Gottsegen, Morris, Et.Al

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

IN TIIE MA 'ITER OF DAVID JACOBY AND MORRIS GOTTSEGEN, PARTNERS, DOING BUSINESS UNDER THE TRADE NAMES AND STYLES, MILLS SILVER WORKS, AND l\fills SALES COMPANY .

COMPLAINT (SYNOPSIS) 1 FINDINGS, AND ORDER IN REGARD TO THE ALLEGF.D VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS Al'PROVED SEPT. 26 1 1914 Doclcel 1HO. Complaint, Mar. 1, 192"1-Declsivn, July 21, 1927 Where a firm engaged as jobbers in the eale of me~.:chandise of sundry kind'!, and doing no manufacturing, (a) Used the trade name lllllls Silver Works on their letterheads, bi:Iheads, invoices and other trade literature and in their cat»lot;Ues and advertisements, together with such statements as "Manufacturers of Silver-plated Hollow- Ware" and "Importers and Manufacturers", with the intent and effect of misleading and deceiving customers into believing them to be manufacturers and that in dealing with them they were therefore obtaining better goods at cheaper p1lces than when purchasing from a jobber; and In their catalogues (b) Falsely described pyrolln or celluloid combs, Ivory colored clocks, wood shaving brush handles paiuted black to resemble ebony, and bill folds made of. some material imitating seal, as pyrolln ivory, and .amber and shell, ivory, ebony wood, and American pin seal, respectively; with the capacity and tendency to deceive the purchasing public and induce them to purchase the articles thus described, in reliance upon the truth and accuracy of such description :

Held, That such practices, under the circumstances set forth, coustltuted unfair methods of. competition.

Mr. Alfred M. Craven for the Commission.

SYNOPsis OF Co~IPLAINT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondents, partners engaged in the sale of merchandise of sundry sorts and kinds at wholesale to retailers in various States, doing no manufacturing but purchasing the merchandise dealt in by them from the manufacturers and reselling the same at a profit, and with principal place of business in New York City, with using misleading trade name, misrepresenting business status, and advertising falsely or misleadingly in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce.

:MILLS SILVER WORKS 215 214 Complaint Respondents, as charged, featured the trade name :Mills Silver Works, or Mills Sales Co., as the case might be, in their advertisements in newspapers, periodicals and other publications of general circulation throughout the United States and in certain sections thereof, and upon their letterheads, envelopes, bill heads, invoices and other trade stationery, together with statements that they were manufacturers of sundry articles dealt in by them, with the capacity and tendency to mislead and deceive, and with the effect of misleading and deceiving many retail dealers into believing that persons dealing with them were buying directly from the manufacturer, thereby eliminating the profits of middlemen, and to cause many to purchase their merchandise in such belief; with the capacity and tendency to divert business from and otherwise injure and prejudice competitors, many of whom manufacture the merchandise dealt in by them and rightfully represent themselves as so doing and others of whom purchase the merchandise dealt in by them and resell the same to others at a profit to themselves over and above the cost thereof to them, without in anywise representing themselves as the manufacturers thereof, and with the effect of so doing. Respondents further, as charged, in their aforesaid advertising made many false and misleading statements and representations concerning the origin, nature, character and value of various articles depicted and described in said advertising and the materials whereof composed, holding out the same as of a greater and higher value and quality than was the case, said statements and representations including the following:

(a) Combs as ivory when made entirely of other materials, of much less value, through the use of the phrase "Pyrolin Ivory"; (b) Clocks containing no ivory, as ivory; (c) Shaving brushes as having ebony handles .and imported French bristles, the fact being that said handles were composed Wholly of wood other than ebony, of much less value than ebony, and resembling it in general appearance;

(d) Pocket books or bill folds, as of seal skin leather, the fact being that they were made of material other than leather, of much less value than leather, and resembling it in general appearnnce through the use of the phrase "American Pin Seal "; and (e) Numerous other similar false and misleading representations. Said acts and practices, engaged in for about three years preceding the complaint, as charged, had the capacity and tendency to and did ~cause many retail dealers to purchase, deal in and resell said articles In reliance upon the truth of the aforesaid false and misleading rep- Findings llf.T.C.

resentations, and had the capacity and tendency to and did divert business from and otherwise injure and prejudice competitors who did not misrepresent the origin, nature, character and value of the merchandise dealt in by them, and were, as charged, all to the prejudice of the public and respondents' competitors. Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an act of Congress approved September 26, 1914, ent.itled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade CoiP..mission issued and served its complaint upon the respondents, David Jacoby and Morris Gottsegen, copartners doing business under the firm names and styles of Mills Silver Works and Mills Sales Company, charging them with the use of unfair methods of competition in commerce, in violation of the provisions of section 5 of said act of Congress. The respondents having entered their appearance and filed their answers herein, hearings were had and evidence was thereupon introduced on behalf of the Commission and of the respondents before an examiner of tho Federal Trade Commission theretofore duly appointed. The respondents having waived the fil.ing of briefs and oral argument, 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 TIIE FACTS PARAGRAPH 1. Respondents, David Jacoby and :Morris Gottsegen are, and have been for 10 years, partners doing business under various trade names and styles, among others, "Mills Silver vVorks" and "Mills Sales Company." They are engaged in the business of selling merchandise of sundry kinds at wholesale, to retail dealers located at points in various States of the United States. They cause said merchandise when so sold to be transported from their place of business in the City and State of New York into and through other States of the United States to said vendees at their respective points of location. In the course and conduct of their said business respondents are in competition with other individuals, partnerships and corporations engaged in the sale and transportation of like articles of merchandise in interstate commerce between and among the various States of the United States.

MILLS SILVER WORKS 217 214 r Findings PAn. 2. Respondents use their trade names mentioned in paragraph 1 hereof on their letterheads, billheads, invoices and other trade literature, in advertisements inserted in newspapers of national circulation, and also in catalogues descriptive of their merchandise and prices, widely distributed to customers and prospective customers throughout the United States. The trade name is usually accompanied by a statement to the effect that respondents are manufacturers.

The following are samples of respondents' printed matter appearing on such stationery as letterheads and invoices: "MILLS SILVER WORKS Manufacturers of Silver-plated Hollow-Ware 661 Broadway, New York."

"MILLS SALES COMPANY Importers and Manufacturers 13 East 16th Street, New York, N. Y."

A catalogue issued by respondents in August, 1926, purporting to be the catalogue of the Mills Sales Company, containing description and prices of a large number of articles offered for sale by respondents, was subscribed as follows:

"MILLS SALES COMPANY Importers and Manufacturers."

PAR. 3. Respondents are not manufacturers of silverware or of any other commodity, but are jobbers, and purchase the commodities in which they deal from the manufacturers thereof. The trade name "Mills Silver 'Vorks" imporb; a factory or plant where silverware is manufactured. The use of such trade name, or of the representation that respondents are manufacturers, taken alone or in connection one with the other, has the tendency and capacity to mislead and deceive, and has misled and deceived, customers of respondent into the belief that respondents were manufacturers, and that said customers were, for that reason, obtaining better goods at cheaper prices than when purchasing from a Jobber. It was the purpose and intention of respondents, in using the firm name " Mills Silver ·works", to secure the custom of persons having such impression.

PAR. 4. In the catalogue referred to in paragraph 2 as being issued in August, 1926, numerous false and misleading descriptions are Order llf.T.C.

applied to certain articles, as follows: (Quotations are from the catalogue.) 1. "Fine Combs, Pyrolin Ivory No. 14."

The combs described were not made of ivory, but were made of pyrolin or celluloid.

2. "Fine Combs, White, Amber·and Shell, 4.50 and 5.25 per gross." None of the combs thus described were made of amber or shell, but were made of celluloid in imitation of amber and shell in color only.

3. "Fancy Clocks, metal, celluloid and ivory, for every conceivable purpose."

None of the clocks thus described were made in whole or in part of ivory, but those referred to as "ivory" in the description were colored to give the appearance of ivory.

4. "SHAVING BRUSHES, Black and Ebony Wood Handles, 'White French Bristles . . • 10.-per gross." The shaving brushes thus described were not made of ebony wood, but of some kind of wood painted black to give the appearance of ebony.

5. " Leather Bill Folds, American Pin Seal, Gold Plated Corners and Shield, packed one to Gold Blue Ribbon box (a corking $1.00 Number) 5.50 per dozen."

The bill folds thus described were not made of pin seal, or the skin or the hide of a seal, but were made of some other material in imitation of seal.

PAR. 5. The false and misleading descriptions mentioned in paragraph 4 hereof, each has the capacity and tendency to- deceive the purchasing public, and to induce them to purchase the articles described, in reliance upon the truth and accuracy of such description. CONCLUSION The practices of the said respondents, under the conditions and circumstances described in the foregoing findings, are to the prejudice of the public and of respondents' 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, the answer of the respondents and the evidence introducecl1 and the Commission having MILLS SILVER WORKS 219 214 Order made its findings as to the facts and its conclusion that the respondents have 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 respondents David Jacoby and Morris Gottsegen do cease and desist from :

1. Doing business under the trade name "Mills Silver ·works", or under any other trade name importing or indicating that the respondents are manufacturers, unless and until the respondents herein are, in fact, manufacturers.

2. Representing by means of advertisements or catalogues or by any other means whatever, that they are manufacturers, unless and until the respondents herein are, in fact, manufacturers. 3. Using the word "ivory" as a noun in advertising or describing any article offered for sale by them, unless that article be made of ivory.

4. Using the word "ivory" in any description or advertisement of an article offered for sale by them, in such way as to indicate that the article is made of ivory, unless such be the fact. 5. Using the word" amber" or" shell" in advertising or describing articles offered for sale by them, except in an adjective sense denoting color, unless such article be made from amber or shell as the case may be.

6. ·Advertising or describing any article as being "ebony wood" unless it be made from ebony wood.

7. Advertising or describing articles to be made of American Pin Seal unless said articles be made of sealskin. 8. Making any other untruthful advertisement or description of any article offered for sale by them.

It is further ordered, that the respondents David Jacoby and Morris Gottsegen shall, within 30 days after the service upon them 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. 220 JI'EDERAL TRADE COMMISSION DECISIONS Complaint llf.T.O.