Nathan Gennet

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

IN THE MATIER OF NATHAN GENNET, AN INDIVIDUAL TRADING UNDER THE NAME AND STYLE OF CENTRAL QUILT & MAT- TRESS MFY.

COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN RE'GARD TO THm ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Doclret 1917. Complaint, Oot. 13, 1931-De~ion, Oct. 91, 1932 Where an Individual engaged In manufacture and sale of mattresses, sold said products in competition with genuine, all new material cotton mattresses and at prices lower than those at which such mattresses could be purchased, labeled as all new material In purported compliance with laws of State in which made, nnd with labels of Eame color specified by law of State in which sold to retailers for resale to ultimate consumer, for all new material mattresses, notwithstanding fact articles thus marked contained shoddy, rags, and other second-hand material, some of which bad indications of having been used about the person; with effect of misleading and deceiving purchasers In respect of the composition of said mattresses, and with capacity and tendency to deceive both retail dealers and purchasing publlc in said respect, and to divert trade from competitors truthfully labeling their products :

Held, That such practices, under the circumstances set forth, were to the prejudice of competitors and the public, and constituted unfair methods of competition.

Mr. Richard P. 'Whiteley for the Commission. Isserman & Isserman, of Newark, N.J., for respondent. SYNOPsis OF Co:r.IPLAINT Reciting its action in the public interest, pursuant to the provisions of the Federal Trade Commission Act, the Commission charged respondent individual, engaged as Central Quilt & Mattress Mfy. in the manufacture and sale of mattresses and quilts, and with principal place of business in Newark, N.J., with misbranding or mislabeling as to composition of product, in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce.

Respondent, as charged, for more than two years last past, " has represented, designated, described, and referred to the said mattresses as containing and being composed entirely of new material, and has attached or caused to be attached or fixed to said mattresses so sold and distributed by him in interstate commerce labels", in purported CENTRAL QUILT & MATTRESS MFY. 107 106 Findings -compliance with the requirements of State laws, setting forth that mattresses in question were composed of all new material; 1 facts being mattresses thus labeled were composed of second hand and used 1naterials, such as cotton, cotton rags, jute, etc., all of which materials were second hand and in many instances filthy or unclean. Such representations and statements by respondent, as alleged, "by means of which he has offered for sale and sold or is selling his products as set forth * * •, have had the capacity and tendency to mislead and deceive and/or have misled and deceived the purchasing public into the belief that the said representations and statements are true, and have tended to induce, and have induced, the purchase of respondent's mattresses in reliance upon such erroneous belief, and have tended to divert trade from, and have diverted trade from, and otherwise injured, competitors of respondent "; all to the prejudice of the public and competitors.

Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTs, AND OnnEn 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, Nathan Gennet, an individual trading under the name and style of Central Quilt & Mattress 1\Ify., charging him with the use of unfair methods of competition in commerce in violation of the provisions of said act. Respondent having entered his appearance and filed an answer to the said complaint, a hearing was had before a trial examiner theretofore duly appointed, and testimony was heard and evidence received in support of the charges stated in the complaint, and in opposition thereto. Thereafter this proceeding came on regularly for final hearing before the Commission on the complaint, answer, testimony and evidence received and brief in support of the allegations of the complaint (no brief being submitted by or for the respondent) and the Commission having duly considered the record and being now fully advised in the premises makes this its report, stating its findings as to the facts and its conclusions drawn therefrom: • Labels In question, ns alleged, and set forth In the complaint, were as follows: DO NOT REMOVEl THIS LABEL Under Penalty of Law This Article Contains ALL NEW MATERIAL Consisting of Manufactured by Central Quilt & Mattress Mfy., Newark, N.J. This tag Is attached ns required by luw as a certification that the contents of this ARTICLE are as reprrs~ntecl, In compliance with Article 25-B of the General Business L11w of the St11te of New York.

DO NOT REIIIOVE LABEL Under Penalty of the Law of State. of New Jersey This mattress Is made of all new material. Central. Central Quilt & Mattress 1\Ify,, N. GENNET, Prop., Newark, N.J. Contains COTTON R. E. Findings 17 F.T.C.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Nathan Gennet, an individual trading under the name and style of Central Quilt & Mattress Mfy., is a resident of Newark, State of New Jersey, with his office and principal place of business located in said State and is now and has been for more than two years engaged in the manufacture of mattresses, and in the sale and distribution of said products to jobbers, storekeepers and retail dealers located in the States of New Jersey and New York. He has caused said mattresses when sold to be shipped from his place of business in Newark, N.J.~ to purchasers thereof located in the State of New York, and in the course and conduct of his said business respondent was at all times herein referred to in competition with other individuals, and with firms, partnerships, and corporations likewise engaged in the sale and distribution in interstate commerce of mattresses.

PAR. 2. In the course and conduct of his business respondent manufactures and sells all kinds of mattresses, including hair mattresses, silk mattresses, kapok mattresses, cotton mattresses, napper mattresses, and woolen material mattresses. The plant of respondent has a capacity of about one hundred mattresses a day and the output is usually from twenty to forty mattresses a day. To certain mattresses manufactured. by respondent and sold and delivered by him to retail dealers in the State of New York during the years 1930 and 1931 the respondent affixed white tags or labels on which the following reading matter approved in red lettering: DO NOT REMOVE Tills LABEL Under Penalty of the Law of State ot New Jersey This mattress is made of CENTRAL all new material CENTRAL QUILT & MATTRESS MFY.

N. Gennet, Prop.

210 W. Kinney St., Newark, N.J.

CONTAINS NAPPER The law of the State of New York with reference to the labeling or branding of mattresses sold within that state contains the following provision :

CENTRAL QUILT & MATTRESS MFY. 109 Findings Section 389 - p. Tagging when new; idem, "second-hand, -" No person ·shall sell, expose for sale, deliver or consign for sale or have in his possession with like intent;

(a) .Any mattress, upholstered spring bed or metal bed spring which con· tains only new material unless there Is attached thereto a white tag signifying: 1. The name and address either of the manufacturer or of the vendor or of the successive vendors; and 2 . .A description of the filling used and a statement that all the material llsed is new: or (b) .Any mattress, upholstered spring bed or metal bed spring which contains any second-hand material unless there is attached thereto a yellow tag bearing the words " second-hand " and specifying: 1. The name and aduress either of the manufacturer or vendor or successive vendors;

2. .A description of the filling used; and 3. The date of sterllizatlon of the material used and name and address of the person, firm, or corporation sterilizing it; 4. In the description of the material used upon any label or tag it shall be unlawful to use in the description of such material used as the filling, or in the construction of any mattress, upholstered spring bed or metal bed spring, any term or designation likely to mislead. The labels or tags attached by respondent to certain mattresses sold by him in the State of New York during the years 1930 and 1931 were white and upon all of them the words "this mattress is made of all new material" appeared. Inspectors of the Mercantile Bureau of the Department of Labor of the State of New York, whose duty it is to inspect mattresses and other articles of bedding in order to ascertain whether said articles being sold in the State of New York are properly labeled or branded, visited certain retail establislunents in the city of New York during the month of March, 1931, and opened a number of mattresses manufactured by respondent and delivered by him to said retail dealers from his place of business in Newark, N.J., to all of which mattresses were affixed the white label quoted in paragraph 2 of these findings. None of the mattresses so opened by said inspectors contained all new material but they all contained second-hand material, consisting of cotton, jute, rags, cloth clippings, and mattress ticking and some of the said material was not only second-hand but was discolored and had a stale, sweaty, and musty odor indicating that it had been used on or about the person. No mattress of respondent that was opened by said inspectors contained all new material as it was labeled or branded to contain. PAR. 3. The mattresses sold and distributed by the respondent in the State of New York as herein described, which mattresses contained second-hand material and were labeled as containing all new material, were sold in competition with mattresses actually containing all new material at prices lower than the purchasers of said mat- Order 17 F.T.C.

tresses could secure mattresses actually containing all new material. Some of the mattresses sold by respondent to retailers in the city of New York as herein stated to which the respondent had attached white labels indicating the material of said mattresses as being of new material and which also designated the material as being napper were found to contain shoddy or second-hand material. PAR. 4. The representations made by respondent on the labels or tags attached to the mattresses containing used or second-hand material to the effect that said mattresses contained all new material were false in fact and the use of the white labels or tags upon the mattresses sold by the respondent in the State of New York misled and deceived the purchasers of the said mattresses into the belief that they contained all new material, and the aforesaid representations and the use of the said white tags or labels had and have the capacity and tendency to deceive both retail dealers and the public purchasing said mattresses from said retail dealers into the belief that the said mattresses really contained all new material, and the aforesaid false representations and misbranding or mislabeling are unfair to the purchasing public and to competitors of respondent who truthfully label their products and have the capacity and tendency to divert trade from said competitors.

CONCLUSION The acts and practices of respondent under the conditions and circumstances described in the foregoing findings are to the prejudice of the public and respondent's competitors and constitute unfair methods of competition 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"· 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, the testimony and evidence introduced, and the brief of counsel for the Commission, 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 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, Nathan Gennet, and his agents, representatives, and employees in connection with advertising, offering for sale and sale in commerce between and among CENTRAL QUILT & MATTRESS MFY. 111 106 Order the several States of the United States and in the District of Columbia of mattresses, do cease and desist from directly or indirectly- !. Designating or describing or representing mattresses made in whole or in part of second-hand or used material as mattresses made of or containing all new material. 2. Labeling or branding mattresses composed in whole or in part of second-hand or used material with labels or tags of such color or design as to import or imply that said mattresses are manufactured of or contain all new material.

3. Representing or designating mattresses manufactured from shoddy or other second-hand material as made of or containing all new material.

It is further ordered, That respondent shall, within 60 days after 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 he has complied with and conformed to the order to cease and desist hereinabove set forth. Syllabus 17 F.T.C.