R. L. Watkins Co., the

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IN THE MATI'ER OF THE R. L. ·watkins COMPANY COMPLAI~T. FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION' OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3596. Complaint, Sept. 19, 1938-Dectsion, Sept. 28, 194Z Where a corporation, engaged in the manufacture, among other things, of Its "Dr. Lyon's Tooth Powder," and in the competitive interstate sale and distribution thereof; by advertisements In numerous newspapers and periodicals of wide interstate, and in some cases nation-wide circulation, and through radio broadcasts, advertising posters and billboards, and streetcar and subway cards- (a) Implied that its said "Dr. Lyon's Tooth Powder" was substantially similar to that used by dentists through featuring the statement "Do as Your· Dentist Does-Use Powder," or "Do as your Dentist Does When He Cleans Your Teeth-Use Powder," and aforesaid name and product as therein depleted and set forth ;

The facts being that while the majority of dentists probably do use powder in cleaning their patients' teeth, such powder is almost Invariably pumice or silex which are both highly abrasive and, if used regularly, would result In serious damage to the teeth; calcium carbonate, active ingredient of its said powder-used only In exceptional Instances by dentists to polish the· teeth after cleaning with pumice or silex-Is much less abrasive and· effective for cleaning the teeth; and product therefore is not comparable to powder used by dentists, either as to composition or effectiveness; . (b) Falsely represented that its said powder was an effective antacid and wouldcorrect acid mouth; and (c) Represented that Its product was free from all grit and could not possibly· injure or scratch the tooth enamel;

The facts being that said representations were exaggerated and misleading, tts said product, occasionally at least, containing particles of quartz or grit. which might scratch .the enamel;

With tendency and capacity to mislead and deceive a substantial portion of tbe purchasing public Into the mistaken belief that said powder possessed properties which it did not, and of thereby causing Its purchase becaus~ of such belief; whereby trade was diverted unfairly to it from competitors: Held, That such acts and practices, under the circumstances set forth, were ail to the prejudice of the public· and competitors, and constituted unfair· methods of competition In commerce and unfair and deceptive acts and practices therein.

As respects a contention that the testimony of certain consumer witnesses, namely, 13 club women and housewives living in or near Washington, D. C.,. of whom 7 testified that seller's advertising, and particularly the slogan "Do As Your bentist Does-Use Powder," Implied that the powder used bY" dentists in cleaning their patients' teeth was substantially the same as sel~ ler's tooth powder, and in the case of some that they would understand from the advertising that the powder used by the dentist was in fact said powder. the Others testifying to a contrary Understanding-could not be ll.Cepted as Indicative of the Impression gathered from ad,·ertlsing in question bY the public generally, in view of testimony of four professors of adv~r·tl~ing THE. R. L. WATKINS CO. 537 -536 Complaint and marketing in certain prominent universities in the East and Midwest who expressed the opinion that the consumer witnesses were not truly representative of the general public and did not constitute an accurate cross section of the purchasing publlc throughout the country: Testimony In question, irrespective of whether or not such witnesses represented an accurate cross section of the entire purchasing public, dld indicate that in a substantial portion of such public, seller's advertisements implled that Its product was substantially similar to the powder used by dentists . .A.s respects contention-with regard to advertiser's claim that Its tooth powder was fret') from all grit and could not possibly injure, or scratch the tooth enamel, and the opinion of experts that it would, based on Bureau of Standards' and other tests which disclosed that some of the samples contained quartz particles or grit-that presence of such grit was accidental and that while it might be found in one sample it might be entirely absent from a number of others; that siliceous material commonly found in chalk in its natural form sometimes is not removed in the precipitation of chemical calcium carbonate and that the United States Pharmacopoeia allows a tolerance for the presence of siliceous material therein: Assuming the correctness of said contentions, it seemed clear that the powder in question, occasionally at least, contained particles of quartz or grit which might scrntch the enamel, so that l'f>presentations that it was "fr~ from all grit" and could not "possibly Injure or scratch the tooth enamel" were exaggeration and misleading. Before Mr. Arth!urr F. Thomas, trial examiner. ·Mr. Merle B. Lyon and llfr.Rarulolph lV.Branoh for the Commission. Rogers, Iioge & II ills, of New York City, for respondent. Complaint 1 Pursuant to the provisions of the Federal Trade Commission Act.! and by virtue of the authority vested in it by said act, the Federal --;---::--.-~ Tbe complaint Is published as amended by the following stipulation, approved by the 0 ffimlsslon on September 18, 1030, to wlt : 1.1' It is l;erebv stipulated and agreed, by and between W. T. Kelley, Chief Counsel for the erleral Trade Commission, and Rogers, Ramsay and Iloge, attorneys for the respondent1 t~ the above-entitled case, that, subject to the appro,·al of the Federal Trade Commission, e complaint heretofore Issued in the above-entitled case be amended in the following respects, to wit: .

1. By the addition to par. 5 of the following words: "9. That Dr. Lyon's Tooth Powder contains no acid, grit or pumice, and cannot possibly1 lljure or scratch the tooth enamel, and Is a safe and harmless .dentifrice for home u~e." ~· By the addition to par. 6 of the following words: · Dr. Lyon's Tooth Powder does contain grit and quartz particles, and a paste mar:le1 torn Dr. Lyon's Tooth Powder mixed with water will scratch g!nss, which Is harder than 00th ennmel. The grit contained In Dr. 'Lyon's Tooth l'powder hns the tendency and capacity ·to injure or scratch the tooth enamel, and Dr. Lyon's Tooth Powder Is therefore not a ~are or harmless dentifrice for home use." hit (8 further stipulated and agreed, That the answer of the respondent heretofore filed ~han be deemed to be addressed to part!. 15 and 6 ot the con1plalnt as hereby amended with a 0 same force and effect as if those same paragraph~ were originally constituted as lllended by tbls stipulation.

lt is further stipulated and agreed, That all testlmon,\1 adduced and all evidence admitted ~t hearings heretofore held in the above·entltled proceeding be received and considered 1180far as same ure runterlnl and competent In nny findings of fact herenfter made herein, 111 like manner and to the ~arne elTect as though sold testimony and evidence bnd been received Rt hearings held upon the charges contained In the complaint as amended by this ltlpuJatlon, saving, however, to the respondent Its right to rebut such testimony· or evidence by any proper means at such subsequent hearings as may be held herein. 538 FEDERAL TRADE COMMISSION DECISIONi? Complaint :mF. T.C.

Trade Commission, having reason to believe that The R. L. ·watkins Co., a corporation, hereinafter referred to as respondent, has vio· lated 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 I. Respondent is a corporation organized, existing, and doing business under and by virtue o£ the laws o£ the State of Ohio, with its principal business oflice at 170 Varick Street, New York, N.Y., and with its principal factory at Newark, N. J. Respondent is now, and for many years last past has been engaged in the manufacture, sale, and distribution of various cosmetic and proprietary products, including, among others, a dentifrice known as "Dr. Lyon's Tooth Powder."

PAR. 2. Said respondent, being engaged in business as af~resaid, causes and has caused its said product "Dr. Lyon's Tooth Powder," when sold, to be transported from its factory at Newark, N. J., to purchasers located in States of the United States other than the State of origin of such shipments, and also in the District of Columbitt. There is now, and has been during all the times herein mentioned, 11 course of trade in the aforementioned product sold by the respondc:nt in commerce between and among the various States of the United States and in the District of Columbia.

PAn. 3. In the course and conduct of its business, respondent is now and has been in substantial competition with other corporations, and with persons, firms and partnerships engaged in the sale and distribution of tooth powders, tooth pastes, and other products intended and used £or cleansing teeth, in commerce between and among the various States of the United States and in the District of Columbitt· PAR. 4. In the course and conduct of its said business, and for the purpose of inducing the purchase of its tooth· powder, respondent has caused false advertisements containing representation-s and claims with respect to the! properties of said tooth powder and the resu~ts that may be expected to be obtained upon the use thereof, to be c~Is­ seminated in commerce as defined in the Federal Trade CommisslOll Act, through use o£ advertisements in newspapers, magazines, and other periodicals having a general circulation throughout the vario~s States of the United States; through continuities broadcast £rom radio stations which have power to, and do, convey the programs emanating therefrom to the listeners thereto locate~ in the various States of th; United States; and through other means. Among and typical 0 ' the representations contained in said false advertisements so used and disseminated as aforesaid, are the following: THE R. L. WATKINS CO. 539 536 Complaint DO AS YOUR DENTIST DOES-USE POWDER.

ALL CLEANSING PROPEHTIES. NO .ACID, NO GRIT OR PUMICE. Cannot possibly injure or scratch.

COSTS LESS TO USE.

Nothing else cleans and polishes teeth more quickly and leaves them more naturally white-than POWDER.

That is why your dentist, when cleaning your teeth, as you know-almost 11hvays uses powder.

As lt is only the powder part of most dentifrices that cleans, a dentifrice that is aU powder just natUt"ally cleans effectively. Dr. Lyon's Tootl:i Powder is ALL POWDER-all cleansing properties.

For over sevl'nty years many dentists everywhere have prescribed Dr. Lyon's 'tooth Powder because normal teeth simply cannot remain dull and dingy looking \Vhen it is used. Dr. Lyon's cleans and polishes the teeth !n a harmless and lH'actical way that leaves them sparkling with natural brightness. It leaves Your teeth feeling so much cleaner, your mouth so refreshed and your breath so S\Veet and pure.

Free from all acids, grit or pumic, it cannot possibly injure or scratch th~ tooth enamel as years of constant use have shown. Even as a neutralizer in acid mouth conditions, Dr. Lyon's is an effective untacid. Dr. Lyon's Tooth Powder, is more economical to use. In the same size and llrlce class Dr. Lyon's outlasts tooth pastes two to one. Even a small package MU last you for months.

1'o have gleaming, naturally white teeth, a ·smile that reveals personality and charm, try cleaning your teeth the way your dentist does when you go to himthat is, with powder. Use the way virtually every dentist you have ever gone to uses to make teeth naturally, sparkling clear. Nothing else, we believe, will !;lve you gleaming and lustrous teeth more quicldy and easily than powder- ~our dentist's way of cleaning and beautifying teeth. Dr. Lyon's Tooth Powder Is all powder-100% cleansing properties. This Is I:Uore than twice the cleansing properties of tooth pastes. Dentists everywhere recommend Dr, Lyon's Tooth Powder, because--teeth Simply cannot remain dull and film coated when it Is nscd. Dr. Lyon's cleans Off au stains and polishes the teeth In a harmless and practical way that leaves them sparkling-many shades whiter.

Dr. Lyon's Tooth Powuer keeps your teeth really clean, and clean teeth mean flrtn, healthy gums and the least possible tooth decay. Dr. Lyon's Tooth Powder Is not only doubly efficient, but it costs only half as ll1u(·h to use. Even a small package lasts twice as long as a tube of tooth paste. Nothing else cleans and polishes teeth so remarkably as powder . .And the proof is ln the fact that powder ls the way dentists clean teeth. · To have gleaming white teeth, a smile that charms and attracts, try cleaning lour teeth at home the way your dentist does when you go to him-with powder. You will find that powder whitens your teeth like no other way you have ever tried.

People by the thousands are quitting less effective ways of tooth cleaning for their dentists' way. People by the thousands are discarding ordinary ways of tooth cleaning and adopting a quick new way that makes teeth white and ~llllrkling, removes film almost instantly. • You wlll find a whiteness you have probably despaired of ever finding in your teeth-a brilliance that you have envied in others but never managed to gain l'ourself.

Complaint 35 F. T. C. Get a can of Dr. Lyon's Tooth Powder-brush your teeth with It and loolt in your mirror. Nine out of ten who do this never go back to less effective. Jess scientific ways of tooth cleansing.

It Is commonly agreed that nothing else cleans teeth, lightens them, brightens them llke powder.

Powder Is the way practically every dentist in the world cleans teeth. When you go to your dentist to have your teeth really transformed in appear· .ance almost invariably be uses powder to do it. Millions are !l.nding a quicker, better way to clean and brighten teeth, a way that makes dull, off-color teeth a folly.

You can do wonders with your teeth, if. you'll only try cleaning your teeth tbe way practically every dentist you bnve gone to does-with powder. Try it· Get a can of Dr. Lyon's Tooth Powder.

A way that would actually do something for teeth that, regardless of brush· ing, remain gre;t, dull and lustreless.

Always remember, wheri your dentist cleans your teeth, he uses powder. Yo~r dentist will tell you that nothing else cleans, whitens and brightens so quickly as pow.der.

No other way Is so quick and effective as powder. Nothing else beautifies and polishes teeth so effectively as powder. An Interesting new discovery has recently been made. AU you do ls clean your teeth at home the way the dentist almost Invariably rleans them. A new scientific way to make their teeth gleaming and white. You will find it gives dull teeth a sparkle and brllliance like nothing else does· Your dentist knows that powder cleans more effectively and scientifically than anything else. . · There Is now a way for every woman to win sparkling teeth and a bmlie tbnt will make her charming and sought after. It is the way your .dentist almost invariably clearts your teeth-with powder.

A way millio~s of users say gives teeth really clear, sparkling brightness sucb as can be obtained in no other way.

'I11e prima1:y representation used by the respond~nt in its advertis· ing dissemin:tted as aforesaid, is the picturization of a can of pr. Lyon's Tooth Powder accompanied by the· slogan, "Do ns You; Dentist Doe!'!-Use Powder.'' In the majority of instances, tins slogan and picturization are accompanied by other representations, bnt in some cases they are used alone.

PAR. 5. Through the use of the statements and representations hereinabove set forth, and other similar statements not herein set out, all of which purport to be descriptive of respondent's tooth powder and its effectiveness in cleansing the teeth and mouth, the respondent hl;S falsely represented, directly and by inference and implicatioll, among ·other things (1) that Dr. Lyon's Tooth Powder possesses properties and effectiveness identical with and comparable to the p1·eparations used by dentists, and that said tooth powder is essenti~tlll the same as the preparations used by dentists in cleansing teeth; (2) tl.at tooth powders, including Dr. Lyon's Tooth Powder, are more THE R. L. WATKINS CO. 541 536 Complaint effective for brushing, polishing, and cleansing teeth than tooth Pustes; (3) that Dr. Lyon's Tooth Powder neutralizes acid mouth conditions, is an antacid, and has substantial value for other purposes than cleansing the teeth; ( 4) that the use of Dr. Lyon's Tooth Powder "'ill make all normal sets of teeth white and brilliant; (5) that Dr. Lyon's Tooth Powder is a deodorant; (6) that Dr. Lyon's Tooth· Powder is more economical to purchase and use than competitive tooth Pastes; (7) that the use of tooth powder in cleansing teeth is a new and scientific discovery; (8) and that the use of Dr. Lyon's Tooth Powder gives results equivalent to professional dental prophylaxis; (9). that Dr. Lyon's Tooth Powder contains no acid, grit, or pumice, and cannot possibly injure or scratch the tooth enamel, and is a safe and harmless dentifrice for home use. - Further, through the use of the statements" and representations hereinabove set forth, the r<'spondent has unfairly disparaged vari· <lus competitive preparations used in cleansing the teeth, and has falst>ly represented (1) that competitive dentifrices. including paste, Contain acid, grit, pumice;· (2) thltt acid ingredients in competitive Qentifrices are harmful; (3) that competitive dentifrices, including .Paste, injure, scratch, and destroy tpoth enamel, tooth structure, and lllonth tissues; ( 4) that the use of competitive dentifrices. is unsafe and dangerous.

PAn. 6. The aforesaid representations, used and disseminated by the ~spondent in the manner above described, are grossly exaggerated, misleading, and untrue, and constitute false advertisements. The true facts are that Dr. Lyon's Tooth Powder does not have any of the qualities or achieves any of the results claimed and represented as hl'reinabove described. Dr.· Lyon's Tooth Powder does not possess Properties or 'effectiveness identical with or comparable to the prep· !\rations generally used by dentists in cleansing teeth and is neither essentially nor basically the same as such preparations. Dr. Lyon's 'tooth Powder is a chalk powder. In cleansing teeth dentists gener· ally use a pumice, silica, or some similar substance in a. powdered form, to which is added glycerine, water, or some similar vehicle n.nd the Whole worked into a paste which is then applied through various abrasive ,processes. Such substances are essentially different fron (!halk powders and are more effective in cleansing the teeth than chau~. Powders or pastes, bnt should be used only infrequently since they are abrasive ancl may be harmful to the enamel unless carefully us.ecl hy ~n e:xperieneeJ dentist· or teehnician. Tooth powders, including Dr. Lyon's Tooth Powder, fie no more effective for brushing, polishing or <:leansing the teeth than tooth pastes. In practice dry powder is not ll>-ed in dE'ansing teeth but is made into a paste or semipaste when 509749m--43--vol.3a----3:

Complaint 35F.T.C.

applied to the teeth. Tooth powders having a chalk base are vet:J similar in' properties to tooth pastes. Dr. Lyon's Tooth Powder ~s not antiacid and is not effective so as to ne~tralize acid mouth condttions. It does not have substantial value for oral hygiene purposes other than cleansing the teeth. The normal acid-alkali balance o£ the blood or other bodily fluids cannot be easily changed and neither Dr. Lyon's Tooth Powder nor any. other dentifrice will have any beneficial effect toward changing this balance. Neither Dr. Lyon's Tooth Powder nor any other dentifrice will materially alter the chemical reaction of the saliva in the mouth. The use of Dr. Lyon's Tooth . Powder will not make all normal sets of teeth white and brilliant. Many normal sets of teeth vary in all sh~~es of color and transiuc~ncy' ranging from brilliant to dull and these shades cannot be altered .or changed by the use of any tooth powder or paste. Dr. Lyon's Too~h Powder is not a competent and effective deodorant. It does maintatn sufficient· oil of wintergreen to temporarily mask the breath or other unpleasant odors in some cases, but it is in no sense a competent or effective deodor!lnt. Dr." Lyon's Tooth Powder.is no more economical to purchase and use than tooth paste. The. use oftooth powder, including Dr. Lyon's Tooth Powder, in cleansing teeth is not .a new or scien-. tific discovery. · In fact, tooth powders were generally known an~ used prior to the development of tooth pastes. The use of Dr. Lyon 5 Tooth Powder does not give results equivalent to professional denta~ prophylaxis. The powder cohtained in Dr. Lyon's Tooth Powder is in no sense comparable in properties or effect to the various preparations used by dental hygienists in cleansing teeth. While both r;spondent's tooth powder and the su,bstances used by dentists are tn powder form they are otherwise dissimilar. . Competing dentifrices, including tooth pastes, do not generally co~l­ tain grit or pumice and such acid ingredients as are contained in Stl1d preparations are not harmful. Competitive dentifrices do not injure, scratch, or destroy tooth enamel, tooth structure, or mouth tissues to any greater extent than does respondent's tooth powder. The use of competive dentifrices, including tooth pastes, is neither. unsafe D?1' dangerous. All tooth powders and pastes are essentially similar 111 properties and effe-ct.

Dr. Lyon's Tooth Powder is no more concentrated or economical to use than other competing preparations, and its use does not acconlplish results that cannot be accomplished by other competing preparations. Any cleansing effect accomplished by brushing-the teeth will~ tooth paste or powder is due primarily to the mechanical action of the brush and not the ingredien~s contained in the' tootl~ paste or powder. 'THE R. L. WATKINS CO. 543 536 Complaint Dr. Lyo1i's Tooth Powder does not contain grit and quartz particles, and a paste made from Dr. Lyon's Tooth Powder mixetl with Water will scratch glass, which is harder than tooth enamel. The grit contained in Dr. Lyon's Tooth Powder has the tendency and capacity· to injure or scratch the tooth enamel, and Dr. Lyon's Tooth Powder is therefore not a safe or harmless denti-frice for home use. PAn. 7. The use of the a{oresaid false advertising disseminated in the manner above described, induces or is likely· to induce, directly or indirectly, the purchase o:f a cosmetic, to wit, Dr. Lyon's Tooth Powder. · PAR. 8. In addition to the false and misleading representations and daims made by the respondent regarding the efficacy in use of the said product, Dr. Lyon's Powder, as hereinabove set forth, respondent has disseminated other false advertisements in the same manner and to the same extent as hereinabove set out. One such advertisement read as follows: • Accept the Very Latest in Jewelry Genuine 22-Karat Gold Plated LOVE CHARM BRACELET $1.50 value, Now only 10¢ nnd one box front from Dr. Lyon's TOOTH POWDER.

~ln·~ugh the use o:f the aforesaid advertisement and the representlthons contained therein, respondent represents to members of the Pllrc·hasing public that, said bracelet has a normal and customary retail value of $1.50 and that extra initial charms therefor can, be secured with one box front per initial at no additional charge. I~ hnth and in fact the bracelet so advertised is a chain bracelet to ,,.hic·h are suspended heart-shaped "charms", each bearing an initial' or letter. The total cost to the respondent is not more thall; 10 cents fo1· each bracelet complete with charms. Said bracelet does not have ~normal or customary retail value of $1.50 or any amount approachlng that sum and the respondent recovers the full cost of the bracelet ?nll all charms that may be supplied· in connection therewith wheat lt. obtains the sum of 10 cents from each order. . • PAR. 9. There are among respondent's competitors many who manllfncture, sell, and distribute tooth powders and tooth pastes anll other products designed, intended, and sold for the purpo:<e of cleusing and beautifying the teeth who do n~t in any way misrepre- S('nt the qualities, effectiveness or character of their respective prod- ~lcts; and there are also many manufacturers and distributors of )e'veJry products, premiums, and ad\'ertising novelti('s intended anll sold for use as premiums or for personal adornment who do not in 1\l)J' way misrepresent the value of such merchandise. f~complaint 33 F. T. C. PAR. 10. The use of the afore,aid fal:>e and misleading st~temrnts, representations, and advertisements by the respondent in designating or describing its said product, Dr. Lyon's Tooth Powder and the efl'Pctiwness of said product in the cleansing and care of the teeth, in oflering for sale and in selling its said product, had, and now has, a tendency and capacity to mislead a substantial portion of the purchasing public into the erroneous and mistaken belief that all of said representations are true, and that said product possesses the properties represented and will in truth accomplish the results claimed. Furthermore, the r£'presentation that the value of the so~ called "Love Charm Bracelet'' offered by the respondent as an adver~ tising premium for 10 cents in conjunction with a box front froll Dr. Lyon's Tooth Powder is $1.50, was und is calculated to, and had, and now has, a tendency and capacity to mislead a substantial po_r~ tion of the purchasing public into the erroneous belief that satd rPlH'£'~entation is 'true, and that said premium is worth an amount greatly in excess of the price at which it is offered and sold by respondent.

PAR. 11. As a direct .consequence of the mistaken and Prroneotts beliefs induced by the acts and n•presentations of the respondent, as .hereinabove detailed; a number qf the purchasing public has pur~ chased a substantial volume of respondent's said product, Dr. Lyon's Tooth Powder, with the result that trade has been unfttirly diverted to the respondent from competitors likewise f:mgag~d in the busi~ess of ·distributing and selling tooth powders, tooth pnstPs, and simii~r products or other product!'! designed, intended and sold for use 1n the cleansing anJ care of the teeth, and who tmthfnlly represent 'the effectivenPSS and qualities of their respective products. Ftirthermore, as n direct consequence of the mistaken and erroneous beliefs induced by the acts and representations of the respondent, a number of the consuming 'public has ·purchased a si1bstantial voluJll6 of the so-called "Love Charm Braeelets" offered. as premiums by the respondent, with the result that trade has been unfairly diverted to the rPspontlent from competitors engaged in the manufacture and sale of jewelry, advertising novelties and premiums, and who truth·· fully represent the Vtllue of their said merchandise. As 11. result thereof, injury has been and is now being done bY rPspontlent to competition in commerce among(J' and between the . '"' .Ynri0ns State:'! of the United States and in the District of Columbli1· PAn. 12. The aforesaid acts v.nd practices of the respondent ns herein all(•geJ ure all to. the prejwlice of the public and of re· spondent'::-; ('ompetitors nnd constitute unfair methods of competition THE R. L. WATKINS CO. 545 536 Fiutliugs and unfair and deceptive act!' and praetiees in commerce within the intent and meaning of the Federal Trade Commission Aet. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal T4:ade Commission on September 19, 1938, issued and subsequently served its complaint in this proceeding upon the respondent, The R. L. \Vatkins Co., a corporation, charging it with the use of unfair methods of competition in commerce and unfair ftnd deceptive acts and practices in commerce in violation of the l1provisions of that act (the complaint being subsequently amended by a stipulation executed by the respondent and the attorney for the Commission and approved by the Commission). After the filing of respondent's answer, testimony, and other evidence in support of the allegations of the complaint were introduced by the attorney for the Commission, and in opposition thereto by the attorney for the respondent, before a trial examiner of the Commission theretofore duly designated by it, and such testimony and other evidence were duly recorded and filed in the office of the Commissi-on. Thereafter, the proceeding regularly came on for hearing b~fore the Commission on the complaint us amended, the answer thereto, testimony and other evidence, report of the trial examiner upon the ~vidence, and the exceptions to such report, briefs in support of and ln opposition to the complaint, and oral argument. The Commission, having duly considered the matter, directed on March 19, 1D41, that the case be reopened for the ta.kin_g of certain additional testimony and other evidence, and pursuant thereto additional testimony and other evidence were. offered before the trial examiner in support of and in opposition to the alle~ations of the complaint, and such ~additional testimony and other evidence were duly recorded and filed ln the office of the Commission. Thereafter, the proceeding again catne on for hearing before the Commission upon the entire record, supplemental report of the trial examiner upon the evidence, and ~he exceptions to such report, supplemental briefs in support of and ln opposition to the complaint, and further oral argument; and the Commission, having. duly considered the matter, and being fully· advised in the premises, finds that this proceeding is in the intel:est of the public, and makes this its findings a.s_ to the facts, and its conclusion drawn therefrom.

FINDINGS A8 TO THE FACTS PARAGRAPH 1. The respondent, The R L. Watl<ins Co., is a corporation organized, existing, and doing business under and by virtue Findings 35F.T.0· of the laws of the State of Ohio, with its principal business office at 170 Varick Street, New York, N. Y., and with its principal fac· tory at Newark, N. J. Respondent is now, and for many years last past has been, engaged in the manufacture, ·Sale, and distribution of various cosmetics and proprietary products, including, among other things, a dentifrice known as Dr. Lyon's Tooth Powder. PAR. 2: Respondent causes and has 'caused its product, Dr. Lyon's Tooth Powder, when sold, to be transported from its factory in the State of New Jersey to purchasers thereof located in the several 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 its product in commerce among and between the several States of the United States, and in the District of Columbia.

PAR.· 3..In the sale and distribution of its product respondent is, and has been, in substantial competition with other corporations and with individuals and partnerships engaged in the sale and distribution, in commerce, among and between the several States of the United States, and in the District of Columbia, of tooth powders, tooth pastes, and other products intended and used for cleaning the teeth. · PAR. 4. In the course and conduct of its business, and for the purpose of inducing the purchase of its tooth powder, respondent has · disseminated ·many advertisements throughout the United States. Advertisements have been inserted in numerous newspapers and periodicals published at various points throughout the country, and having wide interstate circulation, some of them having Nation-wide circulation. Respondent has also made extensive use. of the radio as . an advertising medium, causing programs to be broadcast over radio networks which carry such programs to members of the purchasing public located in many States o~ the United States. Frequent use has also been made by respondent of advertising posters and bill· boards, and of advertising cards placed in streetcars and subways operating in various cities throughout the United States. · . PAR. 5. The principal statement or slogan featured by respond· ent in its newspaper and magazine advertisements, and on its ad· vertising posters and cards is, "Do As Youn DENTIST Does--Usl'l Powder" (Commission's exhibits 2, 4-B, 5, 7, 8, ;u, 14, 16, and others), or, "Do AS Youn DENTIST Does WHEN HE CLEANS Yo1Jll TEETH-USE Powder" (Commission's exhibits 9, 10, 12, 13, 15, and others). These statements appear in prominent and conspicuous type, and are usually accompanied by a pict\lrization of a can oi ,, respondent's tooth powder. The name "Dr. Lyon's Tooth Powder THE R. L. WATKINS CO. 547 536 Findings ~appears on the picturization, and is otherwise prominently displayed 1n the advertisements.

This same theme is emphasized also ·in respondent's •radio pro• grams. Typical of the statements used in such programs are the following: · · There is now a way to reveal the natural brightness and clear color of your tet>th, A way so simple and effective that no woman need handicap her allure a day longer with teeth improperly cleansed and thus dull and unattractive. It is tbe way your dentist almost invariably cleans your teeth when you go to him to have them made gleaming and beautiful. That is WITII POWDER. Thousands of people--"everywhere-are adopting POWDER-their dentist's way ot cleaning teeth.

·Get a can of Dr. Lyon's Tooth Powder tomorrow at any drug or department store. Try it. One look in the mirror will show you what it does. (Commission's Exhibit 19-E.) • • • • • • • To have teeth that are sparlding and naturally white, a smile that charms and attracts, do what people on all sides are doing. Try cleaning your teeth in your ' 0Wn l10me the way ,YOUR' dentist almost invariably does when you go to him-'clean them WITH POWDER.

:N'o matter what you have beard about "this" or "that" dentifrice, the fact remains that your dentist knows more about cleaning and beautifying teeth than anyone else. And he almost invariably uses powder. He'll probably tell you, i:t You ask him, that nothing cleans and polishes teeth more effectively th·an Dowder. (Commission's Exhibit 20-C.) • • • • • • • You've heard remarks like these. "Jane would be a peach of a girl if lt Weren't for her teeth!" "Jim has a wonderful personality-but did you notice his teeth?" · · · Make sure that people cannot tallr like that about you. Clean your teeth the 1cay virtually every dentist you Ttave ever gone to docs-WITH POWDER. See What happens. . Get a can of Dr. Lyon's Tooth Powder at any drug store-tomorrow. Brush Your teeth with it and then look in your mirror • • "' the vast majority Who do this never go back to other ways of tooth cleansing. (Commission's li:~hlbit 27-B.) .

PAn. 6. The Commissioil finds that these advertisements imply that respondent's tooth powder is substantially similar in composition and effectiveness to the powder used by dentists in cleaning their patients' teeth. Not only is this the implication of the language used in the advertisements, but the implication is giveii added emphasis by the form and arrangement of 'certain of the advertisements. Illustrative of this 'is the prominence given by respondent in its streetcar cards and newspaper and magazine advertisements to the slogan "Do as · Your dentist does-use powder," and the use in coimection with this .· slogan of a picturization of a can of respondent's powder with the name "Dr. Lvon's Tooth Powder" prominently displayed ·thereon. FEDERAL TRADE COML>flSSION DECISIONS548 Findings 35 F. T.C.I .PAR. 7. This interpretation of the advertisements finds suppo~·t also in the testimony of certain members of the purchasing pubhc introduced" as witnesses at the instance of the Commission. These witnesses, 13 in number, were clubwomen and housewives living in or near 'Vashington, D. C. Some 7 of the witnesses testified that to them respondent's advertising, and particularly the slogan "Do as your dentist does-use powder," implied that the powder used by dentists in cleaning their patients' teeth is substantially the same as Dr. Lyon's Tooth Powder, and some of this group testified further that they would understand from the advertisil!g that the powd.er used by dentists is Dr. Lyon's Tooth Powder. The other 6 witnesses testified 'that they would not understand from the advertising that the powder used by dentists is Dr. Lyonrs Tooth Powder or that it is substantially similar thereto.

It is insisted by respondent. that these consumer witnesses did n~t represent an accurate cross section of the entire purchasing public and that their testimony,· therefore, cannot be accepted as indicative of the impression gathered from respondent's advertising by the public generally. In support of this contention respondent introduced as expe"rt witnesses 4 professors of advertising and marketing in certain prominent universities in the Easten~ and Middle ·western sections of the United States. These expert witnesses testified, in substance, that in their opinion the consumer witnesses were not truly representative of the general public, that the witnesses did not constitute an adequate cross section of the purchasing public throughout the country. The Commission of the opinion, however, that irrespective of whether the witnesses represented an accurate cross section of the entire~ purchasing public, their testimony does indicate that to a substantial portion of the public respondent's advertisements imply that its product is substantially similar to the powder used by dentists.

PAR. 8. The evidence indicates that while the practice is by no means universal, probably the majority of'dentists do use powder·ill cleaning their patients' teeth. The powder used, ho~ever, is almost invariably pumice or silex, both of which are liighly abrasive and could not safely be used by the public as a dentifrice. The regular use of such highly abrasive substances would result in serious daw· age to the teeth. The active ingredient of respondent's powder, on the other hand, is calcium carbonate, commonly known as chalk, which is much less abrasive than pumice or silex and much less effective than these substances for cleaning_·the teeth. · It is only in isolated and exceptional instances that dentists use calcium carbonate, and even in those cases the calcium carbonate is used some· THE R. L. WATKINS CO. .'549 \ Findings What as a supplement to pumice or silex, being used for the finishing or polishing of the teeth after the heavier work .of cleaning has been . completed. Respondent's product, therefore, is not comparable with the powder used by dentists, either as to composition or effectiveness. PAn. 9. Respondent lias also represented that its tooth powder is an effective antacid and will correct "acid mouth," this representation being made through the use in its advertisements of the statement, '"Even as a neutralizer in acid mouth conditions, Dr. Lyon's is an effective .antacid" (Commission's Exhibits 5, 7, 8, 9, 10, 13, 141 15, and 16): Respondent's product is, in fact, wholly without thera- Peutic properties. It is not an effective antacid and is incapable of correcting any acid condition which might be present in the mouth. PAR. 10. Another statement used frequently by respondent in its advertisement is, "Free from all * * * grit * * *, it (the Powder) cannot possibly injure or scratch the tooth enamel * * *" (Commission's Exhibits 7, 8, 9, and 10). Tests made by the National Bureau of Standards and by other experts disclosed that samples of respondent's powder were capable of scratching glass, and it was the opinion of these experts, based on such tests, that the powder would also scratch tooth enamel. Further examination .of samples of. the Powder disclosed that some of them contained quartz particles, which lllay properly be characterized as grit.

It is insisted by respondent that the presence of this grit in the samples tested was accidental, that while gdt may be found in one !'ample of the powder it may be entirely absent from a number of ()ther samples. It is further pointed out by respondent that siliceous lllaterial is commonly found in chalk in its natural form and sometimes is not removed in the precipitation of chemical calcium' carbonate, that the United States Pharmacopoeia allows a tolerance . for ·the presence of siliceous material in calcium carbonate. Assuming the correctness of respondent's contentions, it neverthe- . less seems clear that respondent's p9wder, occasionally at least, contains particles of quartz or grit, and that there is a possibility of such particles scratching the tooth enamel. The Commission therefore finds that respondent's representations that its powder is "free from all grit" and "cannot possibly injure or scratch the tooth '('namely" are exaggerations and misleading. · · PAR. 11. The Commission therefore finds~ that the representations lllade by respondent with respect to its product, as set forth herein, are misleading and deceptive and constitute false advertisements . .PAR. 12. The Commission further finds that the use by respondent of these false advertisements has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into Order 35F. T.C.

the erroneous and mistaken belie£ that respondent's product p·ossesses properties and qualities which it does not in ·fact possess, and the tendency ;md capacity to cause such portion of the public to purchase substantial quantities of respo"ndent's product as a result of the errone-. ous and mistaken belief so· engendered. In consequence thereof e;ubstantial trade has been diverted unfairly to the respondent froll its competitors, among whom are those who do not misrepresent their products.

CONCLUSION The acts and practices of the respondent as herein found are all to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition 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· sion upon the complaint of the Commission, the answer of respondent, testimony and other evidence in support of and in opposition to the allegations of the complaint taken before a trial examiner of the Commission theretofore duly designated by it, original and supple· mental reports of the trial examiner upon the evidence and the excep· tions to such reports, briefs in support of and in opposition to the complaint, and oral argument, and the Commission having made its findings as to the facts and its conclusion that the respondent has violated the provisions of the Federal Trade Commission Act. It i8 -ordered, That the respondent, The R. L. ·watkins Co., a cor· poration, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of respondent's product designated "Dr. Lyon's Tooth Powder," or any other product of substantially similar composition or possessing substantially similar · properties, whether sold under the same name or under any other' name, do forthwith cease and desist from directly or indirectly: 1. Disseminating or causing to be disseminated any advertisement by means of the United States mails, or by any means in commerce, as "commerce" is defined in the Federal Trade Commission Act, which advertisement (a.) contains the statement "Do As Your Dentist Does-Use Powder," or any other statement of similar import; or which ad-ver· tisement otherwise represents, directly or by implication, that re· THE R. L. WATKINS CO. 551 536 Order Bpondent's product is similar to or comparable with the powder used by dentists. . (b) represents, directly or by implication, that respond~nt's Product is an effective antacid or that it will correct "acid mouth." (o) represents, directly or by implication, that respondent's prodllct is free from all grit or that it cannot injure or scratch the tooth enamel.

2. Disseminating or causing to be disseminated any advertisement b! any means for the purpose of inducing or which is likely to induce, d,lrectly or indirectly, the purchase in commerce, as "commerce" is d(·fined in the Federal Trade Commission Act, of respondent's prod- Uct, which advertisement contains any representation prohibited in Paragraph 1 hereof. · . It is further ordered, That the respondent shall, within 60 days ~after service upon it of this order, file with the Commission a report :n writing setting forth in detail the manner and form in which it 18S complied with this order.

552 FEDE.RAL TRADE COMMISSION DECISIONS Complaint 3;5F. T. C. ' IN THE MATI'ER OF MEMORIAL GRANITE. COMPANY, INC.

CmiPLAINT, FINDINGS, AND ORDER IN REG.\RD TO THE ALLEGED VIOLATION · OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Ducl.-ct 4214. Co-mplaint, Aug. i!, 19-W-Decision, Sept. 28, 19.~2 Where a corporation, engaged in the manufacture of tombstones and monuments, and In the competitive Interstate sale and distribution thereof- . (a.) Represented that the prices- at which it offered its said products constl· tuted a saving ·of from 20 to 50 percent from its competitors' prices for similar products, and that quoted prices included the cost of erection, through such typical statements in new.-papers of general circulation and other advertising material as "BIG SALT..-Save 20% to 50%---400 Monu· ments to choose from. • • • , Delivered anywhere In New England"; und "No extra cost for trucking and erecting"; The facts being its prices did not constitute such a saving, and did not include cost of erection, but Included only such monuments and their setting upon a foundation pt·ovided aud paid for by the purchaser; and (b) Misrepresented the ~;ize and appearance of its places of business, in its advertising In various circulars, through displnying, in •,;;orne instances, cold' posite depictions of its factory and two offices which in fact were several miles apart but, as depicted, appeared to be one place of business; and iO otlwr instances, a composite picture consisting of two photographs which , represented its factory ns twice as large as was the fact; With effect of misleading and deceiving a substantial portion of the purchnsinC public into the mistaken belief that surh representations were true, and ot therel!y inducing its purchase of said products; whereby trade was dl· ,·erted unfairly to it from <'!Hnpetitors,. including many wbo do not in any manner misrevresent the print>es nt which their pt·oducts nre sold or mntters pertaining thereto:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the pul!Ilc and competitors, and constituted unfair methods of competition and unfair and deceptive acts and practices in commerce.

Before Mr. Leu·-i.~ 0. Russell and J/r. llliles J. FurrlflR, trial exammers.

Mr. B. G. 'Wilson for the Commission.

Jh·. John D~Smith, of Quincy, Mass., for respondent. Complaint Pursuant to the provisions of the Fe,leral Trade Commission Act, and by virtue of the authority vested in it by said act, the Fede~nl Trade Commission, having n'ason to believe that Memorial Granrte Co., Inc., a corporation, hereinafter referred to as respondent, has MEMORIAL GRANITE CO., JNC. 553 552 ComrJlaint V'iolated the provisions of said act, and it appearing to the Commis- ~ion 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, Memorial Gmnit('. Co., Inc., is a cor· poration, organized, existing, and doing busine.ss under and by virtue of the laws of the State of Massachusetts, with its office and principal Place of business at 159 Hancock Street, Quincy, 11Iuss. The respond· ent is now, and for more than 2 years last past has been, engaged in the manufacture of tombstones and monuments and in the sale and distribution thereof in commerce between and among the various States of the United States, and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained a course ~f trade in said tombstones and monuments in commerce between and among the various States of the United States, and in the District of Columbia.

PAR. 2. In the course and conduct of its said business, the respondent is in substantial competition with other corporations, and with l)artnerships, firms, and individuals engaged in the manufacture, sale, and distribution of tombstones and monuments in said commerce. PAn. 3. To iil(luce the' purchase of its' said tombstones and monu- Illents, the respondent has disseminated, and. is now disseminating, ~alse and misleading statements and representations with1 respect to ~ts said products. Such statements and representations a.re inserted In newspapers having a general circulation and in pamphlets, circulars, and other advertising material distributed among prospective Purchasers. Among and typical of the false and misleading staten1ents and representations, so made and disseminated as !tforesaid, lii·e the following:

Quincy Barre, Vt.

Westerly, R. l, Imported Red Granite.

BIG SALE-SAVE 30% to rio%.

400 monuments to choose from.

Pl"ice includes lettering delivered anywhere ln New Englnnd. PAR. 4. Through the use of the foregoing statements and representations, together with other statements and ·representations similar thereto not set out herein, the :respondent represents in its ndvt:'rti~e­ ~ents that its monuments and tombstones were preduced or quarried In the Barre, Vt.,. district, the 'Westerly, R. I., district, or manufactured from imported Red Granite; that the price at which the respondent offers its tombstones and monuments for sale saves 30 554 FEDERAL TRADE COM:\IISSION DECISIONS ' Complaint 35F. T.O. to 50 percent more to the purchasers thereof than tombstones and monuments made of the same material and sold by its competitors i that respondent's indicated.price includes such items or expenses ~s the cost of lettering, delivery and erection of said products; that sitld tombstones and monuments are polished on all side:;;, including the front, back, top, sides, and base; and that its place of business is of the size pictured in said advertisements. . PAR. 5. The foregoing statements and representations are false, misleading, and deceptive. In truth and in fact, the respondent's said tombstones and monuments are not produced or quarried in the Barre, Vt., district, the Westerly, R. I., district, or, manufactured from imported Red Granite, but manufactured from Rygate, Vt., granite which is a cheaper grade. The price at which the respondent offers its tombstones and monuments for sale, does not save 30 to 50 percent more to the purchasers of said products than tombstones and monuments made of the same material and sold by respondent's competitors. In fact, said products are not offered for sale for less than the customary and usual price at which said products are sold. Respondent's indicated price as set forth in its advertisements does not include such items or expenses as the cost of lett_ering, delivery, and erection of said products. The respondent does not finish or polish its tombstones and monuments on all sides before delivery t.o ' the purchasers, as represented, and at the indicated price, but addt· tiona! charges are required from the purchasers thereof. The pic· torial representation ·of respondent's place of business is a composite of two different views of the plant, formed by combining two or more pitcures in such a manner as to give or convey a false and un· true impression to purchasers with respect to the size of the business conducted by the said respondent. · PAR. 6. There is a marked preference on the part of a substantial portion of the purchasing public for tombstones and monuments pro· duced or quarried in the.Barre, Vt., district, the Westerly, R.I., dis· trict, or manufactured from imported Red Granite, over the toJllb· stones and monuments manufactured from a cheap or poor grade of' granite. · PAR; 7. There are among the competitors of the respondent, as mentioned in paragraph 2 hereof, many who manufacture, sell, and distribute like products who do not in any manner misrepresent the grade or material of which their products are manufactured, the price at which their said products are offered for sale, or tnatters pertaining thereto. .

PAR. 8. The use by the respondent of the false and misleading statements and representations referred to herein has had, and now MEMORIAL GRANITE CO., INC. 555 552 Findings has, the tendency and capacity to, and does, mislead and deceive a . substantial portion of the purchasing public into the erroneous and inistaken belie£ that such statements and representations are true, and, because o£ such erroneous and mistaken belie£, a substantial portion of the purchasing public is induced to, and does, purchase respondent's said products. As a result thereof, substantial injury has been done, and is being done, by respondent to competition in commerce ~etween and among the various States of the United States, and In the District of Columbia.

PAR. 9. The aforesaid acts and ·practices of the respondent, as herein alleged, are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of com- Petition in commerce and unfair and deceptive acts and practices in conunerce within the intent and meaning of the Federal Trade Comlnission Act. · · REPORT, FINDINGS .AS TO THE F .ACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on August 2, 1940, issued and subsequently served its complaint in this proceeding upon the respondent, Memorial Granite Co:, Inc., a corporation, charging it 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 respondent's a11swer thereto, testimony and other evidence in support of, and in 0~Position t?1 .~l~e allegations of said complaint were introduced before trJnl E-xaminers of the Commission theretofore duly designated by it, a11d said testimony and other evidence were duly recorded and filed in the office of the Commission. . · Thereafter, this proceeding regularly came on for fin.al hearing hl'fore the Commission 'upon said complaint, answer thereto, testimony and other evidence, report of the trial examiners upon the evidence, ~n.d brief in support of the compfaint (respondent not having flied 1'1l'f or requested oral argument); and the Commission, having duly considered the matter and being now fully advfsed in the premises; fi~ds that this proceeding is in the interest of the public and makes tlus its findings asto the facts and its conclusion drawn therefrom. FINDINGS AS TO THE FACTS . P.·\R.\GRAPH 1. Respondent, Memorial Granite Co., Inc., is a corpor:thon, organized, existing, and doing business under and by virtue of · the laws of the State of Massachusetts, with its office and principal DECISIO~S 556 FEDERAL TRADE COMMISSION Findings 35 F. T.C. place of business at 159 Hancock Street, Quincy, Mass. Respondent is now, and for several years last past has been, engaged in the manufacture of tombstones and monuments and in the sale and distribution · thereof in commerce between and among the various States of the United States. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said tombstones and monu· ments in commerce between and among the various States of the United States.

PAR. 2. In the course and conduct of its said business, the respondent i::; in substantial competition with other corporations and with part· nerships, firms, and individuals engaged in the manufacture, sale,. and distribution of tombstones and monuments in said commerce. PAR. 3. To induce the purchase of its said tombstones and monu· ments, the respondent has disseminated false and misleading state· ments and representations will~ respect to its said products. Such statements and representations are inserted in newspapers having a general circulation, and in pamphlets, circulars, and other advertising material distributed among prospective purchasers. Among and typical of the false and misleading statements and repre· sentations so made and disseminated as aforesaid, are the following: Quincy llarre, Vt. Westerly, n. I. Imported llt'd Granite· BIG SALE-Save 20% to 50% 400 Monuments to choose from.

Price includes lettering. Delivered anywhere in New England. Our trucks deliver and erect all monuments at no additional cost anywhere tn New England.' No extra cost for trucking and erecting.

PAR. 4. Through the use of the foregoing statements and representations, together with other statements and representations similar thereto not specifically set out herein, respondent represents that the price at which respondent offers its tombstmws and monuments for sale constitutes a saving of from 30 to 50 percent from the price which purchasers would have to pay in purchasing tombstones and monu· ments made of the same material sol<l by its competitors and that respondent's quoted prices include cost of erection of said products. PAR. 5. The foregoing. statements and representations are {alse, misleading, and deceptive. The prices at which respondent offers its tombstones and monuments for sale do not constitute a saving of froni 30 to 50 percent from prices charged by its competitors for toJilbstones and monuments of like quality and design. The prices quoted by the respondent for its various tombstones and monuments • d6 not include the cost of· erection but include. only the. furnishing · MEMORIAL GRANlTE CO., INC. 557 5G2 Oruer ~nd setting of such monuments upon a foundation, which foundation ls to be provided and paid for by the purchaser. PAn. 6. In addition to the above statements and representations n.tade by the respondent, the respondent also places upon its various Circulars which it distributes among purchasers and prospective pur- ~:hasers pictorial representations of its places of business. In some Jnstances the pictorial representations constitute a composite picture of respondent's factory and two offices maintained by the respondent, all of which are seYerul miles distant from each other but in the l)ictorial representation as placed on respondent's circular appear to be one place of business locateu at one address. In other instances the respondent places upon its circulars a composite picture consisting 0~ two photographs of re~pondent's factory, which, when joined in one Picture, represent that respondent's factory is twice as large as is actually the fact.

PAn. 7. There are, among competitors of respondent, many who manufacture, sell, and distribute like products who do not in any manner misrepresent the prices at which their said products are offered for sale, or matters pertaining thereto. PAn. 8. The use by the responuent of the false and misleading statements anu representations hereinabove described, has had, and now has, the tenuency and capacity to, and does, mislead and deceive a su~stantial portion of the purchasing public into the erroneous and rlstaken belief that such statements and representations are true, and, >Pcause of such erroneous and mistaken belief, a substantial portion of the purchasing public is induced to, and does, purchase respondent'ss . l Ql( prouucts, nnu, as a result, trade has been unfairly diverted to the l'eflpondent from its competitors who are likewise engaged in the sale ~nd distribution of similar products in commerce among and between t e \'arious States of the United States.

CONCLUSION The aforesaid acts anu practices of the respondent as her~in :found, IIJ'e a]l to the prejudice and injury of the public and of respondent's eolhpetitors and constitute unfair methods of competition in com- ~er?e and unfair and deceptive acts and practices in commerce within le Intent and meaning of the Federal Trade Commissi,on Act. ORDER TO CEASE AND DESIST .· ~his proceeding having been heard by the •Federal Trade Commisi:Hon upon the complaint of the Commission, answer of the resrondent, testimony and other evidence in support of, and in opposition to, 1;0!J749m-43-Yol. 35--38 CO~IMISSION DECISIONS558 FEDERAL TRADE Order 35F. T.C.

the allegations of the complaint, taken before trial e~aminers of the Commission theretofore duly designated by it, report of the trial examiners upon the evidence and brief filed by counsel for the Com· mission; 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 the respondent, Memorial Granite Co., Inc., a. corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of tombstones and monu· ments in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication, that respondent's prod· ucts are offered for sale at savings of 30 to 50 percent or at any other savings in excess of the actual savings from prices charged by other manufacturers or dealers for proclncts of like quality and design. 2. Representing, clirectly or by i~plication, that the cost of erection is included ih the price of a monument or· tombstone when the pur· chaser-is required to provide for and pay the cost of the foundation for such tombstone or monument.

3. The use of pictorial representations or composite pictures, ill advertising or in any other manner, which inaccurately portray or misrepresent the size or appearance of respondent's place of business. 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.

SHERMAN HAT CO. 559 Complaint IN THE Matrer OF SHERMAN HAT COl\1P ANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Doeket 4628. ·co:mplaint, Nov. 10, 1911-Decision, Sept. 28,1942 "Where a corpol"lltion engaged in the manufactm·e and interstate sale and distribution of women's hats, and in purchasing in the course of its said busilil'ss old, worn, and previously used hats, which it blocked to desired shapes flrl<l fitted with new trimmings so that they bad the appearance of new hats made from felt or other materials which had never been worn or used- Sold sncb hats to retailers, jobbers, and wholesalers with no n;~arkings or labels to indicate that ·they had been made from old, worn, and previously used hat bodies;

"With result of causing a substantial portion of the purchasing public to believe that its products were manufactured entirely from new materials, thereby causing its purchase of such hats; and of placing in the hands of uninformed or unscrupulous dealers meaqs whereby said dealers might deceive . or mislead members of purchasing public into the mistaken belief that they "'ere purchasing new hats:

11('/d, That such nets and practices, under the cit·cumstances set forth, wm·e all to the prejudice and injury of the public, and constituted unfair and de- N•ptive acts and practices in commerce.

Before Mr. Edward E. Reardon, trial examiner. Mr. L. E. Creel, Jr., for the Commission.

Jfr. Martin lV. Bell, of Chicago, Ill., for respondent. 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 Sherman Hat Co., 1\ corporation, hereinafter referred to as respondent, has violated the_provisions of said act, and it appearing to the Commission that ~Proceeding by it in respect thereof would be in the public interest, ereby issues its complaint, stating its charges in that respect as follows: .

P ARAORAPH 1. Respondent, Sherman Hat ,Co., is a corporation, or- &nnized, existing and doing business under and by virtue of the laws ~f the.' Strite of Illinois with its principal office and place of businrss oratPrl at li59 North Wabash Avenue, Chicago, Ill. P.\R, 2. Responrlent is now and for several yl'ars ln~t past has been engal-,'"t'd in the business of manufactming wonwn's hats from fllt an<l other materials, obtained from old, used, and secon<l-hand hats an<l of ~selling the same to retailers, jobbers, and wholesale dealers locatl:'ll Findings 35F. T. C.

in the various States of the United States. Respondent causes said hats, when sold, to be transported from its place of business in the State of Illinois to ·the aforesaid purchasers located in the various Statps of the United States other than the State of Illinois. Respondent maintains and has maintained a course of trade in said hats 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, respondent buys second-hand, old, worn, and previously used felt hats. The old, worn, and previously used felt hat bodies are cleaned, shaped, and fitted with new trimmings and sold by respondent to dealers who in turn sell said hats to the purchasing public.

PAR. 4. The aforesaid old, worn, and previously used hat bodies, after being manufactured into hats, have the appearance of new hats manufactured from felt and other materials which have never been worn or used. 'When articles which are in fact manufactured from second-hand or usell materials but which have the appearance of being manufactured from new materials are offered to the pur· chasing public and such articles· are not clearly and conspicuously labeled as being manufactured from used or second-hand materials, they are easily and readily ta~en by 'the members of the purchasing public as having b~.en manufactured entirely from new materials. PAn. 5. Respondent's failure to mark or label its products in such a manner as will disclose the fact that its products are made froJil used materials causes and has caused a substantial portion of the pur· chasing public to believe that its products are manufactured entirely from new materials, and acting upon this erroneous impression, many members of the purchasing public have purchased substantial quan· tities of respondent's products.

PAR. 6. Through the use of the aforesaid acts and practices, re· ~pondent has placed in the hands of uninformed or unscrupulous dt:alers the means and instrumentalities whereby said deal~rs may deceive or mislead members of the purchasing public into the erroneous and mistaken belief that they are purchasing hats manu· factured entirely :from new and unused materials. PAR. 7. The aforesaid acts and practices of the respondent, a.s 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 o:f the Federal Trade Commission Act. REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to the provi~ions of the Federal Trade Commission Act, the Federal Trade Commission, on November 10, 1941, issued and SHERMAN HAT CO. fi61 559 Findings subsequently served its complaint in this proceeding upon the respondent, Sherman Hat Company, a corporation, charging it with t~e use of unfair and deceptive acts and practices in commerce in VIolation of the provisions of said act. After the issuance of said complamt and the filing of respondent's answer thereto, testimony and other evidence in support of, and in opposition to, the allegations of said complaint were introduced before a trial examiner of the Commission theretofore duly designated by it, and said te<Jtimony and other evidence were duly recorded and filed in the office of the Commission.

Thereafter, this proceeding regularly came on for final hearing before the Commission upon said complaint, answer thereto, testimony and other evidence, report of the trial examiner upon the evidence and exceptions filed thereto, and brief in support of the complaint, (no brief having been filed by the respondent or oral argument requested); and the Commission, having duly considered th? 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 Tile FACTS PARAGRAPH 1. Respondent, Sherman Hat Co. is a corporation, ~rganized, existing, and doing business under and by virtue of the baw_s of the State of Illinois, with its principal office and place of Usiness ]oca:ted at 159 North 'Vahash Avenue, Chicago, Ill. · PAn. 2. Respondent is nQw, and for several years last past has been, {'nguged in the business of manufacturing women's huts from felt and other materials and of selling same to retailers, jobbers, and ~wholesale .dealers located in the various States of the United States. respondent causes said hats, when sold; to be transported from its flace of business in the State of Illinois to the purchasers thereof ocated in various other States of the United States. Respondent Ulaintains, and at all times mentioned herein has maintained, a course ~f trade in said hats in comni.erce among and between the various ' states o£ the United States.

h PAR. ~· In t?e course and conduct o£ its ?usiriess, respondent buys at bodies which have been rriade from secondhand, old, worn, and l>reviously used hats. These bodies are blocked by the respondent to the desired shapes, fitted with new trimmings, ·and sold by respondent to dealers, who in turn sell said hats to the purchasing PUblic. These hats, when so sold by the respondent, bear no mark~ .