Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-01-04
Supreme Court
Rules on Methods
Beechnut Packing Co.

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methods were further defined today
by the Supreme court in a decision
holding the trade methods and pol
icies of the Beechnut Packing COM
pany, in obtaining the cooperation
Of it's distributors and customers to
be unfair methods Of competition"
within the meaning of the federal
trade commission act.
In upholding the right of the feder-
al trade commission to order discon-
tinuance of such methods the court
divided five to four. Justice Day de-.
livered the opinion of the court, and
Justices Holmes, McKenna. Mercy
nolds and Brandies dissented. The
decision reverses the lower courts.
IF the Beechnut system of merch-
andising is against public policy, be-
cause Of its dangerous tendency to
hinder competing in or to create
monopoly :" the court maintained,
sit was within the power of the COM
mission to make an order forbidding
it's continuation"
Three trade method cases previous
ly decided by the supreme court
which were brought under the Sher-
man antitrust law and not under the
federal trade commission act as was
the Beechnut case settled, the court
stated today that in prosecutions
under the Sherman act a trader is
not guilty of violating it's terms no
simply refuses to sell to others, and
L 1,o1I Ii;
those who will not sell them at the
prices which he fixes for their re-
sales
He may not go beyond
the exercise of this right" it added,
land by contract or combination. ex-
press or implied, unduly hinder or
obstruct the free and natural flow
state trade"
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 as in the Colgate
case 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 considered in determin-
ing what are unfair methods of com
petition. which the federal trade COM
mission Is empowered to condemn
and suppress"
Analysing the federal trade COM
mission act, the court asserted that
congress deemed it better to leave
the subject Of what constitutes I'M
fair methods of competition denounc-
ed by the act without specific defini-
on it's 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 it's products to practical
ly all jobbers. wholesalers and retail
ers who do not sell at prices it sug-
gests. or who resell at prices sug-
gested by it. Further that it refused
to sell to practically all mail order
houses engaged in interstate COM
merce. because they frequently sell
at cut prices and had refused to sell
to practically all jobbers. wholesalers
and retailers who sell it products to
mail order houses. The court also
said It had refused to sell to practi-
cally all so-called price cutters. and
maintained large force of speciality
statesmen or drummers. who refused
to fill their orders through jobbers
and wholesalers who sell at prices
less than suggested retail prices or