Morris, Robert

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IN THE MATI'ER OF ROBERT :MORRIS, TRADING AS D. P. PEN COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE .ALLEGED VIOLATION' OF SEC. 5 OF .AN ACT OF CONGRESS .APPROVED .SEPT. 26, 1914. Docket 3131. Complai-nt, May 15, 193"/-Deci.~ion, Apr. 9, 1938 Where an individual engage-d In sale and distribution of fountain pPn» and pencils, in commerce between and among the various States and In the District of Columbia- Described such pens in newspaper advertisements as possessing retail vnJues and prices many times in excess of the actual price at which !'aid individll•11 soid his merchandi.:e to ultimate purchasers, and sold many of articles dealt In with retail prices stamped and printed on labels attached or on containers thereof, which were many times In excess of the actual selling price to consuming public and many times In excess of their true and actual value. through such advertising as offering, for 59 cents, for two-dny period only and for "special discount coupon", as pretended, alleged "$:3.00 V11lue Vacuum 'Morris' Fountain Pens," etc., and, for 29 cents, "$2.00 Pencils to Match .Above Pens";

Facts being such indicated retail prices, which appeared on items of merdHlDdise or on containers thereof, were not intended to be true retail price or true retail value of merl'hanclise thus price-marked, hut to be far in excess of price to be charged and actually charged in sale of said Articles to con· sumers purchasing In usual course of trade, and far in excess of true value of !nwh articles, true retail value of which was 59 cents and 29 cents, respectively, and not $5 and $2, respectively, as advertised; 'With effect of misleading a substantial part of consuming public b~· iuduciug them to believe that said Items were superior products made by mauufaC· turer to sell at retail at a price closely approximating that stamped thereo»d and that said pens had retail values closely approximating their purporte retail value and price of $5, and had a value substantially in excess of t!Jeir aforesaid actual value of about 59 cents; and with result that such false and misleading statements and representations constituted inducements tot a substantial number of purchasers to buy products thus offered, sold, all~ distributed, and unfairly diverted to said individual substantial volume 0 trade from competitors, among whom there are many who manufactur~ ordinary fountain pens and. others who make pens of superior quality 811 truthfully represent selling price or value to consuming public, and with tendency and capacity so to divert:

Held, That such acts and practices were all to the prejudice and injut'Y of the public and competitors and constituted unfair methods of competition. Before Mr. Johtn lV. Norwood, trial examiner. Mr. S. Brogdyne Teu., II for the Commission. Complaint Pursuant to the provisions of an Act of Congress approved September 2'6, 1914, entitled, "An Act to create a Federal Trade Con1nl15' D. P. PE~ CO. 1037 1036 Complaint sion, to define its powers and duties, and for other purposes," the Federal Trade Commission having reason to believe that Robert Morris, doing business under; the trade name and style of "D. P. Pen Company," hereinafter referred to as respondent, is now and has been using unfair methods of competition in commerce as "commerce" is defh:ed in said act, and it appearing to said Commission that a proceedmg by it would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Robert Morris is an individual who is now and has been for all times mentioned herein doing business under the trade name and style of D.P. Pen Company, city of Bordentown, State of New Jersey. Respondent is now and has been for more than 1 year last past engaged in the business of selling fountain pens in commerce be_tween and among the various Statf>s of the United States and in the District of Columbia.

PAR. 2. Said respondent, being engaged in business as aforesaid, ca~lses said fountain pens, wlwn sold, to be transported from his Principal office and place of business in the State of New Jersey, to the purchasers thereof located in the various States of the United States and in the District of Columbia. There is now, and has been at all times mentioned herein, a constant current of trade and comlnerce in said fountain pens sold 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 llow, and has been, in substantial competition with other individ- ~als and with partnerships, firms, and corporations likewise engaged In the business of selling fountain pens in commerce among and bectweenolumbia.the various States of the United States and in the District of d PAR. 4. Respondent, in the course and conduct of his business as b et~filed in paragraphs 1 and 2 hereof, has caused and still causes to ,e 1 ~1Serted in newspapers having a general interstate circulation, ad- ~ertisements purporting to be descriptive of the merchandise offered t~l' sale and sold by him. The articles offered for sale and sold by ' ~ respondent are described in said advertisements as possessing retai~ values and prices many times in excess of the actual price at "'~Ich the respondent sells said merchandise to purchasers. Many of sald articles ha,·e retail prices stamped and printed on the labels attached thereto, or on the containers in which they are offered for sale and sold to the public. The retail prices so stamped or printed ~ afo:esaid are many times in excess of the actual selling price of e said articles to the consuming public, and are many times in l604:Jlm-39-\·or•. 2tl--68 1038 FEDERAL TRADE COMl\IISSIO)l" DECISIONS Complaint 2ii F. T. C. -excess of their true and actual value. The retail prices so stamped or printed, as aforesaid, are false and fictitious, and in no sense repre- ·sent either the true value or the true selling price of the article so price-marked.

Among the said items advertised as aforesaid, are the following: 9:30a.m. to 9:30 a. m. to- FRI.-SAT., Sept. lltl1 & 12th 8 p.m. only 8 p. m. only 59¢ SPECIAL DISCOUNT COUPON 59¢ 'THIS CETIFICATE AND 59¢ ENTITLES THE BEARER TO ONE OF OUR GENUINE INDESTRUCTIBLE $5.00 VALUE VACUUM "Morris" FOUNTAIN PENS. Visible Ink Supply. YOU SEE the ink! A LIFETIME GV.AR· .ANTEE WITH EACH PEN.

GET READY FOR SCHOOL OPENING (cut of pen) Visible Ink ONLY "MORRIS" HAS ALL NINE FEATURES REQUIRED IN A FIN& WRITING PEN TODAY 1-"Morris" lifetime guarantee 6-New fiat clixr-wlll not tear pockets. 2-Greater Ink Capacity 7-All fittings chromium-will not tar· 3-0ne stroke vacuum fill nlsh. 4-Smoother writing point s-Latest laminated and pearl colors. 5--Featherwelght perfectly balanced 9-Full barrel visible ink supply-not pen mere last drop visiliility. $2 PENCILS TO MATCH ABOVE PENS, 29¢ Price after this sale $5.00 ADD LIMIT 11¢ Extra 3 sets to for Mail Each Orders Certificate The retail prices as indicated above, appearing on the items of mer· chandise or on the containers thereof, were not intended to be the true retail price or the true retail value of the merchandise so price· marked. The retail prices appearing on the articles, or the containers thereof, were intended by the respondent to be far in excess of the prices to be charged, and actually charged, in the sale of said articles D. P. PEN CO, 1039 1036 Complaint to the consumer purchasing in the usual course of trade, and far in t'l:cess of the true value of the various articles so price-marked. PAR. 5. Over a period of many years, manufacturers in many trades have formed a custom of marking or stamping on the article or item of manufacture, or on the container thereof, the retail price ~t which said manufacturers suggest the retailer should sell the Item or article to the ultimate consumer purchaser; this suggested retail price so stamped or marked is intended to represent the cost of the manufacture of the article, plus a reasonable profit for the lllanufacturer and retailer, and consequently, to represent the ap- Pro:ximate retail sales value of the article. The range of suggested retail prices is intended by the manufacturer to be indicative of the quality and character of tTie materials used and the process by Which the article is manufactured. The public generally understands the custom herein detailed, anu has been led to and does Place its confidence in the price-marking so stamped and the representations thereby made as to the quality of the product, to the ex- ~nt that it purchases a substantial volume of merchandise in relance on the aforesaid custom.

h PAR. 6. For many years a substantial part of the consuming public ave expressed, have had and still have, a marked preference for fountain pens manufactured of superior materials and produced by the manufacturer thereof with the intent and design of selling said roducts for prices in excess of the general and usual run of prices or. fountain pens manufactured with the usual and customary mat~l'lals, or with inferior materials. Said manufacturers, following t e .custom herein detailed, have marked or stamped the suggested ;~tail prices on said fountain pens or on price labels or tags attached :f ereto as indicative of the superior quality and character of the ountain pens and their resulting higher values . .Whenever a genuinely superior product so stamped or marked. With the retail price thereof is offered for sale at a E-ubstantially f~duced price, the general purchasing public has been led to be- .leve and does believe, that in purchasing said products it is secur· ~ a bargain not ordinarily obtainable in the usual course of trade. h e. purchasing public has had and still has a preference for pur· ~e as~ng ~enuinely superior products sold at less than the customary ~all prxce thereof over ordinary products sold for the regular Prlce, which is lower than the normal retail price of the superior Product in the customary course of trade.

~n truth and in fact, the merchandise sold by respondent and des~ribed herein is not a superior product, normally sold in the usual ~ annels of trade for the retail price stamped on price labels or 1040 FEDERAL TRADE COMMISSION DECISIOXS Findings 26F.T.C· tags attached thereto, or on the container thereof, or for any price closely approaching the said stamped retail price. PAR. 7. There are among the competitors of respondent many "Yho manufacture ordinary fountain pens, and others who manufac· ture fountain pens of superior quality, and who truthfully represent, said pens and their selling price or value to the consuming public. PAR. 8. The effect of the foregoing false and misleading represen· tations and acts of the respondent in selling and offm·ing for sale the items of merchandise as herein described, with false and ficti· tious price-marks stamped on price labels or tags attached thereto, is to mislead a substantial part of the consuming public in the.sev· eral States of the United States, by inducing them to mistakenly and erroneously believe that:

The items of merchandise sold and distributed by respondents were and are superior products, manufactured with the intent and purpose on the part of the manufacturer that said products should be sold at retail at a price closely approximating the price stamped thereon.

PAR. 9. The foregoing false and misleading statements and repre· sentations on the part of the respondent are inducements for a sub· stantial number of purchasers to buy the products so offered for sale, sold, and distributed by respondent, and have the tendency and capacity to, and do, unfairly divert to the respondent a substantial volume of trade from competitors of respondent engaged in similar businesses, with thp, result that substantial quantities of respondent's products are sold to the consuming public on account of said be· liefs induced by the false and misleading representations, and as tl consequence thereof, a substantial injury has been done to competi· tors in colnmPrce among the several States of the United States, and in the District of Columbia.

PAR. 10. The aforementioned methods, acts, and practices of re· spondent are all to the prejudice of the public and respondent's competitors as hereinabove alleged. Said methods, acts, and prac· tices 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 THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on May 15, 1937, issued and on May 18,1937, served its complaint in this proceeding upon respondent Rob· ert Morris, an individual trading as the D. P. Pen Company. The D. P. PEN CO. 1041 1036 Findings ~espond.ent failed to file answer. After due notice to respondent, hearll1gs were held on behalf of the Commission at which hearings evidence w-as adduced in support of the charges in the Commission's complaint. Respondent has failed to adduce evidence in opposition ~o the charges made in the Commission's complaint. All attempts to serve upon respondent a copy of the Commission's brief failed. Thereafter the proceedina rerrularly came on for final hearing b ' b b e~ore the Commission on the said complaint, testimony, and other evidence and the Commission's brief, and the Commission having duly considered the same and being now fully advised in the premises fi~ds. that this proceeding is in the interest of the public and makes this Its findinrrsb as to the facts and its conclusion drawn therefrom: l'INDINOS AS TO THE FACTS PARAGRAPH 1. Robert Morris is an individual doing busjness under the trade name and style of D. P. Pen Company, with his principal office and place of business in the city of Bordentown, State of New ~er~ey. He has been for more than 1 year last past engaged in the USiness of sellina fountain pens in commerce between and among the various States the United States and in the District of Columbia. ot When the fountain pens are sold the respondent transports, or causes ~hem to be transported, from his principal office and place of business ~n the city of Bordentown, State of New Jersey, to purchasers thereof Jocated in the various States of the United States other than New f ersey and in the District of Columbia. There is now, and has been or some time past, a course of trade in the fountain pens sold by ~s~ondent in commerce between and among the various States of the lllted States and in the District of Columbia. PAR. 2. In the course and conduct of his business respondent is now, a~;I has been, in competition with other individuals and with partner- ~ lps, firms, and corporations likewise engaged in the business of selll~g fountain pens in commerce among and between the various States 0 ~he United States and in the Djstrict of Columbia. dar: 3. The respondent, in the conduct of his business, has caused, ~~ st~U causes advertisements purporting to be descriptive of the mera~dJse offered for sale and sold by him to be inserted in newspapersf laving a general interstate circulation. Said pens are described in ~Uch advertisements as possessing retail values and prices many times ~excess of the actual price at which the respondent sells his merchan- ~:se to ultimate purchasers. Many of the articles have retail prices i amp:d and printed on the labels attached thereto or on the containers .which they are offered for sale and sold to the public. The retailt )l'JcE.>s so stamped or printed are many times in excess of the actual Findings 26 F. T. C. selling price to the consuming public, and are many times in excess o£ their true and actual value. The retail prices so stamped or printed are false and fictitious and in no sense represent the true value or the t~ue selling price of the article so price-marked. Among the items advertised as herein set out are the following: ur--------, - 9:30a.m. to 9:30a.m. to 8p. m. only 8p.m. only FRI.-SAT., Sept. 11th & 12th - 69¢ SPECIAL DISCOUNT COUPON 59¢ THIS CERTIFICATE AND 59¢ ENTITLES THE BEARER TO ONE OF OU~ GENUINE INDESTRUCTIBLE $5.00 VALUE VACUUM "MORRIS" FOU:N- TAIN PENS. Visible Ink Supply. YOU SEE the ink! A LIFETIME GUARANTEE WITH EACH PEN.

GET READY FOR SCHOOL OPENING (cut of pen) Visible Ink.

ONLY "1\IORRIS" HAS ALL NINE FEATURES REQUIRED IN A FJN6 WRITING PEN TODAY 1-"Morris" lifetime guarantee 6-New fiat clip-will not tear pockets. 2-Greater Ink Capacity 7-Ail fittings chromium-will not 3-0ne stroke vacuum fill tarnish. 4-Smoother writing point 8-Latest laminated and pearl colors. 5-Featherwelght perfectly balanced 9-Full barrel visible ink supply-not pen mere last drop visibility. $2 PENCILS TO 1\IATCH ABOVE PENS, 29¢ Price after this sale $5.00 ADD LIMIT 11¢ extra 3 sets to for Mail Each Orders Certificate , The retail prices as indicated above, appearing on the items of merchandise or on the containers thereof were not intended to be the true retail price or the true retail value of the merchandise so price· marked. The retail pric.es appearing on the articles or the containers were intended by the respondent to be far in excess of the prices to be charged and actually charged in the sale of the articles D. P. PEN CO, 1043 1036 Order ~0 the consumer purchasing in the usual course of trade, and far In excess of the true value of the articles so price-marked. In fact t~e actual and true retail value of the pens and pencils sold and distributed by respondent is 59¢ and 29¢, respectively, and not $5.00 and $2.00, respectively, as advertised by respondent. PAR, 4. There are among the competitors of respondent many who :manufacture ordinary fountain pens and others who manufacture !ountain pens of superior quality who truthfully represent the sell- Ing price or value to the consuming public. PAR. 5, The effect of the foregoing false and misleading representations and acts of the respondent in selling and offering for sale t~e articles of merchandise as herein described, with false and .fictihons price-marks stamped on price labels or tags attached thereto, or on the containers thereof, is to mislead a substantial part of the ~onsuming public in the several States of the United States by induc- Ing them to mistakenly and erroneously believe that the items of lnerchanclise sold and distributed by respondent were and are superior l~roducts, manufactured with the intent and purpose on the part of t 1~ manufacturer that said products should be sold at retail at a Pric:e closely approximating the price stamped thereon; that said }Je.ns have retail values closely approximating the purported retail ~'value and price of $5.00; and that said pens have a value substantially 111 excess of their true and actual value of approximately 59¢. PAn, 6. The foregoing false and misleading statements and rt:>pre~ sent t' a Ions on the part of the resr)ondent are inducements for a sub- sta · lltlal number of purchasers to buy the products so offered for sale, sold, and distributed bv respondent, and haw the tendency and cap · J • ac1ty to and do unfairly divert to the respondent a substantial ~·olul11e of trade from competitors of respondent also engaged in sell- ~~lg and distributing fountain pens in commerce among and betlveen le several States of the United States and in the District of Columbia. CONCLUSION i ~:h~ aforesaid acts and practices of respondent Robert Morris, an lVIdual trading as D.P. Pen Company, are all to the prejudice and t. unJ~~y of the public and of respondent's competitors and constitute ., n air methods of competition in commerce within the intent and• ••1ea · nmg of the Federal Trade Commission Act. ORDER TO CEASE AND DF.SIST si 'I'his proceeding having been heard by the Federal Trade Commisa~: upon the complaint of the Commission, the Commission's brief the record herein (the respondent having filed no answer to the COl\Il\IISSIO~ DECISIO~S1044 FEDERAL TRADE Order 20F.T.C.

proceeding herein and having elected not to introduce any evidence on his behalf or file a brief herein), and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission .Act. It is ordered, That respondent Robert Morris, un individual tnlding as D. P. Pen Company, or doing business under any other trade name, his agents, representatives, servants, and employees in connec· tion with the offering for sale, sale, and distribution of founbtin pens or pencils in interstate commerce or in the District of Columbia, do forthwith cease and desist from, directly or indirectly: 1. Representing, through fictitious prices marked or stamped 011 or affixed to said products, or on the containers thereof, or through any other means or device or in any manner, that said prices 50 marked, stamped, or affixed are the regular or customary retail pt·ices for such products;

2. Representing, as the customary or regular retail prices for such products, prices which are in fact fictitious and greatly in e:xc~ss of the prices at which said products are regularly and custon1artlY offered for sale and sold at retail.

It is further ordered, That respondent shall, within 60 days frolll and after the date of service upon him of this order, file with the Commission a report in writing setting forth in detail the man~er and form in which he is complying with the order to cease and destsb hereinabove set forth.

A~IERICA~ :XOVELTY CO. 1045 Complaint