Rild Floor Machine Co

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

IN THE :MA'ITER OF HILD FLOOR MACHINE COMPANY COMPLAINT, FINDINGS, AND ORDER JN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 19H Docket 3356. Complaint, Mar. 12, 1938-Decision, Feb. 16, 1939 Where a corporation engaged in assembling, selling, and distributing rug and carpet cleaning machines which operated through rotating action of a motot·-driven brush, applying on rug or carpet shampoo solution fed to it from tank on machine; and in selling its said machines and de\·lces to purchasers in other States and in the District of Columbia, in substantial competition with those likewise engaged in sale and distribution of carpet and rug cleaning machines and other similar devices in commerce and in said District; in soliciting sale of its said machines and devices in newspapers, magazines, pamphlets, circulars, letters, and other forms of adver· tising having interstate circulation, and In its booklet entitled "How to Make 1\Ioney Cleaning Rugs and Carpets the Hild Way," distributell in large numbers to the public generally throughout the various States and In the District through its distributors, sales branches, and sales persons- (a) Represented that Its said carpet and rug cleaning equipment, costing less than $400, cleaned carpets and rugs without removal from floor as well as or !Jetter than the more expensive installations of cleaning equipment, costing as much as $30,000, and usually installed and used in plants especially equipped for the cleaning of carpets and rugs after removal from floor;

(b) Represented that only with its system could the dirtiest tacked-down rugs and carpets be flawlessly shampooed and cleaned, and that nothing remained In rug or carpet that needed rinsing out; nnd (c) Represented that its rug shampoo employed in operation and ftmctioning of said equipment was highly volatile and evaporated completely, and that grease and grime evaporated with It;

Facts being Its said machine and device did not, as claimed, do work of cleans· lng rugs and carpets as well as or better than the more expensive instal· lations as above set forth, its said machine and device did not clean dirtiest tacked-down carpets and rugs flawlessly, nor remove nll grime and grease from rugs and carpets without rinsing, and said shampoo did not evaporate completely from such rugs or carpets and leave them free from grease and grime, with nothing needing rinsing out; With efrect of confusing, misleading, and deceiving purchasing public into mistaken and erroneous belief that Its said machine and dedce and shall· poo fluid possessed properties claimed and would accomplish results thus represented, and without removal of rugs and carpets, and that they would accomplish such results as well as or better than more expensive installations used in plants especially equipped for such cleaning after removal from floor; and with capacity and tendency to induce members of purchasing public to buy and use its said pi'Oducts because of aforesaid erroneous beliefs thus engendered, and with result of placing in hands of others means and instrumentality whereby they might misrepresent to HILD FLOOR MACHINE CO. 601 600 Complaint public l'fficaey of its said machine and rug cleaning solution, and of diverting trade unfairly to it and its licensees from competitors engaged in manufactm·e and sale, in commerce and in said District, of machines and solutions for cleaning rugs and carpets and for similar purposes for which It represented its said machine and solution: Held, That such acts and practices were all to the prejudice and injury of the public and competitors and constituted unfair methods of competition. Before Mr. Arthur F. Th.oma8, trial examiner. Mr. Oa1'1'el F. Rhodes and Mr. George Foulke& for the Commission. Mr. Samuel E. Davidson, of Chicago, Ill., for respondent. Complaint Pursuant to the provisions of an Act of Congress dated 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 the Hild Floor Machine Co., hereinafter referred to as respondent, has been and is now using unfair methods of competition in commerce, as "commerce" is defined in said act of Congress, and it appearing to the Commission that a proceeding by it in respect thereof would be to the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Hild Floor Machine Co., is a corporation organized in 1928 under and by virtue of the laws of the State of Illinois. Respondent's office and principal place of business is located at 1313 West Randolph Street, Chicago, Ill. Said respondent is now, and at all times since its organization in 1928 has been, engaged in the business of assembling, selling, and distributing rug and carpet cleaning machines, essentially consisting of a round electric motor-driven brush to which a supply of shampoo solution is fed from a tank on the machine. 'When placed on a rug or carpet the rotating action of the brush works the shampoo solution into a foamy lather, thus washing or scrubbing the rug and carpet without removing it from the floor. Respondent now causes, and at all times since the date of its organization has caused, its said carpet cleaning machines and devices, when sold, to be shipped from its :Principal place of business in Chicago, Ill., to purchasers thereof, some located in the State of Illinois, others located in the various States of the United States other than Illinois and in the District of Columbia .

. Respondent is now, and at all times since the date of its organization has been, in substantial competition with other corporations and \With persons, firms, and partnerships likewise engaged in the sale Complaint 28F. T. C.

and distribution of carpet and rug cleaning machines, and other devices similar to that sold by respondent in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 2. In soliciting the sale of and selling its carpet and rug cleaning machines and devices, as herein detailed respondent now states, and has stated in newspapers, magazines, pamphlets, circu- Inrs, letters, radio broadcasts, and other forms of advertising medit1 having an interstate circulation and in a booklet entitled "How to Make Money Cleaning Rugs and Carpets the Hild 'Vay," which it distributes in large numbers to the public generally throughout the various States of the United States and in the District of Columbin. through its distributors, sales branches, and sales people as follows: Hild rug and carpet cleaning equipment, costing Jess than $400.00, now doe<; the work of installations, costing as much as $30,000.00, and does it better, too. Only with the Hild system can you render satisfactory on-the-floor service. Tacked down carpets flawlessly shampooed.

Clean dirtiest carpets flawlessly.

Hild Rug Shampoo Is highly volatile-Evaporates completely, leaving rugs and carpeting dry, bright and .clean-Grease and grime evaporates with tho shampoo.

With Hild Rug Shampoo nothing remains in the rug or carpet which need:! rinsing out.

which representations are accompanied by a pictorial illustration of a man operating a machine in the act of running it over a rug on the floor, and other pictorial representations of like machines. The aforesaid statements and representations on the part of th'3 respondent serve as representations that respondent's aforesaid ma· chine and liquid shampoo will flawlessly clean and remove all grease and grime from the dirtiest rugs and carpets while tacked down on the floor; that said machine and device of respondent costing less than $400 will clean rugs and carpets as well as or better than installations costing up to $30,000; that rugs and carpets can be s~tis­ factorily cleaned on the floor only with respondent's machine; that respondent's shampoo solution has properties which enable it to evaporate completely carrying with it all grease and grime and leaving rugs and carpets dry, bright, and clean; and that when respondent's shnmpoo solution is used all grease and grime ard evaporated so that nothing remains in the rugs or carpets which needs rinsing.

PAR. 3. In truth and in fact, the Hild carpet and rug cleunsing machine and device does not clean the dirtiest tacked-down rugs and carpets flawlessly. The use of the Ilild shampoo preparation applied by the Ilild machine or device to rugs and carpets tacked HILD FLOOR MACHINE CO. 603 600 Findings down on the floor does not remove all grime and grease therefrom without rinsing. The Hild rug shampoo does not evaporate completely from rugs or carpets tacked down on the floor leaving them free from grease and grime with nothing in them that needs rinsing. The Hild rug and carpet cleansing equipment costing less than $400 does not do the work of cleansing rugs and carpets as well as or better than installations costing up to $30,000.

P~R. 4. The representations of respondent as aforesaid are false and grossly exaggerated and have had, and do have, the capacity and tendency to and do confuse, mislead, and deceive members of the purchasing public into the mistaken and erroneous belief that respondent's said machine or device and fluid possess the properties claimed and will accomplish the results represented as aforesaid and to induce members of the purchasing public to buy and use respondent's said products because of the aforesaid erroneous beliefs engendered as above set forth.

The acts and practices of the respondent ns herein detailed place in the hands of others a means and instrumentality whereby the public may be deceived and misled into the erroneous beliefs that respondent's said machine and fluid will accomplish the results claimed. As a result of the use of the aforementioned false, exaggerated, and misleading representations trade is unfairly diverted to the respondent from competitors who do not misrepresent the properties, functions, or merits of their respective products. In conse· quence thereof injury has been, and is now being, done by respondent to competition in commerce among and between the various States of the United States.

PAR. 5. The above alleged acts and practices of respondent are all to the prejudice and injury of the public and of respondent's com· petitors, 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."

REPORTS, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on the 12th day of March 1938, issued and thereafter served its complaint in this proceeding upon the respondent, Hild Floor Machine Co., charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. The respondent filed a statement with exhibits attached as 200340m--40--vo1.28----41 Findings 28F. T. C.

an answer to the complaint. Thereafter, to wit, on June 4, 1938, testi· mony and other evidence in support of the allegations of said complaint were introduced by George Foulkes, attorney for the Commission, before Arthur F. Thomas, an examiner of this Commission, duly appointed for that purpose and in opposition to the allegations of said complai~t by Samuel E. Davidson, attorney for the respondent, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, to expedite the proceedings and to dispense with taking of further oral testimony, respondent's attorney and the Chief Counsel for the Commission agreed upon a statement of facts to be made a part of the record in addition to the testimony already of record, and said stipulated statement of facts was approved January 3, 1939, by the Commission, and made part of the record. 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 PARAGRAPH 1. The respondent, Hild Floor Machine Co., is a corporation organized in 1928 and existing under and by virtue of the laws of the State of Illinois. Respondent's office and principal place of business is located in Chicago, Ill. Said respondent is now, and at all times since its organization in 1928 has been, engaged in the business of assembling, selling, and distributing rug and carpet cleaning machines essentially consisting of a round electric motor-driven brush to which a supply of shampoo solution is fed from a tank on the machine. When placed on a rug or carpet, the rotating action of the brush works the shampoo solution into a foamy lather, thus wash· ing or scrubbing the rug or carpet without removing it from the floor. Respondent now causes, and at all times since the date of its organization has caused, its said carpet cleaning machines and devices, when sold, to be shipped from its principal place of business in Chicago, Ill., to purchasers thereof, some located in the State of Illinois and others located in the various States of the United States other than Illinois, and in the District of Columbia. Respondent is now, and at all times since the date of its organiza· tion has been, in substantial competition with other corporations and with persons, firms, and partnerships likewise engaged in the sale and distribution of carpet and rug-cleaning machines and other devices similar to that sold by respondent, in commerce between and among the various States of the United States and in the District of Columbia.

HILD . FLOOR MACHINE CO. 605 600 Findings PAR. 2. In soliciting the sale of and selling its carpet and rug cleaning machines and devices, respondent now states and has stated in newspapers, magazines, pamphlets, circulars, letters, and other forms of advertising media having interstate circulation, and in its booklet entitled "How to Make Money Cleaning Rugs and Carpets the Hild 'Vay," which it distributes in large numbers to the public generally, throughout the various States of the United States and in the District of Columbia through its distributors, sales branches, and sales persons, as follows:

Ilild rug and carpet cleaning equipment costing less than $400 now does the w~rk of Installations costing as much as $30,()()(}-and does lt better, too. Only with the Hild system can you render satisfactory on-the-floor service. Tacked-down carpets flawlessly shampooed.

Clean dirtiest carpets flawlessly.

Hild rug shampoo Is highly volatil~vaporates completely, leaving rugs and carpets dry, bright and clean-grease and grime evaporate with the shampoo.

With the Hild rug shampoo nothing remains in the rug or carpet which needs rinsing out.

These representations are accompanied by a pictorial illustration of a man operating a machine, in the act of running it over a rug on the floor, and other pictorial representations of like machines. The said representations of respondent, as set out above, serve as representations that respondent's aforesaid machines and liquid shampoo will flawlessly clean and remove all grease and grime from the dirtiest rugs and carpets while tacked down on the floor; that said machine and device, costing less than $400, will clean rugs and carpets better than installations costing up to $30,000; that rugs and carpets can be satisfactorily cleaned on the floor only with respondent's machine; that respondent's shampoo solution has prop- Hties which enable it to evaporate completely, carrying with it all grease and grime and leaving the rugs and carpets dry, bright, and clean; that when respondent's shampoo solution is used, all grease and grime are evaporated, so that nothing remains in the rugs or carpets which needs rinsing out.

PAR. 3. In truth and in fact, the Hild carpet and rug cleaning rnachine and device does not clean the dirtiest tacked-down carpets and rugs flawlessly; the use of the Ilild shampoo preparation, applied by the Hild machine and device to rugs and carpets tacked down on the floor, does not remove all grime and grease therefrom Without rinsing; the Hild rug shampoo does not evaporate coml)letely from rugs or carpets tucked down on the floor, leaving them free from grease and grime, with nothing in them that needs rinsing out; the Hild rug and carpet cleaning equipment costing Order 28F.T.C.

less than $400, does not do the work of cleansing rugs and carpets as well as, or better than, installations costing up to $30,000. PAR. 4. The representations of respondent as aforesaid, are false and grossly exaggerated and have had and do have the capacity and tendency to, and do, confuse, mislead, and deceive the purchasing public into the mistaken and erroneous belief that respondent's said machine or device and shampoo fluid possess the properties claimed and will accomplish the results represented as aforesaid, and more particularly into the mistaken belief that respondent's equipment cleans carpets and rugs, without removal of such carpets und rugs from the floor where used, as well as, or better than, the more expensive installations of cleaning equipment usually installed and used in plants especially equipped for the cleaning of carpets and rugs after removal from the floor where used, and to induce members of the purchasing public to buy and use respondent's said products because of the aforesaid erroneous beliefs, engendered as above set forth.

PAR. 5. The acts and practices of the respondent, as herein set out, by distributidn of circulars and pamphlets through the United States mail and otherwise, have placed in the hands of others a means and instrumentality whereby they may misrepresent to the public the efficacy and use of respondent's machine and its rugcleaning solution. Said acts and practices on the part of respondent have the tendency and capacity to, and do, divert trade unfairly to the respondent and its licensees from competitors engaged in the manufacture and sale in commerce between and among the several States of the United States and in the District of Columbia of machines and solutions for cleaning rugs and carpets and for similar purposes for which respondent represents its machines and solutions are to be used.

CONCLUSION The aforesaid acts and practices of the respondent, Hild Floor :Machine Co., are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent, testimony and other evidence taken before Arthur F. HILD FLOOR MACHINE CO. 607 600 Order Thomas, an examiner of the Commission, theretofore duly designated by it, in support of the allegations of said complaint and in opposition thereto, and the agreed stipulation of facts entered into between respondent herein, Hild Floor Machine Co., and '\V. T. Kelley, chief counsel for the Commission, and the Commission having made its findings as to the facts und conclusion that said respondent has violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondent, Hild Floor Machine Co., its officers, representatives, agents, and employees in connection with its offering for sale, sale, and distribution of its rug and carpet cleaning system, now known as "Hild Rug and Carpet Cleaning :Machine" and "Hild Rug Shampoo," in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing that its carpet and rug cleaning equipment cleans earpets and rugs, without removal from the floor where used, as well as, or better than, the more expensive installations of cleaning equipment usually installed and used in plants especially equipped for the cleaning of carpets and rugs after removal from the floor where used.

2. Representing that only with its system can the dirtiest tackeddown rugs and carpets be flawlessly shampooed and cleaned and that nothing remains in the rug or carpet which needs rinsing out. 3. Representing that Hild Rug Shampoo is highly volatile, evaporates completely, and that grease and grime evaporate with the shampoo.

It M further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it lias complied with this order.

Syllabus 28F.T. C.