David A. Horn and J. M. Hyson, Copartners

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IN THE MA'ITER OF DAVID A. HORN AND J. M. JIYSON, COPARTNERS, DOING BUSINESS UNDER THE TRADE NAME AND STYLE OF THE TAMPA CIGAR COMPANY COMPLAINT (SYNOPSIS), FIND~NGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 11 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docl~et 1326. Complaint, June 11, 1925-Deciswn, July 30, 19f1 Where cigars made in Tampa, Fla., and in the Tampa district for more than a quarter of a century had come to be widely known and referred to in the trade and by the cigar-purchasing public as Tampa cigars, and the word "Tampa" on containers of cigars or In the advertisements thereof had come to be understood by the cigar-purchasing public and the trade as meaning that such cigars had been manufactured in Tampa or in the immediately surrounding territory, and where the word "Havana" on such containers or In such advertising had come to be understood by said trade and publlc as meaning cigars manufactured from tobacco grown on the lsland of Cuba: and thereafter a firm engaged at Red Lion, Pa., in the manufacture and sale of cigars composed of domestic tobacco only, and with no interest in any cigar factory in Tampa or the Tampa district, (a) Employed the words "Tampa cigar" as a part of their trade name and displayed the same on !!igns, on their business stationery, and in their advertising, and on the labels or containers of their cigars ; (b) Caused the word "Havana" to be printed on the bands of one of their brands, and the legend "Made of the finest selected imported and domestic tobaccos," etc., to be printed on the labels and containers of another brand: and (c) Caused to be placed in gold letters upon the containers of another brand the phrase "Double Grand Prize St. Louis Exposition, 1904 ", together with a representation of a gold meclal or prize at either end thereof, and underneath In small type the statement "Title and design registered by Tampa Cigar Co.," the fact being that no such prize was conferred on anyone at the exposition in question;

With the tendency aud capacity to contuse, mislead and deceive the trade and cigar-purchaslng publl<! in respect of the place of manufacturing and composition of the aforesaid cigars, and into believing that the brand last above referred to had been awarded the "Double Grand Prize" by the exposition in question:

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

Mr. Oharles Melvin Neff and Mr. Henry Miller for the Commission.

Mr. S. B. Meisenhelder, of York, Pa., for respondents. SYNorsis oF Complaint Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission l.Amended complaint, Oct. 2, 192G.

TAMPA CIGAR CO. 221 220 Complaint charged respondents, partners engaged in the Borough of Red Lion, York County, Pa., in the manufacture of cigars containing, with unimportant exceptions, no Havana tobacco, and in the sale thereof to wholesale and retail dealers in the various States, with using misleading trade name, advertising falsely or 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.

Respondents, as charged, displayed their trade name including the word "Tampa " to the trade and public, on signs, on their business stationery, in their advertisements of their cigars, and on the labels of the containers thereof and otherwise, with the tendency and capacity to cause the cigar trade and public to believe that said cigars were made in the Tampa district, long possessed of a high repute and good will among the trade and members of the. public as a district known to be one of the principal manufacturing centers in the United States for the manufacture of superior cigars, and with the result that many among said trade and public were confused, misled, deceived and defrauded thereby, in accordance with respondents' intent in the unnecessary choice of the word Tampa as a part of its trade name, to deceive the wholesale and retail cigar trade and members of the public into believing its cigars to have been made in the city or district of Tampa, and into purchasing the same in such belief, into so doing.:~ 1 The background and history of the cigar industry of Tampa, ae related to this case, are Bet forth In the complaint as follows: For many years, prior to the establishment of the cigar-manufacturing industry in the city nnd district of Tampa, Fin., the dominant center of the industry tor the manufacture of cigars composed of l.Iabana tobacco, both u regards the source of supply of the material of which they were composed and of the labor employed in their manufacture, wu located In Cuba.

The said clgara, known by reason of the tobacco composing them as Habana cigar~. liere made by hand, almost exclusively, by what is known as the Spanish hand-made method in which the use of machinery, moulds or other mechanical aids was and Is not t-mployed, and In connection lVIth the manufacture of aald cigars there waa developed In Cuba a large body of native labor of the highest skill In the use of the aforesaid Spanish band method.

During the times mentioned and referred to herein, cigars made of Habana tobacco lVbethcr made In Cuba or In the United Statt-s are and have been made almost exclusively by the aforesaid Spanish hand method. A very substantial number of the sald cigar trade and member of the public In the United States believed and now believe that llabana tobacco was and Is superlot• In quality tor the manufacture ot cigars to tobacco grown elsewhere, and that cigars made either in Cuba or In the United States ot llabana tobacco are and have been superior In quality to clgan made of other tobacco and by any other method or In any other way than by the said Spanish band method. "Vuelta Abajo" Is the name of a district In the Island ot Cuba In which tobacco Is grown that bas been and ls considered by the said trade and public as the finest tobacco tor use In the manufacture of cigars.

On or about 40 yean prior to the time respondents engaged as copartners In their aald business, the cigar·manutacturlng Industry was established In the city ot Tampa, Fla., Alld the eurroundlng countey known and referred to herein aa the Tampa dtatrlct. The Complaint 11 F.T. C. Respondents further, as charged, labeled the boxes or containers of their cigars with brand names almost exclusively Spanish, together with pictures representing a Spanish cavalier or character, Spanish illustrations and decorations, the word "Havana", in the case of one of its brands, the legend, in the case of another, "Made of the finest selected Imported & Domestic Tobaccos Under Sanitary Conditions", the statement, in gold letters, in the case of another brand, "Double Grand Prize St. Louis Exposition 1904," and at either end of the phrase a representation of a gold medal or prize and underneath in small type " Title & Design registered by Tampa. Cigar Co.", and the words on the label of another one of its brands, conspicuously and repeatedly," Vuelta Abajo ",and" Spanish Hand Made", and the phrase "Trade Mark and Design Owned by The Havencia Cigar Co.," a fictitious name; thereby falsely and knowingly representing and causing others to represent said cigars as composed entirely of Habana tobacco of the finest quality, and the manufacturer thereof as the fictitious firm or corporation named manufacturers and workmen engaged In the manufacture of cigars In tile lllld Tampa district from the time of the establls!Jment of the cigar-manufacturing Industry In the eald district, were and now are to a very large extent manufacturers and workmen, or their descl'ndants, who came from the IR!nnd of Cuba, and the 8/lld workm<'n were and now are b~llend to be among those of the highest skill In the making of cigars by the uld trade and public.

For a number of yenra bPg!nnlng Immediately upon,. the establishment of the ciJ:(armanufacturlng Industry In the said Tampa district, and until oo or about the year 1000, most of the cigars made there were known as Ilabana cigars, composed ot Ilabana tobacco and made by the aforesaid Spanish hand method by the said cigar makers, native workmen of Cuba or their deHcendanta, and during the said times cigan ll'lth which the word "Tampa" was associated became known throughout tho United Statrs and hnd a reputation as clgau of auperlor quality to cigars made In many other places In the United S ta tea.

lla\"B.Ila clgara made by the aforesaid Spa.nlsh hand method continued to be and now are made In large and Important quantities In the city of Tampa and Its Immediate environs referud to herein as the Tampa district. On or about 25 yean prior to the date hereof, the cigar-manufacturing Industry In th& aald Tampa district was extend~d to and has since Included not only the manufacture ot Uabana cigars but also the manufacture of civara made either wholly or partly of domestic tobacco and In large and Important qunntltles, and In the manufacture or which the aforesaid cigar makers have be~n employed to a large extent. Since the establishment of the cigar-manurncturlng lnduAtry In the anld Tampa district, on account or the foregoing tacts; on account of the proximity of the said city and district to the source of supply ot llabana tobacco, and on account ot particular climatic conditions existing In the said district wblch are believed by a very IUbstantlal number of the cigar trade and the members of the pu!lllc In the United Statra who purchase cfgnra tor use and conRumptlon, to correspond nearly to the climatic conditions In tbe Island of Cuba; and on account ot the aforesaid character of the labor engaged In the manu!acture of clgnrs made In the euld Tampa district, clgau made In the said city ot Tampa and the enid Tampa district have acquired and now have a high r!'putatlon among the said trade and member of the said public 81 being clgau of a quality superior to that ot cigars made In many other places In the United States, and the said city of Tampa and said district have acquired by reuon thereof during the times mentioned and refPrrclt to herein among the said trade and the membP.u of the said public a similar rrputatlon and a good will as a city and district known to be one of the principal manufacturing centen 1n the United Stutel tvr U!f manufacture ot clgan ot a surerior qualltr u aforesaid. TAMPA CIGAR CO. 223 220 Findings The Havencia Cigar Co., and falsely representing one of their aforesaid brands as having been adjudged by the aforesaid exposition as of a higher grade or quality than other cigars in competition with it, the fact being that no prize or medal of any kind was so awarded respondents, and with the tendency and capacity in the use of the aforesaid brand names, as above set forth, almost exclusively in Spanish, the use of the word "Tampa," Spanish names, pictures, illustrations, words "Vuelta Abajo," "Spanish hand made," "Havana" and "imported," to confuse, mislead, deceive and defraud the trade and public into believing said cigars to have been made of Habana tobacco, that they were made in the city or district of Tampa, and that respondents were cigar manufacturers in said city or district, and into purchasing respondents' cigars in the aforesaid mistaken beliefs.8 • Said acts and practices were, as charged, all to the prejudice of the public and respondents' competitors, some of whom manufacture cigars in said Tampa district and properly use the word Tampa in labeling, branding and advertising the same, and others of whom manufacture cigars elsewhere, without using the word "Tampa" as part of their trade name, or in the labeling, branding or adverti;;ing of their cigars.

Upon the foregoing complaint, the Commission made the following REI'ORT' FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to an act of Congress approved September 26, 1914, the Federal Trade Commission issued and served an amended complaint Upon David A. Horn and J. M. Hyson, partners doing business under the firm name and style of "Tampa Cigar Company", charging t?em, and each of them, with the use of unfair methods of competition in violation of the provision,~ of said act. Each of the respondents entered his appearance and filed an answer. Neither was represented by an attorney. A formal hearing Was had, testimony and other evidence was introduced on behalf of the plaintiff and respondents, and a brief was filed by counsel for the Commission. None was filed by the respondents or either of them. Thereafter this matter having come on regularly for deci;;ion, an.d the Commission having considered the record in this case, and bem.g now advised in the premises, makes this its report, stating its findmgs as to facts and its conclusions drawn therefrom: th 1 Among the br~nd nnm•·s us~!l by respondents for Its cl~ors, n~ above set forth, were e follow lug: " Fernando's El Kii.Jb<>t C. T. Co. • and the phrase, "Title and !lt•Hign . ~~glHtered by Tampa Cigar Co", "!<'lor De Alwin", "E1 DUl·bro ", .. El Sc1ibe ", Unitue" and "Uurule."

224 FEDERAL Tl'tADE COMMISSION DECISIONS Findings 11F.T.C.

FINDINGS AS TO THE FACTS PARAGRAPH 1. That the respondents, David A. Horn and J. M. Hyson, are individuals residing in the borough o£ Red Lion, County of York, State of Pennsylvania, and that since 1916 they have been, as copartners, continuously and until December, 1925, engaged in the business of manu-facturing and selling cigars, under the firm name and ,style of the" Tampa Cigar Company." In December, 1925, the respondents, under the laws of the State o£ Pennsylvania, organized and incorporated "The Federal Cigar Company", to take over and continue the business of the copartnership, the "Tampa Cigar Company.'' PAR. 2. The respondents, since they have been in business, ha,·e mape all their cigars in the city of Red Lion, Pa. They caused their cigars, when manufactured, to be packed for display in wooden boxes or other containers, knowing and intending that they would be displayed for sale and sold to individuals, firms and corporations, both wholesale and retail dealers in cigars, and to the public generally throughout the United States.

PAR. 3. The respondents caused such cigars when sold to be transported from the city of Red Lion, Pa., to and into and through other States of th,.. Pniteu ~tutes and the District of Columbia to the purchasers thereof, and carry on said business in direct and active competition with other individuals, copartnerships and corporations similarly engaged in commerce.

PAR. 4. That for more than a quarter of a century cigars have been made in the city of Tampa, Fla., and in the territory immediately surrounding this city known as the "Tampa District"· Such cigars are widely known and referred to in the trade and by the cigar purchasing public as "Tampa cigars".

PAR. 5. The word "Tampa", when used on the containers of cigars or in the advertisements thereof, is understood by the cigar purchasing public and the trade to mean that such cigars were manufactured in the city of Tampa, Fla., or in the territory immediately surrounding said city.

The word "Havana" when used on the containers of cigars or in the advertising thereo-f, is understood by the trade and the cigar purchasing public to mean 'that such cigars were manufactured from tobacco grown on the Island of Cuba.

PAR. 6. Respondents, since 1916, when they began their partnership trading under the name Tampa Cigar Co., have displayed their trade name including the word "Tampa" on signs, on their business stationery and in advertising their cigars, and on labels on the con- TA:MPA CIGAR CO. 225 ·Findings tainers or boxes containing their cigars. Respondents, on their cigars branded "Flor de Alwin," caused the word "Havana" to be printed on the bands, and on respondents' cigars called "Federal Judge," they caused to be printed on the labels and the containers " Made of the finest selected imported and domestic tobaccos under sanitary conditions."

Respondents, though they have been manufacturers of cigars since 1916, have never owned, operated, controlled or hnd any interest in any cigar factory in the city of Tampa, Fla., or in the Tampa district. They have manufactured their entire output in Red Lion, York County, Pa., and made shipments of their products from said place ..

None of the cigars manufactured by respondents have at any time contained and do not now contain any Havana tobacco. Respondents, in the manufacture of their cigars, used domestic tobacco only. Among other cigars manufactured by respondents is the brand "El Durbro." On the boxes or containers displaying this brand, respondents caused to be placed in gold letters the phrase " Double Grand Prize St. Louis Exposition, 1904; " and at either end of said phrase respondents caused to appear a representation of a gold medal or prize, and underneath said label, in small type, the following statement: "Title and design registered by Tampa Cigar Company." There was no " Double Grand Prize " granted, nor was there conferred on anyone a prize or decoration known as a "Double Grand Prize" by the St. Louis Exposition, otherwise known as the Louisiana Purchase Exposition, in 1904, and the use by respondents of this representation tended to deceive and mislead the purchasing public and respondents' customers into believing that respondents' said brand of cigars had been awarded said prize. PAR. 7. Respondents' use, from 1916 to December, 1925, of the word "Tampa " in their firm name and otherwise as set forth, had the capacity and tendency to cause the cigar trade and the cigar-purchasing public to believe that respondents' cigars were made in the city of Tampa, Fla., or in the Tampa district, when in truth and in fact respondents' cigars were not manufactured in said city of Tampa, Fla., or in the Tampa district, but were manufactured in Red Lion, Pa., as set forth above.

The use by respondents of the word" Havana" in connection with the cigars manufactured and sold by them, whether in advertising or upon cigar containers, or otherwise, had the tendency and ca parity to confuse, mislead and deceive the trade and the cigar-purchasing public into believing that the respondents made their cigars of tobacco grown on the Island of Cuba.

Order 11 F.T. C.

The use by the respondents of the word "Imported" in connection with the cigars manufactured and sold by them, whether in advertising or upon cigar containers, or otherwise, had the tendency and capacity to confuse, mislead and deceive the trade and the cigarpurchasing public into believing that the respondents made their cigars of imported tobacco only.

PAR. 8. Among the compelitors of the respondents engaged in the manufacture and sale of cigars in interstate commerce are a number of individuals, firms and corporations located in the city of Tampa, Fla., or in the Tampa district, who have been and now are properly using the word " Tampa " in labeling, branding and advertising the cigars they manufacture and sell.

Among said competitors of respondents are the individuals, firms and corporations manufacturing and selling cigars outside of the said city of Tampa, Fla., or in the Tampa district, who are not using and have not useu the word "Tampa" as part of their trade name, or in the labeling, branding or advertising of their cigars. PAn. 9. Respondents, from 1916 to December, 1925, conducted their partnership as above set forth under the firm name "Tampa Cigar Company". In December, 1925, respondents David A. Horn and J . .M. Hyson caused to be incorporated under the laws of the State of Pennsylvania a corporation entitled the " Federal Cigar Company", under which name respondents are now operating. Responuents' place of business is still located at Red Lion, York County, Pa. The Federal Cigar Co. had a capital stock of $150,000. Its officers are: Respondent David A. Horn, president, respondent J. M. Hyson, treasurer; Charles II. Horn, vice president; and Earl Grove, secretary.

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 respondents' competitors, and are unfair method:> of competition in commerce, and constitute a violation of the net 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 amended complaint of the Commission, the answer of respondents and the testimony and the evidence, and the Commis- TA:M:PA CIGAR CO. 227 220 Order s.ion having made its findings as to the facts, with its conclusion that respondents have violated the provisions 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 ", It is now c;rdered, That respondents David A. Horn and J. M. Hyson, and each of them, their agents, servants, representatives and employees cease and desist- (!) From using the word "Tampa" in or as a trade name under which to sell and distribute in interstate commerce any cigars which have not been manufactured in the city of Tampa, Fla., or in the • Tampa district in the State of Florida;

(2) From using the word" T.ampa ", or any other word or words of similar import, alone or in conjunction with any other word or Words in descr.ibing, advertising, labeling, branding, or otherwise rl'presenting any cigars sold and distributed in interstate commerce when such cigars have not been manufactured in the city of Tampa, Florida, or in the Tampa district in the State o£ Florida; (3) From using the word" Havana," or word or words o£ similar import in describing, advertising, labeling, branding, or otherwise representing any cigars or parts o£ cigars sold and distributed in interstate commerce, unless such cigars or parts o£ cigars, respectively, as the case may be, are in truth composed wholly o£ tobacco grown on the Island o£ Cuba.

(4) From describing, advertising, labeling, branding or otherwise representing as imported any cigars or parts of cigars sold anu distributed in interstate commerce unless such cigars or parts o£ cigars, respectively, as the case may be, have been imported into the United States from a foreign country.

(5) From representing in any manner whatsoever in connection with the sale and distribution of cigars in interstate commerce that respondents or any of such cigars have been awarded a "Double Grand Prize, St. Louis Exposition, 1904," or any other price, when such is not true in fact.

It is fwrtlwr ordered, That the respondents shall within 60 days after the service upon them o£ a copy of this order, file with the Com- :rnission 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.

65183"--30-VOL 11--16 CO:MMISSIO~ DECISIONS228 F.Bl>ERAL TRADE Complaint ll.F.T.C.