Charles B. Trull

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IN THE MATTER OF CHARLES B. TRULL, TRADING AS WEST COAST DISTILLERIES COMPANY COMPLAINT AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT Ojj' CONGRESS APPROVED SEI''l'. 213, 1914, AND OF f':EC. 3 OF TITLE I OF AN ACT OF CON(;RESS APPROVED JUNE lG, 1933 1 Docket 2419. Complaint, May 27, 1935-ordcr, Feb. 2, l937 Consent order requiring respondent Individual, his agents, etc., in connection with sale or offer, in interstate comnwrc·e and In District of Columbia, of whiskies, gins, and other alcoholic beverages produced by him, I.Jut excepting gins produced by him, through process of rectification whereby alcohol purchased, but not produced, by him ifl redistilled as specified, to cease and desist from representing, through use of word "Distilleries" in his trade name and on his stationery, advertising, etc., or in any other way, that he is a distiller of whiskies, gins, or other alcoholic beyerages or that said whiskies, etc., were by him made through process of distillation, or that he owns, operates, or controls a place where such products are thus made, unless and until he shall own, operute, or control n place or places where such products are by him manufactured through process of original and continuous distillation from mash, wort, or wash through continuous closed pipes and vessels untll manufacture Is complete.

Air. PGad B. AIorehou.~e for the Commission. Air. Albert A. A;eel1'od, of San Francisco, Calif., for respondent. Complaint Pursuant to the provisions of an Art of Congress approved St>p· tember 2G, Hll4, t>ntitlcd "An Act to create a Federal Trade Commission, to dl.'finc its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that Charles D. Trull, trading as West Coast Distilleries Co., hereinafter referred to as respondl.'nt, has b<>en and is 11sing unfair methods of competition in commerce, as "commerce" is tlefined in said act, and in violation of the Act of Congrl.'ss approw<l .June 16, 1933, known as the "National Industrial R(•tovery Act," and it appearing to the 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 rt>sp<>ct as follows:

Count 1 PARAOR.\PII 1. R<>spondent is an individual, doing business under the name and style "'est Const Distilleries Co., with principal office 1 Count 2 of the complnlnt, undrr the Nutlonal JnduRtrial Recovery Act, dismissed. WEST COAST DISTILLERIES CO. 631 :uao Complaint ·and place of business in the city of San Francisco, in the State of California. He is now, and since April 1934, has been engaged in the business of purchasing, rectifying, blending, and bottling -whiskies, gins, and other spirituous beverages in a rectifying plant, ·under a rectifier's permit and in the sale thereof in constant course 'Of trade and commerce between and among the various States of the United States and in the District of Columbia. In the course and ·conduct of his said business he causes his said products when sold to be transported from his place of business aforesaid into and through various States of the United States to the purchasers thereof, ·consisting of wholesalers and distributors, some located within the ·State of California and some located in other States of the United ·States and the District of Columbia, and to some located in Waiakealiilo, Hawaii. In the course and conduct of his business as aforesaid, respondent is now, and since April 1934, has been in substantial competition with corporations and with othl:'r individuals, part- ·nerships, and firms engaged in the manufacture by true distillation ·of whiskies, gins, and other spirituous beverages from mash, wort, 0 l' wash, and in the sale thereof in trade and commerce between and among the various States of the United States, in the District of ·Columbia and in Hawaii; and in the course and conduct of his business as aforesaid respondent is, and since April 1934, has been in .substantial competition with corporations and with other individuals, firms, and partnerships engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous beverages in rectifying plants under rectifiers' permits and in the sale thereof in commerce betwe('n and among the various States of the United States, in the District of Columbia, and in Hawaii. !)An. 2. Upon the premises of rP.:->pondent's place of business afore- 8111d, there is a still for use in the production of gins by a process of rectification whereby alcohol, purchased hut not produced by respond- -ent, is redistilled over juniper berries and otlwr aromatics. Such tectification of alcoholic spirits does not make or constitute respondent a distillery or a distiller, as defined hy Section 3247 of the Hevised Statutes regulating Internal He,·enue, nor as commonly understood by the public and the liquor industry. For a long period of time the word "distilleries'' when used in connection with the liquor industry a~d with the products thereof has had and still has a definite sig- ~llficance and meaning to the minds of the wholesalers and retailers ln such industry and to the ultimate purchasing public, to wit, places 'Where such alcoholic liquors are manufactured by an original and continuous distillation from mash, wort, or wash, through continuous dosed pipes and vessels until the manufacture thereof is complete: 632 FEDERAL TRADE COl\Il\IISSION DECISIONS Complaint 24F.T.C.

and a substantial portion of the purchasing public prefers to buy spirituous liquors bottled and prepared by the actual distillers and manufacturers thereof.

PAR. 3. In the course and con<lnct of his business as aforesaid, by the use of the word "Distilleries" in his trade name, printed on his stationery and on the labels attached to the bottles in which he sells and ships his said products, and in various other ways, respondent represents to his customers and furnishes them with the means of representing to their vendees, both retailers and the ultimate consum~ ing public, that the said whiskies, gins, and other spirituous beverages therein contained were by him manufacture<l through the process of distillation from mash, wort, or wash, when, as a matter of fact, respon<lent is not a distiller, does not distill the said 'vhiskies, gins, and other spirituous beverages by him so bottled, labeled, sold, and transported, and merely by the use of a still operate1l by him as afore· said in the rectification of alcoholic spirits by redistillation over juniper berries and other aromatics, does not distill the whiskies, gins, and other spirituous beverages by him so bottled, labeled, sold, and transporte<l in the sense in which the word "distilled" is com· monly accepted<l and umlerstood by those engage<l in the liquor trade and the public. Respondent does not own, operate, or control any place or places where such alcoholic beverages are manufactured by a process of original and continuous distillation from mash, wort, or wash.

PAR. 4. There are among the competitors of respondent engaged in the sale of spirituous beverages, as mentioned<l in paragraph 1 hereof, corporations, firms, partnerships, and individuals who manufacture and distill from mash, wort or wash whiskies, gins, and other spirituous beverages sold by them aml who truth fully use the words "distillery," "distilleries," "distillers," or "distilling" as a part of their corporate or trade names and on their stationt>ry, advertising, and on the labels of the bottles in which they sell and ship such products. There are also among such competitors corporations, firms, partner· ships, and individuals engaged in the business of purchasing, recti~ fying, blending, an<l bottling whiskies, gins, and other spirituous beverages in rectifying plants under rectifiers' permits who do not use the words "distillery," "<listilleries," "distilling," or "distillers" as a part of their corporate or trade nnmcs, nor on their ~tntionery, ad\·ertising, nor on the labels attached to the bottles in which they sell and ship their said products.

PAR. 5. The representation by respondent, as set forth in paragraph 3 hereof, is calculated to and has a capacity and tcntlency to and does mislead and deceive dealers and the purchasing public into the belief WEST COAST DISTILLERIES CO. 633 630 Complaint that the whiskies, gins, and other spirituous beverages sold by the respondent are manufactured and distilled by him from mash, wort, or wash by one continuous process and is calculated to and has the capacity and tendency to and does induce dealers and the purchasing public, acting in such belief, to purchase the whiskies, gins, and other spirituous beverages rectified and bottled by the respondent, thereby diverting trade to respondent from his competitors who do not by their corporate or trade name or in any other manner misrepresent that they are manufacturers by distillation from mash, wort, or wash of whiskies, gins, or other spirituous beverages, and thereby respondent does substantial injury to substantial competition in interstate commerce.

PAR. 6. The acts and things above alleged to have been done and the false representations alleged to have been made by respondent are to the prejudice of the public and the competitors of respondent and constitute 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. Count 2 PARAGRAPH 1. Uespondent is an individual, doing business under the name and style West Coast Distilleries Co., with principal office ~nd place of business in the city of San Francisco, in the State of Cal- Ifornia. He is now, and since April 1934, has been engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous Leverages in a rectifying plant, under a l:ectifier's permit, anJ in the sale tlwreof in comtant course of trade flnd. commerce between and among the various States of the United States and in the Di:.;trict of Columbia. In the course and conduct of his said business he causes his said products when sold to Le trans- Ported from his place of business aforesaid into anJ through various States of the United States to the purchasers thereof, consisting of Wholesalers aml distributors, some located "i'within the State of California and some located in other States of the United States and the District of Columbia, ami to some located in "\Vaiakea-Ililo, Hawaii. In the course and conduct of his Lusine8s as aforesaid, respondent is llow, and since April 193!, has been in substantial competition with corporations and with other individuals, partnerships, aiel firms engaged in the manufacture by true distillation of whiskies, gins, and other spirituous Leverages from mash, 'vort, or 'vash, and in the sale then·eof in trade and commerce between and among the various S ates 634 FEDERAL TRADE COl\11\IISSION DECISIONS Complaint 24 F. T. C. Qf the United States, in the District of Columbia, and in Hawaii; and in the course and conduct of his business as aforesaid respondent is, and since April 1934, has been in substantial competition with corporations and with other individuals, firms, and partnerships engaged in the business of purchasing, rectifying, blending, and bottling· whiskies, gins, and other spirituous beverages in rectifying plants under rectifiers' permits and in the sale thereof in commerce between and among the various States of the United States and in the District of Columbia.

PARS. 2, 3, 4 and 5. As grounds for these paragraphs of this complaint, the Federal Trade Commission relies upon the matters and· things set out in paragraphs 2, 3, 4, and 5 of count 1 of this complaint to the same extent as though the several allegations thereof were set out at length and in separate paragmphs herein, and the said para-· graphs 2, 3, 4, and 5 of count 1 of this complaint are incorporated: herein by reference and adopted as the allegations of paragraphs 2, 3, 4, and 5, respectively, of this count, and are hereby charged as fully and as completely as though the several averments of the said paragraphs of count 1 were separately set out and repeated verbatim. Pi.n. G. Under and pursuant to Title I of the National Industrial Recovery Act, npprov«:>d Jnne 1G, 1933 (48 Stat. 195 C. 90), the President of the United States, by Executive Order No. 6182, of June 26,. 1933, as supplemented by Executive Order No. 6207, of July 21, 1933, and Executive Order No. 6345, of October 20, 1933, delegated to H. A .. \Yallace as Secretary of Agriculture certain of the powers vested in the President of the United States by the aforesaid Act. Under and pursuant to the delegation of such powers, the said SPcretary of Agriculture pursuant to Section 3 (d) of the Act and Executive orders under the Act, upon his own motion prescnt('d a Code of Fair Competition for tlte Distille1l Spirits Rectifying Industry after due notice and opportunity for !waring in connection therewith had bPt'n a1Tonled inter('sted parties, including respondent, in arcordance with Title I of the National Industrial Recovery Act and applicable regulations isstwd thereunder, to the Presid('nt of the Pnited States who approved the same on the 9th day of December 1::!:~3, therehy constituting the said colle a Code of Fair Competition within the meaning of the said National Imlustrial Recowry Act, for the r('guhtion of the aforesaid industry.

In his written report to the President, the said Secretary of Agri· culture made, among others, the following findings with respect to dw Haid Code in the following words, to wit: Tllat said Code will tend to efl"Pctunte the dcehuPd policy of Title I of tbe· National Industrial UecO\·ery Act as Slt forth In Rt'<'tlon 1 of said A<:t In that WEST COAST DISTILLERIES CO. 635 630 Complaint the terms and provisions of such Code tend: (a) to remove obstructions to the free flow of foreign commerce, which tenu to uiminish the amount thereof~ ( lJ) to provide for the general welfare by promoting the organization of indtLS, tly for the purposes of cooperative action nmong trade groups; (c) to elimi~ nate unfair competitive practices; (d) to promote the fullest possible utilization of the present prouuctive capacity of industries; (e) to avoid undue restrirtlon of production (exc1pt ns may be temporarily required) ; (f) to increase the consumption of industrial and a~ricultural prollucts by increasing purchasing Power; and (g) otherwise to rehabilitate industry. · lly his approval of the said code on December 9, 1933, the Presiuent of the United States, pursuant to the authority VPSted in him by Title I of the National Industrial Recovery Act aforesaid, made and issued his certain written Executive order, wherein he adopted and u approved the report, recommendations, and findings of the sn id i-3P\.Tbtary of Agriculture, and ordered that the said Code of Fair Competition be, and the same thereby was approved, and by virtue of the National Industrial Recovery Act aforesaid, the following pro~ vision of Article V of said Code became and still is one of th~ stand~ ards of fair competition for the Distilled Spirits Rectifying Industry and ;s binding upon every member of said industry and this tc:-;pondent:

The following practices constitute unfair methods of competition and shall not be Pnga~eu In by any member of tbe Industry: Sl'ction 1. False AdvcrtiHillg.-To publish or disseminate In any manner any false adverti>element of any rectifi~d pr·oduct. Any adverti..'element shall be ueemed tc, he fal,·e if it is untrue in any particular, or if directly or by ambiguity, Alli!';;;itm or Inference it tends to create a misleading impre:::sion. PAR. 7. The use by respondent of the word "Distilleries" in his trade name, printed on his stationery and on the labels attached to the bottles in which he sells and ships such products and in various f·ther ways, constitutes false advertising within the meaning of the aforesaid. prov:sion of said. Article V and. tends to and. does create the hlislead.ing impression that respond.Pnt is engaged in the business of distilling whiskies, gins, and. other spirituous beverages from mush~ Wort or wash and that the whiskies, gins, and other spirituous beveragps by him so sold and transported. have been bottled by the original distillers thereof and have been produced by a true process of distillation from mash, wort, or wash, all contrary to the provisions of Sl~ction I, Article V, of the Code aforesaid. PAR. 8. The above alleged methods, nets, and practices of the respondent are and have been in violation of the standard of fair competition for the Distilled Spirits Rectifying Industry of the United States. Such violation of such standard in the aforesaid transactions in interstate commerce and other transactions which affect interstate ·636 FEDERAL TRADE COMMISSION DECISIONS Order 24F. T.C.

commerce in the manner set forth in paragraph 5 of count 1 hereof, are in violation of Section 3 of Title I of the National Industrial Recovery Act and they are unfair methods of competition in commerce within the meaning of the Federal Trade Commission Act as amended.

ORDER TO CEASE AND DESIST This proceeding having come on to be heard by the Federal Trade Commission upon the complaint hereinbefore issued and served upon Charles D. Trull, trading as 'Vest Coast Distilleries Company, ref,pondent herein, and the said respondent's written answer made thereto, waiving the taking of testimony, findings as to the facts, filing of briefs, oral argument and all other intervening procedure, and consenting that an order shall issue herein for him to cease and desist from methods of competition charged in the complaint, and the Commission being fully advised in the premises, having thereupon concluued that respondent has violated 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."

It is now ordered, That the respondent, Charles D. Trull, trading as 'Vest Coast Distilleries Company, his agents anu employees, in connection with the sale, offering for sale and distribution in interstate ~commerce and in the District of Columbia of whiskies, gins, and all other alcoholic beverages, except gins by him produceu through a process of rectification whereby alcohol purchased but not produced by respondent is redistilled over juniper berries and other aromatics, do cease and desist from:

R:>presenting thro11gh the nse of the word "Distilleries," in his trade name, on his stationery, advertising, or on the labels attached to the bottles in which he sells anu ships his said products, or in any other way by word or words of like import, that (a) he is a distiller of whiskies, gins, and other alcoholic beverages; or (b) the said whiskies, gins, and other alcoholic Leverages were Ly him manufactttred through the process of distillation, unless and until the said respondent shall own, operat<', or control a place or places where such whiskies, gins, and other alcoholic beverages are Ly him manufactured through a process of original and continuous distillation from mash, wort, or "·ash, through continuous closed pipes anu vessels until the manufacture thereof is completed.

It i8 further ordered, That the saitl complaint be, and the same is hereby dismissed as to count 2 thereof. • WEST COAST DISTILLERIES· CO. 637 '630 Order It is fur-titer ordered, That the said respondent within 60 days from and after the date of the service upon him of this order, shall file With the Commission a report or reports in writing setting .forth in detail the manner and form in which he is complying and has complied with the order to cease and desist hereinabove set forth. 1467~Gm--39--vol.24----43 638 FEDERAL TRADE COJ\IMISSION DECISIONS Complaint 24F. T.C.