James A. Mccafferty Sons Manufacturing Company, Incorporated

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IN THE MATTER OF JAMES A. McCAFFERTY SONS MANUFACTURING COMPANY, INCORPORATED COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED l'VIOLATION OF SEC. 6 OF AN ACT OF CONGRESS APPROVED SEPT, 20, 1914 Docket 1165. Complaint, Apr. 24, 1924-Decision, June 30, 19'n Where a corporation engaged in the manu:l'ncture and sale of paints and paint products, including a product containing not more than three per cent o:l' carbonate o:l' lend or sulphate of lead, mixed with other Ingredients; designated, branded and labeled said product "GOLD SEAL Combination WHITE LEAD "; with the ef:lect o:l' misleading and deceiving the purchasing public into believing the same to be composed of a mixture containing not less than fifty per cent of white lead by weight, and of placing in the hands of retail dealers a means of so misleading and deceiving the public, and with the effect of diverting trade from and otherwise injuring both competitors engaged in the sale of products composed of carbonate of lead or sulphate of lead ground in linseed oil, and by them properly designated and described as "White Lead 11 , and competitors engaged In the sale of products containing only a small percentage of the aforesaid first named ingredients, without designating or describing the same as "White Lead 11 or "Combination White Lead 11 : Held, That such practices, under the circumstances set fot'th, constituted unfair methods of competition.

Mr. Robert 0. Brownell for the Commission. Fitzgerald, Strtpleton & Malwn, of New York City, for respondent. SYNOPSIS oF CouPLAJNT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent, a New York corporation engaged in the manufacture of paints and paint products and ingredients, and in the sale thereof to wholesale and retail dealers in the various States, and with principal office and place of business in New York City, with naming product misleadingly and misbranding or mislabeling in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce, in that respondent named, branded and labeled a product containing not more than three per cent of sulphate of lead or carbonate of lead "Gold Seal Combination White Lead", with the capacity and tendency to mislead and deceive the trade and public into believing that sulphate of lead or carbonate of lead, understood by the trade and public through common usage as being designated by the term JAl\IES A. 1\IcCAFFERTY SONS 1\IANUFACTURING CO., INO. 171 170 Findings "White Lead ", was the predominant or principal ingredient in said product and to cause the purchase thereof in such belief, all to the prejudice of the public and respondent's competitors, a number of whom, as manufacturers and distributors, do not misbrand or falsely label as white lead their "white lead compound product containing small proportions of sulphate of lead or carbonate of lead", and a number of whom label, brand, advertise and sell as "white lead", products containing "sulphate of lead or carbonate of lead as the predominant or principal ingredient." 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, James A. McCafferty Sons Manufacturing Co., Inc., a corporation organized under the laws of the State of New York, 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 and filed its answer herein, 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 in lieu of testimony and proceed forthwith upon said agreed statement of facts to make its fmdings as to the facts and such order as it may deem proper to enter therein, thereupon this proceeding came on for decision, and the Commission, having duly considered the record and being fully advised in the premises, makes this its findings as to the facts and its conclusions drawn therefrom:

FINDINGS AS TO THE FACTS PARAGnArn 1. Respondent, James A. McCafferty Sons Manufacturing Co., Inc., is a corporation organized under the laws of the State of New York, with its principal office and plttce of business in the City of New York in said State. It is now and for many years has been engaged in the manufacture of paints and paint products and ingredients, and the sale thereof to wholesale and retail dealers located at points in \·arious States of the United States. It causes its said products, when so sold, to be transported from its said principal place of business in the City and State of New York, into and through other States of the United States to sad purchasers at their respective locations. In the course and conduct of its said business, respondent has been for many years and now is in competition with Findings 11 F. T. 0. other corporations, partnerships, and individuals who are also engaged in the sale and distribution of paints and paint products and ingredients in interstate commerce.

PAR. 2. Among the products which are manufactured by respondent in the regular course of its business is one which it designates, brands and labels as "Gold Seal Combination "White Lead," the word " Combination " being in smaller letters than the other words in the label. It is composed of not more than three per cent of carbonate of lead or sulphate of lead mixed with other ingredients. Respondent sold and sells this product in the regular course of its business, as described in paragraph 1 of these findings, to wholesale and retail dealers located in different States of the United States, and it is by them resold to the purchasing public.

PAR. 3. The term "White Lead " is commonly understood by the trade and by the purchasing public to mean either carbonate of lead or sulphate of lead ground in linseed oil, without any other ingredients. The term " Combination White Lead" is understood by the trade and by the purchasing public to mean a mixture of white lead with other ingredients in which mixture the white lead is not less than fifty per cent of the total by weight. PAR. 4. The use by respondent of the name "Gold Seal Combination White Lead", as set out in paragraph 2 hereof, has the capacity and tendency to mislead and deceive the purchasing public and part of the trade into the belief that respondent's product is composed of a mixture of white lead with other ingredients, in which mixture the white lead is not less than fifty per cent of the total by weight, and does so mislead and deceive the purchasing public; and places in the hands of retail dealers a means of so misleading and deceiving the public.

PAn. 5. There are among the competitors of respondent mentioned in paragraph 1 of these findings many who sell and distribute in interstate commerce products composed of carbonate of lead or sulphate of lead ground in linseed oil, and who properly designate and describe such products as "white lead"· There are others among said competitors who sell and distribute in interstate commerce products which contain small percentages of carbonate of lead or sulphate of lead, and who do not designate or describe said products as "white lead " or "combination white lead ". The acts and practices of respondent as set out in paragraph 2 of these findings have the <'apacity and tendency to and do divert trade from and otherwise injure its said competitors.

JAMES A. McCAFFERTY SONS :MANUFACTURING CO., INC, 173 170 Order 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 2G, 1914, entitled "An act to create a Federal Trade Commission, to define its po·wers 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 an agreed statement of the facts, and the Commission having made its findings as to the facts and its conclusion that respondent has violated the provisions of an 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", It is now ordered, That the respondent, James A. McCafferty Sons .Manufacturing Co., Inc., its officers, agents, servants, and employees, do cease and desist from:

(1) Designating or describing any product sold or offered for sale by it in interstate commerce, by means of brands, labels, or otherwise, containing the terms "Gold Seal Combination White LeaJ" or "Combination White Lead," unless the product so designated or described actually contains carbonate of lead or sulphate of lead as its principal and predominant ingredient to the extent of not less than fifty per cent by weight of the product; or (2) Using or making any other representation, oral or written, as to any product sold by it in interstate commerce, which falsely represents the relative proportion of carbonate of lead or sulphate of lead contained in said product.

It i8 further ordered, That the said respondent shall, within 30 days from the receipt of this order, file with the Commission a report in writing setting forth the manner and form in w~iich it has complied with this order, and shall attach to said report two copies of any new form of label which it may have adopted in such compliance. Oomplalnt llf.T.O.