Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-01-04
SUPREME COURT
DEF INES LEGAL
TRADE METHODS
Policies of the BeeChnut
Company in 0ispOSing Of
Its Products Are Declared
to Be "Unfair."
(By The Associated Press.)


Washington, Jan. 3.-Lawful
trade methods were further de-
fined today by the supreme court
in a decision holding that the
trade methods ana policies of the
Beechnut Packing company in
obtaining cooperation Of it's dis
tributors and customers to be
''unfair methods of competition
within the meaning of the federal
trade commission act.
In upholding the right OF the
federal trade commission to order
discontinuance of such methods the
court divided, rive and four. JUS
tee Day delivered the opinion of
the court and Justices Holmes,
McKenna, McReynolds and Bran
deis dissented. The decision re-
verses the lower courts.
Against Public Policy.
If the Beechnut system of
merchandising is against the pub
lie policy because of Its danger
Gus tendency to hinder COMPETE
ton or to create monopoly" the
court maintained, lit was with
in the power o. the commission
10 make an order forbidding its
continuation"
Three trade method cases prev
iously decided by the supreme
court which were brought under
the Sherman anti trust law, and
not under the federal trade COM
mission act as was the Beechnut,
settled, tins court stated today,
-. thn
sherman act trader is not
guilty of violating its terms who
simply refuses to sell to others.
and he may withhold his goods
from those who will not sell them
at the prices he fixes for their
resale.
"He may not go beyond the ex-
ercise of this right" it added.
"and by contract or combination,
expressed or implied, unduly
hinder or obstruct the free and
natural flow of commerce in the
channels of interstate trade"
In the Beechnut case the court
stated that the facts found show
that the Beechnut system goes
beyond the simple refusal to sell
goods to persons who will not sell
at stated prices which the Colgate
case was held to be within the
legal right of the producer" The
Sherman act was not involved eX-
eept as "a declaration of public
policy to be considered in deter
mining what are unfair methods
of competition, which the federal
trade commission is empowered
n cn,1Ct11r,
? AnaIyzing the federal trade
commission act the court asserted
congress deemed it better to leave
the subject of what constitutes un-
fair methods of competition de-
nounced by the act without speci-
fic definition, each case to be
determined on it's own facts by
the commission, subject to review
by the courts.
Court Describes Plan.
The methods and plan Of the
Beechnut company in its trade
policy were described by the court,
which asserted that the concern
refused to sell its products to
practically all jobbers, wholesalers
and retailers VINO do not sell at
prices it suggests hwrerottm
other jobbers, wholesalers and re-
tailers who have failed to resell at
prices suggested by it. Further,
that it refused 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 re-
tailers who sell its products to
mail order houses. The court
also said it had refused to sell
to practically all so-called price
cutters, and maintained a large
force of specially statesmen who
refused to fill orders through
jobbers and wholesalers who sell
at prices less than suggested re-
sale prices or who sell to others
who do so,