Mills Sales Co. of New York, Inc

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IN Tlle MATTER OF MILLS SALES COMPANY OF NEW YORK, INC., ET ~\L. COMPLAINT, FINDINGS, AND ORDER IN REG.\RD TO THE AI,LEGED VIOL.\'1'10~ OF SEC. II OF AN ACT OF CONGRESS APPRO\'ED SEP'l', 2{1, 101-l Docket 307·0. Complaint, Mar. 8, 19J1-Dctision, June 10, 1!13i Where a corporation and five individuals, officers thereof, engaged in sale at wholesale and retail of a variety of peddlers' and retail deniers' supplies, including toothbrushes, dental creams, razor blaues, perfumes, and other drug sundries and notions, in substantial competition with others engaged in manufacture and distribution of lil~:e and similar. products and sale thereof In commerce among the various States and in the District of Co· lnrubla, and iucluiling manufacturers and distributors of such products who do not fictitiously price-mark their merehancli~<e, and also those who do not advertise or falsely represent, through their catnlogfl, that they are manufacturers or importers or that tilly have been e~;tabli~<hed In bush1e~s !or a greater period thnn Is the case-- (a) Listed and described many articles and Items ot mPrchundise, iu their catalogs and price lists, as possrsslug rrtnll valtws or prices many times In excess of their actual selllng prif'e to the rf'tllllf'r or to the pur('hli:f'r, and of the actual retail Jlrlce thereof, and incltuku among Items auu artldcs tlms dcRcrlbrd a numb<>r which bad stamped or printed thereon, or on the labels thereof, ~r on the containers in which offered and gold to the 1111blic, fictitious retail prices many times in excess of the actual selling price of said items or articles of merchandise, as sold by peddler or retailer to consuming public, and In excess of tlwlr true and actual value, and which were not Intended, by f'lther themselves or their purchasers buying for resale, to be true retail price or retail vnlne of mf'rchnndlse thus marked, but to be tlr In excess of price intended to be and actually charged for sale thereof to ultimate consumer purcho~er In usual course of trade, and far in execs~ of true value of various items thus marked; With result of placing in the hands of ltil peddler and retailer custonwn.! buying !or resale, an Instrnmf'nt and means enabllng thf'm to commit n fraud upon a substantial part of consuming public through repreHentlng, ot't'erlng, and sellng shaving and dental creams, cosmetics, and other drug sundries involved, as genuinely superior pt·oduets product'd by the manu· taeturer with lntf'nt of Sille thereof In usual course of trade to public at and tor retail price stumped thf'reon or on containers thereof; (b) Drslgnated, In catalogs and other advertising matter, l.'ertaln domt'stlc perfumes made or compounded In the United States, as "L'Odeur d' Amour,. and "Perfumes of Frnnl.'e," and set forth on the containers of one of said perfumes certain printed matter In the French language to the etr~'Ct that products In question had been JlUlde by the French firm there lllllllt't.l In their factories near Paris, etc.; and (c) Represented, In solicitation and sale of their• said commodities, that bus!· ness In question was an old established one, and that corporation had hr<>n wllolesal<>r tor Mome tw£'nty yrnr!l, and that they were lmporh·rll an•l manufacturers of tolletrlf's, drug snndrlt•s, razor blades, ftc., and made !!Ucla ::IIILLS SALES CO. OF NEW YORK, INC., ET AL. 111 110 Com pia in t statements as "now located in New York only • • • 'Ve have discontinued all other branches • • • Chicago bmnch discoutinnc<l," notwithstanding fact corporation In question was organized, etc., in l!l3G and not 19Hl, and had been, accordingly, wholesaler for only extremely limited period thus indicated, they were not manufacturers and did not own, control, opl'rate, or have any interest whatsoevl'r In manufacturing establishments making such products, and had never operated place of business in Chicago, or in any other place than in New York City; With rl'sults that a substantial portion of the consuming public of the severn! Stater was misled into the belief that various items of ml'rchandise, described as hereinbefore set forth, were a superior value and were to be sold and distributed with the intent ami purpose that they should be sold at retail prices closely approximating those stamped thereon, and that said products, by reason of the marks affixed or stamped thereon, were composed of superior ingrt'dients and ordinarily retailed, in usual course of trade, for prices closely approximating those stamped on merchandise, and that they were manufacturers of said products, in business for a great many years, and were importers of perfumes, etc., and that aforesaid perfuml's had been made in and imported from France or some other foreign country, and with tendency and capacity to mislead and deceive distributors and purchasing publlc into erroneous bellef that said statements and representations were true, and with pffect of inducing members of public to buy their products on account of such belief, and of unfairly diverting trade to them from competitors; to the injury Qf the general and to the damage and Injury of manufacturers and distributors, and to the substantial injury of competition in commerce: licl.d, 'that such nets and practices were to tlle prejudice of the pubiic and comic('titors and constituted unfair methods of competition. Jfr. S. Brogdyne Teu., II for the Commission. Col\ll'LAINT I>ursuant to the prodsions 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 Mills Rales Company of New York, Inc., n corporation, David Jacoby, ~velyn Jacoby, Joseph Jacoby, Estelle J. Kruger and Walter Jacoby, Individuals, officers of the aforesaid corporation, all hereinafter referre,l to as respondents, have been and are using unfair methods of ~otnpetition in commerct>, as "commerce" is dt>fined in said act, und lt appearing to said Commission that a proceeding by it in respt>ct tht>reof would be in the public interest, hereby isstiPs its complaint, !3tating its chargt>s in that rt>spect as follows: • PARAGRAPH 1. Respondent Mills Sales Company of New Y~rk, Inc., Is a corpomtion ha>ing its principal office and place of busmess loented at 901 llroadway, in the city of New York, State of New 121m--~fi----10 112 FEDERAL TRADE COl\DIISSIO!'l" DECISIONS Complaint 2::1F.T.C. York, and operating a branch store located at 87 Orchard Street, city of New York, State of New York. It has been, for more than une year last past engaged in the sale and distribution of cosmetics, perfumes and notions to retail dealers and peddlers purchasing' for resale, and also to the public direct. In the course and conduct of its business it offers said products for sale and sells the same in commerce between the State of New York and the several States of the United States and the District of Columbia. Respondents David Jacoby, Evelyn Jacoby, Joseph Jacoby, Estelle J. Kruger, and Walter Jacoby, are respectively, president, vicepresident, treasurer, secretary, and assistant secretary of the aforementioned respondent corporation. They have their principal places of business at the above-mentioned addresses of the Mills Sales Company of New York, Inc. They all participate in the management nnd direction of the Mills Sales Company of New York, Inc., and its sales policies and geneml business operations. PAn. 2. When said in·oducts are sold, respondents transport or cause the same to be transported from their places of business in tho State of New York to purchasers thereof located in States of the United States other than the State of New York, antl in tlto District of Columbia. There has been for more than one year last past, and still is, a constant current of trade and commerce in said products so sold by respondents, .between and among the various States of the United. States and in the District of Columbia. Ret::pondents are now, and for more than one year last past have been engaged in substantial competition with other individuals, firms, partnerships, and corporations engaged in the manufacture, sale, and distribution of like and similar products in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. Respondents in soliciting the sale and in the selling of their commodities1 and for the purpose of creating a demand on the part of the consuming public for said commodities, have advertised their commodities through the media of catalogues, price lists, and other printed matter published, issued and circulatec.l throuO'h the United Statps mails to their customers anc.l prosp<>cth·e customers"' in tho various States of the United States and in the District of Columbia. In the aforesaid ways and by the aforcsaid means, respondents make and have made to the general public false and misleading state· ments with reference to the commodities offered by them for sale. :Many articles and items of merchandise listed.l in said catalogues anti price lists are des~ribed .as possessing retail values greatly in excess of the actual selhng pncc of respondents to the retailers or other MILLS SALES CO. OF NEW YORK, INC., ET AL. 113 110 Complaint purchasers, and greatly in excess of the actual value thereof. A number of the said items anu articles of merchandise described in the aforesaid catalogues have retail prices stamped or printed on the labels attached thereto, or on the containers in which they are offereu for sale and sold to the public.

Representative of such statements and representations made by the respondents on the containers regarding the selling price and value of the commodities thus offered by them for sale are the following: Economy First Aid Kit. Price 25¢; Safeguard Drand Deluxe Liquid Latex. Price $4; Dupree Pills. Price $2 per box; You love to season with pure spices. Allspice Price 35¢; Champion Cup Shaving Soap. Price 15¢; Spirits of Camphor, U. S. P. Value 35¢; Lather Shave Cream. Palm and Olive Oil. A product of Palm and Olive Oils. Price 35¢; Dr. Ross' Tooth Paste. Contains l\Iilk of l\Iagnesia. Price GO¢; Royal Dlue Dental Cream. Contains l\Iilk of Magnesia. Price CO¢; and Campbell's Lather Shave Cream. Price 35¢.

In truth anu in fact the Economy First Aid Kit is sold to the retail trade for 5¢ per unit; Safpguard Brand Deluxe Liquid Latex is sold to the retail trade for $1 per unit; Dupree pills are sold to the retail trade for 25¢ per box; You love to season with pure spices. Allspice is sold to the retail trade for C4 per unit; Champion Cup Shaving Soap is sold to the retail trade for 2¢ per unit; Spirits of Camphor, U. S. P., is sold to the retail trade for 7¢; Lather Shave Cream. Palm and Olive Oil. A product of Palm and Olive Oils, is solu to the retail trade for 4¢; Dr. Ross' Tooth Paste. Contains Milk of 1\Iagnesia, is solu to the retail trade for 6¢; Royal Dlue Dental Cream. Contains l\Iilk of :Magnesia, is sold to the retail trade for 10¢; and Campbell's Lather Shave Cream is sold to the retail trade for G¢ per unit.

The respective items above referred to are usually and customarily solu to retail dealers or peudlers for the retail prices indicated iii the unnun1hered pararrraph immediately preceuing this one. The said retail prices at "'11ich the products are actually solu to retail consumers do not appear on the containers. The said catalogues of respondents contain many other instances where fictitious retail prices are imprinted upon the label or carton. Over a period of many ,pars, manufactur~rs in many t.mlles have ndf,ptetl and followed the custom of marking or stampmg on the article or item of manufacture, or on the container thereof, the retail price at which the said manufacturers suggest that the retailer should ~ell the item or article to the ultimate consumer purchaser. 114 FEDERAL TRADE CO:\I:;\IISSIOX DECISIO:NS Complaint 2;;F.T.C. This suggestt>d retail price so stamped or marked is intended to represent the co~t to the manufacturer of the article plus a reasonable profit for the manufacturer and the retailer, and, consequently, to represent the approximate retail sale value of the item. The public generally understands this custom and has been led to and does place its confidence in the price-marking so stamped and tht> representations so made as to the quality of the product, to the extent that it pnrchasrs a substantial volume of merchandise in reliance on this aforrsai<l custom.

For many years a r-uLstantinl portion of the consuming puhlic has had and has expressed a marked preferenre for dental creams, shaving creams, toilet articles and similar household notions which are composed of superior ingredients and which are produced by the manufactmers thereof with the intr11t nnd design of srlling said products for prices in excess of the general nnd usual rnnge of prices for similar protlucts or for lho(lncts made of inf<'rior ingredients. ~aid mannfaeturcrs, following the custom h<'rPin (letniled, have mnrlml or stnmpe<l the sHg~rstPtl rrtnil prirP on said products as indicati11g the snprrior quality and character of tho product and its hi!-rlwr nhll'.

'Vhenever a gt>nuilwly Sll)>Prior ]>l'O(luct so stni\J}lP(l or mnrkP1l with the retail price thereon is offt>rf'd for sale ut a suh4antially l'PiltH·Nl price, the gcnrrnl pmchasing public is lfll to believe and clof's believe that in purchasing said pro(lurt it is seeming- n hnrgain not <)l'(linnrily obtainable in the mmnl <'Olii'Sf' of tnul<>. The pm·ehnsing- pnhlic has a preference for purchasing genuinely superior products sold at less than the customary rPtnil prices th<>r('of over ordinary prodnets sold for th~>ir regular price which is lower than the normal retail value of th~> superior products in the customary course of trade. The retail prices so ~tnmp<'d or prinh'(l as aforesaid upon rt>spondents' products are greatly in excess of the actual selling pricp of the saitl items or nrtic!t's of merchandise Ly th£> r£>tail<'r to the ('onf1uming public and are in excess of their true and actual ya)ue. 'fl1c I'('tail prices so stamped or printNl ns afor('sai(l are false and fictitious and in no srnst> r~>prP~tnt either1· the trnr value or the true !"t'llinrr0 price of tlw articles so pric<'-marked.

PAn. 4. The said catalogues published nhl distributed by the re- F:pond~>nts also contain other instances of misleading descriptions and representations of their commoditi('Sj among them nrc the foHowiu~: 1. Perfumes represented and designated as "V OdPur d' Amour." On this contain~>r appears certain printed matte>r in the French language which, wh£>n translated, reaus as follows: 1\IILLS SALES CO, OF XE\V YORK, IXC., ET AL. 115 110 Complaint 'llli~ ~pednlty and these ucce!'l~orles ha,·e !wen created by Orulee Brothers in tie>ir facturles in the City of Perfumes at Suresnes, uear Purls (France). They are the exclusive property of Oralee Brothers for the United States of .America where they ure manufactured.

Counterfeits will be rigorously prosecuted. All our SJJecinltles are sold under the own name of "Oralt:'e Brothers" with· out any forenames.

Oralee Brothers, Paris, France.

2. Package of perfumes bearing (in French) the legend, "Perfumes of France".

For many years a substantial part of the consuming public has had, and still has, and has so expressed, a marked preference for perfumes and toiletries which are manufactured or compounded in foreign countries, and ~.'specially in France, and then imported into the United States.

'lhe aforementioned representations and description appearing on the aforesaid articles by labels printed in the French language serve to lend purchasers and prospective purchasers into the erroneous and lnistaken belief that the commodities so described and referred to are manufactured in France.

In truth and in fact, the aforesaid articles are not manufactured in France or any other foreign country, but are domestic products tnade or compounded in the United States.

PAR. 5. The respondents, in soliciting the sale of and selling their said commodities, and for the purpose of creating the impression that the respondent .Mills Sales Company of·. New York, Inc., is an old t>stablished business, represent that respondent has been a wholesaler since 1916.

P AU. 6. The respondents, in soliciting the sale of and selling their ~ommodities, and for the purpose of creating a demand on the part of t lte consuming public for such commodities, now cause and for ll1ore than one year last past have caused themsel\'es to be representctl, through their letterheads and circulars, order blanks and general Lusiness stationery, as importers and manufacturers of toiletries, drug sundries, razor blades, novelties and notions. PAR. 7. The respondents further represent, through such statelneitts as, "Now located in New York only • • • we have discontintwd all other branches • • • Chicago branch discontinued," and other statements of like import, represent that the corporate tesponuent at one time operated a place of business in the city of Chicago, in the State of Illinois.

In truth and in fact the above set out representations of the respondents are false in that the respondents' business is not an old 116 FEDERAL TRADE COl\11\IISSION DECISIONS Complaint 25F.T. C.

established business. The corporate respondents' business was incorporated in 1936. The respondents are not in any sense whatsoever importers of any of the aforementioned products, and they are not in any sense whatsoever manufacturers of the said articles. The said corporate respondents have never operated a branch in the city of Chicago, State of Illinois, or at any other place than in the ~ity of New York, State of New York.

PAR. 8. The aforesaid false and misleading advertising and representations, together with the aforesaid false and fictitious price markings, on the part of the respondents, place in the hands of the aforesaid peddlers and retailers buying for resale, an instrument and means whereby said peddlers and retailers may commit a fraud upon a substantial portion of the consuming public, by enabling such dealers to represent and offer for sale and sell respondents' said shaving cream, dental cream, and other toilet notions as being genuinely superior, or imported, products produced and sold by the manufacturer thereof with the intent and purpose of selling the said products in the usual course of trade to the general consuming public at and for approximately the retail price stamped on said prodllf'tS or on their containers.

PAR. 9. There are, among the competitors of the respondents in commerce, ns described in paragraph 1 above, manufacturers and distributors of like and similar products who truthfully advertise and r<•Jn·csent the nature, merit, anu value of their respective products anu the nature and size of their business. There are also among tho competitors of respondents manufacturers and distributors of like and similar products who refrain from advertising or representing through their catalogues and other advertising media and through fictitious price markings, that the merchandise offered for sale by them has a merit, origin or value that it does not have. PAn. 10. The effect of the foregoing false and misleading repre· sentations anu acts of the respondents in selling and offering for Fale such items of merchandise as hereinbefore referred to, is to mislead a substantial portion of the purchasing and consuming public in the several States of the United States, by inducing them to mistakenly believe:

1. That the various items of merchandise described in respond· ents' cat a lognC's and other adwrtising- me( lin WE're and are of superior value and were and are sold and distribute<! by rcsponJcnts with the intent and purpose that said products should be sold at retail prices clo:-ely approximating the prices stamped thereon. 2. That the said products, because of the price marks fixed or stampcu th('rcon, arc composed of superior ingredients and are 1\IILLS SALES CO. OF NEW YORH:, INC., ET AL. 117 110 Findings products which ordinarily retail, in the usual course of trade for prices closely approximating the prices stamped on the merchaddise. 3. That the respondents are manufacturers of said products and large scale operators and distributors, and have been in busidess a great many years and conduct their business on such a scale as to as.sure purchasers of a superior quality and lower price by trading Wlth such operators.

4. That the respondents are importers of perfumes, notions and other toiletries.

5. 'that the perfumes described in paragraph 4 are manufactured in and imported from France or some other foreign country. The foregoing false and misleading statements and representations on the part of respondents have induced and still induce a substantial number of retail merchants as well as the consumer purchasers of said commodities, to buy the products offered for sale, sold and distributed by respondents, on account of the aforesaid erroneous and mistaken beliefs. As a result thereof trade has been diverted from those competitors of respondents engaged in similar businesses, referred to in Paragraph 9 above. As a consequence thereof, substantial injury has been and is being done by r!'spondents to competition in commerce between and among the yarious States of the United States. PAR. 11. The aforementioned methods, acts and practices of respondents are all to the prejudice of the public and respondents' competitors, as hereinabove alleged. Said methods, act& and practices 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 Fedeml Trade Commission, to define its powers and duties, and for other purposes," approwd September 26, 1914. REPORT ' FINDINGS AS 'l'O 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 Commis- Slon,. to define' 'its powers and duties, and for other purposes, " t h e Federal Trade Commission, on 1\Iarch 9, 1937, issued and served its complaint in this proceeding upon respondents Mills Sales Company of N'ew York, Inc., a corporation, David Jacoby, individually, and as prebident of Mills SniPs Company of New York, Inc., Evelyn Jacoby, lnuividually and as vice president of Mills Sales Company of New York, Inc., ,J~sPph Jacoby, individually, and as treasurer of Mills Sales Company of New York, Inc., Estelle J. KruPger, individually, and as ~cretary of .Mills Sales Company of :1\Tew York, Inc., and ·walter Jn.cohy, individually, and as assistant sc?rctary of Mills ~ales Coml)n.ny of N'ew York, Inc., charging them with the use of unfair methods FEDERAL TRADE COl\UIISSION DECISIONS 118 Findings 25F.T.C.

of competition in commerce in violation of the provisions of said act. On May 14, 1937 the respondents filed their answer, in which answer they admit all the material allegations of the complaint to be true, and state that they waive hearing on the charges set forth in said complaint and consent that, without further evidence or intervening procedure, the Commission might issue and serve upon them 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 r.egularly came on for final hearing before the Commission on the said complaint, and nuswer thereto, and the Commission having duly considered the same, and being now fully advised in the premises, finds that this proceeding is in the interest of the public, and makes this its 1indings ns to the facts and its conclusion drawn tl1erefrom: }'INili~GS AS '1'0 Tile }'.\GTS PARAGRAPH 1. Thc' respontlents are the Mills Sal('s Company of New York, Inc., a NPw York corporation organized and doing business by virtue of nnd mHlC'r the laws of the State of New York, and David Jacoby, E\·elyn Jacoby, Josrph .Tacoby, Est<'llr J. Krueger, and 'Vnltrr Jacoby, respectively presidt•nt, vire presitlC'nt, treasurer, srcretary, and assistant secretary of the Mills Sal('s Company of New York, Inc.

PAn. 2. RC'f'pondents have hren for more than one year last past cn~a~ed in the wholesale hn<l r<>tltil husinrss of dt>aling in, nn<l selling at n·tail, a variety of peclcllers' an<l rrtuil clc•llkrs' supplies, iHclmliHg tooth brushes, tlentul creams, razor hladPil1 pt>rfunws, and othl'f drug sundries and notions.

PAn. 3. In the sale of said pr·o,lncts responclf'nts Hll\'e transported or caused the same to be transported from thrir principal place of business in the State of New York to the purchasers thereof, locntetl in States of the United States other than the State from which the shipment originated, and in the District of Columbia. There has bef'n for more than one year la.st past, and still is, a constant curr('nt of trade and commerce in said products so distributed nnd sold by rrsponclc•nts between and amo11g the various States of the United ~states and in the District of Columbia.

For more than one year last past the rPsponclt>nts have l~tlll en· gaged in substantial com1wtit ion with otlwr individual:;;, partnerships, firms, anti ('Orporations engaged in the manufacture nntl distdLution of like and similar products, and in the sale thrrrof in commerce be· tween and among the various Stlltf's in the United States and in the District of Columbia.

MILLS SALES CO. OF NEW YORK, INC., ET AL. 119 110 Findings PAn. 4. In the course and conduct of their business as afore~aid the respondents, in soliciting .the sale of and in selling their products, and for the purpose of creatmg a demand upon the part of the consuming public for said products, have for more thnn one year last past caused their products to be advertised through the media of catalogs, price lists, and other printed matter published, issued, and circulated through the United States mails to their customers and prospective customers in the various States of the United States and in the District of Columbia. In the said ways and by said means rpspondents have made to the general public many unfair, false, and misleading statements with reference to the commodities offered by thrm for sale.

PAR. 5. Manv articles and items of merchandise listed in said catalogs and price ·lists have bl.'en described as possessing retail values or Prices many times in excess of the actual selling price by the respondents to the retailer or other purchaser and many times in E:'xcess of the actual retail price thereof. . A number of the said itpms and articles of merchandise described in said catalogs have retail prices stamped or printeu thereon, on the labels attached thereto or on the containers in which they have been offered for sale and sol<l to the public. The retail prices so stamped or printed as aforesaid are many times in excess of the actual selling price of the said items or articles of merchandise sold by the }lcddler or retailer to the consuming public, and nre many times in excess of their· true and actual value. The retail prices so stamped or printed as aforesaid are blsc and fictitiou!'! and in no SPnse repre·sent either the true value or the true selling price of the articles so Price marked .

• PAR. 6. Among the misleading and fictitious price markings appear~ lng on cartons and containers and advertiseu by respondents in cab\logs, price lists, and in other advertising matter are the following: (a) "Economy ~'irst Aid Klt"-''trice 25¢", whereas this item Is regularly sold by enid respondents nt rctaU tor 5¢ 1wr unit. (b) ''Safegunrd Druml Deluxe Llqnld Lntex"-''Price $4", whereas this item Is regularly sold by said re~<pouuents at retail for $1 per unit. (c) "Dupree Plll:o"-"trice $2 per box", whereas this ite>m is rl'gnlarly soh\ by said ti'Fipondt-uts at retnll for 2:"~ per box. (4) "You love to season with pure spices"-"Allsplce"-"Price 3::\¢", whereas thla lte>m Is regul~truly sold by said respondents at retail for 6¢ per unit. (e) "Champion Cup Shaving Sonp"-"Prlcc 15¢", whereas this item Is regu. lar)y sold by said ref,:pondents at retail for 2¢ per unit. (f) "Spirits of Camphor, U. S. r."-"Value 3.1¢", whereas thi;~ ite>m is rE>gular·Jy 1101!1 by said rf'!;pomlents at retail for 7¢ per unit. DECISIO~S120 FEDE£tal TRADE COJ\Il\USSION Findings 25 F. T. C. (g) "Lather Shave Cream"-"Palm and Olive Oil"-"A product of Palm and Olive Olls"-"Prlce 3:-;¢", whereas this Item Is regularly sold by said respond- -ents at retail for 4¢ per unit.

(h.) "Dr. nof;s' Tooth Paste"-"Contalns l\Iilk of Magnesia"-"Price 60¢", wh<.>rens this ltPm is r<'gularly sold by said respondents at retall for 6¢ per unit. (i) "Royal Blue Deutnl Cream"-"Contains l\Iilk of 1\Iagnf'!lia"-"Prlce 60¢", whereas this item is regularly sold by said respondents at retail for 10¢ per unit. (J) "Campb<.>ll's Lather ShaYe Cream"-"Price 3:i¢", whereas this item is regulnrly sold by said respondents at retail for 6¢ per unit. , PAR. 7. The retail prices which, as indicated above, appear on the items of merchandise or on the containers thereof are not and were not intended by either the respondents or the purchaser purchasing for resale to be the true retail price or the true retail value of the merchandise so price marked. The retail prices thus appearing on the items of merchandise or on the containers thereof were intended by the respondents and by the purchasers purchasing for resale to be far in excess of the price intended to be charged and actually chargrd for the sale of merchandise to the ultimate consumer purchasing in the usual coui·se of trade, and far in excess of the true value of the various items of merchandise so price marked. PAn. 8. Over a period of many years manufacturers have in many trades formed the custom of price marking or stamping on the article or item of manufacture, or on the container thereof, the retail price at which said manufacturers suggest the retailer should sell the item or article to the ultimate consumer purchaser. This suggestcd retail price so stamped or marked is intended to represent the cost of the manufacture of the article, plus a reasonable profit for the manufacturer and retailer and, consequently, to represent the approximate retail sale value of the item. The range of the suggested retail price is intended by tho manufacturer to he indicative of the quality and character of the ingredients used and the process by which the item is manufa.durcd. The public generally undC'rstancls the custom herein detailed, and has been led to and does place its confidence in the price markings so stamped and the representations thereby made as to the quality of the product to the extent that it purchases a substantial volume of mcrch:mdise in reliance on thus aforesaid custom.

PAR. 9. For many years a f:>Ubf:>tantial part of the consuming public has expressed and has ha<l a marked preference for dental creams, Bhaving creams, toilet articles, and like and similar drug sundries that nre composed of superior ingredients and are produced by the manufacturer thereof with the intent and design of selling said products for prices in excess of the general and usual range of prices for similar products manufactured with the usual and customary 1\IILLS SALES CO. OF NEW YORK, INC., ET AL. 121 110 Findings ingredients or with inferior ingredients. Said manufacturers following the custom herein detailed, have marked or stamped the suggested retail prices on said products as an indication of the superior quality and character of the product and its resulting higher value. 1Vhenever a genuinely superior product so stamped or marked with the .retail price thereof is offered for sale at a substantially reduced price, the general purchasing public has been led to believe and does believe that in purchasing said product it is securing a bargain not -ordinarily obtainable in the usual course of trade. The purchasing public has a preference for purchasing genuinely .superior products sold at less than the customary retail values thereof over ordinary products sold for the regular price, which is lower than the normal retail price of the superior product in the customary ·course of trade.

PAR. 10. The said catalogs, price lists, and other advertising literature of respondents contain many other instances where fictitious retail prices are imprinted upon the label or carton. PAR. 11. The catalogs, price lists, and other advertising literature of respondents contain many other instances of false and. misleading representations. Among them are the following: (1) Perfumes represented and designated as ''L'Odeur d' Amour." On this container appears certain printed matter in the French language which, when translated, reads as follows: This specialty and these accessories have been created by Orally'e Brothers in their factorl<'s in the City of Perfumes at Snr!'sne~, near Paris (Franee). They are for the exclusive prorwrty of Ornlee Brothers for the United States of America where tlley are manufactured.

Counterfeits will be rigorously prosecuted. All our sperlalties nrc sold under the own nnrne of ''Oralee Brothers" without nny forenames.

Oralee Brothers, Paris, France.

(2) Package of perfumes bearing (in French) the legend, "Perfumes of France".

PAn. 12. For many years a substantial part of the consuming public has had, and. still has, aw.l has so expressed, a marked preference for perfmnes and toiletries which are manufactured or compounded in foreign countries, and especially in France, and then imported into the United States.

P.t~R. 13. The aforesaiu articles of perfumes are not manufactured in France or in any other country, but are domestic prouucts made or compounded in the United States.

PAn. 14. The respondents in soliciting the sale and selling their said commodities have· rrprrsentrd that the respondent, Mills Sales CO)HIJSSIO~ DECISIONS122 FEDERAL TRADE Findings 25 F.T. C. Company of New York, Inc., is an olrl established business, and further represents that respondent, Mills Sales Company of New York, Inc., has been a wholesaler since 1916. Mills Sales Company of New York, Inc. was organized an<l incorporated in 1936 and has only been a wholesaler since 193G. PAR. 15. The respondents in soliciting the sale and selling their commodities have represented themsrlves through letterheads and circulars, order blnnks, and general business stationery to he importers and manufacturers of toiletries, drug sundries, razor blades, novelties, and general drug sundries and notions. PAR. 16. The respondents are not manufacturers of toiletries, drug sundries, razor blades, novelties, and general drug sundries, and notions, nor do they own, control, operate, or have any interest whatsoever in manufacturing establishments making toiletries, drug sundries, razor blades, novelties, aml notions. PAn. 17. The respondent further rC'presC'nts through such statements as "now located in New York only * "' "' 'Ve han• discontinue!} all other branrhes • "' • Chirngo branch discontinued'' and other statements of lilw import, that the corporatl" respondent at one time operated a place of business in the city or Chicago, in the State of Illinois.

The respon<lent, Mills Sales Company of New Y Ork, Inc., has nE:>Yer operated a place of business in the city of Chicago, in the State of Illinois or at any other plate than in the city of New York, Stahl of New York.

PAn. 18. The false utHl misleading advertising nnd representations hereinabove set out together with the false and_ fictitious price markings herein set out on the part of respondents place in the hands of the aforesaid pe<ldlers and retailers, buying for resale, an instrument and a means whereby said. pe<hllers and retailers may, and do, commit a fraud upon a substantial part of the consuming public by <>nal1ing such dealers to represent and_ offer for sale and sell the said shaving cre:un, dental cream, cosmetics, and otlwr general line of <lrug stm1lries as genuinely superior products produce1l by the manufart urer thereof, with the intent and purpose of selling the said products in the usual course of trade to the general consuming public at awl for the retail prire stnmpPcl on the products or on their contninrr;, PAn. 1!.>. There are among the competitors of the respondents in interstate commerce manufacturers and_ distributors of like and similar prouucts who do not fictitiously price mark the merchandise offered for sale by them. There are also among the competitors of the respondents in interstate commerce manufacturers and distrib- MILLS SALES CO. OF NEW YORK, INC., ET AL. 123 110 Conclusion utors of like and similar products who do not advertise or represent through their catalogs that they are manufacturers, importers, or have been established in business for a great period of time unless such are the facts.

PAR. 20. The effect of the foregoing false and misleading representations and acts of the respondents in selling and offering for sale items of merchandise herein described is to mislead a substantial portion of the consuming public in the several States of the United States by inducing them to believe:

1. That the various items of merchandise described in respondents' catalogs and other advertising medi~ were and are of superior ''value, and were and are sold and distributed by respondents with the intent and purpose that said products should be sold at retail prices closely approximating the prices stamped thereon. 2. That the said products, because of the price marks affixed or stamped thereon, are composed of superior ingredients and are products which ordinarily retail in the usual course of trade for prices clos~:>ly approximating the prices stamped on the merchandise. 3. That the respondents are manufacturers of said products and have bl•en in business a great many years. 4. That the respondents are importers of perfumes, notions, and other general line of drug sundries.

5. That the perfumes described in paragraph 11 are manufactured in and imported from France, or some other foreign country, into the United States.

PAR. 21. The use of pach and all the foregoing false and mislead-' ing statements and representations by the respondents as herein set out has had anll now has the tendency and capacity to mislead and deceive distributors and the purchasing public into the erroneous and mistaken },elief that said statements and representations are true, and has induced and now induces members of the public to purchase the products of the said respondents on account of such erroneous bt>liefs, to the resultant damage and injury of manufacturers and distrilmtors, and to the injury of the general public. Said representations have thereby unfairly diverted trade to said respondents from competitors, and substantial injury, has been done by respond- Puts to competition in commerce among and betwt>en the various States of the Uniterl Statps.

COXCLUSIOX The aforesaid acts and pmctices of thl' respondents, Mills Sales Company of NPw York, Inc., a corporation, David Jacoby, individuully, and ns president of 1\Iills Sales Company of New York, Inc., 124 FEDERAL TRADE cmn.IISSION DECISIONS Order 25F. T. C.

Evelyn Jacoby, individually, and as vice president of Mills Snles Company of New York, Inc., Joseph Jacoby, individually, and as treasurer of Mills Sales Company of New York, Inc., Estelle J. Krueger, individually, and as secretary of Mills Sales Company of New York, Inc., and ·walter Jacoby, individually, and as assistant secretary of Mills Sales Company of New York, Inc., are to the prejudice of the public and of respondents' 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 creat~ 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 respondents, in which answer respondents admit all the material allegations of the complaint to be true and state that they waive hearing on the charges set forth in said complaint and consent that without further evidence or other intervening procedure the Commission may issue and serve upon them its findings as to the facts and conclusion and an order to cea"'e atHl 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 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 is ordered, That the respondents, l\Iills Sales Company of New York, Inc., and David Jacoby, Evelyn Jacoby, Joseph Jacoby, Estelle J. Krueger, and 'Valter Jacoby, individually, and as officers of said Mills Sales Company of New York, Inc., and their respective agents, representatives, or employees, individual or corporate, in connection with the offering for sale, sale, and distribution of cosmetics, perfumes, tooth brushes, shaving creams, tooth paste, and other drug !mndries and novelties, in interstate commerce or in the District of Columbia, do forthwith cease and desist from: Causing cartons and containers in which said articles of merchandise are offered for sale to the public, to be printed, labeled, marked, or stamped with retail prices in excess of the actual and usual selling prices at which the said articles are sold by retailers to the consuming public; or Representing, directly or indirectly, by newspaper, or magazine advertisement, articles, catalogs, lal>els, letterheads, or any other form of printed. matter, or by radio broadcasting or in any other manner: MILLS SALES CO. OF NEW YORK, INC., ET AL. 125. 110 Order 1. That the prices marked or affixed. to or stamped on the products sold by them, or on the containers thereof, are the regular or customary retail prices for such products when said price marks are fictitious and greatly in excess of the regular and customary prices at which said products are sold or offered for sale at retail; 2. That their perfumes, cosmetics, and other notions are manufactured in France or any other foreign country; 3. That the respondents, or any one of them, are importers of said products sold by them;

4. That the respondents, or any one of them, are manufacturers of any of the said products sold by them;

5. That the respondent, Mills Sales Company of New York, Inc., is a large scale operator and distributor; that it has been in business since 1916 and is an old established business; and that it formerly operated branches in any city other than New York City; It is further ordered, That repondents shall, within 60 days from the date of the service upon them of this order, file with the Commission a report in writing setting forth the manner and form in which they ha,·e complied with the order herein set forth. Syllabus 25F.T.O.