Notwithstanding this imposing legislative history, respondent argues that it is inconceivable that Congress intended to legalize this "indefensible" practice. To my mind this is a spurious contention. The legislative history leaves no room for doubt but that Congress purposely refrained from outlawing the system and by strong implication gave recognition to its existing legal status.

It is also significant that at the same session of Congress the Wheeler Anti-Basing Point Bill was rejected (80 Cong. Rec. 8102, 8223 and 8224). In 1936, hearings were held before the Senate Committee on Interstate Commerce, from March 9 to April 10, on Senate S. 4055, which was expressly aimed at eliminating the basing point system, and again no legislation re[230]sulted. Also, it may be observed that the Temporary National Economic Committee created by joint resolution of Congress on recommendation of the President to study the entire problem of monopoly recommended in its final report the legislative destruction of the basing point system as a monopolistic price fixing device. (Senate Document No. 35, 77th Congress, 1st Session, page 33.) It is also interesting to note that the Assistant Chief Counsel for the Commission who argued the instant case before this court, on January 30, 1940 urged the Committee to "consider whether legislation outlawing the basing point system would be recommended." It was his position then that the system could be reached only under "theories of conspiracy and concerted action which are necessary to make the law applicable." (Record of proceedings of T. N. E. C., Vol. 4, page 400.) Cf. Federal Trade Commission v. Bunte Brothers, Inc., 312 U. S. 349, 352 [32 F. T. C. 1848; 3 S. & D. 337].

All of which shows that not only has Congress refused in no uncertain terms to outlaw the system, but that the Commission has recognized its use as not unlawful except in combination or concerted action. Can it be possible that Congress in the enactment of the Robinson-Patman amendment proscribed the use of the basing system after its clearly expressed intention and purpose to the contrary? I am unwilling to attribute to Congress such a degree of mediocrity. Is it reasonable to suppose that the Commission and its counsel would have continued to urge legislation outlawing the system if such was already an accomplished fact? The plain unvarnished truth is that respondent seeks from this court that which Congress has steadfastly denied.

Respondent relies upon another crutch which furnishes little, if any, support. In 1924, in Federal Trade Commission v. U. S. Steel Corp., et al. (8 F. T. C. decisions 1), it held that the basing point system was illegal under the Clayton Act prior to the passage of the Robinson-Patman amendment. A cease and desist order was issued but, as I understand, no action has been taken by the Commission to enforce its order and the Steel Corporation continues to use this price system or one of the same principle. It is a fair inference in the light of what has since transpired that the Commission entertained no hope that such an order was enforceable under the old Clayton Act, and in view of the legislative history of the Robinson-Patman amendment and other related events, it has little, if any, basis for such hope at this time.

Another factor of some importance is the alternative price system open to petitioners. Of course, I assume it is not within the province of courts. or respondent to advise petitioners or anybody else how a business should be operated so as to comply with the law. However, in the instant case, respondent's order requires that petitioners within sixty days file with the

Commission a report in writing setting forth "in detail the manner and form in which they have complied with this order." That means, so I would think, that petitioners must advise the Commission of the price system they have adopted in lieu of that which is condemned. Respondent in its reply brief, in response to petitioners' challenge that it describe a price system which would be nondiscriminatory, makes this pertinent suggestion, "But petitioners obviously do not want one pricing method that rather clearly would not be discriminatory, a uniform f. o. b. plant price with exceptions based only on differences in cost." This suggestion no doubt presents the only alternative to the price system now under attack. At any rate, so far as I know, it is the only system which on principle could be distinguished from the basing point system. The f. o. b., or mill price system as it is sometimes called, is the very system which Congress has refused to impose upon industry for the reason that it would cause or tend to cause the centralization of industry in the more highly populated centers. (See Representative Citron's remarks (80 Cong. Rec. 8224).)

This court in its former opinion expressed the view that there was no evidence in the record to support the finding that the discrimination shown tended substantially to lessen competition or to create a monopoly. I am not convinced that we were in error in this respect. In my view, the basing point system has the opposite effect, that is, it has a tendency to preserve competition and prevent monopoly. Especially is this so when compared with the f. o. b. system now sought to be imposed. It was stipulated in effect that the quality of syrup manufactured by petitioners and all competitors was substantially the same, that petitioners could not sell at a higher price than their competitors, and that competitors could not sell at a higher price [231] than petitioners. To me this means that petitioners and their competitors must sell their product at substantially the same price. Petitioners, forced to an f. o. b. price, could not compete with their competitors in the Chicago market any more than their Chicago competitors could compete with them in the area immediately surrounding Decatur. Competition might become a thing of the past, and each manufacturer have a monopoly of the trade in its own area. Other things being equal, and there is nothing in this record to the contrary, such a price system in my judgment would be calculated to lead to a price war from which only the financially strong and those with a favorable geographical location could survive. Such is the unreasonable result which the Commission would have us produce by embracing its construction of the Clayton Act as amended.

I would refuse such construction and leave the matter in the lap of the legislative branch of the government where, in my view, it properly belongs.

casions; and two of these witnesses conducted a demonstration before the trial examiner alone, in which they did so. On conflicting evidence the Commission's decision must be accepted as final. 15 U. S. C. A. § 45 (c). Benton Announcements v. Federal Trade Commission, 130 F. (2d) 254 (C. C. A. 2) [35 F. T. C. 941; 3 S. & D. 495].

We pass now to a consideration of whether the trial was fairly conducted. When counsel for the petitioners sought to cross-examine the respondent's experts as to the methods and instruments they had used in their alleged picking of the lock, the questions were excluded on the ground that the method and tools used by the witnesses were a "trade secret" which they were privileged not to reveal. By an order made on October 12, 1940 the Commission sustained the trial examiner's ruling but directed that the witnesses demonstrate the picking of the lock in the presence of the trial examiner alone, and that he include in the record a statement whether the lock was successfully picked by them. Thereafter such a demonstration was given by the witnesses Rusch and Leurele. Three of the petitioners' lock cylinders were purchased by counsel from hardware dealers and were successively installed in the door of the hearing room. The trial examiner and the two witnesses remained inside the room, all other persons being excluded. Counsel for petitioners and counsel for the respondent remained immediately outside the door until the picking was accomplished. One of the witnesses successfully picked two of the cylinders, the first within thirty minutes and the third within four minutes. The second witness was unsuccessful in his attempt to pick the second cylinder, but the record indicates that possibly this lock was not in perfect condition when purchased.

If "pick-proof" meant that the picking must be done by conventional picks and customary methods, the prevention of cross examination to find out what tools and technique the witnesses had used on the occasions when, according to their direct testimony, they had picked petitioners' locks might perhaps be so serious a limitation of the right of cross examination as to deprive them of a fair hearing, although the authorities recognize a wide discretion in the trial judge to protect against the revelation of trade secrets. See Wigmore, Evidence, 3rd ed. Vol. 8, § 2212; Du Pont de Nemours Powder Co. v. Masland, 244 U. S. 100, 103. But in view of the Commission's definition of picking a lock the issue was not how the lock was picked but whether it could be opened without keys and without damage to the lock. On that issue the petitioners' cross examination was not limited. For the same reason we think that the demonstration before the examiner in camera in order to protect the witnesses' trade secret was not unfair. The petitioners affixed the locks and saw the door opened without damage to the locks and without the use of keys. All they were deprived of was observation of the technique by which it was accomplished. Order affirmed.

ANDREW J. LYTLE, RICHARD CARL LYTLE AND WILLIAM EDGAR SPICER v. FEDERAL TRADE COMMISSION 1

No. 9688-F. T. C. Dock. 4829

(Circuit Court of Appeals, Sixth Circuit. July 17, 1944)

Order dismissing, for lack of prosecution, on motion of the Court, petition to review the Commission's order in Docket 4829, Sept. 28, 1943, 37 F. T. C. 464, requiring respondents, their representatives, etc., in connection with the offering for sale, etc., in commerce, of mailing cards or folders or any other printed or written material for use in obtaining information concerning debtors or other persons, to cease and desist from using the words "Bureau of Records of Employment," "Registration Number" or "Regional agent," or area designations such as "Eastern area," or any other words which represent that respondents are connected with any branch of the United States Government-the Selective Service Administration or any otheror are authorized to secure information for the use thereof, etc.

Mr. Dudley M. Sifling, of Akron, Ohio, for petitioners.

Mr. J. J. Smith, Jr., assistant chief counsel, and Mr. James W. Nichol, special attorney, Federal Trade Commission, both of Washington, D. C., for the Commission.

Before: HICKS, SIMONS & ALLEN, Circuit Judges.

ORDER

It appearing to the court that this cause was docketed on November 27, 1943; that the typewritten transcript of record was filed on January 7, 1944; and that counsel for petitioners has failed to proceed with due diligence to print the record as prescribed by Rule 20,

It is now ordered upon the court's own motion that the petition for review herein be and the same is hereby dismissed for want of prosecution.

POST INSTITUTE SALES CORPORATION AND LOUIS J. STERN, INDIVIDUALLY TRADING AS POST INSTITUTE AND AS AN OFFICER OF POST INSTITUTE SALES CORPORATION v. FEDERAL TRADE COMMISSION 2

No. 18099-F. T. C. Dock. 4129

(Circuit Court of Appeals, Second Circuit. July 24, 1944)

Order dismissing, for lack of prosecution, on motion of the Commission, petition to review Commission's order in Docket 4129, December 16, 1941, 34 F. T. C. 394, requiring respondents, their representatives, etc., in connection with the offer, etc., in commerce, of their preparations for the hair and scalp designated Ultrasol Hair

1 Not reported in Federal Reporter. For case before Commission, see 37 F. T. C. 464. Not reported in Federal Reporter. For case before Commission, see 34 F. T. C. 394.

Bath, Ultrasol Pituitary Fluid, and Ultrasol .33, either singly or in combination under the designation of Ultrasol Scalp Treatment, to cease and desist from disseminating any advertisements which represent, directly or through inference, that use of said preparations would stop abnormal loss of hair, restore natural color to the hair, be effective in curing dandruff, etc.

Mr. Morris L. Bower, of New York City, for petitioners.

Mr. J. J. Smith, Jr., assistant chief counsel, Federal Trade Commission, of Washington, D. C., for Commission.

ORDER DISMISSING PETITION TO REVIEW

This matter coming on for hearing upon the motion of the Federal Trade Commission, respondent, to dismiss petitioners' petition to review filed herein on February 11, 1942, it is ordered that said motion be and it hereby is granted, and that petitioners' said petition to review be and it hereby is dismissed for lack of prosecution.

GELB ET AL. v. FEDERAL TRADE COMMISSION 1

No. 144-F. T. C. Dock. 3615

(Circuit Court of Appeals, Second Circuit. Aug. 14, 1944)

CEASE AND DESIST ORDERS-PROPRIETY-PARTIES-OFFICERS OF RESPONDENT CORPORATION-IF DISMISSAL AS TO LATTER FOR DISSOLUTION.

Though complaint charging unfair competition in advertising cosmetic products was dismissed as against corporation because of its dissolution, Federal Trade Commission was justified in entering cease and desist order against former officers also named in complaint who had dominant control of business activities of dissolved corporation and continued similar control over corporation which succeeded to its name and assets. Federal Trade Commission Act, sec. 5, 15 U. S. C. A. sec. 45. CEASE AND DESIST ORDERS-EXTENT METHODS, ACTS AND PRACTICES-MISREPRESENTATION-ADVERTISING FALSELY OR MISLEADINGLY INCLUSION OF DISCONTIN

UED FORMS.

Forms of advertising which had been discontinued could be included in order to cease and desist from certain unfair competitive practices.

EVIDENCE COMPETENCE-REFUSAL OF EXPERT FOR COMMISSION, AFTER TESTIMONY, AND RECALL AS WITNESS FOR DEFENSE, TO DISCLOSE OTHER SOURCE OF PROSPECTIVE COMPENSATION.

Where expert witness was first called by Federal Trade Commission and was then subject to full cross-examination and was later recalled as a witness for defendants, his refusal during direct examination upon second appearance to disclose to whom besides commission he was looking for compensation bore merely on his credibility and did not require that all his testimony be stricken from the record. Federal Trade Commission, sec. 9, 15 U. S. C. A. sec. 49.

1 Reported in 144 F. (2d) 580. For case before Commission, see 33 F. T. C. 1450.