Concrete Materials Corporation

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IN THE MATTER OF CONCRETE MATERIALS CORPORATION COMPLAINT, FINDINGS, .AND ORDER IN REGARD TO THE .ALLEGED VIOLATION OF SEC. 5 OF .AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5474. Complaint, Dec.10, 1946-Decision, Nov. 9, 1949 Where a corporation, engaged in the manufaetnre and interstate sale and distribution, under the trade name "Comco," of various products for treating stone, brick, and cement structures to make them more resistant to water; through statements in folders, pamphlets, circular letters and labels, directly or by implication- (a) Falsely represented that its product "Cornco 2 Iron ·waterproofing" or "Comco 2" or "Comco No. 2," containing 90 percent metallic iron, would permanently stop all leaks and seepage in concrete, brick, stone, and tiles; would waterproof basements below \vater level and pits under pressure; and would, when mixed with water and brushed into the cracks of walls and floors needing repairs, permanently waterproof and stop leaks in such surfaces under all conditions of water contact; and that use thereof would permanently waterproof concrete, brick, stone, and tile walls and floors when used either from the inside or outside and create a positive waterproof condition for all classes of construction under all conditions, no matter how severe;

The facts being that no iron waterproofing has been developed which is capable of coping \With all forms of seepage abo\e and below grade; (b) Falsely represented that its "Comco Transparent "Waterproofing" or "Comco 6" effectively sealed and waten•roofed c:onerete, brick, stone, stucco, plaster and masonry surfaces, and made said smfaces upon which it was applied permanently nonabsorbent to water; · The facts being that said product, composed primarily of aluminum salts in a mixture of fatty acids, was of little vnlne '"hen applied to highly permeable masonry walls; while it would tend to seal the pores in masonr~r surfaces . as against capillary penetration, its efficacy in such connection was less than the life of the structure and might last for but 5 or 6 years; and it \Vould not seal openings larger than pore spaces which permit water to come through in quantity;

(c) Represented that its "Comco Waterproofing Pnste" or "Comco 4" permanently waterproofed concrete on all forms of new construction work; the facts being that while, when properly integrated with concrete, it would impro\e impermeability by effecting small inductions in absorption through capillarity and lessening the incidence of honeycomb, and similar structural defects, it would not effectively waterproof structures below grade which are subjected to water under pressure; and (d) Falsely represented through the use of the 'vord "Waterproof" or words of similar import, that its said products, when applied as directed, would render masonry units or structures impervious to and proof against the pas- I CONCRETE MATERIALS CORP. 153 152' Complaint sage of water and moisture throughout the life of such musonry under all conditions of water or moisture contact or exposure; With tendency and capacity to mislead a substantial portion of the purchasing public with respect to the nature and properties of its products, and thereby cause it to purchase substantial quantities thereof: Held, That such acts and practices, under the circumstances set forth, were all to the prejudice of the public and constituted unfair and deceptive acts and ptactices in commerce.

In said proceeding, in which it appeared that respondent's advertising formerly contained pictures of Chicago's Merchandise Mart, a large office building, tendency and capacity of whicll was to cause purchasers to believe erroneously that such building was respondent's factory and place of business; but that said practice had been voluntarily discontinued by respondent under circumstances which indicated that it would n,ot be resumed: The Commission was of the opinion that no further corrective action was required in the public interest and. the charges of the complaint in said respect were dismissed.

Before llfr. Henry P. Alden, trial examiner. 11!r. Jesse D. K ash for the Commission.

11/r. John J. Toohey, of Chicago, Ill., for respondent. Co:i.\IPLAINT 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 Concrete J\laterials Corp., a corporation, hereinafter.r referred to as respondent, has violated the provisions .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:

P AR..-\GrtAPH 1. Respondent is a corporation organized and existing ·under and by virtue of the laws of the State of Illinois with its office -and principal place of business located at 318-320 'Vest Hubbard Street, Chicago, Ill. The respondent is now and for more than 1 year last past has been engaged in the manufacture and distribution -of various compounds or materials represented as waterproofing agents for treating stone, brick, and cement structures so as to make them more resistant to water. Said products are sold under the trade name "Comco."

PAR. 2. The respondent eauses said products, when sold, to be transported from its _place of business in the State of Illinois to purchasers thereof located at various points in the several States of the United 154 FEDERAL TRADE COM:\USSION DECISIONS Complaint 46F.T.C.

States and the District of Columbia. Respondent maintains, and at all times herein mentioned has maintained, a course of trade in said products in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In the course and c.conduct of its said business and for the purpose of inducing the purchase of its products, the respondent has circulated, and is now circulating, among prospective purchasers throughout the United States by United States mails, by means of advertising folders, pamphlets, circular letters, labels and other advertising material, all of general circulation, many false statements and representations concerning its said pr.oducts. Among and typical of such false statements and representations are the following: You can now permanently stop all leaks and seepage in concrete, brick, stone and tile; also waterproof below water level basements and pits under pressure. Comco No. 2, our own waterproofing will do the job. This is a special chemical mixture of iron and other chemicals that, when mixed with water only, and brushed into the cracks of walls and floors needing repair will permanently waterproof and stop leaks under all conditions no matter how severe. For after-construction waterproofing problems in foundations. Permanently waterproofs conc:r:ete, brick, stone and tile walls and floors from either inside or outside. For all classes of construction where a prospective waterproof condition is necessary. Successful under all conditions no matter how severe. Comco 6, Comco Transparent Waterproofing. A transparent water repellent liquid that effectively seals and waterproofs concrete, brick, stone, stucco, plaster or masonry surfaces. Makes surface permanently non-absorbent. Comco 4, Comco waterproofing paste for new construction work. Produces a close-meshed concrete that increases strength and permanently waterproofs. Makes concrete flow easily around reinforcing. PAR. 4. Through the foregoing statements and representations hereinabove set forth and others similar thereto but not specifically set out herein, the respondent represents directly or by implication that its product "Comco 2'' will permanently stop all leaks and seepage in concrete, brick, stone, and tile; that it will waterproof basements below water level and pits under pressure; that said product is a special ·chemical mixture of iron and other chemicals which, when mixed with water and brushed into the cracks of walls and floors needing repairs, will permanently waterproof and stop leaks in same under all conditions no matter how severe; that its use will permanently waterproof concrete, brick, stone, and tile walls and floors when used either from the inside or outside; that its use creates a positive waterproof condition for all classes of construction, and successfully waterproofs under all conditions no matter how severe; that its product "Comco 6," transparent waterproofing, effectively seals and waterproofs concrete, brick, stone, stucco, plaster, and masonry surfaces, and makes said surfaces CONCRETE MATERIALS CORP. 155 152 Complaint upon which it is applied permanently nonabsorbent to water; that its product, "Comco 4," waterproofing paste, produces a close meshed concrete on any construction work, and increases the strength and permanently waterproofs same; and that its use makes concrete flow easily around reinforcing.

Respondent thereby represents, directly and by implication that its said products will permanently waterproof concrete, brick, stone, or tile walls or floors, permanently stop all leaks or seepage therein, or make the surface thereof permanently nonabsorbent, and that said products afford permanent or everlasting protection to walls, surfaces, and structures to which they are applied.

PAR. 5. The foregoing statements and representations are false, misleading and deceptive. In truth and in fact, respondent's product Comco 2 iron waterproofing, cannot be considered a satisfactory waterproofing for permeable brick masonry 'valls when applied to the inside exposed face of said walls. Its use does not create a positive waterproof condition for all classes of construction such as concrete, brick, stone, and tile walls and floors under all conditions, regardless of how severe. Said product will not permanently stop all leaks and seepage in concrete, brick, stone, and tile, and will not waterproof basements below water level and pits under pressure. Respondent's said product :is not a special chemical mixture of iron and other chemicals which, when mixed with water and brushed into the cracks of walls and floors, will permanently waterproof and stop leaks and cracks under all conditions. Respondent's product Comco transparent waterproofing is ineffective and of little or no value as a waterproofing for permeable brick, masonry and does not effectively seal m1cl waterproof concrete, brick, stone, stucco, plaster, or maso_nry surfaces, and does not make the surfaces on which it is applied nonabsorbent to water. Respondent's product Comco 4 waterproofing paste is a fatty-acid type of water repellent agent. 1Vhile said product may effect sniall reductions in absorption by capillarity and improve the impermeability, it is not satisfactory or effective for below-grade structure where a waterproofing agent is needed. The lasting or durable quality of the aforesaid products is limited at most by the life expectancy of the base to which they are applied. The aforesaid products will not permanently waterproof concrete, brick, stone, and tile, nor make the surfaces of same permanently nonabsorbent to water. 1Vhile respondent's waterproofing preparations, when expertly applied under certain limited conditions of use, may effectively waterproof such structures for varying periods of time, the effectiveness is not permanent under any condition of use. Said preparations will not effectively waterproof con- Findings 46F. T. C crete, brick, stone, and tile walls and floors or other masonry structures when such surfaces are subjected to water under pressure. There are other products and materials on the market like or similar to those of respondent, which, when expertly applied under certain limited conditions of use, are as effective as respondent's said products. However, no products or materials have yet been developed which are capable of coping with all forms of seepage above and below grade. PAR. 6. In advertising circulars having general interstate circulation among customers and prospective customers of respondent corporation, above the words print~d in heavy black type: CONCRETE MATERIALS CORPORATION appears a picture of a large office bnj}ding, depicting Chicago's :.Merchandise ~1art, said pictorial representation being intended to convey, and conveying, the impression that the said building shown therein was and is the factory and place of business owned and operated by the respondent herein, and from which products manufactured by the respondent were, and are, shipped direct to the consumer. In truth and in fact, the respondent's business is neither located in, nor operated from, the building so depicted in its advertising, nor irom any building remotely approaching in size or appearance the said building so pictorially displayed in respondent's said circular. While respondent's premises on 'Vest Hubbard Street are in close proximity to Chicago's ~1erchandise Mart building, there is no connection, physical or otherwise, between them. PAR. 7. The use by respondent of the foregoing statements and representations disseminated as aforesaid has had, and now has, the tendency and capacity to, and does, mislead and deceive a substantial portion of the purchsing public into the erroneous and mistaken belief that such statements and advertisements are true and did and does induce a substantial portion of the purchasing public to purchase substantial quantities of respondent's said products as a result of such belief, so induced.

PAR. 8. The aforesaid acts and practices of respondent as herein alleged are all to the 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.

REPORT' FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act~ the Federal Trade Cmnmission on February 10, 1946, issued and sub- CONCRETE MATERIALS CORP. 157 152 Findings sequently served its complaint in this proceeding upon the respondent, Concrete l\faterials Corp., a corporation, charging it with the use o:f unfair and deceptive acts and practices in commerce in violation o:f the provisions of that act. Respondent having elected to file no answer thereto, testimony and other evidence in support of and in opposition to the allegations of the complaint subsequently were introduced before a trial examiner of the Commission theretofore duly designated by it, and such testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on the complaint, the testimony, and other evidence, the trial examiner's recommended decision and exceptions thereto filed by respondent, briefs in support of and in opposition to' the allegations of the complaint, and oral argument; and the Commission, having considered the matter and being fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO THE FACTS P AR.A.GRAPH 1. Respondent is a corporation organized and existing under and by virtue of the laws of the State of Illinois, with its principal office and place of business located at 318-320 "\Vest Hubbard Street, Chicago, Ill. The respondent is now, and for 8 years last past has been, engaged in the ma~ufacture and distribution of various products for treating stone, brick, and cement structures to make them more resistant to water which are sold under the trade name "Comco." PAR. 2. The respondent causes its products, when sold, to be transported from its place of business in the State of Illinois to purchasers thereof located at various points in the several States of the United States and the District of Columbia. Respondent maintains, and at all times herein mentioned has maintained, a course of trade therein in commerce among and between the various States of the United States and in the District of Columbia.

P .AR. 3. In the course and conduct of its business, and for the purpose of inducing the purchase of its products, the respondent has circulated, and is now circulating, among prospective purchasers throughout the United States, advertising matter by means of folders, pamphlets, circular letters, and labels containing many statements and representations concerning its products. Among and typical o:f such statements and representations are the following: You can now permanently stop all leaks and seepage in concrete, brick, stone and tile; also waterproof below water level basements and pits under pressure. Findings 46F. T. C.

Comco No. 2, our own waterproofing will do the job. This is a special chemical mixture of iron and other chemicals that, when mixed with water only, and brushed into the cracks of walls and floors needing repair will permanently waterproof and stop leaks under all conditions no matter how severe. For after-construction waterproofing problems in foundations. Permanently .waterproofs concrete, brick, stone and tile walls and floors from either inside or outside. For all classes of construction where a positive waterproof condition is necessary. Successful under all conditions no matter how severe. Comco 6, Comco Transparent 'Vaterproofing. A trnnsparent wnter repellent liquid that effectively senls and waterproofs concete, orick, stone, stucco, plaster or masonry surfaces. l\lakes surface permanently non-absorbent. Comco 4, Cornco 'Vaterproofiug Paste for new construction work. Produces a close-meshed concrete * * * and permanently waterproofs. * * *. PAR. 4. Through the foregoing statements and representations hereinabove set forth and .others similar thereto but not specifically set out herein, the respondent represents directly or by implication that its product "Com co 2" (also designated as "Comco 2 Iron \Vaterproofing" and as "Com co No. 2") will permanently stop all leaks and seepage in concrete, brick, stone, and tile; that it will waterproof basements below water level and pits under pressure; that said product, when mixed with water and brushed into the cracks o:£ walls and floors needing repairs, will permanently waterproo:£ and stop leaks in such sur:faces under all conditions o:£ water contact; and that its use will permanently waterproof concrete, brick, stone, and tile walls and floors when used either from the inside or outside and will create a positive waterproo:£ condition :for all classes o:£ construction under all conditions no matter how severe. Respondent :further represents that its product "Com co 6" (also designated as "Comco Transparent 'Vater-proofing") effectively seals and waterproofs concrete, brick, stone, stucco, plaster, and masonry surfaces, and makes said surfaces upon which it is applied permanently nonabsorbent to water; and that the product "Comco 4" (also designated as "Comco \Vaterproofing Paste") permanently waterproofs concrete on all forms o:£ new construction work.

PAR. 5. Such representations are :false m1d misleading. The product "Comco 2 Iron "\Vaterproofing" is a powder composed o:£ 90 percent metallic iron, 8 percent sand, and 2 percent ammonium chloride. To masonry surfaces which have been cleaned with a wire brush and subsequently flushed with water and then permitted to dry :for 8 to 24 hours, respondent directs that "Comco 2 Iron \V aterproo:fing" be applied with a paint brush in a ''"after mix o£ heavy consistency. CONCRETE MATERIALS CORP. 159 ':

152 Findings The application of two coatings of the product is represented to be sufficient but respondent s~1ggests the addition of a third coat to any damp spots which later may appear. . In experiments conducted by the National Bureau of Standards, Cameo 2 Iron 1Vaterproofing, applied as directed by respondent, did riot prevent the penetration of water through a brick wall under conditions simulating wind-driven rain. Applied as directed to the inside of permeable brick masonry surfaces, such product is not a satisfactory waterproofing and its use will not create a positive waterproof condition for all classes of construction, such as concrete, brick7stone, and tile walls and floors under all conditions of water or· moisture contact, particularly as against water under pressure, in-. eluding some conditions of wind-driven rain. It will not waterproof basements below water level and pits when subjected to water under pressure. No iron waterproofing has been developed which is capable of coping with'all forms of seepage above and below grade. "Comco 6," also designated as "Com co Transparent 1V aterproofing," recommended for application by either brush or spray, is composed primarily of aluminum salts in a mixture of fatty acids. It js of little value "·hen applied to highly permeable masonry walls. 1Vhile it will tend to seal the pores in masonry surfaces as against capillary penetration, its efficacy in such connection is less than the life o:f the structure and may last for but 5 or 6 years. Comco 6 will not seal openings larger than pore spaces which permit water to come through in quantity. The product will not effectively seal or waterproof concrete, brick, stone, stucco, plaster, or masonry sur:faceti under all conditions o:f use or make stn·:faces to which it is applied nonabsorbent to water.

"Comco 4," also designated as "Comco vVaterproofing Paste," is a :fatty-acid type o:f water repelling agent. When properly integrated with concerte it will improve impermeability by effecting small in- I ductions in absorption through capillarity and lessening the incidence o:f honey-comb and similar structural defects. It will not effectively waterproof structures below grade which are subjected to water under pressure.

Through the use o:f the word "waterproof" or words of ·similar import, respondent has :falsely represented that its products, when applied as directed to masonry units or structures, will render such units or structures impervious to and proof against the passage o:f · water and moisture through the life o:f such masonry under all conditions o:f water or moisture contact or exposure. Order 46F. T. C.

PAR. 6. The use by the respondent of the representations referred to above has had, and now has, the tendency. and capacity to mislead a substantial portion of the purchasing public with respect to the nature and properties of respondent's products, and a tendency and capacity to cause such portion of the public to purchase substantial quantities thereof as a result of the erroneous and mistaken beliefs so engendered. CONCLUSION The acts and practices of the respondent as herein found are all to the prejudice of the public and· constitute unfair and deceptive acts .and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

In close proximity to the corporate name respondent's advertising formerly contained pictures of Chicago's :Merchandise :Mart, a large office building, which depiction had the tendency and capacity to cause purehasers to erroneously believe that such building was the factory nnd place of business from which respondent's products were manufactured and shipped to the consumer. In view of respondent's vohmtary discontinuance of such practice under circumstances indicative that it will not be resumed, the Commission is of the opinion that no further corrective action is required in the public interest and the charges of the complaint in respect thereto are being dismissed. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the testimony and other evidence taken before a trial examiner of the Commission theretofore duly designated by it, the recommended decision of the trial examiner, nnd the exceptions filed by respondent, briefs in support of and in opposition to the allegations of the complaint, and oral argument; and the Commission having made its. findings as to the facts and its conclusion that Concrete ~1aterials Corporation, a corporation, has violated the Federal Trade Commission Act:

It is ordered, That the respondent, Concrete Materials Corp., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution in commerce, as "commerce" i~ defined in the Federal Trade Commission Act, of respondent's products now designated as "Comco 2 Iron Waterproofing," "Comco 6," and "Comco 4," or any products of substantially similar composition or possessing substantially similar properties, under whatever names sold, do forthwith cease and desist from:

CONCRETE MATERIALS CORP. 161 152 Order 1. Representing in any 'manner that when used as directed "Comco 2 Iron vV aterproofing," under all conditions of water or moisture contact, will waterproof concrete, brick, stone, or tile walls, or floors, or stop leaks or seepage in or through masonry structu"res or surfaces, or that such product will waterproof basements below water level or pits under pressure.

2. Using the words "waterproof" or ''waterproofing" or words of similar import, to describe or refer to "Comco 2 Iron vVaterproofing" without disclosing that such product will not render masonry structures or surfaces impermeable to water under all conditions of contact, particularly water under pressure.

3. Representing in any manner that "Comco 6," also designated as "Comco Transparent "'\Vaterproofing," effectively seals or waterproofs permeable concrete, brick, stone, stucco,, plaster, or masonry surfaces or makes such surfaces nonabsorbent under all conditions of water or moisture contact.

4. Using the words "waterproofing" or "waterproof," or words of similar import, to designate, describe, or refer to "Comco 6," also designated as "Comco Transparent "'\Vaterproofing," without disclosing that such product will not seal such large openings in masonry units as permit water to penetrate in quantity and that such value as may be afforded by use of the product stems from the tendency thereof to temporarily seal pores in treated masonry units against capillary penetration of moisture.

5. Representing in any manner that "Comco 4," also designated as "Comco "'\Vaterproofing Paste" "\vaterproofs concrete under all conditions of water contact; or using the words "waterproofing" or "waterproof," or words of similar import, to describe or refer to such product "\vithout disclosing that its use will not render surfaces below grade impermeable to water under pressure.

It is fuJ•tlLer ordered, That the charges of the complaint directed to respondent's former use in close proximity with its corporate name o-f pictures of a large office building in which respondent did not have a place of business be, and the same hereby are, dismissed without prejudice to the right of the Commission to take such further action in the future as may be warranted by the then-existing circumstances. 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 a.nd form in which it has. complied with this order.

Syllabus 46 F. T. C.