Tractor Training Service

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IN THE MATTER OF TRACTOR TRAINING SERVICE ET AI.

DECISION IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 59/;3. Complaint, Jan. 1952-Dedsion, Mar. , 1951, Where two corporations, with principal offces and places of business at Portland, Ore. , and Chicago, Ill., respectiveiy, and an individual who was an offcer of both, their principal stockholder and in controi of their business policies and activities; engaged in the sale and distribution by mail of a course of study and instruction in diesel engines and tractor equipment; In promoting the sale of their said courses and to secure inquiries from prospective purchasers to whom oral sales presentations would be made in their homes, in advertisements throughout the midwestern and the western states and in Alaska, and through other advertising matter, including reply postal card and bulletin and circulars forwarded to prospects along with a questionnaire, and through oral statements in the course of sales presentations during which additional promotional matter was exhibited to prospective enrollees contacted through sneh advertising- (a) Hepresented directly and by implication that there was a great demand for graduates of their schools as diesel mechanics, servicemen, and in similar positions, and that employment in such positions was available and assured upon the eompietion of their course of study and instruction; TIle facts being there was no significant demand for such graduates whose training was limited to completion of their courses of study through correspondence, and the demand for men with limited meehanieal experience 1n diesel engines and the training in mechanical theory afforded by their course was not great or unusual; graduates would at best be hired as helpers apprentices, or sweepers unless they had had shop experience or the substantial equivalent in repairing and servicing diesel engines; employers diesel and other skiled mechanics generally speaking prefer to promote their own men with proven shop cxpcrience when better positions become available, rather than to hire men from the outside for such positions; and, in many establishments, as a condition to employment experience as a journeyman or other work qualifications of an applicant, are passed by examining committees of unions;

(b) Hepresented additionally through their salesmen that the schoois had working agreements with manufacturers of diesel engines and tractors and other diesel equipment to place graduates in employment upon completion of their courses of instruction and that, upon such completion, said schools would secure employment for graduates in tbe diesel industry and secure such employment for them as a regular thing;

The facts being they had no such connection or working agreements; while they maintained a placerncnt department and communicated with retail diesel and tractor dealers, other employers of diesel mechanics, and others, as to job vacancies, circulated information thus secured, with details as to pay and conditions of employment usually omitted, and furnished graduates expressly requesting placement help information as to any jobs believed TRACTOR TRAINING SERVICE ET AL. 763 762 Syllabus to forward a statement of the applicant' open, and frequently offered to be considered, it was necessary qualifications, in order for a graduate that be follow up the leads and satisfy any prospective employer that he to training and experience, and conduct his own met latter s requirements as negotiations as to conditions of employment; and the representations expressly made in sales presentations and implicit in promotional matters that jobs were assured to graduates, due to existing great demand and by reason of respondents' aforesaid supposed connections and working arrangements and their placement service were grossly exaggerated and false; (c) Ji'falsely represented through their salesmen that students were afforded on-the-job training for which they would be paid money while pursuing their course of study;

to students upon(d) Hepresented, as aforesaid, that they provided shop training completion of their correspondence study at no cost or at only nominal cost; he facts being that while they did make available to graduates completing their courses shop training during tbe period from September 1950 to June 1951 , through a corporation dissolved on June 29, 1951, which operated as a resident training school from Sept. 11, HJ50, to June 2, 1951, such training was not available without cost or at only nominal cost; charge therefor was $150 for a six-week term of residents' training, with cost of living accommodations extra, and, under an alter'llHtive arrangement, cost for tuition and accommodation in dormitories was $290;

(e) Hepresented, as aforesaid, that they used a system of rigid selectivity of students and accepted only a few from very large numbers of applicants for their training and piacement service, setting forth in the aforesaid questo the "Diesei Committee on Admission" pur- tionnaire, which was directed portedly to enable sueb committee to form an opinion as to tbe adaptability of the person responding, a variety of questions as to marital status, education, specialized training, and others;

The fads being that said schools were commercial enterprises operating for basis; and, contrary to the profit; their agents worked on a com,mission representations in their advertising and the oral statements of their salesmen, they were not selective in accepting prospective students for enrollment, but enroHed all those with some schooling who were interested in mechanical devices, termed by them as evidencing mechanical aptitude, and who were wiling or able to make the payments required; and (f) Hepresented, as aforesaid, that after graduation from said schools, their placement and advisory service would obtain jobs for graduates at $2.50 or $3.50 per hour or at $75 per week and eventually higher wages; Notwithstanding the fact that such levels of wages were available in the diesel and heavy equipment industry only to more highly skiled operators, mefrom substantial shop or other chanics, and workers whose competence came experience; while completion of their course might evidence a laudable sustained interest in mechanical matters on the part of the student applicant and be indicative to prospective employers that he had some knowledge of nomenclature and how parts were assembled, ability of their graduates command higher levels of starting pay depended essentially on their shop and other practical experience; and starting salaries usually received by their graduates, particularly tbose employed in the sweeper, helper, and apprentice categories were substantially below $75 as well as $70 per week and the hourly rates referred to by their salesmen: Findings 50 F. T. C.

Held That such misrepresentations constituted unfair and deceptive acts and practices in commerce.

Before Mr. J. Earl Oom and Mr. Everett F. Haycraft hearing examiners.

llfr. R. T. Porter and Mr. Wiliam L. Pencke for the Commission. Mr. McDannell Brown of Portland, Oreg., for respondents. DECISION OF THE CO IJnSSION AND ORDER TO FILE REPORT OF cO:Vi:PLIANCE Pursuant to the provisions of the Federal Trade Commission Act the Federal Trade Commission on January 18, 1952, issued and subsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of that Act. After the filing of respondents' answer thereto, a hearing was held at which testimony and other evidence in support of and in opposition to the allegations of the complaint were introduced before a hearing examiner of the Commission originally designated by the Commission to act in this proceeding, and additional testimony and other evidence in support of and in opposition to the allegations of the complaint were introduced in the course of hearings subsequently held before a substitute hearing examiner designated to act in the place and stead of the original hearing examiner, and said testimony and other evidence were duly recorded and fted in the offce of the Commission, On May 1, 1953, the hearing examiner designated to act in the place and stead of the original hearing examiner filed his initial decision. Within the time permitted by the Hules of Practice of the Commission respondents appealed therefrom, and this matter cftlJe on 1'01' final hearing upon the record, including briefs in support of and in opposition to the appeal, and oral argument; and the Commission, having duly considered the record and having ruled upon said appeal and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts conclusion drawn therefrom, and order, the same to be in lieu of the initial decision.

FINDINGS AS TO THE FACTS PARAGRAI'H 1. Tmctor Training Serviee, the first of the respo.ndents referred to above in the caption, is a corporation organized under the laws of the State of Oregon. Its operations began in 1943 and its principal offce and place of business is at 406 Panama Building, Portland, Oregon. Tractor Training Service, Inc., named as a re- TRACTOR TRAINING SERVICE ET AL. 765 762 Findings spondent in the complaint but erroneously designated there as Tractor Training Service, is a corporation organized in 1948 under the laws place of business of the State of Illinois and its principal offce and is at 1,525 East 53rd Street, Chicago, Illinois. In the interest of brevity, these two corporations will be referred to as "respondent Oregon corporation" and "respondent Illinois corporation. was Tractor Training Diesel Institute, an Oregon corporation, dissolved on .Tune 29, lug1. It operated as a resident training school from September 11, 1950, to June 2, 1951.

vvith respect to those individuals who are named in the complaint as parties to th is proceeding, respondent oy E. Badley was, prior to September 1951, president and managing director of both the respondent Oregon and respondent Illinois corporations. Since September HJ51 , Mr. T. 'V. Badley has been president of the respondent Illinois corporation, respondent Joy E. Badley remaining as president of the respondent Oregon corporation and chairman of the board of directors oi' the respondent Illinois corporation.

Hespolllent :YlcDannell Brown, nay .r. 'Vatson (erroneously designated in the complaint as Iloy J. 'Vatson) and Fred L. Innes, are directors of both the respondent Oregon and respondent Illinois corporations; respondent Hay J. ,V ltson io also executive vice-president of the respondent Oregon corporation, and respondent Mc- Dannen 13rO\n1 is secretary of the said respondent Oregon and Illinois corpm' 1.tio1lo; and Fred L. Innes is executive vice-president of the respondent Illinois corporation. Eespondents .Joy E. Badley, Ray J. ,Vatson, and McDannell Brown have their principal offces at the place of business of respondent Oregon corporation, and respondent Fred L. Innes has his principal office at the place of business of the l'eopondent Illinois corporation.

lah. Y,. Ilesponclent Tractor Training Service and Tractor Training Service, Inc. , and respondent Joy E. Badley are now lld have been for more than three years last past engaged in the sale and distribution of a course of study and instruction consisting of 4G Jessons on the subject of diesel engines and tractor efluipment, which course of study and instruction is given and pursued through the medium of the l united States mails. They have maintained a course of trade in conunerce among and between the various States of the lJnited States, the volume of which has been sub3tantial. The courses are sold at a price of S27;3.00 less cert ain discounts for "Yodd 'Val' 11 veterans and for cash. During the year lU51 , the Portland school received 1 UJ7 enrollments and the Chicago schoo! received 10GG enrollments. The Portland Oifce of respondent Oregon corporatioJl has approximately 20 employees, of which three are instructors Findings 50 F.

and it also employs a sales force on the road of about 24 sales representatives who work on a commission basis. The volume of business in commerce in these courses has been and now is substantial. PAR. 3. llespondent Joy E. Badley now is and has been during the time aforesaid the guiding spirit and dominant personality controlling the general business policies and activities of respondent Oregon and Illnois corporations, of which he is the principal stockholder, including the preparation and disseminiation of advertising material and the over-all supervision of the sales personnel. He keeps in intimate daily touch with all the activities of the various departments and issues directives in the form of bulletins and manuals. Unless otherwise stated, the word "respondents " as it appears hereinafter is used to designate respondents Tractor Training Service, Tractor Training Service, Inc., and Joy E. Badley.

PAR. 4. In promoting the sale of their courses of instruction and to secure inquiries from prospective purchasers to whom oral sales presentations wi1 be made in their homes, respondents have caused advertisements to be inserted in newspapers throughout the Midwestern and Western States and in Alaska, and have utilized other advertising matter, including reply postal cards and bulletins. Typical and illustrative statements appearing in newspaper advertisements are the following:

DIIDSE Ilea VY EQUIPJ\mnt We need mechanically inclined and reliable men to train for positions in rractor and Equipment industry. If you are not making better than $70 per week you owe it to yourself to write about free facts, without obligation. time lost on your present job whUe training. Selections are being made in this area for training ano placement advisory service. Write at once to Tractor Training Service Box 650 Appeal-Democrat. DIESEL-TRACTOR HEAVY EQUIPMEN'l' OPPORTUNITY In Alaska and all over the world ski1ed men arc in demand by the DIESEIr TRACTOn and HEAVY EQUIPMEKT INDUS'l' , to operate, maintain, repair and supervise HaUroad, Construction, Mine, Marine and Farm DIESEL units. ARE YOU mechanically inclined or experienced? Does this hi-pay permanent field interest you? YOU CAN DO SOMETHING ABOUT IT TRACTOR TRAINIKG SEHVICE wi1 have its representative in the Anchorage Area in .June to interview those qualified for its TRAINING and PLACEMENT ADVISORY SERVICE PROGRAM.

'l' hose qualified can train in spare time without taking time off from your job. Resident shop training available if needed or wanted. 762 Findings The following statements have appeared in respondents' postal card solicitations:

DIESEL-JOBS-TRACTOR THOUSANDS of mechanically inclined men must he trained quickly for High- Pay Permanent Jobs in this industry-Can YOU quaiify for MORE MONEY SECURITY, SUCCESS? Selections Are Now Being Made In This Area For TRACTOR TRAINING AND PLACEMENT SERVICE No Time Lost For Fuil Detaiis & Quaiitications, Fil in Completely, Detach and Maii Attached Postca I'd. . * * Would YOU like a job like Joe A BIG .TOB THAT PAYS BIG M01\'EY. Ail these ' '.TOES'' earn TOP PAY:

YOU can earn '1'01' PAY, too, in the DIESEL and INDUSTRIAL TRACTOR FIELD. T. '1' . S. gives you the "KNOW HOW" To Quaiify you for the job you want. Tractor Training Service is tbe only organization of its kind in tbe country; no other covers the field as completely. It trains qualified men in the operation and servicing of every type of Diesel-powered and tractor-operated equipment used in industry, agriculture, lumbering, construction and transportation. That's why T. T. S. men command respect and high pay. Selections are being made by Tractor Training Service in this area for trainees to enter this industrialized tractor and diesel field. No time need be lost from your present job.

Upon the receipt of inquiries from prospective enrollees, respondents, in instances, have forwarded a questionnaire together with a circular, the latter containing the following statements and representations:

DIESEL A HUNDRED MILLION DOLLAR INDUSTRY! This new industry got its big jump during tbe iast war and is now rapidiy moving ahead in a vast number of peacetime projects, such as in the mechanization of agriculture, lumbering, highway construction, building, contracting, mining, hydroelectric power, etc.

Huge strides have been made with such outstaITding Success that people are now beginning to realize how tremendously important this new industry hab hecome.

The use of diesei tractors and heavy equipment is creating a revolution in construction technique. Engineers are using this new power and equipment to perform the previously "impossible" tasks. The "pick and shovel" method is rapidly becoming a thing of the past now that this new industrial giant is on the scene.

This industry is developing so fast that it is opening up opportunities for profitable employment-jobs where advancement and outstanding success are praeticaily unlimited.

In our country to-day, there are many young men just out of school who have no trade at ail, and there arc others who arc working at jobs offering them Findings 50 F. T. C.

, because of overcrowded conditions and little or no chance for a decent futureotherAmongst these groups wil be factors.found men with ambition and intellgence, whose enable them to succeed if they were character and basic qualifications would employed in a growing industry where opportunities for prOll1otioll exist. You mayor you may NOT have the above mentioned qualiications. Obviously, every person would not be suitable. It would be imjJossible to adapt everyone to this type of work; consequently H bf?cornes necessary for 11S to determine something about a person s natural abilties beforehand. If you arc not earning' better than $70.00 per week, and ure looking for a eareer in sometbinp; really worthwhile. then fill in the enclosed questionnaire. Upon receipt of this form, we shall furnish yon with more details. A PHOMl''l' Imply IS NECESSAHY.

MAIL 'rile (..CESTIOl\NAIIm WIT'IIOUT DELAY. The questionnaire form directed to the "Diesel Committee on Admissions" expressly purports to be for the purpose of enabling such committee to form an opinion as to the ada.ptability of the persons responding. Among the questions which a recipient is directed to answer are those relating to marital status and education and whether he has specialized training, and others inquire as to how long the prospect has been thinking of makilJg a change for the better ami whether, if acceptable, he is willing to undergo a period of training for the purpose of building a career. 'rhe film contains query also as to whether the responding party believes he has adaptability for diesel work and it concludes with an urgent direction that "This form must be completed and returned within f) days" to Tractor Training Service.

PAH. 5. Through nse of the aforesflid :ulvertisements and by means of oral sta.tements made by sales representatives in the course of sa 1ps presentations during which additional promotional nmttpr is exhibited to prospective enrollees respoJlling to 1118 a(hertjsements directe(l to establishing respondents' initial contact with them, respomlpnts have represented, directly and by implication, that there is a great demand for graduates of respondents' schools as diesel mechan ics, servicemen and for similar positions and that employment in such positions is available aJl(l assured upon the completion of re.spondents' course of study and instruction. In the COllrse of such sales presentations, respondents' representatives additionally have stated and represented that the schools have working agreements with manufacturers of diesel engines and tractors and other diesel equipment to place graduates in employment upon completion of their courses of instruction, and that upon completion of their course said schools wi1J se( ure employment for graduates in the diesel industry and secure such employment for TRACTOR TRAI="ING SERVICE ET AL. 769 762 Findings graduates as a regular thing; that students are afforded "on-the-joh training" for which they wiJJ be paid money while pursuing respondents' course of study; that respondents provide "shop training" to students upon completion of their correspondence study at no cost or at only nominal cost; that respondents use a system of rigid selectivity of students and accept only a few from very large numbers of applicants for respondents' training and placement service; and that after graduation from said schools, respondents' placement and advisory 50 or $3. 50 per hour or atservice win obtain jobs for graduates at $2. $75.00 pel' week and eventually higher wages. llespondents contend, however, that such evidence received into the rrcord as in any way attests that statmnrnts and representations havmg the import and Bleaning just noted were in fact made, is vague and eqnivocal evidence. In appraising respondents' contentions, however it should be noted that the record reveals various instances in which sales representatives in efrect have stated that high pay jobs completely assured or guaranteed for graduates. In iw,tances, the test imony of enrollees is corroborated by that of family members present during interviews, some of which last t\VO hours or more. This (widence mauifestly is not vague or equivocal. To prospects invit"d in the advertising litrrature to become "srlec:ions " if " qualified" for their training and placement service, respondents' sales nHlmml counsels agpnts to emphasizl) as a basic sales theme that Tractor Training Service is a service OJganiz tioll to supply the diesel field with good men and salesmen arr directed to make certain wage comlH1riwns during their presentations to show that increased ratings will rcsnlt from thr course. It appears hrre that certain of the oral representations adopted by salesmen in making sales were inspired or suggested by respondents' printed promotional matter. ,Vithout discussing in additional detail the e\"idence ,'relating to each, the Commission is of the view that it is shown by the greater weight of the evidence that the representations refe1'ed to in the preceding paragraph have been made in promoting sales of respondents' courses. PAIL 6. (a) Contrary to the statements and representations used by t1w respondents and their sales representatives, there is no significant demand for graduates of respondents' schools whose training is limited to completion of their course.s of stllly through corresponc1enn\ nor is the demand for men with limited mechanical experience in diesel engines and the training in mechanical theory afforded by respondents course great 01' unusual. MoreowI' , graduates will at best be hired af' helpers, apprentices or sweepers unless they have had shop experience or substantial equivalent in repairing and servicing diesel engines. apjwars also tlmt, gene.rally speaking, employers of diesel aml other 403443 -- 57 fjO Findings 50 F. T.

skilled mechanics prefer to promote their own men with proven shop experience when better positions become available rather than to hire men from the outside for these positions. Other evidence received into the record additionally indicates that, as a condition to employment as a journeyman or for other work in many establishments, the qualifieations of an applicant are passed on by examining committees of unions. One of respondents' former students who had completed a part of the course stated in his testimony that equipment companies contacted would not take an application from him and also to be noted in passing is testimony adduced by two of respondents' graduates wl1ich is to the effect that various equipment dealers to whom they applied for employment had no interest in receiving their applications. The greater weight of the evidence clearly demonstrates that a correspondence course without job training or other practical technical experience cannot qualify a person as a mechanic or skilled workman and that employment in positions of skill and high pay in these fields is neither available nor assured to applicants whose training in maintenance and repair of diesel and other heavy equipment is based primarily on the completion of a course of study through correspondence. The foregoing views and a conclusion corollary thereto that employers place great emphasis on shop experience when selecting workers to fill positions requiring mechanical skill are corroborated by the testimony of various equipment dealers, shop foremen, and service managers who appeared as witnesses in this proceeding. Their testimony is to the general effect that men cannot qualify as diesel mechanics from a book; that books might be helpful if students were working in the trade; that they could not command high salaries nor be qualified as skiled workmen; that graduates of respondents' schools could not qualify as completely eompetent mechanics; that there is no unusual demand for correspondence school graduates nor assurance that such men could secure employment as diesel mechanics; that correspondence training without practical experience would not qualify mechanics in the diesel field; that it takes years of experience to get to the point of becoming a skilled mechanic; that a correspondence course without practical experience wil not make a mechanic entitled to high salary or make an inexperienced man a skilled workman; that there is no unusual demand in the tractor or diesel fields for a man with only correspondence school training; that actual practical hand work along with study is essential. Some of these experts testified to the effect that correspondence course training would qualify a person to be an apprentice; that while there was some demand for skilled mechanics, there was not for helpers or sweepers and other witnesses holding supervisory positions testified that they would employ respondents' graduates only as helpers or laborers.

TRACTOR TRAINING SERVICE ET AL. 771 762 Findings The only witness called by respondents who had completed the course of training in respondents' schools was engaged in the repair business on automotive equipment and was a foreman of a garage which employed three mechanics in the tractor division. He believed that the course of instruction assisted him in his advancement and he able to take a job and tearelassified himself as a journeyman, that is, it down and put it back together again. It appears, however, that he first secured employment as an apprentice through the assistance of respondents' placement and advisory service during the period when worked for four and one-halfhe was studying the course where he years.

(b) Contrary to the representations of respondents' sales representatives, respondents' schools have no connection with manufacturers of diesel equipment or working agreements under which manufacturers of diesel engines, tractors, and heavy equipment regularly place graduates in employment upon completion of the course. Respondents maintain a placement department and its activities entail, among other things, communicating with retail diesel and tractor dealers and other employers of diesel mechanics, service men operators and workers in an effort to ascertain what establishments have job vacancies or opportunities for employment. As a result of these inquiries, respondents learn of various openings and opportunities for employment and information respecting them is circularized by respondents among the graduates and others with details as to pay and conditions of employment usually omitted. Under respondents' routine, graduates expressly requesting placement help are informed as to any jobs believed to be open in their areas or states or furnished with the names of one or more equipment dealers known to respondents as employers of help in those areas. Respondents frequently offer also to forward what they refer to as a statement of the applicant's qualifications setting out, among other things, informfition as to his current occupation, identities of past employers and positions held, and the grades received fis a student in the course. In order to be considered for such positions, however the grfiduates themselves must follow up the job leads and satisfy any prospective employers that they meet their requirements fis to training and experience and conduct their own negotiations as to conditions of employment.

The testimony of two of respondents' graduates who appeared fis witnesses herein is to the effect that the placement service did not secure jobs for them or furnish leads deemed by them suffciently promising for follow up. "\Vhether the aid available from respondents' placement service by way of leads and otherwise assures or Findings 50 F. T. C.

secures jobs for their graduate body or in fact represents substantial assistance to many of the graduates must be weighed in the light of testimony elsewhere referred to which demonstrates that more lucrati ve, skilled positions existing in this field are not available upon graduation to those whose qualifications primarily consist of completion of a course of study through correspondence and which additionally indicates that the demarid for sweepers or apprentices is not great or unusual. It is manifestly infeasible in a very large number of cases for graduates receiving respondents' leads to negotiate for and, perhaps moving their families, to accept jobs with pay levels set for lesser skilled work, but commensurate with their qualifications, in diesel manufacturing plants or other heavy equipment establishments. The Commission accordingly concludes that representations expressly made in sales presentations and implicit in promotional matter that jobs are assured to graduates due to an existing great demand and because respondents regularly secure jobs for graduates through working arrangement with employers 01' the ell'orts of respondents ' replacement service are gross exaggerations and false. To be noted in passing also is the circumstance that respondents have not submitted dab for the record as to the number of placements resulting from their leads and it appears that their placement department maintains no follow up or check as to whether a job qne"t turns out successfully. (c) Students taking the comse in their spnre time are not oiIered or pJ:lced in, full or part time paying jobs in shops OT elsmvhere where they can engage in work on diesel and mechanical equipment. It is concluded, therefore, that the rcpl'm;cn1ations which have been made in instances during the course of sales presentations that students are rjfo!'led on- the-job training for which they will be paid money while pursuing their studies are false representations. (d) During the period from September lDiJO to ,Tnne 1%1 , shop training was available to graduates completing these correspondencc courses through the now dissolved Tractor Training Diesel Institute. Such training, hO\vever, was not anliJable without cost or at only 1l0lllinal cost fls repr'cscn(ed by respondent;;' sales agents, bnt. respondpnts instead imposed a charge of $150 for a six-,veek term of residence training ami cost of living accommodations was extra. It also ltppears that. an alternative arrangement was offered whereby students were to pay $2DO for tuit.ion and accommodations in dormitOlies. Shop training was abandoned when only a J iUle over a dozen students signed up therefor.

(c) Hcspomlents' schools are commercial entcrprjsps operatpd for agents work on commission basi;,. Contrary to thejJrofit. and their pl'psenlabons appearing in the advertising ltd the oral statement.s TRACTOR TRAINING SERVICE ET AL. 773 762 Findings of salesmen, respondents are not selective in accepting prospective students for enronment in their schools. ,With certain minor exceptions not here pertinent, respondents win enroll an persons with some schooling who are interested in mechanical devices, such interest being deemed by respondents to evidence mechanical aptitude, and who are willing or able to make the payments required. The record contains the following information with respect to schooling and employment -of students at the time of enronment:

Education Employment 4 years high school Service station attendant 3 years high school Lineman 2 years high school \Vrecking cars :2 years high school IV elder Seventh grade Molder-iron foundry Seventh grade Truck driver 1 year high school Safeway Store clerk 1 year college Machine operator :2 years high school IVrecking cars Eighth grade IVelder 4 years high school Tag Machine operator 2 years high school Service station owner & operator Eighth grade Taxi driver 1 year high school Smelterman 4 years high school Cleaning business Common school "J1ilk truck driver 3 years high school Street cleaner 81h years grade school Craneman 4 years high school Farmer Eighth grado and Automobile Mechanic mechanical school 3 years high school Maintenance Man, Ship Lines 1 year high school ("Withdrawn from school because of mental deficiency. Re( apping tires years high school Railroad switchman Sixth grade CarpenterNo data Laborer Eighth grade (f) Untrue and not founded on the facts have been the oral representations of respondents' salesmen that, upon graduation from the school, students are able to enter OIl jobs paying $2. 50 or $3.50 per Findings 50 F.

hour or positions at $75.00 per week. The record clearly shows that these levels of wages are available in .the diesel and heavy equipment industry only to more highly skiled operators, mechanics, and workers whose competence comes from substantial shop or other practical experience. In the last analysis, while completion of respondents laudable sustained interest in me-course of study may evidence a chanical matters on the part of the student making application and also be indicative to prospective employers that he has some knowledge of nomenclature and how parts are assembled, it seems equally clear that the ability of respondents' graduates to command higher levels of starting pay depends essentially on their shop and other practical experience. Although various students accepted for the course appear to have had some contact with some farm tools or with maintenance of automobiles or the operation of other mechanical equipment prior to enrolling, others did not. Upon the basis of the entire record, it must be concluded that the starting salaries usually and customarily received by respondents' graduates, particularly those employed in the sweeper, helper and apprentice category, are substantially below $75.00 as well as $70.00 per week and the hourly rates referred to by respondents' salesmen.

PAR. 7. While there is some evidence in the record tending to show that salesmen may have represented to prospective students in the course of two sales presentations that diesel engine manufacturers or other business concerns were financially backing respondents' schools to the extent of defraying part of the expense of tuition, the Com. mission is of the opinion that there is not suffcient evidence for an informed determination of the issues relevant thereto as presented under the complaint. The additional allegations of the complaint to the effect that misrepresentations have been made that all money paid by students will be refunded in the event they discontinue the course or fail to pass final examinations or if employment is not furnished upon completion of the course are not supported by the greater weight of the evidence adduced in the proceeding and this charge accordingly is to be regarded as dismissed also. Similarly lacking in substantial support is another of the charges of the complaint raising an issue as to whether representations have been made that our Government using respondents' schools for training purposes and tlmt there is a great demand by the Armed Forces for respondents' graduates, and the Commission likewise is of the view that the greater weight of the evidence fails to sustain other charges in re1erence to whether certain allegedly false reasons have been assigned by sales representatives as to why veterans were not taking the course under the G. 1. training program.

TRACTOR TRAINING SERVICE ET AL. 775 762 Conclusion CONCLUSION On the basis of the above-stated facts and other evidence of record the Commission has concluded that respondents have used false and misleading representations as described in Paragraphs 5 and 6 hereof in promoting the sale of their courses of study in commerce. Misrepresentation clearly has inhered in oral statements and other representations of respondents that there is a great demand for graduates of respondents' schools as diesel mechanics, service men and for similar positions, and that employment in such positions is available and assured on completion of the course when, in fact, there is no great or unusual demand for graduates whose training is limited primarily to completion thereof and no assurance of employment. Respondents' courses have been offered and sold also through statements that the schools have working agreements with manufacturers of diesel engines and others to place graduates in employment and that the schools will secure employment for them and do so as a regular thing when, on the contrary, respondents have no connection with manufacturers or working agreements for regularly placing graduates in employment nor do the schools customarily and regularly secure jobs for graduates. Other misrepresentations, the Commission concludes, clearly have stemmed from statements of sales agents that students are afforded on-the-job training for which they will be paid and that shop training is afforded at no cost or at only nominal cost as well as from additional false representations to the effect that respondents, in accepting enrollees, adhere to a system of rigid selectivity under which only a few from a very large number of applicants are accepted for their training and placement service, and misrepresentative likewise have been statements relating to the earnings graduates will receive upon completion of the course. Upon the basis of the record, it is additionally concluded that respondents' misrepresentations have had the capacity and tendency to deceive members of the public into the erroneous and mistaken belief that these statements and representations are true and to induce the purchase of substantial numbers of respondents' courses of instruction in commerce. The Commission accordingly concludes that respondents' misrepresentations, as hereinbefore found, have been to the prejudice and injury of the public and therefore constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

Since it is empowered and directed under the provisions of such Act to prevent the use in commerce of the methods, acts and practices referred to, the Commission has given careful consideration also to Order 501;' . T. C. the form of remedy which should be applied here. Other cases have come before the Commission for its determination which have presented situations where sales practices and acts used in promoting the sale of other home study courses likewise were characterized by misrepresentation as to the facilities or advantages available to students accepted for enrollment and the opportunities or assurances for employment and lucrative pay afforded upon completion of such courses. On the basis of its experience in those cases and its consideration of all of the factors involved, the Commission has concluded that the proscriptions, as adopted and set out hereinafter, are responsive to the record and will adequately protect the public interest. ORDER It is 07'dered That the respondents Tractor Training Service, a corporation, and Tractor Training Service, Inc., a corporation, and their offcers, and Joy E. Badley, individually and as an offcer of said corporations, and said respondents' agents, representatives and employees, directly or through any corporate or other device in connection with the ofiering for sale, sale and distribution of a course of study and instruction in diesel training and training in heavy equipment in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing directly or by implication:

1. That there i: a great demand for individuals completing the respondents' course of study on diesel engines, or that their employment as diesel mechanics, service men or in similar positions is assured; or misrepresenting in any manner the opportunities for employment in the diesel engine and allied products industry. 2. That the respondents have working arrangements or other contracts with members of the diesel engine manufacturing industry whereby individuals completing the respondents' course of study are assured employment, or that respondents customarily secure employment for such individuals.

B. That individuals purchasing the respondents' course of study are afforded "on-the-job training," or part-time employment, for which they are paid.

4. That shop training is provided by respondents to students at no cost or only nominal cost unless such training is in fact available without cost or at nominal cost as designated.

5. That individuals to whom the respondents' courses of study are sold are selected on any basis other than their ability to make the required down payment.

TRACTOR TRAINING SERVICE ET AL. 777 762 Order 6. That the earnings of individuals completing respondents' course of study are in excess of the average net earnings consistently made by individuals who have completed such course over substantial periods of time under normal conditions and circumstances. It is further ordered That the complaint be, and the same hereby is dismissed as to respondent Tractor Training Diesel Institute, a cor poration, and as to respondents Ray J. vVatson, McDannell Brown, and Fred L. Innes, in their capacity as individuals but not in their capacity as offcers of the respondent corporations.

It is further ordered That respondents Tractor Training Service Tractor Training Service, Inc., and .Joy E. Badley, shall, within sixty (60) days after service upon them of this order, fhe with the Commis sion a report in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist. Commissioner Howrey not participating for the reason that he did not hear oral argument herein.

Order 50 F. T. C.