Augusta Knitting Corp

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IN THE l\IATTFR OF AUGUSTA KNITTING CORPORATIO~ COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS :APPROVED SEPT. 26, 1914 Docket 4162. Complaint, June 13, 1!140-Defision. Dec. 19, 1940 Where a corporation engaged in manufacture of tuck stitch garments, sweaters, underwear, bathing suits, and other knitted gat·ments and in interstate dis· trilmtion and sale thereof to various wholesale and retail dealer-purchasers- ( a) Represented, as typical of acts and practices engaged in, that certain ladies' undergarments, were composed of mixture of silk and wool through labels, tags, and markers attached thereto, and Including label reading "50'1o siLI< AND wool," or so reading, but with figures 27 percent under words "Silk and Wool," facts being word "and'' on labels in question was printed in minute type and in such runnner as to be illegible to all prnctlcal Intents nnd pnr· poses, notation 27 percent appearing underneath words "Silk and wool" in second label was in much smaller type than the "50'1o" appearing above said words, and was contradictory to label ltst>lf and would not be noticeable to purchnsing public or understood by it, and knitted undergarments thus laheled were not composed entirely of silk and wool, but contained cotton content ranging from 45 percent to 50 percent; (b) Represented that its garments had longer wearing qualities than those knit by its competitors through use, as typical, 'of such labels "Self-t·einforced for 97% longer wear" and "97% Longer \Year," facts being said undergat·ments did not have longer wearing qualities than garments of equivalent price and quality sold by competitors, and use, as aforesaid, of such statements and representations was false, deceptive and misleading; and (c) Failed to disclose by appropriate labels, brands, or tags attached to said garments all of fiber constituents from which they were made and to disclose as !'ubstantial constituent thereof, existence of cotton; With result that through said labels members of purchasing public were misled into believing that said undergarments, thus labeled, were composed entirely of silk and wool In the proportion of 50 percent silk and 50 percent wool, aud with et'ft>ct, through use by It of representations above set forth, of mislead· ing and deceiving substantial portion of purchasing public into erroneous belief that ( 1) knitted garments sold and distributed by it were composed entirely of silk and wool, fabrics of which have established reputation as possessing superior cold-resistance and other desirable qualities over those containing substantial amounts of cotton, and, as consequence are decidedly preferred by many purchasers and prospective purchasers of undergarment"' over fabrics containing cotton in substantial amounts, and that (2) said gar· ments were of longer wearing quality than similar products made by competl· tors. and to cause said portion of public to purchase such products as result ol said erroneous beliefs, engendered as above set forth: Held, That said acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public, and constituted unfair s.nd deceptive acts and practices In commerce.

Mr. Robert Mathis, Jr., for the Commission. Mr. Thomas L. Wilder, of Utica, N. Y., for respondent. AUGUSTA KNITTING CORP. 195 194 Complaint Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Augusta Knitting Corporation, a corporation, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the 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 :

PARAGRAPH 1. Respondent, Augusta Knitting Corporation, is a corporation organized and existing under the laws of the State of New York, and having an office and principal place of business in the city of Utica, in the State of New York, and a sales office at 180 Madison Avenue, in the city and State of New York. PAR. 2. Respondent is now, and has been for more than 2 years last past, engaged in the business of manufacturing, distributing, and selling tuck stitch garments, sweaters, underwear, bathing suits, and other knitted garments. In the course and conduct of its business, respondent sells said garments to various wholesale and retail dealers and causes such garments, when sold, to be transported from its aforesaid places of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains, and at all times ·mentioned herein has maintained, a course of trade in said garments in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of its business the respondent has engaged in the practices of falsely representing the constituent fiber or material of which the various products sold and distributed by it are made, by means of false representations on labels attached to its products. · Among and typical of such acts and practices the respondent represents that certain ladies' knitted undergarments manufactured, sold, and distributed by it are composed of a mixture of silk and wool, by means of labels, tags, and markers attached to said garments which designate and describe said products. One of such labels reads :

50% SILK AND WOOL Another of such labels reads :

lso% SILK AND WOOL 27o/o 27% Complaint 32F.T.C.

The word "and" on the above labels is printed in minute type and in such manner as to be illegible to all practical intents and purposes. On the second label the notation "27%" appearing underneath the words "Silk and 'Vool" is in much smaller type than the "50%" appearing above the words "Silk and 'Vool." By means of the above labels, members of the purchasing public are misled into believing that the said undergarments so labeled are composed entirely of silk and wool in the proportion of 50 percent silk and 50 percent wool. The use on certain labels of "27%" in fine print is contradictory to the label itself and would not be noticeable to the purchasing public or understood by it. In truth and in fact the knitted undergarments so labeled are not composed entirely of silk and wool but contain a cotton content ranging from 45 to 57 percent.

PAR. 4. In addition to the above labels the respondent represents that its garments have longer wearing qualities than garments manufactured by its competitors. Typical of such representations is the use of the following labels:

Self-reinforced for 97% longer wear 97% Longer Wear The use by the respondent of the above statements and representations on its labels is false, deceptive, and misleading. In truth and in £act respondent's knitted undergarments do not have longer wearing qualities than garments of equivalent price and quality sold and distributed by its competitors.

PAR. 5. In addition to the acts and practices hereinabove set out the respondent fails to disclose by appropriate labels, brands or tags attached to its said garments all of the fiber constituents from which said garments are made, and fails to disclose the existence of cotton as a substantial constituent of said garments. PAR. 6. Fabrics made of a mixture of wool and silk fibers have established a reputation as possessing superior cold-resistant and other desirable qualities over fabrics which contain substantial amounts of cotton. In consequence, many purchasers and prospective purchasers of undergarments have a decided preference for silk and wool fabrics over fabrics containing substantial amounts of cotton. PAR. 7. The use by the respondent of the representations hereinabove set forth has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of the purchasing public into the erroneous belief that the knitted garments sold and distributed by the respondent are composed entirely o£ silk and wool and are of longer wearing quality than similar garments manufactured by com- AUGUSTA KNITTING CORP. 197 194 Findings petitors, and to cause them to purchase said products as a result of such erroneous beliefs engendered as above set forth. PAR. 8. The aforesaid acts and practices of respondent as herein alleged, are all to the prejudice and injury of the public, and constitute unfair and deceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on June 13, 1940, issued and subsequently served its complaint in this proceeding upon respondent, Augusta Knitting Corporation, charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which E,Ubstitute anslYer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answer, and the Commission, having duly considered the matter 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, Augusta Knitting Corporation, is a corporation organized and existing under the laws of the State of New York, and having an office and principal place of business in the city of Utica, in the State of New York, and a sales office at 180 Madison Avenue, in the city and State of New York. PAR. 2. Respondent is now, and has been for more than 2 years last past, engaged in the business of manufacturing, distributing and selling tuck stitch garments, sweaters, underwear, bathing suits, and other knitted garments. In the course and conduct of its business, respondent sells said garments to various wholesale and retail dealers and causes such garments, when sold, to be transported from its aforesaid places of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said 198 FEDERAL TRADE COMM:ISSION DECISIONS Findings 32F.T.C.

garments in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of its business the respondent has engaged in the practices of falsely representing the constituent fiber or material. of which the various products sold and distributed by it are made, by means of false representations on labels attached to its products. Among and typical of such acts and practices the respondent represents that certain ladies' knitted undergarments manufactured, sold and distributed by it are composed of a mixture of silk and wool, by means of labels, tags, and markers attached to said garments which designate and describe said products. One of such labels reads :

50% SILK AND WOOL Another of such labels reads :

50% SILK AND WOOL 27% 27o/o The word "and" on the above labels is printed in minute type and in such manner as to be illegible to all practical intents and purposes. On the second label the notation "27%" appearing underneath the words "Silk and ·wool" is in much smaller type than the "50%" appearing above the words "Silk and ·wool." By means of the above labels, members of the purchasing public are misled into believing that the said undergarments so labeled are composed entirely of silk and wool in the proportion of 50 percent silk and 50 percent wool. The use on certain labels of "27%" in fine print is contradictory to the label itself and would not be noticeable to the purchasing public or understood by it. · In truth and in fact the knitted undergarments so labeled are not composed entirely of silk and wool but contain a cotton content ranging from 45 to 57 percent.

PAR. 4. In addition to the above labels the respondent represents that its garments have longer wearing qualities than garments manufactured by its competitors. Typical of such representations is the use of the following labels:

Self-reinforced for 97% longer wear.

97% Longer Wear The use by the respondent of the above statements and representations of its labels is false, deceptive, and misleading. In truth and AUGUSTA KNITTING CORP. 199 194 Order in fact respondent's knitted undergarments do not have longer wearing qualities than garments of equivalent price and quality sold and distributed by its competitors.

PAR. 5. In addition to the acts and practices hereinabove set out the respondent fails to disclose by appropriate labels, brands, or tags attached to its said garments all of the fiber constituents from which said garments are made, and fails to disclose the existence of cotton as a substantial constituent of said garments. PAR. 6. Fabrics made of a mixture of wool and silk fibers have established a reputation as possessing superior cold-resistant and other desirable qualities over fabrics which contain substantial amounts of cotton. In consequence, many purchasers and prosp€ctive purchasers of undergarments, have a decided preference for silk and wool fabrics over fabrics containing substantial amounts of cotton. PAR. 7. The use by the respondent of the representations herein~ above set forth has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of the purchasing public into the erroneous belief that the knitted garments sold and distributed by the respondent are composed entirely of silk and wool and are of longer wearing quality than similar garments manufactured by competitors, and to cause them to purchase said products as a result of such erroneous beliefs engendered as above set forth. CONCLUSION The aforesaid acts and practices of respondent, as herein found, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices 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 and the answer of respondent, in which answer respondent admits all the material al-• legations of fact set forth in said complaint and states that it waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It i8 ordered, That the respondent, Augusta Knitting Corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of its knitted garments in commerce, as "com- Order 32F. T. C.

merce" is defined in the Federal Trade Commission Act, do forthwitl.l cease and desist from:

1. Representing in any manner or by any means that respondent's products are composed of fibers or materials other than those of which such products are actually composed.

2. Using the term "silk" or the term "wool" or any other terms indicative of either silk or wool to describe or designate any fabric or product which is not composed entirely of silk or entirely of wool, provided that in the case of a fabric or product composed in part of silk or wool and in part of materials other than silk or wool fifth terms or similar terms may be used as descriptive of the silk or wool content, as the case may be, when immediately accompanied by a word or words accurately describing and designating each constituent fiber or material thereof in letters of equal size or conspicuousness in the order of its predominance by weight, beginning with the largest single constituent.

3. Representing in any manner or by any means that the fabrics or products offered for sale or sold by respondent contain wool or silk in greater quantity or percentage than is actually the case. 4. Representing that respondent's products have longer wearing qualities than garments of equivalent price and quality ordinarily and customarily sold in the usual course of business; or that the quality, grade, material or character of respondent's products are superior to or different from the actual quality, grade, material or character of such products.

It is 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 has complied with this order. · It is further ordered, That no provisions contained in this order shall be construed as authorizing or permitting, after July 14, 1941, the labeling of any wool product in any manner other than in strict conformity with the provisions of the "Wool Products Labeling Act of 1939."

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