Lawrence W. Powers, trading as L. W. Powers Co.

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LAWRENCE W. POWERS, TRADING AS L. ,V, POWERS CO •. COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUBSEC. (C) o·F SEC. 2 OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914, AS AMENDED Docket 4299, Complaint, Sept. 4 1940-Decision, July 8, 1942 \Vhere an individual, engaged in New York City as commission resident buyer of women's ready-to-wear apparel for a number of retail dealers in various states who advised him of the types, quantities, sizes, colors, and materials of the garments they desired, for shipment to them by r;;ellers direct, and the Price they wished to pay, and who, along with others 'Similarly purchasing through said or other commission resident buyers, were competitively engaged With retailers who bear the expense of maintaining buying offices for the selection and purchase of merchandise in said market, center of the women's ready-to-wear apparel industry of the United Stutes- · Iteceived and accepted from sellers competitively engaged commissions amounting usuaily to 5 percent of the price paid on such purchases, in which said individual acted as agent, buying representative, or other intermediary for said buyers: · • lleld, That such receipt of compensation in the form of commission on purchases from competitive sellers 'constituted a vlola~o~of subsection (c) of Section 2 of the Clayton Act, as amended by th.~~bf }\ti._~ct. . .1~~ •. M1', Edwards. Ragsdale foi! the Cotfil.@.£~4'9t~::t:::~~:~'!P'f~~i~ ·: r Mr. Alfred l!f cO ormaclc and Mr. H arm<J'!I' Duhio'Wtb~~lit11~. firu( of Crnvath, DeGersdorff, Swaine & Wood, of New York City,~.l&Plespondent. · · Col\IPLAINT The Federal Trade Commis!;don having reason to believe that the Party respondent named in the caption hereof, and hereinafter more Particularly designated and described, since June 19, 1936, has violate~ and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act as amended by the Robinson-Patman Act, ·apllroved June 19, 1936 (U. S. C., Title 15, Sec. 13), hereby issues its Coin plaint, stating its charges with respect thereto as follows: PARAGR..\PH 1. Respondent, Lawrence "\V. Powers, is an individual, ~ta~ing as L. W. Powers Co., with his principal office and place of usllless located at 1328 Broadway, New York, N. Y. Uespondent is engaged in the business of a commission resident buyer of women's ready-to-wear apparel, and as such, respondent acts as buying agent for, and in behalf of, a number o£ retail dealers in transactions of purchase and sale of such merchandise.

84 FE.DERAL TRADE COMMISSION DECISIONS Findings 35F.T.C.

The manner of operation of respondent's business is that of receiving from various retail dealers for 'whom he acts as agents, requests, orders, or requisitions to purchase such merchandise upon specifica· tions as to quantity, size, color, kind o£ cloth, type of garment, and price. ·when such an order is received by respondent, he contacts various manufacturers o£ such merchandise and places the order with the source o£ supply offering the specified requirements on terms and conditions most favorable from the standpoint of the purchaser. Generally the merchandise so purchased is shipped by the manu£ac· turer directly to the purchaser. On the orders so placed by respondent, he receives £rom the sellers of such merchandise a brokerage fee or commission, usually 5 percent ·o£ the purchase price paid l;>y the purchaser. · PAR. 2. New York City is the center of the women's ready-to-wear apparel industry in the United States, and the retail dealers in such merchandise, located in States o£ the United States other than the State of New Yorkundergo expense in purchasing such merchandise in the New York market. Many of such retail dealers maintain buy· ing offices in New York City, the operating and overhead expenses of which are borne by such retail dealers. Retail dealers purchasing through commission buyers are generally competitively engaged with retail dealers who purchase through buyers who are compensated by the :retail dealers employing them and ~~ith~ retail dealers who bear the expense incident to the maintenance of New York buyin~ offices. par. 3. In the course and conduct of his business since June 19, 1936, respondent has placed orders for such merchandise with manu· facturers thereof located in the State of New York on behalf of retail dealers located in other States of the United States, pursuant to which orders, such merchandise has peen shipped and transported by the sellers thereof from the State o:f New York across State lines to the respective retail dealer purchasers. · PAR. 4. In the course o£ the purchasing transactions in interstate commerce as set forth herein, respondent, since June 19, 1036, while acting as purchasing agent for and in behalf of the purchasers of such merchandise in the manner hereinabove described, has received and accepted. from the sellers thereof brokerage fees or commissions in substantial amounts.

PAR. 5. The foregoing acts and practic~s ~re in violation o£ sub· section (c) of Section 2 of the Ciayton Act as amended. . . 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 monop"' L. W. POWERS CO. 85 83 Findings olies and for other purposes," approved October 15, 1914 (the Clayton A.ct), as amended by an act of Congress approved June 19, 1936 (the Robinson-Patman Act) .(U. S. C. Title 15, Sec. 13), the Federal 'rrade Commission on September 4, 1940, issued and subsequently served its· complaint in this proceeding upon the party respondent named in the caption hereof, charging said respondent with violation of the provisions of subsection ,(c) of Section 2 of said Clayt<?n Act, as amended. After the issuance of said complaint and the filing of respondent's answer, the Commission entered its order granting re- Spondent's motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening pro- Cedure and further hearing as to said facts. The respondent has also waived oral argument and the filing of briefs. Thereafter, th~s proceeding regularly came on for final hearing before the Comlll.~ssion on the said complaint and substitute answer, and the Com- ~rnssion having duly considered the same and being now fully advised ln the premises, makes this its findings as to the facts and its conchJ.sion drawn therefrom.

FINDINGS AS TO THE FACTS ~ARAGRAPH 1. Respondent, Lawrence '\V. Powers, is an individual, trading as L. '\V, Pow~rs Co. and having l{is principal office and place of business at 1328 Broadway, New York, N. Y. Respondent 19 a commission resident buyer of women's ready-to-wear apparel. PAn. 2. In the course and conduct of his aforesaid business, while acting in behalf of retail dealers located in various States of the United States other than New York, respondent places orders for women's ;eady-to-wear apparel with manufacturers of such products located ln New York City.· Pursuant to such orders, the merchandise so Purchased is by said sellers caused to be' transported through and into "nrious States of the United States to the locations of the respective Purchasers.

PAR. 3. The center of the women's ready-to-wear apparel industry of the United States is in New York City. Retailers located through- · 0Ut the United States purchase supplies of such merchandise in the loew York City market. Respondent's business as a commission resident buyer consists of acting for and in behalf of and as agent for a number of retail dealers in the purchase of women's ready:to-wear ~Pparel from manufacturers thereof located in New York City. these retail dealers who are clients of respondent advise him of the types, quantity, sizes, colors, and materials of the garments desired 86 FE.DERAL TRADE COMMISSION DEGlSIONS Conclusion 35F.T.C· and the price they wish to pay. Upon receipt of such requisitions or orders from his clients, respondent calls on various manufacturers of merchandise of the class ordered, inspects the goods they have for sale, and places the order with the manufacturer from whom the purchase can be made most advantageously from the standpoint of the dealer or dealers be represents. 'Vhen orders so place are filled, the merchandise is shipped by the m!).nufacturer directly to the pur· chasing dealer. On orders placed by respondent as aforesaid, be receives from the seller a commission which usually amounts to 5 per· cent of the price paid by the purchaser.

Many retail dealers maintain buying offices in New York City for the selection and purchase of supplies of merchandise in the New York City market, including women's ;ready-to-wear apparel, and such deal· ers bear the expense of maintaining and operating buying offices. Retail dealers who purchase through respondent or other commission ·resident buyers who secure their compensation from the sellers are generally competitively engaged with retail dealers who bear the expense of maintaining and compensating · their own buying' representatives.

PAR. 4. In the course of the transactions of purchase in commerce as above set forth, respondent since June 19, 1936, while acting as purchasing agent for and in behalf of buyers of such merchandise in the manner described,' has received and accepted · from the sellers thereof brokerage fees or commissions in substantial amounts. OONCLUSION From the aforesaid facts and circumstances the Commission con· eludes· that respondent, Lawrence W. Powers, an individual, trading' as L. ,V. Powers Co., is engaged as agent, buying representative, or other intermediary in the purchase in ~commerce of women's r~ady-to· wear apparel from representative competitive sellers, and as has acted in fact for or in behalf of. or under the direct or indirect control of the retail dealers for whom such purchases were made. 'Vhile act· ing as agent, buying representative, or other intermediary in the purchase of merchandise as aforesaid, respondent . received com pen· sation in the form of commissions or otherwise from competitiv-e sellers from whom purchases of merchandise were made, in violation of the provisions of subsection (c) of Section 2 of "An act to supple· m~nt existing laws against unlawful restraints and monopolies and for other purposes," approved October 15, 1914 (the Clayton Act), as amended by an act of Congress approved June 19, 1936 (the Robinson-Patman Act) (U.S. C. Title 15, Sec. 13). L. W. POWERS CO. 87 Order ORDER TO CEASE AND DESIST . This proceeding having been heard by the Federal Trade Commis- ~non upon the complaint of the Commission and the substitute answer respondent, .Lawrence "\V. Powers, an individual, trading as L. ,V. ;f owers Co., which answer admits all of the material allegations of fact set forth in said complaint and waives all other interven.ing pro- ~edure and further hearing as to said facts, and the Commission hav- ' Ing made its findings as to the facts and conclusion herein that said ~respondent has violated the provisions of "An act to supplement existlng laws against unlawful restraints and monopolies and for other ~Urposes," approved October 15, 1914 (the Clayton Act), as amended an.act of Congress approved June 19, 1936 (the Robinson-Patman f ct) (U. S. C., Title 15, Sec. 13).

It i8 ordered, That respondent, L.awrence ·w. Powers, an individual, trading as L. W. Powers Co., or under any other name, his agents, . ElJU.ployees, and representatives, directly or through any corporate or ~ther device, in or in c~;mnection with the purchase of women's ready- 0·Wear apparel and other commodities in commerce, as commerce is defined in the aforesaid Clayton Act, as amended, do forthwith cease and desist from :

b Receiving or accepting directly or indirectly anything of value as :okerage, commission or other compensation or any allowance or dlscqunt in lieu thereof from any seller on or in connection with pur- . ~hases made from such seller. (a) when such purchases are made for respondent's own account, or (b) when such purchases are made as ~gent or buying representative of the p·urchaser, or (a) when in maklng such purchases respondent' is acting in fact for or in behal:f, or is subject to the direct or indi~ect control, of the purchaser. lt i8 further ordered, That the respondent shall, within 60 days ~after service upon him of this order, file with the Commission a report ~n. Writing, setting forth in detail the manner and form in which he a~ complied with this order.

FE,DERAL TRADE COMMISSION ,DE10ISIONS 88 Syllabus 35F.T.0·