Pergande Institute

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IN THE :h!A TTER OF G. F. PERGANDE, DOING DUSINESS AS PERGANDE INSTITUTE COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION: OF SEC. 5 OF AN ACT OF CONGRESS APPltOVED SEPT. 26, 1914 Docket 4583. Complaint, Sept. 18, 19-P-Decision, Feb. 20, 194S ' Where an individual, engaged in sale and distribution of correspondence courses for civil service examinations for positions in the United States Government- I (a) Represented, directly or by Implication, through advertisements in the form of cards, circulars, and pamphlets, that during the period involved therewere a huge number of positions available at all times in various branches· of the Government;

The facts being tlmt, until the war emergency, the supply of eligible persons for- Govemment employment and whoile namt>s appeared on the Civil Serviceregisters greatly exceeded the number of positions open; and such statements (made by sau. Individual) as "100,000 more jobs under Civil Service" were misleading, in that most of the positions were already filled and persons In question wet·e placed unrlN' Civil Service through noncompetitive· examination; and the "Executive order placing 45,000 exempt posit~ons under Civil Service" diu not open that number of positions to those seeking Government employnwnt; and the statements "42,141 appointed in 1936,'~ and "44,484 appointed in 1937" were similarly misleading, In that they did not, as implied, apply to positions listed by said individual, but covered all appointments during years involved;

(b) Hepresenterl that examinations were being held ft•equently and that appointments for such positions were made within a sllort time after examinations' were passed ;

The facts being examinations were not held frequently, but, In case of numerous positions, at iutervals of several years; for certain positions only thosewere t>liglble who lived within the district served by a particular post office, an(], during the years ln\"olved, appointment to Cl\"11 !'<ervlce JlOSitions could not ot•dlnarlly be expeetl'd within f<«:>vet·al months, and In many cases more than a ;;ear after applicant had passed Pxamlnatlon; (c) Re11resented that ellgibllity to take an examination could be determined byapplicant or sahl Individual, and that a high rating In the I'Xnmlnatlon assured an early appointment;

The facts being that eleglblllty could be drterrulned only by the Civil Service Commission and, bl'clluse of veterans' preference, apportionment of appuintments and other reasons, a hi~h rating did not asslll'e early appolntment; and (d) Misleadingly represented or implied, through use of word "Institute" in his trarle name and al1vertlsing, that he conducted an Institution of blgberlearning devoted to research or Instruction In philosophy, arts, sciences, or other learned subjt->cts, that his school had a starr of educators and the facilltles and. tesourl'es required to carry on such work; when In fact tt. possessed none ot such qualifications;

Complaint 36F. T. C.

With tendency and capacity to mislead and deceive a substantial portion of the public in aforesaid respects, thereby causing its purchase of said courses of instruction, because of such mistaken belief: Ileld, 'that such acts and practices, under the cit·cumstances set forth, were all to the prejudice of the public, and constituted unfair and deceptive acts and practices In commerce.

Before Mr. John B. Bramhall, trial examiner. Mr. "William L. Perwke for the Commission.

Kirkland, Fleming, Green, Martin & Ellis, of 'Yashington, D. C., for respondent.

Complaint I 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 G. F. Pergande, individually, and doing business under the name and style. of Pergande Institute, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, G. F. Pergande, is an individual, trading and doing business under the name and style of Pergande Institute, with his office and principal place of business at 314: Randolph Place NE., 'Yashington, D. C.

PAR. 2. Respondent is now, and has been for more than 2 years last past, engaged in the sale and distribution in commerce between and among the various States of the United States of courses of study and instruction intended for preparing students thereof for exa.minations for certain civil service positions under the United States Government, which said cour~es are pursued by correspondence through the medium of the United States mail. Respondent, in tlui course and conduct of said business during the time aforesaid, caused and does now cause his said courses of study and instruction to be transported from his said place of business in the District of Columbia to, into, and through the various States of the Uniteu States to purchaser~ thereof in such States.

PAR. 3. In the sale of said courses of study and instruction, respondent makes use of printed advertising matter mailed to prospective students throughout the United States a.nd the District of Columbia, through which Yarious representations are made in regard to said courses of instruction and matters and things connected therewith. Among such representations ar·e those whiclt represent or imply that PE'RGAN1DE INSTITUTE 217 215 Complaint there are large numbers of positions available at all times in various branches of the United States Government, that examinations are being held frequently and that appointments to such positions take place within a short time after examinations have been taken and passed; that eligibility for the taking of an examination may be determined by the applicant or by the respondent; and that the 1·respondent has taken and passed three civil service examinations and in each case was offered an appointment almost immediately. Typical of such representations are the following:

100,000 more jobs under Civil Service President lloosevelt issued an Executive Order placing 45,000 "exempt" l!positions under Civil Se1·vice, effective February, 1!)39. Partial List U. S. Civil Service Positions. 42,141 appointed in 1936 44,484 appointed in 1937 Railway l\Iail Clerk, City Mail Carrier, Post Office Clerk, llural (motor) carrier, Postmaster 3rd or 4th class, Statistical Clerk, Clerical-Filing, Sub Clerical- Jr. Messenger, Telephone Operator, Elevator Conductor, Watchman-Guard, Customs Patrol Inspector, Immigration Patrol Inspector, Assistant Lay Inspector ( l\Ieat Inspector), Bookl;:eeper, Auditor-Income Tax, Internal Revenue Agent, Forest and Field Clerk, Typist, Stenographer, Storekeeper-Gauger, Junior Civil Service Examiner.

Send me a service manual describing training for the government jobs for which I am eligible.

Couhl you feel assured of a higher rating and early appointment? l\lr. G. F. Pergande bas taken ttu·ee Civil Service examinations and in each caHe was offered an appointment almost immediately. In truth and in fact, the representation that 100,000 more jobs under Civil Service are available is false in that there were at no time available jobs to the extent of 100,000. The representation that 45,000 "exempt" positions were placed UJHler Civil Service is misleading in that the placing of said positions under Civil Service did not make available 45,000 additional positions to be filled from the civil service register. 1\Ioreover, a substantial number of new positions are generally filled by promotions and transfers of employees already under Civil Service.

The representation that 42,141 individuals were appointed in 1936 and 44,484: were appointed in 1937, followed by a description of a number of civil service positions and headed by the statem!'nt "Partial List U.S. Civil Service Positions" is misleading in that it implies that the stated number of appointments had been made with respect to the particular positions listed by the respondent when in fact said figures constitute the total number of appointments in all civil service 528713-43-Yol. 36-17 Complaint 36F.T.O.

positions which includes a large number of positions in the civil service not listed by the respondent.

The representation that the respondent has taken three civil service examinations and in each instance was offered an appointment almost immediately is false and misleading~ by implying that said examinations were taken recently, and that offers o£ appointments were made almost immediately in all three instances.' In truth and in fact, two of said examinations were taken by respondent approximately 15 years ago, and the third examination was taken in the year 1934t and respondent did not become eligible for appointment at that time for the reason that he withdrew his application prior to the completion of the investigations conducted with respect to each applicant. In many instances examinations for various positions ar:e not held as frequently as is generally implied by the respondent and the time which elapses between the filing o£ an application for the taking of a civil service examination and the actual appointment to a position is generally far greater than is represented and implied throughout the respondent's catalog, and this is true particularly with respect to applications numbering many thousands. Among the positions described in respondent's catn.log are those of Assistant Lay Inspector, Customs and Immigration Patrol Inspector, Inspector o£ Customs, and Storekeeper-Gauger. In truth and in £act, an examination was held £or Assistant Lay Inspector in September o£ 1030, and no other examination was announced until 1\Iay 1930; an examination for Customs Patrol Inspector, Immigration Patrol Inspector, and Inspector of Customs was announced for September 1038. The last examination for Storekeeper~Gauger was held in May 1934, and no other examination has been held since that time.

In representing that his service manual describes training for the Government jobs for which pro!"pective students o£ respondent's courses may be eligible, th~ respondent implies that either he or such prospective student is qualified to determine wheth<>r such student is eligible for a particular position, when in truth and in fact the Civil Service Commission is the only body competent to determine the eligibility of persons for civil service positions. The implication that a higher rating in the examination '"ill carry with it an early appointment is exaggerated and misleading for the reason that there are other factors besides a high rating which determine the appointment of individuals whose names have been plnced on the register, such as established claims to preference, promotions, State apportionment, and priority status for entry on the ree~ploy­ ment list. 1\foreover, an appointment officer may select anyone of the highest three eligibles certified to fill a vacancy. il· i PE'ROANIDE INSTITUTE 2H1 Findings P.AR. 4. The respondent, by the use of the word "Institute" in his trade name, advertising literature, letterheads, and otherwise, represents or implies to prospective students that he conducts an institution of learning with a staff of competent, experienced, and qualified educators, and that his school is an extensive organization offering training and instruction in philosophy, arts, sciences, and other learned subjects. The use of said word as aforesaid is false and misleading. In truth and in fact, respondent offers one general course of instruction which is substantially the same, being modified and adapted to the respective positions and examinations for which his students wish to prcpa~:e. Re.spondent, in the conduct of his business, does not offer training or instruction in philosophy, arts, sciences, or otherlearned subjects. There is no faculty engaged in teaching resident. students, the method of instruction consisting in the mailing of previously prepared sheets and the grading of papers by employees of the respondent.

PAR. 5. The representations of respondent as aforesaid have had, and do have, the tendency and capacity to confuse, mislead, and deceive members of the public into the belief that a large number of civil service positions are available, that examinations are held frequently in the subjects described in respondent's catalog, that applicants may determined their eligibility fqr admission to examinations, that the respondent has been offered three positions im)llediately after taking·tbe respective examinations therefor, and that his business is an institute designed for the promotion of learning in philosophy, arts, and sciences. As a result of such misrepresentations, members of the public purchase respondent's courses of study and instruction and pursue the same.

PAR. 6. The aforesaid acts and practices of the respondent, as herein alleged, are all to the prejudice and injury of the public, and constitute unfair and deceptive acts and practices in commerce within the intent an~ meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTs: AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on September 8, 1941, issued and subsequently served its complaint in this proceeding upon the respondent, G. F. Pergande, individually, and doing business under the name and style of Pergande Institute, charging him with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of that act. After the filing of respondent's answer, testimony, and other evidence in support of the allegations of the com- Findings 36F. T. C.

plaint, 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 Commission. Thereafter, the proceeding regularly ('ame on for final hearing ~efore the Commission on the complaint, the answer thereto, testimony and other evidence, report of the trial examiner upon the· evidence, and brief in support of the complaint (no brief having been filed by respondent and oral argument not having been requested); 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 ancl makes· this its findings as to the facts and its conclusion drawn there~rgm. FINDINGS AS TO THE FACTS PAMGRAPH 1. The respondent, G. F. Pergande, is an individual,. trading and doing business under the name of Pergande Institute,. with his office and principal place of business located at 314 Randolph Place NE., Washington, D. C. Respondent is now and for a number of years last past has been engaged in the sale and distribution o£ courses of study intended for use in preparing students for examinations for certain civil service positions in the United "States Government, such courses being pursued by correspondence through the medium of the United States mail.

PAn. 2. In the course and conduct of his business respondent cause~ and has caused his courses of study, when sold, to be transported from his place of business in the District of Columbia to purchasers thereof located in the various States of the United States. -Respond.ent maintains and has maintained a course of trade in his courses of study in commerce between the District of Columbia and the various States <>f the United States.

PAR. 3. In the course and conduct of his business and for the purpose of inducing the purchase of his courses of study, respondent <listributes among prospective students printed advertising matter in the .form of cards, circulars, and pamphlets, which advertising matter contains numerous representations with respect to respondent's courses of study and with' respect to the number of positicms in the United States Government which are available to persons enrolling for such courses of study and taking the civil service examinations. Among and typical of representations which appeared in respondent's advertising material distributed during the years 1938, 1939, and 1940 .are the following:

II 'I, PERGANIDE INSTITUTE 221 215 Findings President Roosevelt issued an Executive Order placing about 45,000 "exempt" positions under civil service, e'ffectlve February, 1939. (Com. Ex. No.3, p. 3) .. .. • Could y<Ju feel assured of a high rating and an early appointment? • • • (Com. Ex. No. 3, p. 5) 100,000 More .Toss UNDEB CIVIL SERVICE • • • • • • • PARTIAL List U. S. CIVIL SERVICE POSITIONS 42,141 APPOINTED IN 1936 44,484 A.Pl'OINTED IN 1937 Railway Mail Clerk------------------------------------ • • • City Man Carrier--------------------------------------- • • • Post Ofilce Clerk---------------------------------------- • • • Rural (motor) Carrier---------------------------------- • • • PoBtiDaster--3rd or 4th Class---------------------------- • • • Statistical Clerk-------------------,--------------------- • • • Clerlcal-Flllng ------------------------------------------ • • • Sub-Clerical :

Jr~ :Messenger--------------------·------------------ •. • • Telephone Operator--------------------------------- • • • Enevator Condr------------------------------------- • • • Watchman·Guard ---------------------------------- • • • Customs Patrol Inspector------------------------------- • • • Immigration Patrol Insv-------------------------------- • • • Assistant Lay Inspector--------------------------------- • • • (Meat Inspector) lJookkeeper----------------------------------------~---- • • • Auditor Income Tax------------------------------------ • • • Int. Rev. Agent Forest & Field Clerk---------------------------------- • • • Typist------------------------------------------------- • • • Stenographer------------------------------------------ • • • Storekeeper·Gauger ------------------------------------- • • • Jr. Civil Serv. Examiner-------------------------------- • • • • • • send me a Service Manual describing training for the government jobs for which I nm eligible. • • • (Com. Ex. No. 4) PAR. 4. Through the use of these representations and others of a similar nature, respondent represented, directly or by implication, that during the period in question there were large numbers of posi- Findings 36F. T. C.

tions available at all times in various branches of the United States Government; that examinations were being held frequently, and that appointments to such positions took place within a short time after examinations were taken and passed; that eligibility for the taking of an examination could be determined by the applicant or by respondent; and that a high rating in the examination assured a.n early appointment.

PAR. 5. The Commission finds from the evidence that these representations were grossly exaggerated, misleading, and deceptive. During the period in question there were not large numbers of positions available in the United States Civil Service. In fact, until the period of national emergency brought on by the war, the supply of eligible persons available for Government employment, and whose names appeared on the registers of the United States Civil Service Commission, greatly exceeded the number of positions open. Examinations were not held at frequent intervals. On the contrary, in the case of numerous positions, several years frequently elapsed before new examinations were held. For example, in the case of substitute railway postal clerks, no open competitive examinations were held during the period between 1937 and 1941. Quarterly reopened ex- .aminations for "10-point preference people" (such as disabled vet- -erans) were held, but these examinations were not open to applicants generally. Again, in the case of the position of guard, no general t>xaminations wero held between 1937 and 1940. In the case of storekeeper-~auger, the last open competitive exnminn.tion was held in 1934. In the case of assistant lay inspector (meat inspector), only 25 persons were appointed to positions during 1939 and 1940, although there were 8,000 persons on the civil service register for that position. During the period beginning in 1931 and ending in 19-U, there were no open competitive examinations for the position of junior file clerk. Moreover, in the case of certain positions, such as post office clrrk substitute and clerk carrier substitute, only those persons are eligible for the examination who live within the dbtrict served by tho particular post office where the position is open. This fact tends to reduce greatly the opportunity of applicants gt>nernlly to obtain positions .

. During the years in question, an appointment to a civil service position could not ordinurly be expoctrd within a short time after the applicant had passed the examination. Usually several months, and in many cases a year or more, elapsed before an appointment could reasonably be expected. The eligibility for the taking of an examination cannot be dt>terminetl by the applicant or by rrspondent, but can be determined only by the United States Civil Service Commission. PE'RGAN'DE INSTITUTE 223 215 Findings Nor did a high rating in the examination assure an early appointment. In addition to such factors as the preference accorded veterans and the apportionment of appointments among the several .States, vacancies were and are often filled by promotions and transfers from within the service. Moreover, an appointing officer may select any one of the 'lighest three eligible persons certified by the Civil Service Commission for a vacancy.

The statement made by respondent in his advertising that there were "100,000 More Jobs Under Civil Service" was misleading in that it implied that there were available to applicants Gbvernment positions to the extent of 100,000. Most of the positions in question were already filled, and the persons in such positions were placed under the civil service through noncompetitive examinations. Similarly, the Executive order referred to in respondent's advertising as placing 45,000 "exempt" positions under civil service did not in fact result in opening that number of positions to persons seeking to enter the employ of the Government. Respondent's statement that 42,141 pe,rsons were appointed to civil service positions in 1936 and 44,484: in 1937 were likewise misleading in that the figures in question appeared in connection with a list of certain positions set forth in .respondent's advertising, and the statement implied that the appointments were to the listed positions. Actually, the figures covered all of the appointments to all of the positions in the civil service during the years in question, and many of the appointments were to positions not listed in respondent's advertising and in connection with which respondent has never offered any course of instruction. PAn. 6. Through the use of the word "Institute" in his trade name nnd in his advertising literature, respondent represents or implies to prospective students and the public generally that he conducts an institution of higher learning devoted to academic or scientific research or to the giving of instruction in philosophy, arts, sciences, or other learned subjects; that his school has a staff of competent and experienced educators qualified to conduct such research or give such instruction; and that his school possesses the facilities and resources required to carry on such work. Respondent's school does 110t in fact possess nny of these qualifications, and the use of the word "Institute" to designate and describe his school is therefore erroneous nnd misleading.

PAn. 7. The Commission finus further that the use by respondent of the misleauing and deceptive representations herein set forth had nnd has tho tendency and capacity to mislead and deceive a sub- 8tn.ntial portion of tho public with respect to the nature and status '()f respondent's business, and with respect to respondent's courses Order 36F. T. C.

of instruction and the opportunities for appointment to United States Government positions, and the tendency and capacity to cause such members of the public to purchase respondent's courses of instruction as a result of the erroneous and mistaken belief engendered by such representations.

CONCLUSION The acts and practices of the respondent as herein found are all to the prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, 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 duJy designated by it, report of the trial examiner upon the evidence, and brief in support of the complaint (no brief having been filed by respondent and oral argument not having been requested); 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 is ordered, That the respondent, G. F. Pergande, individually, and trading as Pergande Institute, or trading under any other name, and his agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act, of respondent's courses of study, do forthwith cease and desist from:

1. Using the word "Institute," or any abbreviation or simulntion thereof, as a part of respondent's trade name or as a part of the name of respondent's school; or otherwifJO representing, directly or by implication, that respondent's school is an institute. 2. Representing, directly or by implication, that the number of positions available in the United States ·civil Service, or in any branch thereof, is greater than is actually the fact. 3. Representing, directly or by implication, that examinations for positions in the United States Civil Service are held at more frequent intervals than is actually the fact, or that appointments to positions are made within a shorter period of time after the examination than is actually the fact.

PE'HGANU'E INSTITUTE 225 215 Order 4. Repre<;enting, directly or b,t implication, that eligibility :for the taking of a civil service examination may be determined by the applicant or by respondent, or by anyone other than the United States Civil Service Commission.

5. ·Representing, directly or by implication, that a high rating in a civil service examina :ion assures the applicant an early appointment to a position.

It is {u1·ther ordered, That the respondent shall, within 60 days after service upon him of this order, file with the Commissi-on a report in writing, setting :forth in detail the manner and form in which he ·has complied with this order.

22G FEDERAL TRADE COMMISSION DECISIONS Complaint 36F.T.C.