New-York tribune., 1918-01-15
A Dangerous Suit

Attorney General or the United States
against Colgate & Co. which threatens
damage to every American industry based
upon the possession of an honored trade
name. That means, indirectly, damage to
the entire American purchasing public.
The charge is that Colgate & Co. have
violated the Sherman antitrust law and
have acted in restraint of trade in that
they have refused to sell their products to
dealers who fail to maintain the Colgate &
Co. retail sales price. They have not
sought to bind their retailers by contract
They have simply exercised what they con-
sidered their legal right, to say what retail
ers they would sell to. 1t does not appear
that Colgate & Go. have attempted to in
terfere with the manufacture of similar
products by others. There has been no in
timidation of the dealer to prevent the sale
of competing lines. 1t is not charged that
they have conspired with any other manu-
facturer for any illegal purpose. 1t is not
claimed that they are trying to control the
entire output of their particular line. 1t is
not even intimated that Colgate e. Co. are
in any sense of the word a trust Their
sole and only offence alleged to have been
committed is that of choosing whom they
will deal with and whom they will not.
Colgate G. Co. have been in business for
112 years. They maintain that they have
been permitted to enjoy the confidence of
the public during this unusually long
period because of their own fair dealing
with that public. They contend that the
good name which they have established is
not only an asset to their company, but
thing of value to the public as we'll; that
they have stood behind their name during
all of the time they have been in business
and have spent vast sum OF money to
convey to the public it's right to rely upon
their name in it's dealings; that the name
of Colgate & Co. has, in short, been guide
post for shoppers for more than a century.
They further contend that they have
tried to protect the public by placing their
product for sale in only those stores where
their advertising might lead their custom
ers to fair dealing in products other than
their own; but that this would not be pos
sible unless their dealers be assured rea-
sonable profit upon sales; that certain
dealers, in order to attract trade, have seen
fit to advertise and sell the Colgate goods
without profit, and in some instances at
an actual loss to themselves; and Colgate
& Co. contend that a continuation of this
procedure must eventually drive their
wares from the shelves. Of the merchant
who is unwilling to handle them at loss;
that this would ruin their system of mar
e - L
mate market has been destroyed the
individual who now cuts the price will
no longer find it profitable to use them
as leader.
There can be no question of the desira-
biity of permitting the public to buy at
the lowest possible price; but, after ALL
isn't it just as important that the public
know what it is buying at the price
quoted? And if Colgate & Co., selling
their products in open competition, believe
that this is what the public wants; if they
think that the public would prefer paying
a definite price for product concerning
which it knows rather than half the price
for product concerning which it knows
nothing. arc not Colgate & Co. taking all
the chance and do they not have to meet
their competitors on that basis? If they
reason, as they do with force, that every
merchant must make legitimate profit;
that for every profit lost on their goods
double profit must be made on something
else. then they would seem to be doublv
justified, for they have not only their own
but the interests of their consumer as we'll
at stake.
Now, neither the Sherman act nor the
Clayton act covers the facts of the Colpate
case by any express language. If CON-
tract had been sought binding the retailer
to a scale of prices, that would have been
clearly illegal. But Colgate {; Co. merely
sought to exercise the right "to select
their own customers" which was expressly
preserved in the Clayton act Moreover.
in the only case which has come before the
courts presenting the precise facts of the
Colgate case Judge Hough, in the District
Court, squarely upheld the Colgate prac-
tice. That opinion Great Atlantic and
Pacific Tea Company agt. Cream of Wheat
Company, 224 Fed. Rep, 566( ably rebuts
the present contention of the Attorney
ground that it is price cutting which really
restrains trade and lessons competition
and that the maintenance of fair scale
of retail prices is all in the interest of the
buying public. He said:
II injunction were granted defendant and
many retailers would be injured, and the