Electrical Alloy Section of National Electrical Manufacturers Association

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IN Tile MATl'EU OF ELECTRICAL ALLOY SECTION OF NATIONAL ELECTRI· CAL MANUFACTURERS ASSOCIATION, ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION Oil' SEC. 5 OF AN ACT OF CONGRESS APPHOVED SEPT. 26, 1914 Docket -9558. Cmnplaint, Aug. 7, 19~1-Demsion, Mar. 16, 1943 Where a section of an unincorporated trade association together with Its five member corporations, engaged In the manufacture, sale, and Interstate distribution of electrical alloy resistance wire, and in active and substantial competition with each other and with others except Insofar as such competition was restrained and suppressed as below set forth; Entered Into a combination, agreement, and understanding among tlwmselves and through said section for the purpose of restraining price competition ln the sale of the unpatented wire concerned; and pursuant thereto, and making use of said section, which aided and abetted acts In question, from time to time- (a) Fixed and maintained identical prices and uniform discounts and other con- . dltlons for the sale of electrical alloy resistance wire; (b) Exchanged price and discount information between and among themsPlve'l, with expectation and understanding that prices set forth in price lists and discount sheets would be adhered to until rppJacPd by others flll1ilarly ftlpd; and agreed they would not reduce their prices through llSSumptlon of any part of certain State sales taxes;

(c) Adopted and maintained uniform resistance stanllnrd:'! and other uniform standards for use In the manufacture of said wire, with the f'ffect, In some Instances, of fixing and maintaining Identical prices therefor; and (d) Submitted uniform bids in connection with the sale of said wre; With effect of unduly and unlawfully restraining and preventing price competition in the sale of electrical alloy resistance wire In commerce; of unduly restricting nod restraining trade and such commerce; of eliminating competition; of creating In said manufacturers a monopoly In the sale of such products the>reln; ot placing In them power to control and enhance prices; and of unreasonnbly restraining such commerce In said products: Reld, That such acts and practic{'S under the con<lltlons set forth, were all to the prejudice of the puhllc; had n dangerous tendt•ucy unduly to binder and prevent, and actually hindered and preventt>d, competition In the sale and distribution of unpatented electrical alloy resistance wire In commerce; hod a dangerous t{'ndency to create In said manufacturers a monopoly therein; and constituted unfair methods of competition In commerce. Jlr. Fletcher G. Cohn for the Commission.

D01wvan, Leis,nre, Newton & Lumbard, of New York City, for Electrical Alloy Section of National Electricall\Innufacturcrs Assn, George B. Cumming and 1Villiam J. Donald.

llfr. Francia E. Neagle, of New York City, for Wilbur B. Driver Co., and along with- ELECTRICAL ALLOY SEC. OJ.' NATL. ELEC. 1-IFRS. ASSO. 337 336 Complaint Ledward & Hinkson, of Chester, Pa., for Alloy Metal 'Wire Co.r fu~; . Lucking, Van Auken & Spragtte, of Detroit, Mich., for Hoskins Manufacturing Co.;

Mr. John 11. Hilliard, of New York City, for C. 0. Jelliff Manufacturing Corp.; and Mr. Joseph J{ahrs, of Newark, N.J., for Driver-Harris Co. Complaint Pursuant to the provisions of the Federal Trade Commission Act (38 Stat. 717; as amended 52 Stat. 111; 15 U.S. C. A. sec. 41), and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that the parties named in the caption, hereof, and more particularly hereinafter described and referred to as respondents, hav~ violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereo~ would be in the public interest, hereby issues its com-. plaint, stating its charges in that respect as follows: PAIL.\GRAPH 1. Respondent, Electrical Alloy Section of the National Electrical Manufacturers' Association, hereinafter referred to as respondent Association, is an unincorporated trade association, having its principal office and place of business located at 155 East Fortyfourth Street, New York, N. Y. The mc·mheri:ihip of respondent Association is composed of five corporations engaged in the manufacture and sale of copper and nickel alloy wire. The business and affairs of respondent Association are conducted under the active management and supervision of an executive secretary and managing director.

Respondent, George B. Cumming, is executive secretary of respondent Association with an oflice at 155 East Forty-fourth Street, New York,N. Y.

Respondent, 'Villiam J. Donald, is managin~ director of respondent Association with an office at 155 East Forty-fourth Street, New York, N.Y.

PAR. 2. Respondent, Alloy Metal Wire Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal office and place of business located in Prospect Park, Pa.

Respondent, Hoskins Manufacturing Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Michigan, with its principal office and place of business located at 444q Lawton Avenue, Detroit, Mich. 338 FEDERAL TRADE C01\<IMISSION DECISIONS Complaint 36F.T.C.

Respondent, 'Vilbur B. Driver Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 152 Riverside Avenue, Newark, N.J. · Uespondent, C. 0. Jelliff Manufacturing Corporation, is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Connecticut with its principal office and place of business located in Southport, Conn . . Respondent, Driver-Harris Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 201 Middlesex Street, Harrison, N.J.

Each of the respondents named in this paragraph is a member of respondent Association, and is engaged in the manufacture and sale of copper and nickel alloy wire. These respondents, hereinafter referred to as respondent manufacturers, also manufacture and sell many other items which are not involved in this proceeding. · PAn. 3. In the course and conduct of their respective businesses respondent manufacture.'rs sell and distribute alloy wire to purchasers thereof located in various States of the United States, pursuant to which sales said commodities are shipped or transported to the purchasers thereof across State lines into States other than the State of origin of said shipments. Each of the respondent manufacturers, in the aforementioned manner, maintains a constant current of trade in commerce between and among different States of the United States. PAR. 4. Respondent Association, and respondents, George n. Cumming and William 'J. Donald, are not engaged in commerce, but have aided, abetted, furthered, cooperated with, and were instrumentalities of, and parties to some, or all, of the conspiracies, combinations, agreements, and understandings hereinafter set out and actively cooperated and participated in the performance of some or all of the acts and practices done in pursuance thereto and in furtherance thereof. PAR. 5. Respondent manufacturers in the regula.r course and con· duct of their respective businesses have been, and are, in active and substantial competition with each other, and with other, and with other manufacturers nnd sellers of alloy wire in the sale thereof to purchasers for shipment in commerce between and among the several States of the United States, except to the extent to which such competition has been restrained, lessened, in]ured, and suppressed by the conspiracies, combinations, agreements, and understandings hereinafter set forth.

PAR. 6. Respondent manufacturers, respondent Association, and respondents, George D. Cumming and William J. Donald, its execu· ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 339 886 Complaint tive secretary and managing director, respectively, have entered into and for more than 3 years last past have been and are now carrying out, a conspiracy, combination, agreement, and understanding for the purpose of restricting, restraining, suppressing, and eliminating all price competition among themselves and creating a monopoly in themselves in the sale of alloy wire in commerce as aforesaid. PAn. 7. Pursuant to said conspiracy, combination, agreement, and understanding, and in furtherance thereof, said respondents have done and performed, and still do and perform, among others, the following acts and things:

1. Fixed and maintained identical prices at which alloy wire is to be sold, and is sold, by respondent manufacturers. 2. Fixed and maintained uniform discounts and other conditions for the sale of alloy wire by respondent manufacturers. 3. Respondent manufacturers filed with respondent Associatio;n their price lists for alloy wire. ' . 4. Respondent manufacturers adhered to filed prices until new and different prices were filed by them.

5. Respondent Association disseminated the price information so filed to all of its members.

6. Otherwise exchanged price and discount information between .and among respondent manufacturers:

7. Fixed and maintained uniform resistance standards and other uniform standards for use in connection with the manufacture of the alloy wire sold and distributed by respondent manufacturers. . 8. Respondent manufacturers have submitted uniform bids ,in connection with the sale of th~ alloy wire manufactured and sold by respondent manufacturers.

9. Used other means and methods designed to suppress and prevent price competition and to accomplish uniform prices and a monopoly on the part of respondent manufacturers in the sale of alloy wire in commerce as hereinabove described.

PAR, 8. Each of the said respondents herein acted in concert and cooperation with one or more.> of the other respondents in doing and performing the acts and things hereinabove alleged in furtherance Q[ said conspiracy, combination, agreement, and understanding. PAR. 9. The conspiracy, combination, agreement, and understanding, and the things done thereunder and pursuant thereto and in furtherance thereof, as hereinabove alleged, have had and do have the effect of unduly and unlawfully restricting, restraining, hindering, and preventing price competition between and among respondent manufacturers in the sale of alloy wire in commerce within the intent and 340 FEDERAL TRADE COMMISSIO~ DECISIONS Findings 36 F. T. C~ meaning of the Federal Trade Commission Act; of unduly and unln,wfully restricting and restraining trade in commerce in said products in said commerce; of eliminating competition, with the tendency and. capacity of creating a monopoly in the sale of said products in saill commerce; of placing in respondent manufacturers the power to control and enhance prices; of unreasonably restraining such commerce· in said products. The conspiracy, combination, agreement, and underc standing, and the things done thereunder and pursuant thereto and in furtherance thereof, as above alleged, constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDF.R Pursuant to the provisions of the Federal Trade CQmmission Act r the Federal Trade Commission, on the 7th day of August 1941, issued and served its complaint in this proceeding· upon the respondents named in the caption hereof charging them with the use of unfair methods of competition in commerce, as "commerce" is defi11ed in the Federal Trade Commission Act, in violation of the provisions of said act. All of the respondents have duly filed their answers in this proceeding. Thereafter, n stipulation was entered into whereby it was stipulated and agreed that a statement of facts, signed and executed on behalf of the respective respondents and Vv. T. Kelley, chief counsel of the Federal Trade Commission, subject to the approval of the Commission, may be made a part of the record herein and may be taken as the facts in this proceeding and in li~u of testimony in support of the charges stated in the complaint, or in opposition thereto, and that the said Commission may proceed upon said &tatement of facts to make its report, stating its findings as to the facts and its conclusion based thez:eon, and enter its order disposing of the proceeding without the presentation of argument, the filing of briefs, or the filing of a report upon the evidence by a trial examiner for the Commission. The said stipulation further provided that the respondent Electrical Alloy Section of National Electrical Manufacturers Association, an unincorporated trade association, should be bound lf'gally by any order which the Commission might enter properly against it pur~uant to said stipulation, by service, as provided under the rules of the Commission, upon the managing director of National Electrical Manufacturers Association. Thereafter, this proceeding regularly came on to be heard before the Commission upon said complaint, answers, and stipulation, said stipulation having been approved, accepted, and filed, and the Commission having duly considered the same and being now fully , ELECTRICAL ALLOY, SEC. OF NATL. ELEC. MFHS, ASSO. 341 Findings advised in the premises, finds that this proceeding is in the interest of the public and makes its findings as to the facts and its conclusion ·drawn therefrom.

FINDINGS AS TO Tile FACTS PARAGRAPH 1. Respondent, Electrical Alloy Section, is a section of the National Electrical Manufacturers Association, an unincorporated trade association, having its principal office and place of business located at 155 East Forty-fourth Street, New York, N. Y., and said section is hereinafter referred to as "respondent section." During the times hereinafter mentioned the membership of said respondent section has from time to time included the five cocporate respondents hereinafter in paragraph 2 described, which five corporate respondents are hereinafter referred to as "respondent manufacturers"; the respondent, C. 0. Jelliff Mnnufacturing Corporation, was a member of respondent section from January 19, 1934, through December 31, 1940; respondent, .Alloy l\fctal Wire Co., Inc., is, and has been, a member of respondent section since August 25, 1933, except during the period from November 1, 1934, to July 1, 1937. The only other members of respondent section at any time were Geo. ,V. Prentiss & Co., which was a member of said section during all of the times hereinafter mentioned \IP to October 23, 1939, and .Walter Gilby Alloy Co., which was a member of the section from August 25, 1933, to July 1, 1935, both of said companies having theretofore ceased manufacturing and selling copper-nickel alloy resistance wire. The respondent section has officers consisting of a chairman und a vice chairman elected from the personnel of the membership of the section. Prior to February 7, 1939, said respondent section also had a secretary elected from the personnel of the membership of the section.

From 1935 to D,ecember 19, 1941, respondent, George n. Cumming, was elected from the staff of the National Electrical :Manufacturers Association anually by said respondent section as executive secretary of said respondent section, his office being at 155 East Forty-fourth Street, New York, N. Y., and said respondent, George n. Cumming, acted as executive secretary of said section. PAR. 2. Respondent, Alloy l\Ietal Wire Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the Jaws of the State of Delaware, with its principal office and place of llllsiness located in Prospect Park, Pa. . Respondent, Hoskins l\Ianufacturing Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of ·I i FEDERAL TRADE COM1HSSION DECISIONS 342 Findings 3GF. T. C.

the State of l\Iichigan, with its principal office and place of business located at 4445 Lawton Avenue, Detroit, l\Iich. Respondent, Wilbur B. Driver Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New Jer!-Jey with its principal office~ and place of business located at 152lliverside Avenue, Newark, N.J.

Respondent, C. 0. J elliff Manufacturing Corporation, is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Connecticut with its principal office and place of business located in Southport, Conn.

Respondent, Driver-Harris Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located llt 201 Middlesex Street, Harrison, N. ,J. All of said respondent mantrfacturers are, nnd at all times mentioned herein have been, engaged in the manufacture and sa]e of electrical alloy resistance wire, some of which is patented and some unpatented. The facts found herein relate only to unpatented electrical alloy resistance wire. PAR. 3. In the course and conduct of their respective businesses, each of respondent manufacturers sells and distributes e1ectricn1 ·alloy resi:,tance wire to purchasers thereof located, in various States of the United States, and pursuant to such sales, said products are shipped or transported to the purchasers thereof across State lines into Stat£-s of the United States other than the State of origin of said shipments. Each of respondent manufacturers, in the aforementioned manner, has ·maintained, and still does maintain, a constant <'Urrent of trade in said products in commerce between and among the several States of the United States.

PAR. 4. Respondent manufacturers in the regular course and conduct of their respective businesses have been, and are, in active and E.Ubstantial competition with each other and with other manufacturers and sellers of electrical alloy resistance wire in the sale thereof to purchasers for shipment in commerce between and among the several States of the United States, but such competition has been restrained, lessened, injured, and suppressed by the combinations, agreements, and understandings hereinafter set forth.

PAR. 5. From time to time during the periods hereinafter mentioned, respondent manufacturers (except respondent, Alloy Metal 'Vire Co:, Inc., for the period hereinbefore mentioned in paragraph 1) and Geo. W. Prentiss & Co., and 'Valter Gilby Alloy Co. (at the times these two companies were members of respondent section) as the sole members of said respondent section, held meetings which were at- ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 343 836 Findings tended by representatives of some or all of said respondent manufacturers, and at which, from September 29, 1935 to December 19, 1941, respondent, George B. Cumming, acted as executive secretary of flaid respondent section.

PAR. 6. All of respondents herein have stipulated that the respondent manufacturers, at the time when they were, with the addition of Geo. W. Prentiss & Co., the only members of respondent section, did enter into a combination, agreement, and understanding among themselves for the purpose of restraining price competition among themflelves in the sale of electrical alloy resistance wire in the commerce hereinbefore described, and pursuant thereto and in furtherance· thereof, have, from time to time, done· and performed the following_ acts and things :

1. Fixed and maintained identical prices at which electrical alloy resistance wire is to be sold, and is sold, by respondent manufacturers_ 2. Fixed and maintained uniform discounts and other conditions ior the sale of electrical alloy rebistance wire by respondent manufacturers.

3. Exchanged price and discount information between and among respondent manufacturers.

4. .Adopted and maintained uniform resistance standards and other uniform standards for use in connection with the manufacture of the electrical alloy resistance wire sold and distributed by Slid respondent manufacturers with the effect, in some instances, of fixing and maintaining identical prices at which said wire was to be sold and was sold by said respon.dent manufacturers. 5. Submitted uniform bids in connection with the sale of the electrical alloy resistance wire manufactured and sold by respondent manufacturers.

The Commission finds that the aforefound agreement, understanding, and combination- among the respondent manufacturers was entered into, through and by means of the respondent section, as weli us by other means and methods herein set fortl1, and further, that the purpose and effect of said combination, agreement, and under- ~tanding were aided, abetted, and furthered by the responaent section, which often was used by the respondent manufacturers as an instrumentality for effectuating such purpose. P.An. 7. Each of said respondent manufacturers has stipulated that they acted in concert and cooperation with one or more of the other re- Fpondcnt manufacturers in doing and performing the acts and things herein found, in furtherance of said combination, agreement, and understanding.

.344 FEDERAL TRADE COMMISSION DECISIONS Findings 3GF. T. C.

PAR. 8. At the meeting of respondent section on September 9, 1935, the said section adopted a motion that each member should send to respondent, George ll. Cumming, as executive secretary of said respondent section, his published price list, terms, and conditions of sale with instructions concerning distribution of such information. At this meeting, the respondent section also adopted a resolution that the section approve the investigation of closed-business transactions and that the investigation should be conducted by respondent George B. Cumming as executive secretary of respondent section. Under date of September 25, 1935, respondent George B. Cumming, as executive secretary of respondent section, wrote to respondent manufacturers, as members of respondent section, to the effect that the counsel for the National Electrical Manufacturers Association had disapproved the action of the respondent section in connection with the voluntary distribution of published prices, and further, that the said counsel also had disapproved the aforementioned motion of respondent section regarding the investigation of closed-business transactions "because it provides that closed-business transaction statistical activities shall be conducted by the executive secretary," and that ''was contrary to the ruling of the la\V committee awl to the board of governors which has specifically ruled that such statistics cannot be collected other than through the statistics department of the Association."

At the next meeting of the respondent section, which was held on November 13, 1935, it was resolved that the previous action of the respondent section regarding voluntary distribution of published prices be rescinded and that the matter "be in the hands of each member individually with respect to his own prices." Also, the action of respondent section, with respect to closed transactions likewise was rescinded.

The minutes of subsequent meetings of the said respomlent section do not disclose that the subject of voluntary distribution of price lists or the subject of closed-business transactions was considered or discussed at any subsequent meeting or meetings of said responuent section.

However, in his annual report to the members of respondent section, Stanley M. Tracy, secretary of the section, on September 16, 1936, stated that "the matter of distribution of published prices was considered at the first two meetings during the year and finally disposed of by recommending that each member should mail his individually prepared price sheets to the other members of the .section, as well as the trade" and that "the section considered the advisability of in- ELECTRICAL ALLOY SEC. OF N ATL. ELEC. Mills. ASSO. 345 33G Findings Vestigating closed-business transactions in accordance with the standard NEMA procedure. After some discussion it was decided that the section would not benefit from such an activity." This annual report Was prepared :for 1\Ir. Tracy by respondent George B. Cumming, as executive secretary of respondent section.

Tbe Commis'lion concludes and fin<ls that the exchange of price lists directly among respondent manufneturers was the result of their concerted action through respondent section. PAR. 9. On l\Iay 16, 1935, one o:f the respondent manufacturers wrote a second respondent manufacturer, that he was in receipt o:f a letter from a third respondent manufacturer to the effect that it was agreeable to this third respondent manufacturer to use the catalog figures of the first respondent manufacturer "as a basis :for price determination, until such time as there is a reprint of their own pamphlet." PAR. 10. On .May 5, 1937, one of respondent manufacturers wrote another respondent manufacturer requesting price and delivery terms on certain alloy wires, to which letter was attached a plain sheet reading as :follows:

You can guess that my request for this information is due to the fact that we have been told our prices are high, and that customer is purchasing at a lower price.

If you check with us, we feel sure that our figut·es nt·e right and the gentleman is lying.

I would suggest that you destroy this plain sheet. On May 7, 1937, a reply to the aforementioned letter of May 5, 1937, was written and the concluding paragraph of said letter of reply reads as follows:

Our figures have been checked, nnd we feel that what we quote above is entirely conect. However, if you are at variance with any of these figures through any of your own matriculations, we would like very much to have you che<'k with us again.

PAR. 11. A salesman of one o:f respondent manufacturers, reporting to his superior on May 4, 1937, of his call on another respondent manufacturer, stated:

Spoke about Capitol situation • • • Thought our practice of loaning coiling machines was unfair advantage. Had agreeable understanding and will report verbally. Thought exchange of credit information would be helpful and Intended to raise the question at meeting In N. Y. tomorrow. PAn. 12. On August 18, 1938, an official o:f one o:f the respondent manufacturers wrote an official of another of said respondent manufacturers, addressing the letter as "Personal" as follows: There seems to be a little discrepancy In some of the prices that we are finding true In our own organization, nnd In order to greatly help me, I would appreciate 528713--43--vol.36----25 Findings 36 F. 'r. C. It very much If you would give us your price with method of figuring on the following: · • • • To this letter, the reply, dated August 24, 1938, which likewise was marked "Personal" read, in part, as follows: Let me say at the out-set, that you certainly picked out two tough coils. It we sold many coils of this type I am afraid all of our time would be consumed in figuring pt·lces. Of course, these particular coils are special and are not covered by any established price list. I have therefore figured as fat· as I can go in accordance with the establlshed practice and have then added • • • • • * • • • • • • • In this connection, 1\Ir. (herein was given the name of an official of n third respondent manufacturer) has been endeavoring to set up standards which would cover every type of coil that might be ordet·ed • • • Until such time as definite action bas been taken I would say that you would be free to do as you Jllease on all types of special coils which are not covered in the established price schedule. Of course, your price may be higher or lower than competitors, but I don't know of any other answer. PAn. 13. On May 7,1940, one of th~ respondent manufacturers wrote another respondent manufacturer as follows: SUDJECT: Exports to Italy Relative to our t~lephone conversation of Friday last, we, like yourselves, are a little divided as to what ought to be done. The Industry Meeting Is next Saturday at not Springs, and we would be content to allow the matter to rest until It could be discussed there. We can't see any better solution than the above, even though It may not be very satisfactory.

Will see you at not Springs.

PAR. 14. On July 31, 1940, one of respondent manufacturers wrote another respondent manufacturer as follows: Will you please give me the details of your practice covering freight charges on orders totalling less than 100 pounds. For example, If you have un order for 10 pounds of nickel chromium resistance wire and you ship lt via parcel post, do you add the postuge to the Invoice? Or, Is lt your pructice to prepuy parcel post, express or freight charges on all orders irrespective of the quantity Involved? PAR. 15. The Commission infers, and therefore finds, that the filing or interchange of current price lists and discount sheets among respondent manufacturers, as herein described and found, was predicated on the expectation and understanding that the prices set forth in such lists and sheets would be adhered to until and unless they were replaced by other price lists and discount sheets similarly filed or interchanged.

The Commission also finds that pursuant to, and as a part of, the combination, agreement, and unden;tanding hereinbefore found in ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 347 336 Findings paragraph 6, that the respondent manufacturers wrote the letters, performed the acts and did the thing;, set out in paragraphs 9, 10, 11, 12, 13, 14, and 20.

PAn. 16 . .At a meeting held on June 13, 1933, at the offices of the National Electrical Manufacturers Association, the minutes of which are entitled "Organization Meeting-Electrical Alloy Section" and at which were present representatives of respondent manufacturers, Driver-Harris Co., Hoskins Manufacturing Co., Alloy Metal Wire Co., and Wilbur B. Driver Co. (the successor to Gilby Wire Co.), together with representatives of Geo. W. Prentiss & Co., Walter Gilby Alloy Co., and Somers Brass Co., all of whom, with the exception o:f Somers Brass Co., subsequently became members of respondent section at the dates hereinafter set forth, the following resolutions were adopted:

RESOLVED that this group of manufacturers form an association and elect as officers a chairman, a vice-chairman, and secretary and treasurel', r,nd that the association make application to NEl\IA for affiliation wlth that group as a Sectiun.

* * * * * * • RESOLVED that the name of this association shall be the Electrical Alloy Section of NE.M:A.

At this meeting it was also Resolved that no contracts or orders for products of this association shall be taken by a member of the association for a longer period than three (3) months beginning October 1, 1933, and that in the meantime no contracts are to be made for delh·ery after December 31, 1933, and that such contracts must co,·er n specific amount of material, and full and complete shipments must be taken by the customer; also, that a standard form of contract be established for use by members of the Association.

On June 23, 1933, the Board of Governors of National Electrical Manufacturers Association "authorized the formation of an Electrical Alloy Section."

At a meeting of the aforementioned manufacturers held on August 10, Hl33, at National Electrical Manufacturers Association headquarters, the minutes of which are entitled "Electrical Alloy Section'' a resolution was passed reading as follows:

Resolved that the Electrical Alloy Section of NEl\IA extend a vote of thanks to Mr. Berresford, Managing Director of ::\El\!A, for the help which he has extended to this Section in their organization Wolk. At this meeting of August 10, 1933, the following resolution also was passed:

RESOLVED, that the minutes of the meeting of manufacturers of high nickel alloy wire and strip, held on June 13, 1933, before becoming a Sect!<>n of NEMA, be ratified as corrected.

Findings 3GF. T. C, At this meeting of August 10, 1933, there was also passed a resolution that "Inasmuch as it has been the practice of members of this section to sell materials manufactured by them on the basis of printed net price lists or price lists with discount sheets and fixed terms of sale, which are distributed to the trade, it will be the policy of members of this section to file said schedules as required by clause X of the Code of Fair Competition for the Electrical Manufacturing Industry," under the National Industrial Recovery Act (hereinafter called the ';Basic code") (National Electrical Manufacturers Association was designated as the code authority under the basic code. Pursuant to paragraph XII of the Basic Code, a supervisory agency for the 'Vire and Cable Subdivision was set up. Paragraph X of the basic code provided that "If a supervisory agency determined that in any branch or subdivision of the electrical manufacturing industry, it has been the generally recognized practice to sell a specified product on the basis of printed net price lists, or price lists with discount sheets and fixed terms of payment, which are distributed to the trade, each manufacturer of such product shall, within 10 days after notice of such determination, file with the supervisory agency a net price list or a price list and discount sheets, as the case may be, individually prepared by him, showing l1is current prices, or prices and discounts, and terms of payment, and the supervisory ngency shall immediately send copies thereof to all known manufacturers of such specified product.") At this same meeting of August 10, 1933, there also was adopted a resolution declaring it to be "the consensus of opinion of the members of the Electrical Alloy Section that certain unfair trade practices existing in the industry should be included in the Supplemental Code to the Code of Fair Competition for the Electrical Manufacturing Industry, as follows:"

The supplying to customers of any of the following materials or !i'ervices without making adequate charge:

Wire In the form of helical coils :

Resistance wire and ribbon, hot and cold, rolled, with r·e~istancc limits less than standard:

Resistance wire and ribbon In Intermediate sizes; Any wire or ribbon, hot or cold rolled, In 8trnlghtened or cut length; Any wire or ribbon In special surface finishes Involving an lncr·ensed cost In manufacture;

The shipping of spools on which wire or ribbon Is wound (which charge must be paid by customer when invoice covering mater lulls paid). The board of governors of National Electrical Manufacturers Association approved the applications for membership in said Association and affiliation with the Electrical Alloy Section of the respondent, ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 349 336 Findings Driver-Harris Co., at its meeting on July 11, 1933, and of the respondents, Hoskins Manufacturing Co., Alloy :Metal "\Vire Co., Inc., Wilbur B. Driver Co. (then known as Gilby Wire Co.) and of Geo. W. Prentiss & Co., and Walter Gilby Alloy Co., at its meeting on August 25, 1933.

On August 20, 1933, the supervisory agency for the wire and cable subdivision of the electrical manufacturing industry appointed under the basic code, issued a notification to manufacturers of electrical resistance wire and ribbon and strips composed of alloys of nickel chromium, nickel iron and chromium, nickel copper, and nickel steel, directing them to "file with this supervisory agency for distribution, as required by said code, to all other manufacturers of the products specified above, at the oflices of National Electrical Manufacturers Association, 155 East Forty-fourth Street, New York City, • * * copies of your price lists, or price lists and discount sheets, showing your current prices for fixed terms of sale, payment, delivery, and other conditions affecting the sale price on the products specified above." At the meeting which was held on September 28, 1933, at the headquarters of the National Electrical :Manufacturers Association, the minutes of which meeting, are entitled "Electrical Alloy Section," the respondent section approved the minutes of the meeting of August 10, 1933, and these minutes were ordered to be filet! with the secretary "llfter approval by NEMA counsel."

At this same meeting of September 28, 1933, respondent section adopted the following resolution:

RESOLVED that the sngge8tion that an extm price of ten percent (10%) be charged on orders for wl'aving wire, and especially 1\Ionel Metal and Pure Nickel, where the customer specified the number of spools on which the wire is to be wound, he referrell to the ~tanding Committee fot• action as to whether or not this ls an unfair h·alle pl'llctice. At the same meeting the folowing resolution was also allopted: Resolved that the Secretary lnstt·uct the supet·vlsory agency that this Section Is now ready to file schedule of prices on the following, nnd ask that a call be sent out for such filing:

(1) Additional pi·ices for othN' than standard resistance tolerances; (2) Methods of determining pt·ices for lntermeuiate sizes of both wire and ribbon;

(3) Pt·Jces for straightening and cutting to length both wire and rod; ( 4) When matet·ial is sold for net prices, these prices are to be figured nt the publishell list prices lef's discount to their(l decimal place and all other decimals disregarded.

The minutes of the aforementioned meetings of June 13 arid August 10, 1!>33, were submitted to counsel for National Electrical Manufacturers Association under date of September 22, 1933, and on October 2, 1933, said counsel advised the seetion that he disapproved the 350 FEDERAL TRADE COJ.IJIMISSION DECISIONS Findings _86F.T.O.

resolution contained in the June 13, 1933, minutes relative to contracts or orders, and also advised the section with reference to the resolution adopted at the August loth meeting regarding the practice of mem~ bers of the section to sell on the basis of printed price lists that "It is for the supervisory agency to determine whether or not any brunch of the industry shall go on a printeu price list basis. There is, however, no objection to the section's indicating what has been their practice." On October 18, 1933, members of the respondent section were ad· vised by its secretary that counsel for National Electrical 1\Ianufac· turers Association had returned the minutes of the September 28, 1933 meeting, with bis approval, with a comment that it was beyond the power of the "Supervisory agency'' to tell any manufacturer how he should figure his net prices. (The minutes of subsequent meetings of respondent section do not disclose that the Secretary of said section instructed the supervisory agency in accordance. with the aforemen~ · tioneu resolution of September 28, 1933.) Counsel also commented that if the aforementioneu resolution adopted at the meeting of Sep~ tember 28, 1933, regarding an extra price of ten percent to be charged on orders for weaving wire was intended to be voted by the section as an unfair trade practice whkh should n.ot be indulged in by any members of the section, that he then disapproved same, but, if it was intended as being proper for submission in a supplemental code, then no action should be taken regarding such matter until the supplemental code had been approved.

At the meeting of respondent section held on November 8, 1933, which was the next meeting of s~id section after that of September 28, 1933, the section modified the resolution relative to the filing by members of printed price lists to rend as follows: llEsoLvED, that lt has been the practice or members or this section to sell mnterlnls manufactured by them on the bnsls of printed net price lists or discount sheets at tlxed terms of sale which are distributed to the trade. At the same meeting of respondent section on November 8, 1933, in accordance with the aforementioned advice given by counsel for the N a tiona I Ekctrical Manufacturers Association on October 2, 1!>33, the respondent section passed n resolution deleting from the minutes of J unc 13, 1£33, the resolution regarding contracts and orders for prouucts of the members of respondent section. Also, nt this meeting of respondent section of Novemh!'r 8, 1!>33, the said section rescinded its resolution of September 28, 1933, which referred to the Standing Committee for action ns to whether or not it was nn unfair trade practice to charge an extra price of ten percent on orders for weaving wire where customer specifies the number of spools on which the wire is to be wound.

ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 351 R36 Findings PAR. 17. At the meeting of the respondent section on January 15 and 16, 1934, a discussion took place as to items which should be sub- Initted to the NEl\IA Code Committee for action, and which were to be submitted to the authorities at Washington a~ a supplemental code for respondent section. Among the items which the respondent members, together with the other members, of 1:respondent section believed should be included in a supplemental code were; that the terms of sale of each member should be uniform and uniformly applied; that no contracts or orders should be accepted for a longer period than three Inonths; and that when material is sold for net prices, these prices should be figured at published list less discount to third decimal place With all other decimals disregarded.

At the next meeting of respondent section which was on May 2, 1934, respondent section voted that the committee previously appointed complete the recommendation for the supplemental code and submit it to the members for approval.' At the meeting of respondent section on November 15, 1934, the section voted that a committee be appointed to draw up the supplemental code for submission to the members for approval and upon receiving such approval, the code was then to be submitted to NE)fA Code Administration Department for approval and submission to the authorities in Washington. It was also voted that the code committee formulate a plan in the supplemental code for investigating complaints regarding "violations of unfair trade practices or violations of price filings'' under the NRA code, "and arrange a method of payment of expenses to cover the cost of investigating complaints" under the NRA code.

A supplemental code, which was prepared by the Special Code Committee appointed nt the aforementioned meeting of November 15th, was reviewed nnd considered by the respondent members of respondent section under date of December 14, 1934. At tlli~ meeting, the said respondent members unanimously approved, among others, the fol· lowing sections of the proposed supplemental code: Article III, Section 4.-When the Supervisory Agency shall have given notice ot determination that any li'peclfied product shall be sold In accordance with net price lists and/or price lists with discount sheets and/or fixed terms of sale or payment, no employer shall bid, quote, otl'cr to sell or sell any mouificatlon of such specified prouuct on wl.Jicb price schedules have been filed cxcPpt In accordance with the provisions of this section unless such employer file, In accordance with Article X of the Daslc Code, price schedules covering such motllficatlons.

Article IV, Section I.-Offering to sell or selling b£>low cost by any employer mny b£> done under the following conditions: (a) With respect to any product sold competitively under net price lists and/or price lists wlth discount sheets and/or fixed terms of sale or payment Findings 36F.T.C.

(herein referred to as price schedules) filed with the Super\'isory Agency, any employer may file revised price schedules to meet the filed lower price schedules of any other employer, provided that the Supervisory Agency Is advised that selling below cost is involved at the time the revised price schedules to meet com· petition are filed with the Supervisory Agency. (b) With respect to any product or specifications on which price schedules have not been filed with the Supervisory Agency, any employer may meet the proven quoted price made on equal or equivalent products of specifications by any other employer, provided proper notification of sud1 !ntent has been given to the Supervisory Agency.

At the meeting of respondent section on January 31, 1935, the section voted to add to the supplemental code an amendment to article 3, section 4 (d) relating to "Straightening and cutting to length." The section also voted that "the uniform resistance figures for individual sizes, conforming with the specific resistance of the alloy and with the figures shown" in catalogs of two respondent manufacturers, "be recommended as standard to manufacturers who are revising their catalogs." The section further voted to amend the supplemental code by substituting the words "30 days" for the word "net" in article 3, section 1, and to empower the officers of the Supplemental Code Committee "to negotiate and bring to a conclusion with any changes which may be made mandatory, the supplemrntal code which has now been prepared and approved." The Commission infers that the aforefound. amendment substituting the words '(30 days" for the word. "net" related to an agreement among respondent manufacturers concerning discounts and. terms of sale.

The supplemental code which was so prepared and approved by the section did. not provide: that the terms of sale of each mrmber should. be uniform and uniformly applied; that no contracts or orders ~should. be accrpted. for a longer period than 3 months; and that when material is sold for net prices, these prices should<l be figured nt published list less Jiscount to third. decimal point with all other decimals d.isr<>garded. · The supplemental code so prrpnred and approved. was never approved by the Prrsident of the United Statrs in accordance with the provision of the National Industrial Recovery Act. The minutes of EiUbsequent meetings of respondent section do not disclose any further discussion of the supplemental code.

PAR. 18. The minutes. of the meeting of respondent section held on March 17, 1936, contain "proposed NEl\IA standards covering electrical resistant alloys," and indicate, when approval by the section, that they would become the "adopted standard'' and would be "effective when approved."

ELECTRICAL ALLOY SEC. OF N ATL. ELEC. l\1FRS. ASSO. 353 i:36 Findings Rule() of the Organization and ·working Rules of then ational Electrical Manufacturers Association, of which respondent section is a section, defines an "adopted standard" to be: A practice of construction to the observauce of which In the interest of the public all members of the Association should adhere, and in no event should a member of the Association represent as standard any product falling below such standard.

It Is distinctly understood that Adopted Standards relate only to products commercially standardized and subject to repetitive manufacture and do not apply to products built to meet the special requirements of individual customers. PAR. 19. The minutes of the meeting of respondent section of August 30, 1938, state:

Return of Reels The attention of the Sedion was uirected to the fact that one of the large. users of the products of t11e Section had requested the members to use n clause r~c>ading ns follows:

"Spools or reels will be charged nnd credit given for same wl1en returned in good condition by freight, charges prepaid to destination, within twelve months from date of shipment."

On 1\Iotion duly made, seconded and carried, Ir WAS RESOLVED that the Section recommend to Its members the use of this clause.

Under date of September 16, Hl38,.respondent George D. Cumming, as executive secretary of respondent section, wrote the following letter to respondent manufacturers, as members of respondent section: In returning approved minutes of meeting of the Electrical Alloy Section held August 30, 1933, 1\Ir. Nengle, Counsel, commmted as follows: "The Section should also be advised that its resolution appearing on page 103 with reference to the r<>turn of reels should be rescinded. The Federal Trade Commission takes the posltlon that the inclusion of a provision covering the return of reels is not proper in a Section Standard which, of course, carries no recommendation with It and the Federal Trade Commission therefore would consider lt a more serious violation of the law If the Section recommended the use of the clause with regard to payment for reels which ls quoted." The minutes of respondent section of November 1, 1938, state: The l.'ntlre Item and motion headed "Return of Reels" shown on page 103 should be deleted ft·om the minutes as this minute has been disapproved by NEMA Counsel.

The minutes of subsequent meetings of respondent section do not disclose that the subject of return of reels was thereafter considered or discussed at any meeting or meetings of said respondent section. PAR. 20. On September 14, 1938, one of the respondent manufacturers wrote another respondent manufacturer as follows: At the last meeting of NEl\IA, there was a good denl of talk about marking each Invoice containing spools to the etrect that spools must be returned within a certain length of time.

Findings 36F.T. C.

The reply to this letter, which reply is dated September 15, 1938, read, in part, as follows :

In reply to your letter of September 14, If you will refer to the reverse side of our lnvolce #DC50, you wlll see a sheet of conditions of sale. No. 7 of these states that full credit will be given for spools returned prepaid in good condition -before the expiration of six months. At the recent Industry meeting it was suggested that this si:!:: months' period be extended to twelve months. In actual practice credit is frequently given for sr,ools after the six months' period bas expired, so that I had no basic opposition to the extension of the period of time. I did feel, however, that If twelve months were the stated time customers might show a tendency toward further laxness In this regard, and an additional investment in spools would be requil·ed for normal requirements. This is problematical and of no great con· sequence, so that I am perfectly willing to take such steps as the industry may deem advisable.

PAR. 21. The minutes of the meeting of respondent section on May 11, 1940, contain, among other matters, the following: ILUNOIS STATE OCCUPA1IONAL TAX The Section further considered the statement from the Retailers Occupational Tax Division of the Illinois Department of Finance covering a new ruling in that State, df~ctive as of April 1, 19.J.O. This statement Is based on the United States Supt·eme Court ruling In the New York City sales tax case and Its appllcation to certain phases of Interstate commerce: "Tax !lability under the R;!tallers' Occupational Tax Act Is Incurred when sales at t·etnil are made In this State, even though the property sold Is transported directly to the buyer from a point outside this State, whenever the seller is engaged In the business of selling tangible personal pwperty In this State, and whenevet· possession of such property Is transferred to the buyer In Illinois. "It Is immatet·ial whether the purchase or conrract precedes or follows the Interstate shipment or whether the shipment is made f. o. b. point ot origin or f. o. b. destination. Contracts or agt·eernents purporting to require shipments of the pt·operty sold from points outside of Illinois or transfers of possession of such property outside of Illinois wlll not operate to exempt sellers whe_rc the tax would otherwise apllly."

The above regulation presents a new problem to all 1\Iichigan companies sell· fng through an Illinois agent and where the mez·chamllse Is shipped from Mlcb· lgan Into Illinois. Pt·evlous to April 1 no Illinois sales tax applied on such a sale. Since April 1, that type of sale Is taxable under the Illinois 3o/o sales tax. llllnol~ does not make any exemption for Industrial Processing. • • • Following the discussion, one of the members advised that his attorney bad suggested a clause to be Inserted In quotations rending as follcws: "In addition to the above-mentioned price, Buyer agrees to pay Seller the amount of any and all taxes now or hereafter assessed or Imposed by any Municipal or State goyernment, or by the United States, on products cover!'d by 1hls contract, unless Buyer shall be entitled by law to an exemption from said tax and shall furnish S£>ller with proper exemption certificate when shipping lnstruc- 'tlons are given."

It was pointed out that tbls might be somewhat lengthy and the Executive Secretary (respondent George B. Cumming) was Instructed to ascertain the ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 355 836. Findings type of clause used by the General Electric Company in this sltuatic.n, and this clause follows:

"The amount ·or any present or future sales or other similar tax applicable to apparatus sold hereunder shall be ndded to the prices contained herein and paid by the purchaser in the same manner and with the snme effe<:t as if originally added thereto."

The Executive Secretary (respondent George B. Cumming) was lnstructeu to obtain the clause used by the W.estlnghouse Company, which Is as follows: "Prices do not include State or local taxes based on or meusureu by sales, which tax or taxes wlll be added to the prices where applicable." The Executive Secretary (respondent, George B. Cumming) was Instructed to circulate this information among the members and to ask them to indicate which clause appeared most suitable to them, following which the Executive Secretary Is to advise nll the members concerning the relative popularity of the various clauses submitted.

Pursuant to said instructions, said respondent, George B. Cumming, as executive secretary of respondent section, circularized the members of said section, and but two of the members having replied thereto, respondent Cumming did not advise the members of respondent section concerning the relative popularity of said clauses. The Commission infers that the foregoing activities with regard to the relation between prices and sales taxes were based on common consent and understanding among respondent manufacturers tl.at their prices would not be reduced through their assumption of any part of such taxes. · PAn. 22. Under date of July 29, 1937, respondent, George B. Cumming, as executive sccre~nry of respondent section, sent the respondent manufacturers, as members of respondent section, copies of the minutes of the meeting of July 20, 1937, together with a letter in which he stated, "These minutes are being circulated in the absence of counsel who is on vacation. They will be subject to his comment upon his return about September 10." Said minutes were approved by counsel on September 8, 1937. At this meeting of July 20, 1937, of respondent section, the said respondent section considered the matter of offering technical advice to the Electric Range Section and the Domestic Ap~ pliance Section of National Electrical Manufacturers Association, relative to the causes of increased life of electric heating units, and thereafter adopted a resolution "that the subject of increased life of heating units should be laid on the table, and the executive secretary wns instructed to discuss this matter with the executive secretary of the Domestic Appliance and Electric Range Sections and report back to the next meeting."

The minutes of subsequent meetings of said respondent section do not disclose that this subject was thereafter considered or discussed in 356 FEDERAL TRADE COJ1,IMISSION DECISIONS Findings 36F. T. C.

collaboration with the Electrical Range or Domestic Appliance Section of National Electricall\Ianufacturers Association. PAn. 23. At the meeting of respondent section on October 5, 1937, the following resolution was passed:

IT WAS RESOLVED that the Chairman appoint a Committee to work out suitable procedure with the Statistical Department of NE.MA so that the various mem· bers would be apprised of C(/Jllpanies to whom credit would be no longer extended by any member of the Section.

Under date of October 25, 1937, respondent, George B. Cumming, as executive secretary of respondent section, wrote the following letter to respondent manufacturers, as members of respondent section: I am enclosing copy of the minutes of the October ::ith meeting, together with the comments of Counsel, which are as follows: "On page SO the minutes recite a resolution that the Chnlrruau appoint a Committee to work out a procedure with the Statistical Department so that the various members would be apprised of companies 'to whom credit would be no longer exte~ded by any member of the Section.' ''It Is Improper for the members of the Section to agt·ee that they will not extend credit to any particular person or persons. Such action constitutes a boycott: The resolution In that respect, tberefvre, Is disapproved and should be referred to the Board of Governors.

"The NEMA statistical procedure, as approved by the Board of Governors, does not pre;vide for credit reporting and the action of the Section, therefore, should be referred to the Law Committee for consideration at Its meeting on October 24th and for recommendation to the Board." It is obvious that the minutes do not properly describe the Intention of the Section and this matter will, therefore, be considered under the head of "Unfinished Business'' at the next meeting of the Section. The minutes of the meeting of respondent section of January 11, 1938, state:

It was further resolved that the minutes of Octohet· 5, 1037, be approved, subject to the following correction, so that the mlnutl's would more accurately describe what took place at that meeting. The resolution contained In the Item on Page 86 entltled-"Credlt Information" should be read as follows: "IT WAS RESOLVED that the Chairman appoint a Committee to consider the posslblllty of the exchange of certain credit information along the following lines: "When n member company felt doubtful concerning the credit standing of a customer or prospective customer, he should be able to inquire of the NEMA Sta· tlstlcal Department concerning overdue accounts of such customer with other members of the Section and to obtain in return the total amount of overdue indebtedness and the maximum and minimum period in days which these accounts are overdue."

At this meeting a procedure for providing such credit information was adopted by respondent manufacturers and Geo. ,V, Prentiss & Co. as the members of respondent section. This procedure was developed by and proposed to the section by the Committee on Credit Information ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 357 336. Findings after consultation with and approval by counsel. The counsel had approved this procedure on December 6, 1937. Respondent, George B. Cumming, assisted the Committee on Credit Information in its contact with the National Electrical Manufacturers Association Statistical Department and National Electrical Manufacturers Association counsel, and in the preparation of the proposed procedure. The proposed procedure as set forth in exhibit A attached to the minutes of the meeting of the said respondent section held on January 11, 1938, Was as follows :

PROCEDURE FOR CONDUCT OF ELECTRICAL ALLOY SEC'flON CREDIT EXPERIENCE REPORTING ACTIVITY 1. Any member of the Electrical Alloy Section who wishes to find out If one of Its customers or prMpective customers has an account or accounts of more than GO days outstanding with any other member of the Section may ask for a c11nvass of these other members by sending In Form Telegram #1 to the NE~IA Statistical Department.

2. The NEMA Statistical Department upon receipt of this tele>graphlc req~est Will immediately canvass the other members of the Section, using Form Telegram #2.

3. The other members will then reply at the date and time specified. Any telegram SE>nt In earlier thfln the time specified, or after>r reply hns been made to the original inquirer by the Statistical De~Jartmeut, will not be considered. H no reply Is r('ceived up to tile time answer is made to the original Inquirer, It wlll be considered as Indicating that the member has no account outstanding of more than GO days with the customer in question. 4. The Statistical Department upon receipt of the replies at the stated date and time will Immediately telegraph the Inquirer a tabulation of these replies, using form Telegram #4.

5. Any request for Information or reply to an Inquiry which is not made In the proper approved telegrnphic form will not be considered by the Statistical Department.

November 30, 1937 IILII:AP 23-EA-1-Jan. 11, 1!138 Exhibit A FORM TELEGllAl\1 # 1 Statistical Drpt.

National Electrical Manufacturers Assn.

155 E. 44th St.

New York, N.Y.

KINDLY INQUinE AS TO WIIETIIEll ANY MEl\IBEU OF THE ELECTRICAL ALLOY SECTION lias AN ACCOUNT WITH Tile (Customer's Name) WHICH IS MOUE THAN SIXTY DAYS OUTSTAJ\'DING.

FORM TELEGUAl\I #2-------------------- TO-----------------------------Co.

358 FEDERAL TRADE COMJ\fiSSION DECISIONS Findings 36F.T. 0~ WE IIA VE BEEN ASKED BY A MEMBER OF THE ELECTRICAL ALLOY SECTION TO INQUIRE IF YOU IIA VE AN ACCOUNT WITH (Customer's Name) WHICH IS MORE THAN SIXTY DAYS OUTSTANDING. IF YOU HAVE SUCH AN ACCOUNT ABOUT WHICH THERE IS NO DISPUTE AS TO THE DEET OR THE AMOUNT DUE KINDLY WIRE AT (Time) ON ·{Date) THE AMOUNT INVOLVED AND NUMBER OF DAYS OUTSTANDING. STATISTICAL DEPT.

NEl\IA 23-EA-2- Jan. 11, 1938 Exhibit A FORM TELEGRAll #3 STATISTICAL DEPT.

NATIONAL EI.ECTniCAL MANUFACTURERS ASSN.

155 E. 44th RTREET NEW YOHI\: NY RETEL ___ (Date) _________ WE HAVE AN ACCOUNT WITH __ .: ___ (Customer!·'s Name) ______ ABOUT WIIICII THERE IS NO DISPUTE AS TO THE DEBT OR AMOUNT DUE WHICH IS ___ (Number)--------- DAYS OUTSTANDING. THE Al\IOUNT OWING IS ---{Amount)------· ____________________ co. FORM TELEGRAM #4 RETEL ___ (Date) _________ {Three) COMPANIES IIAVE ACCOUNTS OUTSTANDING WITH ______ (Customer's Name) _____ ABOUT WIIICII TIIEHE IS NO DISPUTE AS TO THE DEBT OR THE AMOUNT DUE. THESE) ACCOUNTS ARE FROM ___ (Number>--------- TO ---{Number) __ _ DAYS OUTSTANDING AND TOTAL ___ (Amount) ______ DOLLARS IN AMOUNT.

STATISTICAL DEPARTMENT NEMA 23-EA-3- Jan. 11, 1938 ExhiUlt A PAn. 24. From the facts found in paragraph 22 and from the other facts hereifl set forth, especially those found in paragraphs 16, 19, and 20, the Commission finds that the respondent manufacturers, acting through and by means of respondent section, did follow courses of action which they agreed upon in the meetings of respondent section before such actions were approved or disapproved by counsel of National Electrical :Manufacturers Association. PAn. 25. The rules of the National Electrical :Manufacturers Association ucfine the duties of an executive secret~ry. Such duties are ELECTRICAL ALLOY SEC. OF NATL. ELEC. MFRS. ASSO. 359 336 Findings the arranging for meetings of the section and acting as recording secretary at such meetings, contacting members, and prospective members, keeping the section informed at section meetings and by bulletins of information of interest to the section, coordinating section activities with National Electrical Manufacturers Association activities and with activities of other associations and agencies, and generally, the handling of such other matters as may be assigned to him by the section.

Respondent George B. Cumming, as executive secretary ofthe said respondent section, has received from time to time instructions that he, as the executive secretary, must record in the minutes all actions and discussions at any section meeting, that he must remain in the meeting room until all members have left the meeting, and that he must attend all section meetings. At all times herein mentioned the said respondent George B. Cumming has complied with these instructions, except when on several occasions illness prevented his attend. ance. Respondent, Georg~ B. Cumming, likewise has acted as the executive secretary of special committees of respondent section. PAR. 26. Th~ said rules also provide, as rule 8 thereof, that: No action talwn by a Division, Section, Group, or Sub-Group, or directions given to an officer or Committee of a Division, Section, Group or Sub-Group, shall be followed unless its legality and conformity with the Constitution, By· Laws and these Organization and Working Hules shall have been apvrovcd by Counsel.

I>An. 27. At a meeting of the respondent section of May 2, 1934, a report of the standing committee relating particulady to the employment of an "Executive secretary" for the respondent se~tion, was :ead, whereupon the section passed a resolution that the matter be allowed to remain in abeyance for the time being.

At a meeting of the respondent section on June 7, 1934, a membet of the standing committee on the subject of the employment of the executive secretary for the section, explaiued the functions of such an official, and respondent, William J. Donald, presented to respondent section the advantages of an executive secretary and- of the services available through the National Electrical Manufaeturers Association for said section, including those of respondent, George B. Cumming, "to assist on supplemental code" under the basic N. R. A. Code for the Electrical Manufacturing Industry.

Respondent, George B. Cumming, visited the meeting of the re~ spondent section on June 26,1935, and, according to the minutes of this meeting, "reviewed his qualifications as a possible supervisor for the industry organization." Thereafter, at said meeting, said respond· ent George n. Cumming was duly elected by the respondent section Findings 3GF. T.C.

as its executive secretary, and was in~tructed that his first duty was to call at the plants of all members "for the purpose of acquainting himself with the companies and personnel." At this meeting, in connection with the employment of respondent, George B. Cumming, as executive secretary of respondent section, it was also decided to create a fund to pay his traveling expenses as the executive secretary. At the meeting of the respondent section on September 20, 1035, a resolution was passed that the National Electrical Manufacturers Association should bill the respondent section as a section for the services of respondent, George B. Cumming, "as executive secretary on the basis of the previous supplementary budget to be apportioned on the same basis that dues of this section are assessed." Also, at this meeting, respondent section considered a supplementary budget for .the services of the respondent, George B. Cumming, as executive secretary of said respondent section, and among the items included in this budget were allowances for telephone and telegram expenses, four trips to Detroit a year and for miscellaneous traveling in the East. From July 1, 1935, to December 1, 1941, the total compensation paid by the said respondent section to the said respondent, George B. Cumming, and his secretary for services rendered to the section as executive secretary was:

Period July 1 to December 31: Amotmt 193~---------------------------------------------- $1,447.20 1036---------------------------------------------- 1,6!1.D3 1037---------------------------------------------- 1,184.07 1938---------------------------------------------- 1,736.02 1939--J------------------------------------------- 1,738.00 1940---------------------------------------------- 000.33 1941---------------------------------------------- 020.00 Total------------------------------------------ 9,581.4~ From July 1, 1935, to December 31, 1941, the total amount paid by the said section to the said respondent, George B. Cumming, for traveling expenses as executive secretary of the said section was: Period July 1 to December 31: Amounr 1935--------------------------------------------4-- $117.50 1936----------------------------------------------- 124.73 1937----------------------------------------------- 112.45 1038-------------------------------~--------------- s~8a 1930------------------------------------------~---- 127.~2 1040----------------------------------------------- 100.20 1941----------------------------------------------- 13283 Total-------------------------------------------- 7G0.5S ELECTRICAL ALLOY SEC. OF NATL. ELEC. 1\IFRS. ASSO. 36! 336 Findings . From July 1, 1935, to December 31, 1941, the amount paid by the said section to the respondent, George B. Cumming, for telephone and telegraph charges incurred as executive secretary of the said section was:

Period July 1 to Dec€mber 31: Amo•mt 1935------------------------------------------------ $18.64 1936_ _________ ~------------------------------------- 94.19 1937------------------------------------------------1938 ________________________________________________ 10.0520.25 1939--------~---------------------------------------1940________________________________________________ 10.259.30 1941--------~--------------------------------------- 91.82 Total-----~--------------------------------------- 254.50 PAR. 28. At the meeting of respondent section on May 22, 1937, the minutes of said meeting disclose that "it was the consensus of the meeting that in view of the absence" of respondent, George B. Cumming, as executive secretary of respondent section, ''and a need for further study of the question of the section program by the members and the executive secretary, no action be taken at this time." The minutes of said respondent section show that at the meetings of January 26, March 23, 1\Iay 21 and 22, and July 20, 1937, and October 5, 1937, respectively, the question of a "section program" was considered. The minutes of said respondent section show that at the meeting of July 20, 1937, the executive secretary reported that he had received no suggestions from the members concerning a "section program."

The consideration of a "sec6on program" resulted in the setting up of a definite program for the engineering committee of the section. PAR. 29. At the meeting of respondent section on January 11, 1938, respondent, George D. Cumming, us executive secretary, reported that he had performed the normal functions of his office; had assisted the Committee on Credit Information in its contact with the National Electrical Manufacturers Association's Statistical Department and the National Electrical Manufacturers Association's counsel, and in its preparation of the proposed procedure, had attended the meeting of the General Engineering Committee held in Washington; had prepared the minutes for approval; and had taken care of their disti·ibu· tion.

PAR. 30. The minutes of respondent section, whenever referred to herein, were, unless otherwise indicated, submitted to, and approved by, counsel for the National Electrical Manufacturers Association. G:!Sil3-43-vol. 36-·26 COM~flSSION DECISIONS362 FEDERAL TRADE Conclusion 36F.T.C.

PAR. 31. The Commission finds that respondent, George D. Cumming, as executive secretary of respondent section, had no personal knowledge of the letters set forth in paragraphs 9, 10, 11, 12, 13, 14, nnd 20, inclusive, hereof, nor of the contents thereof, nor of the activities set forth therein, with the exception that, as shown by paragraph 19 hereof, he knew of a discussion at the August 30, 1938 meeting regarding the return of reels, and that none of said letters referred to was ever discussed nt any section meeting at which he was 'present. PAn. 32. Respondent, William J. Donald, is not the managing director of respondent section, as alleged in the complaint, and has no direct contact with the business and affairs of same, but is the managing director of National Electrical Manufacturers Association. PAn. 33. The Commission finds that the tendency and effect of the combinations, agreements, and understandings hereinbefore mentioned, and the things done thereunder and in pursuance thereto and in furtherance thereof, and the further facts, acts and practices hereinbefore enumerated, have had, and do have, as stipulated by the respondents, the effect of unduly and unlawfully restricting, restraining, hindering, and preventing price competition between and among said respondent manufacturers in the sale of electrical alloy resistance wire in commerce as defined in the Federal Trade Commission Act; of unuuly restricting and restraining trade and such commerce in said products; of eliminating competition; of creating in said respondent manufacturers a monopoly in the sale of said products in said commerce; of placing in respondent manufacturers the power to control and enhance prices; and of unreasonable restraining such commerce in said products.

CONCLUSION The acts nnd practices of the respondent manufacturers and the respondent section, as hereinabove found, are nil to the prejudice of the public, have a dangerous tendency to unduly hinder nnd prevent, and have actually hindered and prevented competition in the sale and distribution of unpatented electrical alloy resistance wire in commerce within the intent and meaning of section 5 of the Federal Trade Commission Act; have a dangerous tendency to create in respondent manufacturers a monopoly in the sale and distribution of said product, in said commerce; and constitute unfair methods of competition in commerce within the intent and meaning of section 5 of the Federal Trade Commission Act.

ELECTRICAL ALLOY SEC. OF N ATL. ELEC. MFRS. ASSO. 363 836 Order ORDER TO CEASE AND DESIST This proceeding having, been:hf!ard by the Federal Trade Commission upon the complaint of the Commission, the answers of the respondents, and a stipulation as to the facts entered into between the respondents herein, and W. T. Kelley, chief counsel for the Commission, which provides, among other things, that the said Commission may proceed upon said statement of facts to make its report stating its findings as to the facts (including inferences which it may draw from said stipulated facts) and its conclusion based thereon and enter its order disposing of the proceeding without the presentation of argument or the filing of briefs, and which waives the filing of a report upon the evidence by the trial examiner; and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That respondent Electrical Alloy Section of National Electrical Manufacturers Association, an unincorporated trade association, and respondent corporations, Alloy Metal Wire Co., Inc., Hoskins Manufacturing Co., Wilbur D. Driver Co., C. 0. J elliff .Manufacturing Corporation, and Driver-Harris Co., together with all of said respondents' officers, representatives, agents, and employees, directly or indirectly or through any corporate or other device, in connection with the offering for sale and distribution in commerce as "commerce" is defined in the Federal Trade Commission Act, of unpatented electrical alloy resistance '\vire of any type or description, do forthwith cease and desist from continuing, entering into, carrying out, cooperating, aiding, or abetting in carrying out, any planned common course of action, agreement, understanding, or combination, express or implied, between and among any two or more of said respondents or between one or more of said respondents and nny others not parties hereto, to do or perform any of the following acts or practices:

1. Fixing, establishing, or maintaining prices, terms, discounts, or conditions of sale for electrical alloy resistance wire, or adhering to or promising to adhere to the prices, terms, discounts, or conditions of sale so fixed.

2. Exchanging, distributing, or relaying between and among themselves or between and among themselves and others competing with nny of the respondent corporations either directly among respondent manufacturers and their competitors or indirectly through respondent section or other common agency, information as to prices, terms, discounts, or conditions of sale of said electrical alloy resistance 364 FEDERAL TRADE CO~Imission DECISIONS Order 36F.T. C.

wire, for the purpose or with the ·effect of restraining competition in the offering for sale or sale of such wire. 3. Fixing, establishing, or maintaining uniform resistance standards or other uniform standards for use in connection with the manufacture of said electrical alloy resistance wire, for the purpose or with the effect of fixing or attempting to fix identical prices at which said electrical alloy resistance wire is soh! or offered for sale by respondent corporations.

4. Submitting uniform bids in connect"ion with the sale or offering for sale of said electrical alloy resistance wire sold or offereu for sale by respondent corporations.

It is further ordered, That the case growing out of the complaint be, and the same hereby is, closed as to respondents, William J. Donald, as managing director of the National Electrical Manufacturers Association, and George D. Cumming, as executive secretary of Electrical Alloy Section of National Electrical Manufacturers Association, but without prejudice to the right of the Commission, should future facts so warrant, to reopen the same and resume trial thereof in accordance with its regular procedure.

It is furrther ordered, That all and each of the respondents, except those against whom the complaint herein has been dismissed by this order, shall within GO days after service upon them of this order, file with the Commtssion a report in writing, setting forth in detail the manner and form in which they have complieu with this order. It is further ordered, That this order be served upon the respondent Electrical Alloy Section of National Electrical Manufacturers Association by service, in accordance with the rules of the Commission, upon William J. Donald, managing director of National Electrical Manufacturers Association, 155 East Forty-fomth Street, New York, N.Y.

~1ASTER ARTIST~' :ASSO., L'\C., ET AL. 365 Syllabus·