Smith, Alfred Johnson

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF ALFHED JOHNSON SMITH, PAUL SMITH, AND ARTHUR SMITH, DOING BUSINESS AS JOHNSON SMITH & COMPANY COMPLAINT, FINDINGS, AND Ommn IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket -9778. Complaint, June 29, 1942-Dccision, Mar. 8, 1948 Where three indh·itluals, engaged in interstate sale and tl.istributlon of various articles, including watches- Represented certain watches in their catalogues as "Railroad ·watches" and ''Itallroatl. Type Watches," with, in some cases, the outline of a locomotive stallliJed on the back of the watch;

Notwithstanding the fact that said articles were in no sense railroad watches, which-known nnd deslgnatetl. as such by watch makers and the public generally-possess certain distinctive features ln. design and workmanship and meet high stantlards and stringent tests as to accuracy and dependability; possessed none of such dil;tinctive mechanical features, but were of inferior con~-<truction; and were not comparable with railroad watches as to accuracy and depentlublllty;

With terul<'ncy uzHl cnpncity to mislead anti. deceive a substantial portion of t11e pmchasing IJUhllc with rrspect to the character and quality of said watches, tlwn•by causing its pm·chase thereof because of such mistaken belle!: lleld, That sueb nets nnrl practices, untler the clrcum~tances spt fot·th, were all to the prejuulce of the public, and constltuteu unfair and tleccptlve acts and practices In commerce.

Before Mr. Jolm P. Bramhall, trial examiner. Mr. L. E. 0.1•eel, Jr., for the Commission. Complaint Pursuant to the provisions of the Federal Trade Commission Act anJ by virtue of the authority vested in it by said net, the Federal Trade Commission having reason to believe that Alfred Johnson Smith, Paul Smith and Arthur Smith, copartners, doing business as Johnson Smith & Co., her·einnfter referred to as respondents, have violated the provisions of said act, and it appearing to the Commis...,ion that a proce<>ding by it in respect .thereof would be in the public interest, hereby issues its complaint stating its charges in that l'('spect as follows.

l,ARAORAPII 1. Respondents, Alfred Johnson Smith, Paul Smith and Arthur Smith, are copartners, doing business as Johnson Smith & Co., with their office and principal place of business located at 661t) East J('fferson Avenue, Detroit, Mich. . 246 FEDERAL TRADE COMMISSION DECISIONS Complaint 36F. T.Or PAR. 2. The respondents are now and for more than 1 year last past have been engaged in the sale and distribution of watches and other articles of merchandise. Respondents cause their said merchandiset when sold by them, to be transported from their aforesaid place of business in the State of Michigan to purchasers thereof located at points in various other States of the United States and in the District of Columbia.

Respondents maintain, and at all times mentioned herein havemaintained, a course of trade in said merchandise in commerce between and among the various States of the United States and the- District of Columbia. ' · PAR. 3. In the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their merchandise, the respondents have made many false, misleading, and deceptive statements and representations relative to their said watches in circulars, pamphle.ts, letters, and other written or printed matter and in advertisements inserted in newspapers, magazines, and tra<le journals, all of which are circulated and distributed among prospective purchasers . .Among and typical of such false and misleading and deceptive statements and representations are the following: On Time, All the Time with the Railroad Watch. An Excellent Pocket Watch tor $1.75.

An American umde pocket watch with two-to·ne dial and locomotive design bark-tully guaranteed tor only $1.75.

The Railroad Watch Is regular 16 size, guaranteed to keep arcurate time. • • • RAILROAD TYPE WATCH An accurate, depentlable watch selllng tor n remarkably low price and modeled nttt>r the famou'i RAILROAD WATCHES.

RAILROAD TYPE WATCH $1.05 PAn. 4. Through the use of the foregoing statements and representntiolls, nnd others of similar import and meaning, not specifically fet out herein, r<'spondents represent, nnd have represented, directly or by implication, that said watches are genuine "Hailroad" watches. "Railroad" watches are known and understood by the purchasing public to be watches possessing the accuracy and dependability required for use by railroad employees, and are considered to be nspecially valuable and desirable. Respondents enhance the implication that said wntchf's are genuine "Railroad" watches by pictorial r<'presentations showing said watches with large hands, large distinct hour numerals, and in the Railroad Type 'Vatch small minute numerals, which features are generally found in genuine "Railroad" watehcs. JOHNSON SMITH & CO, 247 245 Findings In addition, such pictorial representations show the outlines of a locomotive stamped on the back of the watch. PAR. 5. The foregoing statements and representations are grossly exaggerated, false, and misleading. In truth and in fact, respondents' watches are not genuine "railroad" watches, and possess none of the essential features and construction required of watches to be used by railroad emplcyees. They are of the cheapest construction, and only simulate in appearance genuine "railroad" watches. PAR. 6. The use by the respondents of the foregoing false, deceptive, and misleading statements and representations with respect to their said watches, disseminated as aforesaid, has the capacity and tendency to, and does, mislead and deceiye a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements and representations are true, and causes, and has caused, a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase substantial quantities of respondents' watches.

PAR. 7. The aforesaid acts and practices of the respondents, 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 meaning and intent of the Federal Trade Commission Act. RErorn, FINDINGs As"To THE FACTs, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on June 29, 1942, issued and subsequently served its complaint in this proceeding upon the respondents, Alfred Johnson Smith, Paul Smith, and Arthur Smith, copartners, doing business as Johnson Smith & Co., charging them with the use of unfair and deceptive acts and practices in commerce, in violation of the provisions of that act. After the filing of respondents' answer, testimony, and other evillence in support of the allegations of the complaint were introduced by the attorney for the Commission, and in opposition thereto by rel'pondents, before a trial examiner of the Commission theretofore duly designatl'd by it, and such testimony and other evidence were duly recorded and filed in the office of th3 Commission. Thereafter, the proceeding regularly came on for final hearing before 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 respondents and oral argument not having been requested); und the Commission, having duly considered the matter, and being now fully advised in the premises, finds that this proceeding is in the ' ! Findings 3GF. T. C.

interest of the public, and rna kes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondents, Alfred Johnson Smith, Paul Smith, and Arthur Smith, are copartners, doing business, under the name Johnson Smith &. Co., with their office and. principal place of business located at 6u15 East Jefferson A venue, Detroit, Mich. Respondents are now and for a number of years ]ast past have been engaged in the sale and distribution of various articles of merchandise, including watches.

PAR. 2. Respondents cause anrl have caused. their merchandise, when sold, to be transported from their place of business in the State of Michigan to purchasers thereof located in various other States of th~ United States and in the District of Columbia. Respondents maintain and have maintained a course of trade in their merchandise in commerce among and between the various States of the United States and in the District of Columbia.

Pan. 3. In the course and conduct. of their business and for the purpose of inducing the purchase of their merehanlli;-;e, re:-.pondents distribute among prospecti \'e purchasers located at various points throughout the United States catalogs deseribing and depicting the various articles sol<l by them. Among the articles described in these catalogs arc certain watches, described by respondents as "Hailroad 'Vatches'' and "Railroa<l Type 'Vatches." Some of the pictorial representations accompanying these descriptions ~how the outlines of a locomotive stamped. on the Back of the watch. The evidence shows that there are certain types of watches known and designated by watch makers and by the public generally as railroad watches, such watch·hcs possessing crrtuin tlistinctive :features in design and workmanship, and. m(•eting c£>rtain high standards and stringent tests as to accuracy and dPpendnLility. Only wntchcs nweting such n•quirrments may he used by railroad employees engaged in the op('ration of trains.

Respondents' watches are in no sense railroad watches. They are of inferior construction and possess none of the uistinctive mechanical features required in genuine railroad watches. They are not comparable with railroad watches as to accuracy or dependability. The Commission therefore finds that the terms "Railroad 1Vntch" and ' 1Railroa<l Type Watch," as used by respon<lents to designate and deo;;cribe thpir wntchPs, are erronC'olls nn<l mislead<ling. PAR. 4. The> Commission finds further that the use by rC'.spondents of these erroneous and misleading representations has the tendency JOHNSON SIMITH & CO. 249 245 Order . and capacity to mislead and deceive a substantial portion of the purchasing public with respect to the character and quality of respond- ~nts' watches, and the tendency and capacity to cause such portion of the public to purchase substantial quantities of respondents' watches as a result of the erroneous and mistaken belief so engendered. CONCLUSION The acts and practices of the respondents 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 respondents, testimony and other evidence in support of and in opposition to the allegations of the complaint taken before a trial examiner of the Commission therefore duly designated by it, report of the trial examiner upon the evidence, and brief in support of the complaint (no brief having been filed by respondents and oral argun'lent not having been requested); and the Commission having made its findings as to the facts and its conclusion that the respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondents, Alfred Johnson Smith, Paul Smith, and Arthur Smith, individually, and trading as Johnson Smith & Co., or trading under any other name, and their ag<'nts, representatives, anJ. employees, directly or through any corporate or other device, in coml<'ction with the offering fot· sale, sale, and distribution of respondents' watches in commerce, as "commerce" is defined in the Federal Trade Commission Act, J.o forthwith cease and desist from:

1. Using the worJ "Railroau'' or the words "Railroad Type," or any other w·ord or words of similar import, to designate or describe any watch which is not in fact a railroad watch possessing the accuracy and dependability required of watches used by railroad employees engaged in the operation of trains. 2. Representing in any manner that respondents' watches are railroad watches when Euch is not the fact.

It is further ordered, That the respondents shall, within GO days after service upon them of this order, file with the Commission a. l't'port in writing, setting forth in detail the manner and form in Which they ha\'e complied with this order.

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