plant in Newark and were doing a good business and making a good deal of money. They did not sell out, so the trust, boycotted their goods. The trust did not boycott their goods as quickly as ours. They commenced on ours the 1st of January, 1899, and they did not throw this paper out until about the 1st of September, 1899; but, on the other hand, when they did throw them out they prohibited the dealers from selling their goods when the dealers had a considerable stock on hand. The trust did not buy that paper out, and the dealers could not sell it, and did not know what to do with it. Consequently those dealers who had not paid the bills shipped it back to the American Self-Toning Co. The goods were perishable, and great quantities came back on the company's hands, and they lost a great deal of money. The accounts being small, if they had undertaken to sue all, they would have had a couple of thousands of suits on hand, and it looked as if it would not pay them. They were losing all their business, and it was not very many months until they were in a receiver's hands.1

Section 16. Enticement of competitors' employees.

Accusations are not infrequently made of attempts to entice away important employees for the purpose of embarrassing a competitor's business. In the celebrated case of People v. Everest, a prosecution of certain persons alleged to have acted in the interests of the Standard Oil Co., it was one of the grounds of complaint that they had conspired to entice certain skilled employees from the Buffalo Lubricating Oil Co., particularly Albert A. Miller, superintendent of the construction of its work, and the only man in the company able to superintend the manufacture of oil.2

Section 17. Espionage by corruption and bribery.

A part of the "restraint upon unfair competition" which the independent tobacco manufacturers asked the court to impose on the new corporations into which the tobacco combination was dissolved was that:

Each corporation which is to carry forward any part of the manufacturing business of the trust should be restrained * ** from espionage on the business of any competitor, either through bribery of any agent or employee of such competitor or obtaining information from any United States revenue official."

Many have proposed specific legislative action to the same effect. Thus Senator La Follette's bill for amending the Sherman Act * proposed to declare every restraint of trade, under circumstances described, unreasonable and in violation of the act as to any party who

As the vendor, lessor, licensor, or bailor of any article spies upon the business of any competitor or secures information concerning his business, either through

1 Reports of the Industrial Commission, Vol. XIII, p. 187.

2 Standard Oil Trust Hearings, 50th Cong., 1st sess., House Report 3112, pp. 815, 816, 945, 946.

* Control of Corporations, Persons, and Firms Engaged in Interstate Commerce: Report

of the Committee on Interstate Commerce, United States Senate, 62d Cong., Pursuant to S. Res. 98, with Hearings, Digest, and Index, p. 1221.

* Ibid., p. 1779.

bribery of an agent or employee of such competitor or of any State or Federal official, or by any illegal means whatsoever secures information concerning the competitive business.

One of the "methods of unfair competition" alleged against the Standard Oil Co. by a former Commissioner of Corporations was the maintenance of a most elaborate system of espionage over the business of independent oil concerns. Sometimes it set its regular men to spy; sometimes it hired special spies; but its chief source of information was reports from railroad employees, whom it bribed to disclose to it facts which it was their duty not to disclose. This system enabled the Standard to ascertain in just what markets its competitors were selling oil, often in advance of the arrival of shipments, and so to cut its prices at those points.1

Certain lumber dealers, doing a mail-order business, have complained that the retail lumber dealers' associations have used a similar plan against them. The practice was admitted, as used against lumber manufacturers, by the defendants, representing retail lumber dealers' associations, in the Lumber Trust case, United States v. Hollis et al. The defendants alleged in their answer that lumber manufacturers generally concealed and denied their sales to consumers, "and that it was thus found necessary, on account of the secret and clandestine manner in which such sales were almost uniformly made by such wholesalers and manufacturers to the consumer, to employ detectives and other means to find out and ascertain the same." 3

In the suit against the American Tobacco Co. the Government alleged that the superintendent of one of that company's subsidiaries had been convicted of attempting to bribe an employee of a competitor to give information about the competitor's business. The Government also presented evidence of the company's tampering with internal-revenue officers to learn what internal-revenue stamps competitors bought."

Until detected and complained of by an inspector of the Interstate Commerce Commission in 1912, the Reading Railway, according to the Government's complaint, regularly furnished the Reading 1 Report of the Commissioner of Corporations on the Petroleum Industry, Pt. II, pp. 58, 669.

2 Statement of Edward C. Roberts, president of the Gordon-Van Tine Co., Davenport, Iowa. Trust Legislation: Hearings before the Committee on the Judiciary, House of Representatives, 63d Cong., 2d sess., on Trust Legislation, p. 1764.

3 United States v. Hollis et al. In the Circuit Court of the United States for the District of Minnesota, fourth division. In equity, No. 1079. The joint and several answer of the defendants, p. 101.

4 United States v. American Tobacco Co. and others; in the Supreme Court, October term, 1910; brief for the United States, p. 245.

5 Ibid., p. 240.

Coal & Iron Co. with lists of anthracite shipments made by its independent competitors, showing names of shippers and consignees.1

Section 18. Secret commissions.

The widespread practice of giving commissions and making gifts to persons who make purchases for others, including domestic servants, buyers for department stores, purchasing agents for railroads, and others, has been complained of as unfair competition.

In a comparatively recent case brought under the Sherman Act, the Government alleged, among other things, that the Cleveland Stone Co. " is accustomed by a money consideration or by conferring favors in different ways to influence architects who prepare plans and specifications for contemplated buildings, and induce said architects. to specify stone quarried by the Cleveland Stone Co. and which has some particular trade name, thus excluding competitors from bidding thereon, though its competitors may have quarries located in the same stratum of stone and producing stone of precisely the same quality as that specified." 2

The practice of giving "premiums" or commissions to salesmen of wholesale dealers, and so inducing them to push one manufacturer's goods at the expense of others, is said to be condemned as an "unfair practice" by salesmen who have profited by such premiums, even while they deny any element of underhandedness on their own part.3

Section 19. Misrepresenting competitors.

This may take the form of misrepresenting the competitor's goods, or his character, responsibility, or business methods. Complaint of such methods has in past times been made by persons in the harvesting-machine business. Mail-order lumber houses have complained that the members of retail lumber dealers' associations, in their efforts to drive the mail-order houses out of business, have made systematic use of misrepresentation.5

The American Press Association, furnishing small newspapers with far the greater part of their plate matter, carried on for some time a vigorous competitive campaign against the Western Newspaper Union. The following complaint of its methods is from the

1 United States v. Reading Co. et al.; in the District Court of the United States, Eastern District of Pennsylvania; Brief for the United States (May, 1914), pp. 61, 62.

2 United States v. The Cleveland Stone Co. et al., 1913. In the District Court of the United States for the Northern District of Ohio. Petition in equity, p. 17.

3 Interstate Trade: Hearings before the Committee on Interstate Commerce, United States Senate, 63d Cong., 2d sess., on Bills Relating to Trust Legislation, pp. 177, 178. Report of the Commissioner of Corporations on the International Harvester Co., pp. 36, 323-325.

Trust Legislation: Hearings before the Committee on the Judiciary, House of Representatives, 63d Cong., 2d sess., on Trust Legislation, p. 1765.

petition in a Government suit under the Sherman Act, in which a decree against the defendants was rendered with their consent.

It has for many years published as a house organ a weekly paper called the American Press. This paper it circulates among all the country newspapers in the States and Territories. From the date of the Newspaper Union's refusal to sell its plate business to the association it has prosecuted, through this organ and by correspondence, a campaign of abuse and misrepresentation as to the Union's business and business methods for the purpose of taking from it its customers.1

In December, 1914, the Supreme Court of North Carolina had before it an indictment of six persons, claiming to be employed by the Wrought-Iron Range Co., for conspiracy to break up a competitor's business. It was alleged that the conspiracy was to be carried out by the following means:

To break up the sales made by the agents of the rival company; to abuse that company; to vilify it; to follow up its agents from town to town, from road to road, from house to house, and vilify and abuse them; to slander, vilify, and run down that company; to charge falsely that such rival company was composed of a set of thieves and liars; and to say falsely that the agents of that company were a set of thieves and liars, who were trying to cheat and defraud the people.'

Attention was called to a special method of competition in a letter on pending trust legislation, addressed to the chairman of the Senate Committee on Interstate Commerce by S. A. Taylor, of Pittsburgh, in February, 1914. Mr. Taylor was opposing any limitation on the right of a concern, in selling its goods, to choose its customers. In that connection he said:

The greatest reason which appears to me, however, is that a competitor might compel another to sell him a portion of his production, and in order to break down a fair competition would sell this portion of his production at a greatly reduced price, assuming to begin with that he would lose money on this portion of his purchase by doing it, so as to cripple and give the production of his competitor a bad name. This has been done in the past, and I can see where this clause might render it legal for him to do such things.3

Section 20. Abuses in advertising.

Complaints under this head relate to two different practices— deceptive advertising and excessive advertising. Deceptive advertising is not different in principle from other kinds of misrepresentation or cheating. "Overadvertising," however, has been condemned also as one of "the acts which wicked ingenuity has devised drive others out of business and exclude them from the free right to

* ** *

to

1 United States v. Western Newspaper Union et al.; petition, quoted in Trust Legislation: Hearings before the Committee on the Judiciary, House of Representatives, 63d Cong., 2d sess., on Trust Legislation, p. 1666.

2 State v. Dalton et al., 83 S. E., 693, 695.

Interstate Trade: Hearings before the Committee on Interstate Commerce, United States Senate, 63d Cong., 2d sess., on Bills Relating to Trust Legislation, p. 1070.

1

trade." The point is that advertising takes money, and that extraordinary financial resources give an advantage which has no relation to any superiority of products or service, and which is, therefore, felt to be injurious to the public, and so unfair. As Prof. Taussig says:

*

It is not easy to say just how far advertising serves a good purpose, how far it means waste. No doubt it does stimulate wants, introduces new devices, promotes variety in production and consumption, and it is often a means of useful competition. But sometimes it is a weapon of destructive competition. Among articles equally good, that which is systematically paraded is likely to be most readily sold. One might suppose that if Smith's wares were equally good and were sold at a lower price (made possible by eliminating the advertising expense) he would hold his own in spite of Jones's preposterous puffing. But, in fact, Jones's wares are preferred; some vague impression of superiority is produced by the incessant boasting. Plentiful cash is the sine qua non of an effective advertising campaign. The large producer, or would-be monopolist, has here again a tactical advantage.'

Section 21. Passing off goods for those of another.

This signifies any method tending to confuse one person's product with another's, so that a customer buys, or may buy, under a mistake as to whose goods he is getting. No other practice, perhaps, has been so often called unfair competition in the law of English-speaking peoples. Edward S. Rogers, of Chicago, says:

At an early day judges with consciences and a proper sense of sportsmanship began to decide cases in favor of the complainant which were in no sense trademark cases, but where the defendant's conduct involved precisely the same wrong the sale of one trader's goods as those of another-the result being accomplished by some ingenious contrivance, the deceptive use of personal, geographical, or descriptive names, imitated labels or form of package, or in some of the infinity of ways which enable one trader to represent his goods as those of a competitor, whose reputation is better and whose trade he covets. The digesters and text-writers at first were puzzled to known where to classify such cases. The author of a textbook on trade-marks would devote a chapter to "Cases analogous to trade-marks," and put them there. Finally, the term unfair competition" was adopted (perhaps from the French concurrence déloyale) and has since been used to describe that class of wrongs where by artifice one trader's goods are sold as and for another's. Probably the phrase "passing off," commonly used in England, more correctly describes the wrong as we now understand it in this country than "unfair competition," but "unfair competition" is the preferable designation if it can be given the meaning that, as a part of the English language, it ought to have-that it includes not alone "passing off" but any conduct on the part of one trader which tends unnecessarily to injure another in his business."

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1 Interstate Trade: Hearings before the Committee on Interstate Commerce, United States Senate, 63d Cong., 2d sess., on Bills Relating to Trust Legislation, p. 1108.

2 F. W. Taussig, Principles of Economics (1913), p. 428.

3 Trust Legislation: Hearings before the Committee on the Judiciary, House of Representatives, 63d Cong., 2d sess., on Trust Legislation, pp. 1600, 1601.