Louis Glasser, trading as Paramount Yarn Company

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IN THE MATTER OF LOUIS GLASSER, TRADING AS PARAMOUNT YARN COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1,521. Complaint, Dec. 16, 191,1'-Decision, Sept. 10, 191,~ Where an individual, engaged in Interstate sale and distribution of knittin!' yarns- ( a) Made use In catalogs and color charts, sample books and other printed and written material, and on labels attached to his products, of such terms 119 "Luster Shetland," "Shetland Floss," and "Sporting Angora,"· understood bY a substantial portion of the purchasing public to mean yarns· made from tb~ wool of sheep grown on the Shetland Islands and the adjacent mainland 0 Scotland, and from the hair of the Angora goat, respectively; d 'lhe facts being said "Shetland" yarn was made entirely of domestic wool, an said "Sporting Angora" contained about 80 percent domestic wool and 2° percent rabbit hair;

(b) Misrepresented certain yarns designated by such trade names as "Cobb!~ Tweed," "Ombre Tweed," "Cravenette," "Petite Boucle," ''Heather \Vorsted. and "Paramount 8013" with words "All Cotton" on its label, through failure to disclose their content of rayon which, when made to. simulate silk, wool. or cotton, Is practically Indistinguishable therefrom; t (c) Falsely represented that his products were sold direct to consumers 11 wholesale prices substantlall;v lower than .retail prices at which similar .yarn~ were usually sold to the consuming public by others, through circulation °d such .statements as "We are the sole distributors of the Paramount brant yarns ;-the finest quality yarns obtainable ;-sold at wholesale prices direc to the consumer" ;

With effect of misleading and deceiving a substantial portion of the p,urcha810: public with respect to the constituent fibers of said products and as to sal 1 Individual's business status, thereby Inducing it to purchase substantlll quantities of products concerned: ll Held, That such acts and practices, under the circumstances set forth, were a to the prejudice and Injury of the public, and constituted unfair and decepti"e acts and practices in commerce.

Before /fir. John lV: Addison, trial examiner. Mr. Donovan Divet for the Commission.

11/r. S. Robert Israel, of New York City, for respondent. AMENDED Complaint Pursuant to the provisions of the Federal Trade Commission ,A.c~ and by virtue of the authority vested in it by said act, the Federll I Amended.

. PARAMOUNT YARN CO. 459 458 : < Complaint 'frade Commission having reason to believe that Louis Glasser, individually, and trading as Paramount Yarn Co., hereinafter referred to as respondent, has violated the provisions of said act, and it ap· Pearing to the Commission that a proceeding by it in respect thereof Would be in the public interest, her~by issues its amended complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Louis Glasser, is an individual, trading as Paramount Yarn Co., with his office and principal place of busi· ness located at 362 Grand Street, in the city of New York, State of ~ew York.

PAR. 2. Respond~nt is now, and for more than ·2 years last past has been, engaged in the sale and distribution of various grades and types of knitting yarn. Respondent causes his said products when sold to be transported from his place of business in the State of New ?:'" ork to the purchasers thereof at their respective points of l.ocation 1n 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 his said products in commerce between -and among the vari~ms States of the United States and in the Disti·ict of Columbia.

PAR. 3. In the course and conduct of his said business, and for the Purpose of inducing the purchase of his said products, the respondent has engaged in the practice of falsely representing the constituent fiber or material of which his products are made, such false repre- ~entations being made by means of statements and legends appearing 1U catalogs, color charts, sample books, and other printed and written material, and on labels attached to such prouucts. · . Typical of the aforesaid practice is the use by respondent of the Words "Lustre Shetland" and "Shetland Floss" .to designate and describe certain. of his yarns which are not composed in whole or in Part of wood from the Shetland sheep raised on the Shetland Islands or the :tdjacent mainland of Scotland.

The word "Shetland" when applied to wool or yarn for. many years has had and now has in the minds of the purchasing and consuming Public generally a definite and specific meaning, to wit: \Vool taken from a breed of sheep known as Shetland sheep raised on the .Shetland Islands and on the· adjacent mainland of Scotland. For many years t?ere has been and there now is a preference on the part of a substantial number of the purchasing pu,blic for Shetland wool and yarn. A further example of· re13pondent's practice is the use of the words ''Sporting Angora" to designate and describe yarns having the appearance of wool, which are not composed of wool from the Angora goat hut are composed of other wool and of rabbit hair. The word 460 FEDERAL .TRADE COMMISSION DECISIONS Complaint 35 F. T. C.

"Angora" has long been understood by the purchasing public as de· noting fiber made entirely from the hair or wool of the Angora goa~ and when such term or simulation thereof is used to designate or de· scribe a product having the appearance of wool, such term is under· stood by the purchasing public as denoting a product made entirely from the hair of the Angora goat. For many years there has been and there is now a preference on the part of a substantial number of the purchasing public for Angora wool and yarn. PAR. 4. Rayon is a chemically manufactured fiber ~r fabric which may be so manufactured as to simulate silk, wool, or cotton. When manufactured to ~imulate silk it has the appearance and feel of silk; when manufactured to simulate wool it has the appearance and :feel of wool; and when manufactured to simulate cotton it has the appear· ance and feel of cotton. By reason of these qualities rayon, when manufactured 'to simulate wool, silk, or cotton, and not designated as rayon, is by the purchasing public practically indistinguishable froill wool, silk, or cotton, as the case may be. Products made of rayon are accepted by the purchasing public as silk, wool, or cotton, even though such products may not be designated by terms representing that they are silk, wool, or cotton. ' · The respondent sells and distributes yarns containing rayon with· out disclosing the rayon content of such products. Among such products are yarns referred to by respondent as "Cobble Twee d ' " . d ,,"Cravenctte," "Pebte Boucle," "Heather Worsted," 'Ombre Twee ' "Boucle," "Paramount 8013," and "Paramount 88." All of said yarns contain F:ubstantial percentages of rayon which has been manufac· tured so as to simulate in appearance wool, silk, or cotton, or a mi:s:· ture of wool and silk, and these yarns are believed by the purchasing public to be wool, silk, or cotton, or a mixture of wool and silk; respec· tively. The said yarn, Paramount 8013, is labeled by respondent "All Cotton" although in truth and in fact it is composed of approximately 92 percent cotton and 8 percent r~yon. The said yarn, Paramount 8~~ is labeled bY. the respondent ."90 percent cotton and 10 percent rayon, whereas in truth and in fact said yarn is composed of 83 percent cot· ton and 17 percent rayon. .

PAR. 5. In the course and conduct of his said business respondent . delivers to customers and prospective customers a circular letter which contains the following statement:

We are the sole distributors ot the Paramount Brand Yarns ;-the finest qual· ity yttrns obtainable ;-sold at wholesale prices direct to the consumer. Dy the use of the said statement and others of similar import and meaning, not herein specifically set forth, the respondent represents PARAMOUNT YARN CO. 461 458 Findings t~ said members of the consuming public that his products are sold dtrectly to consumers at wholesale prices substantially lower than those at which similar yarns are usually sold to the consuming public Y other persons, firms, and corporations engaged in the sale of such ~arns. Such statement is false and misleading. In truth and in fact respondent's dealings as a wholesaler are confined to transactions with ~etailers of knitting yarns in New York City and its immediate vicinl~y and only a small percentage of his sales are wholesale transachcns; the prices at which respondent's said yarns are sold to members of the consuming public are not substantially lower than those charged by other persons, firms, and corporations when selling similar ~arns to the consuming public arid are not wholesale prices. f l? AR. 6. The acts and practices of the respondent as herein set t o~th, including the failure to disclose that respondent's products conll.ln rayon, have the tendency and capacity to and do mislead and ~cei"\l'e a substantial portion of the purchasing public with respect to e constitutent fibers or materials of which respondent's products lire made and with respect to respondent's business status. As a hesult thereof the purchasing public has been induced to purchase and as purchased substantial quantities of respondent's products. . l?An, 7. The aforesaid acts and practices of the respondent as here- ~11 alleged are all to the prejudice and injury of the public and consti- .ute unfair and deceptive acts and practices in commerce within the llltent and meaning of the Federal Trade Commis~ion Act. Report, FINDINGs AS TO THE FACTs, AND Onder •I th Pursuant to the provisions of the Federal Trade Commission Act, e Federal Trade Commission, on June 24, 1941, issued and subsetll.e~tly served its complaint in this proceeding on the respondent, chll.ls .Glasser, individually, and trading as Paramount Yarn Company, i arg1ng him with the use of unfair and deceptive acts and practices 0~ commerce in violation of the provisions of said act. After the filing b respondent's answer to said complaint, the Commission, on Decemb.er 16, 1941, issued and subsequently served its amended complaint tllon said respondent, charging him with the use of unfair and decepth"e acts and practices in commerce within the intent and meaning of e": Federal Trade Commission Act. Thereafter, testimony and other dence in support of, and in opposition to, the allegations of said to.' ended complaint were introduced before an examiner of the Com- 'll;1.ssion theretofore duly desig~ated by it~ and said testimony and other 'l'hdence were duly recorded an~ filed in the office of the Commission. ereafter, this proceeding regularly came on for final hearing before C!00749"'-43-vol. Sli-32 ,, 462 FEDEiRAL .T~Ape _QOMMISSIO~' DE·CISIONS Finding~t 35F.T.C.

the Commission on the said amended complaint, testimony and other: evidence, report of the trial examiner, and brief in support 9f th: complaint (respondent not having filed brief and oral argume1:t nod having been requested); and the Commission, having duly cons1dere. 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 findtngs as to the facts and its conclusion drawn therefrom. , FINDINGS AS TO THE FACTS PARAGRA~II 1. Respondent, Louis Glasser, is an individual, trading as Paramount Yarn Co., with his office. and principal place of businessN ,,, located at 362 Grand Street in the city of New York, State of e York. Respondent is now, and for several years last past has beenf engaged in the sale and distribution of various grades and types ~, knitting yarns. Respondent causes his said products, when sold, to e 1 transported from his place of business in the State o£ New York tot 1e purchasers thereof located in various other States o£ the United Stat.cS· Respondent maintains, and at all times mentioned herein has :rna!lld tained, a course o£ trade in his said products in commerce between an among the various States of the United States. h PAn. 2. In the course and conduct of his said business and fort ~ purpose of inducing the purchase o£ his said products, the respondent has engaged in the practice of falsely representing the constituen_ fiber or material ~rom which his products are made, such false reRreg sentations being made by means of statements and legends appea.rlll in ~atalogs, color charts,_sample books, and other printed and wr1ttel1 material, and on labels attached to such products. , . d· Among and typical o£ the aforesaid practices, is the use by re~pon te (mt o£ the words "Lustre Shetland" and "Shetland Floss" to design!lh and describe certain of the yarns sold and distributed by hi:rn. 'f te word ''Shetland" and the terms "Shetland Floss" and "Lustre She · land," when applied to yarns, are understood by a substantial portio~ o£ the purchasing public to mean yarns made from the wool o£ Shetlall f sheep grown on the Shetland Islands and on the adjacent mainland ,0 Scotland. As a matter o£ fact, respondent's product to which these terms are applied is made entirely of domestic wool. d. Another example o£ respondent's practice is the use o£ the ~ol' ~ "Sporting Angora" to designate or describe certain yarns sol~ ~ 11 d distrib:mted by him. The term "Angora" when applied to Ioutti~ yarns is understood by a substantial portion o£ the purchasing pu 1..IC to mean yarn rna de f rom the hair. o£ the Angora goat. 'fbC • 1 product so designated by respondent contains in £act approximate Y 80 percent domestic wool and 20 percent ra~bit hair. PARAMOUNT YARN CO. 463 458 Findings In purchasing products represented as, or purporting to be made 0,f, Shetland wool or hair of the Angora. goat, members of the public have a preference for the genuine article, rather than a substitute for, or simulation of, the genuine article.

J>An. 3. In addition to the above-described acts and practices, the l'{Jspondent also sells and distributes yarns containing rayon, without disclosing the rayon content of such products. Rayon is a C~ternically manufactured fiber which can be so made as to closely ~ 1Inulate silk, wool, or cotton. ·when manufactured to simulate silk, tt has the appearance and feel of silk; when manufactured to simu~ late wool, it has the appearance and feel of wool; and when manufactured to simulate cotton, it has the appearance and feel of cotton. hy reason of these qualities, rayon, when manufactured to simulate ~'0ol, silk, or cotton, and not designated as rayon, is by the purchaslng public practically indistinguishable from wool, silk, or cotton, as the case may be, and the failure of respondent to disclose the rayon ~on tent of the yarns containing that product has· resulted in the Durchase of such yarns by a substantial portion of the purchasing PUblic under the erroneous impression that they were composed of the genuine products simulated.

Typical of this ·practice of failure to disclose rayoi1 content, is the Use of trade names, such as "cobble tweed," "ombrc tweed," "cmvenftte,'' "petite boucle," and "heather worstetr' to designate or describe Yarns composed ~n whole or in part of rayon .. In addition to the above practices, the respondent also sells and distributes a yarn ~product designated "Paramount 8013," which contains the statement .A.U Cotton" on its label. In truth and in fact a substantial portion of this product is composed of rayon.

l' PAn. 4. In the course and conduct of his business, respondent delVers to customers and prospective customers a circular letter which <:ont · ams the following statement:

·q We are the sole distributors of the Paramount br~nd yarns ;-the finest Uality yarns obtainable ;-sold at wholesale price:; direct to the consumer. ~y the use of said statement and others of similar import and meanlng not herein specifically set forth, the respondent represents to said ~'llen1bers of the consuming public that his products are sold directly 0 consumers at wholesale prices substantially lower than the retail prices at which similar yarns are usually sold to the consuming ll~hlic by other persons, firms, and corporations engaged in the sale . such yarns. In truth and in fact respondent does not sell his · ~:td Y~rns to m~bers. o~ the consuming public at wholesale prices . at prices which are -su?stantially lower than those· charged by 464 FEDERAL 'trade COMMISSION· DECISIONS Ortler 35F. T.C.

other persons, firms, and corporations when selling similar yarns to the consuming public at retail prices. . PAR. 5. The use of acts and practices of the respondent as herein described, including the failure to disclose that respondent's products contain rayon, has the tendency and capacity to, and does, mislead and deceive a substantial portion of the purchasing public with respect to the constituent fibers or materials from which respondent's products are made and with respect to respondent's bus:i,ness status. As a re· suit thereof the purchasing public has been induced to' purchase, ,and has purchased, substantial quantities of respondent's product. CONCLUSION .

The aforesaid nets and practices of the respondent as herein foun~ are all to the prejudice and injury of the public and constitute unfal~ :md deceptive acts and practices in commerce within the intent an 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 amended complaint of the Commission, testimony and other evidence in support of and in opposition to the allegations of ·the complaint, taken before an examiner of the Commission the:e£ tofore duly designated by it, report of the trial examiner, and brle. filed by counsel for the Commission; and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act. It is ordered, That respondent, Louis Glasser, an individual, trading as Paramount Yarn Co., or trading under any other name, his repre· sentatives, agents, or employees, directly or through any corpor~te or other device, in connection with the offering for sale, sale, and dl_s· tribution of knitted yarns in commerce as "commerce" is defined .1~ the Federal Trade Commission Act, do forthwith cease and desis from: · . 1. Using the word "Angora" or any simulation thereof, either alone or in connection or conjunction with any other word or words, to des· ignate, describe, or refer to any' product which is not composed entirely of hair of the Angora goat; Provided, however, That in the case of ~ product composed in part of the hair of an Angora goat and in parf of other fibers or materials, such word may be used as descriptive. 0 the Angora fiber content, if there are used, in immediate connecti°11 or conjunction therew~th, in letters of equal size and conspicuousness, words truthfully describing such other constituent fibers or materials. PARAMOUNT YARN CO. 465 '158 Order 2. Using the word "Shetland" or any simulation thereof, either ~lone or in connection or conjunction with any other word or words, to designate, describe, or refer _to any product which is not composed -entirely of wool of Shetland sheep raised on the Shetland Islands or the contiguous mainland of Scotland; Provided, however, That in the case of a product composed in part of wool of Shetland sheep and in part of other fibers or materials, such word mo,y" be used as ·descriptive of the :Shetland wool content if there are used in immediate c·connection or conjunction therewith, in letters of at least equal size :and conspicuousness, words truthfully describing such other constit- 'llent fibers or materials.

3. Advertising, offering for sale, or selling products composed in '-"hole or in part of rayon, without clearly disclosing such rayon content, and when products are composed in part of rayon _and in ·part of ;.ther fibers or materials, all such fibers or materials, including the ayon, shall be clearly and accurately disclosed. , 4. Uepresenting that the respondent sells direct to the consumer at Wholesale prices when in fact the prices so charged are substantially the same as retail prices charged by other distributors for products ~f like kind and quality, or when the prices so charged are substan- !'~lly higher than the prices at which dealers and jobbers purc~1ase aJd products from the respondent.

It is further ordered, That the respondent shall, within GO days after ~rvice upon him of this order, file with the Commission a report in \Writing, setting forth in detail the manner and form in which he has .tolllplied with this order.

Q. /~is further ordered, That no provision of this order to cease and t es1st shall be construed as relieving respondent in any respect of he necessity of complying with the requirements of the 'Vool Prod- ~ts Labeling Act of 1939 and the rules and regulations promulgated ereunder. .

Complaint 35F. T. c..