Greening Nursery Co

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

IN Tim MAITER oF GHEENING. NURSERY COMPANY 'COMPI"AINT, MODIFIED FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1!>14 Docket 3673. Complaint, Dec. 23, 1938-Decision, Aug. 3, 194~ Where a corporation, enga~:ed In competitive interstate sale and distribution of fruit trees and other nursery products, to induce purchase thereof, and salesmen and agents to sell its products to the purchasing public-- · ·(a) Represented, directly and by implication, that it was the only nursery which . used the bud selection method of grafting in the propagation of fruit trees, and that fruit trees thus propagated could only be procured from it and its salesmen, through such statements in circulars, newspaper advertisements and other publkatlons as "BUD SELECTION, that remarkable, exclusive Greening feature!"; "For 26 years, Greening • • • have been propagating fruit trees by bud selection, exclusive, amazing, scientific discovery unduplicated In the field"; "Only Greening men can sell BUD SELECTED fruit trees"; and. "Non-competi-tive field all to yourself; ~he facts' being that butl selection is a general term used in the fruit industry and the method, known from earliest times, in various forms is followed by most nurserymen; its methods varied from those followed by practically .all commercial nurserymen only In the keeping of records of selected trees or limbs; and whlle it had carried out extensive experimental work in select- .ing buds for propagation of deciduous fruit trees, and had developed :scientific selection to the point where varieties of fruit could be Improved thereby, and its method of bud selection might be more scientific than that employed by some of Its competitors, said method was not, as aforesaid, exclusive with It;

With etrect of misleading and deceiving a substantial portion of the purchasing public Into the mistaken belief that such representations were true, thereby Inducing Its purchase of said products, and inducing a substantial number of salesmen and agents to deal In said nursery products, whereby trade was· diverted unfairly to It from aforesaid competitors who truthfully advertised their products:

Held, That such acts and practices, under the circumstances set forth, were all · to the prejudice and Injury of the public and competitors, and constituted unfair methods ot competition in commerce and unfair and deceptive acts -and practices therein.

Before Mr. Joh.n W. Addison and Mr. lV• .W. Sh.eppard, trial examiners.

Mr. Jesse D.J{a,yh for the Commission.· Smith., Ristig &: Smith., of Washington, D. C., 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 Complaint 37F.T.C.

Trade Commission, having reason to believe that Greening Nursery Co., a corporation, 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 statmg its charges in that respect as follows:

I. PARAGRAPH 1. Respondent, Greening Nursery Co., is a corporation, organized, existing and doing business under and by virtue of the laws of the State of :Michigan, and having its office and principal place of business in the City of Monroe, State of Michigan. PAR. 2. The respondent is now, and has been for more than 1 year last past, engaged in selling and distributing fruit trees and other nursery products. Respondent sells said products to members of the purchasing public situated in various states of the United States and causes said products, when sold by it, to be transported from-its afore· said place of business in the State of Michigan to the purchasers there· of at their respective points of location in various states of the United States other than the State of Michigan and in the District of Co· lumbia. Respondent maintains, and at all times herein has main· tained, a course of trade in said products in commerce among and 1 between the various states of the United States and in the District of Columbia.

PAR. 3. ReE!pondent is engaged in substantial competition in coiJl· merce among and between the various states of the United States and in the Distric;t of Columbia wi"th other corporations, and with partnerships, firms and individuals selling and distributing fruit trees and other nursery products. Among such competitors in such coiJl· merce. are many who do not in any manner misrepresent their said · products and who do not make any false statements in connection with the sale and distribution of their said products. PAR. 4. In the course and conduct of its said business and fot the purpose of inducing the purchase of its nursery products said respond· ent has made and makes by· means of circulars, pamphlets, folders and by means of advertisements inserted in newspapers and other publica· tions, all of which are circulated between and among the various states of the United States and in the District of Columbia, many representa· tions concerning the nature and quality of its said nursery products and results that may be expected from the use thereof. Among and typical of such representations made by respondent are the following: Largest Growers of '£rees in the World.

'Vot·Jd's Largest Tree Growers.

World's Leading Company.

Right now I'm writing monthly GREENING NURSERY CO. 321 319 Complaint Pay checks from $110 Spare Time to $882 Full Time.

Non-Competitive field all to yourself.

BUD SELECTION, that remarkable, ea:clitait'e Greening feature! For 26 years, Greening * * • * • • * have been propagating fruit trees by BUD SELECTION, exclusive, amazing, ICientiflc discovery UNDUPLICATED IN THE FIELD. _ Bud selection gives fruit trees what blood lines are to livestock "pedigreed" KNOWN PERFORMANCE characteristics, which eliminate chance or gamble for fruit tree buyers.

Only Greening men can sell BUD SELECTED fruit trees. We paid Pifer, month after month $248, $413, $445, $375, $282, and he's still going strong I Lorimer earned $302 one month, then $882-yes almost one thousand dollars in a month.

Amazing new nursery development.

Greening famous super-selected Fruit Trees, propagated by our ea:clusive Dud- Selection method.

luy offer is di1rerent than any nursery company's otrer which you may have considered before • • • will be associated with the largest and oldest tree. nursery in the world. • · • • will have as his line, nursery stock of a decidedly different character.

Weekly earnings up to $75.

Greening producers average from $25 to $75 a week In Commissions the year 'round.

PAR. 5. Through the use o£ the statements and representations hereinbefore set out and others similar ther~to not herein set out, all of which purport to be descriptive o£ the nature and quality of respondent's products and the effectiveness o£ its products, as above described, respondent has represented directly and by implication, among other things, that respondent is the largest grower of fruit trees in the world; that it is the world's leading company; that its salesmen earn from $110 part time to $882 full time per month; that the sale of its products is a noncompetitive field which its agents and salesmen will have all to themselves; that bud selection is an exclusive feature of the respondent company only; that respondent has been propagn,ting :fruit trees by bud selection exclusively for 26 years and that its bud selection discovery is unduplicated in the nursery field; that its bud selection method gives fruit known performance char- . acteristics which eliminate any chance or gambling _on the part of fruit tree growers; that only its salesmen can sell bud selected :fruit trees; that the large incomes received by the salesmen mentioned are Complaint 87F.T.C.

examples and truly ·indicative of the salary its salesmen~ would ordi· narily make; that its products are an amazing new development; that , its fruit trees are superselected; that the Greening Nursery is the oldest in the world; that its line of nursery stock is of a decidedly different character from others; that its salesmen average $25 to $75 a week as commissions the year around:

PAR. 6. The aforesaid representations made by the respondent in the manner above described are grossly exaggerated, false, mislead· ing, and untrue. In truth and in fact the respondent is not the _largest grower of fruit trees in the world; respondent is not the world's leading company; respondent's salesmen do not earn froiil $110 part time to $882 full time per month; the sale of respondent's products is not a field which ·offers no competition and which its salesmen have all to themselves; and bud selection is not a remarkable exclusive feature of the Greening Nursery Company alone. Respond· cnt's bud selection is not an amazing, scientific discovery which is not . duplicated in the nursery field, nor are there known performance characteristics which eliminate any ch.ance or gambling on the part of fruit tree growers; Greening salesmen are not the only salesmen who can sell bud selected fruit trees: The large incomes allegedly received by the Greening salesmen are not truly indicative of the earnings a salesmen would make under usual and ordinary circUJil· stances. Respondent's products are not an amazing. new nursery development, nor are its fruit trees superselected or propagated by nn exclusive bud selection method. Respondent's nursery is not the oldest or largest nursery in the world, 'neither is its line of nursery stock of a decidedly different character from that of other nurseries. Respondent's salesmen do not average from $25 to $75 in commissions a week the year around;

par. 7. The use by the respondent of the foregoing false, deceptive and misleading statements and representations with respect to said , products has had, and now has, the capacity and tendency to, and does, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements and representations are true and that respondent's said product& possess the properties claimed and represented and will accomplish the results indicated, and that agents selling its nursery stock will earn the sums indicated, and causes a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase substantial quantities of respondent's said products. As a result, trade has been diverted unfairly to the responde~t from its competitors in said commerce who truthfully advertise thell' products and the earning of their agents. In consequence thereof, GREENING NURSERY CO. 323 Flndlngs injury has been done, and is now being done, by respondent to competition in commer_ce among and between the various states of the United States and in the District of Columbia.

PAR. 8. 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. competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, Modified FINDINGS AS TO THE FACTs, AND ORDER Pursuant to the provisions of the Federal Trade Conunission Act, the Federal Trade Commission on December 23, 1938, issued and subsequently served its complaint in this proceeding upon the respond~ ent, Greening Nursery Co., a corporation, charging it with the use o.f 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 answer thereto, testimony and other evidence in support of and in opposition to the allegations of said complaint were intro- ~Uced before trial examiners of the Commission theretofore duly deslgnated by it, and said testimony and other evidence were duly re- . Corded and filed in the office o£ the Commission. Thereafter, this ~roceeding regularly came on .for final hearing before the Commis- '>lon upon said complaint, answer thereto, testimony and other evidence, report of the trial examiners upon the evidence and exceptions filed thereto, briefs in support of the complaint and in opposition thereto, and oral argument of counsel; and the Commission, having duly considered the matter, on March 10, 1943, issued and subsequently served upon said respondent its findings as to the facts and conclusion b.ased thereon and its order requiring the respondent to cease and de- Sist from the practices charged in the complaint. Subsequent thereto, this cause again came on for hearing before the Commission upon the request of the attorney for the respondent to modify the findings as to the facts issued on March 10, 1943; and the Commission, having duly considered said request and the record herein and being now fully advised in the premises, makes this its modified findings as to the facts and its conclusion drawn therefrom. .· MODIFIED FINDINGS AS TO Tile FACTS P ARAORAPH 1. Respondent, Greening Nursery Co., is a corporation, organized, existing, and doing business under and by virtue of the "324 FEDERAL TRADE CO:Ml\IISSION DECISIONS Flncllngs 37F.·T. C. laws of the State of :Michigan and has its office and principal place ·of business in the city of Monroe, State of Michigan. PAR. 2. The respondent is now, and for severalyears last past has .been, engaged in selling and distributing fruit trees and other nursery products. Respondent sells said products to members of the pur· <{)basing public situated in various States of the United States, and -causes said products, when solid by it, to be transported from its aforesaid .place of business in the State of Michigan to the pur· .chasers thereof located in various other States of the United States. Respondent maintains, and at all times mentioned herein has main· tained, a course o~ trade in said products in commerce among and between the various States of the United States. PAR. 3. Respondent is engaged in substantial competition in com· merce among and between the various States of the United States and in the District of Columbia with other corporations and with part·· nerships, firms, and individuals selling and distributing fruit trees .and other nursery products.

P .AR. 4. In the course and conduct of its said business and for the })Urpose of inducing the purchase of its nursery products and for the purpose of inducing salesmen and agents to sell said nursery products to the purchasing public, the respondent has made false, deceptive, :and misleading statements and representations concerning its said nursery products by means of circulars and pamphlets and by means 'Of advertisements inserted in newspapers and other publications, nll >Of which are circulated between and among the various States of the United States. Among and typical of such representations made bY the respondent are the following: · BUD SELECTION, that remarkable, exclusive Greening feature! For 26 years, Greening • • • have been propagating fruit trees by bud :Selection, exclusive, amazing, scientific discovery undupllcated in the field . .Only Greening men can sell BUD SELECTED fruit trees. Non-competitive field all to yourself.

PAR. 5. Through the use of the statements and representations here· inabove set forth and other similar thereto not set out herein, re· · spondent has represented directly and by implication that th~ respondent is the only nursery which uses the bud selection met\10 of grafting in the propagation of fruit trees and that fruit trees proplld gated by the bud selection metl1od of grafting can only be procure .from the respondent and its salesmen. . PAR. 6. The aforesaid representations, made by the respondent .rn the manner above described, are grossly exaggerated, false, and 1111:· leading. Bud selection is a broad, general term used in the frUl~ .industry and, in various forms, is followed by most nurserymen. B 11 GREENING NURSERY co: 325' 319 Findings selection is not an exclusive feature of the respondent company only, and the sale of trees propagated by tlle bud selection method of grafting is not limited to respondent or its salesmen, but, instead, trees Propagated by the bud selection method of grafting are sold by many \. of respondent's competitors. . 1 The. selection of buds from trees of known character or type and grafting them onto seedlings in the variety propagation of citrus and deciduous fruit trees has been known and practiced from earliest times, and literature as far back as the 16th century describes the process of budding and grafting just exactly as nurseries in the United!. States are doing today. In the ordinary propagation of fruit trees it. has long been known that when they are grown from seeds they do· :not come true to name. Seedlings are different from the plant from: Which they are taken in many respects, and in order to get them to· come true to name, a bud is taken from a tree which it is desired; to propagate. This bud so selected is grafted onto the seedling by in'-· Berting it under the bark of the seedling, where it grows fast when Properly inserted. 'Vhen it starts to grow, the part of the stalk above the grafted bud is cut away, and the above-ground part of the tree is. grown from the cutting or bud. The tree so grown from such grafted; bud will have the characteristics of the tree or limb from which such• bud is taken. The characteristics having been thus established in the· ~rafted tree, the tree is either sold or itself used for bud wood in grnftl:ng other seedlings.

One of the sources of variety in fruit trees which has been long tecognized is the existence of the mutation or sport, which is-a limb• 011 a tree that bears fruit that is different in some respects from the· fruit on the rest of the tree. The buds from such a limb can be· ?rafted to a seedl1ng in the manner above described, and the tree so. grafted will bear fruit having the characteri$tics of the mutation orsport limb.

The methods of bud grafting hereinabove described are followed by practically all commercial nurserymen, including the respondent~ 1'he·mechanics of the actual selection of vegetative buds for grafting· !nay vary with the ideas of the individual doing the selecting. Somelnay go to an orchard and find an exceptionally productive tree that is. hearing very fine fruit of the variety desired and select or obtain their foundation buds from that particular tree. Others may select the· ~ll.ds from a particular limb of a tree that is producing exceptionally arge or exceptionally highly colored or attractive fruits~ The lllethods followed by the respondent in its bud seleetion vary from the above in that records are kept of selected trees or limbs and they are (Jbserved from year to year prior to and after the buds are selected for- Order 37F. T.C.

the grafting process. The respondent has carried out extensive e~· .:perimental work in selecting buds for propagation of deciduous fruit trees and has developed the scientific selection to the point where var· jeties of fruit can be improved 'by the elimination of undesirable <:haracteristics and the improvement of desirable characteristics. While the method of bud selection followed by the respondent may be more scientific than the method which may be employed by some of its competitors, bud selection is not exclusive with the respondent but, in· stead, is practiced in some form or other by practically all nurserymen· PAR. 7. The use by the respondent of the foregoing false, deceptive, and misleading stlltements and representations with respect to the ·exclusive nature of its bud selecting process has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of prospective purchasers, salesmen, and agents into the erro· neous and mistaken belief that such statements and representations are true and causes a substantial portion of the purchasing public to pur· chase, and a substantial number of salesmen and agents to deal in, respondent's nu~ery products because of such erroneous and mistaken belief. As a result, trade has been diverted unfairly to the respondent from its competitors in said commerce who truthfully advertise their products.

CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair meth~ds 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 request of the attorney for the respondent to modify the findings as to the facts issued on March 10, 1943; and the Commission having duly considered said request and the record herein and having' issued its order modifying the findings as to the facts issued on March 10, 1943, an<;! having issued its modified findings as to the facts and con· elusion pursuant to said order, It is ordered, That the respondent, Greening Nursery Co. a corpora· . tion, and 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 fruit trees and other nursery products in commerce as "commerce" is defined in the Federal Trade Com!Wssioil Act, do forthwith cease and desist from:

GREENING NURSERY CO. 327 319 Order • · 1. Representing directly or by implication that the respondent is the only nursery which uses the bud-selection method of grafting in the propagation of fruit trees. ' 2. Representing directly or by implication that fruit trees propagated by the bud-selection method of grafting can only be procured from the respondent or its salesmen.

3. Representing either directly or by implication that the budselection method of grafting is an exclusive feature of respondent's nursery stock.

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.

Syllabus S7F.T.C.

•