ANNOTATIONS, SEC. 5-Continued. "UNFAIR METHODS OF COMPETITION "-MONOPOLISTIC TENDENCY OR ELEMENT-Continued. 5. "The Commission justifies the order complained of by looking to the future rather than at the present, * * *"" "The Commission looking forward sees in the present highly competitive business of the various wholesalers a seed which will in time produce the fruit condemned in Patterson V. United States, 222 Fed. 599, * * 6. It may be admitted that one function of the Trade Commission is to discern and suppress such practices in their beginning; but a thing exists from its beginning, and it is not a conclusion of law from any facts here found that a system [referring to petitioner's system condemned by the Commission of leasing oil tanks and pumps for a nominal rental in consideration of the lessee using lessor's product exclusively in connection therewith], which at present is keenly competitive, extremely advantageous to the public, and, in the opinion of a majority of the competent witnesses economical, is at present unfair to anyone or unfair because tending to monopoly. A tendency is an inference from proven facts, and an inference from the facts as found by the Commission is a question of law for the court. As a matter of law there is at present no violation of the Trade Commission statute; therefore the first of respondent's contentions can not be sustained. Standard Oil Co. of New York v. Federal Trade Commission, May 11, 1921, 273 Fed. 478, 481, 482. (See case in this compilation, p. 184 at pp. 188, 189. PASSING OFF COMMISSION PRICES AT WHICH GOODS SOLD. PUBLIC INTEREST. See also post, pars. 56-63. 7. "The Commission is not made a censor of commercial morals generally. Its authority is to inquire into unfair methods of competition in interstate and foreign commerce, if so doing will be of interest to the public; and if such method of competition is prohibited by the act. to issue an order requiring the person or corporation using it to cease and desist from doing so. We have heretofore so understood the extent of the Commission's authority in Federal Trade Commission v. Gratz, 258 Fed. Rep. 314; affirmed 253 U. S. 421, and New Jersey Asbestos Co. v. Federal Trade Commission, 264 Fed. Rep. 509." Winsted Hosiery Co. v. Federal Trade Commission, April 13, 1921, 272 Fed. 957, 960. (See case in this compilation, p. 180 at p. 183.) ORDER BASED ON PRACTICE ABANDONED BEFORE COMPLAINT ISSUED. 8. "Petitioner insists that the injunctional order was improvidently issued because, before the complaint was filed and the hearing had, petitioner had discontinued the methods in question and, as stated in its answer, had no intention of resuming them. For example, no sugar offers of the character assailed were made after August, 1917. But respondent was required to find from all the evidence be fore it what was the real nature of petitioners's attitude. It was permissible for respondent to take judicial notice of the Government's war-time control of sugar sales and consumption. It was also proper to note that petitioner was contending (and still contends) that the Act is void for indefiniteness, that the Act is unconstitutional, and that the Act, even if valid, under any proper construction, has not been infringed by petitioner's practices * * * no assurance is in sight that petitioner, if it could shake respondent's hand from its shoulder, would not continue its former course.", Baker, J., in Sears Roebuck & Co. v. Federal Trade Commis sion, 258 Fed. 307-310. (See case also in Vol. II of Commission's Decisions, p. 536 at p. 540, or in 1920 "Acts from which the Commission," etc., p. 70 at p. 74.) of sec fair and in violation tion 5, and the court, examining the evidence to see whether the Commission's findings were supported by the testimony or not, found "that the officers of the company in the year 1918 did entertain at the company's expense both customers and employees of customers; and that the salesmen down to May 1 were employed on a salary or on a salary and commission basis and were allowed to charge in their monthly accounts reasonable lump sums for entertainment. After May 1 they were on a commission basis only, and any entertainment given by them was given at their own expense," a charge in the complaint of giving valuable presents and sums of money having been abandoned by the Commission, held, in New Jersey Asbestos Co. V. Federal Trade Commission, February 6, 1920, 264 Fed. 509, reversing the order of the Commission in 1 F. T. C. 472 on the basis of the decision of the lower court in the Gratz case (see case also in Vol. II of ComCON- mission's Decisions, at pp. 545549, or in 1920 "Acts from which the Commission," etc., pp. 79-83) that the matter was one not so affecting the public as to be within the jurisdiction of the Commission. (See case also in Vol. II of Commission's Decisions, at pp. 553–556, or in 1920 "Acts from which the Commission," etc., pp. 87-90.) RESALE PRICE MAINTENANCE. See post, par. 23. TYING OR EXCLUSIVE See post, pars. 24, 25. PRACTICES IN PARTICULAR CASES- 9. Where the Commission found that respondent had been "lavishly giving gratuities such as luncheons, cigars, meals, theater tickets, and entertainment to employees of customers as an inducement to influence their employers to purchase or to contract to purchase from the said respondent its various products, without other consideration therefor, and held such methods of competition un MONEY AND GRATUITIES. 10. Held in T. C. Hurst & Son v. Federal Trade Commission, October 2, 1920, 268 Fed. 874, on petition to enjoin the Commission from proceeding against petitioner under its complaint in which it charged ANNOTATIONS, SEC. 5—Continued. AND GRATUITIES-Continued. MONEY PRACTICES IN PARTICULAR CASES- the Harness Manufacturers' COMMERCIAL BRIBERY Association to the Saddlery Association, as complained of by retailers, for competing with * *that the Harness them; * Manufacturers' Association had influence with the used its Saddlery Association to prevent the admission of specific concerns to membership in the latter association and the recognition said petitioner, a ship chandler, with giving captains and other employees of vessels, "without the knowledge and consent of the owners thereof, sums of money and other gratuities, as an inducement to influence such employees or owners to purchase supplies from the respondents, the complainants herein, which said acts were charged to be unfair methods of competition in commerce, within the intent and meaning of section 5, that the Commission acted entirely within its rights, of and concerning a matter liable to inaffect juriously commerce." (See case in this compilation, p. 127, and 3 F. T. C. 223 for Commission's findings and order.) CONSPIRACIES OR COMBINATIONS TO PUNISH OR COERCE OBJECTIONABLE COMPETITORS. 11. Where it appeared among other things that one of the objects of the Harness Manufacturers' Association, as stated in its constitution and by-laws, is "to protect the harness dealers from the unjust sale of goods by wholesale dealers direct to consumers; that the officers, committees, and members of the Harness Manufacturers' Association and of the Saddlery Association had actively COoperated to establish the principle that a combined and closely affiliated wholesale and retail business was not a legitimate wholesale business; that the secretary of the Saddlery Association had attempted to prevent manufacturers from recognizing, as legitimate jobbers, wholesalers whose names were furnished by accessory stores, other harness * * * Manufachad re of such concerns as legitimate jobbers; that the Harness Association turers' quested and secured the cooperation of members of the Saddlery Association in a refusal to sell mail-order houses, hardware general stores, and of competitors retail manufacturers not recognized by the Harness Manufacturers' Association as legitimate; that the latter had refused the privilege of associate membership to accessory manufacturers and jobbers who sell to mail-order houses, establishing, however, an associate membership restricted to manufacturers and jobbers who do not sell to consumers and to mailorder houses, and who are otherwise in harmony with the policy of the association, and issuing credentials thereof to the traveling salesmen of associate members and urging and encouraging the affiliated retailers to withdraw and withhold patronage from concerns whose salesmen were not so equipped; and have induced the members of the Saddlery Association to use their influence with the accessory manufacturers not to sell. mail-order houses; that by reason of refusals of accessory manufacturers, due to objections of the Saddlery Associa * * * * tion, to recognize as jobbers certain competitors of members of that association, such competitors have been forced to buy from the Saddlery Association at prices higher than charged by manufacturers to recognized jobbers, [and] * that as a result of the opposition of the Harness Manufacturers' Association to sales by manufacturers and jobbers to the classes of competitors before mentioned, the latter had been prevented from purchasing as freely in interstate commerce as they would have been without such opposition. ** *" Held, That the Commission's findings of fact, and the existence of the combinations, schemes, and practices directed to be discontinued are amply sustained, and that the findings of fact being so supported, the Commission's order (see 1 F. T. C. 335, 362) is fully justified by the authorities to which attention has already been called, including especially Eastern States Lumber Co. v. United States." [234 U. S. 600.] Nat'l Harness Mfrs. Ass'n v. Federal Trade Commission, December 7, 1920, 268 Fed. 705. (See case in this compilation, p. 132 at pp. 138-140.) 66 * * * * ** * at a to sell sugar at a price lower than others offering sugar for sale; [and] * * * is selling its sugar at a price much lower than that of its competitors thereby imputing to its competitors the purpose of charging more than a fair price for their sugar;" the fact being that it was "selling certain of its merchandise at less than cost on the condition that the customer simultaneously purchase other merchandise prices which give profit on the transaction, without letting the customer know the facts;" and had been "advertising that the quality of merchandise sold by its competitors is inferior to that of similar merchandise sold by petitioner, and that petitioner buys certain of its mechandise in markets not accessible to its competitors and is therefore able to give better advantages in quality and price than those offered by its competitors": Held, That such false and misleading advertising, under the circumstances set forth, constituted an unfair method of competition, and that the Commission's order should be sustained with the exception of the second paragraph, in which the petitioner is required to cease seling sugar below cost, the court stating on this point: 13. "* * * We find in the statute no intent on the part of Congress, even if it has the power, to restrain an owner of property from selling it at any price that is acceptable to him, or from giving it away. But manifestly in making such a sale or gift the owner may put forward representations and commit acts which have a capacity or a tendency to injure or to discredit competitors and ANNOTATIONS, SEC. 5-Continued. PRACTICES IN PARTICULAR CASES- PRICES-Continued. to deceive purchasers as to the real character of the transaction. That paragraph should therefore be modified by adding to it by means of or in connection with the representations prohibited in the first paragraph of this order, or similar representations.' Baker, J., modifying as above, but other wise affirming Commission's order in 1 F. T. C. 163. Sears, Roebuck & Co. v. Federal Trade Commission, April 29, 1919, 258, MISBRANDING OR MISLA- See post, par. 22. TO PURCHASE. 14. Commission's order in Ward Baking Co. case, 1 F. T. C. 388, reversed in Ward Baking Co. v. Federal Trade Commission, February 26, 1920, 264 Fed. 330, on ground that interstate commerce not involved. See digest of case, infra, pars. 39, 40. unfair any condition, agreement, or understanding that may lessen competition or tend to create a monopoly shows that the method found to be unfair must have been unfair in certain individual transactions. And we discover no evidence to support the finding in paragraph 2, that the respondents ‘ adopted and practiced the policy of refusing to sell steel ties to those merchants and dealers who wished to buy them from them unless such merchants and dealers would also buy from them a corresponding amount of jute bagging.' It is the natural and prevailing custom in the trade to sell ties and bagging together, just as one witness testified it is to sell cups and saucers together. Such evidence as there is of a refusal to sell is a refusal to sell at all to certain persons with whom the respondents had previous unsatisfactory relations and a refusal to sell ties without bagging at the opening of the market in 1916 and 1917 when there was fear that owing to scarcity of ties and the prospect of large crops, the marketing of the cotton crop might be endangered by speculators creating a corner in ties." Ward, J., reversing Commission's order in 1 F. T. C. 249. Federal Trade Commission ▼. (See case also in Vol. II of Commission's Decisions, at pp. 550-552, or in 1920 "Acts from which the Commission." Gratz, 258 Fed. 314, 317. (See etc., at pp. 84–86.) FULL LINE FORCING. 15. "That the Commission did not find sufficient proof to sustain the second count in the complaint, viz, that the method of the respondent found to be unfair violated section 3 of the Act of October 15, 1914, known as the Clayton Act, which makes case also in Vol. II of Commission's Decisions, p. 545 at pp. 548, 549, or in 1920 "Acts from which the Commission," etc., p. 79 at pp. 82, 83.) 16. "The complaint contains no intimation that Warren, Jones & Gratz did not properly obtain their ties and bagging as merchants usually do; the amount controlled by them is |