Mervin Wineiiolt Co., Etc

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Ix THE MATTER oF MERVIN WINEHOLT, TRADING AS WINEHOLT COMPANY AND MERVIN WINEHOLT COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED Sell. 26, 1914 DocT•et 4691. Complaint, Jan. 30, 1942-Dccision, Apr. 29, 1942 Where an individual, engaged in the Interstate sale and di~>tribution of watches and pistols, among other things; by advertisements in newspapers, magazines and trade journals, and by folders, pamphlets, circulars, and oth':!r advertising matter, directly or by implication- ( a) Represented that tile watch he sold at $1.98 was unconditionally guaranteed to have a useful lie and to render satisfactory service under normal usage for 5 years, its movement finely tested, and that the case containt>d gold; and (b) Represented through use of words "Locomotive" and "ll. R D~ul" that it was a "Railroad watch" or comparable thereto, and enhanced such implication by pictorial representations sllow!ng large hands and lar;;e. distinct hour numerals, and, through use of words "Railroad engraved back," that its back was engraved;

The facts being said watch did not have a useful life, but repairs of parts would be necessary long before expiration of 5 years; back thereof was not engraved, but design was stamped thereon mechanically; movement was not finely tested; case contained no gold whatever; and product dld not possess the desirable chartlcteristics and dependability of a "Railroad" watch as long understood by purchasing public as an especially accurate and dependable watch required for use by railroad employees, but was only a cheap imitation thereof; and (c) Falsely represented that the pistols he sold at $6.45 were regularly sold at retail at $12, and that his price of $6.45 was a special price available for a limited time only;

With effect of misleading and deceiving a substantial portion of the public Into the belief that such statements were true, thereby causing it, because of such mistaken belief, to purchase substantial quantities of said products: 1Field, That such acts and practices, under the circumstanc\'s set forth, were all to the prejudice nnd injury of the public, nnd constltut\'d unfair and deceptive acts and practices jn connnerce.

Mr.ltlaurice 0. Pearce for the Commission.

Colli PLAINT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said net, the Federal Tra.de Commission, having r£>ason to b!'lieve that ~fHvin Wineholt, an Individual, trading as 'Vineholt Co., and l\rervin Wineholt Co., hereinafter referred to as respondent, has violated the provisions of Conlplalnt 34F. T. C.

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. The respondent, Mervin 'Vineholt, is an individual, trading and doing business as 'Vineholt Co. and Mervin Wineholt Co., with his office~ and principal place of business located in Woodbine, State of Pennsylvania.

P.An. 2. The respondent is now, and for more than 1 year last past has been, engaged in the sale and distribution of various kinds of merchandise, including watches and pistols in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes his said products, when sold by him, to be transported from his aforesaid place of business in the State of Pennsylvania to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent r.1aintains, and at all times mentioned herein has maintained, a course of trade in said products in commerce between and among the various States of the United States and the District of Columbia. P .AR. 3. In the course and conduct of his aforesaid business, and for the purpose of inducing the purchase of the aforesaid watches and pistols, the respondent has disseminated and is now disseminating, and has caused and is now causing the dissemination of, false and misleading representations relative to his said products, such state· ments and representations being made by advertisements inserted in newspapers, magazines, and trade journals, and by means of folders, pamphlets, circulars, letters, and other advertising matter, circulated and distributed generally among prospective purchasers. Among and typical of such false and misleading representations relative to respondent's watches and pistols, respectively, are the following: Watches:

$1.98.

5 years guarantee.

• • • railroad engraved baclc • • •. Finely tested qnick train lever movement.

• • * Solid gold effect case * • •.

Locomotive Gilt-R. R. Dial * • •.

Pistols:

Final sale RUSH I Only $6.45.

• • • Cost $12 elsewhere.

P .AR. 4. Through the use of the foregoing statements and representations and others of similar import, not specifically set out herein, the respondent has represented and now represents, directly or by im- MERVIN WINEHOLT CO. 1121 1119 Complaint plication, that the watch sold by him at the price of $1.98 is uncondi~ tionally guaranteed to have a useful life and to render satisfactory services under normal usage for a period of 5 years; that the back thereof is engraved; that the movement is finely tested and that the case contains gold.

Through the use of the words "Locomotive" and "R. R. Dial" in connection with and as descriptive of said watch respondent implies that said watch is a "Railroad 'Vatch" or comparable to such grade of Watch. "Railroad" watches are known and understood by the purchasing public to be watches possessing the accuracy and dependability required for use by railroad employees and are considered to be e~pecially valuable and desirable. Respondent enhances the implicat~on that said watches are "Railroad Watches" by pictorial representations showing large hands and large distinct hour numerals, which features are gen~rally found in genuine "Railroad 'Vatches." Through the use of the words "Railroad Engraved Back" respondent represents that the back of said watch is engraved. Engraving is Understood by the public as describing a process whereby a design is cut or incised into the metal by hand. . ~urther, respondent represents that the pistols sold by him at the Price of $6.45 are regularly sold at retail at $12 and that the price of $6.45 is a special price available for a limited time only . .PAR. 5. The foregoing statements and representations are false, lllJsleading and deceptive. In truth and in fact the watches sold by respondent for $1.98 do not have a useful life and will not render satisfactory service for a period of 5 years, but on the contrary the Parts will wear to the extent that repairs will be necessary ldng before the 5-year period has expired. The back of said watch is not en- ?raved, as engraving is commonly understood, but the design thereon 18 stamped mechanically by a die. The movement of said watch isn .fl. 0~ finely tested, but on the contrary any tests that are made are super- Clal and of small extent and short duration. The case of said watch contains no gold whatsoever. Said watch does not possess the desirable characteristics and dependability of :.t "Railroad" watch, but on the contrary is only a cheap imitation therf'of. 1'he pistols advf'rtised and sold by respondent are not rf'gularly ~old .at :etail for $12 and $G.45 ~s not .a spf'c~al price .for~ limited time, lit 1s, ll1 fact, the rf'gular rctail selhng pnce of said pistol. PAil. 6. The use by the respondent of the aforesaid false, misleading and dect•pthe statements and representations has the capacity and tendency to and does mi::-Jead and deceive a substantial portion of the Purchasing public into the erroneous and mistaken belief that such 4CG::iol"'-42-vol. 3-1-71 Fin <lings 34F. T. C. statements and repres~ntations are true and causes the public, because of such erroneous and mistaken belief to purchase substantial quantities of respondent's products.

PAR. 7. 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 OnoER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on January 30, 1942, issued and thereafter served its complaint· in this proceeding upon respondent Mervin Wineholt, an individual trading as Wineholt Co. and Mervin Wineholt Co., charging him 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 substitute answer wns 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. The respondent, :Mervin 1Vineholt, is an individual trading and doing business as Wineholt Co. and Mervin Wineholt Co., with his office and principal place of business located in Woodbine, State of Pennsylvania.

11 AR. 2. The respondent is now, and for more than 1 year last past has been, engaged. in the sale and distribution of various kinds of merchandise, including watches and pistols, in comn~rce between and among the various States of the United States and in the District of Columbia. Respondent causes his products, when sold by him, to be transported from his aforesaid place of business in the State of Penn· syh·ania to purchasers thereof located in various other States of the United States aml in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, a course of MERVIN WINEHOLT CO. 1123 1119 ]!'in dings trade in said products in commerce between and among the various St!,ltes of the United States and the District of Columbia. PAR. 3. In the course and conduct of his bu"siness, and for the pur- Pose of inducing the purchase of the watches and pistols, the r~spond­ ent has disseminated and is now disseminating, and has caused and is now causing the dissemination of, false and misleading representations relative to his products, such statements and representations being ~ade by advertisements inserted in newspapers, magazines and trade Journals, and by means of folders, pamphlets, circulars, letters and other advertising matter, circulated and distributed generally among prospecth·e purchasers. Among and typical of such false and misleadlng representations relative to respondent's watches and pistols, respectively, are the following:

Watches:

$1.98 5 yeat·s guaramee.

• • • railroad engraved back • • • Finely tested quick train lever movement • "' • Solid gold effect case • • • Locomotive Gllt-R. R. Dial • • • Pistols:

Final Sale Rt'SH ! Only $6.45 • • • Cost $12 elsewhere .

• PAR. 4. Through the use of the foregoing statements and representations and others of similar import, not specifically set out herein, the t~spondent has represented and now represents, directly or by implication, that the watch sold by him at the price of $1.98 is unconditionally guaranteed to have a useful life and to rende1· satisfactory service Under normal usage for a period of 5 years; that the back thereof is ~~graved; that the movement is finely tested and that the case con- Ulns gold.

Through the use of the words "Locomotive" and "R. R. Dial" in ~fnnec~ion with and as descriptive of said watch respondent hnplies lat said watch is a "Railroad 'V atch" or comparable t~ such grade of ~atc.h. "Railroad" watches are known and understood by t}1e pure as~ng public to be watches possessing the accuracy and dependability r~quired for use by railroad employees and are considered to he e<>p('- ~:ally valuable and desirable. Respondent enhances the implication hat .watches are "Railroad 'Vatches" by pictorial representations E; owing large hands and large distinct hour numerals, which featurt's are generally found in genuine "Railroad 'Vatches." Through the Use of the words ''Railroad Engraved Back" respondent represent~ Order 3-!F. T. C. that the back of said watch is engraved. Engraving is understood by the public as describing a process whereby a design is cut or incised into the metal by hand.

Further, respondent represents that the pistols sold by him at the price of $6.45 are regularly sold at retail at $12 and that the price of $6.45 is a special price available for a limited time only. PAR. 5. The foregoing statements and representations are :false, misleading and deceptive. In truth and in fact the watches sold by respondent for $1.98 do not have a useful life and will not render satisfactory service for a period of 5 years, but on the contrary the parts will wear to the extent that repairs will be necessary long before the 5-year period has expired. The back of said watch is not engraved, as engraving is commonly understood, but the design thereon is !?tamped mechanically by a die. The movement of said watch is not finely tested, but on the contrary any tests that are made are superficial and of small extent and short duration. The case of said watch contains no gold whatsoever. Said watch does not possess the desirable characteristics and dependability of a "Railroad" watch, but on the contrary is only a cheap imitation thereof. The pistols advertised and sold by respondent are not regularly sold at retail for $12 and $6.45 is not a special price for a limited time, but is, in fact, the regular retail selling price of said pistol. PAR. 6. The use by the respondent of the aforesaid false, misleading and deceptive statements and representations has the capacity and tendency to and does mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements and representations are true and causes the public, because of such erroneous and mistaken belief, to purchase substantial quantities of respondent's products. ' CONCLUSION The aforesaid acts and practices of respondent, as herein found, are all~o 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 Com· mission 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 he waives MERVIN WINEHOLT CO. 1125 1119 Order :tll intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclu· sion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, :Mervin 1Vineholt, individually and trading as ·wineholt Co. and Mervin Wineholt Co., or trading Under any other name or names, his representatives, agents and em· J?loyees, directly or through any corporate or other device, in con· nection with the offeriniY for sale and dishibution of his merchan· dise in commerce, as "c~mmerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication, that respondent's Watches will render satisfactory service for a period of 5 years, or for any other specified period of time in excess of that during which such watches will ~n fact render satisfactory service. 2. Representing that the cases of respondent's watches are en· graved, unless the design is cut or incised into the metal by hand. 3. Representing that the movements of respondent's watches are finely tested, when any tests given such movements are superficial and of short duration. . 4. Representing that the cases of respondent's watches contain gold or that they have a solid gold effect. , " 5. Using the words "Locomotive" or "Railroad" or the abbreviation R.," or any other words or abbreviations of similar import, to /t. . designate, describe or refer to respondent's watches, or representing 111 any manner that respondent's watches are railroad watches. 6. Representing, directly or by implication, that the prices at which re~pondent offers his merchandise for sale are special or reduced Prices, or that such prices are applicable for a limited time only, When in fact such prices are the usual and customary prices at which ~respondent sells such merchandise in the normal and usual course o£ · Usiness.

is further ordered, That the respondent shall, within 60 days 9/t ~ ter service upon him of this order, file. with the Commission a ;~_art in writing ~ettin~ for~h in detail the ~anner and form in Ich he has complied with this order.

Syllabus 34F. T. C.