American Products Co

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

IN THE MATTER OF THE AMERICAN PRODUCTS COMPANY, AND THE ZANOL PRODUCTS COMPANY MODIFIED CEASE AND DESIST ORDER Docket 2896. Order, Jan. 25, 1940 Order, in response to motion, modifying cease and desist order of November 8, 1939, 2!) F. T. C. 1306, so as to require respondents, their officers, etc., in connection with offer, etc., in commerce, of food and toilet products and bousebold cleaners, to cease and desist from misrepresenting volume of respondents' business or risk or expense incurred by their salesmen or distributors, or using term "free" to describe articles offered as compensation for distribution thereof, or misrepresenting earnings or profits of sales persons or dealers, as in said order below set forth.

Before Mr. Edward E. Reardon and Mr. Randolph Preston, trial examiners.

Mr. Alden S. Bradley and Mr. M. 0. Pearce for the Commission. Frost & Jaoobs, of Cincinnati, Ohio, and Mr. J. M. George, of ·winona, Minn., for respondents.

Modified ORDER TO CEASE AND Desist This proceeding having been heard by the Federal Trade Commission upon the motion of W. T. Kelley, Chief Counsel for the Commission, to modify the order to cease and desist heretofore issued in this proceeding on November 8, 1939, and the Commission having considered said motion and the record herein and being now fully advised in the premises ;

It i8 ordered, That the motion to modify the order to cease and desist as issued herein on November 8, 1939, be, and the same hereby is, granted as prayed;

It isfurther ordered, That the order to cease and desist issued herein on November 8, 1939, be, and the same hereby is, modified so as to read as follows:

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of the respondents, in which answer respondents admit the material allegations of facts set forth in said complaint, and the Commission having made its findings as to the facts and conclusion that the said respondents have violated the provisions of the Federal Trade Commission Act;

THE AMERJICAN PRODUCTS CO. ET AL. 425 424 Order It i8 ordered, That the respondents, The American Products Co., a corporation, and The Zanol Products Co., a corporation, their officers, representatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale and distribution of food and toilet products and household cleaners in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Misrepresenting in any manner the volume of respondents' business.

2. Representing that ~alesmen or distributors of respondents' merchandise incur no risk or expense when in fact respondents require a deposit from such persons for the goods, samples, or sales equipment :supplied.

3. Using the term "free" or any other terms of similar import or meaning to describe or refer to articles offered as compensation for distributing respondents' merchandise unless all of the terms and conditions of ,such offer are clearly and unequivocally stated in equal conspicuousness and in immediate connection or conjunction with the term "free" or other terms of similar import or meaning and there i.s no deception as to the price, quality, character, or any other feature of such article or as to the services to be performed in connection with obtaining such articles.

4. Representing any specified sum of money as possible earnings or profits of sales persons or dealers for any stated period which is not a true representation of the net earnings or profits which have been made for such stated period of time by a substantial number of re- .spondents' active sales persons or dealers in the ordinary course of . business under normal conditions and circumstances. 5. Representing any specified sum of money as earnings or profits of any specified dealer or sales per.son for any stated period of time unless such sum of money has .in fact been earned net, by such dealer or sales person averaged over a period of at least 2 months in the ordinary course of bu,siness and under normal conditions and unless such representation is immediately accompanied by a statement to the effect that such dealer or sales person is an exceptional or unusual dealer or sales person.

It i8 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 30F. T. C.