, for The€¦ · Respondent Nashua Corporation (erroneously named in the complaint as a Massachusetts corporation and member of respond-ent The Gummed Industries Association, Inc.)

500 FEDERAL TRADE COMMISSION DECISIONS

Decision 55 F.

IN MATTER OF

THE GUMMED INDUSTRIES ASSOCIATION, INC. , ET AL.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 7079. Compla, int, Mal'. 1958-Dec' is-ion, Oct. , 1958

Consent order requiring a trade association and six of its seven memberstogether producing almost 100 per cent of the gummed paper productsmanufactured in the United States, to cease fixing and maintaininguniform priceEi and terms of sale for flat gummed paper and differentialsfor variations in products , or selling at zone delivered prices; and requir-ing such manufacturer-members to cease quoting or selling their productsat prices determined in accordance with a geographical zone deliveredprice system , and using the Assoc~ation as a clearing house to exchangeprice information.

As to the seventh manufacturer respondent, Minnesota Mining and Manufac-turing Company, complaint was dismissed without prejudice on Mar. 71959, p. 1409 , herein.

By Ea'rl J. Kolb hearing examiner.M1'

. ~

4ndrew C. Good-hope and l'rIr. John Pe1' echinsky for the

Commission.Sawyer 1I1arion of New York , N. , by Mr. Albe1't E. Sa'lOyer

for The Gummed Industries Association , Inc. , and Philip O. Deitsch.;"-11. iVillicun H. Leah'

y,

of Framingham, Mass. , for DennisonJ\rlanufacturing Company.

Nutter, McClennen Fish of Boston, Mass., for Nashua

Corporation.Covington BuTZing, of Washington , D. C., by 11-11'. H. Thornas

A ustern for Ludlow Papers , Inc.F'J' ost Jncobs of Cincinnati, Ohio , by M'/'. John C. EgbeTt

for The Brown-Bridge l\lills , Inc.JIll'/'. Hon~er Craw/onl of New York, N. , for The Gummed

Products Company.MacCoy, Evans Lewis of Philadelphia, Pa. , by M'/'. Mark

Willcox , Jr. for Paper Manufacturers Company.

INITIAL DECISION AS TO CERTAIN RESPONDENTS

The complaint in this proceeding charges the respondentsnamed therein with having entered into a combination andconspiracy to fix prices in violation of Section 5 of the FederalTrade Commission Act.

THE GUMMED INDUSTRIES ASSOCIATION , INC. , ET AL. 501

500 Decision

After the issuance of the complaint, the respondents, except

Minnesota Mining and Manufacturing Company, a corporationentered into an agreement containing a consent order to ceaseand desist with counsel supporting the complaint disposing ofall the issues in this proceeding.

Said agreement provides, among other things, that saidrespondents admit all of the jurisdictional allegations in thecomplaint; that the record on which the initial decision and thedecision of the COlnmission shall be based shall consist solely ofthe complaint and agreement; that the inclusion of findings of

fact and conclusions of law in the decision disposing of thismatter is waived , together with any further procedural stepsbefore the hearing examiner and the Commission; that the orderhereinafter set forth may be entered in disposition of theproceeding, such order to have the same force and effect as ifentered after a full hearing, said respondents specifically waivingany and all rights to challenge or contest the validity of suchorder; that the order may be altered , modified , or set aside in themann~r provided for other orders of the Commission; that thecomplaint may be used in construing the terms of the order; andthat the agreement is for settlement purposes only and does notconstitute an admission by said respondents that they haveviolated the law as alleged in the complaint.

The hearing examiner has considered such agreement and theorder therein contained , and it appearing that said agreementand order provides for an appropriate disposition of thisproceeding, the same is hereby accepted and is ordered filed uponbecoming part of the Commission s decision in accordance with

Sections 3.21 and 3.25 of the Rules of Practice , and , in consonancewith the terms of said agreement, the hearing examiner findsthat the Federal Trade Commission has jurisdiction of the subjectmatter of this proceeding and of the respondents hereinafternamed and that this proceeding is in the interest of the public; andissues the following order:

Respondent, The Gummed Industries Assoeiation, Inc.

an incorporated trade association organized and existing underand by virtue of the laws of the State of Delaware with itsoffice and principal place of business located at 11 West 42dStreet, New York 36 , N.

Respondent Philip O. Deitsch is an individual , and is secretary-treasurer and managing director of said respondent Association.Respondent' s address is 11 West 42d Street, New York 36 , N.


Order 55 F.

Respondent Dennison Manufacturing Company is a corporationorganized and existing under and by virtue of the laws of theState of Massachusetts with its office and principal place ofbusiness located in Framingham, Mass.Respondent Nashua Corporation (erroneously named in the

complaint as a Massachusetts corporation and member of respond-ent The Gummed Industries Association, Inc. ) is a corporation

organized and existing under and by virtue of the laws of theState of Delaware with its office and principal place of businesslocated at 44 Franklin Street, Nashua , N.

Respondent Ludlow Papers , Inc. , is a corporation organized andexisting under and by virtue of the Imvs of the State of Mass-achusetts with its office and principal place of business locatedat Needham Heights , Mass.

Respondent The Brown-Bridge Mills , Inc. , is a corporation or-ganized and existing under and by virtue of the la ViS of theState of Ohio with its office and principal place of business locatedat Water Street, Troy, Ohio.Respondent The Gummed Products Company is a corporation.

organized and existing under and by virtue of the laws of theState of Ohio with its office and principal place of business locatedat South Union Street, Troy, Ohio.

Respondent Paper Manufacturers Company is a corporation or-ganized and existing under and by virtue of the laws of the Stateof Pennsylvania with its office and principal place of businesslocated at 9800 Bustelton A venue , Philadelphia, Fa.

ORDER

It is oTdcTed That respondent The Gummed Industries Associa-tion , Inc. , an incorporated trade association, its officers, agentsrepresentatives, and employees; respondent Philip O. Deitschindividually and as secretary-treasurer and managing directorof said association; and the corporate respondents Dennisonl\fanufacturing Company, Ludlow Papers , Inc. , The Brown-BridgeMills, Inc. , The Gummed Products Company, and Paper IVIanu-

facterers Company, independently and as members of said associa-tion , and Nashua Corporation, their respective officers, agents

representatives and employees, in or in connection with the

offering for sale, sale or distribution in commerce , as "commerceis defined in the Federal Trade Comlnission Act, of flat gummedpaper , do forthwith cease and desist from entering into, contin-

uing, cooperating in , or carrying out any planned common coUrse

THE GUMMED INDUSTRIES ASSOCIATION, INC., ET AL. 503

500 Order

of action , understanding, agreement combination or conspiracybetween or among any two or more of said respondents, or be-tween anyone or more of said respondents and others not partieshereto , to do or to perform any of the following things:

1. Establishing, fixing or maintaining uniform and identicalprices, terms or conditions of sale for any kind of flat gummedpaper, or adhering to any prices, terms or conditions of sale soestablished , fixed or maintained.

2. Quoting or selling flat gummed paper at prices calculatedor determined in whole or in part pursuant to or in accordance

with a zone delivered price system, or quoting or selling flatgummed paper pursuant to or in accordance with any other planor system which results in identical price quotations or pricesfor flat gummed paper at points of quotation or sale or to partic-ular purchasers by any two or more sellers of flat gummed paperusing such plan or system , or which prevents purchasers fromfinding any advantage in price in dealing with one or more asagainst another seller.

3. Using in the quotation and sale of flat gummed paper thegeographical zones , or the price differentials between such zonesheretofore fixed for pricing purposes, or establishing, fixing or

maintaining any geographical areas for pricing purposes, or anydifferentials in price between any such areas for use in quotingor selling flat gummed paper.

4. Exchanging or relaying, directly or through The GummedIndustries Association , Inc. , or any other trade association , c1ear-ing house or agency, price lists or other information as to pricesdiscounts, terms or conditions of sale for flat gummed paper forthe purpose or with the effect of restraining price competition inthe sale and distribution of flat gummed paper.

5. Establishing, fixing or maintaining, in the quotation andsale of flat gummed paper , uniform and identical differentials inprice for variations in color, size , vveight, trim , type , quantity orpacking of flat gummed paper , or adhering to any such differen-tials so established , fixed or maintained.

It is further ordered That the corporate respondents , DennisonManufacturing Company, Nashua Corporation Ludlow PapersInc. , The Brown-Bridge l\1ills, Inc. , The Gummed Products Com-pany, and Paper Manufacturers Company, their offieers , agentsrepresentatives and employees, in or in connection with theoffering for sale , sale or distribution of flat gummed paper incommerce , as "commerce" is defined in the Federal Trade Commis-


Decision 55 F.

sion Act, do forthwith cease and desist from quoting or sellingflat gummed paper at prices calculated or determined in wholeor in part pursuant to or in accordance with a zone deliveredprice systenT for the purpose or with the effect of systematicallymatching the delivered price quotations or the delivered prices ofother sellers of flat gummed paper and thereby preventing pur-chasers from finding any advantage in price in dealing with one

. or more sellers as against another.

DECISION OF THE COMMISSION AND ORDER TO FILE

REPORT OF COMPLIANCE

Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision as to certain respondents of the hearingexaminer shall , on the 3d day of October 1958 , become the decisionof the Commission; and , accordingly:

It is orde?' That respondents The Gumn1ed IndustriesAssociation, Inc., Philip O. Deitsch, Dennison l\1anufacturingCompany, Nashua Corporation , Ludlow Papers , Inc. , The Brown-Bridge Mills, Inc. , The Gummed Products Company, and PaperManufacturers Company shall, within sixty (60) days afterservice upon them of this order, file with the Commission areport in writing setting forth in detail the manner and form inwhich they have complied with the order to cease and desist.

COLE STEEL EQUIPMENT CO. INC. 505

Decision

IN THE MATTER OF

COLE STEEL EQUIPMENT CO. , INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 7127. Complaint, Apr. 1958-Decision, Oct. , 1958

Consent order requiring manufacturers of steel filing cabinets , with principalplace of business in New York City, to cease representing falsely in cata-logs and insert sheets furnished to their distributors that certain of their

said filing cabinets were used in U.S. Government offices for the protectionand preservation of secret and confidential documents and were suitablefor such use by the Government and private industry.

MT. F1'edeT'ick McNlanus for the Commission.Walzer Walze1' of New York , N. , by NIT. MaTtin J. Walze'J'

for respondent.

INITIAL DECISION BY EARL J. KOLB , HEARING EXAMINER

The complaint in this proceeding issued April 18 , 1958 , chargesthe respondent Cole Steel Equipment Co. Inc., a corporation,located at 415 Madison Avenue , New York , N. , with violation ofthe provisions of the Federal Trade Commission Act in themanufacture, sale and distribution of steel filing cabinets.

After the issuance of the complaint, said respondent enteredinto an agreement containing consent order to cease and desistwith counsel in support of the complaint, disposing of all theissues in this proceeding, which agreement '\vas duly approved the director and assistant director of the Bureau of Litigation.

I t was expressly provided in said agreement that the signingthereof is for settlement purposes only and does not constitutean admission by said respondent that it has violated the law as

alleged in the complaint.By the terms of said agreement, the said respondent admitted

all the jurisdictional facts alleged in the complaint and agreedthat the record herein may be taken as if the Commission hadmade findings of jurisdictional facts in accordance with theallegations.

By said agreement, the parties expressly 'waived any furtherprocedural steps before the hearing examiner and the Commis-

sion; the making of findings of fact or conclusions of law; andall the rights they may have to challenge or contest the validity


Decision 55 F.

of the order to cease and desist entered in accordance .with theagreement.

Respondents further agreed that the order to cease and desist

issued in accordance with said agreement, shall have the sameforce and effect as if made after a full hearing.

It was further provided that said agreement, together with thecomplaint, shall constitute the entire record herein; that the com-plaint herein may be used in construing the terms of the orderissued pursuant to said agreement; and that said order may altered , modified or set aside in the manner prescribed by thestatute for orders of the Commission.

The hearing examiner has considered such agreement and theorder therein contained , anel , it appearing that said agreementand order provides for an appropriate disposition of this proceed-ing, the same is hereby accepted and is ordered filed uponbecoming part of the Commission s decision in accordance with~3.21 and S3.25 of the Rules of Practice , and , in consonance \viththe terms of said agreement, the hearing examiner finds that theFederal Trade Commission has jurisdiction of the subject matterof this proceeding and of the respondent named herein, that

this proceeding is in the interest of the public , and issues thefollowing order:

ORDER

It is ordered That the respondent Cole Steel Equipment Co.Inc. , a corporation , and its officers , and its representatives , agentsand employees , directly or through any corporate or other device,in connection with the offering for sale, sale or distribution of

steel filing cabinets in commerce , as "commerce" is defined in theFederal Trade Commission Act, do forthwith C2ase and desistfrom representing, directly or by implication , that any of itssteel filing cabinets are used by the United States Government, orany of its offices , for the protection or preservation of secret orconfidential documents or any of its steel filing cabinets aresuitable for use for such purposes by the United States Govern-

ment , or private industry, unless such is the fact.

DECISION OF THE COMMISSION AND ORDER TO FILEREPORT OF COMPLIANCE

Pursuant to Section 3.21 of the Con1mission s Rules of Practice,the initial decision of the hearing examiner shall , on the 3d day of

COLE STEEL EQUIPMENT CO. INC. 507

505 Decision

October 1958, become the decision of the Commission; and,accordingly:

It is onleTed That respondent Cole Steel Equipment Co., Inc.,a corporation, shall, within sixty (60) days after service uponit of this order, file with the Commission a report in writing,setting forth in detail the manner and form in which it hascomplied with the order to cease and desist.


Decision 55 F.

IN THE l\IA T'fER OF

F. HOLLANDER & SON , INC. , ET AL


Docket 7145. Complaint May 8 1958-Decision , Oct. , 1958

Consent order requiring manufacturers in New York City to reveal the rayonor acetate content of coverings of their umbrellas.

;"'11' Alvin D. Edelson supporting the complaint.MT. Walter ;"'1. vVeisberg, of New York , N. , for respondents.

INITIAL DECISION OF JOHN LEWIS , HEARING EXAMINER

The Federal Trade Commission issued its complaint againstthe above-named respondents on l\iay 8, 1958, charging themwith the use of unfair and deceptive acts and practices and unfairmethods of competition , in commerce , in violation of the FederalTrade Commission Act, by failing to disclose the rayon andacetate content of umbrellas manufactured and sold by thelTIwhere the coverings of such umbrellas simulate silk and in certaininstances are advertised as "satin. n After being served with saidcomplaint respondents appeared by counsel and entered into ' anagreement" dated July 24, 1958 , containing a consent order tocease and desist purporting to dispose of all of this proceedingas to all parties. Said agreement, which has been signed by allrespondents, by counsel for said respondents, and by counselsupporting the complaint, and approved by the director andassistant director of the Co1l1mission s Bureau of Litigation , hasbeen submitted to the above-named hearing examiner for hisconsideration, in accordance with Section 3.25 of the Commis-sion s Rules of Practice for Adj udicative Proceedings.

Respondents , pursuant to the aforesaid agreement , have admit-ted all the jurisdictional facts alleged in the complaint andagreed that the record may be taken as if findings of jurisdic-tional facts had been dulv made in accordance with such allega-tions. Said agreement further provides that respondents \vaiveany further procedural steps before the hearing examiner and theCommission , the making of findings of fact or conclusions of lawand all of the rights they may have to challenge or contest thevalidity of the order to cease and desist entered in accordancevvith such agreement. It has been agreed that the order to

F. HOLLANDER & SON , INC. , ET AL. 509

508 Order

cease and desist issued in accordance with said agreement shallhave the same force and effect as if entered after a full hearingand that the complaint may be used in construing the terms ofsaid order. It has also been agreed that the record herein shallconsist solely of the complaint and said agreement, and that saidagreement is for settlement purposes only and does not constitutean admission by respondents that they have violated the lawas alleged in the complaint.

This proceeding having now come on for final considerationon the complaint and the aforesaid agreement containing consentorder, and it appearing that the order provided for in said agree-ment covers all the allegations of the complaint and provides foran appropriate disposition of this proceeding as to all parties , saidagreement is hereby accepted and is ordered filed upon thisdecision s becoming the decision of the Commission pursuant toSections 3.21 and 3.25 of the Commission s Rules of Practice forAdjudicative Proceedings , and the hearing examiner , accordingly,makes the follmving jurisdictional findings and order:

1. Respondent F. Hollander & Son , Inc., is a corporation

organized , existing and doing business under and by virtue the laws of the State of New York, with its office and principalplace of business located at 114-20 West 30th Street, New York

The individual respondents Irving Hollander and Stanley H.Pollinger are officers of the corporate respondent and maintainbusiness residences at the same address as that of the corporaterespondent.

2. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondents hereinabovenamed. The complaint states a cause of action against saidrespondents under the Federal Trade Commission Act, and thisproceeding is in the interest of the public.

ORDER

It is onZeTed That respondents F. Hollander &, Son , Inc. , a

corporation, and its officers , and Irving Hollander and StanleyH. Pollinger , individually and as officers of said corporation , andrespondents ' agents , representatives and employees, directly or

through any corporate or other device, in connection with theoffering for sale , sale and distribution of umbrellas or any otherproducts in commerce, as "commerce" is defined in the FederalTrade Commission Act, do forthwith cease and desist fron1:


Decision 55 F.

Failing to conspicuously disclose by tag or label on the productsthemselves, and in advertisements and invoices, that their saidproducts are composed , in whole or in part of rayon or acetatewhen such is the fact.


Pursuant to Section 3. 21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 3d dayof October 1958 become the decision of the Commission; andaccordingly:

It is ordered That the respondents herein shall within sixty(60) days after service upon them of this order, file with theCommission a report in writing setting forth in detail the mannerand form in which they have complied with the order to ceaseand desist.

THOMAS &NOA FURS , INC. , ET AL. 511

Decision

IN THE MATTER OF

THOMAS & NOA FURS, ING., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE. FEDERAL TRADE COMMISSION AND THE FUR PRODUCTS LABELING ACTS

Docket 7153. Complai;"1t, May 1958-Decision, Oct. , 1958

Consent order requiring a furrier in Lowell , Mass. , to cease violating- the FurProducts Labeling- Act by tagging fur products with names of animalsother than those producing the fur, and by failing to comply in othel'respects with labeling and invoicing requirements.

Mr. S. F. House for the Commission.No appearance for respondents.

INITIAL DECISION BY EARL J. ROLB, HEARING EXAMINER

The complaint in this proceeding issued May 21 , 1958 , chargesthe respondents Thomas & N oa Furs, Inc., a corporation, andCharles Thomas , individually and as an officer of said corpora-tion , located at 25-33 Prescott Street, Lowell , Mass. , with viola-tion of the provisions of the Federal Trade Commission Act andthe Fur Products Labeling Act in the sale and distribution of furproducts.

After the issuance of the complaint, respondents entered intoan agreement containing consent order to cease and desist withcounsel in support of the complaint, disposing of all the issues inthis proceeding, which agreement was duly approved by thedirector and assistant director of the Bureau of Litigation.

I t was expressly provided in said agreement that the signingthereof is for settlement purposes only and does not constitute anadmission by respondents that they have violated the law asalleged in the complaint.

By the terms of said agreement, the respondents admitted allthe jurisdictional facts alleged in the complaint and agreed thatthe record herein may be taken as if the Comlnission had madefindings of jurisdictional facts in accordance with the allegations.

By said agreement, the parties expressly waived any furtherprocedural steps before the hearing examiner and the Commis-

sion; the making of findings of fact or conclusions of law; andall the rights they may have to challenge or contest the validityof the order to cease and desist entered in accordance with theagreement.

512 FEDERAL TRADE COMMISSION DECISIONSOrder 55 F.

Respondents further agreed that the order to cease and desist

issued in accordance with said agreement, shall have the sameforce and effect as if made after a full hearing.

It was further provided that said agreement, together with thecomplaint, shall constitute the entire record herein; that the com-plaint herein may be used in construing the terms of the orderissued pursuant to said agreement; and that said order may bealtered , modified or set aside in the manner prescribed by thestatute for orders of the Commission.

The hearing examiner has considered such agreement and theorder therein contained , and , it appearing that said agreementand order provides for an appropriate disposition of this proceed-ing, the same is hereby accepted and is ordered filed upon be-coming part of the Commission s decision in accordance withSections 3.21 and 3.25 of the Rules of Practice, and, in consonancewith the terms of said agreement, the hearing examiner findsthat the Federal Trade Comlnission has jurisdiction of the subjectBlatter of this proceeding and of the respondents named hereinthat this proceeding is in the interest of the public , and issues thefollowing order:

ORDER

It is ordered That Thomas & N oa Furs , Inc., a corporation

and its officers , and Charles Thomas , individually and as an of-ficer of said corporation , and respondents ' representatives , agentsand employees , directly or through any corporate or other devicein connection vv'ith the introduction into commerce, or the sale

advertising, offering for sale , transportation or distribution offur products in commerce, or in connection with the sale, ad-

vertising, offering for sale , transportation or distribution of furproducts which have been made in whole or in part of fur whichhas been shipped and received in commerce, as "commerce,fur" and "fur product" are defined in the Fur Products Labeling

Act, do forthwith cease and desist from:A. Misbranding fur products by:1. Failing to affix labels to fur products showing:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in the

Fur Products Name Guide and as prescribed under the Rules andRegulations;

(b) That the fur product contains or is composed of used furwhen such is the fact;

(c) That the fur product contains or is composed of bleached

THOMAS & NOA FURS, INC. , ET AL. 513

511 Order

dyed or otherwise artificially colored fur , when such is the fact;(d) That the fur product is composed in whole or in sub-

stantial part of paws, tails , bellies or waste fur, vlhen such isthe fact;

(e) The name or other identification issued and registered bythe Commission , of one or more persons who manufactured suchfur product for introduction into commerce, introduced it intocommerce, sold it in commerce , advertised, or offered it for salein commerce , or transported or distributed it in commerce;

(f) The name of the country of origin of any imported fursused in the fur product;

2. Failing to show on labels attached to fur products the itemnumbers or marks assigned to fur products as required by Rule40 (a) of the Rules and Regulations.

3. Setting forth on labels affixed to fur products:(a) Information required under Section 4 (2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations thereunderwhich is intermingled with nonrequired information;

(b) The name or names of any animal or animals other than

the name or names specified in Section 4 (2) (A) of the FurProducts Labeling Act.

B. Falsely or deceptively invoicing fur products by:1. Failing to furnish invoices to purchasers of fur products

showing:(a) The name or names of the animal or animals producing the

fur or furs contained in the fur product , as set forth in the FurProducts Name Guide and as prescribed under the Rules andRegulations;


(c) That the fur product contains or is composed of bleached,dyed or otherwise artificially colored fur , when such is the fact;

(d) That the fur product is composed in whole or in sub-

stantial part , of paws , tails , bellies, or vv aste fur , when such isthe fact;

(e) The name and address of the person issuing such invoice;(f) The name of the country of origin of any imported furs

eontained in a fur product.2. Setting forth in invoices , information required under Sec-

tion 5 (b) (1) of the Fur Products Labeling Act and the Rules and

Regulations thereunder , in abbreviated form.


Decision 55 F.


Pursuant to Section 3.21 of the Commission s Rules of Practice,the initial decision of the hearing examiner shall , on the 3d dayof October 1958 become the decision of the Commission; and

accordingly:It is oTdered That respondents herein shall , within sixty (60)

days after service upon them of this order, file with the Commis-sioner a report in writing setting forth in detail the manner andform in which they have complied with the order to cease anddesist.

KRUMHOLZ FIBRE CO. INC. , ET AL. 515

Decision

IN THE l\/fATTER OF

KRUMHOLZ FIBRE CO. , INC. , ET AL.

CONSENT ORDER , ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THEFEDERAL TRADE COMMISSION AND THE WOOL PRODUCTS LABELING ACTS

Docket 7162. Compla,int, May 1958--Decision , Oct. , 1958

Consent order requiring a manufacturer in New York City to cease violatingthe Wool Products Labeling Act by labeling as "100% reprocessed woolrolls of batting which contained a substantial percentage of nonwoolen fibers , and by failing to label cel'tain of such wool products as required.

11-11'. Al' uin D. Edelson supporting the complaint.Respondents p'/'o se.

INITIAL DECISION BY JOHN LEWIS , HEARING EXAMINER

The Federal Trade Commission issued its complaint againstthe above-named respondents on May 28, 1958 , charging them\vith having violated the Wool Products Labeling Act of 1939and the Rules and Regulations promulgated thereunder , and theFederal Trade Commission Act, through the misbranding of cer-tain wool products and falsely identifying the constituent fibersthereof. After being served with said complaint, respondents ap-peared and entered into an agreement containing consent orderto cease and desist, dated August 7 , 1958 , purporting to disposeof all of this proceeding as to all parties. Said agreement, whichhas been signed by all respondents and by counsel supporting thecomplaint, and approved by the Director and Assistant Directorof the Commission s Bureau of Litigation , has been submittedto the above-named hearing examiner for his consideration, inaccordance \vith section 3.25 of the Commission s Rules of Prae-

tiee for Adjudieative Proceedings.Respondents , pursuant to the aforesaid agreement, have ad-

n1itted all the jurisdictional facts alleged in the complaint, andhave agreed that the record may be taken as if findings of juris-dictional facts had been duly made in accordance with such al-legations. Said agreement further provides that respondentswaive any further procedural steps before the hearing examinerand the Commission , the making of findings of fact or conclusionsof la\\! , and all of the rights they may have to challenge or contestthe validity of the order to cease and desist entered in accordancewith said agreement. It has been agreed that the order to cease


Order 55 F.

and desist issued in accordance with said agreement shall havethe same force and effect as if entered after a full hearing andthat the complaint may be used in construing the terms of saidorder. It has also been agreed that the aforesaid agreement is forsettlement purposes only and does not constitute an admission byrespondents that they have violated the law as alleged in thecomplaint.

This proceeding having now come on for final considerationon the complaint and the aforesaid agreement containing consentorder, and it appearing that the order provided for in said agree-ment covers all the allegations of the complaint and provides foran appropriate disposition of this proceeding as to all partiessaid agreement is hereby accepted and is ordered filed upon thisdecision s becoming the decision of the Commission pursuant toSections 3.21 and 3.25 of the Commission s Rules of Practice forAdjudicative Proceedings , and the hearing examiner , accordingly,makes the following jurisdictional findings and order:

1. Respondent Krun1holz Fibre Co. Inc. , is a corporation , or-

ganized and existing under and by virtue of the laws of theState of New York , with its principal place of business locatedat 4242 Park Avenue , Ne\v York , N.

The individual respondent, \Villiam Krumholz is President ofthe corporate respondent and his business address is the sameaddress as the corporate respondent.

2. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondents herein-above named. The complaint states a cause of action against saidrespondents under the Wool Products Labeling Act of 1939 andthe Federal Trade Commission Act, and this proceeding is in theinterest of the pu blic.

ORDER

It is ordered That respondents, Krumholz Fibre Co. , Inc. , a

corporation , and its officers, and vVilliam Krumholz , individuallyand as an officer of the corporation, and respondents ' represen-tatives , agents and employees , directly or through any corporateor other device, in connection with the introduction or manu-facture for introduction into commerce , or the offering for salesale , transportation or distribution in commerce , as "commerceis defined in the Federal Trade Commission Act, and the vV 001

Products Labeling Act of 1939 , of \\Tool products as " \\Tool proc1-

KDUMHOLZ FIBRE CO. , INC., ET AL. 517

515 Decision

ucts" are defined therein , do forthwith cease and desist frommisbranding such products by:

1. Falsely or deceptively stamping, tagging, labeling, or other-wise identifying such products as to the character or amount ofthe constituent fibers contained therein;

2. Failing to securely affix to or place on each such product astamp, tag, label or other means of identification showing in aclear and conspicuous manner;

(a) The percentage of the total fiber weight of such woolproduct, exclusive of ornamentation not exceeding five percentumof said total fiber weight, of (1) wool, (2) reprocessed wool , (3)reused wool, (4) each fiber other than wool where said percent-age by weight of such fiber is five percentum or more, and (5)the aggregate of all other fibers;

(b) The maximum percentage of the total weight of such woolproducts , of any nonfibrous loading, filling, or adulterating matter;

(c) 'The name or the registered identification number of themanufacturer of such wool product or of one or more personsengaged in introducing such wool product into commerce, or inthe offering for sale , sale, transportation , distribution or deliveryfor shipment thereof in commerce , as "commerce" is defined inthe Wool Products Labeling Act of 1939.


Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner did , on the 3d dayof October 1958 become the decision of the Commission; and,accordingly:

It is oTdeTed That the respondents herein shall within sixty(60) days after service upon then1 of this order , file 'with theCommission a report in v.rriting setting forth in detail the man-ner and form in which they have complied with the order cease and desist.


Complaint 55 F.

IN THE MATTER OF

THERMOID COMPANY

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATIONOF SEC. 2(a) OF THE CLAYTON ACT

Docket 7032. Complaint, Ja1t. 14, 1955-Decision, Oct. 4, 1958

Consent order requiring a manufacturer doing a nation-wide business , withsales in 1956 exceeding $40,000 000, to cease discriminating in price inviolation of Section 2 (a) of the Clayton Act in the sale of its automotivereplacement parts through charging independent jobbers higher pricesthan their competitors who bought through group organizations, andthrough favoring its private brand customers-including rubber and oilcompanies and mail order houses-over both. group buying and inde-pendent jobbers, and in addition giving certain oil companies freemerchandise.

COMPLAINT

The Federal Trade Commission , having reason to believe thatthe party respondent named in the caption hereof, and herein-after more particularly designated and described , has violatedand is now violating the provisions of subsection (a) of Section2 of the Clayton Act, as amended by the Robinson-Patman Actapproved June 19, 1936 (U. , Title 15, Section 13), hereby

issues its complaint, stating its charges with respect thereto asfollows:

PARAGRAPH 1. Thermoid Company, respondent herein , is a cor-poration organized , existing and doing business under and byvirtue of the laws of the State of Delaware with its principaloffice and place of business located at 500 Whitehead Road,Trenton 6 , N.

PAR. 2. Respondent is principally engaged in the manufactureand sale of automobile parts, including radiator hose, fan beltsbrake lining, brake parts, brake fluid, and clutch facing. Ther-maid' s total sales in 1956 exceeded $40, 000,000.

Respondent manufactures said automobile parts in severalplants located in several states and sells and ships such parts tocustomers located in each of the States of the United States andin the District of Columbia. Respondent, in the sale of saidparts , has at all times relevant herein been and is no,v engagedin commerce , as "commerce" is defined in the amended ClaytonAct.

THERMOID COMPANY 519

518 Complaint

. PAR. 3. A principal market for respondent's products is com-posed of customers who are engaged in the sale and distributionof automobile replacement parts. A substantial portion of thatmarket is made up of automobile replacement parts wholesalerswho are commonly known , and referred to in the trade, as jobbers.Such jobbers normally and principally resell to retailers , such asrepair garages, car dealers and gasoline filling stations. Therespondent sells its products to more than 750 such jobbers andsaid jobbers, in 1956 purchased in excess of $6,000, 000 worthof respondent's products. Among respondent' s jobber customersare many who are banded together into organizations commonlyreferred to as jobber buying groups. Such customers are herein-after referred to as group jobbers and those not affiliated witha jobber buying group are referred to as independent jobbers.- Another principal segment of the automobile replacement

. parts market is made up of the major marketing oil companiesthe rubber companies , and the mail order companies. Respond-ent' s sales to concerns of this nature in 1956 exceeded $2 000 000.Such customers require that respondent label the products pur-chased by them with their respective private labels and are some-times hereinafter referred to collectively as private brandcustomers.

PAR. 4. In the sale and distribution of its products, respondentis in substantial and continuous competition with other sellersof similar products.

In several trade areas respondent's group jobber customersare in substantial competition with respondent's independentjobber customers.

Each and every one of respondent's jobber customers are insubstantial and continuous competition with one or more respondent's private brand customers.

PAR. 5. In the course and conduct of its business in commercethe respondent has been and is now, in each of several tradeareas , discriminating in price in the sale of its products of likegrade and quality by selling them to independent jobber cus-tomers at higher priees than it sells them to group jobber cus-tomers who are competitively engaged, each with the other , in theresale of said products.

Respondent has effected said discriminations between its inde-pendent jobber customers and group jobber customers in themanner and by the methods hereinafter described.

The respondent sells its products to all of its jobber customers


Complaint 55 F.

at prices published on its "Warehousing Wholesaler" (blue) pricelist. When a jobber customer resells to another jobber, respond-ent upon receiving proof from the jobber customer that such

resales were made, refunds or rebates to the jobber customer apart of the purchase price paid for the goods so resold. Respond-ent does not, however , pay such refunds or rebates to jobbercustomers upon their total purchases but only upon a fixed lnaxi-mum percentage of total purchases regardless of the manner ofresale. The percentage rates of rebate and the maximum per-centages of a jobber customer s total purchases eligible for suchrebates during the years 1951 through 1956 are set out below:

Refund ra teYear (Perccnt)1951------_--_-----

----- ---------------------- - --- ---------

1952

,--- -------- ---- ---__--_

_--n--_------ --

--- - -------- ----

1953____----___n--____, ------- ---------------

--------- ----

- 12

1954 _h__--_h______-------------------_n__----h--

___

__n- 12

1955_--_h__---------

-'---- -------- ----

------------------- 121956__--___-

-------- --- ------------------ --------

---------- 15

Percentage of total1-Ju-rchascs eligible

Respondent discriminates between its group jobber customersand its independent jobber customers by granting the rebatesset out in the above table to group jobber customers on goodswhich they resell to retailers; while independent jobber customersare granted rebates only on goods -which they resell to other job-bers and are denied rebates on goods which they resell toretailers.

Respondent further discriminates in favor of at least three

of its group jobber customers by disregarding the fixed maxi-n1um percentage of total purchases eligible for rebate and grantsrebates to the said three group jobber customers on all goodspurchased from respondent.

The acts and practices of respondent, as above described , effectdiscriminations in price in that independent jobber customers

are required to pay higher and less favorable prices than groupjobber customers for goods purchased from respondent for resaleto retailers.

PAR. 6. In the course and conduct of its business in commercethe respondent has been and is no\v, discriminating in pricein the sale of its products of like grade and quality by sellingthem to jobber customers at higher prices than it sells them toprivate brand customers who are con1petitively engaged, each

with the other , in the resale of said products.


518 Complaint

Respondent has effected discriminations in price between itsjobber customers and its private brand customers in the mannerand by the methods hereinafter described:

As aforedescribed , jobber customers are billed and required topay prices which respondent publishes on its so-called "Ware-housing Wholesaler" price list. Said jobber prices are considerablyhigher than the prices which the private brand customers arecharged for goods of like grade and quality. The private brandcustomers for the most part purchase only fan belts and flexibleradiator hose.

Respondent has divided the private brand customers into threegroups, rubber companies, mail order companies, and oil com-panies. The rubber company private brand customers are:

Goodyear Tire & Rubber CompanyThe B. F. Goodrich CompanyUnited States Rubber Company

These three private brand customers purchase flexible radiatorhose from respondent at net prices approximately 34.5 percent

below the " \""1 arehousing Wholesaler" list prices.The mail order company private brand customers are:

Montgomery Ward & CompanySears Roebuck and Company

These two private brand customers purchase fan belts fromrespondent at net prices which are approximately 42 percent be-low the "Warehousing Wholesaler" list prices and purchase flex-ible radiator hose at net priees which are approximately 25 per-cent below the "Warehousing Wholesaler" list prices.

The oil company private brand customers are:Cities Service Oil CompanyEsso Standard Oil CompanyGulf Oil CompanyStandard Oil Con1pany of CaliforniaStandard Oil Company (Indiana.)Standard Oil Company (Kentucky)Standard Oil Company of TexasSun Oil CompanyUtah Oil Refining Company

These private brand customers purchase fan belts from respond-ent at net prices which are approximately 36 percent below theWarehousing Wholesaler list prices and purchase flexible ra-diator hose at net prices which are approximately 21 percentbelow the "Warehousing Wholesaler" list prices.


Decision 55 F.

An additional discrimination in price is afforded the followingoil company private brand customers:

Esso Standard Oil CompanyStandard Oil Company of CaliforniaStandard Oil Company (Indiana)Standard Oil Company (Kentucky)Standard Oil Company of TexasUtah Oil Refining Company

These companies , since 1953 , for varying periods in each yearhave been given one free belt or one free piece of flexible radiatorhose ,vith each ten belts or ten pieces of hose purchased. During1956 the named private brand customers received free fan beltsand free flexible radiator hose in the following amounts:

CnstomerFrec BeUsreceived

Free hosereceived

Esso Standard Oil Co'-_---_--_nn__________n_- 16 910Standard Oil Co. of CaL_n___---n---m------ 9,730Standard Oil Co. (Ind. ) m_---h_--n--__m_---- 14 788Standard Oil Co. (KY' )--h___nu__--_______n- 10, 176Standard Oil Co. of Texas____m_-- ------- 2,235Utah Oil Refining CO.n

_____

------_____nn_---- 661

197

411232241371

Total valucof free item-

$15 187.41129.245.817.559.650.

PAR. 7. The effect of respondent's discriminations in price , as

above al1eged , may be substantially to lessen , injure, destroy, orprevent competition between respondent and competing sellersof similar automobile replacement parts; between and among re-spondent' s independent jobber customers and group jobber cus-tomers; and between and among respondent' s private brand cus-tomers and all jobber customers.

PAR. 8. The acts and practices of respondent as above allegedconstitute violations of the provisions of subsection (a) of Section2 of the Clayton Act (U. , Title 15 , Sec. 13), as amended bythe Robinson-Patman Act , approved June 19 1936.

MT. Francis C. Mayer and l'.1T. TVilliam fV. Rogal for theCommission.

Breed, Abbott J..1o1'gan of New York , N. , by M1'. Char-resH. Tuttle for respondent.

INITIAL DECISION BY EARL J. KOLB , HEARING EXAMINER

The complaint in this proceeding issued January 14, 1958charges the respondent Thern10id Company, a corporation , lo-

cated at 500 Whitehead Road , Trenton , N. , with violation ofthe provisions of subsection (a) of Section 2 of the Clayton Act


518 Decision

as amended by the Robinson-Patman Act, in the sale of auto-motive replacement parts.

After the issuance of the complaint respondent entered intoan agreement containing consent order to cease and desist withcounsel in support of the complaint, disposing of all the issues inthis proceeding, which agreement was duly approved by thedirector and assistant director of the Bureau of Litigation.

It was expressly provided in said agreement that the signingthereof is for settlement purposes only and does not constitutean admission by respondent that it has violated the law as al-leged in the complaint.

By the terms of said agreement, the respondent admitted allthe jurisdictional facts alleged in the complaint and agreed thatthe record herein may be taken as if the Commission had madefindings of jurisdictional facts in accordance with the allegations.

By said agreement the respondent expressly waived any fur-ther procedural steps before the hearing examiner and the Com-mission; the making of findings of fact or conclusions of law;and all the rights it may have to challenge or contest thevalidity of the order to cease and desist entered in accord-ance with the agreement.

Respondent further agreed that the order to cease and desistissued in accordance with said agreement, shall have the sameforce and effect as if made after a full hearing.

It was further provided that said agreement, together withthe complaint, shall constitute the entire record herein; thatthe complaint herein may be used in construing the terms of theorder issued pursuant to said agreement; and that said order

may be altered , modified or set aside in the manner prescribed bythe statute for orders of the Commission.

The hearing examiner has considered such agreement and theorder therein contained, and , it appearing that said agreementand order provides for an appropriate disposition of this proceed-ing, the same is hereby accepted and is ordered filed upon be-coming part of the Commission s decision in accordance with

Sections 3.21 and 3.25 of the Rules of Practice , and , in consonancewith the terms of said agreement, the hearing examiner finds thatthe Federal Trade Commission has jurisdiction of the subjectmatter of this proceeding and of the respondent named hereinand issues the following order.


Decision 55 F.

ORDER

It is oTCleTed That Thermoid Company, a corporation , and itsofficers , representatives , agents and employees, directly or throughany corporate or other device , in or in connection with the saleof automotive replacement parts, in commerce, as "commerceis defined in the Clayton Act , do forthwith cease and desist fromdiscriminating in price by selling such parts of like grade andquality to any one purchaser at net prices higher than the netprices charged to any other purchaser who , in fact , competes withthe purchaser paying the higher price in the resale and distribu-tion of respondent's products.


Pursuant to Section 3.21 of the Commission s Rules of Prac-

tice, the initial decision of the hearing examiner shall, on the4th day of October 1958 , beeome the decision of the Commission;and , accordingly:

It is Q1'dered That respondent herein shall , \vithin sixty (60)days after service upon it of this order , file with the Commissiona report in writing setting forth in detail the manner and formin \vhich it has complied with the order to eease and desist.

MASSACHUSETTS BONDING AND INSURANCE COMPANY 525

Decision

IN THE MATTER OF

MASSACHUSETTS BONDING AND INSURANCE CaMP ANY

ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 6447. Complaint, Nov. 18, 1955-0nler, Oct. , 1958

Order dismissing, for lack of jurisdiction , following the ruling of the SupremeCourt of the United States in Federal Trade Commission v. National

Casualty Company and Federal Trade Commission v. The American Hos-pita1 and Life Insurallce Company, 357 U.S. 560 , complaint charging aninsurance company in Boston , Mass. , with false advertising of its healthand accident policies.

M1' . John W. BTookfieZd, Jr. for the Commission.Gaston, Snow, Motley Holt by M1' . Joseph P. Rooney and

MT. John B. Pie1' , J1'. of Boston , Mass. , and Afr. RobeTt Watsonof Washington , D. , for respondent.

INITIAL DECISION BY LOREN H. LAUGHLIN HEARING EXAMINER

This proceeding is one brought under the Federal Trade Com-mission Act as affected and amended by the l\1cCarran-FergusonAct, 15 U. , 991011-1015 inclusive, the complaint chargingthe respondent corporation, in substance, with having trans-n1itted in interstate commerce certain alleged false misleadingand deceptive advertising concerning its individual health-and-accident insurance policies. Group health-and-accident insuranceis not involved. The complaint is dismissed herein for lack ofjurisdiction by the Commission over the subject-matter thereof,pursuant to the recent decision of the Supren1e Court of theUnited States, relating to that subject.

The Supreme Court , !n one per cuTial1~ opinion issued on June30, 1958 , decided two cases , entitled FedeTal Trade Co?l1:mission

v. National Cas'u.alty CO1npany (No. 435) and Federal T1'adeCo'lrunission v. The American Hospital and Life Insuxance Corn-pany (No. 436), 357 U.S. 560 (1958). The Supreme Court acceptedjurisdiction of these cases on writs of certiorari from the Courtsof Appeals for the Sixth and Fifth Circuits , respectively, to re-view their " interpretation of an important federal statute.affirmed the judgment of each of such Circuits in setting asidethe Commission s cease-and-desist orders against the said re-spondent insurers. In the course of its opinion , the Supreme Court


Decision 55 F.

rejected all contentions of the Federal Trade Commission pur-porting to sustain its jurisdiction, and, in affirming the saidjudgments of said courts of appeals, held that the Commissionis prohibited by the McCarran-Ferguson Act from regulatingthe practices complained of by it within those states havingstatutes authorizing the regulation of such practices.

With particular pertinence to the case at bar, theCourt, covering in the one case a casualty-insuranceand in the other a life- insurance company, held:

Respondents , the National Casualty Company in No. 435 and the AmericanHospital and Life Insurance Company in No. 436, engage in the sale of healthand accident insurance. National is licensed to sell policies in all States, aswell as the District of Columbia and Hawaii , while American is licens€d infourteen States. Solicitation of business for National is carried on by inde-pendent agents who operate on commission. The company s advertising ma-terial is prepared by it and shipped in bulk to these agents , who distribute thematerial locally and assume the expense of such dissemination. Only aninsubstantial amount of any advertising goes directly by man from the com~pany to the public , and there is no use of radio , tel€vision, or other means ofmass communication by the company. American does not materially differfrom National in method of operation.

:1: * :1: There is no question but that the States possess ample means to regu-late this advertising within their respective boundaries.

:1: :1: :1: Each State in question has enacted prohibitory legislation which pro-scribes unfair insurance advertising and authorizes enforcement through ascheme of administrative supervision.

Supremecompany

In footnote 6 of its opinion , the Supreme Court said:At the time the complaints were filed thirty-sjx States had enacted theModel Unfair Trade Practices Bill for Insurance. " Eight others had statutes

essentially the same in effect as the "Model BilL"

The opinion of the Supreme Court is sweeping and general inits language. It does not attempt to cite the numerous statutesof the several States which constitute the entire regulatory planof each of such States. And to do so herein is wholly unnecessary;suffice it to say that official notice is taken that all States, bystatute , provide for the licensing and regulation of all types ofinsurance agents; that all the States now have legislative actsproviding more or less specifically for the regulation of life-in-suranee companies' business of health-ana-accident insuranceincluding the advertising thereof; and that, with respect to the

business of casualty-insurance companies , nearly all of the Stateshave specific regulatory' statutes , but in each of the remainingfew , the general regulatory powers of the Insurance Departmentar,~ sufficiently broad , when coupled with the criminal and other

MASSACHUSETTS BONDING AND INSURANCE COMPANY 527

525 Order

statutes of the State , to provide a system of regulation of anyunfair advertising by such companies and their agents, whichthe Supreme Court apparently deems adequate to regulate suchbusiness in such States. It holds, in effect, that under the Mc-Carran-Ferguson Act each State is given latitude to enact suchlaws and provide such regulatory processes as each State deemsproper within its own jurisdiction , and that the degree of actuallaw enforcement, if any, in the several States is wholly immaterial.

In the instant proceeding, the complaint was issued on Novem-ber 18 , 1955. Respondent subsequently joined issue, and , amongother pleas , adequately raised the issue of the Commission s juris-diction over the subject-matter. The record is fairly voluminousbut, in view of the conclusion reached herein , only a few un-disputed facts need be stated. While at the conclusion of theproceeding each of the parties submitted extensive and detailedproposed findings of fact as well as conclusions of law, and aproposed order , some of which proposed findings and conclusionsare quite proper , for brevity all such proposals have been rejected.

The respondent is a stock casualty insurance company dulyorganized , existing and doing business under the laws of theCommonwealth of Massachusetts, with its office and principalplace of business in Boston , Mass. The respondent and its agentsrespectively, \vere licensed in all of the forty-nine States of the

United States (including the newly admitted State of Alaska),the District of Columbia and the Territory of Hawaii. Duringthe time covered by this proceeding respondent casualty companynever sent any advertising by mail directly from its home officeto the public generally, and did not use radio, television or othermass media of communication to the public. Its advertising ac-tivity was confined to the preparation of advertising circularsanJ their distribution to its agents , who then distributed themlocally at their own expense.

This proceeding, therefore , falls squarely within the principlesenunciated by the Supreme Court in its said decisions. Accordingly,

It is ordered That the complaint herein be , and the san1e hereby, dismissed for lack of jurisdiction.

FIN AL ORDER

The date on which the hearing exan1iner s initial decision wouldhave become the decision of the Commission having been ex-tended by order issued September 10, 1958, until further orderof the Commission; and


Order 55 F.

The Commission having now determined that said initial de-cision is adequate and appropriate in all respects:

It is ordered That the initial decision of the hearing examinerduly providing for dismissal of this proceeding for lack of juris-diction be, and it hereby is, adopted as the decision of the

Commission.

GUARANTEE TRUST LIFE INSURANCE COMPANY 529

Order 55 F.

IN THE l\1A TTER OF

GUARANTEE TRUST LIFE INSURANCE COMPANY

ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 624.4. Compla,int, Oct. 14, 1954-0rder, Oct. , 1958

Order dismissing, for lack of jur1sdiction , following the ruling of the SupremeCoU1' t of the United States in Federal T1"Clde Commission v. NationalCasualty Company and Fedej"(tl Trade Commission v. The A?11e?'ican Hos-pitcU and Life Insurance Company, 357 U. S. 560 , complaint charging aCh1cago insurance company with false advertising- of its health andaccident policies.

Before MT. LoTen T. Laughlin hearing examiner.Mr. F1'ederick M cM anus for the Commission.Mr. Zacha'ry D. Fonl, JT. and vValkins Meyers

Ill. , for respondent.Chicago

FINAL ORDER

This matter having come on to be heard by the Commissionupon respondent's appeal from the hearing examiner s initialdecision filed prior to the per c1lriam opinion of the United StatesSupreme Court in the combined cases of Federal TTade CO'ln11~is-sion v. National Casualty Company and Federal Trade CO'lnn~is-sian v. The Al12eTican Hospital mul Life InSU1' llce CO?npany, 357

s. 560 (decided June 30 1958) ; andThe Commission having considered respondent's appeal and

the record , and having concluded that this proceeding should bedismissed on jurisdictional grounds upon the authority of saidruling of the Supreme Court:

It is ordered That the initial decision herein , filed April 26,1957 , be , and it hereby is , vacated and set aside.

It is /uTther ordered That the complaint herein be, and hereby is , dismissed.


Order 55 F.

IN THE MATTER OF

PROFESSIONAL INSURANCE CORPORATION

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 6279. Complaint, Dec, 1954-0rdc?", Oct. , 1958

Order dismissing, for lack of jurisdiction , following the ruling of the SupremeCourt of the United States in Federal T?'ade Commission v. NationalCasualty Compa.ny and Federal Trade Co1ll,?nission v. The A?iwj'ican Hos-pital and Life Insu1' nce Co'm.pc/.nY, 357 U.S. 560 , complaint charging aninsurance company in Jacksonville, Fla., with false advertising of itshealth and accident policies.

Before iV/?'. J. EaTl Cox hearing examiner.IJl'l. . Francis C. Mayer, Mr. EugeTLe KapZan and Mr. FTanklin

A. Snyde'J' for the Commission.StTasbu1' ge1' , PTice, Kelton, MilleT MaTtin by Mr. Royal H.

ETin, Jr. and Mr. H. W. StTasbuTger of Dallas, Tex., forrespondent.

FINAL ORDER

This matter having been considered by the Commission uponits review of the hearing examiner s initial decision dismissingthe complaint on the grounds of (1) lack of jurisdiction in theCommission , and (2) discontinuance of the practices alleged tobe unlawful; andThe Commission having concluded that the proceeding should

be dismissed solely on jurisdictional grounds on the authority ofthe Supreme Court' per curiam" opinion in the combined casesof Federnl Trade CO1nmiss1:on v. National CasuaUy Company andFederal Trade Conl1nission v. The A'merican Hospital and Lifelnsu?'nnce Company, 357 U.S. 560 (decided . line 30 , 1958), andthat oral argument of the matter , as requested by the respondentis not necessary:

It is oTde1. That respondent's request for oral argument beand it hereby is , denied.

It is fuTtheT oTdeTed That the initial decision filed herein onlVlay 19, 1958 , be, and it hereby is , vacated and set aside,

It 1:3 furrtheT orde1' That the complaint in this proceeding beand it hereby is dismissed.

INTER-OCEAN INSURANCE COMPANY 531

Order

IN THE MATTER OF

INTER-OCEAN INSURANCE COMPANY

ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 63.92. Complaint July 18 1955-01'der , Oct. , 1958

Order dismissing, for lack of jurisdiction , following the ruling of the SupremeCourt of the United States in Fedentl Trade Com, ission v. National

Casualty Company and deral T1'ade Co'mm' iss1:on v. The Ame1"ica,n Hos-pilld and Life Insumllce Company, 357 U.S. 560 , complaint charging aninsurance company in Cincinnati, Ohio, with false advertising of itshealth and accident policies.

Before MT. LoTen H. Laughlin hearing examiner.M1'. John vV. BTookfield, J1'. and NIT. Donald K. King for the

Commission.MT. Richanl W. BaT1'ett and Ml'. Willia?1~ L. Blum of DinsmoTe

Shohl, SawyeT and DinsmoTe of Cincinnati, Ohio , and Mr.BTooks T1'ueblood Associate Counsel of Respondent, all appear-ing for the respondent.

MT. Ja?nes C. Jay, of Indianapolis, Ind. , Special Counsel for theState of Indiana and the Insurance Department of the State ofIndiana, appearing herein as amicus cu?'iae.

FINAL ORDER

This mattel' having come on to be heard upon the appeal ofcounsel in support of the complaint from the initial decision ofthe hearing examiner dismissing the complaint on the ground ofa lack of public interest in the proceeding; andThe Commission having determined that this matter is gov-

erned by the decision of the Supreme Court of the United Statesin the combined cases of Fede1' al TTade CommissioTI- v. NationalCasualty Company and FedeTal TTade Com?nission v. The Ameri-

can Hospital and Life InsuTance Co?Jl,pany, 357 U.S. 560 (decided

June 30 , 1958), and that the complaint herein should be dismissedsolely on the basis of the aforesaid authority:

It is oTdeTed That the initial decision of the hearing examiner, and it hereby is , vacated and set aside.It is fuTtheT 01'CleTed That the complaint in this proceeding be

and it hereby is , dismissed.


Order 55 F.

IN THE MATTER OF

WORLD INSURANCE COMPANY

ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 6455. Complai' , Nov. 1955-01.der, Oct. 7, 1958

Order dismissing, for lack of jurisdiction , following the ruling of the SupremeCourt of the United States in Federal Trade Commission v. NationalCasHCLlty Company and Federal T1'adc Commission v. The Ame1'iccoL Hos-pital and LIfe lnsw'ance Company, 357 U.S. 560, complaint charging aninsurance company in Omaha , Neb!". , with false advertising of its healthand accident policies.

Before Mr. FTank Hiel' hearing examiner.

Mr. WiUia'ln A. SO17W1' for the Commission.lvI'/'. J. i-V. l11aTer of Omaha, Nebr. , for respondent.

FINAL ORDER

This matter having come on to be heard by the Commissionupon respondent' s appeal from the hearing examiner s initialdecision filed prior to the per c1l1'iwn opinion of the United StatesSupreme Court in the combined cases of Federal T1'ade Co'mm,is-sion v. Na,tional Casualty CO'J1lpany and FedeTal Trade Co1n1nis-sion v. The A 1nen~can H ospitcrZ and Life lnsuntrlce Company, 357

S. 560 (decided June 30 1958) ; andCounsel for respondent additionally having filed a motion to

dismiss the complaint , based upon the aforesaid decision of theSupreme Court; andThe Commission , having considered respondent' s motion to dis-

miss and the record , and having concluded that this proceedingshould be dismissed on jurisdictional grounds upon the authorityof said ruling of the Supreme Court:

It is ordeTecl That the initial decision herein , filed October 22,1956 , be , and it hereby is , vacated and set aside.

It is further o'rde1' That the complaint herein be , and ithereby is , dismissed.

D. H. HOLMES COMPANY, LTD. 533

Decision

IN THE MATTER OF

D. H. HOLMES COMPANY, LTD.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OF THEFEDERAL TRADE CO1\IMISSION AND THE FUR PRODUCTS LABELING ACTS

Docket 7172. Compla'int , June 1958-Dedsion, Oct. 7, 1958

Consent order requiring a furrier in New Orleans , La. , to cease violating theFur Products Labeling Act by labeling fur products falsely with respectto the names of animals producing the fur and by failing to comply withother labeling requirements; by deceptive invoicing; and by advertising innewspapers which failed to disclose the names of animals producing cer-tain fur or the COU11try of origin of imported furs or that some furs con-tained artificially colored or cheap or waste fur, or which contained thenames of animals other than those producing certain furs.

Mr. Tho11'wS A. Ziebarth supporting the complaint.Mr. Leon Sa1'PY of Chaffe, JIIlcCcdl, Ph'illips , Burke Hopkins

of Ne\v Orleans , La. , for respondent.

INITIAL DECISION BY JOSEPH CALLAWAY , HEARING EXAMINER

The Federal Trade Commission issued its complaint againstthe above-named respondent on June 9 , 1958, charging it withhaving violated the Fur Products Labeling Act, the rules andregulations issued thereunder , and the Federal Trade CommissionAct by misbranding, falsely invoicing and falsely advertisingcertain fur products. After being served \vith the complaint re-spondent entered into an agreement, dated July 28, 1958 , contain-ing a consent order to cease and desist, disposing of all the issuesin this proceeding without hearing, which agreement has been,duly approved by the Assistant Director and the Director of theBureau of Litigation. Said agreement has been submitted to theundersigned , heretofore duly designated to act as hearing exam-iner herein, for his consideration in accordance with Section25 of the Rules of Practice of the Commission.Respondent , pursuant to the aforesaid agreement, has admitted

all of the jurisdictional allegations of the complaint and agreedthat the record may be taken as if findings of jurisdictionalfacts had been made duly in accordance with such allegations.Said agreement further provides that respondent waives all fur-ther procedural steps before the hearing examiner or the Com-mission , including the making of findings of fact or conclusions

5'34 FEDERAL TRADE COMMISSION DECISIONS

Order 55 F.

of law and the right to challenge or contest the validity of theorder to cease and desist entered in accordance with such agree-ment. It has also been agreed that the record herein shall consistsolely of the complaint and said agreement; that the agreementshall not become a part of the official record unless and until itbecomes a part of the decision of the Commission, that said agree-ment is for settlement purposes only and does not constitute anadmission by respondent that it has violated the law as allegedin the complaint, that said order to cease and desist shall havethe same force and effect as if entered after a full hearing andmay be altered , modified, or set aside in the manner providedfor other orders , and that the complaint may be used in con-struing the terms of the order.

This proceeding having now come on for final considerationon the complaint and the aforesaid agreement containing theconsent order, and it appearing that the order and agreementcover all of the allegations of the complaint and provide forappropriate disposition of this proceeding, the agreement is here-by accepted and ordered filed upon this decision and said agree-ment becoming part of the Commission s decision pursuant to

Sections 3.21 and 3.25 of the Rules of Practice , and the hearingexaminer accordingly makes the following findings , for jurisdic-tional purposes , and order:

1. Respondent D. H. Holmes Company, Ltd. , is a corporationorganized , existing and doing business under and by virtue ofthe laws of the State of Louisiana with its office and principalplace of business located at 819 Canal Street, New Orleans , La.

2. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondent ~ereinabovenamed. The complaint states a cause of action against said re-spondent under the Fur Products Labeling Act and the FederalTrade Commission Act, and this proceeding is in the interest ofthe public.

ORDER

It is ordered That respondent, D. H. Holmes Company, Ltd.a corporation and its officers, and respondent's representativesagents and employees , directly or through any corporate or otherdevice, in connection with the introduction into commerce, orthe sale, advertising or offering for sale in commerce, or the

transportation or distribution in commerce, of fur products, or

in connection with the sale, advertising, offering for sale , trans-

D. H. HOLMES COMPANY , LTD. 535

533 Order

portation, or distribution of fur products which have been madein whole or in part of furs which had been shipped and receivedin commerce, as "commerce

" "

fur" and "fur product" aredefined in the Fur Products Labeling Act, do forthwith ceaseand desist from:

A. Misbranding fur products by:1. Falsely or deceptively labeling or otherwise falsely identi-

fying any such product as to the name or names of the animalor animals that produced the fur from which such product was

manufactured.2. Failing to affix labels to fur products showing:a. The name or names of the animal or animals producing


Fur Products Name Guide and as prescribed under the Rulesand Regulations;

b. That the fur product contains or is composed of used furwhen such is the fact;

c. That the fur product contains or is composed of bleacheddyed or otherwise artificially colored fur , when such is the fact;

d. That the fur product is composed in whole or in substantialpart of paws , tails , bellies or waste fur, when such is the fact;e. The name or other identification , issued and registered by

the Commission , of one or more persons who manufactured suchfur product for introduction into commerce, introduced it intocommerce, sold it in commerce , advertised or offered it for salein commerce or transported or distributed it in commerce;f. The name of the country of origin of any imported furs

used in the fur product;g. The item number of such fur product.3. Setting forth on labels attached to fur products:a. Information required under Section 4 (2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations thereundermingled with nonrequired information;

b. Information required under Section 4 (2) of the Fur Prod-ucts Labeling Act and the Rules and Regulations thereunder inhandwriting.

4. Failing to show on labels affixed to fur products all theinformation required under Section 4 (2) of the Fur ProductsLabeling Act and the Rules and Regulations thereunder , on oneside of such labels.

B. Falsely or deceptively invoicing fur products by:


Decision 55 F.

1. Failing to furnish invoices to purchasers of fur products

showing:a. The name or names of the animal or animals producing

the fur or furs contained in the fur products as set forth in

the Fur Products Name Guide and as prescribed by the Rules andRegulations;

b. That the fur product contains or is composed of used furwhen such is the fact;

c. That the fur product contains or is composed of bleacheddyed or otherwise artificially colored fur , when such is the fact;

d. That the fur product is composed in v.rhole or in substan-tial part of paws, tails , bellies or waste fur , when such is thefact;

e. The name and address of the person issuing such invoice;f. The name of the country of origin of any imported furs

contained in the fur product.C. Falsely or deceptively advertising fur products, through

the use of any advertisement, representation , public announce-ment, or notice which is intended to aid , promote, or assist, di-

rectly or indirectly, in the sale or offering for sale of fur prod-ucts , and which:

1. Fails to disclose:

a. The name or names of the animal or animals producingthe fur or furs contained in the fur product as set forth in theFur Products Name Guide and as prescribed under the Rulesand Regulations;

b. That the fur products contain or are composed of bleached,dyed or otherwise artificially colored fur , when such is the fact;

c. That the fur product is composed in whole or in substantialpart of paws , tails , bellies , or waste fur, when such is the fact;andd. The name of the country of origin of any imported furs

contained in the fur product.2. Contains the name or names of an animal or animals other

than those producing the fur contained in the fur product.



tice, the Initial Decision of the hearing examiner shall, on the7th day of October 1958 , become the decision of the Commission;and , accordingly:

D. H. HOLMES COMPANY , LTD. 537

533 Decision

It is o1'deTed That the respondent herein shall within sixty(60) days after service upon it of this order file with the Com-mission a report in writing setting forth in detail the mannerand form in which it has complied with the order to cease anddesist.


Decision 55 F.

IN THE MATTER OF

HOWE SEWING CENTERS, INC. , ET AL.


Docket 7156. Co111,pla,i;'1,t , May 1958-Decision, Oct. , 1958

Consent order requiring sellers in St. Paul , Minn. , to cease using bait adver-tising to sell rebuilt sewing machines and vacuum cleaners , representingfalsely that such products were guarante€d in writing, and representingfictitiously high prices as regular retail prices.

M'J' . Cha1'les W. O' Connell supporting the complaint.Mr. Jack L. Prescott of Minneapolis , Minn. , for respondents.

INITIAL DECISION BY JOHN B. POINDEXTER HEARING EXAMINER

On May 26, 1958, the Federal Trade Commission issued acomplaint alleging that Howe Sewing Centers, Inc., a corpora-tion, Royal Appliance Stores, Inc., a corporation, Joseph B.Peters, Jack L. Prescott, Thomas S. Peters , and Emogene Petersindividually and as officers of said corporations, had violated theprovisions of the Federal Trade Commission Act by making falseand misleading representations by. means of radio broadcastsadvertisements in newspapers and statements on postcards sentthrough the United States mails , in connection with the sale anddistribution of sewing machines and vaCUUlll cleaners.

After issuance and service of the complaint, the respondentsHowe Sewing Centers , Inc. , Royal Appliance Stores , Inc. , JosephB. Peters, individually and as an officer of said corporationsand Jack L. Prescott Thomas S. Peters, and Emogene Petersindividually, hereinafter referred to as respondents, their attorneyand eounsel supporting the complaint, entered into an agreementfor a consent order. It was agreed that the complaint be dis-missed as to Jack L. Prescott , Thomas S. Peters and EmogenePeters as officers of said corporations since neither is an officerof either of said corporations.

The pertinent provisions of said agreement are as follows:Respondents admit all jurisdictional facts; the complaint maybe used in construing the terms of the order; the order shallhave the same force and effect as if entered after a full hearingand the said agreement shall not become a part of the officialrecord of the proceeding unless and until it becomes a part

'I;

HOWE SEWING CENTERS, INC. , ET AL. 539

538 Order

the decision of the Commission; the record herein shall consistsolely of the complaint and the agreement; respondents waivethe requirement that the decision must contain a statement offindings of fact and conclusions of law; respondents waive fur-ther procedural steps before the hearing examiner and the Com-

mission, and the order may be altered, modified, or set aside inthe manner provided by statute for other orders; respondentswaive any right to challenge or contest the validity of the orderentered in accordance with the agreement and the signing ofsaid agreen1ent is for settlement purposes only and does not con-stitute an admission by respondents that they have violated thelaw as alleged in the complaint.

The undersigned hearing examiner having considered the agree-ment and proposed order and being of the opinion that the ac-

ceptance thereof will be in the public interest, hereby acceptssuch agreement, makes the following jurisdictional findings , andissues the following order:

JURISDICTIONAL FINDINGS

1. Respondents Howe Sewing Centers, Inc. , and Royal Appli-ance Stores , Inc. , are corporations organized , existing and doingbusiness under and by virtue of the laws of the State of Minne-sota, with their office and place of business located at 2705 High-way 55 , St. Paul, Minn. The former address of said corporaterespondents was 919 Rice Street, St. Paul , Minn.

2. The office and place of business of Joseph B. Peters , pres-ently secretary and treasurer of said corporations , and EmogenePeters are the same as that of the corporate respondents. The

present business address of Jack L. Prescott is 3402 UniversityA venue SE, Minneapolis , Minn. , and the address of respondentThomas S. Peters is 1075 Glenhill Road, St. Paul , ~1:inn.

3. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondents and theproceeding is in the public interest.

ORDER

It is oTdwred That respondents Howe Sewing Centers, Inc. , acorporation, and its officers, and Royal Appliance Stores, Inc. , acorporation, and its officers, and Joseph B. Peters, individual1yand as an officer of said corporations, Jack L. Prescott, Thomas

S. Peters , and Emogene Peters, individually, and respondentsrepresentatives, agents and employees, directly or through any


Decision 55 F.

corporate or other device, in connection with the offering forsale , sale or distribution of sewing machines and vacuum clean-ers or other merchandise in commerce , as "commerce" is definedin the Federal Trade Commission Act, do forthwith cease anddesist from representing, directly or indirectly:

1. That certain merchandise is offered for sale when suchoffer is not a bona fide offer to sell the merchandise so offered.2. That any 111erchandise sold or offered for sale by respond-

ents is guaranteed unless guarantees are furnished and unlessthe nature and extent of the guarantee and the manner in whichrespondents will perform thereunder are clearly set forth in theguarantee and in the advertising.3. That any amount is respondents ' retail price of merchan-

dise when such amount is in excess of the price at which suchmerchandise is regularly and usally sold by respondents at retail.

It is further on/ereel That the complaint herein be dismissed

as to Jack L. Prescott Thomas S. Peters, and Emogene Petersas officers of said corporations.


Pursuant to Section 3. 21 of the Commission s Rules of Prac-tice, the initial decision of the hearing examiner shall, on the8th day of October 1958 , become the decision of the Commission;

and, accordingly:It is ordered That the respondents Howe Sewing Centers , Inc.

a eorporation and its officers , and Royal Appliance Stores, Inc.a corporation , and its officers , and Joseph B. Peters , individuallyand as an offieer of said corporations, Jack L. Prescott, ThomasS. Peters , and Emogene Peters , individually, shall within sixty(60) days after service upon them of this order , file with theCommission a report in writing setting forth in detail the man-ner and form in '\vhich they have complied with the order cease and desist.

ROYAL JEWELRY CO. 541

Findings

IN THE MATTER OF

ALAN NELSON ET AL.TRADING AS ROYALTY JEWELRY COMPANY


Docket 6868. Complaint , Aug. 20 , 1957-DeC'ision , Oct. 1958

Order requiring manufacturers in New York City to cease stamping "14 K"on gold chains of only 131

/~

karat fineness.

Mr. S. F. H o'use supporting the complaint.Mr. Heinz A. L. Hellnwld of New York , N. , for respondents.


PRELIMINARY STATEMENT

On August 20, 1957 , the Federal Trade Commission issued acomplaint charging Alan Nelson and Armin Feigel' , individuallyand as copartners trading as Royalty J e\velry Company, herein-after referred to as respondents , with violation of the FederalTrade Commission Act by reason of their stamping the phrase14K" on gold chains which they manufacture, sell and dis-

tribute, whereas, they contain gold of a fineness substantiallyless than 14 carat.

Respondents answered the complaint, admitting some and de-nying other allegations. Respondents say, among other thingsthat the stamping "14K" on their gold chains does not constitutea representation to the public that such ehains are manufacturedfrom gold of exactly 14 carat fineness , and "14K" may denoteany fineness between 13 and 14 carat.

Hearings have been held and counsel for both parties havefiled proposed findings of fact, coneIusions , and order. All pro-posed findings of fact and conclusions of law submitted by re-spective counsel not specifically found or concluded herein arerejected. Upon the basis of the entire record the hearing exam-

. iner makes the following findings of fact and conclusions andissues the following order:

FINDINGS OF FACT

1. Respondents Alan Nelson and Armin Feiger are individ-uals and copartners trading under the firm name of Royalty


Findings 55 F.

Jewelry Company with their office and principal place of businessat 15 West 47th Street, New York , N.

2. Respondents are now, and for sometime last past have beenengaged in the business of manufacturing, distributing andselling gold chains to wholesalers and retailers for resale to thepurchasing public.

3. In the course and conduct of their business, respondents

now cause, and for some time last past have caused, their goldchains , when sold , to be transported from their place of businessin the State of New York to wholesalers and retailers located invarious other States of the United States for resale to the generalpublic. Respondents maintain , and at all times mentioned hereinhave maintained , a substantial course of trade in said gold chainsin commerce, as "commer is defined in the Federal TradeCommission Act, between and among the various States of theUnited States.

4. In the course and conduct of their business and for thepurpose of inducing the purchase of said gold chains , respondentshave sold and distributed , and do now sell and distribute in com-merce , as aforesaid, gold chains with the phrase " 14K" appearingthereon. By means of said marking, respondents represent, di-rectly and by implication , that said gold chains marked "14K"are manufactured from gold of 14 carat fineness. In truth andin fact said gold chains are not manufactured from gold of 14carat fineness but are manufactured from gold of substantiallyless than 14 carat fineness , to "vit, 131/8 carat.

5. In the course and conduct of their business respondents arein direct and substantial competition with other corporationsfirms and individuals engaged in the sale , in commerce, of goldchains. The practice of respondents , as aforesaid, in selling anddistributing the above-described gold chains in commerce withthe phrase "14K" appearing thereon has had and now has thetendency and capacity to mislead and deceive a substantial por-tion of the purchasing public into the false and erroneous beliefthat said gold chains are manufactured from gold of 14 caratfineness and into the purchase of substantial quantities of said

gold chains because of such mistaken and erroneous belief.6. A substantial portion of the gold chains which respondents

manufacture , sell and distribute to wholesalers , jobbers and retaildealers in interstate commerce are stamped " 14K " whereas the

gold in said chains contains a fineness of only 131js carat.7. The National Stamping Act (15 U. C. Sec. 294 , et seq.


541 Order

provides that the actual fineness of gold (shipped or transportedand delivered in "commerce

) "

shall not be less by more thanone-half of one carat than the fineness indicated by the markstamped" * * * thereon. Admittedly, respondents' acts in know-ingly stamping chains "14K" when they contain gold of a finenessof only 131/s carat is a violation of the above-named act. Proofof such violations are competent evidence that they are to theprejudice and injury of the public and of competitors and con-stitute unfair and deceptive acts and practices and unfair meth-ods of competition within the meaning of the Federal Trade

Commission Act. Also , the circumstance, as alleged by respond-ents , that some manufacturers stamp their products "14K " whenin fact, their products contain gold of a fineness of only 131ju

carat and respondents merely followed this alleged "customno excuse or justification for respondents to violate the law.

8. Respondents have questioned the accuracy of the assay of

one of respondents ' chains made on behalf of the Federal TradeCommission and respondents claim that the volume of their busi-ness in interstate commerce is negligible. preponderance ofthe evidence shows that the assay was performed by a reputablefirm of assayers and respondents ' trade in " interstate commerceis substantial. The hearing examiner has considered each of theother contentions raised by counsel for respondents and they arewithout merit.

CONCLUSION

9. The acts and practices of respondents , as herein alleged, areall to the prejudice and injury of the public and of respondentscompetitors and constitute unfair and deceptive acts and prac-tices and unfair methods of competition in commerce , within theintent and meaning of the Federal Trade Commission Act.

ORDER

It is oTClered That respondents Alan Nelson and Armin Feigel'individually and as copartners trading as Royalty Jewelry Com-pany, or any other name, their agents , representatives and em-ployees, directly or through any corporate or other device inconnection with the offering for sale , sale or distribution of anyarticles eomposed in whole or in part of gold or an alloy of goldin commerce, as "commerce is defined in the Federal TradeCommission Act, do forthwith cease and desist from:

Stamping, branding, engraving, or marking any article with


Decision 55 F.

any phrase or mark such as 14K, or otherwise representing, di-rectly or by implication that the whole or a part of any articleis composed of gold or an alloy of gold of a designated finenessunless the article or part thereof so marked or represented iscomposed of gold of the designated fineness within the permis-sible tolerances established by the National Stamping Act (15

S. Code, Sec. 294 , et seq.

) .


The Commission , by order issued September 19, 1958 , havingplaced this case on its own docket for review, and having con-sidered the matter , has concluded that for purposes of clarifica-tion certain modifications hereinafter specified should be madein the hearing examiner s initial decision herein:

Accordingly, it is ordered That the title "Conclusions" im-mediately preceding the paragraph numbered 7 of the initialdecision be stricken and that, in lieu thereof, the word "Con-clusion" be inserted immediately preceding the paragraph num-bered 9 of said initial decision.

It is further onlered That the paragraph numbered 7 of theinitial decision be modified to read as follO\vs :

7. The National Stamping Act (15 D. C. Sec. 294 , et seq.

provides that the actual fineness of gold (shipped or transportedand delivered in 'commerce

) '

shall not be less by more thanone-half of one carat than the fineness indicated by the markstamped' * * * thereon. Admittedly, respondents ' acts in know-ingly stamping chains ' 14K' when they contain gold of a finenessof only 131ja carat is a violation of the above-named Act. Proofof such violations are competent evidence that they are to theprejudice and injury of the public and of competitors and con-stitute unfair and deceptive acts and practices and unfair meth-ods of competition within the meaning of the Federal TradeCommission Act. Also , the circumstance , as alleged by respond-ents , that some manufacturers stamp their products ' 14K,' vlhenin fact, their products contain gold of a fineness of only 131j8 caratand respondents merely followed this alleged 'custom ' is no excuseor justification for respondents to violate the law.

It is further ordered That the initial decision , as so modified,, and it hereby is , adopted as the deeision of the Commission.It is fu1'the1' ordered That the respondents , Alan Nelson and


541 Decision

Armin Feiger, shall , within sixty (60) days after service uponthem of this order, file with the Commission a report, in writing,setting forth in detail the manner and form in which they havecomplied with the order to cease and desist contained in theinitial decision as modified.


Decision 55 F.

IN THE MATTER OF

BASKIN FURS, INC., ET AL.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OF THEFEDERAL TRADE COMMISSION AND THE FUR PRODUCTS LABELING ACTS

Docket 7158. Complaint , May 27, 1958-Decision, Oct. , 1958

Consent order requiring furriers in Washington, C., to cease violating the

labeling, invoicing, and advertising requirements of the Fur ProductsLabeling Act.

FTedeTick McManus Esq. , for the Commission.TVebsteT Ballinger Esq. , of Washington , D. , for respondents.

INITIAL DECISION BY ROBERT L. PIPER, HEARING EXAMINER

The Federal Trade Commission issued its complaint againstthe above-named respondents on May 27, 1958, charging themwith having violated the Fur Products Labeling Act, the rulesand regulations issued thereunder , and the Federal Trade Com-mission Act, by misbranding and falsely representing their furproducts. Respondents appeared by counsel and entered into an

agreement, dated August 7 , 1958 , containing a consent order tocease and desist, disposing of all the issues in this proceedingwithout further hearings , which agreement has been duly ap-proved by the Director of the Bureau of Litigation. Said agree-ment has been submitted to the undersigned , heretofore dulydesignated to act as hearing examiner herein , for his considera-tion in accordance with ~3.25 of the Rules of Practice of the

Commission.Respondents , pursuant to the aforesaid agreement have ad-

mitted all of the jurisdictional allegations of the complaint andagreed that the record may be taken as if findings of .i urisdictionalfacts had been made duly in accordance with such allegations.Said agreement further provides that respondents waive all fur-ther procedural steps before the hearing examiner or the Com-

mission , including fhe making of findings of fact or conclusionsof Ja\v and the right to ehallenge or contest the validity of theorder to cease and desist entered in accordance vlith such agree-ment. It has also been agreed that the record herein shall consistsolely of the eomplaint and said agreen1ent, that the agreementshall not become a part of the official record unless and until itbecomes a part of the decision of the Commission, that said

BASKINS FURS , INC., ET AL. 547

546 Order

agreement is for settlement purposes only and does not constitutean admission. by respondents that they have violated the lawas alleged in the complaint, that said order to cease and desistshall have the same force and effect as if entered after a fullhearing and may be altered, modified , or set aside in the mannerprovided for other orders, and that the complaint may be usedin construing the terms of the order.

This proceeding having now come on for final considerationon the complaint and the aforesaid agreement containing theconsent order, and it appearing that the order and agreementcover all of the allegations of the complaint and provide for ap-propriate disposition of this proceeding, the agreement is herebyaccepted and ordered filed upon this decision and said agreementbecoming part of the Commission s decision pursuant to ~~3.

and 3.25 of the Rules of Practice, and the hearing examineraccordingly makes the following findings, for jurisdictional pur-poses, and order:

1. Respondent Baskin Furs, Inc., is a corporation organized,existing and doing business under and by virtue of the laws ofthe State of Delaware. Individual respondents Emanuel Baskinand Sylvia Baskin Vogel are president and secretary-treasurerrespectively, of said corporation and eooperate in formulating,directing and controlling the acts, practices and policies of thecorporate respondent. The address and principal place of busi-ness of both the corporate respondent and the individual respond-ents is loeated at 719 G Street, NvV., Washington, D.C. Thecorporate respondent sometimes trades as Baskin Furs.

2. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondents hereinabovenamed. The complaint states a cause of action against said re-spondents under the Fur Products Labeling Act and the FederalTrade Commission Act, and this proceeding is in the interestof the public.

ORDER

It is oTde1'ed That respondents, Baskin Fu , Inc., a corpora-tion, and its officers, and Emanuel Baskin and Sylvia BaskinVogel , individually and as officers of said corporation, and respond-ents ' representatives , agents and employees , directly or throughany corporate or other device , in connection with the introductioninto commerce, or manufacture for introduction into commerceor the sale, advertising, or offering for sale in commerce, or the


Order 55 F.

transportation or distribution in commerce of fur products, orin connection with the manuacture for sale, sale, advertising,offering for sale, transportation or distribution of fur productswhich have been made in whole or in part of fur which has beenshipped and received in commerce , as "commerce,

" "

fur and "furproduct" are defined in the Fur Products Labeling Act, do forth-with cease and desist from:

A. Misbranding fur products by:1. Falsely or deceptively labeling or identifying any such

product as to the name or names of the animal or animals thatproduced the fur from which such product was manufactured;

2. Failing to affix labels to fur products shO\;ving:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in theFur Products Name Guide and as prescribed under the Rules andRegulations;



(d) That the fur product is composed in whole or in substantialpart of paws, tails, bellies , or waste fur , when such is the fact;

(e) The name , or other identification issued and registered bythe Commission , of one or more persons \vho manufactured suchfur product for introduction into CO111merCe, introduced it intocommerce , sold it in commerce , advertised or offered it for saleor transported or distributed it in con1merce ;


3. Setting forth on labels attached to fur products:(a) Information required under Section 4(2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations thereunderin abbreviated form;

(b) Information required under Section 4 (2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations thereunder min-gled with nonrequired information;

4. Failing to show on labels attached to fur products all ofthe inforn1ation required under section 4 (2) of the Fur ProductsLabeling Act and the Rules and Regulations thereunder on one

side of the labe1.

B. Falsely or deceptively invoicing fur products by:

BASKIN FURS, INC. , ET AL. 549

546 Order


showing:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in the FurProducts Name Guide and as prescribed under the Rules andRegulations;


(c) That the fur product contains or is composed of bleached,dyed , or otherwise artificial1y colored fur, when such is the fact;

(d) That the fur product is composed in whole or in substan-tial part of paws, tails, bellies , or .waste fur when such is thefact;

( e) The name and address of the person issuing such invoice;(f) The name of the country of origin of any imported fur

contained in a fur product;(g) The item number or mark assigned to a fur product.2. Setting forth information required under Section 5 (b) (1)

of the Fur Products Labeling Act and the Rules and Regulationsthereunder in abbreviated form;

3. Using the term "blended" to describe the pointing, bleach-ing, dyeing or tip-dyeing of furs.

C. Falsely or deceptively advertising fur products through theuse of ~my advertisement, representation , public announcement,or notice which is intended to aid , promote, or assist, directly orindirectly, in the sale or offering for sale of fur products, and\vhich:

1. Fails to disclose:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in theFur Products Name Guide and as prescribed under the Rulesand Regulations;

(b) That the fur product contains or is composed of bleached,dyed or otherwise artificial1y colored fur , when such is the fact;

(c) That the fur product is composed in whole or in substantialpart of paws, tails, bel1ies or waste fur, ,vhen such is the fact.

2. Contains the name or names of any animal or anin1alsother than the name or names specified in Section 5 (a) (1) ofthe Fur Products Labeling Act;3. Contains the term "blended" to describe the pointing"

bleaching, dyeing or tip-dyeing of furs;4. Represents, directly or by implication:(a) That the regular or usual price of any fur product is any


Decision 55 F.

amount which is in excess of the price at which the respondentshave usually and customarily sold such products in the recentregular course of their business;

(b) That the regular or usual price charged by respondentsfor any fur product in the recent regular course of their businessis reduced in direct proportion to the amounts of savings statedin percentage savings claims , when contrary to fact;

(c) That any such products are the stock of a business in a

state of liquidation, unless such is the fact;

(d) That the sources of fur products are other than the true

sources thereof;

(e) That the prices at which fur products are offered, for saleare wholesale prices or are less than wholesale cost, unless suchis the fact.D. Making claims and representations in advertisements re-

specting con1parative prices, percentage savings claims, clai1ns

that prices are reduced from regular or usual prices or that fur

products are offered at wholesale prices , unless respondents main-tain full and adequate records disclosing the facts upon whichsuch claims and representations are based.


Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 11th dayof October 1958 become the decision of the Commission; and,accordingly:

It is oTdeTed That the above-named respondents shall , withinsixty (60) days after service upon them of this order , file withthe Commission a report in writing, setting forth in detail the

manner and form in which they have complied with the order cease and desist.

PRACTICAL RESEARCH CO. ETC. 551

Decision

IN THE MATTER OF

JOSEPH J. PINKUS DOING BUSINESS ASPRACTICAL RESEARCH COMPANY, ETC.


Docket 7177. Complaint, June 1955-Decision, Oct. , 1958

Consent order requiring the distributor of " 12" reducing preparation tocease representing faJsely in advertising in newspapers , magazines, etc.,

that such product was safe to use by a11 obese persons and enabled themto Jose weight without dieting and to Jose a certain number of pounds ina given period.

M1' . lI.foTton Nes?nith and Mr. Be?Ty'ma:n Davis for the Com-mISSIOn.

Fast Fast by 1'.1. Herm,an L. Fast of Newark, N. , for

respondent.

INITIAL DECISION BY EVERETT F. HAYCRAFTHEARING EXAMINER

On June 27, 1958, the Federal Trade Commission issued itscomplaint against the above-named respondent, charging him withthe use of an unfair and deceptive act and practice in commercein violation of the provisions of the Federal Trade CommissionAct in the dissemination of false advertisements of a drug prep-aration designated " 12." In lieu of. submitting answer to saidcomplaint, the respondent entered into an agreen1ent for consentorder with counsel supporting the complaint disposing of all theissues in this proceeding in accotdance ,vith Section 3.25 of theRules of Practice and Procedure of the Commission , which agree-ment has been duly approved by the Bureau of Litigation.

By the terms of said agreement, the respondent admitted allthe jurisdictional facts alleged in the complaint and agreed thatthe record may be taken as if findings of jurisdictional facts hadbeen duly made in accordance with such allegations. Respondentin the agreement expressly waived any further procedural stepsbefore the hearing examiner and the Commission; the making offindings of fact or conclusions of law; and all of the rights may have to challenge or contest the validity of the order to ceaseand desist entered in accordance with this agreement. It ,vasfurther provided that said agreement, together with the eomplaint


Order 55 F.

shall constitute the entire record herein; that the agreement shallnot become a part of the official record unless and until it becomesa part of the decision of the Commission; that said agreement isfor settlement purposes only and does not constitute an admissionby the respondent that he has violated the law as alleged in the

complaint. The agreement also provided that the order to ceaseand desist issued in accordance with said agreement shall have thesame force and effect as if entered after a full hearing; that itmay be altered , modified or set aside in the manner provided forother orders; and that the complaint may be used in construingthe terms of the order.

This proceeding having now come on for final consideration bythe hearing examiner on the complaint and the aforesaid agree-ment for consent order, and it appearing that said agreementprovides for an appropriate disposition of this proceeding, the

aforesaid agreement is hereby accepted and is ordered filed uponbecoming part of the Commission s decision in accordance with

Sections 3.21 and 3.25 of the Rules of Practice; and in conso-nance with the terms of said agreement, the hearing examinermakes the following jurisdictional findings and order:

1. Respondent Joseph J. Pinkus is an individual doing businessas Practical Research Company and as Practical Research K-Company, with his office and principal place of business locatedat 403 :Market Street , Newark , N.

2. The Federal Trade Commission has jurisdiction of the sub-ject matter of this proceeding and of the respondent hereinabovenamed. The complaint states a cause of action against said re-spondent under the Federal Trade Commission Act and thisproceeding is in the interest of the public.

ORDER

It is onle1'ed That respondent, Joseph J. Pinkus, and individualdoing business as Practical Research Company and as PracticalResearch K-12 Company, or under any other trade name ornames, and respondent's representatives , agents or employees,

directly or through any corporate or other device , in connection\vith the offering for sale , sale or distribution of the preparation

, or any other preparation of substantially similar composi-tion or possessing substantially similar properties, \vhether sold

under the same name or any other name , do forthv;ith eease anddesist from, directly or indirectly:

1. Disseminating or causing to be disseminated any advertise-

PRACTICAL RESEARCH CO. , ETC. 553

551 Decision

ment by means of the United States mails or by any means incommerce, as "commerce" is defined in the , Federal Trade Com-mission Act, which advertisement represents, directly or in-directly:

(a) That said preparation is safe to use by all obese persons;(b) That obese persons can lose weight by the use of said

preparation without dieting and while eonsuming the same kindsand amounts of food as they ordinarily consume;

(c) That any predetermined weight reduction can be achieved

by the taking or use of said preparation for a prescribed periodof time.

2. Disseminating or causing the dissemination of any adver-

tisement by any means for the purpose of inducing or which islikely to induce , directly or indirectly, the purchase in commerce,as "commerce " is defined in the Federal Trade Commission Act,of said preparation, which advertisement contains any of the

representations prohibited in paragraph 1 hereof.



tiee, the initial decision of the hearing examiner shall , on the 11thday of October 1958 , become the decision of the Commission; and,accordingly:

It is ordered That the respondent herein shall, within sixty(60) days after service upon him of ,this order , file \vith the Com-mission a report in writing, setting forth in det~il the mannerand form in which he has compJied with the order to cease anddesist.


Decision 55 F.

IN THE l\IA TTER OF

LA BELLE SILVER CaMP ANY , INC. , ET AL.

CONSENT ORDER, ETC.. IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 70S1. ComlJlaint , Jan. 14, 1958-Decision, Oct. H. 1958

Consent order requiring a manufacturer of small electrical appliances inGlendale, L. , N. , to cease representing- false~y in advertising matterand on labels, price tags, and cartons disseminated for use in the retailsale of its percolators and blenders , that grossly exaggerated prices werethe retail felling prices , th::-.t certain of their percolators were trimmed in24 karat "Warranted Gold Plate " and-through prominent use of thewords "General Electric that its said products were manufactured by

the General Electric Company.

A n~es Tifl. TFilliarns supporting the complaint.Lillian L. Poses of New York , N. , for respondents.

INITIAL DECISION BY JOHN B. POINDEXTERHEARING EXAMINER

On January 14 , 1958 , the Federal Trade Commission issued acomplaint alleging that La Belle Silver Company, Inc. , a corpora-tion Simon Cantor Armand Weinberger Eugene Singer, andHarry 01'01 , individually and as officers of said corporation , herein-after referred to as respondents , had violated the provisions ofthe Federal Trade Commission Act by making false , misleadingand deceptive statements and representations eoncerning theirproducts, small electrical appliances, including percolators andblenders, ",hich they manufacture and offer for sale.

After issuance and service of the complaint, the respondentstheir counsel , and counsel supporting the complaint entered intoan agreement for a consent order. The order disposes of the

matters eomplained about. The agreement has been approved by

the director and assistant director of the Bureau of Litigation.The pertinent provisions of said agreement are as follows:

Respondents admit all jurisdictional facts; the complaint maybe used in construing the terms of the order; the order shall havethe same force and effect as if entered after a full hearing andthe said agreement shall not become a part of the official recordof the proceeding unless and until it becomes a part of the decisionof the Commission; the record herein shall consist solely of the

LA BELLE SILVER COMPANY , INC., ET AL. 555

554 Order

complaint and the agreement; respondents waive the requirementthat the decision must contain a statement of findings of factand conclusions of la-w; respondents waive further proceduralsteps befOre the hearing examiner and the Commission , and theorder may be altered , modified, or set aside in the manner pro-vided by statute for other orders; respondents waive any rightto challenge or contest the validity of the order entered in ac-cordance with the agreement and the signing of said agreementis for settlement purposes only and does not constitute an ad-mission by respondents that they have violated the la\v as allegedin the complaint.

The undersigned hearing examiner having considered the agree-ment and proposed order and being of the opinion that the ac-ceptance thereof will be in the public interest, hereby acceptssuch agreement, makes the following jurisdictional findings , andissues the following order:


1. Respondent La Belle Silver Company, Inc. , is a corporationexisting and doing .business under and by virtue of the laws ofthe State of New York , with its office and principal place of busi-ness located at Cooper A venue and 80th Street, Glendale , LongIsland , N.2. Respondents Simon Cantor Armand Weinberger Eugene

Singer , and Harry Orol are individuals and officers of the saidcorporate respondent, serving respectively as president, vicepresident, treasurer and secretary, with their office and principalplaee of business located at the same place as that of the corporaterespondent.


ORDER

It is oTdeTed That respondents , La Belle Silver Company, Inc.a corporation, and its officers, and Simon Cantor, ArmandWeinberger, Eugene Singer, and Harry Orol individuallyand as officers of said corporation, and respondents' agentsrepresentatives and employees , directly or through any corporateor other device , in connection with the offering for sale, sale ordistribution of small electrical appliances, including percolatorsor blenders, or any other products, in commerce as "commerce


Decision 55 F.

is defined in the Federal Trade Commission Act, do forthwithcease and desist from:

1. Representing, directly or indirectly:(a) That any stated price, which is in excess of the price at

which such products are regularly and usually sold at retail, isthe retail price of such products.

(b) That merchandise is gold plated , unless it has a surfaceplating of gold or gold alloy applied by a mechanical processprovided , however, that a product or part thereof , on which therehas been affixed by an electrolytic process a coating of gold , or agold alloy of not less than 10 karat fineness , the minimum thick-ness of which is equivalent to seven one-millionths of an inchof fine gold, may be marked or described as gold electroplateor gold electroplated.

2. Using the name of any company in connection with mer-chandise which has not been manufactured in its entirety by saidcompany; or representing, directly or indirectly; that merchandisenot manufactured in its entirety by a specified company, \vas somanufactured , provided , however, that this prohibition shall notbe construed as preventing a truthful statement that a part of

an article of merchandise has been manufactured by a specificcompany when such part is clearly and conspicuously identified.3. Furnishing means or instrumentalities to retailers , distrib-

utors or others by or through \vhich they may mislead the publicwith respect to any of the matters set out in the paragraphs above.

DECISION OF THE COM MISSION AND ORDER TO FILE


Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 14thday of October 1958, become the decision of the Commission; and,accordingly:

It is oTClered That the respondents herein shall within sixty(60) days after service upon them of this order , file with theCommission a report in writing setting forth in detail the mannerand form in which they have complied with the order to cease

and desist.

RICH' , INC. 557

Decision

IN THE MATTER OF

RICH' S, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THEFEDERAL TRADE COMMISSION AND THE FUR PRODUCTS LABELING ACTS

Docket 7159. Complaint , May 27, 1958-Decision , Oct. 14, 1958

Consent order requiring a furrier in Atlanta, Ga., to cease violating theinvoicing and advertising requirements of the Fur Products Labeling Act.

Thomas A. Ziebco. Esq. , for the Commission.Parke')' and Parke1" by Benja1nin lVl. Parke1' Esq. , of Atlanta

Ga. , for respondents.

I NITIAL DECISION BY ROBERT L. PIPERHEARING EXAMINER

The Federal Trade Commission issued its complaint against theabove-named respondent on l\1ay 27 , 1958 , charging it with havingviolated the Fur Products Labeling Act, the rules and regulationsissued thereunder, and the Federal Trade Commission Act, bymisbranding and falsely representing its fur products. Respond-ent appeared by counsel and entered into an agreement, datedAugust 15 , 1958 , containing a consent order to cease and desistdisposing of all the issues in this proceeding without furtherhearings , which agreement has been duly approved by the Directorof the Bureau of Litigation. Said agreement has been submittedto the undersigned , heretofore duly designated to act as hearingexaminer herein , for his consideration in accordance with 93.of the Rules of Practice of the Commission.

Respondent, pursuant to the aforesaid agreement, has admittedall of the jurisdictional allegations of the complaint and agreedthat the record may be taken as if findings of jurisdictionalfacts had been made duly in accordance with such allegations.Said agreement further provides that respondent .waives allfurther procedural steps before the hearing examiner or the Com-mission , including the making of findings of fact or conclusionsof law and the right to challenge or contest the validity of theorder to cease and desist entered in accordance with sueh agree-ment. It has also been agreed that the record herein shall consistsolely of the complaint and said agreement , that the agreementshall not become a part of the official record unless and until it


Order 55 F.

becomes a part of the decision of the Commission , that said agree-ment is for settlement purposes only and does not constitute anadmission by respondent that it has violated the law as allegedin the complaint, that said order to cease and desist shall havethe same force and effect as if entered after a full hearing and111ay be altered, 111Odified, or set aside in the n1anner provided forother orders , and that the complaint may be used in construing theterms of the order.

This proceeding having now come on for final consideration onthe complaint and the aforesaid agreement containing the consentorder, and it appearing that the order and agreement cover allof the allegations of the complaint and provide for appropriatedisposition of this proceeding, the agreement is hereby acceptedand ordered filed upon this decision and said agreement becomingpart of the Commission s decision pursuant to S~3.21 and 3-.of the Rules of Practice , and the hearing examiner accordinglymakes the following findings , for jurisdictional purposes, andorder:

1. Respondent Rich' , Inc. , is a corporation organized , existingand doing business under and by virtue of the laws of the Stateof Delmvare with its office and principal place of business locatedat 41-45 Broad Street , SW. , Atlanta , Ga.2. The Federal Trade Commission has jurisdiction of the sub-

ject matter of this proceeding and of the respondent hereinabovenamed. The complaint states a cause of action against said re-spondent under the Fur Products Labeling Act and the Federal

Trade Commission Act, and this proceeding is in the interest ofthe public.

ORDER

It is ordered That respondent, Rich' , Inc. , a corporation , andits officers, and respondent's representatives, agents and em-ployees, directly or through any corporate or other device , in con-nection \vith the introduction into commerce, or the sale, ad-vertising, or offering for sale in commerce , or the transportationor distribution in commerce, of fur products, or in connection

with the sale, advertising, offering for sale, transportation ordistribution of fur products which have been made in whole orin part of fur which has been shipped and received in commerce,as "commerce,

" "

furn and "fur product" are defined in the FurProducts Labeling Act do forthwith cease and desist from:

A. Falsely or deceptively invoicing fur products by:

RICH' S, INC. 559

557 Order



the fur or furs contained in the fur products as set forth in the

Fur Products Name Guide and as prescribed under the Rulesand Regulations;


(c) That the fur product contains or is composed of bleaehed,dyed, or otherwise artificially colored fur , when such is the fact;

(d) That the fur product is composed in "vhole or in substantialpart of paws , tails , bellies , or waste fur, when such is the fact;

(e) The name and address of person issuing such invoice;(f) The nan1e of the country of origin of any imported furs

contained in a fur product;(g) The item number or mark assigned to a fur product;2. Setting forth information required under Section 5 (b) (1)

of the Fur Froducts Labeling Act and the Rules and Regulationsthereunder in abbreviated form.

3. Setting forth on invoices the name of a country of originother than the name of the country of origin of the animal thatproduced the fur.

B. Falsely or deceptively advertising fur products through theuse of any advertisement, representation , public announcement,or notice which is intended, to aid , promote, or assist, directly orindirectly, in the sale, or offering for sale, of fur products, andwhich:

1. Fails to disclose the nan1e or names of the animal or animalsproducing the fur or furs contained in the fur product as setforth in the Fur Products Name Guide and as prescribed underthe Rules and Regulations;

2. Fails to ' disclose that the fur product contains or is composed of bleached, dyed , or otherwise artificially colored fur , when

such is the fact;3. Contains the name or names of any animal or animals other

than the name or names permitted under Section 5 (a) (1) of theFur Products Labeling Act;

4. Represents , directly or by implication , that the regular orusual price of any fur product is any amount which is in excess ofthe price at which respondent has usually and customarily sold

such products in the recent regular conrse of its business;5. Represents , directly or by implication , through percentage


Decision 55 F.

savings claims , that the regular or usual retail prices charged byrespondent for fur products in the recent regular course of re-spondent' s business were reduced in direct proportion to theamount of savings stated, when contrary to the fact;

6. Represents, directly or by implication, that a sale priceenables purchasers of fur products to effectuate any savings inexcess of the difference between the sale price and the price atwhich respondent has usually and customarily sold such fur prod-ucts in the recent regular course of its business.C. Making price claims or representations in advertisement~

respecting comparative prices, percentage savings claims, orclaims that prices are reduced from regular or usual prices , unlessrespondent maintains full and adequate records disclosing thefacts upon which such claims or representations are based.



Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall, on the 14thday of October 1958, become the decision of the Commission;and, accordingly:

It is oTdered That respondent Rich' , Inc. , a corporation , shall

within sixty (60) days after service upon it of this order , file

with the Commission a report in writing, setting forth in detailthe manner and form in whieh it has complied with the orderto cease and desist.

NEVIUS BROTHERS, INC. , ET AL. 561

Decision

IN THE MATTER OF

NEVIUS BROTHERS, INC., ET AL.


Docket 6957. Complaint , Nov. 1957-Dec' is' ion , Oct. , 1958

Consent order requiring a furrier in Trenton , N. , to cease violating the FurProducts Labeling Act by tagging fur products with fictitious prices andfailing to comply with. other labeling and invoicing requirements; byadvertising in newspapers which failed to disclose that certain productscontained artificially colored fur and to set out other required informationrepresented sale prices as reduced from regular prices which were in factfictitious, and misrepresented percentage reductions; and by failing tokeep adequate records as a basis for such pricing claims.

John T. Walker Esq. , in support of the complaint.Scott Sca?nmell. 11. , Esq., of Trenton , N. , for respondents.

INITIAL DECISION BY JAMES A. PURCELL HEARING EXAMINER

The complaint in this proceeding, issued November 25, 1957,

charges the respondents above-named with violation of the pro-visions of the Federal Trade Commission Act, the Fur ProductsLabeling Act and the Rules and Regulations promulgated underthe last-named Act, in connection with the sale , advertising andoffering for sale , transportation and distribution, shipping and

receiving in commerce , of fur and fur products , as the designa-tions "commerce

" "

fur" and "fur products" are defined in theFur Products Labeling Act.

After issuance and service of said complaint, respondentsNevius Brothers , Inc. , and George Nevius entered into an agree-ment for a consent order with counsel in support of the com-

plaint, disposing of all of the issues in this proceeding as them , which agreelnent was duly approved by the director and

assistant director of the Bureau of Litigation. It was provided

in said agreement that the signing thereof is for settlement pur-poses only and does not constitute an admission by the signatory

respondents that they have violated the law as alleged in thecomplaint.

Attached to said agreement, and forming an integral part ofsame for the purposes of the record , are two affidavits:

(1) that of respondent George Nevius which recites in sub-


Decision 55 F.stance that he is president of the corporate respondent but thathis primary responsibility is the management of corporate re-spondent' s store in New Brunswick, N. , (the alleged violationshaving taken place in corporate respondent's store in the cityof Trenton , N. ), wherefore affiant-respondent had no knowledge,and was not aware , of the alleged violations; and

(2) that of the named respondent, Harvey C. Voorhees , whichrecites in substance that his correct name is Harvey C. Voorhees,(incorrectly referred to in the complaint as Harvey :M. Voorhees),and that his duties consist of managing and controlling the ac-counts payable and receivable of the corporate respondent with-out control , responsibility or managerial direction of the corporateactivities forming the basis of the charges of the complaint.

On the basis of the foregoing, and counsel in support of thecomplaint conceding there is no available evidence to contravenethe averments set forth in said affidavits, it was agreed that thecomplaint shall be dismissed as to George Nevius individually,(but not as an officer of the corporate respondent), and shallalso be dismissed as to Harvey C. V oOl"hees , both as an individualand as an officer of said corporate respondent, all of \vhich accomplished by the order hereto attached and as in said agree-ment contained.

By the terms of said agreement, the signatory respondentsadmitted all of the jurisdictional allegations of the complaintand agreed that the record herein may be taken as though theCommission had made findings of jurisdictional facts in accord-ance with such allegations. By said agreement the parties ex-pressly \vaived a hearing before the hearing exan1inel" or theCommission , the making of findings of fact or conclusions oflaw by the hearing examiner or the Commission, the filing ofexceptions and oral argument before the Commission , and allfurther and other procedure before the hearing examiner and theCommission to \vhich respondents may be entitled under theFederal Trade Commission Act or the Rules of Practice of theCommission.

By said agreement the signatory respondents further agreedthat the order to eease and desist issued in accordance \vith saidagreement shall have the same force and effect as if made after afull hearing, presentation of evidence and findings and conclusionsthereon , and specifically waived any and all right power orprivilege to challenge or contest the validity of such order.

It was further provided that said agreement, together with the


561 Order

complaint, shall constitute the entire record herein; that the com-plaint may be used in construing the terms of the order issuedpursuant to said agreement and that the said order may altered , lllodified or set aside in the manner provided for otherorders of the Commission.

Said agreement recites that respondent Nevius Brothers, Inc.trading as N evius- V oOl'hees , and other names, is a corporationexisting and doing business under and by virtue of the laws ofthe State of New Jersey with its office and principal place ofbusiness located at 131-135 East State Street, (inadvertentlydesignated in the complaint as 131-135 State Street), in thecity of Trenton , State of N.

Respondent George Nevius is president of said corporate re-spondent and has the same address as said corporate respondent.

The hearing examiner has considered such agreement and theorder therein contained, and , it appearing that said agreementand order provides for an appropriate disposition of this proceed-ing, the same is hereby accepted and , without further notice torespondents, is ordered filed upon becoming part of the Commis-sion s decision in accordance with Sections 3.21 and 3,25 of theRules of Practice , and in consonance vvith the terms of said agree-ment, the hearing examiner finds that the Federal Trade Commis-sion has jurisdiction of the subject matter of this proceeding

and of the respondents named herein; that this proceeding in the interest of the public , and issues the following order:

ORDER

It is oTde1'ecl That respondents , Nevius Brothers, Inc., a cor-poration , trading under the name of Nevius-Voorhees, or underany other name , and its officers (excepting Harvey C. Voorheesassistant treasurer), and George Nevius, as president of saidcorporation, and respondents' representatives, agents, and em-

ployees, directly or through any corporate or other device inconnection with the introduction into commerce, or the sale,

advertising, offering for sale, transportation or distribution offur products in comlllerce, or in connection ,vith the sale, ad-vertising, offering for sale , transportation or distribution of furproducts which are made, in whole or in part, of fur which hasbeen shipped and received in commerce, as "commerce furand "fur product" are defined in the Fur Products Labeling Actdo forthwith cease and desist from:


Order 55 F.

A. Misbranding fur products by:1. Representing on labels affixed to the fur products or in any

other manner , that certain amounts are the regular and usualprices of fur products when such anlounts are in excess of theprices at which respondents usually and customarily sell suchproducts in the recent regular course of their business.

2. Failing to affix labels to fur products showing:(a) The name or names of the animal or animals producing




(d) That the fur product is composed , in whole or in sub-stantial part, of paws , tails , bellies , or \vaste fur, when such is thefact;

(e) The name , or other identifieation issued and registered bythe Commission , of one or more persons who manufactured such

fur product for introduction into conlmerce, introduced it intocommerce , sold it in commerce , advertised or offered it for saleor transported or distributed it in commerce;


(g) The item number or nlark assigned to a fur product.3. Setting forth on labels affixed to fur products:(a) Information required under Section 4 (2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations promulgatedthereunder in handwriting;


ucts Labeling Act and the Rules and Regulations promulgatedthereunder mingled with nonrequired information.

B. Falsely or deceptively invoicing fur products by :1. Failing to furnish invoices to purchasers of fur products





561 Order


(c) That the fur product contains or is composed of bleacheddyed , or otherwise artificially colored fur, when such is the fact;

(d) That the fur product is composed, in whole or in sub-stantial part, of paws, tails, bellies, or waste fur, when such isthe fact;

(e) The name and address of the person issuing such invoice;(f) The name of the country of origin of any imported fur

contained in a fur product;(g) The item number or mark assigned to a fur product.C. Falsely or deceptively advertising fur products through the

use of any advertisement, representation, public announcementor notice which is intended to aid promote or assist, directlyor indirectly, in the sale or offering for sale of fur productsand which:

1. Fails to disclose that the fur product contains or is com-posed of bleached, dyed, or otherwise artificially colored furwhen such is the fact;

2. Fails to set out all the information required under Section5 (a) of the Fur Products Labeling Act and the Rules and Regu-lations ~romulgated thereunder in close proximity with each otherand in type of equal size and conspicuousness.

3. Represents directly or by implication that the regular orusual price of any fur product is any amount which is in excessof the price at which such products were sold in the recentregular course of their business;

4. Represents directly or by implication through percentagesavings claims that the regular or usual retail prices charged byrespondents for fur products in the recent regular course of

their business are reduced in direct proportion to the amountsof savings stated , when contrary to fact.D. Making price claims or representations in advertisements

respecting reduced prices, comparative prices or percentage sav-ings, unless there is maintained by respondents , full and adequaterecords disclosing the facts upon which such claims and repre-sentations are based.

It is fu1'ther ordered That the complaint be, and hereby isdismissed as to respondent George Nevius, individually, and asto Harvey C. V oOl"hees, individually and as an officer of the cor-pOl"' ate respondent Nevius Brothers , Inc.


Decision 55 F.


Pursuant to Section 3.21 of the Commission s Rules of Practice,the initial decision of the hearing examiner shall on the 15thday of October 1958 become the decision of the Commission;and , accordingly:

It is orde1'ecl That the respondents Nevius Brothers, Inc., a

corporation , and George Nevius , as president of said corporationshall , \\rithin sixty (60) days after service upon them of this orderfile with the Commission a report in writing setting forth indetail the manner and form in which they have complied withthe order to cease and desist.

REUBEN POMERANTZ JEWELRY CO. INC. , ET AL. 567

Findings

IN THE l\IA TTER OF

REUBEN POMERANTZ JEWELRY CO., INC. , ET AL.


Docket 686.9. Conlplahlt , A 1/g. 20, 1957-,-Decision, Oct. , 1958

Order requiring manufacturers in New York City to cease representing falsely,by stamping "14K" on gold spiral chain bracelets and chokers manufac-tured from gold wire of only 13 % karat fineness , that such products wereof 14 karat fineness.

Mr. S. F. House supporting the complaint.MT. Geo'rge Landesman of New York City, for respondents.


PRELIMINARY STATEMENT

Reuben Pomerantz Jewelry Co. , Inc. Reuben Pornerantz , andHyman Pomerantz , individually and as officers of said corpora-tion, hereinafter referred to as respondents, are charged withviolating the provisions of the Federal Trade Commission Actby misrepresenting the gold content of gold spiral chain braeeletsand chokers 'which they manufacture sell and distribute tojobbers and retailers for resale to the general public.

The complaint alleges that respondents stamp the phrase14K" on their gold spiral chain bracelets and chokers which

in fact, are manufactured from gold of less than 14 carat fineness.Respondents admitted some and denied other allegations of thecomplaint and hearings thereon have been completed. Proposedfindings of fact, conclusions and proposed order have been sub-mitted by respective counsel. All findings of fact and conclusionsof law proposed by respective counsel not hereinafter specificallyfound or concluded are rejected. Upon the basis of the entirerecord , the hearing examiner Tnakes the following findings offact, conclusions , and issues the following order:

FINDINGS OF FACT

1. The respondent Reuben Pomerantz J e\velry Co. , Inc., is acorporation organized, existing and doing business under and byvirtue of the laws of the State of New York with its, office andprincipal place of business at 800 Eighth Avenue New York


Findings 55 F.

Y. Individual respondents Reuben Pomerantz and HymanPomerantz are the president and secretary-treasurer , respectively,of said corporate respondent; they formulate , direct and controlthe policies , acts and practices of said corporate respondent. Saidindividual respondents have their office at the same place as thecorporate respondent.

2. Respondents are now, and for some time last past havebeen engaged in the business of manufacturing, selling, and dis-tributing gold spiral chain bracelets and chokers , to distributorsjobbers and retailers for resale to the general public. In thecourse and conduct of their business respondents are in directand substantial competition with other corporations, firms andindividuals engaged in the distribution and sale, in commerceof gold jewelry including spiral chain bracelets and chokers.

3. In the course and conduct of their business, respondents

now cause and for some time last past have caused their saidbracelets and chokers

, '

when sold, to be transported from theirplace of business in the State of Nevl York to distributors andjobbers , located in various other States of the United Statesfor resale to the general public. Respondents maintain , and atall times mentioned herein have maintained , a substantial courseof trade in said products in commerce, as "commerce" is definedin the Federal Trade Commission Act, between and among thevarious States of the United States.

4. In the course and conduct of their business and for the

purpose of inducing the purchase of said products respondentshave sold and distributed and do 110'V sell and distribute, in COlll-

merce , as aforesaid , spiral chain bracelets and chokers with thephrase 14K" appearing thereon. In truth and in fact said prod-

ucts are not manufactured from gold of 14 carat fineness, butare manufactured from gold of substantially less than 14 caratfineness, to wit 131 1~ earat fineness.

5. The practice of respondents, as aforesaid , in manufactur-ing, selling and distributing the above described jewelry in com-merce with the phrase "141(" appearing thereon , has had andno'v has the tendency and capacity to mislead and deceive asubstantial portion of the purchasing public into the false anderroneous belief that said products are manufactured from goldof 14 carat fineness and into the purchase of substantial qllan-tities of said products because of such mistaken and erroneousbelief.

6. Although the respondents admit, and the hearing examiner

REUBEN POMERANTZ JEWELRY CO. , INC. , ET AL. 569

567 Findings

finds, that the spiral chain bracelets and chokers which respond-ents manufacture, sell and distribute are stamped with the phrase14K" imprinted thereon , whereas, said products are manufac-

tured from gold wire of a fineness of only 131j8 carat fineness

respondents contend that, since they sell and distribute theirproducts to distributors, jobbers and retailers who are cognizantthat said products contain gold of a fineness of only 131j8 carat

respondents have not deceived anyone.7. Respondents also contend that there is no privity between

respondents and the purchasing public and there is no fraud ordeception in the sale of said products to department stores andother wholesale outlets by reason of the fact that the actualamount of gold contained in said products, to wit 131ja caratis known to said department stores and wholesalers.8. The circumstance that respondents do not sell their prod-

ucts direct to the general public does not relieve respondents ofresponsibility in falsely and deceptively stamping their products.The stamping of "14K" on their products when, in truth and infact, said products actually contain gold of a fineness of only131ja carat, is an unfair n1ethod of competition as against manu-facturers of spiral chain bracelets and chokers who stamp theirproducts truthfully. \\Then misstamped chain bracelets and chokersattract customers by means of fraud which the false stampingperpetuates, trade is diverted from the producer of truthfullymarked bracelets and chokers. In C. v. W1~nsted H osieTY, 258.

S. 483 , the Supreme Court stated "that a person is a wrongdoerwho so furnishes another with the means of consummating thefraud has long been a part of the law of unfair competition." Nor

does the practice cease to be unfair because the falsity of the

manufacturers ' representation is so "veIl known to the trade thatdealers , as distinguished from consumers, are no longer deceived.9. The National Stamping Act (15 U. C. Sec. 294, et seq.

provides that the actual fineness of gold (shipped or transportedand delivered in "commerce

) "

shall not be less by more thanone-half of one carat than the fineness indicated by the markstamped"

:): * :):

thereon. Admittedly, respondents ' acts in know-ingly stamping chains " 14K" when they contain gold of a finenessof only 131ja carat is a violation of the above-named Act. Proofof such violations are competent evidence that they are to theprejudice and injury of the public and of competitors and con-

stitute unfair and deceptive acts and practices and unfair meth-ods of competition within the meaning of the Federal Trade


Decision 55 F.

Commission Act. Also, the circumstance , as alleged by respond-ents, that 30me manufacturers stamp their products " 14K " whenin fact, their products contain gold of a fineness of only 131carat and respondents merely followed this alleged "customno excuse or justification for respondents to violate the law.

CONCLUSIONS

10. The acts and practices of respondents, as herein foundare all to the prejudice and injury of the public and of respond-ents ' competitors and constitute unfair and deceptive acts andpractices and unfair methods of competition in cornmerce , \vithinthe intent and meaning of the Federal Trade Commission Act.

ORDER

It 1:S ordered That respondents, Reuben Pomerantz JewelryCo. , Inc. , a corporation, and its officers , and Reuben Pomerantzand Hyman Pomerantz , individually and as officers of said cor-poration , and their agents, representatives and employees, di-rectly or through any corporate or other device in connection\\lith the offering for sale, sale, or distribution of any articlescomposed in whole or in part of gold or an alloy of gold in com-merce , as "commerce" is defined in the Federal Trade Commis-sion Act , do forthwith cease and desist from:

Stamping, branding, engraving, or marking any article withany phrase or mark such as 14K , or otherwise representing di-rectly or by implication that the whole or a part of any articleis composed of gold or an alloy of gold of a designated finenessunless the article or part thereof so nlarked or represented

composed of gold of the designated fineness within the permis-sible tolerances established by the National Stamping Act (15

S. Code , Sec. 294 , et seq.


The Commission , by order issued September 23, 1958 , havingplaced this case on its own docket for review, and having con-sidered the matter , has concluded that for purposes of clarifica-tion certain nlodifications hereinafter specified should be madein the hearing examiner s initial decision herein:

AccO1'dingly, it is ordered That paragraphs 9 and 10 be deletedand the follo\ving substituted therefor as paragraph 9

9. The National Stamping Act (15 U. C. Sections 294, et

REUBEN POMERANTZ JEWELRY CO. INC., ET AL. 571

567 Deeision

seq. ) provides that the actual fineness of gold (shipped or trans-ported and delivered in 'commerce

) '

shall not be less by morethan one-half of one carat than the fineness indicated by themark stamped' * * * thereon. Admittedly, respondents' acts inknowingly stamping chains ' 14K' when they contain gold of afineness of only 131j8 carat is a violation of the above-named Act.Proof of such violations are competent evidence that they are tothe prejudice and injury of the public and of competitors and

eonstitute unfair and deceptive acts and practices and unfairmethods of competition within the meaning of the Federal TradeCommission Act. Also , the circumstance, as alleged by respond-ents, that some manufacturers stamp their products ' 14K,' whenin fact, their products contain gold of a fineness of only 131j8carat and respondents merely followed this alleged 'custom' is

no excuse or justification for respondents to violate the law.It is further oTClered That the initial decision , as so modified, and it hereby is, adopted as the decision of the Commission.It is further ordered That the respondents , Reuben Pomerantz

Jewelry Co. , Inc. , a corporation , and Reuben Pomerantz and Hy-man Pomerantz , individually and as officers of said corporationshall , within sixty (60) days after service upon them of thisorder, file with the Commission a report, in writing, setting forthin detail the manner and form in which they have compliedwith the order to cease and desist contained in the initial decisionas modified.


Complaint 55 F.

IN THE MATTER OF

F. A. GOSSE COMPANY ET AL.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATIONOF SEC. 2(c) OF THE CLAYTON ACT

Docket 7099. Complaint, M wo 958-Decision, Oct. , 1958

Consent order requiring a Seattle broker of canned salmon and other sea foodproducts , to cease making illegal brokerage payments to favored custom-ers , in violation of Section 2(c) of the Clayton Act through (1) selling atnet prices less than the amount accounted for to the packer-principals;(2) granting price reductions , a part or all of which were not chargedback to the packer-principals; and (3) taking reduced brokerage on salesinvolving price concessions.

COMPLAINT

The Federal Trade Commission , having reason to believe thatthe parties respondent named in the caption hereof, and herein-after more particularly designated and described , have been andare now violating the provisions of subsection (c) of Section 2

of the Clayton Act, as amended (U. C. Title 15 , Sec. 13), herebyissues its complaint, stating its charges with respect thereto asfollows:

PARAGRAPH 1. The respondent F. A. Gosse Company, herein-after sometimes referred to as corporate respondent, is a cor-poration organized , existing and doing business under and byvirtue of the laws of the State of \Vashington , with its principaloffice and place of business located at 1800 Exchange Building,Seattle , \Vash.

Respondent Frederick A. Gosse is an individual and is presi-dent of the corporate respondent, and owns all or substantiallyall of its capital stock As president and o\vner , he formulatesdirects and controls the acts , practices and policies of the saidcorporate respondent, including its sales and distribution polieies.

PAR. 2. Respondents , both corporate and individual, are no\vand for many years past have been engaged in the business ofselling and distributing food products , including canned salmonall of which are hereinafter sometimes referred to as food prod-ucts. Respondents distribute as primary brokers , negotiating salesfor the account of a number of their packer-principals. Respond-ents are a substantial factor in the seafood industry, particularlyin the sale and distribution of canned salmon.

F. A. GOSSE COMPANY ET AL. 573

572 Complaint

PAR. 3. Respondents sell and distribute their food productsgenerally through field brokers , located in the various marketingareas, to buyers located throughout the United States. Respond-ents have, directly or indirectly, shipped or transported , or causedsaid food products, when sold, to be shipped or transported fromthe canning plants of their various packer-principals, or fromtheir warehouses , to buyers located in various states of the UnitedStates other than the state or territory of origin of such foodproducts. Thus respondents , both corporate and individual, arenow and for the past several years have been engaged in a con-tinuous course of trade in commerce, as "commerce" is' defined inthe aforesaid Clayton Act, as amended.

PAR. 4. Respondents , both corporate and individual, are usu-ally compensated for their services in arranging for the saleand distribution of such food products by deducting a brokeragefee or commission of 5 Ie of the net sales price fron1 the proceedsin their account of sales to their packer-principals. When fieldbrokers are utilized in making the sale , they are customarily com-pensated for their services by receiving from respondents asprimary brokers a brokerage fee or commission in the amount 21j27C of the net selling price of the food products sold.

PAR. 5. In the course and conduct of their business in com-merce as primary brokers for various packer-principals , respond-ents , both corporate and individual , have made grants , allowancesor rebates in substantial amounts in lieu of brokerage, or price

concessions which reflect brokerage, to certain buyers of saidfood products, a part or all of which were not charged back totheir various packer-principals but; on the contrary, were takenfrom the brokerage earnings of respondents. In some instancesthese allowances, rebates or priee concessions made to buyerswere shared by the primary and the field broker out of theirbrokerage earnings on the particular transactions.

Among and including, but not necessarily limited to, the meth-ods or means employed by respondents in so doing are thefollowing:

(a) Selling to certain buyers at net prices which were lessthan the amount accounted for to their packer-principals.

(b) Granting to certain buyers deductions from prices, byway of allowances or rebates, a part or all of which were notcharged back to their packer-principals.

(c) Taking reduced brokerage on sales which involved priceconcessions to certain buyers.


Decision 55 F.

PAR. 6. The acts and practices of respondents , both corporateand individual , as hereinabove alleged and described, constituteviolations of the provisions of subsection (C) of Section 2 of theClayton Act, as amended (U. C. Title 15 , Sec. 13).

M1". Cecil G. Miles and MT. John J. McNally for the Commission.Jones GTey, M1' HaTgTave GaTTison of Seattle , Wash. , for

respondents.

INITIAL DECISION BY LOREN H. LAUGHLIN HEARING EXAMINER

The Federal Trade Commission (sometimes also hereinafterreferred to as the Commission) issued its complaint herein , charg-ing the above-named respondents, F. A. Gosse Company, a cor-poration, and Frederick A. Gosse, individually and as an officerof said corporation , with having violated the provisions of 82 (c)of the Clayton Act, as amended (U. C. Title 15, 913). Therespondents were duly served with process and the initial hearingcanceled pending negotiations for settlement behveen the parties.

On August 19, 1958 , there was submitted to the undersignedhearing examiner of the Commission for his consideration and

approval an "Agreement Containing Consent Order to Cease andDesist " which had been entered into by and between the re-spondents and their attorney, and Cecil G. Miles and John J.l\1cN ally, counsel supporting the complaint, under date of A gust 18 , 1958 , subject to the approval of the Bureau of Litigationof the Commission, Such agreement had been thereafter dulyapproved by that Bureau.

On due consideration of the said "Agreement Containing Ccn-sent Order to Cease and Desist " the hearing examiner findsthat said agreement, both in form and in content, is in ac-cm"dance with 93.25 of the Commission s Rules of Practice forAdjudicative Proceedings , and that, by said agreement, the par-ties have specifically agreed that:

1. Respondent F. A. Gosse Colllpany is a corporation existingand doing business under and by virtue of the lavls of the Stateof Washington , with its office and principal place of businesslocated at 1813 (formerly 1800) Exchange Building, in the cityof Seattle , State of 'Vashington,

Respondent Frederick A. Gosse is an individual and is Presi-dent of respondent corporation , with his office and principal placeof business located at 1813 (fol merly 1800) Exchange Building,in the City of Seattle , State of \\1 ashington.

2. Pursuant to the provisions of 82 (c) of the ClaYton Act, as

F. A. GOSSE COMPANY ET AL. 575

572 Decision

amended (U. , Title 15 , 913), the Federal Trade CommissionOn March 27, 1958, issued its complaint in this proceeding againstrespondents, and a true copy was thereafter duly served respondents.

3. Respondents admit all the jurisdictional facts alleged inthe complaint and agree that the record may be taken as iffindings of jurisdictional facts had been duly made in accord-ance with such allegations.

4. This agreement disposes of all of this proceeding as to allparties.

5. Respondents waive:

(a) Any further procedural steps before the hearing examinerand the Commission;

(b) The Inaking of findings of fact or conclusions of law; and(c) All of the rights they may have to challenge or contest the

validity of the order to cease and desist entered in accordancewith this agreement.

6. The record on which the initial decision and the decisionof the Commission shall be based shall consist solely of the com-plaint and this agreement.

7. This agreement shall not become a part of the official recordunless and until it becomes a part of the decision of theCommission.

8. This agreement is for settlement purposes only and doesnot constitute an admission by respondents that they have vio-lated the law as alleged in the complaint.

9. The following order to cease and desist may be entered inthis proceeding by the Commission without further notice torespondents. V\Then so entered it shall have the same force andeffect as if entered after a full hearing. It may be altered , modi-fied , or set aside in the manner provided for other orders. Thecomplaint may be used in construing the terms of the order.

Upon due consideration of the complaint filed herein and thesaid "Agreement Containing Consent Order to Cease and Desistthe latter is hereby approved , accepted and ordered filed , the samenot to become a part of the record herein , however , unless anduntil it becomes part of the decision of the Commission. Thehearing examiner finds from the complaint and the said "Agree-ment Containing Consent Order to Cease and Desist" that theCommission has jurisdiction of the subject matter of this pro-ceeding and of the persons of each of the respondents herein;that the complaint states a legal cause for complaint under the


Decision 55 F.

Clayton Act as amended , against each of the respondents both

generally and in each of the particulars alleged therein; that this

proceeding is in the interest of the public; that the following

order as proposed in said agreement is appropriate for the justdisposition of all of the issues in this proceeding as to all of theparties hereto; and that said order therefore should be, andhereby is , entered as follows:

ORDER

It is orde1' That F. A. Gosse Company, a corporation , andits officers and directors, and Frederick A. Gosse , individually andas an officer of said respondent corporation, and respondents

agents, representatives, or employees , directly or indirectly, orthrough any corporate or other device, in connection with thesale of seafood products in commerce , as "commerce" is definedin the aforesaid Clayton Act, do forthwith cease and desist from:

Paying, granting, or passing on , either directly or indirectly,to any buyer or to anyone acting for or in behalf of or subject

to the direct or indirect control of such buyer , brokerage earnedor received by respondents on sales made for their packer-prin-cipals , by allowing to buyers lower prices ,vhich reflect all orany part of such brokerage , or by granting them allowances orrebates which are in lieu of such brokerage, or by any othermethod or means.



Pursuant to Section 3. 21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 16thday of October 1958 become the decision of the Commission;

and , accordingly:It is ordered That respondents F. A. Gosse Company, a corpora-

tion , and Frederick A. Gosse , individually and as an officer of saidcorporation , shall , within sixty (60) days after service upon themof this order , file vvith the Commission a report in vl- riting, settingforth in detail the manner and form in which they have compliedwith the order to cease and desist.

ARNOLD CONSTABLE CORP. 577

Order

ARNOLD CONSTABLE CORP.

Docket 7106. Onle1', Oct. , 1958.

Order dismissing certain paragraphs of complaint, since it appeared thatrespondent, in composing the questioned advertisements , relied on advicefrom the Chief , Division of Wool and Fur Labeling, of the Commission.

This matter having been heard on the respondent's motion forrecision of the complaint insofar as it charges the respondentwith having falsely advertised the prices of certain fur productsas reductions from the prices at which said products \vere usuallysold by the respondent, in violation of Section 5 (a) (5) of theFur Products Labeling Act, and Rule 44 (a) of the Rules andRegulations promulgated thereunder

, '

Nhich motion was , on Sep-tember 12, 1958 , certified to the Commission by the hearingexaminer; and

It appearing that the ground for the motion is that the re-spondent in composing the questioned advertisements relied uponadvice contained in certain communications it had received fromthe Chief, Division of Wool and Fur Labeling, of the Commis-sion s Bureau of Investigation , copies of which communicationsare in the record as Respondent' s Exhibits 2 , 3 , and 4; and

It further appearing that \vhile the aforesaid communicationsdid not purport to construe the respondent's advertisements inrelation to the provisions of Rule 44 (a) of the Rules and Regula-tions, which Rule prohibits , among other things , the use in ad-vertising of claimed reductions from prices \vhich are, in factfictitious," such communications did clearly imply that the only

questions with respect to the propriety of the advertisements werewhether the higher prices mentioned therein were the "currentmarket prices" of the products described , the affirmative of \vhichit was stated , is required by Rule 44 (b) in support of "compara-tive prices and percentage savings" claims made in advertise-ments which do not otherwise specify the time of the comparedprices , and whether the respondent had adequate records to dis-close the fact upon which such claims were based, as requiredby Rule 44 (e) ; and

The Commission being of the opinion that \vhile the foregoingdoes not constitute a defense to any unlawful activity in whichthe respondent may have engaged , principles of equity and ordi-nary fair dealing do militate against the further prosecution of


Order 55 F. T.

the complaint insofar as it charges the respondent with the use

of fictitious pricing claims:AccO1'dingly, it is ordered That para,graphs 7 , 8 and 9 of the

complaint be, and they hereby are , dismissed , it being understoodhowever, that this action shall be 'without prejudice to the rightof the Commission to institute a new proceeding against therespondent or to take such other action as may be warranted inthe event the practices alleged to be unlawful are continued or

resumed.

WORLD ARTS AUCTION GALLERY 579

Decision

IN THE MATTER OF

LEON SEVILLA TRADING ASWORLD ARTS AUCTION GALLERY


Docket 712.4. Com,plaint, Apr. 1958-Decision, Oct. 1958

Consent order requiring a funier in San Francisco , Calif. , to cease violatingthe labeling, invoicing, and advertising requirements of the Fur ProductsLabeling Act.

1111'. John J. l'rJ cN o;lly for the Commission.;"'1'1'. Leona'/'d A. Worthington of San Francisco, Calif. , for

respondent.

INITIAL DECISION BY J. EARL Cox , HEARING EXAMINER

The complaint charges respondent with misbranding and withfalsely and deceptively invoicing and advertising certain of hisfur products , in violation of the Fur Products Labeling Act andthe Rules and Regulations promulgated thereunder , and of theFederal Trade Commission Act.

After the issuance of the complaint, respondent, his counsel,and counsel supporting the complaint entered into an agreementcontaining consent order to cease and desist, which was approvedby the director and acting assistant director of the CommissionBureau of Litigation , and thereafter transmitted to the hearingexaminer for consideration.

The agreement identifies respondent Leon Sevilla as an individ-ual trading as vVorld Arts Auction Gallery, with his office andprincipal place of business located at 314 Sutter Street, SanFrancisco, Calif.

The agreement provides , among other things , that the respond-ent admits all the jurisdictional facts alleged in the complaintand agrees that the record may be taken as if findings of juris-dictional facts had been duly made in accordance with suchallegations; that the record on which the initial decision and thedecision of the Commission shall be based shall consist solely ofthe complaint and this agreement; that the agreement shall notbecome a part of the official record unless and until it becomesa part of the decision of the CO111mission; that the complaint maybe used in construing the terms of the order agreed upon , which


Order 55 F.

may be altered , modified or set aside in the manner provided forother orders; that the agreement is for settlement purposes onlyand does not constitute an admission by respondent that he hasviolated the law as alleged in the complaint; and that the orderset forth in the agreement and hereinafter included in this de-cision shall have the same force and effect as if entered after afull hearing.

Respondent \vaives any further procedural steps before the hear-ing examiner and the Commission , the making of findings offact or conclusions of law, and all of the rights he may have tochallenge or contest the validity of the order to cease and desistentered in accordance with the agreement.

The order agreed upon fully disposes of all the issues raised inthe complaint, and adequately prohibits the acts and practicescharged therein as being in violation of the Fur Products LabelingAct and the Rules and Regulations promulgated thereunder , andof the Federal Trade Commission Act. Accordingly, the hearingexaminer finds this proceeding to be in the public interest, andaccepts the agreement containing consent order to cease anddesist as part of the record upon which this decision is based.Therefore

It is onlered That respondent Leon Sevilla , an individual, doingbusiness as World Arts Auction Gallery, or under any other tradename or names, and respondent's representatives, agents and

employees , directly or through any corporate or other device, inconnection with the introduction into commerce, or the sale , ad-

vertisement, offer for sale , transportation or distribution in com-

merce of any fur product, or in connection with the sale , ad-

vertiselnent, offer for sale , transportation , or distribution of anyfur product which is made in whole or in part of fur whieh hasbeen shipped and received in commerce, as "COmlTIerCe,

" "

furand "fur product" are defined in the Fur Products Labeling Actc1oforth\vith cease and desist from:

A. l\lisbranding fur products by:1. Setting forth on labels attached thereto fictitious prices or

any false representation as to the value of such products , eitherdirectly or by implieation ;

2. Failing to affix labels to fur products shO\ving:

(a) The name or names of the animal or animals producingthe fur or furs contained in the fur product as set forth in the


WORLD ARTS AUCTION GALLERY 581

579 Order


(c) That the fur product contains or is composed of bleacheddyed or otherwise artificially colored fur, when such is the fact;

(d) That the fur product is composed in whole or in substantialpart of paws , tails, bellies , or waste fur, when such is the fact;

(e) The name, or other identification issued and registered bythe Commission, of one or more persons who manufactured suchfur product for introduction into commerce, introduced it intocommerce , sold it in commerce , advertised or offered it for saleor transported or distributed it in commerce;


(g) The designations "used fur" and "second-hand used furwhere required by Rules 21 and 23 of the Rules and Regulations;

(h) The item number or mark assigned to a fur product;3. Setting forth on labels affixed to fur products information

required under ~4 (2) of the Fur Products Labeling Act , and theRules and Regulations promulgated thereunder mingled with non-required information;

B. Falsely or deceptively invoicing fur products by:1. Failure to furnish invoices to purchasers of fur products

showing:(a) The name or names of the aniInal or animals producing



(c) That the fur product contains or is composed of bleached,dyed , or otherwise artificially colored fur, when such is the fact;

(d) That the fur product is composed in whole or in substan-tial part of paws , tails , bellies , or waste fur , when such is the fact;

(e) The name and address of the person issuing such invoice;(f) The name of the country of origin of any imported fur

contained in a fur product;(g) The designations "used fur" and " second-hand used fur

where required by Rules 21 and 23 of the Rules and Regulations;C. Falsely or deceptively advertising fur produets through the

use of any advertisement , representation , public announcement ornotice \\'hich is intended to aid promote or assist, directly or


Decision 55 F.

indirectly, in the sale or offering for sale of fur products, andwhich:

1. Fails to disclose:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in theFur Products Name Guide and as prescribed under the Rulesand Regulations;


(c) That the fur product contains or is composed of bleached,dyed , or othen\Tise artificially colored fur, when such is the fact;

(d) The name of the country of origin of any imported furscontained in the fur product;

(e) The designations "used fur" and "secondhand used furwhere required by Rules 21 and 23 of the Rules and Regulations;

2. Represents , directly or by implication , that any of said furproducts are from sources other than the actual sources of suchproducts.


Pursuant to Section 3.21 of the Commission s Rules of Practice,the initial decision of the hearing examiner shall , on the 16thday of October 1958 , become the decision of the Commission; and,accordingly:

It is ordered That respondent Leon Sevilla , an individual , doingbusiness as World Arts Auction Gallery, shall , within sixty (60)days after service upon him of this order, file with the Com-mission a report in writing, setting forth in detail the mannerand form in which he has complied with the order to cease anddesist.

RONA Y FURS , INC., ET AL. 583

Decision

IN THE MATTER OF

RONA Y FURS, INC. , ET AL.

CONSENT ORDER , ETC.. IN REGARD TO THE ALLEGED VIOLATION OF THEFEDERAL TRADE COMMISSION AND THE FUR PRODUCTS LABELING ACTS

Docket 7155. ComplCl'int , May 1.958-Decision , Oct. 1958

Consent order requiring a furrier in Dal1as, Tex., to cease violating the

labeling, invoicing, and advertising requirements of the Fur ProductsLabeling Act.

M'/'. Brockman HOTne supporting the complaint.Respondents pro se.

INITIAL DECISION BY JOHN B. POINDEXTERHEARING EXAMINER

On May 26 , 1958 , the Federal Trade Commission issued a com-plaint charging Ronay Furs, Inc. , a corporation , and William Ivr ullen , individually and as an officer of said corporation , herein-after referred to as respondents with misbranding, falsely and

deceptively invoicing and advertising fur products in violation of

the Federal Trade Commission Act and the Fur Products LabelingAct.

After issuance and service of the complaint, the respondentsand counsel supporting the complaint entered into an agreementfor a consent order. The agreement has been approved by thedirector and acting assistant director of the Bureau of Litigation.The agreement disposes of the matters complained about.

The pertinent provisions of said agreement are as follows:Respondents admit all jurisdictional facts; the complaint may beused in construing the terms of the order; the order shall havethe same force and effect as if entered after a full hearing andthe said agreement shall not become a part of the official recordof the proceeding unless and until it becomes a part of the decisionof the Commission; the record herein shall consist solely of thecomplaint and the agreement; respondents waive the requirementthat the decision must contain a statement of findings of fact andconclusions of law; respondents waive further procedural stepsbefore the hearing examiner and the Commission , and the ordermay be altered , modified , or set aside in the manner provided bystatute for other orders; respondents ,vaive any right to challengeor contest the validity of the order entered in accordance ,vith


Order 55 F.

the agreement and the signing of said agreement is for settlementpurposes only and does not constitute an admission by respondentsthat they have violated the law as alleged in the complaint.

The undersigned hearing examiner having considered the agree-ment and proposed order and being of the opinion that the ac-ceptance thereof will be in the public interest, hereby acceptssuch agreement, makes the following jurisdictional findings , andissues the following order:


1. Respondent Ronay Furs , Inc. , is a corporation existing anddoing business under and by virtue of the laws of the State ofTexas, with its office and principal place of business located at112 South Ervay Street, Dallas , Tex.

2. Individual respondent '\Villiam C. Mullen is president of saidcorporate respondent and controls, directs, and formulates itspolicies , acts , and practices. His address is the same as that ofthe corporate respondent.


ORDER

It is ordered That respondents Ronay Furs , Inc.~ a corporationand its officers, and Willian1 C. Mullen , individually and as anofficer of said corporation, and respondents' representatives

agents and employees , directly or through any corporate or otherdevice, in connection with the introduction into commerce , or thesale , advertising, or offering for sale , in commeree , or the trans-pOl' tation or distribution in commerce, of fur products , or in con-nection with the sale , advertising, offering for sale , transportationor distribution of fur products which have been made in wholeor in part of fur which has been shipped and received in com-merce as "commerce,

" "

fur" and "fur product" are defined inthe Fur Products Labeling Act, do forthwith cease and desistfrom:

A. Misbranding fur products by:1. Failing to affix labels to fur products showing:(a) The name or names of the animal or animals producing

the fur or furs contained in the fur product as set forth in theFur Products Name Guide and as prescribed under the Rules andRegulations.

RONA Y FURS , INC., ET AL. 585

583 Order

(b) That the fur product contains or is composed of used furwhen such is the fact.

(c) That the fur product contains or is composed of bleacheddyed or otherwise artificially colored fur, when such is the fact.

(d) That the fur product is composed in whole or in substantialpart of paws , tails , bellies , or waste fur , ,vhen such is the fact.

(e) The name , or other identification issued and registered bythe Commission , of one or more persons who manufactured suchfur products for introduction into commerce, introduced it intocommerce , sold it in commerce , advertised or offered it for saleor transported or distributed it in commerce.

(f) The name of the country of origin of any imported fursused in the fur product.

2. Setting forth on labels attached to fur products:(a) Information required under Section 4 (2) of the Fur Prod-

ucts Labeling Act and the Rules and Regulations thereunder inhandwriting.


ucts Labeling Act and the Rules and Regulations thereundermingled with nonrequired information.

B. Falsely or deceptively invoicing fur products by:1. Failing to furnish invoices to purchasers of fur products



Fur Products Name Guide and as prescribed under the Rules andRegulations.

(b) That the fur product contains or is composed of used furwhen such is the fact.

(c) That the fur product contains or is composed of bleacheddyed , or otherwise artificially colored fur , when such is the fact.

(d) That the fur product is composed in whole or in sub-

stantial part of paws, tails, bellies, or waste fur , when such isthe fact.

(e) The name and address of the person issuing such invoice.(f) The name of the country of origin of any imported fur

contained in a fur product.C. Falsely or deceptively advertising fur products through the

use of any advertisement, representation , public announcementor notice which is intended to aid, promote , or assist, directly orindirectly in the sale or offering for sale of fur products, andwhich:


Decision 55 F.

1. Fails to disclose:

(a) The nan1e or names of the animal or animals producing thefur or furs contained in the fur product, as set forth in the FurProducts Name Guide , and as prescribed under the Rules and'Regulations.

(b) That the fur product contains or is composed of bleached,dyed , or otherwise artificially colored fur , when such is the fact.

2. Represents , directly or by implication , that the regular orusual price of any fur product is any amount which is in excessof the price at which respondents have usually and customarilysold such products in the recent regular course of their business.

D. Makes use of comparative pricing claims or claims thatprices are reduced from regular or usual prices unless there aremaintained by respondents full and adequate records disclosingthe facts upon which suc~ claims and representations are basedas required by Rule 44 (e) of the Rules and Regulations.


Pursuant to Section 3.21 of the Commission s Rules of Practice,the initial decision of the hearing examiner shall, on the 16thday of October 1958, become the decision of the Commission; andaccordingly,

It is o1'de1'ed That the respondents herein shall within sixty(60) days after service upon them of this order , file with theCommission a report in 'writing setting forth in detail the rnannerand form in 'which they have complied with the order to ceaseand desist.

UNITED STATES ASPHALT CORPORATION ET AL. 587

Decision

IN THE MATTER OF

UNITED STATES ASPHALT CORPORATION ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 7181. Complaint, July 1958-Dec'ision , Oct. , 1958

Consent order requiring distributors in New York City to cease misrepresent-ing the availability and price of their "Neva-Leak Asbestos Roof Coatingby advertising letters advising prospects falsely of "substantial discountsoffered on purported overages from shipments to other purchasers in aparticular locality.

Ga1'land S. Ferguson Esq., for the Commission.BTeed, Abbot MoTgan of New York, N. , for respondents.

INITIAL DECISION BY ROBERT L. PIPER, HEARING EXAMINER

The Federal Trade Commission issued its complaint against theabove-named respondents on July 11 , 1958 , charging them withhaving violated the Federal Trade Commission Act by misrep-resenting the availability and regular prices of their product.Respondents appeared by counsel and entered into an agreementdated August 25, 1958 , containing a consent order to cease anddesist, disposing of all the issues in this proceeding without hear-ing, which agreement has been duly approved by the Director ofthe Bureau of Litigation. Said agreement has been submitted tothe undersigned , heretofore duly designated to act as hearingexaminer herein , for his consideration in accordance with 93.of the Rules of Practice of the Commission.

Respondents pursuant to the aforesaid agreement, have ad-mitted all of the jurisdictional allegations of the complaint andagreed that the record may be taken as if findings of jurisdictionalfacts had been made duly in accordance with such allegations.Said agreement further provides that respondents waive all furtherprocedural steps before the hearing examiner or the Commissionincluding the making of findings of fact or conclusions of lawand the right to challenge or contest the validity of the order tocease and desist entered in accordance with such agreement. Ithas also been agreed that the record herein shall consist solelyof the complaint and said agreement, that the agreement shallnot become a part of the official record unless and until it becomesa part of the decision of the Commission , that said agreement is


Order 55 F.

for settlement purposes only and does not constitute an admissionby respondents that they have violated the law as alleged in thecomplaint, that said order to cease and desist shall have the sameforce and effect as if entered after a full hearing and may bealtered , modified , or set aside in the manner provided for otherorders , and that the complaint may be used in construing theterms of the order. .

This proceeding having now come on for final consideration onthe complaint and the aforesaid agreement containing the consentorder, and it appearing that the order and agreement cover allof the allegations of the complaint and provide for appropriatedisposition of this proceeding, the agreement is hereby acceptedand ordered filed upon this decision and said agreement becomingpart of the Commission s decision pursuant to ~S3.21 and 3.of the Rules of Practice , and the hearing examiner accordinglymakes the following findings, for jurisdictional purposes, andorder:

1. Respondent, United States Asphalt Corporation , is a corpo-ration, organized, existing and doing business under and byvirtue of the la\vs of the State of New York. Its office is locatedat 576 Fifth Avenue New York, N.Y. Individual respondentsStanley Legum and Alvin Legum are officers of said corporation.They formulate , direct and control the policies and practices ofthe corporate respondent. The address of Alvin Legum is thesame as that of the corporate respondent. The address of StanleyLegum is 418 Timothy Avenue, Norfolk, Va.

2. The Federal Trade Comn1ission has jurisdiction of the sub-

ject matter of this proceeding and of the respondents hereinabovenamed. The complaint states a cause of action against said re-spondents under the Federal Trade Commission Act, and thisproceeding is in the interest of the public.

ORDER

It is ordered That respondents United States Asphalt Corpo-ration, a corporation , and its officers, and Stanley Legum andAlvin Legum , individually and as officers of said corporate re-spondent, and respondents ' agents , representatives , and employeesdirectly or through any corporate or other device , in connectionwith the offering for sale, sale, and distribution of roofing n1a-

terial or any other products in commerce , as "commerce" is defined

UNITED STATES ASPHALT CORPORATION ET AL. 589

587 Decisio.n

by the Federal Trade Commission Act, do forthwith cease anddesist from representing directly or by implication:

1. That a certain sale of their product has been made to apurchaser in a specific locality, unless such is the fact; 2. That respondents have an overage or surplusage of their

product in a certain area as a result of a certain sale, unless suchis the fact;

3. That any amount is respondents ' regular price for a productwhen such amount is in excess of the price at which respondentssell such product in their normal and usual course of business;4. That any amount is a reduced price for a product unless it

is less than the price at which respondents sell their product intheir normal and usual course of business.


Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 16th dayof October 1958 become the decision of the Commission; andaccordingly:

It is ordered That the above-named respondents shall , withinsixty (60) days after service upon them of this order, file withthe Commission a report in writing, setting forth in detail themanner and form in which they have complied with the orderto cease and desist.


Decision 55 F.

IN THE MATTER OF

SKYE PUBLISHING COMPANY, INC., ET AL.

CONSENT ORDER. ETC., IN REGARD TO THE ALLEGED VIOLATION OFTHE FEDERAL TRADE COMMISSION ACT

Docket 7197. Complui' , July 1958-Decis'ion , Oct. 16, 1958

Consent order requiring publishers of magazines in New York City to ceaseselling reprinted publications and magazine articles without clearly dis-closing that they had been previously published.

M1'. Miclwel J. Vitale counsel supporting the complaint.

Respondents 1)1'0 se.

INITIAL DECISION BY JOHN LEWIS, HEARING EXAMINER

The Federal Trade Commission issued its complaint againstthe above-named respondents on July 18, 1958 , charging themwith the use of unfair and deceptive acts and practices and unfairmethods of competition , in commerce , in violation of the FederalTrade Commission Act, by failing to adequately disclose that cer-tain of their magazines or articles therein are reprints of earliereditions of one or more of their magazines or of articles whichhave appeared in earlier editions of such magazines. After beingserved with said complaint , respondents appeared and entered intoan agreement, dated August 29 , 1958 , containing a consent orderto cease and desist purporting to dispose of all of this proceedingas to all parties. Said agreement, which has been signed by allrespondents and by counsel supporting the co1l1plaint, and approvedby the director and acting assistant director of the CommissionBureau of Litigation , has been submitted to the above-namedhearing examiner for his consideration , in accordance ,vith Section

25 of the Commission s Rules of Practice for Adjudicative

Proceedings.Respondents pursuant to the aforesaid agreement, have ad-

mitted all the jurisdictional facts alleged in the complaint andagreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations.Said agreement further provides that respondents ,;vaive anyfurther procedural steps before the hearing examiner and the Com-

mission , the making of findings of fact or conclusions of law andall of the rights they may have to challenge or contest the validityof the order to cease and desist entered in accordance with

SKYE PUBLISHING COMPANY , INC. , ET AL. 591

590 Order

such agreement. It has been agreed that the order to cease anddesist issued in accordance with said agreement shall have thesame force and effect as if entered after a full hearing and thatthe complaint may be used in construing the tern1S of said order.

It has also been agreed that the record herein shall consist solelyof the complaint and said agreement, and that said agreement isfor settlement purposes only and does not constitute an admissionby respondents that they have violated the law as alleged in thecomplaint.

This proceeding having now come on for final consideration the complaint and the aforesaid agreement containing consentorder, and it appearing that the order provided for in said agree-ment covers all of the allegations of the complaint and provides

for an appropriate disposition of this proceeding as to all partiessaid agreement is hereby accepted and is ordered filed upon thisdecision s becoming the decision of the Commission pursuant toSections 3.21 and 3. 25 of the Commission s Rules of Practice for

Adjudicative Proceedings, and the hearing examiner , accordingly,makes the following jurisdictional findings and order:

1. Respondent, Skye Publishing Company, Inc. , is a corporationorganized , existing and doing business under and by virtue of thelaws of the State of New York , with its office and principal placeof business located at 16 East 55th Street , New York , N.Y.

Individual respondents Arthur Bernhard , Alan Sills , and RobertSalomon are president, vice-president and secretary, respeCtively,of the corporate respondent, and have the same address as thatof the corporate respondent.

2. The Federal Trade Commission has jurisdiction of the sub-

ject matter of this proceeding and of the respondents hereinabove

named. The complaint states a cause of action against said re-spondents under the Federal Trade Commission Act, and thisproceeding is in the interest of the public.

ORDER

It is ordered That respondent Skye Publishing Company, Inc.a corporation, and its officers , and Arthur Bernhard , Alan Sil1s

and Robert Salomon , individually and as officers of said corpora-

tion, and respondents' representatives, agents and employeesdirectly or through any corporate or other device, in connectionwith the offering for sale , sale or distribution of magazines or anyother publications in commerce , as "commerce" is defined in the


Decision 55 F.

Federal Trade Commission Act, do forthwith cease and desistfrom:

1. Offering for sale or selling any reprinted 11lagazine or otherpublication , unless the word "reprinted" or any other word orphrase stating with equal clarity that said magazine or otherpublication is a reprint, appears in clear, conspicuous type uponthe front cover and upon the title page of the magazine or otherpublication , either in connection with the name of the magazineor in another position adapted readily to attract the attention

of a prospective purchaser.2. Offering for sale or selling any magazine or other publication

which contains reprints of articles previously published , unless astatement which reveals that the article has been previouslypublished, appears in clear , conspicuous type upon the title pageof the magazine or other publication and upon the page where thearticle appears or in another position adapted readily to attractthe attention of a prospective purchaser.


Pursuant to Section 3.21 of the Commission s Rules of Practice,the initial decision of the hearing examiner shall , on the 16th dayof October 1958 become the decision of the Commission; and

accordingly:It is oTclel' That the respondents herein shall with sixty (60)

days after service upon them of this order , file with the Com-mission a report in writing setting forth in detail the manner andform in which they have complied with the order to cease and

desist.

GUILD MOCCASIN ET AL. 593

Decision

IN THE l\lATTER OF

GUILD MOCCASIN ET AL.


Docket 6860. Complaint , Aug. 1957J Decision, Oct. 17, 1958

Consent order requiring manufacturers in Los Angeles , Calif. , to cease repre-senting factory-made moccasins and handbags falsely as Indian productsand , through use of the word "Guild" in their corporate and trade namesthat their business was an association of Indian craftsmen.

1I-1.r. Kent P. Kratz for the Commission.MT. Casirnir A. NHlcetta. of Los Angeles , Calif. , for respondents.

INITIAL DECISION BY J. EARL Cox , HEARING EXAMINER

The amended complaint , '\vhich was substituted for the originalcomplaint by order of the hearing examiner, alleges that respond-ents have used , in various advertising media, certain false , mis-leading and deceptive' statements , symbols and depictionsrepresenting directly and by implicatioi1 that their moccasinshandbags and other related items were Indian products made byIndians.

The amended complaint further alleges that respondents , by theuse of the word "Guild" as part of the corporate name and ofthe names under which they have traded , and in their advertising,have falsely represented that their business is an association or

guild.The amended complaint charges that the use by respondents

of said false and misleading representations constitutes unfairand deceptive acts and practices and unfair methods of competi-tion in commerce , in violation of the Federal Trade CommissionAct (15 D. C. 41, et seq. ; more specifically, 15 U. C. 45).

After the issuance of the amended complaint , respondents , theircounsel , and eoullsel supporting the complaint entered into anagreement containing consent order to cease and desist whichwas approved by the director and an assistant director of theCommission s Bureau of Litigation, and thereafter transmitted

to the Hearing Examiner for consideration.The agreement identifies respondents as follo\vs

1 Amended Nov. 8, 1957.


Decision 55 F.

Respondent Guild Moccasin is a California corporation , with itsoffice and principal place of business located at 219-227 SouthCentral A venue , Los Angeles , Calif. This corporation also tradesunder the name Guild Moccasin Corporation.

Individual respondent Lewis Podus is , and has been for severalyears last past, president of the corporate respondent, and hasand has had, complete or a substantial degree of control anddirection over the affairs, policies, acts and practices of saidcorporation. He is also , and has been for several years last pasta partner trading under the name of Podus of California.

Individual respondent Morris Podus was for several years , im-T11ediately prior to January 1956 , an officer of respondent corpo-ration. During that period he had substantial control and directionover the affairs, policies , acts and practices of said corporation.Also, for several years immediately prior to April 1954 , he wasa partner trading under the name of Podus of California.

Individual respondent William Podus is, and has been forseveral years last past, a partner trading under the name of Podusof California. He is not now nor has he ever been an officer ofcorporate respondent Guild IVloccasin.

Individual respondent Henry Podus was for several years, im-mediately prior to April 1955 , a partner trading under the nameof Podus of California.

For the purposes of the agreement, the address of individualrespondents is the same as that of the corporate respondent.

The agreement provides , among other things , that respondentsadmit all the jurisdictional facts alleged in the amended com-plaint and agree that the record may be taken as if findings ofjurisdictional facts had been duly made in accordance with suchallegations; that the record on which the initial decision and thedecision of the Commission shall be based shall consist solely ofthe amended complaint and this agreement; that the agreementshall not become a part of the official record unless and until itbecOlnes a part of the decision of the Commission; that the amendedcomplaint may be used in construing the terms of the orderagreed upon

, '

which may be altered, modified or set aside in theDianner provided for other orders; that the agreement is forsettlement purposes only and does not constitute an admission byrespondents that they have violated the law as alleged in theamended cDl11plaint; and that the order set forth in the agreementand hereinafter included in this decision shall have the same forceand effect as if entered after a full hearing.

GUILD MOCCASIN ET AL. 595

593 Decision

The agreement states that the term "Indian" as used in theamended complaint and in the order hereinafter set forth refersto the American Indian.

Respondents waive any further procedural steps before the hear-ing examiner and the Commission , the mak~ng of findings of factor conclusions of law, and all of the rights they 111ay have challenge or contest the validity of the order to cease and desistentered in accordance with the agreement.

The order agreed upon fully disposes of all1he issues raised inthe amended complaint, and adequately prohibits the acts andpractices charged therein as being in violation of the FederalTrade Commission Act. Accordingly, the hearing examiner findsthis proceeding to be in the public interest, and accepts the agree-ment containing consent order to cease and desist as part of therecord upon which this decision is based. Therefore

It is ordered That Guild Moccasin , a corporation, its officers

and Lewis Pod us , individually, as an officer of Guild Moccasinand as a partner trading under the name Pocius of CalifOl'nia , ortrading under any other name , Morris Pod us , individually and asa former officer of Guild Moccasin and as a former partnertrading under the name Pocius of California, or trading under anyother name , and William Podus and Henry Podus , individually andas partners or forn1er partners trading under the name Podusof California, or trading under any other name, respondentsagents, representatives and employees, directly or through anycorporate or other device , in connection \vith the offering for salesale or distribution in commerce, as "commerce" is defined in theFederal Trade Commission Act, of moccasins , handbags, or anyother similar or related products , do forthwith cease and desistfrom:

(a) Representing, through the use of tribal or Indian namesderivations of Indian names , Indian symbols or Indian illustra-tions, or in any manner, directly or by implication, that their

products are Indian products or Indian made;(b) Representing, through use of the word "Guild " or other-

wise, that their products are products of a Guild , or that theirbusiness is anything other than a commercial enterprise organizedfor profit; provided, ho,vever , that this shall not be construed asproscribing use of the word "Guild" as part of the name " GuildMoccasin Corporation" so long as the v'lord " Guild" is of the SaIne

type as, and is given no greater prominence than , the other wordsin said name and the said name , wherever used , is accompanied


Decision 55 F.

by a clear disclosure that the products are machine made orfactory made.

It is further o1'de'J'ed That the complaint hereby be and isdismissed as to William Podus as a former officer of GuildJ\rloccasin.


Pursuant to Section 3.21 of the Commission s Rules of Practicethe initial decision of the hearing examiner shall , on the 17th dayof October 1958 become the decision of the Commission; and

accordingly:It is ordered That the above-named respondents except William

Podus as a former officer of Guild Moccasin shall, within sixty(60) days after service upon them of this order, file with theCommission a report in writing, setting forth in detail the mannerand form in which they have complied with the order to cease

and desist.

A TLAS ENTERPRISES , INC. , ET AL. 597

Decision

IN THE MATTER OF

ATLAS ENTERPRISES, INC. , ET AL.


Docket 7122. Complaint , Ap1" 1958-Decision, Oct. 17, 1958

Consent order requiring sellers in Hopkins , Minn. , of vending machines forcigarettes and other products, to purchasers including disabled , retired,and inexperienced individuals , to cease making, in newspaper advertisingand by their agents, purported offers of employment to develop leads forsales; and to cease representing falsely the net profits to be- expected bypurchasers , and help given in locating and securing profitable locationsdisposing of machines for dissatisfied customers , etc.

Mr. B?'ocknw,n Horne supporting the complaint.l'rfr. Eugene C. lVann of New Prague, Minn. , for respondents.

INITIAL DECISION BY JOSEPH CALLA WAY HEARING EXAMINER

The Federal Trade Commission issued its complaint against theabove-named respondents on April 16, 1958 , charging them withhaving violated the Federal Trade Commission Act as set forth insaid complaint.

After being served with the complaint respondents entered intoan agreement , dated August 20 , 1958 , containing a consent orderto cease and desist, disposing of all the issues in this proceedingwithout hearing, which agreement has been duly approved by thedirector and acting assistant director of the Bureau of Litigation.Said agreement has been submitted to the undersigned , heretoforeduly designated to act as hearing examiner herein , for his con-sideration in accordance with Section 3.25 of the Rules of Practiceof the Commission.

Respondents pursuant to the aforesaid agreement, have ad-mitted all of the jurisdictional allegations of the complaint andagreed that the record may be taken as if findings of j urisdic-tional facts had been made duly in accordance with such allega-tions. Said agreement further provides that respondents waive

all further procedural steps before the hearing examiner or theCommission , including the making of findings of fact or conclu-sions of law and the right to challenge or contest the validityof the order to cease and desist entered in accordance with suchagreement. It has also been agreed that the record herein shall


Order 55 F.

consist solely of the complaint and said agreement, that the agree-ment shall not become a part of the official record unless anduntil it becomes a part of the decision of the Commission , thatsaid agreement is for settlement purposes only and does notconstitute an admission by respondents that they have violatedthe law as alleged in the complaint, that said order to cease anddesist shall have the same force and effect as if entered after a fullhearing and may be altered , modified , or set aside in the mannerprovided for other orders , and that the complaint may be used inconstruing the terms of the order.

This proceeding having now con1e on for final consideration onthe complaint and the aforesaid agreement containing the consentorder , and it appearing that the order and agreement cover allof the allegations of the complaint and provide for appropriatedisposition of this proceeding, the agreement is hereby acceptedand ordered filed upon this decision and said agreement becomingpart of the Commission s decision pursuant to Sections 3.21 and25 of the Rules of Practice, and the hearing examiner accord-

ingly makes the following findings, for jurisdictional purposes,and order;

1. Respondent Atlas Enterprises , Inc. , is a corporation exist-ing and doing business under and by virtue of the laws of theState of Minnesota , with its office and principal place of businesslocated at 420 East Excelsior Boulevard, Hopkins, IVlinn. It some-times trades as G. & E. Placement Service and as D.A. V. Dis-tributors , Inc.

2. Individual respondents Gil R. Zaun and Edward R. Zaun,Sr. , are president and vice-president, respectively, of said cor-portion, and they formulate , direct and control its policies, actsand practices. Their business address is the same as that of thecorporate respondent, and their home addresses are: Gil R. Zaun1837 Edgewood Avenue, l\1inneapolis, Minn., and Edward Zaun , Sr., 1600 Hillsboro South , St. Louis Park , IVlinn.

3. The Federal Trade Commission has jurisdiction of the sub-ject matter or this proceeding and of the respondents hereinabovenamed. The complaint states a cause of action against said re-spondents under the Federal Trade Commission Act, and thisproceeding is in the interest of the public.

ORDER

It is ordered That respondents Atlas Enterprises , Inc. , a cor-

poration, and its officers , and Gil R. Zaun and Edward R. Zaun

A TLAS ENTERPRISES, INC. , ET AL. 599

597 Decision

Sr. , individually and as officers of said corporation , and respond-ents ' agents , representatives and employees , directly or throughany corporate or other device, in connection with the offering forsale, sale or distribution of vending machines, in commerce, ascommerce" is defined in the Federal Trade Commission Act, do

forthwith cease and desist from representing, directly or implication:

1. That any offer is an offer of employment when, in factthe real purpose is to obtain purchasers of their machines.2. That the purchase price of respondents' machines is se-

cured, other than by the machines themselves.3. That net profits in any specific amount will be realized by a

purchaser of such machines, unless based upon known profitswhich are customarily earned by the operator of vending ma-chines in the locality of the purchaser, taking into considerationthe experience of the purchaser in operating vending machinesand the character of locations to be secured by respondents.

4. That surveys have been made to determine locations whichwould prove profitable for the installation of such machines.

5. That profitable locations will be secured for a purchasermachines.

6. That, should a location for a purchaser s machine prove tobe unprofitable , said machine will be relocated by respondents.

7. That locations secured will be '\vithin a reasonable distanceof the purchaser.

8. That no selling or soliciting is required of the purchaserin the operation of such machines.

9. That purchased machines will be delivered without unduedelay.

10. That a satisfactory credit-rating, employment stability orcar ownership is required before the machines will be sold.

11. That the business of operating cigarette or any other vend-ing machines is a stable one, or remains profitable during adepression , under all circumstances and conditions.

12. That respondents will resell or otherwise dispose of themachines sold by them in the event the purchaser becomes dis-satisfied with the profit derived therefrom.

DECISION OF THE COMMISSION AND ORDER TO FILEREPORT OF CO11PLIANCE

The Commission having considered the hearing examinerinitial decision herein , filed September 2 , 1958 , wherein the hear-


Decision 55 F.

ing examiner accepted an agreement containing a consent orderto cease and desist theretofore executed by the respondents andcounsel in support of the complaint and entered his order in con-formity therewith; and

It appearing that through inadvertenee said initial decisionrecites that the complaint states a cause of action against therespondents under the Fur Products Labeling Act as well asunder the Federal Trade Commission Act; and

The Commission being of the opinion that this clerical errorshould be corrected:

It is ordered That the initial decision be, and it hereby ismodified by striking from paragraph "3" of the findings, for juris-dictional purposes, the words "Fur Products Labeling Act andthe,

It is further ordered That the initial decision , as so modifiedshall , on the 17th day of October 1958 become the decision ofthe Commission.

It is fuTther oTdered That the respondents , Atlas Enterprises,Inc. , a corporation , and Gil R. Zaun and Ed\vard R. Zaun , Sr.

individually and as officers of said corporation , shall , within sixty(60) days after service upon them of this decision , file with theCommission , a report, in writing, setting forth in detail the man-ner and form in which they have complied with the order con-tained in the aforesaid initial decision.

Documents

, for The€¦ · Respondent Nashua Corporation (erroneously named in the complaint as a Massachusetts corporation and member of respond-ent The Gummed Industries Association, Inc.)