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3672

FEDERAL REGISTER,
price differential,1 where such rebate, refund, discount, credit, or other form of price differential effects a discrimina tion in price between different purchas ers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce,2 and where the effect thereof may be sub stantially to .lessen competition or tend to create a monopoly in any line of commerce,2 or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination or with customers of either of them: P ro vided, however 1 That the goods involved in any such transaction are sold for use, con sumption, or resale within any place under the jurisdiction of the United States;
2 That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery re sulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;
3 That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in com m erce2 from selecting their own cus tomers in bona fide transactions and not in restraint of trade;
4 That nothing herein contained shall prevent price changes from time to time where made in response to chang ing conditions affecting either a the market for the goods concerned, or b the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obso lescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

Saturday, August 19, 1939

or facilities furnished by or through such customer in connection with the proc essing, handling, sale, or offering for sale of any products or commodities manu factured, sold, or offered for sale by such member, unless such payment or con sideration is available on proportionally equal terms to all other customers com peting in the distribution of such prod ucts or commodities.
d Prohibited discriminatory services or facilities. It is an unfair trade prac tice for any member of the industry engaged in commerce2 to discriminate in favor of one purchaser against an other purchaser or purchasers of a com modity bought for resale, with or with out processing, by contracting to fur nish or by furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on propor tionally equal terms.
e Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the in dustry engaged in commerce2, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this Rule 19.
97.20 R u l e 20. Aiding or abetting use of unfair trade practices. It is an unfair trade practice for any person, firm or corporation to aid, abet, coerce or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in these rules.
Group I I
Compliance with the trade practice provisions embraced in these Group I I
rules is considered to be conducive to sound business methods and is to be en couraged and promoted individually or through voluntary cooperation exercised in accordance with existing law. Nonobservance o f such rules does not, per se, constitute violation of law. Where, how ever, the practice of not complying with any such Group I I rules is followed in such manner as to result in unfair meth ods of competition, or unfair or decep tive acts or practices, corrective proceed ings may be instituted by the Commis sion as in the case of a violation o f Group I rules.
R u l e A. Publication of price lists. The industry approves the practice of each in dividual member of the industry inde-

b Prohibited brokerage and com missions. It is an unfair trade practice for any member of the industry engaged in commerce2, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a com mission, brokerage, or other compensa tion, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other inter mediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other 2 A s h erein used, the w ord com m erce than, the person by whom such com m eans trade or com m erce am on g th e several States an d w ith fo re ig n nations, or betw een pensation is so granted or paid.
th e D istrict o f C o lu m b ia or any T erritory of c Prohibited advertising or promo the U n ited States a n d any State, Territory, tional allowances, etc. It is an unfair or fo re ig n nation, or . b etw een a n y in su lar trade practice for any member of the possessions or other places u n d er th e ju r is
industry engaged in commerce,2 to pay diction of th e U n ite d States, or betw een any su ch possession or place a n d any State or or contract for the payment of adver Territo ry o f the U n ite d States or the D istrict tising or promotional allowances or any o f C o lu m b ia or any fo re ig n nation, o r w ith in other thing of value to or for the benefit th e D istrict o f C o lu m b ia or a n y T erritory or any in su la r possession or other p lace u n d er of a customer of such member in the th e ju risd iction o f the U n ited States: Pro course of such commerce as compensa vided, T h a t th is n ot a p p ly to the P h ilip p in e tion or in consideration for any services Islands.

pendently publishing and circulating to the purchasing trade his own price lists fully setting forth his terms of sale.
R u l e B. Return of merchandise. The practice, by members of the industry, of selling merchandise and later permitting the purchaser to return it for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business to the detri ment of both the industry and the pub lic, and is condemned by the industry, subject, however, to the general limita tion that members of the industry shall not engage in any combination or con spiracy in restraint of trade or use any other illegal methods in the regulation, control or prevention of the return of merchandise.
R ule C . Repudiation of contracts.
Lawful contracts are business obligations which should be performed in letter and in spirit. The repudiation of contracts by sellers on a rising market, or by buy ers on a declining market, is condemned by the industry.
R ule D. Arbitration. The industry approves the practice of handling busi ness disputes between members of the industry and their customers in a fair and reasonable manner, coupled with a spirit of moderation and good will, and every effort should be made by the dis putants themselves to compose their differences. I f unable to do so they should, if possible, submit these dis putes to arbitration.
Promulgated and issued by the Fed eral Trade Commission as of August 19, 1939.
seal!
O t i s B. J o h n s o n , Secretary.
F . R . Doc. 39-3047; Filed, A u gu st 18, 1939;
9:27 a. m .

D ock et N o. 3743
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P roducts
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3.6 n 2 Advertising falsely or misleading Nature Product: 3.6 t Advertising falsely or misleadingly Qualities or properties of product: 3.6
x Advertising falsely or misleadingly Results: 3.6 y Advertising falsely or misleadingly S a f e t y . Disseminating, etc., advertisements by means of the United States mails, or in commerce, or by any means, to induce, etc., directly or indirectly, purchase of respondents No-No Germ Control , or other similar medicinal preparation, which advertise ments represent, directly or through implication, that said medicinal prepara tion will kill germs which cannot be reached by powder or liquid preparations, or will kill all germs, or is a germicide;
will prevent pregnancy or is a competent and effective contraceptive; is non-irri tating to the genital organs and odorless;
will clear the nasal passages or reduce swollen membrances or clear away mu cous, or is an effective treatment for 1head colds or hay fever, or will remove