Roy C. Greenberg and Sarah J. Rosenheim, trading as Neway Manufacturing Company

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IN THE 1\IA 'ITER OF ROY C. GREENBERG AND SARAH J. ROSENHEUI, TRAD- ING AS NEW A Y :MANUFACTURING COl\IP ANY ('Ollll'LAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF .AN ACT OF CONGRESS .APPROVED SEPT, 26, 1914 Docket 2858. Complaint, June 30, 1936-Decision, Aug. 1~, 1936 Where two }Jl(liYiduals engaged in the manufacture, distribution, and sale of certain surgical lntPX bandages; in advertising the same in various pcriodi· cals of Interstate circulation usually read by cnm·asserts and sales agents, and by letters and circulars sent and distributed throughout the various States, to Induce purchase of said products by persons suffering from cer· tain ailments and afflictions and to induce persons to become their can· vnsscrs and sales agents- ( a) Falsely represented that said bandage was porous and allowed the sldn to breathe and the wound to heal much qulcli:cr, and that doctors and hos· pitals were aware tllat it offered the safest way on earth for them to trent patients, and that it held snugly while permitting healing air to reach the sore spot, and, while admitting air, kept out dirt and germs and offered the safest bandage known, and did not reopen the wound and resisted water i (b) Represented that it was no longer necessary to buy costly ankle bra cps, through nse thereof as directed, nor to buy expmsive devices for bunions or arch supports, through following directions given for such purpoRcs, and that it was used to assist In slenderizing large and unsightly ankles; and (c) Repre-sented that a salesman could start in a new business that would pay always Increasing income, and "take up to $7200 flrst week"; Facts being said products were not porous in any degree unless stretched, in which event circulation was impairs-d, with likell.~ood of Injury instead of benl'flt, nor were they, not stretchrd, porous, so as to permit Ingress and egres!l of fluids, nor, in view of the m;unl internal causes of swollrn ankles, did they, ns an external bnndage, po's(•ss curative Yalue for such condition, nor, by reason of the opening-s required and their own non· adhes!Ye quality, were they indicated for corns and bunions, and said Yllrions mlsreprcRPntation'l, ns respects the effect of said prudncts nnd rnrnings to be made from the sale thereof, were grossly cxuggerutcd, fnl<:e, and m\!';lrnding ~ With trndency and cnpndty to mislead and decciYe n snh<~tnntinl portion of the purchasing pnhlic into the erroneous belief that said representations respecting the effrctlveness of said product in the trratmrnt of such nil· ments and malformations were true, and that results clalmeu by them would he ol1tnincd by the xmrchaser thereof upon use of said banrlagrs, and with the result that a substantial numher of the consuming public pnrrha,.ed a sub~tnntial volume of its products as a rrr,ult thereof', and trade was unfairly diverted to them from competitors who truthfully ad· Yei'tise their respective products; to the substantial injury of competitors: Held, That such acts and practices, under the conditions and circumstances set forth, were to the prejnrlice of the public and competitors, and constituted unfair methods of competitioi?, NEWAY :MANUFACTURING CO. 261 260 Complaint Mr. lVm. T. Ohantland for the Commission.

Mr. Oscar [{rakow, of Chicago, Ill., for respondents. Co:\IPLAINT 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, having reason to believe that Roy C. Greenberg and Sarah J. Rosenheim, associated together under the name Neway Manufacturing Company, hereinafter referred to as "respondents," have been, and are now, using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof vmuld be in the public interest, hereby issues its complaint, stating its charges in that respect as follows :

PARAGRAPH 1. Uespondents, Roy C. Greenberg and Sarah J. Rosenheim, associated together under the name Neway Manufacturing Company, personally and through said Neway :Manufacturing Company, With office and principal place of business at 30 South Clinton Street, Chicago, Ill., are now and for some time have been engaged in the business of manufacturing, distributing, and selling in commerce as herein set out certain surgical latex bandages known as "N away Latex Dandages."

PAn, 2. Said respondents being engaged in business as aforesaid, cause said bandages, when sold, to be transported from their office and place of business in the State of Illinois to purchasers thereof located at various points in States of the United States other than the State from which said shipments are made. Respondents now maintaill a constant current of trade in commerce in said bandages, manufactured, distributed, and sold by them between and among the various States of the United States and in the District of Columbia. PAn. 3. In the course and conduct of their said business, respondents are now, and have been, in substantial competition with other individuals and with firms and corporations likewise engaged in the business of distributing and selling bandages, in commerce, among and between the various States of the United States and in the District of Columbia.

In the course and operation of their said business, and for the pur- Pose of inci.ucing the purchase of said bandages by persons suffering from certain bodily ailments and malformations and also to induce l)ersons to become canvassers and sales agents for respondents, said respondents in their advertising in various magazines of interstate cir- FEDERAL TRADE COMl\IISSION DECISIONS262 Complaint 23 F.T.C. culation usually read by canvassers and sales agents, and Ly letters anu circulars sent and distributed throughout the various States of the United States other than the State from which they were sent, have made numerous false and misleading representations and statements about their said product, and the earnings to be made in selling it. Among the false and misleading representations and statements so made and distributed by respondents are the following: (1} That the Neway bandage is porous allowing the skin to breathe and the wound to heal much quicker.

(2) That doctors and hospitals are aware that this bandage offers the safest way on earth for them to treat patients. (3) That it is no longer necessary to buy costly ankle braces. Merely make a support of Neway Latex bandage in the wider width and. it is comfortable, relieves the swelling and helps to heal. ( 4) That there is no need to buy expensive devices for bunions, nor arch supports-this marvelous bandage helps to correct all foot ailments.

( 5) That pads for corns and bunions can be made from it, and metatarsal or longitudinal arch supports, by using layers of Neway together, placed in the shoe.

(6) That it holds snugly and comfortably, yet at the same time "breathes," letting healing air reach the sore spot. ( 7) That it is used to assist in slenderizing .large, unsightly ankles. {8} That it admits air but keeps out dirt and germs. It offers the safest bandag~ known. It does not reopen wound when removed. (9) That Neway Latex resists water.

(10) That a salesman can start in a new business that will pay always increasing income, and "take up to $72.00 first week." PAn. 4. The representations made by respondents, as above set out, with respect to the effect when used of their said product, are grossly exaggerated, false, misleading, and untrue, as are their statements of the earnings to be made in selling the same. The bandages are not porous in any degree unless stretched, and when so stretched. in their application the effect is to impair the circulation with likely injury instead of benefit; neither are said bandages porous in the sense that they will permit ingress and egress of fluids. In addition thereto swollen ankles are generally caused by internal disorders either of the blood circulatory system or of the kidneys or liver, or more than one of such disease condititons. An external bandage possesses no curative value. Corns and bunions require pads with openings to relieve pressure and irritation so that no banda!ring is of value and when the bandaging is non-adhesive NEWAY l\IANUFACTURING CO. 263 260 Findings as respondents' is it will slip and move and irritate instead of giving relief. Likewise when bandages are tightly applied to reduce swell~ ing they not only impair circulation but thereby cause increaserl swelling above the bandage.

PAR. 5. There are among respondents' competitors many who dis~ tribute and sell similar bandages who do not in any way misrepre~ sent the effectiveness of their respective products. PAR. 6. Each and all of the false and misleading statements and representations made by the respondents as to the effectiveness of their said product in the treatment of bodily ailments and malforma~ tions, as hereinabove set out, in their advertising, in the course of distributing their product, were and are calculated to, and had, and now have a tendency and capacity to mislead and deceive a sub~ stantial portion of the purchasing public into the erroneous belief that all of said representations are true, and that the results claimed by the respondents will be obtained by the purchasers thereof upon the use of said bandages. Further, as a direct consequence of the mis~ taken and erroneous beliefs induced by the acts, advertisements and representations of respondents, as hereinbefore set out, a substantial number of the consuming public has purchased a substantial volume of respondents' bandages with the result that trade has been unfairly diverted to the respondents from individuals, firms, and corporations likewise engaged in the business of distributing and selling band.ages Jntended for use in connection with the treatment of bodily ailments and malformations who truthfully advertise their respective prod~ Ucts. As a result thereof, ·substantial injury has been and is now being clone by respondents to competitors, in commerce, among and between the various States of the United States and in the District of Columbia.

PAn. 7. The above and foregoing acts, practices, and representa~ tions of the respondents have been, and are, all to the prejudice of the public and respondents' competitors as aforesaid, and have been, and are, unfair methods of competition within the meaning and in~ tent of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its pmvers and duties, and for other purposes." REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions ·of an Act of Congress, approved Sep~ tember 26, 1914, entitled "An Act to create a Federal Trade Commis~ sion, to define its powers and duties, and for other purposes," the F'ederal Trade Commission on June 30, 1936, issued and served its 26·i FEDERAL TRADE COl\Il\IISSION DECISIONS Findings 23F.T.0.

complaint in this proceetling upon respondents, Ro7 C. Greenberg and Sarah J. Rosenheim, trading as Neway Manufacturing Company, charging them with the use of unfair methods of competition in commerce, in violation of the provisions of said act. After the issu· ance of said complaint, respondents, Roy C. Greenberg and Sarah J. Rosenheim, filed separate ans,>ers thereto "·herein they state that Roy C. Greenberg is now the sole owner of Neway Manufacturing Company, and wherein and whereby they state that they desire to 'vaive hearing on the charges set forth in the complaint, and not to contest the proceeding; that they admit all of the material al· legations of the complaint to be true, and that without further evi· dence or other intervening procedure the Commission may make, issue and serve upon respondents findings of fact, and an order to cease and desist from the violations of law charged in the conl· plaint; and the Commission having duly considered the 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 dmwn therefrom:

FINDINGS AS TO TIIE FACTS PARAGRAPH 1. The respondents, Roy C. Greenberg, and Sarah J, Rosenheim trading as Neway Manufacturing Company, have been engaged, and respondent Roy C. Greenberg is now engaged, in the business o£ manufacturing, distributing, and selling in intersfate com· merce certain surgical latex bandages .known as "Neway Late~ Bandages", selling said bandages in many States of the United States. When sold, the re.-;pondents mailer or shipped their said merchandise from their place o£ business in Chicago, III., to pur· chasers locatetl in the said State of Illinois and in various other States, and respondent Greenberg still continues to so srll and ship. P,\R. 2. For more than two years last past the respondents have bee.n selling saill merchandise in substantial comprtition with other bus~­ Jwss -concerns selling similar merchn.ndise at wholesale and retail in interstate commerce by circulars circulated throughout the United States, anll by various otlwr forms of advertising, and by personal solicitation of sales agents. , PAR. 3. Rec;;pondents, in the course and operation o£ their said busi· ness, and for the purpose o£ inducing the purchase o£ sn.id bandages l'y persons suffering f1·om certain bodily ailments and maHormn· tions antl also to induce persons to become canvassers and sales age~ts for them, in their nch·ertising in various magazines o£ interstate c1r· culation usually rend by canvassers and sales agents, and by letters NEWAY ~IAN"C'FACT"C'TIIXG CO. 2G5 2GO Finllings and circulars sent and distributed throughout the various States of the United States other than the State from which they "·ere sent, have made numerous representations and statements about their said product and the earnings to Le made in selling it. Among the representations and statements so made and distributed by re.opondents are the following:

( 1) That the N away bandage is porous allowing the skin to breathe and the wound to heal much quicker.

(2) That doctors and hospitals are aware that their bandage offers the safest way on earth for them to treat patients. (3) That it is no longer necessary to buy costly ankle braces. Merely make a support of Neway Latex bandage in the wider width and it is comfortable, relieves the swelling and helps to heal. ( 4) That there is no need to buy expensive cle,·ices for bunions, nor nrch supports-this marvelous bandage helps to correct all foot ailments.

(5) That pads for corns and bunions can be made from it, and llletatarsal or longitudinal arch supports, by using layers of Neway together, placed in the shoe.

(G) That it holds snugly and comfortably, yet r.t the same time "breathes'', letting healing air reach the sore spot. (7) That it is used to assist in slenderizing large, unsightly ankles. (8) That it admits air but keeps out dirt and germs. It offers the Safest bandage known. It does not reopen wound when removed. (9) That ~cway Latex resists water.

(10) That a salesman can start in a. new businpss that will pay always increasing income, and "take up to $72.00 first wpek." PAn. 4. The bandages sold and distributed by respondents as aforesaid, are not porous in any degree unless stretched, and when so stretchPd in their application the effect is to impair the circulation \With likely injury instead of benefit; neither are said bandages when not so stretclwd porous in the sense that they will permit ingress and egress of fluids. In addition thereto swollen ankles are generally caused by internal disorders either of the blood circulatory system or of the kidneys or liver or more than one of such disease conditions. An external banda~e posse-sses no curative value. Corns and bltnions require pads with openings to relieve pressure and irritation ~0 that no bandaO'in(Y is of value and "·hen bandaging is non-ad-} ~ ~ tesive, as r£>spondents' is, it will slip and mow and irritate instead of giving relief. Likewise when bandages are tightly applied to re- ~uce swelling they not only impair circulation but thereby cause Increased swelling above the bandage.

266 FEDERAL TRADE COl\Il\IISSION DECISIONS Conclusion 23 F. T.C. The representations made by respondents, as above set out in paragraph 3 of these findings with respect to the effect when used of said product, are grossly exaggerated, false, misleading, and untrue, as are the statements of the earnings to be made in selling the same. PAn. 5. There have been and are among respondents' competitors many who distribute and sell similar bandages who do not in any way misrepresent the effectiveness of their respective products. PAn. 6. Each and all of the false and misleading statements and representations made by respondents as to the effectiveness of their said product in the treatment of bodily ailments and malformations, as hereinabove set out, in their advertising in the course of distributing said product, were and are calculated to, and had, and now have a tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that all of said representations are true, and that the results claimed by the respon<lents will be obtained by the purchasers thereof upon the use of said bandages. Further, as a direct consequence of the mistaken and erroneous beliefs induced hy the acts, alh·ertisements, and rrpresentations of respondents, as hereinbefore set out, a substantial number of the consuming public has purchased a substantial volume of respondents' bandages with the result that trade has been unfairly diverted to the respondents from individuals, firms, and corporations likewise engaged in the business of distributing and selling bandages intentlcd for use in connection with the treatment of bodily ailnwnts antl mal· formations who truthfully advertise their respective products. As a result thereof, substantial injury has been and is now being done by t·respondents to competitors, in commerce, among and h£>tween the Yarious States of the United States and in the District of Columbia. PAn. 7. Respondent, Sarah J. Rosenheim is not now and has not been since prior to June 30, 1V36, associated with the respondent Roy C. Greenberg in conducting said business and Roy C. Greenberg has Leen since prior to June 30, 1936, and now is the sole owner of the business conducted under the name Neway Manufacturing Company· CONCLUSION The aforesaid nets and practices of the responuents, under the conditions and circumstances set forth in the foregoing findings ha:ve been and are to the prejudice of the public and of respondents' com· petitors, and are unfair methods of competition in commerce and constitute a violation of Section 5 of an Act of Congress, approved S£>ptember 26, 1914, entitled "An Act to create a Federal Trade Com· mission, to define its powers and duties, and for other purposes." NEWAY 1IA~UFACTURIXG CO. 267 2GO Orller ORDER TO CEASE AND DE:olin This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, filed herein on June 30, 1D3G, rrnd the separate answers of the responllents Roy C. Greenberg and Sarah J. Rosenheim filed herein, in which answers they state that they desire to waive hearing on the charges set forth in the complaint, and not to contest the proceeding; that they admit all of the material allegations in the complaint to be true, and that without further evidence, or other intervening procedure, the Commission may make, enter, issue and sen·e its llndings of fact and conclusion and order to cease aml desist from the violations of law charged ·in the complaint and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of an Act of Congress, approved September 2G, Hl14, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." It is ordered, That the respondents, Roy C. Greenberg, and Sarah J. Rosenheim, individually or as copartners trading as Neway Manufacturing Company, personally or through their representatives, agents, or employees, or by or through the use of Neway Manufacturing Company or of any other trade name or device, in conllcction with the sale and distribution in interstate commerce or in the District of Columbia of latex bandages, fortlnvith cease and desist from directly or indirectly representing: ( 1) That the N away bandage is porous allowing the skin to breathe and the wound to heal much quicker.

(2) That doctors and hospitals are aware that this bandage offers the safest way on earth for them to treat patients. (3) That it is no lonO'cr necessary to buy costly ankle braces. Merely make n. support of N away Latex bamlage in the wider width Ulld it is comfortable rcliens the swelling' and hel11s to heal. ' e , ( 4) That there is no need to buy expensh·e devices for bumons, n?r arch supports-this marvelous bandage helps to correct all foot ailments.

( 5) That pads for coms and bunions can he made from it, and ll1Hntarsal or longitudinal arch supports, by using layers of Neway together, placed in the shoe. . " (6) That it holds snugly and comfortably, yet at the same ttme breathes" lettitJO" lwnlin•,. air reach the sore spot. (7) Th,at it is t7sed to a~sist in slenderizing large, unsightly ankles. (8) That it admits air but keeps out dirt and germs. It offers the Safest bandage known. It does not reopen wound when removed. 268 FEDERAL TRADE COl\Il\IISSION DECISIONS Order 23F. T.C.

(9) That Neway Latex resists water.

(10) That n salesman can start in a new business that will pay always increasing income, and "take up to $72.00 first week." It is further ordered, That the respondents shall, within GO days after service upon them 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 this order.

BRECHT CANDY CO. 269 Syllabus