The Wichita Creamery Company

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

COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF SECTION G OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914. Docket 1042-october 3, 1923.

SYLLABUS.

Where butter manufacturers had long packed and sold butter in cartons or a size, shape and appearance generally known to the purchasing public to contain a full pound. made up either of four units of four ounces each, two units of eight ounces each or one unit weighing a full pound, in unmarked wrappers; and thereafter a competitor, in disregard of the collective action of members or the Industry, to which It bad been a party, denouncing the practice and providing for its discontinuance, Packed, sold and offered for sale butter in cartons simllar in dress, shape, size and appearance to the aforesaid cartons and allo to those likewise containing a full pound ln which said competitor had theretofore sold its butter, but which actually contained units weighing less than the aforementioned weights and aggregating less than a full pound; thereby advisedly placing in the hands of its retailer customers means which enabled and encouraged them to sell such under-weight units l.n their unmarked wrappers as and for units or one-fourth pound, one-half pound and one pound, respectively;

With the result that the purchasing public was deceived In reference to the quantity or butter contained in said cartons, notwithstanding the marking or the weight thereon, and also In respect or that contained in the aroresald units:

Held, That such misrepresentation of product, under the circumstances set forth, constituted an unfair method or competition. COMPLAINT• • Acting in the public interest pursuant to 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," the Federal Trade Commission charges that The 'Vichita Creamery Company, a corporation, more particularly hereinafter described and hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce in violation of the provisions of Section 5 of said Act, issues this complaint and states its charges in that respect as follows: PARAORAPII 1. Respondent, The 'Vichita Creamery Company, is a corporation organized under and by virtue of the laws of the State of Kansas in the year 1909, with its principal office and place of business in the City of Wichita, in said State. Respondent was 436 FEDERAL TRADE COMMISSION DECISIONS, Complaint. 6F.T.C.

at all times hereinafter mentioned, and still is, engaged in the business of manufacturing butter and in marketing or selling the same to jobbers and retail dealers located in various States of the United States, causing said product, when so sold, to be transported in commerce from its principal-place of business in the State of Kansas to purchasers located in other States of the United States; there IS now, and was at all times hereinafter mentioned, a constant current of trade and commerce in said butter manufactured by said respondent between and among the various States of the United States. In the course and conduct of its said business, respondent continuously has been, and is now, in competition with other individuals, partnerships and corporations similarly engaged in commerce among the States of the United States.

PAn. 2. That the respondent, The 'Vichita Creamery Company, in the course of its business as described in paragraph 1, hereof, had fot' a number of years subsequent to the date of its organization in the year 1909, marketed, sold and transported in commerce its product to purchasers in various States of the United States in packages or cartons of the recognized standard weight of one pound, one-half pound and one-quarter pound ,quantities; that said respondent for more than one year prior to August 1, 1920, caused its said product to be put up in packages or cartons containing from one to two ounces less than the recognized standard weight of one pound, onehalf pound and one-quarter pound quantities, and marketed, sold and transported the same in commerce to purchasers in various States of the United States; that said respondent, subsequent to August 1, 1920, caused its said product to be put up, mnrketed, sold and transported in commerce, in packages or cartons of fifteen ounces, one ounce less than the recognized standard weight of sixteen ounces or one pound; that notwithstanding said packages or cartons were marked showing the correct weight, the same were similar'i- in dress, shape, size and appearance and simulated the packages or cartons of said product previously sold by said respondent containing the recognized standard weight of one pound, one-half pound and one-quarter pound quantities; that the sale by respondent of said product in commerce in odd weights less than the recognizee] standard weight of one pound, one-half pound and one-quarter pound packages or cartons has the capacity and tendency to mislead and deceive the purchaser and/or does mislead and deceive the purchaser into the erroneous belief that said packages or cartons contained the recognized standard weight of one pound, one-half pound, or onequarter pound of said product, when in truth and in fact said packages or cartons contain from one to two ounces less than the said recognized standard weight.

THE WICHITA CREAMERY CO, 437 !135 Complaint. PAR. 3. It is now and has been the custom of the trade and consuming public for a long period of years, to advertise, purchase, . sell and offer for sale, butter in the standard recognized quantities of one pound, one-half pound and one-quarter pound; that there are a considerable number of competitors of respondent who manufacture and market their products in commerce in one pound, onehalf pound and one-quarter pound packages or cartons of similar size, shape and appearance as that used by respondent, which said product is sold in competition with the product of respondent. PAR. 4. To meet the demand of the consuming public for small quantities of butter a custom has long prevailed whereby creameries shape butter in sizes weighing respectively four ounces, eight ounces and one pound. The standard and customary carton in which such units are placed by creameries is such as to contain one full pound. In each such carton is placed either four of the four ounce, two of the eight ounce or one of the full pound units. Each such unit before being placed in the carton by the creamery is separately dressed in an unmarked wrapper. The butter so shaped, wrapped and packed in such cartons is distributed by and through wholesale dealers or jobbers and is also sold by creameries direct to retail dealers. Retail dealers located in the States of Arkansas, Texas and Oklahoma sell to customer or ultimate purchaser said separate unmarked units of butter which bear no designation by which the purchaser may ascertain its weight. Prior to the institution or use of the method or practice hereinafter more particularly described purchasers were accustomed to and did receive the full weight units of four ounces, eight ounces and one pound, respectively. In imitation of the form of such units of standard and customary size and weight, and likewise dressed in unmarked wrappers but containing less weight, respondent shapes butter in sizes weighing respectively and approximately three and one-half ounce'3 and three and three-quarter ounces, seven and seven and one-half ounces and fourteen ounces. Respondent likewise places four, two or one such odd weight units respectively in cartons of the size, character and description set out in paragraph 2 hereof. These it sells and ships as described in paragraph 1 hereof to retail dealers who supply and sell to customers or purchasers the smaller unmarked units for, and as, four ounce, eight ounce and one pound units respectively, while in truth and in fact such units contain less than such respective weights. The carrying out of this deception and the circumstance which makes it possible is well known to respondent, and although respondent is ostensibly complying with the law Ly marking the exact weight of the total contents on the outer 438 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 6F.T.C.

wrapper or carton, respondent knows or should know that customarily the outer wrapper or carton is not seen by the ultimate purchaser of the separate smaller units, and respondent by shaping, dressing and packing butter in such undersized and odd weight units is knowingly placing in the hamls of retailers an instrument which enables and encourages retailers to commit a fraud on the consumer or purchaser, respondent thereby increasing its own sales to the disadvantage of manufacturers who refuse to so aid such retailers in the practice of said fraud.

PAn. 5. Investigation by the Commission, based on numerous complaints, revealed that the practice herein complained of was confined -almost wholly to the States of Arkansas and Texas. To eliminate this practice or method more speedily than could be accomplished by formal proceedings instituted against individual concerns and for the enlightenment of the Commission, butter manufacturers competing in said territory assembled, at the invitation of the Commission, at Dallas, Texas, on April2, 1920, and there in open meeting presided over by a duly authorized representative of the Commission did, by means of resolution define and denounce said method of competition which in the experience of the industry had proven to result in fraud on the public. At the time of its adoption by representatives of the industry, and in the announcement tlwrcof by the Commission, such resolution was designated us, and known as " Trade Practice Submittal-Butter Manufacturers." Au~ust 1, 1!>20, was named in the same resolution as the day upon which the practice of the method so denounced was to entirely cease and which on said day did practically cease; among other purposes intended to be accomplished by the institution and adoption of such "Trade Practice Submittal" was the obviation of a multiplicity of formal proceeding due to the voluntary and simultaneous action of the industry in eliminating the method or practice so defined and denounced. PAn. 6. That respondent was, and is, well acquainted with the purpose, intent and spirit of the action taken by representatives of the industry at Dallas, Texas, on April 2, 1920, in the form of said Trade Practice Submittal, respondent having expressed its approval, among other ways, by causing its representatives to be present thereat, such representatives having signed said resolution on and in behalf of respondent.

PAn. 7. That said" Trade Practice Submittal" after stating among other things that the practice complained of was so widespread in the southwestern States that any manufacturer desiring to compete in the markets thereof "is compelled as a matter of self-protection to adopt the practice above described," reads in part as follows: THE WICHITA CREAMERY CO. 439 435 Findings. Now, therefore, We, butter manufacturers assembled in open meeting, condemn the practice above described as a method of unfair competition and as against the public interest, and we hereby petition the Federal Trade Commission to bring its action against any and all manufacturers, makers, or shippers of butter who, after August 1, 1920, sell or after for sale, in cartons, rolls, or prints, butter in quantities or weights other than the standard weights of 16 ounces, or of 8 ounces, or of 4 ounces; or who ship or sell or offer for sale, butter in such standard weight packages, prints, rolls or cartons, upon any of which is not marked the net weight of the butter contained therein, in acordance with subdivision (c) of Regulation 29, of the" Rules and Regulations for the enforcement of the Food and Drug Act" as amended (34 Stats. 7G8), and which as published by the Department of Agriculture reads as follows:

" (c) The statement of the quantity of the contents shall be plain and conspicuous, shall not be a part of or obscured by any legend or design, and shall be so placed and in such characters as to be readily seen and clearly legible when the size of the package and the circumstance under which it is ordin.arily examined by purchasers or consumers are taken into consider-{ltion." PAn. 8. That such shaping, dressing and packing of bufter is calculated and designed to, and has a tendency and capacity to, and does, deceive the public into the belief that it is purchasing butter in units, cartons or packages containing more butter than said units, cartons or packages do in fact contain and that the above alleged acts and things done by respondent are all to the prejudice of the public, and of respondent's competitors, and constitute unfair methods 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 2G, 1914, the Federal Trade Commission issued and served a GOmplaint upon the respondent, The Wichita Creamery Company, a corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. The respondent having filed its answer herein, and having entered into a stipulation in writing as to the facts, in which stipulation it admitted that the matters and things alleged in said complaint are true in the manner and form as alleged th~rein, and thereupon this 440 FEDERAL TRADE COMMISSION DECISIONS. Findings. 6F.T.C.

matter came on for final hearing, and the Commission being fully advised in the premises and upon consideration thereof, makes this its final report stating its findings as to the facts and conclusion. FINDING~ AS TO THE FACTS.

PARAGRAPH 1. Respondent, "Wichita Creamery Company, is a corporation organized under and by virtue of the laws of the State of Kansas in the year 1909, with its principal office and place of business in the City of Wichita, in said State. Respondent was at all times hereinafter mentioned and still is engaged in the business of manufacturing butter and in marketing or selling same to jobbers and retail dealers located in various States of the United States, causing said products when so sold to be transported in commerce from its principal place of business in the State of Kansas to purchasers located in other States of the United States; there is now and was at all times hereinafter mentioned a constant current of trade and commerce in said product manufactured by said respondent between and among the various States of the United States. In the course and conduct of its said business respondent at all times has been and is now in competition with other individuals, partnerships and corporations similarly engaged in commerce among the States of the United States.

PAR. 2. That the respondent, Wichita Creamery Company, in the course and conduct of its business as described in paragraph 1 hereof had for a number of years subsequent to the date of its organizatinn in the year 1909 marketed, sold and transported in commerce its products to purchasers in various States o£ the United States in packages or cartons of recognized standard weight of 1 pound, ¥2 pound and 1,4 pound quantitites, that said respondent for more than one year prior to August 1, 1920, caused the said product to be put up in packa~es or cartons containing from 1 to 2 ounces less than the recognized standard weight of 1 pound, ¥2 pound and 1,4 pound quantities and marketed, sold and transported the same in commerce to purchasers in various States of the United States; that said respondent subsequent to August 1, 1920, caused its said product to be put up, marketed and sold and transported in commerce in packages or cartons of 15 ounces, 1 ounce less than the recognized standard weight of 16 ounces, or 1 pound; that notwithstanding said packages or cartons were marked showing the correct weight the same were similar in dress, shape, size and appearance and simulated the packages or cartons of said product previously sold by respondent containing the recognized standard weight of 1 pound, THE WICHITA CREAMERY CO. 441 43~ Findings. % pound and % pound quantities; that the sale by respondent of said product in commerce in odd weights less than the recognized standard weight of 1 pound, % pound or 14 pound quantities has the capacity and tendency to mislead and deceive the purchasers and has misled and deceived purchasers into the erroneous belief that the said packages or cartons contained the recognized standard weight of 1 pound, % pound and % pound in said carton when in truth and in fact said packages or cartons contained from 1 to 2 ounces less than the said recognized standard weight. PAn. 3. It is now and has been the custom of the trade and consuming public for a long period of years to advertise, purchase, sell and offer for sale butter in standard recognized quantities of 1 pound, % pound and % pound; that there are a considerable number of competitors of respondent who manufacture and market their product in commerce in 1 pound, % pound and % pound packages or cartons of similar size, shape and appearance as that used by respondent which said product is sold in competition with the product of respondent.

PAR. 4. To meet the demand of the consuming public for small quantities of butter a custom has long prevailed whereby creameries shape butter in sizes weighing respectively, 4 ounces, 8 ounces and 1 pound. The standard and customary carton in which such units are placed by creameries is such as to contain one full pound. In each such carton is placed either 4 of the 4 ounce, 2 of the 8 ounce cr 1 of the full pound units, each such unit before being placed in the carton by the creamery is separately dressed in an unmarked wrapper. The butter so shaped, wrapped and packed in such cartons is distributed by and through wholesale dealers or jobbers and is also sold by creameries direct to· retail dealers. Retail dealers located in the States of Oklahoma, r:r:exas and Arkansas sell to customers or purchasers said separate unmarked units of butter which bear no designation by which the purchaser may ascertain its weight. Prior to the institution or use of the method or practice hereinbefore more particularly described purchasers were accustomed to and did receive the full weight units of 4 ounces, 8 ounces and 1 pound respectively. In imitation of the form of such units of standard and customary size and weight and likewise dressed in unmarked wrappers but containing less weight, respondent shapes butter in sizes weighing, respectively and approximately, 31;2 ounces and 3% ounces, 7 and 7% ounces and 14 and 15 ounces. Respondent likewise places 4, 2 and 1 odd weight units, respectively, in cartons of the size, character and description set out in paragraph 2 hereof. These it sells and ships as described in paragraph 1 hereof to retail 442 FEDERAL TRADE COMMISSION DECISIONS. Findings. 6F.T.C.

dealers who supply and sell to customers or purchasers the smaller unmarked units for and as 4 ounces, 8 ounces and 1 pound units, respecti \'ely, while in truth and in fact such units contain less than such respective weights. The carrying out of the deception and the circumstances which make it-possible are well known to respondent and although respondent is ostensibly complying with the law by marking the exact weight of the total contents on the outer wrapper or carton, respondent knows that customarily the outer wrapper or carton is not seen by the ultimate purchaser of the separate smaller tiDits, and respondent by shaping, dressing and packing butter in such undersized and odd weight units is knowingly placing in the hands of retailers an instrument which enables and encourages retailers to sell such smaller odd weight units as and for Yt, ¥2 and 1 pound units or packages.

PAR. 5. Dutter manufacturers competing in the States of Arkansas: Oklahoma and Texas assembled at the invitation of the Federal Trade Commission at Dallas, Texas, on April 2, 1920, and there, in open meeting, presided over by a duly authorized representative of the Commission did, by means of resol_ution, define and denounce said method of competition which, in the experience of the industry, had proven to result in fraud on the public. At the time of its adoption by representatives of the industry and in the announcement thereof by the Commission such resolution "'as designated as and known as "Trade Practice Submittal-Butter Manufacturers." August 1, 1020, was named in the same resolution as the day upon which the practice or method so denounced was to entirely cease and which on said day did practically cease; among other purposes understood by respondent to be intended to be accomplished by the institution and adoption of such "Trade Practice Submittal " was the obviation of a multiplicity of formal proceedings due to the voluntary and simultaneous action of the industry in eliminating the method or practice so defined and denounced. PAR. 6. That respondent was and is well acquainted with the purpose, intent and spirit of the said action taken by representatives of the industry at Dallas, Texas, on April 2, 1920, in the form of said "Trade Practice Submittal," respondent having exercised its approval among other ways by causing its representatives to be present thereat, such representatives, with the consent a.nd by virtue of the authority granted, having signed said resolution on and in behalf of respondent.

PAR. 7. That in compliance with the said "Trade Practice Submittal," respondent promptly discontinued the putting up, shaping of and selling butter in such odd weight units, packages 'or cartons; 'lre WICHITA CREAMERY CO. 443 <135 Order. that on or about April 20, 1921, respondent again did shape and sell butter in such odd weight packages and so continued the practice in this proceeding complained of until December 7, 1921. PAR. 8. That such shaping, dressing and packing of butter in said odd weight units hereinbefore described is calculated and designed to and has the tendency and capacity to and does deceive the public into the belief that it is purchasing butter in units, cartons or packages containing more butter than said units, cartons or packages do in fact contain.

CONCLUSION.

The above practices of 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 Section 5 of the Act 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 Commission upon the complaint of the Commission, the answer of respondent and a stipulation as to the facts, 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 respondent, the 'Vichita Creamery Company, its officers, agents and employees, do cease and desist from selling or offering for sale to distributors, dealers, or others, butter in shapes, sizes and dress in imitation of, or resembling, the standard or recognized shapes and sizes generally known to the purchasing public to contain four ounces, eight ounces and one pound of butter, respectively, when such shapes and sizes contain less than said stand· ard respective weights.

444 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 6F.T.C.

FEDERAL TRADE COMMISSION v.

THE MERIDEN CREAMERY COMPANY.

COliPLAINT IN Tile liATTER OF TIIE ALLEGED VIOLATION OF SECTION II OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914. Docket 1043-october 3, 1923.

SYLLABUS.

Where butter manufacturers had long packed and sold butter in cartons of a size, shape and appearance generally known to the' purchasing public to contain a full pound, made up either of four units of four ounces each, two units of eight ounces each or one unit weighing a full pound, in unmarked wrappers; and thereafter a competitor, in disregard of the collective action of members of the industry, to whom It had communfcated Its acquiescence therein, denouncing the practice and providing for its discontinuance, Packed, sold and offered for sale butter In cartons similar In dress, shape, size and appearance to the afore:;aid cartons and also to those likewise containing a full pound In which said competitor had theretofore sold Its butter, but which actually contained units weighing less than the aforementioned weights and aggregating less than a full pound; thereby advisedly placing In the hands of Its retailer customers means which enabled and encouraged them to sell such under-weight units In their unmarkc1l wrappers as and for units of one-fourth pound, one-half pound and one pound, respectively;

With the result that the purchasing public was deceived In reference to the quantity of butter contained lu said cartons, notwithstanding the marking of the weight thereon, and also In respect of that contained In the aforesaid units, and the concern's sales were Increased at the expense of Its competitors who refused so to aid retailers In such practices: Ileld, That such misrepresentation of product, under the circumstances set forth, constitute(} an unfair method of competition. COMPLAINT.

Acting in the public interest pursuant to the provisions of an Act of Congress, approved September 2G, 1914, entitled "An Act to create a Federal Traue Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission charges that The Meriden Creamery Company, a corporation, more particularly hereinafter described and hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce in violation of the provisions of Section 5 of said Act, issues.this complaint and states its charges in that respect as follows: r ARAGRAPII 1. Respondent, The Meriden Creamery Company, is a corporation organized and doing business under and by virtue of the THE MERIDEN CREAMERY CO. 445 444 Complaint. laws of the State of Missouri, with its principal office and place of business in the City of Kansas City, in said state. Respondent was at all times hereinafter mentioned and still is, engaged in the business of manufacturing butter and in marketing or selling the same to jobbers and retail dealers located in various states of the United States, causing said product, when so sold, to be transported in commerce from its principal place of business in the State of Missouri to purchasers located in other States of the United States, and there is now, and was at all times hereinafter mentioned, a constant current of trade and commerce in said butter manufactured by said respondent between and among the various states of the United States. In the course and conduct of its said business respondent continuously has been and is now in competition with other individuals, partnerships and corporations similarly engaged in commerce among the States of the United States.

PAR. 2. That the respondent, The Meriden Creamery Company, in the course of its business as described in paragraph 1 hereof, had for more than ten years prior to the year 1918 marketed, sold and transported in commerce its product to purchasers in various States of the United States in packages or cartons of the recognized standard weights of one pound, one-half pound and one-quarter pound quantities; that said respondent had for more than one year prior to the year 1918 marketed, sold and transported in commerce its product known as "Gold Bar Brand" to purchasers in various States of the United States in packages or cartons of the recognized standard weight of sixteen ounces or one pound quantity; that said respondent during and subsequent to the year 1918, caused its said product known as "Gold Dar Brand" to be put up in packages or cartons of fifteen ounces, one ounce less than the recognized standard weight of the package or carton previously sold under said trade brand; that said packages or cartons marked fifteen ounces, were similar in dress, shape, size and appearance and simulated the packages or cartons of said product previously sold by said respondent, containing the recognized standard weight of sixteen ounces or one pound; that the sale by respondent of said product in commerce in fifteen ounce packages or cartons has the capacity and tendency to mislead and deceive the purchaser andjor does mislead and deceive the purchaser into the erroneous belief that said packages or cartons contained sixteen ounces or one pound of said product, when in truth and in fact said packages or cartons contain one ounce less than the said recognized standard weight.

PAR. 3. It is now, and has been the custom of the trade and consuming public for a long period of years, to advertise, purchase, 446 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 6F.T.C.

~:.ell and offer for sale, butter in the standard recognized quantities of one pound, one-half pound and one-quarter pound; that there are a considerable number of competitors of respondent who manufacture and market their products in commerce in sixteen ounce or one pound packages or cartons of similar size, shape and appearance as that used by respondent, which said product is sold in competition with the product of respondent.

PAR. 4. To meet the demand of the consuming public for small quantities of butter a custom has long prevailed whereby creameries shape butter in sizes weighing respectively four ounces, eight ounces and one pound. The standard and customary carton in which such units are placed by creameries is such as to c.contain one full pound. In each such carton is placed either four of the four ounce, two of the eight ounce or one of the full pound units. Each such unit before being placed in the carton by the creamery is separately dressed in an unmarked wrapper. The butter so shaped, wrapped and packed in such cartons is distributed by and through wholesale dealers or jobbers and is also sold by creameries direct to retail dealers. Retail dealers located in the States of Arkansas, Texas and Oklahoma sdl to customer or ultimate purchaser said separate unmarked units of butter which bear no designation by which the purchaser may RSC{'rtain its weight. Prior to the institution or usc of the method or practice hereinafter more particularly described purchasers were accustomed to and did receive the full weight units of four ounces, eight ounces and one pound, respectively. In imitation of the form of such units of standard and customary size and weight, and likewise dressed in unmarked wrappers but containing less weight, respondent shapes butter in sizes weighing respectively and approximately three and one-half o.mces and three and three-quarter ounces, seven and seven and one-half ounces and fourteen ounces. Respond- ('nt likewise places four, two or one such odd weight units respectively in cartons of the size, character, and d('scription set out in paragraph 2 hereof. These it sells and ships as described in paragraph 1 hereof to retail dealers who supply and srll to custom('rs or purchasers the smaller unmarked units for, and a~t, four ounce, eight ounce and one pound units respectively, while in truth and in fact such units contain less than such respective weights. The carrying out of this deception and the circumstance which makes it possible is well known to respondent, and although respondent is ostensibly complying with the law by marking the exact weight of the total contents on the outer wrapper or carton, respondent knows or should know that customarily the outer wraps.ter or cnrton is no~ seen by the ultimate purchaser of the separate smaller units, and ihe MERIDEN CREAMERY CO. 447 444 Findings. respondent by shaping, dressing and packing butter in such undersized and odd weight units is knowingly placing in the hands of retailers an instrument which enables and encourages retailers to commit a fraud on the consumer or purchaser, respondent thereby increasing its own sales to the disadvantage of manufacturers who refuse to so aid such retailers in the practice of said fraud. PAR. 5. That such shaping, dressing and packing of butter is calculated and designed to, and has a tendency and capacity to, and does, deceive the public into the belief that it is purchasing butter in units, cartons or packages containing more butter than said units, cartons or packages do in fact contain and that the above alleged acts and things done by respondent are all to the prejudice of the public, and of respondent's competitors, and constitute unfair methods 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 upon the respondent, The Meriden Creamery Company, charging it with the use of unfair methods of competition in commerce, in violation of the provisions of said act. The respondent having filed its answer herein and having entered into a stipulation in writing as to the facts, in which stipulation it is admitted that the methods and things alleged in said complaint nrc true in the manner and form as therein stated, thereupon this matter came on for final hearing and the Commission being fully advised in the premises and upon consideration thereof makes this its report stating its findings as to the facts and conclusion. FINDINOS AS TO Tile FACTS.

PAnAoRArn 1. Respondent, The Meriden Creamery Company, is a corporation organized and doing business under and by virtue of the laws of the State of Missouri, with its principal office and place of business in the City of Kansas City, in said State. Respondent Was at all times hereinafter mentioned and still is, engaged in the business of manufacturing butter and in marketing or selling the same to jobbers and retail dealers located in various Stares of the United States, causing said product, when so sold, to be trans· Ported in commerce from its principal place of Lusiness in the Statl) 86727" -2:}-.vol 6--30 448 FEDERAL TRADE COMMISSION DECISIONS. Findings, 6F.T.C.

of Missouri to purchasers located in other States of the United States, and there is now, and within all times hereinafter mentioned has been a constant current of trade and commerce in said butter manufactured by said respondent between and among the various States of the United States. In the course and conduct of its said business respondent continuously has been and is now in competition with other individuals, partnerships and corporations similarly engaged in commerce among the States of the United States.

PAn. 2. That the respondent, The :Meriden Creamery Company, in the course of said business as described in paragraph 1 hereof, and for more than ten years prior to the year 1918, marketed, sold and transported in commerce its products to purchasers in various States of the United States in packages or cartons of the recognized standard weights of one pound, one-hal£ pound and one-quarter pound quantities; that said respondent had for more than one year prior to the year 1018 marketed, sold and transported in commerce its product known as "Gold Bar Brand" to purchasers in various States of the United States in packages or cartons of the recognized standard weight of sixteen-ounce or one-pound quantity; that sairl respondent during and subsequent to the year 1918, caused its said prouuct known as "Gold Bar Brand" to be put up in packages or cartons of fifteen ounces, one ounce less than the recognized standard weight of the package or carton previously sold under said trade brand; that Eaid packages or cartons marked fifteen ounces, were similar in urcss, shape, size and appearance and simulated the packages or cartons of said product previously sold by said respondent containing the recognized standard weight of sixteen ounces or one pound; that the sale by respondent of said product in commerce in fifteen-ounce packages or cartons has the capacity and tendency to mislead and deceive the purchasers andjor docs mislead and deceive the purchasers into the erroneous belief that said packages or car· tons contain sixteen ounces or one pound of said product, when in truth and in fact said packages or cartons contain one ounce less than the said recognized standard weight. PAn. 3. It is now and has been the custom of the trade and consuming public for a long period of years to advertise, purchase, sell and oifer for sale butter in the standard recognized quantities of one pound, one-half pound and one-quarter pound; that there are a considerable number of competitors of respondent who manufacture and market their products in commerce in sixteen-ounce or onepound puclmgcs or cartons of similar size, shape and appearance as that mc(l by respondent, which said product is sold in competition with the product of respondent.

THE MERIDEN CREAMERY CO. 449 444 Findings. PAR. 4. To meet the demand of the consuming public for small quantities of butter a custom has long prevailed whereby creameries shape butter in sizes weighing respectively, four ounces, eight ounces and one pound. The standard and customary carton in which said units are placed by creameries is such as to contain one full pound. In each such carton is placed either four of the four-ounce, two of the eight-ounce, or one of the full pound units. Each such unit before being placed in the carton by the creamery is separately dressed in an unmarked wrapper. The butter so shaped, wrapped and packed in such cartons is distributed by and through wholesale dealers or jobbers and is also sold by creameries direct to retail dealers. Retail dealers located in the States of Arkansas, Texas and Oklahoma, sell to customers or ultimate purchasers said separate, unmarked units of butter which bear no designation by which the purchaser may ascertain its ·weight. Prior to the institution or use of the method or practice hereinafter more particularly described, purchasers were accustomed to and did receive the full weight units of four-ounce, eight-ounce and one pound respectively. In imitation of the form of sa.id units of standard and customary size and weight, and likewise dressed in unmarked wrappers, but containing less weight, respondent shapes butter in sizes weighing respectively, three and three-quarter ounces, seven and one-half ounces and fifteen ounces. Respondent likewise places four, two or one such odd weight units, respectively, in cartons of the size, character and description set out in paragraph 2 hereof. These it sells and ships, as described in paragraph 1 hereof, to retail dealers who supply and sell to customers or purchasers the smaller unmarked units for and as four ounces, eight ounces and one pound units, respectively, while in truth and in fact such units contain less than such respective weights. The carrying out of this deception and the circumstances which make it possible is well known to respondent, and although respondent is ostensibly complying with the law by marking the exact weight of the total contents on the outer wrapper or carton, respondent knows that customarily the outer wrapper or carton is not seen by the ultimate purchaser of the separate smaller units and respondent by shaping, dressing and packing butter in such undersized or odd weight units is knowingly placing in the hands of retailers an instrument which enables and encourages retailers to sell such smaller odd wei~ht units as and for units of four-ounce, eightounce and sixteen-ounce units or packages, respond.ent thereby increasing its own sales to the disadvantage of manufacturers who refuse to so aid retailers in the practice so described. PAn. 5. Dutter manufacturers competing in the States of Arkansas, Oklahoma and Texas assembled at the invitation of the Federal 450 FEDERAL TRADE COMMISSION DECISIONS. Conclusion. 6F.T.C.

Trade Commission at Dallas, Texas, on April 2, 1920, and there in open meeting, presided over by a duly authorized representative of the Commission, did by means of resolution define and denounce said method of competition which in the experience of the industry had proven to result.in fraud on the public. At the time of its adoption by representatives of the industry and in the announcement thereof by the Commission, such resolution was designated as and !mown as "Trade Practice Submittal-Dutter Manufacturers." August 1,1920, was named in the same resolution as the day upon which the practice or method so denounced was to entirely cease; among the purposes understood by respondent to be intended to be accomplished by the institution and adoption of such "Trade Practice Submittal" was the obviation of a multiplicity of formal proceeding due to the voluntary and simultaneous action of the industry in eliminating the method or practice so defined and denounced. PAn. 6. Respondent was, and is, well-acquainted with the purpose, intent and spirit of said" Trade Practice Submittal "which was made part of the facts stipulated herein. Respondent was not represented at said meeting of April 2, 1920, but subsequent thereto, between April 2, 1920, and August 1, 1920, it expressed its approval thereof and announced to the Commission and to competitors engaged in the manufacture of butter that it would discontinue the practice herein complained of on August 1, 1920; such expression and announcement were communicated to competitors in attendance at said meeting on April 2, 1920, and to other competitors not so in attendance. Many competitors, together with respondent, each acting on such mutual understanding, did on August 1, 1920, abandon said method, while respondent later revived and again indulged in said practice complained of, until July, 1921.

PAn. 7. That such shaping, dressing, and packing of butter in said odd weight units hereinbefore described is calculated and designed to, and has a tendency and capacity to, and does deceive the public into the belief that it is purchasing butter in units, cartons and packages containing more butter than said units, cartons and packages do in fact contain.

CONCLUSION, The above practice of 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 Section 5 of the Act approved September 26, 1914, entitled" An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

THE MERIDEN CREAMERY CO. 451 444 Order. 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 a stipulation as to the facts, 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 respondent, The Meriden Creamery Company, its officers, agents and employees do cease and desist from selling or offering for sale to distributors, dealers, or others, butter in shapes, sizes and dress in imitation of, or resembling the standard or recognized shapes and sizes generally known to the purchasing public to contain four ounces, eight ounces and one pound of butter, respectively, when such shapes and sizes contain less than said standard respective weights.

452 FEDERAL TRADE COMMISSION DECISIONS. Complaint. 6F.T.C.

FEDERAL TRADE COMMISSION v.

LAWRENCE S. 1\fA YERS. AND CHAUNCEY M. 1\fA. YERS, PARTNERS DOING BUSINESS UNDER THE FIRM NAME AND STYLE OF GENEVA "WATCH COMPANY.