Richard L. Schroeder

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In the MATTER OF RICHARD L. SCHROEDER ET AL. DOING BUSINESS AS INTERSTATE MERCHANDISERS CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED. VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 8481. Complaint, June 16, 1961—Decision, Oct. 24, 1961 Consent order requiring a Rochester, Minn., distributor of vending machines and nuts and candy dispensed thereby, to cease using deceptive offers of employment, false earnings claims, and other misrepresentations in newspaper advertisements, the real purpose of which was to sell its products. Complaint Pursuant to the provisions of the Federa] Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Richard L. Schroeder and Lois I. Schroeder, individually and as copartners, trading and doing business as Interstate Merchandisers, hereinafter referred toas respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

Paracraru 1. Respondents Richard L. Schroeder and Lois I. Schroeder are copartners trading and doing business as Interstate Merchandisers, with their office and principal place of business located at 1519 Fourth Avenue, N.W., Rochester, Minnesota. Said individuals cooperate and act together in formulating, directing and controlling the acts and practices hereinafter set forth. Par.2. Respondents are now, and for some time last past have been, engaged in the advertising, sale and distribution of vending machines and nut meats, candy and other merchandise dispensed thereby, to purchasers thereof located in various States of the United States. Par. 3. In the course and conduct of their business, respondents now cause, and for some time last past have caused, said products, when sold, to be transported from their place of business located in the State of Minnesota, or drop-shipped from elsewhere, to purchasers. thereof located in various other States of the United States. Respondents maintain, and at all times mentioned. herein have maintained, a course of trade in said products in commerce, as “commerce” is defined in the Federal Trade Commission Act. Par. 4. Respondents insert advertisements in newspapers soliciting persons to whom to sell said products. Persons responding to said INTERSTATE. MERCHANDISERS 985 984 Complaint advertisements are contacted by respondents or their representatives. Said respondents or their representatives, in soliciting the sale of said products, make various oral representations concerning the benefits to be derived by purchasing said products. Among and typical but not all inclusive of the statements and representations made in newspapers, circulars, form letters, flyers and other printed material given to prospective purchasers are the following: RELIABLE MAN OR WOMAN From this area to service and collect from new automatic cigarette, candy, nut and gum vendors. No selling, we will establish accounts for you. To qualify party must have car, references, and cash capital of $495.00 to $1995 which is secured. Excellent earnings part time—Full time more. For personal interview give phone, etc. Write P.O. Box 156, Rochester, Minnesota. EXCEPTIONAL OPPORTUNITY Reliable man or woman from this area to distribute complete line of cigarettes, candy, nuts, or gum through new automatic vendors. No selling, we will establish accounts for you. To qualify party must have car, references, and cash capital of $900 which is secured by inventory. Excellent earnings part time— Full time more. For personal interview give phone, etc. Write P.O. Box 156, Rochester, Minnesota.

* * * You can get started on a shoestring and build your capital into a snug fortune. * * * * * * We have, therefore designed our machines to attract attention through their attractive appearance. * * * Undisputable Facts Concerning PENNY MERCHANDISE VENDORS The Safest Surest Business on Earth . NO RISK of losing your investment * * *. No EXPERIENCE REQUIRED. * * * . NO SELLING OR SOLICITING.

. NO LONG HOURS. * * * _NO WAITING for month, six months or a year or more to build up the ‘business. It pays you a profit the first day your machines are on location. YOU CANNOT FAIL.

6. It’s on ALL CASH Business. There are no charge accounts. NO BAD ACCOUNTS. Your NET PROFITS ARE approximately 100%, and on some vendors like the BASKETBALL DISPENSERS the Net Profit may be approximately 200% to 300%. Your average business is 10%. ar wh * * » 8. And it is permanent—as long as Uncle Sam manufactures pennies. And it is depression proof. * * * * * * 10. And because you get your original investment back (plus a profit) BE- ‘CAUSE your machines “ON GOOD LOCATION” are worth from 25% to 338144% Complaint 59 F.T.C.

more than you paid for them. If you doubt this statement, try to buy an established Route of GUM machines or other mechanical merchandise machines anywhere in the United States.

Par. 5. By and through the use of the aforesaid statements and representations, and others of similar import but not specifically set forth herein, and by means of oral statements made by the respondents or their representatives, respondents represented, directly or by implication, that:

1. Respondents offer employment. to persons responding to their advertisements.

2. Persons selected must own a car and have references in order to purchase respondents’ products.

3. Any amount invested is secured by an inventory worth the amount. invested and there is no risk of losing any part of the investment. ;

4. Persons selected will not be required to engage in any kind of selling activity. , 5. The vending machine business is permanent. and depression proof. 6. Respondents have designed the vending machines sold by them. 7. Respondents obtain or assist in obtaining satisfactory locations for vending machines purchased from them. 8. Substantial earnings are assured to persons who purchase respondents’ vending machines and other products and engage in business.

Par. 6. The aforesaid statements and representations are false, misleading and deceptive. In truth and in fact: 1. Respondents do not offer employment to persons responding to their advertisements. Their sole purpose and intent. is to sell their products to such persons.

2. It is not. necessary to own a car or to furnish references in order to purchase respondents’ products. The only requirement is the purchase price.

3. Invested sums of money are not secured by an inventory worth the amount invested and there is a real and substantial risk assumed by the purchaser of losing all or a substantial portion of the money invested.

4. Persons purchasing said products were required to engage in extensive selling or soliciting in order to establish, operate and maintain locations for said products.

5. The business opportunity offered by respondents is not permanent and is not depression proof.

6. Respondents do not. design the vending machines sold by them. INTERSTATE MERCHANDISERS 987 984 Decision 7. Respondents do not obtain satisfactory locations for persons purchasing said products. Locations, if any, secured by respondents, are usually undesirable, unsuitable and unprofitable. 8. In most. instances, persons purchasing respondents’ products and engaging in business make little or no profit. Par.7. Inthe course and conduct of their business, and at all times mentioned herein, respondents have been in substantial competition, in commerce, with corporations, firms and individuals engaged in the sale of the same or similar products.

Par. 8 The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantial quantities of respondents’ products. by reason of such erroneous and mistaken belief. As a consequence thereof, substantial trade in commerce has been, and is being, uifairly diverted to respondents from their competitors and substantial injury has thereby been, and is being, done to competition in commerce. , Pan. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, al] to the prejudice and injury of the public and of respondents’ competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

DECISION AND ORDER This matter having come on to be heard by the Commission upon a record consisting of the Commission’s complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act and an agreement by and between respondents and counsel supporting the complaint, which agreement. contains an order to cease and desist, an admission by the respondents of all the jurisdictional facts alleged in the complaint, a statement that the signing of said agreement. is for settlement purposes only and does not. constitute an admission by respondents that they have violated the law as alleged in the complaint, and waivers and provisions as required by the Commission’s rules; and The Commission having considered the agreement and order contained therein and being of the opinion that the agreement provides an adequate. basis for appropriate disposition of the proceeding, the agreement. is hereby accepted, the following jurisdictional findings are made, and the following order is entered. 988 FEDERAL. TRADE ‘COMMISSION DECISIONS Order 59 F.T.C.

1. Respondents Richard L. Schroeder and Lois I. Schroeder are individuals and copartners trading and doing business as Interstate Merchandisers, with their office and principal place of business located at 1519 Fourth Avenue, N.W., Rochester, Minnesota. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered, That respondents Richard L. Schroeder and Lois I. Schroeder, individually and as copartners, trading and doing business as Interstate Merchandisers, or under any other name or names, and their agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution, of vending machines, vending machine supplies, or any other merchandise, in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by implication, that: 1. Employment is offered by respondents or others when in fact the real purpose of the offer is to obtain purchasers for respondents’ merchandise ;

2. Persons must own an automobile or furnish references in order to qualify for purchase of respondents’ products; 3. The amount invested in respondents’ products is secured or that. there is no risk of losing the money so invested ; 4. Selling or soliciting is not required to establish, operate or maintain a route of said products, or otherwise misrepresenting the amount of selling or soliciting required to establish, operate or maintain such route;

5. The sale of merchandise by, through, or in connection with respondents’ products or devices is a permanent business or is unaffected by economic depression ;

6. The respondents’ vending machines or other merchandise have been designed by, or originated by, any person or organization other than the person or organization which actually designed or originated such vending machines or other merchandise ; 7. Respondents or their sales representatives obtain, or assist in obtaining, profitable locations for the vending machines purchased from respondents;

. 8..The earnings or profits derived from the operation of respondents’ vending machines will be any amount greater than that. usually and customarily earned by operators of respondents’ said machines. 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thes 1 10 1 3 8 1135 1896 143 31 96.267876 Federal5 1 10 1 3 9 1295 1895 113 31 96.293457 Trades 1 10 1 3 10 1423 1893 233 41 96.312469 Commission,5 1 10 1 3 11 1672 1893 127 40 93.254074 having5 1 10 1 3 12 1816 1903 70 20 91.909004 rea-4 1 10 1 4 0 580 1943 1307 47 -1 5 1 10 1 4 1 580 1962 59 21 96.329880 sons 1 10 1 4 2 661 1955 34 27 96.329880 to5 1 10 1 4 3 716 1950 129 31 96.728577 believes 1 10 1 4 4 865 1949 76 32 96.416626 that5 1 10 1 4 5 961 1949 100 41 96.782448 Egon5 1 10 1 4 6 1082 1947 134 40 96.478439 Seiden,5 1 10 1 4 7 1240 1957 43 21 96.439514 an5 1 10 1 4 8 1303 1944 191 34 96.767715 individuals 1 10 1 4 9 1516 1944 140 42 96.762314 trading5 1 10 1 4 10 1679 1954 36 21 93.252243 as5 1 10 1 4 11 1737 1943 150 33 91.669395 Seiden’s4 1 10 1 5 0 579 1993 1307 49 -1 5 1 10 1 5 1 579 2002 99 40 96.027824 Furs,5 1 10 1 5 2 697 2000 211 32 96.935135 hereinafter5 1 10 1 5 3 926 1998 151 33 96.756104 referred5 1 10 1 5 4 1098 2002 35 27 96.408928 to5 1 10 1 5 5 1156 2008 34 21 96.510056 as5 1 10 1 5 6 1211 1996 214 42 96.337830 respondent,5 1 10 1 5 7 1445 1995 61 31 96.996429 has5 1 10 1 5 8 1527 1995 148 30 96.693535 violated5 1 10 1 5 9 1697 1994 57 31 93.280273 thes 1 10 1 5 10 1774 1993 112 41 93.086136 provi-4 1 10 1 6 0 580 2043 1308 43 -1 5 1 10 1 6 1 580 2052 91 31 96.660004 sions5 1 10 1 6 2 685 2052 38 30 96.713226 of5 1 10 1 6 3 739 2051 73 31 96.020020 said5 1 10 1 6 4 827 2051 84 30 96.350723 Acts5 1 10 1 6 5 927 2049 66 31 96.884285 ands 1 10 1 6 6 1010 2049 57 31 96.433113 thes 1 10 1 6 7 1083 2048 104 32 96.369377 Rules5 1 10 1 6 8 1203 2047 65 31 96.269867 ands 1 10 1 6 9 1286 2045 223 41 96.188232 Regulations5 1 10 1 6 10 1526 2044 237 41 96.192200 promulgated5 1 10 1 6 11 1780 2043 108 31 96.346825 under4 1 10 1 7 0 581 2093 1306 47 -1 5 1 10 1 7 1 581 2103 57 32 96.625702 thes 1 10 1 7 2 655 2103 73 31 96.593384 Furs 1 10 1 7 3 745 2101 168 33 96.701210 Products5 1 10 1 7 4 928 2100 167 40 96.307083 Labeling5 1 10 1 7 5 1112 2099 69 32 96.778412 Acts 1 10 1 7 6 1198 2097 67 32 95.440063 ands 1 10 1 7 7 1282 2097 28 31 96.909836 it5 1 10 1 7 8 1330 2095 187 43 96.489067 appearing5 1 10 1 7 9 1534 2099 34 28 96.791618 to5 1 10 1 7 10 1587 2095 59 31 96.692642 thes 1 10 1 7 11 1663 2093 224 35 96.113579 Commission4 1 10 1 8 0 579 2145 1307 49 -1 5 1 10 1 8 1 579 2154 77 31 92.434471 that5 1 10 1 8 2 673 2164 19 21 92.434471 a5 1 10 1 8 3 710 2152 205 42 96.365692 proceedings 1 10 1 8 4 931 2151 43 41 96.996613 by5 1 10 1 8 5 993 2151 27 31 96.859612 it5 1 10 1 8 6 1039 2150 33 32 96.433922 in5 1 10 1 8 7 1091 2154 131 37 96.433922 respects 1 10 1 8 8 1237 2148 133 31 96.921349 thereof5 1 10 1 8 9 1388 2147 111 31 96.789017 would5 1 10 1 8 10 1517 2146 40 31 96.426865 be5 1 10 1 8 11 1575 2146 35 30 96.154068 in5 1 10 1 8 12 1630 2146 57 31 97.010498 thes 1 10 1 8 13 1704 2145 115 41 92.835197 public5 1 10 1 8 14 1837 2145 49 31 92.835197 in-4 1 10 1 9 0 580 2196 1306 48 -1 5 1 10 1 9 1 580 2208 112 36 96.987068 terest,5 1 10 1 9 2 710 2203 124 41 96.575150 hereby5 1 10 1 9 3 853 2202 103 32 96.903145 issues5 1 10 1 9 4 975 2202 43 31 96.954590 its5 1 10 1 9 5 1038 2200 186 42 96.493622 complaints 1 10 1 9 6 1241 2199 129 41 96.493622 stating5 1 10 1 9 7 1388 2198 43 31 96.973564 its5 1 10 1 9 8 1450 2197 140 42 96.678146 charges5 1 10 1 9 9 1608 2197 35 31 96.514381 in5 1 10 1 9 10 1664 2196 76 32 96.514671 that5 1 10 1 9 11 1758 2199 128 38 96.755478 respect4 1 10 1 10 0 579 2255 209 32 -1 5 1 10 1 10 1 579 2266 36 21 94.597603 as5 1 10 1 10 2 638 2255 150 31 94.597603 follows:3 1 10 2 0 0 578 2296 1310 151 -1 4 1 10 2 1 0 622 2296 1266 48 -1 5 1 10 2 1 1 622 2306 208 31 49.830139 Paracrapy5 1 10 2 1 2 853 2307 26 28 94.692688 1.5 1 10 2 1 3 923 2303 100 41 96.504738 Egon5 1 10 2 1 4 1046 2301 122 34 96.662468 Seiden5 1 10 2 1 5 1189 2301 29 31 96.765282 is5 1 10 2 1 6 1239 2311 41 21 96.892029 an5 1 10 2 1 7 1303 2298 191 34 96.732887 individuals 1 10 2 1 8 1516 2298 141 41 96.776230 trading5 1 10 2 1 9 1678 2308 36 21 93.291771 as5 1 10 2 1 10 1737 2296 151 34 73.187576 Seiden’s4 1 10 2 2 0 580 2348 1306 46 -1 5 1 10 2 2 1 580 2358 88 31 96.075081 Furs5 1 10 2 2 2 691 2355 83 31 96.075081 with5 1 10 2 2 3 794 2355 55 31 96.728355 his5 1 10 2 2 4 871 2354 88 32 96.989273 offices 1 10 2 2 5 982 2353 65 31 95.779251 ands 1 10 2 2 6 1069 2352 171 42 96.419182 principals 1 10 2 2 7 1264 2352 95 40 96.876678 places 1 10 2 2 8 1382 2350 37 30 96.462151 of5 1 10 2 2 9 1441 2349 151 31 96.667183 business5 1 10 2 2 10 1615 2348 129 32 96.801720 located5 1 10 2 2 11 1769 2352 36 27 96.410324 at5 1 10 2 2 12 1827 2349 59 29 94.219818 9354 1 10 2 3 0 578 2403 634 44 -1 5 1 10 2 3 1 578 2407 203 40 96.101852 Broadway,5 1 10 2 3 2 793 2406 135 31 96.687622 Kansas5 1 10 2 3 3 940 2404 89 42 96.687622 City,5 1 10 2 3 4 1042 2403 170 32 96.687332 Missouri.3 1 10 3 0 0 579 2448 1306 303 -1 4 1 10 3 1 0 622 2448 1262 49 -1 5 1 10 3 1 1 622 2458 121 31 90.598770 Par.2.5 1 10 3 1 2 790 2456 210 41 96.754608 Subsequent5 1 10 3 1 3 1011 2460 35 26 96.125008 to5 1 10 3 1 4 1058 2454 58 31 96.125008 thes 1 10 3 1 5 1127 2453 151 32 96.900398 effective5 1 10 3 1 6 1291 2452 79 32 96.931389 dates 1 10 3 1 7 1382 2451 38 31 96.886185 of5 1 10 3 1 8 1432 2451 56 31 96.848457 thes 1 10 3 1 9 1502 2451 72 31 96.744576 Furs 1 10 3 1 10 1588 2450 167 31 93.280441 Products5 1 10 3 1 11 1766 2448 118 32 92.752922 Label-4 1 10 3 2 0 580 2499 1304 51 -1 5 1 10 3 2 1 580 2509 59 41 96.145630 ings 1 10 3 2 2 655 2508 67 31 96.833847 Acts 1 10 3 2 3 739 2518 43 21 96.742592 on5 1 10 3 2 4 799 2506 138 42 87.981003 August5 1 10 3 2 5 952 2508 29 38 93.988930 9,5 1 10 3 2 6 1000 2507 90 38 95.206146 1952,5 1 10 3 2 7 1109 2503 205 41 96.520660 respondents 1 10 3 2 8 1330 2502 61 32 96.502800 has5 1 10 3 2 9 1408 2501 81 32 96.494385 been5 1 10 3 2 10 1510 2501 65 31 96.647003 ands 1 10 3 2 11 1595 2501 28 31 96.757607 is5 1 10 3 2 12 1640 2512 74 19 96.498924 now5 1 10 3 2 13 1735 2499 149 42 95.819061 engaged4 1 10 3 3 0 580 2549 1304 43 -1 5 1 10 3 3 1 580 2560 34 31 96.544388 in5 1 10 3 3 2 634 2560 56 30 96.586777 thes 1 10 3 3 3 710 2558 231 32 96.099953 introductions 1 10 3 3 4 961 2557 72 30 96.800591 into5 1 10 3 3 5 1054 2566 182 21 96.033363 commerce5 1 10 3 3 6 1256 2554 64 31 96.686554 ands 1 10 3 3 7 1344 2554 35 30 96.940430 in5 1 10 3 3 8 1399 2553 58 31 96.997124 thes 1 10 3 3 9 1477 2552 77 39 96.377426 sale,5 1 10 3 3 10 1577 2551 219 41 96.963531 advertising,5 1 10 3 3 11 1819 2549 65 32 96.847832 anda 1 10 3 4 0 579 2600 1305 50 -1 5 1 10 3 4 1 579 2611 146 39 95.407883 offerings 1 10 3 4 2 740 2609 57 31 96.902397 for5 1 10 3 4 3 811 2609 77 40 94.838104 sale,5 1 10 3 4 4 902 2608 35 31 94.838104 in5 1 10 3 4 5 951 2617 191 30 95.220306 commerce,5 1 10 3 4 6 1158 2605 65 32 96.793343 ands 1 10 3 4 7 1238 2605 34 31 96.508934 in5 1 10 3 4 8 1285 2605 58 31 96.561462 thes 1 10 3 4 9 1357 2602 269 42 96.745636 transportation5 1 10 3 4 10 1642 2602 65 31 93.304047 ands 1 10 3 4 11 1725 2600 159 33 92.602150 distribu-4 1 10 3 5 0 580 2652 1304 49 -1 5 1 10 3 5 1 580 2662 82 39 96.924278 tion,5 1 10 3 5 2 679 2661 36 31 96.924278 in5 1 10 3 5 3 733 2670 191 29 96.274597 commerce,5 1 10 3 5 4 943 2659 37 30 96.521683 of5 1 10 3 5 5 1000 2659 59 30 96.518967 furs 1 10 3 5 6 1075 2658 178 40 96.698692 products;5 1 10 3 5 7 1273 2656 65 31 96.724297 ands 1 10 3 5 8 1358 2655 60 31 96.724297 has5 1 10 3 5 9 1436 2654 83 41 96.990776 sold,5 1 10 3 5 10 1537 2653 202 39 96.631485 advertised,5 1 10 3 5 11 1759 2652 125 31 95.660027 offered4 1 10 3 6 0 579 2703 1306 48 -1 5 1 10 3 6 1 579 2713 57 30 96.644035 for5 1 10 3 6 2 656 2712 78 39 96.573601 sale,5 1 10 3 6 3 753 2710 216 41 96.573601 transported5 1 10 3 6 4 994 2709 64 31 96.724968 ands 1 10 3 6 5 1080 2707 202 33 96.363358 distributed5 1 10 3 6 6 1306 2707 60 31 96.938515 furs 1 10 3 6 7 1384 2705 161 41 96.839371 products5 1 10 3 6 8 1567 2704 109 31 96.706390 which5 1 10 3 6 9 1697 2704 86 31 96.279938 have5 1 10 3 6 10 1804 2703 81 31 96.279938 been Complaint 59 F.T.C.

made in whole or in part of fur which had been shipped and received in commerce, as the terms “commerce”, “fur” and “fur product” are defined in the Fur Products Labeling Act. Par. 8. Certain of said fur products were misbranded in that they were falsely and deceptively labeled or otherwise falsely and deceptively identified with respect to the name or names of the animal or animals that produced the fur from which said fur products had been manufactured, in violation of Section 4(1) of the Fur Products Labeling Act.

Par. 4. Certain of said fur products were misbranded in that labels affixed thereto contained fictitious prices and misrepresented the regular retail selling prices of such fur products in that the prices represented on such labels as the regular prices of the fur products were in excess of the retail prices at which the respondents usually and regularly sold such fur products in the recent regular course of his business, in violation of Section 4(1) of the Fur Products Labeling Act.

Par. 5. Certain of said fur products were misbranded in that they were not labeled as required under the provisions of Section 4(2) of the Fur Products Labeling Act. and in the manner and form prescribed by the Rules and Regulations promulgated thereunder. Among such misbranded fur products, but not limited thereto were fur products with labels which failed :

1. To show the true animal name of the fur used in the fur product. 2. To disclose that the fur contained in the fur product was dyed. Par. 6. Certain of said fur products were misbranded in violation of the Fur Products Labeling Act in that they were not labeled in accordance with the Rules and Regulations promulgated thereunder in the following respects:

(a) The term “dyed Broadtail processed Lamb” was not set. forth as required where an election was made to use that term instead of Lamb in violation of Rule 10 of said Rules and Regulations. (b) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was mingled with non-required information, in violation of Rule 29 (a) of said Rules and Regulations.

Par. 7. Certain of said fur products were falsely and deceptively invoiced by respondent in that they were not. invoiced as required by Section 5(b) (1) of the Fur Products Labeling Act, and in the mariner and form prescribed by the Rules and Regulations promulgated thereunder.

SEIDEN’S FURS 991 989 Complaint Among such falsely and deceptively invoiced fur products but not limited thereto, were invoices pertaining to such fur products which failed:

1. To show the true animal name of the fur used in the fur product. 2. To disclose that the fur contained in the fur products was dyed. Par. 8. Certain of said fur products were falsely and deceptively invoiced in violation of the Fur Products Labeling Act in that information required under Section 5(b) (1) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in abbreviated form in violation of Rule 4 of said Rules and Regulations.

Par. 9. Certain of said fur products were falsely and deceptively advertised in violation of the Fur Products Labeling Act in that said respondent caused the dissemination in commerce, as “commerce” is defined in said Act, of certain newspaper advertisements, concerning said products, which were not in accordance with the provisions of Section 5(a) of the said Act and the Rules and Regulations promulgated thereunder; and which advertisements were intended to aid, promote and assist, directly or indirectly, in the sale and offering for sale of said fur products.

Par. 10. Among and included in the advertisements as aforesaid but not limited thereto, were advertisements of respondent which appeared in issues of the Kansas City Star, a newspaper published in the city of Kansas City, State of Missouri, and having a wide circulation in said State and various other States of the United States. By means of said advertisements and others of similar import and meaning, not specifically referred to herein, respondent falsely and deceptively advertised fur products in that said advertisements : (a) Failed to disclose the name or names of the animal or animals that produced the fur contained in the fur product as set forth in the Fur Products Name Guide, in violation of Section 5(a)(1) of the Fur Products Labeling Act.

(b) Failed to disclose that fur products contained or were composed of bleached, dyed or otherwise artificially colored fur, in violation of Section 5(a) (3) of the Fur Products Labeling Act. (c) Represented directly or by implication through the use of percentage savings claims such as “All prices drastically reduced 25% to 50%” that the regular or usual] prices charged by respondent for fur products were reduced in direct proportion to the percentage of savings stated when such was not the fact in violation of Section 5(a) (5) of the Fur Products Labeling Act.

Par. 11. In advertising fur products for sale as aforesaid respondent falsely and deceptively advertised such fur products in violation Decision 59 F.T.C.

of Section 5(a)(5) of the Fur Products Labeling Act by representing, directly or by implication, through such statements as “Save at the factory storeroom” that respondent owned and operated a factory storeroom and savings could be effected from the purchase of fur products at such storeroom when, in truth and in fact, respondent did not own or operate a factory storeroom and no savings could be effected therefrom.

Par. 12. In advertising fur products for sale as aforesaid respondent falsely and deceptively advertised such fur products in violation of Section 5(a) (5) of the Fur Products Labeling Act by setting forth fictitious prices on labels and misrepresenting the regular retail selling prices of such products in that the prices repr esented on such labels as the regular prices of the fur products were in excess of the regular retail prices at which respondent usually and regularly sold such fur products in the recent regular course of business. Par. 18. Respondent in advertising fur products for sale as aforesaid made claims and representations respecting prices and values of fur products. Said representations were of the type covered by subsections (a), (b), (c) and (d) of Rule 44 of the Rules and Regulations promulgated under the Fur Products Labeling Act. Respondents in making such claims and representations failed to maintain full and adequate records disclosing the facts upon which such claims and representations were based in violation of Rule 44(e) of said Rules and Regulations.

Par. 14. The aforesaid acts and practices of respondent, as herein alleged, are in violation of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder and constitute unfair and deceptive acts and practices in commerce under the Federal Trade Commission Act.

Messrs. Edward B. Finch and Robert W. Lowthian supporting the complaint.

Rich & Rich for respondent.

Initial Decision py Wauter K. Bennert, Heartnc EXAMINER The complaint herein was issued June 16, 1961, charging respondent with violation of both the Fur Products Labeling Act and the Federal Trade Commission Act through false and deceptive labeling, invoicing and advertising of fur products.

Thereafter and on July 27, 1961, respondent, his counsel and counsel supporting the complaint entered into an agreement authorizing the entry of a consent order to cease and desist the practices charged without further notice. Said agreement was duly approved by the Chief, SEIDEN’S FURS © 993 989 Decision Division of Enforcement, Bureau of Textiles and Furs and the Director and Assistant Director of the Bureau of Textiles and Furs. It was presented to the undersigned on August 9, 1961. The hearing examiner finds that said agreement includes all of the provisions required by Section 3.25(b) of the Rules of the Commission, that is:

A. An admission by respondent of all jurisdictional facts alleged in the complaint.

B. Provisions that:

(1) The complaint may be used in construing the terms of the order ; (2) The order shall have the same force and effect as if entered after a full hearing;

(3) The agreement shall not become a part of the official record of the proceeding unless and until it becomes a part of the decision of the Commission ;

(4) The entire record on which any cease and desist order may be based shall consist solely of the complaint and the agreement; (5) The order may be altered, modified, or set aside in the manner provided by statute for other orders ;

C. Waivers of :

(1) The requirement that the decision must contain a statement. of findings of fact and conclusions of law ; (2) Further procedural steps before the hearing examiner and the Commission.

(3) Any right to challenge or contest the validity of the order entered in accordance with the agreement. In addition the agreement contains the following provision: A statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that he has vio- Jated the law as alleged in the complaint. Having considered said agreement, including the proposed order, and being of the opinion that it provides an appropriate basis for settlement and disposition of this proceeding; the hearing examiner hereby accepts the agreement but orders that it shall not become a part of the official record unless and until it becomes a part of the decision of the Commission.

The following jurisdictional findings are made and the following order issued :

1. Egon Seiden is an individual trading as Seiden’s Furs, with office and principal place of business located at 985 Broadway, Kansas City, Missouri.

2. The Federal Trade Commission has jurisdiction of the subject. matter of this proceeding and of the respondent. 693-490—64 64 Order 59 F.T.C.

ORDER It is ordered, That Egon Seiden individually and trading as Seiden’s Furs or under any other trade name, and respondent’s representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction into commerce, or the sale, advertising, or offering for sale in commerce, or the transportation or distribution in commerce of any fur product, or in connection with the sale, advertising, offering for sale, transportation, or distribution of any fur product which is made in whole or in part of fur which has been shipped and received in commerce, as “commerce,” “fur” and “fur product” are defined in the Fur Products Labeling Act, do forthwith cease and desist from:

1. Misbranding fur products by:

A. Falsely or deceptively labeling or otherwise identifying any such product as to the name or names of the animal or animals that produced the fur from which such product was manufactured. B. Falsely or deceptively labeling or otherwise identifying such products as to the regular prices or values thereof by any representation that the regular or usual prices of such products are any amount in excess of the prices at which respondent has usually and customarily sold such products in the recent regular course of business. C. Failing to affix labels to fur products showing in words and figures plainly legible all the information required to be disclosed by each of the subsections of Section 4(2) of the Fur Products Labeling Act.

D. Failing to set forth the term “Dyed Broadtail processed Lamb” in the manner required.

E. Setting forth on labels affixed to fur products, information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder mingled with nonrequired information.

2. Falsely or deceptively invoicing fur products by: A. Failing to furnish to purchasers of fur products invoices showing all the information required to be disclosed by each of the subsections of Section 5({b) (1) of the Fur Products Labeling Act. B. Setting forth information required under Section 5(b) (1) of the Fur Products Labeling Act and the Rules and Regulations promulated thereunder in abbreviated form.

3. Falsely or deceptively advertising fur products through the use of any advertisement, representation, public announcement, or notice which is intended to aid, promote or assist, directly or indirectly, in the sale, or offering for sale of fur products and which: A. Fails to disclose:

oO oe THE YOUNG MEN’S SHOP OF WASH., INC., ET AL. 995 989 Syllabus 1. The name or names of the animal or animals producing the fur or furs contained in the fur products as set forth in the Fur Products Name Guide and as prescribed under the Rules and Regulations. 2. That the fur product contains or is composed of bleached, dyed, or otherwise artificially colored fur, when such is the fact; B. Makes use of comparative prices or percentage savings claims unless such compared prices or claims are based upon the current market value of the fur product or upon a bona fide compared price at a designated time.

C. Represents directly or by implication that respondent owns and operates a factory storeroom, or similar establishment, and savings can be effected from the purchase of fur products at such factory storeroom or similar establishment, when such is not the fact. D. Represents directly or by implication that the regular or usual price of any fur product is any amount which is in excess of the price at which respondents have usually and customarily sold such products in the recent regular course of business. 4. Making claims and representations of the types covered by subsections (a), (b), (c) and (d) of Rule 44 of the Rules and Regulations promulgated under the Fur Products Labeling Act unless there are maintained by respondents full and adequate records disclosing the facts upon which such claims and representations are based. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission’s Rules of Practice, published May 6, 1955, as amended, the initial decision of the hearing examiner shall, on the 24th day of October 1961, become the decision of the Commission; and, accordingly :

It is ordered, That the respondent herein shall, within sixty (60) days after service upon him of this order, file with the Commission a report in writing setting forth in detail the manner and form in which he has complied with the order to cease and desist.