June 5, 1913
Mr. George M. Graham;
Sporting Editor, The North American,
My dear Mr. Graham:—
I am certainly most gratified at receiving your esteemed favor of the 26th ultimo.
I attended a meeting yesterday in New York of some thirty or forty leading manufacturers on this proposition and became more confirmed than ever as to the righteousness and propriety of our views. Mr. Brandeis was present, and after mature consideration again gave us carefully his views more extendedly on the proposition, which cordially re-indorsed everything which he stated in his remarks at the Banquet at the Hotel Astor on May fourteenth. For fear you may not have at hand Mr. Brandeis’ corrected remarks, I am sending you a copy of my pamphlet including them.
I have read Mr. Van Valkenburg’s letter to Mr. Wilson as Governor of New Jersey, and I cordially endorse every single word he says therein. It certainly was an education effort and I feel that it made an impression on Mr. Wilson at the time which I hope he has not forgotten.
I am sending you herewith:
- My pamphlet on Price Maintenance Discussion.
- Copy of letter from Mr. Edward Rector, an eminent counsel of Chicago.
- Copy of my letter in reply to Mr. Rector.
- 4. Copy of a letter to Mr. W.D. Simmons, of the Simmons Hardware Co., St. Louis.
I wish to lay particular stress upon the fact that the Philadelphia North American’s publications are not sold until they are sold to the consumer. If you will draw in your mind a parallel between your sales and the sales of the manufacturer of a specialty, you will have the meat in the cocoanut absolutely before you.
The Kellogg people are wrong in endeavoring to reply upon the right to fix the price by reason of the patented package. The patented package gives them no rights which they do not otherwise inherently have to fix the price of their specialty, the Kellogg Corn Flakes. Mr. Rector clearly states that; Mr. Brandeis clearly states the same.
If you chose to run a special milk farm and put up your carefully prepared milk in patented bottles, the patented bottle has nothing to do with the case, but you ought to have the absolute right to stamp on those bottles “Graham Farm Milk” and fix the price at which it is to be bought by the consumer because it is the special product of your genius and painstaking care, and you make of it by the character you give to it a specialty article and it is of absolute value to the consumer to have the privilege of buying that at the price you fix with your reputation behind it.
I certainly feel that this question is all one-sided in our favor.
In the recent Sanatogen decision the Supreme Court was divided five to four. The powerful influence of Chief Justice White in what I consider the wrong direction is clearly apparent. There are rocks on the track ahead of the Supreme Court in pursuing its lines of thought in this direction. The whole error of the Court comes about through the fact that it regards an article as sold when it is sold by the producer to the wholesaler or retailer. Mr. Thomas A. Edison clearly set forth that in a recent article by him, of which I enclose you a copy, in which he painstakingly shows the evolution by a little manufacturer from first dealing with his own individual agents, then expanding into the use of the natural channels of commerce and trade—the wholesaler and retailer. The manufacturer of a specialty has a perfect right to sell through his agent and fix the consumer’s price, but when he desires to use the natural channels of trade and to also fix the price to the consumer upon which price being maintained actually depends the success of his business and his satisfaction of the consumer, and sell his goods through wholesalers and retailers, he becomes a conspirator in restraint of trade and indictable under the Sherman Act. Could anything possibly be more inconsistent with sound business or more opposed to public welfare?
Yours very truly,