H. & S. Publishing Co

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IN THE MATTER OF H. & S. PUBLISHING COMPANY COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Docket foia. Complaint, Oot. 21, 1932-Decision, Dec. 12, 1932 Where a corporation engaged in publication and sale of a monthly magazine, made such representations in connection with sale of a certain variety of soybeans sold in conjunction with subscriptions to its said publication, as "Coffee 1 cent per pountt-Grow your own coffee and cut down the high cost of living. The domestic coffee berry makes a delicious, nourishing drink, • • • send 25 cents and 10 cents extra • • • and we will send you our publication for one year and one packet of seed • • • You can raise all the coffee you want and sell the balance to your neighbors • • • ", facts being seed in question was not that of a coffee berry; with tendency to mislead and deceive prospects into believing that through subscribing they could buy, grow, and produce coffee at a cost of 1 cent per pound, and with result of bringing about their subscriptions, and purchases of said seed in reliance upon truth of such misleading and false representations, and a tendency to divert trade from and otherwise injure its competitors :

Held, That such acts and practices, under the cir~umstances set forth, were to the injury and prejudice of the public and competitors and constituted unfair methods of competition.

Mr. PGad B. Morehouse for the Commission.

Mr. Stephen A. Day, of Chicago, Ill., 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, an Illinois corporation engaged in publishing, soliciting, and obtaining annual subscriptions for, and circulating a monthly periodical, and also in the sale, in conjunction with subscriptions, of packets of seed advertised and sold by it as the seed of "coffee" or "domestic coffee berry", and with principal place of business in Chicago, with advertising falsely or misleadingly as to nature 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, engaged as aforesaid, in its advertisements of said seed, represents the same as " Coffee 1 cent per pound " and invites the prospect to " Grow your own coffee and cut down the high cost of living ",1 etc., thereby representing to prospective sub- 1 The advertisement alleged in the complaint is set forth In the findings infra at puge 167.

6:1419°-34-12 166 FEDERAL TTIADE COMMISSION DECISIONS Findings 17 F.T.C'. scribers that it will sell them "one or more packets of coffee seeds from which coffee can be grown and produced at a cost of 1 cent per pound, when in truth and in fact, the seed so offered for sale and sold is not the seed of a coffee berry but is a variety of soybean seed and when planted and grown will not produce coffee." "The foregoing false and misleading representation", as alleged, "is calculated and has a tendency to mislead and deceive prospective subscribers into the erroneous belief that by subscribing to respondent's magazine, they can buy, grow, and produce coffee at a cost of 1 cent per pound, and relying upon the truth of such representation and actuated by such erroneous belief said prospective subscribers have purchased of the respondent, annual subscriptions to the aforesaid publication, and have bought such bean seed from respondent. Such misleading and false representation is likewise calculated and has a tendency to divert trade from and otherwise injure the 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 ORDER Pursuant to 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 ", the Federal Trade Commission issued and served a complaint upon the respondent II. & S. Publishing Co., a corporation, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act.

Respondent after having stated by letter of October 28, 1032, that it was desirous of expediting this said proceeding and avoiding the expense incident to the taking of testimony, stipulated and agreed as to the facts involved, and further stipulated and agreed that the Commission might thereupon proceed to make its report, state its findings as to the facts (including all reasonable inferences which it rriight draw from the said stipulated facts), make its conclusion based thereon, and enter its order disposing of the proceeding without presentation of argument or fill.ng of briefs. Thereupon this proceeding came on for final hearing upon the complaint, respondent's statement of October 28, 1032, in lieu of answer and the agreed statement of facts, and the Commission having duly considered the record and being fully advised in the premises makes this its report stating its findings as to the facts and conclusion drawn therefrom :

H. & S. PUBLISHING CO. 167 165 Findings FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, H. & S. Publishing Co., a corporation, organized and existing under the laws of the State of Illinois, with principal place of business in the city of Chicago, State of Illinois, for more than two years last past, has been engaged in publishing, soliciting and obtaining annual subscriptions for, and circulating a monthly magazine entitled " Everyday Life ". This publication, when subscribed to by the public, was by respondent sold and distributed by mail from its principal place of business as aforesaid into and through various other States of the United States to the subscribers. Respondent also has been engaged in selling a certain variety of soybean seed in conjunction with its aforesaid publication. A small number of these seeds were placed in small packets and when sold, likewise were distributed from its principal place of business as aforesaid into and through various other States of the United States to the purchasers thereof. These seeds were advertised and sold by respondent as the seed of "coffee" or "domestic coffee berry".

PAR. 2. In the course and conduct of its businpss as afores:tiu respondent has been in competition with others who are and have been engaged in the sale and distribution in interstate commerce of magazines of a like or similar character, and with others who are and have been engaged in the sale and distribution in interstate commerce of coffee or coffee substitutes or soybeans or seed for growing the same.

PAR. 3. In the course and conduct of its business as aforesaid respondent caused to be published in other magazines and periodicals auvertisements of its monthly magazine " Everyday Life " and in ::.nch advertisements it solicited annual subscriptions as aforesaid in words and figures following:

Coffee 1 CENT PElll Pound Grow your own coffee and cut down the high cost of living. The Domestic Coffe~ Bet-ry makes a Deliclouil, Nourishing Drink, to take the place of injurious coffee. It is a put·e food drink that gives health and strength to ~·oung and old. The best coffee substitute ever discovered, and thousands Ilronouuce it as good or better thnn the best coffee. It has the rich deep brown color of old Java. One ot the hardiest, easiest grown and most productive of all plants. Can be successfully grown in any climate, and is sure to ripen even in the extreme north. As easily grown as corn or beans, and {]oes well on all soils. Thousands suffer untold injuries from store coffee. Better grow the new kind and save your health and money. To introduce our monthly publication Everyday Life, send 25 cents and 10 cents extra (35 cents in all) and we wm send you our publication for one year and one packet of Order 17F.'l'.C. seed. Send 60 cents and we will send the paper and three packets of seed. 12 packets of seed and the paper one year for $1. You can raise all the coft'ee you want and sell the balance to your neighbors. Don't wait-Send now as supply of seed is limited. Everyday Life, 337 W. Madison Street, Dept. 20-d, Chicago, Ill.

Thereby, respondent impliedly represented to the prospective subscribers that it would sell such subscriber one or more packets of coffee seeds from which coffee could be grown and produced at a cost of 1 cent per pound, when in truth and in fact, the seed so offered for sale and sold was not the seed of a coffee berry but a variety of soybean seed and when plant~d and grown would not produce coffee.

PAR. 4. The foregoing false and misleading representation has a tendency to mislead and deceive prospective subscribers into the erroneous belief that by subscribing to respondent's magazine, they can buy, grow, and produce coffee at a cost of 1 cent per pound, and relying upon the truth of such representation and actuated by such erroneous belief said prospective subscribers have purchased of the respondent, annual subscriptions to the aforesaid publication, and have bought such bean seed from respondent. Such misleading and false representation likewise has a tendency to divert trade from and otherwise injure the competitors of respondent. PAR. 5. The above acts and practices of respondent were all to the prejudice of the public and respondent's competitors, and constituted unfair methods of competition in commerce 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", approved September 26, 1914. PAn. 6. Respondent has abandoned the unfair methods above set out.

CONCLUSION The practices of said respondent under the conditions and circumstances described in the foregoing findings have been to the prejudice of the public and of respondent's competitors and were unfair methods of competition in commerce and constituted a violation of section 5 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."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, statement of respond- H. & S. PUBLISHING CO. 169 165 Order ent filed October 28, 1932, in lieu of formal answer and agreed statement of facts filed herein 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 respondent, H. & S. Publishing Co., a corporation, its agents, servants, and employees in soliciting the sale of and selling and advertising of a periodical or publication known as " Everyday Life " or seed in interstate commerce cease and desist from representing directly or by implication that any seed of the soybean variety is the seed of coffee or is the" domestic coffee berry" or that coffee can be raised therefrom, and that by means of the planting thereof coffee can be produced or grown for 1 cent or any other price per pound.

It is further ordered, That the said respondent within 60 days from and after the date of the service upon it of this order shall file with the Commission its report in writing setting forth in detail the manner and form in which it is complying and has complied with the order to cease and desist hereinabove set forth. FEDERAL TitADE COM7-.IISSION DECISIONS170 Syllabus 17 F.T.C.