Morris R. Shapiro

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In THE MATTER OF MORRIS R. SHAPIRO, CHARLES SHAPIRO, MARY SHA- PIRO, AND MRS. ROBERT SHAPIRO, TRADING AS UCA MANUFACTURING COMPANY, UCA MENTHO COM- PANY, UCA MENTHO LABORATORIES, AND ROBERT MOR COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3191. Complaint, July 29, 1937—Decision, Dec. 14, 1938 Where partners engaged in sale and distribution of miscellaneous line of merchandise such as knives, dental cream, musical instruments, toys, and proprietary preparations, to purchasers in other States and in the District of Columbia, in substantial competition with others engaged in sale and distribution of similar products and of products and preparations designed for similar usage in commerce as aforesaid set forth, and including those engaged in sale and distribution of remedies or treatments for certain ailments for which they advertised their preparations and who do not misrepresent the therapeutic qualities or values of their said products; in pamphlets adyertising preparations sold by them as “Uca Mentho Salve” and ‘““Uca Vapor Balm,” ingredients of which, in different quantities, were substantially the same, and in other advertising matter— (a) Represented that said salves possessed healing qualities and constituted effective remedies and cures for eczema, sore throat, colds, cuts, burns, chapped hands and lips, asthma, catarrh, sores, earaches, rheumatism, bronchitis, fever blisters, frost bites, pimples, boils, piles, ivy poisoning, erysipelas, prickly heat, tetter, and chafing, facts being conditions aforesaid arise from many causes and, in many instances, are due to or associated with systemic or organic derangement, effective treatment of which requires treatment of cause or causes and thorough diagnosis by expert to ascertain same and proper treatment therefor, not all ailments and disorders of surface or temporary character only, and without systemic or organic origin or connection, can, due to varying causes thereof, be effectively treated in same way and by same medicine, they had no expert connected with them or in their employ to make diagnosis and prescribe necessary treatments in ease of ailments and conditions due to or associated with systemic or organic derangement, and said salves were not, as claimed as aforesaid, effective remedies or cures for ailments and disorders set forth; (b) Made use of word “Laboratories” in sale of salves in question, facts being, while ingredients from which same were compounded were mixed in vats under supervision of one of partners who had had long years of practical experience in such matters but was not a chemist, place wherein such salves were thus made as aforesaid was not a place devoted to experimental study in some branch of science or to application of scientific principles in testing and analyzing or to similar work, or laboratory, as long understood by purchasing public;

With capacity and tendency to mislead and deceive substantial portion of purchasing public into erroneous belief that said representations were true and into purchase of substantial quantities of their said products by reason Complaint ZUR LAC:

thereof, and with result of thereby diverting trade unfairly to them from their competitors aforesaid; and (c) Offered and sold products dealt in by them, as hereinabove set forth, through means of lottery scheme or game of chance under which they supplied prospective agents with pull cards listing names of 20 articles and prices thereof, for use in distribution and sale of said products under a plan in accordance with which particular article of merchandise secured and price paid therefor were determined by chance in accordance with legend disclosed by removal of card’s various tabs, and operator was compensated through receipt of prize or cash commission for amounts remitted, and thereby supplied to and placed in the hands of others means of conducting lotteries in the sale of their merchandise in accordance with their aforesaid sales plan, contrary to public policy of the United States and to laws of many of the States thereof, and in competition with many who, unwilling to adopt and use such methods or any method involving game of chance or other method contrary to public policy, refrain therefrom ; With result that many persons were attracted by their said method and by element of chance involved in sale and distribution thereof as above described, and thereby induced to buy, sell, and distribute their said products in preference to those offered and sold by their said competitors who do not use such or equivalent method, and with effect of unfairly diverting trade and custom to them from competitors who do so do: Held, That such acts and practices were all to the injury and prejudice of the public and competitors and constituted unfair methods of competition. Before Mr. Arthur F’. Thomas, trial examiner. Mr. Dewitt T. Puckett for the Commission.

Mr. Ralph J. Gutgsell, of Chicago, Lll., 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, and for other purposes,” the Federal Trade Commission, having reason to believe that Morris R. Shapiro, Charles Shapiro, Mary Shapiro, and Mrs. Robert Shapiro, copartners trading as UCA Manufacturing Co., UCA Mentho Co., UCA-Mentho Laboratories, and Robert More Co., hereinafter referred to as respondents, have been and are using unfair methods of competition in commerce as “commerce” is defined in said act of Congress, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: Paracrapu 1. The respondents, Morris R. Shapiro, Charles Shapiro, Mary Shapiro, and Mrs. Robert Shapiro, are copartners trading as the UCA Manufacturing Co., UCA Mentho Co., UCA-Mentho Laboratories, and the Robert More Co. Their place of business is at 836 West Roosevelt Road, Chicago, Il. They are engaged in the sale UGCA MANUFACTURING CO., ETC. 1367 1865 Complaint and distribution of various salves and a miscellaneous line of merchandise to the purchasing and consuming public located in various States of the United States and in the District of Columbia. When orders are received for respondents’ merchandise, it is shipped by respondents from their place of business in Chicago, Ill, to the purchasers thereof located in the various States of the United States and the District of Columbia. There is now, and has been at all times since respondents have been in business, a constant current of trade and commerce by the respondents in proprietary preparations, salves, and other articles of merchandise between and among the various States of the United States and in the District of Columbia.

Respondents are, and for several years last past have been in substantial competition with other firms, individuals, and corporations engaged in the sale and distribution of salves and miscellaneous articles of merchandise similar to those sold by respondents in commerce between and among the various States of the United States and in the District of Columbia.

Par. 2. In the course and conduct of their business, as described in paragraph 1 hereof, respondents have represented and still represent through various advertising channels such as newspapers, magazines, and form letters, that their salves are “healing” and constitute effective and reliable remedies or treatments for colds, cuts, burns, catarrh, eczema, and various other ailments and diseases. In truth and in fact, respondents’ said salves are not and do not constitute effective or reliable remedies or treatments for the various ailments and diseases named in their advertising matter as set out above.

Par. 3. The use by respondents of the representations referred to in paragraph 2 hereof has had and now has the capacity and tendency to lead purchasers and prospective purchasers into the belief that they can diagnose the ailments or diseases from which they are suffering and thereby determine the cause or causes of said ailments or diseases and the proper treatment or remedy therefor and into the purchase and use of respondents’ products in such erroneous belief.

Only by a thorough diagnosis, made by a competent physician can the causes of the various ailments and diseases listed in respondents’ advertising matter as set out above be ascertained and successfully treated. None of respondents is a physician and there is no physician connected with respondents’ business in any capacity. Purchasers or prospective purchasers of respondents’ salves are not given a medical examination for the purpose of determining the 1368 . FEDERAL TRADE COMMISSION DECISIONS Complaint 27 F.DCe | particular ailment or disease from which they are suffering and the cure, if any, for same. | Par. 4. Respondents represent through use of the word “laboratories” and the abbreviation “lab” in connection with their trade names that they own, operate, or control a laboratory wherein their salve is compounded. In truth and in fact, respondents do not own, — operate, or control a laboratory and there is no manufacturing chemist in charge of the manufacture or preparation of their salves. —: Par. 5. The use by respondents of the representations described | herein has had, and now has, the capacity and tendency to mislead and deceive and has misled a substantial portion of the purchasing public into the erroneous belief that such representations are true — and into the purchase of substantial quantities of said salves as a | result of such erroneous belief. There are among the competitors of respondents, as mentioned in paragraph 1 hereof, manufacturers and distributors of salves and other preparations designed and sold | as treatments for eczema, catarrh, and various other diseases listed in respondents’ advertising who do not misrepresent the therapeutic properties of their products or the existence of a laboratory in con- | nection with their businesses and who likewise advertise, sell, and distribute their said products among the various States of the United States and in the District of Columbia.

Par. 6. In the course and conduct of their business, as described in paragraph 1 hereof, respondents sell and distribute some of their merchandise by means of a lottery scheme or game of chance. The respondents mail to agents and prospective agents certain pull cards, said pull cards having a list of the merchandise to be distributed thereby and the price to be paid for each article, together with a number of tabs, under each of which is concealed the name of one of the articles of merchandise and the price thereof. When the agent operating the pull card has succeeded in selling all of the chances or tabs, collected the amounts called for, and remitted the said sums to the respondents, the said respondents thereupon ship to said agent the merchandise described on said card, together with the agents’ premium as compensation for operating the pull card and selling the said merchandise. Purchasers and prospective purchasers of said tabs, or chances, are unable to ascertain until after a tab has been separ ated from the said card, what article of merchndise they are to receive or the price which their pull or chance will cost them. The said articles of merchandise are thus distributed to purchasers wholly by lot or chance.

Par. 7. Respondents’ use of the chance method, described above, has the capacity and tendency to divert to respondents trade and UCA MANUFACTURING CO., ETC. 1369 1365 Findings commerce from their competitors who do not use the same or equivalent methods; to exclude from said trade all competitors who are unwilling to use and who do not use the same or equivalent methods; to lessen competition in said trade, and tend to create a monopoly of said trade in respondents and such other competitors who use the same or equivalent methods; and to deprive the purchasing public of the benefits of free competition in said trade. The use of said methods by the respondents has the tendency and capacity to unfairly eliminate from said trade all actual competitors, and to exclude therefrom all potential competitors who do not adopt and use said method, or any method involving a game of chance, because such method is contrary to the public policy of the United States or to the laws of many of the States of the United States or because said competitors are of the opinion that such method is detrimental to public morals and to the morals of the persons among whom said chances are distributed, or because of any or all said reasons.

Par. 8. By the representations and practices described herein, trade is unfairly diverted to the respondents from their competitors hereinabove referred to, and as a result thereof, substantial injury is being, and has been done, by respondents to competition in commerce as herein set out.

Par. 9. The acts, practices, and methods of the respondents, as hereinabove alleged, are all to the prejudice of the public and the respondents’ said 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 create a Federal Trade Commission, to define its powers and duties, and for other purposes.” - Report, Frnpines As To THE Facts, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on July 29, 1937, issued, and on July 30, 1937, served, its complaint in this proceeding upon respondents, Morris R. Shapiro, Charles Shapiro, Mary Shapiro, and Mrs. Robert Shapiro, copartners, doing business as Uca Manufacturing Co., Uca Mentho Co., Uca Mentho Laboratories, and Robert More Co., charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents’ answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by Dewitt T. Puckett, attorney for the Commission, and in opposition to the allegations of the complaint by Ralph J. Findings 27 Bae:

Gutgsell, attorney for the respondents, before Arthur F. Thomas, an examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint, the answer thereto, testimony and other evidence, and brief in support of the complaint (no brief having been filed by the respondent and oral argument not having been requested), 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 findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS Paracrapy 1. The respondents, Morris R. Shapiro, Charles Shapiro, and Mary Shapiro, are copartners, trading as Uca Manufacturing Co., Uca Mentho Co., and Robert More Co. The trade name Uca Mentho Laboratories, formerly used by the respondents, was discontinued during the year 1936. Respondent Mrs. Robert Shapiro died in July of 1937. The place of business is located at 836 West Roosevelt. Road, Chicago, Ill. The respondents are engaged in the sale and distribution of a miscellaneous line of merchandise such as knives, dental cream, musical instruments, proprietary preparations, and toys.

Respondents now cause, and for several years last past have caused, their said products when sold by them to be shipped from their said place of business in Chicago, IIl., to the purchasers thereof located in the various States of the United States other than the State of Illinois, and in the District of Columbia. There is now, and has been at all times mentioned herein, a course of trade in said products so sold and distributed by the respondents in commerce between and among the various States of the United States and in the District of Columbia. Respondents are, and for several years last past have been, in substantial competition with other partnerships, individuals, and corporations engaged in the sale and distribution of similar products, and of other products and preparations designed for similar usage, in commerce between and among the various States of the United States and in the District of Columbia. Par. 2. Among the products sold and distributed by respondents in commerce, as aforesaid, are two proprietary salves designated Uca Mentho Salve and Uca Vapor Balm. The two salves contain substantially the same ingredients but in different quantities. UCA MANUFACTURING CO., ETC. 1371 1365 Findings The constituent ingredients of Uca-Mentho Salve are: eG sey Se can eeee 750 lbs. ere ne Se ee ee eee 30 lbs.

POOL yy Ol ee a a 8 oz.

Menthol Crystals=—_—=2- —__--_--_-=__ =~ _=—_--—--__ 16 02. Camphor Gum_--------------------------------------- 56 oz. Methyl Salicylate USP__-----~------------------------ 2 lbs. Bucalyptus Oil_--_----------------------------------- 4 lbs. Solid Extract of Arnica___---------------------------- 2 OZ. Venice Turpentine_____------------------------------- 1 Ib. Thymol Crystals__—_—--_-----~----=------------------- Y% IVb. The constituent ingredients of Uca Vapor Balm are: Gamphor__-——-=—— == == see = $5 2 oe = 40 lbs. Buealyptus-_—-—--—----==—_+---~--------+-----------=-- 40 Ibs. Menthol) a ee a eS wos 11 Ibs. BS yeh) eae a ee 7 lbs. MT TOn nO)1eeeen ee 20 lbs. Murpentines.—— e285 Bet tS So 171% lbs. Petrolatunytess ts 2: bets 3e20 sheet) oe a2 eee a= 750 Ibs. \Si Sgn a GED ee OS ee Be ae 30 lbs. The salves are mixed on the respondents’ premises in large vats, packed in tin cans, and distributed to the ultimate purchasers thereof through agents, jobbers, and drug stores.

Said salves are advertised by respondents as remedies and cures for asthma, colds, cuts, burns, eczema, catarrh, sore throat, chapped hands and lips, sores, earaches, rheumatism, bronchitis, fever blisters, frost bites, boils, piles, ivy poisoning, erysipelas, prickly heat, tetter, and chafing. A pamphlet, circulated by the respondents among and between the various States of the United States, contains the following representation :

OURS IS THE BEST SALVE MADE. Uca Mentho Healing and Vapor Salve is well known all over America as the best Salve for Cuts, Burns, Eczema, etc., and an invaluable aid when used as a Vapor Salve in case of Bad Colds. Said pamphlet contains the further statement and representation : UCA-MENTHO Healing and Vapor SALVE Contains No Harmful Drugs Used For—COLDS, CUTS, BURNS, CATARRH, SORE THROAT, CHAPPED HANDS, LIPS, ete.

UCA MENTHO CO.

Other advertising matter used by respondents carries the following representation :

-A valuable aid in the Treatment of Cuts, Burns, Sores, Asthma, Headaches, Colds, Catarrh, Earaches, Rheumatism, Bronchitis, Sore Throat, Eezema, Fever Findings; PATEL aes WOE Blisters, Frost Bites, Chapped Lips, Face and Hands, Pimples, Boils, Piles, Ivy . Poison, Erysipelas, Prickly Heat, Tetter, Chafing of Infants and similar skin affection.

Ideal for Irritations and Abrasions, Cooling, Healing and Antiseptic. For NASAL CATARRH, HEAD COLDS, WHOOPING COUGH, ASTHMA :— Melt a little in a spoon and inhale the Vapors. . If our agent cannot supply you, full size can will be mailed on receipt of 25¢. UCA-MENTHO LAB.

The aforesaid advertising claims for their salves serve as representations on the part of respondents that said salves possess healing qualities and constitute effective remedies and cures for the disorders and ailments listed in said advertising matter. Par. 3. The evidence in this case establishes, and the Commission finds, that Uca Mentho Salve and Uca Vapor Balm will not heal and are not effective remedies or cures for any of the aforementioned ailments and disorders. Such conditions arise from many causes and there is no specific remedy or treatment that is effective in all cases and under all conditions. Said conditions are, in many instances, caused by or associated with a systemic or organic derangement, and in order to effectively treat cases falling within that category it is necessary to treat the cause or causes of such conditions. Among the ailments and disorders which are, according to reliable medical opinion, generally caused by a systemic disorder, are headaches, asthma, colds, catarrh, bronchitis, rheumatism, eczema, fever blisters, piles, and, in some instances, sores and earaches. In all disorders and ailments of the human body which are associated with or caused by a systemic or organic derangement, a thorough diagnosis by an expert is necessary in order to ascertain the cause or causes of the disorder or ailment and the proper treatment therefor. There is no such expert connected with or employed by respondents to make such diagnosis and prescribe the necessary treatments. Not all ailments and disorders of the human body that are of a surface or temporary character only, and which have no systemic or organic origin or connection, can be effectively treated in the same way and by the same medicine. The proper method of treatment and the kind of medicine to be used in the treatment of ailments and disorders of the human body that are of a surface or temporary character only are determined by many factors, the most important of which is the specific cause responsible for the disorder. These causes are so varied that no single preparation is an adequate treatment therefor, irrespective of the cause and stage of the disorder and other pertinent conditions and circumstances. UCA MANUFACTURING CO:, ETC. 1373 1865 Findings Par. 4. Until some time during the year 1936, the respondents traded as Uca Mentho Laboratories. The respondents’ plant, wherein their said salves are compounded, consists of mixing vats and tanks for storage purposes. The ingredients from which the salves are compounded are mixed in said vats under the supervision of one of the partners who has had many years of practical experience in such matters, but is not a chemist.

Originally, the word “laboratory” signified the workroom of a chemist, and hence for a long period of time has had and still has a certain significance and meaning to the minds of the purchasing public, to wit, a place devoted to experimental study in some branch of science, or to the application of scientific principles in testing and analysis, or similar work. The Commission finds that the respondents’ place where its salves are compounded and mixed is not a laboratory within such meaning and understanding. Par. 5. There are among the competitors of respondents, mentioned in paragraph 1 hereof, individuals, partnerships, and corporations engaged in the sale and distribution of remedies or treatments for the ill conditions of the human body listed in respondents’ advertising matter who do not misrepresent-the therapeutic qualities or values of their said products which they offer for sale and sell. Par. 6. The use by respondents of the representations set forth herein has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that such representations are true, and into the purchase of substantial quantities of respondents’ said products on account of such erroneous belief. By the representations aforesaid, trade is diverted unfairly to respondents from their aforesaid competitors. Par. 7. In the course and conduct of their business, as described in paragraph 1 hereof, the respondents offer for sale and sell their products by means of a lottery scheme or game of chance. Trading as Robert More Co., the respondents mail to prospective agents throughout the country a folder or pull card which contains, among other things, a printed list of the names of 20 articles of merchandise and the price of each article. Alongside said list of names of merchandise are 20 pull tabs designated “purchase receipts.” Concealed underneath each tab is listed 1 of said 20 articles of merchandise and the price of the article. Until the tab has been removed from the card, the article of merchandise listed and the price thereof are not known. The person pulling the tab off the card is entitled to receive the article of merchandise listed therein upon payment of a stipulated price, which also appears thereon. When the person operating the pull card 185514"—40—vow, 27-89 Conelusion. 27 E.. Bs: has succeeded in disposing of all the pull tabs and collected therefor, he will have collected the sum of $6.98 which amount is forwarded to the respondents, whereupon the 20 articles of merchandise are shipped to the operator of the pull card for distribution among the holders of the purchase receipts. For his services for operating the pull card, the agent is entitled to a prize or a cash commission. Par. 8. The respondents forward their pull cards, together with descriptive literature and instructions as to how to operate the pull cards and what is necessary in order to obtain the articles of merchandise, to various members of the public, and a substantial amount of such merchandise is sold and distributed by such persons by means of the pull cards and in accordance with the instructions furnished by respondents. Respondents thus supply to and place in the hands of others the means of conducting lotteries in the sale of their merchandise in accordance with the sales plan hereinabove set forth. Par. 9. The sale of merchandise to the purchasing public in the manner above found involves a game of chance or a lottery scheme which is contrary to the public policy of the United States and to the laws of many of the States of the United States. Many partnerships, . individuals, and corporations who sell merchandise in competition with the respondents, as above found, are unwilling to adopt the use of said methods or any method involving a game of chance or any other method that is contrary to public policy, and such competitors refrain therefrom. Many persons are attracted by respondents’ said method and by the element of chance involved in the sale and distribution thereof in the manner above described, and are thereby induced to buy, sell, and distribute respondents’ merchandise in preference to merchandise offered for sale and sold by said competitors of respondents who do not use the same or equivalent methods. The use of said method by respondents, because of said game of chance, has a tendency and capacity to, and does, unfairly divert trade and custom to respondents from their said competitors who do not use the same or equivalent methods.

CONCLUSION The aforesaid acts and practices of the respondents, Morris R. Shapiro, Charles Shapiro, and Mary Shapiro, doing business as Uca Manufacturing Co., Uca Mentho Co., Uca Mentho Laboratories, and Robert More Co., as herein found, are all to the injury and prejudice of the public and of respondents’ competitors and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

UCA MANUFACTURING ©0., ETC. 1375 1865 Order ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, testimony and other evidence taken before Arthur F. Thomas, an examiner of the Commission theretofore duly designated by it, in support of the allegations of said complaint and in opposition thereto, and brief filed herein in support of the complaint (no brief having been filed by the respondents and oral argument not having been requested), and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondents, Morris R. Shapiro, Charles Shapiro, and Mary Shapiro, copartners, trading as Uca Manufacturing Co., Uca Mentho Co., Uca Mentho Laboratories, and Robert More Co., or trading under any other name, and their agents, representatives, and employees, in connection with the offering for sale, sale, and distribution of a miscellaneous line of merchandise including two medicinal products now designated Uca Mentho Salve and Uca Vapor Balm, or of any other medicinal product or products containing substantially the same ingredients, or possessing the same properties, sold under those names or under any other names, in interstate commerce or in the District of Columbia, do forthwith cease and desist from: . 1. Representing that said medicinal products are competent and adequate remedies or cures for eczema, sore throat, colds, cuts, burns, chapped hands and lips, asthma, catarrh, sores, earaches, rheumatism, bronchitis, fever blisters, frost bites, pimples, boils, piles, ivy poisoning, erysipelas, prickly heat, tetter, and chafing; 2. Representing, through the use of the word “laboratories” or the abbreviation “lab,” as part of a trade name, or through any other means or device, that they, or any of them, own, operate, or conduct a laboratory, unless such is a fact;

3. Supplying to or placing in the hands of others pull cards or other lottery devices whereby such persons are enabled to dispose of or sell articles of merchandise by said devices; It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with this order.

Syllabus 27 EF. Tes