The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1913-01-01
RIGHTS OF MANUFACTURERS.
GOVERNMENT BRINGS IMPOR.
- TANr ANTITRUST SUIT.
Case to Determine Whether Maker
Can ~ Prices at Which Toasted
ocrn Fla<es May be Sold.

roasted Corn Flake company Is al
alleged TO be violating Sherman law,
In petition In equity. filed in the
United states district court here to-
day By order OF Attorney General
wickersham to settle for all time the
extent to which manufactures may
control retail prices. The company
and its officers engaged - the m lru-
faeture OF Kelloggs toasted corn
fakes. are charged with nxiug prices
az which the fiakss are sold to re-
taiiers and consumer, preventing
competition which would reduce the
price 10 the public. and creating a mo-
nopoly BY concentrating the entire
interstate traffic In this commodity in
the hands OF the jobbers and retailers
who abide by price agreement ex-
ected by the defendants. It is al.
legged that tho defendants have in
voksd The patent laws through the
use OF a patented carton In which
the flakes are packed as mere SUBJ
tsrfuge and device" to escape the pro-
Visions OF the Sherman law The gov
ernment asks for injunctions to pre-
vent the company. it's officers and
agents from controlling the price OF
the Breakfast food after Il leaves the
hands OF the manufacturers
The following are named as de-
tendants:
Kellogg Toasted Corn FTa,se COM
9nay md VIII X Kellogg. wiifred c.
R~llogg ard Andrew Rose. respective
T president secretary and general
manager OF the company. all ot Battle
,CTscg Mich.
1he petition. filed by United States
Attorney Cbde l. Webster, was drawn
by James A. Fowler. special assistant
70 the attorney general. and Is re-
! garded by the government as of vast
Importance because of its bearing
upon the right OF a manufacturer to
control prices to the consumer.
II is alleged that the company sells
only to jobbers refusing absolutely to
deal directly with consumers or with
} the retilil trade. The commodity, ac-
-cording to the petition. is sold to job
hers al n uniform price under an
agreement that the jobbers will sell
20 retailers at price fixed By the de-
fendants. The defendants are charged
With s'EiStiy cnfar,'.S ,ne ag-eevatr.
I OF sale by absolutely refusing to deal
with any jobber who fails to malntc IN
the 50 :~ihed prize.
BY the uGs OF a patented carton,
the defendants are alleged to control
the price at which retailers sell TO
consumers IL is pointed out that a
notice signed by the Kellogg Corn
! Flake company Is printed on a flap
OF the carton In which the flakes are
packed. stating that the package and
in contents are sold conditionaily
with the distinct under Landing that
they will not be retailer OF less than
- 10 cents ner package. eeIr sell ns al,
Y less than that price. tie vendor is
warned by the notice that ne i5 lla-
oie TO prosecution as an infrlnger 81
patent rights.
The government insists rh,t m,
patented carton can afford no pro
lection In attempting to o., resale
] prices by retailers becausc. it is al
legged
The carton was not III fact ,.nt-
gble. all It's material features ha d
long len N use befoIe Cine pat,n mt
w@s issued: the value OF .rt carton is
, negligible the conts nt. .J.n. ling
/ desired by the purc'essr; ... de-
fendants having solG tp, corto., and
contents To jobbers apv. par.el with
all title to the con uul.H,s ,... have
no legal right to IA prices e. which
the retail purchaser from t,.~ jobber
shah be required TO sell; and lastly.
Its use n resorted TO as a mere sub
terfuge and device TO avoid the pro-
vidons' OF the antitrust law and the
principles OF common law controlling
such contracts.
The agreements. exacted from job,
bers and the conditions OF sale i'm
4 posed upon and accepted by ~ Ic-
tailers. continues the pet re-
strain the interstate comm .rcc als
breakfast food In that ne, g rt
II from moving In ir.crs'a,
nercc at prices othc thsu those Nxed
by the defendant c-urgtv aud pre-
vent all compel ',Yr ts....r dealers
which can ~ '.a cp.f ta the re-
taller or &C T'ry produce"