Louis Gordon and Ben Gordon

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

IN THE MA'l"ler OF LOUIS GORDON AND BEN GORDON TRADING AS BENGOR PRODUCTS CO.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THill ALLEGED Violation OF SlllC. 5 OF AN AC'l' Oli' CONGRESS APPROVED SEPT. 26. 1914 Docket 4420. Oomplai.nt, Dec. 16, 191,0- Decision, Jmw 20, 1951 Where two partners engaged in the interstate sale and distribution of miscellaneous merchandise including cosmetics, perfumes, shaving and dental cream, soap, drug and household sundries, handl<erchiefs, ladies' hose, pajamas, pocl<etbooks, punchboards, push cards, novelties, and household notions; in advertising their merchandise in trade magazines and newspapers, and in catalogs and advertising circulars distributed through the mail and otherwise to wholesale purchasers- (a) H.epresented that various products were ordinarily and customarily sold to consumers at a stated price through such typical statements as "Dr. Sachs Dental Cream 35¢ size tube Dozen 45¢ GO¢ size tube Dozen 65¢," "Royal Blue Dental Cream • * * 35¢ size tube Dozen 4G¢ 60¢ size tube Dozen 65¢," aud ''Powder & Perfume Combination * * * a real Flash. Is packed 12 deals to a box. Retails for 25¢ each. Priced to neat All Competition. Dozen G5¢ gross $7.20 * * • Sun Glo Roses Annette price $1.00";

When in fact the aforesaid au<l other prodllcts offered flllcl sold by them were ordinarily sold to consumers at prices considerably lower than lhose so represented as consumer prices;

With the result of placing in the bancls of retailers buying such products for resale an instrumentality whereby they might deceive the purchasing public by offering sai<l products at purported discounts from the factitious retail price;

(b) J<'falsely represented that ccrtoin of their products were mode in accordance with the formula and under the supervision of a member of the medical or dental profession through such statements as "Dr. Dade's Skin Soap," etc.; (c) Falsely represented that cet·taln of their domestic perfumes were manufac~ tured in France and imported into the United States through the use of the term "Parfnms Jockey Club de Paris" ; and, (d) Falsely rcprcsente<l that certain rayon products were composed wholly of silk and that others were composed of silk in combination with rayon, through such statements as "Ladies' Silk Rayon Hose," "Ladies IIose Rayon Silk Ringless," "A dainty and distinctive handkerchief of rayon silk * '" *" "Men's Pure Silk Handkerchiefs," and "Men's Sili< Pajamas Manufactured from Rayon Silk" ;

With effect of misleading and deeelving the purchasing public and retailers into the enoneous belief that such false representations were true, ami with capacity and tendency so to do and thereby induce purchase of their said prod1tcts; and, Where snit! partners, engaged in the interstate sale ancl distribution of push cards and punrhboards whicll, bearing explanatory legends or blank spaces BENGOR PRODUCTS CO. 1379 1378 Oomplaint provided therefor, were designed for use in the sale and distribution of merchandise at retail by means of a game of chance under a plan whereby the purchaser of a push or punch '.Yho, by chance, selected a concealed winning number, secured an article without additional cost and at much less than the normal retail price, others receiving nothing further for their money- Sold such device to dealers engaged in the sale and distribution of other merchandise; and thereby supplied to and placed in the hands of others the means of conducting lotteries, gift enter pr ises, or games of chance in the sale and distribution of their merchandise to the consuming public, contrary to established public policy of the United States : H elll, '!'hat such acts and 1wactices, under the circumstances set forth, were all to the prejudice and injury of the public, and constituted severally unfair methods of competition in commerce and unfair or deceptive acts or practices therein.

As respects the allegations in the complaint that respondents represented that they were giving cer tai n merchandise free, that in fact the mercha.ndise was given only to purchasers of other merchandise, that the price of the so-called free merchandise was included in that of other merchandise, and that such offer of free goods constituted their regular methf><1 of doing business: It appearing that the record showed that respondents bad discontinued such false representations in 1940, the Commission, in the absence of any reason to believe that they would be resumed, was of the opinion that in the circumstances the public interest did not then required further corrective action as to said discontinued practice.

Before Mr. L. 0. Russell and Mr. John L. Hm-nor, trial examiners. Mr. J oseph 0. F ehr and Mr. J . W. Brookfield, Jr. for the Commission.

Mr. Sarnttel J. Ernstolf, of New York City, for respondents. Complaint P ursuant to the>. provisions of the F ederal Trade Commission Act, Mel by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Louis Gordon and Ben Gordon, individuals and copartners trading as Bengor Products Co., hereinafter referred to as respondents, have 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: PARAGRAPH 1. Respondents, Louis Gordon and Ben Gordon, are copartners doing business under the trade name of Bengor Products Co., with their principal office and place of business located at 878 Broadway, in the city of New York, State of New York. PAR. 2. Respondents are now, and for more than 2 years last past have been, wholesale dealers engaged in the sale and distribution in Complaint 47F. T. 0.

commerce among and between the various States of the United States of a variety of miscellaneous merchandise, including cosmetics, perfumes, shaving and dental creams, soap, drug and household sundries, handkerchiefs, ladies' hose, pajamas, pocketbooks, punchboards, IJ.OVelties, and various household notions. Respondents cause said products when sold by them to be shipped from their principal place of business in the State of New York to the purchasers thereof located in various other States of the United States, and in the District of Columbia.

Respondents maintain, and at all the 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. 3. In the course and conduct of their business the respondents are now and during all times mentioned herein have been, engaged in substantial competition with various other individuals and copartnerships and with corporations engaged in the offering for sale and selling various items of merchandise similar to those sold and distributed by respondents 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 the respondent:,; publish catalogs and various advertising circulars listing and describing the various articles of merchandise sold and distributed by them. Respondents distribute such catalogs and circulars by United States mails and by other means to purchasers and prospective purchasers located in the various States of the United States and in the District of Columbia.

For the purpose of inducing the purchase of the various products sold and distributed by them and listed in said catalogs and circulars, the respondents in the course and conduct of their business have engaged in the practice of falsely representing the quality, material, construction, durability, price, point of origin, and other characteristics of the products sold and distributed by them. In furtherance of this practice the respondents place in said catalogs and circulars various descriptive statements concerning their various products, which statements are exaggerated, false, and misleading. P AR. 5. Typical of these acts and practices are representations made by the respondents with reference to the retail selling price or value of certain of their products as follows :

(1) DR. SAf'H~ DF.NTAL CREAM:

31\e size tube Dozen 45¢.

60¢ size tube Dozen 65¢.

BENGOR PRODUCTS CO. 1381 1378 CQmplaint (2) ROYAL BLUE DENTAL ORE.AM:

Quality guaranteed.

35¢ size tube Dozen 45¢.

60¢ size tube Dozen 65¢.

(3) POWDER & PERFUME C.OMBIN.ATION . .A large box of quality face powder in assorted shades and a bottle of perfume cellophaned together. .A real FLASH. Is packed 12 deals to a box. Retails for 25¢ each: PRIOED TO BEAT ALL COMPETITION. Dozen 65¢. Gross $7.20. (Illustration of single box or package shows words . and figures as follows :) Sun Glo Roses Annette Price $1.00. By means of the above representations and others similar thereto not specifically set ont herein, the respondents represent that various: of their products have a retail price greatly in excess of the actual selling price at which such merchandise ordinarily and customarily is sold to consumers. Respondents' dental creams, represented as "60¢ size," actually are sold to the retail. trade at 65 cents per dozen. Respond.ents' "Powder and Perfume Combination," represe~ted as. retailing at 25 cents, is sold. to-retailers at 65 cents per doz~n packages.. The aforesaid false and misleading statements and representatiops consisting of fictitious retail prices for such products place in the hands of retailers and pedcUers, buying such products fro;m respondents for resale,, an instrumentality and means whereby said ret.ail~rs and peddlers may mislead and deceive a substantial portion of the purchas~ ing pu.bli<; by enabling such peddlers and. dealers to represent and offer for sale and sell respondents said products at various purported, di.scounts from the marked resale price. . : PAR. 6. Also typical of the acts and practices hereinabove described are representations that certain items of merchandise are given free on various quantity purchases, such as the following: FREE MERCHANDISE-Your choice.

Value $7.50, E-Z ELECTRIO RAZOR FREE with an order of $100.00 or more.

Value $5.00, 26 Piece Wm. A. Rogers Silverware Set FREE with an order of $60.00 or more.

LI<lHTHOUSE ELECTRIC CLOCK, Value $5.00 FREE with an order of $75.00 or more.

The products and articles of merchandise which the respondents represent are given free are not free in any instance. The respondents do not give any specified items of merchandise free~ as the price of the so-called "free" items of merchandise are included in the price of other articles of merchandise. The price paid by the purchaser is the regular price which would be paid for the combination of various items including so-called "free" goods . . Furthermore, this offer of "free" goods is one of long-standing and constitutes respondents' per- Complaint 47F. T. C.

manent method of doing business, and the price of the "free" -goods is included in the price of other items which must be purchased to obtain the so-called "free" items.

PAR. 7. Another typical example of the acts and practices her~ein­ above described is the use of such designations as "Dr. Sachs," and "Dr. Dade's," in the trade or brand name of their various products by which respondents represent that the formula of such products has been prepared from a formula of a member of the medical or dental professions or that such products are made under the supervision and direction of a medical or dental practitioner. Examples of the use of such names by the respondents are the following: Dr. Sachs Dental Cream Dr. Dade's Skin Soap The products so marked, stamped, branded, advertis~ct, and sold by the respondents are not made in accordance with the formula of a member of the medical or dental profession. Said products are not made under the supervision of a member of the medical or dental professions as represented.

PAR. 8. Another-and typical example of the acts and practices hereinabove described is the representation by the respondents that certain of their cosmetic products are manufactured in France and imported into the United States. In this connection the respondents use the statements "Parfums. Jockey Club de Paris" in descdbing various of their products. By this means the respondents represent that such products are manufactured in France and imported into the United States.

In truth and in fact such perfumes sold and distributed by the respondents are not imported from·France or any other foreign country into the United States but are wholly manufactured within the United States.

There is a preference on the part of the buying public for perfmnes ·which are manufactured in foreign countries and imported into the United States. This is particularly true regarding perfumes manufactured in France, and such goods so manufactured and imported demand and bring from the purchasing public a higher price in the markets of the United States than domestic perfumes and cosmetics of the same nature and description.

PAn. 9. A further typical example of the acts and practices of the respondents as hereinabove described are false representations with reference to the constituent fibers of which various of their products arc maclc. In describing ladies' hose, men's handkerchiefs, and men's pajamas, the respondents mn.ke the following statements: ..

BENGOR PRODUCTS CO. 1383 1378 Complaint LADIES' SILK Rayon Hose.

LADIES' HOSE, Rayon Silk Ringless.

A dainty and distinctive handkerchief of rayon silk with beautiful cut-out borders.

Men's Pure Silk Handkerchiefs.

Men's Silk Pajamas Manufactur~l from Rayon Silk . . By means of the above statements arid representations the respondents represent that the various products so described are made wholly of silk, the product of the cocoon of the silkworm, or are composed of silk in combination with rayon, when in truth and in fact all of said products are composed wholly of rayon.

PAR. 10. Over a period of many years the word "silk" has had, and still has, in the minds of the purchasing and consuming public generally a definite and specific meaning as being the product of the cocoon of the silkworm. Silk products for many years have held, and still hold, great public esteem and confidence for their pre-eminent qualities.

Rayon is a chemically manufactured fiber or fabric which may be manufactured so as to simulate silk and when so manufactured it has the appearance and feel of silk and is by the purchasing public practically indistinguishable from silk. By reason of these qualities, rayon, when manufactured to simulate silk and not designated a,s rayon, is readily believed and accepted by the purchasing public as being silk, the product of the cocoon of the silkworm. PAR. 11. The use by the respondent of the acts and practices hereinabove described, and the foregoing false, deceptive, and misleading statements and representations, has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of the purchasing public and retail dealers into the erroneous and mistaken belief that such false statements, representations, and advertisements are true, and to induce a portion of the purchasing public and retail dealers, because of such erroneous and mistaken belief, to purchase respondents' products.

PAn. 12. In addition to the false, deceptive, and misleading representations hereinabove described, the respondents are also engaged in the sale and distribution in commerce among and between various States of the United States of devices commonly known as push cards and punchboards to dealers engaged in the sale and distribution of various other articles of merchandise in commerce among and between the various States of the United States and in the District of Columbia. These various lottery devices are listed and described by the respondents in their various catalogs and advertising circulars. Said push 1384 FEDERAL . 'l'RAJ?!Jl COMl\ops~~ON DECISIONS Complaint 47F. T. C.

cards and punchboards are so prepared and ftrranged as to involve games of chance, gift enterprises, or lottery schemes when used in making sales o'f articles of merchandise· to the purchasing public. Respondents sell and distribute, and have sold and distributed, various kinds of said punchboards or lottery devices, all of which . devices involve the same chance or lottery features when used in connection with the sale or distribution of merchandi~e and vary only in detail. . Many of said punc.hboal:ds or lottery devices have printed on the faces thereof certain legends or in!'Jtructions thp.t explai~ the manner in which said devices are to be used or may be used in the sale or distribution of various specified articles of merchandise. The prices of the sales on said punchboards or lottery devices vary in accordance with the individual dev:ice. Each purchaser is entitled to one punch or push from the punchboard or lottery device, and when a push or punch is made a disk or printed slip is separated from the punchboard or lottery device and a number is disclosed. The numbers are effec·· tively concealed from the purchasers and prospective purchasers until a selection has been ma,de and the push or punch completed. Certain specified numbers entitle purchasers to designated articles of merchandise. Persons securing lucky or winning numbers receive articles of merchandise without additional cost at prices which are much less than the normal retail prices of said articles of merchandise. Persons who do not secure such lucky or winning numbers receive nothing for their money. The articles of merchandise are thus distributed to the consuming or purchasing public wholly by lot or chance. Others of said punchboards or lottery devices have no instructions or legends thereon but have blank spaces provided therefor. On those punchboards or lottery devices the purchasers thereof place instructions or legends which have the same import and meaning as the instructions or legends placed by the respondents on said punchboards or lottery devices f).rst hereinabove described. The only use to be made of said punchboards or lottery device.s, and the only manner in which they are used, by the ultimate purchasers thereof is in combination with other merchandise so as to enable said ultimate purchasers to sell or distribute said other merchandise by means of lot or chance as hereinabove alleged.

PAn. 13. Many persons, firms, and corporations who sell and distribute, and have sold n.nd distributed candy, cigarettes, clocks, razors, cosmetics, clothing, and other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia, purchase and have purchased respondents' said punchboarcl and pusl1-card devices, and pack and assemble, and have ....

BENGOR PRODUCTS CO. 1385 1378 Complaint packed and assembled, assortments comprised of various articles of merchandise together with said punchboard and push-card devices. Retail dealers who· have purchased said assortments, either directly or indirectly, have exposed the same to the purchasing public and have sold or distributed said articles of merchandise by means of said punchboards and push cards in accordttnce with the sales plan as hereinabove described. Because of the element of chance involved in connection with the sale and distribution of said merchandise by means of said devices, many members of the purchasing public have been induced to trade or deal with retail dealers selling or distributing said merchandise by means thereof. As a result thereof, m~ny retail dealers have been induced to deal with or trade with manufacturers, wholesale dealers, and jobbers who sell and distribute said merchandise together with said devices. Said persons, firms, and corporations have many competitors who sell or distribute like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. Said competitors are faced with the alternative of descending to the use of said lottery devices or other similar devices which they are under a powerful moral compulsion not to use in connection with the sale or distribution of their merchandise, or to suffer loss of substantial trade. Said competitors do not sell or distribute their merchandise by means of said devices or similar devices because of the element of chance or lottery features involved therein, and because such practices are contrary to the public policy of the Government of the United States and in violation of criminal laws, and such competitors refrain from supplying to, or placing in the hands of, others punchboard or push-card devices, or any other similar devices which are to be used, or which may be used in connection with the sale or distribution of the merchandise of such competitors to the general public by means of a lottery or chance. As a result thereof, substantial trade has been unfairly diverted to said persons, firms, and corporations from said competitors in said commerce, who do not sell or use such devices. PAn. 14. The sale of merchandise to the purchasing public through the use of, or by means of, such devices in the manner above aJ]egecl, involves a game of chance or the sale of a chance to procure articles of merchandise at prices much less than the normal retail prices thereof and teaches ~tncl encourages gambling among members of the public, all to the injury of the public. The use of said sales plan or method in the sale of merchandise and the sale of merchandise by and through the use thereof, and by the aiel of said sales plan or method is a practice of a sort which is contrary to an established public policy of 1386 FEDERAJJ TRADE COMMISSION DECISIONS Findings 471!". T. C. the Government of the United States and in violation of criminal laws, and constitutes unfair methods of competition and unfair acts and practices in said commerce.

The sale or distribution of said lottery devices by respondents, as hereinabove alleged, supplies to, and places in the hands of, others the means of conducting lotteries, games of chance, or gift enterprises in the sale or distribution of their merchandise. Respondents thus supply to, and place in the hands of, said persons, firms, and corporations the means of, and instrumentalities for, engaging in unfair methods of competition and unfair acts and practices within the intent and meaning of the Federal Trade Commission Act. PAn. 15. The afot·csaid acts and practices of respondents as herein 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. R EPORT, FINDINGS A.S TO THE FAm·s, A.ND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on December 16, 1940, issued and subsequently served its complaint in this proceeding upon the responclmits named in the caption hereof, charging them with the use of unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of the provisions of that act. After the filing of respondents' answer, testimony, and other evidence in support of the allegations of the complaint, including a stipulation of counsel aclmitting all of the allegations of the complaint with the exception of those included in the second subparagraph of paragraph 4 and paragraphs 12 to 15, inclusive, were introduced before trial examiners of the Commission thereto-fore duly designated by it (no testimony or other evidence having been presented in opposition to the allegations of the complaint) and such testimony and other evidence were du]y recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on :for final hearing before the Commission upon the aforesaid complaint, the respondents' answer thereto, the testimony, and other evidence, and the recommended decision of the substitute trial examiner, the trial examiner originally designated by the Commission being deceased, anrl 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 duly considered the matter and being now fully advised in the BENGOR PRODUCTS CO. 1387 1378 Findings premises, finds that this proceeding is in the interest of the public and makes this its findings ns to the facts and its conclusion drawn therefrom.

FIN DINGS AS '1'0 'l'J-IE Facts PARAGRAPH 1. Respondents, Louis Gordon and Ben Gordon, are copartners doing business un der the trade name of Bengor Products Co., with their principal office and place of business located at 119 Fifth Avenue, in the city of New York, State of New York. PAR. 2. Respondents are now and for many years have been wholesale 'dealers engaged in the sale and distribution in commerce among and between the various States of the United States of a variety of miscellaneous m~rchandise, including cosmetics, perfumes, shaving and dental creams, soap, drug and household sundries, hancUcerchiefs, ladies' hose, pajamas, pocketbooks, punchboards, push cards, novelties, and various household notions. Respondents cause said products, when sold by them, to be shipped from their principal place of business in the State of New York to the purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents now 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. 3. In the course and conduct of their said business, respondents are now and during all times mentioned herein have been engaged in substantial competition with various other copartnerships and with individuals and corporations also engaged in the offering for sale and selling of various items of merchandise similar to those sold and distributed by respondents 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 said business respondents have made representations with respect to the said merchandise in advertisements placed in trade magazines and newspapers and in catalogs and advertising circulars listing and describing the various articles of merchandise sold and distributed by them. Respondents cause such representations to be distributed by the United States mails and by other means to wholesale purchasers and prospective wholesale purchasers located in the various States of the United States and in the District of Columbia.

PAR. 5. Among and typical of respondents' said. representations are the following:

· Findings 47 F. T. C. DR. SACHS DENTAL CREAM:

35¢ size tube Dozen 45¢.

60¢ size tube Dozen 65¢.

ROYAL BLUE DENTAL CREAM:

Quality guaranteed.

35¢ size tube Dozen 45¢.

60¢ size tube Dozen 65¢.

POWD.I:!J!t & PERFilliE COMBINATION. a large box of quality face powder in assorted shades and a bottle of perfume cellophaned together. A real FLASH. Is packed 12 deals to a box. Retails for 25¢ ea ch. PRICED TO BEAT ALL COMPETITION. Dozen 65¢ Gross $7.20.

(Illustration of single box or paclmge shows words and figures as follows :) 8un Glo Roses Annette Price $1.00. Dr. Dade's Skin Soap.

Parfums Jockey Club de Paris.

LADIES SILK Rayon Hose.

LADIES HOSE, Rayon Silk Ringless.

A dainty and distinctive handkerchief of rayon silk with beautiful cut out borders. Men's Pure Silk Handkerchiefs.

Men's Silk Pajamas Manufactured from Rayon Silk. PAR. 6. By the use of the foregoing statements and representations, and others of similar import, the respondents have represented directly or by implication- ( a) That various of their products are ordinarily and customarily sold to consumers at a stated price;

(b) That certain of their products were made in accordance with a formula and under the supervision of a member of the medical or dental profession;

(c) That certain of their perfumes are manufactured in France and imported into the United States; and · (d) That certain of their products are composed wholly of silk and that other of their products are composed of silk in combination with rayon.

PAR. 7. (a) Dr. Sachs Dental Cream, Royal Blue Dental Cream, Powder and Pcrfmne combination, and various other products offered for sale and sold by respondents are ordinarily and customarily sold to consumers at prices considerably lower than those prices represented by respondents to he the actual consumer prices as hereinabove described. Respondents' said representations are false and misleadillg. The aforesaid false and misleading representations consisting of fictitious retail prices for such products place in the hands of retailers buying such products from respondents for resale an instrmnenbli~y BENGOR PRODUCTS CO. 1389 1378 Findings and means whereby said retailers may mislead and deceive a substantial portion of the purchasing public by enabling such retailers to represent and offer for sale and sell respondents' said products at various purported discounts from the fictitious retail price. (b) Respondents' articles of merchandise, the trade or brand name of which contains the designation "Doctor," or any abbreviation or simulation thereof> are not made in accordance with a formula of, or unclee the supervision of, a member of the medical or dental profession. Respondents' use of such a trade or brand name is false and misleading.

(c) The pcrfnmes sold and distributed by the respondents are not imported from Fra11ce into the United States but arc wholly manufactured within the United States, and respondents' representations to the contrary arc untrue.

There is n. p reference on the part of the buying public for perfumes which are manuf~tctured in France and imported into the United States, and such goods so manufactured and imported bring a higher price in the markets of the United States than domestic perftunes of the same nature and description.

(d) The products which respondents represented as being composed wholly of silk and those products which they represented as being eom:posed of silk in combinn.tion with rayon are in fact products composed wholly o.f rayon. A substantial portion of the purchasing public prefers silk products to those composed of rayon. PAR. 8. The use by the respondents of the acts and practices hereina.bove described and the foregoing false, deceptive, and misleading statements and representations has had, and now has, the capacity and tendency to and docs mislead and deceive a substantial portion of the purchasing public and retail dealers into the erroneous and mistaken Lelief that such false statements, representations, and advertisements are true, and to induce a portion of the purchasing public and retail dealers, because o£ such erroneous and mistaken belief, to purchase 1·respondents' products.

P AR. 9. The respondents are now, and for many years have been, engaged in the sale and distribution of lottery devices commonly known as push cards and punchboards to dealers engaged in the sale and distribution of various other articles of merchandise. Respondents cause and have ca.u::;ed said devices, when sold, to be transported from their place of business in the State of New York to purchasers thereof at their respective places of business in various States of the United States other than the State of New York. Findings 47 F. T. C. Pan. 10. Ce.rtain of the said punchboards and push cards have printed on t.he face!'> thereof certain legt'nds or instructions that explain the manner in which they are to be tlscd in the sale or distribution of various specified articles of merchandise. The prices of the sales on said ptmchboards and push cards vary in accordance with the individual device. Each purchaser, upon paying the price for one chance, is entitled to one punch or push from the lottery device, and when a push or punch is made a disk or printed slip is separated from the lottery device and a number is disclosed. The numbers are effectively concealed from the purchasers and prospective purchasers until a selection has been made and the push or punch completed. Certain specified numbers entitle purchasers to clesigmtted articles of merchandise. Persons selecting winning numbers receive the articles of mel·chanclise without additional cost. The cost of one chance is much less than the normal retail price of the said article of merchandise. Persons who buy a chance but do not select a winning munber receive nothing for their money. The said articles of merchandise are thus distributed to the consuming public wholly by lot. or chance. The said punchboards and push cnrcls sold by respondents which carry legends as above described are designed for use by the ultimate purchasers in combination with merchandise of the type described on the said legend so as to enable the ultimate purchasers to sell such merchandise by means of lot or chance in the manner hereinabove described. That these pw1chboards and push cards are designed and sold for that specific purpo-se is evident not only from the makeup of the boards and cards themselves, but also from statements made by the respondents in their catalogs advertising the said devices. Thus, the respondents supply to and place in the hands of others the means of conducting lotteries, gift enterprises, or games of chance in the sale and distribution of merchandise to the consuming public. PAR. 11. Certain other of the said punch boards and push cards have no instructions or legends thereon but have blank spaces provided therefor. Except when used for gambling, where persons securing winning numbers are paid money prizes, the only use to be made of said boards or cards by the ulti~ate purchasers is in the sale or distribution of merchandise by lot or chance. PAR. 12. The sale and distribution of said lottery devices by respondents, as above set forth, supplies to and places in the hands of others the means of conducting lotteries, games of chance, or gift enterprises in the sale or distribution of their merchandise. Supplying the means of conducting lotteries, games of chance, or gift enter- BENGOR PRODUCTS CO. 1391 1378 Order prise in the sale or distribution of merchandise is a practice contrary to established public policy of the United States. PAR. 13. The complaint in this proceeding further alleges that respondents represented that they were giving certain merchandise free, that in fact the merchandise was given only to purchasers of other merchandise, that the price of the so-called free merchandise . was included in the price of the other merchandise, and that this offer of free goods constitut~d respondents' regular method of doing business. The record shows that respondents discontinued these complained of false representations in 1940. The Commission, having no reason to believe that the complained of representations will be resumed, is of the opinion that in the circumstances the public interest does not require further corrective action as to this discontinued practice at this time. CONCLUSION. The acts and practices of the respondents as herein found are all to the prejudice and injury of the public. The acts and practices of the respondents relating to false representations as found in paragraphs 4 through 8, inclusive, of these findings, constitute unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce within the meaning of the Federal Trade Commission Act. The acts and practices of the re?pondents relating to the sale of lottery devices as found in paragraphs 9 through 12, inclusive, of these findings, constitute unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST Tilis proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the respondents' answer thereto, testimony, and other evidence in support of the allegations of the complaint introduced before trial examiners of the Commission theretofore duly designated by it (respondents having presented no evidence in opposition to the allegations of the complaint), the recommended decision of the substitute trial examiner, the trial examiner originally designated herein being deceased, 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 conclusion that the respondents have violated the provisions of the Federal Trade Commission Act:

919675--58----91 Order 47F. T. C.

I t is ordered, That the respondents, Louis Goruon and Ben Gordon, individually and as copartners trading as Bengor Products Co., or trading under any other name, and their agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of any mer- . chandise 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 any merchandise offered for sale or sold has a retail price in excess of the actual selling price ftt which such merchandise ordinarily is sold to consumers. 2. Using the word "Doctor," or any abbreviation or simulation thereof, to designate, describe, or refer to any merchandise not made in accordance with the formula or under the supervision of a member of the medical or dental profe~sion; or otherwise representing directly or by implication, that any such product has been so made. 3. Using the term "Parfums Jockey Club de Paris," or any other term or word or words indicative of French origin as a brand or trade name for perfumes manufactured or compounded in the United States; or representing in any other manner that perfumes so manufactured or compounded were manufactured or compounded in France.

4. Representing, directly or by implication, that any merchandise is composed wholly or in part of silk when such is not the fact. I t is f~t?·ther o1·dered, That said respondents and their agents, representatives, and employees, directly or through any corporate or other device, do forthwith cease and desist from: Selling or distributing in commerce, as commerce is defined in the Federal Trade Commission Act, push cards, punchboards, or other lottery devices which are to be used or may be used in the sale or distribution of merchandise to the public by means of a. game of chance, gift enterprise, or lottery scheme.

I t is furtlwr ordered, That the allegations of the complaint relating to the use of the word "free" be, and they hereby are~ dismissed without prejudice to the right of the Commission to institute a new proceeding or to take such further or other action at any time in the :future with respect to the subject matter of such allegations as may be warranted by the then existing circumstances. I t is fwrther ordel·ed, 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 said order.

AMERICAN TOBACCO CO. 1393 Syllabus