Garcia, doing business under the trade name of Garcia and Vega, Perfecto Garcia, Manuel Garcia, Jose Garcia and Angel Garcia, copartners under the firm name and style of Perfecto Garcia and Brothers, V. Guerra Diaz and Company, a corporation, Preferred Havana Tobacco Company, a corporation, American Cigar Company, a corporation, Moises Bustillo and Leopold Bustillo, copartners under the firm name and style of M. Bustillo and Company, Corral Wodeska and Company, a corporation, Cuesta Rey and Company, a corporation, J. M. Martinez Company, a corporation, Morgan Cigar Company, a corporation, Jose Escalante and Company, a corporation, F. Lozano Son and Company, a corporation, E. Redensberg and Sons, a corporation, J. W. Roberts and Son, a corporation, Salvadore Rodriguez, a corporation, Sanchez and Haya, a corporation, San Martin and Leon Company, a corporation, A. Santaella and Company, a corporation, Tampa-Cuba Cigar Company, a corporation, Celestine Vega and Company, a corporation, E. M. Schwartz and Company, Inc., a corporation, (each of said above-named respondents, individually, and as members of the said Cigar Manufacturers' Association of Tampa, Florida), The Tampa Box Company, a corporation, D. N. Holway, J. W. Young, and J. Van Roe, copartners under the firm name and style of D. N. Holway and Company, and George F. Weidman, T. D. Fisher, and J. A. B. Anderson, copartners under the firm name and style of Weidman-Fisher & Company, hereinafter referred to as the respondents, have been, and are now using unfair methods of competition in violation of the provisions of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this complaint, stating its charges in this respect on information and belief as follows: PARAGRAPH 1. That the respondent, Cigar Manufacturers' Association of Tampa, Florida, is a voluntary, unincorporated association of cigar manufacturers, the membership of which is limited to manufacturers of cigars engaged in business as such in the city of Tampa, Florida, and in the vicinity thereof, who subscribe to its articles of association and comply with its by-laws and rules; that the executive authority of said respondent is vested by its articles of association in a President, Vice President, Treasurer and Secretary, and a Board of Directors, and that the duty of said several officers, and said Board of Directors are prescribed and defined by said articles of association. That the respondent, Jose Escalante, is the President of said respondent (Cigar Manufacturers' Association of Tampa, Florida) and the respondent Enrique Pendas, and A. A. Martinez, are, respectively, Treasurer and Secretary thereof. That the respondents, C. H. S. Cigar Company, Francisco Arango Cigar Company, V. Guerra Diaz and Company, Corral Wodeska and Company, Cuesta Rey and Company, Jose Escalante and Company, F. Lozano Son and Company, J. M. Martinez Company, Morgan Cigar Company, E. Redensberg and Sons, J. W. Roberts and Son, Salvadore Rodriguez, Sanchez and Haya, San Martin and Leon Company, A. Santaella Cigar Company, Tampa-Cuba Cigar Company, Celestine Vega and Company, are each corporations organized, existing and doing business under and by virtue of the laws of the State of Florida, and each is engaged in the business of manufacturing cigars at the city of Tampa or within the vicinity thereof. That the respondent E. M. Schwartz and Company, Inc., is a corporation, organized and existing under the laws of the State of New York, and operating a factory for the manufacture of cigars in the city of Tampa, Florida, under the name of Jose Lovera Company; that the respondent, Preferred Havana Tobacco Company is a corporation, organized and existing under the laws of the State of New York and operating a factory for the manufacture of cigars in the said city of Tampa, Florida, under the name of Bustillo Brothers and Diaz; that the respondent, Porto Rican American Tobacco Company is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, and operating a factory for the manufacture of cigars in the city of Tampa, Florida, under the name of M. Alvarez and Company; that the respondent, American Cigar Company is a corporation organized and existing under and by virtue of the laws of the State of New Jersey, and operating three factories for the manufacture of cigars in said city of Tampa, under the name of Havana-American Cigar Company, Stachelberg-Vega and Company, and M. Vallez and Company, respectively. That the respondents Facundo Arguelles and Celestine Lopez are copartners doing business under the firm name and style of Arguelles, Lopez and Brothers; that the respondents Matthew W. Berriman and Edward C. Berriman are copartners doing business under the firm name and style of Berriman Brothers; that the respondent Alvara Garcia is a sole trader doing business under the trade name of Garcia and Vega; that the respondents Perfecto Garcia, Manuel Garcia, Jose Garcia, and Angel Garcia are copartners doing business under the firm name and style of Perfecto Garcia and Brothers; that the respondents Moises Bustillo and Leopold Bustillo are copartners doing business under the firm name and style of M. Bustillo and Company, and that each of said copartners and said respondent Alvara Garcia, maintains a factory in the city of Tampa, Florida, or in the vicinity of said city for the manufacture of cigars. That the respondent Tampa Box Company is a corporation organized and existing under and by virtue of the laws of the State of Florida; that the respondents D. N. Holway, J. W. Young, and J. Van Roe are copartners doing business under the firm name and style of D. N. Holway and Company, and that the respondents George F. Weidman, T. D. Fisher, and J. A. B. Anderson, are copartners doing business under the firm name and style of WeidmanFisher & Company; that the last-named corporation and said two copartnerships are each engaged in the business of manufacturing cigar boxes in the city of Tampa, Florida. PAR. 2. That each of the above named respondent cigar manufacturers is a manufacturer of cigars within the City of Tampa, Florida, or within the vicinity thereof and in the course of such business sells the cigars so manufactured by it, to purchasers throughout the United States, and causes the cigars so manufactured and sold by it to be shipped through and into the several states of the United States and the District of Columbia, and that each of said respondent cigar manufacturers is a member of the respondent Cigar Manufacturers' Association of Tampa, Florida. PAR. 3. That in the said city of Tampa, and in its vicinity, there are and have been for many years past, cigar manufacturers, not members of the respondent Cigar Manufacturers' Association, who manufacture cigars and sell them to purchasers throughout the United States and who cause the cigars so sold by them to be shipped through and into the several States of the United States and the District of Columbia, in active competition in interstate commerce, in the sale of cigars with the respondent Cigar manufacturers. PAR. 4. That by long established custom, cigars are packed for sale in boxes suitable for the protection of the cigars and the preservation of their moisture and flavor, so that a supply of boxes is essential to the sale of cigars in interstate commerce. That the respondent cigar box manufacturers were capable of producing, and prior to the month of March, 1920, or thereabouts, did produce a sufficient quantity of cigar boxes to supply the requirements of the respondent cigar makers and their competitors in that district; that the cigar makers of Tampa and vicinity are limited to the production of respondent cigar box makers for a supply of boxes; the cost of procuring boxes elsewhere being in effect prohibitive. PAR. 5. That the respondent cigar manufacturers, the respondent association and the respondent cigar box manufacturers, some time 1 1 Findings. in the month of March, 1920, combined, confederated, and agreed to restrain competition in the sale of cigars in interstate commerce and to create a monopoly of the supply of an essential element in the sale of cigars in interstate commerce and as a means of accomplishing the object of such combination, on or about the 16th day of March, 1920, the respondent association and the respondent cigar box manufacturers entered into an agreement, a copy of which is attached hereto, marked "Exhibit A" and made a part of this complaint, the intent and effect of which was that the respondent association controls the whole of the supply of cigar boxes upon which the manufacturers of cigars in Tampa and vicinity are dependent, for the remainder of the year 1920, with an option for the continuance of this control for the year 1921; that the respondent association employs its control of the supply of cigar boxes to deny to and withhold from nonmember and competing cigar makers, their necessary supply of boxes. PAR. 6. That the effect of the acts of the respondents herein before charged, has been and is to prevent manufacturers of cigars in and around Tampa, Florida, other than those named as respondents herein, from securing a supply of boxes adequate to their needs and thus to compel cigar manufacturers not members of the respondent association, to reduce their output and sales of cigars in interstate commerce as aforesaid; and such acts of respondents have a dangerous tendency unduly to hinder competition in the sale of cigars in interstate commerce and to create monopoly directly affecting interstate commerce. REPORT, FINDINGS AS TO THE FACTS, AND ORDER. The Federal Trade Commission having issued and served its complaint herein, wherein it alleged that it had reason to believe that the respondents hereinafter named, have been and are using unfair methods of competition in interstate commerce, in violation of the provisions of Section 5 of an Act of Congress approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes"; and that a proceeding by it in that respect would be to the interest of the public, and stating its charges in that respect, And the respondents having entered their appearances by their attorneys-at-law, Messrs. McKay and Withers, for the respondent, Cigar Manufacturers; Messrs. Whitaker, Himes and Whitaker for the Tampa Box Company, and Weidman, Fisher and Company; 1 See contract reproduced on pp. 13 and 14. and H. C. Gordon, Esq. for D. N. Holway and Company; and respondents having duly filed their answers admitting certain allegations of said complaint and denying others and setting up certain new matter in defense, and hearings having been held before an examiner of the Commission, and the Commission having offered evidence in support of the charges of said complaint, and said respondents having offered evidence in their defense, and the parties to this proceeding having rested, and attorneys for the respective parties having fully argued the issues in this proceeding, and having présented said issues herein to the Commission for final consideration and determination, The Federal Trade Commission having fully considered the record herein, and being fully advised in the premises, now makes its report and findings as to the facts and conclusion: FINDINGS AS TO THE FACTS. PARAGRAPH 1. (a) The respondent, the Cigar Manufacturers' Association of Tampa, Florida, is a voluntary unincorporated Association, hereinafter referred to as the Cigar Manufacturers' Association, the membership of which is limited to individuals, partnerships and corporations engaged in the manufacture of cigars at Tampa, Florida and its vicinity. The President of said Association is Jose Escalante. Its Treasurer is Enrique Pendas; and A. A. Martinez is its Secretary; (b) The membership of said Cigar Manufacturers' Association consists of the following persons, firms and corporations: Solis Alvarez Francis Arango and Company Albana Cigar Company M. Alvarez and Company F. Benjamin and Company F. Capitano and Company Diaz Raphael and Company Felipe DeSoto and Company Perfecto Garcia and Bros. |