M. B. Waterman and Company et al.

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IN THE :MATTER OF 1\.f. B. \VATER~1AN AND C011PANY ET AL.

COJ11PLA1NT, FINDINGS, AND ORDER I:N REGli.RD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF COXGRESS APPROVED SEPT. 26, 1914 Docket 5.}.21i. Complaint, Mar. 12, 19.J6-Dccision, Oct. I, 19-79 Where an individual engaged in the interstate sale and distribution of crucifixes crosses, religions medals, "glowlights", ladies' anll men's ,iacl~ets and variou:-otller articles; in advertising his said products through circulars and i11 newspapers, comic books, magazines and other periodicals of general circulation- ( a) Rein·esentecl directly and hy implication that his crucifixes were hand can·ed of wood and that the images on certain of them would glow all during the night; when in fact they were machine made of paper pulp, sawdust and glue; and the images acl\·ertised to glow by night were coatecl with some undisclosed material, which, if exposeLl to strong light, would glow faintly for possibly thirty minutes but wonlcl not glow agn in until agnin exposed to light;

(b) Represented that his "glowlights" could be used- to spot objects and give signals in the dnrk, that they \Yonld make e~:celle~1t night lights, and that they were made of metal or leather framri", witll leather (II' composition handles; the facts being that the section of the article which eol'l'i'SP<m<1e<1 to a bulb and lens of a flashlight was coated with a phosphorus material and, if exposed to a bright light, would give off a faint glow for a few minutes, but wonlcl not throw a beam of light or give a light enabling one to spot objects or give signals in the dark; and it was not made, as represented by tlle advertising depictions, of metal, leather or composition, but entirely of cardboard :

(c) Represented that his crosses, which he referred to as "Heplica Virginia Lucl•y Stones" were curios formed by nature antl found in the mountains of Virginia; when in fact they were not even Very good imitations of the original Virginia Fairy Stones, but were merely plastic crosses formed in the same general shape as said stones;

(d) Falsely represented that his St. Christopher's medals, which \Were merely gold "·ashed, were 10 K. gold filled; and that his jacl~ets were tailored and styled in Califomia or by a California manufacturer or designer; and, through use of the trade name Bernard's of California," that he was operating in and hacl a place of l.msiness in said State; ancl (e)· Hepresented that certain articles of merchandise were given free as a gift or gratuity and without cost to the recipient; when in fad in some cases the cost was included in the price of other articles, tlw purchase cf which he required before one could receiye the so-called gift, in other cases he gave the "free" articles only to those who had rendered certain sen·ices in connection Complaint 46 F. T. C. \With the sale of products, and in either case he made a profit on the entire transaction ;

\With tendency am1 capacity to mislead and deceiye a substantial portion of the pmchasinp: public into the erroneous belief that such representations were true, and thereby cause it to purchase substantial quantities of his said products:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce.

Before llfr. John lV. Addison, trial examiner. llfr. J. lV. Brookfield, Jr., for the Commission. Llfr. 0 harles L. Schwartz, 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 ~I. B. \Vaterman & Co., a corporatioi1, ~Iax B. \Vaterman, Dorothea \Vaterman, and ,Julius \V. Kohn, individually and as officers of ~I. B. \Vaterman &. Co., n corporation and trading as ~I. B. \Vaterman & Co., Not Inc., Thereligions If house, Glmvlight Co., Pardon Cross Co., Bernard's of California, Nature's \Vonder., Glo-Sheen Flowers and Glo-Sheen's Flowers Co., hereinafter referred to as respondents, have violated the prov-isions of 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 l\1. B. \Vaterman & Co. is a corporation organized, existing, and doing business under and by v-virtue of the laws of the State of Illinois, with its office and principal place of business located at 333 South ~Iarlmt Street, Chicago, Ill.; respondents ~Iax B. \Vaterman, Dorothea \Vaterman, and ,Julius \Y. Kohn are officers and directors of respondent corporation ~I. B. \Vaterman & Co. Said incliviclual respondents dominate and control the adv-ertising policies and business activities of the corporate respondents. All of respondents cooperate and hate cooperated 'with each other and have acted in concert in doing the acts and things hereinafter alleged: Hespondents ~fax B. \V aterman, Dorothea \Vaterman, and J nlins ,Y. Kohn, through said corporate respondent and as individuals, are also trading and doing business as ~I. B. \Vaterman & ·Co., Not Inc.., The Religious I-Iouse, Glow light Co., Pardon Cross Co., Bernard's of California, Nature's \Yonder, Glo-Sheen Flowers and Glo-Sheen's Flowers Co., with their princ.ipal office and place of business located at 333 South 1\Iarket Street, Chic.ago, Ill.

M. B. WATERMAN & CO. ET AL. 135 133 Complaint PAR. 2. Respondents are now, and for more than 1 year last past hate been engaged in the distribution and sale of various articles of merchandise, including crucifixes, statutes, artificial flmvers, and novelties. Respondents cause and have caused their said products when sold to be transported from their said place of business located in the State of Illinois to purehasers thereof at their respective points of location in the various States of the United States other than Illinois, and in the District of Columbia. Hespondents maintain, and at all times mentioned herein, have maintained a course of trade in their said products in commerce bet"·een and among the various States of the l~nitecl States and in the District of Columbia. P.~n. 3. In the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their said merchandise respondents have cireulated and are now circulating among prospective purchasers throughout the United States through circulars distributed among prospective purchasers, and through advertisement in newspapers, magazines, and other periodicals having a general circulation, false, misleading, and deceptive statements and representations concerning their merehanclise and the nature of their business. Among and typieal of such false, deceptive and misleading statements and misrepresentations disseminated as aforesaid are the follo,ving: Your LAST CHAl\"CE Before Christmas to receiye our newest creation HAND CARYED CRUCIFIX (Picture of Crucifix) This reproduction is the most Beautiful and most imposing crucifix eyer designed. Originally carved, by Hand, in wood, this Burrco ·wood Crucifix carries all the true atmosphere and religious appeal of the ideal of the master artist who created it.

This crucifix is 11 inches in height, beautifully detailed in its carvings. T"·o Big Surprise Gifts Free for Acting Promptly-Ideal Gift-Offer Limited. ACT Arl' ONCE FREE at no cost to you- Reproduction of our Hand Can·ed Crucifix 11" HIGH (Picture of Crucifix) Complaint 46 F. T. C. This magnificant reproduction is made of Bm·rco wood 11" high. BEAUTI- .B'ULLY detailed in CARVED STYLE. The cross is of rich walnut finish. The image, as well as the halo, are in antique ivory by clay-by night, the image GLEAMS A LAVENDER GLOW. This is Your Registry Number-No. 12002. THE IMAGE GLEAMS A LAVENDAR GLOW BY NIGHT.

HOW TO RECEIVE THIS BEAUTIFUL GLOWING CRUCIFIX All you need to do to receive this BEAUTIFUL REPRODUCTION of our HAND CARVED GLOWING CRUCIFIX is to pass out the attached coupons to your friends. If only THREE reach us, you will immediately be eligible to receive YOUR GLO,VING CRUCIFIX-ABSOLUTELY FREE which will be sent to you AT ONCE.

Enclose $1.69 for one; or $3.10 for two, in money oJ'der or check with this coupon and you will receive our FREE GIFT~ and REPRODUCTION of our HAXD CARVED GLOWING CRUCIFIX, ALL PREPAID.

For Every Real American Boy and Girl Mothers And Dads The American Ranger Glowlight Makes A Fine Emergency Night Light Educational And Easy To Please No Batteries No Bulbs Works by Mysten· Glow Free Morse Code And Semaphore Alphabet Chart With Each Glmvlight "Spot"

American Ranger GLOWLIGHT Here it is boys and girls. A PATENTED AMERICAN RANGER GLOWLIGHT that works without BULBS or BATTERIES. IT GLOWS IN THE DARK and you can SPOT DIFFERENT OBJECTS. Yon can give SE~IAPHORE and MORSE CODE SIGNALS. in the clark and have lots of fun. It takes but a few minutes to assemble and it also makes an excellent emergency night light. Complete instructions with each GLOWLIGH'I.

(Said aclrertisement hns a picture of the said Glow light which resembles a very high grade flashlight container and has the appearance of metal and composition covering found on certain fiashlights, and along with some 0f the claims it shows a picture of a small boy casting a strong light on a good· sized clog some feet away from him; a picture which illustrates that signals can be made in the dark with the said Glowlight; a picture of a small boy utilizing the Glowlight to outline a young girl some feet away from him; and another picture of three young boys in uniform of the various armed forces with Glowlight in their bands, which appear to be emitting a very strong beam of light). NEW! GENUI~E PLASTIC PARDON CRUCIFIX THAT GLOWS in the DARK.

FREE PAHDON CROSS * complete with * * * indulgence leaflet M. B. WATERMAN & CO. ET AL. 137 133 Complaint Complete-a Pocket Crucifix with Indulgence Leaflet. (The Indulgence Leaflet contains the following statement:) You have received free five genuine 10 Karet gold plated medals with your St. Christopher Shrine New! ST. CHRISTOPHER MEDAL FOR POCKET OR CHAIN Genuine 10 Kt. Gold Plated QUANTITY LIMITED-ORDER NOW ROSARIES Only $1.49 LAST CHANCE TO OBTAIN BEAUTIFUL CRYSTAL CUT OVAL, ODD SHAPE * * * FAMOUS REPLICA VIRGINIA LUCKYSTONE Now a Genuine Plastic Replica of THE VIRGINIA LUCKYSTONE is available to YOU It is a reproduction of a real curio fashioned by nature in a rare moment. * * * ITS THAT NEW CASUAL CALIFORNIAN Saddle Stitched ALL PURPOSE JACKET QUANTITIES LIMITED STYLED BY BERNARD OF CALIFORNIA * * * An all interwoYen svun enchanting soft-as-down to feel, tailored Jacket for rou to allure Romance, Select yours from the season's ne,vest shades. Camel Tans or Stop Red. Size 12 to 20 QUANTITIES Lil\llTED. PAR. 4. Through the use of the statements and representations hereinbefore set forth and others similar thereto not specifically set out herein, respondents have represented directly and by implication that their said crucifixes are hand carved from wood; that their crucifixes are reproductions of an original hand-carved crucifix; that respondents' crucifixes will glow all during the night; that certain articles are given free as a gift or gratuity and withbut cost; that respondents' offer of articles as being free is limited as to time; that respondents' Glow light will spot objects in the dark, makes an exeellent night light and that it is possible to use said Glow light for the giving of signals in the dark; that respondents' Glow light is made of a leather Findings 46 F. T. C.

Concerning his religious medals :

New! ST. CHRISTOPHER MEDAL FOR POCKET OR CHAIN Genuine 10 Kt. Gold Plated (Admitted in answer) Concerning his "glow lights":

FOR EVERY REAL A:.\lERICAN BOY AND GIRL! MOTHERS AND DADS The American Ranger Glowlight Makes A Fine Emergency Night Light Educational and easy to Build No Batteries No Bulbs Works by MYSTERY GLOW FREE Morse Code and Semaphore Alphabet Chart With Each Glowlight American Ranger GLOWLIGHT Here it is Boys ancl Girls. A PATENTED AMERICAN RANGER GLOW.LIGHT that works without BULBS OR BATTERIES. It GLOWS IN THE DARK and you can SPOT different objects. * * * You can gi>e SEMAPHORE and MORSE CODE SIGNALS in the dark and have lots of fun. It takes but a few minutes to assemble and it also makes an excellent emergency night light. Complete instructions with each glowlight.

(Said advertisement has a picture of the said Glowlig11t which resembles a >ery high grade flashlight container and has the appearance of metal and composition covering found on certain flashlights, and along with some of the claims it shows a picture of a small boy casting a strong light on a good sized dog some feet away from him; a picture which illustrates that signals can be made in the clark with the said Glowlight; a picture of a small boy utilizing the Glowlight to outline a young girl some feet away from him; and another picture of three young boys in uniform of the various armed forces with Glowlights in their hands, which appear to be emitting a very strong beam of light.) (Comm. Ex. 19) Concerning his jackets :

ITS THAT NEW CASUAL CALIFORNIAN Saddle Stitched ALL PURPOSE JACKET • * * QUANTITIES LIMITED STYLED BY BERNARD OF CALIFORNIA * * •.

(Corum. Ex. 26) M. B. WATERMAN & CO. ET AL. 143 133 Findings PAR. 4. Through the use of such statements and representations, said respondent has represented, directly and by implication, that his crucifixes are hand-carved of wood, and that the images on certain of said crucifixes will glow all during the ~light; that his "glow lights" can be used to spot objects and give signals in the dark, that they will make excellent night lights, and that said glowlights are made of metal or leather frames and ·with leather or composition handles; that his crosses referred to as "Replica Virginia Lucky Stones" are curios, formed by nature and found in the mountains of Virginia; that his St. Christopher's medals are 10-kt. gold-plated; that his jackets were tailored and styled in California or by a California manufacturer or designer; and that certain articles of merchandise are given free as a gift or gratuity and without cost to the recipients. Through the use of the trade name "Bernard's of California," the respondent has represented that he was operating in and had a place of business i11 the State of California.

PAR. 5. Contrary to the aforesaid representations, the respondent's crucifixes are not hand carved and are not made of wood, but are ma- ('hine manufactured through the use of metal dies or forms and are made of paper pulp, sawdust, and glue. The images on the crucifixes advertised to gleam a lavender glow by night are coated with some kind of material, the nature of which was not disclosed, and if exposed to strong natural or artificial light will glow faintly, for possibly· 30 minutes thereafter, but they will not glow again until and unless they are reactivated by again being exposed to light. The section of the respondent's "glowlighC corresponding to the bulb and lens of a flashlight is coated with a phosphorous material which~ if exposed to a bright light, will give off a faint glow for a fe,Y minutes, and said "glowlight," even after being exposed to light, will not threw a beam of light or give a light enabling one to spot objects or give signals in the dark. Said "glowlight" is not made of metal, leather, or composition, as represented by the picturizations appearing in the respondent's advertising, but is made entirely of cardboard. The respondent's "Replica Virginia Lucky Stones" are not the orig- ~nal Virginia Fairy Stones, and are not even very good imitations • thereof, but are i11erely plastic crosses formed in the same general shall as ~aid Virginia Fairy Stones.

The respondent's St. Christopher medals are not 10-kt. gold-filled, n~ the respondent represented but are merely gold washed. The jackets sold by the respondent are not made or styled in California. or by n California manufacturer or designer; and the 1'<' · 144 FEDERAL TRADE COM...l\IISSION DECISIONS Order 46F. T. C.

spondent himself has never operated in or had a place of business in the State of California.

The articles represented by the respondent as being "free" or as gifts are not in fac.t given free or a:s a gratuity or without consideration. In some cases the cost of said articles is included in the price of other articles the purchase of which the respondent requires before one can receive the so-called gifts, and in other cases the articles designated as "free" are given only after those who would receive them have rendered to the respondent certain services in connection with the sale of his products. In either case the respondent makes a profit on the entire transaction after taking into consideration the cost of the article or articles delivered to the purchaser or the person performing the services.

For the foregoing reasons, and in the particulars stated, the respondent's advertising representations set forth in paragraph 3 were false, misleading and deceptive.

PAR. 6. The use by the respondent of the foregoing false, misleading and deceptive statements and representations had the tendency and capacity to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements and representations were true, and the tendency and capacity to cause such portion of the public an purchase substantial quantities of the respondent's products because of the erroneous and mistaken belief so engendered.

CONCLUSION The acts and practices of the respondent as herein found were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

Commissioner Davis absent.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, an answer thereto filed by the respondent, l\1ax B. Waterman, testimony and other evidence introduced before a trial examiner of the Commission theretofore duly designated by it, the trial examiner's recommended decision, and brief in support of the complaint (no brief having been filed on behalf of the respondents and oral argument not having been requested); and the Commission having made its findings as to the facts and its conclu- M. B. \VA TERMAN & CO. ET AL. 145 133 Order sion that the respondent, l\:fax B. vVaterman, has violated the provisions of the Federal Trade Commission Act:

It is ordered, That the respondent, :Max B. \Vaterman, individually, nnd trading as l\f. B. \Vaterman & Co., Not Inc., The Religious House, Glowlight Company, Pardon Cross Co., Bernard's of California, and Nature's Wonder, or trading under any other name or through any corporate or other device, and said responde11t's agents, representatives and employees, in connection with the offering for sale, sale or distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act, of crucifixes, crosses, religious medals, "glowlights," jackets, and other articles of merchandise, do forthwith cease and desist from :

( 1) Representing, directly or by implication, that crucifixes or other articles not carved by hand are hand-carved, or that any articles made of substance other than wood is made of wood. (2) Representing, directly or by implication, that any crucifix, or any part thereof, or any other article, which will glow for only a short period of time after exposure to light will gleam or glow all during the night or for any extended period of time. (3) Representing, by picturization or otherwise, that cardboard "glowlights" or other cardboard articles are made of metal, leather, imitation leather, composition, or any material other than cardboard, or representing, directly or by implication that the respondent's "glowlights," by whatever name designated, will throw a beam of light or give any light, except a faint glow for a limited time after exposure to a bright light.

( 4) Representing, directly or by implication, that crosses manufactured of plastic, or of any other material, are "Famous Replica Virginia Lucky Stones" or that they are real curios fashioned by nature, or using any language concerning said crosses which would imply that they are Virginia Fairy Stones.

( 5) Representing, directly or by implication, that religious medals or other articles which have been merely gold washed are gold plated. ( 6) Representing, contrary to the facts, that the respondent's jackets or other wearing apparel has been made or sty led in California. (7) Using the name "Bernard's of California,'' or any other trade name, to indicate that the respondent or his business is located in California, when such is not the fact.

(8) Using the term "free," or any other term of similar import, in advertising, to designate, describe or refer ·to merchandise which is not in truth and in fact a gift or gratuity, or which is not given without requiring the purchase of other merchandise or the performance of 146 FEDERAL TRADE COMM[SSJON DECISIONS Order 46 F. T. C.

some service inuring directly or indirectly to the benefit of the respondent.

It is further ordered, For reasons appearing in the Commission's findings as to the facts in this proceeding, that the complaint herein be, and it hereby is, dismissed as to the respondents l\1. B. vVaterman & Co., a corporation, Dorothea ·yvaterman, and Julius \V. Kahn. It is further ordered, That the respondent, ~fax 13. \Vaterman, shall within 60 days after service upon him of this order file with the Commission a report in writing setting forth in detail the manner and form in which he has complied with this order. Commissioner Davis absent.

G. S. BLAKESLE·E & CO. 147' Order