Adolph Gottscho, Inc.

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IN THE MATTER OF ADOLPH GOTTSCHO, INC., ADOLPH GOTTSCHO, RAY GOT- TSCHO, IRA S. GOTTSCHO, AND ADOLPH GOTTSCHO COMPLAINT, FINDINGS, .AND ORDER IN REGARD TO THE ALLEGED VIOLA ... ION OF SEC. 2 (A) OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914, AS AMENDED BY .AN ACT APPROVED JUNE 19, 1936 Docket 5511. Complaint, Nov. 21, 1941-Decision, Aug. 16, 191,9 Where a corporation and its three officers and principal stockholders engaged in the processing and manufacture and competitive interstate sale and distribution of industrial marking devices, rubber stamps, metal stencils and accessories to dealers, usually retail stationers, and to consumers, principally manufacturing pharmaceutical firms, chain grocery stores, wholesale grocers, banks and industrial firms- Discriminated in p1:ice between different consumer purchasers of their products of like grade and quality by selling to some at higher prices than to others; Effect of which discriminations in price had been and might be substantially to lessen, injure, destroy and prevent competition between them and their competitors in the sale and distributionof said products in commerce, and had been and might be to tend to create a monopoly in them in said line of commerce:

Held, That such acts and practices, under the circumstances set forth, violated section 2 (a) of. the Clayton Act as amended. Mr. Edwards. Ragsdale for the Commission.

1rfr. Daniel Eisenberg, of New York City, for Adolph Gottscho, Inc., a.nd Adolph Gottscho.

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 June 19, 1936, hereby issues its complaint stating its charges with respect thereto as follo·ws: PARAGRAPH 1. Respondent Adolph Gottscho, Inc., is a corporation organized and existing under the laws of the State of New York, with its principal office and place of business located at 190 Dmtne Street, New York, N. Y. Respondent corporation also maintains a branch ADOLPH GOTTSCHO, INC., ET AL. 101 100 Complaint sales office at No.1 Hudson Street, New York, N.Y. The respondent corporation is engaged in the business of processing, manufacturing, ·offering for sale, selling, and distributing industrial marking devices, rubber stamps, metal stencils, and accessories. The products distributed by respondent are sold to dealers who are usually retail stationers, :and also directly to consumers. Respondent's sales of its rubber stamps directly to consumers are made principally to manufacturing pharmaeeutieal firms, ch~in grocery stores, wholesale grocery firms, banks and industrial firms. The complaint herein is directed solely to Tespondent's sales of rubber stamps and other products to consumers. PAR. 2. Respondent Adolph Gottscho is an individual residing in New York, N. Y., and is one of the principal stockholders in said respondent corporation. He is now president of Adolph G-ottscho, Inc., and has been an officer of said corporation since some time after .June 19, 1936. After becoming an officer and at the present time and for some time past as president, respondent Adolph Go.ttscho, to- ·gether with Ray Gottscho and Ira S. Gottscho, has exercised and still exercises a substantial degree of authority and control over the busi- 11ess conducted by said corporation, including the direction of its distribution and sales policies. The respondent corporation is owned :and controlled by the three individual respondents named above. PAn. 3. Respondent Ray Gottscho is an individual residing in New York, N. Y., and is one of the principal stockholders in respondent ·corporation Adolph Gottscho, Inc. He is now vice president of Adolph Gottscho, Inc., and has been an officer of that corporation since some time after June 19, 1936. After becoming an officer and :at the present time and for some time past as vice president, respond- ·ent Ray Gottscho, together with respondent Adolph Gottscho and Tespondent Ira S. Gottscho, has exercised and still exercises a sub- :stantial degree of authority and control over the business conducted by said corporation, including the direction of its distribution and ·sales policies.

PAR. 4. Respondent Ira S. Gottscho is an individual residing in New York, N. Y., and is one the principal stockholders in respondent ·corporation, Adolph Gottscho, Inc. He is now secretary and treasurer ·of Adolph Gottscho, Inc., and has been an officer of that corporation :since some time after June 19, 193G. After becori1ing an officer and ·at the present time and for some time past as secretary and treasurer, respondent Ira S. Gottscho, together with respondent Adolph Gottscho ;and respondent Ray Gottseho, has exercised and still exercises a sub- .stantial degree of authority and control over the business conducted 102 FEDERAL TRADE COMMISSION: !DECISIONS Complaint 46 F. T. C. by said corporation, including direction of its. distribution and sales. policies.

PAR. 5. Respondents Adolph Gottscho, as president, Ray Gottscho,. as Yice president, and Ira S. Gottscho, as secretary and treasurer, of said respondent corporation Adolph Gottseho, Inc., and respondent Adolph Gottseho, Inc.., are now engaged .and for several years prior hereto have engaged in the business of processing, manufacturing, offering for sale, selling and distributing industrial marking devices, rubber stamps, metal stencils, and other products, for their own account. The individual respondents have and are i1ow conducting sa.icl business through Adolph Gottscho, Inc., said corporate respondent, which respondent has likewise engaged in said business for the past :mveral years.

PAR. 6. Each of the individual respondents through the corporate respondent Adolph Gottscho, Inc., manufacture, process, and distribute rubber stamps and other products which are sold and distributed by the resi)ondents to dealers and also directly to consumers. Some customers of respondents purchasing such products are located in States other than the State in which respondent's business is located, and some of respondents customers, although located \within the State in which 1~esponclent's business is located, clireet that the shipments of their purchases of rubber stamps and other products be made by the respondent to its branch offi.ees, some of which branch offi.ees are located in States other than the State in whiehresponclent's business is located, and in such eases, respondent causes such products to be shipped and transported across State lines from respondent's place of business to such customers, or to such branch offi.ees of such customers. There is and has been at all times mentioned, a eontinuons course of trade and commerce in s·aid products between respondent's factory and warehouse and the purehasers of said· procluets, some of which are located in States other than the State in which respondent's busi- . ness 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 eonduet of each of respondents' businese: 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 and other procluets.

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 -ADOLPH:'GOTTSCHO, INC., ET AL. 103 100 Findings discriminating in price ··.between different purchasers buying such products of like grade a,n~ q1,mlity by selling their products to some ·of their customers at higlier pi:ices than respondents sell similar products of like grade and qimlrty to other of their customers. Such ·discrii11inations in price rel~te only to the respondents' sale of rubber stamps and other products to consumers. Respondents' sales made to dealers are 'not involved herein.

PAR. 9. The effect of· each of the respondents' discriminations in ·price, hereinbefore set out, hasbeen and may be substantially to lessen ·competition ancl to injure,clestroy, and prevent competition between Tespondents and their competitors in the sale and distribution of rubber stamps and other products in interstate eommeree, and has been and may be to tend to create a monopoly in respondents in said lii1e of commerce.

PAR. 10. The foregoing. acts and practices of the. respondents, 11amely, Adolph Gottscho, Inc., a corporation, Adolph Gottscho, as president, Ray Gottscho, as vice president, and Ira S. Gottscho, as :secretary and treasurer, of Adolph Gottseho, Inc., since June 19, 1936, are in violation of the provision:s of subsection (a) of section 2 of the ClaytonAct (U. S. C. title 15, sec. 13) as amended by the Robinson- Patman Act approved J nne 19, 1936.

REPORT, From)INGS AS TO THE Facts, AND Onder Pursuant to the provisions of an act of Congress entitled "An act to supplement existing laws against unla,Yful restraints and monopolies, and for other purposes," approved October 15, 1D14 (the Clayton Act), as amended by the Robinson-Patman Act, approved June 19, 1D36 ( 15 U. S. C., sec. 13), the Federal Trade Commission, on November 21, 1D47, 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 issuance of said eomplainant, the .respondents, in clue course, filed their answ·er, in which they admit all material :allegations of fact set forth in said complaint and waive all intervening procedure and further hearing as to said facts but deny that ;gaid alleged facts constitute a violation of said statute. Thereafter, thisproceeding regularly came on for final hearing before the Commission upon the complaint and the answer thereto; and the Commission, having duly eonsiclered the matter and being now fully :advised in the premises, makes this its findings as to the facts and its conclusion clra wn therefrom :

Findings 46 F. T. C. FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Adolph Gottscho, Inc., is a corporation organized and existing under the laws of the State of New York, with its principal office and place of business located at 190 Duane Street, New York, N. Y. Respondents Adolph Gottscho, Ray Gottscho, and Ira S. Gottscho, are, respectively, president, vice president,. and secretary-treasurer of respondent corporation. Each of these individuals is one of the principal stockholders of the corporation,. and each exercises, and has exercised, a substantial degree of authority and control over the corporation, including direction of its distribution and sales policies.

PAR. 2. Respondents are, and for several years last past. have been, engaged in the business of processing, manufacturing, offering :for sale, selling, and distributing industrial marking devices, rubber stamps, metal stencils, and accessories. Said products are sold and distributed to dealer and consumer purchasers. The dealer purchasers are usually retail stationers, while the consumer purchasers are principally manufacturing pharmaceutical firms, chain grocery stores, wholesale grocers, banks, and industrial firms. The present proceeding involves only sales made to consumer purchasers. PAR. 3. In the course and conduct of their aforesaid business, respondents cause, and have caused, their said products, when sold, to be transported or shipped from their place of business in the State of New York to purchasers thereof at their respective points of location in various other States of the United States, and at all times 1nentioned her•ein have maintained a course of trade in said products in commerce among and between the various States of the United States.

PAR. 4. In the offering for sale, sale, and distribution of their aforesaid products, respondents are, and at all times mentioned herein have been, in substantial competition with other corporations, partnerships; individuals, and firms also engaged in manufacturing, offering for sale, selling, and distributing such products in commerce among and between the various States of the United States. PAR. 5. In the course and conduct of their aforesaid business,- 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 purchasers at higher prices than the prices at which they sell similar products of like grade ADOLPH GOTTSCHO, INC., ET AL. 105 100 Order and quality to other of such purchasers. Such products are sold and distributed for use within the various States of the United States. PAR. 6. The effect of respondents' discriminations in price has been, and may be, substantially to lessen, injure, destroy, and prevent competition between respondents and their competitors in the sale and distribution of rubber stamps and other products in commerce as aforesaid, and has been, and may be, to tend to create a monopoly in respondents in said line of commerce.

CONCLUSION The acts and practices of respondents as herein foui1d violate 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 Cominission upon the complaint of the Commission and the answer of respondents, in which answer said respondents admit all the material allegations of fact set forth in the complaint and waive all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and its conclusion that respondents have violated subsection (a) of section 2 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) : It is ordered, That-respondent Adolph Gottscho, Inc., a corporation, its officers, respondents Adolph Gottscho, Ray Gottscho, and Ira S. Gottscho, as officers of said corporation, said respondents' representatives, agents and employees, directly or indirectly, through any corporate or other device, in the sale of rubber stamps and other products: in commerce, as "commerce" is defined in the aforesaid Clayton Act as amended, do forthwith cease and desist from: 1. Directly or indirectly discriminating in the price of rubber· stamps and other products of comparable size and of like grade and quality by selling such rubber stamps and other products to any purchasers at a price or prices materially different from those at which sales of similar rubber stamps and other products of comparable size and of like grade and quality are sold to any other purchaser. 2. Otherwise discriminating in price, either directly or indirectly, a.among different purchasers of rubber stamps and other products of .106 FEDERAL TRADE COMMISSION· DECISIONS Order 46F. T. C.

like ·grade and quality in any manner prohibited by section 2 (a) -o:f said Clayton Act as amended.

It is lurther ordered, That respondents shall, within 60 days 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 l1ave complied with this order.

I JOSEPH WINKLER & CO. ET AL.

I Complaint