discontinued, and the first preferred stockholders were notified that the company was confronted with the necessity of discontinuing dividends on that class of stock as well. The condition of the International company, on the contrary, notwithstanding these adverse conditions in the shoe trade generally, was excellent. That company had so conducted its affairs that its surplus stock was not excessive, and it was able to reduce prices. Instead of a decrease, it had an increase of business of about 25 per cant in the number of shoes made and sold. During the early months of 1921, orders exceeded the ability of the company to produce, so that approximately one-third of [301] them were necessarily canceled. In this situation, with demands for its products so much in excess of its ability to fill them, the International was approached by officers of the McElwain company with a view to a sale of its property. After some negotiation, the purchase was agreed upon. The transaction took the form of a sale of the stock instead of the assets, not, as the evidence clearly establishes, because of any desire or intention to thereby affect competition, but because by that means the personnel and organization of the McElwain factories could be retained, which, for reasons that seem satisfactory, was regarded as vitally important. It is perfectly plain from all the evidence that the controlling purpose of the International in making the purchase in question was to secure additional factories, which it could not itself build with sufficient speed to meet the pressing requirements of its business. Shortly stated, the evidence establishes the case of a corporation in failing circumstances, the recovery of which to a normal condition was, to say the least, in gravest doubt, selling its capital to the only available purchaser in order to avoid what its officers fairly concluded was a more disastrous fate. It was suggested by the court below, and also here in argument, that instead of an outright sale, any one of several alternatives might have been adopted which would have saved the property and preserved competition; but, as it seems to us, all of these may be dismissed as lying wholly within the realm of speculation. The company might, as suggested, have obtained further financial help from the banks, with a resulting increased load of indebtedness which the company might have carried and finally paid, or, on the other hand, by the addition of which, it might more certainly have been crushed. As to that, one guess is as good as the other. It might have availed itself of a receivership, [302] but no one is wise enough to predict with any degree of certainty whether such a course would have meant ultimate recovery or final and complete collapse. If it had proceeded, or been proceeded against, under the bankruptcy act, holders of the preferred stock might have paid or assumed the debts and gone forward with the business; or they might have considered it more prudent to accept whatever could be salvaged from the wreck and abandon the enterprise as a bad risk. As between these and all other alternatives, and the alternative of a sale such as was made, the officers, stockholders, and creditors, thoroughly familiar with the factors of a critical situation and more. able than commission or court to foresee future contingencies, after much consideration, felt compelled to choose the latter alternative. There is no reason to doubt that in so doing they exercised a judg ment which was both honest and well informed; and if aid be needed to fortify their conclusion, it may be found in the familiar presumption of rightfulness which attaches to human conduct in general. Bank of the U. S. v. Dandridge, 12 Wheat. 64, 69. Aside from these considerations, the soundness of the conclusion which they reached finds ample confirmation in the facts already discussed and others disclosed by the record. In the light of the case thus disclosed of a corporation with resources so depleted and the prospect of rehabilitation so remote that it faced the grave probability of a business failure with resulting loss to its stockholders and injury to the communities where its plants were operated, we hold that the purchase of its capital stock by a competitor (there being no other prospective purchaser), not with a purpose to lessen competition, but to facilitate the accumulated business of the purchaser and with the effect of mitigating seriously injurious consequences otherwise probable, is not in contemplation of law prejudicial to the public and does not substantially [303] lessen competition or restrain commerce within the intent of the Clayton Act. To regard such a transaction as a violation of law, as this court suggested in United States v. U. S. Steel Corp., 251 U. S. 417, 446-447, would "seem a distempered view of purchase and result." See also American Press Ass'n v. United States, 245 Fed. 91, 93-94. For the reasons appearing under each of the two foregoing heads of this opinion, the judgment below must be Reversed. Mr. Justice STONE, dissenting. That the facts found by the Commission are a violation of section 7 of the Clayton Act is not questioned. Under sec. 11, 38 Stat. 730, (U. S. Code, Title 15, sec. 21), the findings of the Commission "if supported by testimony" and the inferences which it may reasonably draw from the facts proved or admitted, are conclusive upon us. See Federal Trade Commission v. Pacific Paper Ass'n, 273 U. S. 52. Congress has thus forbidden the substitution of the judgment of courts for that of the Commission where it is founded upon evidence. Conforming to this requirement I can not say that its conclusions here lack the prescribed support. Even without such statutory limitation this court will not set aside the findings of an administrative board or commission, upheld, as in the present case, by the reviewing court below, unless the record establishes that clear and unmistakable error has been committed. Cincinnati, &c. Ry. Co. v. Interstate Commerce Comm., 206 U. S. 142, 154; Cincinnati, N. O. & Texas Ry. v. Interstate Commerce Comm., 162 U. S. 184, 194; Illinois Central R. Co. v. Interstate Commerce Comm., 206 U. S. 441, 466. The opinion of the court and the general testimony of petitioner's officers of their conclusions that there was no competition between the two corporations (see United [304] States v. Trenton Potteries Co., 273 U. S. 392) seem to proceed on the assumption that manufacturers, each engaged in marketing a product comparable in price and adapted to the satisfaction of the same need, do not compete if they do not sell to the same distributors. Without stating it in detail, there appears to me to be abundant evidence that the competitive products, made by two of the largest shoe manufacturers in the world, reached the same local communities through different agencies of distribution; the one, of petitioner, through sales directly to retailers throughout the United States, the other, of the McElwain company, through sales in thirty-eight States, chiefly to wholesalers located in cities, who in turn sold to the retail trade. From detailed evidence of this type the Commission drew, as I think it reasonably might, the inference that the rival products, through local retailers, made their appeal to the same buying public and so were competitive. From a comparative study of the statistics of sales, the Commission might also, I think, reasonably have found that the McElwain company was successfully competing, by securing by far the larger proportion of the trade in this type of shoe, its gross sales of dress shoes in 1920 being more than $33,000,000 and in 1921 more than $15,000,000, as compared with petitioner's sales of its similar dress shoes of approximately $2,500,000. No useful purpose would be served by reviewing the evidence at length. To refer to only two of the many items which support the findings of the Commission, the fact relied upon, that petitioner, in the year ending May 31, 1921, sold only 52 dozen pairs of the competing shoes to dealers patronizing the McElwain company, would seem to be without significance in the light of other evidence that in one State, Missouri, where petitioner sold its product to 4,801 of the 5,150 retail shoe dealers in the State, the McElwain company sold in the same [305] year, chiefly through wholesalers and independent jobbers, 25,669 dozen pairs of the competing product. It appears that in 1921 petitioner sold its shoes to every retailer in Kentucky, Tennessee, and Texas. In that year, when the value of the gross sales of the McElwain company had been cut in half by business depression, it sold in those States 8,791 dozen pairs of its competing product, chiefly through independent jobbers, in addition to its sales in that territory through wholesale houses at Columbus, Ohio, and Chicago. Apart from the more general testimony that both companies sold extensively in the same States and in the same cities, the inference from this evidence seems irresistible that in these States, as was the case in others1 the competing products were not only offered through different systems of distribution to the same retailers, but were by them offered and sold to the ultimate consumers in their communities. Both products being made and suitable for the same use, the fact that each presented some minor advantages over the other, it might reasonably be inferred, would tend to increase, rather than diminish the competition. In fact, the chairman of petitioner's board of directors testified that its 500 salesmen were unsuccessful in their efforts to increase the sales of its Patriot Brand of dress shoes (the alleged competitive product) above about 3,000 pairs a day because they were unable to convince retailers of the superiority of petitioner's more serviceable dress shoes over the better [306] looking dress shoes of the type manufactured by the McElwain company. 1 The petitioner sold to three retail dealers in every four in Illinois. The McElwain company sold 9,547 dozen pairs of competing shoes to independent jobbers and retailers in that State. In addition, an affiliated wholesale house located in Chicago sold about 18,000 dozen pairs. In California, where the International Shoe Co. sold to seven retail dealers in every ten, the McElwain company sold 1,586 dozen pairs to retailers and independent jobbers; and an affiliated wholesaler located at San Francisco sold, almost wholly within the State, about 10,000 dozen pairs of the competing shoes. Nor am I able to say that the McElwain company, for the stock of which petitioner gave its own stock having a market value of $9,460,000, was then in such financial straits as to preclude the reasonable inference by the Commission that its business, conducted either through a receivership or a reorganized company, would probably continue to compete with that of petitioner. See Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346, 356, 357. It plainly had large value as a going concern, there was no evidence that it would have been worth more or as much if dismantled, and there was evidence that the depression in the shoe trade in 1920-1921 was then a passing phase of the business. For these reasons and others stated at length in the opinion of the court below, I think the judgment should be affirmed. Mr. Justice Holmes and Mr. Justice Brandeis concur in this opinion. N. FLUEGELMAN & CO., INC. v. FEDERAL TRADE COMMISSION 1 (Circuit Court of Appeals, Second Circuit. Jan. 6, 1930) No. 85 TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 71-TRADEMARKS AND LABELS USED IN MERCHANDISING PRODUCT WHICH MISLEAD PURCHASING PUBLIC ARE FORBIDDEN (FEDERAL TRADE COMMISSION ACT; 15 USCA SECS. 41-51). Fact that words used in merchandising product have been trade-marked give no unlimited sanction to use words which will deceive, but any misleading trade-mark or label whereby purchasing public is deceived is forbidden under Federal Trade Commission Act (15 USCA secs. 41-51), which forbid unfair methods of competition in commerce. TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 80%1⁄2-ORDER OF FEDERAL TRADE COMMISSION FORBIDDING LAWFUL METHODS OF MERCHANDISING CAN NOT STAND (15 USCA SEC. 45). Order of Federal Trade Commission prohibiting lawful methods of merchandising can not stand, and may be modified by court under power given by statute 15 USCA section 45, to conform order to complaint and findings. [60] TRADE-MARKS AND TRADE-NAMES AND UNFAIR COMPETITION KEY-NO. 71COMPANY MANUFACTURING COTTON FABRICS WITH SATIN WEAVE MAY USE IN CONNECTION THEREWITH TRADE-NAME 'SATINMAID" AND "SATINIZED”, BUT ONLY ON CONDITION THAT SUCH NAMES BE FOLLOWED BY LETTERS EQUALLY CONSPICUOUS DESIGNATING NATURE OF FABRIC (FEDERAL TRADE COMMISSION ACT; 15 USCA SECS. 41-51). Company converting cotton fabrics, silk and cotton fabrics, rayon fabrics, combinations of cotton and artificial silk fabrics, and selling them to wholesale and retail dealers under trade-name of "Satinmaid" and "Satinized", can not be absolutely restrained from using such trade-names for its products, where products had satin weave, but could not use these words or any word or combination of words embracing word “satin" as trade-name, unless there was added in letters equally conspicuous and on the same side of the label the words "a cotton fabric ", "a cotton satin", "no silk", or equivalent modifying terms, under Federal Trade Commission Act (15 USCA secs. 41–51). 1 Reported in 87 F. (2d) 59. Case before Commission reported in 12 F. T. C. 359. (The syllabus is taken from 37 F. (2d) 59) Petition by N. Fluegelman & Co., Inc., to review an order of the Federal Trade Commission entered against the petitioner, ordering it to cease and desist from selling its merchandise under the tradename "Satinmaid" and "Satinized". Order modified and affirmed. Mr. Henry Fluegelman, of New York City (Mr. David Klein, of New York City, of counsel), for petitioner. Mr. Robert E. Healy, chief counsel, Federal Trade Commission, of Washington, D. C., and Mr. James M. Brinson, special attorney, of Washington, D. C., for respondent. Covington, Burling & Rublee, of Washington, D. C., and Hays, Hershfield, Kaufman & Schwabacher, of New York City (Mr. J. Harry Covington, of Washington, D. C., and Mr. Wolfgang S. Schwabacher, of New York City, of counsel), for Rayon Institute of America, Inc. Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges. MANTON, Circuit Judge: The order to cease and desist directs that "the respondent cease and desist, directly or indirectly, from using the word 'Satinmaid', or any word or words, or combination of words, embracing the word satin' as a trade name for, or to describe or designate a cotton fabric offered for sale or sold in interstate commerce." The petitioner's business is that of converting cotton fabrics, silk and cotton fabrics, rayon fabrics, combinations of cotton and artificial silk fabrics and selling them to wholesale and retail dealers in the several States of the United States. The product complained of here is a cotton fabric made in a satin weave and has been advertised under the trade name of "Satinmaid" and "Satinized " and has also been referred to on the labels and tags as a "satinized" fabric. The petitioner has a trade-mark of the name "Satinmaid and "Satinized". In such advertising since the 7th of December, 1925, the petitioner has used the word "Satinmaid" and in almost equally large type or letters has added "a cotton fabric ". The same has been true in the use of the word "Satinized ". Prior to the addition of the words "a cotton fabric ", in each instance, the Federal Trade Commission, after complaint made, entered into a stipulation on December 7, 1925, with the petitioner, in part, as follows: It is further stipulated and agreed that hereafter when respondent (referring to N. Fluegelman & Co.) shall use said trade name "Satinmaid" in advertising, labeling, or describing a fabric composed entirely of cotton or not containing a substantial amount of silk, it will, in every case, use in immediate conjunction with said trade name apt words clearly showing that such fabric is all cotton or contains no silk or the truth as to its silk content. Prior to this stipulation, the Commission found that the product "when sold and delivered by respondent has had so-called board ends affixed to the cards or boards around which the fabric was wound, containing said trade name, accompanied by the words 'a satinized fabric', in one or more places, which also have appeared |