The Washington times., 1913-01-09
KELLOGG EXPLAINS
FLAKE COhPANYS
SELLING SYSTEM
Government Suit Against
Concern Awakens In
tereSt of GrocerS.

NEW YORK. Jan. s.-The action of
Attorney General Wickersham in bring
ing an action against the Kellogg
Toasted Corn Flake Company, of Bat
lie Creek, Mich, under the Sherman
snti-trust law, has occasioned wide
spread interest in manufacturing circles
and those most conversant with issues
centering around grocery trade selling
Policies are awaiting developments.
W. Is. Kellogg is now on his way TO
south America and his first informa-
ton regarding the suit came from the
New York newspapers few hours be-
fore he sailed. Mr.. kellogg declined
to state just what action his COM
pany will take in the matter till he
knew more about the case and under
stood just what the company is charged
with.
An I care to say now" said Mr..
kellogg. 'fs that the whole matter is
complete surprise to us. We adopted
our policy with a very honest desire
not only to conform to the letter of
the law. but TO its spirit, and the things
We aimed to accomplish by our SELL
ing plan are the very things for which
we understood the Sherman and other
protection of the consumer and small
oeaier In the same equality of oppor-
funity enjoyed by trusts and big huy-
ers. III these things are contrary to
Jaw. We shall be much surprised.
Contracts Denied.
We are surprised to FIND ourselves
charged with exacting contracts from
oooeers in the grocery trade, because
we have no contracts with the trode
whatever. and will have no trouble in
proving II.
We have acted under the best legal
advice, and supposed we were entirely
within our rights as owners of our
own brand of goods, upon which wide
spread public approval has placed the
stamp OF quality.
About three months ago an agent |
OF the Department of Justice called |
on US and investigated our selling |
plan. We fully explained 1t to HIM, /
and he frankly stated that he believed |
we were acting legally. He regarded |
our dealings as free from both con-
splracy and coercion, and admirably |
designed to promote equality between |
big and little trader.
AS a matter of fact, our company
has adopted and enforced its policy |
largely in behalf of the consumer The |
nlttOrH Oh Inc MANY breakfast 1000 fall |
ures Is that they have been sold on a |
speculative basis; bought in too large
quantities by the groeers, in order TO |
get low prices. and In consequence went |
10 the consumer stale and inferior |
Quantity prices allowed the big buyers |
TO enjoy unfair advantages. Quick dis |
ftributfon between factory ard con- /
sumer-which is essential in a perish I
able product-was defeated.
Aim of Selling Plan.
Our whole aim has been to keep our
goods moving and to place them in the
hands of as many grocers as possible |
by making them profitable for every |
little corner grocery to handle, free |
from unfair favoritism usually shown
his big competitor, in order that the /
consumer may get them fresh and |
promptly. For that reason a sure and /
quick distribution was necessary and |
statistics show that the surest way to
secure IL IS to deal only through the l
wholesalers, leaving them to sell re-
tailers. H
lit has been the means of placing our
goods in the hands of not less than
25o.O0o retail grocers in every corner of II
the country and on a basis of absolute
equality II
''Of course, this has drawn the enmity II
Of the big dealers who Unjoyed special Il
privileges from some manufacturers and II
we have encountered much opposition. Il
To protect ourselves and our distribu- II
ters-and through them the consumers II
IL has been necessary 10 decline to sell II
our goods to dealers who would use II
them only for unfair competition, and
not only injure us but other dealers,
and ultimately the consumer
Laughs at Suggestion.
ANY suggestion that we are a mo-
nopoly is laughable- There are not less
than 100 other kinds of corn flakes on
the market, all in competition with ours,
and we have no connection with any OF
them. We regard the patent question
as a minor issue Our patented package
was designed just as our selling policy
protect the contents after the package
was opened If there was anything IN
pafentable about the package that sure
~ does not affect our fundamental
rights to deal with our property as we
choose.
I'VE are not certain as yet Just what
course we will pursue with regard to
the suit. If we are doing anything
Illegal, we propose to quit il, but If a
policy aimed at sure, efficient and eco
nomlcal distribution. equal profits for
goods to the consumer is violation
OF the Sherman or any other law it is
lime we found IL out.
las a matter of fact, we San show
that our policy has greatly increased
the size of our package and reduced
the price to the consumer from /. to 10 |
cents per package-aIl due to the wide
spread distribution promoted and made
possible by our advertising and our