Robert Holmes, Inc

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IN THE MATTER OF RODEHT HOLMES, INC., AND ALBERT GOODMAN COMI'LAIN'r, FINDJNUS, M\D ORDER IN REGARD TO 'file ALLEGF.D Violatioll 01!' SEC. 5 Ol•' AN ACT 01!' CONGRESS APPROVED SEP'l'. 26, 1914 Doclcet 289.1. Complaint, Nov. 16, 19.36-DCI'il!ion, Feu. 16, 1931 Where a corporation and an individual, its pr<'sidcnt and manager and director of its policies and practices, engaged in sale all(l distribution of so-called home study psychology health courses, in substantial competition with others likewise engaged in sale of such courses of instruction by correspondence; in advertising the same in varlou!l periodicals, booklets, circulars, and other forms of printed matter- Represented that constipntlou, indigestion, cold sweats, dizzy spells, and bash~ fulness are always cuuseu by nervous exhaustion, and that "lack of energy" and aforesaid ailments or conditions "positively indicate" a deranged nervous system, for which their said course would be an effective treatment, nnd that It was an effecti>e and competent treatment for nervousness and aforesaid ailments or conditions and for sleeplessness, irre>gular heart, worry, fatigue, sex weakness and other conditious specified, and would pfrectlYely eliminate poisons from the system, and was entirely different from any other method and would absolutely bring positl.ve and permanent rt>lief from various ailments noted, and that each case wns given indi· vidual personal atteution IJy them, and that for the sum of twenty-five cents one mig·ht learn how to couquer bashfulness, nervousnesi'l, or em· harras('nnent, ove1·come his faults easily, and enjoy life to the fullest. through such statements as "* • • every form of self-consciousness comes from • • • derangement of the Nervous Syst£>m," "Do not try to fight self-consciousness alone and unaided. It ts a losing battle," etc., "You need a knowledge of the action and abuses of nerves • • • such as my course of instruction fully covers," "ARE YOU-NERVOUS?- WORRIED?.-UNIIAPPY? • • • My wonderful book 'Watch Your Nerves' explains a new metlwd that will help you regain lost vitality and healthy nerves. Send 2;)¢ * * "'," "INSTRUCTION I~ INDIVlDUAu • • • each case is given indi\"ldual personal attention," etc.; Facts being their said courses were not effective in treatment of the various ailments and conditions for which thus offered, and did not enable pur· chasers to eliminate the causes thereof, and their ~;aid representations with respect to the nature, value and effect of their said courses of home study and Instruction were grossly exaggerated, false, misleading, and untrue; With capnrity and tendPnry to mislead and deceive purchasers and proRpcctive purchasers of their so-called home study psychology health courses in aforesaid respects, and with the rE>sult that a substantlnl nnmh<'r of pros· J)(>Ctlve purchasers of such courses Wf?re iuduceu aud prrsuadPd to buy the same through such state>nwnts and representations, which were false, rots· lt>ndln~. and clPreptlve and unfair to otlH•rs selllng aud dh>trihutlng tllmllar courses without mnkiug the same or simllnr ful;;e and misleading statements or repl·eseutatlons In solldtation and sale of their reRpectlve courses, and ROllERT HOL7\res, IXC., ET AL. 713 712 Complaint with result that there was an unfair diversion of trade to them from their competitors; to the substantial injury of competition ln commerce: Held, That such acts and practices were to the prejudice of the public and competitors and constituted unf11ir methods of competition. Before Ah. William 0. Reeves and Mr. lV. W. Sheppard, trial examiners.

Mr. Joseph 0. Feh.r for the Commission.

Nathan D. Shapiro and Brothers, of Brooklyn, N. Y., for respondents.

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, ancl for other purposes,'' the Federal Trade Commission, having reason to believe that Robert Holmes, Inc., a corporation, and Albert Goodman, an individual, hereinafter referred to as respondents, have been and are now using llnfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to the Commission that a proceeding ?Y it in respect thereof would be in the public interest, hereby issues lts complaint, stating its charges in ihat respect as follows: PARAGRAPH 1. Respondent, Robert Holmes, Inc., is a corporation organized and existing under and by virtue of the laws of the State of New Jersey and the respondent, Albert Goodman, an individual is President of the respondent corporation, and manages and directs its Policies and practices. The principal place of business of both of said respondents is located in the Fuller Building, in the city of Jersey City, in the State of New Jersey.

Said respondents are now, and have been for more than one year last past, engaged in the sale and distribution of home study psychology health courses calculated to enable subscribers and purchasers and prospective purchasers thereof to overcome bashfulness, nervousness, and similar and allied ailments. Respondents cause. said courses of home study when sold, to be transported from their Principal place of business in the State of New Jersey to purchasers thereof located in other States of the United States and in the Dist~ict of Columbia. There is now, and has been, at all times menboned herein, a c011stunt current of trade in commerce in said courses of home study and instruction, sold, and distributed by the said respondents, between and among the several States of the UnHed ~states and in the District of Columbia.

In the course and conduct of said busines..'l, said respondents, Robert liolrnes, Inc., a corporation, and Albert Goodman, an individual. DECISIO~S714 FEDERAL TRADE COMMISSION Complaint 24F.T. C.

were and are in substantial competition with other corporations, individuals, firms, and partnerships likewise engaged in the business of selling similar courses of instruction by correspondence through the mails in commerce among the several States of the United States, and in the District of Columbia.

PAR. 2. In the course and conduct of their business, as aforesaid, the respondents, in soliciting the sale of and selling said courses of study and instruction and for the purpose of creating a demand upon the part of the purchasing public for said courses, now cause and for more than one year last past have caused advertisements to be issued, published and circulated to and among the general public of the United States in various periodicals, booklets, circulars, and in other forms of printed matter. In said ways and by said means, respondents make and have made to the general public many unfair, false, and misleading statements with reference to the alleged therapeutic value of said courses of home study and instructions and their alleged salutary effect upon the users thereof, a portion of which are as follows:

• . . every form of self-eonRdousnel:ls comes from • • • derangement of the Nervous System.

Do not try to fight self-consciousness alone and unaided. It is a losing battle. You are fighting yourself-your own sick nerves. You need a knowledge of the action and abuses of net·ves • • • such ns my course _of instruction fully covers.

Others conquer-Nervousness- Constipation- Indigestion- Sleeplessness- 'l•'eeUng Blue'- Sex Weakness- Irregular 1Ie11rt- Worry- Bushfulne8S- ~'a tlb'1te-Pain-So (Jan You I .ARE YOU-NERVOUS?-WORRIED?-UNH.APPY?-'"What's wrong wltb you? Do symptoms of Constipation, Indigestion, Dizzy Spells, Sweating and Sleeplessness keep you Irritable, exhausted and gloomy? .Are you Bashful? .DeHpondent? There's Help for You I Medicine, tonics or Drugs probably will 110t relleve your weak, sick nerves. My wonderful book 'Watch Your Nerves' explains a new method that will help you regain lost vitality and heal'tbY uerves. Send 25¢ for this amazing book. ROBERT IIOLl\IES, 1311 Fuller Dulldlng, Jersey City, N. J .

. . • If I tell you that I can help you, I mean what 1 say; you may rely on lt. And it you deciue to take my eour~<e, you can make terms of payment to ... ult yourself. I give you a free .Analysill. I risk my time and money. You rl~>k 1\0Telling ROBERT HOLl\IES, INC., ET AL. 715 '712 Complaint ...• After many years of intensive study and Investigation, I have discovered a method which will Induce sound and calm sleep In the most chronic case of insomnia. This method will help any one who Is not kept awake by the snfferlngs of physical pain .•• INSTRUCTION IS INDIVIDUAL-All this invaluable information is embodied in my course In Nerve and Health Culture. The instruction Is llot _general and each case is given individual personal attention .•• I have helped thousands of men und women to counteract and prevent extre>me worry and mental depression. My course tends to bring about a nor- Jnal condition of the nerves and to teach you the conserll'ation of precious :!'i'erve Power.

· PAR, 3. The statements and representations set forth in paragraph 2 hereof, and many others similar thereto, have the capacity and tendency to mislead and deceive purchasers and prospective pur- ~hasers of respondents' said home study psychology health courses Into the erroneous belief:

1. That constipation, indigestion, cold sweats, dizzy spells and bashfulness, or any of them, are always caused by nervous exhaustion· ' 2. That for 25 cents, or any other nominal amount, one may learn how to conquer bashfulness or nervousness or embarrassment, over- -come his faults easily and enjoy life to the fullest; 3. That each such case is given individual personal attention by respondents;

4. That respondents' course of study and instruction will, if followed, immunize one against the contraction of colds; 5. That respondents' course is an effective or competent treatment for nervousness, constipation, indigestion, dizzy spells, sweating, 8let>plessness, irregular heart, worry, bashfulness, fatigue, pain, sex "·enkness ' or "feeling'~ blue"·' 6. That the respondents' treatment is entirely different from any '{Jther method, or that it will absolutely bring very positive and pern1ant>nt relief from the various physical ailments mentioned; 7. That la.ck of energy, indigestion, constipation, and kindred ttiltnents "positively indicate" a derangt>d nervous system for which respondents' course would be an effective treatment; 8. That respondents' course will effectively eliminate poisons from the system;

~vhl"leas, in truth and in fact, responuents' courses of home study and lnstruction, when used, are not effective in the treatment of nervous- 716 FEDERAL TRADE COl\Il\IISSION DECISIONS Findings 24 I!'. T. C. ness, constipation, indigestion, sleeplessness, irregular heart, worry, bashfulness, fatigue, sex weakness, pain or any other nervous, mental or physical disorders. They do not eliminate the cause of such ailments or relieve a user's weakened mental or physical condition due to nervousness, bash!uln<'ss, and worry, and other kindred ailmprlts and troubles. The representations made by respondents with J'(\spect to the nature, value and effect of said courses of home study and instruction, when used, are grossly exaggerated, false, misleading and untrue, as said courses will not accomplish the results claimed for them.

PAR. 4. The use by respondents of the statements and representlttions set forth in paragraph 2 hereof, and others similar thereto, is unfair to other corporations, firms, partnerships, and individuals selling like and similar courses of home study and instruction who do not make the same or similar false and misleading statements aJHl representations in. the solicitation and tbe sale of their respective courses of home study and instruction.

By reason of the, said false, misleading and deceptive statements, subscribers and purchasers and prospective purchasers of respollllents' said home study psychology health courses are and have been induced and persuaded to purchase said courses thus offered by respondents. The methods thus used by respondents result in an unfair diversion of trade to respondents from their competitors. In consequence thereof, substantial injury, has been done by respondents to competition in commerce between and among the nrious States of the United States.

PAR. 5. The aforesaid methods, ttcts.tttHl practices of the respowlents are all to the prejudice of the public and of the respondents' competitors as hereinabove allege.d. Said methods, acts, and pmctices constitute unfrtir methous 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 power~ and duties, and for other purposes," approveu September 2G, 191-L REPORT, FINDINGS AS TO 'tiie FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved September 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 16th day of November 1936, issued and on the 18th day of November 1936, and on the 13th day of January 1937, respectively, served its complaint in this proceeding upon respondents, Robert Holmes, Inc., a corporation, and Albert ROBERT HOLl\tes, INC., ET AL. 717 712 Findings Goodman, an individual, charging them with the nse o£ un£ait· methods of competition in commerce in violation o£ the provisions of said aet. The Commission, by order entered herein, granted respondents' motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material alh,gations of the complaint to he true and waiving the taking of further evidence and all other intervening procedure, which substitute answer Was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on t.he said complaint and the substitute answer, briefs and oral arguments of counsel having been waived, and the Commission having duly considered same and being now 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 Ml TO Tile FACTS PAnAGRAI'H 1. The respondent, Robert Holmes, Inc., is a corporation organized anu existing under and by virtue of the laws of the .State of New Jersey. The respondent, Albert Goodman, an in~ diviuual, is president of the respo11dent corporation, and manages and directs its policies and practices. Both respondents have their Principal place of business located in the Fuller Building, Jersey City, N.J.

The respondents herein are now, and for more than one year last Past have been, soliciting the sale and distribution of so-called home study psychology health courses. These courses of home study when sold, are transported by respondents from their principal place of business in the State of New Jersey to purchasers thereof located in other States of the United States, and in the District of Columbia. There is now, and there has been at all times mentioned herein, a constant current of trade in commerce in said so-called home study Psychology health courses thus sold and distributed by the said respondents, between and among the several States of the United States, and in the District of Columbia.

In the course and conduct of said business, said respondents, were and are in substantial competition with other corporations, firms, Partnerships, and individuals, likewise engaged in the business of selling psychology and health courses of instruction by correspond~ ence through the United States mails in commerce between and among the several States of the United States, and in the District of Columbia.

l46750m-39-vol. 24-48 718 FEDERAL TRADE CO~DIISSION DECISIOXS Findings 24 F. T. C. PAR 2. In the course and conduct of their business, as above set out, the respondents, in soliciting the sale of and selling said courses of home study and instruction and for the purpose of creating a demand upon the part of the purchasing public for said courses now cause, and for more than one year last past have caused, advertisements to he issued, published and circulated to and among the general public of the United States in various periodicals, booklets, circulars, and in other forms of printed matter. In said ways and by said means, respondents make and have made to the general public many statements with reference to the alleged therapeutic value of said courses of home study and instruction and their alleged salutary effect upon the users thereof. Typical of the representations, which the respondents have thus publishecl and circulated in commerce throughout the United States and in the District of Columbia, are the following:

. • • every form of self·consciousness comes from • • • demugement of the Nervous System.

Do not try to tight self-consciousness alone and unaided. It Jg u losing battle. You are fighting yourself-your own sick nerves. You need a knowledge of the action and abnHes tJf net·vel! • • • sueb as my course of inAtrnctlon fully covers.

0 the r s conquer-Nervommess-Constiputlon-ln<ligestion-Sleeplessness- "Feellng Blue"-Sex Weakness-I negula r Heart-'Vorry-llashfulnf's~t-Fa· tlgue-Pain-So Can You! ARE YOU-NERVOUS?-WOHRIED'I-UNIIAI'PY?-What's wrong with you? Do symptoms of Constipntion, Indigestion, Dl:r.:r.y ~pells, Sweating aud Sleeplessness keep you Irritable, exhausted and gloomy? Are you Ba~;:ht'ul? Despondent? There's Help for You I 1\Ie<licine, tonics, or Drugs probably will not relieve your weak, sick nerves. My wonderful book "'Vatch Your Nerves" explains a new method that will help yon regnin lost vitality and hP11ltbY nerves. Send 25¢ for this amazing book. nonERT HOL:\IES, 1311 Fuller Building, .Jersey City, N. J .

. . . If I tell you that I can help you, I mean whnt I sny; you mny n•ly on it. And If you decide to take my course, you enn m11ke terms or payment to suit yourself. I give you a free Analyst~. I rl~<k my time nnt\ money. You rl!'~ NOTIIING,,, After many years of intensive study nnd ill\'estlgation, I haw dis· covered a method which will Induce sound and calm ~;IPPp in thf> most chronic ROBERT HOLl\IES, INC., ET AL. 719 '712 Finoin~s case of insomnia. This method will help any one who is kept awake by the suffering of pbyslcul pain INSTRUCTION IS INDIVIDUAL-All this imaluable information is embodied in my course in Nerve and Health Culture. Tlte instruction is uot gener111 and each rase is given iwllvldual per;;oral attention .•• I have helped thousa)}(h! of men aud women to cotmter·act and preveut ·e:!!:treme worry nnd m£>ntnl dept·ession. l\Iy cout·se tends to bring about a normal condition of the nerves and to teach you the conservation of precious llrl.'rve Power.

PAn. 3. Iu the manner above set out the respondents represent and ~mply 'that their course of home study and instruction are effective ln the treatment of nervousness, constipation, indigestion, sleeplessness, irregular heart action, worry, bashfulness, fatigue, sex weakness, pain and other nt>rvous, mental aud physical disorders; that study of said courses will enable purchasers to eliminate the cause of the ailments mt>ntioned and will relieve a purchaser's weakened lllental or physical condition due to nervousness, bashfulness, worry -or other kindred ailments or troubles.

. Respondents' course of home study and instruction are not effective In the treatment of nervousness, constipation, indigestion, sleeplessness, irregular heart action, worry, bashfulness, fatigue, sex weakness, Pa.in or any other nervous, mental or physical disorders. Neither do said courses enable purchasers to eliminate the cause of such aliments -or relieve a purchaser's weakened mental or physical condition due to nervousness, bashfulness, and worry, and other kindred ailments .and troubles. The representations made by respondents with re- ~Pect to the nature, value and effect of sn.id courses of home study and Instruction, when used, are grossly exaggerated, false, misleading and Untrue, ns said courses will not accomplish the results claimed for them.

PAR. 4. The statements and representations used by the respondents have the capacity and tendency to mislead and deceive purchasers nnd prospective purchasers of respondents' so-called home study psy- ~hology health courses into the erroneous belief that constipation, lndigestion, cold sweats, dizzy spells and bashfulness, are always ~aused by nervous exhaustion; that for 25 cents, or some other nom- Ina} amount, one may learn how to conqut>r bashfulness or nervousness or embarrassment, overcome his faults easily and enjoy life to the fullest; that each purchaser's case is given individual personal att .en tion by respondents; that respondents' course )S· an euectlve~ · or 720 FEDERAL TRADE CO)I::\liSSIO:N DECISIONS Ordet• 24F. T. <'.

competent treatment for nervousness, constipation, indigestion, dizzy spells, sweating, sleeplessness, irregular heart, worry, bashfulness, fatigue, pain, sex weakness, or "feeling blue"; that the respondents'· treatment is entirely different from any other method, and that it will absolutely bring positive and permanent relief from the various physical ailments mentioned; that "lack of energy," indigestion, con~ stipation, and kindred ailments "positively indicate" a deranged nervous system for which respondents' course is an effective treatment; and that respondents' course will effectively eliminate poisons from the system.

PAR. 5. The use by respondents of the statements and representations set forth in paragraph 2 hereof, and others similar thereto, is unfair to other corporations, firms, partnerships, and individuals· selling and distributing courses of home study and instruction in psychology and health who do not make the same or similar false· and misleading statements and representations in the solicitation and the sale of their respective courses of home study and instruction. PAR. 6. Dy reason of the said false, misleading, and deceptive statements, as above set out, a substantial number of the prospective purchasers of home study psychology health courses are and have been induced and persuaded to purchase said courses offered by respondents. The acts, practices, and methods used by respondents result in an unfair diversion of trade to respondents from their competitors. In consequence thereof, substantial injury has been done by respond~ f'nts to competition in commerce between and among the various States of the United States.

CONCLUSION The aforesaid acts and practices of the respondents, Robert Holmes, Inc. and Albert Goodman, are to the prejudice of the public and of respondents' competitors, and constitute unfair methods of competitioidn 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 j,ts powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commi,;sion upon the complaint of the Commission and the answer filed herein, dated January 27, 1937, by respondents, admitting all the material allegations of the complaint to be true and waiving the tak- ROBERT HOL~IES 1 INC., ET AL. 721 '712 Order ing of further evidence and all other intervening procedure, awl 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 26, 1914, entitled "An Act to ·create a Federal Trade Commission, to define its powers and duties, and for other purposes."

It i8 onlered, That the respondents, Robert Holmes, Inc., a cor- !>Olation; and Albert Goodman, an individual, their officers, repre- .fientatiYes, agents, and employees, in connection with the offering for sale, sale and distribution of their home study psychology health ·courses in interstate commerce or in the District of Columbia do forthwith cease and desist from representing: 1. That constipation, indigestion, cold sweats, dizzy spells and bashfulness, or any of them, are always caused by nervous exhaustion; 2. That for 2i'l cents, or any other nominal amount, one may learn how to conquer bashfulness or nervousness or embarrassment, over- ·come his faults easily and enjoy life to the fullest; 3. That each such case is given individual personal attention by .rrspondents;

4. That respondents' course; is an.effective or competent treatment for llervousness, constipation, indigestion, dizzy spells, sweating, sleeplessness, irregular heart, worry, bashfulness, fatigue, pain, sex Weakness, or "feeling blue";

5. That the respomlents' treatment is entirely different from any '<lther method, or that it will absolutely bring very positive and per- .rnanent relief from the various physical ailments mentioned; G. That "lack of energy", indigestion, constipation, and kinds·ed :ailments "positively indicate" a deranged nervous system for which respondents' course would he an effective treatment; 7. That respond('nts' course will effectively eliminate poisons from the system;

and• from makinO'b any other representations of similar tenor or Import.

And it i.~ hereby further or·dered, That the said respondents shall ·within GO days from the date of the sen-ice upon them of this order iile with this Commission a report, in writing, setting forth the lnamwr and form in which they have complied with this order. Syllabus 24 F. T. C~