ing the field. On occasions when some outside company or shipowner has put a vessel on a berth near a vessel belonging to one of the conference lines and offered to carry at cheaper rates, a fighting ship has been dispatched to offer the same or a lower rate. When not engaged in thus waging war on a competitor the vessels can be employed on regular charters. In the case of United States v. HamburgAmerican Steamship Line et al.1 the practice of the members of a steamship conference contributing to the maintenance of fighting ships to be used as required by the various lines was condemned. The injunction in this case restrained the defendants from

combining, conspiring or agreeing to interfere with or restrain the business of any owner of a vessel operated in competition with the vessel or vessels of one or the other of said defendants, by providing, operating, or maintaining an extra vessel for the purpose of having it compete with such competing vessel by offering to carry passengers; ** *

While the court in this case enjoined the defendants from combining or agreeing to maintain or operate and from contributing to the expense of a fighting ship, the following clause in the injunction apparently leaves any one of the companies composing the combination free to employ this method of competition if not done in combination with any of the other lines:

This injunction, however, shall not in any way affect the right of each individual defendant to run such vessels and on such terms as such individual defendant may choose in opposition to any competitor provided that the cost and expense thereof is not contributed in whole or in part by any of the other defendants.

3

In a subsequent case the conference agreement attacked by the Government provided for fighting ships, and the court remarked in dismissing the bill that if there were evidence that steps had been taken to put such a ship on they would be inclined to grant an injunction similar to the one in the Hamburg-American case.

"FIGHTING BRANDS."—It has been the practice of some manufacturers to offer certain brands of goods at special prices in competitive territory. The sale of these goods at particularly attractive prices relieves the manufacturer of the necessity of cutting prices on established brands while at the same time giving the dealer practically as good an article at a price which will take the business from competitors. Goods used for this purpose have been termed "fighting brands" and were defined in United States v. American Thread Co. et al. to be "brands which are devised or revived and used for the purpose of being offered principally to customers of competitors at

1216 Fed.. 971 (D. C., 1914).

2 Cf. Lough v. Outerbridge, p. 455, and Mogul Steamship Co. v. McGregor, Gow & Co., p. 404.

3 United States v. American-Asiatic Steamship Co. et al., 220 Fed., 235, 236 (D. C.,

4 Consent decree.

cut prices, that is to say, at prices lower, or on terms more favorable, than the price or terms asked by the seller for substantially the same thread under different brands or trade names." As thus defined, their use was prohibited by the decree in the thread case.

"FLYING SQUADRONS."-Special selling forces, sometimes termed "flying squadrons," have been generally used to push these fighting brands. In the thread case it was alleged that where an independent jobber refused to deal with the defendants these salesmen would canvass his trade and offer the orders obtained to the jobber as an inducement to deal with the defendants. This failing, the orders would be offered to competing jobbers until some one accepted them, or in the event that no jobber accepted them they were filled direct by the defendant thread manufacturers. The use of flying squadrons was prohibited in the thread decree, as was the special canvassing of any dealer or jobber in the manner described above.

Section 18. Exclusive dealing.

CONTRACTS FOR EXCLUSIVE DEALING.-In United States v. Standard Sanitary Manufacturing Co. the court found that among the means adopted by the defendants to carry out the purposes of an unlawful combination were certain jobbers' license agreements which were required to be executed by the purchaser in order to obtain licensed sanitary enameled ironware. Among other things, the purchaser under such contracts agreed "not to purchase, sell, advertise or solicit orders for, or in any way handle or deal in sanitary enameled ironware of any manufacturer not licensed under the letters patent" enumerated in the agreement except with the express written permission of the licensor. The defendants were enjoined and prohibited from doing anything in furtherance of said agreements and from enforcing any of the terms thereof.2

The American Thread Co. and others were enjoined 1 "from soliciting or exacting from wholesale or retail dealers or jobbers or from customers of competitors in the United States any agreement not to handle or to cease handling the brands of competitors."

The Great Lakes Towing Co. and certain corporations controlled by it were restrained from "entering into any agreement, contract or understanding, direct or indirect, with any customer, new or old, for the exclusive furnishing of the whole or any part of the towing or any other service of such customer, except the single item of service then immediately to be performed, and either as respects more than one port or place or as respects but one port or place, to the end that the ultimate rate to each customer shall be absolutely the same for each like, contemporaneous item of service."

1 Consent decree.

2 Standard Sanitary Manufacturing Co. v. United States, 226 U. S., 20, 46 (1912).

In a petition filed by the Government it was alleged that the General Electric Co. and National Electric Lamp Co. controlled all patents covering tantalum filament and tungsten filament lamps and caused dealers to enter into contracts with them and their controlled companies wherein it was agreed that these companies would sell tantalum filament and tungsten filament lamps to such dealers if the latter would purchase from such companies all of the carbon filament lamps required by them; and that inasmuch as the dealers were compelled, in order to meet the demands of their trade, to have all three types of lamps, the necessary result of these contracts was to compel the dealers to buy carbon filament lamps only from the defendants, with the further result of making it practically impossible for any outside company to successfully engage in the manufacture and sale of the carbon filament lamp. In this case the General Electric Co. and other lamp-manufacturing defendants were enjoined1 from "enforcing any contracts, arrangements, agreements or requirements with dealers, jobbers and consumers, who buy from the said defendants either tantalum filament, tungsten filament, metalized carbon filament or ordinary carbon filament lamps, or any of them, by which such dealers, jobbers and consumers are compelled to purchase all their ordinary carbon filament lamps from said defendants as a condition to obtaining such other types of lamps, or any of them, or by which dealers, jobbers and consumers are compelled to purchase any one or more of the above-mentioned types of lamps from the said defendants as a condition to the purchase or supply of any other or all of said types of lamps"; and they were further enjoined from "discriminating against any dealer, jobber or consumer desiring to purchase tantalum, tungsten or metalized carbon filament lamps because of the fact that such dealer, jobber or consumer purchases ordinary carbon filament lamps from others," and from "discriminating against any dealer, jobber or consumer desiring to purchase any one or more of the above-mentioned types of lamps because of the fact that such dealer, jobber or consumer purchases any other of said lamps from other manufacturers or dealers."

REFUSAL TO DEAL SAVE ON EXCLUSIVE TERMS.-The American Thread Co. and others were enjoined from, among other things, "refusing to deal with, or discriminating against, or threatening to refuse to deal with or to discriminate against those who handle the goods of competitors."

The Central-West Publishing Co. and two other corporations controlled by it were enjoined1 from causing or permitting their agents or salesmen to intimate or convey the impression that unless publishers approached by such salesmen dealt with these companies they

1 Consent decree.

would be discriminated against as soon as the American Press Association, a competitor, should be put out of business by the competition to which it was being subjected.

The Great Lakes Towing Co. and others were enjoined from, among other things, "refusing or neglecting to furnish service as speedily as practicable to any applicant therefor, except where refusal to render service to such applicant is justified by a good-faith belief, communicated to the customer, that payment for such service will not promptly be made.”

In another suit the Government alleged that the proprietors of the Prince Line, Lamport & Holt Line, and Hamburg-American Line, in furtherance of a combination and conspiracy in violation of the Sherman Act, and in violation of their legal duty as common carriers, sought to coerce shippers and destroy the competition of rivals by refusing altogether to carry the goods of such shippers as refused to confine their shipments to defendants' lines and other lines with whom the defendants were in combination. The court, by Lacombe, J., enjoined this practice, although in all other respects the bill was dismissed.1

Section 19. Use of certain articles as a condition of purchase or use of other articles.

UTILIZING A PATENT TO CONTROL THE SALE, ETC., OF UNPATENTED ARTICLES. The General Electric Co. and the other defendants in that case were enjoined 2" from utilizing any patents which they may have or claim to have or which they may hereafter acquire or claim to have acquired, as a means of controlling the manufacture or sale of any type or types of lamps not protected by lawful patents."

REQUIRING THE PURCHASE OF CERTAIN UNPATENTED ARTICLES AS A CONDITION OF PURCHASING OTHER UNPATENTED ARTICLES (FULL-LINE FORCING). The practice of requiring dealers to order additional lines or brands of goods as a condition of obtaining some other line has been described as "full-line forcing." In United States v. American Tobacco Co. et al. the defendants were enjoined, among other things, from "refusing to sell to any jobber any brand of any tobacco product manufactured by it, except upon condition that such jobber shall purchase from the vendor some other brand or product also manufactured and sold by it; provided, however, that this prohibition shall not be construed to apply to what are known as 'combination orders,' under which some brand or product may be offered to a jobber or dealer at a reduced price, on condition that he purchase a given quantity of some other brand or product."

1 United States v. Prince Line (Ltd.) et al., 220 Fed., 230 (D. C., 1915).

2 Consent decree.

* 191 Fed., 371, 429 (C. C., 1911).

Section 20. Inducing breach of competitors' contracts.

The decree in United States v. The Burroughs Adding Machine Co. et al. directed the defendants to instruct their agents in writing to "absolutely desist and refrain" from interfering with the business, machines, or appliances of competitors "by inducing or trying to induce such purchasers to cancel their contracts with competitors and to return to such competitors the adding machines or appliances so purchased." The petition in this case alleged that the defendants had instructed their agents and salesmen how to manipulate competitors' machines for the purpose of showing alleged defects therein, and thus dissatisfying customers or prospective customers with competing machines; and also that they had supplied agents with parts or illustrations misrepresenting the mechanism of machines being sold by competitors, for the purpose of deceiving customers or prospective customers of such competitors. These were methods apparently used by the defendants to induce the cancellation of contracts and the return of competitors' machines.

In United States v. Central-West Publishing Co., Western Newspaper Union, et al., certain of the defendants engaged in selling stereotyped news and other matter, and the so-called "patent inside" or ready printed matter to country newspapers, were enjoined1 from offering to protect publishers of such papers against expenses and costs of any suit that might arise from their breaking contracts with others supplying the same class of material and entering into contracts with the defendants. All of the defendants were likewise enjoined from offering bonuses of paper or plate service free or at a nominal price with the intent of inducing or enabling customers of competitors to break their contracts.

Sction 21. Espionage by corruption or bribery of employees.

The Burroughs Adding Machine Co. was required to direct its servants and agents to desist from interfering with the business of competitors by wrongfully obtaining information respecting the business, sales, or shipments of such competitors, or "by fraudulent or illegal means inducing the employees of said competitors to give them such information," or by permitting its agents or employees to seek or induce others to seek employment with competitors for the purpose of wrongfully securing information as to the business of said competitors, or by any other similar and unlawful means acquiring such information.

1 Consent decree.