, club rates, or allegedly special tuition rates are charges not less
than the regular rates or tuition of the respondent for the course or courses of study so
advertised or offered; (d) advertising or in any way representing that any textbooks,
tools, appliances, equipment, and/or materials to be used by pupils in any course of
study given by respondent are free, when in fact the price of cost thereof is included’
in the charge or tuition for the respective course of instruction in which the same are
to be used; (e) advertising or stating to the public or any part thereof or to prospective
or actual pupils that, by virtue of the completion of any of respondent’s courses, pupils
will be qualified and enabled to obtain employment at high and lucrative compensation
or to engage in the catering of foods at great profit; (f) including in its letterheads,
advertising material, matriculation certificate, and/or other matters issued by
respondent a picture of the building which the respondent has rooms, with the
wording’ “American School of Home Economics,” without using in the immediate
context therewith the words, “In which the American School of Home Economics has
quarters,” or without using equivalent explanatory phraseology indicating clearly that
the respondent does not own or occupy, save in a limited way, the building pictured,
the said last-described phraseology to be made in letters not less than one-half as high
and one-half as wide as the lettering giving the name of the school, and to have, except
as to the size of letters, the same coloring, clearness conspicuousness, as the wording
giving the name of respondent’s school, and from including the picture of such
building, although omitting the name of the respondent’s school, without including the
said described explanation; or (g) advertising’ or stating in its printed or circular
matter or in correspondence that respondent’s school is conducted or supervised by
officers and/or a board of trustees so long as the said supposed officers and/or board
of trustees bear no active or supervisory relation to the affairs of respondent, and/or
publishing or otherwise using the names of persons as officers and/or trustees of
respondent who have ceased to act as officers or trustees of respondent and to bear any
active or supervisory relation to respondent and the school conducted by respondent.
at the time such advertisement or statement be made.

ORDERS TO CEASE AND DESIST

81

AGREEMENTS IN RESTRAINT OF TRADE

Albany Billiard Ball Co.--Respondents, Albany Billiard Ball Co. and Portland
Billiard Ball Co., are and have been engaged in the manufacture and sale of
composition billiard or pool balls, same being sold to manufacturers of billiard and
pool tables and wholesale dealers and jobbers of such products, including the
respondent, F. Grote & Hubbell Co. (Inc.), which the latter company is the exclusive
sales agent of respondent Albany Billiard Ball Co. The commission finds that at a
meeting between the three respondents they entered into a verbal mutual triparty
agreement whereby the Albany Billiard Ball Co. agreed that it would manufacture and
sell only composition billiard or pool balls of regulation size and would cease to manufacture and sell composition billiard or pool balls of less than regulation size, and
thereafter would sell its entire out put of regulation size composition billiard or pool
balls for the domestic trade to respondent F. Grote & Hubbell Co. (Inc.), which in turn
agreed to pay to the Portland Billiard Ball Co. a commission of $2.11 on each set of
regulation size composition billiard or pool balls manufactured by the said Albany
Billiard Ball Co. and sold by the said F. Grote & Hubbell Co. (Inc.) in the United
States, and the said Portland Billiard Ball Co. agreed that it would thereafter cease to
manufacture and sell composition billiard or pool balls of regulation size and would
manufacture and sell in the United States only the less-than-regulation-size
composition billiard or pool balls, and would furnish the F. Grote &Hubbell Co. (Inc.),
with the latter’s requirements of composition billiard or pool balls of less than
regulation size.
Testimony was taken, briefs submitted, and oral argument heard by the commission
which thereupon entered an order directing the respondents to cease and desist making,
entering into, or carrying out or observing, either directly or indirectly, any agreement
with each other to suppress, restrict, or restrain in any manner the competition existing,
or which might exist, between or among said respondents, in the sale and distribution
of composition pool balls in interstate and foreign commerce, and more particularly
cease and desist the following: (1) The respondent Albany Billiard Ball Co. agreeing
with the other respondents that it will manufacture and sell only composition pool
balls of regulation size, and will cease to manufacture and sell composition pool balls
of less than regulation size; and also being a party to an agreement whereby said
respondent, F. Grote & Hubbell Co. (Inc.), agrees to pay or pays to said respondent
Portland Billiard Ball Co. a commission on composition pool balls sold by the said respondent, F. Grote & Hubbell Co. (Inc.), in the United States as exclusive sales agent
or distributor for said respondent, Albany Billiard Ball Co., in said commerce; (2) the
said respondent, F. Grote & Hubbell Co. (Inc.), paying or agreeing to pay, directly or
indirectly, any commission or sum of money to the said respondent Portland Billiard
Ball Co. on the sale of composition pool balls sold by said respondent, F. Grote &
Hubbell Co. (Inc.), in the United States, as exclusive sales agent or distributor for said
respondent Albany Billiard Ball Co. in said interstate commerce; or (3) the said
respondent

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Portland Billiard Ball Co. agreeing to manufacture and sell composition pool balls of
less than regulation size only, and to cease the manufacture and sale of composition
pool balls of regulation size in the United States; or agreeing to discontinue the sale
and distribution of composition pool balls in foreign commerce or export trade; and
also from accepting, or agreeing to accept, as a consideration for such agreements, or
for any other purpose, commissions or sums of money from either the respondent F.
Grote & Hubbell Co. (Inc.), or the respondent Albany Billiard Ball Co. on sales made
in said commerce.
ACQUISITION OF COMPETITORS’ STOCK

Temple Anthracite Coal Co. (Clayton Act, sec. 7).--Respondent Temple Anthracite
Coal Co., engaged in the business of mining anthracite coal in Pennsylvania and the
sale and distribution of such coal to purchasers located in that State and in various
other States of the United States, is one of the largest anthracite coal-mining companies in the country, and prior to 1924 had acquired the physical assets of a number
of anthracite coal-mining companies engaged in the mining of anthracite coal in
Pennsylvania and the sale and distribution thereof in interstate commerce.
The commission finds that during October, 1924, the respondent Temple Anthracite
Coal Co. acquired directly by purchase all of the outstanding capital stock of the
Temple Coal Co. and 98 per cent of the outstanding capital stock of the East Bear
Ridge Colliery Co., both of which acquired companies were at the time and had been
actively engaged in the business of mining and selling and distributing anthracite coal
in competition with each other and with the Temple Anthracite Coal Co.
After full hearing the commission issued its order requiring the respondent to cease
and desist violating the provisions of section 7 of the Clayton Act and within 90 days
from the date of service upon it of said order to divest itself in good faith of all the
capital stock of the Temple Coal Co. owned by it and all of its interest in the capita
stock of said Temple Coal Co., such divestment of stock to carry with it all of the
property and assets of all kinds whatsoever of said Temple Coal Co.; or within the
same period to divest itself likewise of all the capital stock of the East Bear Ridge
Colliery Co. owned by it. It was further ordered that such divestment of the capital
stock and interest in the capital stock of Temple Coal Co. should not be made directly
or indirectly to the East Bear Ridge Colliery Co. or to anyone directly or indirectly
connected with said company or to any stockholder or anyone directly or indirectly
connected with the Temple Anthracite Coal Co., and that such divestment of the
capital stock and interest in the capital stock of said East Bear Ridge Colliery Co.
should not be made directly or indirectly to Lackawanna Coal Co. (Ltd.), Mount
Lookout Coal Co., Temple Coal Co., or to any stockholder or other person directly or
indirectly connected with any of such companies or with the Temple Anthracite Coal
Co.
The respondent, May 28, 1930, filed with the third circuit (Philadelphia) its petition
to review and set aside the commission’s order. The case now awaits briefing and

argument.

ORDERS TO CEASE AND DESIST

83

MISREPRESENTATION IN SALE OF BOOKS

Consolidated Book Publishers (Inc.).--Respondent is a corporation engaged in the
sale and distribution of a set of books at retail under the name New World Wide
Cyclopedia and of the same set of books at wholesale under the name of The Times
Encyclopedia and Gazetteer. The works are identical except for the titles and the
bindings, and the commission found that the sale of same under separate titles has the
capacity and tendency to mislead and deceive the purchasing public, and cause
members of the public to purchase both sets of books in the belief that they are
separate, different, and distinct works.
The commission also found that in -the advertising and sale of the New World Wide
Cyclopedia the respondent made numerous false and fraudulent representations with
respect to terms and contents and as a means of securing subscribers. After full hearing
the commission issued its order requiring respondent to cease and desist from (1)
selling or offering for sale, either at wholesale or retail, any set of books of the same
text and content material under more than one name or title at the same time; (2)
advertising or representing in any manner to purchasers or prospective purchasers that
any book or set of books offered for sale and sold by it will be given free of cost to
said purchaser or prospective purchaser when such is not the fact; (3) advertising or
representing in any manner that a certain number of sets or any set of books offered
for sale or sold by it has been reserved to be given away free of cost to selected
persons as a means of advertising, or for any other purpose, when such is not the fact;
(4) advertising or representing in any manner that purchasers or prospective purchasers
of its encyclopedia are only buying or paying for loose-leaf supplements intended to
keep the set of books up-to-date, or that purchasers or prospective purchasers are only
buying or paying for services to be rendered by a research, or other bureau, for a
period of 10 years, when such is not the fact; (5) selling the text and content material
of any set of books in such a way or manner, and with the purpose and intent, that said
text and content material may be resold by any other person, firm, or corporation under
any other name or title than that being used by respondent for said text and content
material; (6) advertising or representing in any manner that it maintains a research
bureau employing a staff of competent editors and experts for the purpose of
answering inquiries from subscribers, when such is not the fact; (7) advertising or
representing in any manner that inquiries addressed to its research bureau are referred
to and answered by experts and specialists in the particular subject inquired about,.
unless such inquiries are actually referred to and answered by said experts and
specialists; or (8) advertising or representing in any manner that its set of books is a
new and up-to-date encyclopedia, when such is not the fact.

COURT CASES
[continuation of chief counsel’s report]

Application may be made by the commission to the United States Circuit Courts of
Appeals to enforce its order to cease and desist or the respondent may petition the
court to have the order modified or set aside. The number of court proceedings in
which the commission has been involved during the year, as well as a cumulative
showing of this work throughout the commission’s life, will be found in the statistical
tables on pages 17 to 124 of this report.
The cases pending in the courts during the year have, for convenient reference been
listed alphabetically in the following table.
They are described at some length in the pages immediately following:
American Snuff Co
Baltimore Paint & Color Works
Bayuk Cigars (Inc.)
Breakstone, Samuel
Burton Brothers & Co., (Inc.)
Cassoff, L. F
Chipman Knitting Mills
Consolidated Book Publishers (Inc.)
Electric Bond & Share Co
Fluegelman & Co. (Inc.)
Good Grape Co
Grand Rapids furniture cases
Grand Rapids Varnish Co
International Shoe Co
Kay, Abbott E. (Dr.)
Kirk, James S. & Co
Kohlberg, Alfred (Inc.)
light House Rug Co
Lomax Rug Mills
Macfadden Publications (Inc.)
Marietta Manufacturing Co
Masland Duraleather Co
McCafferty, James A. & Sons, Manufacturing Co
Millers’ National Federation
Morrissey Charles T
Ohio Leather Co
Paramount Famous-Lasky Corporation
Baladam Co
Royal Baking Powder Co
Royal Baking Powder Co. (mandamus)
ShadeShop
Shakespeare Co
Temple Anthracite Coal Co
Vivaudou, V. (Inc.)
Western Meat Co
84

Page
94
86
92
97
87
85
99
88
105
104
100
98
95
93
97
100
102
96
89
108
89
101
86
106
86
101
96
102
109
110
91
87
87
88
89

COURT CASES

85

CASES IN THE SUPREME COURT OF THE UNITED STATES AND THE UNITED
STATES CIRCUIT COURTS OF APPEALS ARISING UNDER SECTION 5 OF THE
FEDERAL TRADE COMMISSION ACT AND SECTION 7 OF THE CLAYTON ACT
CASES INSTITUTED SINCE JULY 1, 1929
[U S. Circuit Court of Appeals are designated “First Circuit, Second Circuit,” etc.]

The eases below appear in the order in which proceedings were instituted in the
courts:
L. F. Cassoff.--The commission, October 15, 1929, instituted a proceeding for
enforcement of its order in this case, filing the application with the Second Circuit
(New York City).
The order had directed Cassoff, an individual doing business under the names and
styles of Central Paint & Varnish Works and Central Shellac Works, to cease and
desist:
(1) From directly or indirectly employing or using on labels or as brands for varnish
not composed wholly 100 per cent of shellac gum cut in alcohol or on containers in
which varnish is delivered to customers, the words “Orange Shellac,” “White Shellac,”
or the word “Shellac” alone or in combination with any other word or words unless
accompanied by a word or words clearly and distinctly indicating that such product
contains other substances, ingredients, or gums than shellac gum, and by a word or
words clearly and distinctly setting forth the substances, ingredients, or gum of which
the varnish is composed with the percentages of all such substances, ingredients, or
gums therein used clearly stated upon the label, brand, or upon the containers (e.g.,
“Shellac Substitute” or “Imitation Shellac,” to be followed by . a statement setting
forth percentages of ingredients or gums therein used) .
(2) From using or displaying in circulars or advertising matter used in connection
with the sale of its products in interstate commerce, except when such. products
contain 100 per cent shellac gum cut in alcohol, or on the containers in which the
varnish is delivered to customers the words “Orange Shellac,” “White Shellac,” or the
word “Shellac” alone or in combination with any other word or words unless
accompanied by a word or words clearly and distinctly indicating that such product
contains other substances, ingredients, or gum than shellac gum, and by a word or
words clearly and distinctly setting forth the substances, ingredients, or gum of which
the varnish is composed with the percentages of all such substances, ingredients, or
gums therein used clearly stated on the label, brand, or on the containers (e.g., “Shellac
Substitute” or “Imitation Shellac,” to be followed by a statement setting forth
percentages of ingredients or gums therein used)
Respondent filed answer, and after briefing and argument, the court, February 17,
1930, handed down its decision, modifying and affirming the commission’s order. As
shown above, the order permitted the use of labels and advertisements if they clearly
indicated the percentages of ingredients other than shellac which were used. The court
took exception to this proviso, saying, in this connection (38 F. (2d) 790):
The stipulation entered into by the parties does not Justify the findings, and there Is no evidence which

requires a statement as to the percentages of the other Ingredients which make up the respondent’s
substituted shellac. If the respondent labels his goods and advertises the same as “shellac substitute”

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

or “imitation shellac,” accompanied by the statement that it is not 100 per cent shellac, that would be
sufficient to prevent a fraud upon the purchasing public.

The commission did not apply to the Supreme Court for writ of certiorari in this
case.
James A. McCafferty & Sons Manufacturing Co.--The commission, November 22,
1929, filed with the Second Circuit (New York City) an application for the
enforcement of its order in this case. The practice found by the commission to be an
unfair method of competition, and against which its order was directed, was that of
advertising and selling as “Gold Emblem White Lead “ and “Gold Emblem
Combination White Lead” products containing only from 1.8 to 2.9 per cent of white
lead.
The court, March 3, 1930, approved a stipulation between the parties, providing for
withdrawal of the application for enforcement and discontinuation of the proceeding,
without prejudice, however, to the right of the commission to file a new application.
Baltimore Paint & Color Works.--The commission, December 27, 1929, filed with
the Fourth Circuit (Richmond) an application for enforcement of its order in this case.
The corporation involved was organized under the laws of Maryland, with its principal
place of business in Baltimore. The findings were to the effect that, in marketing its
products in containers of the recognized standard sizes of 1 gallon and one-half gallon,
it was placing in such containers less than the quantities indicated, with the consequent
capacity and tendency to deceive the purchasing public. The order directed the
cessation of this practice and also forbade the wrongful use of the word “Army “ or
words or symbols of similar import indicating manufacture by or for the United States
Government. The court, on June 10, 1930, decided the case in favor of the
commission, saying, in the course of its opinion:
The commission alleges in its petition that its order is being violated, and the respect due by the courts
to an independent agency of the Government forbids the presumption that this allegation of the
commission is not made In good faith and based upon substantial grounds. It is inconceivable that the com
mission could make this application to this court without having good ground upon which to make it, and
the commission is certainly to be presumed to be acting in good faith. (41 F. (2d) 474, 476.)

It is to be noted that the court affirmed the commission‘s order in this case without
requiring prior proof of violation thereof, thus following the practice of the Second
Circuit in Federal Trade Commission v. Paul Balme, 23 F. (2d) 615, which took the
position that “it is very apparent that the question of violation of the commissions
order would not be involved until a valid order was recognized by this court after
having acquired jurisdiction. Therefore, we must first examine the proceeding before
the commission and determine whether there has been a violation of the law.”
Charles T. Morrissey.--Application for enforcement was filed by the commission
April 14, 1930, in the Seventh Circuit (Chicago.)
The findings were to the effect that this respondent was so labeling and advertising
soft drink powders manufactured by him as to mislead purchasers into the belief that
such powders and the beverages made therefrom contained natural fruit juices when

such was not the case. Answer was filed May 8, 1930, and the commission’s brief July
14, 1930.

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87

Temple Anthracite Coal Co.--This corporation, May 28, 1930, filed with the Third
Circuit (Philadelphia) its petition to review and set aside the commission’s order in
this case, which was directed against stock acquisition in violation of section 7 of the
Clayton Act. Respondent was a holding corporation and it acquired the stock of two
competitive corporations engaged in interstate commerce. The commission’s order
directed the divestiture of the stock of one of the competing corporations.1
The next steps are briefing and argument. It is expected the case will be reached
during the fall term.
Burton Bros. & Co. (Inc.).--This concern, July 10, 1939, filed with the Second
Circuit (New York City) its petition to review and set aside the commission’s order,
which, in connection with the sale or offering for sale, in interstate commerce, of shirts
made of the fabric “Burton’s Irish Poplin,” directed it to cease and desist from:
(1) Requesting shirt manufacturers to attach to invoices of shirts, or to boxes, or
other containers of shirts, respondent’s “Notice to Trade” set out and referred to in the
findings as to the facts in this proceeding;
(2) Publishing or making use of said notice or any notice or statement which asserts
to retail dealers, directly or in effect, (a) that such shirts are sold them subject to resale
price restrictions or on condition that they be not sold for less than prices fixed by
respondent, or (b) that any retail dealer who sells such shirts at a price less than the
resale price thereof fixed by respondent, then and there becomes legally liable to
respondent;
(3) Making, publishing, or otherwise using any threat, express or implied, to bring
a suit or action in any court against any retail dealer who sells such shirts, at prices less
than the resale price thereof fixed by respondent;
(4) Utilizing any other equivalent methods or means of accomplishing the
maintenance or control of retail dealer resale prices of shirts.
Subsequent to taking the action above described, the petitioner filed with the
commissioner a supplemental report of compliance, which met the objections raised
to its prior report, and as a result of which its petition for review was withdrawn.
Shakespeare Co.--This corporation, a manufacturer of fishing tackle, organized
under the laws of Michigan, with its principal place of business in Kalamazoo, filed
its petition with the Sixth Circuit (Cincinnati), July 11, 1930, asking for the review and
setting aside of the commission’s order, which directed the company, its officers,
agents, representatives, and employees, to cease and desist from:
(1) Entering into or procuring from its dealers’ contracts, agreements,
understandings, promises, or assurances that respondent’s products, or any of them,
are to be resold by such dealers at prices specified or fixed by respondent.
(2) Requesting its dealers to report the names of other dealers who do not maintain
respondent’s resale prices or who are suspected of not maintaining same.
1

Summaries of the commission’s order appear on pp. 82 and 173.

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ANNUAL REPORT OP THE FEDERAL TRADE COMMISSION

(3) Seeking by any methods and cooperation of dealers in making effective any
policy adopted by the respondent for the maintenance of prices.
Consolidated Book Publishers (Inc.).--On July 10, 1930, the corporation of tills
name, engaged in the sale and distribution throughout the United States of a set of
books at retail under the name “New World Wide Cyclopedia,” and of the same set of
books at wholesale under the name of “The Times Encyclopedia and Gazetteer,” filed
with the Seventh Circuit (Chicago) its petition to review the commission’s order,
which directed it to cease and desist from:
(1) Selling or offering for sale, either at wholesale or retail, any set of books of the
same text and content material under more than one name or title at the same time.
(2) Advertising or representing in any manner to purchasers or prospective
purchasers that any book or set of books offered for Sale and sold by it will be given
free of cost to said purchaser or prospective purchaser when such is not the fact.
(3) Advertising or representing in any manner that a certain. number of sets or any
set of books offered for sale or sold by it has been reserved to be given away free of
cost to selected persons as a means of advertising, or for any other purpose, when such
is not. the fact.
(4) Advertising or representing in any manner that purchasers or prospective
purchasers of its encyclopedia are only buying or paying for loose-leaf supplements
intended to keep the set of books up-to-date, or that purchasers or prospective
purchaser are only buying or paying for services to be rendered by a research, or other
bureau, for a period of 10 years, when such is not the fact.
(5) Selling the text an content material of any set of books in such a way or manner,
and with the purpose and intent, that said text and content material may be resold by
any other person, firm or corporation under any other name or title than that being
use& by respondent for said text and content material. (6) Advertising or representing
in any manner that it maintains a research bureau employing a staff of competent
editors and experts. for the purpose of answering inquiries from subscribers, when
such is not the fact.
(7) Advertising or representing in any manner that inquiries addressed to its research
bureau are referred to and answered by experts and specialists in the particular subject
inquired about, unless such inquiries are actually referred to and answered by said
experts and specialists.
(8) Advertising or representing in any manner that its set of books is a new and upto-date encyclopedia, when such is not the fact.
Y. Vivaudou (Inc.).--This corporation, July 22, 1930, filed with the second circuit
(New York City) its petition praying that the commission’s order be reviewed and set
aside. The findings were to the effect that the corporation had acquired the stock of
competitors in the sale of perfumes and cosmetics, in violation of section 7 of the
Clayton Act. The order directed the divestiture, in good faith of all of the capital stock
of its former competitors acquired and

COURT CASES

89

owned by it, such divestiture to carry with it all of the property and assets of said
former competitors.
Marietta Manufacturing Co.--This company, August 18, filed with the seventh
circuit (Chicago) its petition to review and set aside the commission’s order. It is
engaged in the business of manufacturing and selling in interstate commerce a product
used for interior walls, wainscoting, ceilings, table tops, counters, and other like
purposes which it advertises and describes as “Sanionyx”, “Sani-Onyx”, “Sani-Onyx,
a Vitreous Marble.” The product in question is manufactured from various ingredients,
the chief of which is silica. It is neither marble nor onyx, but is manufactured in slab
form and is capable of being used in place of natural or quarried onyx or marble when
such onyx or marble is in slab form. The commission concluded that the designations
used by the company for its product were false and misleading, and entered its order
accordingly.
Lomax Rug Mills.--This is the trade name used by an individual H. L. Lomax
engaged in the purchase of rugs and carpets from t e manufacturers thereof, and the
resale of said rugs and carpets to retailers and direct to consumers throughout the
United States. A small portion of the products in question are “fabricated” by Lomax
from standard carpet material purchased from the manufacturers thereof. This
“fabrication” consists in cutting up carpet material into the desired sizes, sewing it
together, hemming the ends and putting a fringe on it. Lomax advertises extensively,
stressing the representation that he is a manufacturer, and that those purchasing from
him will effect substantial savings by the elimination of the middleman’s profit. The
commission directed him to cease and desist: (1) From doing business under the trade
name and style of Lomax Rug Mills, or any other trade name which includes the words
“mill” or “rug mills” unless and until said respondent actually owns or operates a
factory or mills in which he manufactures the rugs and/or carpets which he sells; (2)
inserting or causing to be inserted advertisements in newspapers, magazines or other
periodicals, or distributing circulars, handbills, private mailing cards, or any other
forms of advertising literature, which contain statements, slogans, words, phrases,
sentences or representations which indicate or create the impression that said
respondent is the manufacturer of the articles which he sells unless and until such
respondent does actually manufacture such articles. Lomax took exception to the
order, and, on September 24, filed with the third circuit (Philadelphia) his petition to
review and set it aside.
CASES INSTITUTED PRIOR TO JULY 1, 1929

The cases described below are those which remained on the commission’s appellate
docket at the beginning of the fiscal year 1930, and in connection with which some
action was taken during the fiscal year. They, too, are listed in the order in which they
were instituted in the courts.
Western Meat Co.--This case, which relates to acquisition of stock in violation of
section 7 of the Clayton Act,, has been discussed at length in previous reports.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

The commission’s order directed the company to so divest itself of all capital stock
of the Nevada Packing Co., a competing corporation, as to include in such divestment
the latter company’s plant and all property necessary to the conduct and operation
thereof as a complete, going packing plant and organization, and so as to neither
directly nor indirectly retain any of the fruits of the acquisition of the capital stock of
said Nevada Packing Co.
The company, July 27, 1923, petitioned the Ninth Circuit (San Francisco) to set
aside the order. This court held that the order went beyond the commission‘s authority
and directed that it be modified by eliminating the injunction against the acquisition
by Western Meat, Co. of the plant and property of the Nevada Packing Co. (4 Fed. (2)
223.)
The Supreme Court of the United States, however, took the position that the
commission’s order must be construed with regard to the existing circumstances; that
divestment of stock must be actual and complete and could not be effected as counsel
for respondent admitted was intended, by using the control resulting therefrom to
secure title to the possessions of the Nevada Packing Co., and then to dissolve it; that,
properly understood, the order was within the commission’s authority and that the
court below erred in directing the elimination therefrom of the injunction referred to.
(272 U. S. 554.)
The final decree of the court of appeals based on the mandate of the Supreme Court,
allowed the Western Meat Co. six months, or until November 2, 1927, to submit to the
commission a report showing how its order had been carried out. Other extensions
allowed the company until September 15, 1928, for filing its report.
On September 15, 1928, the meat company filed a report as to its compliance with
the court’s decree. This report recited that the meat company had brought an action
against the Nevada Packing Co. for debt amounting to $275,000 and interest, alleged
to be due the meat company from the packing company. It was further recited that a
judgment was taken by default and that the meat company had caused execution to
issue to satisfy the judgment, and that upon a sale under such execution the meat
company had bid in substantially all of the physical assets of the Nevada Packing Co.
in satisfaction of such judgment.
It was further recited that the meat company had, after its acquisition of the physical
assets in this manner, sold the stock, which at that time was based upon the bills and
accounts receivable due the Nevada Packing Co., and some $6,000 in cash. The
commission, being of the opinion that the report filed did not show a compliance with
the decree of the court of appeals, in March, 1929, instituted a proceeding in that court
in which it prayed for the restoration to the Nevada Packing Co. of the physical assets
acquired on execution sale by the meat company and the restoration of the stock to the
meat company, which it had sold or transferred, and all other orders necessary to the
enforcement of the decree.
On June 24, 1929, the court of appeals approved the final report of the meat
company, overruled the commission’s objections thereto, and denied all of the relief
prayed for by the commission. (33 F. (2d) 824.) On September 3, 1929, the
commission filed its petition in the Supreme Court of the United States for a writ of

certiorari to

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91

review the action of the court of appeals. This was granted October 21, 1929.
After briefing, and before argument, the Western Meat Co. negotiated a sale of the
physical property and assets of the Nevada Packing Co., and the commission, being
of the opinion that this proposed sale would accomplish the full purpose of its original
order and provide for the full protection of the public interest, approved it and
stipulated with the Western Meat Co. for the dismissal of the proceedings in the
Supreme Court, with the result that they were dismissed May 19, 1930, and the case
remanded to the ninth circuit. By the terms of the stipulation, the lower court, June 6,
1930, vacated and set aside its former ruling in which it overruled the commission’s
objections to the report of the Western Meat Co.
Shade Shop.--This is a District of Columbia case. Alfred Klesner, doing business
under the name and style of “Shade Shop, Hooper & Klesner,” was charged by the
commission with a violation of section 5 of the Federal Trade Commission act in that
he had appropriated and simulated the trade name, “The Shade Shop,” adopted by one
W. Stokes Sammons in connection with his business of manufacturing and selling
window shades. Sammons had been engage d exclusively in the business since 1901.
The commission’s order prohibited Klesner, his servants, agents, and employees
from using the words, “Shade Shop,” standing alone or in conjunction with other
words as an identification of the business conducted by him, in any manner of
advertisement, signs, stationery, telephone or business directories, trade lists or
otherwise.
The respondent having refused to comply with the order, the commission, on May
13, 1924, filed in the Court of Appeals for the District of Columbia its petition for
enforcement.
After briefs and argument the court without considering the merits of the case, held
that it was without jurisdiction and dismissed the petition. (6 F. (2d) 701.) This was
on June 1, 1925. The commission applied to the Supreme Court of the United States
for a writ of certiorari which was granted, and the Supreme Court, after hearing,
reversed the judgment of the court of appeals and remanded the cause for further
proceedings concluding that the words, “Circuit Court of Appeals of the United States”
in the Trade Commission act included the Court of Appeals of the District of
Columbia as the appellate tribunal to be charged with the duty in the District. (274 U.
S. 145.)
After the decision of the Supreme Court (April 18, 1927) the case was twice
reargued in the lower court and on April 2, 1928, that tribunal dismissed the
commission’s petition for enforcement on the ground that the name “Shade Shop,” as
used by the respondent, was a generic term and merely descriptive of the business
carried on by him, and that therefore the prior and exclusive use of this term by
another concern engaged in the window-shade business was not such as to be entitled
to e al protection. (25 F. (2d) 524.) The commission petitioned for a writ of certiorari
on August 15, 1928, and this was granted October 22, 1928. This case was argued
April 10, 1929, and decided October 14, 1929. (280 U. S. 19.) While the judgment of
the court of appeals was affirmed this was done, in the language of Mr. Justice

Brandeis, “not on the merits, but upon

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the ground that the filing of the complaint before the commission was not in the public
interest,” the court holding that the unfair competition complained of in this case arose
out of a controversy “essentially private” in its nature. In discussing the matter of
public interest, the court said:
In determining whether a proposed proceeding will be in the public interest the commission exercises
a broad discretion. But the mere fact that it is to the interest of the community that private rights shall be
respected is not enough to support a finding of public interest. To justify filing a complaint the public
interest must be specific and substantial. Often it is so, because the unfair method employed threatens the
existence of present or potential competition. Sometimes, because the unfair method Is being employed
under circumstances which involve flagrant oppression of the weak by the strong.- Sometimes, because,
although the aggregate of the loss entailed may be so serious and widespread as to make the matter one
of public consequence, no private suit would be brought to stop the unfair conduct, since the loss to each
of the individuals affected is too small to warrant it.

Bayuk Cigars (Inc.).--This ease was instituted by the corporation of this name,
February 15, 1928, by the filing of a. petition to review and set aside the order issued
by the commission February 8, 1928, directing it to cease and desist, in connection
with the sale and distribution of cigars in interstate commerce, (1). from using the
word “Havana,” or other word or words of similar in part, alone or in conjunction with
the word “ribbon,” or other word or words, as or in a brand name for or as descriptive
of any such cigars which are not composed entirely of tobacco grown on the island of
Cuba; (2). from using the words “Mapacuba,” or other word or words of similar
import, as or in a brand name for or as descriptive of any such cigars which are not
composed in whole or in part of tobacco grown on the island of Cuba; (3) from
using the words “ Mapacuba,” or other word or words of similar import, as or other
word or words of similar import, as or in a brand name for or as descriptive of any
such cigars which are composed in part only of tobacco grown on the island of Cuba,
unless said word be immediately followed and accompanied by a word or words in
letters equal or greater in size, visibility, and conspicuousness, clearly and
unequivocally indicating or stating that such cigars are not composed wholly, but in
part only, of tobacco grown on the island of Cuba; (4) from using a depiction
simulating the flag, emblem, insignia, or coat of arms of the Republic of Cuba, map
of Cuba, Cuban tobacco fields, city or harbor of Havana, Cuba, or depiction of similar
import, in the advertising, branding, or labeling of any such cigars which are not
composed in whole or in part of tobacco grown on the island of Cuba; (5) from using
a depiction simulating the flag, emblem, insignia, or coat of arms of the Republic of
Cuba, map of Cuba, Cuban tobacco fields, city or harbor of Havana, Cuba, or depiction
of similar import, in the advertising, branding, or labeling of any such cigars which are
composed in part only of tobacco grown on the island of Cuba, unless such depiction
be accompanied by a word or words of equal or greater visibility and conspicuousness,
clearly and unequivocally indicating or stating that such cigars are not composed
wholly, but in part only, of tobacco grown on the island of Cuba; (6) from representing
in any other manner whatsoever that any of said cigars contain or are composed in
whole or in part of tobacco grown on the island of Cuba, when such is not true in fact.
After briefs had been filed, the case was argued before the Third Circuit

(Philadelphia), May 31, 1928.

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93

On June 14, 1930, the court entered its order (without opinion) modifying and
affirming the commission’s order. The court permitted the use of the name “Havana
Ribbon” on the labels on the boxes of cigars of that brand if certain explanatory
statements were used in connection therewith, viz, “Ripe Long Domestic Filler,”
“Imported Sumatra Wrapper,” and” Notice--These cigars are made in the United States
entirely and only of ripe Domestic Tobacco with an imported Sumatra Wrapper.” It
also allowed the use of the name “Mapacuba” on the labels on the boxes of cigars of
that brand when the explanatory statement “Havana and Domestic Filler-Sumatra
Wrapper.” was used therewith.
The commission, August 28, 1930, filed a petition for rehearing, which still awaits
action by the court.
International Shoe Co.--This corporation, March 3, 1928, filed in the First Circuit
(Boston) its petition to review and set aside the commission’s order, entered November
25, 1925, which, in brief, required the company to divest itself of all assets, property,
etc., acquired by it from the W. H. McElwain Co. (a Massachusetts corporation, with
principal office and place of business located at Boston)., subsequent to the
acquisition by the International Shoe Co. of the stock or share capital of the McElwain
Co., and after the commission’s complaint in this proceeding had been issued and
served. The proceeding was under section 7 of the Clayton Act.
The commission’s order required the company to submit, within 60 days, for
consideration and approval-a plan for the performance of this order in a manner which shall restore in harmony with the law the
competitive conditions which existed with respect to the respondent and such assets, properties, rights,
and privileges prior to the acquisition by International Shoe Co. of the stock or share capital of W. H.
McElwain Co.

Numerous conferences between counsel for the company and the commission failed
to produce a plan as required by the order, and the action referred to above was the
result.
On May 31, 1928, the company filed with the court its motion to have the
commission’s complaint adjudged insufficient in law and to have the order made
pursuant thereto set aside. Both sides filed briefs. and the court, after argument on
June 28, 1928, on the same day denied the motion. The case was argued on the merits
October 4-5 1928, and decided in favor of the commission on November 27, 1928 (29
F. (2d) 518). The court, in the course of its opinion, said:
It is not seriously contended that any of the findings of fact of the commission are unsupplied by the
testimony. Petitioner merely seeks to induce this court to hold the commission wrong In its inferences
from the facts, and on that ground alone to reverse the order. * * * We find that the inferences of the
commission are not only reasonably drawn from undisputed facts hut that no other inferences could
reasonably be so drawn. * * * To hold, as petitioner’s counsel ask this court to hold, that the commission
was bound to draw the inference that the McElwain Co.’s financial condition was such that it would have
ceased to be a competitor of the International in the shoe business, would be for the court, ultra vires, to
substitute a highly speculative prophecy for the commission’s fair and soundly grounded contrary
inference.

The company petitioned the Supreme Court of the United States for a writ of
certiorari; this was denied April 15, 1929 (279 U. S. 849).; it subsequently filed a

petition for rehearing, which was granted May 20, 1929, the court at the same time
reversing its former position and granting the writ of certiorari (279 U. S. 832).

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After briefing and argument, the Supreme Court, January 6, 1930, reversed the
judgment of the Court of Appeals (280 U.- S. 291). The court held that, with respect
to a large percentage of the businesses of the two companies, there was no substantial
competition, saying in this connection:
It is plain from the foregoing that the product of the two companies here in question, because of the
difference in appearance and workmanship, appealed to the tastes of entirely different classes of
consumers; that while a portion of the product of both companies went into the same States, in the main
the product of each was in fact sold to a different class of dealers and found its way Into distinctly separate
markets. Thus it appears that in respect of 95 per cent of the business there was no competition in fact and
no contest, or observed tendency to contest, in the market for the same purchasers; and it is manifest that,
when this is eliminated, what remains is of such slight consequence as to deprive the finding that there was
substantial competition between the two corporations, of any real support in the evidence.

With respect to the contention of the international company, that at the time of the
acquisition of the financial condition of the McElwain company was such as to
necessitate liquidation or sale, the court said:
Shortly stated, the evidence establishes the case of a corporation in failing circumstances, the recovery of
which to a normal condition was, to say the least, in gravest doubt, selling its capital to the only available
purchaser in order of avoid what its officers fairly concluded was a more disastrous fate. * * * In the light
of the case thus disclosed of a corporation with resources so depleted and the prospect of rehabilitation
so remote that it faced the grave probability of a business failure with resulting loss to its stockholders and
Injury to the communities where its plants were operated, we hold that the purchase of its capital stock
by a competitor (there being no other prospective purchaser), not with a purpose to lessen competition but
to facilitate the accumulated business of the purchaser and with the effect of mitigating seriously injurious
consequences otherwise probable, Is not in contemplation of law prejudicial to the public and does not
substantially lessen competition or restrain commerce within the intent of the Clayton Act.

A dissenting opinion was filed by Mr. Justice Stone, Mr. Justice Holmes, and Mr.
Justice Brandeis concurring therein.
American Snuff Co.--On June 30, 1927, the commission entered its order directing
this com p any to cease and desist from a number of practices found to be unfair
methods of competition. The order contained the usual requirement that the
corporation report within 60 days the manner and form of compliance therewith. In
compliance with the latter requirement, the corporation made a report in which, while
it denied the validity of the findings and order, it nevertheless assured the commission
that it would not do any of the things prohibited, with the exception, namely, it
declined to comply with paragraph 3 (a) of the order. This paragraph is set forth below
together with the closely related paragraph (b):
(3) It is further ordered, That the respondent, its officers, agents, representatives, servants, and
employees, cease and desist from-(a) Using the word “dental” and the depiction of a tooth, or either of them, alone or in connection with
any other word or words, in the brand name or on the labels on the containers of any of its snuff products,
to represent, describe, or define such product, when its said product contains no ingredient other than
tobacco.
(b) Making, publishing, or circulating written or oral statements or representations in connection with
the sale or distribution of any of its snuff products that such product will cure toothache, pyorrhea,
bleeding gums, neuralgia, or other like maladies, when such product contains no Ingredient other than
tobacco.

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The commission, accordingly, on March 17, 1928, filed with the Third Circuit
(Philadelphia) its application for enforcement. On May 16 of that year the printed
transcript of the record was filed with the court, and, May 23, a stipulation was entered
into fixing dates for the filing of briefs. Before briefs had been filed, however, the
commission (August 18, 1928) filed with the court a supplemental application for the
enforcement of paragraphs 2 a, b, and c, and 3b) of its order, alleging that the
American Snuff Co. was making, publishing, and circulating written and oral
statements or representations to the effect that the snuff products of its competitors
were made of trash, inferior tobacco, cigar stubs, old tobacco chews, and tobacco
stems; that they contained opium, copperas, glass, hair, dirt, or similar substances; that
they would cause blindness and tuberculosis; that they would destroy the teeth, cause
pyorrhea, bleeding gums, or other maladies; and other statements or representations
of like import; and that the company was making, publishing, and circulating written
or oral statements or representations in connection with the sale and distribution of
certain of its own snuff products to the effect that such products would cure toothache,
pyorrhea, bleeding gums, neuralgia, and other like maladies, when such products
contained no ingredient other than tobacco.
The printing of the supplemental transcript and the subsequent briefing and
argument was delayed for a number of months because of the exhaustion of the
commission’s printing appropriation. A new appropriation becoming available July 1,
1929, however, the record was duly printed, briefs filed, and the case argued on
November 7, 1929. It was decided February 13, 1930, adversely to the commission (38
F. (2d) 547). Petition for rehearing was denied March 24, 1930. The commission did
not apply for writ of certiorari.
Grand Rapids Varnish Co.--The commission, June 18, 1928, filed with the Sixth
Circuit (Cincinnati) an application for enforcement of its order in this ease. This was
one of the earlier proceedings instituted by the commission, and the order, origin ally
entered April 15, 1918, and subsequently modified, was directed against what is
known as commercial bribery. By it, the company, a Michigan corporation, and its
agents, representatives, servants, and employees, were directed to cease and desist
from directly or indirectly secretly giving, or offering to give, employees of its
customers or prospective customers, or those of its competitors’ customers or
prospective customers, without the knowledge or consent of their employers, as an
inducement to cause their employers to purchase or contract to purchase from the
respondent, varnish and kindred products, or to influence such employers to refrain
from dealing, or contracting to deal, with competitors of respondent, without other
consideration therefor, money or anything of value.
On June 30, 1928, the court entered an order directing the company to file its answer
to the commission’s petition on or before October 2, 1928. This time was subsequently
extended to October 12,1928. On the latter date the respondent filed with the court a
motion to dismiss the application for enforcement. The commission filed objections
to this motion. Before hearing, however, the matter was, by stipulation of the parties,
suspended. On June 4, 1929, after argument, respondent’s motion was denied. On
October 8, 1929, the court

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entered its decree affirming the commission’s order, and requiring compliance
therewith. The company consented to this method of disposing of the case. (41 F. (2d)
996.)
Paramount Famous-Lasky Corporation.--The commission, July 9, 1927, entered its
order to cease and desist in this proceeding, which, briefly, was directed against a
conspiracy in restraint of trade in the business of producing, distributing, and
exhibiting motion-picture films, against the practice of “block booking” of motionpicture films, and the acquisition of theater buildings for the purpose of intimidating
or coercing exhibitors of motion-picture films to lease and exhibit films produced by
respondents.
In due course, respondents filed with the commission their report in writing, setting
forth in detail the manner and form in which they were complying with the order. This
was accepted as unobjectionable, with the exception of that portion relating to compliance with paragraphs of the order, which was concerned with the practice of “block
booking.” This particular portion was rejected, as being insufficient to show
compliance with the paragraph in question; and the next step was the filing by the
commission, on August 1, 1928, with the Circuit Court of Appeals for the Second
Circuit (New York City) of its application for enforcement, together with a complete
transcript of the proceedings theretofore had before the commission.
This record, one of the largest ever before the commission, comprised more than
17,000 pages of testimony, and extensive exhibits consisting of more than 15,000
additional pages, a total of over 32,000 pages. By the rules of the Second Circuit, the
burden of printing the record in Federal Trade Commission cases falls upon the
petitioner--in this case, the commission. The size of the record, was of necessity one
of the considerations which led the commission to agree that the issue before the court
might be confined to paragraph 2 of the order, relating to “block booking,” and as a
result of this decision, considerable time has been devoted to negotiations looking to
the elimination of such of the testimony and exhibits as are irrelevant to the point at
issue. These negotiations have resulted in reducing the record to be printed to some
2,000 pages.
Light House Rug Co.--The respondent of this name, an Illinois corporation, October
8, 1928, filed a petition with the Seventh Circuit (Chicago) for review of the
commission’s order, entered July 24, 1928. The commission, briefly, found this
respondent was advertising and selling rugs made on power looms as and for rugs
made on hand looms by the personnel of the Chicago Lighthouse, an institution
employing blind people. The company was directed to cease and desist from this
practice.
On April 2, 1929, the commission filed its answer in the nature of cross bill and on
April 22 the company replied to this answer.
After briefing, the case was argued October 1, 1929, and decided October 25, 1929,
in favor of the commission (35 F. (2d) 163). Among other things, the court said:
In this situation it is obvious that the finding of the commission as to the secondary meaning of the word
“lighthouse” has substantial Support in the evidence before the commission and under the statute and the

Supreme Court’s interpretation is conclusive upon this court.
*
*
*
*

*

*

*

COURT CASES

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The record discloses that agents of petitioner and of its dealers, soliciting purchases of rugs in various
districts likewise supplied by Institutions for the blind, repeatedly misrepresented that the rugs made by
petitioner were made by the blind; * * * that in New York, Duluth, Milwaukee, Minneapolis, and
elsewhere, purchasers of rugs were repeatedly confused as to “lighthouse” rugs sold by petitioner, In that
they purchased rugs upon such representations as created the impressions and beliefs that they were
buying the product of the blind made at “lighthouses” for the blind maintained at various places. These
latter Institutions, in attempting to sell their rugs, frequently lost their sales because people solicited had
previously purchased petitioner’s rugs upon the belief that they were the products of the charitable
“lighthouses” of Duluth. Milwaukee, New York, Chicago, or elsewhere. * * *
There was other and substantial evidence of confusion, deception, and unfair competition, to such an
extent that the finding of the commission is amply supported thereby and is therefore conclusive upon this
court.

Samuel Breakstone.--On October 9, 1928, this respondent, an individual with
principal office and place of business in Chicago, and engaged in the business of
selling automobile parts, supplies, and accessories, filed with the seventh circuit
(Chicago) a petition praying that the commission’s order be set aside.
The practices against which the order was directed may be summarized as follows:
Respondent, in 1925, purchased in the open market certain spark plug cores
manufactured by the A C Spark Plug Co., one of its competitors, for the United States
Government and subsequently sold by the latter as surplus war material. These cores
bore the symbol “A C,” were intended for use in airplane motors, and would not
function properly in automobile motors. After purchasing the cores in question,
respondent mounted them in shells not made by or for the A C Spark Plug Co., in such
a way that the symbol “A C” was conspicuously displayed in the place where the
manufacturers of spark plugs, including the A C Spark Plug Co., cause their trademarks or distinguishing symbols to be affixed--and sold them to wholesalers, retailers,
and the purchasing public throughout the United States without disclosing that they
were not, in fact, genuine “A C” automobile spark plugs.
On motion of the commission, the petition to review was dismissed on December 16,
1929. The court’s original order directed Break-stone to file a statement of the
evidence in narrative form, the commission being given the right to indicate any
changes or additions it deemed desirable. The commission completed its suggestions
February 5, 1929, and sent them to Breakstone. The latter having taken no steps to
reach an agreement with the commission as to the record to be printed, the commission
brought the matter to the attention of the court with the action indicated.
Doctor Abbott F. Kay.--The commission, October 9, 1928, filed with the Seventh
Circuit (Chicago) an application for the enforcement of its order in this case. Its
findings were to the effect that the product sold by respondent was not radium and
contained no radium or radioactive properties, as known to the scientific or commercial world.
The order directed Kay to cease and desist from further, in any manner whatsoever,
(1) selling or offering for sale or advertising as and for radium or as containing radium,
or possessing radio-active properties, the product heretofore sold and advertised as and
for radium by respondent; (2) applying, employing, or using descriptively the word

“radium’ or any compound thereof implying

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

radioactivity in connection with the sale, offering for sale, or advertising of the product
heretofore sold and advertised as and for radium by respondent; (3) making or causing
to be made in advertising matter or otherwise representations, statements, or assertions
that the product heretofore sold and advertised by respondent is radium, or that said
product contains radium; (4) making or causing to be made any false statement, claim,
or representation of similar import or effect in connection with the sale of any other
product or substance.
Argument was had on April 18, 1929, and the court, September 18, 1929, affirmed
the commission’s order, saying, in part (35 F. (2d) 160):
The Government Bureau of Standards was furnished with several samples of the product which the
respondent Kay l)ad sent to various persons in various States, under the “escrow plan,” or for other
purposes, and subjected such specimens to the scientific tests to which that bureau was accustomed to
subject specimens of radium for determining their genuineness: None of such samples of the Kay product
responded to the radium tests so applied. One other test was applied to a sample of Doctor Kay’s product.
outside the Bureau of Standards, and the testimony indicates that the sample failed to respond to such test.
Such failure in all instances, the testimony amply shows, indicated that none of the samples of the Kay
product had any appreciable radioactivity.
*
*
*
*
*
*
*
The evidence does not disclose how extensive a business respondent has done, but It is apparent that
he has been, and is engaged in, advertising and distributing his product in interstate commerce. Radium
is used largely for the treatment of disease, and especially cancer, and it can hardly be gainsaid that any
misrepresentation with respect to the identity of respondent’s product is a matter of public Interest with
which the commission is, by section 5 of the trade commission act, empowered to deal.

Doctor Kay afterwards filed a petition for rehearing, which was denied.
Subsequently he filed with the Supreme Court of the United States petitions for
certiorari and rehearing both of which were denied.
Grand Rapids furniture cases.--On November 16, 1928, 25 furniture manufacturers
of Grand Rapids, Mich., filed with the Sixth Circuit (Cincinnati) petitions praying that
the order issued against them by the commission September 25, 1928, be set aside and
held for naught.
The order in question directed the several respondents to cease and desist from (1)
selling or offering for sale in interstate commerce furniture made with broad or flat
parts of mahogany, or walnut, as the case may be, which have been veneered on other
different wood or woods, unless such furniture be described, labeled, or designated as
veneered; (2) using the word mahogany or the word “walnut” in advertisements,
catalogues, price lists, invoices, or otherwise in connection with the sale or offering
for sale in interstate commerce of furniture made with broad or flat parts of mahogany,
or walnut, as the case may be, which have been veneered on other different wood or
woods, unless accompanied by the word or term “veneered.”
On December 11, 1928, the several respondents filed supplemental petitions, setting
forth more in detail their objections to the commission’s order. Subsequent
developments have been: The negotiation of a stipulation which materially reduced the
size of the

COURT CASES

99

record to be printed; the filing of answers in the nature of cross bills, by the
commission, and replies thereto by respondents; the filing of briefs by both parties;
and argument on March 7, 1930. On June 28, 1930, a decision adverse to the
commission was handed down. (42 F. (2d) 427.) Among other things, the court said:
The record contains no evidence that any of the dealers to whom the present petitioners sold furniture
were in any wise deceived; that the practice of such petitioners cheapens the product or affects its
durability; or that any trade whatsoever was thereby diverted to such petitioners from the very few competitors who still attempted the manufacture of furniture of solid or un-laminated woods. The sole question
is whether, under these circumstances, there is any evidence to support the order of the commission that
the petitioners cease and desist from selling furniture, so constructed, unless such furniture be described,
labeled or designated as “veneered,” or from using the word “mahogany” or the word “walnut” in
advertisements, catalogues, price lists, invoices, or otherwise, In connection with the sale or offering for
sale In interstate commerce of furniture so made, unless accompanied by the word or term “veneered.”
The record contains testimony to the effect that some retailers are accustomed to follow the invoices
in tagging furniture, not only in affixing symbols to the tag Indicative of cost, but also in adding the
description. It is thus urged on behalf of the commission that the petitioners must be charged with
knowledge of this practice, that they are responsible for the probable results of their actions, that the
labeling of furniture in this manner by the retailer has a tendency to deceive the ultimate purchaser, and
that, in any event, no objection can reasonably be taken to the requirement that all manufacturers fully
describe their products as and for what they truly are.
*
*
*
*
*
*
*
There is a complete lack of evidence that the petitioners’ products were ever expressly sold as “solid”
or unlaminated furniture, but only, at best, as “mahogany” or “ walnut,” with the barely possible
interference therefrom that they were unlaminated. This, we think, is wholly insufficient to support a finding of unfairness in competition with the manufacturers of solid furniture as a whole, even if, indeed, a
finer and more costly product may be said at all to be sold in competition, in the proper acceptation of the
terms, with that of cheaper and inferior grade. Unfair methods of competition being entirely excluded from
the case, It is the duty of the court to reverse the decision of the commission as wholly unsupported by any
substantial evidence,
*
*
*
*
*
*
*
In the present case the petitioners have no reasonable ground for believing that the retailer will mark
the goods as “solid” or “genuine” mahogany, implying by the latter phrase that no other wood is used,
where the catalogues, cost sheets, correspondence, and invoices refer only to mahogany, and where the
retailer clearly understands the use of laminated woods. Nor, if the tags follow the invoices and state that
the article is “mahogany,” have the petitioners reasonable ground for believing that such marking has a
tendency to deceive, cheat, or defraud. To us it implies no such result.

The commission decided not to apply to the Supreme Court for certiorari.
Somewhat similar questions are involved in the so-called Rockford furniture cases,
now pending before the commission--12 in number.
Chipman Knitting Mills.--This name, November 26, 1928, filed with the third circuit
(Philadelphia) its petition to review and set aside the commission’s order which
directed it to cease and desist from directly or indirectly-(1) Using the word “ fashioned,” either by itself or in conjunction with any other
word or words, as a name for or to describe a stocking, unless said stocking is shaped
in the knitting by the process known as “ narrowing “ or “ widening, “ which involves
the transfer of loops or stitches from one needle to another and the dropping or adding
of needles in the knitting operation;

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

(2) Using the word “fashioned,” either by itself or in conjunction with any other
word or words, as a name for, or to describe, a stocking only part of which is actually
shaped in the knitting by the process known as “narrowing” or “widening,” which
involves the transfer of loops or stitches from one needle to another and the dropping
or adding of needles in the knitting operation, unless said word “ fashioned “ is
qualified or limited in such a way as to apply specifically to the part of the stocking
thus shaped;
(3) Using the word “fashioned,” either by itself or in conjunction with the word
“form,” as a name for, or in advertising, labeling, and selling, a stocking the leg and
heel of which is knitted on a circular knitting machine, with the ankle shaped by
cutting out a portion of the material, and the instep, sole, and toe shaped in the knitting
on a cotton patent type “footer “ machine, by the process known as “narrowing” unless
said word “fashioned “ is qualified or limited in such a way that it applies specifically
to the foot of said stocking;
(4) Using the term “Form Fashioned” as a name and/or label for a stocking which
closely simulates in outward appearance and characteristics a full-fashioned stocking,
but which in fact is not a full fashioned stocking;
(5) Using the term “Form Fashioned” as a name and/or label for a stocking which
closely simulates a full-fashioned stocking in that it has a full-fashioned foot. a seam
up the back, most of which is imitation, imitation “fashion marks” at the back of the
calf on each side of the seam, and under the knee, and a heel knitted on a circular
knitting machine and cut to shape, which heel closely resembles a full-fashioned heel.
The commission, May 9, filed its answer in the nature of cross bill, and the company,
on June 1, 1929, replied to this answer.
A printed transcript of the record was filed with the court on February 28, 1930. On
June 4, 1930, the petition for review was dismissed, and the commission‘s answer in
the nature of a cross bill was withdrawn. This action was taken pursuant to the terms
of a stipulation, by which the Chipman Knitting Mills acknowledged the commission’s
order as valid and enforceable, agreed to comply with and abide by its terms, and to
file with the commission a report in writing showing compliance therewith. Such
report has been filed and accepted by the commission.
James S. Kirk & Co.--The corporation of this name, January 12,1929, filed with the
Seventh Circuit (Chicago) its petition to review and set aside the commission’s order
in this case, which, among other things, directed it to cease and desist from the use of
the word “ Castile, “ and the words “Olive Oil Soap,” either alone or in conjunction
or in association with any other word or words, which are the name of, or are
descriptive or suggestive of, an oil or a fat, in labeling, branding, or otherwise
describing soap offered for sale or sold in commerce, the oil or fatty composition of
which is not wholly derived from olives.
The next steps are printing of the record, briefing, and argument.
Good Grape Co.--The commission, February 1, 1929, filed with the Sixth Circuit
(Cincinnati) an application for enforcement of its order directed against this company.

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The findings were to the effect that this concern was engaged in the manufacture of
a concentrate or sirup called by it “Good Grape Concentrate,” and in the sale of the
same in interstate commerce to bottling plants, for use in the manufacture and
subsequent sale to retailers and consumers of a beverage known as “Good Grape”; and
that the company, by extensive advertising, represents to the purchasing public that
this beverage is the juice of the natural fruit of the vine, when, as a matter of fact, it
is an imitation grape product, artificially colored and flavored. The order directed the
company to cease and desist from this practice.
The company filed answer to the commission’s application April 29, 1929.
It alleged, among other things, that the commission’s order was not in conformity
with orders theretofore issued in similar cases; that its product was made under a new
formula designed to meet the requirements of the commission’s original order, and that
it had been denied opportunity to make a showing as to this fact; and that the whole
matter was under the jurisdiction of the Secretary of Agriculture and not the Federal
Trade Commission. The case was argued November 13, 1923. 2
Masland Duraleather Co.--This company, March 28, 1929, filed with the Third
Circuit (Philadelphia) its petition to review and set aside the commission’s order,
entered March 22 1929.
The order had directed the company to cease and desist, in connection with the
advertising, offering or sale, and sale, in interstate commerce, of the product
“Duraleather,” or any imitation or artificial leather or substitute for leather (1) from
using the term “Duraleather” as a trade name, brand, stamp, or label for such products;
(2) from using the term “Duraleather” on letterheads, envelopes, invoices, signs, in
circulars, catalogues, magazines, newspapers, or otherwise to designate or describe
such products; and (3) from using the word “leather” or any other word or combination
of words in such manner as to import or imply that such products are real leather.
Subsequent developments have been the printing of the transcript, the filing of a
cross bill by the commission and the company’s answer thereto, the filing of briefs by
both parties, argument on June 5, 1929, and decision on September 18, 1929, in favor
of the commission (34 F. (2d) 733). The court, in the course of its opinion, said:
“Duraleather” is a coined word. “Dura” admittedly is an abbreviation of the word durable,” and the
word thus composed can be given no other meaning than “Durable leather.” So read and considered, it
is an assertion that the product marked, advertised, and sold as “Duraleather “ consists of leather. By
putting this imitation product bearing a false name into the channels of trade, whatever may have been the
petitioners’ motive in so doing, they furnished their customers and those dealing with them the means to
misrepresent that the goods made from that product were made of leather, and when such a false trade
name is subsequently associated with the sale of goods made from such product, the petitioners can not
escape legal responsibility by disclaiming any intention to deceive or by showing that those with whom
they dealt directly-first purchasers of the product--well knew that it was but an imitation or substitute for
the genuine article.

Ohio Leather Co.--Petition to review and set aside the commission’s order in this
case was filed with the Sixth Circuit (Cincinnati) , April 2, 1929. Findings were to the
effect that the company
2

The court, Nov. 10 1930, modified and affirmed the commission’s order in this case.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

was advertising and selling, in interstate commerce, leather made from calfskins, under
the trade-name of “Kaffor Kid.” The order directed the company, in connection with
the advertising and sale of leather made from calfskins, or other leather not made from
kid or goatskins, to cease and desist (1) from using the word “Kid” lone or in
combination with the word “Kaffor” or other word or words, as a trade or brand name
for or as descriptive of any such leather; (2) from using the word “Kid” alone or in
combination with the word “Kaffor,” or other word or words on labels, letterheads
envelopes, or in the advertising or other designation or description of any such leather.
The record has been printed, and the commission has filed an answer in the nature
of cross bill, to which the petitioner has replied. On June 5, 1929, the court denied the
petitioners’ application or motion to have the report of the commission’s trial examiner
made a part of the record.
The case was argued on the merits, February 11, 1930.3
Alfred Kohlberg (Inc.) -Another petition for review filed during April, 1929,, was
that by the New York corporation of this name. The court was the Second Circuit
(New York City), and the petition was docketed April 19 1929. The order in question
directed the corporation and its officers, agents, representatives, servants, and
employees to cease and desist (1) from selling, advertising, or offering for sale, in
commerce among the several States of the United States, lace made in China or
elsewhere than in Ireland under the titles, names, or designations “Chinese Irish Lace,”
“Irish Crochet Lace,” “Siccawei Irish Crochet,” “Swataw Irish Crochet,” “Swataw
Irish Picot,” “Siccawei Irish Picot,” and “Shanghai Irish Picot”; (2) from selling,
advertising, or offering for sale in commerce among the several States of the United
States lace made in China or se-where than in Ireland under a title, name, or
designation which includes the word “ Irish” or any other title, name, or designation
suggestive of Ireland as the place of manufacture of such lace.
Before the record had been printed and after the commission had filed its answer in
the nature of cross bill, a stipulation was entered into, at the instance of the petitioner,
providing for the withdrawal of the petition for review and of the commission’s
answer, without prejudice to further proceedings by the commission for the enforcement of its order prior to the negotiation of the stipulation, the petitioner filed with the
commission a report in writing showing compliance with the order. The order
discontinuing the proceeding was signed by the court on July 3, 1929.
Raladam Co.--This company, May 16, 1929, filed with the Sixth Circuit (Cincinnati)
its petition to review and set aside the commission’s order.
The findings were to the effect that the company was selling thyroid “obesity cure”
tablets, (under the name “Marmola Prescription Tablets”) as safe, effective, and
dependable in use, when the present knowledge of thyroid as a remedial agent does
not justify such representations. The order directed the cessation of such practices.
Further developments have been: The filing of an answer in the nature of a cross bill
by the commission, and of a reply thereto, by the petitioner; the filing of briefs by both
parties; argument on
3

An opinion was handed down Nov.12. 1980. The case was remanded to the commission for taking

of further proofs.

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February 12, 1930; and decision, June 28, 1930, vacating and setting aside the
commission’s order. The court, in the course of its opinion, said (42 F. (2d) 430):
The first question raised Is whether the advertising representations as to the scientific character and the
safety of the remedy are statements of facts or are opinions.
*
*
*
*
*
*
*
Considering and contrasting these views, it seems to us quite impossible to say that the problem whether
this remedy, in the environment of these advertisements, is or is not “scientific” is a question of fact,
capable of being dogmatically fixed, in one way or the other, as disputed facts are decided. We think that
it was at the beginning of the proceeding and continued to the end to be a matter of opinion; and, in final
analysis, a matter of opinion as to what definition of the word was more appropriate to the circumstances.
The same conclusions prevail in the matter of “safety.”
*
*
*
*
*
*
*
These various considerations merely confirm what to us is clear, even upon first glance, that whether
it is “safe” for the public to buy and take Marmola according to instructions is not a matter of fact. It is
a matter of expert opinion, as to which there are as many shades and degrees as there are experts who
discuss it, and as to which a nonexpert board can hardly have been intended to be umpire.
*
*
*
*
*
*
*
A broader question of the jurisdiction of the commission underlies. In the Sliver case (289 Fed. 985),
one member of the court took occasion (p.992) to study the history of the creation and purposes of the
Federal Trade Commission. The conclusion was reached that the commission came into being as an aid
to the enforcement of the general governmental antitrust and anti-monopoly policy, and that its lawful
jurisdiction did not go beyond the limits of fair relationship to that policy. Since that opinion, there has
been no decision of the Supreme Court inconsistent therewith, nor any circuit court of appeals decision
which expressly denies that theory.
*
*
*
*
*
*
*
The thing forbidden by the statute is unfair competition. This can not exist unless there is competition,
and there can not be competition unless there is something to compete with. It must be evident that the
trade which was to be protected against restraint (and unfair competition is a kind of restraint) was that
legitimate trade which was entitled to hold its own In the trade field without embarrassment from unfair
competition. The first thought might be that the one invoking protection should be a particular trader, but
the Winsted case (258 U. S. 483) teaches that protection will also be given under this statute to the entire
class of trade which is having its former customers taken away from it by false representations that the
competing goods are of the same descriptive qualities as those put out by the complaining class. It is
apparent from this record, as well as from other recent or pending cases in this court and other decisions
of the commission and from announcements by its members shown in this record, that the commission
does not take this limited view of its jurisdiction, but that it believes itself authorized to issue its “desist
and refrain” orders in any case where it concludes that sales methods may mislead a substantial part of the
purchasing public, in a way and to an extent that, in the judgment of the commission, is injurious to the
purchaser. The general law of unfair competition uses the misleading of the ultimate retail purchaser as
evidence of the primarily vital fact--injury to the lawful dealer; the commission uses this ultimate,
presumed injury to the final user as itself the vital fact. The result is a realization of what was suggested
in the former opinion as the opened vista (289 Fed. 992-993) and a pro tanto censorship by the
commission of all advertising.
*
*
*
*
*
*
*
We have no occasion to deny, nor indeed, reason to doubt, that this elimination would tend to the public
good; but we can not think that Congress had any conception that it was creating a tribunal for that kind
of action. Its failure for many sessions to pass a proposed “pure fabric” law, and others of similar
character, is familiar; but if the commission’s view of its jurisdiction is right, these laws are unnecessary.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

The commission filed its petition for writ of certiorari September 27, 1930. Petition
was granted November 3, the review to be limited to the question of jurisdiction of the
commission.
N. Fluegelman & Co. (Inc.).--The commission’s order in this case directed this
concern, a New York corporation, and its officers, agents, servants, and employees,
to cease and desist, directly or in directly, from using the word “Satinmaid,” or any
word, or words, or combination of words, embracing the word “satin,” as a trade name
for, or to describe or designate a cotton fabric offered for sale or sold in interstate
commerce. It was entered on April 2, 1929.
The company June 4, 1929, petitioned the Second Circuit (New York City) to have
the order reviewed and set aside.- The commission, August 19, 1929, filed its answer
in the nature of a cross bill, which the petitioner answered September 7, 1929. On
October 24, 1929, the court granted permission to the Rayon Institute of America to
file brief amicus curiae.
After briefing, the case was argued December 12, 1929, and on January 6, 1930, the
court handed down its decision (37 F.- (2d) 59), modifying and affirming the
commission’s order. Pertinent excerpts from the opinion are as follows:
The test of the unfair method of competition was not whether a trade-mark may have been registered
but whether the method of using it falls within the prohibition of the Federal Trade Commission act which
forbids the unfair method of competition in commerce and declares it to be unlawful. Any misleading
trade-marks and labels used In merchandising a product which ‘misleads the purchasing public is
forbidden. (Fed. Trade Comm. v. Winsted Hosiery Co., 258 U. S. 483.) But the evidence concededly
shows that “satin” among other things, means the weave of the cloth, and therefore may be used with or
without additional qualifying words to describe fabrics or cloths woven in the satin weave. Satin may also
be used with qualifying words indicating the yarn in which the fabric described is woven, and such would
not be misleading. Thus used, if the word “satin” makes reference to the weave as well as the yarn and the
petitioner makes known that the yarn of which the fabric is woven is not silk-yarn usually employed in
manufacturing satin--there can be no deception on or misleading of the public. Where cotton yarn is used,
reference should be clearly made that it is used. In December, 1925, the parties recognized this by their
stipulation and agreed upon a policy of sale, with a reference to the cotton fabric, as safe to the purchasing
public. Silk manufacturers, who have a great interest to prevent the sale of materials as silk made when
they are not, define satin as including a weave and a silk-faced fabric. The petitioner has a satin weave and
there can be no deception by the use of the word “Satinmaid” or “Satinized” If it is sufficiently made
known that all of the material used is not silk. Thus the petitioner would describe its “Satinmaid” and
“Satinized” as a cotton fabric with a satin weave which, If thus truly made and truthfully displayed and
offered to the purchasing public, will not be deceptive. An order which would forbid such merchandising
prohibits that which is lawful and the order to cease and desist entered upon such a basis can not stand.
*
*
*
*
*
*
*
Accordingly the order to cease and desist will be modified so as to require the petitioner to cease and
desist, directly or indirectly, from using the words “Satinmaid” or “Satinized” or any word or words or
combination of words embracing the word “satin” as a trade name for or to describe or designate a cotton
fabric offered for sale or sold in Interstate commerce, unless there be added in letters equally conspicuous
and on the same side of the label, advertising matter, wrapper, stationery, or board ends on which the
words “Satin-maid” or “Satinized” appear, the words “a cotton fabric,” “a cotton satin,” “no silk,” or
equivalent modifying terms.

The commission did not apply for certiorari in this case.

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CASES ARISING UNDER SECTIONS 6 AND 9 OF THE FEDERAL TRADE
COMMISSION ACT

In addition to the review by the United States Circuit Courts of Appeals of the
commission’s orders directed against “unfair methods of competition,, issued under
authority of section 5 of its organic act, and orders against price discrimination,
exclusive dealing contracts, stock acquisition in competitive concerns, and interlocking
directorates, issued under authority of section 11 of the Clayton Act, the former statute
invests the commission with power, among other things, to gather and compile
information concerning and to investigate from time to time the organization, business
conduct, practices, and management of corporations engaged in interstate commerce
(excepting banks and common carriers) and their relation to other corporations, such
corpora individuals, associations, and partnerships; to require such corporations to file
annual or special reports concerning their organization, business, etc.; and, 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. To
facilitate the exercise of these powers, the commission is authorized to apply to the
Attorney General for the institution of mandamus proceedings.
A number of cases have arisen as a result of efforts to test the powers of the
commission to compel the production of testimony or of documents in investigations,
or to compel the filing of reports. The cases relating to the Claire Furnace Co., the
Maynard Coal Co., the American Tobacco and Lorillard Co., the Baltimore Grain Co.
and others, and the Basic Products Co., which arose in this manner, were concluded
prior to the beginning of the current fiscal year, and have been discussed at length in
previous annual reports. Those relating to the Electric Bond & Share Co.- and the
Millers’ National Federation (still pending) are discussed below, as are also certain
proceedings in unf air competition cases, where respondents, through the medium of
various extraordinary legal remedies, have sought to halt or influence the conduct of
proceedings by the commission.
Electric Bond & Share Co.--The commission, December 1, 1928, filed, in the
District Court of the United States for the Southern District of New York, its
application for an order requiring certain officers and employees of this company tons,
produce certain records and answer certain questions incident to the investigation
being conducted by the commission pursuant to Senate Resolution 83, directing the
commission to investigate and report upon the financial and business structure of the
electric power and gas industry, the policies and practices of holding companies and
their affiliated companies, their alleged efforts to control public opinion on account
of public or municipal ownership, and whether any of the conditions disclosed
constituted a violation of the antitrust laws. The objections raised by counsel for the
company to administering the oath and interrogation of the witnesses put in issue the
fundamental question of the commission’s power to issue subpoenas in the
investigation directed by the Senate, whether the Electric Bond & Share Co. was
engaged in interstate commerce, and whether the attempt to subpoena the records was
a violation of the constitutional prohibition of unreasonable search and seizure.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

The case was argued before Judge Knox, on February 16, 1929. The commission,
on March 9, 1929, submitted a write such offer of additional proof on the issues of fact
it claimed were made by the application and answer. Briefs on behalf of the
commission and respondents were filed on March 9 and 22, 1929, respectively, and
the commission’s reply brief on April 2, 1929.
The court, on July 18, 1929, handed down its opinion. (34 F. (2d), 323.) Briefly,
the objections of the company to the commission’s subpoenas duces tecum were
sustained, and those that were interposed to the pertinent and competent questions
propounded to the individual witnesses by counsel for the commission were overruled. The court assumed that the company, in part, at least, was engaged in interstate
commerce, saying, in this connection:
If respondents wish to contest the propriety of this assumption, the matter will have to go to a master;
or, if petitioner (Federal Trade Commission) wishes an adjudication to the effect that the interstate
business of the Electric Bond & Share Co. Is so intimately associated and connected with interstate
commerce that all the company’s activities are subject to the jurisdiction of the commission, a reference
will be required to establish the fact.

Millers’ National Federation.--On February 16, 1924 the United States Senate, by
resolution, directed the commission to investigate and report to the Senate, among
other things, the extent and methods of price fixing, price maintenance, and price
discrimination, in the flour and bread industries, developments in the direction of monopoly and concentration of control, and all evidence indicating the existence of
agreements, conspiracies, or combinations in these industries.
In the course of the investigation the commission made inquiry with respect to the
activities of the Millers’ National Federation, a voluntary, unincorporated association,
whose members produce approximately 65 per cent of the flour milled in the United
States, as well as the activities of other milling associations and corporations engaged
in the milling industry. Permission was requested of the Millers’ National Federation
to inspect certain papers, documents, and correspondence files, which permission was
in part granted.
As a result of the inspection of certain correspondence, the commission requested
the federation to supply it with copies of certain designated letters, and further
requested access, for the purpose of inspection, to minutes of meetings among
members of the federation and other millers in various parts of the country and to
letters passing between the federation and its members leading up to the adoption of
a so-called code of ethics by the federation. The request was denied. The commission
thereafter called a hearing in the investigation at Chicago and served subpoenas upon
the secretary of the federation requiring him to produce at the hearing certain letters
specified by dates, names of the parties correspondent, and subject matter, which its
representative had been permitted to inspect in the federation’s offices. Subpoenas
were also served upon
the secretary requiring the production of minutes of the meetings among members of
the federation and other millers above mentioned (inspection of which had been
denied) and of the letters relating to the adoption of the code of ethics. The Washburn-

Crosby Co., a member of the federation and the largest milling corporation in the

COURT CASES

107

United States, having also refused to permit the commission to inspect certain such
letters specified by dates, names of parties correspondent, and subject matter, as well
as having declined to permit a statement of its business, made up from its books by
representatives of the commission, to be taken from its offices, subpoenas duces tecum
were served upon officers of the corporation, requiring the production of the letters
and of the statement, at a hearing to be held at Minneapolis, Minn.
On the day prior to the hearing set for Chicago, Ill.-, the Millers’ National Federation
on behalf of its members filed a petition in the Supreme Court of the District of
Columbia for a temporary restraining order and a temporary injunction restraining the
commission from taking any steps or instituting any proceedings to enforce the
subpoenas or requiring the plaintiffs, or any of them, to produce the documents or
letters required thereby. On the day of hearing set at Chicago the secretary of the
federation, the officers the Washburn-Crosby Co., and certain individuals connected
with the federation through membership therein of corporations in which they were
officers, did not appear as required by subpoenas ad testificandum, and on the morning
of the same day a temporary restraining order was issued by the Supreme Court of the
District of Columbia as prayed for in the petition. A motion for temporary injunction
was subsequently made. The commission answered the motion on the merits and
moved to dismiss the petition on various grounds, among others, that the court was
without jurisdiction to restrain the commission from proceeding with the hearing. Both
motions were argued, and on September 22, 1926, the court rendered its decision
granting the temporary injunction (decision not reported). From this an appeal was
taken on December 10, 1926, to the Court of Appeals of the District of Columbia.
Before hearing on this appeal was had the commission, on March 30, 1927, petitioned
the Supreme Court of the United States for certiorari, which was denied on April 25,
1927 (274 U. S. 743), thus leaving the case to be heard on the appeal in the Court of
Appeals of the District of Columbia.
After briefs and arguments, the Court of Appeals, on December 5, 1927, affirmed
the decree of the Supreme Court of the District (23 F. (2d) 968), and remanded the
case for further proceedings. The court held that the opinion of the Supreme Court of
the United States in the Claire Furnace Co. case was not controlling, that the present
case must be determined upon principles not obtaining in that case , and that injunction
would be to restrain the commission, should the court find, on a final determination
of the case on its merits, that the commission had exceeded its jurisdiction. In short its
holding was that the Supreme Court of the District had jurisdiction to determine the
matter.
The commission, December 12, 1927, filed a petition for rehearing, on the ground
that the court had failed to decide the point of law which the principal basis for the
judgment below, and practically the sole ground assigned in the petition for special
appeal on which the case was heard in the court of appeals-the court below holding
that sections 6 and 9 of the Federal Trade Commission act did not confer any
jurisdiction upon the commission to employ
18131---30-----8

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ANNUAL REPORT’ OF THE FEDERAL TRADE COMMISSION

subpoenas in any investigation made under section 6 of the act, but that the statute
conferred power upon the commission to employ subpoenas only in adversary
proceedings conducted under authority of section 5. The petition for rehearing was
denied on January 21, 1928.
The commission filed answer to the amended bill of complaint on February 14,
1928. On March 23 1928 the court granted the motion of the federation for leave to file
supplemental bill of complaint, in which it was claimed that final decree should issue
against the commission, on the ground that its investigation had been completed, final
report made to the Senate, and its authority thereby exhausted. The commission’s
answer to this supplemental bill was filed on April 4, 1928. Subsequent negotiations
resulted in the adoption of an agreed statement of the facts, in lieu of taking
testimony, in the suit for permanent injunction, in the Supreme Court of the District
of Columbia. This stipulation, signed by counsel, agrees that all of the letters and
documents included in the subpoenas issued by the commission and directed to the
secretary of the Millers’ National Federation, “are pertinent, relevant, and material to
some one or more of the subjects of inquiry embraced within that part of Senate
Resolution No.163, which reads as follows: ‘The extent and methods of price fixing,
price maintenance, and price discrimination; the developments in the direction of
monopoly and concentration of control in the milling and baking industries and all
evidence indicating the existence of agreements, conspiracies, or combinations in
restraint of trade’ ”; and that “none of said documents are private or confidential in the
sense that they would be privileged from production as evidence if lawfully required
in a trial before a court.
The case was argued on the merits on January 15, 1930, and the court, on May 26,
1930, decided the case adversely to the commission. No opinion was filed, and no
reason given for the action of the court. A decree, making permanent the temporary
injunction hitherto issued, was entered June 11, 1930. The commission noted an
appeal to the Court of Appeals of the District of Columbia, filing its assignments of
error and designation of the record on July 2, 1930. The transcript has been printed,
and the case is now set for argument on December 1, 1930.
Macfadden Publications.--The commission’s complaint charged the corporation of
this name, which owns and controls the stock of other concerns engaged in publishing
magazines, periodicals, etc., with representations that the subscription prices of its
magazines bad been lowered for certain periods when such was not the case. During
the trial of the case, the corporation sought, by writ of mandamus, to compel the
commission to issue subpoenas duces tecum directed to its competitors, ostensibly to
show that they were following the same practices with which the corporation stood
charged.
The Supreme Court of the District of Columbia, where the action was brought, on
May 17, 1929, overruled the petitioner’s demurrer to the commission’s answer and
return, discharged the rule to show cause, and denied the petition for the writ.
The petitioner appealed the case to the Court of Appeals of the District of Columbia,
and this court, after briefing and argument,

COURT CASES

109

on January 7, 1930, affirmed the judgment of the lower court, saying, in the course of
its opinion (not yet reported),:
It thus appears that the statute provides a plain, adequate and exclusive method by judicial review for
the correction of any error which the commission may commit In such a proceeding. This being, the case
it follows that mandamus can not be granted as an alternative or additional remedy, for It is well settled
that the writ will not issue where there is any other adequate legal remedy. Nor can the writ be made to
perform the office of an appeal or writ of error or be used as a substitute for either.

No attempt was made to obtain a review of this decision by certiorari.
Royal Baking Powder Co.--(Federal Trade Commission act, sec. 5.) This company
was charged, on complaint of the commission, with publishing false statements about
the products of competitors, among which were (1) that competitors’ baking powders
contained alum and were therefore unfit for use in foods; (2) that the alum contained
in such powders is the astringent commonly sold in drug stores under the name of alum
and chemically known as potassium aluminum sulphate; (3) that competitors’ baking
powders are poisonous, that they are made of ground-up cooking utensils, that they do
not come within the pure food laws that they pucker up the stomach in the same
manner that lump alum puckers up the mouth , and that they are made of the same
substance used as a styptic after shaving. It was further charged that respondent had
advertised anonymously to the same effect.
Answer was filed, testimony taken, and briefs and oral argument presented to the
commission. Thereafter, on March 23, 1926, the commission issued its order
dismissing the proceedings. On the same day counsel for the commission filed a
petition for reargument of the case before the commission , which petition was on said
day granted. Notices of such dismissal and the granting of the petition for reargument
were served upon the baking powder company simultaneously. Thereafter the case was
reargued before the commission, upon which it vacated its order of dismissal entered
March 23, 1926, and directed the reopening of the case solely for the taking of further
testimony with respect to misleading advertising, anonymous advertising, and the
circulation of erroneous extracts from the book A Collation of Cakes.
The order expressly provided that no evidence be taken with respect to statement by
the respondent relative to the deleteriousness of alum baking powder and also
confirmed the previous dismissal with respect to the use by respondent of the slogan
“No alum--no bitter taste,” since the commission was of opinion that its use as before
them in this case was not an unfair method of competition.
Thereupon, October 22, 1926, the Royal Baking Powder Co. filed in the Supreme
Court of the District of Columbia a petition for a writ of certiorari, the court causing
such a writ to be issued and served upon the commission, commanding it to certify and
transmit to that court the record and papers in the case before the commission, it being
the contention of the company that the commission lost jurisdiction of the proceedings
before it upon its entering the order of dismissal of March 23, 1926.
On October 30, 1926, the commission moved the court to dismiss the petition and
to quash the writ of certiorari, and on November 13,

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

1926, in addition tons, its motion to quash the writ of certiorari, the commission also
filed a demurrer: to the petition.- Thereafter the matter was argued, briefs were filed,
and on June 21, 1927, the court rendered its decision sustaining the commission‘s
motion to quash the writ of certiorari on the ground of lack of jurisdiction in the court.
(Not reported.)
The court declined to pass upon the demurrer to the petition, offering at the election
of the petitioner to transfer the matter to the equity side of the court. This was done,
and the equity court, on November 7, 1927, granted the commission‘s motion to
dismiss the bill, saying (decision not reported),: “From an examination of the decided
cases upon the questions presented herein the court is of opinion that, by the entry of
the order of dismissal, on March 23, 1926, the commission did not exhaust its
jurisdiction over the case p ending before it; that its order reopening the case, as well
as its subsequent orders in relation thereto, were administrative and procedural in
character; and that the same are not subject to review by this court.”
Final decree was signed November 15, 1927, the court at the time taking occasion
to discuss allowance of writ of supersedeas, applied for by the company. It said: “It is
not here necessary to decide whether this court, because of the limitation of the equity
rule, is or is not vested with discretion to grant a supersedeas rule, supra, which shall
operate as an injunction against the Federal Trade Commission pending the appeal; but
in view of the fact that this court reached the conclusion herein that the several orders
complained of were administrative and procedural and as such not here properly subject to review, it is of opinion that it should not thus do indirectly that which it had
directly held it had no right or jurisdiction to do.
The company noted an appeal to the Court of Appeals of the District of Columbia,
and on March 22, 1928, filed the transcript of record with this court. The commission,
on April 7, 1928, filed a motion to dismiss the appeal, on the ground that the transcript
had not been filed within the time provided by the new rules of the court of appeals,
effective December 1, 1927. The motion, however, was denied. The printed transcript
of record was filed on June 28, 1928. Briefs were subsequently filed, and the case
argued April 2, 1929. On May 6, 1929, the decree of the Supreme Court was affirmed
(32 F. (2d), 966).
The company petitioned the Supreme Court of the United States for writ of certiorari
on July 6, 1929. The commission’s brief in opposition was filed on August 21, 1929.
The petition was denied October 21, 1929. The company petitioned for rehearing
November 1; this was denied November 4, 1929.
Royal Baking Powder Co. (mandamus to compel commission to pass upon affidavit
of prejudice against member of commission).--In connection with a proceeding then
pending before the commission against the company referred to, and before decision
by the commission on a motion to dismiss the said complaint filed by the respondent
company, the latter, on May 31 and June 4, 1928, filed in said cause certain petitions
in the form of affidavits , in which it was charged that one of the members of the
commission was so biased and prejudiced against the company as to be unable to give
fair and impartial consideration to matters affecting said company, and in which sug-

COURT CASES

111

gestion was made that this commissioner would, on consideration of the facts, admit
the impropriety of his continuing to sit in judgment in matters concerning the Royal
Baking Powder Co.
The petitions prayed that the commission take action to prevent further participation
by this commissioner in deliberations or decisions in matters and proceedings coming
before the commission in which the company was a party or had an interest.- On June
11, 1928, the commission entered an order overruling the motion to dismiss? and on
June 28, 1928, a further order was entered postponing consideration of the petitions
(in the form of affidavits of prejudice) until the final hearing of the case.
The company thereupon, on June 30, 1928, filed with the Supreme Court of the
District of Columbia its petition praying that a rule issue requiring the commission to
show cause why a writ of mandamus should not issue against it, requiring it, before
any other or further action is taken in connection with the pending proceeding (Doc.
1499), or in any other matter in which the company is a party or has an interest, to pass
upon and announce decision on the prayers in the petition in the form of affidavits of
prejudice referred to.
On July 16, 1928, the court granted the company’s motion to strike the commission’s
answer, with leave to the commission to file an amended answer. This was done on
July 25, 1928.
Further developments have been the denial of the motion to strike the amended
answer, the issuance of a writ of prohibition directed to the commission, argument on
the commission’s motion to quash the writ of prohibition, and argument on the motion
of the commission for prior determination of questions of law (demurrer) .
On May 17, 1929, the court sustained the commission’s demurrer, discharged the
rule to show cause, dismissed the petition for writ of mandamus, and granted the
commission’s motion to quash the petition for writ of prohibition, thus disposing of
all the issues before it in favor of the commission.
The company appealed to the Court of Appeals of the District of Columbia. After
filing the transcript, and prior to briefing and argument, the appeal was, on motion of
the company, dismissed (December 31, 1929).

METHODS OF COMPETITION CONDEMNED
The following list shows unfair methods of competition and Clayton Act violations
which have from time to time been condemned by the commission and prohibited by
orders to cease and desist:
Misbranding of fabrics and other commodities respecting the materials or ingredients
of which they are composed, their quality, origin, or source.
Adulteration of commodities, misrepresenting them as pure, or selling the in under
such names and circumstances that the purchaser would be misled into believing them
to be pure.
Bribery of buyers or other employees of customers and prospective customers to
secure new customers or induce continuation of patronage.
Making unduly large contributions of money to associations of customers.
Procuring the business of trade secrets of competitors by espionage, by bribing their
employees, or by similar means.
Procuring breach of competitor’s contracts for the sale of products by
misrepresentation or by other means.
Inducing employees of competitors to violate their contracts or enticing a way
employees of competitors in such numbers or under such circumstances as to hamper
or embarrass them in business.
Making false or disparaging statements respecting competitors’ products, their
business, financial credit, etc.
The use of false or misleading advertisements.
Making vague and indefinite threats of patent-infringement suits against the trade
generally, the threats being couched in such general language as not to convey a clear
idea of the rights alleged to be infringed , but , nevertheless, causing uneasiness and
fear in the trade.
Widespread threats to the trade of suits for patent infringement arising from the sale
of alleged infringing products of competitors, such threats not being made in good
faith but for the purpose of intimidating the trade.
False claims to patent, trade-mark, or other rights or misrepresenting the scope
thereof; appropriating and using trade-marks wrongfully.
Intimidation for the purpose of accomplishing enforced dealing .by falsely charging
disloyalty to the Government.
Tampering with and misadjusting the machines sold by competitors for the purpose
of discrediting them with purchaser.
Trade boycotts or combinations of traders to prevent certain wholesale or retail
dealers or certain classes of such dealers from procuring goods or goods at the same
terms accorded to the boycotters or conspirators, or to coerce the trade policy of their
competitors or of manufacturers from whom they buy.
112

METHODS OF COMPETITION CONDEMNED

113

Passing off of products, facilities, or business of one manufacturer or dealer for
those of another by imitation of product, dress of goods, or by simulation or
appropriation of advertising or of corporate or trade names; or of places of business,
and passing off by a manufacturer of an inferior product for a superior product theretofore made, advertised, and sold by him.
Unauthorized appropriation of the results of a competitor’s ingenuity, labor, and
expense; thereby avoiding costs otherwise necessarily involved in production.
Preventing competitors from procuring advertising space in newspapers or
periodicals by misrepresenting their standing, or other misrepresentation calculated to
prejudice advertising mediums against them.
Misrepresentation in the sale of stock of corporations.
SELLING REBUILT MACHINES AS NEW PRODUCTS

Selling rebuilt machines of various descriptions, rebuilt automobile tires, and old
motion-picture films slightly changed and renamed as and for new products.
Harassing competitors by requests, not in good faith , for estimates on bills of goods,
for catalogues, etc.
Giving away of goods in large quantities to hamper and embarrass small competitors
and selling goods at cost to accomplish the same purpose.
Sales of goods at cost, coupled with statements misleading the public into the belief
that they are sold at a profit.
Bidding up the prices of raw materials to a point where the business is unprofitable
for the purpose of driving out financially weaker competitors.
The use by monopolistic concerns of concealed subsidiaries for carrying on their
business , such concerns being held out as not connected with the controlling
company.
Intentional appropriation or converting to one’s own use of raw materials of
competitors by diverting shipments.
Giving and ordering to give premiums of unequal value, the particular premiums
received to be determined by lot or chance, thus in effect setting up a lottery.
Schemes and devices for compelling wholesalers and retailers to maintain resale
prices on products fixed by the manufacturer.
Combinations of competitors to enhance prices, maintain prices, bring about
substantial uniformity in prices, or to divide territory or business, or to put a
competitor out of business, or to close a market to competitors.
Acquiring stock of another corporation or corporations where the effect maybe to
substantially lessen competition, restrain commerce, or tend to create a monopoly.
USE OF VARIOUS SCHEMES TO DEFRAUD THE CUSTOMER

Various schemes to create the impression in the mind of the prospective customer
that he is being offered an opportunity to make a purchase under unusually favorable
conditions when such is not the case, such as--

114

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

(1) Sales plans in which the seller’s usual price is falsely represented as a special
reduced price made available on some pretext for a limited time or to a limited class
only.
(2) The use of the “free” goods or service device to create the false impression that
something is actually being thrown in without charge, when , as a matter of fact, fully
covered by the amount exacted in the transaction taken as a whole
(3) Sales of goods in combination lots only with abnormally low figures assigned to
staples, the prices of which are well known. and correspondingly highly compensating
prices assigned to staples, the cost of which is not well known.
(4) Sale of ordinary commercial merchandise at usual prices and profits as pretended
Government war surplus offered at a bargain.
(5) Use of misleading trade names calculated to create the impression that a dealer
is a manufacturer selling directly to the consumer with corresponding savings.
(6) Plans ostensibly based on chance or services to be rendered by the prospective
customer whereby he may be able to secure goods contracted for at particularly low
prices or without completing all the payments undertaken by him, when, as a matter
of fact, such plans are not carried out as represented and are a mere lure to secure his
business.
(7) Use of pretended exaggerated retail prices in connection with or upon the
containers of commodities intended to be sold as bargains at lower figures.
(8) Falsely claiming forced sale of stock , with resulting forced price concessions,
when, as a matter of fact, inferior goods are mingled with the customary stock.
Seeking to cut off and hamper competitors in marketing their products through
destroying or removing their sales display and advertising mediums.
Discriminating in price, with the effect of substantially lessening competition.
Subsidizing public officials or employees through employing them or their relatives
under such circumstances as to enlist their interests in situations in which they will be
called upon by virtue of their official position to act officially, making unauthorized
changes in proposed municipal bond issues, corruption public officials or employees
and forging their signatures, using numerous other grossly fraudulent, coercive, and
oppressive practices in dealing with small municipalities.
Suggesting to prospective customers the use of specific, unfair, and dishonorable
practices directed at competitors of the seller.
STANDARD CONTAINERS FOR LESS THAN STANDARD WEIGHTS

Imitating or using standard containers customarily associated in the mind of the
general purchasing public with standard weights of the product therein contained, to
sell to said public such commodity in weights less than the aforementioned standard
weights.
Concealing business identity in connection with the marketing of one’s product, or
misrepresenting the seller’s relation to others, e. g., claiming falsely to be the agent or
employee of some other concern, or failing to disclose the termination of such a
relationship in soliciting customers of such concern, etc.

METHODS OF COMPETITION CONDEMNED

115

Misrepresenting in various ways the advantages to the prospective customer of
dealing with the seller, such as(1)Seller’s alleged advantages of location or size.
(2) False claims of being the authorized distributor of some concern.
(3) Alleged indorsement of the concern or product by the Government or by
nationally known businesses.
(4) False claim by a dealer in domestic products of being an importer, or by a dealer
of being a manufacturer, or by a manufacturer of some product, of being also the
manufacturer of the raw material entering into said product.
(5) False claim of “no extra charge for credit.”
(6) Being manufacturer’s representative and outlet for surplus stock sold at a
sacrifice, etc.
Tying or exclusive contracts, leases or dealings in which in consideration of the
granting of certain rebates or refunds to the customer, or the right to use certain
patented equipment, etc., the customer binds himself to deal only in the products of the
seller or lessor.
Showing and selling prospective customers articles not conforming to those
advertised, in response to inquires, without so stating.
Direct misrepresentation of the composition, nature, or qualities of the product
offered and sold.
Use by business concerns associated as trade organizations or otherwise of methods
which result or are calculated to result in the observance of uniform prices or practices
for the products dealt in by them with consequent restraint or elimination of
competition, such as use of various kinds of so-called standard cost systems, price lists
or guides, exchange of trade information , etc.
Securing business through undertakings not carried out and through dishonest and
oppressive devices calculated to entrap and coerce the customer or prospective
customer, such as:
(1) Securing prospective customer’s signature by deceit to a contract and promissory
note represented as simply an order on approval, securing agents to distribute the
seller’s products through promising to refund the money paid by them should the
product prove unsatisfactory, and through other undertakings not carried out.
(2) Securing business by advertising a “free trial” offer proposition, when, as a
matter of fact, only a "money back” opportunity is offered the prospective customer,
etc.
UNDESERVED VALUES THROUGH MISLEADING NAMES

Giving products misleading names so as to give them a value to the purchasing
public or to a part thereof which they would not otherwise possess, such as-(1), Names implying falsely that the particular products so named were made for the
Government or in accordance with its specifications and of corresponding quality, or
are connected with it in some way, or in some way have been passed upon, inspected,
underwritten, or indorsed by it.

(2) That they are composed in whole or in p art of ingredients or materials,
respectively, contained only to a limited extent or not at all.

116

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

(3) That they were made in or came from some locality famous for the quality of
such products.
(4) That they were made by some well and favorably known process, when, as a
matter of fact, only made in imitation of and by a substitute for such process.
(5) That the y have been inspected, passed, or approved after meeting the tests of
some official organization charged with the duty of making such tests expertly and
disinterestedly or giving such approval.
(6) That they were made under conditions or circumstances considered of
importance by a substantial fraction of the general purchasing public, etc.
Interfering with established methods of securing supplies in different businesses in
order to hamper or obstruct competitors in securing their supplies.

TABLES SUMMARIZING WORK OF THE LEGAL DIVISION AND
COURT PROCEEDINGS, 1915-1930
TABLE 1.--Preliminary inquiries

Pending beginning of year
Instituted during year
Total for disposition
Dismissed after investigation
Docketed as applications for complaints
Total disposition during year
Pending end of year

Pending beginning of year
Instituted during year
Total for disposition
Dismissed after investigation
Docketed as applications for complaints
Total disposition during year
Pending end of year

1915
0
119
119
3
112
115
4

1916
4
265
269
123
134
257
12

1917
12
462
474
289
153
442
32

1918
32
611
643
292
332
624
19

1919 1920 1921 1922
19
29
61
68
843 1,107 1,070 1,223
862 1,136 1,131 1,291
298 351 500 731
535 724 563 413
833 1,075 1,063 1,144
29
61
68 147

1923 1924 1925 1926 1927 1928 1929 1930
147 102 191 176 298 328 224 260
1,234 1,568 1,612 1,483 1,265 1,331 1,469 1,505
1,381 1,670 1,803 1,659 1,563 1,659 1,693 1,765
897 1,157 1,270 1,075 942 1,153 1,649 1,060
382 322 357 286 293 282 384 296
1,279 1,479 1,627 1,361 1,235 1,435 1,433 1,356
102 191 176 298 328 224 260 409

CUMULATIVE SUMMARY TO JUNE 30, 1930.
Inquiries instituted
17,107
Dismissed after investigation
11,146
Docketed as applications for complaints
5,612
Total disposition
16,758
Pending June 30,1930
409

TABLE 2.--Export trade investigations
1922 1923 1924 1925 1920 1927 1928 1929 1930
53
35
79
43
10
10
29
42
40
10
79
16
11
52
54
68
20
11
63 114
95
54
62
70
97
62
51
28
35
52
44
40
41
55
22
24
35
79
43
10
10
29
42
40
27

Pending beginning year
Instituted during year
Total for disposition
Disposition during year
Pending end of year

CUMULATIVE SUMMARY TO JUNE 30, 1930
Investigations instituted
Total disposition
Pending June 30, 1930

374
347
27

117

118

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
TABLE 3.--Applications for complaints

1915
Pending beginning of year
Applications docketed
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Rescinded “To complaints”
Total for disposition
To complaints
Dismissals:
Stipulated:
Trade-practice acceptance
Others
Total disposition during year
Pending end of year

1916

0
112

1917

104
134

0
0
0
0
112
0
0
0
8
8
104

1918

1919

1920

1921

1922

130
153

0
0
105
108
130

280
535

389
724

554
426

0
0
0
0
283
16

0
0
0
0
238
3

188
332
0
0
0
0
520
80

0
0
0
0
815
125

0
0
0
0
1,113
220

0
0
0
0
980
150

0
0
79
95
188

0
0
160
240
280

0
0
301
426
389

0
0
339
559
554

1923

1924

458
416

572
377

467
382

0
0
357
513
467

0
0
5
0
854
104
0
0
292
396
458

0
0
6
0
880
121
0
0
187
308
572

1925 1926 1927 1928 1929 1930
Pending beginning of year
Applications docketed
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Rescinded “To complaints”
Total for disposition
To complaints
Dismissals:
Stipulated
Trade-practice acceptance
Others
Total disposition during year
Pending end of year

565
340

488
273

1
0
3
0
909
118

420
292

457
334

530
679

843
535

1
0
4
0
786
57

5
0
298
421
488

0
0
0
0
712
45

2
0
0
0
793
58

2
1
0
0
1,212
100

3
3
3
2
1,389
171

102
2
185
346
420

80
3
127
255
457

68
19
118
263
530

118
17
134
369
843

244
32
158
636
753

CUMULATIVE SUMMARY TO JUNE 30, 1930
Applications docketed
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Total rescinded dismissals
Rescinded “To complaints”
Total for disposition
To complaints
Dismissals:
Stipulated
Trade-practice acceptance
Others
Total dismissals
Total disposition
Pending June 30, 1030

6,044
10
4
25
39
2
6,085
1,517
620
73
3,121
3,814
5,331
754
TABLE 4.--Complaints

1915 1916 1917 1918 1919 1920 1921 1922
Pending beginning of year
Complaints docketed
Rescinded orders to cease and desist:
Contest
Consent
Default
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Total for disposition
Complaints rescinded
Orders to cease and desist:
Contest
Consent

0
0

0
5

5
9

0
0
0
0
0
0
0
0

86
135

133
308

287
177

312
111

0
0
0

0
0
0
0
0
0
5
0

0
0

10
154

0
0
0

0
0
0

0
0
0

0
0
0

0
0
0
14
0
0
0

0
0
0

0
0
0

164

221
0

3
0

0
0
0

71
0

0
0
1

441
0

0
0
0

465

423

0
75
0

0
0
0

0

110

116
0

0

0

74
17

1
0
4
0
954
143
3
0
243
389
565

Default
Dismissals:
Stipulated
Trade-practice acceptance
Others
Total disposition during
year
Pending end of year

0

0

0
0
0

0

0
0
0

0
0
1

0
0

0
0
0
7

0
5

0
0
0
13

4
10

0

78
86

0
0
44

0
0
37

88
133

0
0
0
75

154
287

0

153
312

166
257

119

SUMMARY OF LEGAL WORK
TABLE 4.--Complaints--Continued
Pending beginning of year
Complaints docketed
Rescinded orders to cease and desist:
Contest
Consent
Default
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Total for disposition
Complaints rescinded
Orders to cease and desist:
Contest
Consent
Default
Dismissals:
Stipulated
Trade-practice acceptance
Others
Total disposition during year
Pending end of year

1923 1924 1925 1928 1927 1928 1929 1930
257 232 264 220 152 147 136 198
144 154 132
62
76
64 149 172
0
0
0

4
1
0

0
0
0

0
0
0

0
0
0

1
0
0

0
0
0

0
0
0

0
0
1
402
0

0
0
1
392
0

0
0
0
396
0

0
0
0
282
0

0
0
1
229
0

0
0
0
212
0

0
0
0
285
0

0
0
0
370
3

28
54
0

45
47
0

30
43
0

28
16
0

34
18
0

38
8
2

56
7
4

36
11
1

0
0
88
170
232

0
0
38
128
264

6
0
97
176
220

3
0
83
130
152

1
5
24
82
147

3
5
20
76
136

3
1
16
87
198

3
0
41
95
275

CUMULATIVE SUMMARY TO JUNE 30, 1930
Complaints
Rescinded orders to cease and desist:
Contest
Consent
Default
Total rescinded orders to cease and desist
Rescinded dismissals:
Stipulated
Trade-practice acceptance
Others
Total rescinded dismissals
Total for disposition
Complaints rescinded
Orders to cease and desist:
Contest
Consent
Default
Total orders to cease and desist
Dismissals:
Stipulated
Trade-practice acceptance
Others
Total dismissals
Total disposition
Pending June 30,1930

1,852
5
1
0
6
0
0
4
4
1,862
3
744
221
7
972
19
11
58261
612
1,587
275

120

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
COURT PROCEEDINGS--ORDERS TO CEASE AND DESIST
TABLE 5.--Petitions for-- review--Lower courts
1919 1920 1921 1922 1923 1924 1925 1926

Pending beginning of year
Appealed
Total for disposition
Decisions for Commission
Decisions for others
Petitions withdrawn
Total disposition during year
Pending end of year

0
4
4
1
1
0
2
2

2
9
11
0
3
0
3
8

8
18
26
1
11
1
13
13

13
5
18
4
5
0
9
9

9
5
14
5
4
1
10
4

4
15
19
1
4
0
5
14

14
6
20
6
3
2
11
9

1927 1928 1929 1930

9
5
14
5
1
0
6
8

8
4
12
4
2
3
9
3

3
4
7
3
1
0
4
3

3
34
37
1
1
0
2
35

CUMULATIVE SUMMARY TO JUNE 30, 1030
Appealed
Decisions for commission
Decisions against commission
Petitions withdrawn
Total disposition
Pending June 30, 1930

35
1
36
4
26
3
33
3

111
36
1 62
10
108
3

1 The above table states that 62 cases have been decided adversely to the commission in the circuit
courts of appeals. However, the Grand Rapids furniture (veneer) group (with 25 different docket numbers)
is in reality 1 case, with 25 different subdivisions. It was trial, briefed, and argued as 1 case, and was so
decided by the court of appeals.- The same holds true of the curb-pump group (with 12 different
subdivisions). In reality, therefore, these 37 docket numbers mean but 2 cases, and if cases and not docket
numbers are counted, the total of adverse decisions would be 27.

TABLE 6.--Petitions for review--Supreme Court of the United, States
1919
1928 1929 1930
Pending beginning of year
Appealed by Commission
Appealed by others
Total for disposition
Decisions for Commission
Decisions for others
Petitions withdrawn by Commission
Writ denied Commission
Writ denied others
Total disposition during year
Pending end of year

1920

0
0

0
2
0

0
0
0

1
2
0

2
0
1
0

0
0
0
0

1921
3
4
0
3
0
0

0
0
0
1
1

3
5
0

7
2
0
0

0
0
0
3

1922
1
0
2
10
0
5
0

2
0
4
3

1923
0
5
1
2
0
1

1
1
2
9
1

4
2
1

6
0
0
0

0
1
2
0

1924
6
1
3
9
0
0
0

1
1
2
4

1925

CUMULATIVE SUMMARY TO JUNE 30, 1930
Appealed by commission
Appealed by others
Total appealed
Decisions for commission
Decisions against commission
Petitions withdrawn by commission
Writ denied commission
Writ denied others
Total disposition

1
0
1

8
3
2
0

2
1
3
6

0
0
0

1
0
0
0

1
1
7
1

1926
1
1
2
2
0
0
0

0
1
1
0

1927

0
2
0
1

0
0
1
1
1

1
0
0
2
0

22
11
33
5
10
2
7
9
33

Pending June 30, 1930

0

121

SUMMARY OF LEGAL WORK
TABLE 7.--Petitions for enforcement--lower courts
1919

1920

1921

1922

1923

1924

1925

1926

1927

1928

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
1
1
1
0
0
0
1
0

0
1
1
0
0
0
0
0
1

1
1
2
2
0
1
0
2
0

0
3
3
0
1
1
0
1
2

2
2
4
0
0
0
1
1
3

3
3
6
1
1
0
2
4
2

Pending beginning of year
Appealed
Total for disposition
Decisions for Commission
Decisions for others
Petitions by commission denied
Petitions withdrawn
Total disposition during year
Pending end of year

1929

2
9
11
5
0
1
1
6
5

1930

5
4
9
4
1
0
1
6
3

CUMULATIVE SUMMARY TO JUNE 30, 1930
Appealed
Decisions for commission
Decisions against commission
Petitions by commission denied
Petitions withdrawn
Total disposition
Pending June 30, 1930

24
11
1
3
5
20
4

TABLE 8.--Petitions for enforcement--Supreme Court of the United States
1919

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
1
1
0
0
0
0
1

1
0
0
1
0
1
0
1
0

0
0
1
1
0
0
1
1
0

0
1
0
1
0
0
0
0
1

1
0
1
2
0
1
1
2
0

Pending beginning of year
Appealed by Commission
Appealed by others
Total for disposition
Decisions for Commission
Decisions for others
Certiorari denied others
Total disposition during year
Pending end of year

CUMULATIVE SUMMARY TO JUNE 30, 1930
Appealed
Decisions for commission
Decisions against commission
Petitions by others denied
Total disposition
Pending June 30, 1930

5
1
2
2
5
0

122

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
TABLE 9.--Petitions for rehearing, modification, etc.--Lower courts
1919

Pending beginning of year
Appealed
Total for disposition
Decisions for commission
Decisions against commission
Petitions by commission denied
Petitions by others denied
Total disposition during year
Pending end of year

1920

1921

1922

1923

1924

1926

1926

1927

1928

1929

1930

0
0
0
0
0
0
0
0
0

0
1
1
0
0
0
0
0
1

1
0
1
0
0
1
0
1
0

0
2
2
1
0
0
0
1
1

1
0
1
0
0
0
1
1
0

0
2
2
0
0
2
0
2
0

0
8
8
1
1
1
3
6
2

2
3
5
0
0
2
2
4
1

1
0
1
0
0
0
0
0
1

1
1
2
0
1
1
0
2
0

0
1
1
1
0
0
0
1
0

0
2
2
0
0
1
1
2
0

CUMULATIVE SUMMARY TO JUNE 30, 1930
Appealed
Decisions for commission
Decisions against commission
Petitions by commission denied
Petitions by others denied
Total disposition
Pending June 30, 1930

20
3
2
8
7
20
0

TABLE 10.--Petitions for rehearing, modification, etc.--Supreme Court of the United States
1919

Pending beginning of year
Appealed
Total for disposition
Petitions by commission denied
Petitions by others denied
Total disposition during year
Pending end of year

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
1
1
0
1
1
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
1
1
0
1
1
0

0
4
4
2
2
4
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
1
1
0
0
0
1

CUMULATIVE SUMMARY TO JUNE 30, 1930
Appealed
Petitions by commission denied
Petitions by others denied
Total disposition
Pending June 30, 1930

7
2
4
6
1

123

SUMMARY OF LEGAL WORK
COURT PROCEEDING MISCELLANEOUS
TABLE 11.--Interlocutory, mandamus, etc.--Lower courts
1919

Pending beginning of year
Appealed
Total for disposition
Decisions for Commission
Decisions against commission
Petitions withdrawn by Commission
Petitions withdrawn by others
0
Total disposition during year
Pending end of year

1920

1921

1
4
5
0
1
0

4
2
6
1
0
0

0
2
2
1
0
0
0
1
1

0
1
4

1922

1
1
5

1923

5
6
11
3
1
0
0
5
6

1924

1925

1926

1927

1928

1929

1930

4
0
4
0
0
0

4
1
5
0
0
1

4
1
5
0
0
1

4
2
6
1
0
0

5
2
7
1
1
2

3
2
5
3
0
0

2
2
4
1
2
0

6
5
11
0
7
0
0
7
4

0
0
4

0
1
4

0
1
4

0
1
5

0
4
3

1
3
2

4
0

CUMULATIVE SUMMARY TO JUNE 30, 1030
Appealed
Decisions for commission
Decisions against commission
Petitions withdrawn by commission
Petitions withdrawn by others
Total disposition
Pending June 30, 1930

29
11
12
4
2
29
0

TABLE 12.--Interlocutory, mandamus, etc.--Supreme Court of the United States
1919

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
6
6
0
0
0
0
0
6

6
0
6
0
2
0
0
2
4

4
0
4
0
3
0
0
3
1

1
0
1
0
0
0
0
0
1

1
1
2
1
0
1
0
2
0

0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0

0
1
1
0
0
0
1
1
0

Pending beginning of year
Appealed
Total for disposition
Decisions for Commission
Decisions against commission
Certiorari denied Commission
Certiorari denied others
Total disposition during
Pending end of year

CUMULATIVE SUMMARY TO JUNE 30, 1030
Appealed
Decisions for commission
Decisions against commission
Petitions by commission denied
Petitions by others denied
Total disposition
Pending June 30, 1930

18131---30-----9

8
1
5
1
1
8
0

124

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
TABLE 13.--Interlocutory, mandamus, etc.--Rehearing, modification, etc.--Lower
courts
1919

Pending beginning of year
Appealed
Total for disposition
Decisions for commission
Petitions by commission denied
Total disposition during year
Pending end of year

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
1
0
2
0

0
2
2
0
1
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

CUMULATIVE SUMMARY--TO JUNE 30, 1930
Appealed
Decisions for commission
Petitions by commission denied
Total disposition
Pending June 30, 1929

2
1
1
2
0

TABLE 14.--Interlocutory, mandamus, etc.--Rehearing, modification, etc.-Supreme Court of the United States
1919

Pending beginning of year
Appealed
Total for disposition
Petitions by commission denied
Petitions by others denied
Total disposition during year
Pending end of year

1920

1921

1922

1923

1924

1925

1926

1927

1928

1929

1930

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
2
0

0
0
0
0
0
0
0

0
2
2
2
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
0
0
0
0
0
0

0
1
1
0
1
1
0

CUMULATIVE SUMMARY--TO JUNE 30, 1930
Appealed
Petitions by commission denied
Petitions by others denied
Total disposition
Pending June 30, 1980

3
2
1
3
0

EXPORT-TRADE SECTION
Foreign-trade work of the commission, under the export-trade act and section 6 (h)
of the Federal Trade Commission act, is handled by the export-trade section of the
legal division.
The export-trade act, commonly known as the Webb-Pomerene law, passed in April
1918, grants exemption from the antitrust Jaws to an association organized for the sole
purpose of and solely engaged in export trade from the United States to foreign
countries, with the provision that such an association shall not restrain the export trade
of a domestic competitor, enhance or depress prices or substantially lessen competition
within the United States, or otherwise restrain trade therein.
Section 6 (h) of the Federal Trade Commission act directs the commission to
investigate 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 this country.
WEBB LAW ASSOCIATIONS NOW OPERATING, TOTAL 57

At the close of the fiscal year ending June 30 1930, 57 export associations were
filing papers with this office under the Webb-Pomerene law.
These groups represent producers, mills, mines, and factories scattered throughout
all parts of the Union, and shipping from Atlantic, Pacific, and Gulf ports.
Headquarters offices are usually at seaports. The associations are as follows:
Alabama-Florida Pitch Pine Export
Association, 601 Blount Building,
Pensacola, Fla.
American Export Door Corporation,
Washington Building, Tacoma,
Wash.
American Locomotive Sales Corporation, 30 Church Street, New York
City
American Milk Products Corporation,
71 Hudson Street, New York City.
American Paper Exports (Inc.), 75
West Street, New York City.
American Pitch Pine Export Co., 1600
Pere Marquette Building, New
Orleans.
American Provisions Export Co., 140
West Van Buren Street, Chicago.
American Rice Export Corporation,
Crowley, La.
American Soda Pump Export Association, 230 Park Avenue, New York
City.

American Soft Wheat Millers Export
Corporation, 8261 K Street, Washington, D. C.
American Spring Manufacturers’ Export Association, 80 Church Street,
New York City.
American Surface Abrasives Export
Corporation, 82 Beaver Street, New
York City.
American Textile Trading Co., 1421
Chestnut Street, Philadelphia.
American Tire Manufacturers’ Export
Association, 30 Church Street, New
York City.
American Webbing Manufacturers’
Export Association, 395 Broadway,
New York City.
Associated Button Exporters of America (Inc.), 320 Broadway, New
York City.
California Dried Fruit Export Association, 1 Drumm Street, San Francisco.
125

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

California Sardine Export Association,
1603 Alexander Building, San Francisco.
Carbon Black Export Association
(Inc.), 80 East Forty-second Street,
New York City.
Cement Export Co., The, Pennsylvania
Building, Philadelphia.
Chalmers (Harvey) & Son Export Corporation, rear 31 East Main Street,
Amsterdam, N. Y.
Copper Export Association (Inc.), 25
Broadway, New York City.
Copper Exporters (Inc.), 25 Broadway, New York City.
Davenport Pearl Button Export Co.,
1231 West Fifth Street, Davenport,
Iowa.
Douglas Fir Exploitation & Export
Co., 1125 Henry Building, Seattle.
Durex Abrasives Corporation, 82
Beaver Street, New York City.
Export Petroleum Association (Inc.),
67 Wall Street, New York City.
Export Screw Association of the
United States, room 504, 101 Park
Avenue, New York City.
Florida Hard Rock Phosphate Export
Association, Savannah Bank & Trust
Building, Savannah.
Florida Pebble Phosphate Export Association, 420 Lexington Avenue,
New York City.
Florida Pine Export Association, Bisbee Building, Jacksonville.
Goodyear Tire & Rubber Export Co.,
The, 1144 East Market Street,
Akron.
Gulf Pitch Pine Export Association,
824 Whitney Bank Building, New
Orleans.
Hawkeye Pearl Button Export Co.,
601 East Second Street, Muscatine,
Iowa.
Metal Lath Export Association, The,
90 West Street New York City.
Naval Stores Export Corporation, Savannah Bank & Trust Building,
Savannah, Ga.

Northwest Dried Fruit Export Association, 400 Security Building, Portland, Oreg.
Northwest Lumber Exporters’ Association, 554 Stuart Building, Seattle,
Wash.
Pacific Flour Export Co., care of
Centennial Mill Co., 506 Central
Building, Seattle, Wash.
Phosphate, Export Association, 420
Lexington Avenue, New York City.
Pipe Fittings & Valve Export Association, Branford, Conn.
Producers Linter Export Co., 822 Perdido Street, New Orleans.
Redwood Export Co., 310 Sansome
Street, San Francisco.
Rice Export Corporation, Lake
Charles, La.
Rubber Export Association, The, 1201
Akron Savings & Loan Building,
Akron, Ohio.
Salmon Export Corporation, 3301
Smith Tower, Seattle, Wash.
South American Fruit Exporters
(Inc.), 44 Water Street, New York
City.
Standard Oil Export Corporation, 26
Broadway, New York City.
Steel Export Association of America,
The, 40 Rector Street, New York
City.
Sugar Export Corporation, 113 Wall
Street, New York City.
Sulphur Export Corporation, 420 Lexington Avenue, New York City.
U. S. Alkali Export Association
(Inc.), 11 Broadway, New York
City.
United States Handle Export Co., The
Piqua, Ohio.
Walnut Export Sales Co. (Inc.),
Packers Station, Kansas City, Kans.
Walworth International Co., 11 Broadway, New York City.
Western Plywood Export Co., 1549
Dock Street, Tacoma.
Zinc Export Association, 40 Rector
Street, New York City.

WEBB LAW EXPORTS TOTAL $724,100,000 IN 1929

Webb law associations report exports during 1929 to the amount of $724,100 ,000,
which was far in excess of totals for previous years, $476,200,000 having been the
amount in 1928 and $371,500,000 in 1927.
Products exported during 1929 included metal and metal products (copper, iron and

steel, zinc, machinery, railway equipment, pipes, valves, and screws) to the amount of
$271,000,000; products Of mines and wells (crude sulphur, phosphate rock, and
petroleum), valued at $270,000,000; lumber and wood products (pine, fir, red-wood,
walnut, hardwood, naval stores, plywood, doors and wooden

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127

tool handles), totaling $20,000,000; foodstuffs, such as milk, meat, sugar, flour, rice,
salmon, sardines, dried. and fresh fruit, to the amount of $67,100,000; and other
manufactured products, such as rubber, paper, abrasives, cotton goods and linters,
buttons, chemicals, etc., valued at $90,000,000.
Exports during the first nine months of 1929 exceeded those of the corresponding
period of 1928, but the depression at the end of the year brought the totals down on
some commodities.
An association exporting manufactured products reported the largest volume in its
history “surpassing even the banner year of 1920” although prices were lower on that
commodity in 1929. Another reports better business than in three or four years
previous “though exports fell off at the end of 1929 due to abnormal conditions in a
number of South and Central American countries, partly as a result of the political
situation and partly due to poor crops. A third reports an increase in 1929 over 1928
primarily due to efforts in expanding the foreign organization, taking additional
business in markets which were already organized, and exporting to markets
theretofore undeveloped. An association exporting foodstuffs reports a decrease in
business due to encouragement by foreign governments in increased production of the
products by foreign competitors.
Sales during the first half of 1930 were appreciably diminished as a result of
business depression, and also because foreign purchasers, anticipating a further drop
in prices, placed, smaller orders to fill only the immediate needs of the market.
SEVEN ASSOCIATIONS ARE ORGANIZED DURING YEAR

During the past year seven new associations were organized as follows:
The Alabama-Florida Pitch Pine Export Association with offices at 601 Blount
Building, Pensacola, Fla., includes the Pensacola Lumber & Timber Co., Pensacola,
Fla.; Alger Sullivan Lumber Co., Century, Fla.; Brown Florida. Lumber Co., Caryville,
Fla.; St. Andrew Bay Lumber Co., Millville, Fla.; Jackson Lumber Co., Lockhart, Ala.;
and Swift Hunter Lumber Co., Atmore, Ala.
The American Textile Trading Co., with offices at 1421 Chestnut Street,
Philadelphia, includes the Aberfoyle Manufacturing Co., Philadelphia; StandardCoosa-Thatcher Co., Chattanooga, Tenn.; The Hampton Co., Easthampton, Mass.;
Spinners Processing Co., Charlotte, N. C.; and the American Yarn & Processing Co.,
Mount Holly, N. C.
The Carbon Black Export Association (Inc.), with offices at 60 East Forty-Second
Street, New York City, includes the United Carbon Co., Charleston, W. Va.; Binney
& Smith Co. (Inc.), New York City; J. M. Huber (Inc.) New York City; R. W. Greeff
& Co. (Inc.), New York City; Godfrey L. Cabot (Inc.), Boston; and the Palmer Gas
Products Corporation, Chicago.
The Durex Abrasives Corporation, with offices at 82 Beaver Street, New York City,
includes the American Glue Co., Boston; Armour & Co., Chicago; Baeder Adamson
Co., Philadelphia; H. H. Barton, & Son Co., Philadelphia; U. S. Sandpaper Co.,

Williamsport, Pa.;

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Behr-Manning Corporation, Falls, N.Y.; Minnesota Min Troy, N.Y.; Carborundum
Co., Niagara Falls, N. Y.; Minnesota Mining & Manufacturing Co., St. Paul; and the
Wausau Abrasives Co., Wausau, Wis.
The Florida Pine Export Association, with offices in the Bisbee Building,.
Jacksonville, Fla., includes the Pensacola Lumber & Timber Co., Pensacola, Fla.; St.
Andrews Bay Lumber Co., Millville, Fla.; Putnam Lumber Co., Shamrock, Fla.;
Foshee Manufacturing Co., Melbourne, Fla.; w. C. Sherman Co., Hicoria, Fla.; and the
J. M Griffin Lumber Co., Holopaw, Fla.
The Northwest Lumber Exporters’ Association, with offices at 554 Stuart Building,
Seattle, Wash., includes the Stimson Timber Co., Seattle; the Washington Lumber &
Spar Co Seattle; the Long Bell Lumber Co., Longview, Wash.; Bolcom Canal Lumber
Co., Seattle; Bay City Lumber Co., Aberdeen, Wash.; Grays Harbor Lumber Co.,
Aberdeen; Bissell Lumber Co., Seattle; Clark Nickerson Lumber Co Everett, Wash.;
Clark & Wilson Lumber Co., Linnton, and Sibley Mills Lumber Co., Portland, Oreg.
The Rice Export Corporation, with offices at Lake Charles, La., includes Frank A.
Godchaux, sr., Abbeville, La.; J. A. Foster, Lake Charles, La.; Frank Roberts, Lake
Charles La W. P. Connell, Baton Rouge, La.; L. M. Simon, Crowley, La.; J. E.
Broussard, Beaumont, Tex.; and Paul F. Pritchard, Houston, Tex.
ADVANTAGES OBTAINED BY WEBB LAW ASSOCIATIONS

Export associations were asked to report advantages and disadvantages resulting
from their operation under the act in 1929. A few of these answers may be of interest:
A lumber export association reports that its advantages have been the establishing
of uniform prices, grades, and trade practices, obtaining and disseminating information
from and to members, and carrying out trade promotion work and advertising which
could not be done by individual firms owing to the cost involved. This organization
adds that its overhead has been lessened by handling sales through centralized offices
and through agencies and correspondents that would not be accessible to individual
firms. “Sales cost to our membership during 1929, including exploitation, advertising,
and foreign representation, was less than 2 per cent on the f. a. s. cost of Shipments.”
A smaller association exporting metal products reports that a more uniform quality
of material is produced by its system of cooperative selling, the expense of marketing
is distributed among all of the companies, and information of commercial value
obtained by one is available to all. This association handles all foreign inquiries and
orders through a central office, and states that “foreign business in any volume would
be impossible without operation as an association.”
One of the newer organizations reports that export prices have been stabilized,
allowing the manufacturer a fair margin of profit which he was unable to procure prior
to the association’s inception. The volume of exports by members of this association
has been appreciably increased, and a better understanding among the manufacturers
has grown out of their cooperative effort .

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129

An exporter of foodstuffs emphasizes the advantage of maintaining uniformity in
terms of sale for export, which is said to be “the most important asset of the export
business in this industry.”
A tendency toward market stabilization makes for better prices as a whole; a more
steady volume of business, and a more uniform movement of products. These
advantages in export trade have been summed up by one of the older associations as
follows: “Continued operation under this plan has a cumulative effect which we have
found very beneficial as years go by.”
Among disadvantages reported by the associations during the past year are the
serious competition of European producers in all foreign markets; unfortunate
economic conditions in Latin-American countries due to reductions in the price of
sugar, coffee, and to consequent unfavorable exchange conditions; as well as social
and political turmoil in China and India. On some manufactured products there has
been a tendency on the part of foreign governments to increase tariff rates; and in some
cases increased production by foreign competitors and the use of cheaper substitutes
have been encouraged by governmental action abroad.
PROCEDURE UNDER THE EXPORT TRADE ACT
Under section 5 of the act, an export association files with the Federal Trade
Commission a verified first report covering its organization plan, as well as copies of
the articles of incorporation, by-laws, membership agreement, or other organization
papers. Annual reports are filed each year and such other information as the
commission may require as to the organization or operation of the association.
Blank forms for the filing of reports and other data concerning procedure under the
law may be obtained from the export trade section.
It is also provided in section 5 that if the commission shall have reason to believe
that an association has violated the law, it may conduct an investigation and make
recommendation for readjustment of the business. In case of failure to comply with
such recommendation, the commission may refer the matter to the attorney general for
further action; But no formal complaints have been prosecuted under the act, and the
law has not been construed by the courts.
During the past year, litigation in a State court involved the membership agreement
of an export association in the State of Washington (American Export Door
Corporation v. John A. Gauger Co., 283 Pac. 462, Dec.10, 1929). This case, in the first
instance, was an action brought by the export organization to restrain a member
company from violation of its membership contract. The lower court awarded
judgment for breach of contract and enjoined the Gauger company from making future
sales of doors contrary to the terms of the contract. Upon appeal to the Supreme Court
of the State of Washington, the decision below was reversed on the ground that the
agreement in question was in violation of a provision in the State constitution
prohibiting monopolies. No attempt was made to take the case into a Federal court, and
the Federal act was not construed.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
INFORMAL FOREIGN-TRADE COMPLAINTS UNDER SECTION 6 (H)

Inquiries made under section 6 (h) of the Federal Trade Commission act included 51
foreign-trade complaints handled by this office during the fiscal year ending June 30,
1930.
These cases involve practices of American exporters and importers ( not Webb law
associations) in their trade with foreign countries. They are usually reported in the first
instance by the foreign complainant to the American consul abroad. If it is found that
inquiry in the States is necessary the matter may be reported to the Federal Trade
Commission and facts obtained to substantiate or refute the allegations of the
complainant. These facts, with inspection reports. of the consul, frequently lead to an
amicable adjustment by the parties, either in the form of settlement or arbitration
proceedings. The commission’s inquiries are made without publicity.
This work has received the generous cooperation of the foreign offices of our
Government as well as the chambers of commerce and other trade organizations in this
country and abroad. The New York Chamber of Commerce has in some cases
provided arbitration machinery. The laboratories of the Bureau of Standards and other
scientific agencies have given valuable service in testing samples of products claimed
to be defective.
Cases handled during the past year involved shipments of bicycles to Salvador,
automobiles to Peru, musical instruments, lumber, and eggs to Argentina, wagons and
glassware to Mexico, hat linings to Cuba, fountain pens to Australia, films to Japan,
shrimps to China, sporting goods to India, oil burners and grass seed to Canada,
lumber to Germany, rubber goods to Holland, apples and jute bags to Sweden, and
toilet articles to the Azores. Complaints involved claims of misrepresentation of goods,
quality below sample or order, short shipment, delay or failure to ship, spoilage or
breakage en route, overcharge, failure to reply to complaints or inquiries, and other
factors resulting in strained relations between the parties, as well as the creation of
anti-American sentiment in foreign markets.
Consuls report that this work has done much toward establishing good will for
American products abroad, especially in out-of the-way markets where American
exporters have not a firmly established trade, and a complaint against an American
trader reflects unfavorably against all Americans trading in the community.
TRUST LAWS AND UNFAIR COMPETITION IN FOREIGN COUNTRIES

The following may be noted, under Section 6 (h) of the Federal Trade Commission
act concerning recent measures in foreign countries and in international trade along
the lines of trust regulation and unfair competition.
CANADIAN COMBINES INVESTIGATION ACT

Under the Canadian combines investigation act, reports of the commissioner dated
October 31 and December 18, 1929 covered investigation of the Amalgamated
Builders’ Council and related organizations, an alleged combine of plumbing and
heating contractors and others in the Province of Ontario.

EXPORT TRADE SECTION

131

The commissioner found that the combine or “guild” from the date of its inception
in June, 1927, was detrimental to the public in contravention of the combines
investigation act and of section 498 of the criminal code. Agreements of the guild, to
raise the price of materials and work to be paid by the public, to limit competition
among operators in and out of the guild, and to compel the jobbers and manufacturers,
members and nonmembers, to respect the so-called sales policy or doctrine of the
guild, were found to have been carried into effect “cautiously and deceptively, so that
it might appear to the law that the action of the guild, in fact collective, was individual
and therefore innocent in the view of the common and statute law.”
In June, 1928, the Amalgamated Builders’ Council was organized, with membership
identical to that of the guild. The commissioner states that the council was a
“contrivance in order to afford to the combine immunity under the trade-unions act.
The council abandoned the pretense of individual action and entered into agreements
with the labor unions of Windsor and Toronto by which these professed to contract
that their members would not work for any but members of the council, that is,
members of the guild. The commissioner states that the registration of the council
under the trade-unions act was a “sham and a fraud” and should be declared null and
void that the true purposes of the council were not those set out in its petition to the
Secretary of State but were “to enable the guild to effect, in violation of the statutes,
an unlawful oppression or ‘discipline’ of the public and the persons engaged in the
plumbing and heating trade, whether members or not members of the guild.”
The Toronto Plumbing and Heating Contractors’ Union, an Organization of
employers, was registered under the trade-unions] act in May, 1929. As to this union,
the commissioner says that “It was with the amazing strike of May 1, 1929, and the
negotiations arising out of that, a part of the activity of the guild or combine. The
purposes were not those set out in the registration, but the true purposes were to
oppress unlawfully the public and the manufacturers, jobbers, and operators of the
plumbing and heating trade in and out of the guild or combine. Registration was
accomplished by what may be fairly called duress as well as by adventurous cunning.
An intolerable power of oppression seems to have been acquired by the registration
of a rule that this union may expel members for any reason. The operators have been
forced in to obtain union labor and they may be forced out to limit competition.” It was
therefore recommended that the registration of the union be annulled.
The commissioner rejected the contention of the council that registration under the
trade unions act of 1872 rendered the members immune from criminal responsibility,
and held that all persons who joined the guild, the council, the Dominion Chamber of
Credits (Ltd.), and the officers of 1929 operating the Toronto Plumbing and Heating
Contractors’ Union were parties to or privies to, or knowingly assisted the formation
or operation of a combine in restraint of trade, within the meaning of the combines
investigation act.
It was further reported that a group of persons in London, Ontario, members of the
Canadian Plumbing and Heating Guild and of the Amalgamated Builders’ Council, had
practiced fraud upon the

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Corporation of the City of London and others, in 1927 and 1928, by erring and
conspiring on tenders. Each of the parties having made the amount of a tender in the
usual manner by including the cost of material, labor, overhead, and profit, would add
an amount agreed upon, with the understanding that the successful tenderer would
receive that sum in addition to the just amount of his tender from the person calling for
tenders, and would then distribute it equally among those who were unsuccessful.
As a result of the commissioner’s report, proceedings were begun by the Canadian
Department of Justice against members of the plumbing and heating industry.
Preliminary hearings in the case of Rex against Singer and others were commenced in
the police courts at London and Windsor, Ontario, in May 1930. Thirteen plumbing
contractors in London pleaded guilty to four charges under the combines investigation
act, and also to a charge of unlawful conspiracy to defraud under section 444 of the
criminal code. Fines totaling $26,000 were imposed by Magistrate Scandrett in the
London police court. In the Winds or police court, George R. Baker, of Toronto,
former vice president of the Amalgamated Builders’ Council, pleaded guilty to the
charges under the combines act and was sentenced to pay a fine of $500 without costs,
or to serve six months imprisonment in default of payment. Hearings in Windsor
involving other defendants were continued in June and July.
In a decision rendered by Mr. Justice Orde on May 5, 1930, O’Connor against
Waldron, it was held that proceedings before a commissioner appointed under the
combines investigation act are absolutely privileged and that the commissioner,
counsel, witnesses, and parties are entitled to the same protection as in a court of law.
This was an action brought by W. F. O’Connor against Mr. Gordon Waldron, K. C.,
for slander during the investigation of the Amalgamated Builders’ Council. In
dismissing the action the court held that the defendant was performing judicial
functions in carrying out the objects of his commission; that it would be practically
impossible to conduct an inquiry under the act if the proceedings were not protected
by the rule; and it would clearly not be in the public interest if the commissioner, as
well as the counsel and witnesses were to be hampered in what they might say during
the course of the proceedings by fear of a possible action for slander.
Decision was rendered by Mr. Justice Middleton on March 25, 1930, in
Amalgamated Builders’ Council against Herman, an action brought by the council
against W. F. Herman, owner and proprietor of the Border Cities Star, for libel in
connection with published articles bearing upon investigation of the council under the
combines investigation act. The defendant publisher moved to stay the action,
contending that, owing to the cancellation of its certificate, the council had no longer
any status in court, and that in any case the trade-unions act of 1872, being
constitutionally invalid, could confer no right to sue. The court issued an order to stay
the action on the ground that the words complained of in this case did not affect the
property or the financial position of the plain tiff, and that the Dominion trade-unions
act is a statute dealing solely with property and civil rights and therefore ultra vires,
and that it is quite in effectual to confer any valid status upon the trade union.

EXPORT TRADE SECTION

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COMPLAINT AGAINST MOTOR FUEL MONOPOLY IN GERMAN CARTEL
COURT

In the latter part of 1929 the Rhineland Garage Operating Co. ( Inc.), of Cologne,
filed complaint in the German cartel court against the motor-fuel monopoly known as
the gasoline convention
It is alleged that the convention is an absolute monopoly in Germany and that its
activities have included underbidding on the basis of common resolutions by the
convention, allowing of high indemnities for tying up importations of outside fuels by
foreign firms, boycott of dealers who refused to sign the convention bonds, granting
of hidden rebates, and entering into stipulations for the sale of motor fuels which
regulate the entire wholesale and retail trade and “represent from beginning to end a
continuous series of offenses against good business morals and even against the cartel
regulation as almost every one of these stipulations, if closely examined, is apt to raise
prices and keep them on a high level in a way that can not be justified in economic
respects, to suppress free competition, to restrict the economic freedom of trade and
of the large consumers in an undue and unwarrantable manner by barring purchase or
sale by differential and prejudicial terms and quotations, in short to injure by these
means national economics and the common weal.”
The cartel court may demand that all prejudiced parties with draw from agreements
objected to if the business conditions or the methods of business undertakings or
unions (trusts, syndicates, cartels, etc.) in fixing policies are such as to injure, under
exploitation of an economic power, the national economics and the common weal.
CARTEL LAWS PROPOSED IN AUSTRIA, CZECHOSLOVAKIA, AND POLAND

The Austrian Protective Association against Cartel Damages was formed in Vienna
in 1927 with the avowed purposes of organizing all buyers of cartel products;
collecting complaints on the harmful effects of the individual cartels and publishing
the same; establishing arbitration commissions for regulating the distribution of goods
within the various branches; protecting all persons having suffered through cartels, by
means of appeal to international competition, preparatory organization of a consumer’s
boycott, and founding of a relief fund; advocating the cancellation of the antiprofiteering act and the passage of a cartel law; forming a subcommittee for
establishing an international cartel bureau in Vienna; naming experts in cartel matters
and making expert reports and proposals for the removal of damages and improvement
of existing legal regulations.
The Austrian association has submitted to the national council a proposed law which
would provide for the creation of a cartel supervision bureau and a cartel court.
Agreements and resolutions which contain obligations on the handling of production
or sales, the application of business conditions, the manner of fixing prices or the
claiming of prices (syndicates, cartels , conventions, and similar agreements) would
be reduced to writing, reported within 14 days of their execution to the cartel
supervision bureau and entered upon a public register. If the bureau shall determine

that an agreement or resolution threatens the whole economic life, a certain branch of
trade, or the general welfare, it may request the cartel court to

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

declare the agreement null and void, or that the special manner of its execution be
prohibited. Among activities to which the bureau may object are mentioned limitations
of production or sales, raising of p rices, or maintaining prices on a high level,
restriction of economic liberty by a blockade in purchases or sales or by fixing of
different prices or conditions. Every person injured by a cartel agreement may appeal
to the bureau, and may further appeal to the cartel court from the decision of the
bureau. Decision of the cartel court shall be final and binding for the law courts and
arbitration courts. Fines may be imposed for disregarding a nullity decreed by the
court; and misuse of the rights granted by this law for the purpose of injuring another
party in his business or economic livelihood is punishable in the penal courts by fines
and imprisonment. A foreigner who has committed a crime according to this law may
be deported. The police authorities and the law courts may, in order to assure seizure,
sequester goods or their proceeds. All fines collected under the law shall be placed in
a fund for the promotion of trade, industry, agriculture, and commerce. The law shall
not apply to state monopolies. It is further provided that the Federal profiteering act
of 1921 and ordinances thereunder shall be canceled.
In Czechoslovakia a cartel law has been under consideration for several years. The
latest draft proposed in 1929 would provide within the Ministry of Industry and Trade
an “Advisory Committee for Cartel Questions” which would be given regulatory
powers in case of agreements whereby independent heads of undertakings combine in
order to influence, by joint action, production, sale, credit, business conditions, or
prices. Such agreements would be enforceable only when drawn up in writing, and
copies thereof would be submitted to the ministry. If, in the opinion of the ministry,
such an agreement constitutes a menace to the national economy or common weal, it
would be empowered to denounce the agreement , declare it to be without effect and
prohibit its execution. The national economy or common weal would be deemed to be
endangered if production or sale were restricted without valid reason, if credit
conditions were rendered difficult, if prices were raised or high prices maintained, or
if economic freedom were unfairly restricted by a boycott in respect of purchase or
sale or by the fixing of prices or conditions of a discriminatory nature. The provisions
of the law would apply also to associations of heads of undertakings (cartels ect.)
having their seat abroad, in so far as they carry on their activities in the territory of the
Czechoslovakian Republic. No special court is provided but the minister would be
empowered to impose fines and penalties for breach of the regulations, and in case of
“wilful or gross negligence,” such as execution of an agreement which has been
prohibited by the minister, proceedings would be instituted in the civil correctional
courts, which could impose larger fines and imprisonment.
In Poland a special draft law on cartels, now under consideration in Parliament,
follows more closely the German law, and would provide for a commissioner of cartels
appointed under the minister of trade and industry, who would receive registrations of
all combinations of mine owners, industrialists, and traders which aim at

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135

the limitation of production, the regulation of sales and prices, and the establishment
of conditions of sale and purchase by means of mutual obligations or the exercise of
control. There would also be set up at Warsaw a cartel court. If in the Opinion of the
commissioner a combination were liable to have consequences dangerous to the
public welfare, he would be authorized to lay before the cartel court a request for a
judgment the dissolution of the combination or the annulment of the decision in
question, or for the proclamation of the right of each participant not to carry out the
decision, or to denounce the combination, or to withdraw therefrom.
Combinations would be held to be dangerous to the public welfare when production,
sale , or freedom of trade is restricted in a manner unjustifiable from the economic
point of view, when prices are raised to or kept on a level not corresponding to
economic requirements, or when combinations, in pursuing their aims, misuse their
economic preponderance to the detriment of other combinations or of individual
traders. Penalties to be imposed by the cartel court would include fines and
imprisonment.
UNFAIR COMPETITION IN THE FRENCH COMMERCIAL COURTS

French commercial courts may award damages against traders or manufacturers
committing acts of unfair competition under article 1382 of the civil code which
provides that every act committed by an individual resulting in injury to another
involves an obligation on the party responsible for its occurrence to make reparation
there-for. In January, 1929, the Seine commercial court at Paris rendered decision
against a group of newspaper proprietors charged with concerted agreement to prevent
the transport, distribution, and sale to the public of a rival newspaper, by refusing to
allow agents and retailers who continued to sell the rival paper to sell the papers to the
defendants, and by refusing to accept advertisements from customers who also
advertised in the rival paper. It was held that the defendants had committed an act of
unfair competition entitling the injured parties to claim damages.
PLAN FOR FUSION OF ALL RUBBER PRODUCERS INTO ONE SELLING UNIT

In May, 1929, the Rubber Growers , Association (Inc.), of London, England,
appointed a committee to investigate the practicability of drafting a scheme for the
establishment of a cooperative selling organization to represent all producers of
rubber. The committee submitted a detailed report in November, 1929, calling
attention to the fact that of the world’s total estimated acreage under plantation rubber,
one-third is under British ownership, one-tenth owned by Dutch concerns domiciled
in Holland, and one-half is under Asiatic ownership comprising individuals of many
nationalities, races, and creeds numbering hundreds of thousands and incapable of
organization. The committee felt that a central selling plan would be im practicable at
this time, but recommended that plans be adopted for the formation of a number of
cooperative organizations , which if adopted would reduce the number of sellers by 90
per cent, in the hope that further coordination would lead ultimately to a complete

fusion of all groups into one selling unit.

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In adopting the committee report, the council of the association passed resolutions
directing the committee to (1) bring about the complete fusion of all the groups into
one selling unit at the earliest possible date, and (2) formulate plans by which finance
up to an agreed figure per pound of rubber lodged for sale may be made available to
all companies that agree to join the scheme.
As a result of a meeting in Amsterdam in February, 1930, attended by Dutch,
French, Belgian, Swiss, and German rubber producers, and a special meeting of the
council of the Rubber Growers’ Association in London in the same month, it was
recommended that growers be urged to stop all tapping of rubber during the month of
May, in order to reduce the steadily increasing world stocks.
INTERNATIONAL TIMBER UNION PROPOSED

The second international timber conference was held at Bratislava, Czechoslovakia,
in August, 1929, attended by more than 200 members. The countries represented
included the United Kingdom, France, Germany, Switzerland, Italy, Poland,
Yugoslavia, Finland Netherlands, Rumania, Latvia, Austria, Hungary, and Russia.
The conference discussed the formation of an international cartel to regulate
production and stabilize prices, and appointed a preparatory committee to consider the
foundation of an international timber union. These matters will be discussed further
at the next conference.
The need for simplification of trade and exchange customs and for standard rules for
grading in the lumber trade was emphasized. Adoption of the sales conditions used by
the Association of Austrian Timber Merchants was recommended in order to avoid
differences. Arbitration for settlement of disputes regarding measure and quality and
a court of arbitration for settlement of all other disputes in the international timber
trade were among the plans proposed.
REORGANIZATION OF THE CHILEAN NITRATE INDUSTRY

The new plan of the Chilean Nitrate Producers’ Association, effective July 1, 1930,
includes operation of a central sales agency with headquarters in London and branch
offices in continental markets. All stocks in Europe will be taken over by the new
organization, sales will be pooled , and deals made irrespective of brands. Provision
will be made for financing the plan through banking institutions. Economies in
freight, insurance, warehousing, and finance are anticipated. Plans are under way for
continuation of the program adopted during the past year for curtailment of production
in order to absorb the large stocks carried over from the production of last season. A
bill has been presented to the Chilean Congress which would provide for a Compania
Salitrera National to be organized with capital of £75,000,000 divided between the
Chilean Government and the existing producers, this company to guarantee the
Government certain revenue from dividends and income tax in return for renunciation
of the export duty.
Cooperation between the Chilean nitrate producers and the German producers of
synthetic nitrogen, begun in 1929, was continued by an international nitrogen

conference concluded in Paris in April and May, 1930.

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CUBAN SUGAR EXPORT POLICY ABANDONED

The Cooperative Sugar Export Agency of Cuba, commonly known as the single
selling agency, was organized in October, 1929, in compliance with a presidential
decree, with power to sell on a pro rata basis for the account of all producers of sugar
in Cuba. all sugar manufactured in the country except that for domestic consumption.
Sales during the winter of 1929-30 were appreciably less than during the same period
of the preceding year, and in April, 1930 the agency announced that it would cease to
act as the sole seller of Cuban sugar exports. It would appear from articles published
in Amsterdam that further conferences and negotiations are under consideration
looking toward international agreements between European sugar producers and the
growers in Cuba and Java.
BRAZILIAN COFFEE VALORIZATION ABANDONED

In the spring of 1930 the State of Sao Paulo obtained a loan of £20,000,000, of
which $35,000,000 was distributed through bankers in the United States, £8,000,000
through London banks, and smaller portions in Amsterdam, Zurich, Stockholm, and
Milan. The loan was accompanied by a radical alteration in the coffee policy. For a
period of 10 years no attempt will be made to valorize coffee, nor will an undue
amount of stock be retained in Brazil to produce shortage and thus increase the price.
THIRD INTERNATIONAL CONFERENCE FOR THE ABOLITION OF IMPORT AND
EXPORT PROHIBITIONS AND RESTRICTIONS

The third international conference for the abolition of import and export prohibitions
and restrictions was held in Paris in December 1929, for the purpose of bringing into
force the international convention of November 8, 1927, and the supplementary
agreement of July 11, 1928.
Under the convention of 1927, the parties thereto undertake to abolish within a
period of six months from the date of the coming into force of the convention, in so
far as the respective territories of each of them are concerned, all import and export
prohibitions or restrictions, and not thereafter to impose any such prohibitions or
restrictions. But parties thereto may and have signed with reservations, and the
convention itself contains numerous exceptions which would limit its scope.
Among prohibitions and restrictions that are exempt from provisions of the
convention are those for protecting in extraordinary and abnormal circumstances the
vital interests of the country; those relating to public security; those imposed on moral
or humanitarian grounds; those regarding traffic in arms, ammunition, and implements
of war, or in exceptional circumstances all other military supplies; those imposed for
the protection of public health or of animals or plants against disease, insects, and
harmful parasites; those issued for the protection of national treasures of artistic,
historic, or archaeological value; those applicable to gold, silver, coins, currency notes,
banknotes, or securities; those designed to extend to foreign products the regime
established within the country in respect of the

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production of, trade in, and transport and consumption of native products of the same
kind; and those applied to products which as regards production or trade, are or may
in future be subject within the country to state monopoly or to monopolies exercised
under state control. The supplementary agreement of July, 1928, provided that the
convention should come into force if 18 ratifications or accessions were secured before
September 30, 1929; but upon that date only 17 countries had ratified. It was therefore
necessary to call another conference to make further provisions for an effective date.
A protocol was signed December 20, 1929, by representatives of 17 countries
(Germany; Austria, Belgium, Great Britain, Denmark, the United States, France,
Hungary, Italy, Japan, Luxemburg, Nor-way? the Netherlands, Portugal, Rumania,
Switzerland, and Yugoslavia) to the effect that as to those countries the convention
supplementary agreement should come into force January 1, 1930. The Hungarian,
Italian, and Norwegian representatives signed with reservations. It was agreed that
ratification of the German and Norwegian Governments should be regarded,
exceptionally, as having the same effect as if they had been deposited before
September 30, 1929; and that the same exception be made in the case of ratifications
on behalf of Czechoslovakia and Poland if they were deposited before May 31, 1930.
INTERNATIONAL AGRICULTURAL CONFERENCES

A meeting of agricultural experts, convened by the League of Nations, was held in
Geneva in January, 1930. A series of studies and investigations were begun along
agricultural lines, such as the position and operation of cooperative societies in the
various countries, the problem of international agricultural credit, the rapid circulation
of agricultural information, the improvement of agricultural statistics, and the present
depressed condition of agriculturalists. This committee is working in cooperation with
the International Institute of Agriculture, and also with organizations of farmers’ and
consumers’ cooperatives which held international conferences in Paris in December,
1929, and at Geneva in May, 1930.
INTERNATIONAL TARIFF CONFERENCE, 1930

Discussion at the League of Nations assembly in September, 1929; of the question
of tariff barriers and the possibility of establishing lower tariffs or effecting a tariff
truce for a period of years resulted in plans for the international tariff conference,
known officially as the preliminary conference with a view to concerted economic
action, which was held at Geneva in February and March, 1930. The United States sent
observers but did not participate in the conference.
The conference drafted three instruments, a commercial convention and a protocol
which were signed by representatives of Germany, Austria, Belgium, Great Britain and
Northern Ireland, Denmark, Estonia Finland France, Greece, Italy Latvia, Luxemburg,
Norway, the Netherlands, Poland, Rumania, Sweden, and Switzerland; and a protocol
regarding the program of future negotiations

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139

which was signed by representatives of the same countries and also by delegates from
Czechoslovakia, Hungary, Portugal, and Yugoslavia.
The convention which was dated March 24, 1930, shall be ratified and the
ratifications deposited with the League of Nations before November 1 1930. A meeting
will then be called to determine the date upon which it will come into force. Article
1 of the convention provides that-The high contracting parties undertake not to avail themselves before April 1, 1931, of the right to
denounce the bilateral commercial treaties which any one of them has concluded with any other of the high
contracting parties and which are in force on this day’s date.

Parties that do not consolidate their customs duties by treaty agree not to make
increases in protective duties above those existing at the date of the convention, or to
impose new protective duties, within the term of the convention. Article 5 provides
that if any of the parties should proceed to make increases in the existing fiscal duties
or to impose new duties such as are likely to interfere seriously with the interests of
any of the other parties, the injured party may denounce the convention; and if such
denunciation should disturb seriously the equilibrium of the convention other parties
may also denounce it. The protocol to the convention includes definition of terms and
reservations of certain parties.
The protocol regarding the program of future negotiations provides for the
distribution of a questionnaire, the replies to which may serve as a basis of further
agreements; and recommendation that the economic organization of the league make
further studies and reports a long the lines of tariff provisions and treaties, customs
nomenclature and formalities, indirect protectionism, export bounties and subsidies,
appellations of origin, international veterinary conventions, avoidance of double
taxation, treatment of foreigners in the various countries, industrial combinations,
rationalization, international statistics, application of agreements regarding commercial
arbitration, unification of laws regarding relating to credit instruments, extension of
international agreements relating to transportation, and the adjustment of railway
tariffs.
GOVERNMENT EXPORT CREDITS SCHEMES ABROAD

A bill has been introduced in the British House of Commons to extend the period
under which the British export credits scheme shall be effective. Government
assistance in the matter of export credits was begun in 1919 and has been extended
from time to time. The present law, passed in 1926, has been amended by extensions.
As it now stands no guaranties were to be given after September 8, 1930, and
guaranties will not remain in force after September 8, 1936. The new bill would extend
these dates to March 31, 1935, and March 31, 1940, respectively. The maximum
liability without recourse offered by the Government to an exporter may not in any
case exceed 75 per cent of the face value of a bill of exchange, and it is said that in
actual operation, insurance granted does not exceed 63 per cent of the total face value

of the bills. Reports for the year 1929 cover insurance on bills the face value of which
totaled

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£5,238,000; and for the first quarter of 1930 the face value of bills upon which
insurance was granted amounted to £2,138,000 on goods shipped to 90 foreign and
British countries.
Export credit insurance offered by the Danish Government has been used largely on
shipments to Russia, upon which insurance could not have been obtained through
private sources. In Denmark; government insurance on exports 15 placed on one of
three plans: (1)State guaranty of exporters’ drafts up to 85 per cent of the draft on the
foreign buyer, if the period of credit does not exceed 12 months; (2) State
responsibility for losses up to one-half of the losses incurred through consignment of
goods to export markets; and (3) State guaranty to banks and others in connection with
sale of consignment stocks and the placing of sample stocks abroad, up to 50 per cent
of the value of such stocks; or on purchases of raw materials for the manufacture of
products for which there is known to be a demand abroad and which can be produced
in Denmark at competitive prices, but the period of credit in this form must not exceed
two years; or in the filling of large foreign orders for fertilizers, ships, locomotives,
railroad material, etc., in which case the guaranties must not exceed 75 per cent of the
amount of the order and must be gradually liquidated within five years except in the
case of ships where a period of six years will be allowed for the complete liquidation
of the account. The Danish plan, begun in 1922, is not intended to be permanent, but
has been continued from year to year through appropriation acts.
In the Netherlands, Government export insurance has been discontinued upon
recommendation of the finance commission appointed to administer the insurance law
of 1923. It was reported that the plan was not popular an& only a small amount of
insurance was placed.
“BLUE-SKY” PROVISIONS OF NEWLY ENACTED COMPANY LAWS ABROAD

“Blue-sky” provisions of the Danish law on joint stock companies, passed by the
Rigsdad, April 12, 1930, will become effective January 1, 1931. The law includes
detailed provisions for the organization of a new company and the issuance of capital
stock, of which 10 per cent must e aid within one year after registration. Further
provision is made for stock issues during operation of the company. No shares may be
issued below par and the company may not purchase its own shares or provisional
certificates in excess of 10 per cent of its capital stock, unless such purchase is made
with a view to reduction of the capital stock. hares held by the company may not be
voted. New requirements are included for the annual reports and accounts, and the
disposition of surplus. Certain responsibilities are placed upon directors, a board
member may not vote upon matters that affect himself or the companies or individuals
with which he is connected. Speculation in the shares is prohibited. It is said that a
large proportion of the American companies organized under Danish law will find it
necessary to amend their organization plans in order to meet the requirements of the
new act.
A Netherlands company act dated April 1, 1929, requires registration and

publication of the balance sheets and profit and loss ac-

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141

counts of limited liability companies. The law revises the system of income taxes
applied to companies, some provisions of which become effective in May, 1930, and
others in May, 1931.
In Yugoslavia a new law provides for the regulation of joint-stock companies,
economic, and credit associations, and other institutions which accept securities for
safe-keeping. This act will be administered by officials of the Provinces. Comptrollers
will be appointed to examine the accounts of the companies and determine whether the
business is conducted according to law and to the rules of the company, and whether
the balance sheet and final accounts are correct. If necessary commissaries will be
appointed to revise the work of joint-stock companies.
MEXICAN DECISION REQUIRES REGISTRATION OF FOREIGN COMPANIES

In a decision rendered by the Mexican Supreme Court, October 26, 1929, it was held
that a foreign corporation that is not registered in the commercial registry may not
bring suit in a Mexican court. This case involved a suit brought by the Palmolive Co.,
a Delaware corporation, for infringement of a trade-mark ‘that was registered in
Mexico under the Mexican trade-mark laws. The case was carried on appeal to the
supreme court which did not pass upon the question of infringement but held that the
American corporation had no standing in Mexican courts since it was not registered
in the commercial registry and therefore did not exist in Mexico. The Mexican
commercial code, article 19, requires registration of all mercantile companies, and
article 24 requires foreign companies that desire to establish themselves or create
branches in the Republic to register by filing copies of their organization papers and
other documents with the commercial register.

PART III. DOCUMENTS AND SUMMARIES

SHERMAN ANTITRUST ACT
FEDERAL TRADE COMMISSION ACT
SECTIONS OF CLAYTON ACT
EXPORT TRADE ACT
PROCEDURE AND POLICY
RULES OF PRACTICE
TRADE PRACTICE CONFERENCES
PROCEEDINGS DISPOSED OF
COMPLAINTS PENDING
STIPULATIONS
RESOLUTIONS DIRECTING INQUIRIES
INVESTIGATIONS, 1913-1930
PUBLICATIONS, 1915-1930

143

SHERMAN ANTI-TRUST ACT
AN ACT To protect trade and commerce against unlawful restraints and monopolies
Be it enacted by the Senate and House of representatives of the United States of America in Congress
assembles:
SECTION 1. Every contract, combination the form of trust or otherwise, conspiracy, in restraint of
trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.
Every person who shall make any such contract or engage in any such combination or conspiracy, shall
be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding
five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the
discretion of the court.
SEC. 2. Every person who shall monopolize, or attempt to monopolize, or com-bine or conspire with
any other person or persons, to monopolize any part of the. trade or commerce among the several States,
or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be
punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by
both said punishments, in the discretion of the court.
SEC. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade
or commerce in any Territory of the United States or of the District of Columbia, or restraint of trade or
commerce between any such Territory and another, or between any such Territory or Territories and any
State or States or the District of Columbia, or with foreign nations, or between the District of Columbia
and any State or States or foreign nations, is hereby declared illegal. Every person who shall make any
such contract or engage in any such combination or conspiracy shall be deemed guilty of a misdemeanor,
and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by
imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.
SEC. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent
and restrain violations of this act; and it shall be the duty of the several district attorneys of the United
States; in their respective districts, under the direction of the Attorney General, to institute proceedings
in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth
the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties
complained of shall have been duly notified of such petition the court shall proceed, as soon as may be,
to the hearing and determination of the case; and pending such petition and before final decree, the court
may at any time make such temporary restraining order or prohibition as shall be deemed just the premises.
SEC. 5. Whenever it shall appear to the court before which any proceeding under section four of this
act may be pending, that the ends of justice require that other parties should be brought before the court;
the court may cause them to be summoned, whether they reside in the district in which the court is held
or not; and subpoenas to that end may be served in any district by the marshal thereof.
SEC. 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy
(and being the subject thereof) mentioned section one of this act, and being in the course of transportation
from one State to another, or to a foreign. country, shall be forfeited to the United States, and may be
seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and
condemnation of property imported into the United States contrary to law.
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SEC. 7 Any person who shall be injured in his business or property by any other person or corporation
by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit
court of the United States in the district in which the defendant resides or is found, without respect to the
amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit,
including a reasonable attorney’s fee.
SEC. 8. That 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.
Approved, July 2, 1890.

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
date 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 : Provided, however,
That upon the expiration of his term of office a commissioner shall continue to serve until his successor
shall have been appointed and shall have qualified. 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 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. 2
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 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
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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 Territory 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 its own profit and has shares of capital or capital stock, and any company, or
association, incorporated or unincorporated, without shares of capital or capital stock or certificates of
interest, 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 and the Communications Act of 1934 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 sections 73 to 77,
inclusive, of an Act entitled “An Act to reduce taxation, to provide revenue for the Government, and for
other purposes,” approved August twenty-seven, eighteen hundred and ninety-four; also the Act entitled
“An Act to amend sections 73 and 76 of the Act of August twenty-seven, eighteen hundred and ninetyfour, entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes,’”
approved February twelveth, nineteen hundred and thirteen; and also 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.
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, common carriers, subject to the acts to regulate commerce, from using unfair methods of
competition in commerce and unfair or deceptive acts or practices 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, partnership, or corporation 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 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. 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
appeals 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.
If such person, partnership, or corporation fails or neglects to obey such order of the commission while
the same is in effect, the commission may apply

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149

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 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. 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 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 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 aside. A copy of such petition shall be
forth-with 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
shall 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, end 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 be served; or (b) by leaving a copy thereof at the principal office of place
of business of such person, partnership, or corporation; or (c) by registering and mailing a copy thereof
addressed to such person, partner-ship, 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 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 the service of the same.
SEC. 6. That the commission shall also have power-(a) To gather and compile information concerning, and to investigate from time to time the organization,
business, conduct, practices, and management of any corporation engaged in commerce, excepting banks,
and common carriers subject to the act to regulate commerce, and its relation to other corporations and
to individuals, associations, and partnerships.
(b) To require, by general or special orders, corporations engaged in commerce, excepting banks and
common carriers subject to the act to regulate 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,

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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 the
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 y any corporation.
(e) Upon the application of the Attorney General to investigate and make recommendations 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 publicly 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, and 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 the 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 matter 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 ca se 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 the 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 have power to require by subpoena 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 may invoke the aid of any court of the United States in requiring the attendance
and testimony of witnesses and the production of documentary evidence.

FEDERAL TRADE COMMISSION ACT

151

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 as 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 deposition may be taken
before an y 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 will-fully
neglect or fail to make, or 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 any other
means falsify any documentary evidence of such corporation, or who shall willfully refuse to submit to
the commission or to an y 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 failure 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 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

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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 punishable 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 act 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.

SECTIONS OF THE CLAYTON ACT ADMINISTERED BY
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 therefor, or discount from, 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 lessen competition or tend to create a
monopoly in any line of commerce.
*
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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 may be 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
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.
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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 the 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 and 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 the 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 he shall not become or be deemed amenable to any of the provisions hereof by reason of any
change 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.
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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 subject to the Interstate Commerce Act, as amended; in the Federal
Communications Commission where applicable to common carriers engaged in wire or radio
communication or radio transmission of energy; in the Federal Reserve Board where applicable to banks,
banking associations, 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, authority, 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 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

THE CLAYTON ACT

155

why an order should not be entered by the commission, authority, 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 shown, may be allowed by the commission, authority, 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, authority, or board. If upon such bearing the
commission, authority, or board, as the case may be, shall be of the opinion that any of the provisions of
said sections have been or are 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 hearing shall have
been filed in a circuit court of appeals of the United States, as hereinafter provided, the commission,
authority, 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, authority, or board while the same
is in effect, the commission, authority, or board may apply to the circuit court of appeals of the United
States, within any circuit where the violation complained of 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, authority, or board. Upon such filing 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 pleadings, testimony, and proceedings set forth in such transcript a decree affirming, modifying, or
setting aside the order of the commission, authority, or board. The findings of the commission, authority,
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 that there were reasonable grounds for the failure to adduce such
evidence in the proceeding before the commission, authority, or board, the court may order such additional
evidence to be taken before the commission, authority, 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,
authority, 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 recommendations, 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, authority, or board to cease and desist from a
violation charged 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, authority, or board be set aside. A copy of such
petition shall be forthwith served upon the commission, authority, or board, and thereupon the
commission, authority, 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, authority, or board as in the case of an application by
the commission, authority, or board for the enforcement of its order, and the findings of the commission,
authority, 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, authority, 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, authority, 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.
Complaints, orders, and other processes of the commission, authority, or board under this section may
be served by anyone duly authorized by the commission or

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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 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 mailed as aforesaid shall be proof of the service of the same.
Original act approved October 15, 1914.
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EXPORT TRADE ACT
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” where-ever 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 info 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 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 Art 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,
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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 com-mission 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 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 before 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.

PROCEDURE AND POLICY
POLICY IN PURELY PRIVATE CONTROVERSIES
It shall be the policy of the commission not to entertain proceedings of alleged unfair practices where
the alleged violation of law is a purely private controversy redressable in the Courts except where said
practices substantially tend to affect the public. In cases where the alleged injury is one to a competitor
only and is redressible in the courts by an action by the aggrieved competitor and the interest of the public
is not substantially involved, the proceeding will not be entertained.
SETTLEMENT OF CASES BY STIPULATION
The end and object of all proceedings of the Federal Trade Commission is to end all unfair methods of
competition or other violations of the law of which it Is given jurisdiction. The law provides for the
issuance of a complaint and a trial as procedure for the accomplishment of this end. But it is also provided
that this procedure shall be had only when it shall be deemed to be in the public interest, plainly giving
the commission a judicial discretion to be exercised in the particular case.
It has been contended that the language of the statute using the word “shall” is mandatory, but in view
of the public-interest clause no member of the commission as now constituted holds or has ever held that
the statute is mandatory. Hence, the proposed rule for settlement of applications for complaint by stipulation may be considered on its merits.
If it were not for the public-interest clause it might appear that the statute would be mandatory. It
remains to determine what effect the public-interest clause has. Jn the interest of economy and of dispatch
of business as well as the desirability of accomplishing the ends of the commission with as little harm to
respondents as possible, therefore all cases should be so settled where they can be except where the public
interest demands otherwise.
But when the very business itself of the proposed respondent is fraudulent, it may well be considered
by the commission that the protection of the public demands that the regular procedure by complaint and
order shall prevail. Indeed, there are some cases where that is the only course which would be of any value
at all. As for instance the so-called “blue-sky cases” and all such where the business itself is inherently
fraudulent or where a business of a legitimate nature is conducted in such a fraudulent manner that the
commission is warranted in the belief that no agreement made with the proposed respondent will be kept
by him.
The rule shall be that all cases shall be settled by stipulation except when the public interest demands
otherwise for the reasons set forth above.
ON AFFORDING PROSPECTIVE RESPONDENTS OPPORTUNITY TO SHOW CAUSE WHY
COMPLAINT SHOULD NOT ISSUE
Except as hereinafter provided, the board of review, before it shall recoinmend to the commission that a complaint issue in any case, shall afford the proposed respondent a hearing
to show cause why a complaint should not issue. Such hearing shall be informal in character and shall not
involve the taking of testimony. The proposed respondent shall be permitted to make or submit such
statements of fact or law as he shall desire. The extent and control of such hearing shall rest with a
majority of the board. The respondent shall have three weeks’ notice of the time and place of hearing, to
be served on the respondent by the secretary of the commission.
Provided, That if in any case the majority of the board shall be of opinion that a hearing is not required
because (a) the respondent has been fully interviewed and has given to the examiner every fact or
argument that could be
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

offered as a defense, or (b) the practice has been fully established and is of such character that in the nature
of the case nothing could be adduced in mitigation, or (c) to delay the issuance of a complaint to afford
a hearing might result in a loss of Jurisdiction, or (d) otherwise unnecessary or incompatible with the
public interest, the board may transmit the case to the commission, via the docket section, with its
conclusions and recommendations, without a hearing, as in this rule provided.
ON PUBLICITY IN THE SETTLEMENT OF CASES
In the settlement of any matter by stipulation before complaint is issued, no statement in reference
thereto shall be made by the commission for publication. 1 After a complaint is issued, no statement in
regard to the case shall be made by the commission for publication until after the final determination of
the case.
After a complaint has been issued and served the papers in the case shall be open to the public for
inspection, under such rules and regulations as the secretary may prescribe.
It has been the rule, which is now abolished, to issue a statement upon the filing of a complaint, stating
the charges against a respondent.
Concerning the withholding of publicity where cases are settled by stipulation without complaint, the
custom has always been not to issue any statement The so-called applicant or complaining party has never
been regarded as a party in the strict sense. The commission is not supposed to act for any applicant, but
wholly in the public interest. It has always been and now is the rule not to publish or divulge the name of
an applicant or complaining party, and such party has no legal status before the commission except where
allowed to intervene as provided by the statute.
ON DEALING WITH UNFAIR COMPETITION THROUGH TRADE-PRACTICE CONFERENCES
The trade-practice conference affords, broadly stated, a means through which representatives of an
industry voluntarily assemble, either at their own instance or that of the commission, but under the
auspices of the latter, for the purpose of considering any unfair practices in their industry, and collectively
agreeing upon and providing for their abandonment in cooperation with and with the support of the
commission.
This procedure deals with an industry as a unit. It is concerned solely with practices and methods, not
with individual offenders. It regards the industry as occupying a position comparable to that of friend of
the court” and not as that of the accused. It wipes out on a given date all unfair methods condemned at the
conference and thus places all competitors on an equally fair competitive basis. It performs the same
function as a formal complaint with out bringing charges, prosecuting trials, or employing any compulsory
process, but multiplies results by as many times as there are members in the industry who formerly
practiced the methods condemned and voluntarily abandoned.
The beneficial results of this form of procedure are now well established, and the commission is always
glad to receive and Consider requests for the holding of trade-practice conferences. 2
1 The commission does. however, after omitting the names of the proposed respondents, make public
digests of cases in which it accepts stipulations of the facts an agreements to cease and desist.
2 The commission has prepared and published for public distribution a pamphlet entitled “ Trade
Practice Conferences,” in which the history, theory, and working of this procedure and the various tradepractice conferences theretofore held by the commission are described.

RULES OF PRACTICE
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 its 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. m 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, 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 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
(1) In case of desire to contest the proceeding the respondent shall, within such time as the commission
shall allow (not less than 30 days from the service of the complaint), 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. Respondent shall specifically admit or deny or explain each of the facts alleged in the
complaint, unless respondent is without knowledge, in which case respondent shall so state, such
statement operating as a denial. Any allegation of the complaint not specifically denied in the answer,
unless respondent shall state in the answer that respondent is without knowledge, shall be deemed to be
admitted to be true and may be so found by the commission.
(2) In case respondent desires to waive hearing on the charges set forth in the complaint and not to
contest the proceeding, the answer may consist of a statement that respondent refrains from contesting the
proceeding or that respondent consents that the commission may make, enter, and serve upon respondent
an order to cease and desist from the violations of the law alleged in the complaint, or that respondent
admits all the allegations of the complaint to be true. Any such answer shall be deemed to be an admission
of all the allegations of the complaint, to waive a hearing thereon, and to authorize the commission,
without a trial, without evidence, and without findings as to the facts or other intervening procedure, to
make, enter, issue and serve upon respondent an order to cease and desist from the method or methods of
competition charged in the complaint.
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(3) Failure of the respondent to appear or to file answer within the time as above provided for shall
be deemed to be an admission of all allegations of the complaint and to authorize the commission to find
them to be true and to waive hearing on the charges set forth in the complaint.
(4) Three copies of answers must be furnished. All answers must be signed in ink by the respondent
or by his duly authorized attorney and must show the office and post-office address of the signer. All
answers must be typewritten or printed. If typewritten, they must be on paper not more than 8 ½ inches
wide and not more than 11 inches long. If printed, they must be on paper 8 inches wide by 10 ½ inches
long.
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 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 mailed, 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 he 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 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. Witness fees and mileage shall be paid by the party at whose instance the witnesses appear.
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

RULES OF PRACTICE

163

the least practicable delay. Not less than five 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, stating the grounds of objections relied upon, and 110 transcript filed shall
include argument or debate.
X. MOTIONS
A motion in a proceeding by the commission small briefly state the nature of the order applied for, and
all affidavits, records, and other papers 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.
XI. HEARINGS ON INVESTIGATION
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, and such hearings may, in the discretion of the
commissioner holding same, be public.
XII. HEARINGS BEFORE EXAMINERS
When issue in the case is set for trial it shall be referred to an examiner for the taking of testimony. It
shall be the duty of the examiner to complete the taking of testimony with all due dispatch, and he shall
set the day and hour to which the taking of testimony may from time to time be adjourned. The taking of
the testimony both for the commission and the respondent shall be completed within 30 days after the
beginning of the same unless, for good cause shown, the commission shall extend the time. The examiner
shall, within 10 days after the receipt of the stenographic report of the testimony, make his report on the
facts, and shall forthwith, serve copy of the same on the parties or their attorneys, who, within 10 days
after the receipt of same, shall file in writing their exceptions, if any, and said except ions shall specify
the particular part or parts of the report to which exception is made, and said exceptions shall include any
additional facts which either party may think proper. Seven copies of exceptions shall be filed for the use
of the commission. Citations to the record shall be made in support of such exceptions Where briefs are
filed the same shall contain a copy of such exceptions. Argument on the exceptions, if exceptions be filed,
shall be had at the final argument on the merits.
When, in the opinion of the trial examiner engaged in taking testimony in any formal proceeding, the
size of the transcript or complication or importance of the issues involved warrants it, he may of his own
motion or at the request of counsel at the close of the taking of testimony announce to the attorneys for
the respondent and for the commission that the examiner will receive at any time before he has completed
the drawing of the “trial examiner’s report upon the facts” a statement in writing (one for either side) in
terse outline setting forth the contentions of each as to the facts proved in the proceeding.
These statements are not to be exchanged between counsel amid are not to be argued before the trial
examiner
Any tentative draft of findings or findings submitted by either side shall be Submitted within 10 days
after the closing of the taking of testimony and not later, which time shall not be extended.
XIII. 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 and having power to administer oaths by the
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

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 postoffice 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, or 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 small, together with a copy thereof
made by such officer or under his direction, he 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.
XIV. 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.
XV. BRIEFS
All briefs must be filed with the secretary of the commission and briefs on behalf of the commission
must be accompanied by proof of the service of the same as hereinafter provided, or the mailing of same
by registered mail to the respondent or its attorney at the proper address. Twenty copies of each brief shall
be furnished for the use of the commission unless otherwise ordered. The exceptions, If any, to the trial
examiner’s report must be incorporated in the brief. Every brief, except the reply brief on behalf of the
commission, hereinafter mentioned, 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 flyleaves 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 10 ½ inches, with
inside margins not less than 1 inch wide, and with double leaded text and single leaded citations.
The reply brief on the part of the commission shall be strictly in answer to respondent’s brief.
The time within which briefs sh all be filed is fixed as follows: For the opening brief on behalf of the
commission, 30 days from the day of the service upon the chief counsel or trial attorney of the commission
of the trial exam-

RULES OF PRACTICE

165

iner’s report; for brief on behalf of respondent 30 days after the date of service upon the respondent or his
attorney of the brief on behalf of the commission for reply brief on behalf of the commission, 10 days after
the filing of the respondent’s brief. Reply brief on behalf of respondent will not be permitted to be filed.
Applications for extension of time in which to file briefs shall be by petition in writing, stating the facts
on which the application rests, which must be filed with the commission at least five days before the time
fixed for filing such briefs. Briefs not filed with the commission on or before the dates fixed therefor will
not be received except by special permission of the commission. Appearance of additional counsel in a
case shall not, of itself, constitute sufficient grounds for extension of time for filing brief or for
postponement of final hearing.
Briefs on behalf of the commission may be served by delivering a copy thereof to the respondent’s
attorney or to the respondent in case respondent be not represented by attorney; or by registering and
mailing a copy thereof addressed to the respondent’s attorney or to the respondent in case respondent be
not represented by attorney, at the proper post-office address. Written acknowledgment of service, or the
verified return of the party making the service, shall constitute proof of personal service as hereinbefore
provided, amid the return post-office receipt aforesaid for said brief, when registered and mailed, shall
constitute proof of the service of the same.
Oral arguments may be bad only as ordered by the commission on written application of the chief
counsel or of respondent filed not later than five days after expiration of the time allowed for filing of
reply brief of counsel for the commission.
XVI. REPORTS SHOWING COMPLIANCE WITH ORDERS
In every case where an order is issued by the commission for the purpose of preventing violations of
law the respondent or respondents therein named shall file with the commission, within the time specified
in said order, a report in writing setting forth in detail the manner and form in which the said order of the
commission has been complied with.
XVII. REOPENING PROCEEDINGS
In any case where an order to cease and desist, an order dismissing a complaint, or other order disposing
of a proceeding Is issued, the commission may, at any time within 90 days after the entry of such order,
for good cause shown in writing and on notice to the parties, reopen the case for such further proceedings
as to the commission may seem proper.
XVIII. ADDRESS OF THE COMMISSION
All communications to the commission must be addressed to Federal Trade Commission, Washington,
D. C., unless otherwise specifically directed.

TRADE PRACTICE CONFERENCES, FISCAL YEAR 1929-30
Industry

Where held

Date of
Date of
conference
statement
New York
Apr. 15, 1930
White Sulphur Springs, W Va. May 7, 1930
Washington
June 12, 1930
Salt Lake City
Dec 3,1929
Jan. 22, 1930
Chicago
May 27, 1930
New York
Mar. 13,1930
Minneapolis
July 2, 1929
Nov. 9, 1929
Memphis
Feb. 3, 1930
French Lick, Ind
Sept. 5, 1929
Nov. 21, 1929
Cincinnati
Jan. 23, 1930
Apr. 15, 1930
Dayton
Oct. 11, 1929
Dec. 18, 1929

Ammunition manufacturers
Athletic goods
Bank and commercial stationery
Bituminous coal, Utah
Bottle cap manufacturers
Clothing cotton converters
Commercial cold storage
Common brick
Concrete mixer and paver
Crushed stone
Direct selling
Electrical industry:
Carbon products
Washington
Electrical mica
do
Flexible cords
do
Molded products
do
Outlet boxes
do
Vulcanized fiber
do
Field and grass seed
Chicago
Floor and wall clay the
St. Louis
Furnace pipe and fittings
Chicago
Greeting card
Washington
Hardware jobbers (Southern States)
do
Ice cream (District of Columbia)
do
Jewelry (school and college)
Chicago
Knit underwear (second conference) Utica, N. Y
Knitted outerwear
Chicago
Lake superior coal-dock dealers
do
Leatherboard
Boston
Marble (interior)
Chicago
Medical gas
Indianapolis
Milk and ice-cream cans
New York
Mixed feed manufacturers (southern) Louisville
Nail and tack
New York
Nonferrous metal
Washington
Paper bag
do
Pin manufacturers
New York
Pipe-nipple manufacturers
Pittsburgh
Plumbers’ and potters’ brass goods New York
Portable fire extinguishers
Cleveland
Prison equipment
Oklahoma City
Public seating
Washington
Roll and machine tickets
do
Saddlery hardware
do
Sardine packers, Maine
Bangor, Me
Schiffli embroidery
West New York, N.J.
Set-up paper box and, paper can,
Cleveland
tube and drum
Sled
Buffalo
Sole and belting leather
New York
Solid section steel windows
Washington
Solvents
New York
Structural clay the
St. Louis
Structural steel fabricators
Biloxi Miss
Veneer fruit and vegetable containers Memphis
Wall paper
New York
Walnut woods
Chicago
Warm-air furnaces
Cleveland
Watch case (third conference)
New York

Oct. 10, 1929
Mar. 6, 1930
do
Mar. 4, 1930
do
Mar. 10, 1930
do
Mar. 5, 1930
do
Mar. 3, 1930
do
Mar. 7, 1930
Dec. 20, 1929
May 24, 1930
Oct. 21, 1929
Jan. 18, 1930
Apr. 11, 1930
Sept. 10, 1929 Jan. 25, 1930
Oct. 18, 1929
Mar. 1, 1930
Dec. 10, 1929
June 27, 1930
May 26, 1930
July 7, 1930
Nov. 21, 1929 Apr. 17, 1930
Jan. 4, 1930
Dec. 19, 1929
Apr. 25, 1930
June 18, 1930
Nov. 25, 1929 Apr. 19, 1930
Mar.21, 1930
May 19, 1930
June 26, 1930
Feb. 6, 1930
Dec. 3, 1929
May 27, 1930
Jan. 28, 1930
June 12, 1930
May 23, 1930
Jan. 31, 1930
Dec. 19, 1929
Feb. 12, 1930
Feb. 25, 1930
Apr. 15, 1930
May 1, 1930
May 24, 1930
Feb. 27, 1930
Oct. 31, 1929
Jan. 21, 1930
Dec. 7, 1929
Nov. 18, 1929 Apr. 28, 1930
Mar. 18, 1930
Mar. 31, 1930
June 11, 1930
Nov. 11, 1929 Jan. 24, 1930
Nov. 22, 1929 Jan. 23, 1930
Feb. 11, 1930
May 22, 1930
Oct. 10, 1929
Jan. 27, 1930
Oct. 23, 1929
Jan. 19, 1930
Feb. 21, 1930

Recapitulation
Total number of conferences held prior to fiscal year
Number of conferences held during fiscal year
Grand total number of conferences held in history of the

68
57

commission to July 1,1930
166

125

PROCEEDINGS DISPOSED OF IN FISCAL YEAR
[The cases listed here are those in which, during the fiscal year reported, the commission issued orders
to cease and desist from unfair methods of competition found to have been practiced by respondents in
violation of the Federal Trade Commission act, except in several instances where the violations were of
the Clayton Act.]
ORDERS TO CEASE AND DESIST
Abraham, Nathaniel (N. Abraham Co. & Warehouse). (Complaint No.1707.) Charge: That
respondent, in the sale of paints and other articles of merchandise, uses firm name “Warehouse” and
advertises among other Army and Navy surplus supplies, certain paints which are not Army and Navy
paints: thereby deceiving purchasing public into erroneous belief that respondent’s product is made in
accordance With specifications of the Government.
Disposition : After a stipulation in lieu of testimony, order to cease and desist was entered February 12,
1930.
Albany Billiard Ball Co., F. Grote & Hubbell Co. (Inc.), and Portland Billiard Ball Co. (Complaint
No.1530.) Charge : That respondents,, engaged in manufacture and sale of composition pool balls,
entered into agreement whereby Albany Billiard Ball Co. manufactures balls of regulation size only,
selling to respondent, F. Grote & Hubbell Co. exclusively, and respondent Portland Billiard Ball Co.
manufactures balls of less-than-regulation size only, discontinuing, for a consideration, exportation of
balls, and selling to respondents F. Grote & Hubbell Co. at 15 per cent less than to other purchasers,
receiving in turn a commission on all sales : thereby tending to hinder and suppress free competition,, to
the prejudice of the public and of respondents’ competitors.
Disposition: After trial, order to cease and desist was entered April 12, 1930.
American School of Correspondence. (Complaint No.1486.) Charge: That respondent, furnishing
courses of instructions by correspondence in sundry arts, sciences, professions, and branches, circulates
false and misleading statements relative to operation without profit, regular prices for course, tools, and
text books that are alleged to be given free of charge, and credits for entrance into all colleges; thereby
deceiving purchasing public into erroneous belief that respondent operates without profit, gives gratuities
the cost of which is not included in price paid for course, offers special, reduced prices, qualifies students
as “experts” in certain courses, and for entrance into colleges in other courses, and secures lucrative
positions for pupils completing course.
Disposition: After trial, order to cease amid desist was entered June 23, 1930.
American School of Home Economics. (Complaint No. 1557.) Charge: That respondent, engaged in
furnishing correspondence courses of instructions in sundry arts, sciences, professions, and branches,
circulates numerous false and misleading statements relative to price of course, corps of instructors,
lucrative positions to be secured, purported gratuities, refund of tuition fees, and right of exclusive sales
in specified territories; thereby deceiving purchasing public into erroneous belief that respondent operates
without profit, that special, reduced prices are being quoted, that a large staff of teachers is retained, that
cost of alleged gratuities is not included in price paid for course, and that lucrative positions are practically
assured students completing the course and that right of exclusive sale in a specified territory is accorded
each student completing course in candy making.
Disposition: After testimony supplemented by a stipulation, in lieu of further hearings, order to cease
and desist was entered January 25, 1930.
Anita Institute. (Complaint No. 1690.) Charge : That respondent, engaged in the manufacture and
sale of a device designated “Anita Nose Adjustor,” falsely represents that the mere wearing of such device
during sleeping hours will permanently transform malformed noses within from one to six weeks’ time,
thereby deceiving the purchasing public in to t he erroneous belief that respondent’s product will furnish
a simple, effective cure within a short space of time.
167

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Disposition: With consent of respondent,, order to cease and desist was entered February 1, 1930.
Boal’s Rolls Corporation. (Complaint No. 1712.) Charge : That respondent, engaged in manufacture
and sale of a cathartic designated “Boal’s Rolls,,” circulates numerous false and misleading statements as
to ingredients and curative properties of product : thereby deceiving purchasing public into erroneous
belief that respondent’s product is a remedy having laxative properties due to its fruit content rather than
to the phenolphthalein, cascara, and senna, contained therein, and that it will prevent various disorders
and diseases.
Disposition: After trial,, order to cease and desist was entered June 30, 1930.
Burton Bros. & Co. (Inc.). (Complaint No.1696.) Charge : That respondent,, engaged in the
converting of a cotton fabric designated “Burton’s Irish Poplin and the sale thereof to retail dealers, has
adopted and employs a system for the maintenance of uniform resale prices, refusing to sell to manufacturers who will not affix to the shirts manufactured from this fabric and to the containers thereof the
price at which the goods must be sold, and threatening retailers with suits for infringement of respondent’s
trade-mark unless such price is maintained; thereby tending to hinder and suppress free competition, to
the prejudice of the public and of respondent’s competitors.
Disposition: After trial, an order to cease and desist was entered May 12, 1930. The case is now
pending in the United States Circuit Court of Appeals for the Second Circuit, on respondent’s petition for
review of order to cease and desist.
Bush, David V. (Complaint No.1596.) Charge : That respondent, engaged in furnishing instructions
by correspondence for reduction of bodily weight, advertises a special price of $2.98 for instructions
covering course of lectures for which he received $25 each from thousands of men and women, which will
cause all excess fat to disappear within few days, regardless of present weight, without starving,
exercising, or drugs, the mimeographed instruction directing that for 1, 2, or 3 days the person desiring
to reduce, go without food except juices of specified fruits and water, and guaranteeing that from 1 to 15
pounds of weight will be lost within 3 to 10 days; thereby deceiving purchasing public into erroneous
belief that a special, reduced price is being quoted, and that such reductions will be effected by following
the instructions as given.
Disposition: With consent of respondent,, order to cease and desist was entered June 23, 1930.
Cherry Blossoms Manufacturing Co. (Complaint No.1542.) Charge : That respondent, engaged in
manufacture of an artificially flavored concentrate and sale thereof to bottlers, uses the words “Cherry
Blossoms,” together with depictions of cherry blossoms, in advertising matter and furnishes wholesale
dealers with labels hearing the words “cherry blossoms,” in conspicuous type, together with depictions
of cherry blossoms, followed by the words “imitation cherry concentrate,” “artificial color and flavor” in
inconspicuous type : thereby placing in hands of others the means of deceiving purchasing public into
erroneous belief that respondent’s products consist of fruit or juice of the cherry.
Disposition : After trial, order to cease and desist was entered December 16, 1929.
Clarkson, David B., Co. (Complaint No. 1540.) Charge : That respondent, engaged in sale of books
at retail, advertises an obsolete encyclopedia entitled “Appleton’s New Practical Cyclopedia,” regularly
sold by him for $11.75, as a new work being sold throughout United States in six volumes at price of $42,
and in connection with certain other books quotes a price in excess of that at which such books have been
sold. as a reduced price for a limited time only; thereby deceiving purchasing public into erroneous belief
that special. reduced prices are being quoted, and that encyclopedia is a new reference work, being sold
at a special price for introductory purposes.
Disposition : After a stipulation in lieu of testimony order to cease and desist was entered December
7, 1929.
Clear Sight Spectacle Co. (Rithoiz, Messrs. B. D., M I.. S. Jr, F., and Ante). ( Complaint No. 1554.)
Charge : That respondents, engaged in manufacture of spectacles, advertise that for a limited time only
a pair of spectacles guar-anteed for five years will be given to one person in each community who will act
as agent and induce two persons to order spectacles, depositing $1 each, the spectacles, which are alleged
to be of $15 value, to be sent to purchasers C.O. D. $2.98, the agent to retain the $1 deposit for all orders
after the first two;

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thereby deceiving purchasing public into erroneous belief that a special, reduced price is being quoted,
and that cost of purported gratuities to agent is not included in price paid by customers.
Disposition : After trial, au order to cease and desist Was entered February 15, 1930.
Consolidated Book Publishers (Inc.). (Complaint No.1538.) Charge : That respondent, engaged in sale
and distribution of a set of books under the titles “New World Wide Cyclopedia” and “Times
Encyclopedia and Gazetteer,” without disclosing fact that the two publications are identical, offers “New
World Wide Cyclopedia,” together with a two-year enrollment in a research bureau, Which proves to be
nonexistent, free with a $33.23 subscription to a 10-year extension service, which price is sufficient to
compensate respondent for the books and the service, and advertises that a limited number of sets will
be given free of charge as part of an advertising campaign; thereby deceiving purchasing public into
erroneous belief that the two publications are entirely different sets of books; that a limited number of sets
are given entirely free of charge; that extension service is of such a character as to justify price charged;
and that the books are in truth gratuities.
Disposition: After trial order to cease and desist was entered May 6, 1930. Case is now pending in
United States Circuit Court of Appeals, Seventh Circuit, on respondent’s petition for review of
commission’s order.
Dixie Pecan Growers Exchange (Inc.). ( Complaint No. 1548) Charge: That respondent, engaged in
sale of pecans purchased by h m from growers in various parts of United States, uses words “Growers
Exchange” in firm name, and slogan “Direct from the Growers,” thereby deceiving purchasing public into
erroneous belief that respondent is an organization of growers able to make quick delivery and supply a
fresh product.
Disposition: After trial order to cease and desist was entered February 15, 1930; a modified order being
entered June 14, 1930.
Enterprise Furniture Factory and Enterprise Upholstered Furniture Co. ( Jacob Woodnick and
Philip Wasserman, partners). ( Complaint No. 1569.) Charge: That respondents, engaged in the sale of
furniture, some of which they finish and upholster, use the word “factory” in firm name, have extended
a sign bearing the firm name across the entire front of a large building of which they occupy only a
relatively small space, and circulate false and misleading statements to the effect that they manufacture
the furniture they sell; thereby deceiving the purchasing public into the erroneous belief that respondents
operated a large factory and that the prices quoted are exclusive of the middleman’s profit.
Disposition : After trial, and order to cease and desist was entered January 30, 1930.
Espositer Varni Co. (Complaint No. 1781.) Charge (see charge in complaint No.1780, p. 209).
Disposition : With consent of respondent, order to cease and desist was entered June 24, 1930.
Everitt & Graf (Inc,). (Complaint No.1611.) Charge : That respondent, engaged in manufacture and
sale of women’s hats, uses words “California Sport Hat” to label and advertise products which he
manufactures in Wisconsin; thereby deceiving purchasing public into erroneous belief that respondent’s
products are manufactured in California.
Disposition : After trial, order to cease and desist was entered May 19, 1930.
Gibbons Knitting Mills (Inc,). (Complaint No. 1434.) Charge : That respondent, in sale of knitted
garments to wholesale dealers, uses word “Mills” in firm name and in advertising matter; thereby
deceiving purchasing public into erroneous belief that prices quoted are exclusive of middleman’s profit.
Disposition : After trial, order to cease and desist was entered December 23, 1929.
Glover, Clara Louise, and Bernard Bernard, trading as L Glover and R. B. Newell. (Complaint No.
1591.) Charge : That respondents, furnishing correspondence courses in physical culture, circulate by
means of advertising matter and pictures false and misleading representations relative to effectiveness of
the course, which Is purported to be in the hands of one “Glover,” a height-increasing specialist, who is
in fact a purely fictitious person, and the indorsement of one Dr. Bernard Bernard, who is in fact a party
to the business; thereby deceiving purchasing public into erroneous belief that respondents’ course is
supervised and indorsed by well-known disinterested persons; that the method will appreciably increase
the height even of persons who have passed

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beyond the age at which physical growth has ceased : and that pictures purporting to show development
in height truly reflect a change in stature.
Disposition: After a stipulation in lieu of testimony, order to cease and desist w as entered June 24,
1930.
Griswold, Graham (Griswold Lumber Co.) (Complaint No.1606.) Charge: That respondent, engaged
in sale of furniture, uses trade name “Jefferson Furniture Manufacturing Company” and slogan “Factory
to Home,” and advertises that respondent manufactures furniture sold by him; thereby deceiving
purchasing public into erroneous belief that prices quoted are exclusive of middleman’s profit.
Disposition: With consent of respondent, order to cease and desist was entered September 23, 1929.
Hamilton Garment Co. (Complaint No.1713.) Charge : That respondent, engaged in the sale of
merchandise through mail orders, falsely claims to be an importer and a manufacturer, and uses the words,
“pearl,” “amber,” “gold,” “silk,” “satin,” “wool,” “leather,” “beaver,” “lynx,” to designate products that
are not as represented, thereby deceiving purchasing public into erroneous belief that certain of
respondent’s products are imported, that in case of some of the merchandise, prices quoted are exclusive
of middleman’s profit, and that all the merchandise is of material and quality designated.
Disposition : After a stipulation in lieu of testimony, order to cease and desist was entered June 30,
1930.
House, L. J., Convex Glass Co. (Complaint No. 1674.) Charge : That respondent. engaged in
manufacture and sale of lamps, gear shift balls, and other products made of a material simulating onyx,
uses the words “ onyx,” “ Ox-X-Glass,” etc., on labels and in advertising matter descriptive of same :
thereby deceiving purchasing public into erroneous belief that respondent’s products are made of onyx.
Disposition : After trial, order to cease and desist was entered M arch 31.1930.
Johns on, William H., trading as Ethylene Sales Co. and Hathaway & Hamilton, J. Merrell Redding,
trading as Ethyl Gas Co., and J. H. Hathaway, trading as American Chemical Co. (Complaint No.1720.)
Charge : That respondents, engaged in sale of a fluid for treating motor fuel, simulate trade name, signs,
and advertising matter of Ethyl Gasoline Corporation, a competitor who manufactures a fluid possessing
high “ anti-knock” properties, and use in advertising matter the phrase “Reg. U. S. Pat. Off.” and “Works
at Passaic, New Jersey,” in connection with picture of large manufacturing plant, and the phrase “ Export
Department, 230 Fifth Avenue, New York City”; thereby deceiving purchasing public into erroneous
belief that respondents are manufacturers and exporters, that prices quoted are exclusive of middleman’s
profit, and that respondents’ product possesses high “anti-knock” properties.
Disposition : With consent of respondent, order to cease and desist was entered against William H.
Johnson, March 31, 1930, charges against remaining respondents having been dismissed.
Kelley, James. ( Complaint No.1610.) Charge : That respondent, engaged in mail-order jobbing
business in fountain pens, pencils, and novelties, falsely claims to be manufacturer, stamps the words “
14K Waterson,” “ Iridium;” and “ Warranted 14K” on parts of inferior pens, and supplies customers with
coupons advertising special prices and with fictitious price tags bearing amounts in excess of those at
which products are regularly Sold; thereby deceiving purchasing public into erroneous belief that prices
quoted are exclusive of middle man’s profits, that respondent’s products are the well-known “Waterman”
fountain pen with points of Iridium or 14K gold. and that special, reduced prices are being quoted.
Disposition: After trial, supplemented by a stipulation in lieu of further hearings, order to cease and
desist was entered April 7, 1930.
Klein, Max (Klimate-Pruf Manufacturing Co.) (Complaint No. 1579.) Charge: That respondent,
selling waterproofing compounds, roof coatings, and paints, uses the word “manufacturing” in trade name,
together with words “manufactured exclusively by,” “factory,” and/or “warehouse” in advertising matter;
thereby deceiving purchasing public into erroneous belief that prices quote are exclusive of middleman’s
profit.
Disposition : After trial, order to cease and desist was entered September 25,1929.
Knitfirm (Inc.). (Complaint No. 1592.) Charge: That respondent, selling knitted outerwear for infants
and children, falsely claims to be an importer

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171

and manufacturer; thereby deceiving purchasing public into erroneous belief that many of respondent’s
products are imported and that prices quoted on those of domestic origin are exclusive of middleman’s
profit.
Disposition: After trial, order to cease and desist was entered April 12, 1930.
Marietta Manufacturing Co. (Complaint No. 1686.) Charge : That respondent, engaged in
manufacture and sale of a product resembling marble in appearance, but consisting principally of silica
sand, uses the trade names “ Sanionyx” and “Vitreous Marble,” thereby deceiving purchasing public into
erroneous belief that respondent’s product is onyx or marble.
Disposition: After trial, order to cease and desist was entered May 27, 1930, Commissioner Humphrey
dissenting.
Morris, Charles E ( Complaint No.1702.) Charge: That respondent, selling fur garments, represents
that purchaser, in dealing with respondent, is dealing with a “wholesale manufacturing furrier” always
selling at wholesale prices; thereby deceiving purchasing public into erroneous belief that prices quoted
are exclusive of middleman’s profit.
Disposition: Following respondent’s failure to file answer, case was duly considered and order to cease
and desist entered December 16, 1929.
Northwest Tile & Mantle Contractors’ Association, its officers and members. (Complaint No.1764.)
Charge : That respondent association, voluntary, unincorporated, composed of members engaged in
purchasing and laying tiles, endeavors to prevent the manufacturers from selling to the and mantel contractors in Washing ton and Oregon who are not members of respondent association, except at prices
substantially higher than those quoted to members of respondent association, refuses to purchase from
manufacturers who do not sell to nonmembers on these terms, refuses to admit to membership those who
join merely to obtain the at same prices as those quoted to members of respondent association, and
prevents nonmember the contractors from securing or fulfilling contracts by interfering with procuring of
necessary labor : thereby tending to hinder and suppress free competition to the prejudice of the public
and of respondent’s competitors.
Disposition: Respondents not desiring to contest proceedings, order to cease and desist was entered
June 26, 1930
Pan-American Manufacturing Co. ( Inc.). (Complaint No.1472.) Charge: That respondent, in
manufacture and sale of an artificially flavored extract or concentrate, uses trade name “Grapico,” together
with advertising matter featuring the word “Grape”; thereby deceiving purchasing public into erroneous
belief that respondent’s products are made from fruit or juice of the grape.
Disposition: After trial, order to cease and desist was entered July 5, 1929.
Powell, J. A. (J. A. Powell Co.) (Complaint No.1762.) Charge: That respondent, selling Jewelry to
wholesale dealers, circulates false and misleading statements regarding quality and value of his
merchandise : thereby deceiving purchasing public into erroneous belief that respondent’s Jewelry is of
gold or platinum, that the rings are engraved and settings are genuine stones.
Disposition : Respondents not desiring to contest proceeding, order to c ease and desist was entered
May 6, 1930.
Redding, J. Merrell (Ethyl Gas Co.). (Complaint No. 1778.) Charge : That respondent, selling a fluid
mixture designated “ Ethyl Gas” a and/or “ Ethyl Gas Anti Knock,” which possesses no “antiknock”
properties, simulates corporate and trade names of Ethyl Gasoline Corporation of New York thereby
deceiving purchasing public into erroneous belief that respondent’s product is that put out by the Ethyl
Gasoline Corporation of New York, which possesses high antiknock properties.
Disposition : With consent of respondent, order to cease and desist was entered May 6, 1930.
Roaring Spring Blank Book Co. (Complaint No. 1594.) Charge : That respondent, engaged. in
manufacture and sale of School supplies, places on covers of composition books such legends as “200Page Composition Book,” “100-Special Composition Books,” “A. S. D. Special, 249 Pages”: thereby deceiving purchasing public into enormous belief that books contain as many pages as number on front
would indicate.
Disposition : After trial, order to cease and desist was entered November 9, 1929.
Roark, Noah: Vest, F red, and Arnold, T., partners, trading as Merchant’s Cooperative Advertising
Service, W. M. Mason and F. E Phillips. (Complaint No.1534.) Charge: Unfair methods of competition
are charged in that respond-

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

ents, engaged in sale of an advertising service whereby coupons, to be redeemed with silverware are sold
to retail dealers to be given to their customers with certain purchases, circulate numerous false and
misleading statements regarding the quantity, quality, price, and conditions under which coupons are
redeemed; thereby deceiving the retail dealer and the purchasing public into the erroneous belief that the
coupons are redeemed free of charge and at the store of the retailer, that portion of the coupon stating that
there is a packing charge of 7 cents per 50 coupons (this sum in some instances being equal to the retail
price of the silverware) not being shown the retailer, that the silverware is “1847 Rogers,” that the retailer
is to be given a set of 26 pieces to be inspected before acceptance upon purchase of 1,000 coupons, such
set proving to consist of six pieces, sent c.o. d. without opportunity for inspection.
Disposition : After trial, supplemented by a stipulation in lieu of further hearings, an order to cease and
desist was entered February 6, 1930.
Roberts Tailoring Co. (Inc.). (Complaint No. 1614.) Charge: That respondent, selling men’s clothing,
uses corporate name of an original and older corporation selling custom-made clothing, and represents
that clothing sold by respondent is made in his own factories of 160 per cent wool, in accordance with
measurements taken by solicitors; thereby deceiving purchasing public into erroneous belief that
respondent’s products are made to measurement of 100 per cent wool, by respondent’s competitor whose
name is simulated.
Disposition : After trial, order to cease and desist was entered May 5, 1930.
Rockwood Corporation of St. Louis. (Complaint No.1536.) Charge : That respondent, manufacturing
gypsum blocks, uses the words “lumber,” “Rockwood gypsum lumber,” and “fireproof,” in designating
and advertising such blocks; thereby deceiving purchasing public into erroneous belief that respondent’s
products consist of a commodity sawed from trees or logs, and will resist fire.
Disposition : After trial, order to cease and desist was entered October 14, 1929.
Selick, C. H. (Inc.). ( Complaint No.1672.) Charge : That respondent, compounding perfumes and
other toilet preparations, uses the words “Paris,” “France,” and other French words and names to designate
products of domestic origin : thereby deceiving purchasing public in to erroneous belief that respondent’s
products are imported from France.
Disposition: After trial, order to cease and desist was entered February 1, 1930
Sereda, Joseph P. (Health Violet Products). (Complaint No. 1695.) Charge : That respondent, selling
a so-called violet-ray machine, makes false and misleading statements regarding regular price of machine
and its efficacy as a curative for some 80 diseases : thereby deceiving purchasing public into erroneous
belief that special, reduced price is being quoted and that respondent’s product. has curative properties
in common with those possessed by true ultra-violet ray.
Disposition : After a stipulation in lieu of testimony, order to cease and desist was entered December
16, 1929.
Shakespeare Co. (Complaint No.1719.) Charge : That respondent, engaged in manufacture of fishing
tackle and sale thereof to mail-order houses and retail dealers, adopted and employs a system for
maintenance of uniform resale prices refusing to sell to dealers who do not maintain such prices, thereby
tending to hinder and suppress free competition, to the prejudice of the public and of respondent’s
competitors.
Disposition : After trial, order to cease and desist was entered May 19, 1930. Case now pending in
United States Circuit Court of Appeals, Sixth Circuit, on respondent’s petition for review of commission’s
order.
Shlansky. Philip & Co. (Inc.). (Complaint No.1748.) Charge : That respondent, engaged in
manufacture and sale of women’s garments, uses the word “ Silverlamb “ in labeling and advertising
garments made entirely of other materials; thereby deceiving purchasing public into belief that
respondent’s products are made of pelts or skins of sheep.
Disposition : Respondents not desiring to contest proceeding, order to cease and desist was entered
March 3, 1930.
Shure, N. Co. (Complaint No.1478.) Charge : That respondent, in whole-sale mall-order business,
selling. among other things, powders and liquid flavors intended to be converted into beverages by
addition of water, uses names of fruits on containers thereof; thereby deceiving purchasing public into
erroneous belief that respondent’s products are made of juice or fruit indicated.

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Disposition: After trial, order to cease and desist was entered July 5, 1929.
Stransky, J. A. and L. G. (J. A. Stransky Manufacturing Co.). (Complaint No. 1812.) Charge: That
respondents, manufacturing a device designated Vaporizer and Decarbonizer” for use in automobiles,
circulates false and mis-leading statements relative to beneficial results that follow installation of
respondents’ appliance, such benefits, when accruing, being due to a simple adjustment of other parts of
the car when appliance is installed; thereby deceiving purchasing public into erroneous belief that
respondents’ product increases power of car from 25 to 50 per cent, and cuts gas bills from 25 to 50 per
cent.
Disposition: After a stipulation in lieu of testimony, order to cease and desist was entered June 80,
1930.
Tailor-Made Shoe System (William Ginsburg and Sam Ginsburg). (Com-plaint No.1562.) Charge:
Unfair methods of competition are charged in that respondent, engaged in the sale of shoes, circulates
numerous false and mis-leading statements to the effect that respondent is a manufacturer with offices in
Paris and New York and branches in the principal cities of the United States, and that the shoes he sells
are custom made; thereby deceiving the purchasing public into the erroneous belief that respondents
operate a number of factories, that the prices quoted are exclusive of the middleman’s profit, and that the
shoes delivered are made according to the measurements taken by the agents.
Disposition: After trial, order to cease and desist was entered May 12, 1930.
Temple Anthracite Coal Co. (Complaint No.1537.) Charge: Unlawful restraint and monopoly in that
respondent, engaged in production and sale of coal, acquired capital stock of Temple Coal Co. and East
Bear Ridge Colliery Co., thereby tending to substantially lessen competition, restrain commerce, and
create a monopoly, in alleged violation of section 7 of the Clayton Act.
Disposition: After trial, orders to cease aud desist and to divest stock was entered March 8, 1930,
Commissioner Humphrey dissenting and Commissioner McCulloch filing a memorandum relative to form
of the order. Case now pending in United States Circuit Court of Appeals, Third Circuit, on respondent’s
petition for review of commission’s order.
Hilgers, Margaret, trading as M. Trilety (Complaint No. 1572,) Charge: That respondent, engaged
in the manufacture and sale of orthopedic devices and toilet preparations, including a substance designated
“Oro,” circulates numerous false and misleading statements relative to the curative properties of the
products, thereby deceiving the purchasing public into the erroneous belief that respondent’s products will
transform crushed, deformed noses into perfect appearing noses, and cause cauliflower ears to lie close
to the head.
Disposition: With consent of respondent, an order to cease and desist was entered February 8, 1930.
United Remedies (Inc.). (Complaint No.1593.) Charge: That respondent, selling a compound
containing acetate of lead, designated “Kolor-Bak,” circulates false arid misleading statements relative to
nature and characteristics of product; thereby deceiving purchasing public into erroneous belief that
product is not a dye, but a hair tonic which will restore original color to gray hair, and that the compound
is harmless, never causing deleterious effect to scalp.
Disposition: After trial, order to cease and desist was entered April 7, 1930.
Universal Lock-Tip Co. (Gay, Katherine; Gay, Emile W. S., otherwise known as William S. Gay).
(Complaint No. 1578.) Charge: Unfair methods of competition are charged in that respondents, engaged
in the sale of shoe laces, advertise that the shares of stock in a patent fastener, owned by W. S. Gay
individually, for use on the ends of shoe laces, which are alleged to be given free of charge to the
purchaser of every pair of shoes sold for $6.50 and equipped with these laces, but wh ch in reality are paid
for by the purchaser of the shoes, will be listed on the New York and Boston Stock Exchanges, and will
give the recipient an opportunity to make $20,000 within the next few months without investment; thereby
deceiving the purchasing public into the erroneous belief that the stock is given as a gratuity, that it will
be listed and will afford some return.
Disposition: After trial, an order to cease and desist was entered February 4,1930.
Val Blatz Brewing Co. (Complaint No. 1608.) Charge: That respondent, manufacturing malt syrup,
all of the ingredients being of domestic origin with exception of small proportion of hops used for
flavoring, employs the words “Blatz Bohemian Malt Syrup,” and “guaranteed genuine by the
Czechoslovakian Government, certificate attached to each bale imported by Blatz,” and

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uses pictorial representations further suggesting a product from a foreign country; thereby deceiving
purchasing public into erroneous belief that respondent’s products are imported from Bohemia or
Czechoslovakia, or consist entirely of ingredients imported therefrom.
Disposition: After trial, order to cease and desist was entered May 12, 1930.
Vivaudou, V. (Inc.). (Complaint No, 1464.) Charge: Unlawful restraint and monopoly in that
respondent, engaged in manufacture of perfumes, cosmetics, and other toilet articles, acquired the stock
of Alfred H. Smith Co., and further, had Parfumerie Melba (Inc.), the stock of which is owned by
respondent, acquire control of Melba Manufacturing Co.; thereby tending to substantially lessen
competition, restrain commerce, and create a monopoly in alleged violation of section 7 of the Clayton,
Act.
Disposition: After trial, order to cease and desist and to desist was entered April 28, 1930,
Commissioner Humphrey dissenting. Case now pending in United States Circuit Court of Appeals,
Second Circuit, on respondent’s petition for re view of commission’s order.
Numerical list, orders to cease and desist
Docket
No.
1434
1464
1472
1478
1486
1530
1534
1536
1537
1538
1540
1542
1548
1554
1557
1562
1569
1572
1578
1579
1591
1592
1593
1594
1596
1606
1608
1610
1611
1612
1614
1672
1674
1686
1690
1695
1696
1702
1707
1712
1713

Respondent
Gibbons Knitting Mills (Inc.).
Vivaudou, V. (Inc.).
Pan-American Manufacturing Co. (Inc.).
Shure, N., Co.
American School of Correspondence.
Albany Billiard Ball Co., F. Grote & Hubbell Co. (Inc.), and Portland Billiard Ball Co.
Roark, Noah; Vest, Fred; and Arnold, T., partners (Merchant’ Cooperative Advertising Service,
Mason, W. M., and Phillips, F. E.).
Rockwood Corporation of St. Louis.
Temple Anthracite Coal Co.
Consolidated Book Publishers (Inc.).
Clarkson, David B., Co.
Cherry Blossoms Manufacturing Co.
Dixie Pecan Growers’ Exchange (Inc.).
Clear Sight Spectacle Co. (Ritholz, Messrs. B. D., M. T., S. J.., F., and Ante).
American School of Home Economics.
Tailor-Made Shoe System (William Ginsburg and Sam Ginsburg).
Enterprise Furniture Factory and Enterprise Upholstered Furniture Co. (Jacob Woodnick and
Philip Wasserman, partners).
Hilgers, Margaret (M. Trilety).
Universal Lock-Tip Co. (Gay, Katherine; Gay, Emile W. S., otherwise known as William S.
Gay).
Klein, Max (Kilmate-Pruf Manufacturing Co.).
Glover, Clara Louise, and Bernard Bernard, trading as L. Glover and R. B. Newell.
Knitfirm (Inc.).
United Remedies (Inc.).
Roaring Spring Blank Book Co.
Bush, David V.
Griswold, Graham Griswold Lumber Co.
Val Blatz Brewing Co.
Kelley, James.
Everitt & Graf (Inc.).
Stransky, J. A. and L. G. (J. A. Stransky Manufacturing Co.).
Roberts Tailoring Co. (Inc.).
Selick, C. H. (Inc.).
House, L. J., Convex Glass Co.
Marietta Manufacturing Co.
Anita Institute.
Sereda, Joseph P. (Health Violet Products).
Burton Bros. & Co. (Inc.).
Morris, Charles E.
Abraham, Nathaniel (N. Abraham Co. & Warehouse).
Boal’s Rolls Corporation.
Hamilton Garment Co.

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1719
Shakespeare Co.
1720 Johnson, William H., trading as Ethylene Sales Co., and Hathaway & Hamilton, J. Merrell
Redding, trading as Ethyl Gas Co., and J. H. Hathaway, trading as American Chemical Co.
1748 Shlansky, Philip, & Co. (Inc.).
1762 Powell, J. A. (J. A. Powell Co.).
1764
Northwest The & Mantle Contractors’ Association, its officers and members
1778 Redding, J. Merrell (Ethyl Gas Co.).
1781
Espositer Varni Co.
ORDERS OF DISMISSAL
Aluminum Co. of America. (Complaint No.1335.) Charge: Unfair methods of competition and price
discrimination in that respondent, controlling the sources of supply of aluminum metal and, through its
subsidiaries, a large manufacturer of aluminum products, discriminates in price between purchasers of
virgin sheet aluminum on basis of agreements that all aluminum scrap resulting from operations of
purchasers shall be resold to respondent, thereby tending to substantially lessen competition and create
a monopoly, in alleged violation of section 2 of the Clayton Act; and in that respondent fixes p rices
arbitrarily, makes price concessions, sells below cost; and discriminates against competitors in the quantity
and quality of its deliveries to them; thereby un fairly harassing competitors and tending to suppress
competition and maintain a monopoly, in alleged violation of section 5 of the Federal Trade Commission
act.
Disposition: Dismissed after trial, the charges in the complaint not being sustained by the evidence.
American Association of Advertising Agencies, American Press Association, and Southern Newspaper
Publishers’ Association. (Complaint No. 1251.) Charge: That respondents combine and conspire to
compel national advertisers to employ respondent agencies or other advertising agencies in placing
national advertising in newspapers throughout United States, compelling them to advertise in papers
selected by respondents, or to pay maximum gross rates if advertising directly or through newspapers other
than those selected, and to prevent said advertisers from advertising directly in said newspapers at
minimum net” rates and to compel such advertisers to pay at maximum “gross” rates, employing various
cooperative means to effectuate said combination and conspiracy the effect of which is to hinder and
obstruct national advertising throughout the United States; to restrict distribution of such advertising, and
of the type parts essential thereto, to channels and upon terms and conditions dictated by respondents; to
restrict publication of national advertising to newspapers selected and approved by respondents; to compel
newspaper publishers to charge for publication of national advertising at maximum gross rates and to
prevent them from according minimum net rates to direct advertisers; to compel employment of
respondents or other agencies as intermediaries in placing national advertising, or in the alternative to pay
for direct advertising at maximum gross rates and in addition thereto prepare and distribute their advertisements at their own expense; and to hinder and obstruct the marketing of goods. wares, and
merchandise; thereby tending to restrain distribution of advertising throughout the United States, to the
prejudice of the public and of respondents’ competitors.
Disposition: Dismissed after trial.
American Smelting & Refining Works (Libsitz, Phillip). (Complaint No. 1560,) Charge: That
respondent, engaged in mining, smelting. and refining ores, simulates name American Smelting &
Refining Co., a competitor having international reputation; thereby tending to deceive purchasing public
into erroneous belief that respondent’s products are manufactured by American Smelting & Refining Co.,
and that dealings with respondent are dealings with last-named company.
Disposition: Dismissed after trial.
Arizona Lumber & Timber Co. (Complaint No.1660.) Charge (see charge in complaint No.1620, p.
197).
Disposition: Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Auburndale Mills (Inc.). (Complaint No.1717.) Charge: That respondent, engaged in sale of woolen
cloth, uses the word “mills” in firm name; thereby deceiving purchasing public into erroneous belief that
respondent is a manufacturer and that prices quoted are exclusive of middleman’s profit.
Disposition Dismissed after trial, practices charged in complaint not having been sustained by evidence.
Berry & Sons, and others. (Complaint No.1669.) Charge (see charge in complaint No.1620, p.197).
Disposition: Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Blanke-Baer Extract & Preserving Co. (Complaint No. 1619.) Charge: That respondent,
manufacturing and selling artificially flavored extracts and concentrates for use in compounding soft
drinks, uses the words “Lemon Extract” and “Real Lemon Flavor” on labels and in advertising matter,
together with a pictorial representation of a lemon cut in half from which drops are failing into a bottle
bearing respondent’s labels; thereby deceiving purchasing public into erroneous belief that respondent’s
products are made of the fruit or juice of lemons.
Disposition: Dismissed after trial.
Bolin,. V. T., trading as V. T. Bolin Co. (Complaint No.1501.) Charge: That respondent, engaged
in sale of shares or interests in leased oil lands, circulates false and misleading statements relative to
location and value of such lands, and other paying properties owned by respondent; thereby deceiving
purchasing public into erroneous belief that respondent’s oil land is located in proven territory in close
proximity to flowing gushers, and that payment of profits on all investments is guaranteed.
Disposition: Dismissed,. respondent having been convicted for violation of criminal statute. prohibiting
misuse of mails, upon substantially same facts as set out in the complaint.
Brooks Rupture Appliance Co. and Brooks Appliance Co. (Harold C., Ellen J., and Lewis E.
Brooks). (Complaint No. 1563.) Charge : That respondent, engaged in sale of a truss through mail orders,
makes false and misleading statements to the effect that appliance is a new discovery and will heal rupture
without surgical aid; thereby deceiving purchasing public into erroneous belief that appliance differs
materially from ordinary truss and possesses therapeutic value.
Disposition : Dismissed, respondent having agreed to discontinue practices charged in the complaint.
B. Z. B. Knitting Co. (Complaint No. 1245.) Charge : That respondent, engaged in manufacture and
sale of hosiery, uses the words “Fashioned” amid “Full Fashioned” in advertising hosiery not
manufactured in accordance with process known as “Fashioned”; thereby deceiving purchasing public into
erroneous belief that respondent’s products are fitted or formed in process of knitting.
Disposition : Dismissed.
California Ink Co. (Inc.). (Complaint No. 1729.) Charge : Unlawful restraint and monopoly are
charged in that respondent, engaged in manufacture of printing and lithographing inks, print rollers, and
allied products, acquired capital stock of Russell Reed Co.; thereby tending to substantially lessen
competition, restrain commerce, and create a monopoly, in alleged violation of section 7 of the Clayton
Act.
Disposition : Dismissed after hearing before board of review.
Calumet Baking Powder Co. (Complaint No. 1292.) Charge : That respondent, engaged in
manufacture and sale of baking powders, conducts misleading tests through house-to-house canvassers
which purport to show that baking powder of the Royal Baking Powder Co. tends to cause food made
therefrom to form a hard mass in the digestive tract of the consumer, and circulates numerous false and
misleading statements concerning Royal Baking Powder Co.; thereby deceiving purchasing public into
erroneous belief that products of said company are harmful and that the 6 and 12 ounce containers are used
in the expectation that purchaser will believe he is obtaining the one-half pound and pound can, the sizes
in which other baking powders are packed, which is to the prejudice of the public and of respondent’s
competitors.
Disposition: Dismissed without prejudice.
Cassileth,. Schwartz & Cassileth (Inc.), Joseph Brickner and Julius Bernfeld, partners, trading as
Brickner & Bernfeld, Samuel Oldman and Max Oldman,

PROCEEDINGS DISPOSED OF IN FISCAL YEAR

177

partners, trading as Oldman Bros. (Complaint No.1382.) Charge That respondent Cassileth, Schwartz
& Cassileth,. dressing and dyeing Australian and New Zealand rabbit skins on contract for the owners,
stamps the trade-mark “Iceland Seal” or “Iceland Beaver” on the back of each skin; thereby placing in the
hands of others, including respondent Brickner & Bernfeld, engaged in the distribution of such skins,. and
respondent Oldman Bros., engaged in the manufacture of garments therefrom, the means of deceiving
purchasing public into erroneous belief that such garments are made from pelts of seals or beavers.
Disposition : Dismissed after trial.
Consolidated Cigar Corporation. (Complaint No.1451.) Charge : Unlawful restraint and monopoly
in that respondent, engaged in manufacture of cigars,. acquired capital stock of “44” Cigar Co. and G. H.
P. Cigar Co.; thereby tending to substantially lessen competition, restrain commerce, and create a
monopoly, in alleged violation of section 7 of the Clayton Act.
Disposition: Dismissed after trial, Commissioner McCulloch filing dissenting memorandum.
Cordiano Bros. (Inc.) and W. P. Bernagozzi. (Complaint No. 1687.) Charge : That respondent,
Cordiano Bros. (Inc.), engaged in manufacture and sale of tin cans, by and with consent of respondent W.
P. Bernagozzi, sells the distinctive container hearing name of last-named respondent and used by him as
container for imported Italian olive oil, to distributors of inferior oils; thereby placing in hands of others
the means of deceiving purchasing public into erroneous belief that inferior olive oil in such containers
is the superior product put out by W. P. Bernagozzi.
Disposition: Dismissed after trial, charges in complaint not having been sustained by evidence.
Feldbaum & Spiegel (Inc.). (Complaint No.1380.) Charge : That respondent, manufacturing and
selling to dealers garments made of dyed Australian and New Zealand rabbit skins bearing the dyer’s
trade-mark “Northern Seal,” labels the garments made therefrom “Genuine Northern Seal,” thereby deceiving purchasing public into erroneous belief that such garments are made of the pelts of seals.
Disposition: Dismissed after trial, respondent having discontinued business.
Freshman, Charles, Co. (Inc.). (Complaint No.1706.) Charge : Unlawful restraint and monopoly in
that respondent, engaged in manufacture and sale of radio apparatus, acquired capital stock of FreedElseman Radio Corporation; thereby tending to substantially lessen competition, restrain commerce, and
create a monopoly in alleged violation of section 7 of the Clayton Act.
Disposition : Dismissed.
General Shale Products Corporation, Johnson City Shale Brick Corporation, and Kingsport Brick
Corporation. (Complaint No. 1682.) Charge : That respondents, manufacturing and selling refractories
and building the, have combined in effort to eliminate Arrow Brick Co., a competitor, by circulating
derogatory statements as to company’s financial status, endeavoring to have his lease canceled, and selling
bricks below cost, thereby tending to hinder and suppress free competition to the prejudice of the public
and of respondents’ competitors.
Disposition : Dismissed after trial, charges in complaint not having been sustained by evidence.
Hess Lumber Co. (Complaint No.1622.) Charge (see charge in complaint No.1620, p.197).
Disposition : Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Hollander, A.,. & Son (Inc.), A. Hollander & Son-Arnold Corporation, and Harry H. Hertz Co.
(Complaint No. 1385.) Charge : That respondent A. Hollander & Son, engaged in dressing and dyeing
muskrat skins on contract for the owners and respondent, A. Hollander & So n--Arnold Corporation,
engaged in dressing and dyeing imported Australian and New Zealand rabbit skins, stamp the trade-mark
“Hollander Seal” or “Bay Seal” on the back of each of the skins, thereby placing in the hands of others,
including respondent, Harry H. Hertz Co., engaged in manufacture of garments therefrom, the means of
deceiving purchasing public into erroneous belief that such garments are made from pelts of seals.
Disposition : Dismissed after trial.
Horr, Harry. (Complaint No. 1667.) Charge (see charge in complaint No. 1620, p.197).

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Disposition : Dismissed after trial, with out prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Iona Co. (Complaint No. 1487.) Charge : That respondent, engaged in manufacture of an
electromagnetic device purporting to have curative and therapeutic value and action when applied to the
human body, circulates numerous false and misleading statements relative to cures effected by said device
and its indorsement by prominent physicians, thereby deceiving purchasing public into erroneous belief
that respondent’s product is a scientific device highly indorsed by the medical world, and that it possesses
therapeutic value.
Disposition: Dismissed, practices having been discontinued as a result of action by Post Office
Department.
Klamath Pine Manufacturing Co. (Complaint No. 1659.) Charge (see charge in complaint No. 1620,
p.197).
Disposition: Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Kurns,. Henry A. (Complaint No. 1668.) Charge (see charge in complaint No.1620, p.197).
Disposition: Dismissed after trial, without prejudice to right of commission to institute further
proceedings: in the event subsequent methods of competition render it expedient.
Lincoln Auto and Tractor School (Lincoln Engineering School). (Complaint No. 1539.) Charge: That
respondent; conducting a resident mechanical school which instructs pupils in repairing automotive
vehicles, circulates: false and misleading statements relative to regular price of course and tools to be
given therewith free of charge, qualifications of the faculty, letters of recommendation received, and
positions obtained for graduates; thereby deceiving purchasing public into erroneous belief that special,
reduced prices are being quoted; that cost of purported gratuity is not included in price paid for tuition;
that a large, well-trained faculty is provided; and that positions carrying high salaries will be obtained for
students completing the course.
Disposition : Dismissed after trial.
McCoy’s Laboratories (Inc.). (Complaint No. 1708.) Charge : That respondent, engaged in sale of a
proprietary medicine designated McCoy’s Tablets,” circulates false and misleading statements relative
to curative properties of product; thereby deceiving purchasing public into erroneous belief that
respondent’s product has therapeutic properties.
Disposition : Dismissed, respondent having agreed to discontinue practices charged in complaint and
not to resume same.
Mendoza Fur Dyeing Works (Inc.). ( Complaint No. 1432.) Charge Th at respondent, dressing and
dyeing Australian and New Zealand rabbit skins,. dresses pelts to simulate fur of beaver pelts, stamps the
words “Mendoza Beaver” on back of each skin, and supplies purchasers thereof with labels similarly
marked to attach to garments made therefrom; thereby placing in hands of others the means of deceiving
purchasing public into erroneous belief that such garments are made of pelts of beavers.
Disposition : Dismissed after trial.
Michigan-California Lumber Co. (Complaint No.1634.) Charge (see charge in complaint No.1620;
p. 197).
Disposition : Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Morgan Belleek China Co. (Complaint No. 1670.) Charge: That respondent, manufacturing china
ware, uses the word “Belleek” in firm name, and inn designating and describing china of domestic origin
; thereby deceiving purchasing public into erroneous belief that respondent’s products are imported from
Belleek, Ireland.
Disposition : Dismissed after trial, Commissioner McCulloch filing dissenting memorandum.
Morgan-Field & Co. (Inc.), Lester Stern, Michael Heller, and Earl Well. (Complaint No. 1474.)
Charge: That respondent individuals incorporated under the name “Morgan-Field & Company, Inc.,”
circulate false and misleading statements relative to organization and products sold; thereby deceiving
purchasing public into erroneous belief that respondents a re identical with

PROCEEDINGS DISPOSED OF IN FISCAL YEAR

179

Marshall Field & Co., that the clothing sold is made to measure by union labor, and that a “Guarantee
Bond” assures high quality of goods.
Disposition : Dismissed, respondent having discontinued business.
Myer, Henry, Thread Manufacturing Co. (Complaint No.1568.) Charge: That respondent,
manufacturing thread, uses the word “Subsilk” in advertising matter; thereby deceiving purchasing public
into erroneous belief that respondent’s product consists in part of silk.
Disposition : Dismissed after stipulation in lieu of testimony.
Pepsodent Co. (Inc.). (Complaint No. 1402.) Charge That respondent, engaged in manufacture of
a dentifrice designated “Pepsodent,” and sale thereof to wholesale and retail dealers, adopted and employs
a system for maintenance of uniform resale prices, refusing to sell to dealers who do not maintain such
prices, thereby tending to hinder and suppress free competition, to the prejudice of the public and of
respondent’s competitors.
Disposition : Dismissed after stipulation in lieu of testimony.
Personal Stationery Corporation of New York. ( Complaint No. 1684.) Charge: That respondent,
engaged in press-printing and in sale of process-printed stationery, uses the words “ Embossed and
“Engraved” in connection therewith ; thereby deceiving purchasing public into erroneous belief that
respondent’s products are engraved or embossed.
Disposition: Dismissed after trial, Commissioners Hunt and McCulloch dissenting on ground that order
of dismissal is in conflict with former decisions of commission involving process printing.
Portland Cement Association, its board of directors, officers, and members. (Complaint No. 1532.)
Charge : That respondents, having adopted and promoted use of a formula for making concrete in
proportions 1-2-3, endeavor to influence those who control the making, awarding, or approval of road
construction contracts by statements discrediting the Vibrolithic method employed by American
Vibrolithic Corporation which recommends a mixture of 1-2-4 ½, a formula requiring less cement,
proportionately, than that adopted by respondents ; thereby deceiving purchasing public into erroneous
belief that the Vibrolithic method Is inferior to that in use by respondents.
Disposition : Dismissed for want of jurisdiction.
Radio Association of America (Inc.). (Complaint No. 1555.) Charge: That respondent, furnishing
correspondence courses of instructions in the art of radio, electricity, and other mechanics incidental
thereto, amid dealing in radio sets and accessories incident to aforesaid instruction courses., uses the word
“Association” in firm name and in advertising matter and circulates false and misleading statements
relative to price of course. free consultation service, equipment, and membership in respondent
association, personal supervision by head of the corporation, and the unusual demand for radio operators
and mechanics; thereby deceiving purchasing public in to erroneous belief that respondent is an
association with organization thus implied, that a special, reduced price is being quoted, that cost of
alleged gratuities is not included in price paid for course, amid that lucrative positions are practically
assured students completing the course.
Disposition : Dismissed after trial.
Reifschneider Paint & Glass Co. (Complaint No. 1716.) Charge That respondent, engaged in selling
paint manufactured and labeled for him by Redgeway-Quest Co., buys from jobbers and retailers their
supply of competitors’ products, substituting his own in lieu of, and sells competitors’ goods thus
acquired, below cost to respondent and below regular selling price, thereby bringing about a loss to other
dealers handling competitors’ products and tending to injure competitors.
Disposition : Dismissed.
Saginaw & Manistee Lumber Co. (Complaint No. 1061.) Charge (see change in complaint No.1620,
p.197).
Disposition : Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render it expedient.
Shasta View Lumber & Box Co. (Complaint No. 1653.) Charge (see charge in complaint No.1620,
p.197).
Disposition : Dismissed after trial, without prejudice to right of commission to institute further
proceedings in event subsequent methods of competition render It expedient.
Southern Alberta Lumber Co. (Ltd.), also known as Southern Alberta Lumber & Supply Co. (Ltd.).
and H. N. Seruth. ( Complaint No. 1430. ) Charge :

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

That respondents, engaged in purchase of lumber and sale thereof to dealers, reduce carrying costs by
altering bills of lading and other documents issued by producers for material being reshipped, these
documents being accepted by shippers as setting forth true amount of shipment and made basis of their
bills of lading ; thereby so reducing costs so as to enable respondents to sell lumber at prices below those
at which their competitors can make a reasonable profit, and tending to injure competitors who do not
resort to fraudulent practices.
Disposition : Dismissed respondent having discontinued business.
Standard Furniture Factories (Balmuth, Herman L., and Isadore). (Complaint No.1710.) Charge :
That respondents, engaged in sale and distribution of furniture, use the word “Factories”iin firm name,
thereby deceiving purchasing public into erroneous belief that prices quoted are exclusive of
middleman’s profit.
Disposition : Dismissed after trial, respondent not having been engaged in interstate commerce.
Strongfort, Lionel, Institute. (Complaint No. 1528.) Charge : That respondent, furnishing courses
of instruction in physical culture by correspondence, circulates false and misleading statements relative
to regular price of course and articles accessory thereto that are purported to be given free of charge, the
personal supervision exercised, and results to be expected ; thereby deceiving purchasing public into
erroneous belief that a special, reduced price is being quoted, exclusive of price of dumb-bells which are
alleged to be given free of charge, that a physician considers each case personally and that the photographs
purported to have been taken of pupils do in truth represent respondent’s pupils and are illustrative of the
development that may be expected.
Disposition : Dismissed after trial, respondent having agreed to discontinue practices charged in
complaint.
Thenonett & Co. (Inc.). (Complaint No. 1556.) Charge : That respondent, engaged in manufacture
of artificially flavored and artificially colored flavors and concentrates, uses the words “Concord Grape,”
“Peerless Lemon,” “Grape Concentrate,” “Orange Concentrate (Made from Pure Orange Oil),” and similar
terms containing names of other fruits ; thereby deceiving purchasing public into erroneous belief that
respondent’s products are made from juice or fruit indicated.
Disposition: Dismissed after trial supplemented by stipulation in lieu of further testimony.
Tim’s Cap Corporation. (Complaint No.1701.) Charge: That respondent, manufacturing caps and
selling them to retail dealers, has adopted and employs a system for maintenance of uniform resale prices,
refusing to sell to dealers who do not maintain such prices and repurchasing from dealers upon request,
all goods remaining unsold at specified prices; thereby tending to hinder and suppress free competition
to the prejudice of the public and of respondent’s competitors.
Disposition: Dismissed after trial, practices charged in complaint having been discontinued long prior
to commission’s investigation of matter.
Wirz & Waidmann (Inc.) ( United Provision Co.). ( Complaint No.1613.) Charge: That respondent,
engaged in manufacture of sausage, sausage meat, and other pork products, uses trade name and dress
formerly used by Phillips Bros. & Co., whose good will, firm name, etc., respondent purchased with full
knowledge that said company had been directed by Federal Trade Commission to cease and desist from
use of a trade name and a trade dress so closely simulating that of Joseph Phillips Co. ; thereby deceiving
purchasing public into erroneous belief that respondent’s products are those of Joseph Phillips Co.
Disposition : Dismissed.
Numerical list, orders of dismissal
Complaint
No.
Respondent
1245
B. Z. B. Knitting Co.
1251
American Association of Advertising Agencies, American Press Association, and Southern
Newspaper Publishers’ Association.
1292
Calumet Baking Powder Co.
1385
Aluminum Co. of America.
1380
Feldbaum & Spiegel ( Inc. )
1382
Cassileth, Schwartz & Cassileth (Inc.).
1385
Hollander, A., & Son (Inc.).

PROCEEDINGS DISPOSED OF IN FISCAL YEAR
1430
1432
1451
1462
1474
1487
1501
1528
1532
1539
1555
1556
1560
1563
1568
1613
1619
1622
1634
1653
1659
1660
1661
1667
1668
1669
1070
1682
1684
1687
1701
1706
1708
1710
1716
1717
1729

181

Southern Alberta Lumber Co. (Ltd.), also known as Southern Alberta Lumber & Supply Co.
(Ltd.).
Mendoza Fur Dyeing Works (Inc.).
Consolidated Cigar Corporation.
Pepsodent Co. (Inc.).
Morgan-Field & Co. (Inc.).
Iona Co.
Bolin, V. T., trading as V. T. Bolin Co.
Strongfort, Lionel, Institute.
Portland Cement Association.
Lincoln Auto and Tractor School (Lincoln Engineering School).
Radio Association of America (Inc.).
Theonett & Co. (Inc.).
American Smelting & Refining Works.
Brooks Rupture Appliance Co. and Brooks Appliance Co.
Myer, Henry, Thread Manufacturing Co.
Wirz & Waidmann (Inc.) (United Provision Co.).
Blanke-Baer Extract & Preserving Co.
Hess Lumber Co.
Michigan-California Lumber Co.
Shasta View Lumber & Box Co.
Klamath Pine Manufacturing Co.
Arizona Lumber & Timber Co.
Saginaw & Manistee Lumber Co.
Horr, Harry.
Kurns, Henry A.
Berry & Sons, and others.
Morgan Belleek China Co.
General Shale Products Corporation, Johnson City Shale Brick Corporation, and Kingsport
Brick Corporation.
Personal Stationery Corporation of New York.
Cordiano Brothers (Inc.) and W. P. Bernagozzi.
Tim’s Cap Corporation.
Freshman, Charles, Co. (Inc.).
Mccoy’s Laboratories (Inc.).
Standard Furniture Factories (Balmuth, Herman L. and Isadore).
Reifschneider Paint & Glass Co.
Auburndale Mills (Inc.).
California Ink Co. (Inc.).

COMPLAINTS PENDING JULY 1, 1930
[Except where otherwise designated, the charges in each of the following cases concern unfair methods
of competition in alleged violation of section 5, Federal Trade Commission act.]
Abrams, Irving A., trading as Globe Scientific Co. ( Complaint No.1711.) Charge: That respondent,
engaged in sale of merchandise through mail orders, uses the words “Illinois Watch Case Company” and
“Elgin, U. S. A.,” on the straps of wrist watches not manufactured by the Illinois Watch Case Co., and
circulates false and misleading statements regarding sales and free goods; thereby deceiving purchasing
public into erroneous belief that respondent is selling Elgin watches, is quoting special, reduced prices,
and is giving gratuities the cost of which are not included in the price paid by the purchaser for the
merchandise with which they are alleged to be given free of charge.
Status : Awaiting completion of service.
Adams, Charles F. (Inc.). (Complaint No. 1812.) Charge (see charge in No.1789, p.198).
Status : At Issue.
Advance Candy Co. (Inc.). (Complaint No.1792.) Charge : That respondent, engaged in manufacture
of candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes an assortment consisting of wrapped pieces of candy to be sold at 1 cent each, and larger pieces
of candy to be given as prizes to the purchaser of last piece of candy in assortment and to purchaser who
by chance selects a piece having concealed within wrapper a printed slip of paper stating that purchaser
thereof is entitled to a 5-cent package of candy as a prize ; thereby supplying and placing in hands of
others means of conducting a lottery, and tending to injure competitors who do not make provision for the
disposal of their products by such means.
Status : At Issue.
Aetna Fire Brick Co. and 55 other fire-brick manufacturing companies, Brooks, J. J., jr., Donahoe,
Frederick W., Hopwood, H. H., and McKinley, J. M. (Complaint No. 1527.) Charge: That respondents,
engaged or interested in the business of manufacturing and selling refractories or fire-brick shapes made
of fire clay and/or silica, entered into a combination to establish sizes of base brick, uniform methods of
compiling sizes of refractories and base brick equivalents, uniform prices, terms, and methods of sale ;
thereby tending to hinder and suppress free competition, to the prejudice of public and of respondents’
competitors.
Status : At Issue.
Agmel Corporation. (Complaint No.1766.) Charge : That respondent, engaged in the importation and
sale of a preparation designated “Agmel” manufactured by its subsidiary, the Agave Co. in Mexico, from
the sap of then maquey plant, circulates false and misleading statements to the effect that “Agmel” is a
tonic and is effective in treatment of many diseases ; thereby deceiving purchasing public into erroneous
belief that respondent’s product possesses therapeutic properties.
Status : Awaiting answer.
Algoma Lumber Co. (Complaint No.1654.) Charge (see charge in com plaint No.1620, p.197).
Status : Awaiting respondent’s brief.
American Business Builders (Inc.), Ostrander, W. M., and Moyle, Seth. (Complaint No. 1680.)
Charge: That respondent, furnishing courses of instruction by correspondence in salesmanship, circulates
numerous false and misleading statements relative to a subscription to a magazine and a course of lectures,
which are in fact text from a book entitled “Practical Real Estate Methods,” alleged to be given by
prominent real estate experts, which respondent alleges to be a gratuity, a money-back bond alleged to be
given in case of dissatisfaction on the part of the student, and incomes received by
182

COMPLAINTS PENDING JULY 1, 1930

183

graduates; thereby deceiving purchasing public into erroneous belief that cost of purported gratuities is
not included in price paid for course, that refund of purchase price in case of dissatisfaction is guaranteed
by a bond, and that a graduate is qualified as a real estate expert and in a position to receive a yearly
income of not less than $5,000.
Status : Awaiting briefs.
American Candy Co. (Complaint No.1807.) Charge (see charge in complaint No. 1789, p.198).
Status : At issue.
American Caramel Co. (Inc.). (Complaint No. 1806.) Charge : That respondent, engaged in
manufacture of candy and sale thereof, together with explanatory display cards, to wholesale dealers and
jobbers, distributes an assortment consisting of wrapped candies to be sold at 5 cents each, and articles
of merchandise to be given as prizes to purchaser of last piece of candy in assortment and to purchaser
who by chance selects a piece containing a slip concealed within wrapper, stating that a prize is to be given
with that piece of candy; thereby supplying and placing in the hands of others the means of conducting
a lottery, and tending to injure competitors who do not make provision for the disposal of their products
by such means.
Status : At issue.
American Institute of Mentalism, trading as Segno, A. Victor, Segno, A. D., Segno Success Club, and
American Institute and Life Culture Association, Robinson, Mrs. A. D., and Robinson, H. T. (Complaint
No.1851.) Charge : That respondents engaged in sale and distribution under the nom de plume “A. Victor
Segno” of various books and pamphlets prepared by one Albert J. Hall, organizer of American Institute
of Mentalism and certain charms or talismans designated as “Lucky Sheckles,” which are manufactured
in United States, organized “Success Club,” ostensible purpose of which is to enlist a number of members
upon payment of a fee of $1 to extend their mental influence to each other to create conditions necessary
to promote success, use combination offers of memberships with opportunity to purchase literature and
procure a talisman, which Is purported to be a rare piece used in Palestine in the year 1391 B. C., and to
cost ordinarily from $5 to $15, many of which are in possession of lucky stars in the motion-picture world
; thereby deceiving purchasing public into erroneous belief that these talismans are rare pieces with a
capacity for bringing good luck, that pictures depicting motion-picture stars as possessor’s’ of said lucky
sheckles are used by and with their consent, and that membership in the “ Success Club” will promote
their well-being.
Status : Awaiting answer.
American Poultry School and Quisenberry, T. E. ( Complaint No. 1508. ) Charge : That
respondents, furnishing correspondence courses of instruction in poultry culture, circulate false and
misleading statements relative to regular price charged for course, and the giving of baby chicks free of
charge; thereby deceiving purchasing public into erroneous belief that a special, reduced price is being
quoted and that cost of alleged gratuity is not included in price paid for course.
Status :a Before commission for final determination.
American Radium Products Co. (Neil M. Jones and Robert D. Emery, partners). (Complaint No.
1752.) Charge : That respondents, engaged in manufacture and sale of earthenware water jars purported
to be lined with radium ore, circulate false and misleading statements to the effect that water remaining
in the jug 24 hours will possess a degree of radio activity sufficient to make it of a quality equal to that
of the famous Well of Beauty” at Donje Bodne, Turkey, causing it to possess curative value in
approximately 40 diseases ; thereby deceiving purchasing public into erroneous belief that jars possess
therapeutic properties.
Status : At issue.
Amusement Novelty Supply Co. (Max Kenner and Samuel Graubark, partners). (Complaint No.1763.)
Charge: That respondents, engaged as jobbers in sale of novelties such as knives, toilet sets, pocketbooks,
field glasses, and Imitation jewelry, circulate false and misleading statements regarding quality of their
merchandise; thereby deceiving purchasing public into erroneous belief that respondents’ merchandise
consists of genuine amber, Ivory articles, cameos, and precious stones.
Status : At issue
Armand Co. (Inc.), its officers and agents ; Spurlock-Neal Co., Berry, DeMoville & Co., RobinsonPettet Co., Lamar & Rankin Drug Co., Greiner

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Kelly Drug Co., the J. W. Crowdus Drug Co., San Antonio Drug Co., Western Wholesale Drug Co.,
Fuller-Morrison Co., Humiston, Keeling & Co., Peter van Schaack & Sons, the McPlke Drug Co., FaxonGallagher Drug Co., J. S. Merrell Drug Co., A. M. Berry, A. D. Berry, F. S. Berry, W. D. Phillips, M. P.
Williams, partners trading as Berry, De Moville & Co., The Fair (Inc.)., E. H. Cone (Inc.), T. C. Marshall
(Marshall’s Pharmacy), Clarence E. Jeffares and Malcolm J. Long (Jeffares-Long Drug Co.), Owl Drug
Co. (Inc.), (Complaint No.1329.) Charge : That respondent, Armand Co., engaged in manufacture of toilet
articles and cosmetics, adopted and employs, together with respondent wholesalers and dealers, a system
for maintenance of uniform resale prices, refusing to sell to dealers who do not maintain such prices ;
thereby tending to hinder and suppress free competition, to the prejudice of the public and of respondents’
competitors.
Status : In course of trial.
Armour & Co. and Armour & Co. of Delaware. (Complaint No.1423.) Charge:
That respondents, engaged in manufacture of soaps, use the words “Imported,” “Dona Castile,” “Stork
Castile,” “Carrara Sapon Catiglia,” and “Broadway Bath Olive Castile,” in labeling and advertising soap
consisting in substantial part of vegetable oils and animal fats, in some instances to the practical exclusion
of olive oil ; thereby deceiving purchasing public into erroneous belief that certain of respondents’
products are imported, and that all of the soap labeled “Castile” consists in preponderant part of olive oil.
Status : On suspense calendar to await decision of court of last resort in Docket 1110, in matter of James
S. Kirk & Co.
Arnold Stone Co. (Inc.). ( Complaint No.1732.) Charge : That respondent, engaged in manufacture
and sale of artificial products for use as substitutes for natural stone in architectural work, uses the word
“Stone” in corporate name, and the words “Stone,” “Marble,” and “Granite,” in advertising matter ;
thereby deceiving purchasing public into erroneous belief that respondent’s product is stone in the natural
state.
Status : Before commission for final determination.
Arrow-Hart & Hegeman (Inc.) and Arrow-Hart & Hegeman Electric Co. (Complaint No.1498.)
Charge : Unlawful restraint and monopoly are charged in that respondent, Arrow-Hart & Hegeman (Inc.),
engaged in manufacture of electric wiring devices, acquire share capital of Hart & Hegeman Manufacturing Co. and Arrow Electric Co., thereby tending to substantially lessen competition, restrain
commerce, and create a monopoly, in alleged violation of section 7 of Clayton Act.
Status : At issue.
Artloom Corporation, trading as Artloom Rug Mills. (Complaint No.1675.) Charge: That
respondent, engaged in manufacture and sale of rugs, tapestries, etc., advertises and labels certain of said
rugs as “Wilton” rugs; thereby deceiving purchasing public into erroneous belief that such rugs are
manufactured by same process and have same characteristics as the well-known Wilton rug.
Status : Awaiting briefs.
Asbestos Shingle, Slate & Sheathing Co. (Complaint No.1683.) Charge: That respondent, engaged
in manufacture and sale of roofing material, uses the term “Ambler Asbestos Building Lumber” to
designate a product composed of asbestos (15 per cent) and cement, and represents said “Building.
Lumber” to be “Absolutely Indestructible,” “Absolutely Fireproof” and composed of slate, and circulates
exaggerated, derogatory statements as to lack of durability of the ordinary cedar, cypress, or redwood
shingles; thereby deceiving purchasing public into erroneous belief that respondent’s products consist in
substantial part of asbestos or slate, that they are absolutely fireproof and indestructible, and are far
superior to other shingles in every way, and tending to injure competitors who sell cedar, cypress, or
redwood shingles.
Status: At issue on amended complaint.
Associated Knitting Mills Outlet Co. (Inc.). (Complaint No.1783.) Charge :
That respondent, engaged in sale of hosiery, lingerie, sweaters, blankets, etc., uses words “Knitting Mills”
in firm name, and on display signs in front of retail establishment, and advertises “Buy Direct From the
Mill and Save”; thereby deceiving purchasing public into erroneous belief that respondent is a
manufacturer and that prices quoted are exclusive of middleman’s profit.
Status: At issue.
Aviation Institute of U. S. A. (Inc.). (Complaint No. 1834.) Charge : That respondent, engaged in
furnishing a correspondence course of instruction in

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aviation, uses the letters “U. S. A.” In corporate and trade names In conjunction with a depiction of wings
and shields in simulation of insignia in use by United States, makes frequent use of word “Lieutenant” and
frequent references to officials in Army and Navy Air Service, and indorsement of Army and Navy
officials ; thereby deceiving purchasing public into erroneous belief that respondent is officially connected
with United States Government and that course furnished has indorsement of Federal Government.
Status : At Issue.
Badger Candy Co. (Complaint No. 1841.) Charge : That respondent, engaged in manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale and retail dealers and
jobbers, with pieces of candy and certain other pieces of merchandise to be given as prizes to purchaser
of last piece of candy in assortment and to purchaser who by chance selects a piece bearing the word
“Winner” stamped thereon ; thereby supplying and placing in the hands of others the means of conducting
a lottery, and tending to injure competitors who do not make provision for disposal of their products by
such means.
Status : Awaiting answer.
Bailey Radium Laboratories (Inc.), and William J. A. Bailey. (Complaint No.1756.) Charge : That
respondent, engaged in manufacture and sale of a medical preparation composed of water and radium ore,
and/or mesothorium salt, designated “Radithor,” made by diluting a concentrated radioactive fluid
purchased from United States Radio Corporation with distilled water, use the word “Laboratories” in firm
name, and circulate false and misleading statements to the effect that the product is the result of 30 years
of scientific research and has been effective in treatment of approximately 160 diseases, that the alpha
radium ray which is present in large quantities in “Radithor” is not destructive, and that numerous books
and pamphlets citing successful use of “ Radithor” have been published ; thereby deceiving purchasing
public into erroneous belief that product is made according to a special scientific formula, that it is not
dangerous to use, that the booklets and pamphlets are published by persons other than respondent Bailey
and that medicinal preparation possesses therapeutic properties.
Status : At issue.
Bates, W. H., trading as Central Fixation publishing Co; (Complaint No. 1673.) Charge : That
respondent, engaged in publication of a book designated “Perfect Sight Without Glasses,” circulates false
and misleading statements relative to what may be accomplished by discarding spectacles and practicing
the method of eye training set forth in the publication ; thereby deceiving purchasing public into erroneous
belief that respondent’s book sets forth a new method of eye training which will cure practically every
known eye trouble, including partial blindness.
Status : In course of trial.
Belline, L. A. ( Cooperative Book Co.). ( Complaint No.1551.) Charge :
That respondent, engaged in sale of books, advertises an encyclopedia designated “The American
Reference Library,” sold by Perpetual Encyclopedia Corporation under name of “The Source Book,” as
a new publication, and circulates numerous false and misleading statements relative to educators
compiling it, regular price of the books and cost of then extension service ; thereby deceiving purchaser
into erroneous belief that encyclopedias were recently compiled by well-known educators and are kept up
to date by extension service, that price quoted is in some instances a special introductory offer and insures
receipt of book and extension service for one year, and that a limited number of books are given free of
charge to school-teachers for purpose of introducing them into school system.
Status : At issue.
Ben-Burk (Inc.). (Complaint No.1775.) Charge : That respondent, engaged in sale of malt products,
some of which consist of one-eighth or one-ninth of Imported hops, to wholesale dealers for making
home-brew beverages, uses labels bearing the words “German Maid,” “Dutch Maid,” “Kronprinz,” “Mierlenof,” and “Imported,” and solders upon lids of containers a brass diamond bearing the stamp of a
German iron cross, on which are the words “Gott mit Uns, 1870” and “Imported Hop Flavor “ ; thereby
deceiving purchasing public Into erroneous belief that respondent’s products are imported.
Status : Awaiting trial.
Benedict Stone (Inc.). (Complaint No.1692.) Charge : That respondent, en-gaged in manufacture and
sale of a composition block used for building per-

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poses, used the words “ Stone “ and “Benedict Stone “ to designate and describe same; thereby deceiving
purchasing public into erroneous belief that respondent’s product is stone in its natural state.
Status : On suspense, pending outcome of proceedings in Docket 1732, in matter of Arnold Stone Co.
Berliner, Edwin E., Burton, Frederick A., and Hochheimer, Lawrence, partners’ (Edwin E. Berliner
& Co.). (Complaint No. 1731.) Charge : That respondents, engaged in converting cotton goods and rayon
mixtures, and In sale thereof to manufacturers and retail dealers, use the trade name “Lyksilk “ on labels
and in advertising matter descriptive of a cotton fabric possessing a high luster ; thereby deceiving
purchasing public into erroneous belief that respondents’ product is made of silk.
Status : Awaiting final argument.
Bethlehem Steel Corporation, Bethlehem Steel Co., Bethlehem Steel Bridge Corporation; Lackawanna
Steel Co., Lackawanna Bridge Works Corporation, Midvale Steel & Ordnance Co., and Cambria Steel Co.
(Complaint No.962.) Charge: That respondent, Bethlehem Steel Corporation, acquired properties, assets,
and business of remaining respondents and their subsidiaries; thereby tending to substantially lessen
competition, contrary to public policy expressed in section 7 of Clayton Act, and to restrain trade contrary
to public policy expressed in sections 1 and 3 of Sherman Act in alleged violation of section 5 of Federal
Trade Commission act.
Status : In course of trial.
Big Lakes Box Co. (Complaint No.1647.) Charge (see charge in complaint No.1620, p.197).
Status : Awaiting respondent’s brief.
Billings-Chapin Co. (Complaint No.1733.) Charge : That respondent, en-gaged in manufacture and
sale of paints and varnishes, uses labels bearing the words “ USN Varnish “ and “ USN Deck Paint,” etc.,
together with a depiction of a United States battleship, the navy colors, and marine scenes ; thereby
deceiving purchasing public into erroneous belief that respondent’s products are manufactured in
accordance with Government specification.
Status : At issue.
Black & Yates (Inc.). (Complaint No.1736.) Charge: That respondent, engaged in sale of lumber to
lumber dealers and furniture manufacturers, designates this lumber as mahogany and/or Philippine
mahogany ; (hereby deceiving purchasing public into erroneous belief that respondent’s product and
articles made therefrom consist of wood derived from trees of mahogany family.
Status : In course of trial.
Black, Frank W., Howton, Walter, and Leonh art, Max ( Frank W. Black & Co. and Griffitts Engraving
Co.). (Complaint No. 1697.) Charge : That respondent, engaged in process printing and sale of stationery
printed by a process designated “ Mi-Process,” use the word “ Engraving “ in connection therewith ;
thereby deceiving purchasing public Into erroneous belief that respondent’s product is engraved.
Status : Testimony closed : awaiting examiner’s report.
Blackhawk Candy. (Complaint No.1791.) Charge (see charge in complaint No.1785, p. 200).
Status: At issue.
Blair Bros. Lumber Co. (Complaint No. 1665.) Charge (see charge in complaint No. 1620, p. 197).
Status : Awaiting respondent’s brief.
Blanton Co. (Complaint No. 1558. ) Charge: That respondent, engaged in manufacturer of butter
substitutes or oleomargarine, containing no cream In some brands and in other brands less than 5 per cent
cream, uses the words “Creamo,” “Creamaid,” “Blanton Creamo, Churned In Cream,” and “Blanton
Creamo Nut Butter” on labels and In advertising matter ; thereby deceiving purchasing public, into
erroneous belief that respondent’s products are what is properly designated creamy butter.
Status : In course of trial.
Bleadon-Dun Co. (Complaint No.1703.) Charge : That respondent, some-times trading as “The ViTex Co.,” engaged in manufacture and sale of electric generators designated “Violetta” for use in the
treatment of diseases, circulates false and misleading statements regarding regular price of appliance, free
goods given therewith, and its efficacy as a curative for some 86 ailments, thereby deceiving purchasing
public Into erroneous belief that respondent’s product possesses curative properties In common with those
possessed by the true violet-ray machine, and that a special, reduced price Is being quoted.

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Status: At issue.
Bossert, Louis, & Sons (Inc.). (Complaint No.1735.) Charge (see charge In complaint No.1734, p.
209).
Status: In course of trial.
Breece, George E., Lumber Co. (Complaint No.1663.) Charge (see charge In complaint No.1620,
p.197).
Status: Awaiting respondent’s brief.
Breitbart Institute of Physical Culture (Inc.). (Complaint No. 1609.) Charge: That respondent,
engaged in furnishing courses of instructions by correspondence In physical culture, circulates false and
misleading statements relative to the regular price of the course, its supervision by Seigmund Breitbart and
a council of athletes, and depictions purporting to show development; thereby deceiving purchasing public
into erroneous belief that the founder, Seigmund Breitbart, is still alive and directing the instruction with
the aid of a council consisting of seven prominent athletes, that the pictures are in fact illustrative of
development, and that special reduced prices are being quoted.
Status: In course of trial.
Boston, Bradley (Inc.). (Complaint No.1847.) Charge: That respondent engaged in sale of
merchandise direct to purchaser by mail, uses the words “Wholesale Jewelers and Manufacturers” in
catalogues, and uses the words Gem,” “Ruby.” “Sapphire,” “Silverware,” “Ivorette,” “Carved” and
“Engraved” to designate articles that are not as represented; thereby deceiving purchasing public into
erroneous belief that respondent’s products are precious stones, sterling silver, leather goods, ivory
articles, and are carved and engraved as indicated in catalogue, and that prices quoted are exclusive of
middleman’s profits.
Status: Awaiting answer.
Braymill White Pine Co. (Complaint No. 1657.) Charge (see charge In complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Brooks, T. E (T. E Brooks & Co.). (Complaint No.1442.) Charge: That respondent, engaged In
manufacture of cigars in State of New York, uses the words “ Havana Sweets” on cigar bands and
containers; thereby deceiving purchasing public into erroneous belief that respondent’s product is made
of tobacco grown on island of Cuba.
Status: At issue.
Bunte Brothers (Inc.). (Complaint No.1811.) Charge (see charge In complaint No.1789, p.198).
Status: At issue.
Cadwallader-Gibson Co. (Inc.). (Complaint No.1744.) Charge (see charge in complaint No.1736,
p.186).
Status: In course of trial.
Cady Lumber Corporation. (Complaint No.1662.) Charge (see charge In complaint No. 1620, p.
197).
Status: Awaiting respondent’s brief.
California Door co. (Complaint No.1630.) Charge (see charge in complaint No.1620, p. 197).
Status: Awaiting respondent’s brief.
California Fruit Exchange. (Complaint No.1626.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
California-Oregon Box & Lumber Co. (Complaint No. 1658.) Charge (see charge in complaint
No.1620, p.197).
Status: Awaiting respondent’s brief.
California Preserving Co. (Inc.). (Complaint No.1726.) Charge: That respondent, engaged in sale of
preserves, canned fruits, pickles, seafood, etc., to retail dealers, simulates corporate name, order blanks,
labels, etc., of Borden California Products Co., claiming either to be in employ of said company and
showing pictures to that effect, or claiming to have acquired same; thereby deceiving purchasing public
Into erroneous belief that respondent’s goods are identical with those sold by Borden California Products
Co.
Status: Awaiting respondent’s brief.
Canada’s Pride Products Co. (Inc.), formerly International Products Co. (Complaint No. 1843.)
Charge: That respondent, engaged in sale of malt sirups to wholesale grocers and chain stores, uses the
word “ Canada” both In firm and trade names, and a’ depiction of the map of Canada on labels and in
advertising matter descriptive of malt sirup manufactured in the United

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States; thereby deceiving purchasing public into erroneous belief that sirups or ingredients thereof are
imported from Canada.
Status: Awaiting answer.
Casoff, L. F, trading as Central Paint & Varnish Co., Central Shellac Works, and Cumberland Paint
Works. (Complaint No.1698.) Charge: That respondent, engaged in manufacture and sale of paint, uses
the words “Lead,” “Zinc,” “Linseed Oil,” “Purest Paint,” and “ 100% Pure,” in labeling and advertising
products containing inferior substitutes, thereby deceiving purchasing public into erroneous belief that
respondent’s products consist in substantial part of the ingredients designated.
Status: At issue.
Castle Crag Lumber Co. (Complaint No. 1623.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Charms Co. (Complaint No. 1800.) Charge (see charge in complaint No. 1785, p.200).
Status: At issue, commission to Issue findings and order to cease and desist, which respondent will obey
if case involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Chatham Manufacturing co. (Complaint No. 1777.) Charge: That respondent, manufacturing blankets
consisting of from 5 per cent to 70 per cent wool, with less than 50 per cent for the most part, and sale
thereof to Jobbers and wholesale dealers, uses picture of three sheep in an oval as a trade-mark, and
advertises and labels products as “Part Wool,” “Wool and Cotton,” and “Wool Mixed”; thereby deceiving
purchasing public into erroneous belief that respondent’s products consist in substantial part of wool.
Status: At issue.
Chicago Warehouse Lumber Co. (Complaint No.1742.) Charge (see charge in complaint No.1736,
p.186).
Status: In course of trial.
Chiloquin Lumber Co. (Complaint No.1655.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Cincinnati Soap Co. (Complaint No.1425.) Charge: That respondent, engaged in manufacture of
soaps, uses the words “Purity Castile,” “Crown Castile,” “Olive Castile,” and “Fontaine Castile,” in
labeling and advertising soap consisting in substantial part of vegetable oils and animal fats, in some
instances to the exclusion of olive oil; thereby deceiving purchasing public Into erroneous belief that
respondent’s products consist in preponderant part of olive oil.
Status: At issue.
Citrus Products Co. (Complaint No.1700.) Charge: That respondent, engaged in manufacture and sale
of concentrates, uses the trade names “Blue Bird,” and “Orangekist” together with descriptive material
containing the words “ Grape” and “ Orange,” on labels and in advertising matter descriptive of products
simulating the fruit indicated in odor, flavor, and appearance, but not consisting of the fruit in substantial
quantity; thereby deceiving purchasing public into erroneous belief that respondent’s product is a fruit
drink.
Status: At issue.
Clark, D. L., Co. (Complaint No.1797.) Charge (see charge in complaint No.1785, p.200).
Status : u At issue, commission to issue findings and order to cease and desist, which respondent will
obey if case involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Cliquot Club Co. (Complaint No. 1819.) Charge: That respondent, engaged in manufacture of ginger
ale and sale thereof to wholesale dealers, circulates through mediums of newspapers, radio broadcasting,
labels, etc., statements to effect that respondent’s product has been aged six months in the making and that
unless so aged, ginger ale is unripe, green, and injurious; thereby deceiving purchasing public into
erroneous belief that respondent’s product has been aged six months in the making and is thus superior
to any other brand of ginger ale.
Status: Awaiting trial.
Clover Valley Lumber Co. (Complaint No.1621.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.

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Cohen, Goldman & Co. (Inc.). (Complaint No. 1754.) Charge: That respondent, engaged in
manufacture of men’s clothing and sale thereof to wholesale and retail dealers, has adopted and employs
a system for maintenance of uniform resale prices, refuses to sell to dealers who do not maintain same,
and to wholesalers supplying retailers who do not maintain same; thereby tending to hinder and suppress
free competition to the prejudice of the public and of respondent’s competitors, in alleged violation.
Status: At issue.
Colgate-Palmolive-Peet Co. (Complaint No.1536.) Charge: That respondent, engaged in manufacture
of soap and soap powder and sale thereof to whole-sale and retail dealers, labels and advertises a soap that
at the time of sale to the public contains not more than 1 per cent of naphtha by weight, as “Sea Foam
Naptha Soap Powder,” “Sea Foam Naphtha Powder,” “Feet’s White Naphtha Soap,” and “Peet’s A-B
Naphtha Soap,” and uses in connection therewith the phrase “A Chemical Union of Ammonia and
Naphtha”; thereby deceiving purchasing public into erroneous belief that respondent’s products contain
a substantial amount of naphtha
Status: At issue.
Continental Steel Corporation. (Complaint No.1589.) Charge: Unlawful restraint and monopoly in
that respondent, engaged in rolling and fabricating steel sheets, acquired stock of Superior Sheet Steel Co.
and Chapman Price Steel Co.; thereby tending to substantially lessen competition restrain commerce, and
create a monopoly, in alleged violation of section 7 of Clayton Act.
Status: At issue.
Cooke, L. L., School of Electricity. (Complaint No.1603.) Charge: That respondent, engaged in
furnishing courses of instructions by correspondence in practical electricity, circulates numerous false and
misleading statements relative to regular price of course, and accessories thereto, alleged to be given free
of charge, personal supervision given, and salaries earned by graduates; thereby deceiving purchasing
public into erroneous belief that special, reduced prices are being quoted, the cost of purported gratuities
is not included in price paid for course, that head of school gives personal and direct instructions, and that
graduates may expect to earn from $3,000 to $10,000 a year.
Status: Before the commission for final determination.
Coty (Inc.). (Complaint No.1688.) Charge: That respondent, engaged in the packing of toilet
preparations imported from France and in the distribution thereof to wholesale and retail dealers, has
adopted and employs a system for the maintenance of uniform resale prices, refusing to sell to dealers who
do not maintain such prices, and furnishing the names of such dealers to cooperating distributors, thereby
tending to suppress free competition to the prejudice of the public and of respondent’s competitors, in
alleged violation of section 5 of the Federal Trade Commission act.
Status: At issue.
Cox, C. N. (Norton Institute). (Complaint No.1581.) Charge: That respondent, furnishing
correspondence courses to qualify pupils for positions in various departments of the Government, uses the
word “Institute” in trade name, naming one C. H. Norton as president, quotes fictitious prices as regular
prices, publishes fictitious indorsement and inserts spurious “ Help Wanted” advertisements in the
newspapers, thereby deceiving purchasing public into erroneous belief that respondent conducts an
institute, with officers and an organization such as Is associated with an institute; that the course is
indorsed as being adequate for purpose specified; that special, reduced prices are being quoted; and that
respondent’s activities are such as to demand a constantly increasing force.
Status: Awaiting respondent’s brief.
Crancer, L. A., and Fleischman, G. B., partners, trading as Allegheny Tube & Steel Co., Coupling
Manufacturing Co., Erie Iron & Tube Co., Illinois Steel Products Co., Westinghouse Union Co.,
Pittsburgh Malleable Fittings Co., and Plumbers National Supply Co. (Complaint No.1848.) Charge:
That respondents, engaged In sale of pipe fittings and In manufacture of same on a limited scale in name
of one company only, use a number of firm names, each firm being ostensibly an independent company
with fictitious names listed as officers and each name resembling somewhat the name of a large, wellknown corporation engaged in manufacture and sale of pipe fittings whose address is in some instances
placed on respondents’ price list, arrangements having been previously made for forwarding of all mall
sent to such address as a result of this misrepresentation ; simulate competition among pseudo
independents by

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circulating price lists in name of each company, with different price ranges; sell old material as new; and
represent each firm as a manufacturer; thereby deceiving purchasing public into erroneous belief that free
competition exists among the firms; that they represent in some manner the well-known corporations
whose names they simulate; that merchandise offered for sale is new, and that prices quoted are exclusive
of middleman’s profit.
Status: Awaiting answer.
Crosse & Blackwell, a corporation of London, England, and Crosse & Blackwell, a corporation of
Baltimore, Md. (Complaint No.1821.) Charge: That respondents, engaged in manufacture and sale of
marmalades, jams, etc., distribute through the Baltimore corporation products manufactured by that
company as well as those manufactured by the London corporation, using same style of label for all of the
products, which does not indicate that any of them are of domestic manufacture ; thereby deceiving
purchasing public into erroneous belief that any product identified by the Crosse & Blackwell label is an
imported product.
Status: Awaiting trial.
Crown Overall Manufacturing Co. (Complaint No. 1676.) Charge: Un lawful restraint and
monopoly in that respondent, engaged In manufacture and sale of working garments, acquired stock of
Larned Carter & Co. (Inc.); thereby tending to substantially lessen competition, restrain commerce, and
create a monopoly, in alleged violation of section 7 of the Clayton Act.
Status: At issue.
Curtis Candy Co. (Complaint No.1699.) Charge: That respondent, engaged in manufacture of candy
and sale thereof to jobbers, has adopted and employs a system for maintenance of uniform resale prices,
refusing to sell to jobbers who do not maintain such prices, thereby tending to hinder and suppress free
competition to the prejudice of the public and of respondent’s competitors.
Status: Testimony closed ; awaiting examiner’s report.
Dart Boats (Inc.). (Complaint No. 1768.) Charge: That respondent, en gaged in manufacture and sale
of motor boats constructed of woods other than mahogany, makes false and misleading statements relative
to construction of such boats ; thereby deceiving purchasing public into erroneous belief that respondent’s
products are constructed of wood derived from trees of mahogany family.
Status: Awaiting answer.
Davies-Johnson Lumber Co. (Complaint No.1624.) Charge (see charge in complaint No.1620, p.
197).
Status: Awaiting respondent’s brief.
Diamond Match Co. (Complaint No.1625.) Charge (see charge in com plaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Domino House (Inc.) and Margaret Sullivan. (Complaint No. 1718.). Charge: That respondents, en
gaged in furnishing courses in beauty culture and selling toilet preparations and curling irons, quote
fictitious prices as regular prices for course of instructions, and offer as purported gratuities, curling irons
and membership in a so-called “ Beauty Arts Society” which Is purely fictitious trade name used by
respondent; thereby deceiving purchasing public into erroneous belief that respondent is offering special,
reduced prices and giving goods the cost of which is not included in price paid by purchaser for course
with which it is alleged to be given free of charge.
Status: Awaiting respondent’s brief.
Elmer Candy Co. (Complaint No.1788.) Charge (see charge in complaint No.1772, p.193).
Status: At issue, commission to issue findings and order to cease and desist which respondent will obey,
if case involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Empire Manufacturing Co. (Complaint No.1515.) Charge That respondent, manufacturing furniture,
uses the words “Genuine Walnut” and “ Combination Walnut” to designate furniture made of wood
derived from trees other than those of walnut family, with exception of a walnut veneer on exposed parts,
about one twenty-eighth of an inch in thickness; thereby deceiving purchasing public into erroneous belief
that furniture so designated is composed entirely of walnut.
Status: Before commission for final determination.
Euclid Candy Co. (Complaint No.1794.) Charge (see charge in complaint No. 1785, p.200).

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Status: Awaiting answer.
Ewauna Box Co. (Complaint No.1048.) Charge (see charge in complaint No. 1620, p.197).
Status: Awaiting respondent’s brief.
Fairchoth, E. C., jr., Faircloth, E C., sr., Evers, F. B., and estate of Evers, C. K., partners, trading as
Cherokee Mills. (Complaint No. 1004.) Charge: That respondents, engaged in purchasing flour from
mills in the Middle West, and blending same with leavening agents such as baking powder, to produce
what is known as “ Self-Raising Flour,” use the word “Mills” In firm name and use in advertising matter
depictions of extensive buildings having a sign reading “Cherokee Mills, High-Grade Flour”; thereby
deceiving purchasing public into erroneous belief that respondents manufacture the products they sell, and
that prices quoted are exclusive of middleman’s profit.
Status: Awaiting briefs.
Fayro Laboratories (Inc.). (Complaint No.1564.) Charge: That respondent, manufacturing bath salts
designated “ Fayro “ circulates false and misleading statements relative to curative properties of product,
and its indorsement by physicians, its composition, and its effectiveness as a reducing agent; thereby
deceiving purchasing public into erroneous belief that respondent’s product is concentrate of natural
mineral salts that make effective the waters in 22 hot springs of America, England, and continental Europe,
is beneficial in the early stages of Brights’s disease, and will enable user to reduce from 2 to 4 pounds in
one night when used in a hot bath.
Status: Awaiting trial.
Feather River Lumber Co. (Complaint No.1629.) Charge (see charge in Complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Fleck Cigar Co. (Complaint No.1453.) Charge: That respondent, engaged in manufacture of cigars
in State of Pennsylvania, uses the words “Rose-O-Cuba” and “Habana” an cigar bands and labels ; thereby
deceiving purchasing public into erroneous belief that respondent’s products are made of tobacco grown
on island of Cuba.
Status: At issue.
Fleer, Frank H., Corporation. (Complaint No. 1832.) Charge: That respondent, engaged in
manufacture of chewing gum and sale thereof, together with explanatory display cards, to wholesale
dealers and jobbers, distributes four different assortments consisting of wrapped pieces of gum to be sold
at 1 cent each, and other packages of gum to be given as prizes to purchaser who by chance selects a piece
of a specified color and, in case of one assortment, to be given as a prize to purchaser of last piece of gum
in assortment also ; a fifth assortment consisting of wrapped pieces of gum to be sold at 1 cent each, and
pieces of gum to be given as prizes to purchaser who by chance selects a piece of a specified color, a piece
of merchandise to be given as a prize to purchaser who by chance selects pieces having concealed within
wrappers pictures of such parts of a piece of merchandise pictured on outside of cover, as will enable him
to form a completed picture of the article, which is sent to him as a prize upon receipt by respondent of
such pieces pasted in completed form ; and a sixth. assortment consisting of pieces of gum to be sold at
5 cents each, a prize to be mailed to purchaser who by chance selects pieces by means of which he can
complete a picture, as in fifth assortment; thereby supplying and placing in the hands of others the means
of conducting a lottery, and tending to injure competitors who do not make provision far the disposal of
their products by such means.
Status: At issue.
Flynn & Emrich Co. (Complaint No. 1584.) Charge: That respondent, manufacturing stokers, grates,
and coal-feeding mechanisms, circulates and causes its agents to circulate threats to institute suits for
infringement of respondent’s patent” against Perfection Grate & Stoker Co., also known as Perfection
Grate & Supply Co., thereby deceiving purchasing public into erroneous belief that respondent’s threats
are made in good faith, and tending to hinder, embarrass, and eliminate competition in the sale of
respondent’s products.
Status: Awaiting final argument.
Forest Lumber Co. (Complaint No. 1649.) Charge (see charge in complaint No,. 1620, p. 197).
Status: Awaiting respondent’s brief.
Franklin Paint Co. (Complaint No.1567.) Charge: That respondent, selling paints, uses In advertising
matter the wards “White Lead,” “Zinc Oxide,” etc.,

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and picture of a large factory bearing a sign with name “ Franklin Paint Company “ thereon; thereby
deceiving purchasing public into erroneous belief that respondent’s products consist in substantial part
of ingredients named and that respondent operates such a factory or occupies such a building as the one
pictured, and that the prices quoted are exclusive of the middleman’s profit.
Status: At issue.
Fruit Growers Supply Co. (Complaint No.1633.) Charge (see charges in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Geiger Candy Co. (Complaint No.1823.) Charge (see charge in complaint No.1789, p.198).
Status: Awaiting answer.
Gillespie, F. H., Gillespie, M. L., and MacDougall, A. F., partners, trading as Gillespie Furniture Co.
(Complaint No. 1739.) Charge: That respondents, engaged in manufacture of household and office
furniture and sale thereof to wholesale and retail dealers, represent certain of their products as mahogany
; thereby deceiving purchasing public into erroneous belief that such products are made of wood derived
from trees of mahogany family.
Status: In course of trial.
Globe Soap Co. (Complaint No.1424.) Charge: That respondent, engaged in manufacture of soaps, uses
the words “ Castile “ and “ Lion Castile “ in labeling and advertising soap consisting in substantial part
of vegetable oils and animal fats, in some instances to the exclusion of olive oil ; thereby deceiving
purchasing public into erroneous belief that respondent’s products consist in preponderant part of olive
oil.
Status: On suspense calendar to await decision of court of last resort In Docket 1110, in matter of James
S. Kirk & Co.
Goldenberg, D. (Inc.). (Complaint No.1810.) Charge: That respondent, engaged in manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes one assortment of candies to be sold at 1 cent each and larger pieces of candy and other articles
of merchandise to be given as prizes to purchaser of last piece of candy in assortment and to purchaser
who by chance selects a piece of candy having a center of a specified color ; and another assortment
consisting of wrapped candies to be sold at prices ranging from 1 to 3 cents, purchaser to pay whatever
sum is set forth on a slip of paper concealed within wrapper ; thereby supplying and placing in the hands
of others the means of conducting a lottery, and tending to injure competitors who do not make provision
for the disposal of their products by such means.
Status: At issue.
Golden Fur Dyeing Co. (Inc.). Samuel Jacobs and Isidor Sachs (Jacobs & Sachs). (Complaint
No.1381.) Charge: That respondent, Golden Fur Dyeing Co., engaged in dressing and dyeing Australian
and New Zealand rabbit skins on contract for the owners, stamps the trade mark “Golden Seal” on back
of each skin; thereby placing in hands of others, including respondent, Jacob & Sachs, engaged in
manufacture and sale of garments made from such skins, the means of deceiving purchasing public into
erroneous belief that garments are made from pelts of seals.
Status: Before commission for final determination.
Great Northern Fur Dyeing & Dressing Co. (Complaint No. 1379.) Charge: That respondent,
engaged in the business of dressing and dyeing Australian and New Zealand rabbit skins, stamps one of
its trade-marks--“Northern Seal” (black), “Northern Bevre” (brown), “Northern Nutriette” (plum color)
on the back of each skin prepared by it, and supplies the purchasers thereof with labels marked “Genuine
Northern Seal” to attach to the garments made therefrom ; thereby placing in the hands of others the means
of deceiving the purchasing public into the erroneous. belief that the garments made therefrom are made
from the pelts of the fur-bearing animals indicated, and tending to injure competitors who do not practice
misrepresentation, in alleged violation of section 5 of the Federal Trade Commission Act.
Status: Before commission for final determination.
Greenfield’s, E., Sons (Inc.). (Complaint No.1804.) Charge: That respondent, manufacturing and
selling candy, together with explanatory display cards, to wholesale dealers, distributes one assortment
consisting of candies to be sold at 1 cent each, and larger pieces of candy and/or other pieces of
merchandise to be given as prizes to the purchaser of last piece of candy in assortment, and to purchaser
who by chance selects a piece having a center of a

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specified color; and another assortment consisting of wrapped candies to be sold at prices ranging from
1 to 5 cents, purchaser to pay whatever sum is set forth on printed slip of paper concealed within wrapper
; thereby supplying and placing in hands of others means of conducting a lottery, and tending to injure
competitors who do not make provision for the disposal of their products by such means.
Status: At issue.
Gropper, M. J., & Sons (Inc.). (Complaint No.1722.) Charge: That respondents, engaged in
manufacture of glass marbles and sale thereof to jobbers, chain stores, and mail-order houses, uses the
word “Onyx” on labels and in advertising matter descriptive of same; thereby deceiving purchasing public
into erroneous belief that respondent’s product is composed of onyx.
Status: At issue.
Hardie Bros. Co. (Complaint No.1786.) Charge (see charge in complaint No. 1772, below).
Status: At issue.
Havatampa Cigar Co. (Complaint No. 1465.) Charge: That respondent, manufacturing cigars, uses
the words “ Hoye de Cuba “ on cigar bands and containers and the words “Havana,” “Habana,” “Mild
Havana,” and “Mild Habana” on containers of cigars, some of which are made in part of Cuban’ tobacco;
thereby deceiving purchasing public into erroneous belief that respondent’s products are made entirely
of tobacco grown on island of Cuba.
Status: At issue.
Headley Chocolate Co. (Complaint No.1803.) Charge (see charge in com plaint No.1789, p.198).
Stat us: At issue.
Health Laboratories (Inc.). (Complaint No. 1844.) Charge: That respondent, engaged in manufacture
of a proprietary medicine designated “Acidine,” and sale thereof to retail dealers and jobbers, circulates
false and misleading statements relative to curative properties of “Acidine” and its recommendation by
physicians ; thereby deceiving purchasing public into erroneous belief that respondent’s product is a new
discovery, is highly recommended by physicians, is manufactured under supervision of research chemists
and has therapeutic properties.
Status: Awaiting answer.
Heidelberger Confectionery Co. (Complaint No.1772.) Charge: That respondent, engaged in
manufacture of candy, and sale thereof, together with explanatory display cards, to wholesale dealers and
Jobbers, distributes an assortment consisting of pieces of candy to be sold at 1 cent each, together with
larger pieces of candy and/or other merchandise to be given as prizes to purchaser who by chance selects
a piece having a center of a specified color ; thereby supplying and placing in hands of others the means
of conducting a lottery, and tending to injure competitors who do not make provision for the disposal of
their products by such means
Status: At issue
Henry, DeWitt P., Co. (Complaint No.1818.) Charge: That respondent, engaged in manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale dealers and Jobbers,
distributes one assortment of candles to be sold at 1 cent each, and larger pieces of candy and other articles
of merchandise to be given as prizes to purchaser of last piece of candy and to purchaser who by chance
selects a piece having a center of a specified color ; another assortment consisting of wrapped candies to
be sold at prices ranging from 1 to 3 cents, purchaser to pay whatever sum Is set forth on a slip of paper
concealed within wrapper ; and a third assortment consisting of wrapped candies to be sold at 5 cents each,
with larger pieces or boxes of candy to be given to purchaser of last piece of candy in assortment, and
purchaser who by chance selects a piece having a printed slip of paper concealed within wrapper
designating a certain prize ; thereby supplying and placing in hands of others the means of conducting a
lottery and tending to injure competitors who do not make provision for the disposal of their products by
such means.
Status: At issue.
Herman, John C., and Edwin S. (John C. Herman & Co.) (Complaint No. 1443.) Charge: That
respondents, manufacturing cigars in State of Pennsylvania, use the words “Havana Darts” on cigar bands
and containers ; thereby deceiving purchasing public into erroneous belief that respondents’ product is
made of tobacco grown on island of Cuba.
Status: At issue.

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Hobart Estate Co. (Complaint No. 1632.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Homan, John G. (New Science Institute). (Complaint No.1677.) Charge: That respondent, engaged
in manufacture and sale of a surgical appliance designated “ Magic Dot,” circulates false and misleading
statements relative to curative value of the product; thereby deceiving purchasing public into erroneous
belief that respondent’s product is a recent scientific discovery that will cure hernia by means of a socalled “sealing” process.
Status: Awaiting trial.
Hoover Suction Sweeper Co. (Complaint No.238.) Charge: That respondent, engaged in manufacture
and sale of vacuum sweepers, offers gratuities to employees of its competitors and employees of dealers
handling products of competitors, as an inducement to influence them to favor sale of respondent’s
products over those of its competitors, thereby tending to injure competitors who do not offer such
gratuities.
Status: Order to cease and desist, entered May 27, 1910, was vacated by commission order dated May
12, 1928, and case is now before commission for consideration looking forward to issuance of modified
order to cease and desist.
Hoyt Bros. (Inc.). (Complaint No.1510.) Charge: Th at respondent, manufacturing a general line of
pharmaceuticals, cosmetics, toilet preparations. soaps, etc., uses the word “ Castile “ in labeling soap
consisting in substantial part of vegetable oils and animal fats, in some instances to the practical exclusion
of olive oil; thereby deceiving purchasing public into erroneous belief that soap so labeled consists in
preponderant part of olive oil.
Status: On suspense calendar awaiting decision in Docket 1110, in matter of James S. Kirk & Co.
Hurty-Peck & Co. (Complaint No.1826.) Charge: That respondent, engaged in manufacture of fruit
extracts and concentrates, and sale thereof to bottlers, together with electrotype cuts to be used in
advertising drinks prepared therefrom, uses the words “Concord Grape,” “Orange,” “Cherry,” “lemon,”
“Peach,” “Strawberry,” and “Raspberry,” together with a picture representing the fruit, to designate
products that do not contain in substantial quantity the juices of fruits indicated, advertising being
accompanied in some instances by the word “Imitation” or “Imit” in small print, and in others by a
statement to the effect that extracts and concentrates are made of real fruit juices; thereby deceiving
purchasing public into erroneous belief that beverages made from respondent’s products contain a
substantial amount of fruit juices indicated.
Status: At issue.
Idaho Coal Dealers Association, Utah Coal Producers Association, and Retail Fuel Dealers
Association of Utah, and their officers and named members. (Complaint No. 1840.) Charge: That
respondent, Idaho Coal Dealers Association, a voluntary, unincorporated association with a membership
engaged in business as retail coal dealers, Utah Coal Producers Association, a voluntary unincorporated
organization with a membership engaged in business as coal producers, and Retail Fuel Dealers
Association of Utah, a voluntary, unincorporated organization with a membership engaged in business as
retail coal dealers, combine and agree among themselves as follows: (a) Coal producers shall sell only to
retail coal dealers, such rating being determined by possession of yard and office, a stock of coal, a display
sign and scales; (b) such qualified retail dealers shall sell to all domestic consumers, States, counties,
municipalities, and schools, where truck service is required, and to all employees of industrial concerns;
(c) coal producers shall sell retail dealers, railroads, steamship companies, and other industrial plants
provided with an industrial spur, such not to be resold by them for purposes not directly connected with
the industrial enterprise, and the United States Government, States, counties, and municipalities, wherever
an industrial spur is provided ; thereby tending to hinder and suppress free competition to the prejudice
of the public and of respondents’ competitors.
Status: Awaiting answer.
Inecto (Inc.). (Complaint No.1452.) Charge: That respondent, engaged in manufacture and sale of hair
dye designated “Inecto Rapid NoTox,” uses fictitious testimonials and circulates false and misleading
statements relative to nature and characteristics of product ; thereby deceiving purchasing public into
erroneous belief that coloring content of dye penetrates the hair, thereby insur-

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ing a permanent coloration and that dye is harmless, never having caused any deleterious effect to the
scalp.
Status: In course of trial.
International Gum Corporation. (Complaint No.1799.) Charge: That respondent, engaged in
manufacture of chewing gum and sale thereof, together with explanatory display cards, to wholesale
dealers and jobbers, distributes an assortment consisting of wrapped pieces of chewing gum to be sold at
1 cent each, and larger pieces of chewing gum and other pieces of merchandise to be given as prizes to
purchaser of last piece of gum in assortment, and to purchaser who by chance selects a piece of a specified
color; thereby supplying and placing in hands of others means of conducting a lottery, and tending to
injure competitors who do not make provision for the disposal of their products by such means.
Status: At issue, commission to issue findings and order to cease and desist which respondent will obey,
if case involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Jenkins, Edward L., and Auten, Myrtle E., partners, trading as Cheri. (Complaint No. 1850.) Charge:
That respondents engaged in sale of toilet articles since 1929, represent themselves to be manufacturers
and to be owners of an old established business world-wide in extent, employing a chemist of wide
experience and a beauty expert designated as “Edmyr Janaut”; thereby deceiving purchasing public Into
erroneous belief that respondents are manufacturers, that prices quoted are exclusive of middleman’s
profit, that they are conducting a large, old established business and employing scientific and trained
workers.
Status: Awaiting answer.
Johnson, D. V. (Tennessee Grain Co. and Tennessee Milling Co.) (Complaint No.1598.) Charge:
That respondents, engaged In buying and selling grain, buying wheat flour from millers and mixing it with
other ingredients to produce the commodity known as self-rising flour, and to a small extent grinding grain
for feed for stock and for whole-wheat flour, uses the words “ Milling “ and “ Grain “ in trade names, and
uses in advertising matter statements to the effect that respondents are manufacturers of soft wheat flour;
thereby deceiving purchasing public into erroneous belief that respondents manufacture the product they
sell, and that prices quoted are exclusive of middleman’s profit.
Status: Awaiting briefs.
Johnson-Fluker Co. (Complaint No.1831.) Charge: That respondent, engaged In manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes an assortment of candles to be sold at 1 cent each, and larger pieces of candy and other articles
of merchandise to be given as prizes to purchaser of last piece of candy in assortment and to purchaser
who by chance selects a piece of candy having a center of a specified color ; another assortment consisting
of wrapped candles to be sold at prices ranging from 1 to 5 cents, purchaser to pay whatever sum Is set
forth on a slip of paper concealed within wrapper ; and a third assortment of wrapped candles to be sold
at prices ranging from 1 to 3 cents, purchaser to pay whatever sum is set forth on a slip of paper concealed
within wrapper ; thereby supplying and placing in the hands of others the means of conducting a lottery,
and tending to injure competitors who do not make provision for the disposal of their products by such
means.
Status: At issue, commission to Issue findings and order to cease and desist which respondent will obey,
If case Involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Johnson, Walter H., Co. (Complaint No.1817.) Charge: That respondent, engaged in manufacture
of candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes one assortment consisting of wrapped pieces of candy to be sold at prices ranging from 1 to
5 cents, and a similar assortment to be sold at prices ranging from 1 to 3 cents, purchaser to pay whatever
sum is set forth on a slip of paper concealed within wrapper; and a third assortment consisting of wrapped
candies to be sold at 5 cents each, certain of which have concealed within wrapper a slip of paper stating
that such piece is given free of charge to purchaser who by chance makes this selection; thereby supplying
and placing in hands of others the means of conducting a lottery, and tending to injure competitors who
do not make provision for the disposal of their products by such means.
Status: At issue.

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Kalb, Sam, and Kalb, George, partners (Kalb Bros.). (Complaint No. 1801). Charge (see charge In
complaint No.1789, p.198).
Status: Awaiting answer.
Karcher, A., Candy Co. (Complaint No.1849.) Charge (see charge in com plaint No.1772, p.193).
Status: Awaiting answer.
Kemper Silk Co. (Inc.) (Complaint No. 1685.) Charge: That respondent, engaged in sale of textile
fabrics to retail dealers and to garment makers, falsely claims to be a manufacturer, and uses on labels and
in advertising matter the trade names “Sparkal Satin” and “Taffet-Ray” to designate a product made of
rayon or of cotton and rayon; thereby deceiving purchasing public into erroneous belief that prices quoted
are exclusive of middleman’s profit, and that respondents products are made of silk.
Status: Awaiting respondent’s brief.
Keppel, R. F., & Bro. (Inc.) (Complaint No.1816.) Charge: That respondent, engaged in manufacture
of candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes an assortment of candy with larger pieces of candy and other articles of merchandise to be
given as prizes to purchaser of last piece of candy in assortment, and to purchaser who by chance selects
a piece of candy having a center of a specified color ; another assortment consisting of wrapped candies
to be sold at prices ranging from 1 to 5 cents, purchaser to pay whatever sum is set forth on a slip of paper
concealed within wrapper; and a third, assortment consisting of wrapped candies to be sold at 1 cent each,
purchaser who by chance selects a piece containing money concealed within wrapper to receive that
money as a prize ; thereby supplying and placing in the hands of others the means of conducting a lottery
and tending to injure competitors who do not make provision for the disposal of their products by such
means.
Status: At issue.
Kesterson Lumber Co. (Complaint No.1631.) Charge (see charge in complaint No. 1620, p.197).
Status: Awaiting respondent’s brief.
Klamath Lumber & Box Co. (Complaint No.1650.) Charge (see charge in complaint No. 1620, p.197).
Status: Awaiting respondent’s brief.
Knapik and Erickson (Knapik, Thomas, and Erickson, George W., partners). (Complaint No. 1750.)
Charge: That respondents, engaged in sale of leather goods to wholesale dealers, use the trade name of
“Mulelde” to designate a cotton fabric finished so as to simulate leather, and furnish to the purchaser for
use in labeling gloves and mittens manufactured therefrom, tags and labels bearing the words “MuleldeNon Slip-Patents Pending”; thereby deceiving purchasing public into erroneous belief that respondents’
products and the articles made therefrom, are made from the hides or skins of animals.
Status: At issue.
Kotex Co. (Complaint No.1782.) Charge: That respondent, engaged in sale of sanitary supplies to
wholesale and retail dealers, advertises that a product designated “Kotex” contains cellu cotton absorbent
; thereby deceiving purchasing public into erroneous belief that content of respondent’s product is derived
from the cotton plant.
Status: At issue.
La Lasine International (Inc.). (Complaint No.1845.) Charge: That respondent, engaged in
manufacture of an antiseptic designated “La Lasine” and sale thereof to wholesale dealers, circulates false
and misleading statements relative to its curative properties, lists some 30 diseases that may be caused by
the germs that La Lasine destroys, uses the words “Paris, Rome, New York,” and “The Famous French
Formula” with descriptive French words on labels and in advertising matter together with claims of
indorsement by United States Government ; thereby deceiving purchasing public into erroneous belief that
respondent’s product is imported or made in accordance with a French formula, has been tested or
indorsed by United States Government, and possesses therapeutic value.
Status: At issue.
Lamm Lumber Co. (Complaint No. 1651.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.

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Lassen Lumber & Box Co. (Complaint No.1643.) Charge (see charge In complaint No. 1620, below).
Status: Awaiting respondent’s brief.
Lazier, J. F., Manufacturing Co. (Inc.). (Complaint No.1758.) Charge: That respondent, engaged
In manufacture of artificially flavored extracts and concentrates, and sale thereof to bottlers, together with
caps and labels for use therewith, uses the trade names “Little Boy Blue Grape,” “Cinderella Orange,” and
“Peter Pan Cherry,” and uses other advertising matter featuring names of these fruits; thereby deceiving
purchasing public into erroneous belief that respondent’s products are made from fruits or juices indicated.
Status: At issue.
Leadite Co. (Inc.). (Complaint No.1730.) Charge: That respondent, engaged in manufacture of
compounds used for making joints in cast iron, bell, and spigot pipes, uses the word “ Leadite “ in
corporate name, and on labels and in advertising matter descriptive of product ; thereby deceiving
purchasing public into erroneous belief that respondent’s product is composed in whole or in part of lead.
Status: At issue.
Lewis Brothers (Inc.). (Complaint No.1761.) Charge (see charge in complaint No.1724, p.212).
Status: At issue.
Lewis, Edgar P., & Son (Inc.). (Complaint No.1813.) Charge (see charge In complaint No.1789,
p.198).
Status: At issue.
Libbey, W. S., Co. (Complaint No.1824.) Charge That respondent, engaged in manufacture of
blankets and sale thereof to jobbers and retail dealers through a sales agency in New York, uses the trade
name “Golden Fleece,” and labels and advertises blankets not containing over 5 per cent of wool as
woolen blankets, sometimes using the words “part wool,” together with a picture representing Jason
setting forth on his quest of the “Golden Fleece,” thereby deceiving purchasing public into erroneous
belief that respondent’s products consist in substantial part of wool.
Status: At issue.
Liederman, Earle E. (Complaint No.1771.) Charge: That respondent, furnishing courses of
instructions in physical culture, circulates false and misleading statements relative to regular prices of
course, articles, accessory thereto, that are alleged to be given free of charge, and individual supervision
; thereby deceiving purchasing public into erroneous belief that cost of accessory articles is not included
in price paid for course, that special requirements of individual pupils are considered, and that special
reduced prices are being quoted.
Status: Awaiting respondent’s brief.
Likely Lumber Co. (Complaint No.1627.) Charge (see charge in complaint No.1020, below).
Status: Awaiting respondent’s brief.
Limoges China Co., Sebring Pottery Co., Salem China Co., and Crescent China Ca. (Complaint
No.1570.) Charge: That respondents, manufactures of earthenware, chinaware, porcelainware, and
pottery, advise competitors by letter that respondents hold a patent covering transparent yellow glaze ware
and that they intend to prosecute any manufacture of such ware as an infringement on said patent, and
insert in trade magazines advertisements headed “Warning,” stating in effect that respondents have a
patent pending upon transparent yellow glaze ware, and advising purchasers to insist upon manufacturers
furnishing bond sufficient to cover any liability purchasers might incur; thereby deceiving purchasing
public into erroneous belief that respondents have patents on such ware or have applications pending.
Status: In course of trial.
Lomax, H. L. (Lomax Rug Mills). (Complaint No.1715.) Charge: That respondent, engaged in the
sale of rugs, uses the word “ Mills “ in firm name, and advertises sales direct from mills to customer ;
thereby deceiving purchasing public into erroneous belief that respondent is a manufacturer, and that the
prices quoted are exclusive of the middleman’s profit.
Status: Before commission for final determination.
Long-Bell Lumber Co. (Complaint No.1620.) Charge: That respondent, engaged in manufacture and
sale of lumber products, advertises certain products produced from trees botanically designated “ Pinus
ponderosa “ under name and designation “White Pine” with or without addition before such name of one
or another of the words “California,” “Arizona,” “Western,” or “New Mex-

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ico”; thereby deceiving purchasing public into erroneous belief that such products belong to pine group
known as “Pinus strobus” or “Pinus lamber tiana,” either of which is superior to “Pinus ponderosa” and
commands a higher market price.
Status: Awaiting briefs.
Luden’s (Inc.). (Complaint No. 1789.) Charge: That respondent, engaged in manufacture of candy
and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers, distributes an
assortment consisting of pieces of candy to be sold at 1 cent each, and larger pieces of candy and other
pieces of merchandise to be given as prizes to purchaser of last piece of candy in assortment, and to
purchaser who by chance selects a piece having a center of a specified color ; thereby supplying and
placing in the hands of others means of conducting a lottery, and tending to injure competitors who do not
make provision for the disposal of their products by such means.
Status: At issue.
Macfadden Publications (Inc.). (Complaint No. 1549.) Charge: That respondent, engaged in
controlling and directing other corporations publishing magazines of various kinds, in the process of
circulization quotes a fictitious price, in excess of that at which the magazine subscriptions are usually
sold, as the regular price, quoting regular price as a special offer to recipient of circular; thereby deceiving
purchasing public Into erroneous belief that a special, reduced price is being quoted.
In the course of the trial of this case, respondent appealed to Supreme Court of District of Columbia
and Court of Appeals of District of Columbia for a writ of mandamus requiring commission to issue
certain subpoenas duces tecum in behalf of respondent. Petition was denied in both courts.
Status: Testimony closed ; awaiting examiner’s report.
Madison, Dr. Robert, Laboratories (Inc.), and Madison, Rodney. (Complaint No. 1507.) Charge:
That respondents, engaged in sale of an electric magnetic device designated “Vitrona,” circulate false and
misleading statements relative to curative properties of respondents’ device, and the standing of Rodney
Madison as physician and inventor; thereby deceiving purchasing public into erroneous belief that
respondents’ device is result of scientific research, and possesses therapeutic value.
Status: In course of trial.
Madison Mills (Inc.). (Complaint No. 1776.) Charge: That respondent, engaged in manufacture and
sale of men’s shirts. substitutes other designs or patterns when those ordered by purchaser are not in stock,
without tendering purchaser a refund or giving him an opportunity to make “lien” selections, and refuses
to refund purchase price upon return of same, while guaranteeing in advertising matter that purchaser’s
money will be refunded without question if products are not in fabric, in fit, and in price the best value
ever seen by purchaser ; thereby deceiving purchasing public into erroneous belief that orders will be
satisfactorily filled as given, or that appropriate adjustment will be made.
Status: In course of trial.
Madison Paint Co. (Complaint No.1573.) Charge: That respondent, selling paint, falsely claims to be
a manufacturer, and advertises and represents that his product is made in whole or in part of specified
ingredients, that go to make best quality of paint, thereby deceiving purchasing public into erroneous
belief that prices quoted are exclusive of middleman’s profits and that respondent is selling a high-grade
paint, consisting in whole or in part of those ingredients that are used in best-quality paints.
Status: At issue.
Magnecoil Company (Inc.). (Complaint No.1846.) Charge: That respondent, engaged in manufacture
and sale of electric blankets, circulates false and misleading statements regarding cures effected by their
use as a cover for human body, their indorsement by institutions of medical and scientific research, and
respondent’s laboratories and consulting board of medical experts ; thereby deceiving purchasing public
into erroneous belief that respondent operates a large factory with a laboratory and a consulting staff of
medical experts, and that respondent’s products possess therapeutic properties other than those possessed
by reason of the heat generated.
Status: Awaiting answer.
Manchester Shoe Co., Dustin, Forrest, and Rose, C. G. (Complaint No. 1561.) Charge: That
respondent, engaged in sale of shoes, circulates false and misleading statements to the effect that
respondent is a manufacturer and that

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shoes he sells are custom made; thereby deceiving purchasing public into erroneous belief’ that prices
quoted are exclusive of middleman’s profit, and that shoes delivered are made according to measurements
taken by agents.
Status: Before commission for final determination.
Margarella, Pasquale (Complaint No.1790.) Charge (see charge in com plaint No.1789, p. 198).
Status: At issue, commission to issue findings and order to cease and desist, which respondent will
obey, If case involving methods of competition similar to those used by respondent be affirmed by A
United States court.
Matthews Co. (Inc.). (Complaint No. 1751.) Charge (see charge in com plaint No.1734, p. 209).
Status: At Issue.
McCarthy, Francis J. (Wautaga Milling Co., Modern Milling Co., McCarthy, F. J., Milling Co.,
Southern Flour Mills Co., and Star Mills.) (Complaint No. 1601.) Charge: That respondent, engaged in
mixing and blending flour and “Self-Rising Flour,” uses the words “Mills” and “Milling” in firm names
and in advertising matter; thereby deceiving purchasing public into erroneous belief that respondents
manufacture the products they sell, and that prices quoted are exclusive of middleman’s profit.
Status: Awaiting briefs.
McCloud River Lumber Co. (Complaint No.1635.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
McKesson & Robbins (Inc.). (Complaint No. 1689.) Charge: Unlawful restraint and monopoly in that
respondent, engaged in manufacture and sale of drugs and proprietary medicines, acquired capital stock
of Bedsole-Colvin Drug Co., Churchill Co., Eastern Drug Co., Farrand, William & Clark, Faxon & Gallagher Drug Co., Fuller-Morrison Co., Gibson-Snow Co. (Inc.), Croover-Stewart Drug Co., Hall-Van
Gorder Co., Kirk-Geary & Co. (Inc.), Langley & Mechaels Co., Minneapolis Drug Co., Murray Drug Co.,
Roeber-Kuebler Co., Southern Drug Co., Western Wholesale Drug Co. (Inc.), Alfred Vogeler Drug Co.,
J. W. Crodus Drug Co., Hornick, More & Porterfield, Huntington Drug Co., C. J. Lincoln Co., Ogden
Wholesale Drug Co., Parker, Blake Co. (Ltd.), Peter Neat Richardson Co., J. B. Riley Drug Co., Roanoke
Drug Co., and Spurlock-Neal Co., thereby tending to substantially less sen competition, restrain
commerce, and create a monopoly, In alleged violation of section 7 of the Clayton Act.
Status: At issue.
McLaren Consolidated Cone Corporation. (Complaint No.1830.) Charge: That respondent, engaged
in leasing or licensing machinery for manufacture of ice-cream cones and cup pastries, leases same on
condition that licensee shall not use like machinery handled by any competitor of respondent, thereby
tending to substantially lessen competition and create a monopoly in alleged violation of section 3 of the
Clayton Act.
Status: At issue.
Mechanical Manufacturing Co., O’Hara, R., and Mayfield, W A. (Complaint No. 1727.) Charge:
That respondent, Mechanical Manufacturing Co., engaged in manufacture of meat packing house
machinery and railway equipment endeavors to induce railway companies to place orders for equipment
by promising through respondents R. O’Hara and W A. Mayfield, managers of the traffic department of
Swift & Co., certain volumes of freight traffic from that company in return for patronage, such traffic to
be withdrawn if patronage is withheld; thereby tending to lessen free flow of competition in sale of railway
equipment, and tending to injure competitors who do not tender reciprocal patronage.
Status: Awaiting briefs.
Mechanics Furniture Co. (Complaint No.1516.) Charge: That respondent, manufacturing furniture,
uses the words “Walnut,” “Mahogany,” “Mahogany and American Walnut,” etc., to designate furniture
made of wood derived from trees other than those of the walnut or mahogany family with exception of a
walnut or mahogany veneer on exposed parts, about one twenty-eighth of an inch in thickness; thereby
deceiving purchasing public into erroneous belief that furniture so designated is composed entirely of
walnut or mahogany wood.
Status: Before commission for final determination.
Mennie, F. L. (Mineral Coal Saver Co., Mennie Manufacturing Co., and M. and K. Manufacturing Co.)
(Complaint No. 1770.) Charge: That respondent, engaged in manufacture and sale of a compound
designated “Mineral Coal

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Saver,” which is composed of 97 per cent ordinary salt (worth at the most 10 cents per pound) and 1 ½
per cent of deck lead, iron oxide used as coating, and other chemicals in very small proportions, sells this
product at $1.25 per pound package, with promise of refund to dissatisfied customers upon receipt of
complaints addressed to a certain box number, through which number it proves to be impossible to locate
respondent, representing that it will prevent and remove soot and will give 20 per cent more heat with less
coal ; thereby deceiving purchasing public into erroneous belief that respondent’s product is a valuable
chemical compound having a greater capacity for reducing soot than that possessed by common salt.
Status: In course of trial.
Mercerizer Association of America, its officers and members. (Complaint No.1755.) Charge: That
respondent, a voluntary, unincorporated association of members engaged in manufacture of mercerized
ply cotton yarn, and sale thereof to manufacturers of hosiery and underwear, has adopted and employs a
system for maintenance of uniform resale prices, arbitrarily advancing such prices without respect to
cotton market or cost of material; thereby tending to hinder and suppress free competition to the prejudice
of the public and of respondent’s competitors.
Status: At issue.
Metro Chocolate Co. (Inc.). (Complaint No. 1808.) Charge (see charge in complaint No.1789, p.198).
Status: At issue, commission to issue findings and order to cease and desist which respondent will obey,
if case involving methods of competition similar to those used by respondent be affirmed by a United
States court.
Miller, Louis A. (Southern Milling Co.), (Complaint No.1617.) Charge: That respondent, engaged in
sale of flour, uses trade name “Southern Milling Company” and circulates statements implying operation
of a mill wherein flour sold is ground and manufactured; thereby deceiving purchasing public into
erroneous belief that respondent manufactures product he sells, and that price quoted is exclusive of
middleman’s profit.
Status: Awaiting answer.
Minter Bros. (Minter, Clayton A., and Minter, Ira W.). (Complaint No. 1785.) Charge: That
respondents, manufacturing and selling candy together with explanatory display cards, to wholesale
dealers and jobbers, distributes an assortment consisting of wrapped candies to be sold at prices ranging
from 1 to 5 cents, and a similar assortment with prices ranging from 1 to 3 cents, the purchaser to pay
whatever sum is set forth on a printed slip of paper concealed within the wrapper ; thereby supplying and
placing in the hands of others the means of conducting a lottery, and tending to injure competitors who
do not make provision for the disposal of their products by such means.
Status: At issue, commission to issue findings and order to cease and desist, which respondent will
obey, if case involving methods of competition similar to those used by respondent be affirmed by a
United States court.
Mohawk Asbestos Slate Co. (Inc.). (Complaint No.1767.) Charge: That respondent, engaged in
manufacture and sale of shingles manufactured of Portland cement (85 per cent) and asbestos (15 per
cent), uses the words “Asbestos Slate” in corporate name and in advertising matter ; thereby deceiving
purchasing public into erroneous belief that respondent’s products are asbestos slate shingles.
Status: In course of trial.
Mulhens & Kropff (Inc.). (Complaint No.1531.) Charge: That respondent, engaged in manufacture
and sale of chemical and toilet products, advertises, offers, and sells an “Eau de Cologne” which it labels,
marks, dresses, and packs in simulation of the Eau de Cologne “4711,” originally produced and sold by
the long-established and favorably known house of Mulhens; thereby deceiving purchasing public into
erroneous belief that respondent’s Eau de Cologne is the genuine Eau de Cologne now manufactured and
sold by Ferd. Mulhens
Status: At issue.
Murray, Arthur (Arthur Murray School of Dancing.) Complaint No.1723.) Charge: That respondent,
engaged in furnishing courses of instructions in dancing, circulates false and misleading statements
regarding regular price of course, well-known persons who have subscribed to it, its indorsement by
United States Naval Academy, and personal supervision exercised by respondent ; thereby deceiving
purchasing public into erroneous belief that pupils are under personal supervision of respondent, that
special, reduced prices are

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being quoted and that the United States Naval Academy has had its instructors trained therein.
Status: Before commission for final determination.
Mutual Publishing Co., Shelton, C. J. Bufton, H. A., Publishers Acceptance Corporation, Neargard,
P. I., Thompson, T. E., Critzinger, Carl, Educators Service Association, Thomas, A. C., and Bufton, H.
A. (Complaint No.1571.)
Charge: That respondent, engaged in publication and sale of encyclopedias, circulates false and
misleading statements relative to educators compiling it, regular price and quality of books and cost of
extension service ; thereby deceiving purchasing public into erroneous belief that books are printed on
good paper in leather bindings, were recently complied by well-known educators, that price quoted is a
special, reduced price, and that certain sets are given free of charge with a subscription to extension
service.
Status: At issue.
Nashville Roller Mills, John Schultz, Louis Baujan, and Virgil S. Typper. (Complaint No.1599.)
Charge: That respondents, engaged in blending wheat flour with leavening agents such as baking powder
to produce what is known as “Self-Rising Flour,” use the words “mill” and “milling,” in firm name, and
use in advertising matter statements to the effect that respondent is a manufacturer ; thereby deceiving
purchasing public into erroneous belief that respondents manufacture products they sell, and that prices
quoted are exclusive of middleman’s profit.
Status: Awaiting briefs.
National Candy Co. (Inc.). (Complaint No.1802.) Charge: That respondent, manufacturing and selling
candy, together with explanatory display cards, to wholesale and retail dealers, distributes an assortment
consisting of pieces of candy to be sold at the rate of two for 1 cent, and pieces of merchandise to be given
as prizes to purchaser of last piece of candy in assortment, and to purchaser who by chance selects a piece
having a center of a specified color; thereby supplying and placing in hands of others means of conducting
a lottery, and tending to injure competitors who do not make provision for the disposal of their products
by such means.
Status: At issue.
National Leather & Shoe Finders’ Association, its officers, executive committee, and members;
Greater Boston and New England Leather and Finders’ Credit Bureau; Northwestern Leather and Finders’
Credit Bureau; Northern New Jersey Leather and Finders’ Credit Bureau; Wisconsin Leather and Finders’
Credit Bureau; New York State Leather and Finders’ Credit Bureau; Shoe Finders’ Board of Trade;
Colorado Leather and Finder’s Credit Bureau; Pittsburgh Leather and Finders’ Credit Bureau;
Philadelphia Leather and Finders’ Credit Bureau; Baltimore Leather and Finders’ Credit Bureau; Greater
New York Leather and Finders’ Credit Bureau; Capital Leather and Finders’ Credit Bureau of Albany,
N. Y.; Michigan Leather and Finders’ Credit Bureau of Detroit ; Illinois Leather and Finders’ Credit
Bureau (Inc.); Cleveland Leather and Finders’ Credit Bureau ; Toledo Leather and Finders’ Credit Bureau;
Cincinnati Leather and Finders’ Credit Bureau; St. Louis Leather and Finders’ Credit Bureau; Connecticut
Leather and Finders’ Credit Bureau; Virginia Leather and Finders’ Credit Bureau; Iowa and Nebraska
Leather and Finders’ Credit Bureau; Missouri, Kansas, and Arkansas Leather and Finders’ Credit Bureau;
Illinois State Leather and Finders’ Credit Bureau; Louisville Leather and Finders’ Credit Bureau; Twin
Cities Leather and Finders’ Credit Bureau; Rubber Heel Club of America and the officers and members
thereof. (Complaint No.1263.) Charge: That respondents, engaged in manufacture and sale of leather to
retail dealers, have adopted and employ a system for maintenance of uniform resale prices, refusing to sell
except to so-called “legitimate” dealers; that is, those dealers selling their findings and repair service at
prices respondents deem sufficiently high to insure a satisfactory profit; thereby tending to hinder and
suppress free competition to the prejudice of the public and of respondents’ competitors.
Status: At issue.
National Pastry Products Corporation. (Complaint No. 1700.) Charge: Unlawful restraint and
monopoly in that respondent, engaged in production of pastry products, confections, and ice-cream cones,
acquired capital stock of United Products Co. (Inc.), Old South Cone Co. (Inc.), Modern Baking Co.
(Inc.), Preferred Baking Co. (Inc.), and Atlantic Cone Co. (Inc.); thereby tending to substantially lessen
competition, restrain commerce, and create a monopoly, in alleged violation of section 7 of the Clayton
Act.

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Status: At issue.
National Silver Co., Samuel E Bernstein (lnc.), and Samuel E Bernstein. (Complaint No. 1704.)
Charge: That respondents, engaged in sale of white metal tableware to wholesale and retail dealers, use
the words “ Nickle Silver “ In labeling same; thereby deceiving purchasing public into erroneous belief
that respondents’ product contains sliver.
Status: At issue.
Natural Eyesight Institute (Inc.). (Complaint No.1838.) Charge: That respondent, engaged in sale
and distribution of a systematic training for improving eyesight, uses the word “Institute” in corporate
name and advertises that the system, largely by virtue of an instrument called an “eye normalizer,” will
remove cause of defective vision and initiate progressive improvement which will enable user to discard
glasses; thereby deceiving purchasing public into erroneous belief that respondent is an institute having
facilities for instructing, diagnosing, treating, and conducting scientific investigations, and that benefits
claimed are possible of accomplishment through respondent’s training.
Status: At Issue.
Natural Health Association (lnc.), Botwen, Morris, and Ross, Edwin J. (Complaint No. 1577.)
Charge: That respondents, engaged in publication and sale of certain books dealing with preservation of
health through diet and exercise, use the word “Association” in firm name, and circulate numerous false
and misleading statements relative to authors and indorser of their books; thereby deceiving purchasing
public into erroneous belief that respondent is a successor to American Health Association, and is
conducting a campaign in interest of better health, that books contain material indorsed by United States
Government and contributions made by Doctors Carrel, Wiley, Carroff, Copeland, and Mayo, and that
purchaser of the book becomes a member of alleged association in a position to receive expert advice on
how to become strong and healthy.
Status: In course of trial.
Nessler, Charles (C. Nestle Co. and Society for the Advancement of Hair and Beauty Science) and
Nestle-LeMur Co. (Inc.) (Complaint No. 1833.) Charge: That respondent, Charles Nessler, engaged in
manufacture of hair-waving machines and of appliances and instruments for use In connection therewith,
organized and maintains an association designated as “Society for the Advancement of Hair and Beauty
Science” purported to be a disinterested association publishing a beauty culture magazine, through which
service advice is furnished to the trade relative to beauty culture, examinations of beauty parlor operators
are conducted, certificates and badges being issued to all accredited operators who use the “Text-OMeter,” a device invented by respondent Charles Nessler, and the merits of various new appliances are
passed upon, those by respondent Charles Nessler being cited as especially meritorious; thereby deceiving
purchasing public into erroneous belief that inventions of Charles Nessler are approved by disinterested
experts above those of any other inventor of beauty culture devices, and tending to injure competitors who
do not exploit sale of their products through channels purporting to represent the impartial
recommendation of a body of trained individuals.
Status: At issue.
New England Electrical Fixture Co. (lnc.), Esther Fistel, Abraham Fistel and Harry Parker;
(Complaint No. 1749.) Charge: That respondents, engaged in sale of electric-lamp fixtures and parts
thereof, falsely represent that a lighting unit (sold by other dealers for approximately $6), sold on the
installment plan by respondents for approximately $16.50, will consume less electricity than that used by
prospective purchaser, and secure signatures to contracts of sale on the pretense of securing signatures to
a receipt for a unit to be left on trial, placing attachments on the property of alleged purchaser upon failure
of payment; thereby perpetrating a fraud and deceiving purchasing public into erroneous belief that
respondent’s product is a superior unit, sold at a reasonable price.
Status: At issue.
No-Ring Corporation, American Druggists’ Syndicate (Inc.), and Vadsco Sales Corporation.
(Complaint No. 1815.) Charge: That respondent, American Druggists’ Syndicate (lnc.), engaged in
manufacture of a cleaning preparation, formula of which is owned by No-Ring Corporation, and sale
thereof to wholesale and retail dealers largely through respondent Vadsco Sales Corporation, designates
preparation “No Ring,” uses the words “No Ring” in corporate

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name, and advertises product as one of “chemistry’s wonders,” its cleansing power and not the rubbing
removing the spots ; thereby deceiving purchasing public into erroneous belief that cleaning fluid has a
capacity beyond that of any other cleaner for removing spots without a ring.
Status: Awaiting trial.
NuGrape Co. of America. (Complaint No.1576.) Charge: That respondent, manufacturing a
concentrate consisting in substantial part of ingredients other than fruit or juice of the grape, uses the “Nu
Grape” on labels and in advertising matter descriptive of same; thereby deceiving purchasing public into
erroneous belief that respondent’s product consists in whole or in substantial part of fruit or juice of the
grape.
Status: In course of trial.
Oak Valley Lumber Co. (Complaint No. 1666.) Charge (see charge in complaint No. 1620, p.197).
Status: Awaiting respondent’s brief.
Old Colony Candy Co. (Complaint No.1814.) Charge (see charge in complaint No. 1725, p. 207).
Status: At issue.
Old Hickory Mills, J. Frank Foster, James Willis, R. W Condon, and D. L. Anderson. (Complaint
No.1607.) Charge: That respondents, engaged in selling flour purchased from the Mero Mills to retail
grocers, use the words “Mills” and “Milling” in trade names, letterheads, etc., and use in advertising
matter statements to the effect that respondents are manufacturers ; thereby deceiving purchasing public
into erroneous belief that respondents manufacture products they sell, amid that prices quoted are
exclusive of middle-man’s profit.
Status: At issue on amended complaint.
Overland Candy Co. (Complaint No.1822.) Charge (see charge in com plaint No.1785, p. 200).
Status: At issue.
Owen-Oregon Lumber Co. (Complaint No. 1645.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Pacific Door and Sash Co. (Complaint No.1737.) Charge,: Unfair methods of competition are charged
in that respondent, engaged in sale of sashes, doors, and other millwork to lumber dealers, represents
certain of the products as mahogany, and/or Philippine Mahogany ; thereby deceiving purchasing public
into erroneous belief that such products are derived from wood of trees of the mahogany family.
Status: In course of trial.
Paradise Lumber Co. (Complaint No. 1638.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Paiton, Frank, Lumber Co. (Complaint No. 1738.) Charge (see charge in complaint No.1736, p.186).
Status: In course of trial.
Pecheur Lozenge Co. (Complaint No. 1798.) Charge (see charge in com plaint No.1792, p.182),
Status: At issue.
Peet Bros. Co. (Complaint No.1426.) Charge: That respondent, manufacturing soaps, uses the words
“Crystal Cocoa,” “Hardwater Castile” “Cocoa Castile,” “Defender Castile” find “Rainbo Castile” in
labeling and advertising soap consisting in substantial part of vegetable oils and animal fats, In some
instances to the exclusion of olive oil; thereby deceiving purchasing public into erroneous belief that
respondent’s products consist in predominant part of olive oil.
Status: On suspense calendar to await decision of court of last resort in Docket 1110, in matter of James
S. Kirk & Co.
Pelican Bay Lumber. Co. (Complaint No.1652.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Pelton, Albert L., trading as Ralston University Press. (Complaint No. 1615.) Charge: That
respondent. engaged in sale of books, circulates false and misleading statements relative to what may be
accomplished by anyone having knowledge of the information, sec rets, methods, and suggestions contained therein; thereby deceiving purchasing public into erroneous belief that a study of respondent’s
products will enable anyone to enjoy perfect health,
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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

be immune from incurable diseases, and cured of those already contracted, and to develop physical and
mental powers by which others may be dominated and controlled.
Status: Awaiting respondent’s brief.
Penick & Ford (Ltd.) and Penick & Ford Sales Co. (Inc.). (Complaint No. 1580.) Charge: That
respondents, manufacturing cane sirup, corn sirup, blended sirups, and molasses, has adopted and employs
a system for maintenance of uniform resale prices, furnishes a sales agent to accompany agents of
wholesale customers when calling on prospective customers, sends agents to canvass the retail trade of
competitors of wholesale customers and purchases goods of competitors of wholesale customers selling
same below cost, in an effort to further wholesale customers’ business and establish what respondents
designate as the 100 per cent policy ; that is, that wholesale customers purchase from respondents only,
this sales cooperation being denied such customers who do not sell respondents’ products exclusively ;
thereby tending to hinder and suppress free competition, to the prejudice of the public and of respondents’
competitors.
Status: At issue.
Penman Peak Lumber Co. (Complaint No.1628.) Charge (see charge in plaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Perfect Voice Institute and Cook, T. G. (Complaint No.1503.) Charge: That respondent, furnishing
courses of instructions in voice culture, quotes fictitious prices and makes false and misleading statements
based on a so-called Feuchtinger discovery of functions of the hyoglossus muscle; thereby deceiving
purchasing public into erroneous belief that special, reduced prices are being quoted and that the
hyoglossus muscle developed in accordance with respondent’s instructions will make it possible for
everyone to be successful in his vocal studies.
Status: Awaiting respondent’s brief.
Perpetual Encyclopedia Corporation, North American Publishing Co. (lnc.), Source Research Council
(lnc.), Frank J. Mackey, H. F. McGee, Harold C. Sherman, Robert T. Mackey, Edmund P. Rucker, Warren
T. Davis, John J. Hennessey, Leonard C. Maier, Turney T. Cull), Russell O. Priebe, Emma L. Priebe,
William H. Gorham, and George A. Seller. (Complaint No. 1371.) Charge: That respondents republished
without substantial change the “Home and School Reference Work” (originally copyrighted in 1912 or
1915) under different names and as a new and up-to-date (1924) edition, employing with-out right the
names of attorneys, fictitious corporate organizations, and collection agencies to further sale of said
publication and to assist in coercing and blackmailing purchasers into payment of money on orders or
contracts, substituting late copyright registration dates for actual date of such registration, falsely stating
that well-known educators, scientists, and public officials are members of editorial staff and contributors,
misrepresenting and grossly exaggerating sales prices, obtaining signed orders by subterfuge,
misrepresenting quality of paper and binding, and offering additional books or extension service “free”
when price of this purported gratuity is included in price paid for the books; thereby deceiving purchasing
public into erroneous belief that respondents’ product is an up-to-date superior publication, edited by wellknown educators ; that reduced prices are being quoted and gratuities given.
Status: Awaiting briefs.
Peterson, H. Josephine, doing business under name of Peterson Institute of Diet. (Complaint No.1671.)
Charge: That respondent, engaged in conducting dietary treatments and furnishing courses of instructions
by correspondence, circulates false and misleading statements relative to curative value of diet; thereby
deceiving purchasing public into erroneous belief that cancer and deafness are caused by imperfect
nutrition and that both of them, together with many other diseases, can be cured by treatment by
respondent.
Status: Awaiting briefs.
Philadelphia Leather House, trading as Western Tanning Co. (Complaint No.1835.) Charge: That
respondent, engaged in distribution of leather, shoe findings, and shoe machinery, as a jobber under name
of Philadelphia Leather House and as proprietor of a mail-order business with retail dealers under firm
name of Western Tanning Co., advertises “Buy Direct from Us and Save the Difference “ and “ We Sell
Our Leather Direct to the Man Who Uses It,” etc. ; thereby deceiving purchasing public into erroneous
belief that

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respondent operates a tannery or factory, and that prices quoted are exclusive of middleman’s profit.
Status: At issue.
Pickering Lumber Co. (Complaint No. 1641.) Charge (see charge in complaint No. 1620, p.197).
Status: Awaiting respondent’s brief.
Poust, Abraham, and Poust, Jack, partners, trading as Pilzner Importing Co. and Pilzner Products Co.
(Complaint No.1842.) Charge: That respondents, engaged in distribution of malt sirup products,
purchased from manufacturer, Jacob Ruppert Brewing Co., New York City, to wholesale and retail
dealers, cause such products to be shipped to them in containers bearing the words “Imported,” “Sazer
Hop Flavored” and affix to these containers labels reading “Imported Sazer Hop Flavored 100% Pure,”
and “Especially Selected, Cleaned and Malted by Our Own Process,” together with the firm name of
Pilzner Importing Co.; use the words “U-Blen-It-Ry-Age” An imported German Flavor “ to designate a
product containing no rye ; advertise themselves without authority as the representatives of Olime & Baler,
of Leipzig, Germany; thereby deceiving purchasing public into erroneous belief that respondent’s products
are either Imported or malted by their special process, of ingredients of German origin.
Status: At issue.
Progress Paint Co. (Complaint No.1575.) Charge: That respondent, selling roofing materials, falsely
claims to be a manufacturer, operating a million dollar factory the purported equipment of which is
depicted on his trade literature, and to be manufacturing a roof coating designated “Asbestos-Ruf “ which
will keep roofs waterproof for 10 years ; thereby deceiving purchasing public into erroneous belief that
respondent is an old-established firm, that prices quoted are exclusive of middleman’s profit, and that
“Asbestos-Ruf “ sold by respondent is made of Ingredients specified and will continue to be waterproof
for 10 years.
Status: At issue.
Pro-phy-lac-tic Brush Co. (Complaint No.1825.) Charge: That respondent, engaged in manufacture
of tooth brushes and sale thereof to jobbers and retail dealers, has adopted and employs a system for
maintenance of uniform resale prices, refusing to sell to dealers who do not maintain same, thereby
tending to hinder and suppress free competition to the prejudice of the public and of respondent’s
competitors.
Status: At issue.
Purity Bakeries Corporation. (Complaint No. 1588.) Charge: Unlawful restraint and monopoly in
that respondent, engaged in manufacture and sale of bakery and other food products, acquired capital stock
of Purity Baking Co. and Grennan Bakers (lnc.), and a majority of capital stock of Nafziger Baking Co.
and Winkleman Baking Co. ; thereby tending to substantially lessen competition, restrain commerce, and
create a monopoly, in alleged violation of section 7 of Clayton Act. Status: At issue.
Quaker City Chocolate & Confectionery Co. (Complaint No.1773.) Charge (see charge in complaint
No.1772, p. 193).
Status: At Issue.
Quincy Lumber Co. (Complaint No. 1640.) Charge (see charge in complaint No.1620, p. --).
Status: Awaiting respondent’s brief.
Radiant Specialty Co., Rose Fistel, Hyman Fistel, and Esther Fistel (Complaint No.1728.) Charge:
That respondents, engaged in sale of electric-lamp fixtures, falsely represent that a lighting unit (sold by
other dealers for approximately $4) sold on the installment plan by respondents for approximately $15.50,
will consume less electricity than that in use by prospective purchaser, and secure signatures to contracts
of sale on pretense of securing signatures to receipts for unit to be left on trial, placing attachments on
property of alleged purchaser upon failure of payment ; thereby perpetrating a fraud and deceiving
purchasing public into erroneous belief that respondents’ product is a superior unit sold at a reasonable
price, and tending to injure competitors who do not make use of such misrepresentation and fraudulent
practices.
Status: At issue.
Radio Corporation of America. (Complaint No. 1529.) Charge: That respondent, engaged in sale of
radio receiving sets, devices, tubes, and accessories and licensing of radio receiving patents, embodies a
contract of sale in

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its license agreements which tends to prevent licensees from using or dealing in radio tubes other than
those sold by licensor ; thereby tending to hinder and suppress free competition, to the prejudice of the
public and of respondent’s competitors.
Status: At issue.
Radium Ore Revigator Co., a Nevada corporation, and Radium Ore Revigator Co., a Delaware
corporation. (Complaint No.1753.) Charge: That respondents, engaged in manufacture and sale of
earthenware water jars designated as “Radium Ore Revigator,” circulate false and misleading statements
to there effect that water remaining In the jug 24 hours will materially benefit, and In some cases cure,
some 27 diseases, and that United States Government approves use of these Jars ; thereby deceiving
purchasing public in to erroneous belief that the jars possess therapeutic properties and have been indorsed
by the United States Government.
Status: At issue.
Redmond, D. G., trading as Milo Bar Bell Co. (Complaint No. 1714.)
Charge: That respondent, engaged In manufacture and sale of dumb bells, together with a course of
Instructions to be used therewith, circulates false and misleading statements concerning the development
to be made under this course of Instructions, using pictures to illustrate such development that have not
been taken under the conditions stated ; thereby deceiving purchasing public into erroneous belief that
respondent’s apparatus used in accordance with instructions will rebuild and develop to an extent that is
Impossible of attainment with such apparatus.
Status: Awaiting respondent’s brief.
Red River Lumber Co. (Complaint No.1644.) Charge (see charge in com plaint No. 1620, p. 197.)
Status: Awaiting respondent’s brief.
Reichard, John F. (Manchester Cigar Co.). (Complaint No.1459.) Change: That respondent, engaged
in manufacture of cigars, uses the words “Havana Cadet” on cigar bands and containers ; thereby
deceiving purchasing public into erroneous belief that respondent’s product Is made of tobacco grown on
Island of Cuba.
Status: At issue.
Rex Co. (Complaint No. 1693.) Charge: That respondent, engaged in manufacture of insecticides and
fungicides, and sale thereof to wholesale dealers, has adopted and employs a system for maintenance of
uniform resale prices, allowing a materially larger trade discount to those dealers maintaining such prices,
and allows different discount rates based upon a purely arbitrary classification of customers; thereby
tending to hinder and suppress free competition to the prejudice of the public and of respondent’s
competitors, and discriminating in prices without regard to the quality or quantity of goods purchased or
to status as wholesale or retail dealers, in alleged violation of section 5 of the Federal Trade Commission
act and section 2 of the Clayton Act.
Status: At issue.
Rockford Cabinet Co. (Complaint No. 1520.) Charge: That respondent, engaged in manufacture of
furniture, uses the words “Walnut,” “Mahogany,” “Combination mahogany and gum,” etc., to designate
furniture made of wood derived from trees other than those of walnut or mahogany family with exception
of a veneer of walnut or mahogany on exposed parts, about one twenty-eighth of ran inch in thickness ;
thereby deceiving purchasing public into erroneous belief that furniture so designated is composed entirely
of mahogany or walnut wood.
Status: Before the commission for final determination.
Rockford Chair & Furniture Co. (Complaint No. 1521.) Charge: That respondent, manufacturing
furniture, uses the words “Walnut” and “Mahogany” to designate furniture made of wood derived from
trees other than those of walnut or mahogany family with exception of a veneer of walnut or mahogany
on exposed parts, about one twenty-eighth of an inch in thickness; thereby deceiving purchasing public
into erroneous belief that furniture so designated is composed entirely of mahogany or walnut wood.
Status: Before commission for final determination.
Rockford National Furniture Co. (Complaint No. 1522.) Charge: That respondent, manufacturing
furniture, uses the words “Mahogany,” “Walnut,” “Combination Mahogany,” etc., to designate furniture
made of wood derived from trees other than those of walnut and mahogany family with exception of a
veneer of walnut or mahogany on exposed parts, about one twenty-eighth of

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an inch in thickness; thereby deceiving purchasing public into erroneous belief that furniture so designated
is composed entirely of mahogany or walnut wood.
Status: Before the commission for final determination.
Rockford Palace Furniture Co. (Complaint No. 1523.) Charge: That respondent engaged in
manufacture of furniture, uses the words “Walnut,” “Mahogany,” “Walnut and gumwood,” etc., to
designate furniture made of wood derived from trees other than those of walnut or mahogany family with
exception of a veneer of walnut or mahogany on exposed parts, about one twenty-eighth of an inch in
thickness; thereby deceiving purchasing public into erroneous belief that furniture so designated is
composed entirely of mahogany or walnut wood.
Status: Before commission for final determination.
Rockford Republic Furniture Co. (Complaint No. 1524.) Charge: That respondent, manufacturing
furniture, uses the words “ Five-ply walnut tops, fronts and ends “ and “All exterior walnut construction
“ to designate furniture made of wood derived from trees other than those of walnut family with exception
of a walnut veneer on exposed parts about one twenty-eighth of an -Inch In thickness; thereby deceiving
purchasing public into erroneous belief that furniture so designated is composed entirely of walnut.
Status : Before commission for final determination.
Rockford Standard Furniture Co. (Complaint No. 1525.) Charge: That respondent, engaged in
manufacture of furniture, uses the words “Genuine Mahogany,” “Genuine Walnut,” “Combination
Walnut,” etc., to designate furniture made of wood derived from trees other than those of mahogany or
walnut family with exception of a veneer of mahogany or walnut on exposed parts, about one twentyeighth of an Inch in thickness; thereby deceiving purchasing public into erroneous belief that furniture so
designated is composed entirely of mahogany or walnut wood.
Status: Before commission for final determination.
Rockford Superior Furniture Co. (Complaint No. 1526.) Charge: That respondent, manufacturing
furniture, uses the words “Mahogany,” “Walnut,” “Genuine Mahogany,” etc., to designate furniture made
of wood derived from trees other than those of mahogany or walnut family with exception of a veneer of
mahogany or walnut on exposed parts, about one twenty-eighth of an inch in thickness; thereby deceiving
purchasing public into erroneous belief that furniture so designated is composed entirely of mahogany or
walnut wood.
Status: Before commission for final determination.
Rodda, R. E., Candy Co. (Complaint No.1725.) Charge: That respondent, engaged in manufacture
of candy and sale thereof. together with explanatory display cards. to wholesale dealers. distributes one
assortment consisting of candies to be sold at 1 cent each, and a similar assortment consisting of candies
to be sold at 5 cents each, with larger pieces of candy to be given as prizes to purchaser of the last piece
of candy in each assortment and to purchaser who by chance selects a piece having a center of a specified
color; and a third assortment consisting of wrapped pieces of candy to be sold at prices ranging from 1 to
5 cents, purchaser to pay whatever sum is set forth on a ship of paper concealed within the wrapper ;
thereby supplying and placing in the hand of others the means of conducting a lottery, and tending to
injure competitors who do not make provision for the deposal of their products by such means.
Status: At issue.
Rotham, Isador, and Rotham, Emanual M., partners, trading as Monroe Candy Co. (Complaint
No.1774.) Charge (see charge In complaint No.1772, p.193).
Status: At issue.
Royal Baking Powder Co. (Complaint No. 540.) Charge: That respondent, engaged in manufacture
and sale of baking powder, charges that competitors’ products, which contain alum, to wit, sodium
aluminum sulphate (Sas) are harmful, unhealthful, and dangerous to users thereof; thereby deceiving purchasing public into erroneous belief that only those baking powders that have no alum content may be
used with safety, and tending to injure competitors who sell alumni baking powders.
Status : Awaiting trial. following decision In Court of Appeals of the District of Columbia dismissing
with costs respondent’s application to enjoin commission from vacating order of dismissal entered March
23, 1926, and reopening case for trial.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

bearing the firm name, that special, reduced prices exclusive of middleman’s profits are being quoted,
mind that respondent’s products are those of the well-known Goodyear Tire and Rubber Co.
Status : At issue.
Smith, Herbert L. (Complaint No. 1467.) Charge : That respondent, manufacturing cigars, some of
which consist in part of Cuban tobacco, uses the words “Havana” and “Havana Brown” on cigar bands
and containers ; thereby deceiving purchasing public into erroneous belief that respondent’s products are
made entirely of tobacco grown on island of Cuba.
Status : At issue.
Snell Milling Co., Thomas E. Snell, J. A. Stevens, and Percey Myatt. (Com plaint No. 1600.) Charge
: That respondents, engaged in purchasing wheat flour from flour millers throughout the Middle West, and
blending same with leaving agents, such as baking powder to produce what is known as “selfrising flour,”
use the words “ Milling” and “Mills” in firm name and in the fictitious name “ Peabody Mill Company
“ sometimes used by respondent, and use in advertising matter statements to the effect that respondent is
in manufacturer ; thereby deceiving purchasing public into erroneous belief that respondents manufacture
the products they sell, and that prices quoted are exclusive of middleman’s profit.
Status: Awaiting briefs.
Snyder, W. H., Snyder, R. P., and Snyder, Roger N. (W. H. Snyder & Sons). (Complaint No. 1441.)
Charge : That respondents, manufacturing cigars in State of Pennsylvania, use the words “Havana Fruit”
and “Havana Velvet” on cigar bands and containers; thereby deceiving purchasing public into erroneous
belief that respondent’s products are made of tobacco grown on island of Cuba.
Status: At issue.
Spalding, A. G., & Bros. (Complaint No.1583.) Charge : That respondent, manufacturing sporting
goods, supplies many leading players in the country with golf balls free of charge, on condition that upon
their finishing high in a tournament respondent shall publish advertisements stating that they used
respondent’s products, and upon their instructing at golf clubs, or conducting stores in connection
therewith, respondent’s balls shall be recommended and sold In preference to other balls ; thereby
deceiving purchasing public in to erroneous belief that superiority of respondent’s products constitutes
the sole reason for their use by so large a percentage of leading players.
Status : At issue on amended complaint.
Stanton, E. J., & Son. (Complaint No.1740.) Charge (see charge in complaint No.1736, p 186).
Status : In course of trial.
Spanish Peak Lumber Co. (Complaint No.1642.) Charge (see charge in complaint No.1620, p.197).
Status : Awaiting respondent’s brief.
Standard Education Society and Stanford, H. M (Complaint No.1574.) Charge: That respondents,
engaged in the publication of encyclopedia, circulate false and misleading statements relative to regular
price of book ; thereby deceiving purchasing public into erroneous belief that special reduced prices are
being quoted, and that a limited number of books are given free of charge upon subscription to extension
service.
Status: In course of trial.
Sugar Pine Lumber Co. (Complaint No. 1639.) Charge (see charge in complaint No.1620, p.197).
Status : Awaiting respondent’s brief.
Swayne Lumber Co. (Complaint No. 1637.) Charge (see charge in com-plaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Tailor-Made Shoe System and Triangle Factories (Dustin, Forrest, and Rose, C. G.). (Complaint
No. 1509. ) Charge : That respondents, engaged in sale of shoes, advertise and represent that they are
manufacturers of shoes ; thereby deceiving purchasing public into erroneous belief that prices quoted are
exclusive of middleman’s profit amid that shoes ordered from respondent are made on a last especially
cut to measurements.
Status : At issue.
Tarbell System (Inc.) and T. G. Cooke. (Complaint No. 1721.) Charge: That respondents, engaged
in furnishing correspondence courses of instructions for the teaching of magic, circulate false and
misleading statements regarding

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regular price of course, diplomas given, and positions held by former pupils ; thereby deceiving
purchasing public into erroneous belief that respondents are quoting a special, reduced price, and that
possession of diploma insures a lucrative position.
Status: Before commission for final determination.
Textile Bag Manufacturers’ Association, its officers and members. (Complaint No.1765.) Charge
: That respondent, a voluntary, unincorporated association of members engaged in manufacture of cotton
amid burlap bags, and sale thereof to jobbers and wholesale dealers. has adopted and employs a system
for maintenance of uniform resale prices, terms, discounts, and freight allowances ; thereby tending to
suppress free competition to the prejudice of the public and of respondent’s competitors.
Status: In course of trial.
Textileather Co. (Complaint No. 1585. ) Charge : That respondent, engaged in manufacture of a
coated fabric resembling leather, uses the word “Textileather” as a part of firm name and uses trade
names “Royaleather,” “Modeleather,” and “Krafthyde”; thereby deceiving purchasing public in to
erroneous belief that respondent’s products are made from hides of animals.
Status: At issue.
Thinshell Candies (Inc.). (Complaint No.1852.) Charge : That respondent, engaged in manufacture
of candy and sale thereof, together with punch boards having explanatory legends, to wholesale dealers
and jobbers, distributes jars of candy to he given as prizes to persons who upon pummeling the board
following payment of 5 cents for privilege of so doing, punch last hole in any one of four sections, the last
hole in the board, or the mole concealing any of the members designated in the legend as prize numbers;
thereby supplying and placing in the hands of others the means of conducting a lottery, and tending to
injure competitors who do not make provision for the disposal of their products by such means.
Status : Awaiting answer.
Titus Institute (Inc.), W. Harry Titus, and Ralph H. Sinclair. (Complaint No. 1681.) Charge: That
respondents, furnishing correspondence courses of instructions in physical culture, make use of paid
testimonials and pictures of persons, who have either not taken the course or whose pictures do not
represent conditions specified, misrepresent physical development under the system, and falsely represent
that the original founder, who died in 1925, still super vises students’ work and gives financial awards for
certain student accomplishments ; thereby deceiving purchasing public unto erroneous belief that
respondents’ course of instruction will produce results beyond those possible of accomplishment with the
course given, and that financial awards are still being made.
Status: In course of trial.
Tomlin Box Co. (Complaint No.1646.) Charge (see charge in complaint No.1620, p.197).
Status: Awaiting respondent’s brief.
Tuvin, Louis A., and Byoir, Carl, partners (Colloidal Chemists). (Complaint No.1691.) Charge : That
respondents, engaged In manufacture and sale of a compound designated “Viaderma,” designed to reduce
flesh, circulate false and misleading statements as to quality and curative properties of the product and its
approval by chemists and physicians ; thereby deceiving purchasing public into erroneous belief that
respondent’s product will reduce flesh by absorption.
Status: Awaiting answer.
Ucanco Candy Co. (Inc.). (Complaint No. 1795.) Charge (see charge in complaint No.1785, p. 200).
Status: At issue.
Union Furniture Co. (Complaint No. 1517.) Charge: That respondent, manufacturing furniture, uses
the words “Walnut,” “Mahogany,” “Walnut and Gumwood,” to designate furniture made of woods derived
from trees other than those of walnut or mahogany finally with exception of a veneer of walnut or
mahogany on exposed parts, about one twenty-eighth of an inch in thickness ; thereby deceiving
purchasing public into erroneous belief that furniture so designated Is composed entirely of walnut or
mahogany.
Status : Before commission for final determination.
United American Metals Corporation. (Complaint No). 1745.) Charge : That respondent, engaged
in manufacture and sale of nonferrous metal amid alloys, uses labels hearing the words “Government
Genuine” with a depiction of the head of “Liberty” similar to that found on silver coinage of the United

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States; thereby deceiving purchasing public into erroneous belief that respondent’s products are made in
accordance with Government specifications.
Status : In course of trial.
Vandeweghe, Adiel, and Feshback, David. (Complaint No.1383.) Charge : That respondent, Adiel
Vandeweghe, engaged in dressing and dyeing Australian and New Zealand rabbit skins, stamps the trademark “ Superior Seal “ on back of each skin ; thereby placing in hands of others, Including respondent
David Feshback, engaged in manufacture of garments therefrom, the means of deceiving purchasing public
into erroneous belief that such garments are made from pelts of seals.
Status : Before commission for final determination.
Vit-O-Net Corporation. (Complaint No. 1679.) Charge: That respondent, engaged In manufacture
and sale of electric blankets, circulate false and misleading statements relative to curative properties of
blankets and their indorsement by prominent physicians, scientists, and hospitals; thereby deceiving
purchasing public into erroneous belief that respondent products will cure any disease from which user
may be suffering by revitalizing the cells of the body and charging the blood stream with electromagnetic
energy, and that It Is highly indorsed by prominent physicians, scientists, and hospitals.
Status : Before commission for final determination.
Voneiff-Drayer Co. (Complaint No.1724.) Charge : That respondent, engaged in manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale dealers, distributes
assortments of candies to be sold at 1 cent each, with larger pieces or packages of candy, to be given as
prizes to purchaser of the last piece of candy in the assortment, and to purchaser who by chance selects
a piece of candy having a center of a specified color ; thereby supplying and placing in hands of others
the means of conducting a lottery, and tending to injure competitors who do not make provision for the
disposal of their products by such means.
Status : At issue.
Warner-Jenkinson Co. (Complaint No. 1839.) Charge: That respondent, engaged in manufacture of
extracts and concentrates and sale thereof to wholesale dealers under trade name of “ Red Seal,” uses
labels bearing the words “Grape,” “Cherry,” “Orange,” “Peach,” and “Strawberry”; thereby deceiving
purchasing public into erroneous belief that respondent’s products are made of juices of fruits indicated.
Status : At issue.
Waugh Equipment Co., Arthur Meeker, Frederick W. Ellis, and J. B. Scott. (Complaint No. 1779.)
Charge : That respondent, Waugh Equipment Co., engaged in manufacture of railway equipment,
endeavors to induce railway companies to place orders for equipment by promising through respondents
Arthur Meeker, Frederick W. Ellis, and J. B. Scott, officers or stockholders of Armour & Co., certain
volumes of freight traffic from that company in re turn for patronage, such traffic to be withdrawn if
patronage is withheld ; thereby tending to lessen free flow of competition in sale of railway equipment and
to Injure competitors who do not tender reciprocal patronage.
Status : In course of trial.
Wells, J. A., Wilkerson, J. M., Johnson, H. P., and Johnson, Mrs. H. P. (State Milling Co. and Myrache
Milling Co.). (Complaint No.1602.) Charge :
That respondents, engaged in purchasing. flour from an ills located throughout Middle West, and blending
same with leavening agents such as baking powder, to produce what is known as “ Self-Rising Flour,” use
the word “ Milling “ in firm names, and use in advertising matter statements to the effect that respondents
are manufacturers ; thereby deceiving purchasing public into erroneous belief that respondents
manufacture products they sell and that prices quoted are exclusive of middleman’s profit.
Status : Awaiting briefs.
Wendelstein, Carl (Carl Wendeistein & Co.). (Complaint No.1741.) Charge (see charge in complaint
No.1736, p.186).
Status : In course of trial.
West End Furniture Co. (Complaint No.1518.) Charge : That respondent, manufacturing furniture,
uses the words, “Walnut,” “Mahogany,” etc., to designate furniture made of wood derived from trees other
than those of walnut or mahogany family with exception of a veneer of walnut or mahogany on exposed
parts, about one twenty-eighth of an inch in thickness; thereby deceiving purchasing public into erroneous
belief that furniture so designated is composed entirely of walnut or mahogany wood.

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Status : Before commission for final determination.
Western Hardwood Lumber Co. (Complaint No. 1743.) Charge (see charge in complaint No.1736,
p.186).
Status : In course of trial.
Western Leather Clothing Co. (Complaint No. 1820.) Charge : That respondents, engaged in
manufacture and sale of leather cloth, uses labels bearing the words “Genuine Horse Hide” and represents
that product Is made from hides of horses; thereby deceiving purchasing public into erroneous belief that
respondent’s product thus labeled is a genuine leather product.
Status: Testimony closed ; waiting report of trial examiner.
Wetchler, L., & Sons (Wetchier, Isadore, and Wetchler, Solomon, partners), Old Gold Combination
White Lead and Color Corporation, and Camel Lead Color and Chemical Products Manufacturing Co.
(Complaint No. 1829.) Charge : That respondents, engaged in manufacture and sale of shellacs and paints,
uses the words “Shellac Camel” in labeling and advertising a product containing other ingredients than
shellac gum, and the words “White Lead” and “Zinc Lead” in labeling and advertising a product not
containing head and zinc in substantial quantities ; thereby deceiving purchasing public into erroneous
belief that respondents’ product consists entirely or In substantial part of the ingredients named.
Status: At Issue.
Wheeling Steel Corporation, John Wood Manufacturing Co., Detroit Range Boiler & Steel Barrel
Co., W. A. Case & Son Manufacturing Co., Casy-Hodges Co. (Inc.), and Scaife Manufacturing Co.
(Complaint No. 1461.) Charge :
That respondents, engaged in manufacture of range boilers, sell same at one fixed and lump sum, paying
transportation charges to all parts of United States, which sum allows for ii sufficiently large profit on
sales near respondents’ factories to cover loss sustained on shipments to Pacific coast markets ; thereby
tending to injure competitors, National Steel Construction Co. of Seattle, and National Boiler and
Manufacturing Co. of Los Angeles, whose transportation charges on raw materials, which are produced
In the East, are in excess of those of respondents, and discriminating against the purchasing public
conducting business near respondents’ factories, In alleged violation of section 5 of Federal Trade
Commission act and section 2 of Clayton Act.
Status : At issue.
White Pine Lumber Co. (Complaint No. 1664.) Charge (see charge in complaint No.1620, p.197).
Status : Awaiting respondent’s belief.
Whitney, E. K.; individually and trading as Motor-Snap Co., and Whitney Sales Co. (Complaint
No.1747.) Charge: That respondent, engaged in sale of a product designated “Motor Snap-Gas-Garets,”
circulates false and misleading statements regarding higher engine efficiency obtained by placing these
tablets in gasoline tank of an automobile or other motor vehicle; thereby deceiving purchasing public into
erroneous belief that respondent’s product will dissolve carbon and give at least one-third more mileage.
Status : At Issue.
Whitney, L. M., individually, and trading as Motor Snap Co., and Whitney Sales Co. (Complaint
No.1759.) Charge: That respondent, engaged in sale of a product designated “Motor Snap-Gas-Garets,”
circulates numerous false and misleading statements regarding higher engine efficiency obtained by
placing these tablets in gasoline tank of an automobile or other motor vehicle ; thereby deceiving
purchasing public into erroneous belief that respondent’s product will dissolve carbon and give at least
one-third more mileage.
Status : Awaiting respondent’s brief.
Williams, Ichabod T., & Sons, Thomas Williams, Thomas R. Williams. Thomas Blagdon Williams,
D. S. Williams, and Edward Williams. (Complaint No. 1746.) Charge : That respondent, engaged In sale
of lumber and other wood products to lumber dealers and manufacturers of furniture, represent certain of
their products as mahogany, and/or African mahogany, genuine mahogany, etc.; thereby deceiving
purchasing public into erroneous belief that such products consist of wood derived from trees of the
mahogany family.
Status : At Issue.
Winnebago Manufacturing Co. (Complaint No. 1519.) Charge : That respondent, manufacturing
furniture, uses the words “Mahogany,” “Walnut,” “Combination mahogany,” etc., to designate furniture
made of wood derived from trees other than those of mahogany or walnut family with exception of a
veneer of mahogany or walnut on exposed parts, about one twenty-eighth of

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

an inch in thickness ; thereby deceiving purchasing public into erroneous belief that furniture so
designated is composed entirely of mahogany or walnut wood.
Status : Before commission for final determination.
Yekum Bros. (Inc.). (Complaint No. 1438.) Charge : That respondent, engaged in manufacture of
cigars in State of Pennsylvania, uses the words “Spana-Cuba” on cigar ban(is and containers ; thereby
deceiving purchasing public into erroneous belief that respondent’s products are made of tobacco grown
on island of Cuba.
Status : At issue.
Zapon Leather Cloth Co. (Complaint No.1586.) Charge : That respondent, manufacturing imitation
leathers, uses the word “ Leather “ in firm name, and uses trade names “Leather Cloth,” “Moleskin,”
“Pinto,” “Mustang,” and “Broncho”; thereby deceiving purchasing public into erroneous belief that
respondent’s products are made from bides of animals.
Status : At issue.
Ziegler, George, Co. (Complaint No. 1787.) Charge : That respondent, engaged In manufacture of
candy and sale thereof, together with explanatory display cards, to wholesale dealers and jobbers,
distributes an assortment consisting of pieces of candy to be sold at 1 cent each, and larger pieces of candy
and pieces of merchandise to be given as prizes to purchaser of last piece of candy in the assortment and
to purchaser who by chance selects a piece having a center of a specified color ; thereby supplying and
placing in hands of others the means of conducting a lottery, and tending to injure competitors who do not
make provision for the disposal of their products by such means.
Status : At issue.
Complaints Pending, Numerical List
Complaint
Company
No.
238 Hoover Suction Sweeper Co.
540 Royal Baking Powder Co.
962 Bethlehem Steel Corporation, Bethlehem Steel Co., Bethlehem Steel Bridge Corporation,
Lackawanna Steel Bridge Works Corporation, Midvale Steel & Ordnance Co., and Cambria
Steel Co.
1263 National Leather & Shoe Finders’ Association and others.
1329 Armand Co. (Inc.), and others.
1371 Perpetual Encyclopedia Corporation, North American Publishing Co. (Inc.), Source Research
Council (Inc.), and others.
1379 Great Northern Fur Dyeing & Dressing Co.
1381 Golden Fur Dyeing Co. (Inc.), Samuel Jacobs and Isidoir Sachs (Jacobs & Sachs).
1383 Vandeweghe, Adiel, and Feshback, David.
1384 Singer, Philip A., & Bro., and Gelberg, Herman, and Schwartin.
1423 Armour & Co. and Armour & Co. of Delaware.
1424 Globe Soap Co.
1425 Cincinnati Soap Co.
1426 Peet Bros. Co.
1438 Yokum Bros.
1441 Snyder, W. H., Snyder, R. P., and Snyder, Roger N. (W. H. Snyder & Sons).
1442 Brooks, T. E. (T. E. Brooks & Co.).
1443 Herman, John C., and Edwin S. (John C. Herman & Co. )
1452 Inecto (Inc.).
1453 Fleck Cigar Co.
1458 San Martin & Leon Co. (Inc.).
1459 Reichard, John F. (Manchester Cigar Co.).
1461 Wheeling Steel Corporation, John Wood Manufacturing Co., Detroit Range Boiler & Steel Barrel
Co., W. A. Case & Son Manufacturing Co., Casy-Hodges Co. (Inc.), and Scaife Manufacturing
Co.
1465 Havatampa Cigar Co.
1467 Smith, Herbert L.
1498 Arrow-Hart & Hegeman (Inc.) and Arrow-Hart & Hegeman Electric Co.
1499 Royal Baking Powder Co.
1503 Perfect Voice Institute and Cook, T. G.
1507 Madison, Dr. Robert, Laboratories (Inc.) and Madison, Rodney.
1508 American Poultry School and Quisenberry, T. E.

COMPLAINTS PENDING JULY 1, 1930

215

Complaint Company
No.
1500 Dustin, Forrest, and Rose, C. G. (Tailor-Made Shoe System and Triangle Factories).
1510 Hoyt Bros. (Inc.).
1515 Empire Manufacturing Co.
1516 Mechanics Furniture Co.
1517 Union Furniture Co.
1518 West End Furniture Co.
1519 Winnebago Manufacturing Co.
1520 Rockford Cabinet Co.
1521 Rockford Chair & Furniture Co.
1522 Rockford National Furniture Co.
1523 Rockford Palace Furniture Co.
1524 Rockford Republic Furniture Co.
1525 Rockford Standard Furniture Co.
1526 Rockford Superior Furniture Co.
1527 Aetna Fire Brick Co. and 55 other firebrick manufacturing companies, Brooke, J. J., jr., Donahoe,
Frederick W., Hopwood, H. H., and McKinley, J. M
1529 Radio Corporation of America.
1531 Mulhens & Kropff (Inc.).
1549 MacFadden Publications (Inc.).
1551 Belline, L. A. (Cooperative Book Co.).
1558 Blanton Co.
1561 Manchester Shoe Co., Dustim, Forrest, and Rose, C. G.
1564 Fayro Laboratories (Inc.).
1567 Franklin Paint Co.
1570 Limoges China Co., Sebring, Pottery Co., Salem China Co., and Crescent China Co.
1571 Mutual Publishing Co., Shelton, C. J., Bufton, H. A., Publishers Acceptance Corporation,
Neargard, P. I., Thompson, T. E., Critziner, Carl, Educators Service Association, Thomas, A.
C., and Bufton, H. A.
1573 Madison Paint Co.
1574 Standard Education Society; and Stanford, II. M
1575 Progress Paint Co.
1576 NuGrape Co. of America.
1577 Natural Health Association (Inc.) Botwen, Morris, and Ross, Edwin J.
1580 Penick & Ford (Ltd.), and Penick & Ford Sales Co. (Inc.).
1581 Cox, C. N. (Norton Institute).
1583 Spalding, A. G., & Bro.
1584 Flynn & Emrich Co.
1585 Textileather Co.
1586 Zapon Leather Cloth Co.
1587 Sanford Mills, Kendall, O. F., Mertz, W. H., Nelson, J. E., Clemons, James, Hopwell, Henry C.,
Underbill, W. P., L. C. Chase & Co.
1588 Purity Bakeries Corporation.
1589 Continental Steel Corporation.
1597 Royal Milling Co., Empire Milling Co., and Richland Milling Co., McGraw, John, and Glennon,
E. A., partners.
1598 Johnson, D. V. (Tennessee Grain Co. and Tennessee Milling Co.).
1599 Nashville Roller Mills, John Schultz, Louis Baujan, and Virgil S, Typper.
1600 Snell Milling Co., Thomas E. Snell, J. A. Stevens, and Percey Myatt.
1601 McCarthy, Francis J. (Wautaga Milling Co., Modern Milling Co., F. J. McCarthy Milling Co.,
Southern Flour Mills Co., and Star Mills).
1002 Wells, J. A., Wilkerson, J. M., Johnson, H. P., and Johnson, Mrs. H. P., partners (State Milling Co.
and Myracle Milling Co.).
1603 Cooke, L. L., school of electricity.
1604 Faircloth, E. C., jr., Faircloth, E. C., sr., Evers, F. B., and estate of Evers, C. K., partners (Cherokee
Mills).
1607 Old Hickory Mills, J. Frank Foster, James Willis, R. W. Condon, and D. L. Anderson.
1609 Breitbart Institute of Physical Culture (Inc.).
1615 Pelton, Albert L. (Ralston University Press).
1617 Miller. Louis A. (Southern Milling Co.).
1620 Long-Bell Lumber Co.
1621 Clover Val ley Lumber Co.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Complaint
Company
No.
1623 Castle Crag Lumber Co.
1624 Davies-Johnson Lumber Co.
1025 Diamond Match Co.
1620 California Fruit Exchange.
1627 Likely Lumber Co.
1628 Penman Peak Lumber Co.
1629 Feather River Lumber Co.
1030 California Door Co.
1631 Kesterson Lumber Co.
1632 Hobart Estate Co.
1633 Fruit Growers’ Supply Co.
1635 McCloud River Lumber Co.
1636 Siskiyou Lumber Co.
1637 Swayne Lumber Co.
1638 Paradise Lumber Co.
1639 Sugar Pine Lumber Co.
1640 Quincy Lumber Co.
1641 Pickering Lumber Co.
1642 Spanish Peak Lumber Co.
1643 Lassen Lumber & Box Co.
1644 Red River Lumber Co.
1645 Owen-Oregon Lumber Co.
1646 Tomlin Box Co.
1647 Big Lakes Box Co.
1648 Ewauna Box Co.
1049 Forest Lumber Co.
1650 Klamath Lumber & Box Co.
1651 Lamm Lumber Co.
1652 Pelican Bay Lumber Co.
1654 Algoma Lumber Co.
1655 Chiloquin Lumber Co.
1656 Shaw Bertram Lumber Co.
1657 Braymill White Pine Co.
1658 California-Oregon Box & Lumber Co.
1662 Cady Lumber Corporation.
1663 George E. Breece Lumber Co.
1664 White Pine Lumber Co.
1665 Blair Bros. Lumber Co.
1666 Oak Valley Lumber Co.
1671 Peterson, H. Josephine (Peterson Institute of Diet).
1073 Bates, W. H. (Central Fixation Publishing Co.).
1675 Artloom Corporation (Artloom Rug Mills).
1670 Crown Overall Manufacturing Co.
1677 Homan, John G. (New Science Institute).
1678 Sittenfeld, George M (Goodyear Manufacturing Co.).
1679 Vit-O-Net Corporation.
1680 American Business Builders (Inc.), W. M Ostrander and Seth Moyle.
1681 Titus Institute (Inc.), W. Harry Titus and Ralph H. Sinclair.
1683 Asbestos Shingle, Slate & Sheathing Co.
1685 Kemper Silks Co. (Inc.).
1688 Coty (Inc.).
1689 McKesson & Robbins (Inc.).
1691 Tuvin, Louis A., and Byoir, Carl, partners (Colloidal Chemists).
1692 Benedict Stone (Inc.).
1693 Rex Co.
1697 Black, Frank W., Howton, Walter, and Leonhart, Max (Frank W. Black & Co. and Griffitts
Engraving Co.).
1698 Cassoff, L.F. (Central Paint & Varnish Co., Central Shellac Works, and Cumberland Paint Works).

1699
1700
1703
1704
1711
1714

Curtis Candy Co.
Citrus Products Co.
Bleadon-Dun Co.
National Silver Co., Samuel E. Bernstein (Inc.), and Samuel E. Bernstein.
Abrams, Irving A. (Globe Scientific Co.).
Redmond, D. G. (Milo Bar Bell Co.).

COMPLAINTS PENDING JULY 1, 1930

217

Complaint
Company
No.
1715 Lomax, H. L. (Lomax Rung Mills).
1718 Domino House (Inc.) and Margaret Sullivan.
1721 Tarbell System (Inc.) and T. G. Cooke.
1722 Gropper, M J., & Sons (Inc.).
1723 Murray, Arthur (Arthur Murray School of Dancing).
1724 Voneiff-Drayer Co.
1725 Rodda, R. E., Candy Co.
1726 California Preserving Co. (Inc.).
1727 Mechanical Manufacturing Co., R. O’Hara and W. A. Mayfield.
1728 Radiant Specialty Co., Rose Fistel, Hyman Fistel, and Esther Fistel.
1730 Leadite Co. (Inc. )
1731 Berliner, Edwin E. Burton, Frederick A., and Hochimeimer, Lawrence, partners, trading as Edwin
E. Berliner & Co.
1732 Arnold Stone Co. (Inc.).
1733 Billings-Chapin Co.
1734 Sea Sled Corporation.
1735 Louis Bossert & Sons (Inc.)
1736 Black & Yates (Inc.).
1737 Pacific Door & Sash Co.
1738 Frank Paxton Lumber Co.
1739 Gillespie, F.H., Gillespie, M.L., and MacDougall, A.F., partners. trading as Gillespie Furniture Co.
1740 Stanton & Son, E. J.
1741 Wendelstein, Carl, trading as Carl Wendelstein & Co.
1742 Chicago Warehouse Lumber Co.
1743 Western Hardwood Lumber Co.
1744 Cadwallader-Gibson Co. (Inc.).
1745 United American Metals Corporation.
1746 Williams, Ichabod T, & Son, Thomas Williams, Thomas R. William, Thomas Blagdon Williams,
D. S. Williams, and Edward Williams
1747 Whitney, E. K., Individually and trading as Motor-Snap Co. and Whitney Sales Co.
1749 New England Electrical Fixture Co. (Inc.).
1750 Knapik, Thomas, and Erickson, George W., partners, trading as Knapik & Erickson.
1751 Matthews Co. (Inc.).
1752 American Radium Products Co. (Nell M Jones and Robert D. Emery, partners).
1753 Radium Ore Revigator Co., a Nevada corporation, and Radium Ore Revigator Co., a Delaware
corporation.
1754 Cohen, Goldman & Co. (Inc.).
1755 Mercerizer Association of America, its officers and members.
1756 Bailey Radium Laboratories (Inc.) and William J. A. Bailey.
1757 Rubber City Paint Co. and Bell Paint Co.
1758 Laziei, J. F., Manufacturing Co. (Inc.).
1759 Whitney, L. M., Individually, and trading as Motor Snap Co. and Whitney Sales Co.
1760 National Pastry Products Corporation.
1761 Lewis Bro. (Inc.).
1763 Amusement Novelty Supply Co. (Max Kenner and Samuel Graubark, partners).
1765 Textile Bag Manufactures’ Association, its officers and members.
1766 Agmel Corporation.
1767 Mohawk Asbestos Slate Co. (Inc.).
1708 Dart Boats (Inc.).
1769 Sexton Manufacturing Co.
1770 Mennie, F. L., trading as Mineral Coal Saver Co., Mennie Manufacturing
1771 Co. and M and K. Manufacturing Co. Liederman, Earle E.
1772 Heldelberger Confectionery Co.
1773 Quaker City Chocolate & Confectionery Co.
1774 Rotham, Isador, and Rotham, Emanuel M., partners, trading as Monroe Candy Co.
1775 Ben-Burk (inc.).

218

ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Complaint
Company
No.
1776 Madison Mills (Inc.).
1777 Chatham Manufacturing Co.
1779 Waugh Equipment Co., Arthur Meeker, Frederick W. Ellis, and J. B. Scott.
1780 Shainin, Isaac, Shainin, Solomon, Shainin, Bernard, and Shensin, Jesse, partners, trading as Isaac
Shainin & Co.
1782 Kotex Co.
1783 Associated Knitting Mills Outlet Co. (Inc.).
1785 Minter, Clayton A., and Minter, Ira W., partners, trading as Minter Bros.
1786 Hardie Bros. Co.
1787 Ziegler, George, Co.
1788 Elmer Candy Co.
1789 Luden’s (Inc.).
1790 Margarella, Pasquale.
1791 Blackhawk Candy Co.
1792 Advance Candy Co. (Inc.).
1793 Schwarz & Son (Inc.).
1794 Euclid Candy Co.
1795 Ucanco Candy Co. (Inc.).
1796 Shotwell Manufacturing Co.
1797 Clark, D. L., Co.
1798 Pecheur Lozenge Co.
1799 International Gum Corporation.
1800 Charms Co.
1801 Kalb, Sam, and Kalb, George, partners, trading as Kalb Bros.
1802 National Candy Co. (Inc.).
1803 Headley Chocolate Co.
1804 Green field’s, E., Sons (Inc.).
1805 Schutter-Johnson Candy Co.
1806 American Caramel Co.
1807 American Candy Co.
1808 Metro Chocolate Co. (Inc.).
1809 Rudy Chewing Gum Co.
1810 Goldenberg, D. (Inc.).
1811 Bunte Bros. (Inc.).
1812 Charles F. Adams (Inc.).
1813 Lewis, Edgar P. & Son (Inc.).
1814 Old Colony Candy Co.
1815 No-Ring Corporation, American Druggists’ Syndicate (Inc.).
1816 Keppel, R. F., & Bro. (Inc.).
1817 Johnson, Walter H., Co.
1818 Henry, DeWitt P., Co.
1819 Cliquot Club Co.
1820 Western Leather Clothing Co.
1821 Crosse & Blackwell, a corporation of London, England, and Crosse & Blackwell, a corporation
of Baltimore, Md.
1822 Overland Candy Co.
1923 Geiger Candy Co.
1824 Libbey, W. S., Co.
1825 Pro-phy-lac-tic Brush Co.
1826 Hurty-Peck & Co.
1827 Shure, N., Co.
1828 Sheldon, Albert K.
1829 Wetchler, Isadore, and Wetchler, Solomon, partners trading as L. Wetchler & Sons, Old Gold
Combination White Lead and Color Corporation, and Camel Lead Color and Chemical Products
Manufacturing Co.
1830 McLaren Consolidated Cone Corporation.
1831 Johnson-Fluker Co.
1832 Fleer, Frank H., Corporation.
1833 Nessler, Charles, trading as C. Nestle Co. and Society for the Advancement of Hair and Beauty
Science, and Nestle-LeMur Co. (Inc.).
1834 Aviation Institute of U. S. A. (Inc.).
1835 Philadelphia Leather House, trading as Western Tanning Co.
1836 Colgate-Palmolive-Peet Co.

COMPLAINTS PENDING JULY 1, 1930

219

Complaint
Company
No.
1838 Natural Eyesight Institute (Inc)
1839 Warner-Jenkinson Co.
1840 Idaho Coal Dealers Association, Utah Coal Producers Association, and Retail Fuel Dealers
Association of Utah, and their officers and named members.
1841 Badger Candy Co.
1842 Poust, Abraham, and Poust, Jack, partners, trading as Pilzner Importing Co. and Pilzner Products
Co.
1943 Canada’s Pride Products Co. (Inc.).
1844 Health Laboratories (Inc.).
1845 La Lasine International (Inc.).
1846 Magnecoil Co. (Inc.).
1847 Bradley Boston (Inc.).
1848 Crancer, L. A., and Fleischman, G. B., partners, trading as Allegheny Tube & Steel Co., Coupling
Manufacturing Co., Erie Iron & Tube Co., Illinois Steel Products Co., Westinghouse Union Co.,
Pittsburgh Malleable Fittings Co., and Plumbers National Supply Co.
1849 Karcher, A., Candy Co.
1850 Jenkins, Edward L., and Auten, Myrtle E., partners trading as Cheri.
1851 American Institute of Montalism, trading as A. Victor Segno, A. D. Segno, Segno Success Club.
and American Institute and Life Culture Association, Mrs. A. D. Robinson, and H. T. Robinson.
1852 Thinshell Candles (Inc.).
18131---30-----15

STIPULATIONS APPROVED AND ACCEPTED
(Copies of statements covering these stipulations may be bad upon request to the
commission)
During the fiscal year ending June 30, 1930, the commission approved and accepted stipulations Nos.
405 to 672, both inclusive, wherein respondents agreed to cease and desist from certain alleged unfair
methods of competition, thereby disposing of pending applications for complaints involving unfair
practices as follows :
405. Beverages; Malt Sirups.--Using the name and Canadian address of a subsidiary, together with
Canadian insignia, on labels and printed matter descriptive of domestic products of another subsidiary
located in New York City, whose products are neither imported nor made of ingredients of foreign origin.
406. Toy Airplanes.--Using in advertising matter a picture of a large building having a display sign on
the front when engaged only In a small business manufacturing toy airplanes and the repair parts for same,
and occupying only two rooms in a small building.
407. Motor Boats.--Using the word “Mahogany” to designate parts of motor boats which are made of
wood derived from trees other than those of the mahogany family.
408. Overalls.--Advertising that overalls are “shrunken” when the material from which they are made
has not been shrunk.
409. Shirts.--Using the word “Manufacturing” in firm name when neither owning nor operating mills.
410--411. Jewelry; Diamond Rings.--Using the advertisement “Diamond Ring. Must Sell For Quick
Cash $100” when there is no emergency compelling immediate sale and the sale is In line with those made
in the regular course of business.
412. Soap.--Using the word “Naphtha” to designate soap containing not more than 1 per cent of
naphtha at time of sale.
413. Soap.--Using the word “Naphtha” to designate soap containing not more than 1 per cent of
naphtha at time of sale.
414. Soap.--Using the word “Naphtha” to designate soap containing not more than 1 per cent of
naphtha at time of sale.
415. Milk.--Using the designation “ Certified Dairies “ when the milk distributed has been neither
inspected nor certified.
416. Woolen Goods.--Using the word “ Mills “ when neither owning nor operating mills.
417. Flavors and Sirups.--Using the words “Maple Flavored” to designate a product containing no
maple sugar or sap of the maple tree.
418. Luggage.--Using the word “Nuhide” to designate luggage made of material other than leather.
419. Woolens and Velveteens.--Using the word “Mills” in firm name when neither owning nor
operating mills.
420. Wrist-Watch Straps.--Using the words “English Leather Straps” to designate products imported
from Germany.
421. Hardwoods; Mahogany.--Using the words “Brazilian Mahogany” to designate woods derived
from trees other then those of the mahogany family.
422. Furnaces.--Representing to prospective purchasers that a change to an agency for another line of
furnaces and severance of connection with the former employer arose from unwillingness to sell the
cheapened product that was being put out when in truth the product has not been cheapened and the
severance of business relations was due to other causes.
423. Women’s Cloth Coats.--Using the word “Wombat” to designate a garment not made of the fur
of wombats.
424. Woolens and Dress Goods.--Using the word “Mills” in firm name when neither owning nor
operating mills.
220

STIPULATIONS APPROVED AND ACCEPTED

221

425. Incinerators.--Using such statements as “Adopted exclusively by the Quartermaster General’s
Department, the Navy, the Veterans’ Bureau, and all other Governmental Agencies” when such are not
the facts.
426. Typewriter Ribbons.--Using the trade name “Silkcloth” to designate’ products not made of silk.
427. Dress Goods; Mail Orders.--Using the word “Mills” in firm name when neither owning nor
operating mills, and advertising certain articles as “free” when the cost of the purported gratuity is
included in the price paid by the purchaser for the merchandise with which it is alleged to be given free
of charge.
428. Woolens and Dress Goods.--Using the word “Mills” in firm name when neither owning non
operating mills.
429. Sales-Promotion Schemes; Advertising.--Selling to merchants merchandise and advertising
literature which furnishes the means for conducting a lottery ; claiming to be a manufacturer selling some
goods at factory cost, when neither owning nor operating mills and selling all merchandise at a profit.
430.Candles.--Using the word “Beeswax” to designate candles not made in substantial part of beeswax.
431. Hosiery.--Using the words “ Rayon Silk “ amid “Fashioned Ankles “ to designate hosiery not
fabricated from silk, and not manufactured in accordance with the process known as “ fashioned.”
432. Beverages; Concentrates.--Using the slogans “Flavors are fruit concentrates” and “Every ounce
an orchard,” together with the names of certain fruits In large, heavy type, accompanied by the word
“Imitation” in much smaller type, in advertising and/or labeling products not made in substantial part from
the juices or the fruits indicated.
433. Matches.--Packing defective goods from their own factory in containers’ bearing fictitious name
and the address of a city in which is located a match manufacturing company having a name somewhat
similar to the fictitious name used.
434. Shellacs.--Using the trade name “White Shellac” without the word “Compound” in equally
conspicuous type, to designate a product consisting in substantial part of shellac gum dissolved in alcohol,
and without the word “Substitute” in equally conspicuous type to designate a product In which shellac
gum is not the principal ingredient.
435. Oleomargarine.--Using the slogan “Churned especially for lovers of good butter” and
“Government Inspected and O. K’d by Uncle Sam,” to designate a product consisting In substantial part
of ingredients other than those of which creamery butter is made, and not Inspected by the United States
Government.
436. Underwear and Hosiery.--Representing a rayon product manufactured from cellulose, as being
superior to rayon.
437. Silverware, Cutlery, and Novelties.--Using the words “Nickel Silver” “Platinum Finish,” “Gold
Lined,” etc., to designate products of a character other than that indicated, and marking same with prices
in excess of those at which it is intended the article shall be sold.
438. Soap Products.--Representing that a product, which is in the form of soap flakes, will sterilize
cotton, dishes, etc., when such product is not sufficiently concentrated to so function.
439. Overalls.--Charging to manufacture “union made” overalls, when neither owning nor operating
mills, and not buying from manufacturers employing union labor.
440. Cotton Goods.--Using the word “Satin” to designate a product not fabricated from silk.
441. Motor Boats, Cruisers, and Submarines.--Using the word “ Mahogany “ to designate certain
parts of motor boats, cruisers.- and submarines which are made of wood derived from trees other than
those of the mahogany family.
442. Process Printing; Stationery.--Using the words “ Printing and Engraving “ and “ Plateless
Engraving,” to designate a raised-lettering effect that is, produced by a form of process printing, rather
than by Engraving.
443. Jewelry.--Using the words “Ruby,” “ Sapphire,” “Amethyst,” “Pearl,”, “Ivory,” “Amber,” “
Platinum,” and “ Silverware “ to designate articles of. a character other than that Indicated; using the word
“Insured “ to indicate guaranty against defects In material and workmanship ; and representing In bad faith
that accounts have been placed in the hands of a collection agency and that debtors are rendering
themselves liable to criminal prosecution.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

444. Stationery.--Simulating trade names and symbols of competing firms in such a way as to imply
association with these firms, when no business connection exists, and using the words “Printing” and
“Manufacturing,” when neither owning nor operating factory or printing establishment.
445. Shellacs.--Using the word “Shellac” without the word “Compound” in equally conspicuous type,
to designate a product consisting in substantial part of shellac gum cut in alcohol, and without the word
“Substitute” in equally conspicuous type, to designate a product in which shellac gum is not the principal
ingredient.
446. Razor and Razor Blades.--Using the words “Free” and “Give” when the price of the purported
gratuity is included in the price paid by the purchaser for the merchandise with which it is alleged to be
given free of charge.
447. Sponges and Chamois.--Using the terms “Operating Our own Packing Houses at Tarpon Springs,
Florida. Batabano, Cuba,” and “Importer and Exporter” when neither owning nor operating packing
houses at the places designated, nor importing or exporting products.
448. Advertising Signs; Raised Opal Glass Letters.--Using a word from the trade name of another
company, thus implying association with that company, when no business connection exists.
449. Cotton Threads.--Using the words “Linen processed” to designate a product not made of linen.
450. Flannel Cloth.--Using the word “ Mills” in firm name, when neither owning nor operating mills.
451. Electrical Appliances.--Advertising a specially built infra-red ray therapeutic lamp and using the
words “Special Price,” when the lamp possesses no special features, and is being sold at the regular price,
the declared intention of raising the price on a special date being made in bad faith.
452. Electric Clocks.--Representing clocks as controlled and corrected by United States Naval
Observatory time, when such is not the fact.
453. Sweaters and Knit Wear.--Using the words “Knitting” and “Mills” in firm name, when neither
owning nor operating mills.
454. Pharmaceuticals; Drug Sundries.--Using a trade name of a large drug company, thereby implying
association with that company, when no business connection exists.
455. Sweaters and Knit Goods.--Using the words “Knitting” and “Mills” in firm name and in
advertising matter, and the word “Manufacturers” in advertising matter, when neither owning nor
operating mills.
456. Meat Curing Preparations.--Advertising that competitors’ products are dangerous and deleterious
to health, when such is not the fact.
457. Jewelry; Watches--Using the words “Manufacturers” and “Factory” when engaged in the
importation of watch movements and neither owning nor operating factories.
458. Courses of Instructions in Resilvering and Replating.--Falsely claiming to be owners of 14
patent grants and copyrights pertaining to the art of plating or silvering. and advertising as a “special
price” the price at which the course is regularly sold.
459. Pharmaceuticals; Livestock Remedies.--Advertising that remedies contain the same ingredients
as those of a competitor, and possess curative properties, when such are not the facts; using testimonials
that are unauthorized.
460. Cigars.--Using the word “Havana” to designate cigars not made entirely of tobacco grown in
Cuba, without setting forth in type equally conspicuous. the fact that such are not made entirely of Cuban
tobacco.
461. Pharmaceuticals; Medicinal Supplies.--Using a word to indicate that a product is made of a high
grade of glass like the product of a competitor, when such is not the fact.
462. Stereopticon Song Slides.--Using words and a photograph in advertising, thereby implying
association with a competitive company when no business connection exists.
463. Knit Goods.--Using the words “Knitting” and “Mills” in firm name, when neither owning nor
operating mills.
464. Woolen Goods.--Using the word “Mills” in firm name and in advertising matter, when neither
owning nor operating mills.
465. Woolen and Dress Goods.--Using the word “Mills” in firm name and in advertising matter. when
neither owning nor operating mills.
466. Jewelry; Watchcases.--Making use of trade and/or firm name similar to that of a competitor,
thereby implying that products are manufactured by such competitor, when no business connection exists,

STIPULATIONS APPROVED AND ACCEPTED

223

467. Paper Products.--Using the word “Mills” in firm names when neither owning nor operating mills;
implying association with competitor by simulation of trade name, when no business connection exists.
468. Gifts, Premiums, and Novelties.--Using the words “ Jade and Ivory,” “Pearl and Ivory,”
“Mahogany and Ivory,” and “Ebony Finish,” to designate products made of materials other than those
indicated; Using the word “Free,” when the price of the purported gratuity is included in the price paid
by the purchaser for the merchandise with which it is alleged to be given free of charge; handling a device
which involves the conducting of a lottery.
469. Tobacco Products.--Using the word “Manufacturers” when neither owning nor operating
factories; Using the words “Nicotine-freed,” “Denicotinized,” “Harmless,” etc., when products are not
harmless nor free from nicotine.
470. Cellulose Products.--Using the words “Rayon” and “Silk” to designate products not fabricated
from rayon or silk.
471. Candles.--Using the words “Altar,” “Rubricol,” and “Candlemas as “to designate candles not made
in conformity with established ecclesiastical requirements; Using the words “Beeswax,” “Stearic Acid,”
or “Stearine” to designate candles without indicating in type equally as conspicuous that such candles are
not made wholly from beeswax or stearic acid.
472. Chewing Gum.--Using the word “Cimicie “ to designate gum that does not have chicle gum as
its base ; using the word “Free “ when the cost of the purported gratuity is included in the price paid by
the purchaser for the merchandise with which it is alleged to be given free of charge.
473. Sweaters, Bathing Suits, Knit Goods.--Using the words “Knitting” and “Mills” in firm name and
in advertising matter, together with the slogans “Direct from mill to wearer” and “Made in our mills,”
when neither owning nor operating mills.
474. Beverages; Concentrates and Sirups.--Using the word “Cherry” either alone or in connection
with the word “ Smash “ without the word “ Imitation “ in type equally conspicuous, to designate a
product not consisting in substantial part of the juice or the fruit, and without explanatory words in equally
conspicuous type to the effect that product consists in part of other ingredients, to designate a product
consisting in substantial part of the fruit or the juice.
475. Hosiery and Lingerie.--Using the word “Mills” in firm name when neither owning nor operating
mills; Using the word “Silk” to designate articles not fabricated of silk.
476. Cigars.--Representing that products can be used, regardless of quantity, without injury to health.
when such is not the fact.
477. Knit Goods.--Using the words “Knitting” and “Mills” in firm name, when neither owning nor
operating mills.
478. Cotton Goods.--Implying that products are made in accordance with Government specifications,
by the use of pictorial representations simulating the official colors of the United States Military Academy
and swords crossed on a shield, often in connection with the words “West Point,” when products have
neither been made in accordance with Government specifications, nor adopted by the War Department for
use at West Point.
479. Paint, Varnishes and Shellacs.--Using the word “Shellac” without the word “Compound” in type
equally conspicuous, to designate a product made In substantial part of shellac gum, and without the word
“Substitute” in type equally conspicuous to designate a product containing no shellac gum.
480. Cotton Thread.--Using the words “Silk” and “Linen” to designate products not made of silk, flax.
or hemp.
481. Coupons; Silver-Plated Ware.--Using a word suggestive of a well-known make of silverware,
in connection with the sale of coupons to be redeemed by silver-plated ware other than that suggested by
the word used.
482. Knives and Razors.--Using a trade name that Implies products are made in a city in Germany,
when such is not the fact.
483. Encyclopedias and Reference Works.--Advertising as a “special reduced” price, the price at
which the goods are regularly sold ; advertising “Free Goods,” when the cost of the purported gratuity is
included in the price paid by the purchaser for the merchandise with which it is alleged to be given free
of charge.
484. Animal Biscuits.--Using an analysis that is inaccurate and misleading; circulating statements to
the effect that products have only 2 per cent moisture content, and that purchasers of competitors’ products
pay from $16 to $32 a ton for water, when such is not the fact.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

485. Musical Instruments; Musical Saws.--Falsely claiming to be manufacturers and to have a
process patented article; using fictitious price markings to Imply a special offer, when such special price
is in fact the regular price; using the word “Free,” when the cost of the purported gratuity is included In
the price paid by the purchaser for the merchandise with which it is alleged to be given free of charge;
representing that the art of playing musical saws may be acquired by persons having no special musical
talents, when such is not the fact.
486. Canned Goods; Rice, Citron, Lemon Peal, Orange.--Using containers simulating those used by
a well-known company putting out the same products, when no business connection exists.
487. Office Furniture; Desks.--Adopting a system for the maintenance of uniform prices to govern
sales by members of an organization of desk manufacturers and cooperating to maintain same by refusal
to sell to irregular dealers.
488. Beverages; Malt Sirup.--Using the word “ Germany “ in trade name, when product has not been
imported from Germany.
489. General Merchandise; Mail Orders.--Using the words “Beaver” and “Muskrat” to designate
products not made of beaver and muskrat pelts; using the words “Satin,” “Rayon Satin,” “Silk-face
Velour,” “Pongee,” “ Wool Mixed,” “ Flannel” and “Serge,” when articles do not consist in substantial
parts of the products named, without some words in equally conspicuous type to show that the articles are
not made wholly of the products indicated.
490. Jewelry.--Using the words “Amethyst,” “Topaz,” “Aquamarine,” “Emerald,” and “Sea Pearl,” to
designate imitation stones; using the words “White Gold” and “14 kt” to designate articles not made of
gold as represented.
491. Woolens and Worsted Goods.--Using the word “Mills” in firm name and In advertising matter,
when neither owning nor operating mills.
492. Men’s Clothing.--Using the word “Tailor Craft,” “Tailors,” “Tailored to custom requirements,”
etc., in firm name or in advertising matter, when neither operating mills nor tailoring garments to measure.
493. Table Covers and Luncheon Sets.--Using the word “Manufacturing” when neither owning nor
operating mills; using the word “Linenette” and “Embroidered” to designate articles not made of linen and
not embroidered.
494. Books; Special Editions.--Representing through the title of a book that it was written in the time
of Christ but edited by a modern author, when such book was written as well as edited by an author living
to-day.
495. Soap Products; Naphtha.--Using the word “Naphtha” to designate soap products that do not
contain naphtha in excess of 1 per cent by weight at time of sale.
496. Hardware; Mail Orders.--Using the words “Tool Steel,” “Special Analysis Steel,” “Tempered,”
“Well Tempered,” “First Quality,” and “High Grade” to designate tools that are not of tool steel showing
a superior temper, or high grade in any way.
497. Rubber Tires.--Using the words “Manufactured by” in advertising matter, when neither owning
nor operating factories.
498. Velvet.--Using the word “Velvet” to designate a product that is not fabricated from silk.
499. Cutlery and Kitchen Tools.--Using the words “ Stainless Steel “ to designate products not
composed entirely of stainless steel, without using explanatory words to that effect in type equally
conspicuous.
500. Candles.--Using the word “Wax” or “Beeswax” to designate products not composed entirely of
wax or beeswax, without explanatory words to that effect in type equally conspicuous.
501. Metal Products.--Using the words “Silver” and/or “Nickel Silver” to designate products not
composed of silver.
502. Dry Goods and Wearing Apparel; Mail Orders--Using the words “Wool,” “All Wool,” “ Silk,”
and “All Silk” to designate products not made entirely of wool or silk.
503. Tobacco Products; Cigarettes.--Using what purport to be testimonials of various persons, when
such statements are often neither seen nor signed by the alleged authors and the use of the name is given
for a consideration; using paid testimonials without statement to that effect; advertising through newspapers, radio, etc., that cigarette smoking is healthful, reduces flesh, and keeps women’s figures slender,
when such results do not consistently follow the use of cigarettes.
504. Dress Goods Remnants.--Using the word “ Free,” often in connection with the statement “ for a
limited time only,” when the offer of the purported

STIPULATIONS APPROVED AND ACCEPTED

225

gratuity is without limitation and the cost is Included in the price paid by the purchaser for the
merchandise with which it is alleged to be given free of charge
505. Fly-catching Devices.--Using the word “ Honey “ In advertising a device that is neither composed
of nor treated with honey.
506. Beverages; Concentrates and Sirups.--Using the words “Orange,” “Loganberry,” and “Lime”
to designate concentrates not composed entirely of the ingredients indicated, without using explanatory
words to that effect in type equally conspicuous ; using the words “Orange,” “Loganberry,” and “Lime,”
without the word “Imitation” in type equally conspicuous, to designate concentrates deriving their flavors
from a product other than fruit.
507. Paper Specialities.--Advertising that a certain brand of crepe paper “is the only crepe paper that
can be sewed successfully by hand or on the sewing machine,” when such is not the fact.
508. Hardware; Files.--Selling used or discarded files without apprising purchasers that such are
secondhand or reclaimed.
509. Men’s Neckties.--Using the word “Silk “ to designate a product not made of silk, and to designate
a product not made wholly of silk, without explanatory words to that effect in type equally conspicuous.
510. Process Printing; Stationery.--Using the words “Engraving” and “Embossing” to designate a
raised lettering effect that is produced by a form of process printing rather than by engraving or
embossing.
511. Woolens.--Using the word “ Mills “ In firm name and In advertising matter, when neither owning
nor operating mills.
512. Typewriter Ribbons.--Using the word “Silk” to designate a product that is not made of silk.
513. Beverages; Malt Sirups.--Using a picture of the German flag and other German Insignia to
designate products that are neither made in Germany nor imported therefrom.
514. Hosiery.--Using the words “ Mills,” “Knitting,” and/or “Manufacturers” in firm name and in
advertising matter, when neither owning nor operating mills.
515. Brushes; Mail Orders.--Using the word “ Bristles “ to designate a product that does not consist
of bristles.
516. Cotton Yarns.--Using the word “Silk” to designate a product that is not made either in whole or
in part of silk.
517. Leather Harness.--Representing that a designated Individual is living and giving his personal
attention to the direction of a business when such person is not living; quoting as wholesale prices that
are in fact the usual retail quotations.
518. Soap Products.--Using the word “Naphtha” in trade name and in advertising matter to designate
a product that does not contain naphtha in excess of 1 per cent by weight at time of sale.
519. Tile Flooring.--Using the word “Rubber” to designate a product that’ contains no rubber.
520. Confectionery.--Using the words “Home Made” to designate products that are not made in homes
or by hand.
521. Fly-catching Devices.--Using the word “Honey” in advertising a device that is neither composed
of nor treated with honey.
522. Towels and Sheets.--Using the word “Linene” to designate products not made of material
fabricated from flax or hemp.
523. Cotton Fabrics.--Establishing and employing a system for the maintenance of uniform resale
prices.
524. Knitwear.--Using the words “Knit” and “Mills,” when neither owning nor operating mills.
525. Pharmaceuticals; Drugs.--Advertising that a drug is the same mineral salt that makes effective
the waters of European baths and American hot springs, and that the compound has therapeutic value,
when such are not the facts.
526. Toy Airplanes.--Using advertising matter that does not accurately represent the products offered
for sale nor what is possible of accomplishment therewith.
527. Paper Box Board.--Using in advertising matter part of the trade name of a competitor, thereby
implying that products are made by such company, when no business connection exists.
528. Pharmaceuticals; Proprietary Medicines.--Using advertising matter that does not truthfully
represent the product offered for sale.

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529. Motor Boats.--Using the words “ Mahogany” and “Philippine Mahogany “ to designate products
made of wood derived from trees other than those of the mahogany family.
530. Liquid Floor, Furniture and Automobile Polish.--Using the word Wax” to designate a product
not made in substantial part of wax, and to designate a product made in substantial part of wax without
explanatory words in type equally conspicuous to the effect that there are other ingredients contained
therein.
531. Pharmaceuticals; Milk of Magnesia Wafers.--Using the word “Laboratory “ in trade name, when
neither operating nor owning a laboratory ; advertising that “ each wafer represents two teaspoonfuls of
milk of magnesia,” when product is not so concentrated.
532. Fishing Tackle.--Using the words “ Silk Gut “ to designate a product that is not silk gut leader.
533. Cotton Goods.--Using a word of French origin thereby implying that a product is manufactured
from silk, when such product is not fabricated from silk.
534. Motor Boats.--Using the word “Mahogany” and “Philippine Mahogany” to designate parts of
motor boats which are made of wood derived from trees other than those of the mahogany family; using
the word “factory” in advertising matter when neither owning nor operating factories.
535. Motor Boats.--Using the words “Mahogany” and “Philippine Mahogany” to designate parts of
motor boats which are made of wood derived from trees other than those of the mahogany family.
536. Paints and Varnishes.--Using the word “Manufacturing “ in trade name, when neither owning
nor operating mills; using combinations of the word Rubber “ to designate products not composed of
rubber; using statements that imply affiliation with a well-known paint company, when no business connection exists.
537. Books.--Using expressions such as “ The Authentic Text,” or “ The Complete Text,” in connection
with the sale of special editions of books, thereby implying that such edition is an authentic and complete
text of a standard work of a well-known American author, when such is not the fact.538. Monuments and Statues.--Using words that imply existence of branch offices or works in
Scotland and In Vermont when neither having offices nor operating factories in that country or that State
of the Union.
539. Paints and Varnishes.--Using the word “ Rubber “ to designate enamel that is not a rubber
enamel.
540. Automobile Tires.--Using the three initials of a well-known automobile association to imply
indorsement by such organization, when no such indorsement has been given.
541. General Merchandise; Mail Orders.--Using the word “Wool” to designate a product not made
in substantial part of wool; implying ownership or operation of mills, when neither owning nor operating
mills or factories.
542. Artificial Limbs.--Using undated testimonials from persons who are not now living; using cues
in advertising matter that purport to represent individuals wearing artificial limbs actually engaged in
occupations from which they would necessarily have been barred by reason of their physical limitations.
543. Toilet Preparation; Cosmetics.--Using the word “Paris” on labels and in advertising matter, when
products are neither made in France nor imported therefrom.
544. Jewelry.--Using the words “Pearl,” “Crystal,” “Jade,” “Amethyst,” and “Ruby,” without the word
“Imitation” in type equally conspicuous to designate imitation stones; using the words “Synthetic” and
“Indestructible” when such do not truthfully represent the product.
545. Wrapping Paper.--Implying that product has a rupture strength sufficient to withstand a test not
less than 150 pounds to the square inch, and that it meets the qualifications set by the Interstate Commerce
Commission and the regulations of the trade, when such are not the facts.
546-547. Piece Goods.--Using the words “Silk,” “Sylk,” and “Nusylk” to designate products not
fabricated from silk.
548. Lead Pencils.--Using the words “22 kt.,” “Gold,” and “Gold Leaf,” to designate imprint lead
pencils that are not engraved or imprinted in gold or gold leaf.
549. Men’s Clothing.--Using the word “Mills” in firm name, when neither owning nor operating mills.

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550. Pharmaceuticals; Colic Remedy.--Misrepresenting in advertising matter the therapeutic value
of the product.
551. Finger Cots.--Simulating trade name and general appearance of a competitor’s design and
mounting, when there is no business connection between the companies.552. Paints.--Using the words “ Manufactured Only “ and Manufacturers,” when neither owning nor
operating a factory ; labeling products in such a way as to indicate that contents are chemically pure
aluminum bronze, when such is not the fact.
553. Fountain Pens.--Using the word “ Iridium “ in advertising a product that is neither made of nor
equipped with iridium.
554. Coffee.--Advertising through catalogues, radio talks, etc., that product has been treated with a
ripening process involving fungus growth, when such is not the fact.
555. Plumbing Goods.--Selling under exclusive dealing contracts, when such tends to substantially
lessen competition.
556. Chemical Seed Corn Protector.--Using the trade name “Repellent,” and pictorial representations,
advertising matter, and containers that simulate those of competitor ; representing that competitor’s
product is Identical with “ Repellent “ and that competitor’s business has been acquired, when there is no
business connection between the companies.
557. Woven Suiting Fabrics.--Using the words “Lamb” and “Fur” to designate and label products that
are not made of the hide of sheep or lambs, or of the pelt of fur-bearing animals.
558. Paraffin Paper Containers.--Using the word “Manufacturers” when neither owning nor operating
a factory.
559. Paints and Varnishes.--Using the word “Manufacturers” when neither owning nor operating
factories; indicating in advertising matter that a fluid is ground in linseed oil when the product is not
compounded in substantial part of linseed oil.
560. Paints and Varnishes.--Using words indicating that a fluid is ground In linseed oil when such
product is not compounded in substantial part of linseed oil.
561. Fabrics.--Using the words of Chinese origin to designate a fabric not made in China, nor of the
product of the wild silkworm of that region.
562. Household and Office Supplies; Mail Orders.--Using the word “Linene” to designate a product
not fabricated of flax or hemp; using the word “Damask” to designate a fabric in which the pattern is not
woven and formed by the different directions of the thread.
563. Correspondence Schools; Auto Instruction.--Quoting as “Especial” and limited offers, prices
and terms which are the customary terms made in the usual course of business; advertising as “free”
certain purported gratuities, the cost of which are included in the price paid by the purchaser for the course
with which they are alleged to be given free of charge; representing that personal instructions are given,
when such is not the fact; representing in bad faith that all past due accounts will be handled through a
collection agency; designating “Money Back” agreements as guarantees of reimbursement, when such
agreement is not unconditional except as to completion of course an payment and return of textbooks.
564. Process Oils and Sizings.--Circulating statements to the effect that products is not a sulphated oil
when it is so compounded.
565. Knitted Wear.--Using the word “Mills” in firm name and in advertising matter, when neither
owning nor operating mills.
566. Canned Goods; Fish.--Using labels hearing a word resembling the word salmon, together with
the picture of a salmon, on canned goods other than salmon.
567. Canned Goods; Fish.--Using labels bearing words resembling the word “Salmon,” and a picture
of a salmon, on canned goods other than salmon ; using such words on labels designating any kind of fish
without the name of the fish, in type equally conspicuous.
568-569-570. Canned Goods; Fish.--Using labels bearing words indicating that the product is packed
in the style of salmon, together with a picture of a salmon, on canned mackerel.
571. Toy Airplanes.--Using the word “Manufactured” when neither owning nor operating factories ;
advertising results impossible of accomplishment.
572. Toy Air Rifles and Liquid Pistols.--Establishing and employing a system for the maintenance of
uniform resale prices.

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573. Food Products; Pimentos.--Using labels resembling those used by Spanish packers and bearing
Spanish words and expressions to designate products that are not imported from Spain.
574-575. Beverages; Malt --Using Canadian names, often with a depiction simulating the coat of arms
of a foreign country, on labels and advertising matter designating a product that is not of Canadian
manufacture
576. Automobile Tires.--Claiming to be the manufacturer of tires sold by a large mail-order house, and
to have the advantage in the sale of same over this company as well as over a large tire and rubber
company; claiming to have knowledge of a contemplated contract and a director common to both companies named, when such are not the facts.
577. Beverages; Grape Juice.--Claiming to possess gold medals given at various expositions, and to
own vineyards in California and warehouses In New Jersey, and representing that competitors’ products
are either pasteurized products or concentrates preserved with chemicals, when such are not the facts.
578. Shellacs.--Using labels bearing the word “Shellac” to designate products not consisting wholly
of shellac.
579. Oysters.--Using the word “Cotuit” to designate oysters other than “Cotuit” oysters.
580. Pharmaceuticals; Milk of Magnesia.--Using the words “Milk of Magnesia to designate tablets
not formulated in accordance with specifications for milk of magnesia
581. Paints and Varnishes.--Using the words “Lead” and “Zinc” to designate products not consisting
in whole or in predominant part of white lead or zinc.
582. Hosiery and Lingerie.--Using the words “Mills” In firm name and in advertising matter when
neither owning nor operating mills; using the word “ Silk” to designate products not made of silk.
583. Beverages; Malt.--Using European names to designate products none of the ingredients of which
have been imported, and to designate products in which some of the ingredients are not of domestic origin
without indicating what particular Ingredients are imported.
584. Liquid Meat Seasoning.--Using the words “Oil of Spice” to designate a product not consisting
in whole or in predominant part of oil of spice.
585. Window Screens.--Composing a firm name in such way as to imply affiliation with a competing
company, when there is no business connection between the companies.
586. Gums and Waxes.--Using the word “Ceresine” to designate a synthetic product.
587. Beverages; Hairbrushes, Soap, Cod Liver Oil.--Quoting fictitious prices and values; using -the
words “ Grape,” “Apricot,” “Lemon,” “Nectar,” “Cherry,” “Lime,” “Orange,” and “Loganberry” oil labels
and in advertising matter to designate an artificially flavored product without the word “Imitation” in type
equally conspicuous and to designate products consisting in substantial part of the juice or the fruit
designated, without setting forth conspicuously the fact that such products consist in part of other
ingredients; using the words “ Mahogany,” “Ebony,” and “Ivoroid” to designate hairbrushes, the backs
of which are not made of mahogany, ebony, or ivoroid; using the word “ Castile” to designate soap not
made of olive oil ; using the words “Cod Liver Oil” to designate a product not containing such oil in sufficient quantity to be so designated.
588. Novelties; Cigar Lighters; Key Cases.--Advertising that pocket lighters are packed, made in
leather, gold, nickel silver, or silver plate, when such are not the facts; representing profits to be made by
agencies that are far in excess of the true profits, and advertising a guaranty on sale without setting forth
conspicuously that said guaranty applies only to first orders ; using the word “ Manufacturing.” when
neither owning nor operating mills; distributing a device to be used for conducting a lottery.
589. Knitted Sweaters.--Using the words “ Knitting” and “ Mills” in firm name and using the word
“Manufacturers” in advertising matter, when neither owing nor operating mills or factories.
590. Beverages; Concentrates and Sirups.--Using the words “Orange” and Orange Crush” to
designate a product- made in substantial part of the juice of the fruit of the orange, without setting forth
conspicuously the fact that such product consists in part of other ingredients.
591. Reference Books and Imitation Pearls.--Representing that products were purchased from
manufacturers, that quoted prices are special, introductory prices, and that the pearls are indestructible,
when such are not the facts.

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229

592. Hosiery.--Using the word “Wool” to designate a product not fabricated from Wool.
593. Hides and Furs.--Using the words “Tannery” and “Manufacturers when neither owning nor
operating tanneries or factories.
594. Knitted Outerwear and Hosiery.--Using the words “Knitting” and “Mills” in firm name and in
advertising matter, and using the words “Direct from mills to you” in advertising matter, when neither
owning nor operating mills.
595. Suitings.--Using the words “Woolens” and “Worsteds” to designate products not fabricated in
whole or in part of wool.
596. Toilet Preparations.--Quoting exaggerated prices, using price markings that are in excess of the
prices at which it is intended articles shall be sold, and falsely representing that sales at such prices afford
no profit.
597. Pharmaceuticals; Medicines.--Misrepresenting the therapeutic value of medicines; using
indorsement that do not represent the unbiased opinions of the authors thereof, and using paid testimonials
without indicating that such have been given for a consideration.
598. Cotton Goods.--Using a misleading trade name to designate a product without indicating
conspicuously that it is an all-cotton fabric.
599. Cotton goods.--Using misleading trade names to designate products not fabricated from silk.
600. Jewelry.--Using the markings “14-K” and “12-K,” to designate products not consisting of 14 or
12-carat gold; using the words “Rolled Gold” to designate Watch cases not manufactured in accordance
with the specified standard of not less than three one-thousandths of an Inch thickness on the out-side of
the case, and not less than one one-thousandth of an inch in thickness on the inside of the case.
601. Watches.--Using the words “Emerald” and “Sapphire”in designating watches not set with the
stones indicated.
602. Shellacs.--Using the Word “Shellac” or phonetic spelling of the Word without the word
“Compound” In type equally conspicuous to designate a product in which shellac Is the predominant
element and without the word “Substitute” in type equally conspicuous to designate a compound in which
shellac gum is not the predominant ingredient.
603. Confectionery.--Manufacturing and distributing assortments of candy, together with advertising
literature and merchandise to be given as prizes, to be used in conducting a lottery.
604. Metallic Powder.--Using the name of a metal without the Word “Compound” In type equally
conspicuous to designate a product not consisting entirely of that metal; using the term “U. S.” with a
picture of the flag or the shield of the United States, thereby implying that the product is made in accordance with Government specifications, when such Is not the fact.
605. Credit and Statistical Information.--Using the name of a commercial body as part of a firm name,
thereby Implying a voluntary, nonprofit association of individuals and companies, engaged in the sale of
women’s apparel, when such is not the fact.
606. Coal.--Misusing the name of a grade of coat in trade name to designate a product that is not of that
variety.
607. Portraits and Picture Frames.--Using words in firm name to any that it Is an organization for the
promotion of art, when such Is not the fact; quot- mg the regular prices to residents of certain communities
as special introductory prices for a limited time only.
608. Pharmaceuticals; Live-Stock Remedies.--Using the word “Antiseptic” to designate remedies
which do not have antiseptic properties.
609. School Supplies; Composition Books.--Using letters and figures on com- position books in such
a Way as to imply a greater number of pages than those contained therein.
610. Shellacs.--Using the word “Shellac,” without the word “Compound” In type equally conspicuous,
to designate a’ product in Which shellac gum Is the predominant element, and without the word
“Substitute” In type equally conspicuous to designate a product containing no shellac gum
611. Blankets and Shawls.--Using Indian names to designate blankets and shawls not hand loomed
by Indians.
612. Confectionery.--Manufacturing and distributing assortments of candy together with advertising
literature, and merchandise to be given as prizes to be used in conducting a lottery.

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ANNUAL REPORT OP THE FEDERAL TRADE COMMISSION

613. Paper Products.--Using the word “Mills” in firm name when neither owning nor operating mills.
615. Battery Chargers.--Circulating statements to the effect that device Is the most successful charger
ever made, having the capacity for handling almost double the batteries handled by similar devices, and
saving a substantial percentage on electric current, when such are not the facts.
616. Fur.--Using the word “Wombat” to designate sheep and lamb skins.
617. Blankets, Robes, and Shawls.--Using Indian names to designate products not hand loomed by
Indians.
618. Knitted Goods.--Using the word “Factory” in advertising matter, when n either owning nor
operating. factories.
619. Confectionery; Mail Orders--Using the word “Free” when the cost of the purported gratuity is
Included In the price paid by the purchaser for the merchandise With which it is alleged to be given free
of charge; using the word “Sliver” to designate products not made of silver.
620. Confectionery.--Manufacturing and distributing assortments of candy together with advertising
literature, and merchandise to be given as prizes to be used in conducting a lottery.
621. Publications; Reproduction of Printed Data.--Reproducing data published by competitors
without stating that such data is not reproduced in Its entirely.
622. Paper Products.--Using the word “Mills” in advertising matter when neither owning nor operating
mills.
623. Printed Goods.--Using the word “Silk” to designate products not fabricated from Silk.
624. Blankets and Shawls.--Using Indian names to designate products not hand loomed by Indians.
625. Hardwoods; Walnut.--Using the word “Walnut” to designate an imported wood that is derived
from trees other than those of the walnut family.
626. Beverages; Malt Sirups.--Using the word “Bohemian”In labeling products not made in Bohemia,
nor in Czechoslovakia.
627. Hardwoods; Walnut Veneer.--Using the word “Walnut” to designate veneers made from
imported Wood that is derived from trees other than those of the Walnut family.
628. Woolen Cloth.--Using the words “English Broadcloth” in labeling blouses that are not made of
material imported from England.
629. Food Products; Toast --Simulating the color scheme, style, and size of cartons used by a
competing firm, when no business connection exists.
630. Cigars.--Using the word “Havana” to designate cigars that are not composed of tobacco grown
on the island of Cuba, and Implying that such products are the same as the products formerly made and
sold under the same firm name, when such is not the fact.
631. Cotton and Rayon Fabrics.--Using the word “Mills” in advertising matter, when neither owning
nor operating mills; using the words “Tub-fast” to designate articles that will fade when washed; using
the word “Linene” to designate articles not made of material fabricated from flax or hemp.
632. Motor Appliances.--Falsely representing that appliances are patented, and implying a special
reduced price by placing on the containers thereof prices that are in excess of those at which the articles
are regularly sold.
633. Jewelry; Watches.--Using the word “Rebuilt” to designate watches that have not been
overhauled, or reconstructed, and using the word “Factories” in advertising matter, when neither owning
nor operating factories.
634. Shirts.--Using the word “Broadcloth” in labeling shirts that are not made of broadcloth.
635. Carbon Paper.--Using the words “Manufacturers” and “Manufactured by” in labeling
containers of carbon paper When neither owning nor operating factories.
636. Tobacco Products.--Using words that imply products are harmless and free from nicotine, when
such are not the facts.
637. Linings.--Using the words “Satin” and “Serge” in advertising matter descriptive of linings not
fabricated from silk or from wool.
638. Celery.--Advertising as a grower of celery and a shipper of Michigan-grown celery, when not
engaged in growing celery, but engaged in shipping from the State of Michigan celery grown In other
States, thereby furthering the belief that it is Michigan-grown celery.

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231

639. Celery.--Using labels and advertising matter representing that product sold is Michigan grown,
When such product is not grown in the State of Michigan, but is shipped from that State to further the
belief that it is Michigan-grown celery.
640. Celery.--Advertising as a grower of celery and a shipper of Michigan-grown celery, when not
engaged in growing celery, but engaged in shipping from the State of Michigan celery grown in other
States, thereby furthering the belief that it is Michigan-grown celery.
641. Celery.--Using the labels and advertising matters presenting that product sold is Michigan grown,
when such product is not grown in the State of Michigan, but is shipped from that State to further the
belief that it is Michigan-grown celery.
642. Celery.--Advertising as a grower of celery and a shipper of Michigan-grown celery, when not
engaged in growing celery, but engaged in shipping from the State of Michigan celery grown in other
States, thereby furthering the lief that it is Michigan-grown celery.
643-644. Celery.--Using labels and advertising matter representing that product sold is Michigan
grown, when said product is not grown in the State of Michigan, but is shipped from that State to further
the belief that it is Michigan-grown celery.
645. Motor Boats.--Using the term “Mahogany” to designate motor boats, parts of which are made
from wood derived from trees other than those of the mahogany family.
646. Beverages.--Using labels and advertising matter misrepresenting therapeutic value of product, and
representing that the United States Government indorses all claims made for it, when no Federal approval
or indorsement has been given.
647. Correspondence Schools; Aeronautics.--Printing statements implying inspection and rating by
the Government, when the school has no Federal status or rating.
648. Shellacs.--Using the word “Shellac” to designate products containing no shellac.
649. Toilet Preparations.--Distributing assortments of toilet preparations, together with advertising
literature, and merchandise to be given as prizes to be used in conducting a lottery.
650. Beverages; Malt.--Using the word “Imported” to designate products of which none of the
ingredients have been imported: and to designate products in which some of the ingredients are not of
domestic origin, without indicating what particular ingredients have been imported.
651. Correspondence Schools; Law.--Offering a scholarship which is not given on account of ability
or previous foundation study for the work: quoting as the regular price a sum in excess of that regularly
charged for the course; representing that the reduction is in consideration of the signing of the reference
pledge.
652. Paper Products.--Using the word “Mills” In advertising matter, when neither owning nor
operating mills.
653. Woolen Robes and Blankets.--Using Indian names to designate robes and blankets not hand
loomed by the Indians.
654. Coupons; Chinaware.--Using as part of firm name words that imply association with
manufacturing china companies, when no business association exists; falsely claiming to be conducting
an advertising campaign for those manufacturers whose products are being distributed: using the word
“Free,” when the cost of the implied gratuity is included in the price paid by the purchaser for the
merchandise with which it is alleged to be given free of charge.
655. Coupons; Silverware.--Using the words “Publicity Bureau” as part of firm name, when
conducting no organization having the characteristics associated with the term “Bureau”; falsely claiming
to be conducting an advertising campaign for those manufacturers whose goods are being distributed using
the word “Free,” when the cost of the purported gratuity is included in the price paid by the purchaser for
the merchandise with which it is alleged to be given free of charge.
656. Radios.--Using the word “Advertising” in firm name when conducting no advertising bureau:
falsely claiming to be conducting an advertising campaign for those manufacturers whose products are
being distributed; quoting fictitious values for products; distributing a set-up consisting of a radio,

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together with advertising literature, and merchandise to be given as prizes to be used In conducting a
lottery.
657. Chinaware.--Authorizing use of firm name, thereby implying that certain companies are
conducting an advertising campaign for the company whose name is being, used, when there is no actual
representation; using lug the word “Free” when the cost of the purported gratuity is included in the price
paid by the purchaser for the merchandise with which it is alleged to be given free of charge;
misrepresenting rating and financial responsibilities.
658. Chinaware.--Authorizing use of firm name, thereby implying that certain companies are
conducting an advertising campaign for the company whose name is being used, when there is no actual
representation; using the word “Free,” when the cost of the purported gratuity is included in the price paid
by the purchaser for the merchandise with which it is alleged to be given free of charge; misrepresenting
rating and financial responsibilities.
659. Surgical Supplies; Trusses.--Misrepresenting therapeutic value of products; quoting the prices
regularly charged for the products as special, reduced prices; using the word “Free” when the cost of the
purported gratuity is included in the price paid by the purchaser for the merchandise with which it is
alleged to be given free of charge.
660. Paints; Roofing Cement and Caulking Compound.--Using the abbreviation “ Mfg.” in firm
name, when neither owning nor operating factories.
661. Rayon Underwear.--Using a word in firm name, thereby implying association with an underwear
corporation of New York, when no business connection exists.
662. Lacquers.--Giving gratuities to employees of prospective customers without the consent of their
employers, with a view to inducing patronage.
663. Beverages; Concentrates.--Using the words “Grape,” “Lemon,” “Orange,” “Cherry,”
“Strawberry,” and “Loganberry,” to designate concentrates containing other ingredients than those
indicated, without the use of explanatory words to that effect in type equally conspicuous, and to designate
products containing no fruit or fruit juices, without the word “Imitation” In type equally conspicuous.
664-665. Toy Airplanes.--Using advertising matter that does not accurately represent the product
offered for sale, nor what is possible of accomplishment therewith.
666. Furniture; Mahogany.--Using the word “Mahogany” to designate furniture made of wood derived
from trees other than those of the mahogany family.
667. Pharmaceuticals; Phosphorated Iron and Laxative Tablets.--Using advertising matter that
misrepresents the therapeutic properties of the product.
668-669. Cigar Banding Machinery.--Making the leasing of machinery conditional on’ the agreement
that the lessee shall not deal in merchandise, supplies,, ore other commodities of any competitor.
670. Cotton--Mail Orders.--Using such words or expressions as “Pongee,” “Silk Chiffon Velvet,” and
“Wool Mixed,” to designate products not fabricated from silk or from wool, and to designate products not
composed in substantial part of pongee, silk, or wool, without explanatory words in type equally conspicuous to the effect that products are not fabricated, from silk or wool; using the words “Mink” and
“Wolf” to designate products not made of the fur or pelt of mink or wolf; using the word Tooled” to
designate an article that is not band-tooled using the words “Kid” and “Calf” to designate products not
made from the skin or hide of young goats; using the word “Linene” to designate a product not fabricated
from flax or hemp.
671. Beverages; Malt Sirups.--Establishing and employing a system for the maintenance of uniform
resale prices.
672. Correspondence Schools; Accounting and Business Administration.--Using advertising material
overstating and misrepresenting the actual and possible earnings of graduates and the demands for their
services, the course, of Instructions and the space occupied; using the word “ University” when school Is
not under State supervision and neither accredited nor empowered to confer degrees.

RESOLUTIONS DIRECTING INVESTIGATIONS
UTILITY CORPORATIONS
[S. Res. 83, 70th Cong., 1st sess., Feb.15, 1928]
Resolved, That the Federal Trade Commission is hereby directed to inquire Into and report to the
Senate, by filing with the Secretary thereof, within each thirty days after the passage of this resolution and
finally on the completion of the investigation (any such inquiry before the commission to be open to the
public and due notice of the time and place of all hearings to be given by the commission and the
stenographic report of the evidence taken by the com-mission to accompany the partial and final reports)
upon: (1) The growth of the capital assets and capital liabilities of public utility corporations doing an
interstate or international business supplying either electrical energy in the form of power or light, or both,
however produced, or gas, natural or artificial, of corporations holding the stocks of two or more public
utility corporations operating in different States, and of nonpublic utility corporations owned or controlled
by such holding companies; (2) the method of issuing the price realized or value received, the
commissions or bonuses paid or received, and other pertinent facts with respect to the various security
issues of all classes of corporations herein named, including the bonds and other evidences of
indebtedness thereof, as well as the stocks of the same; (3) the extent to which such holding companies
or their stockholders control or are financially interested In financial, engineering, construction, and/or
management corporations, and the relation, one to the other, of the classes of corporations last named the
holding companies, and the public utility corporations; (4) the services furnished to such public utility
corporations by such holding companies and/or their associated, affiliated, and/or subsidiary companies,
the fees, commissions, bonuses, or other charges made therefor, and the earnings and expenses of such
holding companies and their associated, affiliated, and/or subsidiary companies; and (5) the value or
detriment to the public of such holding companies owning the stock or otherwise controlling such public
utility corporations immediately or remotely, with the extent of such ownership or control, and particularly
what legislation, if any, should be enacted by Congresses to correct any abuses that may exist in the
organization or operation of such holding companies.
The commission is further empowered to inquire and report whether, and to what extent, such
corporations or any of the officers thereof or any one in their behalf or In behalf of any organization of
which any such corporation may be a member, through the expenditure of money or through the control
of the avenues of publicity, have made any and what effort to influence or control public opinion on
account of municipal or public ownership of the means by which power is developed and electrical energy
is generated and distributed, or since 1923 to influence or control elections: Provided, that the elections
herein referred to shall be limited to the elections of President, Vice President, and Members of the United
States Senate.
The commission is hereby further directed to report particularly whether any of the practices heretofore
in this resolution stated tend to create a monopoly or constitute violation of the Federal antitrust laws.
UTILITY CORPORATIONS (PRINTING OF REPORTS)
[S. Res. 221, 70th Cong., 1st sess., May 8, 1928]
Resolved, That the reports submitted to the Senate, or which may hereafter be filed with the Secretary
of the Senate, pursuant to S. Res. 83, current session, relative to the investigation by the Federal Trade
Commission of certain electric power and gas utility companies, be printed, with accompanying
illustrations, as a document.
233

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
UTILITY CORPORATIONS (PRINTING OF EXHIBITS)
[S. Res 112, 71st Cong., 1st sess., Sept. 9, 1929]

Resolved, That, as a part of its reports to the Senate, pursuant to Senate Resolution 83, Seventieth
Congress, first session, the Federal Trade Commission be required expeditiously to transmit duplicates,
or true copies, of all exhibits introduced into its record in hearings held and to be held pursuant to said
resolution, and that they be printed as parts of said reports, to accompany the respective parts thereof
printed in accordance with Senate Resolution 221 of May 3, 1928; except that as to copyrighted books,
bulky volumes, and other lengthy exhibits only such descriptions thereof and pertinent extracts therefrom
shall be printed as the Federal Trade Commission may indicate and transmit with such exhibits for that
purpose.
INTERSTATE MOVEMENT OF ELECTRIC ENERGY
[S. Res. 151, 71st Cong., 1st sess., Nov. 8, 1929]
Resolved, That the Federal Trade Commission Is hereby directed to inquire into, ascertain, and report
to the Senate by filing with the Secretary thereof within thirty days after the passage of this resolution, and
at least once each ninety days thereafter until the completion of the investigation, the quantities of
electrical energy used for the development of power or light, or both, how-ever produced, measured by
kilowatt-hours, generated in any State (the term “State” as herein used meaning any State, Territory, or
the District of Columbia), and transmitted by any means from the State in which it is generated into any
other State, or between points within the same State but through any place outside thereof; whether said
electrical energy be transmitted from persons, corporations, firms, or associations to themselves and/or
their branches, subsidiaries, parent companies, or associates In other States, or to other and distinct
persons, corporations, firms, or associations. Said report shall set forth each State in which such electrical
energy is generated and the States into or through which it is transmitted, and shall, in cases where there
is an interchange of transmitted energy between two plants in different States, set forth the gross quantity
transmitted in each direction and not the net difference between the quantities transmitted by said plants.
The commission shall further inquire into, ascertain, and report at the same time upon the percentage
of electrical energy generated In each State which is transmitted to other States, and the percentage of
electrical energy consumed in each State which is imported from other States.
The commission shall, in connection with its report, where such information can be furnished without
unduly delaying the reports herein requested, give the names of persons, firms, corporations, and
associations generating and transmitting such electrical energy In the manner herein described,. the points
at which generated and from which transmitted, and the names of the persons, firms, corporations, or
associations to whom such energy is transmitted and the points to which transmitted.
The commission shall inquire into, ascertain, and report such other facts relative to the transmission of
electrical energy from one State to another or between points in the same State but through any place
outside thereof as the commission may deem pertinent to the inquiry and investigation herein directed.
CHAIN STORES
[S. Res. 224, 70th Cong., 1st sess., May 12, 1928]
Whereas it is estimated that from 1921 to 1927 the retail sales of all chain stores have increased from
approximately 4 per centum to 16 per centum of all retail sales; and
Whereas there are estimated to be less than four thousand chain-store systems with over one hundred
thousand stores; and
Whereas many of these chains operate from one hundred to several thousand stores; and

RESOLUTIONS DIRECTING INVESTIGATIONS

235

Whereas there have been numerous consolidations of chain stores throughout the history of the
movement, and particularly In the last few years; and
Whereas these chain stores now control a substantial proportion of the distribution of certain
commodities in certain cities, are rapidly increasing this proportion of control in these and other cites, and
are beginning to extend this system of merchandising into country districts as well; and
Whereas the continuance of the growth of chain-store distribution and the consolidation of such chain
stores may result in the development of monopolistic organizations in certain lines of retail distribution;
and
Whereas many of these concerns, though engaged in interstate commerce in buying, many not be
engaged in interstate commerce in selling; and
Whereas, in consequence, the extent to which such consolidations are now, or should be made,
amenable to the Jurisdiction of the Federal antitrust laws is a matter of serious concern to the public: Now,
therefore, be it
Resolved, That the Federal Trade Commission is hereby directed to under-take an inquiry into the chainstore system of marketing and distribution as conducted by manufacturing, wholesaling, retailing, or other
types of chain stores and to ascertain and report to the Senate (1) the extent to which such consolidations
have been effected in violation of the antitrust laws, if at all; (2) the extent to which consolidations or
combinations of such organizations are susceptible to regulation under the Federal Trade Commission act
or the antitrust laws, if at all; and (3) what legislation, if any, should be enacted for the purpose of
regulating and controlling chain-store distribution.
And for the information of the Senate in connection with the aforesaid sub-divisions (1), (2), and (3)
of this resolution the commission is directed to Inquire into and report in full to the Senate (a) the extent
to which the chain store movement has tended to create a monopoly or concentration of control in the
distribution of any commodity either locally or nationally; (b) evidences indicating the existence of unfair
methods of competition in commerce or of agreements, conspiracies, or combinations in restraint of trade
involving chain-store distribution; (c) the advantages or disadvantages of chain-store distribution in
comparison with those of other types of distribution as shown by prices, costs, profits, and margins,
quality of goods, and services rendered by chain stores and other distributors or resulting from integration,
managerial efficiency, low overhead, or other similar causes; (d) how far the rapid increase in the chainstore system of distribution is based upon actual savings in costs of management and operation and how
far upon quantity prices available only to chain-store distributors or any class of them; (e) whether or not
such quantity prices constitute a violation of either the Federal Trade Commission act, the Clayton Act,
or any other statute; and (f) what legislation, if any. should be enacted with reference to such quantity
prices.
RESALE-PRICE MAINTENANCE
[Resolution of the Federal Trade Commission, July 25, 1927]
Whereas several bills providing for resale-price maintenance have been introduced in Congress since
1920, including the Merritt bill, Kelly bill, the Wyant bill, and the Williams bill; and
Whereas in 1916, on a referendum of the Chamber of Commerce of the United States, about 74 per cent
of the votes cast were In favor of legislation permitting resale-price maintenance; and
Whereas in 1926, on a similar referendum, about 54 per cent of the votes were in favor; and
Whereas this commission many years ago recommended that Congress enact legislation permitting
resale-price maintenance under certain conditions of governmental control; and
Whereas it seems probable that agitation for some legislation of this character will continue; and
Whereas there has been no thorough and comprehensive investigation of the economic advantages and
disadvantages of such legislation: Therefore be it
Resolved, That the chief economist of the commission be directed to inquire into the question of the
maintenance of manufacturers’ resale prices, both at wholesale and retail, and to report to the commission1. The advantages and disadvantages of resale-price maintenance (a) to competing manufacturers
employing it and to other competing manufacturers,

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

(b) to competing wholesalers and retailers employing it and to other competing wholesalers and
retailers, (c) to the ultimate purchaser.
2. The costs, profits, and margin of manufacturers and distributors and the prices to consumers on
competing price maintained and nonprice maintained goods and particularly the relation of advertising
expenses to such costs, profits, margins, and prices.
3. The causes and motives for price cutting by distributors (a) in general: (b) below the total cost of the
distributor; (c) below the purchase price paid by the distributor of goods; the Justification for such price
cutting, if any; the effect of price cutting on manufacturers, distributors, and consumers particularly with
reference to: (a) How far, if at all, price cutting increases volume of business for a distributor and offsets
the decreased profit per unit; (b) how far, if at all, price cutting has eliminated manufacturers and
distributors from business; (c) the effect of price cutting by distributors on the prices, profits, and margins
of manufacturers.
4. The relation of resale-price maintenance, if any, to the multiplication of distributors, and, if such
effect is found, the relation of this multiplication to the cost of marketing.
5. Any other facts pertinent for the consideration of Congress with reference to legislation on this
subject.
6. The character of the legislation, if any, which should be recommended by the commission.
COTTONSEED PRICES
[S. Res. 136, 71st Cong., 1st sess., Oct. 21, 1929]
Whereas it is alleged that certain cottonseed crushers and oil mills have entered into a combination for
the purpose of fixing prices on cottonseed in violation of the antitrust laws; and
Whereas it is alleged that cottonseed prices have been arbitrarily forced down by the cottonseed
crushers and oil mills to a lower level than has ever existed at this season of the year and
Whereas It is alleged that as a result of such combination cottonseed buyers are not permitted to pay
more than a certain price for cottonseed and sell cottonseed meal at less than a certain price under threat
of boycott: Therefore be it
Resolved, That the Federal Trade Commission is hereby requested to make an immediate and thorough
investigation of all facts relating to the alleged combination in violation of the antitrust laws with respect
to prices for cotton-seed and cottonseed meal by corporations operating cottonseed-oil mills. The
commission shall report to the Senate as soon as practicable the results of its investigation.
COTTONSEED PRICES
[S. Res. 147, 71st Cong., 1st sess., Nov. 2, 1929]
Whereas it is alleged that certain cottonseed-oil mills have acquired control of cotton gins and have
arranged with ginners not to store cottonseed for farmers in order to force the farmers to put their seed
upon the market immediately instead of holding them for the purpose of obtaining a profitable price; and
Whereas it is essential that full publicity be given to such matters: Therefore be it
Resolved, That the Federal Trade Commission is hereby directed (1) to investigate the charge that
certain corporations operating cottonseed-oil mills are acquiring by purchase or otherwise the ownership
or control of cotton gins for the purpose of destroying the competitive market for cottonseed and de
pressing and holding down the price paid to farmers for cottonseed, and (2) to hold public hearings in
connection with the investigations with respect to such matters and in connection with the investigations
pursuant to S. Res. 186, agreed to October 21, 1929. The commission shall report to the Senate as soon
as practicable the results of its investigations under this resolution.

RESOLUTIONS DIRECTING INVESTIGATIONS

237

COTTONSEED PRICES (PRINTING OF TRANSCRIPT)
[H. Con. Res. 37, 71st Cong., 2d se, June 12, 1930]
Resolved by the House of Representatives (the Senate concurring), That the Federal Trade Commission
is hereby directed to transmit, from time to time, to the Senate, or expeditiously file with the Secretary of
the Senate, during the recess of Congress, a transcript or true copy of the hearings held before said
commission, pursuant to S. Res. 136 and S. Res. 147, Seventy-first Congress, directing an investigation
of the charges that certain corporations, operating cottonseed-oil mills, are violating the antitrust laws with
respect to prices for cottonseed and acquiring the ownership or control of cotton gins, and that the same
shall be printed, with accompanying illustrations, as a document for the use of the Senate and House.
COTTONSEED PRICES (PRINTING OF TRANSCRIPT AND EXHIBITS)
[S. Res. 292, 71st Cong., 2d sess., June 20, 19303
Resolved, That the Federal Trade Commission is hereby directed to transmit, from time to time to the
Senate, or expeditiously file with the Secretary of the Senate, during the recess of Congress, a transcript
of the hearings held before said commission, and exhibits filed in connection therewith, pursuant to S.
Res. 136 and S. Res. 147, Seventy-first Congress, directing an investigation of the charges that certain
corporations, operating cottonseed oil mills, are violating the antitrust laws with respect to prices for
cottonseed and acquiring the ownership or control of cotton gins. The transcript of the hearings and
exhibits so transmitted shall be printed, with accompanying illustrations, as a Senate document; except
that as to copyrighted books, bulky volumes, and other lengthy exhibits only such descriptions thereof and
pertinent extracts there from shall be printed as the Federal Trade Commission may indicate and transmit
with such exhibits for that purpose.
PEANUT PRICES
[S. Res. 139, 71st Cong., 1st sess., Oct.22, 1929]
Whereas it Is alleged that certain peanut crushers and mills have entered Into a combination for the
purpose of fixing prices on peanuts in violation of the antitrust laws; and
Whereas it is alleged that as a result of such combination prices for peanuts have been arbitrarily forced
down; and
Whereas the lack of a competitive market for peanuts has been demoralizing and destructive to the
producers of peanuts and considerable losses have been caused to the peanut growers: Therefore be it
Resolved, That the Federal Trade Commission is hereby requested to make an immediate and thorough
investigation of all facts relating to the alleged combination in violation of the antitrust laws with’ respect
to prices for peanuts by corporations operating peanut crushers and mills. The Commission shall report
to the Senate as soon as practicable the result of its investigation.
NEWSPRINT PAPER 1
[S. Res. 337, 70th Cong., 2d sess., Feb.27, 1929]
Resolved, That the Federal Trade Commission Is requested to make an Investigation upon the question
of whether any of the practices of the manufacturers and distributors of newsprint paper tend to create a
monopoly in the supplying of newsprint paper to publishers of small daily and weekly news-paper or
constitute a violation of the antitrust laws, and to report to the Senate as soon as practicable the results of
such investigation together with its recommendations, if any, for necessary legislation.
1

Inquiry completed during fiscal year. Report transmitted to Senate, July 3, 1930.

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION
PRICE BASES
[Resolution of the Federal Trade Commission, July 27, 1927]

Whereas the economical distribution of commodities is one of the chief problems of the day; and
Whereas the method of determining the prices (or the total cost to the purchaser) of commodities sold
in the same or in different localities is an important factor in a sound system of distribution; and
Whereas there are various systems and theories on which such prices are made and marked differences
of opinion as to their expediency and fairness; and
Whereas some distributors are employing the policy of national distribution with prices, particularly
in different consuming territories, that make no allowance for difference in transportation costs, while
others allege that there should be a delimitation of markets having respect to transportation expense: Now,
therefore, be it
Resolved, That the chief economist of the Federal Trade Commission is hereby directed to inquire into
and report upon (1) the factory-base method, the basing-point method, and the delivered-price method of
quoting and charging prices (including their respective variations), together with any other method of
differentiating prices with respect to location; (2) the causes for the adoption of the several methods
employed and the purposes intended to be served by them; (3) their actual and potential effects upon
prices and competitive conditions; and (4) any constructive measures which might be employed to
promote greater efficiency, economy, or fairness in the methods of quoting or charging prices.
“BLUE SKY” SECURITIES
[Resolution of the Federal Trade Commission, July 27, 1927]
Whereas this commission has had frequent occasion to proceed against unfair methods of competition
with respect to the sale of so-called “bluesky” securities and has found In that respect that present
legislative remedies are in adequate; and
Whereas this commission formerly initiated a general inquiry into this subject with a view to
constructive remedial proposals, but no report was published; and
Whereas the practice of fraudulently selling worthless securities is a great economic evil which should
be remedied promptly if practicable: Now, therefore, be it
Resolved, That the chief economist of this commission Is hereby directed to inquire. further into (1) the
practice of selling blue-sky securities, (2) the legislative, administrative, and other methods employed to
abate the evil and the results thereof, and (3) other matters covered by the previous inquiry, in order to
bring the same up to date, and to report thereon to the commission without formulating conclusions of
legislative policy but, instead, stating succinctly the arguments both for State and for Federal regulation
and the forms which such regulation should take.
BREAD AND FLOUR 2
[S. Res. 163, 68th Cong., 1st sess., Feb. 16, 1924]
Resolved, That the Federal Trade Commission be, and it is hereby, directed to investigate the
production, distribution, transportation, and sale of flour and bread, including by-products, and report its
findings in full to the Senate, showing the costs, prices, and profits at each stage of the process of
production and distribution, from the time the wheat leaves the farm until the bread is delivered to the
consumer; the extent and methods of price fixing, price maintenance, and price discrimination; the
developments In the direction of monopoly and concentration of control in the milling and baking
industries, and all evidence indicating the existence of agreements, conspiracies, or combinations in
restraint of trade.
2 Inquiry completed during fiscal year 1927-28. Reports transmitted to Senate in 1926 1927, and 1928.
Subject to further report pending court decision in Millers’ National Federation case. (See p. 106.)

INVESTIGATIONS, 1913-1930
AUTHORIZED BY THE SENATE
Fertilizer (S. Res. 487, 62d Cong., 3d. sess., March 1, 1918) -The inquiry made in response to this
resolution which was begun by the Bureau of Corporations, disclosed the extensive use of bogus
Independent fertilizer companies used for purposes of competition, but through conferences with the
principal manufacturers agreements were reached for the abolition of such unfair competition. Report
transmitted August 19, 1916.
Pipe lines (S. Res. 109, 63d Cong., 1st sess., June 18, 1918) -The report on this Inquiry, which was
begun by the Bureau of Corporations, showed the dominating importance of the pipe lines in the great
mid-continent oil field and that the pipe-line companies, which were controlled by a few large oil
companies, not only charged excessively high rates for transporting petroleum but also evaded their duties
as common carriers by insisting on unreasonably large shipments. to the detriment of the numerous small
producers. Transmitted February 28, 1918.
Gasoline (S. Res. 457, 63d Cong., 2d sess., September 28, 1914).--Acting under this resolution, the
commission published a report on gasoline prices in 1915, which discussed the high prices of petroleum
products and showed how the various Standard Oil companies had continued to maintain a division of
marketing territory among themselves. The commission suggested several plans for restoring effective
competition in the oil industry. Transmitted April 11, 1917.
Sisal hemp (S. Res. 170, 84th Cong., 1st sess., April 17, 1916).--In response to a resolution calling on
the commission to assist the Senate Committee on Agriculture and Forestry by advising how certain
quantities of hemp, promised by the Mexican sisal trust, might be fairly distributed among American
manufacturers of binder twine, the commission made an inquiry and submitted a plan of distribution,
which was followed. Report transmitted May 9, 1916.
Newsprint paper (first Investigation) (S. Res. 177, 64th Cong., 1st sess., April 24, 1916).--The
newsprint-paper inquiry resulted from au unexpected advance in prices. The reports of the commission
showed that these prices were very profitable, and that they had been partly the result of certain news-print
association activities which were in restraint of trade. Through the good offices of the commission
distribution of a considerable quantity of paper to needy, publishers was obtained at comparatively
reasonable prices. The Department of Justice instituted proceedings in consequence of which the
association was abolished and certain newsprint manufacturers indicted. Reports transmitted March 3,
1917, and June 13, 1917.
Anthracite coal (S. Res. 217, 84th Cong., 1st sess., June 22, 1916, and S. Res. 51, 65th Cong., 1st
sess., April 80, 1917) .-The rapid advance in the prices of anthracite at the mines, compared with costs,
and the extortionate overcharging of anthracite Jobbers and dealers were disclosed in the inquiry in
response to these resolutions and a system of current reports called for regarding selling prices which
substantially checked further exploitation of the consumer. Reports transmitted May 4, 1917, and June
20, 1917.
Book paper (S. Res. 269, 64th Cong., 1st sess., September 7, 1916).--The inquiry into book paper,
which was made shortly after the newsprint inquiry, had a similar origin and disclosed similar restraints
of trade, resulting in proceedings by the commission against the manufacturers involved therein to prevent
the enhancement of prices. The commission also recommended legislative action to repress restraints of
trade by such associations. Reports transmitted June 13, 1917,, and August 21, 1917.
Flags (S. Res. 35, 65th Cong., 1st sess., April 16, 1917).--A sudden increase In the prices of American
flags led to this inquiry, which disclosed that while a trade association had been active to fix prices shortly
before the price advance had been so great on account of the war demand that further price fixing had been
superfluous. Report transmitted July 26, 1917.
239

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ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION

Independent Harvester Co. (S. Res. 212, 65th Cong., 2d sess., March 11, 1918) --This resolution
called for a thorough Investigation of the organization and methods of operation of the company which
had been formed several years before to compete with the Harvester Trust. The company passed into
receivership and the report disclosed that mismanagement and insufficient capital brought about its failure.
Report transmitted May 15, 1918.
Farm implements (S. Res. 228, 65th Cong., 2d sess., May 13, 1918) --The high prices of farm
implements led to This inquiry, which disclosed that there were numerous trade combinations to advance
prices and that the consent decree for the dissolution of the International Harvester Co. was absurdly In
adequate. The commission recommended a revision of the decree and the Department of Justice
proceeded against the company to that end. Report transmitted May 4, 1920.
Milk (S. Res. 431, 65th Cong., 3d. sess., January 31, 1919).--This inquiry into the fairness of milk
prices to producers and of canned milk to consumers, and whether they were affected by fraudulent or
discriminatory practices, resulted in a report showing marked concentration of control and of questionable
practices in the buying and handling of cream by butter manufacturers, many of which have since been
recognized as unfair by the trade itself. Report transmitted June 6, 1921.
Southern livestock prices (S. Res. 133, 66th Cong., 1st sess., July 25, 1919).--The low prices of
southern livestock, which gave rise to the belief that dis-crimination was being practiced, were
investigated, but the alleged discrimination did not appear to exist. Report transmitted February 2, 1920.
Pacific coast petroleum (S. Res. 138, 66th Cong., 1st sess., July 31, 1919).--On the Pacific coast the
great increase in the prices of gasoline, fuel oil, and other petroleum products led to This inquiry, which
disclosed that several of the companies were fixing prices. Reports transmitted April 7, 1921, and
November 28, 1921.
Commercial feeds (S. Res. 140, 66th Cong., 1st sess., July 31, 1919).--The inquiry into commercial
feeds, which aimed to discover whether there were any combinations or restraints of trade in that business,
was diligently pursued; and though it disclosed some association activities in restraint of trade, it found
no important violation of the antitrust laws. Certain minor abuses In the trade were eliminated. Report
transmitted March 29, 1921.
Meat-packing profit limitations (S. Res. 177, 66th Cong., 1st sess., September 3, 1919).--The inquiry
into meat-packing profit limitations had as its object the study of the system of war-time control
established by the Food Administration; certain changes were recommended by the commission, including
more complete control of the business and lower maximum profits. Report transmitted August 24, 1919.
Tobacco prices (S. Res. 129, 67th Cong., 1st sess., August 9, 1921).--This inquiry was also directed
to the low prices of leaf tobacco and the high price of tobacco products. It disclosed that in the sale of
tobacco several of the largest companies were engaged in numerous conspiracies with their customers--the
jobbers--to enhance the selling prices of tobacco. Proceedings against these unlawful acts were instituted
by the commission. Report transmitted January 17, 1922.
House furnishings (S. Res. 127, 67th Con g.. 2d sess., January 4, 1922).--The alleged failure of housefurnishing goods to decline in price since 1920 as much as most other commodities, alleged to be due to
restraints of trade, was inquired into by the commission. Three reports were issued on the subject, dealing
with wooden household furniture, household stores, kitchen furnishings, and domestic appliances. These
reports showed that extensive conspiracies existed, under the form of cost-accounting devices and
meetings, to inflate tire prices of such goods. Reports transmitted January 17, 1928, October 1, 1923, and
October 6, 1924.
Export grain (S. Res. 138, 67th Cong., 2d sess., December 22, 1921).--The low prices of export wheat
gave rise to tins inquiry, which developed extensive and harmful speculative manipulation of prices on
tire grain exchanges and conspiracies among country grain buyers to agree on maximum prices for grain
purchased. Legislation for a stricter supervision of grain exchanges was recommended, together with
certain changes in their rules. Tire commission also recommended governmental action looking to
additional storage facilities for grain uncontrolled by grain dealers. Reports transmitted May 16, 1922, and
June 18, 1923.
Flour milling (S. Res. 212, 67th Cong., 2(1 sess., January 18, 1922).--A report on the inquiry into the
flour-milling industry was sent to the Senate in May,

INVESTIGATIONS, 1913-1930

241

1924. It showed the costs of production of wheat flour and the profits of the flour-milling companies In
recent years. It also discussed the disadvantages to the miller and consumer arising from an excessive and
confusing variety in the sizes of flour packages. Transmitted May 16, 1924.
Cotton trade (S. Res. 262, 67th Cong., 2(1 sess., March 16, 1922).--The inquiry into cotton trade
originated by this resolution was covered in part by a preliminary report issued in February, 1923, which
discussed especially the causes of the decline In cotton prices in 1922 and left the consideration of the
other topics indicated to be treated in connection with an additional and related inquiry called for by the
Senate at that time. Reports transmitted February 26, 1923, and April 28, 1924.
Fertilizer (S. Res. 307, 67th Cong., 2d sess., June 17, 1922).--The fertilizer inquiry developed that
active competition generally prevailed In the industry in this country, though in foreign countries
combinations control some of the most important raw materials. The commission recommended
constructive legislation to Improve agricultural credits and more extended cooperative action in the
purchase of fertilizer by farmers. Report transmitted March 3, 1923.
Foreign ownership in petroleum industry (S. Res. 311, 67th Cong., 2d sess., June 29, 1922).--The
acquisition of extensive oil interests in this country by the Dutch-Shell concern, an international trust, and
discrimination practiced against Americans in foreign countries provoked this inquiry which developed
the situation in a manner to promote greater reciprocity on the part of foreign governments. Report
transmitted February 12, 1923.
Calcium arsenate (S. Res. 417, 67th Cong., 4th sess., Jan.23, 1923).--The high prices of calcium
arsenate, a poison used to destroy the cotton boll weevil, led to this inquiry from which it appeared that
the cause was due to the sudden Increase in demand rather than to any restraints of trade. Report
transmitted March 3, 1923.
Cotton trade (S. Res. 429, 67th Cong., 4th sess., Jan.31, 1923).--The Inquiry in response to this second
resolution on the cotton trade was combined with the one mentioned above and resulted in a report which
was sent to the Senate In April, 1924 This report recommended that Congress enact legislation pro-viding
for some form of southern warehouse delivery on New York contracts, and as a part of such a delivery
system the adoption of a future contract which would require that not more than three adjacent or
contiguous grades should be delivered on any single contract. The commission also recommended a revision of the system of making quotations and differences at the various spot markets and the abolition of
deliveries on futures at New York. The special warehouse committee of the New York Cotton Exchange
on June 28, 1924, adopted the recommendations of the commission with reference to the southern delivery
on New York contracts, including the contiguous grade contract. Report transmitted April 28, 1924.
National wealth (S. Res. 451, 67th Cong., 4th sess., Feb.28, 1923).--This resolution called for a
comprehensive inquiry into national wealth and income and specially indicated for investigation the
problem of tax exemption and the increase in Federal and State taxes in recent year Two reports were
issued as a result of this inquiry. The first was a discussion of taxation and tax exemption which among
other things comprised an elaborate estimate of the amount and ownership of tax-exempt securities by
different classes of corporations and persons, and examined the significance of these facts with respect to
the great increase In the burdens of taxation. The second report was devoted to national wealth and
income, estimating the former to be $353,000,-000,000 in 1922 and the national income in 1923 at
$70,000,000,000, The nature of the wealth and income and Its distribution among various classes are also
given. Reports transmitted June 6, 1924, and May 25, 1926.
Bread (S. Res. 163, 68th Cong., 1st sess., Feb. 16, 1924).--This resolution directed the commission to
Investigate the production, distribution, transportation, and sale of flour and bread, showing costs, prices,
and profits at each stage of the process of production and distribution; the extent and methods of price
fixing, price maintenance, and price discrimination; concentration of control in the milling and baking
industries; and evidence indicating the existence of agreements, conspiracies, or combinations In restraint
of trade. Two preliminary reports were issued, dealing with competitive conditions in flour milling and
bakery combines and profits. The final report covered the whole problem and show among other things
that wholesale baking in recent years had been generally profitable. It disclosed also price cutting wars
by the big bakery

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combines and subsequent price-fixing agreements. Reports transmitted May 3, 1926, February 11, 1927,
and January 11, 1928.
Cotton merchandising practices (S. Res. 252, 68th Cong., 1st sess., June 7, 1924).--Abuses In
handling consigned cotton are discussed in the report on this inquiry and a number of recommendations
designed to correct or alleviate existing conditions are made. Transmitted January 20, 1925.
Packer consent decree (S. Res. 278, 68th Cong., 2d sess., Dec. 8, 1924).--In response to this resolution
a report was made reviewing the legal history of the consent decree and the efforts made to modify or
vacate it. A summary is given of the divergent economic interests involved in the question of packer
participation in unrelated lines, The report recommended the enforcement of the decree against the Big
Five packing companies. Transmitted February 20, 1925.
Empire Cotton Growing Corporation (S. Res. 317, 68th Cong., 2d sess., January 27, 1925).--This
inquiry concerned the development, methods, and activities of the Empire Cotton Growing Corporation,
a British company. The report discusses world cotton production and consumption and concludes that
there is little danger of serious competition to the American cotton grower and that it will be many years
before there is a possibility of the United States losing its position as the largest producer of raw cotton.
Transmitted February 28, 1925.
Tobacco (S. Res. 329, 68th Cong., 2d sess., February 9, 1925).--The report on this investigation related
to the activities of the American Tobacco Co. and the Imperial Tobacco Co. of Great Britain. The alleged
illegal agreements, combinations, or conspiracies between these companies did not appear to exist. The
report disclosed on the other hand evidences of mismanagement in a leading tobacco growers cooperative
association. Transmitted December 23, 1925.
Electric power (S. Res. 329, 68th Cong., 2d sess., February 9, 1925) --Two reports on the electric
power industry were made pursuant to this resolution. The first dealt with the organization, control, and
ownership of commercial electric power companies, and showed the extreme degree to which pyramiding
has been carried, in superposing a series of holding companies over the underlying operating companies.
The second report related to the supply of electrical equipment and competitive conditions existing in the
industry. The dominating position of the General Electric Co. is clearly brought out. Report transmitted
February 21, 1927, and January 12, 1928.
Open-price associations (S. Res. 28, 69th Cong., special sess., March 17, 1925).--This resolution
called for an investigation to ascertain the number and names of so-called open-price associations, their
importance in the industry, and the . nature of their activities, with particular regard to the extent to which
uniform prices are maintained among members to wholesalers or retailers. Report transmitted February
13, 1929.
Cooperative marketing (S. Res. 34, 69th Cong., special sess., March 17, 1925).--An inquiry on the
development and importance of the cooperative movement in the United States and illegal interferences
with the formation and operation of cooperatives. The report includes also a study of comparative costs
prices and marketing practices as between cooperative marketing organizations and other types of
marketers and distributors handling farm products. Transmitted April 30, 1928.
Petroleum prices (S. Res. 81, 69th Cong., 1st sess., June 3, 1926).--A comprehensive study covering
all branches of the industry from the ownership of oil lands and the production of crude petroleum to the
conversion of petroleum into finished products and their distribution to the consumer. The report described not only the influences affecting the movements of gasoline and other products, but also discussed
the organization and control of the various important concerns in the industry, No recent evidence was
found of any understanding, agreement, or manipulation among the large oil companies to raise or depress
prices of refined products. Report transmitted December 12, 1927.
Stock dividends (S. Res. 804, 69th Cong., 2d sess., December 22, 1926).--This resolution called for
a list of the names and capitalization of those corporations which had issued stock dividends, together with
the amount of such stock dividends, since the decision of the Supreme Court, March 8, 1920, holding that
stock dividends were not taxable. The same information for the equal period prior to that decision was also
called for. The report contains a list of 10,245 such corporations and a brief discussion on the practice of
declaring stock dividends, concluding it to be of questionable advantage as a business policy. Transmitted
December 5, 1927.

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243

Utility corporations (S. Res. 83, 70th Cong., 1st sess., February 15, 1928).--This resolution directed
the commission to make an investigation of electric and gas public utility companies and their holding
companies with respect to their financial development and practices, the conditions respecting the control
of the industry, propaganda in opposition to public ownership, and attempts to Influence elections to
certain offices. The resolution directed the holding of public hearings in the conduct of the investigation
and called for monthly progress reports to be made to the Senate. The first of these reports was dated
March 15, 1928.
Chain stores (S. Res. 224, 70th Cong., 1st sess., May 12, 1928).--Pursuant to This resolution the
commission initiated a general inquiry into merchandising through chain stores, The study will bring out
the advantages or disadvantages of This form of marketing as compared with those of other types and an
examination of the activities of chain-store systems to ascertain whether they involve any violation of the
antitrust laws.
Newsprint paper (S. Res. 337, 70th Cong., 2d sess., February 27, 1929) .--An inquiry to determine the
presence of a monopoly among manufacturers and distributors of newsprint paper In the supplying of
paper to publishers of small daily and weekly newspapers. Report transmitted July 3, 1930.
Cottonseed prices (S. Res. 136, 71st Cong., 1st sess., October 21, 1929, and S. Res. 147, 71st Cong.,
1st sess., November 2, 1929).--Under direction of these resolutions the commission seeks information as
to whether or not certain large cottonseed oil mill operators have acquired control of cotton gins In order
to destroy the competitive market for cottonseed, and to depress prices paid the farmer. Data are also
sought concerning an alleged combination in violation of the anti trust laws with respect to prices for
cottonseed and cottonseed meal. The resolution calls for public hearings.
Peanut prices (S. Res. 139, 71st Cong. 1st sess., October 22, 1929).-Under direction of This resolution
the commission seeks data concerning an alleged combination of peanut crushers and mills for price-fixing
purposes in violation of the antitrust laws as well as information with respect to an alleged arbitrary
decrease in prices.
Interstate power transmission (Si Res. 151, 71st Cong., 1st sess., November 8, 1929).--This resolution
provides for the commission’s filing within 30 days after passage, and at least once each 90 days thereafter
until completion of the investigation, statements of the quantity of electrical energy used for development
of power or light, or both, generated In any State and transmitted across State lines, or between points
within the same State but through any place outside thereof.
AUTHORIZED BY THE HOUSE OF REPRESENTATIVES
Bituminous coal (H. Res. 352, 64th Cong., 1st sess., August :18. 1916).--While This resolution aimed
originally at the investigation of the alleged depressed condition of the bituminous coal industry, the
inquiry had not long been under way before there was a great advance in prices, and the commission In
its report suggested various measures for insuring a more adequate supply at reasonable prices. War-time
price control was soon after established. Reports transmitted May 4, 1917, May 19, 1917, and June 20,
1917.
Sugar (H. Res. 150, 66th Cong., 1st sess., October 1.1919).--The extraordinary advance in the price
of sugar’ in 1919 led to this inquiry, and the price advance was found to be due chiefly to speculation and
hoarding in sugar. ‘Certain recommendations were made for legislative action to cure these abuses. Report
transmitted November 15, 1920.
Shoe costs and prices (H, Res. 217, 66th Cong., 1st Bess., August 19, 1919.).--The high price of shoes
after the war led to this Inquiry, and the investigation of the commission attributed them chiefly to supply
and demand conditions. The economic waste due to the excessive variety of styles and rapid changes
therein was emphasized. Report transmitted June 10, 1921.
Cotton yarn (H. Res. 451. 66th Cong., 2d sess., April 5, 1920).--The commission was called upon in
1920, by this resolution, to investigate the very high prices of combed cotton yarn, and the inquiry
disclosed that there had been an unusual advance in prices and that the profits In the industry had been
extraordinarily large for several years. Report transmitted April 14, 1921.
Petroleum prices (H. Res. 501, 66th Cong. 2d sess., April 5,1920).--Another inquiry into high prices
of petroleum products. The report of the commission pointed out that the Standard companies practically
made the prices in their

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several marketing territories and avoided competition among themselves. Various constructive proposals
to conserve the oil supply were made by the com mission. Transmitted June 1, 1920.
Tobacco prices (H. Res. 533, 66th Cong., 2d sess., June 3, 1920) --All inquiry into the prices of leaf
tobacco and the selling prices of tobacco products. The unfavorable relationship between them was
reported to be due in part to the purchasing methods of the large tobacco companies. As a result of this
inquiry the commission recommended that the decree dissolving the old Tobacco Trust should be amended
and alleged violations of the existing decree prosecuted. Better systems of grading tobacco were also
recommended by the com-mission. Report transmitted December 11, 1920
Radio (H. Res. 548, 67th Cong., 4th sess., March 4, 1923).--As a result of the investigation made by
the commission in response to this resolution it was found that a vast number of patents were owned by
and cross licensed among a number of large companies. At the conclusion of the investigation the commission instituted proceedings against these companies charging a monopoly of the radio field. Report
transmitted December 1, 1923.
Cottonseed (H. Res. 439, 69th Cong., 2d sess., March 2, 1927).--Merged fixing of prices paid for
cottonseed led to this investigation. The commission found considerable evidence of cooperation among
the State associations, but the evidence as a whole did not indicate that prices had been fixed by those
engaged in crushing or refining cottonseed in violation of the antitrust laws. One of the main causes of
dissatisfaction to both the producer of cottonseed and those engaged In its purchase and manufacture was
found to be the lack of a uniform system of grading. Report transmitted March 5, 1928.
AUTHORIZED BY THE PRESIDENT
Trade and tariffs in South America (July 22, 1915).--This report was an outgrowth of the First Pan
American Financial Conference which met at Washington, May 24-29, 1915. Its immediate purpose was
to furnish the American branch of the International High Commission, appointed as a result of this
financial conference, with concrete information to assist it in the deliberations of the International High
Commission. The tariff characteristics of Brazil, Uruguay, Argentina, Chile, Bolivia, and Peru are
discussed in the report. The investigation established the prevalence of a decided protective tariff tendency
in some of the South American countries as against the erroneous impression that had been created in this
country that all the Latin American tariffs were devised purely for revenue. Report dated June 30, 1916.
Food inquiry (Feb. 7, 1917).--The general food investigation, undertaken with a special appropriation
of Congress, resulted in a very important series of reports on the meat-packing industry, which had as their
immediate result the enactment of the packers and stockyards act for the control of this industry and the
prosecution of the big packers for a conspiracy in restraint of trade by the Department of Justice. Another
branch of the food inquiry developed important facts regarding the grain trade which were of assistance
to Congress in regulating the grain exchanges and to the courts in interpreting the law. Reports were also
issued on the flour-milling and food-canning industries.
War-time cost finding (July 25, 1917) .--The numerous cost investigations made by the Federal Trade.
Commission during the war into the coal, steel, lumber, petroleum, cotton-textile, locomotive, leather,
canned foods, and copper industries, not to mention scores of other important industries, on the basis of
which prices were fixed by the Food Administration, the War Industries Board and the purchasing
departments like the Army, Navy, Shipping Board, and Railroad Administration, were all done under the
President’s special direction, and it is estimated that ,they helped to save the country many billions of
dollars by checking unjustifiable price advances.’ Subsequent to the war a number of reports dealing ,with
costs and profits were published based on these war-time inquiries. Among these may be mentioned
reports on steel, coal, copper, lumber, and canned foods.
Wheat prices (Oct. 12, 1920).--The extraordinary decline of wheat prices In the summer and autumn
of 1920 led to a direction of the President to inquire into the reasons for the decline. The chief reasons
were found in abnormal market conditions, including certain arbitrary methods pursued by the grainpurchasing departments of foreign governments. Report dated December 13, 1920.

INVESTIGATIONS, 1913-1930

245

Gasoline (Feb. 7, 1924) --At the direction of the President, the commission undertook an inquiry into
a sharp advance In gasoline prices. The report on this inquiry was referred by the President to the Attorney
General and has not yet been published. Report dated June 4, 1924.
AUTHORIZED BY THE ATTORNEY GENERAL
Raisin combination (Sept.30, 1919) .--A combination of raisin growers in California was referred to
the commission for examination by the Attorney General pursuant to the Federal Trade Commission act,
and the commission found that it was not only organized in restraint of trade but was being conducted in
a manner that was threatening financial disaster to the growers. The commission recommended a change
of organization to conform to the law, which was adopted by the raisin growers. Report dated June 8,
1920.
Lumber trade associations (Sept. 4, 1919).--An extensive survey of lumber manufacturers’
associations throughout the United States. The information secured was presented in a series of reports
revealing the activities and attitude of lumber manufacturers toward national legislation, amendments to
the revenue laws, elimination of competition of competitive woods, control of prices and production,
restriction of reforestation, and other matters. In consequence of the commission’s findings and
recommendations the Department of Justice initiated proceedings against certain of these associations for
violations of the antitrust laws. Reports dated January 10, 1921, February 18, 1921, June 9, 1921, and
February 15, 1922
ON MOTION OF THE COMMISSION
Cooperation in American export trade.--An extensive investigation of competitive conditions
affecting Americans in international trade. The report dis-closed the marked advantages of other nations
in foreign trade by reason of their superior facilities and more effective organizations. The WebbPomerene Act authorizing the association of manufacturers for export work was enacted as a direct result
of the recommendations embodied in this report Reports dated May 2, 1916, and June 30, 1916.
Commercial bribery.--The prevalence of commercial bribery of employees was brought out in a special
report to Congress. The report carried with it recommendations for legislation striking at this vicious
practice. Report dated May 15, 1918.
Resale price maintenance.--The question whether a manufacturer of standard articles, identified by
trade-mark or trade practice, should be permitted to fix by contract the price at which the purchasers could
resell them led to this inquiry. The commission recommended to Congress the enactment of legislation
permitting resale-price maintenance under certain conditions. Reports dated December 2, 1918, and June
30, 1919.
Leather and shoe industries.--The general complaint about the high prices of shoes In the latter part
of 1917 as compared with the low prices of country hides led the commission to undertake this
investigation. No justification for the high prices for shoes could he found and recommendations were
made for the relief of this condition. Report dated August 21, 1919.
Woolen rag trade.--This report contains certain Information that was gathered during the war at the
request of the War Industries Board for its use in regulating the prices of woolen rags. The compilation
of the data and the preparation of the report was authorized by the commission on June 30, 1919.
Petroleum.--Complaints of several important producing companies in the Salt Creek oil field led to this
investigation. The report covers the production, pipeline transportation, refining, and wholesale marketing
of crude petroleum and petroleum products in the State of Wyoming. Report dated January 3, 1921.
Bituminous coal.--The reports on investment and profit in soft-coal mining were prepared and
transmitted to Congress with the belief that the information would be of timely value in consideration of
pending legislation regarding the coal trade. The data covers the years 1916 to 1921, inclusive. Reports
dated May 31, 1922, and July 6, 1922.
Petroleum.--A special report directing the attention of Congress to conditions existing In the petroleum
trade in Wyoming and Montana. Remedial legislation is recommended by the commission. Report dated
July 13, 1922.
Cooperation.--The report on cooperation in foreign countries is the result of studies of the cooperative
movement in 15 European countries and concludes

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with recommendations for further developments of cooperation in the United States. Report dated
December 2, 1924.
Anthracite coal.--A report dealing with premium prices of anthracite coal charged by certain mine
operators and the premium prices and gross profits of wholesalers In the latter part of 1923 and early in
1924. The report dis-cusses also the development of the anthracite combination and the results of the
Government’s efforts to dissolve it. Report dated July 6, 1926.
Panhandle petroleum (October 6, 1926).--An inquiry into conditions in the Panhandle (Texas) oil field
made in response to requests of crude-petroleum producers. The report revealed that a reduction of prices
late in 1926 was largely a result of difficulties of handling and expenses of marketing this oil because of
peculiar physical properties. Report dated February 3, 1928.
Lumber trade associations.--An investigation of the activities of five large lumber trade associations
bringing down to date the study made at the request of the Attorney. General in 1919-20. This inquiry has
been conducted in conjunction with the inquiry into open-price associations. Transmitted February 13,
1929.
Resale price maintenance.--A further investigation into this subject was ord£red by the commission
on July 25, 1927. The study is being conducted from the point of view of its economic advantages or
disadvantages to the manufacturer, distributor, and consumer, the effects on costs, profits, and prices, and
the purpose and results of price cutting. Part I of the report was transmitted to Congress January 30, 1929.
Blue-sky securities.--This inquiry, bringing down to date a previous inquiry of the commission on
which no report had been published, is directed to the nature of the abuses in the sale of worthless
securities, the present methods of controlling this evil and the comparative advantages of State and Federal
regulation.
Price bases.--An inquiry ordered by the commission into the various practices regarding price bases,
namely, factory base, basing point base, and delivered base, with a view to determining the causes for the
adoption of the several methods employed and the purposes intended to be served by them, and their
actual or potential effects on prices and competitive conditions. This matter is still In course of
investigation.
Du Pont investments (July 29, 1927).--The reported acquisitions of E. I. du Pont de Nemours & Co.
of the stock of the United States Steel Corporation, together with the previously reported holdings in the
General Motors Corporation. caused an inquiry into these relations with a view to ascertaining the real
facts and their probable economic consequences. Report dated February 1, 1929.