Uniform Manufacturers Exchange, Inc

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IN THE 1tfAmR OF UNIFORM MANUFACTURERS EXCHANGE, INC., ITS OFFl·. CERS, BOARD OF DIRECTORS, AND MEMBERS, ET AL. COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATlOlO OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4112. Oomf)laint, Feb. 25, 1942-Decision, Sept. 15, 1942 Where 23 concerns, engaged in 'the manufacture, sale, and distribution of uni· forms, overcoats and other apparel commonly worn by doormen, bellbOYs, porters, ci1au1Ilmrs, nnd others similarly employed, but excepting policellleP and firemen; doing a substantial portion of all business of the industry~ concerned, particularly in the metropolitan area of New York City, an in competition with on.e another and with others, except Insofar as colJl· petition had been lessene<l or restrained and potential competition for~· stalled by the acts, practices and policies below set forth; along with tbe r tors incorporated Exchange or trade association, and the officers and direc tbel·eot- Entered into and carried out agreements, understandings and conspiracie; among themselves to suppress competition in the manufacture, sale an delivery of their products; and in pursuance thereof- d (a) Organized their said Exchange to control and regulate their business, 80 thereafter adopted and maintained a cost guide and Manual to gover~ manufacture and distribution of their said uniforms which (1) require t that the price of cloth In any garment made by them should be figured n the market or replacement cost and not at the cost to the purchaser; <2) fixed a standard shrunk net yardage scale for their various products: all average cutting cost; material cost for trimmings, findings, sewings, front~ , pockets, and linings; standard labor costs In· detail; minimum overbea d costs; and selllng terms;- and (3) required a member who bid below s~lf Manual cost to submit a revised bid at least 5 percent higher t;bLlD original bid;

ed to (b) Reported to their said Exchange the names of all members who fall 1 abide by the overhead charges and other items covered b:v said MaoUII · to· and by the rules and regulations of the Exchange; and set up and [llll 8 tatned an Arbitration Board or Committee as a disciplinary and punltl" agency to enforce the provisions of said Manual, with authority to i[llpos: fines, suspend and expel members who tailed or refused to comply wit the rules and regulations of said Exchange, and otherwise to enforce t~~ same, subject only to the review of a Chairman whose decision was 11°11 { and, for that purpose, allowed the 'examination of the books and records 0 the respective members. by said Committee; .and (c) Made use of other means to suppress and restrain competition among tbelt' members, and through said arbitrary fixing of costs and conditions of sal; by their Manual, as above described, and their adherence thereto, fil:e minimum prices and terms at which their uniforms and garments were to be sold, with tendency and effect ot fixing and regulating prices tor sucll merchandise;

UNIFORM 1\fANUF~CTURERS EXCHANGE INC., ET IAL. 473 472 Complaint With effect of unreasonably suppressing and restraining competition In the manufacture, sale and delivery of said products, and depriving the purchasing public of the advantage of competltlve prices, terms and conditions ln purchase thereof, and of otherwise operating as a restraint upon fair competition in such trade and industry, and particularly between members II 0f said Exchange :

eld, That such acts and practices were all to the prejudice of the public; had a dangerous tendency to binder and prevent competition between and among said members; placed in them the power to enhance and control prices, terms and conditions in connection with manufacture, sale and delivery of their products; had a dangerous tendency to create in said members a monopoly in said products; unreasonably restrained commerce therein; and constituted' unfair methods of competition in commerce. Mr. George lV. lVilliallM for the Commission. Mr. Elias Lieberman, of New York City, for respondents, with the ~~ception of Fisher-Mair Uniform Co., represented by Mr. F. Murray 0hen, of New York City. .

Complaint Pursuant to the provisions of the Federal Trade Commission Act, by virtue of the authority vested in it by said act, the Federal ;nd . rude Commission, having reason to believe that the parties named ln the caption hereof, and hereinafter particularly described, desigll!tted and referred to as respondents, have violated the provisions of section 5 or said act, and it appearing to the Commission that a rroceeding by it in respect thereof would be in the public interest, issues its complaint, stating its charges in that respect as ;e1rebyo lows: i PAIL\cRAPII J, Respondent, Uniform Manufacturers Exchange, Inc., ~ an incorporated association, organized on or about April 20, 1934, nder and by virtue of the laws of the State of New York with its ~flice at 112 East Nineteenth Street, New York, N.Y., and hereinafter ef~'rred to as respondent "Exthange."

~ 'I'he following named individuals are officers of said respondent r·"'~change and ns such officers, and individually, are designated ns \r~spondent herein; George Appel, president; Howard V. Smith, Sr., t lee president; I. Charles Bernhard, secretary; Elias Goldstein, l'~>nsurer. . . ~ lhe following-named individuals, together with said officers, are ~members of, and constitute, the board of directors of said Exchange, h~~ ~s such directors, and individually, are designated as respondents itn: T. A. DuBois, Arthur Stone, and E. S. Smith. as respondent Exchang~ is the successor of a voluntary unincorporated SI)Ciation formed for the same purposes as respondent Exchange . • Complaint The membership of said respondent Exchange is made up of nud merous corporations, partnerships, firms, and individuals, engaged in the manufacture, sale, and distribution of uniforms, overcoats, an other articles of wearing apparel commonly worn by policemen, fir~­ men, doormen, bell boys, porters, chauffeurs, and others engaged 1n similar employment. · d PAR. 2. The following members of respondent Exchange are name as respondents herein and hereinafter sometimes referred to as re- E:ipondent members: All-Bilt Uniforms, Inc., is a corporation, organf ized, existing and doing business under and by virtue of the la\VS 0 the State of New York, with its office and principal place of business at 147 Fulton Street, Ney York, N.Y. . S. Appel &"'Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business at 18 Fulton Street; New York, N.Y. . . Bernhard, Schrag & Co., Inc., is a corporation, organized, existin1 and doing business under and by virtue of the laws of the State 0 t New York, with its office and principal place of business at 18 Wes Eighteenth Street, New York, N. Y. d Brooks Uniform Co., Inc., is a corporation, organized, existing all doing bt~since.ss under and by. vi~tue of the laws ~f the State of ~e~ York, Witll Its office and prmc1pal place of busmess at 1140 St:s:t Avenue, New York, N.Y. . I. Buss, Inc., is a corporation, organized, existing and doing b~S~ ness under and by virtue of the laws of the State of New York, wit its office and principal place of business at 84 Fifth Avenue, Ne'\1' York, N.Y. d '\Valter Cahn Co., Inc., is a corporation, organized, existing, all doing business under and by virtue of the laws of the State of Ne'\1' York, with its office and principal place of business at 237 Lafayette Street, New York, N. Y. d Stone Uniform Co., Inc., is a corporation, organized, existing, an doing business under and by virtue of the laws of the State of Ne'\1' York, with its office and principal place of business at 9 East ~jne· teenth Street, New York, N. Y. · · Uniforms By Ostwald, Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of ~~''f York, with its office and principal place of business at 18 East SI:S:" teenth Street, New York, N.Y. . The Joseph F. Webber Uniform Corporation, is a corporation, organized, existing, and doing business under and by virtue of the la."'S • UNIFORM MANUFACTURERS EXCHANGE, INC., ET AL. 475 472 Complaint of the State of N~w York, with its office and p~incipal place of business at 273 Fifth Avenue, New York, N.Y.

Wender & Goldstein Uniform Service Corporation, is a corporation, organized, existing, and doing business under and by virtue of the ~aw~ of the State of New York, with its office and principal place of Usllless at 387. Fourth Avenue, New York, N. Y. d ?· & 0. Uniform Co., Inc., is a corporation, organized, existing and oing business under and by virtue of the laws of the State of New ork, with its office and principal place of business at 45 East Twen-r leth Street, New York, N. Y. . b ~Ussell Uniform Co., is a corporation, organized, existing, and doing · ~ 8lness under and by virtue of the laws of the State of New York, tlth its office and principal place of business at 1600 Broadway, New ork, N.Y.

~· Schellenberg & Sons, is a corporation, organized, !'lxisting, and doing business by virtue of the laws of the State of New York, with its ~flice and principal place of business at 72 Willoughby Street, Drook- Yn,N. Y.

d ~l1with-Gray Corporation, is a corporation, organized, existing, and • 0111g business by virtue of the laws of the State of New York, with ~s office and principal place of business at 740 Broadway, New York, ·Y.

b J.~. DuBois Son, Inc., is a corporation, organized, existing, and doing Uslness by virtue of the laws of the State of New York with its office ~~d Principal place of business at 17 Union Square, West, New York, ~~. Y.

b ~· P. Maher, Inc., is a corporation, organized, existing, and doing Usiness by virtue of the laws of the State of New York, with its office and Principal place of business ata:n Fourth Avenue, New York, N.Y. d ~Ierson Clothes, Inc., is a corporation, organized, existing, and • 0111g business by virtue of the laws of the State of New York, with ~s office and principal place of business at 254 Canal Street, New ork,N. Y.

Charles Palley and Abraham Cebulsky, are individuals and copart- ;;rs, trading as Acme Uniform Co., with their office and principal ace of business at 817 Broadway, New York, N.Y. . t Charles Mitchell and Paul Perkins, are individuals and copartners, rfading as Mitchell & Perkins, with their office and principal place 0 b . Usmess at 260-262 'VPst Forty-first Street, New York, N.Y. John A. Hughes· and William A. Thomas, are individuals and co- ~~rtners, trading as Hug-hes& Thomas, with their office and principal ace of business at 53 East Nineteenth Street, New York, N.Y. b ~· l\f. Barth, is an individual, with his office and principal place of Usiness at 257 Fourth A venue, New York, N. Y. 476' FEDERAL TRADE CO.M.MISSION DECISIONS Complaint 35F. T.C.

Arthur R. Meyers, is an individual, trading as National Unifor!ll Co., with his office and principal place of business at 41 East Twenty' eighth Street, New York, N.Y. . . Albert T. Scafati, is an individual, trading as A. T. Scafati Corpo~ ration, with his office and principal place of business at 226 wes Forty-first Street, New York, N. Y.

Henry Fisher, is an individual, trading as Fisher-Mair Unifor!ll Co., with his office and principal place of business at 11 \Vest Twenty· fifth Street, New York, N.Y. . d PAR. 3. Said respondent members at all times herein ment1one ·have been and now are engaged in the manufacture, sale and deliver~ of articles of the type and character mentioned in paragraph 1 hereo £ · and delivering the same to their customers in the various States~ the United States other than New York, the State of origin, and in t. e District of Columbia, whereby said respondents created and maiil" tained, and still maintain, a constant and continuous current of coll" merce in said uniforms and other like articles of merchandise between~ the respondent members and the purchasers thereof, in, among a~ t between the various States of the United States, and in the Distric of Columbia. • tes The volume of business done by respondent members constitu . a substantial portion of the whole of such done by this industry par· ticularly in the metropolitan area of New York City. PAn. 4. Said respondent members are in competition with 0~~ another in the manufacture, sale and distribution of their said pro ucts and other like articles in the various States of the United Stutes and in the District of Columbia, except insofar as their said coJl'l· petition has been hindered, lessened or restrained, or potential coJl'ld petition among them ·forestalled, by the acts, practices, methogs, nn policies of said respondents hereinafter set forth. 15 There are other corporations, partnerships, firms, and inclividu~ not affiliated with respondent Exchange and which are engaged in t. 1e manufacture, sale and distribution of similar articles of merchandise in the area in which said respondents trade, in competition with on~ another, and with one or more of said member respondents, e~ce~ insofar as such competition has been hindered, lessened and restrained' or potential competition among them forestalled, by the said respoll · ents' acts, practices, methods, and policies hereinafter described. PAR. 5. Said respondents, during the time herein referred to, ha"e -entered into, maintained and carried out agreements, understandings~ combinations and conspiracies, between aod among themselves to suPd press, hinder and lessen competition in the manufacture, sale a~ delivery of their said products in the course of said commerce, 111' UNIFORM MANUFACTURERS 'EXCHANGE; INC., ET AL. 477 472' .. Complaint ~tn.on~ and between the various States of the United State~, ai1d in e District of Columbia. • Pursuant to, and in furtherance of, and to make effective said agreements, understandings, combinations and conspiracies, said respond-· ~llts have cooperatively, concertedly and collectively adopted, engaged tn. 'd . ' an carried· out, among others, the following methods, acts and Practices: . · l' 1. Organized respondent Exchange, as aforesaid, to control and e~late the business of manufacturing, selling, and delivering the 8 ald articles of merchandise. 2. Adopted in January 1936 and maintained, and still maintain, a ~st guide and Manual for the manufacture and distribution of uniorrns which required, and requires, among other things: (a) That the price of cloth in any garment manufactured by re- ·8 J.:londent members shall be figured at the market or replacement cost, and not at the specific cost to the purchaser thereoi; and (b) Fixed ' , )\ (1) A standard shrunk net yardage scale in detail for their various t'l'Oducts • · • · · (2) A~ average cutting cost;

· (3) Material cost for trimmings, findings, sewings, fronts, pockets, ~lld linings for their various products;

( 4) Standard labor costs in detail for their various products; (5) Minimum overhead costs ;

(6) Selling terms; and b 1(c) Required, and now require,· a respondent member who bids h~rr0"' Manual. cos~ t.o sub~it a new or revised bid at least 5 percent . ~her than his ongmal bid. , Of 3· ·Reported and now report to respon4ent Exchange the names ite an members who failed to abide by the overhead chargl!s and other ~ lus covered by said Manual and by the rules and regulations of said · , ll:change, as herein set forth. "' . 4· Set· up and maintain, and still maintain, an arbitration board 0 ../ ~ommittee as a disciplinary and punitive agency to enforce the a:l'lous provisions of said Manual, with authority to impose fines, l'u~J?end and expel members who failed or refused to comply with the sa es and regulations of said Exchange and to otherwise enforce th~ de~e! subject only to the review and approval of a chairman whose Clslon is final. · . 5 ' Of • Allowed and now allow the examination of the books and records as t~e respondent members by said committee for the purpose of · surlng the compliance with all the rules and regulations of the fi09749"'-43-vol. 83-33 ' 35F.T.C· Findings said Manual and for the employment of the necessary aid to enforce the aforesaid rules and regulations. ~ d 6. Used other similar means and methods to lessen, suppress, an restrain competition among respondents' members and with oth~~ members engaged in the manufacture, sale, and delivery of 5111 products. · . f 'd all'ree· PAR. 6. The capacity, tendency, and effect o the aforesa1 e li· ments, understandings, combinations, and conspiracies and the pots cies, practices and acts and things done and performed by respon~en . in pursuance thereof are and have been to unreasonably lessen, suPf press and restrain c01ppetition in the manufacture, sale and delivery 0d respondents' products in the various States of the United States and in the District of Columbia and to deprive the purchasing, using !l.ll d consuming public of the advantage of competitive prices, terms a.n. conditions in connection with the purchase thereof, and Qther conf siderations which they would receive and enjoy under condi~ions ~e normal and unobstructed and free and fair competition in said tr~ n and industry, and to otherwise operate as a restraint upon, ob~r~ctl~ and detriment to the freedom of fair and legitimate competition f such trade and industry; and particularly between the members 0 said Exchange. · ' · · . ·PAR. 7. The acts and practices of said respondents, and the ~hl~~ done and performed by them, as herein alleged, are all to the preJudl d of the public; have a dangerous tendency to hinder and prevent, an g have actually hindered and prevented competition between and allll~f said member respondents in the manufacture, sale and deli"~ry of their said products in commerce, within the intent and meanlllg ts the Federal Trade Commission Act; and placed in member responde~i· the power to control and enhance prices and other terms and con ir tions in connection wit4 the manufacture, sale and delivery of th~e· said products; have a dangerous tendency to create in member a· spondents a monopoly in said products in said commerce; have u~re te sonably restrained such commerce in their said products, and constl:d unfair methods of competition in commerce within the intent meaning of section 5 of the Federal Trade Commission Act. REPORT, FINDINGS . .AS TO THE FACTS, AND. ORDER Pursuant to. the provisions of the Federal Trade Commission :c~ the Federal Trade Commission on February 25, 1942, issued, an t~e February 26, 1942, served, its complaint in this proceeding· upon se respondents named in the above caption, charging them with the u 0.: of unfair methods of competition in commerce in violation of the P:he visions of said act. After the issuance of said complaint and UNIFORM MANUFACTURERS EXCttANG:E:, INC., ET AL. 479 472 Findings filing of an answer on behalf of the respondents, except the respondentt. lienry Fisher, the Commission, by order entered herein, granted the~ respondents' 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, except as hereinafter set forth,. and waiving all intervening procedure and further hearing as to said:t. facts, which substitute answer was duly filed in the office of th~ Com-· lllission. An admission answer was filed on behalf of respondent, Al~ S.. Mair, trading as Fisher-Mair Unifoi:m Co. (sued herein as Henry- ];'lsher, trading as Fisher-Mair Uniform Co.), admitting all the matetiaJ allegations of fact set forth in said complaint, except as therein set forth. and ,~waiving all intervening procedure and further hearing as to the facts. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint, answer, and substitute answer, ari.d the Commission having duly considered the matter and being now fully advised in the premises, finds that this Proceeding is in the interest of the public, and makes this its findings as to the facts and its conclusion drawn therefrom: . :t'INDINGS AS TO THE FACTS • PanAGUAI'H 1. Respondent, Uniform Manufacturers Exchange, Inc'., 18 an incorporated association, organized in 1934 under and by virtue ~the laws of the State of New York with its office at 112 East Nineenth Street, New York, N. Y., and hereinafter referred to as respondent "Exchange." · h'I'he following named individuals are officers of said respondent Ex- ~ ange: George Appel, president; Howard V. Smith, Sr., vice presient; I. Charles Bernhard, secretary; alj.d Elias Goldstein, treasurer. 'I'he following named individuals, together 'with said officers are *members of, and constitute the board of directors of said Exchange; · .A.. DuBois, Arthur Stone, and E. S. Smith. ll.respondent Exchange is the successor of a voluntary unincorporated association formed for the same purposes as respondent Exchange~ . ll:t 'I'he membership of said respondent Exchange is made up of nui erous corporations, partnerships, firms, and individuals~ engaged i~he manufacture, sale, and distribution of uniforms, overcoats, and b er articles of wearing apparel commonly worn by doormen, beue0Ys, porters, chauffeurs, and others engaged in similar employment,. ltcept policemen and firemen.

f o~~:1flAn. 2. Respondent members of. said respondent Exchange are asd :'-11-Bilt Uniforms, Inc., is a corporation, organized~ existing; and 01Dg business under and by virtue of the laws of the State of New 480 FEDE.RA.L TRADE COMMISSION DE-CISIONS Findings 35F. T.C.

York, with its office and principal place of business at 147 Fulton Street, New York, N.Y.

. S. Appel & Co., Inc., is a corporation, organized, existing, and doing business tinder and by virtue of the laws of the State of New York, with its office and principal place of business at 18 Fulton Street, New York, N.Y.

Beri}hard, Sc~rag & Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal place of business at 18 West Eighteenth Street, New York, N.Y.

Brooks Uniform Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Ne"' York, with its office and principal place of business at 1140 Sisth Avenue, New York, N.Y. · . · I. Buss, Inc., i~ a corporation, organized, existing, and doing bu.sl· ness under and by virtue of the laws of the State of New York, with its office and principal place of business at 84 Fifth Avenue, Ne'" York,N. Y. . · . Walter Cahn Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Ne"' York, with office and principal place of business at 237 Lafayette Street, New York,,N, Y.

Stone Uniform Co., Inc., is a corporation, organized, ~existing, and doing business under and by virtue of the laws of the State of Ne"' York, with office and principal place of"business at 9 East Nineteenth Street, New York, N.Y. , Uniforms by Ostwald, Inc., is a corporation, organized, existing, 11nd doing business under and by virtue of the laws of the State of New York, with office and principal place of business at 18 East Sixteenth Street, New York, N. Y.

The Joseph F. 'Vebber Uniform Corporation, is a corporation, <>rganized, existing, and doing business under and by virtue of tl~e laws of the State of New York, with office and principal place of busi· Jless at 273 Fifth .Avenue, New York, N.Y. d Z. & 0. Uniform Co., Inc., is a corporation, organized, existing, all doing business under and by .. virtue of the laws of the State o:f Ne"' York, with office and principal place of business at 45 East Twentieth Street, New York, N.Y.· d Russell Uniform Co., is a . corporation, organized, existing, an doing business under and by virtue of the laws of the State of Ne"' York, with its office and principal place of business at 1600 Broad\\"'lly• New York; N. Y. · UNIFORl\I 1\IAXv"'TACTURERS EXCHANGE, INC., ET AL. 481 472 Findings : n. Schellenberg & Sons, is a corporation, organized, existing, n.nd -~doing business by virtue of the laws of the State of New York, with Its office and principal place of business at 72 Willoughby Street, Brooklyn, N. Y. · Smith-Gray Corporation, is a corporation, organized, existing and doing business by virtue of the laws of the State of New York, with its office and principal place of business at 740 Broadway, New York, ~.Y. . A. DuBois Son, Inc., is a corporation, organized, existing, and doing business by virtue of the laws of the State of New York, with office and principal place of business at 17 Union Square, 'Vest, New l'"ork,N. Y.

'· L. P. Maher, Inc., is a corporation, organized, existing, and doing business by virtue of the laws of the State of New York, with office and Principal place of business at 331 Fourth Avenue, New York, N.Y. Merson Clothes, Inc., is a corporation, organized, existing, and doing business by virtue of the laws of the State of New York, with office and principal place of business· at 254 Canal Street, New York, ~.Y.

Charles Palley and Abraham Cebulsky,. are individuals and co- P.partners, trading as Acme Uniform Co., with their office and prin- Cipal place of business at 817 Broadway, Ne·w York, N.Y. Charles Mitchell and Paul Perkins, are individuals and copartners, ~ra~ing as Mitchell & Perkins, with their office and principal place of tlsmess at 260-262 West Forty-first Street, New York, N.Y. John A. Hughes and 'William A. Thomas, are individuals and collnrtners, trading as Hughes & Thomas, with their office and principal Place of business nt 53 East Nineteenth Street, New York, N.Y. b L. M. Barth, is an individual, with his office and principal place of tlsiness at 257 Fourth Avenue, New York, N.Y. Arthur R. Meyers, is an individual, trading as National Uniform ~o., !With his office and principal place of business at 41 East Twentyeighth Street, N~w York, N.Y. ' Albert T. Scafati, is an individual, trading as A. T. Scafati Corpo- ~ation, with his office and principal place of business at 226 ·west forty-first Street, New York, N.Y .

. Respondent, 'Vender & Goldstein Uniform. Service Corporation, 1~, and wns, during the time hereinafter mentioned, a service corporatlon, and was not a member of the respondent Exchange, and did not llarticipate in the acts and practices hereinafter described. · .While it appears from the answer filed by AI S. Mair, trading as li'1sher-Mair Uniform Co., whose office and principal place of business • 482 FEDERAL TRADE C0l\1MISSIQN DE·CISIONS Findings 35F.T.C.

is at 11 West Twenty-fifth Street, New York, N. Y., that during B part of the time hereinafter mentioned, said company was compos~~ of said Harry Fisher and AI S. Mair, copartners, trading under sal name, but at the time of the issuance of the complaint said partner· ship had been dissolved and said Al S. Mair became the sole owner -of, and continued to trade as, Fi~her-Mair Uniform Co. at the above address and filed his answer herein.

PAR. 3. Said respondent members at all times mentioned have be~n, and now are, engaged in the manufacture and in the sale and dis· tribution of uniforms and wearing apparel in commerce among and between the various States of the United States, and caused said pro~­ ucts when sold to be shipped to purchasers thereof located in the var~ "OUS States of the United States other than the State of origin of, sue shipments, whereby said respondents created and maintained a con· stant and continuous current of commerce in said uniforms and other like articles of merchandise between the respondent members and the purchasers thereof, in, among, and between the various States o~ the United States, and in the District of Columbia. The vblume of business done by respondent members constitutes a substantial portion of the whole of such done by its industry, particu· larly in the metropolitan area of New York City. PAR. 4. Said respondent members are in competition with one another in the manufacture, sale, and distribution of their said prod· ucts and other like articles in the various States of the United State_s and in the District of Columbia, except insofar as their said compet;· tion has been hindered, lessened, or restrained, or potential co:rnpetd tion among them forestalled, by the acts, practices, methods, an policies of said respondents hereinafter set forth. 1 There are other corporations, partnerships, firms, and individual s not affiliated with respondent Exchange and which are engaged in t?e manufacture, sale, and distribution of similar articles of merchandtse in the area in which said respondents trade, in competition with on: another, and with one or more of said member respondents, excep insofar as such competition has been hindered, lessened, and ~~ strained, or potential competition among them forestalled by the sat respondents' acts, practices, methods, and policies hereinafter described.

PAR. 5. Said respondents, during the' time herein referred to, have entered into, maintained, and carried out agreements, understandings, ·combinations,. and conspiracies, between and among themselves to suPd press, hinder and lessen competition in the manufacture, sale, a~1 delivery of their said products in the course of said commerce, 1?' 10among and between the various States of the United States, and the District of Columbia .

. .

UNIFORM MANUFACTURERS EXCHANGE, INC., ET AL. 483 . Findings Pursuant to, and in furtherance of, and to make effective said agreetnents, understandings, combinations and conspiracies, said respond- ?nts have cooperatively, concertedly, and collectively adopted, engaged In, and carried out, among others, the following methods,. acts and Practices:

1. Organized respondent Exchange, as aforesaid, on or about August 20, 1934, to control and regulate the business of manufacturing, selling a~d delivering the said articles of merchandise. 2. Adopted in January 1936 and maintained for sometime there- 11,after a cost guide and Manual to govern manufacture and distribution of said uniforms which required, and requires, among other things:

(a) That the price of cloth in any garment manufactured by respondent members shall be figured at the market or replacemen~ cost, and not at the actual cost to the specific purchaser thereof; and which (b) Fixed · ( 1) A standard shrunk net yardage scale in detail for their various Products·. ' (2) An average cutting cost;

(3) Material cost for trimmings, findings, sewings, front$, pockets, llnd linings for their various products;

( 4) Standard labor costs in detail for their various products; (5) Minimum overhead costs;

(6) Selling terms; and which (c) Required a respondent member who bids below Manual cost to submit a new or revised bid at least· 5 percent higher than his Original bid.

~· Reported to respondent Exchange the names of all members who 1 alled to abide by the overhead charges and other items covered by haid Manual and by the rules and regulations of said Exchange,· as erein set forth .

. 4. Set up and maintained an arbitration board or committee as a disciplinary arid punitive agency to enforce the various provisions of bnid Manual, with authority to impose fines: suspend and expel memers who failed or refused to comply with the rules and regulations Of said Exchange and to otherwise enforce the same, subject only to the review and approval of a chairman whose decision is final. t' 5. Allowed the examination of the books and records qf the respec- ,1\"e respondent members by said committee for the purpose of assurlllg their compliance with all the rules and regulations of the said 1tanual and providing for the employment of the necessary sanctions to enforce the aforesaid rules and regulations. 484 ··FEDERAL TR~UE COMMISSION DECISIONS Order 35F.'l'· 0· . 6. Us~d other similar means and methods to lessen; suppress nnd restrain competition among respondent members in the manufacture. sale, and delivery of said products. . · . 1. PAR. 6. The Commission finds that the arbitrary fi"'dng of materia t labor and overhead costs and· conditions of sale by means of a cosh guide or manual as hereinbefore described, and the adherence to s~c costs and conditions of sale by the respondents,. constituted the fixln: 5 of the minimum prices at which respondents' uniforms and garme? were to be sold and had the tendency and effect of fixing or regulating prices for such merchandise.

'd ree· PAR. 7. The capacity, tendency and effect of the aforesa1 a¥. ments, understandings, combinations and conspiracies and the pohc 1~' practices and acts and things done and performed by respondents 111 ,pursuance thereof are and have been to unreasonably lessen, suppress£ and restrain competition in the manufacture, sale, and delivery 0d respondents' products in the various States of the United States nn d in the District of Columbia and to deprive the purchasing, using nn d consuming public of the advantage of competitive prices, terms 1111 • conditions in connection with the purchase thereof, and other conf siderations which they would receive· and enjoy under (:onditions ~e normal and unobstructed and free and fair competition in said tra . and industry, and to otherwise operate as a restraint upon, obs~f~C~ tion and detriment to the freedom of fair and legitimate competit 10 f in such trade and industry; and particularly between the members 0 said Exchange.

' CONCLUSION The acts and practices of ~aid respondents, and the thi:lgs.donell~~ ·performed by them, as herem found, are all to the pr{jJUdice of e public; have a dangerous tendency to hinder and prevent, and ha~d actually hindered and prevented competition between and among sa~ d member respondents in the manufacture, sale and delivery of sail products in commerce, withjn the intent and meaning of the Federnr Trade Commission Act; and placed in member respondents the P0"'~­ to control and enhance prices and other terms and conditions in c~s· nection with the manufacture, sale and delivery of their said produc IY have a dangerous tendency to create in member respondents a mon°P 0 h in said products in said commerce; have unreasonably restta\ned sue f commerce iu their said products; and constitute unfair metho~s 0 6 competition in commerce within the intent and meaning of. section of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade CoJllllli~i sion upon the complaint of the Commission and the answers of a \.

UNIFORM MANUFACTURERS EXCHANGE, INC., ET AL. 485 . Order the respondents, except Henry Fisher·, in which answers all the respondents, except Wender & Goldstein Uniform Service Corporation? a corporation, admit all the material allegations of fact set forth in ~aid complaint and waive all.intervening procedure and further hearlngs as to said facts; and the Commission having made its findings ns to the facts and its conclusion that said respondents, except 'Vender &.Goldstein Uniform Service Corporation, a corporation, and Henry l!'1sher, have violated the provisions of section 5 of the Federal Trade Commission Act. · It is ordered, That the respondents, Uniform Manufacturers Exchange, Inc., an incorporated association, All-Bilt Uniforms, Inc., a corporation; S. Appel & Co., Inc., a corporation; Bernhard, Schrag ~Co., Inc., a corporation; Brooks Uniform Co., Inc., a corporation; I. Uss, Inc., a corporation; Walter Cahn Co., Inc., a corporation; Stone lJniform Co., Inc., a corporation;- Uniforms by Ostwald, Inc.~ a corl>oration; The Joseph F. 'Webber Uniform Corporation, a corporation; 2. & 0. Uniform Co., Inc.; a corporatio~; Russell Uniform Co., a·cor-· lloration; B. Schellenberg & Sons, a corporation; Smith-Gray· Cor-: l>otation, a corporation; A. DuBois Son, Inc., a corporation; L. P. :Maher, Inc., a corporation; and Merson Clothes, Inc.,. a corporation;· and their respective officers, directors, agents, and representatives; and· Charles Palley and Abraham Cebulsky, individuals, trading as Acme bniform Co.; Charles Mitchell and Paul Perkins, individuals, trading ~s Mitchell & Perkins; John A. Hughes and William A.· Thomas, lndividuals, tradii\g as Hughes & Thomas; L. M. Barth, an individual; J\.rthur R. Mey~rs, an individual, trading as National Uniform Co.; J\.albert T. Scafati, an individual, trading as A. T. Scafati Corporation; and AI S. Mair, an individual, trading as Fisher-Mair Uniform Co. (sued herein as Henry Fisher, trading as Fisher-Mair Uniform Co.); and their respective agents, representatives, and employees; and George J\.ppel, Howard V .. Smith, Sr., I. Charles' Bernhard, Elias Goldstein, 'l'. A. DuBois, Arthur Stone, and E. S. Smith; individuals, and as Officers and directors of the Uniform Manufacturers Exchange, Inc.,. and their respective representatives, agents, and employees, directly or through any <)Corporate or other device in connection with the offering for sale, sale, and distribution of unforms, overcoats, and other like llrtieles o£ wearing apparel commonly worn by doormen, bellboys, l>orters, and others engaged in similar employment or any other uniforms or articles of wearing apparel, in commerce as "commerce" is d.efined in the Federal Trade Commission Act, do forthwith cease and d.desist £rom entering into, continuing, cooperating in, or carrying out, nby common course o£ action, agreement, understanding, combina- 486 FEDEIRAI,. TRADE COMMISSION DECISIONS · · Order 35F.T.0· tion, or conspiracy, between and among any two or more of said respondents, or between any one or more of said respondents and others not parties hereto, to do or perform any o'f the following acts or practices: · 1. Compiling, publishing, or distributing any cost guide or manual, · or any other similar device for use of respondents, which established~ 0{ provides an arbitrary method for fixing or determining materia ' labor, and overhead costs.

2. Establishing, fixing, or maintaining minimum prices for respond· ents' garments by adhering to, or promising to adhere to, any arbitral')' or fixed cost for material, labor, and overhead costs established by any cost guide or manual, or by any other plan or method, or fixing or . regulating prices for said products by any other means or in any other manner.

3. Establishing, fixing, or maintaining terms or conditions of sale for respondents' garments by adhering to, or promising to adhere to, any arbitrary or fixed selling terms established by any cost guide or manual or by any other plan or method.

4. Establishing, fixing, or maintaining material, labor, or overhead costs~ as a basis for any price or bid quotation on· respondents' gar· ments, by adhering to, or agreeing to adhere to, any cost guide or manual or any other plan or method which provides for any of the following or similar arbitrary methods of fixing or determining such costs: . . 0 r {a) The use of market or replacement costs, or any other specific arbitrary price other than actual cost to the manufacturer, to deter· mine the cost of cloth used in the manufacture of any garment, (b) The use of any standard shrunk net yardage scale,· (c) The use of an,average cutting cost, . (d) The use of standard or uniform costs for trimmings, find1Dgs, sewings, fronts, pockets, and linings used in the manufacture of any garment, . (e) The use of standard labor costs in detail for various products, (f) The use of minimum overhead costs.

5. Arriving at the amount of any bid or price quotation to be sub· mitted to any purchaser of. uniforms or wearing apparel by any a:· bitrary method for fixing material, labor, or overhead costs, as a basl: for such bid or price quotations, as set out in any cost guide, manua ' or by any other plan or method, or requiring a member who bids bel?"' such costs to submit a new or revised bid higher than the original bld· 6. Reporting <>r relaying to respondent Uniform Manufacturers E:tf change, Inc., or to any other medium or central agency, the names 0 members of the Exchange who fail to adhere to any schedule of costs . ' U:NlFORM MANUFACTURERS EXCHANGE, INC.~ ET AL. 487 472 Order-· or prices contained in any cost guide, manual, or in any otller plan or method. . 7. Coercing, inducing, or persuading, or attempting to coerce, induce, or persuade, members of Uniform Manufacturers Exchange, Inc., to adhere to or maintain the minimum prices, terms, or conditions of sale, or any schedule of costs or prices, contained in any cost guide, ~anual, or in any other plan or method, by maintaining an arbitration oard, committee, or other similar agency as a disciplinary or punitive agency to enforce the various provisions of such cost guide, manual, or other plan or method. . 8. Authorizing or permitting the examination of the books and rec- ~rds of the respondent members by any agent of the respondents or ~ any arbitration board, committee, or like agency having discil>hnary, punitive, or other powers to enforce compliance with any rules and regulations pertaining to costs, prices, or terms or conditions of sale, contained in any cost guide, manual, or in any other- I>lau or method .

.9. Authorizing, directing, or permitting any arbitration board, coml)}lttee, or other central agency to impose fines upon, or suspend or- (\tpel, members who fail, refuse, or neglect to comply with the rules a~d regulations of respondent Uniform Manufactu~rs Exchange, Inc., Wlth reference to costs and prices, or to maintain minimum prices, terms, or conditions of sale, or· who fail to adhere to arbitrary or fixed costs for material, labor, or overhead established by any cost guide, lnanual, or any other plan or method. · · · 10. Formulating or putting into operation any other practice or lllan which has the purpose or the tendency or effect of fixing prices for uniforms or other articles of wearing apparel, or otherwise rest:icting,·restraining, or eliminating competition in the sale and distrlbution of such products.

11. Employing or utilizing respondent Uniform Manufacturers Exchange, Inc., or any arbitration board, committee, or other central agency, as a punitive or disciplinary agency to enforce any rules or regulations pertaining to costs and prices, or as an instrument, vehicle, bl' aid in performing or doing any of the acts or practices prohibited Y this order.

h lt is fwrtl~e-r o-rdered, That the complaint herein be, and the same f ereby is, dismissed as to the 'i'respondents, Wender & Goldstein Uniorm Service Corporation and Henry Fisher.

lt is full'tlter o-rdered, That the respondents shall, within 60 days after servic~ 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 this order·. · · Complaint a;:; F. T. C.·