Norwich bulletin., 1920-08-16
CHAIN-sHnr SALES

Opposition by the department of jus- tice and the federal trade commission to the so-called "chain-shot" sales has re- ceived a setback by decision of the United States supreme court. The "chain-shot" sale is one that is made con ditional upon the purchase of some oth- Ter commodity at the same time It be- came familiar to the housewife during the war notably in the purchase of su- ~gar, when dealers required the pur- chase of tea, coffee rice or some other article, without which no sugar was sold The "chain-shot' sale was, in fact resorted to by the food administration during the war in the sale of wheat flour when the buyer was compelled to pur- chase, as a condition of obtaining the flour, certain quantities of other cereals, such as cornmeal, oatmeal or the like. After tFe food administrations re- strictions were removed, the practice was resorted to by dealers, ostensibly to conserve the sugar supply, though that reason was received with considerable skepticism by the average buyer The government frowned upon. this extension of the 'chain-shot" idea.
 
 preme court, however, did not relate to food products, but the principle is the same. It was in the case of the federal trade commission vs Gratz, in which the defendant was charged with violation of paragraph of the federal trade com mission, act, that is, with applying un- fair methods of competition because it refused to sell customers any ties, which are used in the baling of cotton, unless the customer bought from the defendant corresponding amount of bagging. The supreme court of the United States on July held that the defendant had the right to refuse to sell ties unless the purchaser at the same time bought a corresponding amount of bagging. The rule was laid down that under the feder- al trade commission act an individual seller, acting without any combination or agreement with others may lawfully require a purchaser of closely related articles to purchase corresponding amount of another such article to ob- tain particular article.
 There has been a good deal of con fusion in the public mind as to the vari- ous rulings of the supreme court relating to sales which seem to conflict Tn the Colgate case the defendant was prose- cuted under the Sherman antitrust law for merely refusing to sell goods to a customer unless they maintained certain resale prices, while in the Sharder case, decided last March, theNfacts appeared to be about the same, except that the seller made formal contract with his cus- toner for the maintenance of a certain resale price The Colgate case was de- cided in favor of the defendant, where as the Sharder case was in favor of the government.
 It therefore, apears that the Sherman antitrust 1aS does not prevent a n1anu- facturer from selecting his customers, and in the absence of contract to maintain prices-that being an essen tia1 feature-to refuse to sell to these who will not maintain certain prices but the Sherman act does prohibit the manu- facturer from entering into a definite contract with customers to maintain fix ed prices. In other words, the Colgate case is an act of omission and the Sharder case an act of commission.