Marx Finstone

Text (OCR of the scan at left; may contain errors)

COMPLAINT IN THE l\IATTER OF THE ALLEGED VIOLATION OF SECTION II OF AN ACT OF CONGRESS APPROVED SEPTEl\IBER 26, 19H, f Docket 663-January 7, 1922.

SYLLABUS.

Where an individual engaged ln the manufacture and sale of cheap fountain pens and of lndlvldu.al containers therefor, sold Mid pens together with containers bearing the legend " Price $1.50 " or " Price $3.00," the prices shown being fictitious and exaggerated; with tb9 elrect ot misleading purchasers and the general public into believing said prices to be the usual retail prices, and of enabling, encouraging and aldlng dealers to defraud the public by obtaining excessive prices, and, by selling at less than the figure Indicated, to mislead and deceive purchases into believing that a higher grade of pen was beln,g sold at a reduced price: Held, That such mislabeling, or misrepresentation of price, under the circumstances set forth, constituted an unfair metl10d of competition. AMENDED COMPLAINT.

The Federal Trad~ Commission, having reason to believe from a preliminary investigation made by it, that Marx Finstone has been and is using unfair methods of competition in violation of the provisions of Section 5 of an Act of Congress approved September 26, 1914, entitled, "An Act. to create a Federal Trade Commission, to define it powers and duties, and for other purposes," and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this amended complaint, stating its charges in that respect on information and belief as follows: PARAGRAPH 1. That respondent is engaged in the business of manufacturing and selling fountain pens with principal place of business at New York, N. Y., and causes pens sold by him to be transported to the purchasers thereof, from the State of New York, through and into various other States of the United States, and into foreign countries, and carries on such business in direct active competition with other persons, partnerships and corporations similarly engaged. PAR. 2. That respondent in the course of his business, as described in Paragraph One hereof, sells at wholesale fountain pens manufactured by him, which pens he packs singly in containers upon which he conspicuously prints what purport to be proposed resale prices, but which prices are false, fictitious and misleading in that such prices are greatly in excess of the prices at which respondent 111213"-23-VOL 4-12 164 FEDERAL TRADE COMMISSION DECISIONS. Findings. 4F.T.C.

and his vendees contemplate that said pens will be resold, and are greatly in excess of the actual prices at which such pens sell in the usual course of retail trade; and such pens are sold by respondent, packed in the containers marked as~aforesaid, with full knowledge that such marks are to be used for the purpose of misleading and deceiving the purchasing public and inducing the public to purchase said pens, when offered for sale at prices substantially below those printed on said containers, upon the mistaken belief that said pens are being sold at a greatly reduced price; that among pens so sold by respondent, at prices ranging from 7¢ to 25¢ each are pens placed in containers upon which the respondent prints "Price 1.50" and " Price $3.00," and that in selling the pens in containers so marked the respondent comes in direct competition with other manufacturers of and dealers in pens who do not mark their product with such false, fictitious and misleading price marks, and the said respondent by the means aforesaid aids, abets and assists his customers to whom he sells his pens in containers so marked, in using unfair methods of competition against others similarly engaged, but who do not sell their pens in containers marked with such false, fictitious and misleading price marks.

PAR. 3. That by reason of the facts recited, the respondent has been using an unfair method of competition in commerce within the intent and meaning of Section 5 of an Act of Congress, entitled, "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO THE FACTS, AND ORDER. Pursuant to the provisions of an Act of Congress approved September 26, 1914, the Federal Trade Commission issued and served a complaint and an amended complaint upon the respondent, Marx Finstone, charging him with the use of unfair methods of competition in commerce in violation of the provisions of said Act. Respondent having entered his appearance and filed his answer herein, admitting that certain of the methods and things alleged in said complaint are true in the manner and form therein set forth, and having made, executed and filed an agreed statement of facts in which it is stipulated and agreed by the respondent that the Federal Trade Commission shall take such agreed statement of facts as the facts in this case and in lieu of testimony, and proceed forthwith with such agreed statement of facts to make its findings as to the facts and such order as it may deem proper to enter therein, without the introduction of testimony or the presentation of argument in sup- MARX FINSTONE. 165 163 Findings. port of same, and the Federal Trade Commission being now fully advised in the premises makes this its findings as to the facts and conclusion.

FINDINGS AS TO THE FACTS.

PARAGRAPH 1. That respondent, Marx Finstone, is engaged in the business of manufacturing and selling fountain pens and also selling or supplying individual boxes or·containers stamped or marked with a resale price, with his principal place of business at 161 Grand Street, in the City of New York, State of New York, and causes pens sold by him to be transported to the purchasers thereof, from the State of New York, through and into various other States of the United States, and into foreign countries, in direct, active competition with other persons, partnerships and corporations similarly engaged. · PAR. 2. That within two years last past the respondent has sold at wholesale, in commerce as aforesaid, throughout the United States, cheap grades of fountain pens at prices ranging from $10 to $24 per gross, and has sold or supplied purchasers of said pens with individual boxes or containers on which boxes or containers is stamped or marked "Price $1.50" for the cheaper grade and "$3.00" for the better grades.

PAR. 3. That respondent sells said fountain pens and sells or supplies said purchasers with boxes stamped or marked with false and fictitious proposed resale prices, that such resale prices are not bona fide but placed on such boxes for the purpose of enabling the retail dealer to represent to the ultimate consumer that such pens are of high grades and reasonably worth the false and fictitious prices marked on such boxes.

PAR. 4. That the sale by respondent to dealers of cheap fountain pens and at the same time the sale or supplying of individual boxe! or containers, stamped or marked with fictitious prices as aforesaid, is calculated to and does enable dealers in said pens to defraud the purchasing publi? by obtaining for such pens, price.s gre~~Jy i~ excess of cost pnce of sa~d pens; that s_aid peru:;_ a!e s~ld by s~n;J.~ dealers~ a~ price}8 below those, indicat~d Qn the box or con~ainers, and purchas~ng puh-!ic into be~eving that· a higher grade, of pen i~*e,tpe prices indic~ted o_n the boxes or. contain(}rs mi~lead and. deceive being sold -at .a reduced ·price; a~d-that thus respondent encou~ages, a.i,ds and· abets said dealers in misleading or·deceiving the public as t9 the real value of said pens. · - P.AR .. 5• .That the effect of printing or stamping of fictitious or exaggerated prices on the boxes or containers supplied or sold by resp<;>ndent, in which fountain pens are sold to the public, as afore- S!I-~d, .. has_ be~~ and is to mislead purchasers·~ and the general~ public. . 166 FEDERAL TRADE COMMISSION DECISIONS. Order. 4F.T.O.

into the belief that the retail price of said fountain pens is the price stamped or marked on the boxes or containers. OONCLUSION.

The practices of the said respondent, under the conditions and circumstances described in the foregoing findings, are unfair methods of competition in interstate commerce and constitute a violation of the Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Com~ mission upon the complaint and the amended complaint of the Commission and agreed statement of facts filed herein, and the Commission having made its findings as to the facts and its conclusion that the respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,"

It is now ordered, That the respondent, Marx Finstone, his agents, representatives, servants and employees, do cease and desist from directly or indirectly:

1. Stamping, printing or otherwise markmg on boxes or containers in which fountain pens are sold or intended to be sold, a fictitious, exaggerated or misleading price, known to be in excess of the price at which such pens are intended to be and usually are sold at retail.

2. Selling or supplying his customers with individual boxes or containers, made to contain fountain pens, on which said boxes or containers is stamped, printed or otherwise marked, a fictitious, exaggerated or misleading price, known to be in excess of the price at which such pens are intended to be and usually are sold at retail. And it ia further ordered, That said respondent Marx Finstone, shall within thirty (30) days from the date of service of this order, file with the Commission a report, setting forth in detail the manner and form in which he has complied with the order of the Commission herein set forth.

SHATKUN & KAHN (BENJAMIN SRATKUN ET AL.). 167 Complaint.

FEDERAL TRADE COMMISSION v.

BENJAMIN SHATKUN AND DAVID KAHN, PARTNERS, STYLING THEMSELVES SHATKUN & KAHN.