Fraering Brokerage Co., Inc

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IN THE MATTER OF FRAERING BROKERAGE COMPANY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUB-SEC. (C) OF SEC. 2 OF AN ACT OF CONGRESS APPROVED OCT. 111, 1914, AS AMENDED BY AN ACT OF CONGRESS APPROVED JUNE 19, 1036 Docket 4823. Complaint, Aug. £8, 194£-Decision, Dec. 5, 1944 Where a corporation engaged principally as a jobber in buying and reselling in its own name and for its own account various canned foods, dried fruit, canned fish and other miscellaneous merchandise, and, to a minor extent, in acting as a broker of such products- Received and accepted, in connection with the interstate purchase of said various products, in its own behalf and for its own account for resale, brokerage fees or allowances and discounts in lieu thereof in substantial amounts from numerous sellers, in many ways, including (1) purchases at prices lower than those at which commodities of like grade and quality were sold by the sellers to other purchasers, (2) the obtaining of the commodities at prices lower than those at which they were sold to other purchasers, by an amount which reflected all, or a part, of the broker· age fees currently being paid by such sellers to brokers for the sale of such com· modi ties in behalf of such sellers, (3) the making of deductions in lieu of brokerage from the Invoices of certain sellers, on payment of such invoices, and (4) the receiv• ing from certain sellers of monthly rebate checks representing their customary brokerage fees:

lleld, That said receipt and acceptance by it of brokerage fees, or allowances and discounts in lieu thereof, under the circumstances above set forth, was in violation of ' subsection (c) of Section 2 of the Clayton Act, as amended. Mr. Edwards. Ragsdale for the Commission.

Mr. Robert A. Ainsworth, Jr., of New Orleans, La., and Mr. William f. Smith, of Washington, D. C., for respondent, COMPLAINT The Federal Trade Commission, having reason to believe that the part)' respondent named in the caption hereof and hereinafter more particular~l)' designated and described, since June 19, 1936, has violated and is now V10"' lating the provisions of subsection (c) of Section 2 of the Clayton Act (U.S.C. Title 15, Sec. 13) as amended by the Robinson-Patman Act, llp"' proved June 19, 1936, hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent, Fracring Drokerage Co., Inc., is a corpo~n· tion, organized and existing under the laws of the State of Louisiana, "1th its principal office and place of business located at 423 South Front Street, New Orleans, La. Ucl'pondent was organized, as stated in its corporate charter, for the purpose of bu)ing and selling merchandise for its own ~c· count, as well a.'! to buy and sell merchandise on a brokerage or com[llls" sion basis for the accounts of others. H.cspondent operates two branch FRAERING BROKERAGE CO., INC. 481 480 Complaint offices and warehouses, one of which is located at Alexandria, La., and the other at Jackson, Miss. . PAn. 2. Respondent is now, and for many years last past, has been engaged in business, principally as a jobber, buying in its own name for resale various canned foods, dried fruit, canned fish and other miscellaneous merchandise, and reselling such products. To a minor extent respondent acts as a broker of canned foods, dried fruits, canned fish and other miscellaneous merchandise.

. PAn. 3. Respondent in the course and conduct of its said business as a Jobber purchases a substantial portion of its requirements of canned foods, dried fruits, canned fish and other miscellaneous merchandise from sellers located in States other than the States in which respondent is located. ~ursuant to respondent's purchase orders and instructions such commodities are caused to be shipped and transported by the respective sellers thereof across State lines to the respondent or to respondent's customers. PAn. 4. Respondent since June 19, 1936, in connection with the purchase of its requirements of canned foods, dried fruits, canned fish and other miscellaneous merchandise in interstate commerce in its own behalf and for its own account for resale from numerous sellers located in States ot~er than the State where respondent is located, has been and is now receiving and accepting from numerous sellers of said canned foods, dried fruits, canned fish and other miscellaneous merchandise, brokerage fees or allowances and discounts, in lieu of brokerage in substantial amounts. . The respondent receives such brokerage fees, discounts and allowances ln lieu thereof in many ways, including the following four specified ways, and others:

1. Dy purchasing canned foods, dried fruits, canned fish and other miscellaneous merchandise from sellers at prices lower than the same sellers sell such commodities and commodities of like grade and quality to other Purchasers. · 2. Dy various methods obtaining such commodities at prices that are lower thap the prices at which such commodities and commodities of like grade and quality arc sold by such sellers to other purchasers, by an a~count which reflects all, or a part, of the brokerage fees currently being Pfa1d by such sellers to brokers for the selling of such commodities in behalf 0 such sellers.

t ~· Dy making deductions in lieu of brokerage from the invoices of ceraln sellers when paying such invoices.

th 4. Dy receiving from certain sellers monthly rebate checks representing e customary brokerage fees of such sellers.

PAn. 5. A representative but incomplete list of sellers who since JW1e 19,1 93(), have sold and delivered canned foods, dried fruits, canned fish and Other miscellaneous merchandise to respondent for its own account, and have allowed, granted, and paid, directly or indirectly! as herei~ab<?ve:hotht out, or othemise brokerage fees or allowances or discounts m heu a ereof on respondeni's purchases for its own account from said sellers is s follows:

C. Lang & Son, Inc., Baltimore, Md. fu 'J"o chmond-C.hase Co., San Jose, Calif. ... he Hills Bros. Co. New York City.

Findings 39 F. T. C.

Taormina Corporation, Donna, Tex.

Bonner Packing Co., Fresno, Calif.

C. H. Musselman Co., Biglerville, Pa.

Dillon Candy Co., Inc., Jacksonville, Fla.

PAR. 6. The receipt and acceptance by the respondent of brokerage fees or allowances and discounts in lieu of brokerage by respondent as set forth above is in violation of subsection (c) of Section 2 of the Clayton Act, as amended.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914 (the Clayton Act), as amended by the Robinson-Patman Act, approved June 19, 1936 (15 U. S. C., Sec. 13), the Federal Trade Commission on August 26, 1942, issued and subsequently served its complaint in this proceeding upon the respondent, Fraering Brokerage Company, Inc., a corporation, charging it with the violation of subsection (c) of Section 2 of said Clayton Act, as amended. After the filing by respondent of its answer to the complaint, the Commission by order entered herein granted respondent's request for permission to withdraw such original answer and to substitute therefor ~n amended answer admitting all of the material allegations of fact set forth 10 the complaint but denying that the acts of respondent set forth in the complaint constitute a violation of the statute in question. The amended an· swer also waived all intervening procedure, including hearings as to the facts,.the filing of briefs, and oral argument before the Commission. Subsequently, the proceeding regularly came on for final hearing before t~e Commission upon the complaint and amended answer, and the Comnns· sion, having duly considered the matter and being now fully advjsed in the premises, makes this its findings as to the facts and its concluswn drawn therefrom.

FINDINGS AS TO Tile FACTS PARAGRAPH 1. The respondent, Fraering Brokerage Co., Inc., is a. corporation, organized and existing under the laws of the State of Louis1anat with its principal office and place of business located at 423 South :Fron Street, New Orleans, La. Ilespondent was organized, as stated in its c~r­ porate charter, for the purpose of buying and selling merchandise for Its 0\\11 account, as well as to buy and sell merchandise on a brokerage or coolmission basis for the accounts of others. Respondent operates two bran~ offices and warehouses, one of which is located at Alexandria, La., and t 0 other at Jackson, 1\IL,;;s.

PAR. 2. Respondent i~ now and for many years last past has been en; gaged in business principally as a jobber, buying in its own name and r :0 its own account various canned foods, dried fruit, canned fish a~d ot 1~­ miscellaneous merchandise, and reselling such products. To a Dllnor 0" FRAERING BROKERAGE CO., INC. 483 480 Order tent respondent acts as a broker of canned foods, dried fruits, canned fish and other miscellaneous merchandise.

PAR. 3. Respondent in the course and conduct of its business as a jobber purchases a substantial portion of its requirements of canned foods, dried fruits, canned fish and other miscellaneous merchandise from sellers located in States of the United States other than those in which respondent is located. Pursuant to respondent's purchase orders and instructions, such commodities are caused to be shipped and transported by the respective sellers thereof across State lines to the respondent or to respondent's customers .

. PAR. 4. Respondent since June 19, 1936,inconnection with the purchase, tn interstate commerce, of canned foods, dried fruits, canned fish and other miscellaneous merchandise in its own behalf and for its own account, for resale, has been and is now receiving and accepting brokerage fees, or allowances and discounts in lieu thereof, in substantial amounts from numerous sellers of such commodities.

The respondent receives such brokerage fees, or discounts and allowances in lieu thereof, in many ways, including the following: 1. By purchasing canned foods, dried fruits, canned fish and other miscellaneous merchandise from sellers at prices lower than those at which such commodities and commodities of like grade and quality are sold by such sellers to other purchasers.

2. By various methods obtaining such commodities at prices lower than ~hose at which such commodities and commodities of like grade and qualtty are sold by such sellers to other purchasers, by an amount which reflects all, or a part, of the brokerage fees currently being paid by such sellers to brokers for the sale of such commodities in behalf of such sellers. 3. By making deductions in lieu of brokerage from the invoices of certain sellers when paying &uch invoices.

4. By receiving from certain sellers monthly rebate checks representing the customary brokerage fees of such sellers.

CONCLUSION The receipt and acceptance by the respondent of brokerage fees, or allowances and discounts in lieu thereof, as set forth above, is in violation of subsection (c) of Section 2 of the Clayton Act, as amended. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission Upon the complaint of the Commission and the amended answer of respondent admitting all of the material allegations of fact in the complaint and waiving all intervening procedure, including hearings as to the facts, the filing of briefs and oral argument before the Commission; and the Conuni.,sion h:living made its findings_a_s to the facts ald its conclu.'li_on that the re1-1pondcnt hnR violated the provtswns of subsection (c) of Section 2 of the Act of Congres." entitled" An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved Order 39 F. T. C.

October 15, 1914 (the Clayton Act), a.s amended by the Robinson-Patman Act, approved June 19, 1936 (15 U.S. C., Sec. 13). It is ordered, That the respondent, Fraering Brokerage Co., Inc., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the purchase of food products or other merchandise in commerce, as 11 commerce" is defined in the Clayton Act, do forthwith cease and desist from: Receiving or accepting from any seller, directly or indirectly, anything of value as brokerage, or any commission, compensation, allowance, or discount in lieu thereof, upon purchases made for respondent's own account.

It is further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with this order.

GLOVER & WILSON 485 Complaint