Evening star., 1922-01-04
AUTHORITY UPHELD
BY HIGHEST COURT
Approval of Trade Commits
sion Action in So-CaIIed
Beechnut Case.


Authority Of the Federal Trade
Commission to determine what are
unfair trade practices was upheld by
the United States Supreme Court yes
terday In the so-called Beechnut case.
the court standing Ave to four.
Three trade method cases previously
decided by the Supreme Court which
were brought under the Sherman anti
trust law. and not under the Federal
! Trade Commission act. as was the
Beechnut case. settled. the court
! stated. that in prosecutions under
! the Sherman act a trader Is not guilty
| OF violating its terms who simply re-
fuses to sell to others. and he may
| withhold his goods from those who
Will not sell them at the prices which
he fixes for their resale"
| He may not go beyond the exercise
or this right" 1t added, "and by con-
tract or combination, express or i'm
piled. unduly hinder or obstruct the
free and natural flow Of commerce in
the channels Of interstate trade"
Beechnut Case Reviewed.
In the Beechnut case the court
stated that "the facts found show
that the Beechnut system goes far
beyond the simple refusal to sell
goods to persons who will not sell at
stated prices. which in the Colgate
| case was held to be within the legal
right of the producer" The Sherman
act was not involved except as "a
declaration of public policy to be con-
sidered in determining what are un-
ralr methods of competition, which
the Federal Trade Commission is en-
n
Analysing the Federal Trade Com
mission act, the court asserted that
Congress deemed 1t better to leave
the subject of what constitutes un-
fair methods of competition de-
nounced by the act without specific
upon its own facts by the commission,
subject to review by the courts.
The METHODS and plan of the Beech
nut Company in its trade policy were
described at length by the court,
which asserted that the concern re-
fused to sell its products to prac-
tically all jobbers, wholesalers and
retailers who did not sell at prices
II suggests. or who resell to other
1obbers. wholesalers and retailers
who have failed to resell at prices
suggested by it. Further. that it re-
fused to sell to practically all mail
order houses engaged in interstate
commerce. because they frequently
sell at cut prices. and had refused
to sell to practically all jobbers
wholesalers and retailers who sell
its products to mail order houses.
Other Refusals to Sell.
The court also said it had refused
to sell ta practically all so-called
price cutters. and maintained a large
force of speciality statesmen or drum
mers who refused to fill their orders
through jobbers and wholesalers who
sell at prices less than suggested re-
sale prices or who sell to others who
do SO. Reference was also made by
the court to the various lists main
tained by the company of dealers,
with key numbers to enable it to
identify the distributors from whom
Jobbers and retailers purchase, en-
aoiing Its representatives to identify
price cutters. as well as those from
whom they obtained their supplies,
the company refusing to sell to the
dealers from whom the retailers who
cut prices obtained the supplies. Card
records, the court asserted. also were
maintained with the names of thou
sands OF jobbing, wholesale and re-
tail distributors, using to indicate the
various classes of trade the words
Undesirable price cutters" DO not
SELL" or ID. N. S." the abbreviation
for do not SELL" or expressions of
like character.
q
order which the Federal Trade Com
mission should have used in forbidding
the continuance by the company Of
its practice.
Justice Holmes Dissents.
Justice Holmes. in dissenting, said:
THE ground on which the respond
ent is held guilty is that its conduct
has a dangerous tendency unduly to
hinder competition or to create mo-
nopoly. 1t is enough to say that this
l cannot understand. So far as the
posed that its policy was aimed
against attempts to create a monopoly
in the doers Of the condemned act or
to hinder competition with them. OF
course, there can be nothing Of that
sort here.
THE respondent already has the
monopoly of its own goods with the
full assent of the law and no one can
compete with it with regard to those
goods, which are the only ones con-
cerned. 1t seems obvious that the
respondent is not creating a monopoly
in them for any one else. although 1
see nothing to hinder its doing so by
conveying them all to one single
vender.
1.-THE worst that can be said, so far
as see, is that it hinders competition
among those who purchase from it.
But it seems to me that the founda-
tion Of the policy of the law to keep
competition open is that the subject
matter of the competition could be
open to all, but for the hindrance
complained of. cannot see what
that policy has to do with the subject
matter that comes from a single hand
that is admitted to be free to shut as
closely as it will.
Sees No Wrong Done.
"And to come back to the words
Of the statute, cannot see how it
is unfair competition to say to those
to whom the respondent sells and
to the world, You can have my goods
only On the terms that I propose.
T F 7, ,I|1,1|[I|