Evening star., 1923-01-08
CURTIS CO. UPHELD
IN AGENT CONTRACT
May Demand Exclusive Serv-
ice of Wholesalers, Su-
preme Court Rules.

publishers are not prohibited by the
clayton law from entering into con-
| tracts with newsdealers as agents tc
act exclusively as their wholesale
distributing agents, the Supreme
Court held today in a case brought
! by the Federal Trade Commission
against the Curtis Publishing Com
pany.
dissenting opinion was delivered
by Chief Justice Taft.
Charged Unfair Methods,
The case was brought by the Fed
eral Trade Commission against the
Curtis Publishing Company.
The commission charged the COM
pany with engaging in unfair meth
ods of competition because of con-
tracts with wholesale dealers NOT to
carry or handle at wholesale peri
odicals of competitors. The com
mission contended that enforcement
OF these contracts had the effect of
substantially lessening competition
and tended to create monopoly. 1t di-
rected the company not to enter into
any contracts with wholesale agents
which provided that they should not
act as agents for. sell or supply others
at wholesale prices any periodicals of
competitors without the written con-
sent of the Curtis Publishing Com
pany, or TO contract with wholesalers
TO discontinue the sale or distribution
or competing publications.
Upheld in Court.
The Curtis Company. alleging that
the proceeding grew out of an at
tempt by two magazine publishing
companies to obtain without expense
to them. the services and benefit of
It's distributing organization. asked
the circuit court of appeals at Phila- :
delphia to protect 1t against the or
held that the contracts of the Curtis
Company were legal because the
wholesalers were acting merely as
their agents. The Clayton act did
not apply, it stated. to such forms of
contract, but only to sales and con-
tracts for sale.
To use the Curtis forms of contract
with wholesale agents, the court said
did not amount to an unfair method
of competition for the reason that
it's competitors to sell to its whole
sale dealers it would disrupt its sell
ing organization, to which the court
found 1t had an exclusive right Com
merce was not restrained, but was
enlarged by such methods. the court
added, holding that Curtis competi-
tors had other effective means of dis
tributing their publications.
Government Appeals.
The government in appealing the
case to the Supreme Court contended
that the form of contract complained
of was not one of agency, as found
by the lower court. but was. in fact a
contract of sale, and constituted un-
fair methods of competition. 1t was
the governments contention that the
Circuit Court of Appeals in reaching
it's conclusion had made a finding of
referring the case back to the
ther investigation. The government
asserted that a publisher obtained no
property right in an organization for
the distribution of his periodicals
through the expenditure of money
necessary to it's formation and main
tenance.
Testimony in the case showed, the
government claimed, that many
wholesalers were established by the
joint efforts of newspapers and that
the Curtis Company was not the
originator of the idea of selling
through such dealers. 1t had, how
ever, the government added, placed a
number of these wholesalers, trained
by others, under contracts exclusively
to serve it in the wholesaling of its
publications. thus profiting by work
done by Others" but claiming IAN
exclusive right to profit by its own
labors in that direction" This prac-
tice, it was argued, would create a
new monopoly, not in ideas, but in
human labor"