Burkhalter, F

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IN THE MATTER OP F. BURKHALTER, DOING BUSINESS UNDER THE TRADE NAME AND STYLE ROYAL SOAP COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1289. Complaint, Feb. 17, 1925-Decirion, Nov. 29, 19Z6 Where an Individual engaged In the sale of a soap which was neither medicated nor contained ingredients having a curative and healing effect upon the skin; branded and labeled the same and the wrappers thereof "Royal Medicated Cuticle Doctor Soap", and represented said soap as being medicated and containing various ingredients having the aforesaid effect, in soliciting the sale thereof and advertising the same 1n newspapers in the communities of his retail dealer vendees; with the etrect of causing many of the trade and public to purchase such soap as and for a medl· cated product possessing curative and healing qualities not possessed by ordinary· toilet soap, and of diverting business from competitors dealing in soaps having such qualities, and from competitors dealing In ordinary toilet soaps, and selllng the same under truthful representations: Held, That such practices, under the circumstances set forth, constituted unfair methods of competition.

Mr. Otto R. Stites and Mr. Alfred M. Craven for the Commission. Lathrop, Morrow, For» & Moore and Mr. Johns. Bates, of Kansas City, Mo., for respondent.

Synopsis OF Complaint Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent, engaged in the sale of an unmedicated toilet soap to retail dealers in various States and with place of business in Kansas City, with misbranding or mi~labeling and misrepresenting product dealt in, and advertising falsely or misleadingly, in viola· tion of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce, in that respondent, for more than a year preceding the complaint, stamped each cake of the aforesaid soap "Royal M~dica.ted Cuticle Doctor Soap" and so labeled the wrappers thereof, and falsely represented the same to dealers solicited by him as a high-grade toilet soap of the regular value of twenty-five cents per cake, and as medicated and containing ingredients having a. curative and healing effect upon the skin, and so advertised F;aid soap in local papers in communities in which he sold the same, the facts being that said soap was of the Findings 11 F. T. C. reasonable value of not more than ten cents a cake and was habitually sold by him to retail dealers for resale at such price, and had no further curative and healing effect than ordinary toilet soaps; with the effect of causing many of the trade and public to purchase the aforesaid soap as and for one possessing the qualities above set forth, and of diverting business from and otherwise prejudicing competitors selling toilet soaps to retailers without representing the sa.me as medicated or otherwise superior to ordinary soaps and as offered at lower than the ordinary and usual retail prices, and with the capacity and tendency so to do; all to the prejudice of the public and respondent's competitors.

Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE Facts, AND Onder 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, F. Burkhalter, doing business under the trade name of Royal Soap Co., charging him with the use of unfair methods of competition in commerce in violation of the provisions of section 5 of said act of Congress. Respondent having entered his appearance, but not having filed an answer, hearings were had and evidence was thereupon introduced on behalf of the Commission before William F. Dinnen, an examiner of the Federal Trade Commission theretofore duly appointed. Thereupon this proceeding came on for decision and the Commission having considered the record and being now fully advised in the premises, makes this its findings as to the facts and its conclusion 1drawn therefrom :

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent is now and since the year 1922, has been, doing busin(i)SS under the trade name and style "Royal Soap Co." with his place of business in the city of Kansas City, State of Missouri, and engaged in the business of selling toilet soap to retail dealers located at points in various States of the United States. He causes said soap when solq to be transported from his place of business or from various places where said soap is manufactured into and through States other than the States wherefrom said soap is so shipped, to said purchasers at their respective points of location. In the course and conduct of his said business respondent is and has been in competition with other individuals, partnerships, and corporations engaged in the sale and transportation of toilet soap in interstate commerce between and among various States of the United States.

ROYAL SOAP 00. 39 37 Findings PAR. 2. The soap dealt in by respondent in the course of his busi· ness as set out in paragraph 1 hereof, is named and denominated by respondent " Royal Medicated Cuticle Doctor Soap," which said name and designation respondent causes to be stamped upon each cake of his said soap and to be printed upon the wrappers wherein said soap is wrapped, and respondent delivers said soap so stamped and wrapped to his aforesaid vendees.

PAR. 3. Upon soliciting and making sales to aforesaid vendees respondent represents to said dealers that said soap is medicated and contains various ingredients having a curative and healing effect upon humari skin. Further, upon making a sale respondent causes to be inserted in a newspaper or newspapers of general circulation in the community wherein the dealer is located advertisements offer· ing said soap for sale by said dealer, in which advertisements re· spondent causes to be inserted aforesaid representations and others of similar import.

PAR. 4. In truth and in fact respondent's said soap is not medi· cated and contains no ingredients having a curative and healing effect upon the human skin. The representations referred to in paragraphs 2 and 3 hereof have been made by the respondent continuously since some time in the year 1922 down to the present time, during which period of time respondent has never sold a soap con· taining medicaments or any ingredients of a curative or healing nature.

PAR. 5. The stamping and wrapping by respondent of his said soap with the name and designation "Royal Medicated Cuticle Doctor Soap," and the representations made by respondent to his dealer vendees and in his advertising, all as set out in paragraphs 2 and 3 hereof, have the capacity and tendency to cause and have caused many of the trade and public to purchase respondent's said soap in the belief that said soap is a medicated soap possessing curative and healing qualities not possessed by ordinary toilet soa:v. PAR. 6. Among the competitors of respondent referred to in para· graph 1 hereof are many manufacturers of and dealers in soap who sell and have sold soap in competition with respondent which contains ingredients having healing and medicinal qualities. There were and now are many other competitors who sell ordinary toilet soap having no medicinal or healing qualities. Both classes of said competitors as a rule make truthful representations in regard to the soap offered for sale by them. The respondent's misrepresentations as found in paragraphs 2 and 3 hereof tend to and have diverted business from both classes of said competitors.

Order 11 F. T.C.

CONCLUSION The practices of the said respondent, under the conditions and circumstances described in the foregoing findings, are to the prejudice of the public and respondent's competitors and are unfair methods of competition in ·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 Commission upon the complaint of the Commission, and the evidence received in support of said complaint, the respondent, not having offered any evidence, 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, F. Burkhalter, his agents and employees do cease and desist from using the words " Doctor Soap" or "Medicated Soap" on soap, labels, wrappers, boxes, or other containers, or in newspapers, circulars, or other printed matter in connection with the sale of respondent's soap, or representing in any other manner soap sold or offered for sale by respondent as "Doctor Soap" or "Medicated Soap."

It is further orvlered, That the respondent, F. Burkhalter, shall within 60 days after the service upon him of a copy of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist hereinbefore set forth.

Bell CAP l!O. 41 Complaint