Home Furniture, Inc.

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

In vee Matrer oF HOME FURNITURE, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-288. Complaint, Dec. 27, 1962—Decision, Dec. 27, 1962 Consent order requiring Fargo, N.D., retailers of furniture to cease advertising falsely in newspapers and by radio that they are conducting a “quitting business” sale, offering merchandise at prices as much as 75% below usual prices, and representing excessive amounts as “Reg.” prices. 1458 FEDERAL TRADE. COMMISSION DECISIONS Complaint 61 F.T.C.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Home Furniture, Inc. a corporation, and David E. Bullert, Henry Cruz and Dennis Erickson, individually and as officers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Act and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: Paragrarn 1. Respondent Home Furniture, Inc., is a corporation organized, existing and doing business under and by virtue of the laws. of the State of North Dakota with its principal office and place of business located at 414-16 Main Avenue, in the city of Fargo, State of North Dakota.

Respondents David E. Bullert, Henry Cruz and Dennis Erickson are individuals and are officers of said corporate respondent. They formulate, direct and control the acts and practices of the corporate respondent, including the acts and practices hereinafter set forth. Their address is Northport Furniture, Northport Shopping Center, Fargo, N. Dak.

Par. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of furniture at retail to the purchasing public. Par. 8. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said merchandise when sold, to be shipped from their place of business i in the State of North Dakota to purchasers thereof located in various other States of the United States and the District of Columbia, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in commerce, as “commerce” is defined in the Federal Trade Commission Act.

Par. 4. In the course and conduct of their business and for the purpose of inducing the purchase of their merchandise, respondents have made certain statements and representations with respect thereto in newspapers and in radio broadcasts of which the following are typical but not all inclusive:

Yes! Going out of Business Quitting Business Home Furniture is Quitting Business Quitting Business Sale We must Liquidate! TimeIs Short! HRUBY DISTRIBUTING CO. 1459 1457 Complaint Help! Disaster Strikes! Due to circumstances beyond our control, we are forced to reduce our large stock at once.

Emergency Sale We are forced to unload our vast stock.

Store wide Sacrifice of Definitely Better Furniture! We Quit Forever Every Item On Sale You will actually save 48%—55%—70% and more off our regular price Stocks Must Go—Reductions to 75% Save up to %4 5 Pe. Drop Leaf Table & 4 Chairs Reg. $99.50 now 59.97 Davenport & Chair_...---.__-.______ Reg. 389.50_---------. 289.97 Par, 5. Through the use of the above said statements and representations, and others of similar import, but not specifically set out herein, respondents have represented, directly or by implication that: 1. Respondents are conducting a bona fide “quitting business” sale caused by circumstances beyond their control. 2. Respondents’ merchandise is being offered for sale at reduced prices and that said reductions represent savings to the purchasers thereof of the differences between the selling prices of said merchandise and the prices at which said merchandise was usually and customarily sold at retail by the respondents in the recent regular course of their business.

_ 8. Respondents have reduced the prices of their merchandise as much as 75% below the usual and customary prices at which such merchandise was sold in the recent regular course of their business and that said reductions represented savings to purchasers thereof from respondents’ usual and customary retail prices. 4, The higher stated prices set out in said advertisements in connection with the term “Reg.” are the prices at which the advertised merchandise had been usually and customarily sold by respondents at retail in the recent regular course of business and that the differences between the higher and lower prices represent savings, to purchasers from respondents’ usual and customary retail prices. Par. 6. In truth and in fact:

1. The sale conducted by the respondents is not a bona fide “quitting business” sale conducted by them because of circumstances beyond their contro] and respondents are not actually quitting business but are merely conducting the same business from another location and under another name.

Decision and Order 21 F.T.C.

2. Certain of the advertised merchandise is not being offered for sale at reduced prices and the purhcasing public is not afforded savings of the differences between the reduced prices and the prices at which said merchandise was usually and customarily sold at retail by respondents in the recent regular course of their business. 3. Respondents have not reduced the prices of their merchandise by 75% or any other such high percentage and the purchasing public is not afforded savings in such amounts from the prices at which such merchandise is usually and customarily sold at retail by the respondents in the recent regular course of their business. lo 4, The higher stated prices set out in said advertisements in connection with the term “Reg.” were in excess of the prices at which the advertised merchandise had been usually and customarily sold by respondents in the recent regular course of business and the differences between the higher and lower prices did not represent savings to purchasers from respondents’ usual and customary retail prices. Therefore, the statements and representations referred to in paragraphs 4 and 5 are false, misleading and deceptive. Par. 7 In the course and conduct of their business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals engaged in the sale of merchandise of the same general kind and nature as that sold by respondents. , Par. 8. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents’ merchandise by reason of said erroneous and mistaken belief.

Par. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice of the public and respondents’ competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5(a)(1) of the Federal Trade Commission Act. os DrEcIsION AND ORDER The Commission having heretofore determined to issue its complaint charging the.respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents HOME FURNITURE, INC., ET AL. 1461 1457 Decision and Order having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission’s rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent Home Furniture, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of North Dakota, with its office and principal place of business located at 414-16 Main Avenue, in the city of Fargo, State of North. Dakota.

Respondents David E. Bullert, Henry Cruz and Dennis Erickson are officers of said corporation and their address is Northport Furniture, Northport Shopping Center, Fargo, N. Dak. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered, That respondents, Home Furniture, Inc., a corporation, and its officers, and David E. Bullert, Henry Cruz and Dennis Erickson, individually and as officers of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of furniture or any other articles of merchandise in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from: A. Representing, directly or indirectly that: 1. Such merchandise is distress merchandise or is from the stock of a business which is being liquidated or which is going out of business.

2. Any savings are afforded from the usual and customary retail price of merchandise, unless the price for which such merchandise is offered constitutes a reduction from the price 1 28-122—65: 93 . Complaint... 61 F.T.C.

at which it has been sold by respondents in the recent regular course of business. :

B. Using the words “regular price” or “Reg.”, or any other word or words of similar import or meaning, to describe or refer to the retail prices of such merchandise, unless the prices so designated are those at which such articles of merchandise have been usually and customarily sold by respondents in the recent regular course of business., C. Misrepresenting, in any manner, the savings available to purchasers of respondents’ merchandise or the amount by which the price of such merchandise has been reduced. D. Misrepresenting, in any manner, the type and kind of sale - which they are conducting.

It is further ordered, That the respondents herein shall, within sixty (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 have complied with this order. In the Matter oF CRANE CO.

5 1 7 1 1 2 736 1738 113 29 90.620293 ORDER,5 1 7 1 1 3 865 1736 81 30 86.469162 ETC.,5 1 7 1 1 4 962 1735 42 21 96.932617 IN5 1 7 1 1 5 1021 1733 125 22 96.956116 REGARDS 1 7 1 1 6 1161 1733 41 21 96.931091 TO5 1 7 1 1 7 1217 1732 72 20 96.453415 THES 1 7 1 1 8 1303 1730 146 21 96.453415 ALLEGED5 1 7 1 1 9 1465 1728 182 22 96.526688 VIOLATIONS 1 7 1 1 10 1664 1728 41 21 96.483017 OF5 1 7 1 1 11 1721 1728 66 21 77.786926 SEC.5 1 7 1 1 12 1804 1716 19 32 92.489632 75 1 7 1 1 13 1840 1727 40 21 96.555084 OF4 1 7 1 2 0 1139 1779 336 32 -1 5 1 7 1 2 1 1139 1783 70 28 96.833504 THES 1 7 1 2 2 1231 1779 157 24 95.838432 CLAYTON5 1 7 1 2 3 1410 1779 65 22 96.989647 ACT2 1 8 0 0 0 796 1840 1024 39 -1 3 1 8 1 0 0 796 1840 1024 39 -1 4 1 8 1 1 0 796 1840 1024 39 -1 5 1 8 1 1 1 796 1854 111 24 96.479134 Dockets 1 8 1 1 2 920 1853 76 25 93.983353 7833.5 1 8 1 1 3 1036 1850 170 29 94.902740 Complaint,5 1 8 1 1 4 1219 1849 72 23 93.241806 Mar.5 1 8 1 1 5 1303 1848 43 27 93.263344 18,5 1 8 1 1 6 1357 1845 249 28 60.290524 1960—Decision,5 1 8 1 1 7 1618 1845 67 24 93.553757 Dec.5 1 8 1 1 8 1697 1844 42 28 96.849106 28,5 1 8 1 1 9 1750 1840 70 28 96.661774 19622 1 9 0 0 0 653 1907 1313 209 -1 3 1 9 1 0 0 653 1907 1313 209 -1 4 1 9 1 1 0 653 1907 1313 41 -1 5 1 9 1 1 1 653 1921 92 26 92.417236 Orders 1 9 1 1 2 769 1920 240 28 92.352859 dismissing—on5 1 9 1 1 3 1031 1917 109 24 96.737961 motions 1 9 1 1 4 1162 1916 31 23 96.478973 of5 1 9 1 1 5 1216 1914 157 28 96.281319 complaints 1 9 1 1 6 1394 1913 116 23 96.335480 counsels 1 9 1 1 7 1532 1912 57 24 96.714180 ands 1 9 1 1 8 1612 1911 78 25 96.909073 after5 1 9 1 1 9 1712 1911 175 28 96.410782 respondents 1 9 1 1 10 1907 1907 59 26 96.688751 had4 1 9 1 2 0 725 1950 1241 39 -1 5 1 9 1 2 1 725 1964 129 25 96.517105 divested5 1 9 1 2 2 875 1962 81 24 96.038261 itself5 1 9 1 2 3 970 1961 37 25 96.340988 of5 1 9 1 2 4 1025 1960 49 24 96.406548 thes 1 9 1 2 5 1093 1958 160 30 92.953323 properties5 1 9 1 2 6 1273 1954 351 29 91.448006 concerned—complaints 1 9 1 2 7 1641 1953 139 29 96.696640 charging5 1 9 1 2 8 1798 1959 54 18 96.660255 ones 1 9 1 2 9 1869 1952 31 23 96.320961 of5 1 9 1 2 10 1918 1950 48 25 96.802696 thea 1 9 1 3 0 724 1992 1242 43 -1 5 1 9 1 3 1 724 2007 111 28 96.895584 largest5 1 9 1 3 2 853 2003 236 25 96.431068 manufacturers5 1 9 1 3 3 1109 2001 31 24 96.800156 of5 1 9 1 3 4 1159 1999 148 30 96.152283 plumbing5 1 9 1 3 5 1326 1998 130 27 96.438911 fixtures,5 1 9 1 3 6 1476 1996 118 29 95.771194 heating5 1 9 1 3 7 1613 1995 168 30 96.370544 apparatus,5 1 9 1 3 8 1801 1995 58 23 93.282539 ands 1 9 1 3 9 1877 1992 89 25 91.887047 fabri-4 1 9 1 4 0 727 2035 1239 40 -1 5 1 9 1 4 1 727 2049 82 24 96.344063 cated5 1 9 1 4 2 827 2047 71 24 96.359856 steels 1 9 1 4 3 916 2046 64 29 96.352974 pipes 1 9 1 4 4 997 2045 72 23 96.471008 with5 1 9 1 4 5 1085 2043 158 28 96.249763 acquiring,5 1 9 1 4 6 1259 2040 103 25 96.558784 within5 1 9 1 4 7 1378 2046 17 18 96.869537 a5 1 9 1 4 8 1411 2041 139 27 96.765137 two-years 1 9 1 4 9 1564 2038 107 30 96.743736 period,5 1 9 1 4 10 1687 2037 40 25 96.273590 all5 1 9 1 4 11 1743 2043 32 18 96.187943 or5 1 9 1 4 12 1790 2038 67 27 96.750229 parts 1 9 1 4 13 1871 2036 32 24 96.194717 of5 1 9 1 4 14 1918 2035 48 24 96.911118 thea 1 9 1 5 0 729 2073 1237 43 -1 5 1 9 1 5 1 729 2091 80 25 96.728600 stocks 1 9 1 5 2 829 2096 31 18 97.001175 or5 1 9 1 5 3 878 2090 94 23 96.501472 assets5 1 9 1 5 4 990 2088 32 24 96.207802 of5 1 9 1 5 5 1039 2087 55 23 95.998711 five5 1 9 1 5 6 1111 2085 161 28 95.998711 competing5 1 9 1 5 7 1288 2083 155 30 96.818825 producers5 1 9 1 5 8 1460 2081 31 24 96.493210 of5 1 9 1 5 9 1508 2081 49 24 96.912018 thes 1 9 1 5 10 1573 2086 80 18 96.509018 same5 1 9 1 5 11 1669 2085 89 23 96.523476 ranges 1 9 1 5 12 1774 2079 31 24 96.515778 of5 1 9 1 5 13 1822 2073 144 39 96.610115 products.2 1 10 0 0 0 1207 2156 208 34 -1 3 1 10 1 0 0 1207 2156 208 34 -1 4 1 10 1 1 0 1207 2156 208 34 -1 5 1 10 1 1 1 1207 2156 208 34 91.547546 Complaint2 1 11 0 0 0 658 2218 1315 471 -1 3 1 11 1 0 0 658 2218 1315 471 -1 4 1 11 1 1 0 700 2218 1271 53 -1 5 1 11 1 1 1 700 2238 72 33 96.353287 Thes 1 11 1 1 2 791 2235 145 34 96.353287 Federal5 1 11 1 1 3 955 2234 113 32 96.863136 Trades 1 11 1 1 4 1087 2231 234 40 96.210457 Commission,5 1 11 1 1 5 1339 2229 129 42 96.803864 having5 1 11 1 1 6 1486 2238 118 22 96.936455 reasons 1 11 1 1 7 1621 2231 40 38 96.649109 to5 1 11 1 1 8 1675 2226 128 34 96.649109 believes 1 11 1 1 9 1819 2226 77 32 96.889969 that5 1 11 1 1 10 1913 2218 58 39 96.889969 thea 1 11 1 2 0 658 2277 1313 55 -1 5 1 11 1 2 1 658 2293 103 39 96.979019 party5 1 11 1 2 2 780 2286 205 43 96.702034 respondents 1 11 1 2 3 1003 2283 122 34 96.977493 named5 1 11 1 2 4 1143 2283 37 31 96.883179 in5 1 11 1 2 5 1198 2283 58 31 96.937042 thes 1 11 1 2 6 1275 2280 137 42 96.593979 captions 1 11 1 2 7 1430 2279 119 32 95.790855 hereof5 1 11 1 2 8 1567 2278 68 33 94.963844 ands 1 11 1 2 9 1652 2277 210 33 96.202850 hereinafter5 1 11 1 2 10 1878 2285 93 23 96.388115 more4 1 11 1 3 0 658 2325 1312 58 -1 5 1 11 1 3 1 658 2339 226 44 96.882042 particularly5 1 11 1 3 2 906 2335 198 43 96.486038 designated5 1 11 1 3 3 1125 2334 68 31 96.535049 ands 1 11 1 3 4 1214 2331 182 41 96.515579 described,5 1 11 1 3 5 1417 2331 61 31 96.515579 has5 1 11 1 3 6 1497 2328 150 34 95.690536 violated5 1 11 1 3 7 1667 2328 68 43 96.853798 ands 1 11 1 3 8 1755 2327 29 33 96.054451 is5 1 11 1 3 9 1804 2338 77 21 93.289429 now5 1 11 1 3 10 1900 2325 70 33 82.315613 Vio-4 1 11 1 4 0 659 2372 1312 60 -1 5 1 11 1 4 1 659 2391 111 41 96.898964 lating5 1 11 1 4 2 790 2390 58 32 96.907364 thes 1 11 1 4 3 865 2387 192 44 96.669250 provisions5 1 11 1 4 4 1075 2385 39 32 96.942505 of5 1 11 1 4 5 1133 2383 135 35 96.622314 Sections 1 11 1 4 6 1288 2385 17 30 95.830780 55 1 11 1 4 7 1324 2382 39 32 95.830780 of5 1 11 1 4 8 1380 2382 57 31 96.643753 thes 1 11 1 4 9 1454 2380 144 33 96.447685 Federal5 1 11 1 4 10 1616 2379 114 32 96.475876 Trades 1 11 1 4 11 1747 2372 224 51 95.971260 Commission4 1 11 1 5 0 661 2427 1311 55 -1 5 1 11 1 5 1 661 2442 67 33 92.995255 Acts 1 11 1 5 2 759 2439 138 43 92.942276 (U.S.C.5 1 11 1 5 3 921 2438 91 33 96.735603 Titles 1 11 1 5 4 1036 2439 49 38 96.735603 15,5 1 11 1 5 5 1110 2435 71 35 96.286896 Sec.5 1 11 1 5 6 1203 2434 74 42 96.671043 45),5 1 11 1 5 7 1301 2433 67 32 96.587433 ands 1 11 1 5 8 1392 2431 135 35 96.957901 Sections 1 11 1 5 9 1549 2430 20 34 96.962273 75 1 11 1 5 10 1591 2430 40 33 97.009468 of5 1 11 1 5 11 1651 2430 59 34 97.012177 thes 1 11 1 5 12 1733 2428 147 42 96.693848 Clayton5 1 11 1 5 13 1903 2427 69 33 96.103111 Acta 1 11 1 6 0 667 2479 1306 56 -1 5 1 11 1 6 1 667 2492 139 43 95.816307 (U.S.C.5 1 11 1 6 2 828 2490 91 33 96.589523 Titles 1 11 1 6 3 940 2492 49 37 96.938835 15,5 1 11 1 6 4 1012 2487 70 34 95.647568 Sec.5 1 11 1 6 5 1105 2487 72 41 95.647568 18),5 1 11 1 6 6 1198 2497 35 21 96.832848 as5 1 11 1 6 7 1255 2484 163 33 96.562599 amended5 1 11 1 6 8 1438 2483 67 32 96.727188 ands 1 11 1 6 9 1526 2481 174 43 96.349892 approved5 1 11 1 6 10 1720 2479 183 33 96.775940 December5 1 11 1 6 11 1922 2480 51 38 96.896095 29,4 1 11 1 7 0 664 2529 1309 57 -1 5 1 11 1 7 1 664 2546 90 40 96.566811 1950,5 1 11 1 7 2 773 2543 67 32 96.566811 ands 1 11 1 7 3 858 2542 29 32 96.447960 it5 1 11 1 7 4 904 2539 190 43 96.447960 appearing5 1 11 1 7 5 1110 2542 35 28 96.995132 to5 1 11 1 7 6 1162 2537 58 32 97.011734 thes 1 11 1 7 7 1240 2534 223 35 96.316162 Commissions 1 11 1 7 8 1480 2533 76 33 96.316162 that5 1 11 1 7 9 1574 2544 19 20 96.895554 a5 1 11 1 7 10 1610 2530 204 45 96.561028 proceedings 1 11 1 7 11 1829 2530 45 42 96.919701 by5 1 11 1 7 12 1891 2530 29 31 96.801117 it5 1 11 1 7 13 1936 2529 37 32 96.801117 in4 1 11 1 8 0 662 2581 1310 56 -1 5 1 11 1 8 1 662 2599 129 38 95.988457 respects 1 11 1 8 2 809 2591 133 38 95.846939 thereof5 1 11 1 8 3 959 2590 113 32 97.003090 would5 1 11 1 8 4 1084 2588 46 32 96.629654 be5 1 11 1 8 5 1146 2588 35 32 96.569725 in5 1 11 1 8 6 1198 2587 58 32 96.569725 thes 1 11 1 8 7 1271 2585 116 44 96.983765 public5 1 11 1 8 8 1401 2585 153 39 96.902046 interest,5 1 11 1 8 9 1566 2583 125 43 96.171951 hereby5 1 11 1 8 10 1705 2582 105 38 96.932709 issues5 1 11 1 8 11 1826 2581 44 33 93.266426 its5 1 11 1 8 12 1885 2590 87 22 92.750641 com-4 1 11 1 9 0 662 2635 1283 54 -1 5 1 11 1 9 1 662 2646 112 43 90.987328 plaints 1 11 1 9 2 787 2644 130 41 96.848816 stating5 1 11 1 9 3 928 2642 46 32 96.928635 its5 1 11 1 9 4 987 2641 140 41 96.913734 charges5 1 11 1 9 5 1138 2639 37 32 96.895187 in5 1 11 1 9 6 1186 2639 77 32 96.655701 that5 1 11 1 9 7 1275 2640 129 39 96.655701 respects 1 11 1 9 8 1417 2647 36 21 96.867348 as5 1 11 1 9 9 1465 2635 151 32 96.333435 follows: CRANE CO. 1463 1462 Complaint .

ParacraPH 1. Respondent, Crane Co. (hereinafter sometimes referred to as Crane), is a corporation doing business under and by virtue of the laws of the State of Illinois, with its principal offices and place of business located at 836 South Michigan Avenue, Chicago 5, Ill. Crane Co. is the successor to a business established in 1865 under the name North Western Manufacturing Co. Following several changes in name during subsequent years, the name and style “Crane Co.” was adopted in the year 1922.

Crane Co. is now, and for several years last past has been, directly and indirectly, engaged in the manufacture, sale and distribution of different categories of products in the plumbing fixture and heating apparatus field together with other kindred and related products including, among others, (1) valves and fittings; (2) plumbing fixtures and fittings; (8) heating equipment and auxiliary or related products; and (4) fabricated steel pipe.

Crane Co. is now, and for several years last past has been, one of the largest, if not the largest, manufacturer of a complete line of valves and fittings in the United States and is one of few companies in the United States equipped to manufacture, distribute and sell a coniplete, or virtually complete, line of these products. Crane Co. is now, and for several years last past has been, a major and significant factor in the manufacture, distribution and sale of plumbing fixtures and equipment, and in the manufacture, distribution and sale of heating apparatus and auxiliary products. It is also a significant factor in the manufacture, distribution and sale of fabricated steel pipe.

As of December 31, 1958, Crane’s products, and products available to Crane, either through purchase or otherwise, were handled by 1,312 independent wholesale establishments and by 175 company-owned branches located throughout the United States and Canada. As of the end of 1958, approximately one-half of the sales made by Crane and its domestic subsidiaries were of goods manufactured by Crane and its domestic subsidiaries and approximately one-half of such sales were of goods manufactured by others and handled by Crane and its domestic subsidiaries on a jobbing or agency basis. Selected financial data for Crane Co. for the year ending December 31, 1958, is as follows:

Sales______--.----------~------~------ ee $336, 196, 279 Total assets__.--------------------------- ee 224, 073, 781 ‘Net current assets______---.--_______--- eee 186, 1638, 472 Net income___.....--------------_-------- eee 5, 475, 598 Complaint 61 F.T.C.

Par. 2, Crane as a manufacturer and fabricator purchases some, if not all, of the necessary: materials and supplies from sources located in States of the United States other than the State or States in which the. manufacturing and fabricating processes take place and the ultimate products are then caused to be shipped or otherwise transported ‘by Crane to various States of the United States other than the State ‘in which such manufacturing and fabricating took place and to foreign ‘countries.

In addition, Crane is a distributor for the various related and allied product lines set forth herein, including valves and fittings, fabricated steel pipe, plumbing fixtures and equipment, heating apparatus and auxiliary products.

The material purchased and used by Crane in the manufacture and fabrication of the various products listed herein, as well as the various products purchased and sold by Crane as a distributor thereof, are transported from one State or another to various other States of the United States and to foreign countries, and respondent, as a result thereof, is now, and has been, engaged in commerce, as “commerce” is defined in the Clayton Act and the Federal Trade Commission Act. Par. 3. In a series of transactions taking place within the past two years, Crane has acquired, directly or indirectly, all or part of the stock or assets of the certain corporations, hereinafter named, engaged in the purchase, manufacture, processing, fabrication or distribution of different categories of products in the valve, plumbing fixtures and equipment and heating apparatus industry, together with other kindred and related products, including, among others, (1) valves and fittings; (2) plumbing fixtures and fittings; (3) heating equipment and auxiliary or related products; and (4) fabricated steel pipe. All of the acquired corporations at the time of the said acquisitions, in the regular course of business, either purchased, manufactured, processed, fabricated or distributed the foregoing products in and throughout the various States of the United States or purchased and received shipments related to the manufacture, processing, fabrication or distribution of said products from other purchasers, suppliers, manufacturers, fabricators or processors located throughout the United States. All of the acquired corporations, prior to and at the time of the acquisitions, were engaged in commerce, as “commerce” is defined in the Clayton Act and the Federal Trade Commission Act. Respondent’s acquisitions include, among others, all or part of the stock or assets of the following corporations: (1) Chapman Valve Manufacturing Company, a Massachusetts corporation.

CRANE CO. 1465 1462 Complaint:

(2) Briggs Manufacturing Company, a Michigan corporation. (3) National-U.S. Radiator Corporation, a Maryland corporation. (4) Swartout Company, Inc., an Ohio corporation. (5) Pipe Fabricators, Inc. (Crane also acquired at this time Canadian Pittsburgh Piping, Ltd., a subsidiary of Pipe F abricators, Inc.), an Indiana corporation.

Par. 4, The effect of the aforesaid acquisitions by the respondent, individually and collectively, may be substantially to lessen competition or to tend to create a monopoly in the production, distribution and sale of (1) valves and fittings; (2) plumbing fixtures and fittings; (3) heating equipment and auxiliary or related products; and (4) fabricated steel pipe within the meaning of Section 7 of the Clayton Act as amended and approved December 29, 1950. Specifically, the effects flowing from the acquisitions recited herein include the actual or potential lessening of competition or a tendency to create a monopoly in violation of Section 7 of the Clayton Act in the following ways, among others:

(1) Chapman, National-U.S., the Autronic Division of Swartout, Pipe Fabricators, Inc., and Canadian Pittsburgh Piping, Ltd., have been or may be permanently eliminated as substantial independent competitive factors in their respective industries; (2) Briggs will either (a) be eliminated as a substantial independent competitive factor in its industry if Crane gains control or working control of Briggs, or (b) the competitive vigor of Briggs will be substantially impaired, lessened or eliminated should Crane elect one or more members to Briggs’ Board of Directors; (3) Respondent’s competitive position in the products or product lines hereinbefore named has been materially improved, or wil] be materially improved, to the actual or potential detriment of competition in these products or product lines;

(4) Actual and potential competition between respondent and the corporations hereinbefore named has been or will be substantially decreased or entirely eliminated;

(5) Actual and potential competition between wholesalers and distributors of the products or product lines hereinbefore named may be, or will be, substantially lessened or completely eliminated; (6) Actual and potential competition in the products or product lines hereinbefore named may be substantially lessened and industrywide concentration in these products or product lines has been and may be substantially increased; .

(7) Respondent (a) has materially strengthened its financial position; (b) is better able, or will be better able, to arrange financial ac- Initial Decision 61 F.T.C.

commodations; (c) has facilitated, or will have facilitated, its access to markets; (d) has increased the number and scope of technical and managerial skills available to it; (e) has become, or will become, better able to inhibit new producers from entering its markets; (f) is better able, or will become better able, through the decrease in unit costs of production and distribution or through other means, to drive existing producers and distributors from its markets. Par. 5. The foregoing acquisitions alleged and set forth hereinabove constitute a violation of Section 7 of the Clayton Act (U.S.C. Title 15, Sec. 18), as amended and approved December 29, 1950. Par. 6. The acquisitions hereinbefore described tending substantially to lessen competition or to create a monopoly are to the prejudice and injury of the public and constitute an unfair method of competition and unfair acts and practices in commerce within the intent and meaning of Section 5 of the Federal Trade Commission Act. Par. 7. The foregoing acquisitions, acts and practices as hereinbefore alleged and set forth constitute a violation of Section 5 of the Federal Trade Commission Act (U.S.C. Title 15, Sec. 45). Myr. Norman L. Holmes for the Commission.

Lord, Day & Lord, by Mr. John D. Garrison, Mr. Thomas F. Daly, and Mr. Raymond L. Hays, of New York, N.Y. Inittat Decision py Leon R. Gross, Heartne Examiner The complaint in this proceeding, issued March 18, 1960, alleged that the effect of respondent Crane Co.’s acquisition of all or part of the stock or assets of (1) Chapman Valve Manufacturing Company, a Massachusetts corporation, (2) Briggs Manufacturing Company, a Michigan corporation, (3) National-U.S. Radiator Corporation, a Maryland corporation, (4) Swartout Company, Inc., an Ohio corporation, and (5) Pipe Fabricators, Inc., an Indiana corporation, individually and collectively, may be substantially to lessen competition or to tend to create a monopoly in certain lines of commerce, enumerated in the complaint, in violation of §7 of the Clayton Act, as amended. Pursuant to a ruling of the hearing examiner, on December 14, 1961, respondent filed its “Supplemental Statement of Facts” giving the details of certain voluntary divestitures and acquisitions which had occurred after the complaint was filed. Hearings were held at which formal background evidence was introduced. Respondent’s Supplemental Statement contained other recitals bearing upon the alleged monopolistic effect, if any, of respondent’s acquisitions and divestitures. On May 7, 1962, the exam- CRANE CO. _ 1467 1462 Initial Decision iner entered an order for counsel supporting the complaint: to show cause why this proceeding should not be dismissed for want of prosecution. This rule to show cause and the proceeding generally were set for October 15, 1962, in Washington, D.C. Thereafter complaint counsel sought by court action to obtain, and did obtain, additional] information to help evaluate the monopolistic effects, if any, of respondent’s acquisitions.’ On September 17, 1962, complaint counsel filed his motion to dismiss these proceedings setting forth:

2. Respondent, Crane Co., has divested all of its substantial stock holdings in the Briggs Manufacturing Company, (Tr. 66-67) thereby restoring Briggs as a substantial competitor in the plumbing fixtures industry. Furthermore, respondent, on December 14, 1961, filed with the Hearing Examiner, a Supplemental Statement of Facts, wherein respondent states that it has voluntarily divested the following assets of the National-U. S. Radiator Corporation: a. The Viking Products Division, which manufactured blowers, fans, humidifiers and components for air conditioning equipment. b. The Drayer-Hanson Division, which manufactured central air conditioning and air handling equipment and heat transfer units. ce. The stock of Magnetic Powders, Inc., as well as the assets of the Powdered Metals Division. OO d. Two plants in Illinois have been sold and a third plant in that state has been offered for sale.

8. In this same aforementioned Supplemental Statement of facts, respondent states that it has disposed of the physical inventories acquired from Pipe Fabricators, Inc., and has sold or has put up for sale, the remaining acquired property, equipment and plant.

4, Canadian Pittsburgh Piping, Ltd., was acquired by Crane, Ltd., a Canadian subsidiary of respondent. There is no indication in any of the various materials submitted by respondent and in the possession of counsel supporting the complaint that either Crane, Ltd., or Canadian Pittsburgh Piping, Ltd., made any sales of fabricated pipe in the United States. 5. Now therefore inasmuch as the aforementioned divestitures of stock and assets by respondent have served the public interest as concerns respondent’s acquisition of such stock or assets, and whereas such divestiture has substantially vitiated the basis of the complaint as concerns the divested stock and assets, counsel supporting the complaint respectfully urge the dismissal of this matter without prejudice to the right of the Commission to undertake such further investigation or further proceedings to protect the public interest as may be warranted in the future on the basis of all the facts and circumstances pertinent to an evaluation of such matters.

After complaint counsel filed the aforesaid motion to dismiss, counsel for respondent were requested to state whether respondent intended to file any paper responsive to said motion to dismiss, or in opposition thereto, and have represented that they do not intend to do so. The 15 1 5 1 1 2 614 2727 44 21 94.197548 Sees 1 5 1 1 3 672 2725 65 24 96.614708 Civil5 1 5 1 1 4 751 2727 91 20 92.954872 Actions 1 5 1 1 5 855 2727 26 20 92.954872 M5 1 5 1 1 6 896 2726 96 21 78.201538 18-3045 1 5 1 1 7 1009 2727 25 19 96.567825 in5 1 5 1 1 8 1048 2727 43 20 96.754478 thes 1 5 1 1 9 1105 2726 56 22 95.697586 U.S.5 1 5 1 1 10 1175 2727 110 20 94.677773 Districts 1 5 1 1 11 1299 2726 78 21 96.762665 Courts 1 5 1 1 12 1390 2726 43 21 96.931610 for5 1 5 1 1 13 1446 2727 43 20 97.015373 thes 1 5 1 1 14 1505 2725 127 22 97.015305 Southern5 1 5 1 1 15 1646 2715 110 32 96.261879 Districts 1 5 1 1 16 1771 2727 26 20 96.261879 of5 1 5 1 1 17 1811 2727 60 21 96.999786 New4 1 5 1 2 0 559 2760 294 25 -1 5 1 5 1 2 1 559 2761 73 24 95.842957 York,5 1 5 1 2 2 643 2761 62 20 92.082291 FTC5 1 5 1 2 3 716 2764 21 16 92.082291 v.5 1 5 1 2 4 751 2760 102 24 96.241646 Cooper. Sylabus 61 F.T.C.

hearing set for October 15, 1962, on the Rule to Show Cause of May 7, 1962, and for further proceedings, has been canceled because the parties have indicated that they deem the pending motion to dismiss as dispositive of this proceeding, if allowed. Rule 4.6(e) of this Commission’s Rules of Practice, inter alia, provides:

When a motion to dismiss a complaint ... is granted with the result that the proceeding before the hearing examiner is terminated, the hearing examiner shall make and file an initial decision in accordance with the provisions of §4.19....

In view of the recitals contained in the motion to dismiss complaint filed September 17, 1962, and it appearing that complaint counsel has therein admitted that the public interest does not require that this particular proceeding go forward, It is ordered, That the Rule to Show Cause of May 7, 1962, be and hereby is discharged; and It is further ordered, That this complaint and the proceeding thereunder be and hereby are dismissed without prejudice to the rights of ‘the Federal Trade Commission to institute such further proceeding in the future as the facts and circumstances may at that time warrant. Finau Orpvrer The Commission by its previous order having placed this case on its docket for review; and The Commission now having concluded that the initial decision of the hearing examiner is appropriate in all respects to dispose of this proceeding:

It is ordered, That the initial decision of the hearing examiner filed October 17, 1962, be, and it hereby is, adopted as the decision of the Commission.

By the Commission, Commissioner MacIntyre not concurring.