Krengel Manufacturing Co., Inc., Abraham L. Gershon, George Feldman, and Sadye Gershon

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IN THE MATTER OF KRENGEL MANUFACTURING CO., INC., ABRAHAiv1 L. GER-· SHON, GEORGE FELDMAN, AND SADYE GERSHON COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (a) OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914, AS AMENDED BY AN ACT APPROVED JUNE 19, 1936 Docket 5516. Compla:int, No-v. 20, 191/i'-Decision, July 15, 1949 "Where a corporation, and its three principal stockholders who were respectively its president, vice president, and secretary-treasurer, engaged in the competitive interstate sale and distribution of rubber stamps to dealers-generally retail stationers-and directly to consumers, including principally large firms such as oil companies, industrial corporations, telephone companies, department stores, railroad companies, and insurance companies- Discriminated in price between different consumer purchasers of their products of like· grade and quality by selling such products to some at higher I}rices than to others, not, it appeared, in good faith to meet an equally low price of' a competitor nor on account of differences in cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such products were sold or delivered ;

With the result that a competitor lost one Very substantial account to them due to his inability to meet their low, discriminaton' price, which did not permit the manufacture and sale of said products profitably; and that the effect of such discriminations bad been and might be substantially to lessen, destroy, and prevent competition between them and their competitors in the sale and distribution in commerce of the products concerned: Held, That such acts and practices, under the circumstances set forth, violated se~tion 2 (a) of the Clayton Act as amended. Before Mr. Everett F. H ayoraft, trial examiner. Mr. Edwards. Ragsdale and 11!7'. Oeoil G. Miles for the Commission. Mr. A. Aaron Raphael, of New York City, for respondents. Complaint The Federal Trade Commission, having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly designated and described, since June 19, 1936, have been and are now violating the provisions of subsection (a) of section 2 of the Clayton Act (U.S. C. title 15, sec. 13) as amended by the Robinson- Patman Act, approved J nne 19, 1936, hereby issues its complaint stating its charges with respect thereto as follows: PARAGRAPH 1. Respondent, J{rengel :Manufacturing Co., Inc., is a corporation organized and existing under the laws of the State o£ New York with its principal office and place of business located at 227 Fulton Street, New York, N. Y. Respondent corporation is engaged in Complaint 46 F. T. C. the business or selling and distributing rubber stamps. The products distributed by respondents are sold, principally to dealers, generally retail stationers, and also directly to consumers. Respondent's sales or its rubber stamps directly to consumers are made principally to large firms such as oil companies, industrial corporations, telephone companies, department stores, railroad companies, and insurance companies. The complaint herein is directed solely to respondent's sales -or rubber stamps to consumers.

PAR. 2. Respondent, Abraham L. Gershon, is an individual residing in New York, N. Y., and is one or the principal stockholders in said respondent corporation. He is now president or the ICrengel Manufacturing Co., Inc., and has been an officer or said corporation since -some time after J nne 19, 1936. Arter becoming an officer and at the present time and for some time past as president, respondent, Abraham L. Gershon, together with his wife, respondent, Sadye Gershon, and his son-in-law, respondent, George Feldman, has exercised and still ·exercises a substantial degree or authority and control over the business conducted by said corporation, including the direction or its distribution and sales policies.

PAR. 3. Respondent, George Feldman, is an individual residing in New York, N. Y., and is one or the principal stockholders in said re- -spondent corporation. He is now vice president or ICrengel JYianufacturing Co., Inc., and has been an officer or that corporation since some time after June 19, 1936. Arter becoming an officer and at the present time and for some time past as vice president, respondent George Feldman, together with respondent Abraham L. Gershon and respondent Sadye Gershon, has exercised and still exercises a substantial degree or authority and control over the business conducted by said corporation, including the direction or its distribution and sales policies. PAR. 4. Respondent, Sadye Gershon, is an individual residing in New York, N.Y., and is one or the principal stockholders in said respondent corporation. She is now secretary and treasurer or l{rengel Manufacturing Co., Inc., and has been an officer of that corporation since some time after J nne 19, 1936. After becoming a!1 officer and at the present time and for some time past as secretary and treasurer, respondent, Sadye Gershon, together with respo~ident, Abraham L. Gershon, and respondent, George Feldman, has exercised and still exercises a substantial degree or authority and control over the business conducted by said corporation, including the direction of its distribution and sales policies.

PAR. 5. Respondents, Abraham L. Gershon, as president and George Feldman, as vice president and Sadye Gershon as secretary and treas- KRENGEL MANUFACTURING CO., INC., ET AL. 77 75 Complaint ure.r of said respondent corporation, Krengel Manufacturing Co., Inc., :are now engaged and for seve.ral years prior hereto have engaged in the business of processing, manufacturing, offering for sale, selling, :and distributing rubber stamps for their own account. The individual respondents have and are no,w conducting said business through Krengel :Manufacturing Co., Inc., said corporate respondent, which respondent has likewise engaged in said business for the past several years.

PAIL 6. Each of the. individual respondents through said respondent cul·pora tion, n11cl said respondent corporation, now sell and distribute, and since J nne 19, 1936, have sold and distributed rubber star.aps to dealers and also direct to the consuming public. Some customers of respondents purchasing such products are located in States other than the State in which respondents' business is located, and some of re- ·spondents' customers, although located within the State in which respondents' business is located, direct that the shipments of their purchases of said rubber stamps be made by the respondents to their branch offices, some of which branch offices are located in States other than the State in which respondents' business is located, and in such cases, respondents cause such products to be shipped and transported across State lines from respondents' place of business to such customers, or to such branch offices of such customers. There is and has been at all times mentioned, a continuous course of trade and commerce in said products between respondents' factory and warehouse and the purchasers of said products, some of which are located in States other than the State in which respondents' business is located as aforesaid . .Said products are sold and distributed for use within the various .States of the United States.

PAR. 7. In the course and conduct of each of the respondents' business in commerce as aforesaid, respondents since June 19, 1936, have been and are now in substantial competition with other corporations, partnerships, individuals and firms engaged in the business of processing, manufacturing, offering for sale, selling, and distributing rubber stamps.

PAR. 8. In the course and conduct of the business of each respondent, as aforesaid, respondents since June 19, 1936, have been and are now discriminating in price beb\een different purchasers buying such products of like grade and quality by selling its products to some of its customers at higher prices than respondents sell similar products of like grade and quality to other o:f their customers. Such discrimi- Findings 46F.T. 0.

nations in price relate only to the respondents' sales of rubber sta1nps to consumers. Respondents' sales made to dealer are not involved herein.

PAR. 9. The effect of each of the responents' discriminations in price, hereinbefore set-out, has been and may be substantially to lessen competition and to injure, destroy, and prevent competition between respondents and their competitors in the sale and distribution of rubber stamps in interstate commerce, and has been and may be to tend to create a monopoly in respondent in said line of commerce. PAR. 10. The foregoing acts and practices of the respondents; namely, Krengell\1anufncturing Co., Inc., a corporation, Abraham L. Gershon, as president, and George Feldman, as vice president, and Sadye Gershon, as secretary and treasurer, of the l{rengel Manufacturing Co., Inc., since June 19, 1936, are in violation of the provisions of subsection (a) of section 2 of the Clayton Act (U.S. C. title 15, sec. 13) as amended by the R.obinson-Patman Act approved June 19, 1936.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the 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 J nne 19, 1936 ( 15 U. S. C., Sec. 13), thb Federal Trade Commission on November 20, 1947, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with violation of subsection (a) of section 2 of that act, as amended. After the filing by respondents of their answer to the complaint, testimony and other evidence in support of the complaint were introduced before a. trial examiner of the Commission theretofore duly designated by it (no evidei1ce being offered on behalf of respondents). Subsequently, the matter regularly came on for final consideration by the Commission upon the complaint, answer, testimony, and oth~r evidence and recommended decision of the trial examiner (no briefs having been submitted by counsel and oral argument not having been requested), and the Commission, having duly considered the matter and being now fully advised in the premises, makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS P .A.RAGRAPH 1. Respondent, ICrengel l\:Ianufacturing Co., Inc., is a corporation organized and existing under the laws of the State of KRENGEL MANUFACTURING CO., INC., ET AL. 79 75 Findings New York, with its principal office and place of business located at 227 Fulton Street, New York, N. Y. Respondents, Abraham L. Gershon, George Feldman, and Sadye Gershon, arb individuals residing in New York, N.Y., and are, respectively, president, vice president, and secretary-treasurer of the respondent corporation. Each of these individuals is one of the principal stockholders in the corporation and each has exercised and still exercises a substantial degree of authority and control over the corporation, including the direction of its distribution and sales policies.

PAR. 2. Respondents are and for several years last past have been engaged in the business of manufacturing and selling rubber stamps. These stamps are sold by respondents principally to dealers, generally retail stationers, and also directly to consumers, such consumers being principally large firms such as oil companies, industrial corporations, telephone companies, department stores, railroad companies, and insurance companies. The present proceeding involves only sales made · by respondent to consumers.

PAR. 3. In the course and conduct of their business respondents cause and have caused their products, when sold, to be transported from their place of business in the State of New York to purchasers thereof located in various other States of the United States. Respondents maintain and at all times mentioned herein have maintained a course of trade in their products in commerce among and between the various States of the United States.

PAR. 4. Respondents are and at all times mentioned herein have been in substantial competition with. other corporations and individuals and with firms and partnerships engaged in the manufacturing of rubber stamps and in the sale of such stamps in commerce among and between the various States of the United States. PAR. 5. In the course and conduct of their business as aforesaid, respondents, since June 19, 1936, have been and are now discriminating in price between different purchasers of their products of like grade and quality by selling such products to some of such purchasers at higher prices than the prices at which respondents sell similar products of ljke grade and quality to other of such purchasers. Such products were and are sold by respondents for use within the United States.

PAR. 6. There is no evidence that the lm,er prices so charged by respondents to some of their customers were made in good faith to meet an equally low price of a competitor. Nor is there any evidence that such differenees in price were based upon differences in cost of Order 46 F. T. C. manufacture, sale, or delivery resulting from the differing methods or quantities in which such p~·oducts were sold or delivered. PAR. 7. 'With respect to the effect of respondents'_ discriminatory prices on competition, the record discloses that one very substantial account was practically lost to respondents by one of their competitors because of such competitor~s inability to meet respondents' low, discriminatory prices. In addition to this specific instance, there is testimony from three other competitors of respondents to the effect that it was not possible to manufacture and sell rubber stamps profitably at the discriminatory prices granted by respondents to their favored customers. The evidence further showsthat price is one of the principal factors governing purchases of rubber stamps. The Commission therefore concludes and finds that the effect of respondents' discriminations in price has been and may be suostantially to lessen, destroy, and prevent competition between respondents and their competitors in the sale and distribution of rubber stamps in commerce as aforesaid.

CONCLUSION The acts and practices of respondents as herein found are violative of subsection (a) of section 2 of the aforesaid Clayton Act, as amended. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the coinplaint of the Commission, the answer of respondents, testimony, and other evidence in support of the complaint introduced before a trial examiner of the Commission theretofore duly designated by it (no evidence having been offered on behalf of respondents) and the recommended decision of the trial examiner (no briefs having been filed by counsel and m:al argument not having been requested), and the Commission having made its findings as to the facts and its conclusion that respondents have violated subsection (a) of section 2 of the 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, 1036 (15 U. S. C., sec. 13) :

It is onlered, That respondent, Krengel :Manufacturing Co., Inc., a corporation, and its officers, and respondents, Abraham L. Gershon, George Feldman, and Sadye Gershon, individually and as office.rs of said corporation, and respondents' representatives, agents, and employees, directly or through any corporate or other device, in the sale KRENGEL MANUFACTURING CO., INC., ET AL. 81 75. Order of rubber stamps in commerce, as "commerce" is defined in the aforesaid Clayton· Act, do forthwith cease and desist from: 1. Directly' or indirectly discriminating in the price of rubber stamps of comparable size and of like grade and quality by selling such rubber stamps to any purchaser at a price or prices materially different from those at which sales of similar rubber stamps of camparable size and of like grade and quality are sold to any other purchaser.

2. Otherwise discriminating in price, either directly or indirectly, among different purchasers of rubber stamps of like grade and qti.ality in any manner prohibited by section 2 (a) of the said Clayton Act as amended.

It is further ordered, .That the respondents shall, within 60 clays after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

.'82 FEDERAl;. TRADE COMMISSION DECISIONS Syllabus 4G F. T. C.