National Coin Corp

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IN THE MATI'ER. OF NATIONAL COIN CORPORATION AND JOHN ROMANO COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. I) OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3862. Complaint, July 29, 1939-Decision, Aug. 14, 191,2 Where a corporation, F:uhsequently dissolved, and the individual who was its president an•l priueipul owner, competitively engaged in the purchase o! old and t·are coins and In the interstate sale and distribution In said connection of a colo catalogue which they repr~ented as describing ·an old and rare coins of value and the prices which they would pay therefor: in their advertisements in newspapers, periodicals and other publications, mal!:· lng possession of such catalogue a condition to such purchase- . (a) Represented, directly or by Implication, that all old coins were rare coins with values comparable to those of coins described or referred to therein, through mentioning only the old and rare coins of great value; The facts being that only l1 small number of old coins are rare and higly valuable. and values and prices listed in their advertisements were greatly in excess of the usual values or selling prices of old coins; and · (b) ltepresl'nted that they would pay the prices listed In said advertliwmcnts for coins bearing the uates set forth therein without any other limitat1°0' and that their suld catalogue listed all known valuable coins; · The facts being their catalogue contained conditions and restrictions not set out by them In their advertisements: they did not pay the prices represented in their advertisements or, as illustrative, pay $450 for all dime.s dated prior to 1895, but paid it for only the ''1894 Mint" dime; they required that pros· ~ctlve selle~·s post a $1 appt·alsal fee to be returned only In event of their purchase of eoln or coins In the amount of $5 or more; their prices depended upon the state of preservation of coins In addition to the seat·clty or dates thereof; and their catalogue did not list all known rare coins; With effect of mlsleading and- deceiving a substantial number of the purcbaSi11g public Into the mistaken belief that said representations were true, thereby Inducing it to purchase substantial number of said catalogues; whereby trade was unfairly diverted to them from competitors who did not IJlis· repre~cnt the comlitions under which they purchnsed coins, and their cold catalogues, as consequence whereof, Injury wn.s done to competition: Held, That such acts aiel practices, under the circumstances set forth, were all to th~ prejudice aud Injury of the public and competitors, and constituted unfair methods of com~tition, and unfair and deceptive acts and practices,. in commerce.

Before Mr. Arthur F. Thomas, trial examiner.

Mr. R. P; Bellinger for the Commission.

Mr. Cltarles E'. Booth, of Daytona Beach, Fla., f~r respondents. Complaint . Pursuant to the provisions of the Federal Trade Commission A.ct,. and by virtue of the authority yested in it ~y said act., the Federal NATIONAL COIN CORP. ET AL. 313 312 Complaint '· 'trade Commission having reason to believe that National Coin Cor- Poration, a corpora.tion, and John Romano, an individual, hereinaft~r referred to as respondents, have 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, National Coin Corporation, is .a corporation, organized, and existing under and by virtue of the laws of the State of Massachusetts, having its office and principal .Place of business at 8 South Oleander Avenue, Daytona Beach, I1'la. The respondent, John Romano, of the same address, is president and principal owner of said respondent corporation, and directs and controls the s~les policies and other activities of the said corporate respondent Wlth 'respect to the acts and practices herein described. PAR. 2~ Respon.d~)lts are now, lleld for several years last past have been, engaged in the business of purchasing old and rare coins. In the conduct of said business, respondents sell and distribute a coin catalog . Which is represented by respondents· to describe all old and rare coins of vahte and the prices which respondents pay for the same. Respondellts cause said coin catalog, when sold, to be transported from their lllace of business in the State of Florida to purchasers thereof at their respective points of location in various States of the United States other th~n the State of Florida, and in the District of Columbia. ~~spondents maintain, and at all times mentioned herein have main- O.Incd, a course of trade in said coin catalog in commerce between und ~lllong the various States of the Vnited States and in the District of columbia PAn. 3.. In the course ~nd .condu<;t of their aforesaid business, res~ndents.are in substantial competition with other corporations and 'With individuals, firms, and partnerships likewise engaged in the J)urchase of old and rare coins and in the sale and distribution in com- ~~ree between and among the various States of the United States and ~n the District of Columbia, of catalogs and other books or pamphlets ,escribing the coins that .they offer to purchase. f PAn. 4. In the course and conduct of their aforesaid business ·and or the purpose of inducing the· purchase of their said coin catalog, ~esp_ondents have caused statements and representations which purport to hst the prices which respondents pay for said old and rare coin!'! 0 • be inserted in newspapers, periodicals, and other public-ations ha v- ~n~ a ge_neral ~irculat~on throughout t~~ Un.ited States. In' order· 0 Induce the purchase of respondents' said .com catalog, respondents ~~ate i1,1 such advertisements that they will purchase coins only ft·om OSe persons having respondents' said coin catalog, and make false ''I :!'' 314 FEDERAL. TRADE ·commission DECISIONS Cvmplaint 35F. r:G.

and misleading statements with respect to the values of old coins generally and the price that the respondent will pay for such old coins· · Among and typical of the respondents' aforesaid advertise!llents are the following:

·· $2,000 for 1¢. $!,000 for $1.00.

We pay up to $10.00 each for 1909 cents. · - : IHG CASH PREMIUMS FOR HUNDREDS OF COINS NOW IN CIRCUL·\· TION. . . Dimes before 1895---------------------r-------------- $450.00 . Liberty Head Nickels before 1914---------------------- 300,00 Indian Cent '64-65---------------------.--------;------- 100.00 ~~ Cents------~--------------~-----~~--------------~-- 275.00 Large Copper Cent-------------------------"----------- 2,000.00 "Half Dimes-----------------------------~----'-------- 175.00 20¢ Piece---------------~-----------------~----------- 150.00 25¢ l'iece----------------------~---------------------­ 300.00 Silver DoUars----------------------------------------- ~.000.00 50¢ Piece--------------------------------------------- 1,000.00 Trade Dollar~--------------------------------------- 300.00 Gold Dollars---------------------------·-------------"'-- 1,500.00 $2.50 Gold Pieces------------------------------------- 500.'00 $3.00 Gold Pie<>es------------------------------------- 2,000.00 $5.00 Gold Pieces------------------------------------- 6,000.00 $10.00 Gold Pieces------------------------------------ 150.00 Colonial Coins---------------------------------------- 300.00 Foreign Colns-~------------------------------------- 165.00 $20.00 Gold Pieces _________________ :._ __________________ _ 500.00 Commeru. lh Dollars----------------------------------- 60.00 All foreign currencies.

Send 15¢ to-day for Coin Book * * * we do not accept your old coiUS from those who do not have our price book.

01<1 money. Coins wanted. 1909 cent $10.00.

We buy all rare and old coins:

1933 50¢ $4.00.

The following is also a typical advertisement used by responden~~ as aforesaid for the purpose of inducing the purchase of their sip catalog:

Big prices paid for c~rtain wanted coins. 1909 cent, $10. Some silver dol· lat·s, $4,000; 1864-1865 Indian head cents, $100 each; dimes before 189G, $GOO; Liberty bead nickels before 1914, $500.; encased postage stamps; some large pennies, $2,000; half-cents, $275, paper money, gold dollars, $1,500, foreign co \lis• $165 some worth $6,000 each. You may have coins for which we pay big pre· mlums. Therefore, send 15¢ today for 1939 big, illustrated coin book for certat.'(I -wanted cains. National Coin Corporation (80) Daytona Beach, Florida . . :It is a fact that certain coins, because of their scarcity and age, a.re of high value and sell for exceedingly high prices among dealers and collectors of such coini. Such old and rare coins are generally, how·· NATJONAL. COIN ·CORP. ET AL. · 315i 312 . Complaint I tver, in the possession of dealers, collectors, museums or others en-I l .gaged in collecting old and rare coins, and are not in possession of lll.members of the purchasing public in any appreciable numbers. The vast majority of old coins are not rare and especially valuable Coins, an~ the value of said coins and the prices paid for them by dealers, collectors, and others are often merely nominal, and not in e:xcess of the bee value of said coins ..

By mentioning only the old and rare coins of great value in its advertisements, in the manner aforesaid,. respondents represent, directly and by implication, tt> members of the public that all old coins are rare coins with values comparable to the coins described or referred to in said advertisements. Said members of the general public do not know that only a comparatively small number of said old coin:s are rare and highly valuable. Consequently, many members of the Purchasing public are misled and deceived into the false and erroneous belief that the high values and prices which respondents set out in their advertisements, as hereinbefore set forth, are representative of the values of old coins generally and the usual selling prices which respondents will pay for all old coins, when in truth and in fact said Values and prices are greatly in excess of the usual values of old coins and. greatly in excess of the usual selling prices of old coins. Respondents also represent that the prices listed in said advertisements \\'ill be paid by respondents for coins bearing the dates set forth in Said advertisements without any other limitations or restrictions, and ~hat respondents' coin catalog lists all known valuable coins. Rely- Ing upon such statements and representf!tions, a substantial number Of the purchasing public have purchased respondents' coin catalog. PAR. 5. The c~in catalog which respondents send to purchasers of the same contains a list of certain rare coins and the prices which lest)Ondents represent they will pay for such coins. Said coin catalog contains, with respect to the purchase of rare coins by the respondents, ' Various conditions, restrictions, and limitations which are not set out by respondents in the aforesaid advertisements. In truth and in fact, respondents do not pay the prices for old coins which respondents represent they will pay in said advertisements, and upon which representations members of the public purchase respondents' catalog. For e~arnple, respondents represent in said advertisements that they will tlay the sum of $450 or other larger· sums·for all d~mes bearing dates Prior to the year 1895. Members of the public purchase respondents' ~atalog upon such representation, but find that respondents do not J:lny the sum of $450 or other larger sums for all dimes bearing dates flrior to the year 1895, but pay such sums for only one dime dated J:ltior ·to the year 1895, -which dime is a "1894 Mint" dime.· The afore- : i !' 316 FE,DERAL TRADE COMMISSION DECISIONS Findings 35F.T.C· said advertisements by the respondents contain vari~us other false and misleading' statements and representations • with ·respect· to th~ prices which respondents pay for rare and old coins. Respondent~ coin catalog does not list all known rare coins. Among other liilll' tations and conditions which respondents place on their purchase ~~ rare coins, and with respect to which prospective purchasers of sal ·coin catalog are not advised, are:

Respondents require prospective sellers of coins to post with re· spondents a $1 appraisal .fee, which fee is returned by responde~t: .only in the event of the purchase of respondents of a coin or coin in the amount of $5 or more; and the prices which respondents p~Y for coins are dependent upon the state of preservation of the -coins i1I1 addition to the scarcity or dates of the coins. . . PAR. 6. The use by respondents of the aforesaid false and ~ 15 ~ leading statements and representations has tlie capacity and t'imdencY to, and does, mislead and deceive a substantial number of member: of the purchasing public into the erroneous and mistaken belief thll the aforesaid false and misleading statements and representations are true, and that respondents pay the prices listed in said advertisements for all rare coins bearing the respective dates listed therein, and into the purchase of a substantial number of respondents' coin catalo1~ because of said erroneous and mistaken belie£. As a direct resu thereof, trade in commerce among and between the various State; of the United States and in the District of Columbia has been diverte t. unfairly to the respondents from their said competitors who do no mi.srepresent the . terms a1~~ co~ditions un4er which they purchas;. corns and sell their respective com catalogs. In consequence ther~o ' injury is being done, and has been done, by respondents to competi! 10~ in commerce among and betwaen the various States of the Unite States and in the District of Columbia.

PAR. 7. The aforesaid. acts and practices of the respondents, [l~ herein alleged, are all to the prejudice and injury of the public and. 0 respondents' competitors, and constitute unfair methods of cornp.e· 111 tition in commerce and unfair and deceptive acts and practices commerce within the inte.nt and meaning of the Federal Trade Cotn· mission Act.

.. REPORT, FINDINGS AS TO THE FACTS, AND Om>ER Pursuant to the provisions of the Fed~ral T~ade Commission j\ct, the Federal Trade Commission, on· July 29, 1939, issued and .subse· quently served its complaint in this proceeding upon respondents National Coin Corporation, a corporation, and John Romano, 11n NATIONAL• COIN CORP. E·T AL. 317 312 Findings i~dividual, charging them with the use of unfair methods of competition in commerce and 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 respondents' answer thereto, testimony and other evidence in support of the all£>gntions of said complaint were introduced before 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 said complaint, the answer thereto, and testimony and other evidence; 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. National Coin Corporation, named as a respondent herein, was a corporation organized under and by virtue of the laws of the State of Massachusetts, with its office and principal place of business at 8 South Oleander A venue, Daytona Beach, Fla. Subsequent to the issuance of the complaint herein said corporation was dis-. ~olved and it is not now in existence. Respondent, John Romano, an Individual, formerly of the same address, was president and principal owner of said respondent corporation and directed and controlled the sales policies and other activities of the said corporate respondel.1t with respect to the acts and practices herein described. Respondent John . :Romano now owns and operates a curio shop located at 1004 Main Street, Daytona Beach, Fla .

• PAR. 2. Respondents, for several years prior to July 1940, engaged In the business of purchasing old and rare coins. In the conduct of said business, respondents sold and distributed a coin catalog which Was represented by respondents to describe all old and rare coins of Value and the prices which respondents would pay for the same. :Respondents caused said coin catalog, when sold, to be transported from their place of business in the State of Florida to purchasers thereof at their respective points of location in various States of the Dnited States other than the State of Florida, and in the District of Columbia. Respondents maintained a course of trade in said coin catalog in commerce between and among the various States of the Dnited States and in the District of Columbia. ' PAJl. 3. In- the course and conduct of their aforesaid business, respondents were in substantial competition with other corporations li09749m-43-vol. 315-23 318 FEDERAL TRADE COMMISSION DE.CISIONS Findings 35F. T.C.

and with individuals, firms, and partnerships likewise engaged in the purchase of old and rare coins, and in the sale and distribution in commerce betweef\ and among the various States of the United States and in the District of Columbia of catalogs and other books or pan1phlets describing the coins that they offered to purchase. · PAR. 4. In the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their said coin catalog, re· spondents caused statements and representations which purported to list the prices which respondents would pay for said old and rare coins to be inserted in newspapers, periodicals, and other publications having a general circulation throughout the United States. In order to induce the purchase of respondents' said coin catalog, respondents stated in such advertisements that they would purchase coins only from those persons having respondents' said catalog, and made false and misleading statements with respect to the values of old coins generaliy and the price that the respondents would pay for such old coins.

Among and typical of the respondents' aforesaid advertisements were the following:

$2000 for 1¢. $1000 for $1.00. • • • • • • • We pay up to $10.00 each for 1909 cents. • • • • • • BIG CASH PREl\IIUl\IS FOR HUNDREDS 01!' COINS NOW IN CIRCV- LATION.

Dimes before 1803-------------------------------------- $450.00 Liberty Head Nic·kels before 1914_______________________ 300. 00 Indian Cent '64-63------------------------------------- 100. CO lh Cents----------------------------------------------- 275. 00 Large Copper Cent---------------------------------- 2, 000. 00 IIolf Dimes------------------------------------------- 175.00 20¢ Piece--------------------------------------------- 150.00 23¢ Piece---------------------------------------------- 300.CO Silver Dollars----------------------------------------- 4, 000. 00 50¢ Piece _________________ : ____________________________ 1,000.00 Trade Dollars----------------------------------------- 300. CO Gold Dollars------------------------------------------- 1, 500. 00 $2.50 Gold Pieces----------~---------------------------- 500. 00 $3.00 Gold Pieces--------------------------------------- 2,000.00 $5.00 Gold Pieces------------------------------------- 6, 000. 00 $10.00 Gold Pieces------------------------------------ 150. 00 Colonial Coins----------------------------------------- 300.CO Foreign Coins------------------------------------------ 1C5.00 $20.00 Gold Pieces----------------~-------------------- 500. 00 Commem. % Dollars----------------------------------- 60. 00 All foreign currencies NATIONAL COIN CORP. E·T AL. 319 312 Findings Send 15¢ to-day for Coin Book • • • we do not accept your old coina from those who do not have our price book.

• • • • • • • Old money. Coins wanted. 1909 cent $10.00. • • • • • • • We buy all rare and old coins. * * * • "' "' • 1933 50¢ $4.00. The following is also a typical advertisement used by respondents as aforesaid for the purpose of inducing the purchase of their said catalog:

Big prices paid for certain wanted coins. 1909 cents, $10. Some silver dollars $4,000; 1864-1SG5 Indian head cents, $100 each; dimes before 189[), $600; Liberty head nickels before 1914, $GOO; encased postage stamps; some large pennies. $2,ooo; half-cents, $2i5, pape1· money, gold dollars, $1,500, foreign coins, $165 some worth $6,000 each. You may have coins for which we pay big premiums. 'therefore, send 15¢ today for 1930 big, illustrated coin book for certain wanted Coins. National Coin Corporation (80) Daytona Beach, Florida. It is a fact that certain coins, because of their scarcity and age, are of high value and. sell for exceedingly high prices among dealers artd Collectors of such coins. Such old and rare coins are generally, however, in the possession of dealers, collectors, museums, or others engaged in collecting old and rare coins, and are not in possession of members of the purchasing public in any appreciable numbers. The vast majority of old coins are not rare and especially valuable coins, and the value of said coins and the prices paid for them by dealers, collectors, and others are often merely nominal, and not in excess 0f the face value of said coins.

By mentioning only the old and rare coins of great value in its advertisements, in the maimer aforesaid, respondents represented, directly and by implication, to members of the public that all old coins .are rare coins with values comparable to the coins described or referred to in said advertisements. Said members of the general public do not know that only a comparatively sman number of said old coins are rare and highly valuable. Consequently, many members of the purchasing public were misled and deceived into the false and erroneous belief that the high values and prices which respondents set out in their advertisements, as hereinbefore set forth, are representative; of the values of old coins generally and the usual selling prices which respondents would pay for all old coins, when in truth and in fact Said values and prices are greatly in excess of the usual values of old Coins and greatly in excess o:f the usual selling prices of old coins. respondents also represented that the prices listed in said advertisetnents would be paid by respondents for coins bearing the dates set I I :' • I i 320 FE1DERAL TRADE COMMISSION DECISIONS Findings 35F.'l'.C·' forth in said advertisements without any other limitations or restric· tions, and that respondents' coin catalog lists all known valuable coins. Relying upon such statements and representations, a substantial num· her, of the purchasing public have purchased respondents' coin catalog. PAR. 5. The coin catalog w}iich respondents sent to purchasers of the same contained a list of certain rare coins and the prices whi:h respondents represented they would pay for such coins. Said com e:atalog contained, with respect to the purchase of rare coins by the respondents, various conditions, restrictions, and limitations which -were not set out by respondents in the aforesaid advertisements. In truth and in fact, respondents did not pay the prices for old coins which respondents represented they would pay in said advertisements, :and upon which representations members of the public purchas~d :respondents' catalog. For example, respondents represented in srtld lldvertisements that they would pay the sum of $450 or other larger sums for all dimes bearing dates prior to the year 1895. Members of the public purchased respondents' catalog upon such representa· tions, but found that respondents did not pay the sum of $450 or other larger sums for all dimes bearing dates prior to the year 1895, but paid such sums for only one dime dated prior to the year ~89 5 which dime is a "1894 Mint" dime. The aforesaid advertisements by the respondents contained various other false and misleading state· ments and representations with respect to the prices which respond· .ents paid for rare and old coins. Respondents' coin catalog did not list all known rare coins. Among other limitations and conditi~ns which respondents placed on their purchase of rare coins, and with respect to which prospective purchasers of said coin catalog were not advised, was the requirement that prospective sellers of coins post with respondents 11 $1 appraisal fee, which fee was returned by r~­ spondents only in the event of the purchase by respondents of a cold or coins in the amount of $5 or more, and the condition that the pri~e~ which respondents paid for coins were dependent upon the state 0 preservation of the coins in addition to the scarcity or dates of the coins.

PAR. 6. The use by respondents of the aforesaid false and mislead· ing statements and representations had the capacity and tendency tof and did, mislead and deceive a substantial number of members 0 the purchasing public into the erroneous and mistaken_ belie£ that the aforesaid false and misleading statements and representations were true, and that respondents paid the prices listed in said advertisements for. all rare coins bearing the respective dates listed therein, and into the purchase of a substantial number of respondents' coin catalogs NATIONAL COIN ·CORP. ET AL. 321 312 . Order because ·of said erroneous and mistaken belief. · As a direct result thereof, trade in commerce among and between the various States of the United States and in the District of Columbia has been diverted Unfairly to the respondents from their ~;aid competitors who do not lnisrepresent the terms and conditions under which they purchase ~oins and sell their respective coin catalogs. In consequence thereof, lnjury has been done by respondents to competition in commerce lllnong and between the various States of the United States and in the District of Columbia.

CONCLUSION The aforesaid acts and practices of the aforesaid respondents, ash erein found, were all to the prejudice and injury of the public and Of respondents' competitors, and constituted unfair methods of coml>etition in commerce and 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 Commis· 810n upon the complaint of the Commission, the answer of the respondents, and testimony and other evidence in support of the allegations of said complaint taken before an examiner of the Commission theretofore duly designated by it, and the Commission having made its fi~dings as to the fa~ts and its conclusion that the respondents have \'!olated the provisions of the Federal Trade Commission Act . . It is ordered, That the respondent, John Romano, an individual, hls representatives, agents, and employees, directly or through any Corporttte or other device, in connection with the offering to purchase a~d purchase of old and rare coins of the offering for sale, sale, and distribution of such coins and catalogs or other material describing 811lne in commerce, as "commerce" is defined in the Federal Trade Comlbission Act, do forthwith cease and desist from representing, directly or by implication:

1. That all old coins are rare coins or have values comparable to the "nlues or prices of rare coins. '-- 2. That old coins generally have any value greatly in excess of their face value.

3. That the values of or prices which may be obtained for a very few rare coins are representative of the values or usual selling prices of old coins generally. · I:' '' 'i. I 322 FEDERAL TRADE COMMISSION DECISIONS Order 35F.T.C· 4. That respondent will buy particular coins, or coins of certain kinds, at prices in excess of their face value, unless all conditions, limitations, or restrictions applicable to such purchases are clearly stated in conjunction therewith.

5. That respondent's coin catalogs list all known valuable coins. It is further ordered, That the said respondent shall, . within 6° days after service upon him of this order, file with the Commissi~n a report in writing setting forth in detail the manner and form 1n which he has complied with this order. . It is further ordered, That, it appearing to the Commission that . respondent National Coin Corporation has been dissolved and is n?t now in existence, this case be, and the same hereby is, closed as to said corporate respondent.

CUTTER LABORATORIES 323 Syllabus