BULLETIN OF PHARMACY VOL. XX. THE DETROIT, MICH., JANUARY, 1906. No. I. BULLETIN OF PHARMACY to depend more generally upon direct contracts, THE LODER JUDGMENT. Laymen often make themselves ridiculous in discussing questions of law and jurisprudence, and perhaps we had best disarm criticism at the outset of this editorial by frankly confessing that we are neither lawyers nor judges. Of one thing concerning the Loder case, however, we are sure: it did not involve the merits of the direct-contract and serial-numbering plan, and the legality of this plan therefore remains unquestioned. Judge Holland, indeed, upheld in his charge to the jury the absolute legality of the contract plan. It was the tripartite plan that was in question, and if it should transpire that this plan has been given a serious blow, the Loder case may even be a blessing in disguise in forcing the N. A. R. D. which have both the merits of unquestioned legality and of superior efficiency. Whether the tripartite plan has, however, lost its legal prop remains to be seen. The one issue in the case seemed to be this: Did manufacturers and jobbers refuse Loder goods by virtue of a combination or conspiracy among themselves, or did each do so upon his own individual initiative? Attorney Scott for the plaintiff sought to prove the former; Attorney Johnson for the defendants sought to prove the latter; and Judge Holland, in charging the jury, declared that "if you find there was a combination, it will be my duty to tell you that it is illegal." The decision of the jury indicated a belief in the existence of a combination or conspiracy. Now what makes the decision somewhat confusing to the layman is this, that it is contrary to those reached in the famous and epoch-making Park* and Platt cases. In both these it was admitted that the jobbers, the manufacturers, and the retailers had acted in concert, but it was nevertheless declared by Judge Tuley in the Platt case that "the rule invoked by [Platt's] counsel that any kind of a combination, even to keep up prices, is in restraint of trade, does not apply to patentees or to manufacturers using trade secrets: this appears to be well established by the authorities." Similar ground was taken in the Park decision. So far as patented or trade-marked (or even "trade-secret") preparations are concerned, the Loder decision is therefore in apparent conflict with the decisions rendered in the Platt and Park cases. So far as other classes of goods are concerned, no one of the three decisions would seem to favor any restriction in their sale through the concerted efforts of manufacturers, jobbers, or dealers. *See BULLETIN OF PHARMACY, June, 1903, page 222. +See BULLETIN OF PHARMACY, March, 1905, page 90. But, considering only for the moment goods like "patent medicines," which are protected by trademarks or otherwise, why should we find this difference of opinion between judges? Well, for one thing, jurisprudence is far from being a settled science, and judges, like doctors, often disagree. A few months ago, for instance, Judge Ray of the United States Circuit Court in New York, passing judgment in the Macy book case which apparently involved the same principles as those in the Park case, rendered a decision' diametrically opposite to that which had been handed down in the latter case by the Court of Appeals of the same State.* And then, too, another reason why a different result was reached in the Loder than in the Platt and Park cases was doubtless because the former was brought under the federal or Sherman antitrust law. This statute is sweeping in its condemnation of associated effort; it does not discriminate between just and unjust restraint of trade; and the opinion has often been expressed, indeed, that the law is so radical as to render illegal almost every labor union in the United States. The Loder case has been promptly appealed, and its further history will be followed with much anxiety and interest. In the meantime two lessons may be drawn from the situation: 1. The N. A. R. D. must pin its faith more than ever to the direct-contract plan. 2. Individual instead of collective action must be taken in refusing to sell cutters goods. This is particularly true of articles not protected by patent or trade-mark. A manufacturer or dealer, acting alone, may refuse to sell anybody he chooses, for any reason or for no reason: this has been repeatedly shown, the most recent case being that of two or three weeks since in which a supreme court judge in New York decided that The American Tobacco Company acted well within its rights in refusing arbitrarily to sell a certain firm of retailers in Brooklyn. But may manufacturers and dealers, though acting in concert, take the same action, provided the goods are patented or trade-marked? "Yes," reply the Park and Platt decisions. "No," reply the Macy and Loder decisions. And the question therefore finds anything but a definite With unpatented and untrade-marked articles, however, there is apparently not even this difference of opinion and judgment-every court has agreed that there must be no concerted action to restrict their sale. STILL ANOTHER DRUGGIST AND HIS EARNINGS. I have been very much interested in the several statements Total expense, including clerk hire, freight, and $1750.00 1951.15 4362.00 6426.52 1988.85 In the element of expense I have made no charge for interest on investment. How do you think the figures compare with other drug businesses of the same size? U. M. Let us analyze these figures a bit: The inventory taken September 1, 1905, shows by its excess over the inventory of the year before that $201.15 worth of goods were purchased during the year which were not sold. Subtracting this amount from the $4362.00 worth of goods purchased, we find that $4160.85 was invested in goods that were handed out again over the counter-goods whose sale brought in $6426.52. Thus gross profits were realized of $2265.67-amounting to 32 per cent. The expenses, meanwhile, were $1988.85, and so net profits were realized of only $276.82. "U. M.'s" statement is defective in not giving the amount of the proprietor's or "manager's" salary: assuming from the amount of total expenses that his salary was probably $1000.00, and adding this amount to the net profits of $276.82, we find total earnings of only $1276.82. We are inclined to think that an income of $1276.82 on an annual business of $6426.52, situated in a country district, is rather low. On page 266 of the July BULLETIN the case was cited of a New York druggist who had realized $1636.17 on a business of $7331.97. On page 384 of the September BULLETIN another instance was cited where a Wisconsin pharmacist had made over $2500 a year on a business of $7717.09. It will thus be seen that both druggists made their stores pay them somewhat better returns than "U. M." is able to do, although it is to be noted that their annual business was a little larger. This comparison of incomes brings us to speak of the related questions of percentage expense and gross profits. It cost "U. M." $1988.85 to sell \$6426.52 worth of goods, and his percentage *See BULLETIN OF PHARMACY, September, 1905, page 356. expense was therefore about 322. These figures take account also, it must be observed, of the proprie- and toxoid, and that these latter, not less than the tor's or manager's salary, which we have assumed to be $1000. Now it is to be noted that the New York druggist, whose case is cited in the foregoing paragraph, paid himself a salary of $1500 annually, and yet had a percentage expense of about 30 only. Turning to the question of gross profits, we find that "U. M." sold $6426.52 worth of goods, made $2265.67 on them, and thus realized a profit only of 32 per cent on his sales. The Wisconsin druggist, on the other hand, who made the very handsome and probably unusual earnings of over $2500 on an annual business of less than $8000, made a gross profit of 48.18 per cent on his sales. Here we have a wide difference-32 per cent on the one hand, and 48.18 on the other. And this difference goes far to explain the difference in percentage expense and the difference in annual income. toxin itself, combine with the antitoxin and absorb its activity to the extent of their presence. Since, however, this is virtually a scientific distinction merely, and since in practice a pure toxin is rarely if ever attained, laboratory biologists usually ignore the abstract question of pure and impure toxin and base their statements upon the impure substance. In either case the result is virtually the same. If an impure toxin is used, an antitoxic unit will neutralize 100 minimum lethal doses; if a pure toxin could be. used, an antitoxic unit would theoretically neutralize 200 minimum lethal doses. In other words, if the toxin were pure, the antitoxin would go twice as far. As we have stated several times before in discussing this subject in the BULLETIN, it is almost an axiom that the small druggist, doing an average sized business, must, if he desires to make sufficient money, cut his percentage expense down to at least 30, and realize gross profits on his sales of at least 40 per cent. "THE ANTITOXIC UNIT" AND THE NATIONAL STANDARD DISPENSATORY. Some comment has been made upon a seeming discrepancy of statement in the new National Standard Dispensatory regarding the unit of strength for antidiphtheric serum. On page 200, in the article on "Antitoxin," it is asserted that "an antitoxin unit neutralizes the action of 100 times the minimum lethal dose of toxin" (this minimum lethal dose being the amount of toxin required to kill a guinea-pig weighing 250 grammes). On page 1385, in the article on "Serum Antidiphthericum," this statement is made: "From a theoretical point of view, it [the antoxic unit] may be defined as that quantity of antidiphtheric serum which will just neutralize 200 minimum lethal doses of a pure poison, the latter being one containing only toxin, and no toxoid, toxone, or other substance capable of uniting with the antibodies." Now both these statements are correct, and the words we have italicized furnish the key to the situation. It has been found by scientists that the bouillon toxin is impure, that it contains approximately 50 per cent only of pure poison, that the remainder is made up of what are called toxone Thus the editors of the National Standard Dispensatory have after all committed no blunder in making the second statement quoted by us in the foregoing. That they are open to criticism for using an ultra-scientific definition may perhaps be held with better reason, but it is to be noted in their defense that they were quoting from an authoritative bulletin by one of the governmental expertsBulletin No. 21, prepared by M. J. Rosenau, Director of the Hygienic Laboratory, and entitled "The Immunity Unit for Standardizing Diphtheria Antitoxin." Pharmacists who are interested in the scientific aspects of the question would do well to send for this important bulletin and read it with care. SOME LEGISLATION WE MAY EXPECT. · The legislative season is now almost upon us, and before long the mill will begin to grind out laws of more or less importance. May we venture a prediction? So far as pharmacy is concerned, the two subjects of greatest significance just now in legislation are anti-narcotic reform and graduation prerequisite laws, but there are two other types of measures which we shall hear from even more often within the next few months-those referring to wood alcohol and patent medicines. With reference to the latter subject, the resolutions passed by the Proprietary Association, and printed in an adjoining column, show that the manufacturers will themselves take the initiative in an effort to head off radical legislation. In this place we desire to speak more particularly of wood alcohol bills. In a review of the legislation of 1905, published elsewhere in this issue of the BULLETIN, it is shown. that wood alcohol became the subject of legislative control last year for the first time, and that laws involving its sale were enacted in four States and discussed in several others. That this history will be repeated in 1906 seems reasonably certain. The toxic and dangerous nature of wood alcohol has finally been realized, and the necessity of surrounding its sale and use with proper safeguards has become evident in all its urgency. It was not until within the last few years that any general knowledge was had of the poisonous character of this substance. Manufacturers of articles like "Jamaica Ginger" long used it with perfect impunity. Even a few manufacturers of pharmaceuticals winked at the practice and permitted themselves to be deflected by a money consideration from the straight and narrow path of alcoholic virtue. Druggists employed wood alcohol widely in the manufacture of external preparations, and frequently also in those intended for internal administration. Many drink habitués, unable to buy grain alcohol, purchased methyl alcohol and drank it with calm assurance. Much of this tampering with human life was unconscious. It was not realized how toxic an agent wood alcohol was, but, now that we do understand the danger, there is positively no excuse for the use of the substance in either internal or external preparations, and it is well that laws should be enacted for the protection of the public health. Three of the laws passed last year, those of Massachusetts, Connecticut, and Minnesota, provide that wood alcohol must be labeled "poison" when sold; the fourth, enacted in New York, prohibits the use of the substance in beverages; and the nature of these measures suggests the question: Would it not be well to go farther and render illegal the use of wood alcohol in any preparation intended for the internal or external treatment of the human or animal body? Fully half the queries we get every month involve information which we have given again and again. If our readers would only keep their BULLETINS, and have them bound every year, they could answer their own questions without tedious delay and with much more satisfaction to themselves. Every December we print an annual index by means of which anything in the year's volume can be turned to immediately. Look at the index in last month's BULLETIN and see what a mine of information it represents! Why not make a resolve this January to keep the BULLETINS during the year? If you desire, we shall be glad to furnish at the cost price of 65 cents a temporary binder in which the copies can be fastened as they appear from month to month. You always know then where to find them, and they are in position to be easily consulted. THE MONTH. THE LODER CASE. ing the attention During the last month the Loder judgment and the patent medicine situation have been absorb of druggists throughout the country. In an editorial printed on another page we have sought to show the bearings of the Loder decision, and to compare it with previous decisions of importance—namely, those rendered in the famous Park and Platt cases. It is a little early yet, however, to reach any definite conclusions regarding the significance of the Loder case. A new trial has been asked for, and if it is not granted an appeal will be taken to the higher court: in either event we shall hear more of the case, and it will be some time before the courts have settled the The decision has question beyond peradventure. given great joy to the cutting fraternity, and it is now reported that similar suits will be brought under the Sherman law in Philadelphia, Cincinnati, and elsewhere. In the meantime, so far as the cut-rate situation in Philadelphia is concerned, the town is "wide open," and cutters are being furnished supplies by the jobbers without let or hindrance. For the time being it is to be expected that little or no restraint will be exercised upon either prices or the delivery of supplies. THE QUESTION OF DAMAGES. One of the features of the Loder case sure to play an important part in either a new trial or in an appeal is the question of damages. In awarding the plaintiff damages of $20,738.00, the jury in effect gave a verdict of three times this amount, since triple damages are provided for under the Sherman act. The financial question is, therefore, a very important one. Mr. Johnson, counsel for the defendants, has insisted throughout the trial and since that Loder was not injured to any such extent as the jury indicated, and it would seem from the charge of Judge Holland that he believed the damages to be excessive. Loder, for instance, declared that the additional time which he had been |