Nolde & Horst Company

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C011Il'LAINT IN TIIE latter OF TIIE ALLEGED VIOLATION OF Seclion ~ OF AN ACT OF CONGRESS APrROVED SErTEMBER 26, 1914. Docket (i79-November 14, 1V22.

SYLLABUS, Where a corporation engaged In the manufacture and sale of hosiery In competition with concerns who either correctly branded, labeled lmd advertised their products with reference to comllosition or failed to u~·and, label and advertise the same at all in that re~:;pect; bt·andcd, labeled, advertised and sold hosiery composed of cotton and wool as "\Vorsted," "Fine \Vool," "Merino," "Natural \Vool," and "Cashmere," thereby misleading a substantial part of the purchasing public with reference to the composition of said goods :

Jield, That such branding, labeling, advertising and sales, under the circumstances set forth, constituted unfair methods of competition. COMPLAINT.

The Federal Trade Commission, having reason to believe from a preliminary investigation made by it that the Nolde & Horst Company, hereinafter referred to as respondent, has been al1\l 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 its powers and duties, nnd for other purposes," and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this complaint, stating its charges in this respect on information nnd belief as follows:

PanAGRAPII 1. That the respondent is a corporation organized and existing under the laws of the State of Pennsylvania, with its principal place of business in the City of Reading, in said State. PAn. 2. That respondent is engaged in the business of manufacturing and selling hosiery, and causes hosiery sold by it to be transported to the purchasers thereof, from the State of Pennsylvania, through and into other States of the United States, nnd carries on such business in direct, active competition with other persons, partnerships and corporations similarly engaged. PAn. 3. Tiwt respondent in the course of its business as described in paragraph 2 hereof, places upon hosiery sold by it, and upon the boxes in which hosiery is packed and in which boxes the hosiery is eventually exhibited to the purchasing public by the retail dealers, certain NOLDE & HORST CO. 285 .

284 Findings. false and misleading labels; that upon hosiery so sold by respondent made of mixed cotton and wool, and upon the boxes containing same, respondent places or causes to be placed labels, among which are the following, viz: " 1Vorsted," " Fine 'Vool," " Merino," " All 'Vool," " Natural 'Vool" and " Cashmere;" which labels are false and misleading and are calulated to and do mislead and deceive the purchasing public.

PAn. 4. That by reason of the. facts recited, the respondent is 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 Fe.deral 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 upon the respondent, Nolde & Horst Company, charging it with the use of unfair methods of competition in commerce, in violation of the provisions of said Act.

The respondent having entered its appearance in its own proper person and filed its answer herein, admitting all the all~gations of the complaint and each count and paragraph thereof, and having made, executed, and filed an agreed statement of facts, in which it is stipulated and agreed by the respondent that the Federal Trad~ 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 fa~ts and such order as it may deem proper to enter therein without the introduction of testimony or the presentation of argument in support of same, and the Federal Trade Commission, having duly considered the record and being now fully advised in the premises, makes this its report stating its findings as to the facts and conclusion: FINDINGS AS TO THE FACTS.

PAnAGRAPII 1. That the respondent, the Nolde & Horst Company, is a corporation duly organized, and existing under and by virtue of the laws of the State of Pennsylvania, with its principal place of business in the City of Reauing, in said State. PAn. 2. That the respondent is engaged in the business of manufacturing and selling hosiery at wholesale, in the State of Pennsylvania and in other States of the United States, causing same to be shipped and transported from the State of Pennsylvania through and into other States of the United States pursuant to such sales, 286 FEDERAL TRADE COMMISSION DECISIONS. Findings. 5F.T.C.

in competition with other corporations, copartnerships and individuals engaged in similar commerce between and among the States of the United States, and that there has been anu is continuously a current of trade to and from the said respondent in said hosiery among and between the States of the United States. · PAR. 3. That the respondent until it learned of this in vestiga· tion by the Commission, about June 1, 1920, in the conuuct of its husin£>ss as described in Paragraph 2 above, sold and shipped hosiery which it knew was made of mixed cotton and wool, labeled, advertised and branded, and in packages or containers labeled, advertised and branded " ·worsted," and " Fine ·wool," and "Merino" and "Natural '\Vool " and " Cashmere." That dealers purchasing this hosiHy from respondent, labeled, advertised and branded as aforesaid, offer and sell it so labeled, auvertiseu and branded to the general purchasing public. That neither the said hosiery nor the boxes containing it were labeled, advertised or branded with any other worJ or worJs to indicate the character, kind or grade of material or materials entering into the manufacture of said hosiery. PAn. 4. That the word" Worsted" means primarily and popularly a yarn and fabric made wholly of wool and when applied to hosiery without any other worJ or words descripth·e of the character, kind or grade of material or materials, is understood by the general purchasing public to mean hosiery which is made entirely of wool. That the term "Fine ·wool," when applied to hosiery without any other word or words descriptive of the character, kind or grade of material or materials, is understood by the general purchasing public to mean hosiery which is made entirely of wool. That the word "1\Ierino" as applieJ to wool means primarily anJ popularly a fine long-staple wool which commands the highest price, anJ when applied to hosiery without any other word or words descriptive of the character, kind or grade of material or materials, is understood by the general purchasing public to mean hosiery which is made entirely of a high-grade wool. That the term "Natural Wool," when ap· plied to hosiery without any other worJ or words descriptive of the character, kind or grade of material or materials, is unllerstood by the general purchasing pu11ic to mean hosiery which is made en· tirely of wool. That the worJ " Cashmere," when applied to hosiery without nny other word or words descriptive of the character, kind or graJe of material or materials, is understood by the general pur· chasing public to mean hosiery which is made entirely of a high· grade wool.

PAR. 5. That many of respondent's competitors are engaged in the sale of hosiery to persons in States other than those in which their lra'" .. - ·--- _....___ __________________________ o~M-••-·• NOLDE 4£ HORST CO. 287 284 Findings. principal factories and places of business are located, and in causing hosiery so sold to be transported from the States in which their principal factories or places of business are located through and into other States of the United States, pursuant to such sales. That many such competitors, prior to June 1, 1920, sold and shipped and are now selling and shipping, in said commerce between the States of the United States, hosiery which is made entirely of a high-grade wool, which hosiery and the packages or containers for which are labeled, advertised and branded "Merino" and "Cashmere." That many such competitors, prior to June 1, 1920, sold. and shipped and • are now selling and shipping, in said commerce between the States of the United States, hosiery which is made entirely of wool, which hosiery and the packages or containers for which are labeled, advertised and branded " Worsted" and "Fine V/ ool" and "Natural Wool."

PAn. 6. That many of respondent's competitors, in the course of commerce between the States as describeu in Paragraph 5 above, prior to about June 1, 1!)20, sold and shipped and are now selling and shipping hosiery, which is made of mixed cotton and wool, which hosiery nnu the packages or containers for which are labeled, advertised and brunded with no word or words descriptive of the material or . materials entering into the manufacture of such hosiery. That many of respondent's competitors, prior to about June 1, 1920, solu and shipped anu are now selling and shipping, in the course of commerce between the States as descriLeu in Paragraph 5 above, hosiery which is made of mixed cotton nnu wool, and the labels, advertisements and brands on which nnd the packages or containers for which contain the words "1Vool and Cotton," or the words "'Vorsted and Cotton," or the words "l\ferino and Cotton." PAR. 7. The labels or brands under which the respondent sells, advertises and ships hosiery, as set forth in the foregoing findings, tend to and do mislead and deceiye a substantial part of the purchasing public as to the composition of materials of said hosiery; said labels or bran<ls as so used by respondent cause said hosiery to compete unfairly with goods of its competitors in interstate comlllerce, who, as set forth in paragraphs 5 and 6 above, sell hosiery made entirely of wool, or hosiery made wholly or in part of other materials than those named, labeled and branded so as to indicate the true composition thereof, or not labeled or branded by any words uescriptive of the composition thereof.

80044 °-24-VOL 5--20 -- - - -~--- -- 288 FEDERAL TRADE COMMISSION DECISIONS, Order. 5F.T.C.

CONCLUSION, 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 2G, 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 Commission, upon the complaint of the Commission, the answer of the respondent, and the statement of facts agreed upon by the respondent and counsel for the Commission, and the Commission having made its findings as to the facts with its conclusion, that the responuent has violated the provisions of the Act of Congress approved September 2G, 1914, entitled "An Act to create a Federal Trade Commission, to uefine its powers and duties, and for other purpuses," It is now ordered, That the responuent, Nolde & Horst Company, and its officers, agents, representatives, servants and employees, cease and desist from directly or inuirectly: I. Using as labels or brands on hosiery solu by it, or on the containers thereof, or in advertisements thereof, the word" ·wool" (1) unless the hosiery so labeled, branded or advertised be composed entirely of wool, or (2) unless, when the hosiery is composed partly of wool, it is accompanied by a word or worus aptly anti truthfully describing the other material or materials of which the hosiery is in part composed.

II. Using as labels or brands on hosiery solu by it, or on the containers thereof, or in advertisements thereof, the word " 'Vorsted " (1) unless the hosiery so labeled, branded or advertised be composed entirely of wool, or (2) unless, when the hosiery is composed partly of wool, it is accompanied by a word or words aptly and truthfully describing the other material or materials of which the hosiery is in part composed.

III. Using as labels or brands on hosiery sold by it, or on the containers thereof, or in advertisements thereof, the word ":Merino " (1) unless the hosiery so labeled, brnnded or advertised be composed entirely of wool of a high grade, or (2) unless, when the hosiery is composed partly of merino it is accompanied by a word or words aptly and truthfully describing the other material or materials of which the hosiery is in part composed.

IV. Using as labels or brands on hosiery sold by it, or on the containers thereof, or in advertisements thereof, the words " Natural _.,...__.

NOLDE & HORST CO. 289 284 Order.

Wool " ( 1) unless the hosiery so labeled, branded or advertised be composed entirely of wool, or (2) unless, when the hosiery is composed partly of wool, it is accompanied by a word or words aptly and truthfully describing the other material or materials of which the hosiery is in part composed.

V. Using as labels or brands on hosiery sold by it, or on the containers thereof, or in advertisements thereof, the word "Cashmere" (1) unless the hosiery so labeled, branded or advertised oo composed entirely of wool of a high grade, or (2) unless, when the hosiery is composed partly of cashmere, it is accompanied by a word or words aptly and truthfully describing the other material or materials of which the hosiery is in part composed.

Respondent is further ordered, To file a report in writing with the Commission sixty {flo) days from notice hereof, stating in· detail the manner in which this order has been complied with and conformed to.

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HUB HbSIERY UILLS.