Progress Tailoring Co

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IN THE MATTER OF I I PROGRESS TAILORING COMPANY, ALSO TRADING AS J. C. FIELD & SON; STONE FIELD CORPORATION, ·w. Z. GIBSON, INC., PIONEER TAILORING COMPANY, AND ,. I CERTIFIED TAILORING COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. t1 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 81,f1. ' Oomplaint, Mar. 28, 1939-Decision, J·uly 20, 1948 Where a parent corporation and Its. four wholly owned subsidiaries with common officers and directors, engaged In competitive Interstate sale and distribution of men's suits and coats which-manufactured by a fifth subsidiary from cloth furnished to It by the parent concern under an arrangement by which it charged the parent for cutting, trimming, and tailoring, and latter charged Its four other subsidiaries for garments sold by them-wet·e sold directly to the consuming public through canvassers equipped with order blanks, samples of materials, and advertising matter- ( a) Represented In advertisements in newspapers and periodicals soliciting the services of salesmen that a "free" suit or suits would be given to them, through such statem~nts as ''Local agents wanted • • •." "If I send you this fine suit, w.ill you wear it and show it to your friends," "I need a reliable man in your town," "I supply everything free of cost," and "Your own suits free of extra charge"; and thereby Indicated that persons answering would receive a free suit which might be used by them In soliciting orders from customet·s for similar suits;

'lhe facts being that when inquiry was received in response to such advertisement, circular was forwarded to the inquirer prominently displaying and stressing the word "free," but informing him for the first time that lt would be necessary to obtain orders for a specified number of suits before receiving his own so-called "free" suit, and It was not until after sale of said number of suits that so-called "free" suit was delivered to him; . (b) Falsely represented In advertisln~ literature that "Supersheen Linings" and ''Deluxe Trimmings", cost of which was Included In the sales price paid by the purchaser for the garment bought, were "Furnished Free"; (c) Falsely represented the size, extent and nature of their business through depletion of a large, four-story commercial or industrial building In their various advertising folders, and thereby caused members of the purchasing public to believe that they owned, operated, and exclusively occupied such building, of which In fact they occupied two floors only; (d) Falsely represented through statements In advertising mate:rial that all middlemen's expenses were eliminated, and that purchases were made from them at manu,facturer's prices; when in fact a substantial part of the price Paid by purchasers consisted of retalllng costs and agents' commissions, and also charges of the manufacturing subsidiary and charge made by the parent concern against its various subsidiaries, as noted above; (e) Falsely represented that they were exclusively wholesale tailors, and that their garments were supplied to purchasers at whol!'sale prices; when in fact a substantial part, as afot·esaid, of the purchase price was made up Complaint 37F.T.C.

of retailing costs and commissions, and in fact they were engaged in selllng at retail and at retail prices; and (f) In order to emphasize certain statements· contained In ·their cit·cular·s, used a false and fictitious affidavit purportedly executed by one H. J. Graves as president of one of said corporations, notwithstanding no such person had ever been president of any of their concerns, and no such affidavit "'as ever made;

With tendency and capacity to mislead and deceive prospective purchasers into the erroneous belief that such statements were true, thereby inducing pur· chase of said products, in rellance upon such belief, whereby trade was diverted unfairly to them from competitors who did not use aforesaid methods:.

Held, That such acts and practices, under the circumstances set forth, were all to the prf'judice and injury of the public and competitors, and constituted unfair methods of competition in commerce and unfair and <leceptlve acts and practices therein.

Before Mr. ROJndolph Preston and Jfr. James A. Purcell, trial es:amjners.

11/r. R. P. Bellinger for the Commission.

Mayer, Meyer, Au.strian & Platt, of Chicago, Ill., for respondents. 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 Progress Tailoring Co., a corporation, trading under its own name, and also as J. C. Field & Son; Stone-Field Corporation, a corporation; W. Z. Gibson, Inc., a corporation; Pioneer Tailoring Co., a corporation; and Certified Tailoring Co., a corporation, hereinafter referred to as respondents, have violated the provisions of said act, and it appearing to the CoJD· mission 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, Progress Tailoring Co., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 500 Throop Street in the city of Chicago, in said State. Said respondent also has been and is, doing business under the nails and style of J. C. Field & Son.

Respondent, Stone-Field Corporation, is a corporation', organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 1300 West Harrison Street in the city of Chicago in said State. PROGRESS TAILO:ij.ING CO. ET AL. 279 277 Complaint Respondent, W. Z. Gibson, Inc., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 500- 532 South Throop Street in the city of Chicago in said State. Respondent, Pioneer Tailoring Co.,. is a corporation, organized, existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at Congress and Throop Streets in the city of Chicago in said State. Respondent, Certified Tailoring Co., is a corporation, organized existing and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 1300 West Harrison Street in the city of Chicago in said State. In doing the acts and things herein complained of, and during all times •material to this complaint, respondents, Stone-Field Corporation, W. Z. Gibson, Inc., Pioneer Tailoring Co., and Certified Tailoring Co., have been, and now are, wholly owned subsidiaries of respondent, Progress Tailoring Co., and under the control and direction of its :managing officers.

PAn. 2. For the past several years said respondents have been, and now are, and each of them has been, and now is, engaged in the business Qf offering for sale and selling garment products, including men's suits and coats, in commerce, among and between the various States of the United States, and in the District of Columbia, and in causing said products when sold or ordered, to be shipped and transported from the States of Indiana and Illinois to purchasers thereof located in States other than the States of Indiana and Illinois, and to purchasers thereof located in the District of Columbia. In the course and conduct of the aforesaid business, and at all times herein referred to, the respondents have been, and now are, and each of them has been, and now is, in competition with other corporations, firms, partnerships, and individuals engaged in offering for sale and selling garment products in commerce among and between the various States of the United States and the District of Columbia, who do not Use the methods and practices herein set forth and complained of. PAn. 3. In the course and conduct of the business of respondents, ns aforesaid, respondents employ agents and salespersons, who can- Vass, solicit, and sell prospective purchasers, purchasers, and members of the buying public, in and throughout the various States of the United States and in the District of Columbia. For each sale made said agents and sales persons are paid a commission, or. percentage of the sales price paid by the purchaser. Said agents and salespersons are equipped by respondents with order blanks, samples, and materials from which purchasers make selections as to color, weave, and quality Complaint 37 F. T. C.

of material from which the garment ordered is to be made, and with certain circulars, folders, literature, and other advertising matter re· £erring and relating to said respondents and to their said products, all of which are circulated, distributed, or exhibited to said prospective purchasers, purchasers, and members of the buying public. PAR. 4. In the course and conduct of the business of respondents, as aforesaid, it has been and is the practice of each, as an integral part of the sales promotion program employed by each, to advertise for and solicit the services of agents and salespersons through and by means of magazines and other advertising media, and in the course thereof to state and represent that a "free" suit or suits will be given to such persons. Demonstrative of the statements and representations so made by respondents, among others, are the following: Free Suit! A big feature of our marvelous proposition Is the suit we offer you FREE OF EXTRA COST! We give you this opportunity to get a suit FREE-without a penny of cost to you.

THIS FINE SUIT Made to-your measure FREEl Why we make this remarkable offer. As our salesman we believe that you should be wearing one of the suits you are selling. LOCAL AGENTS wanted to wear and demonstrate free suits to friends. No canvassing. Up to $12.00 ln a day easy.

SALESMEN-Amazing new opportunity. Demonstrate for nationally known tailoring company. Start at $35 weekly. No canvassing. Permanent position. Rapid advancement. Your own clothes free.

. 1\IEN W .ANTED TO WEAR SUITS .AND SHOW FRIENDS I New way to earn up to $12 ln a day I Big clothing manufacturer wants am· bitlous man in every city to wear all wobl, Union made-to-measure suits as demonstrators, and earn money showing friends and taking orders. Sample suits FREE of extra cost I The above referred to offer and representation of a free suit or suits is false, deceptive, and misleading, in that the suit referred to is not given free by respondents, but requires the payment of a valuable consideration on the part of agent itnd salesperson in the form of services and the sale of a certain number of suits by the agent or salesperson before the same is delivered to the agen:t or salesperson. PROGRESS TAILORING CO. ET AL. 281 277 Complaint 'rhe said condition and requirement to the procurement of the suit is not disclosed in the initial advertising in which said offer of a fl"ee suit or suits is made. By this means and method respondents thus contact and secure responses from prospective agents and salespet"sons nnd induce and secure their services in the sale of respondents' garlllent products to the public, and their purchases of such garment Products for themselves in considerati9n of services rendered, all tQ the profit of respondents and to the. injure and prejudice of. their competitors.

PAR. 5. In the course and conduct of the business as aforesaid, each of the respondents, Stone-Field Corporation, 1V. Z. Gibson, Inc., Pioneer Tailoring Co., and Certified Tailoring Co., in and by means ?i letterheads, circulars, folders, and other advertising matter which lt has cq.used and causes to be distributed and exhibited to members of the buying public in connection with the offer and sale of its garment Products, refers to and represents itself as a "tailoring" company, or as "tailorst thereby signifying and representing, and inducing members of the buying public to believe, that it is engaged in the business of making and "tailoring" the garments which it offers for sale and Sells, and that it operates its own plant, facilities and equipment, and employs its own personnel, for the cutting,· sewing, and making of Said garments.

In the foregoing connection, also, respondents, Stone-Field Cor- J:loration, ,V. Z. Gibson, Inc., and Pioneer Tailoring Co., further pic- ~Ure and refer to a large, multistory, commercial or industrial buildlng or plant, each of the said respondents thereby employing the ~arne to represent its size and strength and the nature and extent of 1ts business operations, and thereby inducing members of the buying PUblic to believe that it is a large manufacturer, owning, operating, &.nd exclusively occupying the building pictured and referred to. In certain of the aforesaid circulars, folders and advertising matter distributed and exhibited to members of the buying public by and through respondent, Stone-Field Corporation, the following statelllents and representations, among other things, have been and are ltlade:

We have our own staff of designers, design and cut our own patterns and tb.anutacture every coat.

We tailor every garment.

We own our own shops.

t liiany of them (tailors) have been in our employ since the business was ounded.

We buy our woolens direct from the mills and cut every garment we sell.· l'light from the original piece of cloth. · \Ve are not middlemen and do not "farm" out any part of the work. 569637--44----21 Complaint 87F.T.C.

In certain of the aforesaid circulars, folders, and advertising matter distributed and exhibited to members of the buying public by and through respondent, ,V. Z. Gibson, Inc., the following statements and representations, among other things, have been and are made: .All :Middlemen's expenses are eliminated by our manufacturer-to-wearer policy. A Challenge To Retailers.

We are making the flat-footed statement that serges anywhere near the value of Nos .. 980-981-982-083 cannot be purchased in a suit from any retail store at this low price.

No other tailoring line offers their equal a·t anywhere near the price we ask. The retail merchant absolutely requires the additional money he asks to pay his rent, his clerks, his electric light bill, his general overhead. We have none of these. We send the suit to you direct from our shops. There are no costly showcases to buy or long pericds of waiting for customers, to pile up expenses.

Visit this Model Tailoring Plant (accompanied by a picture of a large four· story building and references to its size and "hundreds of skilled workman"). Exclusive Styles, by our own fashion artists. The aforesaid statements and representations are false and mislead· ing, in that the respondents referred to in paragraph 5 hereof are not "tailors" or "tailoring companies," are not engaged in the business of making the garments which they offer and sell, and do not operate their own plant or facilities and equipment, or employ their own personnel, for the cutting, sewing, and making of said garments, and none of said respondents w:;;ing the picture of the commercial or industrial building above referred to, owns, operates, or exclusively occupies the building pictured and referred to, or any other.r building of equal or comparable ~apacity or size. All of the garment products offered and sold by said respondents are made on contract by Fort ·wayne Tailoring Corporation, which· is a separate and distinct corporation apart from said respondents. Said respondents do no manufacturing and are selling corporations only.

The aforesaid statements and representations of respondents, Stone- Field Corporation, ,V. Z. Gibson, Inc., and Pioneer Tailoring Company, further imply and represent, and induce members of the buying public to believe, that said respondents' business operations are those of a large manufar;turer, and that purchases from them may be made at "manufacturer's prices" and at a saving to the purchaser of retailer's or middleman's costs and profits; whereas, on the contrary, said respondents are not manufacturers and do not sell at manufacturer's prices, and at prices which save to the purchaser the retailer's or middleman's costs and profits. A substantial percentage or part o{ the purchase prices paid respondents by purchasers is included in the said PROGRESS 1·AILORING CO. ET AL. 283 277 Complaint price to cover retailing costs and commissions to agents, and salespersons for effecting sales. · PAR. 6. In certain of the aforesaid circulars, folders and advertising matter distributed and exhibited to members of the buying public by and through respondent, Progress Tailoring Co., also trading as J. C. Field & So~, the following statements and representations, among other things, have been and are made:

We are exclusively wholesale tallors.

Order one of these fine Progress 'suits yourself, if you wish, at wholesale price. I~ certain of the aforesaid circulars, folders and advertising matter distributed and exhibited to members of the buying public by and through respondent, Stone-Field Corporation, said respondent is referred to and represented as "wh9lesale tailors." The aforesaid statements and representations imply and represent, and induce members ·of the buying public to believe that respondents, Progress Tailoring Co., also trading as J. C. Field & Son, and Stone- Field Corporation, are "wholesalers" engaged in the business of selling their garment products at wliolesale; that they are not "retailers," and that they offer for sale and sell their garment products to the buying Public at "wholesale prices" and at a saving to the purchaser of retailer's costs and profit. Said representations are :false and misleading in that said respondents are engaged in the business of selling at retail and at retail prices to the buying public, and not to retailers or jobbers. A "retailer," or one who sells a~ "retail," is one who sells direct to the ~uying and consuming public. A "wholesaler," or one who sells at 'wholesale," is one who sells usually in "quantity lots," to a "retailer'~ or a "jobber," a sort of middleman, and not direct to the ultimate ~onsumer of an individual unit. Said respondents do not sell at Wholesale prices," or at a saving to the purchaser of a retailer's costs ll.nd profit. A substantial percentage or part of the purchase prices Paid respondents by purchasers is included in said prices to cover retailing costs and commissions to agents and salespersons for effecting sales.

PAR. 7. In certain of the aforesaid circulars, folders and advertising lb.atter distributed and exhibited to members of the buying public by ~nd through respondents, Stone-Field Corporation and W. Z. Gibson, bnc:, each of said respondents states a~d re~resents that i~ has been in lls1ness for 41 years, thereby employmg said representation to reprebf>ents.-sinessthe . size, strength and life of said respondent's corporation and . 'I'he aforesaid representation is false and misleading in that neitherof said respondents has been in business for the past 41 years, or any other comparable length of time.

Complaint 37F.T.C.

par. 8. Among the folders and advertising literature above referred to and distributed and exhibited to members of the buying public by and through respondent, Stone-Field Corporation, a certain folder describing its No. 230 blue serge suit carries the picture of a face t·epresented to be that of "H. J. Graves, President of the Stone-Field Corporation," together with the following statement: I Hate to Swear-But there are a few things about this No. 230 blue serge suit that I want to say, and ordinary words aren't strong enough, So I'll swear to 'em;

followed by what purports to be an affidavit with facsimile signatures and notarial seal, I SWEAR that it weighs a full 15 oz. or more to the yard-almost a pound. The said picture, name H. J. Graves, and affidavit are false and fictitious, in that the picture is not that of H. J. Graves or of the president of the said respondent corporation; no such person is or ever has been president of the said respondent corporation, and no such affidavit was ever made and does not exist. The said statement and representation is further false in that the weight of said wool and material of the blue serge suit referred to is· substantially less than 15 ounces to the yard.

Among the folders and advertising literature above referred to and distributed and exhibited to members of the buying public bY and through Pioneer Tailoring Company, a certain folder describing its No. 230 blue serge suit, carries the statements and representations that the materials thereof are all wool and a "Full 15 ounces to the yard," "Almost a full pound," and "Almost 50% more than the average serge." · Among the folders and advertising literature above referred to and distributed and exhibited to members of the buying public bY and through 'V. Z. Gibson, Inc., a certain folder describing its No. 980-983 serge suits, carries the statements and representations that the materials of said suits are all wool and "full heavy weight 16ounce," meaning 16 ounces to the yard.

' The aforesaid representations of respondents, Pioneer Tailoring Co. and W. Z. Gibson, Inc., are false and misleading in that the weight of the woolen material of the serge suits referred to is substantially less than 1 pound and substantially less than 15 ounces to the yard· PAR. 9. In certain of the folders and advertising literature above referred to and distributed and exhibited to members of the buying public by and through respondents, Stone-Field Corporation, W. z. Gibson, Inc. and Pioneer Tailoring Co., each of said respondents, referring to suits therein ofl:'ered and represented, states and repre· PROGRESS TAILORING CO. ET AL. 285 277 Findlngs sents that the "super-sheen Linings" and "Deluxe Trimmings" are ''Furnished Free." The said representation is false !lnd misleading in that the cost of said linings and trimmings is included in the sale price paid by the purchaser of the garment proiluct referred to, and is not "Free."

PAR. 10. The aforesaid false and misleading statements ar...d representations have had and have the tendency and capacity to mislead and deceive prospective purchasers and purchasers of garment products into the erroneous belief that the said statements and representations are true, and into the purchase of garment products from respondents in reliance upon such belief, thereby unfairly diverting trade in said commerce to respondents from their competitors who do. not use' the methods and practices herein complained of, allllo the Injury of said competitors in said commerce, and to the injury of the Public.

PAR. 11. The aforesaid acts and practices of respondents, as hereinabove alleged, are all to the prejudice of the public 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.

REPORT, FINDINGS AS TO THE FACTs, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on March 28, 1939, issued and subsequently served its complaint in this proceeding upon the respondents, Progress Tailoring Co., a corporation, trading under its own llarne and also as J. C. Field & Son; Stone-Field Corporation, a corporation; ·w. Z. Gibson, Inc., a corporation; Pioneer Tailoring Co., a corporation; and Certified Tailoring Co., a corporation, charging them. with the use of unfair methods of competition in commerce !lnd unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint lin~ the filing of respondents' answer thereto, testimony and other e\'idence in support of, and in opposition to, the alh::gations of said complaint were introduced before trial examiners of the Commission th:retofore duly designated by it, and said testimony and other ~ldence were duly recorded and filed in the office of the Commission. f hereafter, this proceeding regularly came on for final hearing beore the Commission upon said complaint, answer thereto, testimony ~n.d other evidence, report of the trial examiners upon the evidence, l'lefs filed in support of the complaint and in opposition thereto, 286 FEDERAL TRADE' COMMISSION DECISIONS Findings 37F. T.C.

und oral argument of counsel; and the Commissiont having duly considered the" matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefroiD· FINDINGS AS TO TIIE FACTS PARAGRAPH 1. Respondent, Progress Tailoring Co., is a corpora· tion, organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located at 500 Throop Street in the city of Chicago, State of Illinois. Said respondent does business. under its own name and also under the name, style, and description of J. C. Field & Son. Respondent, Stone-Field Corporation, is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Illinois, .with its principal office and place of business located at 1300 West Harrison Street in the city of Chicago, State of Illinois.

Respondent, W. Z. Gibson, Inc., is a corporation, organized, exist· ing, and doing business under and by virtue of the laws of the State · 'of Illinois, with its principal office and place of business located at 500-532 South Throop Street in the city of Chicago, State of Illinois. Respondent, Certified Tailoring Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at Congress and Throop Streets in the city of Chicago, State of Illinois.

Respondent, Certified Tailoring Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business Io· cated at 1300 West Harrison Street in the city of Chicago, State of Illinois.

Fort ·wayne Tailoring Co., not named as a respondent herein, is a corporation having its office and principal place of business in the city of Fort W~!yne, State of Indiana.

PAn. 2. The Fort Wayne Tailoring Co., and the respondents, Stone· Field Corporation, W. Z. Gibson, Inc., Pioneer Tailoring Co., and Certified Tailoring Co., are wholly owned subsidiaries of the respon?·· ent, Progress Tailoring Co., a corporation. Alfred E. Stern, Ir-vill . Stern, Albert Duncan, and Charles A. Olson, are president, vice~ president and treasurer, secretary, and assistant secretary, respec· tively~ of the Fort 'Vayne Tailoring Co., and of the respondents, Progress Tailoring Co., Stone-Field Corporation, ,V. Z. Gibson, Jnc., PROGRESS TAILORING CO. ET AL. 287 277 Findings Pioneer Tailoring Co., and Certified Tailoring· Co. Alfred E. Stern and D. B. Stern are directors of the Fort Wayne Tailoring Co., and directors of all of the respondent corporations. Irvin Stern is a director of the Fort 'Wayne Tailoring Co. and of respondent, Progress Tailoring Co. Albert Duncan is a director of the Fort Wayne Tailoring Co. and of respondents, Stone-Field Corporation, W. Z. Gibson, Inc., Pioneer Tailoring Co., and Certified Tailoring Co. • The Commission finds that the respondent, Progress Tailoring Co., as· the parent corporation; directs and controls the sales policies and Practices of respondents, Stone-Field Corporation, ,V, Z. Gibson, ' Inc., Pioneer Tailoring Co., and Certified Tailoring Co., its wholly owned subsidiaries, and that all of the respondent corporations, acting by a~d through identical officers and substantially identical directors, acted in conjunction and cooperation with each other in performing the acts and practices hereinafter described. PAR. 3. In the course and conduct of their said businesses, respondents, for several years last past have been, and are now, engaged in the sale and distribution of wearing apparel, including men's suits and coats, in commerce among and between the various States of the tinited States and in the District of Columbia and cause said prod- Ucts, when sold, to be transported from their places of business in the State of Illinois~ or from the places of business of the Fort Wayne !niloring Co. in the State-of Indiana to purchasers thereof located 1n various States of the United States other than the States of Illinois and Indiana. Respondents maintain, and at all times mentioned herein have maintained, a course of trade in said products in commerce atnong and between the various States of the United States. PAR. 4. In the course and conduct 6f their aforesaid businesses and at all times referred to herein the respondents have been and are now, and each of them has been and is now, in competition with other ?orporations and ·with firms, partnerships, and individuals engaged 1n the offering for sale and selling of wearing apparel, including tnen's suits and coats, in commerce among and between the various States of the United States and in the District of ·columbia, who do not use the methods and practices hereinafter described. PAR. 5. The garments sold and distributed by the respondents are n~l manufactured by the Fort 'Vayne Tailoring Co. from cloth furnished to it by respondent, Progress Tailoring Co. The Fort 'Vayne 'tailoring Co. charges the respondent, Progress Tailoring Co., for its ~er\'ices in cutting, trimming, and tailoring the cloth furnished to it Y said respondent, Progress Tailoring Co. Said respondent, Progress Tailoring Co., in turn makes a charge against the respondent, COMM~SSION DECISIONS 288 FEDERAL TRADE Findings 87 F. T. C.

Stone-Field Corporation, W. Z. Gibson, Inc., Pioneer Tailoring Co., and Certified Tailoring Co., for garments sold by said respondents. PAR. 6. In the course and conduct of their businesses the respondents sell said garments directly to the consuming public through the means of agents and salesmen who canvass, solicit, and sell such members of the buying public in and throughout the various States of the t United States. For each sale made, said agents and salesmen are paid a commission or percentage of the sales price paid by the purchaser.· Said agents and salesmen are equipped by respondents with order blanks and samples of materials from which purchasers make sele<:tions as to color, weave, and quality of material from which the garment ordered is to be made and with certain circulars, folders, literature, and other advertising matter referring and relating to said respondents and to their said products, all of which are circulated, distributed, or exhibited to said prospective purchasers and members of the buying public.

PAR. 7. In the course and conduct of their businesses, the respondents have engaged in the practice, as an integral part of the sales promotion plan employed by each of them, of advertising for, and soliciting the services of, agents and salesmen through and by means of advertisements placed in magazines, newspapers, and other perjodi· cals, which advertisements represent that a "free" suit or suits will be given tal such agents and salesmen. Typical of such advertisements are the following:

LOCAL AGENTS Wanted to Wear and demonstrate Free Suits to friends. No canvassing. Up to $12 in a day easy. Experience unnecessary. Valuable demonstrating equipment, actual samples Free. H. 1. Graves, Pres. 1300 Harrison. Dept. A-819, Chicago. ' IF I SEND YOU THIS FINE SUIT- WILL YOU WEAR IT AND SHOW IT TO FRIENDS? I need a reliable man in your town to wear a fine, made-to-measure, an-wool DEMONSTRATING SUIT-advertise my famous Union clothing-and take orders. • • • I supply everything required FREE of extra cost. YOUR OWN SUITS FREE OF EXTRA CHARGE Sensational new liberal bonus plan I No quuntity limit-no time limit 00 FREE SUITS fot· yourself! It's easy TO l\IAKE MONEY-easy to get orders-and easy to get your own SUITS FREE of extra ch~rge, with the Certified une. PROGRESS TAILORING CO. ET AL. 289 277 Findings WRITE FOR FREE SAMPLE DETAILS! YOUR OWN SUITS FREE OF EXTRA CHARGE N'ew unlimited bonus plan gives you your own suits Free of extra cost-no quantity limit, no time limit. Mall coupon for details. Through the use by the respondents of the statements and representations hereinabove set forth and others similar thereto not specifically set out herein, prospective salesmen and agents are led to believe that upon answering respondents' advertisement they will· receive a suit of clothes free and without charge, which may be used by them when soliciting orders from customers for similar suits. When an inquiry is received from a prospective agent or salesman in response to such advertisement, a circular is forwarded to him which Pl·ominebtly displays and stresses the word "free," and which informs such prospective salesman or agent that it will be necessary to obtain orders for a specified number of suits before receiving the suit designated by the respondents as being "free." Such suits, which are delivered to the salesman or agent only after he has sold a specified number of suits, are not free but in fact constitute part ofthe com- Pensation for services performed in selling respondents' wearing ·apparel. The condition and requirement to the procurement of the so-called "free" suit is not disclosed in the initial advertisement in 'Which said offer of a free suit or suits is m~de, and such prospective salesman or agent is only advised of the conditions necessary to ob- ~ain such so-called "free'; suit or suits when reply is received to his lnquiry with reference to said advertisement . . In addition to the above representations, the respondents have also, ~ ~alders and advertising literature, represented that "Supersheen 1llings" and "Deluxe Trimmings" are "Furnished Free." Such representations are false and misleading in that such linings and trimmings are not furnished free but the cost of said material is included in the Sales price paid by the purchaser for the garment referred to. h l:> AR, 8. In the course and conduct of their businesses the respondents ave falsely represented and exaggerated the size and extent of the ~Usiness of the respective respondents thtough the use of a picture of a arge, four-store', commercial or industrial building or plant in their \'arious circulars and advertising folders. By means of such pictorial representations the respondents are enabled to misrepresent the nature and extent of their business operations and cause members of the purchasil)g public to believe that they are the owners of, operate, and e~clusively occupy the building pictured nnd referred to in such ad- Vettising. In trutli' and in fact, the respondents cl.o not exclusively occupy the building pictured or any other building of equal or com- Findings 37 F. T.C.

parable capacity or size but instead occupy only a portion, consist· ing of two floors, of the building so pictured. · PAR. 9. The respondents have also represented by statements con· tained in circulars, folders, and other advertising material that all middlemen's expenses are eliminated and imply that purchases made from the respondents are at manufacturers' prices and at a saving to the purchaser of retailers' or middlemen's costs and profits; whereas, on the contrary, the "respondents do not sell at manufacturers' prices ·or at prices which save the purchaser the retailers' or middlemen's costs or profits. A substantial percentage or part of the purchase prices paid respondents by purchasers is included in the said price to cover retailing costs and ~ommissions to agents and sales persons for effecting sales, and also to cover service charges of the Fort ·wayne Tailoring Co. for the manufacture of such garments and the charge made by the respondent Progress Tailoring Co. against its va;rious subsidiary corporations when the garments are sold by them.' PAn. 10. In certain of their circulars, folders, and advertising ma· terial distributed by the respondents they have represented that they are exclusively wholesale tailors and that their garments are supplied to the purchasers thereof at wholesale prices. Such representations are false and misleading in that said respondents are engaged in the business of selling at retail, and at retail prices, to the buying public.· A wholesaler, or on~ who sells at wholesale, is one who sells to a re· tailer or jobber, usually in quantity lots, and not direct to the ultimate consumer of an individual unit. The respondentsdo not sell at whole· sale prices or at a saving to the purchaser of a retailer's cost and profit. A sub~tantial percentage or part of the purchase prices paid respond· ents by purchasers is included in said prices to cover retailing costs and commissions to agents and salesmen for effecting such sales. PAn. 11. The respondents, in order to emphasize certain statements contained in certain of their circulars, have used a false and fictitious affidavit, purportedly executed by one H. J. Graves as president of one of the respondent corporations, when, in fact, no such pers6n is or ever has been president of any of said respondent corporations and no such affidavit was ever made.

PAR. 12. The aforesaid false and misleading statements and rep· resentations have had the tendency and capacity to mislead and de· ceive prospective purchasers and purchasers of wearing apparel into the erroneous belief that said statements and representations are true and into the purchase of garments from respondents in reliance upon such belief, thereby unfairly diverting trade to respondents from their competitors who are also engaged in the sale and distribu· tion of similar items of wearing apparel in commerce among and be· PROGRESS TAILORING CO. ET AL. 291 277 Order tween the various States of the United States and who do not use the methods and practices herein described.

OONCLUSION The aforesaid acts and practices of the respondents as herein found are all to the prejudice and injury of the public and of respondents' competitors and constitute unfair methods of competition in comlllerce 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 t.he Federal Trade Commission upon the complaint of the Commission, answer of the respondents, testimony and other evidence in support of and in opposition to the allegations of said complaint taken before trial examiners of the Commission theretofore duly designated by it, report of the trial e:x:aminers upon the evidence, briefs filed in support of the complaint and in opposition thereto, and oral argument of counsel; and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act: ' It U! ordered, That the respondents, Progress Tailoring Co., a cor- Poration, trading under its own name and also as J. C. Field & Son; Stone-Field Corporation, a corporation; vV. Z. Gibson, Inc., a cor- !?oration; Pioneer Tailoring Co., a corporation; and Certified Tailorlug Ce., a corporation, and their respective officers, representatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of wearing apparel and other similar items of merchandise in commerce as "commerce" is defined in the Federal Trade Commission .A.ct, do forthwith cease and desist from:

1. Using the' term "free" or any other term of similar import or ~meaning to designate, describe, or refer to wearing apparel or other ltems of merchandise which are furnished as compensation for services rendered.

2. Using the term "free" or any other term of similar import or . lneaning to describe or refer to linings, triri1mings, or other portions , of garments which constitute a part of any garment, and the price of \\rhich is included in the price of the entire garment . . 3, Using a pictorial representation of a building, in advertising or 111 any other manner, which inaccurately portrays or misrepresents the size or extent of respondents' business or the comparative volume of business transacted by the respondents.

Order 37F. T.O.

4. Representing directly or by implication that respondents are selling their garments at manufacturers' prices or at prices which save the purchaser the cost or profit of the retailer or middleman. 5. Representing that respondents are wholesale tailors or that their garments are supplied to purchasers at wholesale prices or that respondents are engaged in any business other than the sale of garments at retail. · 6. The use of reproductions of any fictitious affidavit in advertising material or in any other manner.

It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Conlmission a report in writing, setting forth in detail the ma~er and form in which they have complied with this order.

BERTHA M. URBAN 293 Complaint