Julius Abrahams

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

IN THE Matrer OF JULIUS ABRAHAMS, TRADING AS PHILADELPHIA BADGE COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2100. Complaint, Jan. 31, 1936-Decision, Mar. 17, 1936 Where an individual engaged in the manufacture and sale of stamp photos, falsely and misleadingly represented that his said products were purchased, used, or endorsed by the Government through stating that "among our national known users are • • • United States Government" in periodl· cal and other advertising and otherwise; with effect ot misleading and deceiving substantial parts of the purchasing public and inducing them to buy said products in and because of the erroneous belief that it was purchased in large quantities by the Government, and, by inference, was endorsed thereby, and of diverting to himself trade from competitors among whom there are those who truthfully represent their products as being thus purchased and those who do not misrepresent their products as thus purchased, when such is not the case, and with capacity and tendency so to mislead, deceive, and divert; to the substantial injury of substantial competition in commerce:

Held, That such acts and practices were to the prejudice ot the public and competitors and constituted unfair methods of competition. Mr. Joseph 0. Fehr for the Commission.

Mr. Maurice Stern, of Philadelphia, Pa., for respondent. COl\IPLAINT Pursuant to the provisions of an Act of Congress entitled "An Act to create a Federal Trade Conimission, to define its powers and duties, and for other purposes", the Federal Trade Commission, having reason to believe that Julius Abrahams, an individual trading as Philadelphia Badge Co., has been and is using unfair methods of competition in commerce as "commerce'' is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPil 1. Julius Abrahams is an individual trading as Philadelphia Badge Co., with his principal place of business in the city of Philadelphia, in the State of Pennsylvania. He is now and, for more than 1 year last past, has been engaged in the business of manufacturing, selling, and transporting in commerce stamp photos, causing said products, when sold, to be shipped from his place of Complaint 22 F. T. C. business in the State of Pennsylvania, to purchasers thereof located in a State or States of the United States other than the State of Pennsylvania, and in the District of Columbia. In the course and conduct of his business, respondent has at all times herein referred to been in competition with other individuals, partnerships, corporations, and firms likewise engaged in the sale and distribution, in interstate commerce, of similar products and commodities. PAR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, respondent, in soliciting the sale of and selling his stamp photos in interstate commerce, has by advertising in various periodicals, advertising literature, and otherwise made the following statement and representation:

"Among our national known users are • • • United States Government." PAR. 3. The said statement and representation when applied to respondent's products and commodities as aforesaid, is false, misleading, and deceptive. Respondent's use thereof, as hereinabove set forth, was and is calculated, has and had the capacity and tendency to and does mislead and deceive substantial parts of the purchasing public, and causes them to purchase said product and commodity in and because of the erroneous belief that said product and commodity is purchased in large quantities by the Government of the United States, and, by inference, is endorsed by the Government. PAR. 4. There are among the competitors of the respondent mentioned in paragraph 1 hereof, and have been for more than 1 year last past, manufacturers and distributors of stamp photos and similar products and commodities who truthfully advertise and represent that their products and commodities are purchased by the Government of the United States, or any department thereof, when such is the case. There are also among such competitors of the respondent and have been for more than 1 year last past manufacturers and distributors of stamp photos and similar products and commodities who do not falsely represent that such products and commodities have been or are purchased by the Government of the United States or any department thereof when they are not in fact so purchased. PAR. 5. The use by the respondent of the aforementioned statements and representations in its advertisements and otherwise has had and still has the capacity and tendency to and has diverted and still diverts trade to respondent from his competitors who truthfully represent their products and commodities, and thereby substantial injury is being done and has been done by respondent to substantial competition in interstate commerce.

PAR. 6. The acts and practices set forth herein are to the prejudice of the public and all respondent's competitors, and constitute unfair PHILADELPHIA BADGE CO. 401 399 Findings methods of competition within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, and entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

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, on the 31st day of January 1936, issued and served its complaint in this proceeding upon the respondent, Julius Abrahams, an individual, trading as Philadelphia Badge Co., charging him with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of said respondent's answer thereto the respondent through his attorney, Maurice Stern, Esq., filed a motion to withdraw said answer and filed a substituted answer, subject to the approval of the Commission, in and by which it was agreed that the statement of facts contained in the complaint might be taken as the facts in this proceeding, and in lieu of testimony in support of the charges stated in the complaint or in opposition thereto; and in which said stipulated answer it was provided that the Commission might proceed upon the statement of facts as set forth in the complaint to make its report, its findings as to the facts (including inferences which it might draw from said facts as agreed upon), and its conclusion based thereon and enter its order disposing of the proceeding without the presentation o£ arguments or the filing of briefs; and the Commission having duly considered same and being fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS PARAGRAPH 1. Julius Abrahams is an individual trading as Philadelphia Badge Co., with his principal place of business in the city of Philadelphia in the State of Pennsylvania. He is now, and for more than 1 year last past has been engaged in the business of manufacturing, selling, and transporting in commerce stamp photos, causing said products, when sold, to be shipped from his place of business in the State of Pennsylvania to purchasers thereof located in a State or States of the United States other than the State of Pennsylvania and in the District of Columbia. In the course and conduct of his business, respondent has at all times herein referred Conclusion 22F. T.C.

to been in competition with other individuals, partnerships, corporations, and firms likewise engaged in the sale and distribution, in interstate commerce of similar products and commodities. PAR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, respondent, in soliciting the sale of and selltng his stamp photos in interstate commerce, has by advertising in various periodicals, advertising literature, and otherwise made the following statement and representation :

"Among our national known users are • • • United States Government." PAR. 3. The said statement and representation when applied to respondent's products and commodities as aforesaid, is false, misleading, and deceptive. Respondent's use thereof, as hereinabove set forth, was and is calculated, has and had the capacity and tendency to and does mislead and deceive substantial parts of the purchasing public, and causes them to purchase said product and commodity in and because of the erroneous belief that said product and commodity is purchased in large quantities by the Government of the United States and, by inference, is endorsed by the Government. PAR. 4. There are among the competitors of the respondent mentioned in paragraph 1 hereof, and have been for more than 1 year last past, manufacturers and distributors of stamp photos and similar products and commodities who truthfully advertise and represent that their products and commodities are purchased by the Government of the United States, or any department thereof, when such is the case. There are also among such competitors of the respondent and have been for more than 1 year last past, manufacturers and distributors of stamp photos and similar products and commodities who do not falsely represent that such products and commodities have been or are purchased by the Government of the United States or any department thereof when they are not in fact so purchased. PAR. 5. The use by the respondent of the aforementioned statements and representations in its advertisements and otherwise bas had and still has the capacity and tendency to and has diverted and still diverts trade to respondent from his competitors who truthfully represent their products and commodities, and thereby substantial injury is being done and has been done by respondent to substantial competition in interstate commerce.

CONCLUSION The acts and practices set forth herein are to the prejudice of the public and all respondent's competitors, and constitute unfair methods of competition within the intent and meaning of Section 5 of an PHILADELPHIA BADGE CO, 403 399 Order Act of Congress, approved September 26, 1914, and entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST The respondent herein, having filed his answers to the complaint in this proceeding, and having subsequently filed with this Commission a motion that he be permitted to withdraw his said answer and that he be permitted to file in lieu thereof, as a substitute answer, the draft of a proposed substituted answer annexed to the said motion; and the Commission having duly considered the said motion; . It is hereby ordered, That the said motion be, and the same hereby is, granted; that the answer be, and the same hereby is, withdrawn; and that the said proposed substituted answer be, and the same hereby is, filed in lieu of the said answer hereby withdrawn. The said respondent, in and by his said substituted answer, having waived hearings on the charges set forth in the complaint in this proceeding, and having stated in his said substituted answer that he does not contest the said proceeding and that he admits all of the material allegations of the complaint to be true, and that he consents that the Commission may, without further evidence and without any intervening procedure, make and enter its findings as to the facts and conclusion thereon, and issue and serve upon him an order to cease and desist from the methods of competition alleged in the complaint; and the Conunission having duly considered the record and being now fully advised in the premises;

It is ordered, That the respondent, Julius Abrahams, an individual trading as Philadelphia Badge Co., his agents, servants, representatives, and employees, in connection with the sale or offering for sale of stamp photos in interstate commerce and in the District of Columbia, do forthwith cease and desist from- Representing through advertisements in newspapers and magazines and through circulars, labels, or in any other form of printed matter, or by radio broadcasting, or in any other way or manner, that his said products are purchased, used, or endorsed by the United States Government, or by any branch or agency thereof, or from making any similar representations or representations of like import or effect; It is further ordered, That the said respondent shall, within 60 days from the date of the service upon him of this order, file with this Commission a report in writing, setting forth the manner and form in which he has complied with this order.

Complaint 22F.T.C.