The American Snuff Co. case.-On June 30, 1927, the commission entered its order directing this company to cease and desist from a number of practices found to be unfair methods of competition. The order contained the usual requirement that the corporation report within 60 days the manner and form of compliance therewith. In compliance with the latter requirement, the corporation made a report in which, while it denied the validity of the findings and order, it nevertheless assured the commission that it would not do any of the things prohibited, with one exception, namely, it declined to comply with paragraph 3 (a) of the order. This paragraph is set forth below, together with the closely related paragraph (b):

(3) It is further ordered, That the respondent, its officers, agents, representatives, servants, and employees, cease and desist from--

(a) Using the word "dental" and the depiction of a tooth, or either of them, alone or in connection wjith any other word or words, in the brand name or on the labels on the containers of any of its snuff products, to represent, describe, or define such product, when its said product contains no ingredient other than tobacco.

(b) Making, publishing, or circulating written or oral statements or representations in connection with the sale or distribution of any of its snuff products that such product will cure toothache, pyorrhea, bleeding gums, neuralgia, or other like maladies, when such product contains no ingredient other than tobacco.

The commission, accordingly, on March 17, 1928. filed with the Circuit Court of Appeals for the Third Circuit (at Philadelphia) its application for enforcement. On May 16 the printed transcript of the record was filed with the court, and on the 23d of that month a stipulation was entered into fixing dates for the filing of briefs. Before briefs had been filed, however, the commission (on August 18 last) filed with the court a supplemental application for the enforcement of paragraphs 2-a, b, and c, and 3–b of its order, alleging that the American Snuff Co. was making, publishing, and circulating written and oral statements or representations that the snuff products of its competitors are made of trash, inferior tobacco, cigar stubs, old tobacco chews, and tobacco stems; that they contain opium, copperas, glass, hair, dirt, or similar substances; that they will cause blindness and tuberculosis; that they will destroy the teeth, cause pyorrhea, bleeding gums, or other maladies; and other statements or representations of like import; and by making, publishing, and circulating written or oral statements or representations in connection with the sale and distribution of certain of its snuff products that such product will cure toothache, pyorrhea, bleeding gums, neuralgia, and other like maladies. when such product contains no ingredient other than tobacco.

International Shoe Co.-Violation of section 7 of the Clayton Act. On March 3, 1928, the corporation of this name filed in the Circuit Court of Appeals for the First Circuit (Boston) its petition to review and set aside the commission's order, entered on November 25, 1925, which, in brief, required the company to divest itself of all assets, property, etc., acquired by it from the W. H. McElwain Co. (a Massachusetts corporation, with principal office and place of business located at Boston), subsequent to the acquisition by the International Shoe Co. of the stock or share capital of the McElwain Co., and after the commission's complaint in this proceeding had been issued and served. The proceeding was under section 7 of the Clayton Act.

The commission's order required the company to submit, within 60 days, for consideration and approval—

a plan for the performance of this order in a manner which shall restore in harmony with the law the competitive conditions which existed with respect to the respondent and such assets, properties, rights, and privileges prior to the acquisition by International Shoe Co. of the stock or share capital of W. H. McElwain Co.

Numerous conferences between counsel for the company and the commission failed to produce a plan as required by the order; and the action referred to above was the result.

On May 31, 1928, the company filed with the court its motion to have the commission's complaint adjudged insufficient in law, and to have the order made pursuant thereto set aside. Both sides filed briefs, and the court, after argument on June 28, on the same day denied the motion. The matter now awaits briefing and argument on the merits. It will probably be reached the early part of the October term.

Paramount Famous Lasky Corporation.-As noted more fully elsewhere in this report (pp. 37, 38), the commission, on July 9, 1927, entered its order to cease and desist in this proceeding, which, briefly, was directed against a conspiracy in restraint of trade in the business of producing, distributing, and exhibiting motion-picture films, against the practice of "block booking" of motion-picture films, and the acquisition of theater buildings for the purpose of intimidating or coercing exhibitors of motion-picture films to lease and exhibit films produced by respondents.

The respondents having failed and neglected to obey the order, the commission, on August 1, 1928, filed with the Circuit Court of Appeals for the Second Circuit (New York City) its application for enforcement.

Bayuk Cigars (Inc.)—Misbranding-False and misleading advertising. This case was instituted by the corporation of this name,

on February 15, 1928, by the filing of a petition to review and set aside the order issued by the commission on February 8, 1928, directing it to cease and desist, in connection with the sale and distribution of cigars in interstate commerce, (1). from using the word "Havana," or other word or words of similar import, alone or in conjunction with the word "ribbon," or other word or words, as or in a brand name for or as descriptive of any such cigars which are not composed entirely of tobacco grown on the island of Cuba; (2) from using the word "Mapacuba," or other word or words of similar import, as or in a brand name for or as descriptive of any such cigars which are not composed in whole or in part of tobacco grown on the island of Cuba; (3) from using the word "Mapacuba," or other word or words of similar import, as or in a brand name for or as descriptive of any such cigars which are composed in part only of tobacco grown on the island of Cuba, unless said word be immediately followed and accompanied by a word or words in letters equal or greater in size, visibility, and conspicuousness, clearly and unequivocally indicating or stating that such cigars are not composed wholly, but in part only, of tobacco grown on the island of Cuba; (4) from using a depiction simulating the flag, emblem, insignia, or coat of arms of the Republic of Cuba, map of Cuba, Cuban tobacco fields, city or harbor of Habana, Cuba, or depiction of similar import, in the advertising, branding, or labeling of any such cigars which are not composed in whole or in part of tobacco grown on the island of Cuba; (5) from using a depiction simulating the flag, emblem, insignia, or coat of arms of the Republic of Cuba, map of Cuba, Cuban tobacco fields, city or harbor of Habana, Cuba, or depiction of similar import, in the advertising, branding, or labeling of any such cigars which are composed in part only of tobacco grown on the island of Cuba, unless such depiction be accompanied by a word or words of equal or greater visibility and conspicuousness, clearly and unequivocally indicating or stating that such cigars are not composed wholly, but in part only, of tobacco grown on the island of Cuba; (6) from representing in any other manner whatsoever that any of said cigars contain or are composed in whole or in part of tobacco grown on the island of Cuba, when such is not true in fact.

After briefs had been filed, the case was argued before the third circuit (Philadelphia) on May 31, 1928. A decision is expected at the October, 1928, term of court.

Philip Carey Manufacturing Co.-Disparagement of competitors. A petition for review was filed by the corporation of this name, with the Circuit Court of Appeals for the Sixth Circuit (Cincinnati) on September 13, 1927. It asked that the order entered by the commission on August 4 of that year be reviewed and set aside.

16588-28-6

The order in question directed the company, in connection with its business of manufacturing and selling asphalt paving blocks in interstate commerce, to cease and desist from, directly or indirectly

1. Employing or using any system of espionage whereby officers, agents, or employees of respondent corporations, or either of them, obtain or seek to obtain information as to the facilities, capacities, operations, or customers of any competitor;

2. Circulating, representing, or publishing, or causing to be circulated, represented, or published among purchasers or prospective purchasers of preformed bituminous-expansion joint, any false, deceptive, or misleading statement concerning the ability of any competitor to fill orders or make deliveries;

3. Circulating, representing, or publishing, or causing to be circulated, represented, or published among purchasers or prospective purchasers of preformed bituminous expansion joint any false, deceptive, or misleading statement of or concerning the acceptableness or adaptability for the use intended of the product of any competitor;

4. Circulating, representing, or publishing, or causing to be circulated, represented, or published, among purchasers or prospective purchasers of preformed bituminous expansion joint any false, deceptive, or misleading statement concerning the financial standing, the business, or business methods of any competitor.

Briefs were filed, and the case was argued on the merits on May 18, 1928. The commission's order was reversed November 12, 1928. The Utah-Idaho Sugar Co. case-Suppression of competition in the manufacture and sale of beet sugar.—The respondents in this case, namely, the Utah-Idaho Co., the Amalgamated Sugar Co., E. R. Wooley, A. P. Cooper, and E. F. Cullen, were charged by the commission with stifling and suppressing competition in the purchase of sugar beets in the manufacture and sale of refined beet sugar by means of a combination or conspiracy, involving, among others, the following unfair trade practices:

(1) The circulation of false, misleading, and unfair reports as to competitors and prospective competitors; (a) concerning financial standing and responsibility; (b) that they would be unable to secure sugar-beet seed or the beets or to pay for those they did purchase; (c) that their contemplated factories would not be built,

etc.

(2) The circulation of false reports to the effect that respondents (a) occupied all the producing territory in which their competitors contemplated operating; (b) had contracts for all the beets to be grown, etc.

The commission after very extensive hearings dismissed the complaint as to the respondent E. F. Cullen and entered its order to cease and desist against the other respondents. The respondents filed petitions for review in the Circuit Court of Appeals for the Eighth Circuit.

After briefs and argument, this court, on October 21, 1927, reversed the commission's order, holding that the facts found by the commission presented a situation over which it had no jurisdiction, and that it was without authority to make the restraining order. (22 F. (2d) 122.) The following extracts from the opinion are pertinent:

In this case the respondents are engaged in the manufacture and sale of beet sugar. The sugar is sold in interstate commerce. The manufacture is intrastate. This proceeding is based on section 5 of the Federal Trade Commission act, which declares unlawful unfair methods of competition in commerce. The fact that respondents are engaged in commerce in selling sugar produced has no bearing on the case, for the reason that the proof does not show any acts of unfair competition in such product. The fact that a respondent is engaged in commerce is not material unless the acts charged have to do with such commerce or that of its competitors in such commerce. The acts to which the proof is directed are concerning only the manufacture. The manufacture of sugar from beets is somewhat peculiar in that it is necessary to have the factory located where beets may readily be obtained by short haul. It is not profitable to ship the beets a great distance to the factory. The acts to which the proof is directed consisted in the effort of respondents to prevent competing factories being located in contiguous territory where they might absorb a part of the supply of beets to respondents' factories. It was at most a prevention of competition in the purchase of the raw material for manufacture within the State, and in no case does the proof show an interference with the transport of beets from one State to another or an interference with the purchase thereof.

In the present case there is no commerce to obstruct until the beets are manufactured into sugar and such sugar has been placed in transport. The argument is, however, as stated above, that the acts here cut off at the source such commerce. It is only such acts as directly interfere with commerce which come under the Federal jurisdiction. The line must be drawn somewhere, else all jurisdiction in trade or production would become Federal. Hence Congress has not jurisdiction of such acts as only indirectly or remotely affect commerce. In the instant case if interference with the production and manufacture into sugar of beets is an obstruction to a later or unborn commerce in sugar to be made from the beets, one who intrastate sold defective beet seed, thus preventing the production of beets to be manufactured into sugar, would be in commerce. Or one who sold fertilizer to raise the seed to plant the beets to make the sugar to be shipped in commerce would be in commerce.

The commission decided not to apply to the Supreme Court for a writ of certiorari.

Grand Rapids Varnish Co.-Commercial bribery.-The commission, on June 18, 1928, filed with the Circuit Court of Appeals for the Sixth Circuit (Cincinnati) an application for the enforcement of its order in this case. This is one of the earlier proceedings instituted by the commission, and the order, originally entered on April 15, 1918, and subsequently modified, was directed against what is known as commercial bribery. By it the company, a Michigan