Perry Halseth trading as Perry Sales Company

Text (OCR of the scan at left; may contain errors)

IN THE :MATTER OF PERRY HALSETH Tl ADING AS PERRY SALES COMPANY DECISION IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COllfMISSION ACT , Sept. 14, 1953 Docket 6009. ComIJlaint, July 195Z-Decision Where an individual, engaged in the interstate sale and distribution of cameras radios, pens, dolls, cutlery, hedspreads, and other articles, with a volume of business in excess of $1 00 a year; in soliciting orders for and in sellng and distributing his merchandise- , orMade use, among other courses, of a plan of merchandising which involved might Involve, the operation of games of chance, gift entcrprises, or lottery schemes, pursuant to which he sent out in great quantities to members of the public, along with return envelopcs, form letters, circulars, order blanks, and sales" or push cards, for use, in accordance with a scheme, as typical, pursuant to which the customer who selected by chance that one of 39 girls' names displayed on the particular card which corresponded with that concealed under the card's master seal, received as a prize the comforter, bedspread, or other article picturcd thereon; those pushing certain discs as disclosed by the numbers concealed thereunder, received certain lesser prizes; amount paid by customer for chance was similarly determined; and prospecti ve customers or operators of the cards received, according to the aforesaid circulars, as a premium or prize for their efforts, in disposing of the merchandise through the use of such cards, a bcdspread or other article equal in value to thc main item, plus a premium of lesser value if an order was placed with respondent within 15 days following receipt of the offer; and Therehy supplied to and placed In thc hands of others, contrary to an established public policy of thc Cnited States Government, the means and instrumentality of conducting games of chance, gift enterprises, or lottery schemes in connection with the sale and distribution of merchandise, in which persons who selected and paid for the lucky or winning name ami numbers received the ignated articles, without additional expense, at prices which were much less than thc normal retail prices thereof; those who did not select such a name or number received nothing- for their money other than the privilege of making the push or punch; and whctller a purchaser received an article or nothing for the money paid aml tile amount paid for the merchandise or chance to receive it were detcrmincd wholly by lot or chance: Held 'l' hat such acts and practices, under the circumstances set forth, were all to tllc prejudice and injury of the public and constituted unfair acts and practices in commerce.

Before M1'. J. Ead Cow hearing examiner. MI' . J. W. BTookfield, b' for the Commission. W ilcenfeld (0 Harris of Chieago, Ill., for respondent. DECISION at' THE COllfMISSION A;-D ORDER '10 FILE REPORT OF COMPUANCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on July 16, 1952, issued and subse- PERRY SALES CO. 243 242 Findings quently served its complaint in this proceeding upon respondent Perr Halseth, individually and trading as Perry Sales Company, charging him with the use of unfair acts and practices in commerce in violation of the provisions of said Act. After the issuance of said complaint and the fiing of respondent's answer thereto, hearings were held at which testimony and other evidence in support of and in opposition to the allegations of said complaint were introduced before a hearing examiner of the Commission theretofore duly designated by it, and such testimony and other evidence were duly recorded and filed in the offce of the Commission. Thereafter the proceeding regularly came on for final consideration by said hearing examiner upon the complaint, the answer thereto, testimony and other evidence, and p,roposed findings as to the facts and conclusions presented by counsel oral argument not having been requested, and said hearing examiner on Febru:.ry 9, 1953, filed his initial decision herein. 1V"within the time permitted by the Commission s Rules of Practice respondent filed an appeal from said initial decision and the Commission, after duly considering said appeal and the record herein issued its order denying said appeal.

The Commission is of the opinion, however, that the initial decision of the hearing examiner is deficient in certain respects, principally in that the order therein is inconsistent with the form of order which the United States Court of Appeals for the District of Columbia Circuit has determined is appropriate in cases where the facts are essentially similar to those in this case. Hamilton Manufacturing Co. v. Fedeml Tmde Commission 194 F. 2d 346 , and U. S. Printing db Novelty Co. v. Fedeml Trade Commission CCH Trade Reg. Servo Par. 67 502 Tune 4, 1953). Therefore, the Commission, being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes the following findings as to the facts, conclusion drawn therefrom, and order, the same to be in lieu of the initial deeision of the hearing examiner.

TNDINGS AS TO THE FACTS Paragraph 1. Respondent, Perry Halseth, is an individual trading and doing business under the name of Perry Sales Company with offce and principal place of business located at 1250 West Van Buren Street in the City of Chicago, Ilinois.

Respondent is now and for more than three years last past has been engaged in the sale and distribution of cameras, radios, pens, dolls cutlery, bed-spreads and other articles of merchandise and has caused said merchandise when sold to be transported from his place of business in Chicago, Illinois, to purchasers thereof located in the various Findings 50 F.

'Other States of the United States and in the District of Columbia. Respondent's volume of business has been in excess of $1 000 000. per year and t11ere is now and has been for more than three years last past a substantial course of trade by respondent in such merchandise in commerce as "commerce" is defined in the Federal Trade Commission Act.

PAR. 2. In the course and conduct of his aforesaid business in soliciting orders, selling and distributing merchandise, respondent sometimes deals directly with jobbers, retail stores and other business firms; sometimes respondent uses circulars, form letters. order blanks and return envelopes in direct mail solicitation; at other times respondent uses and has used a plan of merchandising which involves or may involve the operation of games of chance, gift enterprises or lottery schemes. Under the latter plan, respondent mails to each prospective customer advertising and solicitation material consisting of a form letter, circular, order blank, push card referred to by respondent as a sales card, and return envelope, copy for all of which is prepared by respondent or under his supervision. This literature is sent out to members of the public in great quantities-hundreds of thousands at a time-and orders are received from approximately 0.3 to 1 percent of the total number of recipients of said literature. The circulars describe the merchandise which respondent offers and the letters explain how, through the use of the push cards, sales can be made to "friends, relatives, neighbors and co-workers" who may obtain the merchandise offered usually "for as little as 111 and not more than 391. Prospective customers also are told that as a premium or prize for their efforts in disposing of the described merchandise through use of the push card they may receive without cost a bedspread or other article of merchandise equal in value to the main item described in the circular, plus a premium of lesser value if an order is placed with the respondent within 15 days following receipt of the offer. Fountain pens or other small articles of merchandise are often included in the merchandise offered and shipped by respondent for use as additional prizes to purchasers of chances in connection with "push" card sa lest A typical push card has thirty perforated discs each of which is designated by a feminine name, and concealed within each disc is a number by which is determined the cost of each push. On the back of the card is a list of the names on the discs with spaces for writing in the names of the persons who may have pushed the corresponding discs. Upon the face of the card is a large master seal under which is one of the names appearing on the discs. This seal is to be removed only after all the discs have been sold and the person having pushed PEIlRY SALES CO. 245 Findings the disc bearing the name corresponding to the one under the seal receives the comforter, bedspread, tablecloth, or other main article of merchandise pictured on the push card and described in the circular accompanying it. In addition to this main prize there are lesser prizes such as fountain pens, which are distributed to persons who have pushed certain other specified discs.

Thc typical push card has on its face the following legend and jnstruction :

(Picture of mmforter and bedspread) 4 PRIZI Do Kot Lucky Name 1Jnder Larg-e Red Seal Ueceivcs Choice of a lle tutifnl Remove Seal E A Unti Entire A QUILTED COJ\FORTER BEDSPREAD OR TABLECLOTH Card is Sold L Numbers 1 to 39 Pay What You Draw Numbers Over 39 Pay Only 39c Numbers None Higher 19-22 Each Receive Push ont with Pencil A $1. Panel bearing Fountain Pcn Discs. Persons having selected and p,tid for the Jucky or winning name and numbers receive the designated articles of merchandisc, without additional expense, at prices which arc much Jess than the normal retail prices of said articles, but persons who do not select such lucky or wilming name or numbers receive nothing for their money other than the privilege of making a push or puneh from said card. Whether a purchaser receives an article of merchandise or nothing for the money paid, and the amount to be paid for the merchandise or the chance to receive said merchandise are thus determincd wholly by lot or chance, and articles of merchandisc are thus distributed to the conswning or purchasing public wholly by lot or chance. Respondent furnishes and has furnishcd various other similar push cards, form letters, circulars, and order blanks for use in the sale and distrjbution of his merchandise. The sales plan used in the sale and distribution of merchandise by means of these other push cards the same as that hercinabove described varying only as to the merchandise offered, the price of each chance and the number of chances on each card.

PAR. 3. The order form used by respondent in connection wilh thc aforcsaid sales method contains no reference to the push card. Upon receipt of such an order properly filled out the respondent scnds out hjs merchandise. He has no control over thc buyer and has in fact no direct means of knowing whether the buyer will retain the merchandise hiself or dispose of it by use of the push card or by some 246 FICDERAL TRADE COMMISSION DECISIONS Order 50 F.

other method. However, the respondent does distribute push cards extensively, sends out accompanying lctters describing their use, and does know that if his suggested plan is followed the merchandise shipped by him, excepting the special premium offered the operators of the push cards, wil reach the ultimate purchaser through sales made under the push card plan through the sale and purchase of the push card chanoes.

Thc record specifically establishes that some individuals have used the push eards furnished by respondent in the distribution of merchandise reoeived from respondent. Respondent's wide and continued use of the push cards confirms the conclusion that a substantial number of persons to whom respondent has furnished and furnishes said push cards have used and now use the same in sellng and distributing respondent's merchandise in accordanoe with the aforementioned sales plan. Respondent thus supplies to and plaoes in the hands of others the means and instrumentality of conducting games of chance, gift enterprises or lottery schemes in connection with the sale and distribution of his merchandise, all of which is contrary to established public policy of the Government of the United States. PAR. 4. The sale and distribution of merchandise in the manner above described involves games of chance or the sale of chances to procure onc of the said articles of merchandise at a price much less than the normal retail price thereof. Many persons are attracted by said sales plan or method used by respondent and by the element of chance JIvolved therein and thereby have been and are induced to buy and sell respondent' s merchandise.

The use by respondent of a sales plan or method involving sales and distribution of merchandise by means of chance, lottery or gift enterprise is contrary to the public interest and constitutes unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

CONCLUSION The aforesaid acts and practices of respondent as herein found are all to the prejudice and injury of the public and constitute unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER It is ordered That respondent Perry Halseth, trading as Perry Sales Company or under any other name or names, his representatives agents and employees, directly or through any corporate or other device in connection with the offering for sale, sale and distribution of PERRY SALES CO. 247 242 Order cameras, radios, pens, dolls, cutlery, bedspreads or other articles of merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Supplying to or placing in the hands of others push cards or any other lottery device or devices which are designed or intended to be used in selling or distributing said merchandise to the public by means of games of chance, gift enterprises or lottery schemes. 2. Shipping, mailing or transporting to agents or distributors, or to members of the purchasing public, push cards or any other lottery device or devices which are designed or intended to be used in the sale or distribution of respondent' s merchandise to the public by means of games of chance, gift enterprises or lottery schemes. 3. Selling or otherwise disposing of any merchandise by means of or under a plan involving a game of chance, gift enterprise, or lottery scheme.

It is further ordered That respondent shall, within sixty (60) days after service upon him of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which he has complied with the order to cease and desist. Consent Settlement 50 F. T. C. Ix TITE J\LATTER m' LAGOMARCINO-GRUPE COMPANY OF IOWA DAVEN- PORT BROKERAGE COMPANY, AND ANDREW S. LAGO- MARCINO ET AL.

CONSENT SETTLEJV(ENT IN REGARD TO THE ALLEGED VIOLATION UF SEC, 2 (C) OF THE CLAYTON ACT AS AMENDED Docket 5784. Complflint, June 1950-Deaision, Sept. , 1953 Where a corporation, which was engaged in the buying and seilng of fruits vegetables, canned goods, sugar, candy, and other food products, and had become one of the largest wholcsalers thereof in the United States and numbered among its stockholders a family group, ailed by blood or marriage which owned a suhstantial majority of all its stock and all of that of a corpora te broker-- (a) Purchased through said corporate broker substantial requirements of its food products from vendors, all, or substantially all, of whom paid said broker commissions or brokerage fees on said purchases; and Where said broker, controlled as aforcsaid, and acting as agent of or representative for said wholesaler, and subject to the direct control of those individuals who were members by blood or marriage of the aforesaid familes, made up the group refclTed to, and owned a majority of the capital stock of said broker-- (b) Received and accepted said fecs as income from which dividcnds were paid to and recelvcd and accepted by its aforesaid stockholders: Held That such acts and practices of said corporations and of their aforesaid stockholders were in violation of subsec. (c) of Scc. 2 of the Clayton Act as amended by the Hobinson- Patman Act.

Before M1'. AoneT E. Lip8crnnb hearing examiner. lv. r. Edward S. Ragsdale for the COllunission. and Mr. Russell Ha1'dy, of 'Washington Mr. Smith "fV. Brookhart D. for respondents.

CONSENT SETTLEMENT 1 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, 1814 (the Clayton Act) as amended by an Act of Congress approved June 19, 1936 (the Robinson-Patman Act), (15 U. S. C. A. Section 13), thcFederal Trade he Commission s "Notice" announcing and promulgating the consent settlement as published herewith, follows :

The consent settlement tendered by the parties in this proceeding, a copy of which is served herewith, was accepted b;y the COlImission on September 15, 1953 , and ordered entered of record as the Commission s findings as to the facts, conclusion, and order in disposition of this proceeding.

lJ'he time for filing report of compliance pursuant to the aforesaid order runs from the date of service hereof.

LAGOlvIARCINO-GRUPE CO. OF IOWA ET AL. 249 248 Findings Commission, on .June 26, 1950, issucd and subsequently served its complaint on the respondents, and each of them, named in the caption hereof, charging them, and each of them, with receiving and accepting commissions, brokerage fees or other compensation, allowances or discounts in lieu thereof, on purchases of food products in commerce made directly or indirectly for their own account in violation of subsection (c) of Section 2 of thc Clayton Act, as amended by the Robinson-Patman Act.

The respondents, and each of them, desiring that this proceeding be disposed of by the consent settlement procedure provided in Rule V of thc Commission s Rules of Practice, solely for the purposes of this proceeding, and review thereof, and the enforcement of the order consented to, and conditioned upon the Commission s acceptance of thc consent settlement hereinafter set forth, and in lieu of the answer and supplemental answer to said complaint heretofore filed and which, upon acceptance by the Commission of this settlement, are to be withdrawn from thc record, hereby:

1. Admit all the jurisdictional allegations set forth in the complaint.

2. Consent that the Commission may enter thc matters hereinafter set forth as its iindings as to the facts, conclusion, and ordcr to cease and desist. His understood that the respondents, and each of them in conscnting to the Commission s entry of said findings as to the facts, conclusion, and order to cease and desist, specifically refrain from admitting or denying that they have engaged in any of the acts 01' practices stated therein to bc ill violation of law. 3. Agree that this eonscnt settlement may be set aside in whole or in part under the conditions and in the manner provided in paragraph (f) of Rule V of the Commission s Rules of Practice. The admitted jurisdictional facts, the statement of the acts and practices which the Commission has reason to believe were unlawful the conclusion based thereon, and the order to cease and desist, all of which the respondents consent may be entered herein in final disposition of this proceeding, ate as follows: l'fND1NGS . \S TO THE FACTS PARAGRAPH 1. Itespondent Lagomarcino-Grupe Company of Iowa (named in the complaint as Lagomarcino-Grupe Company) is corporation organized, existing, and doing business under and by virtue of the laws of the state of Iowa, with its principal offce and place of business located at 101 V.llley Street, Burlington, Iowa. Findings 50 F.

Said respondent, on the date of the issuance of the complaint and since several years prior to June 19, 1936, has been engaged in the business of buying and selling food products at wholesale within the vegetables, cannedUnited States. Such products include fruits, goods, sugar and candy. It has become one of the large wholesalers of food products in the Middle Western States. On the date of the issuance of the complaint, it owned a 34% stock interest in Lagomarcino-Grupe Fruit Company, located at Galesburg, Illinois, and owned and operated a large number of branches, some of which were located at Creston, Ottumwa, Burlington, Cedar Rapids, Iowa City, Clinton, Music.atine, Fort Madison, Keokuk, Iowa, and Quincy, Illinois.

Lagomarc.ino and Grupe are family names. On the date of the issuance of the complaint and all times mentioned herein, a substantial majority of the capital stock.k of said respondent was owned by individuals who were members of the Lagomarcino or Grupe families by blood or marriage. For some time prior to June 26, 1950 and on that date, said respondent had issued and outstanding approximately 588 shares of capital stock.k, a substantial majority of which was, and for some time prior has been owned by those individuals who are named as individual respondents herein and as set forth in Paragraph 3 hereof.

From April 20, 1925 until dissolution of the latter on September 1 1934, respondent, Lagomarcino-Grupe Company of Iowa, made substantial purchases of food products through Davenport Brokerage Company, a corporation not named as a respondent herein, the stock of which was 76% owned by said respondent. During the period from September 1, 1934 until September 1, 1936, Mr. E. H. Beattie operated a brokerage business as a sole proprietor doing business as shares of stoekDavenport Brokerage Company. Mr. Beattie held 10 in Lagomarcino-Grupe Company during this period. PAR. 2. Respondent Davenport Brokerage Company (named in the complaint as Davenport Brokerage Company, Inc.) is a corporation organized, existing, and doing business under and by virtue of the laws of the state of Iowa, with its principal offce and place of business located at 301 Union Arcade Building, Davenport. Iowa. 1936, to engage Said respondent was inc.orporated September 2, and since its incorporation and continuing to the present time it has engaged, in the business theretofore conducted by E. H. Beattie doing business as Davenport Brokerage Company, and prior to that by the original Davenport Brokerage Company, a corporation. During said period of time, respondent Lagomarcino-Grupe Company made substantial purchases of food products through respondent Davenport Brokerage Company.

___ __ _ LAGOMARCINO-GRUPE CO. OF mWA ET AL. 251 248 Findings Upon incorporation, 24% of the stock of respondent Davenport Brokerage Company was issued to E. H. Beattie, and the remainder to members of the Lagomarcino family and Grupe family. E. H. Beattie died on March 7, 1946. Thereafter, on January 2, 1947, the stock owned by his widow was purchased by members of the Lagomarcino family and members of the Grupe family. After January 2 1947, all of the capital stock of respondent Davenport Brokerage Company, was issued to, and at all times thereafter mentioned herein has been owned by, those stockholders of respondent Lagomarcino-Grupe Company of Iowa, who were members of the Lagomarcino or Grupe families by blood or marriage. For some time and at the time of issuance of this complaint, respondent Davenport Brokerage Company has issued and outstanding approximately 1 000 shares of capital stock, all of which was and for some time had been owned by those individuals who are named as individual respondents herein and as set forth in Paragraph 3 hereof. PAR. 3. Each of the following respondents is an individual; is a member of the Lagomarcino or Grupe families by blood or marriage as indicated; and at the date of issuance of the complaint and for some time prior had owned the number of shares of capital stock of respondent Lagomarcino-Grupe Company of Iowa and/or respondent Davenport Brokerage Company, which is set forth opposite his or her name in columns appropriately designated: Capital Stock OWnersN1J of Lagomarcino-G1upe Co. of Iowa and of Davenport Brokerage Co., as of June 26 1950 Daven- Members ot Lagomarcino- port Grupe Company Broker-Lagomarclno of Iowa age Co. Andrew S. Lagomarcino--__Family - 232C. L. Lagomarcino__-__------------- ------- 272 Joe J. Lagornarcino_____---- ---- 280 John Lagornarcino__ 42;r Richard Lagornarcino_____---------- ----------- 73 Gertrude Lagomarcino___ 169 35Mayme Lagornarcino_____------------- ---- 195Mamie Lagornarcino_____------- ----- 472 Katherine S. Lagomarcino--____-------------------------------- 89 Theresa Bley ----------------------- --------------------- 17 Trula E. Voss----- ---------- 267 Subtotal owned by individual respondents who are members of Lagomarcino family --------- 1974;r 524 _______ Findings 50 E'. T. C. Da ven- Lag-omarcino- port Grupe Company:r Broker-Members of of Iowa age Co. 146HaroldGrupeW. Grnpe------ Family 586 12.Tohn D. Keehn- -- None 114Dorothy D. Keehn-_---- --- 465 Helen Parker- ---- 479 Edward Dornsife ----------. NoneMarion (Mrs. Edward) Dornsife__--------- ------ 5Q2 Patricia P. FilipowskL_----------- 21 Subtotal owned by individual1s who are members of Grupe family ---- --- 2054 476 Total owned by individuals who are members of either Lagomarcino or Grupe familes-- ----------- 4028 1000 The following named respondents dicd on dates indicated: lRosanna Ogeshly -- -- July 28, 1948 Ed ward Dornsife--- December 10, 1950 IIar01d W. Grupe- June 12, 1952 At the date of the issuance of thc eomphint, individuals who were members of the Lagomarcino or Grupe familics by blood or marriage and for some time prior thereto, thc above-named individual respondcnts, directly or indirectly as owners of a substantial majority of the capital stock of respondent Lagomarcino-Grupe Company of Iowa and of all of the capital stock of respondent Davenport Brokerage Company have through such stock ownership elected the directors who in turn electcd officers of the corporate respondents responoible for formulating, authori:ting and dirceting all of their policies, practices and acts referred to herein. The individual respondents, who were neither offcers nor directors of either of respondent corporations did not actively participate in said acts. PAR. 4. In the course ancl conduct of its wholesale food busines prior to and since September 2, 1936, respondent Lagomarcino-Grupe Company of Iowa, through the original Davenport Brokerage Company or through respondent Davenport Brokerage Company, continuously made such purchases of food products from many vendors with places of business located in several states of the United States; and respondents caused such food products so purchased to be transported from said states to destinations in other states. PAR. 5. In the course of said business in commerce, beginning some years prior to SeptembOl' 1 , 193'1, and ending shortly thereafter, respondent Lagomarcino-Grupe Company of Iowa purchased through the original Davenport Brokerage Company, not named as a respondent, substantial quantitie.s of food products from vendors, all or substantially all, of whom paid Davenport Brokerage Company commissions or brokerage fees on said purchases. LAGOMARCINO-GRUPE CO. OF IOWA ET AL. 253 248 Conclusion From 1925 until September 1, 1934, Davenport Brokerage COlJpany, not named as a respondent herein, received and accepted as income said fees from which dividends were paid to, and they were received and accepted by, respondent Lagomarcino-Grupe Company of Iowa, in the form of dividends on the capital stock of the original Davenport Brokerage Company.

In turn, respondent Lagomarcino-Grupe Company of Iowa, transmitted and paid said fees to, and they were accepted and received by,. the stockholders of said respondent in the form of dividends upon its capital stock.

In making said purchases, and in receiving and accepting and in transmitting and paying said fees, as above alleged, the original Davenport Brokeragc Company was acting as agent or representative for respondent Lagomarcino-Grupe Company of Iowa, subject to its direct control and to thc indirect control of those individuals who were members of thc Lagomarcino or Grupe families by blood marriagc who owned a majority of its capital stock. PAR. 6. In the course of said business in commerce, beginning September 2, 1936, and continuing to the present time, respondent Lagomarcino-Grupe Company of Iowa purcha ed through respondent Davenport Brokerage Company, substantial quantities of its requirements of food products from vendors, all, or substantially all, of whom paid respondent Davenport Brokerage Company, commissions or brokeragc fees on said purchases.

Respondent Davenport Brokeragc Company received and lwcepted said fecs as income from which dividcnds were paid to and were rcceived and acceptell by, its stockholders as dividcnds on its capital stock.

In making said purchases, and in receiving and accepting and in transmitting and paying said fees, as above stated, respondent Davenport Brokerage Company was acting as an Agent or representative of respondent Lagomarcino-Grupe Company of Iowa, subject to its indirect control through, and subject to the direct control of, those individuals who were members of the Lagomarcino or Grupe families by blood or marriagc who owned a substantial majority of the capital stock of respondent Lagomarcino-Grupe Company of Iowa and all of the capital stock of respondent Davenport 13rokcragc Company. CONCLUSION Em. 7. Thc acts and practices of respondents indi vidually and collectively, si nce .J nne 19 , 19;)6, in accepting and recei villg commissions or brokerage fees. as a bove alleged, are in violation of subsection (c) Order 50 F.

of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act. In receiving and accepting commissions, brokerage fees or other compensation, allowances or discounts in lieu thereof on purchases of food products in commerce as set forth in Paragraph 6 hereof, respondents, and each of them, have violated the provisions of Section 2 (c) of the Clayton Act, as amended by the Robinson-Patman Act. ORDER I. It is ordered That thc respondent, Davenport Brokerage Company, a corporation, its offcers, directors, agents, representatives, and employees, directly or through any corporate or other device, in conncetion with the purchase of fruits, vegetables, canned goods, sugar candy and other products of whatsoever nature in commerce, as "commerce" is defined in the aforesaid Clayton Act, as amended, do forthwith cease and desist from:

(a) Receiving or acccpting, directly or indirectly, from any seller anything of value as a commission, brokerage. or other compensation or any allowance or discount in lieu thereof, upon any purchase in connection with which respondent Davenport Brokerage Company is the agent, representative, or other intermediary acting for, or in behalf , or subject to the direct or indirect control of any buyer, including such control by any buyer cxercised through the ownership or control of capital stock of Davcnport Brokerage Company, by any stockholder or cooperating group of stockholders in such buyer who directly or indirectly controls such buyer.

(b) Transmitting, paying, or granting, directly or indirectly, any part of any commission, brokerage, compensation, allowance or discount, which is referred to in paragraph I (a) above, to any buyer or to any stockhoJdcr in any buyer, who is referred to in paragraph I (a) above, in the form of money, dividends, crcdits, services, facilities or in any other form.

II. It is further ordered That the respondents Lagomarcino-Grupe Company and its offcers, directors, agents, representatives, and employees, directly or through any intermediary (including Davenport Brokerage Company) in connection with the purchase of fruts vegetables, canned goods, sugar, candy and other products of whatsoevcr nature in commerce as "commerce" is defined in the Clayton Act, as amended, do forthwith cease and desist from: Receiving or accepting from any seHer, or from any agent, representative, or other intermediary acting for, or in behalf or subject to the direct or indirect control of respondents Lagomarcino-Grupe Company, including such control by said respondent exercised through , .

LAGOMARCINO-GRUPE CO. OF IOWA ET AL. 255 248 Order the owncrship or control of capital stock of any such agent, representative, or other intermediary by any stockholder or cooperating group of stockholders of respondent Lagomarcino-Grupe Company, who directly or indirectly controls said respondent, anything of value as a commission, brokerage, or other compensation, or any discount or allowance in lieu thereof, in the form of money, dividends, credits, or in any other form, upon purchases for their own accounts. III. It is further ordered That the respondents Andrew S. Lagomarcino, C. L. Lagomarcino, Joe J. Lagomarcino, John Logamarcino Richard Lagomarcino, Gertrude Lagomarcino, Mayme Lagomarcino Mamie Lagomarcino, Katherine S. Lagomarcino, Theresa Bley, Trula R Voss, John D. Keehn, Dorothy D. Keehn, Helen Parker, Marion Dornsifc, and Patricia P. Filipowski, either in their individual or representative capacities, in connection with the purchase of fruits vegetables, canned goods, sugar, candy, and other products of whatsoever nature in commerce, as "commerce" is defined in the aforcsaid Clayton Act, as amended, do forthwith cease and desist from: Receiving or accepting any part of any commission, brokerage compensation, allowance, or discount which, in paragraphs I (a) and I (b) above, respondent Davenport Brokerage Company, is ordered to cease and desist from receiving or acccpting and from transmitting, paying or granting, and which, in paragraph II above, respondent Lagomarcino-Grupe Company is ordered to cease and desist from receiving or accepting.

It i8 fll,Tther ordered That the complaint be dismissed as to Rosanna L. Ogesbly, Harold W. Grupe, and Edward Dornsife, deceased. It i8 /,urther ordered That thc respondents shall, within sixty (60) days after service upon them of this order file with the Commission a report in writing sctting forth in detail the manner and form in which they have complied with said order.

LAGOMARCINO-GRUPE COMP AKY OF IOWA, a corporation; DAVENPORT DROKE RAG E COJ\fP ANY, a corporation; and ANDREW S. LAGOMARCINO, C. L. LAGO- MARCINO JOE .J. LAGOMARCINO, John LAGOMAR- CINO, RICHARD LAGOMARCINO, GERTRUDE LAGO- MARCINO MAYME LAGOMARCINO MAMIE LAGO- MARCINO, KATHERINE S. LAGOMARCINO, ROSANNA L. OGESBLY, THERESA BLEY, TRULA E. VOSS, HAR- OLD W. GRUPE, JOHN D. KEEHN, DOROTHY D. KEEHN HELEN PARKER EDWARD DORNSIFE, MARION DORNSIFE, PATRICIA P. FILIPOWSKI, individuals, individually and eollectively as thc owners of all the capital stock .. .. .... .. _ . _., kiU\.

Order 50 F. T. C.

o:f Davenport Brokerage Company, Inc., and a substantial majority o:f the capital stock o:f Lagomarcino-Grupe Company. (sgd. ) Smith W. Brookhart SMITH W. BROOKHART Counsel :for Respondents and each o:f them.

DRted: .July 21 , 1953.

The :foregoing consent settlement is hereby accepted by the Federal Trade Commission and entered of record on this 15th day o:f Septembcr 1953.

&:

BEGASEWING MACHINE, INC., ET AL. 257 Syllabus