Combinations of competitors to enhance prices, maintain prices, bring about substantial uniformity in prices, or to divide territory or business, or to put a competitor out of business, or to close a market to competitors.

Acquiring stock of another corporation or corporations where the effect may be to substantially lessen competition, restrain commerce, or tend to create a monopoly.

Various schemes to create the impression in the mind of the prospective customer that he is being offered an opportunity to make a purchase under unusually favorable conditions, when such is not the case, such as

(1) Sales plans in which the seller's usual price is falsely represented as a special reduced price made available on some pretext, for a limited time or to a limited class only.

(2) The use of the "free" goods or service device to create the false impression that something is actually being thrown in without charge when as a matter of fact fully covered by the amount exacted. in the transaction taken as a whole.

(3) Sales of goods in combination lots only with abnormally low figures assigned to staples the prices of which are well known, and correspondingly highly compensating prices assigned to staples the cost of which is not well known.

(4) Sale of ordinary commercial merchandise at usual prices and profits, as pretended Government war surplus offered at a bargain. (5) Use of misleading trade names calculated to create the impression that a dealer is a manufacturer, selling directly to the consumer, with corresponding savings.

(6) Plans ostensibly based on chance, or services to be rendered by the prospective customer, whereby he may be able to secure goods contracted for at particularly low prices, or without completing all the payments undertaken by him, when as a matter of fact such plans are not carried out as represented and are a mere lure to secure his business.

(7) Use of pretended exaggerated retail prices in connection with, or upon the containers of, commodities intended to be sold as bargains at lower figures.

(8) Falsely claiming forced sale of stock, with resulting forced price concessions, when as a matter of fact there is mingled with the customary stock inferior goods, and other methods are employed so that as a matter of fact no such concessions are in fact accorded.

Seeking to cut off and hamper competitors in marketing their products through destroying or removing their sales display and advertising mediums.

Discriminating in price.

Subsidizing public officials or employees through employing them or their relatives under such circumstances as to enlist their interests in situations in which they will be called upon by virtue of their official position, to act officially, making unauthorized changes in proposed municipal bond issues, corrupting public officials or employees and forging their signatures, and using numerous other grossly fraudulent, coercive, and oppressive practices in dealing with small municipalities.

Suggesting to prospective customers the use of specific, unfair, and dishonorable practices directed at competitors of the seller.

Imitating or using standard containers customarily associated in the mind of the general purchasing public with standard weights of the product therein contained, to sell to said public such commodity in weights less than the aforementioned standard weights.

Concealing business identity in connection with the marketing of one's product, or misrepresenting the seller's relation to otherse. g., claiming falsely to be the agent or employee of some other concern, or failing to disclose the termination of such a relationship, in soliciting customers of such concern, etc.

Misrepresenting in various ways the advantages to the prospective customer of dealing with the seller; such as

(1) Seller's alleged advantages of location or size.

(2) False claims of being the authorized distributor of some

concern.

(3) Alleged indorsement of the concern or product by the Government or by nationally known businesses.

(4) False claim by a dealer in domestic products of being an importer, or by a dealer of being a manufacturer, or by a manufacturer of some product of being also the manufacturer of the raw material entering into said product.

(5) False claim of "no extra charge for credit."

(6) Of being manufacturers' representative and outlet for surplus stock sold at a sacrifice, etc.

Tying or exclusive contracts, leases, or dealings, in which, in consideration of the granting of certain rebates or refunds to the customer, or the right to use certain patented equipment, etc., the customer binds himself to deal only in the products of the seller or lessor.

Showing and selling prospective customers articles not conforming to those advertised, in response to inquiries, without so stating. Direct misrepresentation of the composition, nature, or qualities of the product offered and sold.

Use by business concerns associated as trade organizations or otherwise, of methods which result or are calculated to result in the observance of uniform prices or practices for the products dealt in by them, with consequent restraint or elimination of competition;

such as use of various kinds of so-called standard cost systems, price lists or guides, exchange of trade information, etc.

Securing business through undertakings not carried out and through dishonest and oppressive devices calculated to entrap and coerce the customer or prospective customer, such as

(1) Securing prospective customer's signature by deceit to a contract and promissory note represented as simply an order on approval, securing agents to distribute the seller's products through promising to refund the money paid by them should the product prove unsatisfactory, and through other undertakings not carried out.

(2) Securing business by advertising a "free-trial" offer proposition, when as a matter of fact only a "money-back" opportunity is offered the prospective customer, etc.

Giving products misleading names so as to give them a value to the purchasing public or to a part thereof which they would not otherwise possess, such as

(1) Names implying falsely that the particular products so named were made for the Government, or in accordance with its specifications, and of corresponding quality, or are connected with it in some way, or in some way have been passed upon, inspected, underwritten, or indorsed by it.

(2) That they are composed in whole or in part of ingredients or materials, respectively contained only to a limited extent or not at all.

(3) That they were made in or came from some locality famous for the quality of such products.

(4) That they were made by some well and favorably known process, when as a matter of fact only made in imitation of and by a substitute for such process.

(5) That they have been inspected, passed, or approved after meeting the tests of some official organization charged with the duty of making such tests expertly and disinterestedly or giving such approval.

(6) That they were made under conditions or circumstances considered of importance by a substantial fraction of the general purchasing public, etc.

Interfering with established methods of securing supplies in different businesses in order to hamper or obstruct competitors in securing their supplies.

SPECIAL LEGAL INQUIRIES

During the year the chief examiner conducted an investigation of the American Tobacco Co. and the Imperial Tobacco Co. (Ltd.). This investigation was made pursuant to Senate Resolution 329

(68th Cong. 2d sess.), which required the submission of a report to the President. The phases of the tobacco industry covered by the inquiry were (1) the present degree of concentration and relationship between the two companies involved, and (2) the methods employed by these companies with respect to cooperative tobacco marketing associations. At the request of the parties under inquiry, hearings were held upon a preliminary report. This retarded the completion of the final report, which was pending at the close of the

year.

PROCEDURE AND STATISTICS ON LEGAL WORK

Responsive to many inquiries, it has been thought well to set forth details of the procedure upon legal matters. This is done in connection with statistics under topic headings which carry the unfair competition and Clayton law cases from their inception, through their several steps, to decision in the Supreme Court of the United States, the end of the process in the final determination of existing law. These topic headings are (1) preliminary inquiries, (2) applications for complaints, (3) complaints, including orders to cease and desist, and (4) court cases.

PRELIMINARY INQUIRIES

These are handled by the chief examiner and his staff. The preliminary inquiry is the initial approach to the commission in an unfair competition or Clayton law case, and is usually in the form of a letter from the general public, through an individual or corporation, calling attention to some alleged illegal or harmful practice in foreign or domestic commerce. In bringing these matters to the commission no formalities or blank forms are required. A letter suffices if it is signed by the complaining party and contains the name and address of the party complained against and a statement of the nature of the relief sought. It should also transmit all the evidence in the possession of the complaining party, documentary or otherwise, to aid in the inquiry. Upon its receipt the preliminary inquiry is immediately referred to the chief examiner, who causes the same to be examined for certain necessary jurisdictional elements-the public interest, unfair competition, and the interstate-commerce feature. The examination of the papers submitted by the applicant is supplemented when necessary by correspondence. At this stage the inquiry is regarded as confidential, to which no publicity attaches. If the jurisdictional elements are present, and without them the commission can not proceed, and the matter fails of disposition by conferences and correspondence with the chief examiner, the preliminary inquiry is docketed as an application for the issuance of a complaint.

During the year here reported upon the commission was called upon to handle 1,857 preliminary inquiries, this number being made up of 234 on hand at the beginning of the fiscal year and 1,623 received during the year. Of this number, 1,215 were disposed of to the satisfaction of the parties upon summary review by the chief examiner at small cost to the Government and 456 by the docketing of applications for complaints. This left 186 on hand undisposed of at the end of the year.

The following table gives a record of the work on preliminary inquiries during the entire history of the commission, from 1915 until 1925, inclusive.

The table shows a steady increase of from 119 in 1915 to 1,623 in 1925, or an increase of 1,264 per cent in 11 years.

The commission has used various means to meet the increase in preliminary inquiries received, and has increased the force at the command of the chief examiner as far as its funds would permit. It has made changes in procedure with a view to expediting the disposition of the inquiries, and in this way has reduced the proportion of preliminary inquiries which are docketed as applications for complaints.

The reduced proportion referred to has been possible by the fact that, as the established precedents grow in number and the field which they cover widens, it becomes possible to dispose of more inquiries with less investigation and consideration. Court decisions have also been helpful in this respect. If it is possible to do so, the inquiries are handled without docketing as applications for complaints.