National Blind Industries, Inc.

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IN THE MATTER OF NATIONAL BLIND INDUSTRIES, INC. ET AL.

DECISION IN REGARD TO THE ALLGED vraLATION aF THE FEDERAL TIL"-DE COMMISSION Docket 6036. Complaint, Aug. 1952-Decision, Oct. 20, 1953 Where a non-profit institution serving as a coordinating agency, broker, and clearing house for numerous workshops for the blind, located at various points tl1rolJghout the Uniteu States, included as one of its principal functions tlle assisting of tlle Government in locating nnu procuring desired articles made by the blind and in assisting the various workshops in marketing their products to the Government as well as to private business concerns charitable institutions, etc., and, as National Industries for the Blind, was a long established and weU recognized organization; and thereafter a corporation and an individual, its offcer and owner, engaged in the interstate sale and distribution of luminous house numbers and woven articles such as table and place mats, in competition with other corporations and individuals and with eleemosynary and charitable institutions similarly engaged- (a) .Made use of a corporate name which, as National Blind Industries, Inc., so closely resembled that of National Industries for tbe Blind as to be confusing to the public and to have the tendency and capacity to cause it to mistake said private business enterprise for the other and thereby cause, or tend to cause, trade and contributions to be diverted unfairly to said private enterprise from the affliates of National Industries for the Blind; and (b) Represented tllat they bad facilities for training blind persons in bandicraft and tllat contributions solicited from the public in connection with tbe sale of their merchandise would be used to train blind persons and for other rehabiJtation work among tlle blind;

he facts being tl1ey had not trained any blind persons and were wHhout facilties so to do; the ouJy blind person in their employ received his training elsewhere, as did others engaged in making various articles sold by said corporation and its owner; and contributions were not otherwise used in rehabiJtation work among the blind, but were made use of, as respects the major portion, for other purposes such as commissions of solicitors, salaries of coUectors and other employees, rent on their place of business and payments to said owner as income and also on an indebtedness due him by said corporation:

Held: That such acts and practices, under the circumstances set forth, were all to the prejudice of tbe public and of their competitors and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices therein.

Before IIh. Wiliam L. Pack hearing examiner. Mr. J. W. Brookfield, Jr. for the Commission. NATIONAL BLIND INDUSTRIES, INC., ET ./.

372 Findings DECISION OF THE COMMISSION Pursuant to Rule XXII af the Commission s Rules af Practice, and as set forth in the Commission s " Decision af the Cammissian and Order to File Report af Campliance " dated October 20, 1953, the initial decision in the instant matter af hearing examiner vVilliam L. Pack, as set aut asfollaws, became on that date the decision af the Commission.

INITIAL DECISION BY WILLIAM L. PACK, HEARING EXAJllINER Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission an August 29, 1952, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use unfair methods of competition. and unfair and deceptive acts and pmctices in commerce in violation af the provisions af that Act. After the fiing by respondents of their answers to. the complaint hearings were held at which testimony and other evidence in support af and in oppositian to. the allegations af the complaint were intraduced befare the above-named hearing examiner, theretafore duly designated by the Commission, and such testimony and other evidence were duly recarded and fied in the offce of the Cammissian. Thereafter the proceeding regularly came an far final cansideration by the hearing examiner an the complaint, answers, testimony and other evidence, and proposed findings as to the facts and conclusions submitted by counsel supporting the complaint and by certain af the respondents (oral argument not having been requested); and the hearing examiner, having duly considered the matter, finds that this proceeding is in the interest af the public and makes the fallawing findings as to. the facts, canclusian drawn therefrom, and order, FINDINGS AS TO Tile FACTS PARAGRAPH 1. Hespandent N atianal Blind Industries, Inc., is a carparatiall organized and doing business under and by virtue af the laws af the District of Columbia, with its place of business located at 1211 I" Street, N. IV. , in the city af vVashington, District of Columbia. Hespandent David A. Ulrey formulates the policies af the corporation and directs and contrals all af its pmctices and activities. While his affcial title in the corporation is that of Secretary and Treasurer such title is af no. significance as respondent Ulrey is in fact the awner af the business and has camplete cantrol aver it. 6/4 FEDERAL TRADE COMMISSION DECISIONS Findings 50 F. T. C.

In the farmatian af the carparatian respondents Walter O. Ulrey and Frances D. Lehman appeared as incorparatars alang with David A. Ulrey. It also. appears that in the organization af the carparatian Walter O. Ulrey was elected President and Frances D. Lehman Vice-President. These titles, however, were only naminal, as neither of the two. has ever had any part in formulating the policies af the business ar directing its activities. Walter O. Ulrey appears to have visited the corporation s place af business only ance ar twice and he resigned his affce in July 1952, having had no cannectian with the business since that time. Miss Lehman was in the employ af the carporatian fram approximately the date af its arganization in July 1951 to. March 1952 , her duties being principally af a clerical nature. She has never had any financial investment in the business but received a weekly salary in her capacity as an employee. Her employment was terminated in March 1952, since which time she has been employed in work af an entirely different nature. In view af these facts it is cancluded that no. saund basis exists far retaining these two. individuals as respondents in the proceeding and the complaint is being dismissed as to. them. The ward respondents as used hereinafter will therefore include only the carparate respondent and respondent David A. Ulrey unless the contrary is indicated. PAR. 2. Respondents are and have been engaged in the sale and distributian of luminaus house numbers, and woven articles such as table 11d place mats. Respondents cause and have caused their products when sold to. be transported fram their place af lmsiness in the District af Columbia to. purchasers located at other paints within the District af Columbia and also. in the States af Maryland and Virginia. In the sale and distribution af their products respondents are and have been in substantial competition with other carparatians and individuals, and with eleemasynary and charitable institutians, engaged in the sale and distribution af similar products in commerce in the District af Columbia and between and among the various States of the United States.

PAR. a. In pramoting the sale of their products respondents have represented to prospective custameTS that the articles are made by blind persons, and the first issue raised by the complaint is whether this representatian is true. The principal item sald by respondents has been luminaus hause numbers. The two. pieces af waad used in making the numbers are purchased by respondents in pre-cut sizes, ane af the two. being a small past or stake and the other a small rectangular board. The two. pieces of waad are fastened together JY a blind warker by means af screws inserted in pre-cut hales, the )aard being placed erasswise the stake and near the tap. To. the , , KATIONAL BLIND INDUSTRIES , INC. , ET AL. 375 372 Findings board the blind worker affxes metal numerals theretafare purchased by respondents. The entire sign is then painted by the blind warker. frant yard af a residenceThe signs are designed to be placed in the and are made luminaus in order that they may be visible at night. As his campensation the single blind worker who has been engaged in this work receives $1.00 per sign. The price received by respondents far the finished signs was ariginally $2.50 each but later was raised to. persons $3.50. Sttles are solicited aver the telephane by emplayed by respondents for that purpose. The signs are delivered employees. Alland the purchase price collected by still other these employees are sighted rather than blind persons. It is urged in support af the complaint that the work dane an the signs by the blind warker constitutes a mere assembling process, and that respondents' representation that the signs are made by the blind is unwarranted and misleading. The examiner rejects this cantentian. The work dane by the blind person constitutes the major portion the process af making the sign and respondents are warranted in representing the signs as having been made by the blind. The only other work af tL substantial nature done at rcspandents place of bnsilless is the caning af chairs. It is not disputed that all , some seven or eight af suchof this work is clolle by blind persons persons lmving at various times been engaged in such work. In additian to the sale af house munbers and the caning af chairs respondents have at times said a few household articles such as waven table and place mats. All of these articles were made by blind persons, although nat at respondents' place of business nar by persons in respondents' cmploy. The articles were made by blind persons in their hames 0.1' in institutians far the blind in the District of Columbia. PAR. 4. In connection with the sale af their merchandise respondents have solicited cantributians fram the public, representing that they have facilities for training blind persons in handicraft and that ouch cantributions wil be used to train blind persons and far other rehabilitation work among the blind. These contributions have been , calls being made to. praspeetssalicited principally over the telephone in the vVashingtan metropolitan area by women emplayed by re- The solicitor frequently states to. thespandents for that purpose. prospect that she is a member of a "Ladies Cammittee" engaged in saliciting funds to help the blind. The salicitors usually work on a commission basis, receiving 35% of all funds obtained through their efiorts. The actual callecting of the amounts subscribed is done by other employees who usually are emplayed an a salary basis. Hespandents' representations were unwarranted and misleading. Respondents have not in fact trained ally blind persons and are with- , , Iindings 50 F. T. C.

aut facilities for such work. As indicated above, only ane blind person has been employed in making the hause numbers sold by respondents, and this person received his training elsewhere and before he became associated with respondents. In fact, it appea,rs that this person approached respondents an his awn initiative and suggested the hause number enterprise. N one of the few persons engaged in caning chairs received his training in such work fram respondents, all having been previously trained elsewhere. Nar were such contributions otherwise used in rehabilitatian work among the blind, the major portion being used far other purposes such as commissions af solicitars, salaries af collectors and other employees, rent au respondents' place of business, and payments to respondent David A. Ulrey as income ami also. on an indebtedness due him by the corporation.

PAH. 5. The complaint also charges that the name af the respondent eorporatian Kational Blind Industries, Inc. " is in and of itself false and misleading, one of the reasons assigned for this charge being that the name so. clasely resembles that 0.1' another arganization that its use by respondents has the tendency and .capacity to confuse and mislead the public. The other organization in question is the "Xational Industries for the Blind" which has its heac/quarters ill N ew York City. This organization which is a llon-profit institution, serves as a caardilUtting agency, brakes' and clearing hause and numeraus workshops far the blind which are affliated with it and which are located at various points throughaut the United States. The United States Gavernmcnt is frequently in the market for numerous articles made by the blind, and ane of the principal functious af N atianal Industries far the Blind is to assist the Government in locating and procuring the articles desired, and to assist the various workshops in marketing their products to the Government as well as to private business cancerns, charitable institutions, etc. National Industries far the Blind is a lang established and well recognized organization its origin having antedated that of respondent corporation by many years.

The examiner finds that this charge in the complaint is well faunded. The name af the corporate respondent, National Eli nd Industries, Inc. , so clasely resembles that af N atianal Industries far the Blind as to be confusing to. the public and to have the tendency and capacity to .crcuse the public to mistrcke respondent carporatian for N rctianrcl Industries :for the Blind, thereby causing, or having the tendency and capacity to. cause, trade ami cantributians to be diverted unfairly to respondents fram the affliates af N atianal Industries far the Blind. Unlike N atianal Industries far the Blind NATIONAL BLIND INDUSTRIES, INC., ET AL.

372 Order and its affliates, respondent corporation is not a nan-prafit institutian but is a private business enterprise.

PAR. 6. The complaint appears to. charge also that, irrespective the similarity between the name of respondent carparatian and that of N atianal Industries for the Blind, the corporate name is misleading. The allegations af the ,complaint in this respect are that Through the use af the carp orate name 'National Blind Industries Inc. ' respondents represent that said corporation is a charitable eleemosynary institutian devoted exclusively to the interests of the blind and operating at the national ar natian wide level; that all the articles said and offered for sale by them are made by blind persons and that the business is conducted for the benefit af the blind. There appears to. be no evidence in the record, certainly no. substantial evidence, indicating that the corporate name represents or connates all of these things to. the public, and the examiner is af the view that the name cannot reasonably be so construed. The name does represent or imply that the articles oft' ered far sale by respondents are made by blind persons but, as heretofore pointed out, this representation is true.

PAR. 7. The acts and practices af the respondents as set forth in Paragraphs Four and Five have the tendency and capacity to confuse, mislead and deceive a substantial partian af the public as to. respondents' business and its facilities, and the tendency and capacity to. cause such members of the public, as a result af such confusian and misunderstanding, to. make purchases fram and cantributions to respondents which they wauld nat otherwise make. In consequence substantial trade has been diverted uni'irly to. respondents fram their competitors.

CONCLUSION The acts and practices of the respondents as set forth above are all to. the prejudice af the public and of respondents' competitors, and constitute unfair methods af competition and unfair and deceptive acts and practices in commerce within the intent and meaning af the Federal Trade Commission Act.

ORDER It is ordered That respondent Natianal Blind Industries, Inc., a carparatian, and its affcers, and respondent David A. Ulrey, individually and as an oftcer af said corparatian, and respondent's representatives, agents and employees, directly or through any corporate other device, in cannectian with the offering far sale, sale and distribu- 378 FEDERAL TRADE COMlvUSSION DECISIONS Order 50 F. T. C.

tian af hause numbers, waven gaads ar any other products in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist fram: 1. Representing, directly or by implication, that respondents have facilities far training, or that they do. train, blind persons. 2. Representing, directly ar by implication, that cantributians received fram the public wil be used to. train or rehabilitate the blind ar otherwise used far the benefit af the blind. 3. Using as a part af res pan dents ' corporate ar trade name the wards National Blind Industries ar any other word ar cambinatian wards substantially similar to. the name " N atianal Industries far the Blind. "

It is furtker O1 der' That the complaint be, and it hereby is, dismissed as to respondents 'Valter O. Ulrey and Frances D. Lehman. ORDER TO. FILE REPORT OF caMPLIANCE It is ordered That the respondents, N atianal Blind Industries, Inc. a corparatian, and David A. Ulrey, individually and as an offcer said carparatian, shall, within sixty (60) days after service up an them af this order, file with the Commission a report in writing setting forth in detail the manner and farm in which they have complied with the order to cease and desist (as required by said declaratory decision and order af October 20, 1953).

HOL'fI'l' E MFG. CO. (CAT' S PAW RUBBER CO, ) INC. ) ET AL. 379 Syllabus IN THE 1Alter OF HOLTITE MANUFACTURING COMPANY AND CAT'S PAW RUBBER COMPANY, INC. ET AL.

DECISION IN HEGAUD TO THE ALLEGED VIOLATION Of' SEC. (A) OF THE CLAYTON ACT, AS AMENDED Duclect 58'z8. Complaint, Nov, 1950-Decision, Oct, 1953 Where the largest manufacturer of rubber heels and soles in the United States engaged in the competitive interstate sale and distribution, nationally, of a Hue of its said products under its nationally advertised brand name "Cat' Paw" and various other brand names, including customers' private brands to wholesalers of shoe repair materials, or shoe finders, and to operators of chain shoe repair shops in department stores throughout the United States to retailers of shoe repair and maintenauce materials, and to independent shoe repair I' shops- (a) Discriminated in price between different purchasers of rubber beels and soles and findings, of like grade and quality, by seJing said products to some of its customers at substantially higher prices than it sold such products of like grade and quality to other of its customers, through granting discounts yolurne or otherwise, rebates, and allowances on sales to favored customers including shoe finders and large operators of thaill shoe repair shops, competitively engaged either with other shoe finders or with other shoe repair shops, retail shoe stores, and l'etaiJers of shoe repair and maintenance materials who purchased rubber heels and soles and findings either from said manufacturer Or from shoe finder-customers of it, or flom whomsoever purchased, within the various trading areas in which said favored c.,"tomers were engaged in business, and who did not receive the benefit of such discriminatory discounts, etc., aud the substantially lower prices and discriminations thereby brought about, ranging from one per cent to as high as about twenty pel' cent; and Where (1) an individual businessman; and (2) a corporation, and various individuals, its offcers and stockholders, partners in an associated and common enterprise; which were engaged in the interstate sale and distribution at wholesale of leather and rubber shoe repair materials and other products classified as findings, such as shoe polish, saddle soap, nails, laces heel plates, shoe machinery, and other products and materials used in the repair, rebuilding, alteration, servicing, cleaning, or preservation of shoes slippers, sandals, boots, and similar footwear products, were among the largest shoe finders in the Chicago, IUinois, area and sold to independent and chain opera tors, shoe repair shops, retaij shoe stores, and to retailers of shoe repair and maintenance materials, in competition with other shoe tindel's who purchased leather and rubber shoe repair materials and findings from manufacturers or suppliers thereof for resale within the various trading areas in which said respondents offered and sold said products; and said man ufacturer- (b) Jointly and several11y discriminated in price between different purchasers of rubber heels and soles and findings, of Uke grade and quality, made by said manufacturer, by seUing said products to some of their customers at 380 FEDImAI, TRADE COMJVllSSION DECISIONS S,'llabus 50 F. T. C.

substantially higher prices than they sold such products of Jike grade and quality to others of their customers through grantiug discounts, volume or othervo'ise, rebates, and allowances, to favored customers, particularly large operators of chain shoe repair shops, competitively engaged with other shoe repair shops, retaij shoe stores, and retailers of shoe repair and maintenance materials who purchased rubber heels and soles and findings from said respondents or from whomsoever purchased, within the various trading areas iu which said favored customers were engaged and who did not receive the benefit of such discriminatory discounts, etc. , and the suhstantia11y lower prices and discriminations thereby brought about, ranging from one per cent to as high as about fifty per cent; and Where aforesaid individual shoe finder, engaged as above set forth- (c) Discriminated in price between different purchasers of leather and rubber heels and soles and findings, of Jike grade and quality, by sellng said products to some of its customers at substantially higher prices than it sold such products of like grade and quality to others of its customers, through granting discounts, rebates, or allo,vances to favored customers, particularly large operators of chain shoe repair shops, which were competitively engaged with other shoe repair shops, retail shoe stores, and retailers of shoe repair and maintenance materials who purchased leather and rubber heels and soles and findings from said individual shoe finder or from whomsoever purchased, within the various trading areas in which said favored customers were engaged in business, and who did not receive the benefit of such discriminatory discounts, etc. , and the substantially lower prices thereby brought about, ranging' from one per cent to as high as about twenty per cent; and Where said second shoe finder group, i. e., said corporation and its offcer and stockholder partners, associated as above set forth- (d) Dipc,riminated in price between different purchasers of leather and rubber heels and soles and findings, of like grade and quality, by seUing said products to some of its customers at substantially higher prices than it sold such products of m,e grade and quality to others of its customers through granting discounts, rebates, or allowances to favored customers, particularly large operators of chain shoe repair shops, competitively engaged with other shoe repair shops, retail shoe stores, and retailers of shoe repair and mai.ntenance 11laterials who purchased leather and rubber heels and soles and findings from said group enterprise or from whomsoever purchased within the various trading areas in 'which said favored customers \Were engaged in business and who did not receive the beuefit of such discriminatory discounts, etc., and the substantially lower prices and discriminations thereby brought about, ranging from one percent to as high as about twenty percent; Effect of which discrimination in price, as above set forth, might be substantially to lessen competition or tend to create a monopoly in the lines of commerce in which respondents and their purchasers were respectively engaged, or to injure, destroy, or prevent competition with said respondents or with customers of theirs who received the benefits of such discriminations:

Held That such alleged acts and practices of said respondents, as above set forth, constituted violations of Subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

Befare Mr. Frwnk IJier hettring examiner.

&; &! HOLTITE MFG. CO. (CAT' S PAW RUBBER CO. , INC. ) ET AL. 381 379 Decision Mr. James 1. Rooney and Mr. James 8. lielaher for the Cammissian. Gordon Feinblatt, af Baltimare, Md. far Holtite Manufacturing Ca. Cat' s Paw Rubber Co. , Inc., Morris Eisen, Larry L. Estersan and Albert A. Estersan.

M1\ 1. Leonard liovitz of Chicago., Ill., far .Tack Klinger. Lede1' er-, Livingston, Kahn Adsit, 0.1' Chicago., Ill., for K. Kaplan Sans & Ca. Rudalph E. Kaplan, Eli E. Kaplan, 1. Gilbert Kaplan Sidney Kaplan, Rubin Chupack and Edwin Kardan. ORDERS AND DECISION OF THE COJlIMISSION Onler denying respondents' appeal from initial decision of hearing examiner and decision of the Commission and order to file report of campliance, Docket 5828, October 22, 1953, fallaws: This matter came on to. be heard by the Federal Trade Commission upon an appeal by all of the respondents herein with the exception af J ack Klinger from the initial decision of the hearing examiner briefs in support af and in oppositian to. said appeal and oral argument therean, an order granting leave to respondents to show cause why the form of order contained in the initial decision should not be entered as the order to cease and desist af the Commission, respondents' objections stated in answer to said order to show cause and answer of counsel supporting complaint in opposition to. said objections.

The record herein consists of a complaint 8nd respondents' answers :1c1mitting all of the Im1terial allegations of fact. These answers were filed by respondents after an agrecment had been reached between tlwm and counsel supporting the complaint as to. the farm af proposed order which would be urged by all counsel. It was clearly understood, however, that the Commission ,"vas not haund to issue its order to cease and desist in the farm proposed. The hearing examiner in his initial decision varied from the form af the proposed ardor by omitting from its provisos which, in effect, state that the defenses of cost justificatian and 01' meeting the equally low price af a competitor are available to respondents under the order. Respondents appealed from this initi,"1 decision an the ground that the exclusian of these pravisas taak fram them substantial rights to which they are entitled. Further abjection was marle to the entry 0.1' any order to cease and desist herein prior to disposition by the Conmlission of the cases in Docket N as. 6042, 6043, 6044, and 6045, involving competitors pricing practices.

Hespandents ' contentian that the amission af the pravisas from the order is erraneaus is of no merit. The Supreme Court of the United States in Federal TNlde Commission v. The Ruberoid 00. 343 U. S. Decision 50 F. T. C.

470 (1952) stated that such pravisos are necessarily implicit in every such order af the Cammissian. However, as stated by that caurt, the implicit. availability af these defenses does not allow respondents to. relitigate issues already decided by the proceeding be fare the Cammission which resulted in the order to cease and desist. Thus, the only difference between the proposed order and the order adapted the hearing examiner is that the prapased order wauld allow respondents to relitigate on the questions of meeting campetitian and cost justification in a proceeding far violation af the order on the same facts as considered herein. The Commission is af the opinion that the order contained in the intitial decision provides the mare adequate relief from the camplained af practices and is proper in all respects. As to. respondents' cantention that no. order should be issued herein until its dispasition af the cases in Docket N as. 6042, 6043 , 6044 and 6045 involving competitors' pricing practices, the Commission on August 5, 1953, issued its decision accepting a consent settlement containing an order to cease and desist in each of these cases. . The basis far this abjectian, therefare, has been eliminated. The Commission, there fare, being of the opinian that respondents graunds for appeal are of no. merit :lld that the initial decision of the hearing examiner is apprapriate in all respects to dispase of this proceeding:

' appeal from the initial decision It is ordered That respondents the hearing examiner be, and it hereby is, denied. It is further oT'dered That the initial decision of the hearing examiner shall, on the 22d day of October 1953, became the decision af the Commission.

It is further ordeT'ed That the respondents shall within sixty (GO) days after service up an them af this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist contained in said initial decision, a copy of which is attached hereto.. Cammissioners Hawrey and Carretta nat participating for the reason that oral argument on respondents' appeal from the initial decision was heard prior to their appointment to. the Cammissian. Said initial decision, thus adapted by the Commission as its decision, follows :

INITIAL DECISION BY FRANK HIER, TRIAL EXAJ\IIKER Pursuant to. the provisions of the Clayton Act as amended by the Robinson-Patman Act (15 U. S. C. Sec. 13), the Federal Trade Cammission an November 7, 1950, issued and subsequently served its cam- HOLTITE MFG. CO. (CAT' S PAW RUBBER CO. , INC. ) ET AL. 383 379 Findings plaint in this proceeding up an Haltite Manufacturing Company, a corporation, Cat's Paw Rubber Company, Inc., a corporation, Marris Eisen, Larry L. Estel'son, and Albert A. Esterson, individually and as affcers af said two carparatians; upon Jack Klinger, an individual doing business as A. Leveton Company; and upon K. Kaplan Sons and Company, a corparatian, Rudolph E. Kaplan and Eli E. Kaplan individually and as affcers thereaf, Rudolph E. Kaplan, Eli E. Kaplan I. Gilbert Kaplan, Sidney Kaplan, Rubin Chupack and Edwin Kardon, individually and as copartners doing business as Reick, Langendorf and Company, a partnership, charging them with violation of subsection (a) of section 2 af said Act as amended. Time within which to. file answer, as fixed in the complaint, was, by the trial examiner, enlarged far respondents Haltite Manufacturing Company and Cat's Paw Rubber Company, Inc., and the individuals named as their affcers, but all the remaining respondents filed answers on December 4, 1950. Thereafter, an January 4, 1951, respondents Haltite Manufacturing Company, Cat' s Paw Rubber Company, Inc., Morris Eisen, Larry L. and Albert A. Estersan filed answer through counsel admitting all the material allegations of the complaint and waiving all intervening procedure and further hearing as to the facts. On J anuary 12, 1951 , the remainder af the named respondents, with the exception of Jack Klinger, through counsel filed matian to. withdraw their answer filed December 4, 1950 , and to. substitute therefar an amended answer admitting all the material allegations of the complaint and waiving all intervening procedure and further hearing as to. the facts, which motian was granted by the trial examiner and said amended answer filed. On January 24, 1951, respondent Jack Klinger through counsel fied mati on to. withdraw answer dated December 4, 1950 , and to. substitute amended answer admitting all the material allegations af the complaint and waiving all intervening procedure and further hearing as to the facts, which motion was granted by the trial examiner, the amended answer filed and the record clased.

Thereafter, the proceeding regularly came an for final consideratian by said trial examiner an the complaint, answer, and amended answers thereto and said trial examiner, having duly considered the record herein, makes the fall wing findings as to the facts, conclusion drawn therefrom, and order:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent lIaltite Manufacturing Company is a Maryland corparatian with its offce and principal place of business located at Warner and Ostend Streets, Baltimore, Maryland. 384 FEDERAl, TRADE COJViMISSION DECISIONS indings 50 F. T. C.

Respondent Cat's Paw Rubber Company, Inc., is a Maryland carparatian with its offce and principal place of business located at Warner and Ostend Streets, Baltimare, l\faryland, and is a wholly owned subsidiary af respondent Holtite Manufacturing Company. Respondents Marris Eisen, Larry L. Estersan, and Albert A. E:iterson are individuals and are Pre:iident, Vice President, and Secretary- Treasurer, respectively, of respondent Haltite Manufacturing Com- , 1'8-pany and are Secretary-Treasurer, Vice President, and President :ipectively, af corporate re:ipondent Cat':i Paw l rubber Company, Inc. Said individual respondents formulate, cantrol, and direct the policies practices, and lYethads 0.1' :iaid corporate respanclents. All of the re:ipondents named in this paragraph are hereinafter referred to. jointly and severally as respondent Cat' s Paw. PAR. 2. Respondent Jack Klinger is an individual doing business under the trade name and style of A. Leveton Company, hereinafter referred to. as respondent A. Levetan Company, with his affce and principal place of business located at 711 west Raosevelt Raad, Chicago, Illinois.

PAR. 3. Respondent K. Kaplan Sons and Company is an Illinois corparatian with its offce and principal place of business located at 711 North Milwaukee Avenue, Chicago, 111inais. Respondents Rudalph E. Kaplan and Eli E. Kaplan are individuals and are President and Secretary-Treasurer, respectively, af respondent K. Kaplan Sans and Company, and as such formulate, control and direct the policies, practices, and methods of said respondent carparatian The aforesaid individual respondents I udolph E. K:tplan and Eli E. Kaplan, together with individual respondents I. Gilbert Kaphm , own all 0.1' theSidney Kaplan, Rubin Chupack, and Edwin Kardon capital stock af K. Kaplan Sans and Company, and are copartners doing business under the finn name and style of Reick, Langendorf :tlld Camp any with its offce and principal place of business located at ;n South IVells Strect, Chi-cago, Illinois. Al1 of the respondents muned in this paragraph are hereinafter referred to jointly and severally as re:ipondent K. Kaplan.

PAR 4. Respondent Cat's Paw is now and has been since J UlJe 19 1936, engaged in the m:tnufacture, sale, and distribution of a line of rubber heels and soles and allied products used in the shoe repair industry. Rcspaudent Cat' s Paw is thc largest manufacture af rubber he cis and soles in the United States.

Said respondent sells and distributes its products prim ipall'y under the nationally advertised brand name "Cat' s Paw " and also under various other brand names, including custamcrs' private brands. , INC. ) ET AI" 385 HOLTITE MFG. CO. (CAT' S PAW HUEBER CO. 379 Findings 11'1-Saiel proeluds are sold nationally to wholesalers of shoe repair terials, known generally as shoe finders; and to opemtors of chain shoe repair shops located in clepl1rtment stares throughout the United , retailers af shoe repair and maintenanceStates, retail shoe stares materials, and independent shoe repair shops. llespandent Cat's Paw causes said products, when said, to be trans. ported from the place of manufacture at Baltimare, Maryland, to the af the United Statespurchasm' s thereof located in the various States and in the DistI'iet of Columbia. There is and has been at all times herein mentioned a continuous current af tl'Hle and commerce in said pl'ducts ((cro',s State Jines between respondent's manufacturing plant and purchasers at' such products. Said products are sold and distributed for use, consumptian, and resale within the vltriaus States of the United States and in the District of Columbia. since PAR. 5. Respondents A. Leveton Company and K. Kaplan, .Tune 19 , 1936, have been and are naw engaged in the sale and distribution at wholesale af leather and rubber shoe repair materials and other pradncts elassified as fiudings, such as shoe palish, saddle soap, nails, laces, heel plates, shoe machinery, and other products and materials, all for use in the repair, rebuilding, alteratian, servicing, cleaning, 0.1' preservation ot' shoes, slippers, srtndals, baots, and similar faatwertr praclucts. Said respondents, generally known as shoe finders, are among the largest shoe finders in the Chicago, Illinois, area rtnd sell to independent and chain aperated shoe repair shops, retail shoe stores ltnd to re :8.ilers af shoe repair and maintenance materials. to. be transported Said respondents cause said products, when said from the points of origin of shipments to the purchasers thereof 10.cated in the various States af the United States and in the District of Columbia. There is and has been at all times herein mentioned a continuaus current of trade and COlmnerce in said products across State Jines between the points af origin of shipment and the purchasers of such products. Said products are said and distributed for nse, consumption, and resale within the various States of the united States and in the District of Columbia. PAR. 6. In the course and conduct of its business, as aforesaid, respondent Cat's Faw is now and during the times herein mentioned Ims been in substantial competition with other carparations and firms engaged in the business of manllfactnriug, selling, and distributing withmaterials and findings used in the shoe repair industry, and shoe finders engaged in the business af selling and distributing said products in interstate commerce. Respondents A. Leveton Company , in the course and conduct af their business, as afare- :1mlK. Kn.plan said, are now and during the times herein mentioned have been in 40:\44:--- Q!-- Findings 50 F.

substantial campetitian with other shoe fiders who. purchase leather and rubber shoe repair materials and iindings fram manufacturers ar suppliers thereof far resale within the various trading areas in which respondents affer far sale and seu said products. PAR. 7. Respondent Cat's Paw, in the course and conduct af its business, as hereinbefore set forth, has been since June 19, 1936, and naw is discriminating in price between different purchasers af rubber heels and sales and findings, of like grade and quality, by sellng said products to. same of its customers at substantially higher prices than it sells such products af like grade and quality to. others of its customers. The aforesaid discriminations in price are effected by granting discounts, vaJume or otherwise, rebates and allowances on sales to favored customers, including shoe finders and large aperatars chain shoe repair shops, which have the net effect, either directly indirectly, af reducing said customers ' prices to. a substantially Jower amount than respondent charges others of its customers an products of like grade and quality. Said discriminations in price vary in amount and range from one percent to as high as approximately twenty percent.

The favored customers receiving the aforesaid discriminations in price are campetitively engaged either with other shoe finders or with other shoe repair shops, retail shoe stares, and retailers af shoe repair and maintenance materials who. purchase rubber heels and soles and s Paw ar fram shoe iinder-cus-findings either fram respondent Cat' tamers af respondent Cat's Paw, or from whomsoever purchased, within the various trading areas in which said favored customers are engaged in business.

PAR. 8. Respondent Cat's Paw and respondents A. Levetan Campany and K. Kaplan, jointly and severally, in the course and conduct of their business, as hereinbefare set forth, are now and during the times herein mentioned have been discriminating in price between different purchasers af rubber heels and sales and findings af like grade and quality, manufactured by respondent Cat's Paw, by selling said products to. same of their customers at substantially higher prices than they sell such products af like grade and quality to others their customers.

The aforesaid discriminations in price are effected by granting discounts, valume or otherwise, rebates and allowances to favored customers, particularly large operatars of chain shoe repair shops which have the net effect, either directly ar indirectly, af reducing said customers' prices to a substantially lower amount then said respondents, jointly and severally, charge others of their customers far products af like grade and quality. Said discrimina.tions in price HOLTITE MFG. CO. (CAT' S PAW RUBBER CO. INC. ) ET AL. 387 379 Findings vary widely and range fram ane percent to. as high as approximately fifty percent.

The favored customers receiving the aforesaid discriminations in price are eampetitively engaged with other shoe repair shops, retail shoe stores, and retailers af shoe repair and maintenance materials who. purchase rubber heels and sales and findings fram respondents named herein ar fram whamsaever purchased, within the various trading areas in which said favored customers are engaged in business. PAR. n. R.espandent A. Levetan Company in the course and conduct af its business, as hereinbefore set forth, has been during the times herein mentioned and now is discriminating in price between different purchasers af leather find rubber heels and soles and findings of like grade and quality, by sellng said products to. same af its customers at substantially higher prices than it sells such products af like grade and quality to others of its customers. The a faresaid discriminations in price are effected by granting discounts, rebates or allowances to. favored customers, particularly large aperators af chain shoe repair shops, which have the net effect, either directly ar indirectly, af reducing said customers' prices to. a substantially lower amount than respondent charges others af its custamers for products af like grade and quality. Said discriminations in price vary widely in amount and range fram one percent to. high as approximately twenty percent.

The favored customers receiving the aforesaid discriminations in price are competitively engaged with other shoe repair shops, retail shoe stares, and retailers af shoe repair and maintenance materials who. purchase leather and rubber heels and sales and findings from respondent A. Levetan Company, or fram whomsoever purchflsed within the various trading areas in which said favored customers are engaged in business.

PAR. 10. Hespandent K. Kaplan, in the course and conduct af its business, as hereinbefare set forth, has been during the times herein mentioned and now is discriminating in price between different purchasers af leather and rubber heels and sales and findings af like grade 3J1d quality, by selling said products to same af its customers at substantially higher prices than it sells such products af like grade and quality to. others af its customers. The aforesaid discriminations in price are effected by granting discounts, rebates or allowances to favored customers, particularly large aperatars af chain shoe repair shops, which have the net effect either directly ar indirectly, af reducing said customers' prices to. a substantially lower amount than respondent charges others af its customers far products of like grade and quality. Said discriminations 388 FEDEllAL TRADE COJ'admission DECISIONS Order 50 F. .T.

in price vary widely in amount and range fram ane percent to as high as approximately twenty percent.

The favored customers receiving the aforesaid discriminations in price are campetitively engaged with other shoe repair shops, retail shoe stares, and retailers of shoe repair and maintenance materials who. purchase leather and rubber heels and soles and findings fram respondent K. Kaplan ar fram whamsoever purchased, within the various trading areas in which said favored customers are engaged in business.

PAR. 11. The effed of fiuch discriminations in price as set forth in Paragraph 7, Paragmph 8, Pantgmph U and Paragraph 10 hereof may be substantiany to lessen eompetitian or tend to. create a, monapoly in the lines 0.1' commerce in which respondents named herein and their purchasers are respectively engaged; to. injure, destray 0.1' ar prevent competition with respondents named herein or with customers af aforesaid respondents who. receive the benefits of such discriminations.

CONCLUSION The faregaing alleged acts and practices of said respondents, as herein found, constitute vialations of subsection (a) af section 2 the Clay tan Act (U. S. C. Title 15 , Sec. 13) as amended by the Rabinson- Patman Act, approved June 19, 1936.

ORDER It is onlered That respondeJJts I-altite Manufacturing Company, It corporation, Cat's Paw Rubber Company, Inc., a corporation, K. Kaplan Sons and Campa ny, a corporation, their affcers, agents representatives and employees, respondents MOITis Eisen, Larry L. Esterson. Albert A. Esterson, Rudolph E. Kaplan and Eli E. Kaplan individually and as aIJcers af the named corparations, their representatives, employees and agents, respondent .J ack Klinger, doing business as A. Leve(on Company, or under any other name, his agents, employees and reprcsentativcfi, and respondents Rudolph E. KapLm, Eli K Kaplan, 1. Gilbert Kaplan, Sidney Kaplan, Rubin Chupack and Edwin Kanlon, indivichmJly and as partners doing business under the name of Reick, L:mgendorf and Company, a partnership, OJ' under any other partnership or linn name, their representativeii, agents and employees, directly 0.1' through any carporate 0.1' other device, in connection with the sale of leather and rubber heels and solcs, Jeather and rubber shoe repair materials and other productii known commercially as iindings, such as shoe polish saddle soap, nails, laces, heel plates and shoe machinery, in commerce , HOLTITE MFG. CO. (CAT' S PAW RUBBlm CO. , INC. ) ET AL. 389 379 Order as "eomrnerce" is defined in the aforesaid CJaytan Act, do. forthwith ar with any other individual, fmlleease and desist, severally, jointly or earparatian, directly or indirectly, fron'! discriminating in price between different purehasers af said products by selling products of like grade and quality to any purchaser at prices lower than those granted other purehasers who in fact compete, or whose customers , in the resalecampete, with the favored purchaser ar purchasers distribution of such products.

For the purpose af eomparisan, the term "price" as used in this order takes into. account discounts, volume ar otherwise, rebates allowances and other terms and canditians of sale. Order TO FILE RJ PORT OF CO:\IPLIANCE It is further o1ylered That the respondents shall within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist aforesaid order and decision af the Commission.las J'E',quired by , , Consent Settlement 50 F, T. C. IN THE Matler SAXONY WOOL CORPORATION OF NEW YORK ET AL.

REGARD TO. THE ALLEGED VIOLATION OF THE FED-consent SETTLEJlfENT IN ERAL TRADE COMMISSION ACT AND TJ-IE WOOL Products LABELING ACT , Oct. 29, 1953 Docleet 6114. Complaint, Aug. 7, 1953-Deaision Where a corporation and its president, engaged in the interstate sale and distribution of wool products as defined in the Wool Products Labeling Act Cashmere (a) Misbranded certain knitted clips-in that, labeled as (1) "Wool and (2) "96% Wool Cashmere, 4% Cotton and Rayon " they were in fact composed substantially of fibers other than the fleece of the Cashmere goat; (b) Mishranded said products in that they were not stamped, tagged, or labeled as required by said Act and more particularly, in that the lahels did not give the percentage of the aUeged cashmere fiber:

Held That such acts and practices, under the circumstances set forth, were ill violation of said 'Vool Products Labeling Act and said Rules and Regulations, and constituted unfair and deceptive acts and practices in commerce. Befare Mr. Webster Ballinger hearing examiner. Mr. Henry D. Strin,ger far the Commission. City, far re- pett SheinbeTg, af New York Weisman, Allen spondents.

consent SETTLEMENT 1 he provisions af the Federal Trade Commission Act Pursuant to t af 1939 the Federal Trade Cam- and the '"V aoll'l'oducts Labeling Act , issued md subsequently served its cam- mission, an August 7, 1953 charging them plaint an the respondents named in the caption hereof, with the use of unfair and deceptive acts and practices in vialatian the provisions of said Acts, , desiring that this proceeding be disposed af by the The respondents consent settlement procedure provided in Rule V af the Commission far the purposes af this proceeding, any Rules of Practice, solely enforcement af the order cansented to., and review thereof, and the s acceptance af the consent settle- conditianed upon the Commission , and in lieu af answer to said complaint ment hereinafter set forth hereby;

'1 The Commission s "Notice" announcing and promulgating the consent settlement as published herewith, follows:

be consent settlement tendered by the parties in this proceeding, a cop;r of which is served herewith, was accepted by the Commission on October 29, 1953, and ordered entered of record as the Commission s findings as to the facts, conclusion, and order in disposition of this proceeding.

The time for filing report of compliance pursuant to the aforesaid order runs from the date of service hereof.

SAXONY WOOL CORP. OF N. Y. ET AL. 391 390 Findings 1. Admit aJl the jurisdictional allegations set forth in the complaint. 2. Consent that the Commission may enter the matters hereinafter set forth as its findings as to. the facts, canclusian, and order to cease and desist. It is understood that the said respondents, in consenting to the Commission s entry af said findings as to. the facts, canclusian and order to. cease and desist, specifically refrain from admitting denying that they have engaged in any af the acts ar practices stated therein to be in violation af law. 3. Agree that this consent settlement may be set aside in whale ar in part under the conditions and in the manner provided in Paragraph (f) of Rule V of the Commission s Rules of Practice. The admitted jurisdictional facts, the statement af the acts and practices which the Commission had reason to believe were unlawful the conclusion based thereon, and the order to cease and desist, all which the respondents consent may be entered herein in final disposition of this proceeding, are as fallaws :

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Saxany IY 001 Carparatian of New Yark is a carporatian duly incarparated under the laws af the State af New York. Respondents, Halph Rubinger and Ann Rivlin, are president and secretary, respectively, af such carporatian. Ralph Rubinger farmulates, directs, and cantrols the acts, policies, and practices af such earparate respondent. The offces and principal place af business of such corporate respondent, and Ralph Rubinger and Ann Rivlin are located at 7 Vestry Street, New Yark, New Yark. PAR. 2. Respandcnt, Ann Rivlin, has filed an affdavit herein, setting forth . that she has never at any time during her tenure as secretary af respondent corparatian, participated in the management, direction or cantrol thereof, and has never formulated, directed, nor eantrolled the acts, policies, and practices camplained about. By reason af the matters set out in said affdavit the Commission finds that the said complaint, insofar as it relates to. the respondent Ann Rivlin as an individual, should be dismissed. PAll. 3. Subseqnent to the effective elate of the VV 001 Products Labeling Act of 1939 and more especially since 1951, said respondents, other than Ann Rivlin, have manufactured or caused to. be manufactured far introduction into commerce, il1trocluced 01' caused to be introduced into commerce, said, offered for sale, transported, distributed, and delivered far shipment, in commerce, as "commerce" is defined in the Wool Praclucts Labeling Act af 1939, wool products, as "wool products" are defined therein.

Order 50 F. T. C.

PAIL 4. Certain af said wool products were misbranded within the intent and meaning af Section 4 (a) (1) of the \V 00.1 Products Labeling Act of 1939, and the Hules and Jlegnlatians thereunder, ill that they were falsely and deceptively stamped, tagged, labeled, or otherwise identified as to the character and amount of the constitllentfibers contained therein.

.Mare particularly the misbranded wool products aforementioned were waolell stacks, that is, fibrous materials made from knitted clips labeled or caused to. be labeled by the respondents as (1) "1Vool cashmere " and (2) "96% 1Vool cashmere /0 cotton and rayan" and the nse by the respondents af the labels aforesaid had a substantial tendency to. cause purchasers thereof to. believe that, in the first instance hair or fleece af thesuch waolen stacks were campaserl entirely of the fleeceCashmere gaat, and, in the second instance, of 96% hair or the Cashmere goat; whereas, in fact, such woolen stocks were compased fleece af the Cashmeresubstantially af fibers other than the hair or goat.

PAR. 5. Certain af said wool products were misbranded in that they were not stamped, tagged, or labeled as required lmder the provisions of Section 4 (a) (2) of the \Vool Praclucts Labeling Ad af 1939, and in the manner and fonTl prescribed by the Hules and Hegnlations promulgated under said Act.

Mare particularly the said waal products were misbranded within the intent and meaning -1 the 1V 00.1 Products Labeling Act af 1939 and Rule 19 of the Regulations thereunder in this, that the labels referred to in Paragraph Four did not give the percentage of the alleged cashmere fiber present therein.

PAR. 6. The respondents assert that the acts and practices camplained of herein were discontinued by them an ar befare May 1, 1953, and have nat been engaged in by respondents since that time. CONCLUSION The acts and pl'ctices of respaudents, Saxany 1V 0.0.1 Corporation 0.1' New York, a corporation, and Ralph Hubinger, individually, as hereinbe1'are i'aund, were and are in violation af the Wool Products Labeling Act of 1939, and the H1l1es and llegnlatians promulgated thereunder 1ld constitute unfair and deceptive acts and practices ill commerce, within the intent and meaning of the Federal Trade Cammission Act.

ORDER TO CEASE AND DESIST Carparatian 0.1' It is ordend That the respondents, Saxony 1V 00.1 New Yark, a carparation, and its officers, and Ralph Rubinger in- SAXONY WOOL CORP. OF N. Y. ET AL. 393 390 Order dividually, and respondents' respective representatives, agents, and employees, directly or through any corporate or other device, in cannection with the introduction or manufacture far introduction into. commerce, or the offering for sale, sale, transportatian ar distribution in commerce, as "commerce" is defined in the Federal Trade Commission Act and the W 0.0.1 Products Labeling Act of 1939, of fibraus stocks ar other "waal products " as such products are defined in and subject to. the VV 0.01 Products Labeling Act of 1939, which products contain, purpart to. contain ar in any way are represented as containing "wool reprocessed wool" 0.1' " reused wool " as those terms are defined in said Act, do forthwith cease and desist fram misbranding such products by; 1. Falsely or deceptively stamping, tagging, labeling, ar otherwise identifying such products as to. the character or lUnaunt of the constituent fibers included therein;

2. Failing to securely affx to 0.1' place an each such product a stamp, tag, label, or other means af identification showing in a clear and cansplCUOUS manner:

(a) The percentage of the total fiber weight of such wool product exclusive of ornamentatian not exceeding five pel' centum af said total fiber weight, of (1) waal, (2) reprocessed wool, (3) reused waal, (4) each fiber other than waal where said percentage by weight of such fiber is five percentnm or more, and (5) the aggregate af all other fibers;

(b) The maximum percentage af the total weight af such wool product af any nonfibraus loading, filling, or adulterating matter; (c) The name 0.1' the registered iclcntificatian number af the manufacturer af such wool product or of one or more persons engaged in introducing such wool product into. commerce, or in the offering far sale, sale, transportation, distribution, 0.1' delivery far shipment therein commerce, as "commerce" is defined in the IV 001 Products Labeling Act af 1939.

3. Falsely ar deceptively stamping, tagging, labeling, or otherwise identifying such products as containing hail' or fleece of the Cashmere gaat when such is not the fact;

4. Stamping, tagging, labeling, ar otherwise identifying such products as containing the hair or fleece of the Cashmere gaat without setting out in a clear and conspicuous manner on each such stamp, tag, label ar other identification the percentage af such cashmere therein. Provided That the faregaing provisions concerning misbranding shall not be construed to. prohibit acts permitted by paragraphs (a) and (b) of Section 3 af the W 0.0.1 Products Labeling Act of 1939; and Prol!ided fUTtlw'l That nothing contained in this order shan be Order 50 F.

construed as limiting any applicable pravisians af said Act 0.1' the Rules and Regulations promulgated thereunder. It is furtker ordered That the complaint herein insafar as it relates to. Ann Rivlin, individually, be, and the same is hereby dismissed, it being understood, however, that this action shall not be construed to. prevent the application af this order to. the said Ann Rivlin as an offcer af the Saxany ,Voal Carparatian of New Yark. It is further order-ed That the respondents herein shall, within sixty file with the Cam- (60) days after service upon them af this ardcr, mission a report in writing setting forth in detail the manner and form in which they have camp lied with the order to cease and desist. Saxony "V 00.1 Corporation af New Yark a carporatian.

(Sgd) By Ralph llubinger, Pres.

(Sgd) Ralph Rubinger Ralph Rubinger, individually.

(Sgd) Ann Rivlin Ann Rivlin, individually.

Date; October 7, 1953.

The foregoing consent settlement is hereby accepted by the Federal Trade Commission and entered af record an this 29th day af October 1953.

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PAGE DAIRY CO, 395 Decision