facturers selling to grocers doing both a wholesale and a retail business; these discussions having special reference to the case of sales by manufacturers to the Standard Grocery Co. It was disclosed that the associated jobbers, without dissent, condemned the practice of some manufacturers in selling to that company on the same terms and conditions as those accorded to such jobbers. The Standard Grocery Co., which was organized in 1916, owned and [662] operated six retail grocery stores in El Paso, in one of which it conducted for several years a wholesale grocery business, having storage and warehouse facilities therefor in the basement of several of its storehouses. In the fall of 1917 it opened a branch house at Deming, N. Mex., where it engaged, until about January 1, 1919, exclusively in the business of buying and selling in wholesale quantities groceries and other food products; its purchases and sales, at both El Paso and Deming, including such as were transactions in interstate commerce. It was in active competition at El Paso and Deming with the associated jobbers, both it and such jobbers selling to retail grocers, restaurants, cafés, commissaries of industrial and railway companies, Army post exchanges and zone supply offices, civilian branches of the United States Government, Army hospitals, and other Federal and State institutions. Following such discussions and adverse criticisms of the associated jobbers there were numerous instances of it being brought to the attention of manufacturers that sales by them direct to the Standard Grocery Co. were objected to by the associated jobbers at El Paso, and that the continuance of such sales would cause those jobbers to withhold patronage from such manufacturers; the means whereby such manufacturers were so advised including letters to them from brokers at El Paso handling their products plainly disclosing that sales of those products direct to the Standard Grocery Co. constituted an obstacle to selling those products to the associated jobbers at El Paso, numerous inquiries made by such jobbers of traveling salesmen of manufacturers as to whether their principals sold direct to the Standard Grocery Co., and other incidents indicating that such sales were condemned by the associated jobbers and the brokers at El Paso.

[2] We are of opinion that direct and circumstantial evidence adduced furnished support for the inferences that there was concert of action by the petitioners and others with the object of preventing sales by manufacturers and their agents to the Standard Grocery Co. of food products, and other groceries in wholesale quantities, at the prices and on the terms accorded to other wholesalers or jobbers similarly situated, that that concert of action was a result and in pursuance of an agreement or understanding to which the petitioners and others were parties, and that by the means indicated sales by manufacturers and their agents to the Standard Grocery Co. were hindered or impeded, and that company was prevented from buying as a wholesaler in interstate commerce as it would have done without such opposition by the petitioners and others cooperating with them.

It is contended that the attacked order should be set aside: (1) Because the evidence upon which the commission acted did not supportany of its findings as to the petitioners combining, conspiring, and cooperating as set forth; and (2) because the conduct of the petitioners stated in the findings did not amount to or involve an unfair

method of competition in commerce, within the meaning of the provision of section 5 of the Federal Trade Commission Act (38 Stat. 717).

[3, 4] Evidence of an express agreement to obstruct or prevent dealings with the Standard Grocery Co. as a legitimate wholesaler or jobber was not necessary to support the charges made. A conspiracy [663] may be inferred from the things actually done by the alleged conspirators, where those things are the natural consequences of an agreement or understanding to do them, and help to accomplish a disclosed common purpose. (Eastern States Lumber Association v. United States, 234 U. S. 600, 612.) What happened after it was disclosed that the associated jobbers were in accord in condemning sales of their products by manufacturers or their agents to a competitor which was obnoxious because it was a retailer as well as a wholesaler, indicated the existence of an agreement or understanding between the petitioners and others to take concerted action to obstruct or prevent the continuance of such sales. As above indicated, we are not of opinion that the order of the commission is subject to be set aside on the ground that no substantial evidence supporting its findings of fact was adduced. Failure to recognize or concede due probative effect to significant circumstances disclosed is a fault in criticism by counsel of the evidence adduced. Part of that criticism involves the assumption that the commission was bound to believe testimony relied on to support the conclusion that conduct of one of the petitioners did not have the meaning or effect indicated. by a written communication signed by its representative. It was for the commission to pass on the credibility of that testimony.

Whether the conduct of the petitioners which is the subject of the attacked order to cease and desist comes within the meaning of the provisions of the Federal Trade Commission Act declaring unlawful "unfair methods of competition in commerce " is a question of law presented for decision by this court. (Federal Trade Commission v. Gratz, 253 U. S. 421.) That conduct was concerted action having for its object the putting of a ban, within the trade range of the petitioners, upon manufacturers of food products or other groceries supplying their products at jobbers' prices and terms to a dealer doing or endeavoring to do both a wholesale and a retail business; a result of the success of such concerted action being to cut off such wholesale and retail dealer from sources of supply available to dealers whose business is exclusively wholesale. The facts of the instant case are quite similar to those passed on in the case of Eastern States Lumber Association v. United States, supra. The just-cited case was an action brought by the United States under the Sherman Antitrust Act (26 Stat. 209), having for its object an injunction against certain alleged combinations of retail lumber dealers, which, it was averred, had entered into a conspiracy to prevent wholesale dealers from selling directly to consumers of lumber. It was held in that case that the circulation of a so-called official report among members of an association of retail lumber dealers calling attention to actions of listed wholesale lumber dealers in selling direct to consumers, tended to prevent members of the association from dealing with the listed dealers referred to in the report, and to directly and unreasonably restrain trade by preventing it with such listed

dealers, and was within the prohibition of the Sherman Act. The following are extracts from the opinion rendered in that case:

[664] True it is that there is no agreement among the retailers to refrain from dealing with listed wholesalers, nor is there any penalty annexed for the failure so to do, but he is blind indeed who does not see the purpose in the predetermined and periodical circulation of this report to put the ban upon wholesale dealers whose names appear in the list of unfair dealers trying by methods obnoxious to the retail dealers to supply the trade which they regard as their own.

A retail dealer has the unquestioned right to stop dealing with a wholesaler for reasons sufficient to himself, and may do so because he thinks such dealer is acting unfairly in trying to undermine his trade. "But," as was said by Mr. Justice Lurton, speaking for the court in Grenada Lumber Co. v. Mississippi (217 U. S. 433, 440), “when the plaintiffs in error combine and agree that no one of them will trade with any producer or wholesaler who shall sell to a consumer within the trade range of any of them, quite another case is presented. An act harmless when done by one may become a public wrong when done by many acting in concert, for it then takes on the form of a conspiracy, and may be prohibited or punished, if the result be hurtful to the public or to the individual against whom the concerted action is directed."

The above-quoted decision is not rendered inapplicable to the facts of the instant case by the circumstances that the object of the concerted action to which the petitioners were parties was to restrict sales by manufacturers of their products to dealers who are exclusively wholesalers, instead of, as in the cited case, concerted action by retailers to prevent wholesalers selling directly to consumers, and that the methods adopted by the petitioners were different from those disclosed in the cited case. The just-mentioned differences between the two cases are not material. In legal effect there is no substantial dfference between a conspiracy by retailers to prevent wholesalers selling directly to consumers and a conspiracy by wholesalers to prevent manufacturers selling directly to dealers whose business includes both wholesaling and retailing. It well may be inferred that the lawmakers, in using in the Trade Commission Act the words "unfair methods of competition in commerce," intended to include concerted action to eliminate competition, in pursuance of what amounts to a conspiracy in restraint of trade or commerce among the several States, within the meaning of the Sherman Act. (Federal Trade Commission v. Gratz, supra.) What the associated jobbers severally did went beyond each of them refraining altogether or to a less extent from buying from manufacturers whose products were sold directly to the Standard Grocery Co. They combined and cooperated with others to keep manufacturers willing to do so from selling their products directly to the Standard Grocery Co., and by that means to obstruct or prevent that company from competing as a wholesaler in territory sought to be appropriated by dealers not doing a combined wholesale and retail business. The combining of wholesaling and retailing is not a novelty and is not unlawful. The success of the concerted action participated in by the petitioners meant the monopolizing of the wholesale grocery business in the El Paso territory by dealers not engaged in retailing.

[5] We are of opinion that the practices forbidden by the attacked order were "unfair methods of competition in commerce," within the meaning of the provisions of section 5 of the Federal Trade Commission Act, because, in the circumstances disclosed, they were against the public policy evidenced by the Sherman Act. (Federal

Trade Commission v. Gratz, supra; National Harness Manufacturers Association v. Federal Trade Commission, 268 Fed. 705.)

It follows from the above-stated conclusions that the petitions should be denied; and it is so ordered.

Petitions denied.

BEECH-NUT PACKING COMPANY, PETITIONER, v. FEDERAL TRADE COMMISSION, RESPONDENT.47

(United States Circuit Court of Appeals, Second Circuit, at a stated term. February 7, 1922.)

[ORDER ON MANDATE OF SUPREME COURT]

This cause having been taken to the Supreme Court of the United States on writ of certiorari to review the decision of this court

herein;

And the mandate of said Supreme Court having been duly received;

Upon consideration thereof it is

Ordered, That said mandate be, and hereby is, filed, and the judgment of said Supreme Court of the United States is made the judgment of this court.

Further ordered, That, in accordance with the provisions of said mandate the said Beech-Nut Packing Co. cease and desist from carrying into effect its so-called Beech-Nut policy by cooperative methods in which the petitioner and its distributors, customers, and agents undertake to prevent others from obtaining the company's products at less than the prices designated by it—(1) by the practice of reporting the names of dealers who do not observe such resale prices; (2) by causing dealers to be enrolled upon lists of undesirable purchasers who are not to be supplied with the products of the company unless and until they have given satisfactory assurances of their purpose to maintain such designated prices in the future; (3) by employing salesmen or agents to assist in such plan by reporting dealers who do not observe such resale prices, and giving orders of purchase only to such jobbers and wholesalers as sell at the suggested prices and refusing to give such orders to dealers who sell at less than such prices, or who sell to others who sell at less than such prices; (4) by utilizing numbers and symbols marked upon cases containing their products with a view to ascertaining the names of dealers who sell the company's products at less than the suggested prices, or who sell to others who sell at less than such prices in order to prevent such dealers from obtaining the products of the company;

Not reported. Opinion of Circuit Court of Appeals is reported at p. 54, and of bupreme Court at p. 170.

(5) by utilizing any other equivalent cooperative means of accomplishing the maintenance of prices fixed by the company.

Further ordered, That the Federal Trade Commission recover against the petitioner eighty-two dollars and fifteen cents for its costs as taxed in the said Supreme Court of the United States, and have execution therefor.

Filed February 14, 1922.

CLAIRE FURNACE COMPANY ET AL., COMPLAINANTS, v. FEDERAL TRADE COMMISSION ET AL., DEFENDANTS.48

(Supreme Court of the District of Columbia, in Equity, No. 37954, March 10, 1922.)

FINAL DECREE.

The above-entitled cause having come on to be heard upon plaintiffs' motion to strike out certain parts of the amended answer and to strike the entire amended answer from the files, and it appearing to the court, from the papers and from the oral argument, that the amended answer of the defendants, the Federal Trade Commission, and Nelson B. Gaskill, Huston Thompson, and Victor Murdock, as commissioners, was intended to and did replace the original answer of all of the original defendants in said suit, and John F. Nugent, commissioner, heretofore made a party defendant herein, having answered and adopted said amended answer as his answer in this suit;

And said motions of said plaintiffs having been fully argued and submitted by counsel for plaintiffs and defendants, and the court having considered said motions and having heretofore rendered its opinion in which it reserved decision upon the motion to strike the entire amended answer from the files, in order to permit counsel, if they should so desire, to present further arguments, and the court having been advised that no such further argument is desired;

It is now, this 10th day of March, 1922, by the court ordered: First. That the motion to strike out certain parts of the amended answer be overruled without prejudice to the right of the plaintiffs on any further hearings in said suit to raise objections to matters not properly pleaded.

Second. That the second motion to strike the entire amended answer from the files be, and the same is hereby, denied, except as

Not reported in National Reporter system.

In memorandum filed in the instant case on Mar. 18. 1922, the court (Mr. Justice Bailey) cited the decision in the case of Maynard Coal Co. v. Federal Trade Commission, dated Apr. 19, 1920, 48 Washington Law Reporter 278 (reported at p. 60 hereof), and stated I adopt that opinion as my opinion in this case so far as applicable.” For statement of facts and subsequent decisions see pp. 259 and 602, respectively.