sold under different trademarks or trade names, but all distributors of the merchandise of the same proprietor sold under the same mark or name may cooperate with him in maintaining the stipulated or minimum prices established by him, or his sole distributor specifically authorized for that purpose, and no such cooperation shall constitute an unreasonable or unlawful contract or combination in restraint of trade." (NOTE.-H. R. 10770, introduced by Mr. Tollefson, of Washington; H. R. 10847, introduced by Mr. Pelly, of Washington; and H. R. 11048, introduced by Mr. Miller of California, are identical with H. R. 10527 and are not printed herewith.) [H. R. 11216, 85th Cong., 2d sess.] A BILL To amend the Federal Trade Commission Act, as amended, so as to equalize rights in the distribution of identified merchandise. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it is the purpose of this Act to recognize the legitimate interest of the manufacturer or wholesaler who identifies merchandise manufactured or distributed by him in stimulating demand for his identified merchandise through effective distribution to ultimate consumers; to equalize rights in the distribution of identified merchandise, by affording the small manufacturer or small wholesale distributor of identified merchandise in free and open competition with articles of the same general class produced by others an opportunity to compete on more nearly equal terms with the large manufacturer or distributor who can afford to control the distribution of his merchandise through his employees and consignees, and by affording the small retailer an opportunity to compete on more equal terms with the large retailer, and to that end to permit manufacturers or wholesalers of identified merchandise in such free and open competition to maintain upon their merchandise prices which are adequate to enlist the active efforts of distributors, at all necessary or appropriate stages of distribution, and which are low enough to complete effectively with other goods adopted to serve the same needs of ultimate consumers. SEC. 2. Section 5 (a) of the Federal Trade Commission Act, as amended, is hereby amended to read as follows: “SEC. 5. (a) (1) Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful. The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to the Civil Aeronautics Act of 1938, and persons, partnerships, or corporations subject to the Packers and Stockyards Act, 1921, except as provided in section 406 (b) of said Act, from using unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce. "(2) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful any notices provided in paragraph 5 of this subsection or any contracts or agreements prescribing minimum or stipulated prices, or requiring a vendee to enter into contracts or agreements prescribing minimum or stipulated prices, for the resale of a commodity which bears, or the label, dispenser, or container of which bears, the trademark, brand, or trade name of the proprietor, producer, or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, when notices, contracts, or agreements of that description are lawful or effective as applied in intrastate transactions under any statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia in which such resale is to be made or to which the commodity is to be transported for such resale. "(3) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful the exercise or the enforcement of any right or right of action created by any statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia, which in substance provides that willfully and knowingly advertising, offering for sale, or selling any commodity at less than the price or prices prescribed in such notices, contracts or agreements, whether the person so advertising, offering for sale, or selling is or is not a party to such a contract or agreement, is unfair competition and is actionable at the suit of any person damaged thereby. "(4) Neither the giving of notices as provided in paragraph 5 of this subsection, the making of contracts or agreements, nor the exercise or enforcement of any right or right of action as described in paragraph (6) of this subsection shall constitute an unlawful burden or restraint upon, or interference with, commerce. "(5) For the purposes of paragraphs 5 to 9 inclusive of this subsection, the word 'commerce' means all commerce that may be lawfully regulated by Congress, and a 'proprietor' is one who identifies merchandise manufactured or distributed by him by the use of his trademark or trade name. He is deemed to retain a proprietary interest in such merchandise after he has sold it to distributors, by reason of his interest in stimulating demand for such merchandise through effective distribution to ultimate consumers, and by reason of his further interest in the trademark or trade name identifying his products. Merchandise bearing his trademark or trade name is accordingly herein designated as 'his merchandise' and distributors handling his merchandise are designated as 'his distributors': Provided, however, That a distributor of merchandise identified by the trademark or trade name of the manufacturer is not a proprietor within the meaning of this Act unless he is a distributor specifically authorized by the manufacturer to establish resale prices for such merchandise. It shall be lawful for a proprietor to establish and control by actual notice to his distributors stipulated or minimum resale prices of his merchandise in commerce which is in free and open competition with articles of the same general class produced by others. He may so establish schedules of resale prices differentiated with reference to any criteria not otherwise unlawful. Such schedules may be changed from time to time by actual notice to distributors having acquired his merchandise with actual notice of any established resale price. He may so establish such resale prices for his distributors, even though he sells in competition with them, so long as he sells at the applicable prices he has established for his distributors making comparable sales. Actual notice' of established resale prices includes notice imparted by mail, or through advertising, or through notice attached to merchandise, or containers, packages or dispensers thereof, or imparted orally. Deposit in the United States mail, with postage prepaid of a letter properly addressed to a distributor and specifying resale prices established by a proprietor shall constitute prima facie evidence of actual notice of such prices. The acquisition of or dealing in merchandise clearly marked, or enclosed in containers, packages or dispensers clearly marked, with resale prices established by a proprietor shall be conclusive evidence of actual notice of such prices. Actual notice may also be established by legally admissible evidence without limitation of manner or form. A person with actual notice of any applicable resale price is thereby charged with notice that such a price is subject to change. Except as provided in paragraph 8, it shall be unlawful for any person with actual notice of an applicable stipulated resale price duly established by a proprietor to sell, offer to sell, or advertise merchandise in commerce at a different price, or for any person with actual notice of any applicable minimum resale price so duly established to sell, offer to sell, or advertise merchandise in commerce at a lower price. "(6) Any person suffering or reasonably anticipating damage by reason of anything forbidden in paragraph 5 may sue in any State or Federal court of competent jurisdiction without respect to the amount in controversy and shall be entitled to recover the amount of damages sustained, plus the costs of suit, including a reasonable attorney's fee and to obtain injunctive relief and recover such costs and fee, whether or not specific monetary damages are established: Provided, however, That where no injunction lies, a Federal court shall not entertain a suit for damages, unless the amount in controversy, exclusive of interest and costs, exceeds the sum of $3,000. "(7) If a substantial portion of the merchandise upon which a proprietor has established a particular stipulated or minimum resale price crosses State lines at any stage of distribution, these provisions shall apply to all his identified merchandise to which that price applies, whether or not some or most of said merchandise is entirely distributed in the State or district of origin. The provisions of paragraphs 5 to 9 inclusive shall not apply to the merchandise of proprietors no substantial part of whose merchandise crosses State lines at any stage of distribution. "(8) It shall be a defense to an alleged violation of paragraph 5 for a defendant to sustain the burden of proving that merchandise has been advertised, offered for sale, or sold by him only in the following cases: "(a) In closing out the stock on hand for the bona fide purpose of discontinuing dealing in any such merchandise: Provided, That plain notice of the fact is given sold under different trademarks or trade names, but all distributors of the merchandise of the same proprietor sold under the same mark or name may cooperate with him in maintaining the stipulated or minimum prices established by him, or his sole distributor specifically authorized for that purpose, and no such cooperation shall constitute an unreasonable or unlawful contract or combination in restraint of trade." (NOTE.-H. R. 10770, introduced by Mr. Tollefson, of Washington; H. R. 10847, introduced by Mr. Pelly, of Washington; and H. R. 11048, introduced by Mr. Miller of California, are identical with H. R. 10527 and are not printed herewith.) [H. R. 11216, 85th Cong., 2d sess.] A BILL To amend the Federal Trade Commission Act, as amended, so as to equalize rights in the distribution of identified merchandise. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That it is the purpose of this Act to recognize the legitimate interest of the manufacturer or wholesaler who identifies merchandise manufactured or distributed by him in stimulating demand for his identified merchandise through effective distribution to ultimate consumers; to equalize rights in the distribution of identified merchandise, by affording the small manufacturer or small wholesale distributor of identified merchandise in free and open competition with articles of the same general class produced by others an opportunity to compete on more nearly equal terms with the large manufacturer or distributor who can afford to control the distribution of his merchandise through his employees and consignees, and by affording the small retailer an opportunity to compete on more equal terms with the large retailer, and to that end to permit manufacturers or wholesalers of identified merchandise in such free and open competition to maintain upon their merchandise prices which are adequate to enlist the active efforts of distributors, at all necessary or appropriate stages of distribution, and which are low enough to complete effectively with other goods adopted to serve the same needs of ultimate consumers. SEC. 2. Section 5 (a) of the Federal Trade Commission Act, as amended, is hereby amended to read as follows: "SEC. 5. (a) (1) Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful. The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to the Civil Aeronautics Act of 1938, and persons, partnerships, or corporations subject to the Packers and Stockyards Act, 1921, except as provided in section 406 (b) of said Act, from using unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce. "(2) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful any notices provided in paragraph 5 of this subsection or any contracts or agreements prescribing minimum or stipulated prices, or requiring a vendee to enter into contracts or agreements prescribing minimum or stipulated prices, for the resale of a commodity which bears, or the label, dispenser, or container of which bears, the trademark, brand, or trade name of the proprietor, producer, or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, when notices, contracts, or agreements of that description are lawful or effective as applied in intrastate transactions under any statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia in which such resale is to be made or to which the commodity is to be transported for such resale. "(3) Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful the exercise or the enforcement of any right or right of action created by any statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia, which in substance provides that willfully and knowingly advertising, offering for sale, or selling any commodity at less than the price or prices prescribed in such notices, contracts or agreements, whether the person so advertising, offering for sale, or selling is or is not a party to such a contract or agreement, is unfair competition and is actionable at the suit of any person damaged thereby. "(4) Neither the giving of notices as provided in paragraph 5 of this subsection, the making of contracts or agreements, nor the exercise or enforcement of any right or right of action as described in paragraph (6) of this subsection shall constitute an unlawful burden or restraint upon, or interference with, commerce. "(5) For the purposes of paragraphs 5 to 9 inclusive of this subsection, the word 'commerce' means all commerce that may be lawfully regulated by Congress, and a 'proprietor' is one who identifies merchandise manufactured or distributed by him by the use of his trademark or trade name. He is deemed to retain a proprietary interest in such merchandise after he has sold it to distributors, by reason of his interest in stimulating demand for such merchandise through effective distribution to ultimate consumers, and by reason of his further interest in the trademark or trade name identifying his products. Merchandise bearing his trademark or trade name is accordingly herein designated as 'his merchandise' and distributors handling his merchandise are designated as 'his distributors': Provided, however, That a distributor of merchandise identified by the trademark or trade name of the manufacturer is not a proprietor within the meaning of this Act unless he is a distributor specifically authorized by the manufacturer to establish resale prices for such merchandise. It shall be lawful for a proprietor to establish and control by actual notice to his distributors stipulated or minimum resale prices of his merchandise in commerce which is in free and open competition with articles of the same general class produced by others. He may so establish schedules of resale prices differentiated with reference to any criteria not otherwise unlawful. Such schedules may be changed from time to time by actual notice to distributors having acquired his merchandise with actual notice of any established resale price. He may so establish such resale prices for his distributors, even though he sells in competition with them, so long as he sells at the applicable prices he has established for his distributors making comparable sales. 'Actual notice' of established resale prices includes notice imparted by mail, or through advertising, or through notice attached to merchandise, or containers, packages or dispensers thereof, or imparted orally. Deposit in the United States mail, with postage prepaid of a letter properly addressed to a distributor and specifying resale prices established by a proprietor shall constitute prima facie evidence of actual notice of such prices. The acquisition of or dealing in merchandise clearly marked, or enclosed in containers, packages or dispensers clearly marked, with resale prices established by a proprietor shall be conclusive evidence of actual notice of such prices. Actual notice may also be established by legally admissible evidence without limitation of manner or form. A person with actual notice of any applicable resale price is thereby charged with notice that such a price is subject to change. Except as provided in paragraph 8, it shall be unlawful for any person with actual notice of an applicable stipulated resale price duly established by a proprietor to sell, offer to sell, or advertise merchandise in commerce at a different price, or for any person with actual notice of any applicable minimum resale price so duly established to sell, offer to sell, or advertise merchandise in commerce at a lower price. "(6) Any person suffering or reasonably anticipating damage by reason of anything forbidden in paragraph 5 may sue in any State or Federal court of competent jurisdiction without respect to the amount in controversy and shall be entitled to recover the amount of damages sustained, plus the costs of suit, including a reasonable attorney's fee and to obtain injunctive relief and recover such costs and fee, whether or not specific monetary damages are established: Provided, however, That where no injunction lies, a Federal court shall not entertain a suit for damages, unless the amount in controversy, exclusive of interest and costs, exceeds the sum of $3,000. "(7) If a substantial portion of the merchandise upon which a proprietor has established a particular stipulated or minimum resale price crosses State lines at any stage of distribution, these provisions shall apply to all his identified merchandise to which that price applies, whether or not some or most of said merchandise is entirely distributed in the State or district of origin. The provisions of paragraphs 5 to 9 inclusive shall not apply to the merchandise of proprietors no substantial part of whose merchandise crosses State lines at any stage of distribution. "(8) It shall be a defense to an alleged violation of paragraph 5 for a defendant to sustain the burden of proving that merchandise has been advertised, offered for sale, or sold by him only in the following cases: "(a) In closing out the stock on hand for the bona fide purpose of discontinuing dealing in any such merchandise: Provided, That plain notice of the fact is given to the public: And provided further, That the proprietor shall be given prompt and reasonable notice in writing of the intention so to close out and an opportunity to purchase such stock at the net price paid therefor by the defendant; "(b) When the merchandise is damaged, defaced, or deteriorated in quality and plain notice of the fact is given to the public in the advertisement and sale thereof, and when such notice is conspicuously displayed in all advertisements and affixed to the merchandise, or the container, package, or dispenser in which it is offered for resale; provided that the proprietor shall be given prompt and reasonable notice in writing of the intention so to close out and an opportunity to purchase such stock at the net price paid therefor by the defendant; "(c) When the merchandise is advertised, offered for sale, or sold by any officer acting under the orders of any court; "(d) In the sale of any quantity of the merchandise acquired prior to actual notice of any established resale prices; "(e) In resales to charitable institutions or Government agencies, which acquire the merchandise not for resale to the consuming public. "(9) Nothing contained in this subsection shall permit two or more proprietors or two or more distributors to take joint action in establishing resale prices for competing commodities sold under different trademarks or trade names, but all distributors of the merchandise of the same proprietor sold under the same mark or name may cooperate with him in maintaining the stipulated or minimum prices established by him, or his sole distributor specifically authorized for that purpose, and no such cooperation shall constitute an unreasonable or unlawful contract or combination in restraint of trade." (NOTE.-H. R. 11264, introduced by Mr. Macdonald, of Massachusetts, is identical with H. R. 11216 and is not printed herewith.) Hon. OREN HARRIS, UNITED STATES DEPARTMENT OF JUSTICE, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice concerning the bill (H. R. 10527) to amend the Federal Trade Commission Act, as amended, so as to equalize rights in the distribution of identified merchandise. The bill would amend section 5 (a) of the Federal Trade Commission Act (15 U. S. C. 45 (a)), which embodies the so-called Federal fair-trade laws. The bill would substantially reenact paragraph (2) of the present section 5 (a) with the exception that notices (as provided in par. (5)) would be added to the language of the present section so as to provide that notices and contracts or agreements prescribing minimum or stipulated prices, or requiring a vendee to enter into contracts or agreements prescribing such prices, shall not be unlawful when effective as applied in intrastate transactions under the laws of any State, Territory, or the District of Columbia. The bill would add a new paragraph (5) to section 5 (a) which would define the word "commerce" as meaning "all commerce that may be lawfully regulated by Congress," and the word "proprietor" as one "who identifies merchandise manufactured or distributed by him by the use of his trademark or trade name." Paragraph (5) would provide that it "shall be lawful for a proprietor to establish and control by actual notice to his distributors stipulated or minimum resale prices of his merchandise in commerce which is in free and open competition with articles of the same general class produced by others," and that he may so do "even though he sells in competition with them, so long as he sells at the applicable prices he has established for his distributors making comparable sales." Paragraph (5) would define "actual notice" and would provide that it shall be unlawful for a person with actual notice of an applicable stipulated or minimum price to sell, offer to sell, or advertise merchandise at a different or lower price. The bill would add a new paragraph (6) to section 5 (a) which would enable any person suffering "or reasonably anticipating damage" to sue in any "State or Federal court of competent jurisdiction" for damages and injunctive relief and be entitled to recover costs of suit, including a reasonable attorney's fee. New paragraph (7) would provide that if a "substantial portion of the mer |