The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-12-26
To See Whether COntrOl %
Prices Can Be Maintained.
UNDER SHELTER OF PATENT
The Kellogg People at Battle
Creek Are Operating
Government Alleges Violation
of Sherman Antitrust Law.

Detroit, Dec. 26.-The Kellogg Toast
ed Corn Flakes company is alleged to
be violating the Sherman law in Pc
tition in equity filed in the United
states district court here today by or
der of Attorney General Wickersham
TO settle for all time the extent to
which a manufacturer may control re-
tail prices.
The company and its officers engaged
in the manufacture Of Kellogg toasted
corn fakes are charged with fixing
prices at which the flakes are sold to
retailer and consumer. preventing COM
petition which would reduce the price
to the public and creating a monopoly
by concentrating the entire interstate
traffic In this commodity in the hands
of jobbers who abide by price agree
ments exacted by the defendants. II is
alleged the defendants have invoked
the patent laws through the use of a
patented carton in which the fakes
are packed as a mere subterfuge and
device" to escape the provisions Of the
Sherman law.
The government asks for an fnjunc-
ton to prevent the company It's Off
GERS. and agents from controlling the
price of breakfast food after 1t leaves
the hands Of the manufacturer. The
following are named as defendants:
Kellogg Toasted Corn Flake COM
pany. and Will K. Kellogg, Wilfred c.
Kellogg and Andrew Rose respectively
president. secretary and general man
ager of the company, all Of Battle
Creek.
Prices Are Fixed.
The suit is regarded as of vast i'm
portance because of it's bearing on the
right of a manufacturer to control
prices to the consumer. 1t is alleged
the company sells only to joggers re-
fusing absolutely to deal direct with
consumers or with the retail trade.
The commodity according to petition
is sold to jObbers at a uniform price
under an agreement that the jobbers
viii sell TO retailers at a price fixed
by the defendants. The defendants are
charged with strictly enforcing the
agreement of sale by absolutely refus-
ing to deal with any jobber who fails
to maintain the specified price
It is pointed out that a notice signed
by the Kellogg Corn Flake company is
printed on flap of the carton in which
the flakes are packed. stating that the
package and its contents are sold con-
ditionalIy with the distinct understand
ing that they will not be retailed at
less than ten cents per package For
selling at less than that price the
vendor is warned bv the notice that he
is liable to prosecution as an infringer
of DaterF rights.
Carton Not Patentable.
The government insists that the pat
eEted carton can afford no protection
in attempting to fix resale price by
retailers because it is alleged:
The carton was not in fact patent
able as all of its material features had
long been in use before the patent was
issued; the value of the carton is neg
lible, the contents alone being desired
by the purchaser; the defendants hav-
ing sold the cartons and contents to
jobbers. have parted with all title to
the commodities and have no legal
right to fix prices at which the retail
purchaser from the jobber shall be re-
quired to sell and lastly, it's use is re-
sorted to as a mere subterfuge and
device to avoid the provisions of the
antitrust law and the principles of the
common law controlling such con-
tracts