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CONFERENCE RULINGS
ISSUED JANUARY 31, 1916
washingtoN
Government PRINTING OFFICE
1916


THE FEDERAL TRADE COMMISSION.
Joseph E. DAVIES, Chairman.
EDwARD N. HURLEY, Vice Chairman.
WILLIAM J. HARRIs.
WILL H. PARRY.
GEORGE RUBLEE.
LEONIDAS L. BRACKEN, Secretary.
EXPLANATORY NOTE.
The following are rulings of the commission in conference which
are published as being of public interest. Future rulings will be
announced from time to time through the public press and subse-
quently compiled and issued by the commission in successive bulle-
tins. ese rulings are published for the information of business
men engaged in interstate commerce and others interested in the
work of the commission. They are not decisions in formal pro-
ceedings, but merely expressions of the opinion of the commission
on applications for the issuance of complaints and informal inquiries
with regard to particular facts which involve the interpretation and
construction .P the Federal Trade Commission Act and of those
sections of the Clayton Act with the enforcement of which the
commission is charged.
While these rulings may be regarded as precedents in so far as they
are applicable in proceedings before the commission, a more extensive
presentation of facts in later cases may result in their modification,
and they should not, therefore, be regarded as conclusive in the
determination by the commission of any future action.
Copies may be obtained by those interested on application to the
secretary of the commission.

JANUARY 31, 1916.
24356°–16 3
CONFERENCE RULINGS OF THE FEDERAL TRADE COM-
MISSION.
Issued January 31, 1916.
1. Public interest—Competitive method discontinued.—On applica-
tion for the issuance of a complaint, it appeared that a corporation
engaged in the refining and sale of cane sugar, whose principal market
is in the State in which its refinery is located, alleged that a larger
corporation, having refineries located in other States and disposin
of its product in interstate commerce in many States, refined and Sol
exclusively in the State of the applicant and in competition with it
sacked sugar which is branded “pure cane fine granulated sugar.”
The applicant alleged that this sugar is not a standard fine granulated
sugar as the branding leads consumers as well as many in the trade to
believe, but is what is known as “off” sugar in the manufacture of
which an expensive part of the refining process which is necessary to
extract the final residue of from 2 to 3 per cent of molasses is omitted;
that this “off” sugar is sold to jobbers at about 10 cents per hundred
pounds less than the market price for standard granulated sugar;
and that by reason of the alleged false brand or label on the sacks
retailers and consumers are deceived into the belief that they are
buying granulated sugar equal to standard. As a result, the ºppº,
cant stated, it was compelled to meet the competition of this “off”
sugar in the sale of its standard fine granulated sugar, in the manu-
facture of which it uses the complete refining process, a part of which
its competitor omits in manuf º the “off” sugar.
Upon consideration of the above allegations, the commission, hav-
ing instituted an investigation, and shortly thereafter the corporation
complained of having issued a notice to the trade announcing that it
had discontinued the sale of the “off” brand of sugar, and the appli-
cant requesting to be permitted to withdraw its application, and the
corporation complained of assuring the commission that it had dis-
continued the sale of sugar branded in the manner complained of
and had no intention of resuming the sale of this package: Held,
That the method of competition complained of having been perma-
nently discontinued, it does not appear to the commission that a
gºing by it in respect thereof would be to the interest of the
pupilc.
2. Public interest—Competitive method discontinued.—On applica-
tion for the issuance of a complaint, it appeared that a manufacturer
engaged in interstate commerce issued a publication in which, under
the guise of trade news, misinformation of a character unfair and
detrimental to the applicant's business was circulated. Upon inves-
tigation by the commission the applicant advised that the use of the
5
6 CONFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION.
alleged unfair method had been discontinued; and the party com-
plained of assured the commission that its policy had changed with
a change of management and no such practice would in the future be
engaged in either against the applicant or any other competitor.
Held, That the method of competition complained of having been
permanently discontinued, it does not appear to the commission that
à. ºding by it in respect thereof would be to the interest of the
pupilc.
3. Public interest—Competitive method discontinued.—On applica-
tion for the issuance of a complaint, it appeared that a typewriter
rebuilding company engaged in interstate commerce had circulated
among dealers in various States a letter falsely stating that a com-
petitor's factory in the Middle West had been removed to the East,
and that for this reason many of its customers in Central and Western
States would make new arrangements for obtaining typewriters.
The party complained of subsequently advised the commission that
the statement when made was believed to be true. It also sent a
letter of retraction to all dealers receiving the first communication,
and assured the commission of its readiness to take any further action
deemed necessary. The applicant, being advised of these facts,
suggested that no further action be taken. Held, That the method of
competition complained of having been permanently discontinued,
it does not appear to the commission that a proceeding by it in re-
spect thereof would be to the interest of the public.
4. Public interest—Competitive method discontinued.—On applica-
tion for the issuance of a complaint, it appeared that a manufacturer
º; in interstate commerce sent out a printed circular containing
an alleged letter to it by a dissatisfied customer of the º
disparaging the quality of applicant's product, which letter the appli-
cant charged was fictitious. Upon investigation, the commission
received assurances from the concern complained of that it had dis-
continued the publication of the circular in question, and that in
future it would not in its advertising matter refer in any way to the
products of its competitors. Held, That the method of competition
complained of having been permanently discontinued, it does not
appear to the commission that a proceeding by it in respect thereof
would be to the interest of the public.
5. Public interest—Competitive method discontinued.—On applica-
tion for the issuance of a complaint, it appeared that an association of
wagon peddlers, competing with a jobber, had, by threats of boycott,
prevailed on a manufacturer engaged in interstate commerce to refuse
to sell to such jobber. Shortly after an investigation was started the
commission was advised by the jobber that the manufacturer had
resumed selling to it. Assurances were also given the commission by
the manufacturer that the jobber would not in future be denied
the privilege of buying from it by reason of the threatened boycott.
Held, That the matter having been satisfactorily adjusted as between
the parties, it does not appear to the commission that a proceeding
by it in respect thereof would be to the interest of the public.
CoNFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION. 7
6. Exclusive territory—Refusal to sell.—On application for the
issuance of a complaint, it appeared that a manufacturer engaged in
interstate commerce, having designated an exclusive ... in a
certain local territory, refused to sell to another dealer within this
territory. It further appeared that such exclusive dealer was under
no obligation to refrain from dealing in the products of other manu-
facturers of the same commodity. Held, That neither the Federal
Trade Commission Act nor the Clayton Act prohibits manufacturers
selling their product exclusively through one dealer in a given terri-
tory. A refusal to sell to others in such territory, under such cir-
cumstances, is, therefore, not unlawful. -
7. Manufacturers engaged in interstate commerce, irrespective of
the size of their business, and all wholesalers so engaged, subject to
Clayton Act.—On inquiry: Held, That all manufacturers engaged in
interstate commerce, irrespective of the size of their business, and all
jobbers or wholesalers thus engaged, are subject to the provisions of
the Clayton Act. - -
8. The right of one manufacturer engaged in interstate commerce
to buy out a competitor, and jurisdiction of the commission in such
matters.-On inquiry as to the right of one manufacturer to buy out
a competitor in the same line of business: Held, That the only juris-
diction of the commission in respect of such transactions is to enforce
the provisions of section 7 of the Clayton Act prohibiting the acqui-
sition by any corporation engaged in interstate commerce of the
capital stock, in whole or in part, of another corporation thus engaged,
where the tendency of such acquisition may be to j
competition between such two corporations, or to restrain interstate
commerce, or to create a monopoly; and also possibly to enforce
section 5 of the Federal Trade Commission Act, if such purchase
either of property or of capital stock in connection with other cir-
cumstances might constitute an unfair method of competition.
Held, also, That the mere purchase of the property of such competitor
other than capital stock is not prohibited by the Clayton Act or the
Federal Trade Commission Act. -
As to the validity of such purchase of property or capital stock
under the Sherman Act, the commission expresses no opinion.
9. Exclusive agency.—On inquiry by a piano manufacturer whether
the following clause in a “consignment agreement” is in contraven-
tion of the Clayton Act, to wit:
Item 3. The factor shall offer, sell, or lease the pianos consigned to him by the con-
signor only to persons residing in the counties of — in the State of
and shall not sell nor lease, during the life of this contract, any other pianos than
those consigned by the said (piano manufacturer).
Held, It appearing that the “consignment agreement” does not provide
for a sale or lease of the goods of the principal to the person desig-
nated as “factor,” but only for the establishment of an agency for the
sale of the goods of the principal, therefore the use of . clause does
not appear to be in violation of section 3 of the Clayton Act.
8 CONFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION.
10. Direct selling.—On application for the issuance of a com-
plaint, it was alleged that certain mining operators were selling their
product direct to consumers at wholesale prices, and coercing retail
dealers into handling their product, either by threats to sell or by
temporary arrangements for selling their product direct to consumers.
Upon investigation by the commission, it appeared that the operators
were in fact selling their product direct to consumers, but that this
method of competition was not used for purposes of coercion but was
necessary in order to keep their product on the market. Held, That
the sale by a mining operator of his product direct to the consumer
is not of itself an unfair method of competition. -
11. Practice—Information respecting alleged violation of law sub-
mitted by parties not directly interested.—On inquiry: Held, That
the fact that a party complaining to the commission has no direct
interest and acts without specific authority from the parties alleged
to be injured will not prevent the commission from taking action if
the matter presented is one properly within its jurisdiction. It is
the evident purpose of the law that action by the commission should
be taken regardless of the source-of its information when it has reason
to believe that there is a violation of a law which it is empowered to
enforce and that a proceeding by it in respect thereof would be to
the interest of the public.
12. Public Interest.—Violation of State Statutes.—On application
for the issuance of a complaint, it appeared that the commission-
ers of a certain county had appointed an employee of a bridge com-
pany to the position of county civil engineer, and that this situation
made it possible for the company to secure information respecting the
letting of bridge work which was not available to competing compa-
nies. It appears that the State law prohibits such engineer from
being interested, directly or indirectly, in any contract for the con-
struction of bridges under his supervision. Held, That as the condi-
tion complained of may be corrected by resort to a State statute a
proceeding will not be instituted in the absence of important con-
siderations of public interest.
13. Exclusive Territory.—On inquiry by a manufacturer whether
section 3 of the Clayton Act is violated by a contract containing the
following clause: -
In consideration of exclusive sale of your goods in — from date of this
contract to March 1, 191—, -— agree to neither sell your goods outside of the
territory heretofore reserved to —, directly or indirectly, under penalty of
paying all damages resulting from a violation of this clause and cancellation of this
contract at the option of the manufacturer; nor to countermand this order except on
payment to Manufacturing Co., as liquidated damages, 20 per cent of the net
amount of goods hereby purchased.
Held, That section 3 of the Clayton Act does not prohibit manufac-
turers selling their product exclusively º one dealer in a given
territory and requiring the dealer not to sell their product outside
of the territory assigned.
14. Refusal to Sell.–On application for the issuance of a com-
plaint, it appeared that certain manufacturers, pursuant to their
established sales policy of selling only to local retail dealers, refused
CoNFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION. 9
to sell to the applicant, a retail dealer doing business principally by
mail, a certain commodity for shipment direct from the mills to con-
sumers in a State where the applicant maintained no place of busi-
ness. On investigation by the commission it appeared that there
TW8S InC) º or understanding among the manufacturers com-
lained of to prevent the applicant or others doing a similar business,
y refusal to sell or otherwise, from securing this commodity, nor
did it appear that such manufacturers had been coerced or intimi-
dated by retailers affected by the competition of the applicant.
Held, That, under the circumstances, a refusal of a manufacturer to
sell to the applicant for direct shipment from the mill to territory
covered by local dealers is not a violation of any law which the
&ommission is authorized to enforce. Whether a refusal to sell under
other circumstances is contrary to the provisions of the Clayton Act or
the Federal Trade Commission Act the commission does not now decide.

15. Exclusive agency—Exclusive territory—Refusal to sell.—On
application for the issuance of a complaint, it appeared that several
Imanufacturers, having appointed exclusive agents or distributors in
a given place, refused to sell to another dealer at the same point.
Held, That neither the Clayton Act nor the Federal Trade Commis-
sion Act prohibits manufacturers establishing exclusive agencies or
assigning exclusive territory to dealers. inder such circumstances
a refusal to sell to others than such agents or distributors is not
unlawful under these acts.
16. Practice—Charges not sustained on investigation.—On ap-
plication for the issuance of a complaint, it was charged by a
packer of canned clams that a competitor, in order to drive the
applicant out of business, bid up the price of fresh clams to such an
extent as to make the business unprofitable. The applicant, when
requested, failed to submit further information, and an investigation
by the commission did not substantiate the charges made. Held,
*. the commission, having no reason to believe that the party
complained of has been or is using the alleged unfair method of com-
petition, will not proceed further.
17. Corporate name—Private rights—Public interest.—On appli-
cation by a corporation for the issuance of a complaint, it was alleged
that one of its stockholders, whose name had been adopted by the
lº as part of its corporate name, had formerly been a stock-
holder in a competing corporation and had then permitted the latter
to use his name as part of its corporate name, but that after the with-
drawal of said stockholder from the competing corporation it had,
in violation of an alleged agreement between one of its officers and
said stockholder, retained his name in its corporate name, to the injury
of the applicant. Held, That as the application presents questions
concerning purely º rights, in which the interest of the public
is quite remote and indirect, it does not appear to the commission
ia proceeding in respect thereof would be to the interest of the
pupil.c.
10 ConFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION.
18. Refusal to sell—Exclusive agency.—On inquiry: Held, That the
Clayton Act does not prohibit manufacturers establishing exclusive
sales agencies in certain territory and selling their product in such
territory only through such agencies. A refusal to sell to others in
such territory, where such agency has been established, is therefore
not unlawful. Whether a mere refusal to sell under any circumstances
is contrary to the provisions of the Clayton Act or the Federal Trade
Commission Act the commission does not now decide.
19. Pipe lines—Jurisdiction.—On application for the issuance of a
complaint as to methods of a pipe line for the transportation of oil
between the States: Held, That the commission has no jurisdiction
in the premises, and that the matter should be referred to the Inter-
state Commerce Commission.
20. Exclusive territory—Refusal to sell.—On application for the
issuance of a complaint, it appeared that a manufacturer engaged in
interstate commerce lº exclusive territory to jobbers of his
product in various States and refused to sell to the applicant, a com—
eting jobber. Held, That the Federal Trade Commission Act and the
layton Act do not prohibit manufacturers selling their product
sºci: through one dealer in a given territory. A refusal to sell
to others in such territory under such circumstances is therefore not
unlawful. Whether a mere refusal to sell under any circumstances
or for any reasons is contrary to the provisions of the Clayton Act or
the Federal Trade Commission Act the commission does not now
decide.
21. Exclusive agency—Exclusive territory—Refusal to sell.—On
application for the issuance of a complaint, it appeared that a manu-
facturer, engaged in interstate commerce, having selected an exclusive
agent or distributing dealer in certain territory, refused to sell to
another dealer within this territory. Held, That neither the Federal
Trade Commission Act nor the Clayton Act prohibits manufacturers
establishing exclusive agencies or assigning exclusive territory to
dealers. Under these circumstances a refusal to sell to others than
such agents or distributors is therefore not unlawful under these acts.
22. Railroads—Jurisdiction.—On application for the issuance of a
complaint as to abandonment by an interstate railway company of
part of a branch line and its purpose to abandon more of it: Held, *.
. commission has no jurisdiction of the subject matter of this com-
plaint.
23. Interstate commerce—Jurisdiction.—On inquiry whether a
local merchant in offering an automobile free to the customer drawing
a specified number is practicing an unfair method of competition:
Held, That, as interstate commerce is not involved, the commission
has no jºtion to determine whether or not the act complained
of is unlawful. -
24. Interstate commerce—Jurisdiction.—On application for the
issuance of a complaint, a retail dealer alleged that a competitor,
engaged in business in the same city, sold goods below the price at
CONFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION. 11
which the applicant could purchase them. Held, That, as interstate
commerce is not involved, the commission has no jurisdiction to deter-
mine whether or not the practice complained of is unlawful.
25. Interstate commerce—Jurisdiction.—On application for the
issuance of a complaint, it appeared that a retail dealer was selling a
well-known make of underwear much below the customary price, to
the injury of a jobber in the same city who sold these goods to the
local retail trade. Held, That, as interstate commerce is not involved,
the commission has no jurisdiction to determine whether or not the
practice complained of is unlawful.
26. Interstate commerce—Jurisdiction.—On application for the
issuance of a complaint, it appeared that two competitors of the appli-
cant, located in the same city, sold lumber below cost. The sales of
all parties at interest were confined wholly within one State. Held,
That, as interstate commerce is not involved, the commission has no
jurisdiction to determine whether or not the practice complained of
is unlawful.
27. Interstate commerce—Jurisdiction.—On application for the
issuance of a complaint, it was alleged by a retail dealer that other
dealers in the community were using unfair methods in competition
with him. Held, That, as interstate commerce is not involved, the
commission has no jurisdiction to determine whether or not the
methods complained of are unlawful.
28. Banks—Jurisdiction.—On inquiry respecting the refusal of
banks to lend money on a º of collateral: Held, That the
facts do not present a case within the jurisdiction of the commission,
banks being expressly excepted from the provisions of section 5 of
the Federal Trade Commission Act.
29. Practice where suggestion of violation of decree of Federal
court is made.—On application for the issuance of a complaint, it
appeared that the practice complained of might be in violation of a
decree against the party charged with these practices, which decree
was entered in a Federal court. Held, That the matter should be,
in this instance, referred by the commission to the Department of
* Each matter of this kind will be disposed of upon its own
acts.
30. Jurisdiction—Deprivation of rights by municipal ordinance.—
On inquiry: Held, That the commission has no jurisdiction to pass
upon the claim of an electrical engineer that, by town ordinance, his
right there to carry on his work is unduly abridged.
31. Interstate Commerce—Jurisdiction—Refusal to sell.—On in-
quiry: Held, That where a jobber or manufacturer refuses to sell to
a retailer in the same State, and no interference with interstate com—
merce appears to be involved, the commission has no jurisdiction to
act in the premises.
12 CONFERENCE RULINGS OF THE FEDERAL TRADE COMMISSION.
32. Interstate commerce—Labor unions—Jurisdiction.—On appli-
cation for the issuance of a complaint respecting the enforcement of
certain local labor-union rules: Held, That as the labor union is not
engaged in commerce, the commission has no jurisdiction to deter-
mine whether or not the practice complained of is unlawful.
33. Refusal to manufacture and sell—Competition—Jurisdiction.—
On application for the issuance of a complaint, it appeared that a
company engaged in the manufacture of bottle crowns refused to
make certain crowns for the applicant, assigning as the reason that
the crowns ordered would constitute an #º: of the trade-
mark of another customer, a competitor of the applicant. It did not
appear that the refusal complained of was induced by the compet-
itor. Held, That, as the facts do not disclose a method of competition,
the commission is without jurisdiction to act in the premises.
34. Interstate commerce—Jurisdiction.-On application for the
issuance of a complaint, it appeared that the º of certain
small coal mines refused to .# to a retail dealer in the immediate
vicinity except through a competing dealer and, through the pur-
chase of other near-by mines, cut off his supply of coal. Held, That,
as interstate commerce is not involved, the commission has no juris-
diction to determine whether or not the practice complained of ‘is
unlawful.
35. Interstate commerce—Jurisdiction.—On application for the
issuance of a complaint, it appeared that a retail dealer competing
with the applicant, both doing business only within the State,
discriminated in price between different localities in the sale of a
commodity. Held, That, as interstate commerce is not involved, the
commission has no jurisdiction to determine whether or not the
practice complained of is unlawful. .
36. Procedure—Combinations in restraint of trade,-On application
for the issuance of a complaint, suggesting unlawful combinations by
companies engaged in interstate commerce in restraint of such com-
merce, no unfair method of competition being alleged: Held, That the
matter thus involved should be referred to the Department of Justice.
37. Clayton Act—Section 3–Pending litigation.—On application
for the issuance of a complaint, alleging a violation of section 3 of
the Clayton Act, where it appeared that the party complained of is
the defendant in a suit brought by the Department of Justice, in-
wolving the same questions of law and fact: Held, That a proceeding
... commission at this time would not be to the interest of the
pupilc. ſº
. 38. Interstate commerce—Jurisdiction—Competition.—On applica-
tion for the issuance of a complaint, it appeared that a retail dealer,
doing business wholly within one State, advertised the product of
the applicant, a manufacturer engaged in interstate commerce, at
less than the price at which the latter sold it at wholesale. Held, that,
as in this instance, the method of competition complained of is used
CONFERENCE RULINGS OF THE FEDERAL TRADE COMMESSION. 13
by a concern engaged solely in intrastate commerce, and only against
local competitors not engaged in interstate commerce, the commission
has no jurisdiction.
39. Manufacture and sale of repair parts—Unpatented articles.—
On application for the issuance of a complaint, it appeared that cer-
tain foundrymen made and sold repair parts for stoves manufactured
by the applicant. It was not claimed that the stoves were patented
or that the foun en led the public to believe that the parts were
made by the applicant. Held, That under such circumstances the
making and selling of repair parts Ior unpacented articles, by others
than the original manufacturer, is not a violation of section 5 of the
Federal Trade Commission Act.

40. Interstate commerce—Local boycott—Jurisdiction.—-On appli-
cation for the issuance of a complaint, it appeared that certain adver-
tisers in a local newspaper, and some of its subscribers, all apparently
residing in the community where it was published, combined together
and threatened to withdraw their patronage unless the management
of the paper changed its policy. Held, That the facts alleged do not
disclose . violation of any law which the commission has jurisdic-
tion to enforce.
O