Remember the 1920 Gillette v Inland Revenue case that I have mentioned in a couple of threads? I finally pulled most of its text, and there are some interesting tidbits.
First, Charles A. Gaines figures largely in this account. He was the brother-in-law to King Camp Gillette, and it seems he was already in London when the branch office opened up in 1905. Gaines was working for "a metal and cork seal company". That suggests Crown Cork, for whom King Camp was working in England, January-July 1904. As background, Gillette apparently married Atlanta Gaines in 1890 (1909 source). I found another source from 1922 that claims the wedding was in 1905, but because it is a later source I am inclined to believe 1890. Also apparently their son was born in 1891: http://www.findagrave.com/cgi-bin/fg.cgi?page=gr&GRid=114114053.
Placing Gaines in London as early as 1904 ties into McKibben, who wrote that King Camp took his wife and son with him to London in 1904 when he was working for Crown Cork, and left them there while he returned to Boston in July. That sounds better if his brother in law was already working for the same company in London at the time. Perhaps they even lived in the same household. This is speculation, of course.
This account places the move from The Minories to Holborn Viaduct in 1908, which fits with other sources. It would be interesting to know exactly when Gaines took up his post for the London branch of the Gillette company, but by this account it was sometime 1905-08. Considering the family ties and his role as treasurer, it seems likely that he had a fair amount to do with the Leicester plant. Also he became managing director (think CEO) in 1909, so presumably he did good work in those early years.
There were multiple sources with substantially the same text.
http://books.google.com/books?id=HeYbAQAAMAAJ
http://books.google.com/books?id=TMZMAQAAIAAJ
These versions have slightly different text and are probably summaries:
http://books.google.com/books?id=OyQyAAAAIAAJ
http://books.google.com/books?id=tc8fAQAAMAAJ
In the end there was quite a bit of text, and I apologize for the length. Even so I probably missed some material. The financial details may seem tedious. However the data might be useful for estimating production or other purposes. These details also help show us how the Boston company kept a firm hand on the companies in Canada and England during this period. Those foreign companies were always in debt to the Boston company. It was also gratifying, in a petty way, to see the Boston company acknowledge in court that their "offices and factories" claims were misleading.
Enough commentary: here is the text.
[p359]
In 1904 the Gillette Safety Razor Company of Boston, USA (hereinafter called the Boston company), acquired the patent and all other rights of and connected with the Gillette safety razor, and, having established a business with their head office in the USA, opened a branch office in The Minories, London. A Mr. Charles A. Gaines was at the time in the employ of a metal and cork seal company in London, but at another address, such company being entirely independent of the Boston company, and he became "treasurer" of and managed the English branch of the Boston company which
[p360]
in 1908, removed from the Minories to 17 Holborn Viaduct. The business was that of manufacturers and vendors of Gillette razors and razor blades. The Boston company had a factory at Leicester at which they manufactured Gillette razors and razor blades.
On the 29th Sept. 1908 a company named the Gillette Safety Razor Co. of England, Ld. (hereinafter called the English company), of 17, Holborn Viaduct, was registered in London under the Companies Acts, and by an agreement dated September 30, 1908, it purchased from the Boston company as from June 30, 1908, as a going concern, (1) the goodwill of the business; (2) the leasehold premises at 17, Holborn Viaduct, and Leicester, (3.) all plant, machinery, stock-in-trade, etc., (4.) the benefit of all pending contracts, (5.) all other property except the British Letters Patent of the English branch of the Boston company.
It was also provided by the agreement that the Boston company should grant to the English company the sole and exclusive licence to manufacture and sell in the United Kingdom safety and other razors manufactured under such letters patent, for the residue of the term granted by such letters patent or any extension thereof, such licence to be subject to a reservation to the Boston company of the right to regulate from time to time the prices at which articles manufactured under the licence could be sold to and by factors, wholesalers, and dealers, and to and by retailers, and to require every such article to bear a label containing the conditions as to prices from time to time imposed, and to such other reservations and upon and subject to such royalties, terms and conditions as might be reasonably imposed by the Boston company.
The nominal capital of the English company was 20,000l. divided into 2000 shares of 10l. each, of which the Boston company was allotted 1700 fully paid up shares of l0l. each as part consideration for the above-mentioned transfer of its business. Mr. Gaines held ten shares in the English company of which he was a director. In 1909 he was made managing director and received twenty additional shares, the nominal
[p361]
capital of the company being increased in that year to 100,000l. of which 60,000l. was allotted to and stood in the name of the Boston company, the remaining 40,000l. being subscribed for and allotted by other shareholders.
In 1912 it was thought desirable that an American company should be formed and that the business should be carried on by it and accordingly the English company went into voluntary liquidation on August 3, 1912, and was finally wound up on October 6, 1913.
On the 2nd Sept. 1912 the Gillette Safety Razor Limited of Massachusetts, USA (hereinafter called the USA company), was registered. The greater part of the share capital of this company was owned and held by the Boston company and the majority of the directors of the USA company were directors of the Boston company.
One of the objects of the USA company was to acquire all assets and rights of the English company then in liquidation, an object which was attained, being sanctioned by an order of the High Court of Justice dated July 1, 1913.
Mr. Gaines was appointed manager at a salary of 3000l. per annum of the English branch of the USA company, of which company he was made a director in February 1913. He went to America at certain times, and at one time was general manager of the Boston company. The business in the United Kingdom so acquired by the USA company from the English company was carried on in the United Kingdom by the USA company, from its formation down to August, 1915, when, owing to the war, it was decided to close the business. A statutory notice dated August 25, 1915, was filed notifying the company's intention to cease to carry on business in the United Kingdom. Pursuant to this decision it terminated Mr. Gaines' engagement as manager. Mr. Gaines then decided to promote an English company which should carry on in the United Kingdom the sale of Gillette razors, etc. To this end he obtained from the Boston company in consideration of a payment of 20001. the right to use the word "Gillette" and on August 25, 1915, the Gillette Safety
[p362]
Razor, Ld. (hereinafter called the appellant company), was registered in London under the Companies Acts as a private limited liability company with a nominal capital of 6000l. divided into 600 shares of 10l. each of which 500 were allotted to Mr. Gaines, who was a promoter and chairman of the directors of the company.
Negotiations took place between the Boston company and the appellant company with a view to arriving at an agreement with regard to the terms on which the former should supply, and the latter should obtain, Gillette safety razor outfits and blades for sale by the latter in the United Kingdom and British Colonies. An agreement was provisionally arrived at and signed by the sales manager on behalf of the Boston company and by Mr. Gaines on behalf of the appellant company which agreement was in the form of a letter to Mr. Gaines by the sales manager and was as follows:
Dear Sir, In reply to your request that we supply you with Gillette safety razors and blades for resale in Great Britain we propose to sell you at the prices and discounts, and upon the terms as to their resale by you as hereinafter stated and subject to the conditions, limitations and licence restrictions as shown upon the licence labels affixed to each carton in which each razor set or package of blades are contained
1) Prices. You as buyer will purchase from us at the following prices and discounts razors at the list prices fixed by us less a discount of 50% from such list prices. Blades at the list prices fixed by us less a discount of 45% from such list prices.
2) Terms. 90 days nett cash, all invoices payable in N.Y. or Boston exchange. Deliveries f.o.b. Boston all carrying charges by you.
3) Insurance. All shipments are to be made at your risk, the insurance will not be taken out by us except on your special instructions, and then only with the understanding that you will pay the premium for such insurance.
4) Orders. Your orders for stock to be in as large quantities as you can consistently order but not less than 500 razors
[p363]
or one standard case of blades 6250-12's or one standard case of 8 cu.-ft. of razors and blades assorted.
5) Stock. You are to carry a sufficient stock of Gillette razors and blades at all times as will enable you without delay to fill all reasonable orders received from your trade.
6) Trade Supply. You are to supply the wholesalers and retailers in Great Britain, who will maintain the resale prices and other conditions herein imposed.
7) Handling Other Razors. During the life of this agreement you are not to engage in the sale of any other safety razor or blades which is an imitation or infringement of the Gillette type without first obtaining our permission in writing.
8) Price Maintanence. You are to use your utmost endeavour to sell Gillette razors and blades and to thoroughly organize the trade in your territory and refuse to sell to any person or firm who does not maintain your resale prices.
9) Supervision of Territory. We reserve the right to appoint representatives to travel in and call on the trade in the territory covered by this agreement.
10) Advertising. We agree to advertise Gillette safety razors and blades in your territory to such extent and in such publications as in our judgment may be for our best interest, you are to furnish and supply such printed matter, show cards, or other advertising material that is considered necessary.
11) Resale. You are to resell to your trade f.o.r. your warehouses or branches, carriage and duty paid as hereinafter provided, and no allowance, rebate, bonus, or other consideration is to be allowed by you whereby the ultimate net prices to your customers shall be lower than herein provided.
12) Territory. This agreement covers the sale of Gillette razors and blades in Great Britain, British South Africa, Australasia, Norway, Sweden, Denmark, Belgium, Holland, Switzerland, Spain, Portugal and Italy, provided however that we reserve the right to sell direct in any and all of this territory should you in our opinion fail to satisfy the trade demands as set forth in this agreement.
13) Protection of Territory. All orders or inquiries which we receive for Gillette razors and blades from this territory
[p364]
will be referred to you. If for any reason other than the compliance with our terms as herein above set forth such orders or inquiries are not filled by you we reserve the right to fill such orders direct, but only at the price, discount and quantity requirements, at which you are to resell and as set forth in our Schedule A resale prices attached and made a part hereof. It is understood that if sales are made by importers, jobbers or others in the above-described territory without our knowledge or consent we shall be held harmless and not accountable to you for damages by reason of such sales.
14) Minimum Quantities purchased. You are to purchase from us for resale in your territory a minimum quantity of 50,000 razors annually and a sufficient quantity of blades to meet the reasonable demands of your trade. If within the life of this agreement or an extension thereof you do not with each period of 12 months purchase said minimum quantity of 50,000 razors then and in that event we reserve the option of cancelling this agreement by giving you thirty days' notice by registered post of our intention to cancel and determine the same and at the expiration of the term fixed in said notice this agreement shall be absolutely determined.
15) Agency Duration. This agreement shall be effective on and after the first day of September, 1915, and shall continue in force for two years from that date unless sooner terminated by a breach thereof or by mutual consent. It can be renewable thereafter from year to year but only by a written consent of the parties hereto.
Your acceptance of this agreement signified by your signature below is to constitute an agreement between us when same has been duly approved by the Executive Committee of the Gillette Safety Razor Co. at Boston.
This agreement never became legally binding as it was never formally approved by the executive committee of the Boston company, but it had in fact formed the basis on which all trading transactions had since taken place between the appellant company and the Boston company.
[p365]
When the USA company closed its business in the United Kingdom it had at the factory at Leicester a stock of goods valued at valued at 56,000l. The appellant company by arrangement was allowed to treat this stock as goods supplied under the terms of the last-mentioned agreement. The appellant company temporarily took over the factory at Leicester for use as a store at a rent after the rate of 400l. per annum, and it also took over the lease of the Holborn Viaduct premises. The appellant company moved out of the Leicester factory in January, 1916, upon which it was disposed of by the USA company. The appellant company opened its offices in Great Portland Street in October, 1915, as the Holborn Viaduct premises were not suited to the company's purposes. These premises were for a time a burden to the appellant company, but the lease thereof was surrendered in 1917.
There was in Canada a company named the Gillette Safety Razor of Canada, Ld. (hereinafter called the Canadian company), which was intimately connected with the Boston company. Between 80 per cent. and 90 per cent. of the shares in the Canadian company were owned by the Boston company, and three directors of the Boston company were directors of the Canadian company. The Canadian company obtained the bulk of the materials it required for manufacture of its goods in Canada (steel, copper, leather, etc.) from or through the Boston company. The USA company sold in the United Kingdom Gillette goods manufactured by itself at Leicester as well as Gillette goods imported from Canada and the United States of America.
The appellant company was not at liberty to manufacture Gillette goods in the United Kingdom and had not done so. Under clause 7 of the agreement they were not during the life of the agreement to engage in the sale of any other safety razor or blades which was an imitation or infringement of the Gillette type without first obtaining the permission of the Boston company in writing. Apart from the stock already in the United Kingdom the appellant company had in fact obtained all their supplies from the Boston
[p366]
company or from the Canadian company. All orders for goods were sent by the appellant company to the Boston company, though the goods might be supplied direct to the appellant company by the Canadian company. Occasionally in sending an order the appellant company had stipulated for Canadian made goods, but even in that case the orders were sent to the Boston company, to which company also payment was invariably made for all goods supplied. Payment for the stock of goods at Leicester taken over from the USA company was made to the Boston company. The Canadian company always was in debt to the Boston company and when the Boston company received payment for goods supplied by the Canadian company the amounts so received were applied to reduction of the said indebtedness.
The Boston company's invoices continued to include London in the list of places at which that company had offices and factories, but it was stated by the officials of the appellant company that the Boston company had not now any office in London, Paris or Montreal and that such names ought to have been blocked out. It was admitted by the appellant company that the Boston company had no connection with any premises in London apart from the appellants' own premises.
The invoice price of Gillette goods sold by the Boston and Canadian companies included delivery on board, but not freight or insurance. These matters were arranged by the Boston company or the Canadian company as the case might be on behalf of the appellant company, the cost being debited to the appellant company. The Boston company were at liberty to supply their goods and did in fact supply them to other persons in the territory of the appellant company - namely, in the United Kingdom and British colonies.
The accounts of the appellant company showed that at December 31, 1916, its stock in hand was valued at 65,620l. ; that while on the one hand it owed to creditors the sum of 124,637l. it had at the same time 56,037l. in its bankers' hands;
[p367]
that in sixteen months its sales amounted to 260,523l., and that its gross profit out of which all expenses had to be defrayed amounted to 6.37 per cent. of the sales. The 124,637l. was all owing to the Boston company, and the 56,037l. was left in the hands of the appellant company's bankers with the approval and pursuant to the wishes of the Boston company The appellant company sent to the Boston company a monthly statement relative to trading in the United Kingdom showing the amount of stock at the beginning and the end of the month and the purchases and sales during the month. The terms of payment by the appellant company were sufficiently elastic to permit of goods purchased by them being sold in the United Kingdom before payment was made for them to the Boston company.
The Commissioners were satisfied that, as a result of the arrangements aforesaid between the appellant company and the Boston company, the appellant company was substantially controlled by the Boston company, and that the financial arrangements between the two companies were such that the appellant company carried on trade in the United Kingdom to an extent and in a manner which would not otherwise be possible.
First, Charles A. Gaines figures largely in this account. He was the brother-in-law to King Camp Gillette, and it seems he was already in London when the branch office opened up in 1905. Gaines was working for "a metal and cork seal company". That suggests Crown Cork, for whom King Camp was working in England, January-July 1904. As background, Gillette apparently married Atlanta Gaines in 1890 (1909 source). I found another source from 1922 that claims the wedding was in 1905, but because it is a later source I am inclined to believe 1890. Also apparently their son was born in 1891: http://www.findagrave.com/cgi-bin/fg.cgi?page=gr&GRid=114114053.
Placing Gaines in London as early as 1904 ties into McKibben, who wrote that King Camp took his wife and son with him to London in 1904 when he was working for Crown Cork, and left them there while he returned to Boston in July. That sounds better if his brother in law was already working for the same company in London at the time. Perhaps they even lived in the same household. This is speculation, of course.
This account places the move from The Minories to Holborn Viaduct in 1908, which fits with other sources. It would be interesting to know exactly when Gaines took up his post for the London branch of the Gillette company, but by this account it was sometime 1905-08. Considering the family ties and his role as treasurer, it seems likely that he had a fair amount to do with the Leicester plant. Also he became managing director (think CEO) in 1909, so presumably he did good work in those early years.
There were multiple sources with substantially the same text.
http://books.google.com/books?id=HeYbAQAAMAAJ
http://books.google.com/books?id=TMZMAQAAIAAJ
These versions have slightly different text and are probably summaries:
http://books.google.com/books?id=OyQyAAAAIAAJ
http://books.google.com/books?id=tc8fAQAAMAAJ
In the end there was quite a bit of text, and I apologize for the length. Even so I probably missed some material. The financial details may seem tedious. However the data might be useful for estimating production or other purposes. These details also help show us how the Boston company kept a firm hand on the companies in Canada and England during this period. Those foreign companies were always in debt to the Boston company. It was also gratifying, in a petty way, to see the Boston company acknowledge in court that their "offices and factories" claims were misleading.
Enough commentary: here is the text.
[p359]
In 1904 the Gillette Safety Razor Company of Boston, USA (hereinafter called the Boston company), acquired the patent and all other rights of and connected with the Gillette safety razor, and, having established a business with their head office in the USA, opened a branch office in The Minories, London. A Mr. Charles A. Gaines was at the time in the employ of a metal and cork seal company in London, but at another address, such company being entirely independent of the Boston company, and he became "treasurer" of and managed the English branch of the Boston company which
[p360]
in 1908, removed from the Minories to 17 Holborn Viaduct. The business was that of manufacturers and vendors of Gillette razors and razor blades. The Boston company had a factory at Leicester at which they manufactured Gillette razors and razor blades.
On the 29th Sept. 1908 a company named the Gillette Safety Razor Co. of England, Ld. (hereinafter called the English company), of 17, Holborn Viaduct, was registered in London under the Companies Acts, and by an agreement dated September 30, 1908, it purchased from the Boston company as from June 30, 1908, as a going concern, (1) the goodwill of the business; (2) the leasehold premises at 17, Holborn Viaduct, and Leicester, (3.) all plant, machinery, stock-in-trade, etc., (4.) the benefit of all pending contracts, (5.) all other property except the British Letters Patent of the English branch of the Boston company.
It was also provided by the agreement that the Boston company should grant to the English company the sole and exclusive licence to manufacture and sell in the United Kingdom safety and other razors manufactured under such letters patent, for the residue of the term granted by such letters patent or any extension thereof, such licence to be subject to a reservation to the Boston company of the right to regulate from time to time the prices at which articles manufactured under the licence could be sold to and by factors, wholesalers, and dealers, and to and by retailers, and to require every such article to bear a label containing the conditions as to prices from time to time imposed, and to such other reservations and upon and subject to such royalties, terms and conditions as might be reasonably imposed by the Boston company.
The nominal capital of the English company was 20,000l. divided into 2000 shares of 10l. each, of which the Boston company was allotted 1700 fully paid up shares of l0l. each as part consideration for the above-mentioned transfer of its business. Mr. Gaines held ten shares in the English company of which he was a director. In 1909 he was made managing director and received twenty additional shares, the nominal
[p361]
capital of the company being increased in that year to 100,000l. of which 60,000l. was allotted to and stood in the name of the Boston company, the remaining 40,000l. being subscribed for and allotted by other shareholders.
In 1912 it was thought desirable that an American company should be formed and that the business should be carried on by it and accordingly the English company went into voluntary liquidation on August 3, 1912, and was finally wound up on October 6, 1913.
On the 2nd Sept. 1912 the Gillette Safety Razor Limited of Massachusetts, USA (hereinafter called the USA company), was registered. The greater part of the share capital of this company was owned and held by the Boston company and the majority of the directors of the USA company were directors of the Boston company.
One of the objects of the USA company was to acquire all assets and rights of the English company then in liquidation, an object which was attained, being sanctioned by an order of the High Court of Justice dated July 1, 1913.
Mr. Gaines was appointed manager at a salary of 3000l. per annum of the English branch of the USA company, of which company he was made a director in February 1913. He went to America at certain times, and at one time was general manager of the Boston company. The business in the United Kingdom so acquired by the USA company from the English company was carried on in the United Kingdom by the USA company, from its formation down to August, 1915, when, owing to the war, it was decided to close the business. A statutory notice dated August 25, 1915, was filed notifying the company's intention to cease to carry on business in the United Kingdom. Pursuant to this decision it terminated Mr. Gaines' engagement as manager. Mr. Gaines then decided to promote an English company which should carry on in the United Kingdom the sale of Gillette razors, etc. To this end he obtained from the Boston company in consideration of a payment of 20001. the right to use the word "Gillette" and on August 25, 1915, the Gillette Safety
[p362]
Razor, Ld. (hereinafter called the appellant company), was registered in London under the Companies Acts as a private limited liability company with a nominal capital of 6000l. divided into 600 shares of 10l. each of which 500 were allotted to Mr. Gaines, who was a promoter and chairman of the directors of the company.
Negotiations took place between the Boston company and the appellant company with a view to arriving at an agreement with regard to the terms on which the former should supply, and the latter should obtain, Gillette safety razor outfits and blades for sale by the latter in the United Kingdom and British Colonies. An agreement was provisionally arrived at and signed by the sales manager on behalf of the Boston company and by Mr. Gaines on behalf of the appellant company which agreement was in the form of a letter to Mr. Gaines by the sales manager and was as follows:
Dear Sir, In reply to your request that we supply you with Gillette safety razors and blades for resale in Great Britain we propose to sell you at the prices and discounts, and upon the terms as to their resale by you as hereinafter stated and subject to the conditions, limitations and licence restrictions as shown upon the licence labels affixed to each carton in which each razor set or package of blades are contained
1) Prices. You as buyer will purchase from us at the following prices and discounts razors at the list prices fixed by us less a discount of 50% from such list prices. Blades at the list prices fixed by us less a discount of 45% from such list prices.
2) Terms. 90 days nett cash, all invoices payable in N.Y. or Boston exchange. Deliveries f.o.b. Boston all carrying charges by you.
3) Insurance. All shipments are to be made at your risk, the insurance will not be taken out by us except on your special instructions, and then only with the understanding that you will pay the premium for such insurance.
4) Orders. Your orders for stock to be in as large quantities as you can consistently order but not less than 500 razors
[p363]
or one standard case of blades 6250-12's or one standard case of 8 cu.-ft. of razors and blades assorted.
5) Stock. You are to carry a sufficient stock of Gillette razors and blades at all times as will enable you without delay to fill all reasonable orders received from your trade.
6) Trade Supply. You are to supply the wholesalers and retailers in Great Britain, who will maintain the resale prices and other conditions herein imposed.
7) Handling Other Razors. During the life of this agreement you are not to engage in the sale of any other safety razor or blades which is an imitation or infringement of the Gillette type without first obtaining our permission in writing.
8) Price Maintanence. You are to use your utmost endeavour to sell Gillette razors and blades and to thoroughly organize the trade in your territory and refuse to sell to any person or firm who does not maintain your resale prices.
9) Supervision of Territory. We reserve the right to appoint representatives to travel in and call on the trade in the territory covered by this agreement.
10) Advertising. We agree to advertise Gillette safety razors and blades in your territory to such extent and in such publications as in our judgment may be for our best interest, you are to furnish and supply such printed matter, show cards, or other advertising material that is considered necessary.
11) Resale. You are to resell to your trade f.o.r. your warehouses or branches, carriage and duty paid as hereinafter provided, and no allowance, rebate, bonus, or other consideration is to be allowed by you whereby the ultimate net prices to your customers shall be lower than herein provided.
12) Territory. This agreement covers the sale of Gillette razors and blades in Great Britain, British South Africa, Australasia, Norway, Sweden, Denmark, Belgium, Holland, Switzerland, Spain, Portugal and Italy, provided however that we reserve the right to sell direct in any and all of this territory should you in our opinion fail to satisfy the trade demands as set forth in this agreement.
13) Protection of Territory. All orders or inquiries which we receive for Gillette razors and blades from this territory
[p364]
will be referred to you. If for any reason other than the compliance with our terms as herein above set forth such orders or inquiries are not filled by you we reserve the right to fill such orders direct, but only at the price, discount and quantity requirements, at which you are to resell and as set forth in our Schedule A resale prices attached and made a part hereof. It is understood that if sales are made by importers, jobbers or others in the above-described territory without our knowledge or consent we shall be held harmless and not accountable to you for damages by reason of such sales.
14) Minimum Quantities purchased. You are to purchase from us for resale in your territory a minimum quantity of 50,000 razors annually and a sufficient quantity of blades to meet the reasonable demands of your trade. If within the life of this agreement or an extension thereof you do not with each period of 12 months purchase said minimum quantity of 50,000 razors then and in that event we reserve the option of cancelling this agreement by giving you thirty days' notice by registered post of our intention to cancel and determine the same and at the expiration of the term fixed in said notice this agreement shall be absolutely determined.
15) Agency Duration. This agreement shall be effective on and after the first day of September, 1915, and shall continue in force for two years from that date unless sooner terminated by a breach thereof or by mutual consent. It can be renewable thereafter from year to year but only by a written consent of the parties hereto.
Your acceptance of this agreement signified by your signature below is to constitute an agreement between us when same has been duly approved by the Executive Committee of the Gillette Safety Razor Co. at Boston.
This agreement never became legally binding as it was never formally approved by the executive committee of the Boston company, but it had in fact formed the basis on which all trading transactions had since taken place between the appellant company and the Boston company.
[p365]
When the USA company closed its business in the United Kingdom it had at the factory at Leicester a stock of goods valued at valued at 56,000l. The appellant company by arrangement was allowed to treat this stock as goods supplied under the terms of the last-mentioned agreement. The appellant company temporarily took over the factory at Leicester for use as a store at a rent after the rate of 400l. per annum, and it also took over the lease of the Holborn Viaduct premises. The appellant company moved out of the Leicester factory in January, 1916, upon which it was disposed of by the USA company. The appellant company opened its offices in Great Portland Street in October, 1915, as the Holborn Viaduct premises were not suited to the company's purposes. These premises were for a time a burden to the appellant company, but the lease thereof was surrendered in 1917.
There was in Canada a company named the Gillette Safety Razor of Canada, Ld. (hereinafter called the Canadian company), which was intimately connected with the Boston company. Between 80 per cent. and 90 per cent. of the shares in the Canadian company were owned by the Boston company, and three directors of the Boston company were directors of the Canadian company. The Canadian company obtained the bulk of the materials it required for manufacture of its goods in Canada (steel, copper, leather, etc.) from or through the Boston company. The USA company sold in the United Kingdom Gillette goods manufactured by itself at Leicester as well as Gillette goods imported from Canada and the United States of America.
The appellant company was not at liberty to manufacture Gillette goods in the United Kingdom and had not done so. Under clause 7 of the agreement they were not during the life of the agreement to engage in the sale of any other safety razor or blades which was an imitation or infringement of the Gillette type without first obtaining the permission of the Boston company in writing. Apart from the stock already in the United Kingdom the appellant company had in fact obtained all their supplies from the Boston
[p366]
company or from the Canadian company. All orders for goods were sent by the appellant company to the Boston company, though the goods might be supplied direct to the appellant company by the Canadian company. Occasionally in sending an order the appellant company had stipulated for Canadian made goods, but even in that case the orders were sent to the Boston company, to which company also payment was invariably made for all goods supplied. Payment for the stock of goods at Leicester taken over from the USA company was made to the Boston company. The Canadian company always was in debt to the Boston company and when the Boston company received payment for goods supplied by the Canadian company the amounts so received were applied to reduction of the said indebtedness.
The Boston company's invoices continued to include London in the list of places at which that company had offices and factories, but it was stated by the officials of the appellant company that the Boston company had not now any office in London, Paris or Montreal and that such names ought to have been blocked out. It was admitted by the appellant company that the Boston company had no connection with any premises in London apart from the appellants' own premises.
The invoice price of Gillette goods sold by the Boston and Canadian companies included delivery on board, but not freight or insurance. These matters were arranged by the Boston company or the Canadian company as the case might be on behalf of the appellant company, the cost being debited to the appellant company. The Boston company were at liberty to supply their goods and did in fact supply them to other persons in the territory of the appellant company - namely, in the United Kingdom and British colonies.
The accounts of the appellant company showed that at December 31, 1916, its stock in hand was valued at 65,620l. ; that while on the one hand it owed to creditors the sum of 124,637l. it had at the same time 56,037l. in its bankers' hands;
[p367]
that in sixteen months its sales amounted to 260,523l., and that its gross profit out of which all expenses had to be defrayed amounted to 6.37 per cent. of the sales. The 124,637l. was all owing to the Boston company, and the 56,037l. was left in the hands of the appellant company's bankers with the approval and pursuant to the wishes of the Boston company The appellant company sent to the Boston company a monthly statement relative to trading in the United Kingdom showing the amount of stock at the beginning and the end of the month and the purchases and sales during the month. The terms of payment by the appellant company were sufficiently elastic to permit of goods purchased by them being sold in the United Kingdom before payment was made for them to the Boston company.
The Commissioners were satisfied that, as a result of the arrangements aforesaid between the appellant company and the Boston company, the appellant company was substantially controlled by the Boston company, and that the financial arrangements between the two companies were such that the appellant company carried on trade in the United Kingdom to an extent and in a manner which would not otherwise be possible.
