Findings as to the Facts, Conclusions, Orders to Cease and Desist, Court Decisions, and Material Relative Thereto, etc. (except cases arising under secs. 7 and 8 of the Clayton Act, and the Pending Complaints-- 82-124-G Natural-Gas-Producing, Pipe-Line, and Utility Industries. 205-E 205-F 1 The exhibits were admitted to the record during hearings held March 1, 1939, marked "Exhibit No. V REPORT OF FEDERAL TRADE COMMISSION TO THE TEMPORARY NATIONAL ECONOMIC COMMITTEE RE MONOPOLISTIC PRACTICES IN INDUSTRIES PART I Résumé of data concerning formal action taken by the Federal Trade Commission in cases involving unlawful_monopolistic practices and restraints of trade (except cases arising under secs. 7 and 8 of the Clayton Act, and the RobinsonPatman Act) covering the period July 1, 1930, to date. INTRODUCTORY During the month of July 1938 there was submitted to the Temporary National Economic Committee for its consideration a compiled list of data relating to matters upon which the Commission had taken formal action in the view that such matters involved unlawful monopolistic practices and restraints of trade in interstate commerce, which data were available in the records of the Commission. It is the purpose in this part I, to present to the Committee a brief résumé of the cases therein referred to, consisting of a brief statement of fact pertaining to each case, the commodity involved, the nature and extent of the monopolistic practices used and the effect thereof as found by the Commission upon the evidentiary facts in the record. A descriptive generalization of these acts and practices is that they are all calculated and tend to interfere with the natural play of normal competitive forces, with a resultant increased concentration of private economic power in the hands of private and limited groups, and in the imposition of unnatural limitations and restrictions on trade with consequent injury to the public. Documentary evidence submitted with this report is identified herein by exhibit numbers such as "F. T. C. Ex. No. 1." The cases are arranged chronologically and indexed as to companies and commodities. The Federal Trade Commission Act is indicated by the letters FTCA, the Clayton Act, by the letters CA, and the numeral following such abbreviation indicates the section of the act referred to. Where the findings and orders of the Commission have been published in volume form, the reference is made to the Federal Trade Commission Reports as "14 F. T. C. 261." November 17, 1930 FOOD CANNED SYRUPS AND MOLASSES PENICK & FORD, LTD., AND PENICK & FORD SALES COM- STATEMENT OF FACTS Penick & Ford, Ltd., a Delaware corporation, controlled the stock of Penick & Ford Sales Company, Inc., and certain of the officers and directors of the two corporations were the same. The former engaged in the business of packing various 1 Entered in the record March 2, 1939. See Hearings, Part V. p. 1769. 2305 canned syrups, in plants located in Alabama, Louisiana, Iowa, and Vermont, and selling its entire output to the Sales Company for resale to wholesale and retail grocers. Between 1924 and 1927 the Sales Company was the largest vendor of canned cane syrups in Mississippi, Louisiana, Arkansas, and Texas, and the only vendor in the Southern States selling a complete line of canned cane, corn, and blended syrups and molasses. MONOPOLISTIC PRACTICES The Sales Company pursued the policy and practice of entering into agreements with its wholesale grocer customers whereby such customers would deal in its canned syrups and molasses to the exclusion of the merchandise of its competitors, in return for sales assistance and cooperation to be furnished by the Sales Company. This sales assistance was refused or discontinued in the event that the wholesale grocer customer sold any competitive products. In furtherance of this sales policy, which was a violation of section 3 of the Clayton Act, and of section 5 of the Federal Trade Commission Act, the respondent Sales Company, in one instance, purchased from a wholesale grocer 2,500 cases of a competitive syrup which it repacked under its own labels and resold at less than its cost to respondent. EFFECT By the aforesaid practice, the public was deprived of a substantial proportion of the competition previously existing between the Sales Company and its competitors in numerous Southern markets by virtue of the closing of outlets for this class of merchandise to competitors. This had a direct tendency toward monopoly in canned syrups and molasses and the Commission ordered cessation of such practice. A copy of the Commission's findings as to the facts and conclusion, and its order to cease and desist, is herewith submitted, marked "F. T. C. Ex. No. 1." The order was directed against the Sales Company only, because the parent company was not engaged in interstate commerce and was not the Sales Company's principal (14 F. T. C. 261). March 24, 1931 (FTCA-5) CLOTHING MERCERIZED COTTON YARN MERCERIZERS ASSOCIATION OF AMERICA, ET AL. DOCKET No. 1755 STATEMENT OF FACTS The Association was a voluntary, unincorporated association of nine competing companies, located in Massachusetts, Pennsylvania, North Carolina, and Tennessee and engaged in the manufacture, processing and mercerizing of plied cotton yarns and in the sale and distribution of the same to manufacturers of hosiery, underwear, and other garments. They had an aggregate capacity of 1,200,000 pounds of yarn per year, and occupied a dominant position in this industry. MONOPOLISTIC PRACTICES By understandings, agreements, and combinations, through the Association, respondents fixed and maintained uniform prices, terms, and discounts, and uniform extra charges and thereby suppressed competition in the sale of the mercerized yarns at wholesale to garment manufacturers located throughout the United States. EFFECT Between August 1, 1926, and August 1, 1929, prices on said product advanced without respect to the raw cotton yarn market or the cost of the raw yarns to the respondents, competition in the sale of the product was substantially lessened, restricted, and suppressed, and the Commission ordered the respondents to cease and desist. A copy of the Commission's findings as to the facts and conclusion, together with its order to cease and desist, is submitted, marked "F. T. C. Ex. No. 2" (15 F. T. C. 1). |