This statute [Clayton Act, sec. 3] forbids the converse of the acts complained of in the present action, and we have nothing to do with what might happen if the Green trading stamp people were seeking to forbid the use by its subscribers of any other kind of trading stamps. This might or might not be a restriction upon competition or tend to effect a monopoly.1

Section 29. The Act to Regulate Commerce.

In addition to the above, the provisions of the interstate-commerce law 2 making it a crime for a railroad to give, or for a shipper to receive, a rebate from the published tariffs of the railroads, as well as those provisions prohibiting unjust discrimination and the giving of undue preference to any shipper, may be regarded as directed at one form of unfair competition. A shipper who secures a lower rate than is enjoyed by his competitors, or who obtains an undue preference in some other form, is frequently in a position to exclude them from certain territory and thus to deprive the public entirely of competition in the particular locality. The administration of these provisions of the interstate-commerce law respecting rebates, unjust discriminations, and undue preferences is in large measure conferred on the Interstate Commerce Commission, and their enforcement is lodged with the said Commission and the courts. No attempt will be made in this report to summarize the decisions construing these provisions, but the portions of the statutes quoted below will serve to give a general idea of the unfair advantages in competition which it was intended to prevent:

*** if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful.

it shall be unlawful for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.

** ** it shall be unlawful for any person, persons, or corporation to offer, grant, or give, or to solicit, accept or receive any rebate, concession, or discrimination in respect to the transportation of any property in interstate or

1 Cf. Merchants' Legal Stamp Co. v. Murphy et al., p. 150n.

234 Stat. L., 587.

324 U. S. Stats., pp. 379–380.

foreign commerce by any common carrier subject to said Act to regulate commerce and the Acts amendatory thereof whereby any such property shall by any device whatever be transported at a less rate than that named in the tariff's published and filed by such carrier, as is required by said Act to regulate commerce and the Acts amendatory thereof, or whereby any other advantage is given or discrimination is practiced.

* *

*

In construing and enforcing the provisions of this section, the act, omission, or failure of any officer, agent, or other person acting for or employed by any common carrier, or shipper, acting within the scope of his employment, shall in every case be also deemed to be the act, omission, or failure of such carrier or shipper as well as that of the person. Whenever any carrier files with the Interstate Commerce Commission or publishes a particular rate under the provisions of the Act to regulate commerce or Acts amendatory thereof, or participates in any rates so filed or published, that rate as against such carrier, its officers or agents, in any prosecution begun under this Act shall be conclusively deemed to be the legal rate, and any departure from such rate, or any offer to depart therefrom, shall be deemed to be an offense under this section of this Act.1

No carrier, unless otherwise provided by this Act, shall engage or participate in the transportation of passengers or property, as defined in this Act, unless the rates, fares and charges upon which the same are transported by said carrier have been filed and published in accordance with the provisions of this Act; nor shall any carrier charge or demand or collect or receive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, between the points named in such tariffs than the rates, fares, and charges which are specified in the tariff filed and in effect at the time; nor shall any carrier refund or remit in any manner or by any device any portion of the rates, fares, and charges so specified, nor extend to any shipper or person any privileges or facilities in the transportation of passengers or property, except such as are specified in such tariffs: Provided, That wherever the word "carrier" occurs in this Act it shall be held to mean common carrier.":

66

A further relevant provision of the Interstate-Commerce law is that which prohibits common carriers or their agents from disclosing, without the consent of the shipper or consignee, any information concerning any shipment in interstate commerce made by them, and likewise makes it unlawful to solicit or knowingly receive such information. This part of the law is as follows:

It shall be unlawful for any common carrier subject to the provisions of this Act, or any officer, agent, or employee of such common carrier, or for any other person or corporation lawfully authorized by such common carrier to receive information therefrom, knowingly to disclose to or permit to be acquired by any person or corporation other than the shipper or consignee, without the consent of such shipper or consignee, any information concerning the nature, kind, quantity, destination, consignee, or routing of any property tendered or delivered to such common carrier for interstate transportation, which information may be used to the detriment or prejudice of such shipper or consignee, or which may improperly disclose his business transactions to a competitor; and it 234 U. S. Stats., p. 587.

134 U. S. Stats., pp. 587-588.

shall also be unlawful for any person or corporation to solicit or knowingly receive any such information which may be so used

1

The law also provides that whenever a carrier by railroad shall in competition with a water route reduce the rates on the carriage of any species of freight to or from competitive points it shall not be permitted to increase such rates unless after hearing it shall be found that such proposed increase rests upon changed conditions other than the elimination of water competition.2

136 U. S. Stats., p. 553. This is a part of the act to create the Commerce Court, and was offered as an amendment by Senator Burton, who explained its purpose as follows: "It has developed in judicial proceedings in two instances that certain great industrial combinations maintain information bureaus. Those engaged in the work of these bureaus, by divers methods, none of which, I think, can be rated as commendable, obtain from railway corporations, or through their agents, information relating to the business of their minor competitors. For example, a great establishment ascertains that a competitor intends to ship into the State of Ohio, Indiana, or Texas a consignment of merchandise. The amount of that merchandise becomes known to the information bureau, and the name of the consignee is also ascertained. Using this information, a strenuous effort is made to prevent the competitor from disposing of his merchandise, from making any sales in the locality to which the shipment is made. An unfair advantage is thus given to the larger establishment, which enables it, in a measure, to crush out competition; I have a mass of information on this subject, if there is a desire that I should read it." (Congressional Record, June 1, 1910, vol. 45, Pt. VII, p. 7207.)

In the brief for the Government in U. S. r. Reading Company et al. (D. C. E. D. Pa.) it was stated that "in plain violation of this provision of law, defendant Reading Railway Co. made a practice of furnishing each morning to an employee of the defendant Reading Coal Co., sent to it for that purpose, a complete list of all the anthracite coal shipments transported over its lines and received by it at Philadelphia during the previous day, together with the names of all the shippers and consignees. This practice continued until it was detected and complained of by an examiner of the Interstate Commerce Commission late in the year 1912."

*

The following sources of information indicate that manufacturers and dealers have engaged in the practice of bribing employees of railroads to disclose information concerning shipments of competitors: United States v. Standard Oil Co. of New Jersey (C. C. E. D. Mo.), 173 Fed., 177, 190 (1909), brief of facts and arguments of petitioner, Vol. II, pp. 358-428, and record, Vol. V, pp. 2503-2505, Vol. VI, pp. 3032–3033; State (Mo.) v. Standard Oil Co. of Indiana, Waters-Pierce Oil Co., and Republic Oil Co., 218 Mo., 1, 71, 72, 98, 102, 103, 105, 106, 115, 123, 174, 222, 285, 286, 397, 398; Report of the Commissioner of Corporations on the Petroleum Industry, Pt. I, p. 19, and Pt. II, p. 669. By the decree in United States v. Burroughs Adding Machine Co. et al., the defendant company was directed to instruct its agents to desist from interfering with the business of competitors, by wrongfully obtaining information respecting the business, sales, or shipments of such competitors.

For testimony concerning efforts of the Southern Pacific Co. to secure copies of manifests of cargoes of the Philadelphia & Gulf Steamship Co.'s steamers, see hearings before the House Committee on the Merchant Marine and Fisheries in the investigation of shipping combinations under House resolution 587, 62d Cong., 2d sess., vol. 2, pp. 934-943.

The annual report of the Board of Directors of the New Jersey Lumbermen's Protective Association, submitted Feb. 20, 1906, contained the following: "In our last report we called attention to the necessity of bringing pressure to bear upon the various railroad companies to furnish the name of consignors of irregular shipments. *" (U. S. v. Eastern States Retail Lumber Dealers Association et al., record, Vol. IV, petitioner's Exhibit No. 13, p. 277; see also pp. 244-245.)

236 U. S. Stats., p. 548.

Section 30. Legislation prohibiting importation of articles bearing deceptive trade descriptions.

A section of the trade-mark act of 1905 prohibits the entry of merchandise which shall copy or simulate the name of any domestic manufacture, or manufacturer, or of any manufacturer located in any foreign country which affords similar privileges to citizens of the United States, or which shall copy or simulate a trade-mark registered in accordance with this act, or shall bear a name or mark calculated to induce the public to believe that the article is manufactured in the United States, or that it is manufactured in any foreign country or locality other than the country or locality in which it is in fact manufactured.1

133 U. S. Stats., 730; Customs Regulations of 1908, art. 315; Treasury Doc. 26198. A somewhat similar provision was contained in an act approved Mar. 3, 1871, prohibiting the importation of watches, watch cases, watch movements, or parts of watch movements of foreign manufacture, which shall copy or simulate the name or trade-mark of any domestie manufacturer, unless such domestic manufacturer is the importer of the same (16 U. S. Stats., 580). See also Tariff Acts, 26 U. S, Stats., 613; 28 U. S. Stats., 547, 548; 30 U. S. Stats., 207; In re Vintschger, 50 Fed., 459 (C. C., 1892); 21 Op. Atty. Gen., 260 (1895).

CHAPTER IX.

STATE STATUTES CONCERNING UNFAIR COMPETITION AND CERTAIN RELATED TRADE PRACTICES.

Section 1. Introduction.

There is a considerable volume of State legislation prohibiting certain dishonest or improper trade practices, some of which may be regarded as unfair competition. These laws are designed (1) to protect business men from competitive practices hurtful to them, and in some instances injurious to the purchasing public or to public morals as well; and (2) to protect the public from dishonest or fraudulent practices of manufacturers or dealers. The chief distinction between the two classes of statutes is that in the first the protection of the competitor appears to be the primary object, while in the second the protection of the public appears to be the dominant purpose. As an illustration of the first class may be mentioned laws making it criminal to offer a bribe or secret commission to the agent or employee of another for the purpose of influencing his conduct respecting his principal's or employer's business. One of the causes for the enactment of such laws was unquestionably the prevalence of the practice of giving buyers for commercial houses, domestics, and others, commissions on purchases made for their employers. In addition to preventing an abuse of the fiduciary relation of principal and agent which results in loss to the employer, these statutes protect the more scrupulous manufacturer or merchant who finds himself too often unable to sell in competition with those willing to resort to bribery in order to secure patronage. Statutes prohibiting the use by one corporation of a name previously adopted by another, or prohibiting manufacturers or dealers from representing, by marks, labels, or otherwise, that the goods of one manufacturer are those of another, are instances of legislation having a similar purpose but perhaps more clearly directed to the protection of the competitor. On the other hand, an example of laws apparently intended primarily to guard the purchasing public against fraud and imposition is found in those statutes forbidding false or misleading advertisements or the use of false marks respecting the quality of gold or silver ware. Laws of this character, however, incidentally protect the honest manufacturer or dealer from the competition of unscrupulous rivals.