Garment Box Manufacturers Ass'N

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IN THE l\IATTim OF GARMENT BOX l\IANUF ACTURERS ASSOCIATION, ET AL. COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOT,ATION OI<' SEC. 5 OF AX ACT OF CONGRESS APPROVED SEPT. 2<l, 1014 Docket 4171. Complaint, June 2G, 19.p-Dcci.Hion, Apr. 10, 19.p 'Vhere 13 corporations and 11 other concems, mewbei'S of an llllinc01·porated trade association, engaged in t11e manufacture or assembly, sale, and distribution of garment boxes to garment wholesalers and retailers; constituting for many purchusei'S of such artldes their only rrgular source of supply, and In competition with one another priot• to, and. but for the matters below set forth;

Acting In concert with one anothrr and with and through their said association and seven individuals who were president und directors thel·eof; with intent of eliminating price competition among themselves- ( a) Entered Into and carried out an agreement to fix and maintain uniform prices for garment boxes, and at meetings of their u~sueiation discussed IHH.l agl'l!ed upon such prlc£'8 ;

(b) Adopted and carried out a plan of collectlng lnfonuation with re!;pPCt, among other things, to the qnnntltles of. products ROld by mrmbers nnd selling Jll'icf's tlwrpof, lnduding the JUilllPs of customers und quantities to be sold to euch, null consisting, In part, of duplicate lnvolt•es nnd analyses of daily sales of meu1bPt·s, anti divulged t;;Ueh lnfonnnthm to 1111 the members of. their assodatlou nt open llli'Ptiu~s Ol' supJiliP<l thl' snmt' llj)Oil request; (c) Employed aceonutunts to examine lllll Hll!\it llH'l!thel·s' hooks to detl'l·mlne whetlll'l' uforesull) I"Pports of prlePs, qnautltlt·~. und UIIIIIPS of customers were true, oral to date<·t vlollttlons of ugl'ePmeuts; (1l) A<loptf'd und t·an·Jpd out lhron~h tlll'!r prior "GIIl'llll'llt Dox Ventni'P" ant) later "Gnrrnrnt nux CrPtllt HUI'I'IIll" ('OIIIIJIIttt"t', ll Jllllll of. nllocatlng to eah memht•r a JlCr<·Pntng-e of the ln<lust ry's toto! Rah•s whl!"h, us agreed, was not to be exePetlell, and vlolutlon of whkh l!'llhjt•dt•d mPrnh~>r to }ICilalty of }l:rylng to thp ll:<l"ol'latlou 3 t·Puts for· t•adt hox sold In excess thl'l't'Of, whilt> nu•mher !'Plllll~ bt>low his quota wus l'elmhui'HPcl ut the same rate for uuml•er of hoxPs Holt.l !JI'low such quota; (e) TIPqu lr£'<1 ea<'h llll'mht•r to I!P)Io~it n :snl•sta nt Ia! sum of nJOIII'Y with the 11>1:-io<'illtion as 11 gmli'Uilll't> that he wonlcl nbide by lull•s anti t·p~ulatlons the~·eof, nnd pay d1ws nt the rate or 1 <·rnt for l'll<"h box ~ole! hy him; (f) Colll'l'tt•!l fi'Oill nwmhPI's nnd dl~bm·sell undt>r ~nll plan dues, a!;sPssuwnts, and pt•naltle!l through ufoi'P~nltl t•ommlttePs, OJIPI'Ilt!'cl hy Its )ll'l'tihlent nnd nnot hrr din•ctor all tl'ustf•rs, uni!PI' Its m:lllngl'r's gultl11nce; (g) AgrrPd not to, and refnsPcl, to !':I'll garnJPnt hoxt>s to nny pnn:·hasrr who I.Jou:;:ht from any nss1•mhlf'l' or dt•alt>l' not a nwrnbe1• f,f the association; (h) Allot•ated to CPI'turn mt•mlll'r~ till IPS of hoxt•s to tll"taln lllll'l'IIIHII'rs, with 1l1e understanding that none of tlw other:l ~honltl sdl to those' who~!' pnrdtnst•s werr Ro o llot 1{'d; o ncl (I) PnrchasPd t111• hnslnt>ss cot ~<omc> of tlwir I'Oil1Jll'tltor8 who hac! !'~old gnrmt>nt bOXl'l'l nt lr~oc than till' })I'){'I'S tlx£'11, nncl llHln<'ttl nud rol'l'l'l'd otht>rs sPll!ng at Ie~>s than surh prfcl's, to discontinue the bnsint•ss of selling such I.JoxPs; GARMENT BOX MFRS. ASSOCIATION ET AL. 489 4SS Complaint With result that sale prices on garment boxes since February 1941, uniformly and simultaneously increased in excess of 100 percent, and customers, allocated as aforesaid, were forced thereby to purdJase their requirements from the different respective members:

Held, That such acts and pl'Uctkes, unuer the circumstances set forth, hindered and prevpnted price competition between and an.:·ong said members in the sale of garment boxes in commerce; Illaced in said members the power to control and enhance prices, and created In them a monopoly in the sale of said boxes In commerce; unreasonably rest mined the same; and constituted unfai1· methods of competition In commerce. Before 1lh. J olvn lV. Norwood, trial e.examiner. lllr. Edward L. Srnith for the Commission. Mr. Benjamin S. J(inh, of New York City, for respondents generally with the exception of- Mr. Charles /(1·ajt, of N~w York City, who appeared for llilt-Rite nox Corp.; and J.lfr. Charles Gertler, of Miami lleacll, Fla.~ who appeared for Louis II. Clark.

Complaint Pursuant to the provisions of the Federal Trade Commis::;ion Act and by virtue of the authority vested in it by said act, the Federal Trade Commission, having rrason to believe that Garment llox Manufacturers Asl:iociation; Samuel Small, president, and Danielllellin, Samuel Small, .l\Iorris Bradhoff, Harry Siegel, Bernard N. Jaffe, and Henry Hosen, directors; llilt-Rite llox Corporation; Chic Container Corpolation; Excel Container Corporation; F & F Box Co.; Gates Container Corporation; GPin Corrugated Box Corporation; Independent Container Corporation; UainLow Container Corporation; Small Bros. Container Corporation; Solid Container Corporation; Sp.:ar Box Co., Inc.; State Container Co.; United Box Corporation; York llox & Paper Corporation; Phineas Reel{, trading as lleck Container Co.; J. Holman; Bemanl N. J alle; Max Firsty, trading ns l\1 & F llox Co.; Louis ll. Clark, tm(ling us Interboro Container Co.; Samuel Goldstein, and Abraham Gold::;tein, trading as Merit Container Co.; Henry Uosen 'and 1\Iarvin A. Rosei1, trading as Mutual Fibre Box Co.; Jerome Uosen and Henry Hosen, trading as Quick Service Box Co.; Irving llelsell, trading as Hoyal Corrugated Box Co.; Joseph llarbash and Hose Bar- Lash, trading as Sunshine Papt'r Box Co.; and Samuel L. 1Vallerstein, 1wr<'inaft!'I' referred(l to as respomknt~, have violated the provisions of st•ction 5 of f>ai(lnet and it nppe-aring to the Commil-!sion that a procel'ding hy it in respect thrreof would be in the public interest, hereby i~:sues its complaint, !itating its charges in that rrspect as follov;s: PAnAGR.\rn 1. Uespondent, Garment Box Manufacturers Association, is a voluntary unincorporated as~ociation, whose membership is 5:!8713-43-vol. a0-34 490 FEDERAL TRA.DE · COMl\USSION DECISIONS Complaint 36F.T.C.

composed of, and at all times since its organization, has been composed of, the respondents namm in paragraphs 2 and 3 hereof, sometimes hereinafter referred to as respondent members, which said respondents are engaged in the manufacture and sale of garment boxes to wholesalers and retailers of garments who use such garment boxes in packaging and delivering garments when sold by them. It was organized in June 1940 or thereabouts, since which time its affairs have been managed by respondent, Samuel L Wallerstein, and by its officers and directors, who, with said respondent, Samuel L. Wallerstein, in such management assisted the other-respondents in entering into and carrying out the agreement, combination, understanding, and conspiracy described in paragraph 6 hereof, for which reason said Samuel L. Wallerstein and the officers of said respondent, Garment Box Manufacturers Association, at·e made respondents herein. Such officers and directors of said respondent, Garment Box Manufacturers Association, are now, and at all times since its organization have been, respondents, Samuel Small, president, and Daniel Bellin, Samuel Small, Morris Dradhoff, Harry Siegel, Bernard N. Jaffe and Henry Rosen, directors. PAn. 2. The following-named respondent members, are corpomtions, with their principal places of business in New York City, N.Y., and are organized under the laws of the State of New York. Names and addresses of respondents:

Bilt-Rite Box Corporation, 242 West Forty-first Street. Chic Container Corporation, 129 'West Twenty-seventh Street. Excel Container Corporation, 527 \Vest Thirty-fifth Street. F & F Box Co., 514 \Vest Thirty-sixth Street. Gates Container Corporation, 152 \Vest Twenty-fifth Street. Gem Corrugated Box Corporation, 118 \Vest Twenty-second Street.

Independent Container Corporation, 527 \Vest Thirty-fifth Street. Rainbow Container Corporation, 132 \Vest Twenty-first Street. Small Bros. Container Corporation, 498 Seventh Avenue. Solid Container Corporation, 27 \Vest Twenty-fourth Street. Spear Box Company, Inc., 270 Eleventh Avenue. State Container Co., 449 \Vest Thirtieth Street. United Box Corporation, 37 \Vest Twentieth Street. York Box & Paper Corporation, ()30 \Vest Forty-fourth Street. PAn. 3. Respondent member, Phineas Beck, has his principal place of business at 152 \Vest Twenty-fifth Street, New York City, and now and all times her£>inafter mentioned hus operated under the trade name, Deck Container Co. RcsponJcnt member, J. Holman, has his principal place of business at 314 \Vest Thirty-sixth Street, GARME...~T BOX MFRS. Association ET AL. 491 488 .. Complaint New York City. Respondent member, J.-louis H. Clark, has his principal place of business at 121 1Vest Twentieth Street, New York City, :and now and at all times hereinafter mentioned has operated under the trade name, Interboro Container Co. Respondent member, Bernard ~t Jaffe, has his principal place of business at 114 West Twentyseventh Street, New York City. Respondent member, l\Iax Firsty, has his principal place of business at 433 \Vest Thirty-fifth Street, New York City, and at all times hereinafter _mentioned has operated under the trade name, M & F Box Co. Respondent members, Samuel Gold~iein and Abraham Goldstein, are- partners, and at all times hereinafter mentioned have operated under the name, Merit Container Co., with their principal place of business at 345 1Vest Thirty-sixth Street, New York City. Respondent members, Henry Rosen and Marvin A. Rosen, are partners, and at all times hereinafter mentioned have operated under the name, Mutual Fibre Box Co., with their principal place of business at 1'400 Broadway, New York City. Respondent members, Jerome Rosen and Henry Rosen, are partners, and at all times hereinafter mentioned have traded under the name, Quick Service Box Co., with their principal place of business locatedat 421 1Ve:>t Thirty-ninth Street, New York City.· Respondent member, Irving Ilelsell, has his principal place of business at 22 West Twentyfirst Street, New York City, and now and at all times hereinafter mentioned has operated under the name, Royal Corrugated Box Co. Respondent members, Joseph Barbash and Rose Barbash, have their principal place of business at 503 1Vest Forty-third Street, New York City, and now and at all times hereinafter mentioned have operated under the trade name, Sunshine Paper Box Co. l)An. 4. Respondent members named in paragrnphs 2 and 3 hereof are now, nnd at all times hereinafter mentioned have been, engaged in the assembling and sale of garment boxes. In the course and conduct of their businesses all of the said respondents for more than 2 years last past have caused and still cause such garment boxes, when sold by them, to be transported in commerce from their respective places of business to, into, and through the various States of the United States and the District of Columbia to the purchasers thereof, some in the State of New York and others in other States of the United States and in the District of Columbia. Such purchasers use such garment boxes, so sold to them by said respondents, in packaging and delivering garments sold by such purchasers to their vendees located not only in the States in which such purchasers have their places of business but in l"arious other States of the United States and in the District of Columbia. Such garment boxes are necessa~y for use in the delivery of garments sold by them to their Complaint 30 F. T. C. vendees. The amount of garment boxes assembled and sold by the respondents named in paragraphs 2 and 3 hereof constitutes, and at all times since 1940 has constituted, a substantial part of all of the garment boxes assembled and sold in the United States and many purchasers of garment boxes have no regular source of supply thereof excepting from the said respondents and since the organization of the said respondent, Garment Dox Manufacturers Association, have had no regular source of supply of garment boxes excepting from said respondents. · PAR. 5. The respond~nts named in paragraphs 2 and 3 hereof were, prior to Hl40, in competition with one another as to price in the sale of garment boxes between and among the various States of the United States, the Territories thereof, and in the District of Columbia, and, but for the combination, agreement, understanding, and conspiracy hereinafter described, said re~pondents would have been at all times since 1940 and would now be in such competition with one another. PAR. G. In July 1940, or thereabouts, the respondents named in paragraphs 2 and 3 hereof for the purpose of eliminating price com-= petition among themselves, entered into, through, and by respondent, Garment Dox l\fanufacturers Association, and have since carried out and are still carrying out through and by respondent, Garment Box Manufacturers Association, an agreement, combination, understanding, and conspiracy among themselves to fix and maintain, and by which they have fixed and maintained and still fix and maintain, uniform prices to be, and which have been and are still being, exacted by them from their purchai"crs of garment boxes in commerce between and among the variow; States of th(> United States and in the District of Columbia. Pursuant to and for the purpose of carrying out the aforesaid ngre('ment, combination, ml<l('rstnnding, ltlHl conspiracy, tho said re!>pondents have concertellly ancl cooperatively done and performed, among other things, the following method~, acts and practices: (a) By agrerment, among themselves, have fixed1l and maintained, and still fix and maintain, uniform prices for garment boxes sold by them and by each of them;

(b) At meetings of respomknt, Garment Dox Manufacturers Association, have dil'cu~sed nn1l still discu~s the prices at which the members thereof should sell garment hoxPs, and at such meetings arrive at ancl agree upon prices at which the members of said Association should sell such gar·ment Loxes;

(c) Through said respondent, Garment Box Manufacturers Association, have adopted and carried out nnd nro still carrying out n plan of collecting and disseminating information with respect, among other things, to the quantities of, and prices at which the members of said GARMENT BOX MFRS. ASSOCIATION ET AL. 493 488\ . Complaint Association should sell and do sell their products, including the names of customers to whom such respondents should sell, and the quantities to be sold to each of such customers. A part of such information is in the form of duplicate invoices and daily sales analyses of respondent members, which such information is divulged to all of the members of said respondent Association to open meetings or supplied by respondent Association to its members upon their request;

(d) Through the respondent Association, have employed and still employ accountants to examine and. audit their_ books for the purpose of determining whether the reports furnished by the members thereof as set out in subsection (c) hereof are true with respect to prices, quantities, and names of customers sold, and for the further purpose of detecting any violations of the agreements set out in subs~actions (a), (b), (c), (e), (f), (g), (h),and (i) hereof; (e) Through the respondent Association, have adopted, and are carrying out, originally by means of a committee of respondent Assoeiation, known as Garment Dox Joint Venture, and since the dissolution of that committee, by means of another committee of respondent As::;ociation, known as Garment Dox Credit llut·eau, a plan of allocating to each member of respon<lent Association 11 percentage or quota Qf the indu~try's total sales which they have agree<l must not be exceeded by any member, which ag1·ecment, if violated by a member, ~:mbjects him to the penalty of paying to the respondent Association 3 cents for each box sol<l in excess of his quota, the member or members ~selling below his or their quetas being reimbursed at the same rate for the numbet· of boxes sold by him or them below his or their quota; (f) Hiive agreed to r1'quire nn<l pursuant to such agreement have required each memlx>r and new member of the respondent Association to deposit a substantial sum of money with the respondent Association ns a J,ruarantee that the said memLl'r or new member will abide by the rules and regulations of the respondent Association, and pay <lues at the rate of 1 cent for each Lox sold by said member; (g) Have collt'ct<>d chw'l, assets~ments, and penalties from and disbursr<l to mc1ubers under said plan set forth in subparagraph (e) herein through sai<l committee of respondent Association known as Garment Box Joint Vrnture nnd GurmPnt Box Credit Bureau, operated Ly re~pondents Samurl Small and Daniel J. Bellin as trustees under the gui1la11C'C and direction of respondent 'VallerstPin; (h) Haw a:,rre£'1l not to srll garment boxes, anu pursuant to such agr ment, have refused to sell garment boxes to any purchaser or user ther<'of who buys or has bought garment boxes from any assembler or (l£'aler thereof not a member of re::pon<lent Association: 494 FEDERAL TRADE COM:MISSION DECISIONS Findings 36F. T. C_ ( i) Have allotted to ~certain of respondent members to the exclusion of all of the other respondent members, sales to certain purchasers of garment boxes, with the agreement and understanding among themselves that none of the other respondent members shall sell garment boxes to purchasers and prosp~ctive purchasers whose purchases have· been so allotted to the particular respondent members, to the exclusion of the other respondent members; · . (j) Have purchased the business of some of their competitors who have sold garment boxes at less than the prices fixed as described herein, and have induced and coerced others selling at less than the· prices so fixed to discontinue the business of selling garment boxes. PAn. 7. As a result ofthe said agreement, combination, understanding, and conspiracy and the methods, acts, and practices engaged in by respondents pursuant thereto, as hereinbefore set forth, the sales prices on garment boxes since February 1941, uniformly and simultaneously increased in excess of 100 percent and customers of the respondent members are allocated among the various members of the respondent Association and are unable to purchase or obtain price quotations except from members of respondent Association from whom they have been making purchases in the past and said customers are thus forced to purchase their requirements of garment boxes from said respective members, as. there is no other source of supply. PAn. 8. The acts and practices of the respondents as herein alleged are all to the prejudice of the public; have a dangerous tendency toand have actually hindered and prevented price competition between and among respondents in the sale of garment boxes in commerce within the intent and meaning of the Federal Trade Commission Act;: have placed in respondents the power to control and enhance prices; have created in the respondents a monopoly in the sale of garment boxes in such commerce; have unreasonably restrained such commerce in garment boxes, and constitute unfair methods of competition in commerce within the intent nnd meanin~ of section 5 of the Federal Trade Commission Act.

llEI'OnT, FINDINOs .AS TO 'I'IIE FACTs, .AND OnnER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on June 2G, 1942, issued and subsequently served its complaint in this proceeding upon the respondents, Garment Box 1\fanufacturers Association; Samuel Small, as president, and Danielllellin, Samuel Small, :Morris Bmdhoff, Harry Siegel, Bernard N. Jaffe, and Henry Rosen, as directors of respondent, Garment Box Manufacturers Association; Dilt-Rite Bo::t Corporation, GARMENT BOX MFRS. ASSOCIATION ET A.L. · 495 488 Findings Chic Container Corporation, Excel Container Corporation, F & F Box Co., Gates Container Corporation, Gem Corrugated Box Corporation, Independent Container Corporation, Rainbow Container Corporation, Small Bros. Container Corporation, Solid Container Corporation, Spear Box Co., Inc., State Container Co., United Box Corporation, York Box and Paper Corporation, Phineas Beck, trading as Deck Container Co., J. Holman, Bernard N. Jaffe, Max Firsty, trading as M & F Box Co., Louis ·H. Clark, traaing as Interboro Container Co., Samuel Goldstein and Abraham Goldstein, trading as Merit Container Co., Henry Rosen and Marvin A. Rosen, trading as Mutual Fibre Box Co., Jerome Rosen and Henry Rosen, trading as Quick Service Box Co., Irving Helsell, trading as Royal Corrugated Box Co., and Joseph Darbash and Rose Barbash, trading as Sunshine Paper Box Co., members; ~md Samuel L. Wallerstein, charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' answers thereto, the Commission, by order entered herein, granted the motion of all of the respondents except State Container Co. for permission to withdraw said answers and to substitute therefor answers admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which substitute answers were duly filed in the office of the Commission. A heari11g was held in this matter on November Hi, 1942, at which time testimony and other evidence were introduced in support o£ and ·in opposition to the allegations of complaint as to respondent State Container Co. befor~ a trial examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly record<'d and filed in the office of the Commission. Thereafter, this proceeding r('gularly came on for final hearing before the Commission on said complaint, substitute answers, testimony, and other evidence, and report of the trial examiner upon the evidence (the filing of briefs having been waived and oral argument not having been requested); and 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.

FINDINGS AS TO Tile FACTS PARAORAPII 1. Respondent, Garment Box Manufacturers .Assodation, hereinafter referred to as "respondent Association," is a voluntary unincorporated trade association, which was organized on or 496 FEDERAL TRADE COMl\IISSION DECISIONS Findings 36F.T.C.

about June 1940. The membership of said respondent Association, has at aU times since its organization, been composed of the respondents hereinafter named, with the exception of State Container Co., who are hereinafter referred to as "respondent members." Said respondent members are engaged in the manufacture and sale of garment boxes to wholesalers and retailers of garments, who use such garment boxes in packaging and delivering garments when sold by them. Since the time of its organization, the respondent Association, has been managed by respondent, Samuel L. 'Vallerstein, and by its officers and directors, who, with said respondent, Samuel L. Wallerstein, in such management assisted the other respondents in entering into and carrying out the acts and practices hereinafter described. Such officers and directors of said respondent since its organization have been respondents, Samuel Small, president, and Daniel Bellin, Samuel Small, Morris Dradhoff, Harry Siegel, Bernard N. J after, and Henry nosen, directors.

PAn. 2. The following-named respondent members are corporations organized under the laws of the State of New York, with their principal places of business in the city of New York: Names and rulJresses of respondents:

Dilt-Rite Box Corporation, 2i2 'Vest Forty-first Street. Chic Container Corporation, 129 West Twenty-seventh Street. Excel Container Corporation, 527 'Vest Thirty-fifth Street. F & F Box Co., 514 West Thirty-sixth Street. Gates Container Corporation, 152 W'est Twenty-fifth Street. Gem CorrugatP£1 Box Corporation, 118 'Vest Twenty-second St.rf'et.

Independf'nt Container Corporation, 527 '\\•st Thirty-fifth Stref't.

Rainbow Container Corporation, 132 'Vest Twenty-first Street. Small Dros. Container Corporation, 498 Seventh Avenue. Solid Container Corporation, 27 West Twrnty-fourth Stred. Spear Box Co., Inc., 270 Eleventh A venue. United Box Corporation, 37 'Vest Twentieth Street. York Box & Paper Corporation~ 630 'Vest Forty-fourth Stn•Pt. In addition to the above-named corporate respondents, the following individuals and copartnerships were al~o respondent mrmbers of the Garment Dox Manufacturers Association: Phineas Drck, an individual, trading as Deck Container Co.! with his principal place of business nt 152 'Vest Twenty-fifth Street, New York, N.Y.; .1. Holman, an individual, with his principal place of business at 314 West Thirtysixth Street, New York, N.Y.; Louis H. Clark, nn individual, trading GARMENT BOX MFRS. ASSOCIATION ET AL. 497 488 Findings as Interboro Container Co., with his principal place of business at 121 West Twentieth· Street, New York, N.Y.; Bernard N. Jaffe, an individual, with his principal place of business at 114 West Twentyseventh Street, New York, N.Y.; Max }i'irsty, an individual, trading as M & F Box Co., with his principal place of business at 433 West Thirtyfifth Street, New York, N.Y.; Samuel Goldstein and Abraham Goldstein, copartners, trading as Merit Container Co., with their principal place of business at 345 \Vest Thirty-sixth Street, New York, N. Y.; Henry Rosen and Marvin A. Rosen, copartners, trading as Mutual Fibre Box Co., with their principal place of business at 1400 Broadway, New York, N. Y.; ,Jerome Rosen and Henry Rosen, copartners, trading as Quick Service Box Co., with their principal place of business at 421 west Thirty-ninth Street, New York, N. Y.; Irving Helsell, an individual, trading as Royal Corrugated Box Co., with his principal place of business at 22 \Vest Twenty-first Street, New York, N. Y.; and Joseph Barbash and Rose Barbash, copartners, trading as Sunshine Paper Box Co., with their principal place of business at 503 \Vest Forty-third Street, New York, N.Y.

The State Container Co. is a corporation which was organized on or about May 1,1941, and during all the times of its corporate existence it was not a member of the Garment Box Manufacturers .Association and did not participate in any of the~ acts and practices hereinafrer described.

PAR. 3. All of said respondent members are now, and at all times hereinafter mentioned have been, engaged in the assembly and sale of garment boxes. In the course and conduct of their retipective busillesses, all of said respondents for several years last past have caused, and still cause, such garment boxes when sold by them to be transported in commerce fmm their respective places of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. Such purchasers use such garment boxes so sold to them by said respondents in packaging and delivering garments so1tl by such purchasers to th<'ir vendee:>s located not only in the States in which such pmchasers have their places of business but in various other States of the United States ~ml in the District of Columbia. Such garment boxes are nec<'ssary for use in the delivery of garments sold by them to their vendees. The amount of garment boxes assembled aiel sold by the respondents at all times since 1940 has constitute,} a substantial part of all the garment boxes assembled and sold in the United Stat<'s, and many purchasers of garment boxes have no rl:'gular source of supply thereof except from the said rE:>spond<'nts and, sim·e the organization of said respondent Garment 498 FEDERAL 'TRADE COMMISSION DECISIONS Findings 36F.T.C.

Box Manufacturers Association, have hacl no regular source of supply of garment boxes excepting from said respondents. PAR. 4. All of said respondent members were, prior to 1940, in competition with one another as to price in the sale of garment boxes between and among the various States of the United States and the District of Columbia and, but for the combination, agreement, understanding, and conspiracy hereinafter described, said respondents would have been at all times since 1940, and would now, be in such competition with one another.

PAR. 5. In July 1940 or thereabouts the respondent members, for the purpose of eliminating price competition among. themselves, entered into, through, and by respondent, Garment Box :Manufacturers Association, and have since carried out and are still carrying out, through and by respondent, Garment Box Manufacturers Association, an agreement, combination, understanding, and conspiracy among themselves to fix and maintain, and by which they have fixed and maintained and still fix and maintain, uniform prices to be, and which have been and are still being, exacted by them from their purchasers of garment boxes in commerce between and among the various States of the United States and in the District of Columbia. Pursuant to and for the purpose of carrying out the aforesaid agreement, combination, understanding, and conspiracy, the said respondents have concertedly and cooperatively done and performed, among other things, the following methods, acts, and practices: (a) By agreement among themselves have fixed and maintained, and still fix and maintain, uniform prices for garment boxes sold by them and by each of them.

(b) At meetings of respondrnt, Garment Box Manufacturers Association, have discussed, and still discuss, the prices at which the members thereof should sell garment boxes, and at such meetings arrive at and agree upon prices at which the members of said Association should sell such garment boxes.

(c) Through said respondent, Garment Box Manufacturers Association, have adopted and carried out, and are still carrying out, a plan ol collecting and disseminating information with respect, among other things, to the quantities of, and prices at which, the members of said Association should sell and do sell their products, including the names of customers to whom such respondents should sell, and the quantities to be sold to £'ach of such customers. A part of such information is in the form of duplicate invoices and daily sales analyses of respondent members, which such information is divulged to all of the members of said respond<'nt Association at open GARMEKT BOX MFRS. ASSOCIATION ET AL. 4!)!) 488 Findings meetings or supplied by respondent, Association, to its members upon their request.

(d) Through the respondent, Association, have employed, and still -employ, accountants to examine and audit their books for the purpose o0f determining whether the reports furnished by the members thereof in connection with their plan of collecting and disseminating information are true with respect to prices, quantities, and names of -customers sold and for the further purpose of detecting any violations of any of the agreement described herein. (e) Through the respondent, Association, have adopted, and are carrying out, originally by means of a committee of respondent, Association, known as "Garment Box Joint Venture," and since the dissolution of. that committee, by means of another committee of respondent, Association, known as "Garment Box Credit Bureau," a plan of allocating to each member of respondent, Association, a percentage or quota of the industry's total sales which they have agreed must not be exceeded by any member, which agreement if violated by a member subjects him to the penalty of paying to the respondent, Association, 3 cents for each box sold in excess of his quota, the member or members selling below his or their quotas being reimbursed at the same rate for the number of boxes sold by him or them below his ()r their quota.

(f) Have agreed to require, and pursuant to such agreement have required, each member and new member of the respondent, Association, to deposit a substantial sum of money with the respondent, Association, as a guarantee that the said member or new member will abide by the rules and regulations of the respondent, Association, and pay dues at the rate of 1 cent for each box sold by said member. (g) Have collected dues, assessments, and penalties from, and disbursed to, m~mbers under said plan hereinabove set forth through said committee of respondent, Association, known as Garment Box Joint Venture and Garment llox Credit Bureau operated by respondents, Samuel Small and Daniel Bellin, as trustees under the guidance and direction of the respondent "Wallerstein. (h) Have agreed not to sell garment boxes, and pursuant to such agreement have refused to sell garment boxes, to any purchaser or user thereof who buys or has bought garment boxes from any as- . sembler or dealer thereof not a member of respondent, Association. ( i) Have allotted to certain of respondent members, to the exclusion of all of the other respondent members, sales to certain purchas- (;rs of garment boxes, with the agreement and understanding among themselves that none of the other respondent members shall sell garment boxes to purchasers and prospective purchasers whose purchases Ordel· 36 F. '1'. C. have been so allotted to the particular respondent members, to th~ exclusion of the other respondent. members. (j) Have purchased the business of tome of theit· competitors who have sold garment boxes at less thun the prices fixed as described herein, and have induced and coerced others selling at Jess than the prices so fixell, to discontinue the business of selling garment boxes. PAR. 6. As a result of the said agreement, combination, understanding, and conspiracy and the methods, acts, and practices engaged in by respondents pursuant thereto us hereinbefore set forth, the sales prices on garment boxes since February 1941, uniformly and simultaneously increased in excess of 100 percent, and customers of the respondent members are allocated among the various members of the respondent, Association, and are unable to purchase or obtain price quotations except from members of responllent, Association, from whom they have been making purchases in the past and said customers are thus forced to purchase their requirements of garment boxes from said respt>ctive members, as there is no other source of supply.

COXCI.USION The acts and practices of the respondents as herein found are all to the prejudice of the public; have a dangerous tPJH1ency to and have actually hindel'<'U and prewnte1l price competition between and among ref'pondents in the sale of garment boxes in commerce within the intent and meaning of the Federal Trade Commission Act; have placed in responuPnts the power to control and enhance prices: have created in the re~poudents a monopoly in the sale of garment boxes in such commerce; have unreasonably restrained such commerce in garment boxes; and constitute unfair methods of competition in commerce within the intent and meaning of section 5 of the Federal Trade Commission Act.

ORDER TO CE.\SE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the> Commission and the answers of all the respon<l<•nts Pxcrpt State Container Co., in which answrrs said respondents admit all the material allf'gations of f:wt srt forth in said complaint and waive all i11ter\'ening proc<•dure ancl further hearings as to sui1l facts, and abo upon tr~timony and other evi<ll'nce in support of the ul1<·gations of !'!ai<l complaint and in oppos;ition thereto as to res;ponclent, State Container Co .• takf'n before a trial examiner of the Commission therrtofore duly designated by it, nnd report of the trial f'Xamim•r upon th<' HidPncr (the filing- of bripfs having been GARMENT BOX MFRS. ASSOCIAT.ION ET AL. 501 waived and oral argument not having been requested); 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 ·i8 ordered, That the respondents, Garment Box .Manufacturers .l\.association, an unincorporated association, llilt-Itite Box Corporation, a corporation, Chic Container Corporation, a corporation, Excel Container Corporation, a rorporation, F & F Box Co., a corporation, Gates Container Corporation, a corporation, Gem Corrugated Box Corporation, a corporation, Independent Container Corporation, a corporation, Rainbow Container Corporation, a corporation, Small Bros. Container Corporation, a corporation, Solid Container Corporation, a corporation, Spear Box Co., Inc., a corporation, United Box Corporation, a corporation, York Box & Paper Corporation, a corporation, and their respective officers, representatives, agents, and employees; respondents, Phineas Deck, an individual, trading as Beck Container Co., J. Holman, nn individual, Bernard N. Jaffe, an individual, Max Firsty, an individual, trading as M & F Box Co., Louis H. Clark, an individual, trading as Interboro Container Co., Samuel Goldstein and Abraham Goldstein; individuals, trading us .Merit Container Co., Henry Rosen nnd Marvin A. Rosen, individuals, trading as Mutual Fibre Box Co., Jerome Rosen and Henry Uost'n, individuals, trading as Quick Service Box Co., Irving Ilelsell, an individual, trading as Royal Corrugated Box Co., Joseph Barbash and Rose Barbash, individuals, trading as Sunshine Paper Box Co., Samuel L. 'Valierstein, an individual, and their respective representatives, agents, and employees; and Samuel Small, individually, and as president and director, and respondents, Daniel Dellin, Morris Dradhoff, Harry Siegel, BC>rnnrd N. Jaffe, and Henry Rosen, individually, and as directors, of Garment Box. Manufacturers Association, 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 garment boxes and other similar merchandise in commerce as "commerce'' is defined in the Federal Trade Commission Act, do forth with cease and desist from entering into, continuing, cooperating in, or carrying out any planned common course of action, agreement, understanding, combination, or conspiracy between and among nny two, or more of said respondents or between any one or more of F-aid respondents and others not parties hereto to do or perform any of the following acts or practices:

1. Establishing, fixing, or maintaining prices for garment boxes or adhering to or promising to adhere U> prices HO fixed. Order 36F. T. C.

2. Holding or participating in any meeting, discussion, or exchange of information among themselves or under tho auspices of respondent, Garment Dox Manufacturers Association, or any other medium or agency concerning proposed or future prices at which respondents should sell garment boxes or other similar merchandise. 3. Exchanging, distributing, or relaying among respondent members or any of them or through respondent, Garment Dox Manufacturers Association, or through any other medium or central agency duplicate invoices, daily sales analyses, or other information showing current or future prices, or information showing the current or future prices of any particular respondent.

4. Exchanging, distributing, or relaying among respondent members or any of them or through respondent, Garment Box Manufacturers Association, or through any other medium or central agency duplicate invoices, daily sales analyses, or other information which discloses to competing respondent members data on prices charged and quantities sold on individual sales to named customers, or information as to quantities of garment boxes Rold. by any rpspond.ent member to any particular customer or group of customers. 5. Fixing, determining, designating, or maintaining sales quotas or allocations of business among respondent members or formulating, promoting, placing in effect, or participating in any plan or policy to allocate or divide among respondent members or any of them the total business of the industry or any part thereof or any lot or piece of business or the business of any purchaser or purchasers. 6. Formulating, promoting, placing in effect, or participating in nny plan or policy which provides for a penalty for exceeding any sales quota established by such plan or policy or for reimburseml'nt for failing to sell such quota.

7. Adhering to or promising to adhd·e to any allocation or division of any Jot or piece of business or the husine~s of any g-iven purchas<'r or purchasers hy refusing to sell such purchasers or prospective purchasrrs so allotted to particular respondent members. 8. Coercing, inducing, or persuading, or attempting to coerce, induce, or persuade, respond<'nt members to adhere to or maintain prir<'S or sales quotas among respondent members by maintaining nny agency, committee, or burc•au ns a disciplinary or punitive agency to enforce the provisions of any plan or policy with reference to the allocution of business among respondent members, or to collect or enforce payment of any assessment or penalty to cover violation of quota. sales provided by such plun or policy.

9. Coercing, inducing, or persuading, or attempting to coerce, induce, or persuade, respondent members to adhere to or maintain prices or GARMENT BOX MFRS. ASSOCI.ATION ET AL. 503 488 Order sales quotas among respondent members by requiring the deposit of sums of money by respondent members to guarantee or assure the maintenance by such respondent members of any quota or allocation of business established by any plan or policy adopted by the respondent, Association, or the respondent members or by providing for the payment of a penalty by any respondent member who might exceed such quota or allocation of business so established. 10. Coerciug, inducing, or persuading, or attempting to coerce, induce, or persuade, any competitor of respondent members who does not maintain the prices fixed by said respondent members to discontinue the business of selling garment boxes. 11. Refusing to sell or agreeing not to f*lll garment boxes to any purchaser or user thereof who buys or has bought garment boxes from any assembler, dealer, or di~tributor who is not a member of respondent, Association.

12. Authorizing or permitting the examination of the books and records of the respondent members by any agent of the respondent, Garment llox Manufacturers Association, or by any agent of the respondents or any of them to determine or check the quantity of garment boxes sold by any respondent member, the prices charged by such respondent member, and the extent to which any respondent member has or has not sold garment boxes within the quotas established or the extent to which such respondent member has or has not complied with any plan for allocation of sales.

13. Formulating or putting into op<>ration any other practice or plan which has the purpose of or the tendency or effect of fixing prices for garment boxes, or otherwise restricting, restraining, or eliminating competition in the sale and distribution of garment boxes. 14. Employing or utilizing respondent, Garment Dox Manufacturers Association, or any other medium or central agency as an instrument or vehicle or aid in performing or doing any of the acts and Practices prohibited by this order.

It is further ordered, That the complaint herein be, and it hereby is, dismiss<>d as to State Container Co., a corporation. It i., further ordcrrJ, That the rc~pondt>nts shall, within 60 days after S<>rvice upon th<>m of this order, file with the Commis~ion a report in writing, setting forth in detail the manner an<l form in which they have complied with this oruer.