packing plant situated in the State of California, and after the slaughtering of said cattle, calves, hogs, sheep, and lambs in said plant, has shipped the meat and meat products resulting therefrom from such packing plant to and through various distributing branches situated in the State of California and other States of the United States, to the purchasers of said products in such various States and Territories of the United States, including the States of California and Nevada. On December 30, 1916, the outstanding capital stock of said Western Meat Company consisted of 12,500 shares of common stock of the par value of $100 each, and the said concern at that time had assets of approximately $5,000,000 in value. PAR. 2. The Nevada Packing Company is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Nevada, with its principal office and place of business in the city of Reno, in said State, now, and at all times herein mentioned, engaged in the business of purchasing live cattle, calves, hogs, sheep, and lambs in various States and Territories of the United States, and in transporting same and causing same to be transported from such States to its packing plant situated in the State of Nevada, and after the slaughtering of said cattle, calves, hogs, sheep, and lambs in said plant has shipped the meat and meat products resulting therefrom from such packing plant to the purchasers of said products in various States and Territories of the United States, including the States of Nevada and California.

PAR. 3. On December 30, 1916, respondent, Western Meat Company, acquired all of the issued and outstanding capital stock of the Nevada Packing Company, which consisted of 3,530 shares of common stock of the par value of $100 each. At the time of said acquisition Louis F. Swift, president of Swift & Company, meat packers, and other stockholders of Swift & Company, owned approximately 45 per cent of the stock of the Western Meat Company, and officers of Armour & Company, Morris & Company, and Cudahy Packing Company owned in the aggregate 30 per cent of said stock. Louis F. Swift was instrumental in causing said acquisition of said stock to be made by respondent, and said acquisition was made. only after assurance of no objection on the part of Armour & Company.

PAR. 4. In January, 1914, Louis F. Swift was president and director of the Western Meat Co., and he resigned during that month at the annual meeting of the stockholders and F. L. Washburn was made president and director of the company. The following letter from Louis F. Swift to E. B. Shugert, treasurer of the Western Meat

Co., dated January 6, 1914, is indicative of the Swift control of the Western Meat Co.:

Please have it understood with Mr. Washburn that it may be that we will want to change back again later on to the present officers, and I do not want him to feel hurt if such should prove to be the case. In the meantime want him to understand that there is to be no change in the manner of conducting the business from the present, viz, it will be directed from Chicago, as heretofore.

The said letter of instructions was received and accepted by the interested parties. Shortly after the stock of the Nevada Packing Co. was purchased by the Western Meat Co. with the approval of Louis F. Swift, president of Swift & Co., a letter was sent to F. L. Washburn, president of respondent, by Louis F. Swift, under date of January 31, 1917, as follows:

I would suggest that you arrange that matters between the Nevada Packing Company, Reno, and Chicago, be handled similarly to those between the Western Meat Company and Chicago, viz:

On all matters of policy, etc., communications should be addressed to Louis F. Swift, Chicago.

On sales and trading between the companies, satisfactory to address the departments interested.

Will you please arrange?

Kindly acknowledge receipt.

The instructions of said Swift as set forth in the foregoing letter were carried out and from that date the business policy of respondent was controlled by said Swift, president of Swift & Company.

PAR. 5. At the date of the acquisition of the capital stock of the Nevada Packing Company by the Western Meat Company, competition existed between said Nevada Packing Company and the Western Meat Company, particularly in the States of Nevada and California in the purchase of live stock and in the sale and shipment of meat products; buyers of live stock for the Nevada Packing Company and the Western Meat Company endeavored to purchase live stock from the same producers in the States of Nevada and California and other States; and salesmen of both the Nevada Packing Company and the Western Meat Company solicited orders for meat and meat products from the same trade in the States of Nevada and California and other States in competition with each other.

PAR. 6. From December 30, 1916, to the date of the taking of testimony in this case in June, 1920, respondent Western Meat Company has operated the packing plant of the Nevada Packing Company, and, connected with the business of such operation, has continuously purchased and shipped to said plant from various points in the States of Nevada and California and adjacent States live

cattle, calves, hogs, sheep, and lambs, and after slaughtering same, sold and shipped the meat and meat products resulting therefrom to various purchasers in the States of Nevada and California and elsewhere, and still continues so to do, and as a part of its said business respondent serves substantially all of the trade that was served by Nevada Packing Company while it was in business in competition with respondent as hereinbefore set out.

PAR. 7. The effect of the acquisition by respondent of the capital stock of the Nevada Packing Company, and the control and operation of the Nevada Packing Company's plant and business by respondent which followed said acquisition, and still exists, was and is the entire elimination and suppression of the competition which had theretofore existed between respondent, Western Meat Company, and said Nevada Packing Company in the buying of live stock and in the sale of meats and meat products, resulting from the slaughtering thereof, throughout the States of Nevada and California, and was and is to restrain commerce in the purchase and sale of meat and meat products commonly known as the meat-packing industry in the States of Nevada and California.

CONCLUSION.

The acquisition and continued control and ownership of the capital stock of the said Nevada Packing Co., a corporation, by respondent, and the total suppression of competition between the said Nevada Packing Co. and the respondent resulting from such control and operation by respondent under the conditions and circumstances set forth in the foregoing findings as to the facts, were and are unfair methods of competition within the meaning 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 were and are in violation of the provisions of Section 7 of an Act of Congress approved October 15, 1914, entitled, "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes."

ORDER.

The Federal Trade Commission, having issued and served its complaint herein, and respondent, Western Meat Company, having entered its appearance by its attorneys, Messrs. Sullivan & Sullivan and Theodore J. Roche, of San Francisco, Calif., duly authorized and empowered to act in the premises, and having filed its answer; and thereafter hearings in this proceeding having taken place before an examiner of the Commission and evidence having been presented before said examiner on behalf of the Commission and on behalf

of respondent; and the presentation of such evidence having been closed, respectively, by the attorneys for the Commission and by the attorneys for the respondent, and thereafter the attorneys for the Commission and attorneys for respondent having duly filed their briefs in this proceeding with the Commission and having submitted said issues for consideration and determination, and the Commission having fully considered the record and having been fully advised in the premises as heretofore, has made and entered its findings as to the facts and its conclusion that respondent has violated the provisions of Section 5 of the 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 also the provisions of Section 7 of the Act of Congress approved October 15, 1914, entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," which said report and findings are hereby referred to and made a part hereof:

Now, therefore, it is ordered, That the respondent, Western Meat Company, shall forthwith cease and desist from violating the provisions of Section 5 of said 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 also the provisions of Section 7 of said Act of Congress approved October 15, 1914, entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," and particularly to so divest itself absolutely of all capital stock of the Nevada Packing Company as to include in such divestment the Nevada Packing Company's plant and all property necessary to the conduct and operation thereof as a complete, going packing plant and organization, and so as to neither directly or indirectly retain any of the fruits of the acquisition of the capital stock of said Nevada Packing Company, a corporation.

It is further ordered, That in such divestment no stock or property above mentioned to be divested shall be sold or transferred, directly or indirectly, to any stockholder, officer, director, employee, or agent of, or anyone otherwise directly or indirectly connected with or under the control or influence of, respondent or any of its officers, directors, or stockholders, or the officers, directors, or stockholders of any of respondent's subsidiaries or affiliated companies.

It is further ordered, That respondent, Western Meat Company, shall within six months from the service of this order submit in writing its report showing how this order has been carried out, including the names of the purchasers of said capital stock and the amount of money received or to be received therefor.

5 F. T. C.

Complaint.

FEDERAL TRADE COMMISSION

v.

B. H. STINEMETZ & SON COMPANY.

COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF SECTION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914.

SYLLABUS.

Docket 858-February 5, 1923.

Where a retail clothing establishment located in a high grade retail district, and theretofore enjoying an enviable reputation as an old concern of integrity and high standing dealing in high grade goods exclusively, and being at the time neither insolvent nor threatened with forced action by its creditors, nor contemplating the discontinuance of its business; in announcing and holding a special sale of its goods,

(a) Published large and sensational advertisements, both prior to and during said sale, in the daily papers and in its show windows, so worded and displayed as to be calculated to induce the purchasing public to believe that it was compelled by unusual circumstances beyond its control to sacrifice its regular stock of goods regardless of cost;

(b) Mingled with said regular stock large quantities of inferior stock bought especially for said sale;

(c) Marked its stock, as thus composed, with fictitious cancelled figures purporting to represent the regular or usual selling prices, and with other lower figures equal to, and often largely in excess of, the market value thereof, representing the prices at which offered; and

(d) Placarded the store with similar matter announcing other pretended bargains;

With the result that large numbers of the purchasing public were thereby misled and induced to purchase articles so advertised, tagged and placarded, in the mistaken belief that they were securing goods of high quality from its regular stock at prices lower than ordinarily available and lower than their prevailing market value:

Held, That such practices, under the circumstances set forth, constituted unfair methods of competition.

COMPLAINT.

The Federal Trade Commission, having reason to believe from a preliminary investigation made by it that the B. H. Stinemetz & Son Company, hereinafter referred to as respondent, has been using unfair methods of competition in commerce within the District of Columbia in violation of the provisions of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and it appearing to the Commission that a proceeding by it in respect thereof