Frances Brown

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IN THE MA'ITER OF FRANCES BROWN, DOING BUSINESS AS AMERICAN BANK MACHINERY COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS AI'I'ROVED SEPT. 26, HlH Docket 2846. Complaint, June 19, 1936-Dedsion, Nov. :1!, 1936 Where an individual engaged in the city of Philadelphia in repairing and • rebuilding perforating and check cnclorsing machines, and in selling and sup]Jlying new parts therefor in connection therewith, in competition. among others, with three of the larger manufacturers of such machines, located in Philadelphia and Chicago, and the products of which had been widely sold and were in use by banks and others in various States, and which companies, in addition to manufacture und sale of their said prod· ucts, also engaged in repairing and rebuilding all mal,es of such ma· chines, and in connection therewith in installing and supplying new parts therefor- ( a) Falsely represented, through salesmen or solicitors employed to solicit such work and the sale and supplying of new parts in connection there· with, and acting within the scope of their employment, that said in· dividual represented one or the other of the two Chicago manufacturers and did all the repair work for one or the other, as the case might be, or that said two Chicago companies were out of business, and that one of said companirs and said individual business were one and the smne; facts being said individual was not in any manner directly or indirectly affiliatrd, or otherwise connected with, company in question, and said statements or representations were also otherwise false; and (b) Represented, as aforesaid, that it made and repaired the machines that were sold by said Philadelphia manufacturer, and that said Individual was a member of the National Association of Manufacturers of the United States of America, and through letterheads had places of business in Chicago, Atlanta, and Philadelphia, and thereby imported and Implied to the owners of such machines and to the general public that said individ· ual owned, operated, maintained, and controlled a business of such pro· portion that it was necessary to have places of business as there set out; facts being said individual did not make machines sold by said Philadelphia company, and bad only mailing addresses at Chicago and Atlanta locations, from which mail was sent and forwarded to said individual's sole and only place of business in Philadelphia; With capacity and tendency to mislead and deceive owners of old machines in need of repair or new parts, and induce such owners to deliver the machines to said individual for such purposes, in the erroneous belief that said various statements, etc. were true, and particularly on account of their natural preference for dealing only with either the manufacturer or with any other large concern duly authorized by the manufacturer to do such repairing and rebuilding work; and with result that trade was nufairly diverted thereby to said individual from competitors, including said manufacturers who in nowise make such false and misleading statements and representations, but truthfully represent their status as manu· AMERICAN DANK MACHINERY CO. 715 714 Complaint factut·ers or repairers, or both, of such machines; to the substantial injury of competition in commerce:

lleld, That such acts and practices were to the prejudice of the public and competitors, and constituted unfair methods of competition. Before Mr. Edward M. Averill, trial examiner. Mr. John lV. Hilldrop for the Commission.

Howson & Howson, of Philadelphia, Pa., for respondent. Complaint 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 Frances Brown, doing business under the trade name of American Bank Machinery Co., hereinafter referred to as respondent, 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 pro- ~eeding by it in respect thereof would be in the public interest, hereby lssues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Uespondent, Frances Brown, is an individual trading as American Bank Machinery Co., with her office and place of business at 4626 Lancaster Avenue, in the city of Philadelphia, State of Pennsylvania.

PAn. 2. Respondent is now and has been for more than one year last Past engaged in the business of repairing anJ rebuilding perforating and check endorsing machines already in use, and in selling and supplying new parts therefor in connection therewith, causing such lllachines to be shipped by, and transported from, the owners thereof located in various States of the United States to respondent's said Place of business located in the city of Philadelphia, in the State of Pennsylvania for the purpose of having such repairing and rebuilding Work done thereon or the installing anJ supplying of new parts therein in connection therewith. In the course and conduct of her said business, as aforesaid, respondent is and has been in competition with corporations, partnerships, firms, and individuals engaged in the business of rebuilding and repairing, in interstate commerce, of old perforating and check endorsing machines and in selling and supplying llew parts therefor in connection therewith. PAn. 3. Among the larger manufacturers o£ perforating and check endorsing machines are the American Perforator Company and the Cummins Perforator Company, both of the city of Chicago, in the State of Illinois, a11d the National Perforator Company, Inc., of the city of Philadelphia, in the State of Pennsylvania. Their perforati11g Complaint 23 F. T C'. and check endorsing machines have been widely sold and are in use by banks and others in various States of the United States. Each of these companies, in addition to manufacturing and selling machines, also does repairing and rebuilding of all makes of perforating and check endorsing machines, and in connection therewith installs and supphes new parts therefor. Respondent does not manufacture perforating or check endorsing machines, but is merely engaged in repairing and rebuilding machines made by other companies as heretoforealleged in paragraph 2 hereof.

PAR. 4. In the course and conduct of her business, as heretofore described and alleged in paragraph 2 hereof, the respondent, in soliciting orders for such repairing and rebuilding work and in soliciting the sale of parts to be installed in connection therewith, employed salesmen or solicitors who travelled in various States of the United States and solicited the work of repairing and rebuilding old perforating and clu'ck endorsing machines and the sale and supplying of new parts therefor in connection therewith; and in the course of such employment and acting within the scope .of their employment, said salesmen or solicitors made the following statements and representations: 1. That respondent either represents the American Perforator Company or the Cummins Perforator Company j 2. That respondent does all of the repair work for the American. Perforator Company or the Cummins Perforator Company; 3. That the American Perforator Company and the respondent are one and the same concern;

4. That the American Perforator Company and the Cummins Perforator Company were out of business; and 5. That the respondent manufactures and repairs machines that are sold by the National Perforator Company, Inc. In addition to the foregoing, the respondent has represented and does represent to the said owners of old perforating and check endorsing machines and to the general public located in different States of the United States that she owns, operates, maintains, or controls a manufacturing establishment for the manufacture of such machines. by carrying on her letterheads, distributed in interstate commerce, the· following statements:

"MANUFACTURERS OF MACHINES FOR CANCELLING CHEOKS AND VOUCHERS, RF.XJEIPT- ING BILLS. IDENTIFYING POSTAGE STAMPS, DATING INCOMING 1\IAIL, CHECK SIGN- ING AND ENDORSING MACHINES"

and also AMERICAN BANK MACHINERY CO. 717 7H Complaint ''MEMDER-NATIONAL ASSOCIATION OF MANUFACTURERS OJ' THE UNrrED STATES OF AMERICA"

Said letterheads, so distributed in interstate commerce, also contain therein the following addresses of the respondent: 56 W. Washington St., CHICAGO, Illinois 901-6 Wm. Oliver Bldg., ATLANTA, GEORGIA and together therewith, and in larger type, EASTERN SERVICE CENTER 4626 LANCASTER AVENUE PHILADELPHIA P A.

au of which, when taken together, tended to import and imply, and does import and imply, to said owners of such perforating and check endorsing machines, and to the general public, that respondent was a. lnanufacturing concern and that she owned, operated, maintained, and controlled a manufacturing plant or plants. PAR. 5. In truth and in fact the said representations, statements and assertions heretofore described, alleged and set forth in paragraph 4 hereof are false, misleading, and deceptive in that respondent did not and does not represent either the American Perforator Company or the Cummins Perforator Company; did not and does not do the repair work for either the American Perforator Company or the Cummins Perforator Company;. was not and is not one and the same concern with, or in any manner directly or indirectly affiliated or otherwise connected with, the American Perforator Company; did not and does not manufacture the machines sold by the National Perforator Company, Inc.; and when the American Perforator Com- Pany has not gone out of business, and is still so engaged. Further, said respondent does not, nor has she, owned, operated, maintained, or controlled any plant or factory for the manufacture of machines ~uch as machines for cancelling checks and vouchers, receipting bills, Identifying postage stamps, dating incoming mail, check signing and endorsing machines, or any other like or similar machines. PAR. 6. Said statements, representations and assertions, as heretofore alleged and set forth in paragraph 4 hereof, have the capacity and tendency to mislead and deceive the owners of old perforating and ~heck endorsing machines, already in use and in need of repair or the Installation of new parts in connection therewith, and to induce them to deliver same to respondent for such purposes in and on account of the erroneous belief that they are true, and particularly so because of their natural preference to deal only with either the manufacturer or with any other large concern duly authorized by such manufacturer to do the work of repairing and rebuilding same. 718 FEDERAL TRADE COMl\USSION DECISIONS Findings 23 F.T.C. PAR. 7. Among the competitors of the respondent, there are cor· porations, partnerships, firms, and individuals who are engaged in the same business as respondent, as heretofore alleged and described in paragraph 2 hereof, among them being the American Perforator .Company, the Cummins Perforator Company ami the National Per· !orator Company, Inc., who in nowise make the same or similar false and misleading statements and representations as are made by the respondent, as hereinabove described and set forth, but who truth· fully represent their true status either as manufacturer or repairer, ·or both, of perforating and check endorsing machines. The aforesaid false representations and misleading statements made, anq caused to 'be made, by respondent about her status as a manufacturer, and as to the status of said American Perforator Company, the Cummins Per· forator Company, and the National Perforator Company, Inc., and about her relationship, connection and affiliation with each of said ceoncerns, have the capacity and tendency to deceive and mislead •owners of old perforating and check endorsing machines, causing thell to deliver same to respondent for the purpose of repair and. the instal· lation of new parts in connection therewith; and thereby trade is unfairly diverted to respondent from her said competit01!s with the result that substantial injury has been and is being done by respond· tent to competition in commerce, as hereinabove set out. 'PAR. 8. The acts and things done by respondent, as hereinabove alleged, described and set forth, are to the injury and prejudice of the public and to competitors of respondent, and constitute unfair meth· ods of competition, in interstate 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. 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 Com· mission, to define its powers and duties, and for other purposes," the Federal Trade Commission, on the 19th day of June 1936, issued -and served its complaint in this proceeding upon respondent, Frances llrown, doing business as American Dank Machinery Co., charging ber with the use of unfair methods of competition in commerce€ in violation of the provisions of said act. On the 21st day of October 103G, the respondent filed her answer, in which answer she admitted -all the material allegations of the complaint to be true, save and except that in her said answer she alleged that in the year 1935, and .at the time the complaint was issued herein and served on her, she AMERICAN BANK MACHINERY CO. 719 714 Findings \vas manufacturing perforating and check endorsing machines, and stated that she waived hearings on the charges set forth in the said complaint and consented that, without further evidence or other intervening procedure, the Commission might issue and serve upon her findings as to the facts and conclusion and an order to cease and desist from the violations of law charged in the complaint. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint and the answer thereto, 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 make this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE .FACTS • PARAGRAPH 1. Respondent, Frances Drown, is an individual trad~ lng as American Dank Machinery Co., with her office and place of business at 4626 Lancaster A venue, in the city of Philadelphia, State of Pennsylvania.

PAn. 2.' Respondent is now ancl has been for more than one year last past engaged in the business of repairing and rebuilding perforating and check endorsing machines already in use, and in selling and supplying new parts therefor in connection therewith, causing such machines to be shipped by, and transported from, the owners thereof located in various States of the United States to respondent's said place of business located in the city of Philadelphia, in the State of Pennsylvania for the purpose of having such repairing and rebuilding work done thereon or the installing and supplying of new Parts therein in connection therewith. In the course and conduct of I:e: said business, as aforesaid, respondent is and has been in compe- ~Ibon with corporations, partnerships, firms, and individuals engaged In the business of rebuilding and repairing, in interstate commerce,. of olc.l perforating and check endorsing machines and in selling and supplying new parts therefor in connection therewith. PAn. 3. Among the larger manufacturers of perforating and check endorsing machines are the American Perforator Company and the Cummins Perforator Company, both of the city of Chicago, in the S_tate of Illinois, and the National Perforator Company, Inc., of the· ?Ity of Philadelphia, in the State of Pennsylvania. Their perforat- ~ng and check endorsing machines have been widely sold' and ar£>" In Use by banks and others in various States of the United States~ Each of these companies, in addition to mnnufacturing and selling ~nachines, also does repairing and rebuilding of ali makes of perforatln~ and check endorsing machines, ancl in c.onnectjon. therewith. in:staiis and supplies new parts therefor.

720 .FEDERAL TRADE COMMISSION DECISIONS Findings 23F. T.C.

PAR. 4. In the course and conduct of her business, as heretofore described nnd alleged in paragraph 2 hereof, the respondent, in soliciting orders for such repairing and rebuilding work and in soliciting the sale of parts to be installed in connection therewith, employed salesmen or solicitors who travelled in various States of the United States and solicited the work of repairing and rebuilding old perforating and check endorsing machines and the sale and supplying of new parts therefor in connection therewith; and in the course of such employment and acting within the scope of their employment, said salesmen or solicitors made the following statements and representations:

1. That respondent either represents the American Perforator Company or the Cummins Perforator Company; 2. That respondent does all of the repair work for the American Perforator Company or the Cummins Perforator Company; 3. That the American Perforator Company and the respondent are one and the same concern;

4. That the American Perforator Company and the Cummins Perforator Company were out of busin€SS; and 5. That the respondent manufactures and repairs machines that are sold by the National Perforator Company, Inc. In addition to the foregoing, the respondent has represented and does represent to the said owners of old perforating and check endorsing machines and to the general public located in different States of the United States that she was a member of National Association of Manufacturers of the United States of America, which is an organization composed of corporations, associations, individuals, and firms engaged in the manufacture of various commodities; and also in the letterheads of respondent which she distributed in interstate commerce, respondent represented that she had places of busin~ss at 56 \VASHINGTON ST., CniCAoo, ILL.; 901-6 \VILLIAM OLIVER DurLDINo, ATLANTA, GA.; and EASTERN SERVICE CENTEn, 4626 LAN· CASTEn AVENUE, PIIILADELPIIIA, PA., which tended to import and irn· ply, and docs import and imply, to said owners of such perforating and check endorsing machines, and to the general public, that respondent owned, operated, maintained, and controlled a business of such proportion that it was necessary to have places of business in the locations in this paragraph heretofore set out. PAn. 5. In truth and in fact the said representations, statements and assertions heretofore described, alleged and set forth in paragraph 4 hereof nre false, misleading, and deceptive in that respondent did not and does not represent either the American Perforator Company or the Cummins Perforator Company; did not and does not do the AMERICAN BANK MACHINERY CO. 721 Findings repair work for either the American Perforator Company or the Cummins Perforator Company; was not and is not one and the same concern with, or in any manner directly or indirectly affiliated or otherwise connected with, the American Perforator Company; did not and does not manufacture the machines sold by the National Perforator Company, Inc.; and in that the American Perforator Company has not gone out of business but is still so engaged. In truth and in fact, the respondent has not, nor has she had, a place of business at 56 West Washington St., Chicago, Ill., nor in Oliver Building, Atlanta, Ga., nor elsewhere in said cities, but, to the contrary, for a period of time she did have mailing addresses at said location in Chicago and in Atlanta where mail would be sent and then forwarded to her sole and only place of business at 4626 Lancaster A venue, Philadelphia, Pa.

PAn. 6. Said statements, representations and assertions, as heretofore alleged and set forth in paragraph 4 hereof, have the capacity and tendency to mislead and deceive the owners of old perforating and check endorsing machines, already in use and in need of repair or the installation of new parts in connection therewith, and to induce them to deliver same to respondent for such purposes in and on account of the erroneous belie£ that they are true, and particularly so because of their natural preference to deal only with either the manufacturer or with any other large concern duly authorized by such :manufacturer to do the work of repairing and rebuilding same. PAn. 7. Among the competitors of the respondent, there are corporations, partnerships, firms, and individuals who are engaged in ~he same business as respondent, as heretofore alleged and described. ln paragraph 2 hereof, among them being the American Perforator Company, the Cummins Perforator Company and the National Perforator Company, Inc., who in nowise make the same or similar false and misleading statements and representations as are' made by the respondent, as hereinabove described and set forth, but who truthfully represent their true status either as manufacturer or repairer, or both, of perforating and check endorsing machines. The aforesaid false representations and misleading statements made, and caused to be made, by respondent about her status as a manufncturer, and ns to the status of said American Perforator Company, the Cummins Perforator Company, and the National Perforator Company, Inc., and about her relationship, connection, and affiliation with each of said concerns, have the capacity and tendency to deceive and mislead (JWners of old perforating and check endorsing machines, causing them to deliver same to respondent for the purpose of repair and the installation o£ new parts in connection therewith; and tlterehy Order 23F.T. C.

trade is un:fairly diverted. to respondent from her said comp~titors with the result that substantial injury has been and is being done by respondent to competition in commerce, as hereinabove set out. CONCLUSION The aforesaid. acts and practices of the respondent, Frances Brown, doing business as American Dank Machinery Co., are to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce, within the intent and meaning 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 and the answer of respondent, in which answer respondent admits all the material allegations of the complaint to be true, save and except that in her answer she alleges that in the ye!lr 1935 and. at the time the complaint was issued herein and served on her, she was manufacturing perforating and check endorsing machines, and states that she waives hearing on the charges set forth in said complaint and consents that, without further evidence or other intervening procedure, the Commission may issue and serve upon her findings as to the facts and conclusion and an order to cease and desist from the violations of law charged in the complaint, and the Commission having made its findings as to the facts and conclusion that said 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 ordered, That the respondent, Frances Drown, as an individual and under her trade name, American Dank Machinery Co., or under any other trade name, her representatives, agents and employees, in connection with the soliciting, in interstate commerce, of business of repairing and rebuilding perforating and check endorsing machines already in use and in selling, offering for sale and supplying, in interstate commerce or in the District of Columbia, new parts for use in connection with said perforating and check endorsing machines, do forthwith cease and. desist from representing: (a) That respondent either represents the American Perforator Co. or the Cummins Perforator Co.;

(b) That respondent does all of the repair work for the American Perforator Co. or the Cummins Perforator Co.; AMERICAN BANK MACHINERY CO. 723 714 Order (c) That the American Perforator Co. and the respondent are one and the same concern;

(d) That the American Perforator Co. and the Cummins Perf a· rator Co. were, or are, out of business;

(e) That respondent is a member of National Association of Manufacturers of the United States of America, unless and until she actually becomes such a member;

(f) That respondent has places of business at 56 'Vest Washington St., Chicago, Illinois; 901-6 William Oliver Building, Atlanta~ Georgia, or elsewhere in said cities of Chicago, Ill., and Atlanta, Ga., or in any other place or places unless in truth and in fact she aotuallydoes have in Chicago, Atlanta, or such other represented city, places of business other than mailing addresses.

It is further ordered, That the respondent shall, within 60 day& after service upon her of this order, file with the Commission a re. port in writing setting forth in detail the manner and form in which she has complied with this order.

78035'"-39-vol. 23-48 FF.DERAL TRADF. COMMISSION DECISIONS124 Complaint 23 F. T. C.