Section 22. Boycotting and blacklisting by trade associations.

In recent years there has been manifested a tendency toward more direct distribution; that is, for the manufacturer to sell directly to the retailer, the mail-order house, the department store, and, in some instances, even to the consumer. This movement has been opposed by dealers who would be unfavorably affected by such direct selling, and organized opposition has come principally from associations of. jobbers, wholesalers, or retailers. Their object has been to maintain the established system of selling, and thus to secure for themselves a profit on all products passing from the manufacturer to the con

sumer.

The boycott has been the principal means used to further this object. Members of wholesalers' associations have agreed not to patronize manufacturers who sell directly to retailers or consumers, and the members of retail associations have likewise refused to buy from wholesalers who sell to consumers. Various methods have been employed by these associations to advise their members of manufacturers or wholesalers who make direct sales. In some instances lists of such sellers, sometimes termed "black lists," have been circulated among the members, and this has been followed by a boycott of the wholesalers or manufacturers so listed. Reciprocal agreements have also been effected between wholesalers' associations and manufacturers' associations whereby, in consideration of the manufacturers selling only to the wholesalers, the latter have agreed to purchase exclusively from such manufacturers. Retail dealers have entered into similar agreements with wholesalers. To further the execution of these agreements both classes of associations have exchanged lists of their members in order that they might be advised of the concerns with whom they should deal. Such lists are sometimes termed "white lists." In some instances wholesale associations have admitted manufacturers and importers to associate membership, and in such cases the lists of associate members constitute another form of "white list."

A number of such organizations have been attacked under the Sherman law, and the courts have condemned not only certain ends sought to be attained by these associations but have prohibited the use of any means by which these purposes may be achieved. The usual means-the boycott, black list, and white list-have been specifically enjoined.

UNLAWFUL OBJECTS.-In a suit by the United States against the Southern Wholesale Grocers' Association the members of the association were enjoined from, among other things, combining, conspiring, confederating, or agreeing, together or with others, expressly

1 Consent decree.

or impliedly, directly or indirectly (1) to prevent manufacturers or producers from selling commodities to any person who was not a member of the association or who was not listed in the Green Book (white list); (2) to prevent any person, firm, or corporation not a member of the association from purchasing commodities from manufacturers, jobbers, or producers; (3) to do or refrain from doing anything the purpose or effect of which was to hinder or prevent, by intimidation or coercion, any person, firm, or corporation from buying or selling any commodity from and to whomsoever might be agreed upon.

In United States v. The National Wholesale Jewelers' Association, the National Association of Manufacturing Jewelers et al., the defendants were enjoined1 from combining, conspiring, confederating, or agreeing with each other or with others, expressly or impliedly, directly or indirectly (1) to hinder or prevent manufacturers of jewelry or jewelry products from selling the same to any person, firm, or corporation not a jobber or wholesaler of such products or not so classified by the defendant wholesale association or not listed in the rating books of the trade; (2) to hinder and prevent such manufacturers from selling to retail dealers, department stores, mailorder houses, purchasing syndicates, or others desiring to purchase; (3) to hinder or prevent any person, firm, or corporation from buying jewelry directly from manufacturers; (4) to hinder or prevent any person, firm, corporation, or other organization from buying or selling jewelry from or to whomsoever he, they, or it may desire; (5) to favor with their custom and patronage only those manufacturers who agreed, or whose avowed policy it was, to sell through the wholesaler or jobber and not directly to retailers, mail-order concerns; department stores, or purchasing syndicates; (6) to intimidate or coerce manufacturers or producers of jewelry into selling only to persons, firms, etc., approved by the wholesale association; (7) to do or refrain from doing anything the purpose or effect of which would be to hinder or prevent, by intimidation, coercion, or withdrawal, or threatened withdrawal, of patronage, any person, firm, etc., from buying or selling jewelry wherever, whenever, and from or to whomsoever might be agreed upon by the seller or purchaser.

In United States v. Pacific Coast Plumbing Supply Association et al. the defendants were enjoined from combining, conspiring, confederating, or agreeing together, or with others, expressly or impliedly, directly or indirectly, to prevent manufacturers of plumbing supplies from selling such supplies to any person not a member of the defendant supply association or whose name did not appear on the list of dealers published by the defendant association.

1 Consent decree.

In United States v. Philadelphia Jobbing Confectioners' Association et al., the defendants were enjoined,1 among other things, “from combining, conspiring, confederating, agreeing or contracting together, or with one another, or with others, orally or in writing, expressly or impliedly, directly or indirectly, with a view to preventing manufacturers or producers, or their agents, engaged in shipping and selling such commodities among the several States, from shipping and selling such commodities freely in the open market” and "from sending to manufacturers or producers, or their agents, engaged in selling or shipping said commodities among the several States, communications, oral or written, suggesting directly or indirectly that such manufacturers or producers, or their agents, shall refrain from selling such commodities directly to the consuming or retail trade, or to jobbers not members of said association."

BOYCOTTS.-In United States v. National Wholesale Jewelers' Association et al. the defendants were enjoined 1 "from combining, conspiring, confederating, or agreeing with each other or with others, expressly or impliedly, directly or indirectly to boycott or threaten with loss of custom or patronage any manufacturer engaged in interstate or foreign commerce in jewelry or jewelry products for having sold, or being about to sell jewelry or jewelry products to retail dealers, department stores, mail-order houses, purchasing syndicates, or to any other person, firm, or corporation not engaged in the wholesale or jobbing jewelry business.”

Boycotts have also been specifically prohibited in United States v. Pacific Coast Plumbing Supply Association et al., United States v. Southern Wholesale Grocers' Association et al., and United States v. Philadelphia Jobbing Confectioners' Association et al.1

BLACK LISTS.-In United States. The Eastern States Retail Lumber Dealers' Association and others the defendants were enjoined from “combining, conspiring, confederating, or agreeing together or with others jointly to distribute, and from jointly distributing, to any of the members of the aforesaid associations or any other person or persons any information showing soliciting, quotations, or sales and shipments of lumber and lumber products from manufacturers and wholesale dealers to consumers of or dealers in lumber" and from the preparation and distribution of lists known as the "Official Report," heretofore described, or by the use of any similar device. The defendants in United States r. National Wholesale Jewelers' Association, National Association of Manufacturing Jewelers and others, were enjoined, among other things, from "publishing or distributing, or causing to be published or distributed, or aiding or assisting in the publication or distribution of the names of any manufacturers of jewelry or jewelry products who have been

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3 See p. 476.

or are selling or shipping jewelry or jewelry products to any person, firm, corporation, or other organization not classified or recognized by the said National Wholesale Jewelers' Association as legitimate wholesalers or jobbers" or not listed in certain rating books as wholesalers or jobbers, "or the names of any manufacturers from whom any such person, firm, corporation, or other organization has been, is, or is supposed to be receiving jewelry or jewelry products."

The defendants in United States v. Pacific Coast Plumbing Supply Association et al. were enjoined,' among other things, from circulating, causing to be circulated, or aiding in the circulation of "the name of any manufacturer of plumbing supplies who is or may be selling and shipping plumbing supplies to persons, firms, or corporations who are not members of the said Pacific Coast Plumbing Supply Association," or who are not listed in the so-called Blue Book published by one of the defendants, or any book, pamphlet, or list of like character.

The defendants in United States v. The American Thread Co. et al. were enjoined "from soliciting, making, ratifying, or confirming, by agreement or understanding of any kind or nature with any other corporation, copartnership, or person, any lists of wholesale or retail dealers or jobbers in the United States with whom trade in sewing thread shall not be carried on."

The defendants in United States v. The New Departure Manufacturing Co. et al. were enjoined,' among other things, from "selecting, making up, ratifying or confirming by combination, conspiracy, mutual agreement or understanding by and between any of said parties, any lists of manufacturers or jobbers or dealers with whom trade shall or shall not be carried on

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WHITE LISTS-LISTS OF APPROVED MANUFACTURERS AND DEALERS.The Southern Wholesale Grocers' Association and its members were enjoined, among other things, from publishing or encouraging the publication or distribution of any list of wholesale grocers located in the territory embraced by said organization who had announced their intention or agreed, directly or indirectly, expressly or impliedly, to work in harmony with said association. They were also enjoined from publishing or encouraging the publication or distribution of lists of manufacturers or producers who had expressly or impliedly, directly or indirectly, agreed to sell only to members of said association, or to persons or firms listed in the so-called Green Book, entitled "Official List of Wholesale Grocers in the States of Alabama, Arkansas, District of Columbia, Florida, Georgia, Indian Territory, Louisiana, Maryland, Mississippi, North Carolina, Okla

1 Consent decree.

homa, South Carolina, Tennessee, Texas, and Virginia," or any list of like character. In a contempt proceeding subsequently brought for violating this decree, the Government having conceded that it would not ask punishment for any act which did not violate both the decree and the Sherman law, it was held that members of the association who continued to send to manufacturers lists of dealers who had announced their intention or agreed, directly or indirectly, expressly or impliedly, to work in harmony with the association, were guilty of contempt.2

Section 23. Defamation of competitors and disparagement of competitors' goods.

The Central-West Publishing Co., and certain corporations controlled by it, were enjoined from causing or permitting their agents or salesmen to circulate reports or to intimate that these companies would put the American Press Association out of business, or that the latter would not be able to continue in business against the competition of such companies, or that the American Press Association intended to combine with them. They were further enjoined from unfairly criticizing and abusing the method of the American Press Association with reference to advertising, from misrepresenting the business and business methods of the American Press Association, with the intent and for the purpose of taking away its customers or otherwise injuring its business, and from continuing or participating in unfair attacks upon the said press association, with the purpose of injuring or depreciating or destroying the value of its property and securities.

The American Press Association was likewise enjoined from doing some acts of a similar nature for the purpose of taking away the customers of the Western Newspaper Union (controlled by the Central-West Publishing Co.) or destroying the value of its property and securities.

All the companies above referred to were enjoined from committing any acts of "unfair competition," and particularly from doing, among other things, the acts above referred to.

3

The American Thread Co. and others have likewise been enjoined 3 "from attacking the credit or business reputation of or the quality of thread dealt in by any competitor in the United States, by means

1 Substantially similar injunctions have been issued in the following cases: United States v. National Wholesale Jewelers' Association, National Association of Manufacturing Jewelers et al.; United States v. Pacific Coast Plumbing Supply Association et al.; United States r. New Departure Manufacturing Co. et al.; United States r. Philadelphia Jobbing Confectioners' Association et al.; and United States r. National Association of Retail Druggists, et al.

2 United States v. Southern Wholesale Grocers' Association, 207 Fed., 434 (D. C., 1913). 3 Consent decree.