Milton Selbst

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IN THE MATTER OF MILTON SELBST ET AL. TRADL'W AS EXCELSIOR CLOAK MANUFACTURING CO.

C01lPLAIXT, :FINDINGS A:r"" ORDERS l REGARD TO THE ALLEGED VIOLATION OF BEC. 5 OF AN ACT OF COXGRESS APPROVED SEPT. 26 , 1914 , AND OF AN ACT OF COX GRESS AI PROVED OCT. 14 : 1940 Docket 5803. Complaint, Sept. 1950-Decision, Oct. 30, 1951 Where three individuals engaged in the manufacture, introduction into eommerce, and sale therein of wool products as defined in the Wool Products Labeling Act of 1939- Misbranding coats and other wool products in that they did not have affxed thereto stamps, tags or labels or other means of identification showing there constituent fibers, Dame or registered identification numbers of the manufacturer or other persons subject to said act, and other information required by said act and the Rules and Regulations promulgated thereunder: Held That such acts, IJracticcs and methods were in violation of said Act and the Rules and Regulations promulgated tbereunder, and constituted unfair and deceptive acts and practices in commerce. Before Mr. John W. Addison trial examiner. Mr. Jesse D. f(Mh for the Commission. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the 'W 001 Products Labeling Act of 1939, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission having reason to believe that J\iJton Selbst, Hyman Sclbst, and Jacob Selbst, individually and as partners trading as Excelsior Cloak Manufacturing Co., hereinafter referred to as respondents, have violated the provisions of said acts a.nd the rules and regulations promulgated under the 'Wool Products Labeling Act of 1939, and it appearing to the Commission that a procccding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PAHAGRAPlI 1. The respondents, Milton Selbst, Hyman Selbst, and Jacob Selbst, are partners trading as Excelsior Cloak Manufacturing Co. , with their offcc and principal place of business located at 240 Market Street, Philadelphia, Pa.

PAR. 2. The respondents arc engaged in the introduction and manufacture for introduction into commerce and in offering for sale, sale transportation, and distribution of wool products, as such products are defined in the Wool Products Labeling Act of 1939, in commerce 394 FEDERAL TRADE COM:\fISSION DECISIOXS Complaint 48 F.

as "commerce" is defined in said act and in the Federal Trade COll1mission Act. :Many of respondents' said . products are composed in whole or in part of wool, reprocessed wool, or reused wool, as those terms arc defined in the IV 001 Products Labeling Act of 1939, and such products arc subject to the provisions of said act and the rules and regulations promulgated thereunder. Since July 15, 1941, respond ents have violated the provisions of said act and said Rules and Regulations in the introduction and manufacture for introduction into commerce, and in the sale, transportation and distribution of said \vool products in said commerce, by causing said wool products to be misbranded within the intent and meaning of said act and the rules :llcl regulations.

PAR. 3. Among the wool products introduced and llnnufactured for introduction into commerce and sold transported, and distributed in said commerce as aforesaid, were coats find other products. Exemplifying respondents' practice of violating said act and the rules and regulations promulgated thereunder is their misbranding" of the aforesaid products in violation of the provisions of said act and the rules and regulations by failing to affx to said garments a stamp, tag, label or other means of identification, or a substitute in lieu thereof as provided by said act, showing (a) the percentage of the total fiber weight of the wool product, exclusive of ornamentation not exceeding five per centum of said total fiber weight of (1) wool, (2) reprocessed wool, (3) reused wool, (4) each fiber other than wool where said percentage by ,veight of such fiber was fiyc per centum or 111ore, and (5) the aggregate of all other fibers; (b) the maximum percentage of the adulterating matter; (c) the percentages in words and figures plainly legible by weight of the ".001 contcnts of such wool product where said total weight of the wool product of nonfibrous loading, filling or wool product contains a fiber other than wool; (d) the name of the manufacturer of the wool product or the name or one. or more persons subject to section 3 of said act with respect to such wool product, or the registered identification number of such person or persons, as provided for in rule 4 of the regulations as amended. PAR. 4. The aforesaid acts, practices, and methods of respondents as alleged were and are in violation of the. \Vool Products Labeling Act of 1939, and the rules and regulations promulgated thereunder, and const.itute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act EXCELSIOR CLOAK MAKcFACTURING CO. 395 393 Findings DECISION OF THE COMMISSION Pursuant to rule XXII of the Commission s Rules of Practice, and a8 set forth in the Commission 8 "Decision of the Commission and Order to File Report of Compliance " dated October 30, 1951, the initial decision in the instant matter of trial examiner John 'V. Addison, as set out as follows, became on that elate tJJ8 decision of tj Commission.

INITIAL DECISION BY JOHN w. ADDISON, TRIAL EXAMINER Pursuant to the provisions of the Federal Trade Commission Act and the ''1001 Products Labeling Act of 1939 , and by virtue of the authority vested in it by said acts, the Federal Trade Commission on September 1, 1950, issued and subsequently served its complaint upon respondents yIilton SeJbst, Hyman Selbst, and Jacob Selbst, individually and as partners trading as Excelsior Cloak l\lanufacturing Co., charging them with the use of acts, practices and methods in violation of the ''1001 Products Labeling Act of 1939 , and the Rules and Regulations promulgated thereunder, and constjtllting unfair and deceptive acts and practices within the intent and mea.ning of the Federal Trade Commission Act, in connection \with the sale of coats and other wool products. On October 4, 1950, respondents filed their answer, in which answer they a.admitted all material allegations of facts set forth in said complaint and \waived all intervening procedure and further hearing as to saiel facts. Thereafter, the proceeding regularly came on for final consideration by the above-named trial examiner theretofore duly designated by the Commission upon said complaint and answer thereto (all intervening procedure having been waived, proposed iindings and conclusions not having been presented by counsel and oral argument not having been requested) ; and said trial examiner, having considered the record herein, finds that this proceeding is in the interest of the public and makes the following findings as to the facts, conclusion drawn tho1'8:11'011, and order: FINDINGS AS TO THJ FACTS PARAGRAPH 1. The respondents, Milton Sclbst, Hyman Selbst, and Jacob Selbst, are partners trading as Excelsior Cloak YIanufacturing Co. , with their offce and principal place of business Jocatcd at 240 Market Street, Philadelphia, Pa.

PAR. 2. The respondents are engaged in the introduction and manufacture for introd uetion into commerce and in oiIering for sale, sale transportation and distribution of \vool products, as such products are Conclusion 48 F. T, C.

defined in the Wool Products Labeling Act of 1039, in commerce, as commerce" is defined in said act and in the Federal Trade Commission Act. :Many of respondents' said products are composed in whole or in part or -wool, reprocessed wool, or rensed wool, as those terms are defined in the 11'001 Products Labeling Act of 1939, and such products are subject to the provisions or said act and the Tules and regulations promulgated thereunder. Since July 15, 1041, respondent.s have violated the provisions or said act and said rules and regulations in the introduction and manufacture ror introduction into commerce, and in the sale, transportation and distribution or said wool products in said commerce, by causing said wool products to be misbranded within the intent anel meaning or said act and the rules and regulations PAR. 3. Among the wool products introduced and manufactured for introduction into commerce, and sold, tla,nsported and distributed in said commerce as aforesaid, were coats and other products. Exemplifying respondents' practice of violating said act and the rules and regulations promulgated thereunder is their misbranding or the aforesaid products in violation of the provisions or said act and the rules and regulations by railing to affx to said garments a stamp, tag, label or other means of identification, or a substitute in lien thereof, as provided by said act,. showing; ((t) the percentage of the tout! fiber ,veight of the wool product, exclusive of ornmnentatioll not exceeding G per centum of said total fiber weight. of (1) \\001, (2) reprocessed wool, (3) reused wool, (4) each fiber other than \\001 where said pereentage by IVeight or such fiber was 5 per centum 01' more, and (5) the aggregate of all other fibers; (b) the maximnrn percentage or the total 'weight of the IVool product of nonfibrous loading, fining or adulterating matter; (c) the percentages in words and figures plainly lC',gible by 'weight or the wool contents of such 'wool product where said wool product contains a fiber other than wool; (eI) the name of the manufacturer or the wool product OJ' the name or one or more persons subject to section 3 or said act with respect to such wool prod- Ilct, or the registered identificat.ion number of such penon or persons as provided for in rule 4 of the regulations as amended. COXCLTISION The aforesaid acts, practices, ancl methods of respondents as :found WE're and arc in violation of the ,Vool Prochlcts Labeling Act of 1939 alld the rules and regulations promulgated thereunder, and constitute unfair and deceptive acts and practices in commerce within the intent 11 !HI meaning of the Federal Trade Commission Act. :

EXCELSIOR CLOAK MANUFACTURING CO. 397 393 Order ORDER It is ordered That respondents Milton Selbst, Hyman Selbst, and J aeob Selbst, individually and as partners trading as Excelsior Cloak J\laIlufacturing Co., or under any other name, jointly or severally, t.their representatlvee, agente, and employees, directly 01' through any corporate or other device, in connection with the introduction or manufacture for introduction into commerce, as "commerce" is defined in the acts aforesaid, do forthwith cease and desist from misbranding coats or other wool products as defined in and subject to the Wool Products Labeling Act of 1939, wliieh contain, purport to contain, or in anyway are represented as containing "wool l'e processed wool " or "reused "wool/, as those terms arc defined in said act, by railing to securely affx or place on euch products a stamp, tag, label, or other means of identification showing in a clear and conplCUOUS manner:

(a) The percentage of the tobl fiber weight of the wool product exclusive of ornamentation, not exceeding :3 per centum of said total feber weight of (1) wool (2) reprocessed "001 (3) reused "001 (4) each fiber other than ,,001 where said percentage by weight of such fiber is 5 per centum or more, and (5) the aggregate of all other fibers.

(b) The maximum percentage of the total "eight of such ,,001 product of any nonfibrous loading, filling, or adulterating matter. (c) The name or the registered identification llumber of the manufacturer of such w. ool proclnct or of one 01' more persons engaged in introducing such \fool product into commerce, or in the offering for sale, sale, transportation, or distribution thereof in commerce, as "commerce" is defined in the Federal Trade Commission Act and in the ,Vaal Products Labeling Act of 1939.

Pl' ovi decl That the foregoing provisions concerning misbranding shall not be construed to prohibit acts permitted by paragraphs (0) and (b) of section 3 of the ,Vool Products Labeling Act of 1939; and JJl'ovicled further' That nothing contained in this order shall be construed as limiting any applicable, provisions of said act or the rule and regulations promulgated thereunder.

Order 48 If.

ORDER TO FIL REPORT OF CQJ.PLIANCE It 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 fornl in which they have complied with the order to cease and desist las 1'equired by said declaratory decision and order of October 30, 1951J. EDWARD GOLDSTEIN E TEHPIUSES, INC. ET AL. 399 Syllabus IN THE :MArfEH OF EDWARD GOLDSTEIN ENTEHPIHSES, INC., ET AL.

CO::UPLAIXT, FIXDlXGS, AXD URDEHS IN H.EOARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AX OF COXGHESS APPROVED SEPT. 26 , 1914ACT Docket 5792. Compla.i.nt, Ju,ne 1950-Decision, Nov. 3 1951 \V1Jere a corporation and the offcer in control thereof, engaged through foul' subsidiaries in the operation of ladies' furnishings stores in Washington Baltmore, '(paper Darby, Pa. , and ::ew York City, and in the sale in com. merce, among other things, of women s fur and cloth coats, dresses and suits;

In advertising their prices and operations in newspapers, by circulars, and through radio continuities, in connection with which they mailed several JHlnured thousand letters to residents li,ing in the various cities in which said retail stores were located and in surrounding trade territories, and in \which they enclosed as a " valuable gift" a trade check or coupon good for a "$50 down payment" on any fur coat, cape or jacket at the store, with an attacheu stub "good for a $20 down payment" on any cloth coat or suit or scal'- (a) Represented that a store was going out of business, and that all of its merchmH1ise WflS offered at a discount or savings of 50 percent or more from the usual or regular prices and that many articles were offered at less than \vbolesale cost;

The facts being that no merchandise was thus sold at a discount or saving of 50 percent or any other percent from the usual prices, and any articles wlJich might hayebeen offered at less than wholesale cost, were old, soiled and outmoded;

(b) Represented that the recipients of said coupons were entitled to use them as payments of $50 or $20 on the articles set forth, with a resulting saving or discount of saiu amounts;

The facts being that while the recipients of said trade checks or coupons were allowed to apply the amounts llesignated as a part of the IJrice charged for the garments purcbaseu, the prices of the garments were increased by adding to the re ular prices the amount set out jn the coupon, so that purchases made in connection therewith \were actually at regular lllices; and (c) Falsely represented that the recipients of such coupons had been specially selecteu, when in fact letters containing the checks or coupons were mailed to all indiYiluals Hsted in the telephone directories for the cities concerned and adjoining areas;

With capacity and tendency to mislead and deceiye a substantial portion of the p1l1.cbasing public in tlJe aforesaid respects and therehy induce its purchase of their said products; and with the result that substantial trade was unfairly cliyerted to them from their competitors, many of whom do not misrepre ent their practices or prices to their injury in commerce: Held That such acts and practices, ull1er the circumstances set forth, were all to the prejudice and injury of the public and constituted unfair methods of competition in commerce, and unfair and deceptiyc acts and practices therein. 2138-tO 400 FEDERAL TRADE CQAL'dISSION DECISIOKS Complaint 48 F. 1'. C.

As concerns the charge of the complaint that respondent retailer advertised falsely that it was going out of business: while it was stil operated as a going concern when respondent' s answer was fied, tile record harr1t,y formed sumcicnt basis for a conclusion tllat the representation ,,,as not made in gaoll faith.

Before jj/T. /lohn lV. Addison trial examiner. Mr. Jesse D. J(ash Tor the Commission. Sclwefte1' , Goldstein Esbitt aT New York City, Tor respondent,. COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act find by virtue aT the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that the corporation and individuals set out in the caption hereof, hereina,after 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 wi1 be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

P ARAORAPll 1. Corporate respondent, Edward Goldstein Enterprises, Inc., is a corporation organized under the laws of the State of New York and having its offce and principal place of business located at 315 Seventh Avenue, Kew York, New York. R.respondent Brentley, Inc., is a corporation organized under the laws of the State of New York and having its offce and principal place of business at 315 Seventh Avenue New York. It is a subsidiary corporation owned und eontro1Jed by Edward Goldstein Enterprises, Inc. BrentJey- Edwards is a trade llarne sometimes employed by Edward Goldstein Enterprises, Inc. , and Drentleis, Inc. In addition to Brentleis Inc. respondent E(h\'ard Goldstein Enterprises Inc., controls and operates three subsidiary corporations to-wit: Dranow, IJ1c. Baltimore: ::Iaryland, Dranow s of 1;ppe1' Darby, Inc. , Upper Darby, Penn sylvania, and Ben Dranow Furs, Inc., Xew York City: Ne"\v York. Respondent Edward Goldstein and Benjamin 1-1. Dranow are the president and secretary-treasurer of said corporate respondents and either subsidiary corporations. The post offce address of Edw,lld Goldstein and Benjamin II. Dranow arc Jacksonville, Illinois anc1315 Seventh Avenue, Kew York, Xew York, respectively. The principal offce of said corporate respondents and subsidiary corporations and the records and accounts of their businesses are kept in corporate respondent' s place or business in New York, )Tew York. During all the times mentioned herein the individual respondents formulated .. .. ..

ED\VARD GOLDSTEI)l ENTERPRISES, INC., ET AL. 401 399 Complaint directed, controlled and put into operation the practices of the corporate respondents.

PAR. 2. The corporatc respondent Edward Goldstein Enterprises Inc., and individual respondents arc now and have been for more than one year last past operating ladies' furnishings stores under the name of Drentley's, Inc., and Brentley-Edwards located at 425 Sevcnth Street, N. VV., vVashington, D. C., and under the names of the subsidiary corporations at the locations set out in Paragraph One and selling, among other things, fur and cloth coats, women s dresses and suits in commerce, as "commerce" is defined in the Federal Trade Commission Act. Their volume of business in such commerce is and has been substantial.

PAR. 3. In the course and conduct of their business and for the purpose of inducing the. purchase of their products in commerce, respondents, in circulars and advertisements inserted in newspapers and by means of radio continuities, made various representations concerning the prices of their said 1 1erchanc1isc and their business operations, among and typical of which, but not a11 inclusive, are the following:

GOIKG OUT OF BUSINESS EVERYTHI1\G MUS'I' GO OUR LOSS IS YOLR GAIN SAVE 50% OR MORE Brentley, 425 7th Street . \v.

GOI1\G OUT QJ' BUSI ESS 50% and more OFF E:'Tille STOCK! 'l' thousands and rhousands of Dollars Worth of Fur Coats, Suits & Dresses To Be Sflcrificed EVERYTHI G MUST GO! OUR LOSS IS YOUR Gall\ SALE KOW ON! Brentley, 425 7th Street, ='. W.

Both of the aforesaid advertisements enumerate various fur products and other wearing apparel with stated regular and sale prices. Complaint 48 F. 'l' BRENTLEY-EDW ARDS FINE FURS AND FI E FASHIONS 425 Seventh St., N. W.

ew Partnership Consolidates Huge Stocks of Five Big Stores to Bring Sensational Values in This Great Opening Event TOl'l'ERS- Coors-FUR SCARFS- FUR COATS-SUITS-DRESSES- FUR CAPES-FUR .JACKETS Many below Original Wholesale Cost! WALL TO WALL CLOSEOUT A CLEAN SWEEP! EVERYTHING GOES! In connection with this advertisement various fur products and other wearing apparel are listed showing former prices and sale prices. In conjunction \with their radio advertising on behalf of the various retail stores respondents mailed several hundred thousand letters to residents living in the various cities in which said retail stores are located and surrounding trade territories, typical of which is the following:

CONGRATULATIONS! bere is your RADIO SVRPRISE LISTEN TO . . . WWDC . . .

1450 on your dial You have been selected to receive this valuable gift.

Yes, rour name bas been chosen by BrenUey Fur Ielody Man to receive this sure rise gift.

This gift is good for a $50 down payment on any fur coat, fur cave, or fur jacker at Brentley Fur Store. Also, note the attached stub, \which is good for a $20 down payment on any cloth coat, cloth suit, or fur scarf in the store. Brentley Furs are now sUlrtil1g" one of the most tremendous promotion sales in the history of the fur business. To meet the demand, they have hmught in bundreds of extra fine 1949 style furs for von to choose from. The fur coats, capes, and jackets are priced from $99 to $1 500. The cloth cmlts, cloth suits, and fur searfs start at $39.95. Cordially, (S) JAMIN DRA:"OW.

Fhm-NTTEY Fos 425 Seventh St. No W., Washington D. C.

, . . . EDWARD GOLDSTEIN E)iTERPRISES INC., ET AL. 403 399 Complaint So-called checks or coupons "\were enclosed in these letters, a typical copy of which is as follows:

WWDC Cowboy Hank' s Rhythm Roundup Brentlcy s Fine Furs 425 Scventh Street, N. 'V., Washington, D. C. TO THE ORDER OF THE OF $30.

00 Erentley s Agrees to Accept as a Money C"" :Payment of OJ H i" P O:I THE SUM OF 50 DOL'S OO CTS. 0; C P On any Fur Coat, Cape, Jacket or Stole Pur- "" H ('based in the Store Between Feb. 1 and l\Inrch 1 O"LY ONE CHECK GOOD 0" A"Y Z 0: ONE PURCHASE C P Brentley Fine Furs Benjamin Dranow PAR. 4. By means of the statements and representations set out in the aforesaid advertisements, respondents represented that the store operated at different times under the names of Brentley, Inc" and Brentley-Edwards was going out of business; that all the merchandise in the store operated as Brentley, Inc., was offered for sale at a discount or savings of 50% or more from the usual or regular prices; that many of the articles for sale in the store operated as Brentley- Edwards were offered for sale at less than wholesale cost; that the recipients of the coupons were entitled to use them as payments of $50 on the regular price of a fur coat, jacket, cape or stole and $20 on a cloth coat, suit or fur scarf on presentation of the coupons during a specific time, thereby resulting in a savings or discount of $50 or $20 as the case might be from the usual and regular prices of the garments purchased and that the recipients had been especially selected to receive such coupons.

PAR. 5. The aforesaid statements and representations were false misleading and deceptive. In truth and in fact, thc store operated as Brentley, Inc., and Brentley-Edwards did not go out of business and said store has continued to operate and now operates as a going concern. The merchandise offered for sale by Brcntley, Inc., was not sold at a discount or savings of 50% or any other percent from the usual or regular prices. No significant portion of the stock of the store operated as Brentley-Edwards was offered for sale at less than whole!sale cost. Such articles as may have been so offered were old Decision 48 F. T. Miled and outmoded merchandise. While the recipients of the checks or coupon were allowed to apply the appropriate amounts designated therein as a part of the price charged for the garments purchased, such applications did not result in any savings or discounts from the usual customary or regular prices for such garments since such prices were increased by adding thereto the amount set out in the coupon, with the result that purchases made in connection with the coupons were actually at regular or usual prices. Persons receiving said checks or coupons were not especially selected. On the contrary, the letters containing the checks or coupons were mailed to an individuals listed in the telephone directories for the cities in which the various retail stores were located, and adjoining areas.

PAR. 6. Respondents, in the conduct of their various retail stores have been and are in substantial competition, in commerce, with corporations, individuals, and others engaged in the sale of the same kinds of merchandise as that sold by respondents. Among such competitors are many who do not make any misrepresentations concerning their practices, the prices charged for their merchandise or otherwise.

PAll. 7. The use by the respondents of the foregoing false and misleading representations had the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the mistaken and erroneOllS belief that said representations were true, and caused a substantial portion of the purchasing public, because of such mistaken and erroneous belief, to purchase respondents' said products. As a result thereof, substantial trade has been unfairly diverted to respondents from their competitors. In consequence thereof, injury has been and is being done to respondents' competitors in commerce. PAll. 8. The acts and practices of the respondents, as herein alleged were a11 to the prejudice and injury of the public and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

DECISION OF THE COl\fl:USSION Pursuant to Rule XXII of the Commission s Rules of Practice and as set forth in the Commission s "Decision of the Commission and Order to File Heport of Compliance, dated November 3 , 1\151 the initial decision in the instant matter of tri8.1 examiner John 'V. Addison, as set out as follows, became on that date the decision of theCommission. WARD GOLDSTEIN ENTERPRISES , INC. , ET AL. 405 399 Findings INITIAL DECISION BY .JOHN 'v. ADDISON, TRIAL EXA:\IINER Pursuant to the provisions of the F'ederal Trade Commission Act and pursuant to the authority vested in it by said Act, the Federal Trade Commission on June :28, 1D50, issued and subsequently served its complaint upon the corporations and individuals named in the foregoing caption, charging them with the use of unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of the provisions of said Act. On September 8 1050 Benjamin H. Dranow, individually and as Secretary and Treasurer of Edward Goldstein Enterprises, Inc., and of Brentley s Inc., !ied his ans"\ver, in which answer he admitted all of the material allegations of facts set forth in said complaint and waived all intervening procedure and further llearing as to the said facts, upon condition, however, that the complaint be dismissed as to respondent Edward Goldstein. Thereaftcr, t.he proceeding regularly came on for final consideration by the above-named trial examiner theretofore duly designated by the Commission upon said complaint and answer thereto and motion by counsel supporting the complaint to dismiss the complaint as to respondent Echvard Goldstein (all intervening procedure having been waived, proposed findings and conclusions by counsel not having been presented and oral argument not having been requested); and the trial examiner, having duly considered the record herein, finds that 1 hjs proceeding is in the interest of the public and makes the following findings as to the facts, conclusion dra\vn therefrom, and order: FIXDIXGS AS TO THE FACTS P ARAGHAPH 1. Respondent Edwanl Goldstein Enterprises, Inc. , is ;1 corporation organized under the laws of the State of New York and having its offce anel principal place of business located at 315 Seventh A venue ew York ew York. Respondent Brentlcy Inc., is a corporation organized under the laws of the State of K York and having its offce and principal place of business at 315 Seventh Avenue, New York e\v York. It is a subsidiary corporation owned and controlled by Edward Goldstein Enterprises, Inc. Brentley-Eclward is a trade name sometilnes employed by Edward Goldstein Enterprises, Inc. , and Brent1e:is, Inc. In addition to Brcnt1ey s Inc., respondent Edwnrcl Goldstein Enterprises, Inc. , controls and operates three subsidiary corporations, to-\vit: Drallow Inc., Baltimore, l\Iarylanc1, Dranow s of Upper Darby, Inc., Upper Darby, Pennsylvania, and Ben Dra,now Furs, Inc., Kew York, New York.

, . . .

406 FEDERAL TRADE COM:YIISSION DECISIONS Findings 48 F. T. C.

Respondents Edward Goldstein and Benjamin H. Dranow are the President and Secretary-Treasurer of said corporate respondents and other subsidiary corporations. The post oflce address of Edward Goldstein and Benj amin H. Dranow are Jacksonville, Illinois, and ,;15 Seventh A venue, N ew York, K ew York, respectively. The principal offce of said corporate l'e,spondents and subsidiary corporations and the records and accounts of their businesses are kept in corporate respondents' place of business in Kew York Kew York. During all the times mentioned herein the individual respondent Benjamin II. Dranow has formulated, directed, controlled and put into operation the practices of the corporate respondents. Respondent Edward Goldstein took no part in the practices found herein. His only interest in the corporate respondents is as an investor. He put the money in but Benjamin H. Dranmv runs the businesses. PAR. 2. Corporate respondent Edward Goldstein Enterprises, Inc. and individual respondent Benj amin H. Dranow are now and have been ror more than one ye,ar last past operating ladies' rurnishings stores under tho name or Brentley, Inc. , and Brentley Edwards located at 425 Seventh Street, X. IV. Washington, D. C., and under the names or the subsidiary corporations at the locations set out in Paragraph One, and selling, among other things, rur and cloth coats und women s dresses and suits in commerce, as "commerce" is defined in the Federal Trade Commission Act. Their volume of business in such commerce is and has been substantial.

PAR. 3. In the course and conduct of their business and for the purpose or inducing the purchase of their products in commerce, respondents, in circulars and advertisements inserted in newspapers and by means or radio continuities, made various representations concerning the prices or their said merchandise and their business operations among and typical or which, but not all-inclusive, are the rollowing: GOIKG OUT OF BUSINESS EVERYTHING MUST GO OUR LOSS IS YOUR GAIN SAVE 50% . OR MORE Brentley s, 425 7tl1 Street, N. W.

EDWARD GOLDSTEIN E?\TEHPRISES, IKC. , ET AL. 407 399 Findings GOJNG OUT OF BUSINESS 50% and more OFF ENTIRE STOCK! Thousands and Thousands of Dollars Worth of :H'ur Coats, Suits & Dresses To Be Sacrificed EVERYTHING l\'lust GO! OUR LOSS IS YOliR GAIN SALE: :'OW ON! Brcntley, 4 5 7th Street, N. W.

Both of the aforesaid advertisements enumerate various fur products and other wearing apparel with stated regular and sale prices. BRENTLE'Y' EDW ARDS FEE Funds AND FI:\E FASHIONS 425 Seventh St. , N. \V.

N'ew Partnership Consolidates Huge Stocks of Five Rig Stores to Bring Scnsational Values in 'this Great Opening Event TOPPERS-COATS-FUR SCARFS- FUR COATS-SUI'fS- DRESSES- FUR CAPES-FTR .JACKETS ::'lany below Original Wholesale Cost! WALL TO WALL CLOSEOl:T A CLEAN SWEEP! EVERY'l'HING GOES! In connection ,,,ith this advertisement various fur products and other ,vearing apparel are listed showing former prices and sale prices. In conjunction with their radio advertising on beha.lf of the various retail stores, respondents mailed several hundred thousand letters to residents living in the. various cities in which said retail stores are located and surrounding trade territories, typical of which is the following:

COKGRATULATIONS! here is your BADIa SURPRISE LISTED:' TO , . ' WWDO 1450 on your dial You have been selected to receiye this valuable gift. Yes, :rour name has been chosen by Brentley Fur s Melody !'Ian to receive this surprise gift.

::p.. :::. .

408 FEDERAL TRADE COM:\IISSIOX DECISIONS Findings 48 F. T. C.

This gift is good for a $JO down pa;yment on any fur coat, fur cape, 01' fur jacket at Brentley Fur Store. Also, note the attached(1 stub, \\"hicl1 is good for a S20 down payment on any clotl1 coat, cloth suit, or fur scarf in the store.

Bl'entlcy Furs are 11mv starting one of the most tremendous promotion sales in tile history of the fur lmsincss. To meet the demand, they lw.ye blau;;ht in hundreds of extra fine 1849 style furs for OU to choose from. The fur coats, capes, aull jackets are pricecl from $00 to 500. The cloth coats, cloth suits, and fur scarfs start at $39. 0;:. Cordially, (8) EF.:\,T.iMIX DRA?'mw.

BREKTLEY FL'RS 425 Seventh St., N. W., "T ashington So-called checks or coupons were enclosed in these letters, a typical copy of which is as follows:

WWDC . . . "Co\yboy Hank' s Rhythm Roundup s 1 ine Ful's o t' Brentley 4:25 SeH'nth Street N. W. , "\Vnshington, D. C. u; ;: TO THE ORDER OF Z ;.

THE SU:\l O:b $50.

:R :2 :c .. 8 0", Brentley s Agrees to Accept as a ::Ioner1: y 4j .. U w. E t" Payment of HB SUM OF ,. .. .. . 50 DOL' S OO CTS.

t5 On any Fur Coat, Cape, Jacket or Stole " u H;= ., U '" Mal'chPurcbased in the Store Eet\veen1 Feb. 1 fwd 0:: OXLYOK A YOKEOi\ECHECKPI:RCI-IASEGOOD 5 w ERENTLEY' S FIXED FURS Eenjamin Drfinow PAR. 4. By means of the statements and representations set out in the aforesaid advertisements, respondents represented that the store operated at different times under the names of Brentley's, Inc., and Brentley-Edwards was going out of business; that all the merchandise in the store operated as Brentley, Inc. , \Vas offered for sale at a discount or saving of 50% or more from the usual or regular prices; that llany of the articles for sale in the store operated as Brent1ey-Edwards were offered for sale at less than wholesale cost; that the recipients of the coupons were entitled to use them as payments of $50 on the regular price of a fur coat, jacket, cape or stole and $20 on a cloth coat EDWARD GOLDSTEI:\ ENTERPRISES, INC., ET AL, 409 399 Findings suit or fur scarf on presentation of the coupons during a specific time thereby resulting in a saving or discount of $50 or $20 as the case might be from the usual and regular prices of the garments purchased and that the recipients had been especially selected to receive such coupons.

PAll. 5. The aforesaid statements and representations were false misleading and deceptive. In truth and in fact, the merchandise offered for sale by Brentley, Inc., was not sold at a discount or saving of 50% or any other percent from the usual or regular prices. No significant portion of the stock of the store operated as Brentley- Edwards was offered for sale at less than wholesale cost. Such articles as may have been so offered were old, soiled and outmoded merchandise. While the recipients of the checks or coupons were allowed to apply the appropriate amounts designated therein as a part of the price charged i-or the garments purchased, such applications did not result in any savings or discounts from the usual, customary or regu- Jar prices for such garments since such prices were increased by adding thereto the amount set out in the coupon, with the result that purchases made in connection with the coupons were actuany at regular or usual prices. Persons receiving said checks or coupons were not especially selected. On the contrary, the letters containing the checks or coupons were mailed to an individuals listed in the telephone directories ror the cities in "which the various retail stores were located a.nd adjoining areas. Although the store operated as Brentley, Inc. and as Brcntley-Edwards did not go out of business but was stil operated as a going concern when the answer herein vms filed, the record hardly forms sufficient basis for a conclusion that the representation that it was going out or business was not made in good faith.

PAll. 6. Respondents, in the conduct of their various retail stores have been and are in substantial competition, in commerce, with corporations, individuals, and others engaged in the sale of the same kinds of merchandise as that sold by respondents. Among such competitors are many who do not make any misrepresentations concerning their practices, the prices charged for their merchandise or otherwise.

PAR. 7. The use by the respondents of the foregoing false and mis- Jeading representations hnd the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the mistaken and erroneous belief that said representations were true, and caused a substantial portion of the purchasing public, because of such mistaken and erroneous belief, to purchase respondents' said products. 410 FEDERAL TRADE COJYuVIISSION DECISIO!\S Order 48 F. T. C.

As a result thereof, substantial trade has been unfairly diverted to respondents from their competitors. In consequence thereof, injury has been and is being done to respondents' competitors in commerce. CONCLUSION The acts and practices of the respondents, as herein found, are all to the prejudice and injury of the public and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER It i8 ordered That respondents Edward Goldstcin Enterprises, Inc. a corporation, Brentley, Inc., a corporation, their offcers, representat.ives, agents and employees, and Benjamin H. Dranow, individually and as an offcer of said corporate respondents, directly or t.through any corporate or other device, in connection with the offering for sale sale and distribution of fur or cloth coats, dresses, suits, or other women s furnishings in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing to customers or prospective customers, by use of trade checks or coupons or otherwise, that snits, coats or other articles of women s furnishings offered by respondents or any respondent have greater selling prices than the prices at which the same are so offered when such is not the fact;

2. Representing that many coats snits, dresses or other articles of women s furnishings are ouered for sale by any respondent at less than wholesale cost when in fact no substantial portion of the stock in the store making the offer or only old, soiled or outmoded merchandise is so offered and sold;

3. Representing that fifty-dollar, twenty-dollar or other t.trade checks or coupons are sent only to especially selected persons, when in truth and in fact the trade checks or coupons are mailed to all individuals listed in the telephone directory for the city and adjoining are,a in which the store sending the trade checks or coupons is located; and It is furthe,. ordered That t.his proceeding be, and it. is, dismissed hereby as to respondent Edward Goldstein without prejudice to the light of the Commission to institute further proceedings should future facts warrant.

ED'V ARD GOLDSTEIN ENTERPRISES, !:C. , E'l AL. 411 399 Order ORDER TO FILE REPORT OF COMPLIANCE It i8 ordered That the respondents Edward Goldstein Enterprises Inc., a corporation, Brentley, Inc., a corporation, and Benjamin H. Dranow, individuaUy and as an offcer of Edward Goldstein Enterprises, Inc., and BrentJey, Inc., shaU, within sixty (60) days after file with the Commission a report inservice upon them of this order 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 November 3, 1951J. 412 FEDERAL TRADE COMMISSION DECISIOXS Syllabus 48 F. T. C.

IN THE MA Tler OF H. HAROLD BECKO TRADING AS HAROLD' STUDIO COMPLAINT, FINDINGS , A)\D ORDERS I REGARD TO THE ALLEGED VIOLATIO OF SEC. 5 OF AX OF COXGRESS APPROVED SEPT. 26 , 1014ACT Docket 57$. Complalnt, Feb. 1950-Decision, Nov. S, 1951 The term "Gold.Tone" bas a definite meaning in the profession of photography and connotes that a finishing process \Vllich involves the use of a flnlsbing paint containing gold chloride or other gold salts, bas been used in producing a picture thus designated.

Where an individual, with a studio and finishing plant at Winona, Minn., and with branch studios at Rochester, ::linn., and Fargo, K. Dak., and, formerly at Fond du Lac, Wis., engaged in making phutographs, including tinted or colored enlargement and reductions, and in the interstate sale unci distribution thereof; and of frames; through advertisements in newspapers, radio broadcasts, circulars, cards, certificates and coupons, and by other llcans- (a) Represented both directly, and. through the contest title itself, that cash awards of $2500 were made to the winner of his "S2500 Charming Child Contest" ;

'The facts being that the prizes consisted of 1Jnitcl1 States Savings Bonds in th face value of $500, fort:r-eight prizes of hand-colored photographs valned by him at $lG each, and twenty-four merchawlise certificates a\val'led each week for twelve weel;:s, \\;t11 a value of $4 each, and good only in exchange for merchandise; the value of all wbicb awan1s aggregate.l 82 372, including the bonds at face value and the hanel-colored photograph prizes at the value arbitrarily fixec1 by him;

rears (b) Hepresentec1 that all children between tbe ages of six mouths and ten whose photographs were taken at his studios were eligible for p. ' zes under said "$2500 Charming Chill1 Contest" and that the contest was cl.nducted in a fair and impartial manner with awards mack solely on merit; The facts being that only those placing orders for photographs were consil1ered (with some early exceptions) ; and the awarding was influenced !Jy the size of the purchase order and the possibility of obtaining sllcl1 an ordcr; (c) Represented that various persons were specially selectell to l' cceiye certain of his offers; when in fact said offers were a\-ailable to all comcrs on an equal basis;

(d) Represented that certain photographs offered and sold by him \-were genuine Gold Tone" photographs; when in fact he had produced no photo raphs through the use of the gold- tone process since about 1D47 nnrl had no facilities for such flnishing;

(e) Represented that free prizes 'would be awarded to the three most photogenic children and girls photographed at the place designated in the locality where the customer resided, and that with the purchase of hvelve or more pictures he would give a colored photograph free and without cost; The facts being that purchase of other merchandise was required to receive any of said so-called "free" prizes; prizes were not awarded to the three most , , HAROLD' S STUDIO 413 412 Complaint photogenic, but it was his practice to restrict to onc thc number of winners selected in each community; and the cost of the colored photograph represented as given free with tbe purchase of twelve or more photographs, was covered by the cost to the purchaser of the photograph ordcl'; and (1) Represented that he was a member of the Minnesota State Photographers Association; when in fact there was no such association, and his rnember ship in the :.1innesota Professional Photographers Association terminated prior to the IJel'iou during which his contests were being concluded; With tendency and capacity to mislen.d and deceive !I sn1Jstantial portion of the purchasing- public aml thereby cause it to purchase a substantial Quantity of his prollucts:

lJeld That such acts and IJracticps, under the circumstances set forth, \were all to the prejudice flld injury of the IJnblic and cunstituted unfair and cleceptive a(:ts flnrllJractices in commerce.

As respects the "$2;;00 Charming Chih1 Contest," ancl its advertislng (which in some case.;; contained no reference to the fact that. the a,,'ards in major part were to be conl'cl'ed in merchandise, and in other,': accentuated the aforesaid title t1nuugh much lnr ('r type), it was tile opinion of the Commission that the title itself c()n tijl1tc(l a representation t11:t any and a1l nwards to be made hereunder wonlll lJe conferred in money, and tlHlt SL\(:h connotation stemmcd from the liternl mr.nnills' of the title itself, and it was its further view that the ins('rtipl1 elscwhere in saill w1Yertisement of adrlitioua1 language with respect to merchamlise and other articles was as a confusing contradiciion to the title, ami dill not suffce to dispell the E'l'oneous im- IJre sions which sucll a contest title would engendC!. As resIlects a(lditlonal char;;es that respondent's phoiot;raphs 'were not outstanding, as represented, that Y:lrious offers \were not "sllccinl" offers at reduced IJrices, that certain of the pbotograplls were not "hand colored" or hand colored "\with oil paints, that: be was not the offcial photographer for tlle "Babee National Contest", that sflmples were of better gl'fide and (IUality than the product actually used, that frames were shipped to customers \with. out order, that fictitious prire lists were eml110yecl, and that the 'worn "gold" "\\"lS misused: the Commission upon consideration of the record, including contentions of respective counsel in s111Jj:ort of their appeals from the initial decision as of the view that clismissal \\,without lwejudire \YflS \yarl'anted with rcspcct to al1 snic chflrges, including certain charges which had not been embraced within sairl initial decision. Before 1111'. J mne8 A. Pu.rcell trial examiner. Nr. Charles S. Cox and Afr. Lee J. Fal'nS1UOl'th for the Commission. Lanier cG Lanie1' of Fargo, N. Dak. for n:spondent. CO):IPLAIXT 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 H. Harold Becka an individual trading as J-Jarold' s Studio, hereinafter referred to as .. .

414 FEDERAL TRADE CQ11MISSION DECISIOXS Complaint 48 . 1'. C. 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 AHAGRAPH 1. Respondent, H. Harold Becka, also known as Harry Becka, Harold Zavatsky and Harold Zavatsho, is an individual trading as Harold' s Studio with main offces and principal place of business, including main studio and finishing plant, located at 111 1Vest Third Street, Winona, Minnesota, with branch studios operated respectively at Hochester, :Minllesota; Fargo, Korth Dakota; and Fond du Lac, 1Viscollsin. Respondent is now and for mote than three years last past has been engaged in t.he business or making, processing and selling photographs and in the sale of picture frames therefor. PAR. 2. Respondent, during the period stated herein, has engaged in the sale and distribution of photographs or various types, including tinted or colored enlargements or reductions of photographs, and or frames therefor, in commerce between and among the various States of the United States and in the District of Columbia. In the course and conduct of his said business, respondent causes and has caused his said products, when sold, to be transported from his place of business in the State of Jiinnesota to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains, and at all times mentioned herein has maintained, 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. Respondent' s volume of business in such commerce is and has been substantial.

P AH. 3. In the course and cond uet of his business as aforesaid, and for the purpose of inducing the purchase of his wares, respondent has made: through advertisements in newspapers, radio continuities, cirulars, canls, certificates, coupons, bonds, and other means, various representations concerning himself, his phot.ographs, the persons to whom they ate offered and thc terms upon which they may be purchased, a "Charming Child Contest:: conducted by him and "Free Prizes:' a.nc1 other " free" goods. Among and typical of the said representations are the following:

Emer your child in the Charming Child COJltest today. $2500 in cash prizes * * * hfl,€ your child's picture taken in ODe of the Harold' Studios chillIren between the Hges of 6 mos. and 10 years, Hrc eligible * .

You h:1ye lJecn selected to ban a lJcantiful 5 x 7 enlarged portrait .. 79(t .. *'"

:;

HAROLD' S STUDIO 415 412 Complaint One beautiful 8 x 10 Gold Tone photograph One of the country s outstanding photographers wil be there to take your photograph Free lJrizes wil be awarded to the three most photogenic children and girls Members *' * * .:1inllesota Photographers Association Offcial photographer Rabee National Contest Special low contest prices Special contest rate Special $1.

Special $1.00 A very special offer Special graduation bond Special $35.00 wedding offer All work guaranteed With orders of 12 or more 5 x 7 photographs we wil give OU one beautiful 8 x 10 colored picture FREE Hand colored photograph Portrait hand colored in oils PAR. 4. In the manner aforesaid, respondent represents and ha& represented that cash awards of $2500 are made to the winners of his Charming Child Can lest; that all children between the ages of six months and ten years arc eligible for an prizes when the child' s picture is taken at Harold's Studio, for which there is no charge, irrespective of \vhether or not addi60nal pictures are purchased from respondent; that said contest is conducted in a fair and impartial manner and that the a wards will be made on merit.

That various persons to whom certain of respondent' s offers have been made were specially selected to receive them; that certain the photographs offered and sold by him are genuine GoJd Tone photographs; that respondent's photographers are among the country outstanding photographers; that free prizes will be awarded to the three most photogenic children and girls; that respondent is a member of the linnesota Photographers Association; that respondent is the iIrial photographer for the "Babee National Contest." That various of respondent's offers are " special and that the prices quoted ill such offers are less than the prices regularly charged by responde,nt for the pictures described in such offers; that all of 1'espon(lent' s photographs rtre guaranteed j that respondent will give with the purchase of 12 or more ,) x 7 pictures a colored 8 x 10 picture free; that certain of respondent's photographs are hand colored and others are hand colored with oil paints.

PAE. 5. In truth and in fact respondent's statements and repreentations are false and misleading. Respondent's $2500 Chrlrming Child Contest is not. ono in which cash av;-rc1s of S2,500 are made, nor is any part of sllch contest award made in cash; all children between 213S40- .'O i'- 416 FEDERAL TRADE COIvnJISSIO:\ DECISIONS Complaint 48 F. T. C. the ages of six months and ten years, who have their pictures taken by respondent, atc not eligible for all or any of the prizes as only those placing orders for pictures are considered; the prizes are not awarded on a merit basis but on the basis of the size of the purchase order or the probability of obtaining an order from the parents or guardian of the child photographed.

The persons represented as having been selected to receive certain of respondent' s oilers are not specially selected nor are they made to a specinlly selected limited number of persons. The photographs representeel as genuine Gold Tone photographs arc not genuine Gold Tone photographs. Respondent's photographers are not in any sense of the word "outstanding," but on the contrary arc frequently penions without previous training in photography find their work is on occasion inferior anc1ullskilled. There is no Babee National Contest. Respondent' s airel's are not "spec.iar' in any sense of the 'Ivord, but em the contrary are made continllol1s1y and arc his usual oiIcrs, available to everyone alike; the pictures represent eel as "free" arc not gifts or gratuities, and the purchase of other pictures is requirell in order to obtain them. one of responclenfs colored.( photogl'H phs are colored by hand, or with oil paints. Respondent docs not avmnl free prizes to the three most photogenic children and girls and the only a.ward Inac1e is a cheap paper certificate entitled " Contest Vinner First Prize. " There is no such organization as the )'Iinncsota Photographers Association; there is an organization known fls the Iinnesota Professional Photographers, mciation but respondent is not it member thereof, nor vms he a member thcrcof at the time said1rcpl'csentations and statements were made.

PAIL 6. In addition to the foregoing statements and representa. Lions made in the manner aforesaid, respondent has been and is engaged in the following acts and practices:

(a) Displaying samples of photographs and frames to customers and prospective customers of a better grade and quality than those actual11y shipped to customers when ordered; (0) Shipping customers picture frames which were not ordered lmd making a charge therefor;

(c) Representing by means of fictitious price lists that the regular price of the goods in question is greater than the price being quoted to the customer or prospective customer;

(d) Representing goods as "guaranteed" without disclosing the extent and terms of tlle guarantee.

PAR. 7. The use by respondent of the foregoing false and misleading statements and representations and acts and practices has had thc HAROLD. S STUDIO 417 412 Findings capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that the said statements and representations are true and into the purchase of substantial quantities of respondent' s goods. An. 8. The aforesaid acts and prn.ctices of respondent, as herein alleged, 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. DECISION OF THE CO DnSSION A::D Onder '1'0 FILE R.F.POHT OF COMPLIANCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on February 6, 1950, issued and subsequently served its complaint in this proceeding upon the respondent 1-1. IIarold Becka, an individual trading as Harold' s Studio, charging him with the use of unfair ancl deceptive acts and practices in commerce in violation of the provisions of said Act. After the issuance of said complaint and the filing of respondents answer thereto, hearings were held at which testimony and other evidence in support of and in opposit.ion to the allegations of the complaint were introduced before a trial examiner of tho Commission, theretofore duly designated by it, and such testimony and other evidence were uly recorded anel filed in the offce of the Commission. On N ove11bo1' 20 1D50 the tria.l examiner filed his initial decision. This matter thereafter came on to be heard by the Commission upon an appeal from said initial decision filed by counsel for respondent and an appeal filed by counsel supporting the complaint, briefs in support of and in opposition to said appea.ls, and oral argument, and the Commission having duly considered and ruled upon said appeals and having considered the record herein, and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes the following findings as to the facts, concl usion drawn therefrom, and order, the same to be in lieu of the initial decision of the trial examiner:

FINDlXGS AS TO THE FACTS P ARAGRAPU 1. Respondent, H. IIarold Becko, also known as Harry Becka, Harold Zavatsky and Harold Zavatsho, is an individual trading under the name and style of Harold' Studio, with his main offce and principal place of business, inc.uding his principal studio and finishing plant, loc:lted at No. 111 'Vest Third Street, 'Vinona, l\linnesota. Respondent also operates and conducts branch studios at 418 FEDERAL TRADE CO:VL\IISSIO DECISIONS Findings 48 F. T. C.

Hocheswr, Nlinnesota, and Fargo, X orth Dakota, and :formerly maintained a branch studio at Fond du Lac, 'Visconsin. Respondent is now, and for more than three years last past has been, engaged in the business of making, processing and sening photographs and in the sale of frames therefor.

PAR. 2. Among the items sold and distributed by respondent ate photographs, tinted or colol'ecl enlargements and reductions thereof and frames. Respondent causes and has caused his products, when sold, to be transported from his place of business in the State of :Minnesota to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondent maintains and has maintained a course of trade. in his products in commerce between and among the various States of the United States and in the District of Columbia. Respondent' s volmne of business in such commerce is and has been substantial.

PAR. 3. In the course and conduct of his business, as aJoresaicl, and for the purpose of inducing the purchase of his mCl'chfUldise, respondent has made through advertisements in newspapers, ra(Ea broadcasts circulars, cards, certificates and coupons, and by other means, various representations concerning himself, his photographs, qle persons to ,,,hom they are offered, and the conditions under which his photographs may be secured and purchased, and in reference to a "$:2 500. Charming Child Contest" conducted by him. Amollg such statements and representations are the following:

'YATCR TUESDAY' S PAPER for Harold' s Studios' $2500 Charming Child contest winners for the week. Enter now. Out of town folks need no appointment. Harold' s Stmlios, 308 1st Aye., N. , Fargo. '" enter Harold Studio s S2 500 Charming Child Contest'" 300.00 "CI1Hrming Child" CO TEST 'VL'\i\Ens Fon TI-lS '""EEK AH.E * * * Enter ;yom chillI in thc Channing Child Contest Today. $2,500 in cash prizes '" * 1wye YOl1r ('hilrl' s victul'e taken at one of the Rflrold' years areStudios. * '" , cl1ilclren bet"een the ages of 6 mo. and 10 eligible. " * "' You have been selected to han n lJenutiful 5 x f'lllargcd j"ortrnit " One Beautiful S x 10 Golrl Tone Photograph. 'Ve irrdle ou to be our gue"ts at the ,. * '" botel em " , *" between the hours of * *' nnd " " FHEr7 PRIZES n:il be (/1wn!u! lo the three most 1ll1oto c:enic childrC1J and p:irls. ilh orders of 12 or more 5 x 7 or 18.rger photogTaplJ. , we ,,"il gi1e yon one heautiful 8 x 10 ('010lec1 picture FREE! 1IIemlJcl's * ::IinnE'sotn State PJlOto;:raphers .'SS 1). HJ\l OLD' S STUDIO 419 412 Findings PAR. 4. By and through the use of the statements and representations hereinabove set forth, respondent has represented that cash awards of 82 500.00 are made to the winners of his " 500.00 Charming Child Contest " that all ehildren between the ages of six months and ten years whose photographs nre taken at respondent' s studios are eligible for prizes thereunder, and that respondent' s " 500.00 Charming Child Contest" is conducted in a fn.ir and impartial manner, with awards being made thereunder solely on the basis of merit. In the manner aforesaid, respondent has further represented that various persons to whom certain of respondent' s offers have been made were specially selected to receive them; that certain of the photographs offered for sale and sold hy him are genuine Gold Tone photographs; that free prizes will be awarded to the three most photogenic children and girls appearing to be photographed at the place designated in the locality where the customer resides and that with the purchase of twelve or more pictures respondent will give a colored photograph free and without cost; and that respondent js a member of the Minnesota State Photographers Association. PAR, 5. In truth and in fact, respondent' s statements and representations are false and misle-ading. Hesponclent's "$2)500.00 Charming Child Contest" was not one in which cash a,wards aggregating 500.00 were made. On the contrary, responclenes prizes consisted of United States Savings Bonds in the face value of $500. , fonyeight prizes of hand-colored photographs valued by respondent as being worth $15.00 each and representing a total of $720. , and twenty-four merchandise certificates awarded each week for a period of twelve weeks, which certificates had a value of $4.00 each, good only in exchange for merchandise, for a total jn this category of merchandise prizes of $1 152.00. The aggregate value of all awards for respondent's " 500.00 Charming Child Contest" represented 372. , including the United States bonds at face value and the hand-colored photograph prizes at the value arbitrarily fixed by respondent.

The representation that cash awards aggregating $2 500.00 would he made by respondent in connection with such contest has stemmed not only from language appearing in the advertising, which expressly states that $2 500.00 in cash prizes would be awarded, but has been conveyed, by implicatjon as wen, in other advertising matter used by respondent. Certain of the advertising identifying the contest by its title contains no reference whatsoever to the fact that the awards major part were to be conferred in merchandise. In other advertising, the format accentuates in much larger type than that appe.aring 420 FEDERAL TRADE CO:MMISSIOX DECISIONS Findings 4S in the body of the advertisement the words and figures " 500. Charming Child Contest." It is the opinion of the Commission that this contest title constitutes a representation that any and all awards to be made thereunder wil bc conferred in mo1\ey and that such connotation stems not from innuendo or suggestion but from the literal meaning of the title itself. The Commission is of the further view that the insertion, elsewhere in an advertisement for a contest identified as above, of additional language in reference to merchandise and other articles which are to be confcrred serves not to explain but merely as a confusing contradiction to the title and does not suffce to dispel the erroneous impressions which a contest title containing no reference to merchandise may engender.

All children between the ages of six months and ten years IV ho were photographed at respondent's studios have not been cligible for all or any of the prizes, as only those placing orders for photographs were considered, with some exceptions during the early stages of respondent' s twelve-week " 500.00 Charming Child Contest." Tho prizes were not impartially awarded but such awards were influenced by the size of the purchase order or the probability in instances of obtaining sllch an order. Those persons to "Whom the representation was made that they were especially selected to receive certain of rcspondent' s offers have not been espccial1y selected and such offers were available to all comers on an equal ba.sis. Since. approximately lD47 respondent has not produced any photographs by use of a finishing bath containing gold chloride 01' other gold salts and does not have facilities for such finishing. The term "gold-tone ' has a definite meaning in the profession of photography and connotes that the aforesaid finishing process has been llsed in producing a pictllre thus designated. The photographs which have been OffCTCd for sale and sold as Gold Tone photographs are not genuine gold-tone photographs. The photographs which respondent' s advertising states would be awarded as "Free" prizes were not gifts or gratuities, and in order to receive any of such prizes the purchase of other merchandise has been required. Such prizes have not been awarded to the three most photogenic children and girls but, all the contrary, it has been respondent' s practice to restrict the number of winners selected in each town or community to but one winner. Respondent, moreover, does not give with the purchase of twelve or more photographs a colored photograph free and without cost, inasmuch as the cost of such photograph is covered in and embraced within the cost to the purchaser of the photographs ordered. There is no such organization as Minnesota State Photographers Association. There is, however, an association HAROLD' S STUDIO 421 412 Conclusion known as J\1:inncsota Professional Photographers Association, of which respondent was formerly a member. Such membership termi. nated on December 31, 1948. During the periods in which respondent' s contests were being conducted and including the period in 1949 when various offers of 5" x 7" portraits at prices of 69 , 79 , and 89ct were made in the advertising therefor, respondent was not a member of the lVlinnesota Professional Photographers Associatjon. PAR. 6. The use by respondent of the foregoing statements and representations and acts and practices has had the tendency and capacity to mislead and deceive a substan6al portion of the purchasing public and the tendency and capacity to cause the public to purchase substantial quantities of respondent's merchandise as a result of the erroneous and mistaken beliefs so engendered. CONCLUSION (0:) The acts and practices of the rpsponc1ent, as found hereinabove are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices b1 commerce within the intent and meaning of the Federal Trade Commission Aet. (0) Additional charges of the complaint pertain to other statements appearing in respondent's advertising and allege, in such connection that respondent's photographers arc not outstanding photographers as represented by respondent, that various offers are not in fact "special'1 offers at prices which are reduced from those customarily charged, that certain of the photographs are not "hand-colored" or hand-colored with oil paints " and that respondent is not, as stated 1n the advertising, offcial photographer for the "Babee National Con test. ' Other charges arc that respondent has engaged in unfair and deceptive acts and practices through the displaying of samples of photographs and frames to prospective customers which are allegedly of b"tter grade and quality than those actually used in filling orders and through allegedly shipping frames to customers who ordered no frames, and relate also to alleged use of fictitious price lists and to alleged misuse of the word "guaranteed" without disclosing the extent and term of such 'warranty of satisfaction as may be offered to purchasers. The provisions of the initial decision of the trial examiner in e/fect, provide for dismissal of all but one of these additional charges without prejudice. The Commission is of the view upon consideration of the record, including the contentions of counsel for respondent and counsel supporting the complaint as advanced in support of their appeals from said initial decision, that dismissal without Order 48 F. T. C.

prejudice is warranted with respect to all of these additional charges and the other herein contained accordingly thus provides. ORDER It is ordered That the respondent H. Harold Decka, individually a.nd trading as I-Iarolc1's Studio, or trading under any other name, and his agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale sale or distribution of photographs, frames and similar merchandise 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 a specified sum of money or monetary amount in awards will be made to winners in a contest unless the specified sum or amount in awards is made in cash. (2) Failing to disclose in the advertising for any contest conducted by respondent the conditions and requirements which govern the selection of contest winners: including the extent to which such selection is controlled or influcnced by the purchase of respondent' s merchandise.

(3) Representing, directly or by implication, that recipients of any of respondent's promotional offers are especially selected. (4) Lsing the term "Gold Tone" or any other word or words or similar import or meaning: either alone or in combination with Hny other word or words, to designate, describe or refer to a photographic reproduction which is not t product of a finishing process involving the use of a toning or developing bath which contains chloride of gold or other gold salts.

(5) Representing, directly or by implication, that awards in a specified number or value will be made in any contest unless such awards are actually conferred.

(6) Using the word "Free" or any other word or term of similar import or meaning to desi,bY11ate, describe or refer to any article of merchandise which is not in fact a gift or gratuity or ,which is not given without requiring the purchase of other merchandise or the performance of some service inuring, directly or indirectly, to the benefit of the respondent.

(7) Representing, directly or by implication, that respondent is a member of the Minnesota Photographers Association, of the iinnesota State Photographers Association or of the Minnesota Professional Photographer Association, or of any association or organization, unless such be true in fact.

HAROLD' S STUDIO 423 412 Order It i8 fU1.ther ordered That the charges of the complainant hereinbefore referred to and discussed in paragraph (b) of the Conclusion , and the same hereby are, dismissed without prejudice to the right of the Commission to take such further or other action in the future as may be warranted by the then existing circumstances. It i8 further ordered That respondent shall, within sixty (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 l\iason not participating as to inhibition (6) of this order.

, \\ 424 FEDERAL TRADE COlfMISSION DECISIONS Syllabus .8 F. T. C.