United States Color & Chemical Co. (Inc.)

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COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF SECTION IS OP' AN ACT OP' CONGRESS APPROVED SEPTEMBER 26, 1914. Docket 621-March 9, 1!.>21.

SYLLABUS.

Where a corporntlon engaged In the' manufacture and sate of dyestut!s and chemicals,, gav~ to employees of customers, without the knowledge and • consent of thelr employers, cash gratuities ns an Inducement for them to tnftuence their employers to purchase Its products and to refrain from dealing with its competitors:

Ileld, That such gifts, under\' the circumstances set forth, constituted an unfair method of competition.

COMPLAINT.

The Federal Trade Commission, having reason to bclie~e from a Preliminary investigation made by it that the United States Color &. Chemical Co. (Inc.), hereinafter referred to as the respondent, has been and is using unfair methods of competition in violation of the provisions of section 5 of an act of Congress approved September ~6, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and dutl.es, and for other purposes," and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this complaint, st.'l.ting its charges in this respect on information and belie£ us follows:

PARAGRAPH 1. That the respondent is a corporation organized and existing under the laws of the State of :Massachusetts, with its principal place of business in the city of Boston, State of Massachusetts. • PAR. 2. That respondent is engaged in the business of manufacturing and selling dyestuffs and chemicals, causing such commodities to be transported from the State of Massachusetts through and into other Stutes of the United States, in direct, ~ctive competition with other persons, partnerships, and corporations similarly engag~d. PAR. 3. That the respondent in the course of its business giveg and has given to employees of its customers, cash gratuities or com- Inissions to influence such employees to induce their employers to purchase respondent's products, and without other consideration therefor. That such cash gratuities aggregate in one year approximately $10,000.

-=----·.- 814 FEDERAL TRADE COMMISSION DECISIONS. Findings. 3F.T.O.

PAR. 4. That by reason of the facts recited the respondent is using an unfair method of competition in commerce, within the intent and meaning of section 5 of an act of Congress entitled "An net to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO THE FACTS, AND OllDER. Pursuant to the provisions of an net of Congress approved September 26, 1914, the Federal Trade Commission issued and served a complaint upon the respondent, the United States Color & Chemical Co. (Inc.), charging it with the use of unfair methods of competition in commerce in violatioll of the provisions of said act. The respondent not having entered its appearance· and not having filed its answer herein, hearings were had and evidence was thereupon introduced in support of the allegations of said complaint before an examiner of the Federal Trade Commission theretofore duly appointed, niter which the respondent entered its appearance and filed its answer herein, and stipulated and agreed that a statement of facts signed and executed by counsel for the Commission and the respondent, subject to the approval of the Commission, shall be taken by the Commission in lieu of testimony, and agreeing and consenting that the Federal Trade Commission shall forthwith proceed to make and enter its findings as to the facts, its conclusion, and order, without the introduction of testimony, and thereupon this proceeding came on for final hearing, and the respondent having waived the filing of briefs and oral argument, and the Commission, having duly considered the record and now being fully advised in the premises, makes this its findings as to the facts nnd conclusion: FINDINGS AS TO Tlle FACTS.

PARAGRAPH 1. That the respondent, United States Color & Chemical Co. (Inc.), is a corporation organiz:ed and existing under the laws of the State of Massachusetts, with its principal place of business at the city of Doston in said State, and is now and at all times hereinafter mentioned has been engaged in the business of manufacturing and selling dyestuffs and chemicals, causing such commodities to be transported from the State of Massachusetts through and into other States of the United States, in direct, active competition with other persons, partnerships, and corporations similarly engaged. PAR. 2. That the respondent, United States Color & Chemical Co. (Inc.), in the course of its business, as described in para· graph 1 hereof, for several years last past has given cnsh gratuities UNITED STATES COLOR & CHEMICAL CO., INC. 315 813 Order. to employees of its customers, without the knowledge or consent of their employers and without other consideration therefor, as an inducement to influence their employers to purchase respondent's products and to refrain from purchasing the products of its competitors. CONCLUSION.

The practices of said respondent, under the conditions and circumstances described in the foregoing findings, are unfair methods of competition in interstate commerce and constitute a violation of the act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and. for other purposes."

ORD~R TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of the respondent, an agreed statement of facts, and the testimony, and the Commission having made its findings as to the facts with its conclusion that the respondent has violated the provisions of the act of Congress approved September 2G, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,"

It is ordel·ed, That the respondent, United States Color & Chemical Co~, and its officers, directors, agents, servants, and employees, cease and desist from directly or indirectly giving to employees of its customers cash gratuities or gratuities of any kind whatsoever, as an inducement to influence ·their employers to purchase respondent's products and to refrain from purchasing the products of its competitors.

It is further ordered, That the respondent, within 60 days after the ?~te of service upon it of this order, file with the Commission a report 1n writing setting forth in detail the manner and form in which it has complied with the order to cease and desist "hereinbefore set forth.

316 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 3F.T.C.

FEDERAL TRADE COMMISSION v.

TIIOl\IAS DUGGAN AND W. C. DUGGAN, PARTNERS STYLING THEMSELVES THOMAS DUGGAN & SON.

COJIIPLAINT I~ THE liATTER OF THE ALLEGED VIOLATION OF SECTION G OF AN ACT OF CONGRESS APPllOVED SEPTEMBER 20 1 1914. Docket G!Jl-1\farch 0, 1921.

Snr.Anus.

Where n firm engaged ln the sale of ship chandlery, gave to <'nptain!! and other employees of vessels to which it furnished supplies, without the knowledge and consent of their employers, cash gratuities and commissions, expensive gifts, meals, theater tickets, automobile rides, and other forms of enter· bllnment ns an Inducement to purchn!'le supplies: llcld, That such ~lfti'!, under the circumstances set forth, constituted an unfair lllethod of competition.

COMPLAINT.

! Tl1~ Federal Trade Commission, having reason to believe from a preliminary investigation made by it that Thomas Duggan and ,V, C. Duggan, partners styling themselves Thomas Duggan & Son, hereinafter referred to ns rrspondents, have been and nre using un· fair methods of competition in violation of the provisions of section 5 of an act of Congress approved September 2G, 1014, entitled "An net to create n Federal Trode Commiss1on1 to define its powers and duties, and for other purposes," and it appearing that n proceeding by it in respect thereof would be to the interest of the public, issues this complaint, stating its charges in this respect on information and belief1 as follows: · Jl AnAGnArii 1. That respondents constitute a pnrtnership and carry on business at Savannah, Ga., under the firm name and stylt'l of Thomas Duggan t, Son, and are engaged in the business of sell· ing ship chandlery supplies for ships engaged in constwis~ and foreign commerce, and ueliver said commodities to ships reaching the port of Savannah while engaged in transporting passengers and commodities between ports in various States of the United States and in transporting passengers nnd commodities between ports of the United States and foreign countries, such supplies so sold by respondt'nts being for consumption and use by the purchasers thereof urrn tho high seas ir. anll Le,pm1l the territorial jurisdiction of the United States; said business is and has been conducted by respondents THOMAS DUGGAN & SON. 317 816 Finding~ in _direct, active competition with other persons,. partnerships, and corporations similarly engaged.

PAR. 2. That the respondents in the course of their business as described in paragraph 1 hereof give and have given to captains and other officers and employees of vessels to which they furnish ship chandlery supplies, cash gratuities and commissions, expensive gifts, meals,:theater tickets, automobile drives, and other forms of entertainment, amusement, or diversion to induce such officers and employees to purchase from respondent ship chandlery supplies for the ships operated by the.m for the owners thereof, and without other consideration therefor. That respondents expend for cash -gratuities and commissions ns aforesaid sums of money equaling approximately 5 per cent of the total volume of sales by respondents of such ship chandlery supplies, and have paid out for entertainment purposes as aforesaid sums of money equaling approximately 2} per cent of the volume of business done.

PAR, 3, That by reason of the facts recited, the respondents are using an unfair method of competition in commerce, within the intent and meaning of section 5 of an act of Congress entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. · REPORT, FINDINGS AS TO THE FACTS, AND ORDER. Pursuant to the provisions of an act of Congress, approved September 26, 1914, the Federal Trade Commission issued and served a complaint upon the respondents, Thomas Duggan and ,V. C. Duggan, partners styling themselves Thomas Duggan & Son, charging them with the use of unfair methods of competition in violation of the provisions of said act. · The respondents having entered their appearance and filed their answer herein admitting all of the allegations of the complaint nnd each count and paragraph. thereof, and having stipulated and agreed that a statement of facts signed and executed by counsel for the Commission and the respondents, subject to the approval of the Commission, are the facts in this case and shall be taken by the Federal Trade Commission as such and in lieu of testimony, and agreeing and consenting that the Federal Trade Commission shall forthwith proceed to make and enter its findings as to the facts, its conclusion and order, without the introduction of testimony, and thereupon this pro· cccding came on for final hearing, and the respondents having waived the filing of briefs and oral argument, and the Commission having 318 FEDERAL TRADE COMMISSION DECISIONS. Conclusion. SF.T.O.

duly considered the record and now being fully advised in the premises, makes this its findings as to the facts and conclusion: FINDINGS AS TO Tile FACTS, PARAGRAPH 1. That the respondents, Thomas Duggan and W. C. Duggan, are partners styling themselves Thomas Duggan·& Son, having their principal place of business in the city of Savannah, State of Georgia, and are now and at all times hereinafter mentioned have been engaged in the selling of ship chandlery for ships engaged in coastwise and foreign commerce, causing said commodities to be delivered to ships reaching ports in the State of Georgia while en· gaged in transporting passengers and commodities between ports in the various States of the United States and between ports of the United States and foreign countries, in due course of commerce among the several States of the United States or with foreign nations, such supplies so sold being for consumption and use by the purchasers thereof upon the high seas in and beyond the territorial jurisdiction of the United States, said business being conducted by the respondents in direct competition with other persons, partnerships, and cor· porations similarly engaged.

PAn. 2. That the respondents in the course of their business as described in paragraph 1 hereof, for several years last past have given to captains and other officers and employees of vessels to which they furnish ship chandlery supplies, without the knowledge or consent of their employers and without other consideration therefor, cash gratuities and commissions, expensive gifts, meals, theater tickets, automobile rides, and other forms of entertainment, amusement, Ol' diversion, to induce such officers and employees to purchase from respondents ship chandlery supplies for the ships operated by them for the owners thereof. That respondents have expended for cash gratuities and commissions as aforesaid sums of money equalling ap· pro:ximately 5 percent of the total volume of sales by the respondents of such ship chandlery supplies, and have paid out for entertainment purposes approximately 2! per cent of the volume of said business. CONCLUSION.

The practices of the said respondents, under the conditions and circumstances described in the foregoing findings, are unfair methods of competition in interstate and foreign commerce and constitute a. nolation of the act of Congress approved September 26, 1914, en· THOl\IAS DUGGAN I; SON. 319 316 Order. titled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." ORDER TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of the respondents, and an agreed statement of facts, and the Commission having made its findings as to the facts with its conclusion that the respondents have violated the provisions of the act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,"

It is ordered, That the respondents, Thomas Duggan and W. C. Duggan, partners styling themselves Thomas Duggan & Son, and their agents, servants, and employees, cease and desist from directly or indirectly giving to captains and other officers and employees of '\'essels cash gratuities and commissions, expensive gifts, meals, theater tickets, automobile rides, and other forms of entertainment, amusement, or diversion, as an inducement to such officers and employees to purchase for the owners of the '\'essels operated by them ship chandlery supplies from the respondents. It is further ordered, That the respondents within 60 days after the date of service upon them of this order file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist hereinbefore set forth.

820 FEDEllAL TllADE COMMISSION DECISIONS. Complaint. SF.T.C.

FEDERAL TRADE COMMISSION v.

JOHN ,V, FOCKE,