Lucas, John C

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

IN THE MATI'ER OF JOHN : C. LUCAS, TRADING AS FOX STUDIOS, AND FORMERLY TRADING AS UNITED STUDIOS, ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION' OF SEC. 15 OF AN ACT OF CONGRESS APPROVED SEPT 26, 1914 ·Docket 480"1. Complaint, Aug. 10, 19-~2-Decision, Nov. S, 1943 A drawing is a representation produced by the art of drawing, and a painting is a likeness, image or scene depicted with paints without the aid of photography, a water color being a painting with pigments for which water and not oil is used as a solvent, and an oil painting being a painting done bY hand with brushes and plastic oil colors on canvas, or other materials, without the ald of photography.

A portrait In its ordinarily accepted meaning, Is a picture of a person drawn from life, especially a plct.ure or representation of a face; a likeness, particularly in oil. · Where an lndlvi?ual trading as "United Studios" and "Fox Studios" and his associate, engaged in interestate sale and distribution of photographs and, particularly, tinted ot• colored enlargements and miniatures thereof, in colopetition with others similarly eng11ged and with those engaged in the sale of genuine original paintings; contacting customers and prospective customers through newspaper advertising and through house-to-house .salesmen canvassing variou~ towns in crews, supplied with attractive sawpleS of said individuals' work and with order coupons displaying aforesaid trade name "Fox Studios," and obtaining signatures to contracts for photographs-- ( a) Falsely represented that the tinted or colored photographs and the tinted enlargements or miniatures made that·efrom, were "portraits in oil," "oil paintings," ''oil portraits," "hand paintings," "hand colored paintings," or "paintings" through so describing them in or<ler blanks, advertisements in newspapers, p1·ice lists, and representations employed by their canvassers;

(b) Represented as the customary prices for their said pictures, prices which were In excess of those at which they were customarily offered, through salesmen's representations or statements in certificates that salol so-called paintings, etc., were of a "$7.50 value" or "$5.00 value," etc.; represented that said pictures were being sold as "special introductot·y offers," "special opening bargains," "special Easter values," "Mother's Day s(Jeclnls" or at a redu~ed price for a limited time and to a limited number of customers; and, in soliciting from those who had already placed orders, sale of additional photographs at higher prices, represented through said saleswen that they could not make any money unless additional orders were given and would be forced out of business since the original offer was at less than cost or at the "special" offer price: . . d The facts being that photographs In question were of the sort ordmurily sol by popular price coupon photographic studios for $1.00 each, and their aforesaid "special introductory" offers, etc., were not limited or special, but comprised part of a continuous scheme of solicitation iu the regular comse of their busine~>s;

-FOX STUDIOS, ET AL. 559 558 Complaint (c) Represented falsely that they employed in their studio photographers from Hollywood who had there acquired experience and proficiency as motion picture photographers, and that their lighting effects were those used in motion picture photography, through such statements in newspaper advertisements as "Fox Studio Has Hollywood Cameramen"; "By Utilizing the Very Latest in Hollywood Lighting Etfects Fox Is Able to Make Pictures to Suit Personalities"; "Howard Sheld, recent arrival from Hollywood, one of the most popular motion-picture photographers of that city • • *" and pictures taken with Hollywood lightings"; and (d) Referred In price lists and In salesmen's talks to their products as "Gold Tone Oil Painting" and "Gold tone Vignetted Oil Paintings"; The facts being their said product was not the genuine "Goldtone" print result- Ing from the more laborious and expensive process Involving use of a toning bath employing salts or chloride of gold and resulting in a much warmer tone than in the case 'of the bln'ck-and-whlte or sepia, but was the much less costly sepia print, slightly tinted, and the toning process employed was an ordinary one in universal use in the production of BPpia effects ;

With the result of misleading and deceiving the purchasing public and Inducing it to purchase said products under such mistaken helicf, thereby unfairly diverting trade to them from their competitors who truthfully rept·escnt thpir products; to the substantial injury of competition In commerce: lleld, That such acts and pmctices, under the circumstances set forth, were all to the prejudice and injury of the public and their competitors, and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices therein.

Mr. Randolph lV. Branch for the Commission. Mr. Fred M. Taylor, of Boise, Idaho, for John C. Lucas and Isla' Fineman Lucas.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, a~d by authority vested in it by said act, the Federal Trade Comlnission, having reason to !Jelieve that John C. Lucas, individual.ly, and trading as Fox Studios, and formerly trading as United Studios, and Saul C. Fineman, Isla Fineman Lucas, Harry llecko, Howard S.held, Harvey Grastey, Dick Sperling, and Nicholas Mock, indi- V~duals, hereinafter designed and referred to as respondents, have VIolated the provisions of said act, and it appearing to the Commission ~hat a proceeding by it in respect thereof would be in the public Interest, hereby issues its complaint, stating its charges in that Tespect as follows:

~ ARA<.;RAPII 1. Respondent, John C. Lucas, formerly trading as ~nlted Studios, is an individual, now trading as Fox Studios, with n15• principal office and place of business located at 915 Main Street, . Oise, Idaho .. The resident or business addresses of the remainin!!lnd· · ~ lV!dual respondents, so far as known to the Commission, are as Complaint 37F.T.O.

follows: Saul C. Fineman, 915 Main Street, Boise, Idaho; Isla Fineman Lucas, 915 Main Street, Boise, Idaho; Harry Becko, 915 Main Street, Boise, Idaho; Howard Sheld, 915 Main Street, Boise, Idaho; Harvey Grastey, 915 Main Street, Boise, Idaho; Dick Sperling, 915 .Main Street, Boise, Idaho; and Nicholas Mock, 915 Main Street, Boise, Idaho. These respondents are associated with and representatives of John C. Lucas, formerly trading as United-Studios, and now trading as Fox Studios. · All of said respondents are engaged in the sale and distribution of photographs, and particularly tinted or colored enlargements and miniatures of photographs.

Respondents sell and distribute such products to customers located in various States of the United States and cause and have caused said products, when sold, to be transported from their place of business in Idaho to purchasers thereof located in various States of the United States other than the State of Idaho, and in the District of Columbia. PAR. 2. In the course and conduct of their said business, respondents have been, and are now, engaged in direct and substantial competition with various corporations, partnerships and individuals also engaged in the sale and distribution in commerce between ·and among the yarious States of the United States and in the District of Columbia, of photographs and tinted or colored enlargements and miniatures of photographs, and with corporations, partnerships, and individu::ls engaged · in the sale of genuine original paintings, including oil paintings and water color paintings, in commerce between and among the various States of the United States and in the District of Columbia. PAR. 3. Said respondents during the period of time for more than three years last past, acting under the control and direction of respondent, John C. Lucas, have entered into and carried ont various understandings, agreements, combinations and conspiracies with ea~h other and with divers other persons whose names are to the- Commjssion unknown, to sell photographs, including tinted or colored enlarged ments and miniatures of photographs to the purchasing public by and through the use of false, misleading and deceptive acts, methods an practices.

PAR. 4. In the course and conduct of said business o£ producing, selling and distributing photographs and colored or tinted enlargements and miniatures of photographs, respondent, John C. Lucas, directs and controls the policies, affairs and activities of the busin~s~ conducted under the name of Fox Studios and exercises a substantia measure of direction and control over the organization, manageme~t, policies, operation' and f}.nancing of tho remaining respondents herelil FOX STUDIOS, ET AL. 561 558 Complaint in carrying out the unfair methods of competition and the unfair and deceptive acts and practices alleged herein. PAR. 5. In the course and conduct of their said business and for the purpose o£ inducing the sale and distribution of their .said products in commerce, as "described herein, respondents have made, and are now making various advertising and sales representations concerning their said products. Customers and prospective customers are contacted variously through the medium of newspaper advertising, by the use o£ United States mails and by house-to-house canvassers or sales agents operating from and under the direction of the said Fox Studios.

PAR. 6. Respondtmts' plan of operation is in substance as follows: House-to-house salesmen or canvassers, each group or crew being in charge of a crew manager, go out into various cities and towns located in States other than the State of Idalia. All such 'salesmen are equipped with attractive samples of respondents' work and with "V"arious types of coupons to be used in obtaining orders for respondents' Products. Said crews, after locating in a town, canvass the same and obtain signatures to contracts for photographs or pictures. The customer signing for a picture pays 50 cents or other initial sum to the manager of a sales or canvassing crew. After a crew has worked a. town they transmit to Fox Studios a list of the names and addresses of the customers obtained, the amount paid by each customer, and a statenlent of the work to be done. The crew then moves on to the next town. Respondent, Lucas, follows said canvassing crews, contacts those customers who have made contracts for pictures, collects the balance due from each customer, takes the customer's picture, then moves on to the next town. Negatives for the pictures thus taken by respondent, ?ohn C. Lucas, are sent in to the Fox Studios in Boise, where unfin- Ished prints therefrom are made. "When the prints are ready, :respondent, r... lucas, again visits the towns in question, again contacts the customers who have signed contracts and attempts to obtain additional business from them. "When the customer completes the Payment on his contract, the prints, with instructions as to coloring or finishing, are sent back to Fox Studios. When the pictures are finally completed, they are mailed out. from Fox Studios in Boise, lda!1o, to the respective purchasers in. other States than the State of Idaho.

In "V"isiting the homes of customers and prospective customers in the c?urse and conduct of their said business, and acting under the direc- !Ion and at the instance of respondent, John C. Lucas, respondents Indue~ prospective customers to pay 50 cents on the purchase price of a picture and to execute nn order therefor which entitles the customer ' ' 562 o• FEDERAL TRADE COMMISSION. DECISIONS . Complaint 37 F. '.r. C. to one'"7 X 11 beautiful ~il colored photograph" to be taken at a place to be designated later and upon the· payment at;that time o£ an addi. · tional 48 cents. At v~rious times similar offe1;s are n1ade at different prices. Purchase~s of puch photographs are led to believe that they are contracting ?r dealing with duly constituted agents or representalives of an association of artists organized under;the.name and-known a~, "Fox Studios." Each said respondent is' furnished by said respondent Lucas with various identification cards and price lists. Respondent, John C. Lucas, causes the ordm;s or. contracts for .pictures or paintings to be taken on-printed forms' provided by him bearing the name and address of "Fox Studios," across the top thereof, and in such order it is varioitsly stated tl~at the customer is entitled to a "beautiful oil colored portrait" or "beautiful oil colored photograph" or "oil colored true-toi1e photograph." The said order. is duly signed by one of tlui respondents herein as "representative'' oi1 a line provided therefor and delivered to the customer. · '· Said or4er blanks, used by respondents under the trade name "Fox Studios," contain variousstatemerits and· representations, of which th<> following ar~ typical:· · · This 'offer expires in 10 days after date· of purchase; . I ' Only One Offer 'l'o a Family;.

Llitest Modernistic Lighting Used On All Sittings; One 7 x 11 Beautiful Oil Colored Photograph * * Special 98¢ Only. The prospective purchaser is told and impressed with the fact that the order which he has exectited .. erititles hiin to a· photograph or painting at a "special· offer" price or· at a. "cost of prodi.wt~on" price or at a "reduced" pi·ice. Respondents particularly call attention to the high grade of the workdone, to its beauty,.the finish and to the natural color produced of the hair, eyes, complexion, and clothing. The pictures produced by respondents are represented land referred to by respondents' sal,esnien and canvassers-as "paintings," "oil paint-.. ·ings," "oil portraits," "hand paintings," and "hand painted portraits," and are represented. as being of ."$7.50 value" or "$5.00'· value '' or similar amounts. I . Subsequent.· to the .dowrr payment of 50 cents f6r.the order the , .prospective customer is notified of the date on which a sitting for a. photograph will be held. The p.rospective p~trchaser reports to. the ,designated. place, which is usually a temporary hotel room <Wan auto camp and ~ipon tile. payment 'of the additi~nal suin of 48 cents the photograph is taken. , At this time· considerable pressure is placed upon the prospective· customer· to. order additional photographs. of the same or larger size aml· in greater numbers than one, and pnces ·stated therefor are considerably ~higher, than:.the price oi the original FOX STUD!_OS, ;ET -AL/ . 563 offer. Resp?n~ents .represent' at t!1is tii?e that th_~y ean~?t ~;ake any JJ1011ey unless additional o~de~s: are' give:r:; that if th~ eustoin~r nlv takes one· photograph the respondent w11l be forced out of -busi- ~es~, since the o~·iginal :offer-i_s give~l at cless'than cost" or at the "specitil " . . . . . '. . : offer . pnce. - . . . - ~. ' . . . . . .-. - . , Respondents inform· the prospective purchas~i· that the completed "painting;' fin~shed by'. t~e respond~nt ·will _be ?~ th~ grade, type, and quality of samples exh~~Ited_and will fully col1f6rin to !-he representatiol1s made. _ · · · · · · - · - · . __ 1 - · Delivery of pictures or "p·aintings" is made by shipping the com- •· pleted prodtic~ c.?· d. directly to.the cust?mer -or -by per~ol1al ~eli very_,_ · of a "follpw-up" salesman or representative. If the dehvery IS made in person, additional orders are :~ttempte_d by means of t_he same representations used at the sitting. _·,: · _ . PAR. 7·. On other occasions i·respondents . insert ·advertisements -in. the various newspapers circillating in .States other than the State of Idaho. · Said advertisements represent: that ·any -customer. who. presents one of these advertisements att.he studici is entitled, to a "Beautiful 6 x 8 hand cole red hand. painting for only 48¢." 'Respondents represent th~t this offer is for the purpose of advertising and introducinrr~ the Fox Studios to the public. At- various- . other times. siinilar offers are made at .different prices. Typical among 'the statements made in these adv{ntisements are the following: . - "Sr:i-ecial oi)timing. bargain good only· for one week"; "A beautiful Gx 8 hand pf!.inting"; "Special-This ·week Only * * * a beau:; tiful8 x 10 oil1iairiting * * * Hollywood motion p~cture lightii1g '-used"; '"'Si)ecial . Easter Value"; "Mother's 'Day ·special"; "Hand Colored P'airiting." - ; · · · · -· · . , ' .~ · In special ne\\CS write~'U:ps' appearing as 'advertisemen,ts in daily papers circulatl.ng: in States other than- the State of ldah'o there have· / appeared the following, arriorig other statements and representations: "Fox Studio Has Hollywood Cameramen"; "By Utilizing the Very Latest' in Hollywood Lighting Effects Fox Is Able to Make Pictures. to Suit Personalities"; "Howard Sheld;· recent arrival f!_'om Hollywood, one of .the most popular motion. picture photographers ~{that city * * *':Uiid ''p.ictui:es taken with Hollywood lightii1g."' In other certificates .employed by the said respondent, John C. Lucas, trading as United Sti1dios, or othenvise, pictures offered and sold by him in commerce· as herein· _described· have been represented J·cspect-ively as being a "Special Advertising 'Offer"; as having values of $7.50 and $5; as prodticed by "-Hollywood 'Lightings," and as being ll "* * *; Beautiful Oif Colored Portniit." : · In price lists distributed by respoi1dent's to ctistomei·s and pro~ spcctive customers :md in sales ta~ks by respondents' salesmm: and can" ' · Complaint 37F. T. C.

vassers, respondents' products are described and represented as "Gold Tone Oil Paintings" and "Goldtone Vignetted Oil Paintings." PAR. 8. The aforesaid false and misleading statements, representa· tions, acts, practices and methods employed by the respondents in connection with the conduct of their business enterprise; as aforesaid, are not all inclusive, but are merely illustrative of the character and type of statements, representations, acts, practices and methods used by respondents to mislead and deceive members of the pu!'chasing public, and to induce the purchase of their said products. PAR. 9. A drawing is a representation produced by the art of draw· ing; a work of art produced by pen, pencil or crayon. The pastel, in art, is a colored crayon made of pigments ground with chalk and compounded with water into a sort of paste. A drawing made with a colored chalk or crayon is called a pastel, as in also the art of draw· ing with colored crayons. A painting is a likeness, image or scene depicted with paints without the aid of photography. A water color is a painting with pigments for which water, and not oil, is used as a solvent. A portrait, in its ordinarily accepted meaning, is a picture of a person drawn from life, especially a picture or representation of a face; a likeness, particularly in oil. An oil painting is a painting done by hand with brushes and plastic oil colors on canvas; or other materials, without the aid of photography.

PAR. 10. The aforesaid representations and implications made and £'mployed by respondents as aforesaid, are false, misleading, and deceptive in that: · The photographs or pictures produced and distributed by respond· ents are not "portraits in oil," "oil paintings," "oil portraits," "hand paintings" or "hand colored paintings." Said photographs or pictures are not "paintings" nor "oil painted," they do not conform to the established belief of the public as to what constitutes a "painting" or an "oil painted" production, nor do said photographs or pictures constitute "paintings" or "oil painted" products as understood by artists who paint pictures or photographers who color photographs. Respondents' said photographs or pictures, in truth and in fact, ns produced and sold by them, are merely sepia prints produced from a photographic base and negative, and slightly tinted or colored thereafter.

The photographs or pictures represented as having values of $7.50 and $5 have not had and do not have any such values, and have not, been sold for $7.50 nor for $5, for in truth and in £act, photogrnphs or pictures of the same kind, type and quality as those sold by respondents are regularly and ordinarily sold by popular-price, coupon photographic studios for $1 each.

FOX STUDIOS, ET AL. 565 558 Complaint The offers that are advertised as terminating on or being limited to a given date or period, are not actually terminated or withdrawn at, or limited to, the time stated as to each, nor are any of said advertising or coupon offers "Special Introductory Offers," "Special Opening Bargains," "Special Easter Values" or "Mother's Day Specials." Said offers, in truth and in fact, comprise only a part of a continuous scheme of solicitation in the regular course and conduct of the business of respondents.

Hespondents do not employ, and have not employed "Hollywood Cameramen," nor is respondent, Howard Sheld, a "recent arrival from Hollywood," or "one of the most popular motion picture photographers of the city." Pictures taken by respondents are not and have not been taken with any so-called "Hollywood lighting effects," but, on the contrary, constitute the ordinary photographs, slightly tinted or colored, made by the average photographic studio employing a coupon selling plan.

J-> AR. 11. A genuine "Goldtone" print or picture is a product resulting from a process involving the use of a toning bath employing salts or chloride of gold. The process produces a much warmer tone than is true in the case of black and white or sepia, involves more labor and detail, comprehending the toning of a print or pictures a second ' time, and is considerably more expensive than the process employed in the production of black-and-white or sepia prints or pictures. The tohing process employed by respondents is an ordinary one in universal Use in the production of sepia effects.

In truth and in fact, the colored photograph advertised and represented by respondents to be a "Goldtone Oil Painting" or "Goldtone Vignetted Oil Painting" is not in fact a Goldtone picture but is instead a slightly tinted or colored sepia print which costs much less to . Produce and which respondents do not actually color or paint in oil. PAR. 12. Each of said respondents herein has acted and does act in concert and cooperation with one or more of the other respondents herein in doing and performing the acts and practices herein alleged and in furtherance of said understandings, agreements, combinations and conspiracies.

PAR. 13. The use by the. respondents of the aforesaid false and misleading representations, acts and practices in the sale and offering for sale purported portraits and paintings has had and now has the ~tendency and capacity to and does mislead and deceive the purchas- Ing public concerning the quality and value of respondents' products sold as herein described, and has thel'€by induced and is inducing the P~rchasing public to purchase said products under the erroneous and llllstaken belief that the same were and are high-grade, quality por- Findings 37 F.T.C.

traits or paintings of excsptional value. The use by respondents of the aforesaid acts and practices has a tendency and capacity to and does unfairly divert trade to respondents from their competitors also en· gaged in the sale and distribution of tinted or colored enlargements or miniatures of photographs in commerce among and between the various States of the United States and in the District of Columbia, who truthfully represent their products. As a consequence thereof, substantial injury has been done and is now being done py respondents to competition in commerce between and among the various States of the United States and in the District of Columbia. PAR 14. The aforesaid acts and practices of respondents, including said understandings, agreements, combinations, and conspiracies, and the things done thereunder and pursuant thereto and in furtherance thereof, as hereinabo'le alleged, are all to the prejudice and injury of the public and of respondents' competitors, and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REP_ORT, FINDINGs As TO THE FAcrs, AND Onder Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on August 10, 1942, issued its com· plaint charging .John C. Lucas, Saul C. Fineman, Isla Fineman Lucas, Hary Backo, Howard Sheld, Harvey Grastey, Dick Sperling, and Nicholas Mock with the use of unfair methods of competition in com· merce and unfair and _deceptive acts and practices in ·commerce in vio· lation of the provisions of said act. Said complaint was duly served on respondents, John C. Lucas, Isla Fineman Lucas, and Saul C. Fine· · man, but no service of said complaint was effected as to respondents, Harry Becko, Howard Sheld, Harvey Grastey, Dick Sperling, and Nicholas 1\fock. Thereafter, on August 4, 1943, the Commission per· mitted respondents, John C. Lucas and Isla Fineman Lucas, to file their answer dated June 22, 1943, in which said answer respondents admitted all the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to ~he facts. Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint and the answer of the ~e­ spondents, John C. Lucas and Isla Fineman Lucas, and the Comnn.s· sion having duly considered the matter and being now fully advised 1.n the premises finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom as to said answering respondents. FOX STUDIOS, ET AL. 567 558 Findings FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, John C. Lucas, is an individual, who, Prior to about September 1, 1942, traded first under the name United Studios and thereafter the name Fox Studios with his last principal office and place of business at 915 Main Street, Boise, Idaho. Respondent, Isla Fineman Lucas, was associated with him in the enter- Prise described herein.

Said respondents were engaged in the sale and distribution of Photographs, and particularly tinted or colored enlargements and llliniatures 'of photographs. Respondents sold and distributed such Products to customers located in various States of the United States and caused said products, when sold, to be transported from their Place of business in Idaho to purchasers thereof located in various States of the United States other than the State of Idaho, and in the District of Columbia.

PAn. 2. In the course and conduct of their said business, respondents were engaged in direct and substantial competition with various corporations, partnerships, and individuals also engaged in the sale and distribution in commerce between and among the various States of the United States and in the District of Columbia, of photographs and tinted or colored enlargements and miniatures of photographs, and with corporations, partnerships, and individuals engaged in the sale of genuine original paintings, including oil paintings and water Color paintings, in commerce between and among the various States of the United States and in the District of Columbia. PAn. 3. In the course and conduct of their said business and for the purpose of inducing the sale and distribution of their said prod- ~cts in commerce, as described herein, respondents have made var- Ious advertising and sales representations concerning their said Products. Customers and prospective customers were contacted · Variously through the medium of newspaper advertising, by the use of the United States mails and by house-to-house canvassers or sales ~gents operating from and under the direction of the said Fox tudios. . PAn. 4. Respondents plan of operation was in substance as follows: . house-to-house salesmen or canvassers, each group or crew being ~n charge of a crew manager, went out into various cities and towns ocated in States other than the State of Idaho. All such salesmen 'Wer.e equipped with attractive samples of respondents' work and with "nrtous types of coupons to be used in obtaining orders for respondents' p d S . . . ed l ro ucts. aid crews, after locatmg m a town, canvass t 1e !lUJne and obtained signatures to contracts for photographs or pic- Findings 37F.T.O.

tures. The customer signing for a picture paid 50 cents or other initial sum to the manager of a sales or canvassing crew. After a crew had worked a town they transmitted to Fox Studios a list of the names and addresses of the customers obtained, the amount paid by each customer, and a statement of the work to be done. The crew then moved on to the next town. Respondent, Lu~as, followed said canvassing crews, contacted those customers who had made con· tracts for pictures, collected the balance due from each customer, took the customer's picture, then moved on to the next town. Neg· atives for the pictures thus taken by respondent, John C. Lucas, were sent in to the Fox Studio in Boise, where unfinished prints therefrom were made. When the prints were ready, respondent Lucas again . visited the' towns in question, again contacted the customers who had signed contracts and attempted to obtain additional business frolll them. 1-Vhen the customer completed the payment on his contract the prints, with instructions as to coloring or finishing, were sent back to Fox Studios. 1-Vhen the pictures were finally completed, they were mailed out from Fox Studios in Boise, Idaho, to the re· spective purchasers in other States than the State of Idaho. In visiting the h9mes of customers and prospective customers in the course and conduct of their .said business, and acting under the direction and at the instance of respondent, John C. Lucas, respond· ents' salesmen or canvassers induced prospective customers to pay 50 cents on the purchase price of a picture and to execute an order therefor which entitled the customer to one ''7 x 11 beautiful oil colored photograph" to be taken at a place to be designated later and upon the payment at that time of an additional 48 cents. At variou~ times similar offers were made at different prices. Purchasers of such photographs were led to believe that they were contracting or dealing with duly constituted agents or representatives of an associa· tion of artists organized under the name and known as, "Fo:S Studios." Said salesmen were furnished by said respondents with various identification cards and price lists. Respondent, John C. Lucas, caused the orders or contracts for pictures or paintings to be taken on printed forms provided by him bearing the name and address of "Fox Studios" across the top thereof, and in such order it was variously stated that the customer was entitled to a "beautiful oil colored portrait" or. "beautiful oil colored photograph" or "oil colored true-ton·e photograph." The said order was duly signed by one of the salesmen of the respondent herein as ''representative'' on t1 line provided therefor, and delivered to the customer. Said order blanks contained various statements and representations: of which the following are typical:

FOX STUDIOS, ET AL. 569 Findings This offer expires in 10 days after date of purchase; Only One Offer to a Family ;

Latest l\Iodernistic Lighting Used On All Sittings; One 7xll Deautiful Oil Colored Photograph • • • Special 98¢ Only. The prospective purchaser was told and impressed with the fact that the order which he had executed entitled him to a photograph or Painting at a "special offer" price or at a "cost of production" price or at a "reduced" price. Respondents particularly called attention to the high grade of the work 'done, to its beauty, the finish, and to *e natural color produced of the hair, eyes, complexion and clothing. he pictures produced by respondents were represented and referred ~0 by respondents' salesmen and canvassers as "paintings," "oil paintl:ngs," "oil portraits," "hand paintings," and "hand painted portraits," a~d Were represented as being of "$7.50 value" or "$5.00 value" or 811llilar amounts. · Subsequent to the down payment of 50 cents for the order the Prospective customer was notified of the date on which a sitting for : Photograph would be held. The prospective purchaser reported 0 the designated place, usually a temporary hotel room or an auto catnp, and upon the payment .of the additional sum of 48 cents the Photograph was taken. At this time considerable pressure was placed ~on the prospective customer to order additional photographs of e same or larger size and in greater numbers than one, and pri~es ~t~t~d therefor were considerably higher than the price of the l'lglnal offer. Respondents represented at that time that they ·could ~t lllake any money unless additional orders were given, and that if f e customer only took one photograph the respondent would be orceq out of business, since the original offer was given at less than Cost or at the "special offer" price.

,, :n.respondents informed the prospective purchaser that the completed l'lalnting" finished by the respondent would be of the grade, type, and quality of samples exhibited and would fully conform to the representations made.

Nbelivery of pictures or "paintings" was made by shipping the comfeted product c.o.d. directly to the customer or by personal delivery ~ a "follow-up" salesman .or representative. If the delivery was s ade in person, additional orders were attempted by means of the . alll.e representations used at the sitting. t) P.a.n. 5: On other occasions respondents· inserted advertisements in l~e Various newspapers circulating in States other than the State of s aho. Said advertisements represented that any customer who pre- ,,~ted .one of these advertisements at the studio was entitled to a eauhful 6 x 8 hand colored hand painting for only 48¢." Re- 1169637-u-s9 Findings 37 F. T. C. spondents represented that this offer was for the purpose of advertis· ing and introducing the Fox Studios to the public. At various other times similar offers were made at different prices. Typical among the statements made in these advertisements were the following: "Special opening bargain good only for one week"; "A beautif~l 6 x 8 hand painting"; "Special-This 'Veek Only "' "' "' a beautl· ful 8 x 10 oil painting "' * * Hollywood motion picture lighting used"; "Special Easte~ Value"; "Mother's Day Special"; "Hand Colored Painting."

In special new~ write-ups appearing as advertisements in daily papers circulating in States other than the State of Idaho there have a.appeared the following, among other statements and representations: "Fox Studio Has Hollywood Cameramen"; ''By Utilizing the Very Latest in Hollywood Lighting Effects Fox Is Able to Make Pictures to Suit Personalities"; "Howard Sheld, recent arrival from Holly· wood, one of the most popular motion picture photographers of that city * * *" and "pictures tn.kel) with Holly\vood lighting." In other certificates employed by the said respondent, John C. Lucas, trading as United Studios or otherwise, pictures offered and sold bY him in commerce as herein described were represented respective!~ as being a "Special Advertising Offer"; as having values of $7.50 an 11 $5; as produced by "Hollywood Lightings," and as beinb' a " * "' Beautiful Oil Colored Portrait."

In price lists distributed by respondents to customers and prosd pective customers and in sales talks by respondents' salesmen an canvassers, respondents' products were described and represented a;, ''Gold Tone Oil Paintings" and "Goldtone Vignetted Oil Paintings5• PAR. 6. The afore!'aid false and mi~leading statements, represent~­ tions, a:ts, p_ractices and method~ emp~oyed by the. respondents .~1 ronnectron ~Ith t_he .conduct of their ?Hsme:;;s. enterprise, as a for~sa\J are not allmclusive, Lilt :ue merely Illustrative of the ('haractet aid type of stateiD.(><llts, representations, acts, practi~s, and methods u~e by respondents to mislead and deceive memiJers of the pm't'h::tSliig' public, and to i~19uce the purchase of their said products. · , PAn. 7. A drawing is a representation prodnred by the art of dra"; ing; a work of art produced by pen, pencil, or ern yon. The pasted in art, is n colored crayon made of pigments g-roulld with chalk 11~ h compotmtled with water into a sort of paste. A dt·awing made '~ 11 .,. a colored chalk or cmyon is called a pa!'itel, as is also the art of dra~'' 111d with colored crayons. A painting is a likeness, image, or scene tlepl~tet­ with paints without the aid of photography. A water color is n. pll 111 t ing with pigments for which water, and not oil, is used as a solved; A portrait, in its ordinarily acc£>ptPd meaning is n picture of a pcr~oT FOX STUDIOS, ET AL. 571 558 Findings drawn from life, especially a picture or representation of a face; a likeness, particularly in oil. An oil painting is a painting done by hand with brushes and plastic oil colors on canvas, or other materials, without the aid of photography.

PAR. 8. The aforesaid representations and implications made and employed by respondents as aforesaid were false, misleading and deceptive in that:

The photographs or pictures produced and distributed by respondents were not "portraits in oil," "oil paintings," "oil portraits," "hand paintings" or "hand colored paintings."- Said photographs or pictures were not "paintings" nor "oil painted," they did not conform to the established belief of the public as to what constitutes a "painting" or an "oil painted" production, nor did said photographs 01~ pictures constitute "paintings" or "oil painted'' products as understood by artists who paint pictures or photographers who color photographs. Respondents' said photographs or pictures, in truth and in fact, as produced and sold by them, were merely sepia prints produced from a photographic base and negative, and slightly tinted or colored thereafter.

The photographs or pictures represented as having values of $7.50 and $5 did not have any such values, and were not sold for $7.50 nor for $5, for in truth and in fact photographs or pictures of the same kind, type, and quality as those sold by respondents were regularly and ordinarily sold by popular pri(!e, coupon photographic studios for$1 each.

The offers that were advertised as terminating on or as being limited to a given date or period, were not actually 'terminated or withdrawn -at, or limited to, the time stated as to each, nor were any of said adverti"sing or coupon offers "Special Introductory Offers," "Speci:1l Opening Dargains," "Spec-ial Easter Values" or "l\Iother's Day Specials." Said offers, in truth and in fact, comprise\} only a part of a continuous scheme of solicitation in the regular course nnd conduct of the business of respondents.

Respondents did not employ, and have _not employed "Hollywood Cameramen," nor was respondent, Howard Sheld, a ''recent arrival from Hollywood," or "one of the most poimlar motion pictur~ pho- -togrnphers of the city." Pictures taken by respomlents were not taken with any so-called "Hollywood lighting effects," but, on the contrary, constituted the ordinary photographs, slightly tinted or colored, made by the average photographic studio employing a. Cotmon selling plan.

. PAn. 9. A genuine "Goldtone'' print or picture is a product resulttng from a process involving the use of a toning bath employing salts 572 FEDERAL TRADE COM~~ISSION DECISIONS Order 87F.T.O.

or chloride of gold. This process produces a much warmer tone than IS true in the case of black and white or sepia, involves more lalilor and detail, comprehending the toning of a print or pictures a second time, and is considerably more expensive than the process employed in the production of black-and-white or sepia prints or pictures. The toning process employed by respondents was an ordinary one in universal use in the production of sepia effects. · In truth and in fact, the colored photograph advertised and represented by respondents to be a "Goldtone Oil Painting" or "Goldtone Vignetted Oil Painting" was not in fact a Goldtone picture but was instead a slightly tinted or colored sepia print which cost much less to produce and which respondents did not actually color or paint in oil.

PAR. 10. The use by the respondents of the aforesaid false and misleading representations, acts and practices in the sale and offering for sale of purported portraits and paintings had the tendency and capacity to and did mislead and deceive the purchasing public concerning the quality and value of respondents' products sold as herein described, and thereby induced the purchasing public to purchase said products under the erroneous and mistaken belief that the same were high-grade, quality portraits or paintings of exceptional value. The use by respondents of the aforesaid acts and practices had '1 tendency and capacity to and did unfairly divert trade to respondents from their competitors also engaged in the sale and distribution of tinted · or colored enlargements or miniatures of photographs in commerce among and between the various States of the United States and in the District of Columbia, who truthfully represent their products. As a consequence thereof, substantial injury has been done by respond· ents to competition in commerce between and among the various States of the United States and in the District of Columbia. CONCLUSION The aforesaid acts and practices of respondents, as hereinabove found, were all to the prejudice and injury of the public and of re· spondents' competitors, and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act .. ORDER TO CEASE AND DESIST Thi~ proceeding having been heard by the Federal Trade Co-mmission upon the complaint of the Commission, and the answer of John C. Lucas and Isla Fineman Lucas, in which answer said respondents FOX STUDIOS, ET AL. 573 558 Order admit all the material allegations of fact set forth in said c~mplaint and state that they waive all intervening procedure and further hearing as to the facts, and the Commission having made its findings as to the facts and conclusion that said respondents, John C. Lucas and Isla Fineman Lucas, have violated the provisions of the Federal Trade Commission Act.

Jt is ordered, That respondents, John C. Lucas, individually, and trading as Fox Studios or United Studios, or trading under any other name, and Isla Fineman Lucas, their representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of photographs, including tinted or colored photographs and enlargements or miniatures thereof in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing directly or by implication that tinted or colored Photographs, including tinted or colored enlargements or miniatures ~ade from a photographic base, are "Portraits in Oil," "Oil Paint- Ings," "Oil Portraits," "Hand Paintings," "Hand Colored Paintings," or ''Paintings," or that respondents' said products are works of art Produced by the skill and brush of a painter. · 2. Representing as the customary, regular or 'studio prices for re- ~Pondents' pictures, enlargements or miniatures, any prices which are 1n fact in excess of the prices at which said pictures, enlargements or lniniatures are customarily offered for sale in .the normal and usual course of respondents' business.

3. Representing that pictures being sold in the regular course of business at the usual and customary prices therefor are being or will be sold only to a limited number of customers or as "Special Introductory Offers," "Special Opening Bargains," "Special Easter Values," as "Mother's Day Specials" or at a "reduced price" or that the offer \ !t C'tpires on any given date, or in any other manner representing that ~ Purchaser is receiving an advantage. in price or other consideration not ordinarily available.

4. Representing that any specified sum in excess of the actual cost of production is merely the "cost of production" of respondents' said Products.

5, Representing that respondents have employed in their studio Photographers from Hollywood, Calif., who have acquired experience and proficiency as motion picture photographers in said city, or that the lighting effects employed by respondents in their studio are those Used in motion picture photography.

6. Using the expression "Gold tone" alone or in conjunction with any other word or words, to describe, designate or indicate any sepia or Order 87F.T.O.

other finish picture which is not the result of a toning or developing bath or process employing chloride of gold salts. It appearing that respondents, Harry Becko, Howard Sheld, Harvey Grastey, Dick Sperling, and Nicholas Mock, have not been served with the complaint and respondent, Saul C. Fineman, has not' been served with notice of hearing, It is orde11ed, That the proceeding be, and the same hereby is, closed without prejudice to the right of the Commission to reopen the same as to said respondents. It is further ordered, That said respondents, John C. Lucas and Isla Fineman Lucas, shall within 60 days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

EVENING DRESS GUILD, INC., ET AL. 575 Syllabus