Wein, Adolph

Text (OCR of the scan at left; may contain errors)

IN THE MA TIER OF ADOLPH "\VEIN, TRADING AS AMERICAN TOY 'VORKS <:OJIIPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 0~' AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3117. Complaint, Apr. 26, 1937-Decision, Aug. 2, 1937 'Vhere an individual engaged in sale and distribution, to retailers and direct to consuming public, of toys which were not of domestic origin, but which were made in or imported from Japan and other foreign countries, In substantial competition with those engaged In manufacture and distribution of like and similar products and in sale thereof in commerce among the various States and in the District of Columbia, and including among such competitors those who truthfully advertise and represent their products, and many importers of like and similar products who do not in any manner misrepre~ent the country of origin thereof- Placed or caused to be placed upon containers of many of the toys sold and distributed by him, words and letters "1\Iade in U. S. A.," notwithstanding fact many of such toys thus sold and distributed by him were not of domestic origin, but were made in or imported from Japan and other foreign countries, and many of said toys thus containered and lnbPled lud imprinted thereon words "Japan" or "1\lade In Japan"; With effect of misleading and deceiving a substantial portion of purchasing public in the several States and In said District, and causing them erroneously to believe that toys thus packaged, labeled, sold, and dbtributed by him were made in the United States, and of causing substantial part of such public, because of such erroneous belief, to buy products offered, sold, and distributed by him, and with result thereby of unfair and sujstantlal diversion of trade to him from his competitors; to their injury and that of the public:

licld, That such acts and practice'! were to the prejudice of the public and competitors and constituted unfair methods of competition. Mr. S. Brogdyne 1'eu II for the Commission. Mr. Joseph 0. /{adane, of New York City, for respondent. ColllPLAINT Pursuant to the provisions of an Act of Congress, approved September 26, 1914, entitled. "An Act to create a Federal Trade Comlnission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that Adolph Wein, trading and d.doing business as American Toy 'Vorks, hereinafter designated. as respondent, is now and has been using unfair methods of competition in commerce, as "commerce" is defined in ~aid act, and it appearing to said Commission that a proceeding by ~t in respect thereof would be in the public interest, hereby issues lts complaint, stating its charges in that respect as follows: Complaint 25F.T.C~ PARAGRAPH 1. "Respondent, Adolph 'Vein, is an individual who is now, and has been at all times mentioned herein doing business underthe trade name and style of American Toy Works, at 41 East Eleventh Street, city of New York, State of New York. PAR. 2. Respondent is now and has been engaged in the business of assembling, packing and selling toys to retailers and others for personal use and consumption in commerce as herein set out. Said respondent, being engaged in business as aforesaid, causes said toys when sold to be transported from his principal office and place of business in the State of New York to purchasers thereof located in other States of the United States and in the District of Columbiar and there is now and has been at all times mentioned herein a constant current of trade and commerce in said above described productssold by respondent between and among the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of his said business, respondent is now and has been in substantial competition with other individuals, firms, partnerships, and corporations likewise engaged in the business of selling toys in commerce among nnd between the various States of the United States and in the District of Columbia. PAR. 4. The toys manufactured, labeled and sold and distributed by respondent are displayed and have been displayed for sale to and by dealers, jobbers, retailers, and department stores and are sold to purchasers and users thereof in containers bearing the words "Made in U. S. A.," and such contain;ners bear no words, labels, or Rymbols to indicate that a substantial part of the toys contained therein and so sold and distributed by respondent are not made in the United States.

In truth and in £act, a substantial part of the toys so labeled, advertised, sold, and distributed by respondent are made in Japan and other foreign countries and purchased by respon<.lent £rom resi· dent manufacturers' agents of the forrign producers. PAR. 5. For many years a substantial part of the consuming pub· lie has had and expressed a marked preference for toys which nre manufactured in the United States over toys manufactured in any foreii,m country. As a. result of this said preference of the purchasing public, they have purchased a substantial quantity of toys domes· tically manufactured and have refrained from purchasing toysmanufactured in any country because of the feeling prevailing' among a substantial part of Americans towards toys manufactured in foreign countries.

PAn. 6. The effect of the foregoing false and misleading represen· tations and acts of the respondent in selling and offering for sale- AMERICAN TOY WORKS 649 647 Findings toys as hereinbefore referred to is to mislead a substantial part of the purchasing and consuming public in the several States of the United States by inducing them to mistakenly and erroneously believe that the toys offered for sale, sold, and distributed by respondent are manufactured in the United States.

PAn. 7. There are among the competitors of the respondent in commerce as herein described, manufacturers and distributors of toys who truthfully advertise and represent the place of origin of their products.

PAR. 8. The foregoing false and misleading representations on the part of the respondent have induced a substantial number of consuming purchasers of said toys to buy the products offered for sale, sold, and distributed by the respondent on account of the aforesaid mistaken belief. As a result thereof, trade has been diverted to respondent from competitors engaged in like and similar businesses. As a consequence thereof, a substantial injury has been and is being done by respondent to competition in commerce between the various States of the United States.

P.\R. D. The aforementioned methods, n~ts, and practices of respondent are all to the prejudice of the public and respondent's competitor3 as hereinabove alleged. Said nets 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 Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved Sept~mber 26, 1914, entitled "An Act to create a Federal Trade Commis- Sion, to defme its powers and duties, and for other purposes," the Federal Trade Commission, on April 26, 1937, issued and served its ~ornplaint in this proceeding upon respondent, Adolph '\Vein, an Individual trading as American Toy 'Vorks, charging him with the Use of unfair methods of competition in commerce in violation of th~ provisions of said net. After the issuance of said complaint and fihng of respondent's answer thereto, a stipulation as to the facts was e~te1·ed into between ,V. T. Kelley, Chief Counsel of the Commiss~on, and Joseph C. Kadane, counsel for respondent. Said stipulation Was thereafter approved by the Commission and duly recorded and filed in the office of the Commission. Thereafter the proceeding re~ularly came on for final hearing before the Commission on the B!lld complaint and answer thereto, and the stipulation as to the facts Findings 25F. T. C. (respondent having waived the filing of a brief); 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 AS TO THE FACTS PARAGRAPH 1. Respondent Adolph 'Vein is an individual trading :and doing business under the name and style American-Toy 'Yorks, with his principal place of business in New York, N.Y. P .AR. 2. The respondent is now and has been for more than one year last past engaged in the business of selling and distributing toys to retailers and direct to the consuming public. PAn. 3. In the sale of said products respondent has transported or -caused the same to be transported from his principal place of business in the State of New York to purchasers thereof located in the States of the United States other than the State from which shipment originated, and in the 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 toys so sold and distributed by respondent between and among the various States of the United States, and in the District of Columbia. PAn. 4. For more than one year last past the respondent has been engaged in substantial competition with other individuals and with partnerships, firms, and corporations, engaged in the manufacture and distribution of like and similar products, and in the sale thereof in commerce between and among the various States of the United States and in the District of Columbia.

PAn. 5. In the course and conduct of his business, as aforesaid, the respondent, in soliciting the sale, and in the selling, of his products, and. for the purpose of creating a demand on the part of the consuming public for said products causes, and has for more than one year last past caused, his products to be advertised through the media of labels attached to the containers of said toys or by words and phrases imprinted upon the said toys. In said ways and by said means re· spondent has made to the general public false and misleading statemf'nts with reference to the country of origin of the commodities offpred for sale by him.

I)An. G. l\fany of the toys sold. and distributed by the respondent are sold in containers upon which the respondent places, or causes to be placed, the words and letters "Made in U. S. A.". l\Iany of the toys so sold and distributed by the respondent in the containers bearing the words and letters ")fade in U. S. A." are not made in the AMERICAN TOY WORKS 647 Conclusion United States, and are not of domestic origin, but are made in, or imported from, Japan and other foreign countries. Many of the toys so packaged in containers bearing the words and letters "Made in U. S. A." have imprinted thereon the word "Japan" or the words "Mttdc in Japan'' which indicates the country from which they were imported. Said containers bear no words or symbols to indicate that any part of the contents thereof are not made in the United States but in a foreign country.

P.An. 7. For many years a substantial part of the consuming public has had, and has expressed, a marked preference for toys which are manufactured in the United States over toys manufactured in any !foreign country. As a result of the said preference of the purchas- I?g public, they have purchased and still purchase a substantial quanhty of toys domestically manufactured, and have refrained from PUrchasing toys manufactured in any foreign country because of the feeling prevailing among a substantial part of Americans toward toys Inanufactured in foreign countries.

PAn. 8. Among the competitors of the respondent engaged in said commerce mentioned in paragraph 4 hereof are manufacturers and distributors of like and similar products who truthfully advertise and represent their respective products, and among such competitors are many importers of like and similar products who do not in any Inanner misrepresent the country of the origin of their respective Products.

PAn. 9. The use by the respondent of the words "Made in U. S. A." 0? the containers in which such imported toys are packaged, sold, and distributed misleads and deceives a substantial part of the purchasing Public in the several States of the United States and in the District of Columbia, and causes them erroneously to believe that the toys 80 Packaged, labelled, sold, and. distributed by the respondent were, and. are, manufactured in the United States; and causes a substantial Part of the purchasing public, because of such erroneous belief, to Purchase the products offered for sale, sold, and distributed by the ~respondent. As a result of such erroneous belief, there has been and ~san unfair and substantial diversion of trade to the respondent from ~ts competitors in said commerce to the injury of said competitors and 0 the injury of the public.

CONCLUSION ,V;he nforemention;d .acts and pract.ices of the respondent Adolp.lt t In nre to the prejudice of the pubhc and of respondent's competl- "~.rs,. and constitute unfair methods of competition in commerce Itlnn the intent and meaning of Section 5 of an Act of Congress,. Order 25F.T.C.

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, and the stipulation as to the facts entered into between ,V, T. Kelley, Chief Counsel of the Commission, and Joseph C. Kadane, counsel for respondent, and the Commission having made its findings as to the facts and its 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 d.efine its powers and duties, and for other purposes." It is ordered, That the respondent, Adolph 'Wein, an individual, his representatives, agents, and employes, in connection with the offering for sale, saJe, and distribution of toys in commerce among and between the various States of the United States and in the District of Columbia, do forthwith cease and desist from representing, directly or indirectly, through price lists, circulars, labels, containers, or any other form of printed matter, or by radio broadcasting, or in any other manner, that any of said toys made in Japan or any other foreign country are made in the United States. It is further ordered, That the respondent shall, within 60 days after service upon him of this order, file with the Commission a. report in writing setting forth in detail the manner and form in which he has complied with this order.

THE AMERICAN DIRIGOLD CORP, 653 Syllabus