National Numbering Machine Company, Inc.

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IN THE MATTER OF NATIONAL NUMBERING MACHINE COl\IPANY, INC. COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED nOLATION OF SUDSEC. (A) OF SEC. 2 OF AN ACT OF CONGRESS APPROVED 0\.:T. 15, 1914, AS AMENDED BY AN ACT OF CONGRESS API'ROVED JUNE 19, 1936 Do,·ket 3889. Complaint, Srpt. 12, 19J9-Dedsicm, Dec. 19, 1939 Where 11 corpol'!ltion engaged in manufacture of typographic numbering machines of five-wheel and six-wheel ty11e for stock, and in sale, offer and distribution of such machines to purchasers In commerce among the various States engaged in sub>:tantial competition with each other in resale of said machines, and, a>! engaged as aforeSilid in manufacture, sale, etc .. of such machines, in active competition with others engaged In manufacture, sale, and distribution in commerce of similar products- ( a) Discriminated in price between dealer purchaser>! in active competition with one another in resale of such machines to same prospective purchasers, through selling to certain company 100 machines at net price of $6 per machine, while selling, at or about same time, 300 machines of like grade and quality at net price of $5 per machine to dealer competitor, by whom substantial number of such machines, thus purcha>'ed by it. were advertised and resold at net price of $7.50 and $8.50 for the five-wheel and six-wheel types, respectively; and (b) Discriminated In price through selling for resale its machines of like grade and quality in quantities of five or less and at net prices varying from $6 to $8 per machine to various other concerns, corporati(..lJS, individuals, firms, and partnerships competitive the one with the other; With the result that the effect of such discriminations in price made by it as aforesa_id in sale in commerce of its said typogrnvhic numbering machines of like grade and quality to purchasers competitive the one with the other, bad been and might be-- (1) Substantially to lessen competition with it and with favored purchasers;

(2) To tend to create a monopoly in it and in said favored purchasers in line of commerce in which it and favored customers engaged; and (3) To injure, destroy or prevent competition in sale and distribution of said typographic numbering machines between it an<l its competitors, and between said favored purcha;;ers of said machines reeehing such discriminatory prices and other less favored competing purchasers of same machines not receiving such discriminatory prices:

llcld, That said corporation discriminated in price in sale in commerce of its said machines of like grade and quality to purchasers competitive one with the other, in violation of provisions of sub,;ection (a) of section 2 of the Clayton Act, as amended.

Mr. John lV. Carter, Jr. for the Commission. Mr. Irving Fo~, of Brooklyn, N.Y., for respondent. Complaint 30F. T. C.

Complaint The Federal Trade Commission having reason to believe that the party respondent named in the caption above and hereinafter more particularly described, at various times since June 19, 1936, has violated and is now violating the provisions of subsection (a) of section 2 of the Clayton Act, as amended by the Robinson-Patman Act, approved June 19, 1936 (U. S. C. title 15, sec. 13), issues its complaint stating its charges with respect thereto as follows: PARAGRAPH 1. Respondent, National Numbering Machine Co., Inc., is a corporation organized and existing under and by virtue of the laws of the State of New York, with its office and place of business at 1 Beekman Street, New York, N. Y. Said. respondent was incorporated in 1936 and from that time up to June 1938, manufactured special made-to-order typographic numbering machines. Thereafter respondent commenced the production of typographic numbering machines for stock. Respondent sells and distributes such machines in commerce between and among the various States of the United States causing said machines to be shipped and transported from their place of manufacture in New York, N.Y., to purchasers thereof located in the various States of the United States. PAR. 2. For more than 25 years prior to June 1938, typographic numbering machines were manufactured, sold, and distributed in the United States by 4 producers, all located in New York City. Two of such producers sell and distribute their machines at list prices of $12 per machine for the 5-wheel type and $14 per machine for the 6-wheel type. The other 2 sell and distribute their·machines at list prices of $13 for the 5-wheel type and $15 for the 6-wheel type. All of said machines are sold and distributed to dealers at a functional discount of 331f3 percent from list price and are sold and distributed to users at a discount from list price of 5 percent on purchases of 6 to 11 machines, 10 percent on purchases of 12 to 24 machines, 15 percent on purchases of 25 to 4!) machines, and 20 percent on purchases of 50 machines or more. PAR. 3. In June 1938, respondent began the manufacture, sale, and distribution of stock typographic numbering machines at list prices of $13 for the 5-wheel type and $15 for the 6-wheel type per machine. Several months after J nne 1938, however, respondent in an effort to compete more effectively with the better-known machines of its older and better established competitors reduced its list prices thereon to $11 for the 5-wheel type and $13 for the 6-wheel type and offered discounts to the trade generally from said list prices of 35 percent on purchases of 6 to 12 machines, 40 percent on pur- NATIONAL NUMBERING MACHINE CO., INC. 141 139 Complaint chases of 12 to 25 machines, 40 percent plus 5 percent on purchases of 25 to 100 machines and special discounts on purchases of 100 machines or more.

PAR. 4. In the course and conduct of its business as aforesaid, re. spondent is now and during the time herein mentioned has been in substantial competition with other corporations, individuals, partnerships, and firms engaged in the business of manufacturing, selling, and distributing typographic numbering machines in commerce between and among the various States of the United States. P,\R. 5. In the course and conduct of its business as above described, respondent has discriminated in price and is now discriminating in price between different purchasers buying typographical numbering machines of like grade and quality for resale to dealers and users by giving and allowing to some of its purchasers of said machines lower prices than those given or allowed to other of its purchasers competitively engaged one with the other in the resale of the said machines to dealers and ultimate users within the United States. Respondent, since June 1938, sold 300 of said machines of both the 5- and 6-wheel type to the Craftsmen Machinery Co. of Boston, 1\Iass., at a net price of $5 per machine and at or about the same time has sold 100 machines of like grade and quality to the American Wood Type Manufacturing Co. of New York City at a net price of $6 per machine, both of which concerns are dealers in said machines and are in active competition one with the other for the resale of said machines to the same prospective purchasers. The Craftsmen :Machinery Co. has advertised and resold a substantial number of the machines so purchased at unit prices of $7.50 for the 5-wheel type and $8.50 for the 6-wheel type. The respondent has likewise, since June 1938, sold for resale machines of like grade and quality in quantities of 5 or less to various other concerns, corporations, individuals, firms, and partnerships at net prices varying from $6 to $8 per machine.

PAR. 6. The general effect of said discriminations in price made by said respondent as above set out has been and may be substantially to lessen competition with respondent and with the favored purchasers; to tend to create a monopoly in respondent and in said favored purchasers in the line of commerce in which said respondent and said favored purchasers are engaged; to injure, destroy, or prevent competition in the sale and distribution of said typographic numbering machines between respondent and its competitors and between the said favored purchasers of said machines receiving such discriminatory prices and other less favored competing purchasers of the same machines not receiving said discriminatory prices. Findings 30F. T. U.

PAR. 7. The foregoing alleged acts of said respondent are in violation of section 2 (a) of the Clayton Act, as amended by the Robinson- PatmanAct, approved June 19,1936 (U.S. C., title 15,sec.13). REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies and for other purposes," approved October 15, 1!)14 (The Clay. ton Act), as amended by the Robinson-Patman Act, approved June 19, 1936 (title 15, sec. 13), the Federal Trade Commission on the 12th day of September 1939, issued and thereafter served its complaint in this proceeding upon the respondent, National Numbering Machine Co., Inc., a corporation, charging it, the aforesaid corporation, with violating the previsions of section 2 of the Clayton Act as amended, by the Rohinson-Patman Anti-discrimination Act approved June 19, 1936, (U. S. C. title 15, sec. 13).

After the issuance and service of the said complaint, the said respondent, National Numbering :Machine Co., Inc., by its attorney Irvin Fox, filed a request with the Commission seeking an extension of time within which to file the answer of respondent. By an order entered on the 28th day of October 1939, the Commission extended such time from October 3, 1939, to October 30, 1939. On October 4, 1939, the said respondent, National Numbering Machine Co., Inc., by its attorney Irvin Fox, filed its answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearings as to the said facts. Thereafter the proceeding regularly came on for final hearing before the Commissi~n on the complaint filed and served as aforesaid, the motion to extend time for filing answer, the order extending said time, the answer of respondent admitting all the material allegations of fact in said complaint, the waiver, by the respondent, of all intervening procedure and further hearing, and the Commission now having duly considered the record and being fuliy advised in the premises, makes this its findings as to the facts and from these facts draws the conclusion hereinafter set out.

FINDINGS AS TO Tile FACTS PARAGRAPH 1. Respondent, National Numbering Machine Co., Inc., is a. corporation organized under the laws of the State of New York, with its principal office and place of business located at 1 Beekman Street, in the city of New York, N.Y., und until June 1938, was en- NATIONAL NU:MllERING 1\IACHINE CO., INC. 143 139 Findiugs gaged in the manufacture of special made-to-order typographic numbering machines.

Since J nne 1938, the said respondent has been, and now is, engaged in the city of New York in the manufacturing o£ typographic numbering machines of the five-wheel and six-wheel type for stock, and in the sale, offering for sale, selling, and distribution o£ such machines to purchasers in commerce between and among the various States of the United States. In the course of its business respondent causes said machines when sold, to be shipped and transported from its principal place of business in the State of New York to purchasers thereof in the State of New York and in the various States of the United States.

In so carrying on its business as aforesaid, respondent has been, and now is, engaged in active competition with other corporations, individuals, partnerships, and firms engaged in the manufacture of typographic numbering machines and in the sale and distribution thereof in commerce between and among the various States o£ the United States; and the purchasers of said machines manufactured and sold by respondent as aforesaid, in the course of their business in reselling said machines, have been for several years last past, and are now, in substantial competition with each other. PAn. 2. .The Craftsman Machinery Co. of Boston, Mass., and the American Woodtype Manufacturing Co. of New York City are dealers in typographic numbering machines and are in active competition one with the other in the resale of such machines to the same prospective purchasers. Respondent sold to American 'Voodtype Manufacturing Co. of New York City 100 machines at a net price of $6 per machine, and at or about the same time sold to the Craftsman Machinery Co. of Boston, Mass., 300 machines of like grade and quality at a net price of $5 per machine. The Craftsman Machinery Co. of Boston, Mass., advertised and has resold a substantial number of the machines, purchased as aforesaid, to users at a net price of $7.50 and $8.50 for the 5-wheel and 6-wheel type respectively.

The respondent has likewise since June 1938, sold for resale its machines of like grade and quality, in quantities of five or less, to various other concerns, corporations, individuals, firms, and partner- ~hips, competitive the one with the other, at net prices varying from $6.00 to $8.00 per machine.

The different prices as found and set out herein amount to, and are, discriminations in price in commerce between purchasers of responuent's typographic numbering machines. Order 30F.T.C.

PAR. 3. The Commission finds that the discriminations in price made by respondent, as aforesaid, in the sale in commerce of it& typographic numbering machines of like grade and quality to purchasers competitive the one with the other, has been, and may be, (a) Substantially to lessen competition with respondent and with the favored purchasers.

(b) To tend to create a monopoly in respondent and in said fa· vored purchasers in: the line of commerce in which said respondent and in which favored customers engage.

( o) To injure, destroy or prevent competition in the sale and dis· tribution of said typographic numbering machines between respond· ent and its competitors and between said favored purchasers of said machines receiving such discriminatory prices and other less favored competing purchasers of the same machines not receiving such dis· criminatory prices.

CONCLUSION The Commission therefore concludes that the respondent, N a tiona) Numbering Machine Co., Inc., has discriminated in price in the sale in commerce of its typographic numbering machines of like grade and quality to purchasers, competitive one with the other, as herein· above set out, in violation of the provisions of subsection (a) Section 2 of the Clayton Act as amended by the Robinson-Patman Act, approved June 19, 1936, (U. S.C. title 15, sec. 13). ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer filed by respondent, National Numbering Machine Co., Inc., admitting the material allegations of fact in the complaint to be true, and waiving all intervening procedure and further hearing as to the said facts, and the Commission having made its findings as to the facts and its conclusion drawn therefrom, which findings and conclusion are hereby made a part hereof, that said respondent has violated the provisions of an Act of Congress entitled "An act to supplement existing laws against unlawful restraints and monopolies and for other purposes" approved October 15, 1914, as amended by the Robinson-Patman Act approved June 19, 1936, (U. S. C. title 15, sec. 13).

It is ordered, That respondent, National Numbering Machine Co., Inc., and its successors, together with its respective officers, directors, representatives, agents, and employees, in the sale of respondent's typographic numbering machines of like grade and quality sold for NATIONAL NUMBERING MACHINE CO., INC. 145 139 Order use, consumption, or resale within the United States, do forthwith cease and desist from :

(a) Discriminating in price, either directly or indirectly, between the Craftsman :Machinery Co. and the American 1Voodtype :Manufacturing Co., and, where either or any of the sales are in interstate commerce, between other purchasers competitively engaged one with the other in the resale of such machines, by selling such typographic numbering machines to such customers at the different prices set forth in paragraph 2 of the aforesaid findings as to the facts and conclusion.

(b) Discriminating in price, where either or any of the sales are in interstate commerce, between different purchasers competitively engaged in the resale of its typographic numbering machines by means of price differences substantially similar to the price differences set forth in paragraph 2 of the aforesaid findings as to the facts and conclusion unless the differences between the prices paid by such purchasers make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such machines are to such purchasers sold or delivered.

It is further ordered, That the respondent, the National Numbering :Machine Co., Inc., a corporation, shall, within 60 days after service upon it of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with the order to cease and desist hereinabove set forth. 146 FEDERAL TRADE COl\IMISSION DECISIONS Modified Order 30 F. T. C.