Belt Oil & Chemical Corp

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IN THE MATTER OF ' BELT OIL & CHEMICAL CORPORATION, ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4973. Complaint, June .4, 1943-Decision, May 10, 1944 Where a corporation, two officers thereof, and three partners, engaged in the interstate sale and distribution of their "Rubber-Life" product; in advertisements in circulars, newspapers, periodicals and by other means- Falsely represented· that their said product, painted on the treads of automobile tires, extended the life thereof, was "the answer" to the tire saving problem, added up to 25 per cent more mileage to a tire, or doubled its life, or otherwise increased its wearing qualities, prevented deterioration of rubber and was a tire "Ilfe-saver"; "seals the tiny pores and prevents the entrance of dust and humidity," "solidifies the millions of rubber particles on the surface into one mass," "improves the molecular structure of rubber," and "makes the rubber in a tire harder and more resistant";

Facts being product in question, a colorless glue-like mixture or compound of water and sodium silicate, contained nothing which would substantially affect the properties of the rubber used in tires, which was not porous in the sense that their said product would penetrate it and add something to or cause a change in the wearing surface thereof;

With effect of misleading and deceiving a substantial portion of the public into the erroneous belief that said representations were true, as a result whereof the public purchased substantial quantities of product in question: Held, That such acts and practices were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce. Before Mr. Jarnes A. Purcell, trial examiner. Mr. Jarnes M. Harnrnond for the Commission.

Mr. Gabriel Wartels, of New York City, 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 Belt Oil & Chemical Corporation, a corporation, Ernest Buchbinder, and William Blitz, individually, and as officers, of Belt Oil & Chemical Corporation; and Philip M. King, Jr., Stella King, Lila King, and Lillian McKinley, individually, and as copartners, doing business under the firm name and style of Overman & Co., hereinafter referred to as respondents, have violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Belt Oil & Chemical ·Corporation, is a corporation, organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business at 1265 Broadway,· New York, N.Y. I BELT OIL & CHEMICAL CORP. ET AL. 447 446 Complaint \Respondent, Ernest Buchbinder, an individual, is president and treasurer of respondent, Belt Oil & Chemical Corporation, with his office and place of business at 1265 Broadway, New York, N. Y. Respondent, William Blitz, an individual, is vice president and secretary of respondent, Belt· Oil & Chemical Corporation, with his office and place of business at 1265 Broadway, New York, N. Y. Respondents, Philip lvi. King, Jr., Stella IGng, Lila King and Lillian McKinley, are copartners, doing business under the firm name and style of Overman & Co., having their office and place of business at Room 1821, 9 Rockefeller Plaza, New York; N.Y.

PAR. 2. Said respondents, acting concertedly and in cooperation each with the other, are now, and for more than one year last past have been engaged in the sale and distribution of a product known and described as "Rubber-Life."

PAR. 3. Respondents cause the said preparation, when sold, to be transported from the place where manufactured or from their place of business in the city of New York, State of New York, to purchasers thereof located in the several States other than the State in which said shipments originate and in the District of Columbia. At all times mentioned herein respondents have maintained and now maintain a course of trade in said product in commerce among and between the various States of the United States and in the District of Columbia. PAR. 4. In the course and conduct of their business in said commerce as aforesaid, the said respondents have made and are now making, and have caused and are now causing the publication of false, misleading and deceptive representatimjs concerning their said product, through the means of circulars, newspapers and magazines circulated among prospective purchasers, and by various other means. Among and typical of the ·false, misleading and deceptive representations so made and used by the respondents in connection with the offering for sale and sale of said product are the following:

Rubber-Life-It's the answer to your tire saving problem. Just paint it on the tread of your tires. It's colorless, but penetrates into the minute pores of rubber and increases resistance to wear.

Tests prove that "Rubber-Life" will add up to 25% more mileage to your tires. RUBBER-LIFE. The new invention that increases tire mileage and prevents deterioration of rubber! Add thousands of Extra Miles to the life of your tires for only 16¢ per tire! It is a tire "Life-Saver." You Can Make The Tires You Have Last Longer-, many thousands of miles longer. "Rubber-Life" is the amazing new product that does this. It's New, Sensational-RUBBER LIFE-add thousands of Extra miles to the life of Your Tires. · · 1. Seals the tiny pores and prevents the entrance of dust and humidity. 2. Solidifies the millions of rubber particles on the surface into one mass. 3. Improves the molecular structure of the rubber. 4. Makes it harder and more resistant.

Defense needs rubber. Defend your tires with Rubber-Life-Make your tires last twice as long.

PAR. 5. The foregoing representations, together with similar representations not herein set out, are false and misleading. In truth and in Findings 38 F. T. C.

fact, the product offered for sale and sold by respondents when applied as directed, or in any other manner, does not extend the life of a tire; it is not "the answer" to the tire saving problem; it does not add up to 25 percent more mileage to a tire or double the life of a tire or increase or add to the mileage or wearing qualities of a tire in any other degree or percentage; it does not prevent deterioration of rubber and it is not a tire "life-saver"; it does not seal the tiny pores and prevent the entrance of dust and humidity, or solidify the millions of rubber particles on the surface into one mass, or improve the molecular structure of rubber, or make the rubber in a tire harder and more resistant to wear. Respondent's said product is composed principally of water and sodium silicate, a colorless glue-like mixture or compound, and contains nothing which will substantially effect the properties of the rubber used in tires. Such rubber is not porous in the sense that respondents' said product will penetrate it and add something to or cause a change in the wearing surface of the tires.

PAR. 6. The use by the respondents of the foregoing false, misleading, deceptive and exaggerated representations with respect to their said product Rubber-Life, or any other like and similar products, mislead, and has had, and now has the capacity and tendency to, and does, mislead and deceive a substantial portion of the public into the erroneous and mistaken belief that said statements and representations were, or are, true and into the purchase of substantial quantities of respondents' said product because of said erroneous and mistaken belief. PAR. 7. The aforesaid acts and practices of the respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices iri 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 May 29, 1943, issued and on or about June 1, 1943, served its complaint. in this proceeding upon respondents, Belt Oil & Chemical Corporation, a corporation, Ernest Buchbinder, and William Blitz, individually, and as officers, of Belt Oil & Chemical Corporation; and Philip lVL King, Jr., Stella King, Lila IGng, and Lillian McKinley, individually, and as copartners, doing business under the firm name and style of Overman & Co., charging them with the use of unfair and deceptive a~ts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' ans>ver, the Commission, by order entered herein, granted respondents' motion for permission to withdraw said answer and to substitute therefor an answer admitting all the materin,l allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answer, and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this procedure is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom. BELT OIL & CHEMICAL CORP. ET AL. 449 \ 446 Findings FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Belt Oil & Chemical Corporation, is a corporation, organized, existing and doing business under and by virtue of the laws of the State of New York, w.ith its office and principal place . of business at 1265 Broadway, New York, .N.Y. Respondent, Ernest Buchbinder, an individual, is president and treasurer of respondent, Belt Oil & Chemical Corporation, with his office and place of business at 1265 Broadway, New York, N. Y. Respondent, William Blitz, an 'individual, is vice president and secretary of respondent, Belt Oil & Chemical Corporation, with his office and place of business at 1265 Broadway, New York, N.Y. Respondents, Philip 1\L King, Jr., Stella King, Lila King and Lillian McKinley, are copartners, doing business under the firm name and style of Overman & Co., having their office and place of business at Room 1821, 9 Rockefeller Plaza, New York, N.Y.

PAR. 2. Said respondents, acting concertedly and in cooperation each with the other, are now, and for more than one year last past have been engaged in the sale and distribution of a product known and described as "Rubber-Life."

PAR. 3. Respondents cause the said preparation, when sold, to be transported from the place where manufactured or from their place of business in the city of New York, State of New York, to purchasers thereof located in the several States other than the State in which said shipments originate und in the District of Columbia. At all times mentioned herein resporidents have maintained and now maintain a course of trade in said prod\).ct in commerce among and between the various States of the United States and in the District of Columbia. PAR. 4. In the course and conduct of their business in said commerce as ·aforesaid, tho said respondents have mn.de and are now making, and have caused and are now causing the publication of false, misleading and deceptive representations concerning their said product, through the means of circulars, newspapers and magazines circulated among prospective purchasers, and by various other means. Among and typical of the false, misleading and deceptivereprcsentations so made and used by the respondents in connection with the offering for sale and sale of said product are the following:

Rubber-Life-It's the answer to your tire saving problem. Just paint it on the tread of your tires. It's colorless, but penetrates into the minute pores of rubber and increases resistance to wear. . Tests prove that "Rubber-Life" will add up to 25% more mileage to your tires. RUBBER-LIFE. The new invention that increases tire mileage and prevents deterioration of rubber! · Add thousands of Extra Miles to the lifo of your tires for only 16¢ per tire! It is a tiro "Lifo-Saver." You can Make Tho Tires You Have Last Longer-::-, many thousands of miles longer. "Rubber-Life" is the amazing new product that does this .. It's New, Sensational-RUBBER LIFE-add thousands of Extra miles to the life of Your Tires. . 1. Seals the tiny pores and prevents the 'entrance of dust and humidity. 2. Solidifies the millions of rubber particles on the surface into one mass. 3. Improves the molecular structure of the rubber. 4. Makes it harder and more resistant.

Conclusion 38 F. T. C.

Defense needs rubber. Defend your tires with Rubber-Life-Make your tires last twice as long.

PAR. 5. The foregoing representations are false and misleading. In truth and in fact, the product 'offered for sale .and sold by respondents when applied as directed, or in any other manner, does not extend the life of a tire; it is not "the answer" to the tire saving problem; it does not add up to 25 percent more mileage to a tire or double the life of a tire or increase or add to the mileage or wearing qualities of a tire in any other degree or percentage; it docs not prevent deterioration of rubber and it is not a tire "life-saver"; it does not seal the tiny pores and prevent the entrance of dust and humidity, or solidify the millions of rubber particles on the surface into one mass, or improve the molecular structure of rubber, or make the rubber in a tire harder and more resistant to wear. Respondents'· said product is composed principally of water and sodium silicate, a colorless glue-like mixture or compound, and contains nothing which will substantially affect the properties of the rubber used in tires. Such rubber is not porous in the sense that respondents' said product will penetrate it and add something to or cause a change in the wearing surface of the tires. · PAR. 6. The use by the respondents of the foregoing false, misleading, deceptive and exaggerated representations with respect to their said product Rubber-Life, or any other like or similar products, has had, and now has, the capacity and tendency to, and does, mislead and deceive a substantial portion of the public into the erroneous and mistaken belief that said statements and representations are ttue. As a result of said erroneous and mistaken belief, the public has purchased substantial quantities of respondents' said product. · PAR. 7. It is further found that the person named in the complaint herein as Ernest Buchbinder is in truth and in fact the person named Ernst Buchbinder in the answer to the complaint herein as president and treasurer of the respondent, Belt Oil and Chemical Corporation, and that Ernest Buchbinder and Ernst Buchbinder are one and the same person. PAR• 8. It is further found that the person named in the. complaint herein as Lillian McKinley is the person p.amcd in the ans;ver herein as Lilian McKinley, a partner in the firm of Overman & Co. and that Lillian McKinley and Lilian McKinley are one and the same person. CONCLUSION.

The aforesaid acts and practices of the respondents, Bolt Oil & Chemical Corporation, a corporation, Ernest Buchbinder, being one and the same person as Ernst Buchbinder, and William Blitz, individually, and as officers, of Belt Oil & Chemical Corpoi·ation; and Philip l\1. King, Jr. 1 Stella King, Lila King, and Lillian McKinley being one and the same person as Lilian McKinley, individually, and as copartners, doing business under the firm name and style of Overman & Co., as herein found, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

' BELT OIL & CHEMICAL CORP. ET AL. 451 446 Order ORDER TO CEASE AND DESIST· This proceeding having been heard by the ·Federal Trade Commission upon the complaint of the Commission, and the substitute answer of respondents, in which substitute answer respondents admit all the material allegations of fact set forth in said complaint, and state that they waive all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, Belt Oil & Chemical Corporation, a corporation, its officers, agents and employees, Ernest Buchbinder, being one and the same person known as Ernst Buchbinder, and William Blitz, individually, and as officers, of Belt Oil & Chemical Corporation; and Philip M. King, Jr., Stella King, Lila King, and Lillian McKinley, being one and the same person known as Lilian McKinley, individually, and as copartners, doing business under the firm name and style of Overman & Co., their representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of the product sold under the trade name "Rubber-Life" or any similar or like substance, whether sold under that name or any other name, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Using the term "RUBBER-LIFE" or any like or similar name to describe the paint like substance sold by it as a tire or rubber preservative.

2. Representing that said product penetrates into the minute pores of rubber, increases its resistance to wear; will add 25% or any other percentage to the life of tires; that it is a new invention which increases tire mileage and prevents deterioration of rubber; that it will add thousands of extra miles to the life of a tire; that it is a tire life saver and seals the tiny pores preventing the ent-rance of dirt and humidity to a tire; that it solidifies the millions of rubber particles on the surface of a tire into one mass; that it improves the molecular structure of rubber or makes rubber harder and more resistant to wear. 3. H.representing that said product adds anything to the life or wearing qualities of rubber or to an automobile tire in any way whatsoever. It is fttrlher ordered, That the respondents 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.

Syllabus- 38 F. T. C.