Continental Radio Tube Co.

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IN THE Matler OF CONTINENTAL RADIO TUBE CO. ET AL.

Complalnt, FINDI NGS, AND ORDERS IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5125. Complaint, Dec. 20, 1949-Decisi?n, .Ap1·. 19, 1951 Many radio repairmen and service dealers are prejudiced against the purchase of war surplus tubes, and have a preference for the current commercial tubes.

Where a corporation and its four officers, eugaged in the interstate sale and distribution of radio tubes- ( a) Removed from radio tubes purchased by them the identification number or symbols placed thereon by the manufacturers or others, substituted in lieu thereof other numbers or symbols, and delivered said tubes in commerce as and for the tubes which are commonly identified in the trade by the substituted numbers and symbols;

(b) Buffed away the service numbers of symbols on war surplus tubes which they had purchased, substituted therefor commercial numbers or symbols, and caused said tubes to be delivered to their customers as the tubes commonly identified by such commercial markings; and (c) Falsely represented that they held a license from Radio Corp. of America and that they were master builders of radio tubes, through statements to such effect on cartons packaging their tubes ; With capacity and tendency to mislead and deceive the trade and public in said respects; and with the effect of placing in the hands of purchasers of their tubes for resale, a means whereby they might and did pass on to the ultimate users thereof incorrectly marked and delusively identified products : Helcl, 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 !Jlr. Clyde 111. Hadley, trial examiner. 1111'. Randolph, W. B1·anch for the Commission. J{iwMiller, Baar & Morris, 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 Continental Radio Tube Co., a corporation, P. D. Jackson, Jacob L. Gaber, Erwin F. Rempert, and Martin Gaber, individually and as officers of said corporation, 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, Complaint 47 F. 'f. C. hereby issues its complaint stating as its charges in that respect as follows:

PARAGRAPH 1. Respondent, Continental Radio Tube Co., is an Illinois corporation and has its principal office and place of business .at 1800 ·wiimemac Avenue, Chicago, Ill. Respondents, P. D. Jackson, Jacob L. Gaber, Erwin F . Rempert, and Martin Gaber, are president, vice president, secretary, and treasurer, respectively, of the respondent, Continental Radio Tube Co. Said respondents are now, and for several years last past, have been engaged in selling radio supplies. In the course and conduct of said business, respondents use the trade names Concert Master Radio Tube Co., and P remier Radio Tube Co. Respondents cause said products, when sold, to be tr1msported from their aforesaid place of business to purchasers thereof located in various States of the United States and in the District of Columbia. Re.:>pondents maintain, and at all times mentioned herein have 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. 2. Respondents advertise their said products in trade publications, and sell the bulk of their products to jobbers, retail dealers, !Ulcl repairmen.

PAn. 3. In the course and conduct of their business as aforesaid, and in promoting the sale of their products, the respondents have engaged in various deceptive and misleading practices. Among those practices, respondents pt~rchase radio tubes from various sources, remove therefrom the identification number or symbol plnced on the tubes by the manufacturer thereof, and substitute, in lieu of said number or symbol, another number or symbol signifying a more expensive tube or a tube of current manufacture. Respondents purchase war surplus tubes, buff away the service marking thereon, and substitute therefor a commercial number or symbol, and stamp thereon the legend "Made in U. S. A.," CC. The carton in which respondents package their aforesaid tubes for shipment to the purchasers thereof, are marked by respondents, "Licensed by Radio Corp. of America," or "Licensed by RCA," when in truth and in fact, respondents were never licensed by the Radio Corp. of America. PAn. 4. By and through the aforesaid acts and practices, the respondents have sold their radio tubes and supplies to the purchasers thereof throughout the United States, who bought said tubes in the Prroneous and mistaken belief that said tubes and supplies were cor- J·ectly marked, and that they were buying current stock of the latest manufacture from a dealer duly licensed by the Radio Corp. of America. By said acts and practices, respondents have also placed in CONTINENTAL RADIO TUBE CO. ET AL. 1279 1277 Decisions the hands of the purchasers of their tubes for resale, a means or instrumentality whereby said purchasers may and do pass on to the ultimate users of the tubes and supplies incorrectly marked and identified products.

P AR. 5. The aforesaid acts and )Jractices of respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair or deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. D ECISION OF THE CoullrrssroN Pursuant to rule X...,""'{II of the Commission's rules of practice, and as set forth in the Commission's "Decision of the Commission and Order to File Report of Compliance," dated April19, 1951, the initial decision in the instant matter of trial examiner Clyde M. H adley, as set out as follows, became on that date the decision of the Commission. I NITIAL DECISION BY CLYDE llf. HADLEY, TRIAL EXAJI:[lNER Pursuant to the provisions of the F ederal Trade Conunission Act, the Federal Trade Commission on December 20, 1949, issued and subsequently served its complaint in this proceeding upon respondents, Continental Corp. (incorrectly designated in the complaint as Continental Radio Tube Co.), a corporation; and P. D. Jackson, J acob L. Gaber, Erwin F. Rempert, and Martin Gaber, individually and as officers of such corporation, charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said Act. After respondents filed their answer in this proceeding, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts signed and executed by counsel for respondents and Randolph W . Branch, for the Federal Trade Commission, may be taken as the f acts in this proceeding and in lieu of testimony in support of and in opposition to the charges stated in the complaint, and that the said statement of facts may serve as the basis for findings as to the facts and conclusion based thereon and order disposing of the proceeding, counsel having duly waived p r~s­ entation of proposed findings and conclusions or oral argument. Said stipulation as to the facts expressly provides that upon appeal to or review by the Commission such stipulation may be set aside by the Commission and this matter remanded for further proceedings under the complaint. Thereafter, this proceeding regularly came on for final consideration by said trial examiner upon the complaint, answer, and stipulation, said stipulation having been approved by the trial examiner, who, after duly considering the record herein, finds that 919675--53----84 Findings 47 F.T. C. this proceeding is in the interest of the public and makes the following findings as to the facts, conclusion drawn therefrom, and order : FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Continental Corp. (incorrectly named in the complaint as Continental Radio Tube Co.) is an Illinois corporation with its principal office and place of business now at 551-553 West Randolph Street, Chicago, Ill. During all the times mentioned herein, respondent P. D. Jackson was the president, respondent Jacob L. Gaber, the vice president, respondent Erwin F. Rempert, the secretary and treasurer of said corporation, and until March 31, 1950, respondent Martin Gaber was its manager to carry out the policies formulated by the officers as to advertising and other operations, and since then has been its vice president and participates in formulation of policies. At the present time, neither said P. D. J ackson nor Erwin F. Rempert is in any way connected with such Continental Corp. PAn. 2. Respondents have been and now are engaged in selling radio supplies, including radio tubes, causing the same, when sold, to be transported from their place of business in the State of Illinois to purc~asers thereof in other States and in the District of Columbia, maintaining a course of trade in said products in commerce between and among the various States of the United States and in the District of Columbia. In conducting said business, respondents have also used the trade names Concert Master Radio Tube Co. and Premier Radio Tube Co. They have advertised their said products in trade publications and sold the bulk of such products to jobbers, dealers, and repairmen.

PAR. 3. In the course and conduct of their business, and in promoting the sale of their products, respondents have purchased radio tubes from various sources, removed the identification numbers or symbols placed thereon by the manufacturers or by others prior to their acquisition by respondents, and have substituted in lieu thereof other numbers or symbols and delivered them in commerce as and for the tubes which are commonly and usually identified in the trade by the numbers and symbols thus substituted. While many of respondents' tubes with the substituted markings were in fact identical with tubes generally so identified, in other instances they were not. Respondents have also purchased war surplus tubes, buffed away the service numbers or symbols thereon, substituted therefor commercial numbers or symbols, and caused them to be delivered to their customers in commerce as and for the tubes which are commonly and usually identified by such cmmnercial numbers or symbols. Thus, a tube originally bearing the Army number "VT- 131" is marked and CONTINENTAL RADIO TUBE CO. ET AL. 1281 1277 Conclusion offered commercially by them as "12S.K7." Many radio repairmen and service dealers are prejudiced against the purchase of war surplus tubes, and have a preference for the current commercial tubes. Various cartons used by respondents in packaging their tubes shipped in commerce bear the following:

Concert Master matched Radio Tubes Uniformly consistent Licensed by R. C. A.

Concert Master Radio Tube Co.

Chicago, Ill. U. S. A.

Continental R adio Tubes Licensed by Radio Corporation of America Continental Radio Tubes designed and engineered by Master Builders of lladio Tubes PAR. 4. In truth and in fact, the Army surplus tubes thus sold by respondents with substituted commercial markings are not, as thereby connoted, current stock of recent manufacture; and certain other tubes sold by respondents bearing their substituted identification marks are not, in fact, the items which said substitute markings indicate to the trade and the public. Respondents do not hold and never have held any license from Radio Corporation of America, nor do they manufacture any of the tubes sold by them. PAn. 5. The aforesaid acts and practices of respondents have had and now have the capacity and tendency to mislead and deceive the trade and the public as to their radio tubes, inducing purchasers to buy the same in the erroneous and mistaken belief that said tubes were correctly marked, were of current stock of the latest manufacture, and were offered by a concern duly licensed by the Radio Corp. of America, and that such corporate respondent is a master builder of radio tubes. By said acts and practices, respondents have also placed in the hands of the purchasers of their tubes for resale, a means or instrumentality whereby said purchasers may and do pass on to the ultimate users thereof incorrectly marked and delusively identified products.

CONCLUSION The acts and practices of said respondents 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.

Order 47 F . T. 0, ORDER It is o1·dered, That the respondents Continental Co., a corporation, trading under its own or by any other name, and P. D. Jackson, Jacob L. Gaber, Erwin F. Rempert, and Martin Gaber, either individually or as officers thereof, and their agents, representatives and employees, directly or through any corporate or other device, in connection with the sale and distribution of radio tubes in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from the following acts and practices : 1. Removing the manufacturers' or other identifying numbers or symbols on radio tubes purchased by them, substituting in lieu thereof other numbers or symbols, and delivering same to customers in commerce as products to which such substitute identification marks would not truthfully or properly apply, as understood in the t trade and by the consurning public.

2. Buffing n.way the service numbers or symbols on war surplus radio tubes purchased by them; substituting therefor commercial 11umbers or symbols, and delivering same to customers in commerce, t·hereby representing directly or inferentially, that such war surplus tubes are current commercial stock of recent manufacture. 3. Representing that respondents luwe been licensed by Radio Corp. of America to make or distribute tubes, or for any other purpose. 4. Repr esenting, by statement or by implication, that respondents are master builders of radio tubes or that they manufacture any tubes whatsoever.

ORDER TO FILl~ REPORT OF COMPLIANCE I t is ordered, That the respondents herein shall, within sixty (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 the order to cease and desist [as required by said declaratory decision and order of April 19, 1951]. GARDNiER & CO. 1283 Complaint