The Rubber Manufacturers Association Inc.

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Ix THE )\fA TIH OF THE RUBBER MA:\UFACTUREI S ASSOCIATION INC. ET AL.

CONSEN'f ORDER, ETC. , IN HEGAHD TO THE ALLEGED vrOLATIOK OF THE FEDER.\L TRADE CO:1BIISSlON ACT Docket 750.5. Oomplaint, June 1959-Dccision, Jan. G, 1962 Consent order requiring two trade associations and 15 manufacturers, accounting for substantially all the domestic production of rubber tires and tubes and with annual sales approximating two bilion dollars, to cease engaging in a price-fixing conspiracy in the course of which they agreed upon and maintained a single zone delivered price system for tires and tubes-with the "Big Four" quoting identical prices to all customers of a class throughout the Cnited States, and the others quoting prices lower by agreed-upon differentials-and engaged in other contriLmting ilegal practices as in the order below indicated.

IPLAINT Pursuant to th provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that the party respondents named in the caption hereof, and hereinafter more particularly designated and described, have violated and are now violating Section 5 of the Federal Trade Commission Act (U. , Title 15, Sec. 45), and it appearing to the Commission that a, proceeding by it in respect thereof would be in the public interest, the Commission hereby issues its complaint, stating its charges as rollows: PARAGR.4PH 1. Respondent The Rubber :\fnnufacturers Association Inc., hereinafter referred to as respondent RJ1A, is an incorporated trade association organized and existing under llnd by virtue of the !a,YS of the State of Connecticut, with its principal offce located at trade associat.ion was 444 :Mac1ison Avenue, New York, N.Y. Said originally organized in 1900. After undergoing changes in nalne and organizational structure, it was incorporated under the laws of the State of Connecticnt in 1915, undor the name "The Rubber Club or America, which nalTe was changed to "The Rubber Association of America, Inc. " in 1917 , and to its present corporate title in 1929. , Inc., hereinafter re- Hesponclent The Tire and Rim Association ferred to as respondent TRA, is an incorporated trade association organized and existing under and by virtue of the laws or the State of Ohio, with its principal offce located at 2001 First National Tower Akron, Ohio. Said trade association was originally organlzed in 1903 FEDERAL TRADE CmnIISSIO:\ DECISIONS Complaint 60 F, l'.

under a different name. After undergoing several changes in mane and organizational structure, it ,,,as incorporated under its present corporate title in 1933.

Respondent The Goodyear Tire and Rubber Company, here,inafter re.erred to as respondent Goodyear, is a. corporation organized, existing and doing business under and by Yll'tlle of the laws of ihe State of Ohio, with its principal1 office and place of business located at 1144 East Market Street, Akron, Ohio.

Respondent The Firestone. Tire and Rubber COl1pally hereinafter re.ferred to as respondent Firestone, is fl, corporation organized, existing and doing business under find by virtue. of the la'iYs of the State of Ohio, ,with its principal offce and place of busine s loeateel at. 1200 Firestone PaJ'kway Akron, Ohio.

Respondent. United States Rubbe,r Company, hereinafter refcl'ecl to as respondent 1;. : is a corporatioll organized, existing and doing businessundel' ilnc1 by virtue of the laws of the State. of Xew ,Jersey, with its principal offce. illlc1 p11ce of business located at 1:2:-0 A'Venne of the A-\lnel'icas: Xew York Respondent The B. F. Goodrich Company, hereinnftel' referred to ns respondent B. F. Goodrich, is a c.orporation organized, existing and doillg business under nnd by "il'tlle of the laws of the State of Ohio with its principal offce and place of business located at 500 South Chain Street, ":kr011, Ohio.

Respondent. The General Tire and Rubber Company, hereinafter.r referred to as respondent General, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with is principal offce and plac.e of business located at 1708 Englewood A\'enue, Akron, Ohio.

Respondent The Armstrong Rubber Company is a corporation organized, existing and doing business under and by virtue of the laws of the St.ate of Connecticut, with its principal office and place of business located at 475 Elm Street, ,Vest Hn ven, Conn. Saiel respondent was ineorporated in 1940 ns successor in interest to Armstrong Rubber s of the State ofCompany, Inc. , incorporate.d nncle.r the Ilh\' T ew Tersev in 1916.

pondent Cooper Tire find Rubber COlnpnny is a corporation organized, existing and doing business under and by virtue. of the laws of the State of Delav..are, with its princi pal office and place of business Ioeated at Lima and ,Vesterll A Yennes, Findlay, Ohio. Respondent The Dayton Hubber COlnpany is a- corporation organized, e.existing and doing business under and by virt.ue of the laws of THE RVBBER :MNUFACTURERS ASSN. , INC. , ET AL. Complaint the State of Ohio, with its principal offce and place of business located at 2342 Riverview A venue, Dayton, Ohio.

Respondent Dunlop Tire and Hubber Corporation is a corporation organized, existing and doing business uIlder and by virtue of the laws of the State of New York, ,with its principal office and place of business located at River Hoad and Sheridan Drive, BnfIalo, N. Respondent The Gates Hubber Company is a corporation organized existing and doing business under and by virtue of the la,1'S of the State of Colorado, '1'ith its principal offee and place of business located at 999 South Broadway, Denver, Colo.

Respondent Lee Hubber and Tire Corporation is a corporation organized, existing and doing business under and by virtue of the hn1's of the State of ew York: with its principal offce and place of bllsiness located at Conshohocken, Pa.

Respondent The l\fansnelc1 Tire and Hubber Company is a, corporation organized, e,existing flnd doing business under and by, virtue of the la,1's of the Stat.e of Ohio, with its principal offce and place of business located at 515 R ely11 an Street, l\fansfield, Ohio. Respondent j)IcCreary Tire and Rubber C01npany is a corporation organized, existing fwd doing business under and by virtue of the laws of the State of Pennsylvania, with it.s principal offce and place of business locat.ed at Indiana, Pa.

Respondent The Jlohawk Rubber Corporation is a corporation virtue of theorganized, existing a.ncl doing business under and by Ja ws of the State of Ohio, with its prineipa l oiUec and place of business located at 1325 Second A venue, East Akron, Ohio. R.respondent Seiberling Rubber Company is a corporation organized existing and doing business under' ancl by virtue of the b ws of the State of Delamtrc, ,with its principal offce and phce of business located at 845 15th Street, Northwest, Darberton, Ohio. All of the respondents named hercjn, other than respondents It:\IA and TRA, are collectively referred to hereina,ft.e' as " respondent manufacturers . Eacll of said respondent manufacturers is a 111cmber or contributing nonlle.nbel', of respondents Rl\IA and TRA, and has for a number of years, through suc.h membership and othenvise, directly or indirectly, participated in the c.ooperative and collective action of all of those named he1'e,1n as respol1(lcnts in formulating, engaging systems, acts, practices andin and making effective the methods, po1ieies which are alleged here,in to be unlawful. PAR. 2. Respondent manl1fadul'el's, either diredly or indirectly through subsidiary or affliated corporations or operating divisions are engaged in the manufacture sa,1c and distribution of a great Complaint 60 t' variety of rubber and associated products, including tires and inner tubes and items related thereto, hereinafter referred to as "tires and tubes, for use on automobiles, trucks, buses, tractors and other vehicles.

PAR. 3. Respondent R1\fA is a trade association whose membership is composed of manufacturers of 61'88 and tubes and various other types of rubber products. Said respondent has been and now is engaged, through divisions, committees and other operating units, in a wide range of activities of mutual interest to Hs members, including standardization and simplification programs and the formulation and promotion of uniform accOlmting practices in the rubber industry. Respondent TRA is a trade association whose me,mbership is composed of manufacturers of tires and tubes, rims, wheels, and theircomponent parts. S tid respondent "is the technical standardizing body of the tire and rim manufacturers of the United States, and has been and now is principally engaged, through committees and other operaUng units, in the formulation and adoption of standardization and simplification programs for the mutual interests of its members. Respondent manufacturers are among the principal members of repondents RMA and TRA (except respondent The Gates Rubbel' Company, which is a contributing nonmember of respondent Inl and actively pa.rticipate in the management, operations, policies, discussions, meetings and programs thereof.

PAR. 4. Total sales of tires and tubes by domestic manufacturers thereof approximate two billion dollars annually, substantially al1 of which is accounted for by respol1cl€mt manufacturers.To tl1c extent that said respondent manufacturers act collectively or cooperatively in the pricing of tires and tubes, they are in a position to dominate and control the prices at which said products are sold by them to purchases in the original equipment and replacement markets. The , statelatter includes independent dealers and distributors, federal and local government agencies and dep uiments, and other classes of customers.

PAR. 5. The leading ma,nufacturcrs of tires and tubes in the United States arc respondents Goodyear, Firestone, 17. , and B. F. Goodrich. Said respondents collectively have been referred to in the, industry for many ye,ars as the "Big Four, and are hereinafter so designated. The next lel1ding manufacturer of said products for many years has been, and no\y is, respondc11t Genend. The Big Four and respondent General collectively have been referred to in the industry for many years as the "majors, and are hereinafter so designated. An other 1'e- respondent mflnllfacturers collectively have been, and now are, Tile RUBBER MANUFACTURERS ASSN. , INC. , ET AL. :89 Complaint ferred to in the industry as the "minors, and are hercimdter so designated.

PAR. 6. Respondent manufacturers produce tires and tubes in factories located in various parts of the United States, with many of said respondents having factories in more than one locality, from which points such products ate transported, when sold or consigned, either directly or through numerous field warehouses or the company-owned stores of certain of said respondents, to their respective customers located throughout the United States. Among such customers are thousands of independent tire dealers or distributors who purchase tires and tubes from respondent manufacturers for resale at the wholesale level to automobile dealers, service stations, garages, fleet operators, and others, as well as for resale at the retail level. Respondent manufacturers also solicit business at the ,vholesale level from auto- 1nobile dealers, service stations, garages, fleet operators, and others and certain of said respondents have numerous stores located throughout the United States which resell tires and tubes at the wholesale level to the foregoing classes of customers, as well as at the retail level. Other important customer classes include the manufacturers of motor and other vehicles, who purchase tires and tubes primarily for use as original equipment on said vehicles; and feder.al, state and local governments, many of whom purchase tires and tubes on a sealed bid basis. The "majors" are the leading suppliers of tires and tubes to the original equipment market, although all respondent manufacturers solicit the business of, and seh tires and tubes to, purchasers in said market.

PAR. 7. Respondent manufacturers maintain, and at all times mentioned herein have maintained either directly or indirectly through subsidiary or affliated corporations or operating divisions, a sub- -stantial and continuous course of trade in tires and tubes in commerce, as "commerce" is defined in t,he Federal Trade Commission Act, between and among the various states of the United States and the District of Columbia. Respondents R:\IA and TRA have been and now are engaged in aiding respondent manufacturers in carrying out the unla.wful methods, acts and practices a,s alleged herein, which directly and substantially have affected and now affect competition between and mnong said respondent manufacturers. PAR. 8. Respondent manufacturers have been and now are in competition with each other, and with others, in the n1allufacture, sale and distribution of tires and tubes to purchasers thereof, except 1nso- Tar as actual and potential competition has been hindered, lessened. FEDERAL TRADE COMMISSION DECISIONS, Complaint 60 F.

restricted, restrained, suppressed or eliminated by the unlawful and unfair methods, acts and practices hereinafter alleged. PAR. 9. Respondent manufacturers, either directly or indiredly through subsidiary or affliated corporations or operating divisions acting between and among themselves and through and by means respondents RMA and TRA, for many years last past and continuing to the present time, have mainta.ined and now maintain and have in effect an understanding, agreement, combination and conspiracy to pursue, and they have pursued, a planned common course of action between and among themselves to adopt and adhere to certain praetices and policies to hinder, lessen, restrict, restrain, suppress and eliminate competition in the manufacture, sale and distribution of tires and tubes in the course of the aforesaid commerce. Paint. 10. Pursuant to and in furtherfllCe of said lUlClerstanding, agreement, combination, conspiracy a:nd pia.nned common course of action, respondent manufacturers, either directly or indirectly through subsidiary or affliated corpoI'fLtions or operating divisions, acting between and among themselves and through and by means of respondents R. IA and THA, for many years last past and continuing to the present time, have engaged in and carried out by various methods and means the following acts, practices, Blothods, systems and policies among others:

(1) Agreed to adopt, and have adopted, maintained and made effec- 6ve, a syste,m of delivered price quotations for tires and tubes, designed to prevent, and ,which does prevent, refle.ction in such quotations of any differences in cost of raw materials, factory overhead, depreciation or other ite, , as be.tween respo-ndent manufaeturers, or any differences in the cost of delivery between the respective places of manufa,cture" or other shipping points, of said respondents io the respective locfltions of the purchasers or prospective purchasers of tires and tubes. Saiel system also prevents any advantage to many of said purchasers in de1iverecl cost TIhich would otherwise result beca.use of their proximity to the places of production or shipping point, thereby discriminating against such purchasers. (2) Agreed to adopt, and have adopted, , Ina.int.ainec1 and made eirective, a single zone delivered price system for tires and tubes whereby price airel's made by all respondmit Inanufactnrers to all purchasers of a class throughout the Lnit.ed SLates, regardless of location and any differences in freight rates frolTi shipping point to destination, arc identically or substantially matched, execpt to the extent that by prearrangement and understanding the price offers made by rm:pondp, General a,nd by each of respondent "minors" are permitted to be made THE ReBBER :MANUFACTURERS ASiSN., I , Ell AL. 95: Complaint a.nd maintained at recognized differentials below the identically substantially matched offers of the "Big Four" respondents (3) For many yea.rs prior to about N ovelnber 1955, respondent manufacturers of indust.ria'! solid tires adopted, maintained and made effective a system whereby the United States was divided into two zones, designated by certain of said respondents a.s East and 'Vest zones, which operated in the same manner and with the same effect within each zone, with a price differentia.l between zones, as the single zone delivered price system set fort.h 111 subparagraph (2) above. Since about November 1955, industrial solid tires have been offered for sale and have been sold by said respondent manufacturers in the same manner and with the same effect as all other tires and tubes, as set forth in subparagraph (2) above.

(4) Beginning about 1923, respondent manufacturers, with the active participation and cooperation of respondent R , prepared and made effective a uniform system of accounting for the tire and tube industry. Said accounting systeln has been continually used, as revised from time to time, by respondent manufacturers since its in ception. In or about 1933, a "Cost Accounting Formula for the. Calculation of Hubber Product Costs for Estab1isJ1lwnt of Selling Prices hereinafter referred to as "Cost Formula, was include.d in sidd system " a.s 1 vita.lly essential a.nd integral part of the unifonn cost accounting plan . Saiel "Cost Formula" was n,adopted and has been continued in effect since its ineeption by respondent Tnanufacturers by agreement, understanding and concerted action between and among themselves for utilization, together with other price-fixing fornmlae in calculatinp;, fixing, establishing and rnaintaining identical or substantially identical delivered price quotations in the sale of tjres and tubes, except to the, extent that agTeecl upon recognized price differentials aro permitted lor respOlH.1cnt. General and respondent "ruinors as described in subparagraph (2) above.

(5) In furtherance of their utilization of the "Cost Formula" in the manner and Jar the purposes described in subparagraph (4) above and since the inception thereof, respondent manufacturers JutVe submitted confidential aecounting chLta to reepondent R LL\. for the determination by the latter of arbitra.ry and artificial pricing factors which it has disseminated to them Hl1(1 "which have been and now arc used by said respondent mallfacturers in the establishment of selling prices for tires and tubes.

(6) Agreed to fix, adopt and mainta, , and have fixed, adopted maintained, and made effective, ic1enticn1 01' substantially uniform customer c1assillcations, list prices, trade discounts, promotional dis- FEDERAL TR ADE co:.nnssIO" DECISIONS Complaint 60 F.

counts, carload and truckload discounts, cumulative annual volume bonuses and allowances, transportation tenns, other terms and conditions of sale, and all other factors affecting the selling prices of tires and tubes, all for the purpose and with the effect of either identically or substantially matching delivered price quotations, except to the extent that agreed upon recognized price differentials are permitted for respondent General and respondent "minors, as described in subparagraph (2) above.

(7) Agreed to adopt, and have adopted, maintained and continued in effect, at times through and by means of respondent R\IA, uniform or substantially similar policies and terms of sale and delivery with respect to Spring (and VintBr) Dating Plans, whereby tires and tubes are delivered to purchasers thereof eluring specified periods on a deferred payment basis.

(8) Respondent "majors" agreed to adopt, and have adopted, maint.ained and made effective, uniform policies and practices for special sales promotions of tires and tubes, including the types and sizes of said products featured during such promotions, the applicable terms and conditions of sale and delivery, and the identical or substantially similar prices at which such tires and tubes are sold at retail by said respondent "majors through their company-owned stores and other outlets. For example, such special sales promotions arc conducted during certain National Holiday periods, generally at or about Decoration Day (May), July Fourth, and Labor Day (September). (9) Agreed to fix and maintain, and have fixed, maintfLinecl and made effective, price-fixing formulae for calculating, determining and establishing identical or substantially similar prices for tires and tubes at which sales or offers of sale, by scaled bid or otherwise, have been Rnd now are made or submitted by respondent manufacturers to federal Clnd state, and eertajn county, city and other local, governmental agencies and departments, and to original equipment manufacturers except to the extent that agreed upon recognized price differentials are permitted for respondent General and respondent "minors, as described in subparagraph (2) above.

(10) Respondent "majors agreed to adopt, and have adopted, maintained and continued in effect, a system, method or plan for policing, controlling and enforcing adherence to identical or substantially similar prices, as set forth in Net State Price Lists, on sales, or offers of sale, by sealed bid or otherwise, of tires and tubes by said respondents and their respective company-owned stores and independent dealers to state, and certain county, city and other local, government a I agencies and departments.

'TUE RUBBER :MANUFACTVRERS ASSN. , IKC. , Err AL. Complaint (11) Agreed to adopt, and have adopted, maintained and continued in effect, a price leadership plan whereby one of the "Big Four respondents generally leads in the announcement of tire and tube list price increases and decreases, as well as in the announcement of changes in all other factors or policies which affect the selling prices of said products, such as, but not limited to, discounts, bonuses and allo\vances, terms and conditions of sale and delivery, customer classifications, and Spring (and .Winter) Dating Plans. Thereafter respondent General and respondent "minors, by agreement, follow in the adoption and alu10uncement of either identical or substantially similar prices or pricing factors or policies, except to the extent that agreed upon recognized price differentials are pCl'lnitted for said respondents, as described in subparagraph (2) above. (12) Respondent ll1anufacturers have communicated between and among themselves and filed and exchanged with each other, through correspondence, telegraph, telephone and otherwise, confidential and other information concerning past, current and future prices and price quotations, terms and conditions of saJe and delivery which have bee,ll and now are, or are to be, quot.ed and chargec1 by f3aid respondents to purchasers or prospective purchasers of tires and t.tubes. Through and by means of such acts, practices and methods, all respondent manufacturers keep informed and have a common understanding of the prices and pricing factors and policies expected to be, and which ha vo been, used by each of them in the sale, or offering for sale, of tires and tubes.

(13) Respondent manufacturers, with the active cooperation and assistance, through meetings and otherwise, of respondent H1\.IA and respondent TRA, have planned, adopted and made eilective, simplification and standardization programs and policies for the purpose and with the effect of fixing, establishing and maintaining identical or substantially similar prices and price quotations, terms and conditions of sale and delivery and other factors affecting prices at which tires and tubes and related products, such as, but not limited to vn,lves for tubeless tires, arc solel Or offered for sale by respondent manufc.cturers, except insofar as agreed upon recognized price differentials are permitted for respondent General and respondent (2) above. lninors J as described in subparagraph (14) Hespondcnt manufacturers have held and continue to hold meetings from time to time under the auspices and supervision of respondent R1\IA a,nc1 of respondent Tn.A , during the course of w11ich and at other times, said tra,de associations have cooperated "ith and assisted, and continue to cooperate with and assist, said respondent Complaint 60 F.

manufacturers in fllthering and carrying out the unlawful acts practices and methods set fort.h herein.

PAR. 11. The inherent and necessary effects of the adoption and ma.intcllance by respondent manufacturers of the zone delivered price systems of pricing and othet acts, practices and methods set fort.h in paragraph 10 herein include the following, among others: (1) The elimination of price competition between and among respondent manufaetllrers in the sale or tires and tubes; (2) A subst.antial lessening of compet.itjon behyeen and among respondent. manufacturers in all parts of the United States by virtue of each of them voluntarily and reciprocally surrendering and cancelling the inherent advantage it has over other respondent manufacturers wit.hin the market area nearer freight wise to its factory or factories than to a factory of auot11m' respondent manufacturer in considenttion of a similar surrender and cancellation by each of said other respondent Inanufacturers;

(3) The fixing and using of certain arbitrary or average costs in determining seHing prices of tires and tubes rather than any respondent manufacturer using its own such costs;

(4) The maintenance of Inonopo1istic unfair and oppressive dis crirninatioll against purehasers of tires and tubes in large areas of the Cnited States by depriving such purchasers of the (ldvantage in cost otherwise necruing to them by reason of their proximity to the faetories of respondent manufacturers, and by compelling such purchasers to pay portions of the cost of t.transportation of such products to other purcha,sers nlo1'e distantly located froln the respective factories of said respondents, an in the accomplishment of said respondents' unlawful purpose to dest.roy price competition in the sale of tires and tubes in commerce and to create for said respondents a monopoly t.herein and thereof.

PAR. 12. The combination and conspiracy and the acts, pnwtices methods, policies, agreements anclul1c1erstnndings of the respondents as hereinbefore alJegecl, all and singularly, are unfair and to the prejudice of the public; deprive the public of the benefits of competition in the sale of tires and tubes; prevent price competition among respondent manufactl1re.rs in the sale of said products; deprive purchasers of said products of the benefits of c0111petition in price j are cliscrimimltury against. some buyers anc1l1sers of said products; maintain a.artificial a,nd monopolisti(., rnethods and prices 11\ the sale and distribution of sa-id products; have a. dangerous t.tendency and capa,city to hinder, frustrate, suppress and eliminate, and have actually hjndered, frustrated, sl1ppresseLl anll eliminated, competition in the &\ &\ &\ &\ &\ &\ THE RUBBER MANUFACTURERS AS6N. , ll'\C., ET AL. Complaint sale of tires and tubes in commerce; h",ve a dangerous tendency and capacity to restrain unreasonably, and have restrained unreasonably, COlnmerce in said products; have a dangerous tendency and capacity to create in re-spondent manufacturers a monopoly in the sale and distribution of such products; ",nd constitute unfair methods of competition and unfa.ir acts and practices in C011lncrce within the intent and meaning of Section 5 of the Federal Trade Commission Act. llfr. James S. J(elahe'l, ST. anclllI/'. James P. T-illwny supporting the complaint.

Alemande,. Green New York by Afr. Edward E. Rigney for respondent The Rubber lVIanufacturers Association, Inc. Wise, Roetzel, Maxon, Kelly And?'es8 Akron, 0. , by Mr. John M. UI1n,tn for respondent The Tire and Rim Associ",tion, Inc. Oahill, Gordon, Reindel Ohl New York by ilfathiM F. Oorrea for respondent The Goodyear Tire & nubber Company. Gravelle, Whitlock, Madcey Tad \Yashington, D. , by Afr. Tho1nM 8. Markey for respondent The Firestone Tire and Hubber Company.

Arthur, Dry Dole New York by AIr. AfY7'on Kaldsh for respondent United St",tes Rubber Comp,my.

White OMe New York, N. , by Mr. Edga1' Barton for respondent The B. F. Goodrich Comp",ny.

Sullivan OT01nwell New York by AIr. Willimn E. Wilis and l1ir. Fmnk W. Knrnvlton and l1h. John J. Dalton Akron, 0., for respondent The General Tire & H.rubber Company. Thmnpson, "YVeir ru Ban:lay, ew I-Iaven, Coml. , by 311'. John lV. Bm'clay for respondent The Armstrong Rubber Company. Aianhal1, Melhorn, Bloch cD Belt Toledo, 0. , by 1iT. W. A. Belt for respondent Cooper Tire & Rubber Company.

Yickrel, Schaeffel' Ebeling, Dayton, 0. , by jib' . Jam.es E. Om'key and M,' . William G. Pickrel and Gmvelle, Whitlock, Markey Tait W",shington, D. , by llfr. ThmnM S. Aim.key for respondent Dayeo Corporation.

Phillips, Aiahoney, Lytle, Yorkey Letchwodh Buffalo M". Robert Ai . Hitchcock for respondent Dunlop Tire and Hubber Corporation.

!rir. Dayton Den'ious Denver, Colo., for respondent The Gates Rubber Company.

Satterlee, Browne, Ohel'DonnieJ' ickerson e'W York, N. , by j,f r. Paul Van A ndn for respondent Lee Rubber and Tire Corporation. Balcer, Hostetler Patterson Cleveland, 0. , by 11/1'. EzmK. Bryan for respondent The :YIansfield Tire ",nd Rubber Company. &, &, 100 FE'DERAL TRADE COMMISSION DEGISIONS Initial Decision 60 F.

Reed, Smith, Shaw McClay, Pittsburgh, Pa. , by Mr. EdriInd K. T1' ent for respondent McCreary Tire and Rubber Company. B1'house, il1cDm()ell, Mrty, Bie1'ce c6 TVortman Akron, 0. , by J1fr. O. Blake McDowell, J1' for respondent The Mohawk Rubber Company.

B",ckingham, Doolittle Bw' rouglUi Akron, 0. , by lift. Richard A. Ohenoweth for respondent Seiberling Rubber Company. INITIAL DECISION BY EDWARD CREEL, HE.A.RIXG EXA:\finer The Federal Trade Commission issued its complaint against the respondents in this proceeding, charging that fifteen tire and tube manufacturers, accounting for substantially all of the industry domestic production, ancl two trade associations had conspired to fix prices on tires and tubes.

On November 3, 1961, there was submitted to the hearing examiner an agreement bet"een respondents, their c0U11sel, and counsel supporting the complaint providing for the entry of a consent order. -cncler the terms of the agreement, the respondents admit the jurisdictional facts a.alleged in the complaint. The parties agree, among other things, that the cease tll1d desist order there set forth may be entered 'without further notice and have the same force and effect as if entered after a full hearing and the document includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith. The agreement further recites that it is for settlement purposes only and does not constitute an admission by the respondents that they have violated the law as alleged in the complaint.

The hearing examiner iinds that the content of the agreement. meet.s all of the requirements of Section 3.25(b) of the Rules of the Commission, published J\lay 6, H)55, as amended. The hearing examiner having considered the agreement and proposed order, and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepteel, and it is ordered that said agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of t.he Commission. The following jurisdictional findings arc made and the following order issued: 1. Respondent The Rubber Manufacturers Association, Inc. (hereinafter somet.times referred to as RJ\fA), is an incorporated trade association organized and existing under and by virtue of the la-ws of the State of Connecticut, with its principal offce located at 444 Madison Avenue, New York, N.

THE RUBBER MANUFACTURERS AS'SN. , L'\C. , ET AL. 101 Initial Decision (hereinafter some- Respondent The Tire and Rim Association, Inc. t.times referred to as TRA), is an incorporated association organized and existing under and by virtue of the laws of the State of Ohio with its principal offce located at 2001 First National Tower, Akron Ohio.

Respondent The Goodyear Tire & Hubber Company, referred to in the complaint as The Goodyear Tire and Hubber Company, is an Ohio corporation with its principal offce and place of business located at 1144 East Market Street, Akron, Ohio.

Respondent The Firestone Tire and Rubber Company is an Ohio corporation with its principal offce and place of business located at 1200 Firestone Parkway, Akron, Ohio.

Respondent United States Rubber Company is a Kew Jersey corporation with its principal offce and place of business located at 1230 A\'enue of the Americas, New York Respondent The B. F. Goodrich Company is anew York corporation (referred to in the complaint as an Ohio corporation) with its principal offce and place of business located at 500 South Main Street Akron, Ohio.

Respondent The General Tire & Rubber Company, referred to in the cOlnplaint as The General Tire and Rubber Company, is an Ohio corporation with its principal.l offce and place of business located at 1708 Englewood A venue, Akron, Ohio.

Respondent The Armstrong Rubber Company is a Connecticut corporation with its principal offce and place of business located at 475 Elm Street, IV est IIa ven, Conn.

Respondent Cooper Tire & Rubber Company, referred to in the complaint as Cooper Tire and R,ubher Company, is a- Dela.ware corporation with its principal offce and place of business located at Lima and \Vestern Avenues, Findlay, Ohio.

Respondent Dayco Corporation, formerly kno\Vn as and nmned in the complaint as The Dayton R,l1bber Company, is an Ohio corporation with its principal oHico and place of business presently located at 333 IV est First Street, Dayton, Ohio.

Respondent Dunlop Tire and Rubber Corporation is a New York business located at corporation with its principal offce and place of Hiver Road and Sheridan Drive, Buffalo, N.

Respondent The Gates Rubber Company is a Colorado corporation with its principal offce and place of business located at 999 South Broadway, Denver, C010.

Respondent Lee Hubber and Tire Corporation is ew York corporation -with its principal.l offce and place of business located at Conshohocken, Pa.

71D-G03-64- 102 FEDERAL TRADE COMMISSION DECISIONB Initial Decision 60 F.

Respondent The Mansfield Tire and Rubber Company is an Ohio corporation with its principal offce and place of business located at 515 N ewma.n Street, Mansfield, Ohio.

Respondent lcCreary Tire and Rubber Company is ,a Pennsylvania corporation with its principal offce and place of business located at Indiana., Pa.

Respondent The Mohawk Rubber Company, referred to in the complaint as The Mohawk Rubber Corporation, is an Ohio corporation with its principal offce and place of business located tt 1325 Second Avenue, Akron, Ohio.

Respondent Seiberling Rubber Company is a Delaware corporation with its principal offce and place of business located at 345 15th Street orthwest, Barberton, Ohio.

All of the respondents named herein, other than respondents RMA and TRA , are collectively somet.times referred to hereinafter as respondent manufacturers.

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 A. J t is orde?' That respondents, The Rubber Manufacturers Association, Inc., The Tire and Rim Association, Inc., The Goodyear Tire & Rubber Company, The Firestone Tire and Rubber Company, United States Rubber Company, The B. F. Goodrich Company, The General Tire & Rubber C.Qnpany, The Armst.rong Rubber Company, Cooper Tire & Rubber Company, Demlop Tire and Rubber Corporation, The Gates Rubber Company, Lee Rubber and Tire Corporation The Mansfield Tire and Rubber Company, McCreary Tire and Hubber Company, The :Mohawk Rubber COlnpfUlY, and Seiberling Rubber Company, their respective offcers, representatives, agents e.nployees, subsidiaries, successors and assigns, directly or through n.ny corporate or other device in or in eonncction with the manufacture, oilering for sale, sale or distribution of rubber tires and t.tubes tire valves, retrend materials and repair materials (a11 of which proc1uds arc hereinafter referred to as tires and tubes) in interstate commerce, do forthwith cease and desist from entering into, continuing, cooperating in, or carrying .out any planned common course of action 'mderstanding, agrcmnent, combination, or conspiracy between or among any t-yo or more of the said respondents, or between anyone THE RUBBER MANUFACTURERS A&SN. , INC. , Elf AL. 103 Initial Decision or 1110re of said respondents and any others not parties hereto, to do or perform any of the following things:

1. Establish, fix or -nmintain prices, discounts, bonuses, allowances terms or conditions of sale, or any other pricing policies or adhere to or follow any prices, discounts, bonuses, allowances, tenus or conditions of sale, or any other pricing policies so esta.blished, fixed or maintained.

2. Quote, bid or sell at prices calculated or determined pursuant to or in a,accordance with a single zone delivered price system, or pursuant to or in accordance with any other plan or systmn of delivered prices.

3. Adopt, use or in any way follow any prices, diseolUlts, bonuses allowances, terms or conditions of sale, or any other pricing policies announced by a particular respondent or respondents, or any of them whe.reby prices, discounts, bonuses: allo-wances, terms or conditions of sale" or a,ny other pricing policies are made identical or substantially uniform or matched, or reflect agreed upon price differentials. 4. Quote, bid or sell at prices calculated or determined in whole or in part through the use of a system of a.ecol1nting or a cost fonnula. 5. Circulate or cOllnl1nicate cost data to respondent Rl\IA or to any other.r trade association, business organization or non-governmental agency.

6. :Establish, fix, maintain or adopt customer classifications, list prices, discounts, bonuses, warranties, guarantees, allowances, transportation terms, sales promotion plans (such as Labor Day sales or liquidation sales), payment plans (such as Spring Dating Plans), terms or conditions of sale, or any other pricing policies. 7. Quote, bid or sell to federal, state, county, or municipal governments, or any agencies thereof, or to original equipment manufacturers at prices arrived at through any agreed upon fonl1uIa, , or by any other agreed upon methods or means, whereby prices are made identicolor substantially uniform or matched, or reflect agreed upon price differentials.

8. Establish or maint.ain a system, method or plan for policing, controlling, or enforcing adherence to any prices or pricing policies to any class of customers.

9. Exchange, distribute or circulate with, between or among respondents any information concerning prices, discounts, bonuses, allowances, terms or condit.ions of sale, or any other pricing policies before RlllOUncement t.hereof to respondent s customers or the public. 10. Plan, adopt or make effective, t.through respondent HAf.:\., or any other trade lS3ociatioll or business organiza,tion, or thl'ongll respondent 104 FEDERAL TRADE CO!" ISSION DECISIONS Initial Decision GO F.

TR.A, or through any other non-governmental agency, any standardization or simplification programs or policies for the purposes of fixing: ma,into.ining or tampering with prices or pricing policies. 11. Establish, fix, maintain, adopt or suggest any resale price to be maintained by any dealer; or police, control or enforce adherence to any resale price.

12. Allocate or designate the business of a specific purchaser, governmental or other, to or for n. particular respondent or respondents. 13. Use or lnaintain respondent R.J\1A or respondent TRA or any other agency as an instrument or medium for promoting, aiding, or rendering more effective, any cooperative or concerted effort or efforts to suppress or eliminate competition by or through any of the means or methods set forth in this order.

E. It is understood that nothing contained in the foregoing or Paragraph III hereof shall prevent any respondent manufacturer from negotiating or carrying out in good faith a. contract to manufacture, or to sell to or buy from any bona fide customer or supplier whether such customer or supplier is or js not a respondent herein. It ,is f1.lrther ordered That each manufacturing respondent, and subsidiary thereof, shall, within ninety (90) days after the ,late of service of this Order, individually and independently revise its prices and pricing factors and policies on tires and tubes in the following manner:

A. Independently review its p1'ices,price lists, discounts, bonuses and allowances, and other pricing factors and policies, on the basis of its own costs, the Inargin of profit inclividunJly desired, and other lawful considerations including outstanding contractual commitments;

D. \Vithdraw its presently e.fectlve prices, price lists, discounts bonuses and allowances;

C. Establish new prices, price lists, discounts, bonuses and allowances on the basis of such an independent review; D. In the event any prices, price lists discounts, bonuses or allowances thus established are changed within the period of six (6) months following their adoption, the respondent making such change shall have the burden of establishing that such change \Vas made in good faith to meet a competitive pricing situation. For a period of two years following the adoption of the prices, price lists, discounts, bonuses or allowances provided for in subparagraph C hereof, any respondent who has made changes therein during the above-noted six- THE RUBBER MANUFACTURERS ASSN. , INC. , ET AL. 105 Initial Decisioll month period shall have the bnrden of documenting a11 evidence relied upon in making such change and rebtil1ing and making available to the Commission upon request all such documentation; and E. within one hundred and twenty (120) days after the date of service of this Order, file with the Commission an affdavit setting forth the fact and manner of compliance with subparagraph C hereof. III It i8 further ordered That each of the respondents, its offcers, representatives, agents, employees, subsidiaries, successors and assigns directly or through any corporate or other device, in connection with the sale of tires and tubes in interstate commerce, do forthwith cease and desist from:

A. Disseminating any information or data as to prices, discounts bonuses, allowances, terms or conditions of sale, or any other pricing policies to any other of the respondents before announcement thereof t.o respondenes customers or to the public. B. Attending any meeting with another re,spondent- or respondents at which prices, discounts, bonuses, allowances, terms or conditions of sale, or any other pricing policies are discussed or considered. i t That respondent The Rubber Ianufacturers furthe1' o"dered -\association, Inc. , its offcers, representati Yes, agents, employees, subsidiaries, successors and assigns, directly or through any eli visions committees or other operating units or devices, formally or informally, in connection with the manufadure, offering for sale, sale or distribution of tires and tubes, do fortlnvith cease and desist and pennanelltly refrain from planning or performing any of the following things: A. Obtaining or disseminating any information as to prices, discounts, bonuses, allowances, warranties, guarantees, sa.Jes promotion plans (such as Labor Day sales or liquidation sales), payment plans (such as Spring Dating plans), terms or conditions of sale, or customer classifications in connection therewith, or any other pricing policies.

B. Conducting or holding any meeting at which discussion is had or consideration is given concerning information as to prices, discounts bonuses, allowances, warranties, guarantees, sales promotion plans (such as Labor Day sales), payment plans (such as Spring Dating plans), terms or conditions of sale, or Cllstomer classification in connection therewith, or any other pricing policies. Initial Decision 60 F.

c. Obtaining, compiling, retaining or disseminating any uniform aecounting manuals or any cost data relating to accounting praetiees or procedures, including but not limited to cost accounting data, cost accounting surveys, cost formulae, or any accounting data relating to prices.

D. Cooperating in the formulation of any standardization or simplification programs or policies with the purpose of fixing, ma.intainiug or tampering with prices or pricing policies. E. Obtaining or collecting any information on non public freight rates or transportation charges from any tire and tube manufacturer or disseminating any information on any fictitious or averaged freight rates, or any zone pricing plan or system.

F. Acting as an instrument or medium for promoting, aiding or rendering lTIOre effective any cooperative or concerted effort to suppress or eliminate competition, or to cooperate with any of the other respondents herein in carrying out any of the acts prohibited by this Order.

It i8 j,trther o1'deTerl That respondent The Tire and Rim Association, Inc., its offcers, representatives, agents, employees, subsidiaries SHceessors and assigns, directly or through any divisions, committees or other operating units or devices, formally or informalJ;y, in connection with the maj1ufacture, offering for sale, sale or distribution of tires and tubes, do forthwith cease and desist and pe.rmanentJy refrain from planning or performing any of the following things: A. Cooperating in the formulation of any standardization or Si111.plification programs or policies with the purpose of fixing, maintaining or tampering with prices or pricing policies. B. Acting as an instrument or medium for the purpose of pro. mating, aiding or rendering more effective any cooperative or concerted effort to suppress or oj iminate competition, or to cooperate with any of the other respondent.s herein in carrying out any of the acts prohibited by this Order.

It is f1lather oTClel'ed That the compbint be, and it is hereby, dismissed as to respondent Dayco Corporation (formerly operating as The Dayton Rubber Company).

VII It is jurtheT ordered That each of the respondents shall within sixty (60) days after service upon it of this order file with the Com- , , THE NATIONAL SCHOOL OF CONSTRUCTION, INC. , ET AL. 107 Complaint mission a report in \writing setting forth in detail the manner and form in which it has complied with Paragraphs I, III, IV and V of this Ordcr to cease and desist.

DECISION OF THE co nIISSION AND ORDER TO FILE REPORT OF CQ::IPLIAKCE Pursuant to Section 3.21 of the C011111188ion 8 Rules of Practice published May 6, 1055, as amended, the initial decision of the hearing examiner shall, on the 6th day of J annary 1062, become the decision of the Commission; and, accordingly:

It 7:8 therefore ordered That respondents shall, within the times provided for in the order c.contained in the init.ial decision herein, file with the Commission reports, in writing, setting forth in detail the manner and form in which they have cOlllpIied with the order to cease and desist.

Ix THE l\iATrR OF THE NATIONAL SCHOOL OF CONSTRUCTION INC.

ET AL.

CONSENT ORDER ETC. IN REGARD TO TI-IE ALLEGED VIOLATION OF Tile FEDEIL-\L TR"\DE CO::\I::IISSIO ACT Docket C-62. Comp7aillt, Jan. S, 19G2 Decision Jan. S , DJG2 Consent order requiring :i\ilwaukee sellers of a correspondence course in the operation and maintenance of heavy construction equipment, to cease using false representations in advertising in l1ewpapers and periodicals, leaflets form letters, etc. , to sell its courses, including false employment offers and opportunities, exaggerated earnings claims, GI and Justice Department approval, operation of several branches, etc. , as in the order below indicated.

COjIPLAIXT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the anthorit.y vested in it by said Act, the Federal Trade Commission, having reason to believe that The Kational School of Construction, Inc., a corporation, and Raymond F. "\Vatt and Richard Kolpin, individually and as officers of said corporation; and James lIaig Advertising, a corporation, and lTames l--aig, individually a.nd as an offcer of said corporation, hereinafter reJerrecl to as respondents, have vioJatecl the provisions of saiel Act, Rnd it appea-ring to the Commission that a proceeding by it. in respect thereof "lOulcl be , , THE NATIONAL SCHOOL OF CONSTRUCTION, INC. , ET AL. 107 Complaint mission a report in \writing setting forth in detail the manner and form in which it has complied with Paragraphs I, III, IV and V of this Ordcr to cease and desist.

DECISION OF THE co nIISSION AND ORDER TO FILE REPORT OF CQ::IPLIAKCE Pursuant to Section 3.21 of the C011111188ion 8 Rules of Practice published May 6, 1055, as amended, the initial decision of the hearing examiner shall, on the 6th day of J annary 1062, become the decision of the Commission; and, accordingly:

It 7:8 therefore ordered That respondents shall, within the times provided for in the order c.contained in the init.ial decision herein, file with the Commission reports, in writing, setting forth in detail the manner and form in which they have cOlllpIied with the order to cease and desist.

Ix THE l\iATrR OF THE NATIONAL SCHOOL OF CONSTRUCTION INC.

ET AL.

CONSENT ORDER ETC. IN REGARD TO TI-IE ALLEGED VIOLATION OF Tile FEDEIL-\L TR"\DE CO::\I::IISSIO ACT Docket C-62. Comp7aillt, Jan. S, 19G2 Decision Jan. S , DJG2 Consent order requiring :i\ilwaukee sellers of a correspondence course in the operation and maintenance of heavy construction equipment, to cease using false representations in advertising in l1ewpapers and periodicals, leaflets form letters, etc. , to sell its courses, including false employment offers and opportunities, exaggerated earnings claims, GI and Justice Department approval, operation of several branches, etc. , as in the order below indicated.

COjIPLAIXT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the anthorit.y vested in it by said Act, the Federal Trade Commission, having reason to believe that The Kational School of Construction, Inc., a corporation, and Raymond F. "\Vatt and Richard Kolpin, individually and as officers of said corporation; and James lIaig Advertising, a corporation, and lTames l--aig, individually a.nd as an offcer of said corporation, hereinafter reJerrecl to as respondents, have vioJatecl the provisions of saiel Act, Rnd it appea-ring to the Commission that a proceeding by it. in respect thereof "lOulcl be 108 FEDERAL TRADE CO:'l:\rSSION DECISIONS Complaint GO F.

in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPnl. Respondent The National School of Construction, Inc. is a corporation organized, e,existing and doing business under and by virtue of the Jaws of the State of 1Visconsin, with its offce and principal place of business located at 10852 IV est W'isconsin A venue, in the city of Milwaukee, State of Wisconsin.

Respondent Raymond F. IV aU is an individual and President of corporate respondent The National School of Construction, Inc., and respondent Richard Kolpin is an individual and Vice President and Treasurer of said corporate respondent. They formulate, control and direct the policies and practices of said corporate respondent and have the same address as that of the corporate respondent. Respondent James Haig Advertising is a corporation organized existing and doing business under and by virtue of the Jaws of the State of 1Visconsin, \with its ailiee and principal place of business located at 3707 North 92nd Street, in the city of Milwaukee, State of .Wisconsin.

Respondent James Haig is an individual and President of corporate respondent James Haig Advertising. He formuh,tes, controls and directs the policies and pra,dices of said corporate respondent, including those hereinafter referred to, and his address is the same as that of said corporate respondent. Corporate respondent J a,mcs Haig Advertising is the advertising agent of corporate respondent The National School of Construction, Inc., and prepares and places for publication or broadcast advertising material, including but not limited to that hereinafter set forth, to promote the instruction courses sold by corporate respondent The Kational School of Construction, Inc.

PAR. 2. Respondent The National School of Construction, Inc. , is now, and for some time last past has been, engaged in the business of conducting a correspondence school and in selling and distributing courses of instruction in the operation and maintenance of heavy construction equipment.

PAR. 3. Respondents have caused, and are now causing, said courses of instruction in said subjects, when sold, to be transported from their place of business in the State of IYiscollsin to purchltsers thereof at their respective locations in other States of t.he United States and in the District of Columbia. Said respondents have maintained, and now maintain, a course of trade in said courses of instruction in commerce, as "commerce" is defined in the Federal Trade Commission Act.

THE l' ATIOXAL SCHOOL OF CONSTRUCTION) INC. ) ET AL. 109 107 Complaint PAR. 4. In the course and cond uet of t.hcir business as aforesaid and for the purpose of enrolling prospective students and thereby promoting the sale of their said courses or instruction in the operation and maintenance or heavy construction equipment, respondents, through advertisements inserted and pubEshed in newspapers and periodicals having general circulation throughout the United States in pamphlets, letterheads, leaflets, circulars, form letters, cards printed contracts and other media distributed through the United States mail, and by radio broadcasts across state lines, and through oral representations made by their salesmen, and by other means and media, have made, and are now making, numerous statements with respect to their said courses of instruction and the advantages and benefits which the purchasers thereof will receive. Among and typical of such statements, bnt not limited thereto, are the following: ?lien Needed to operate all kinds of heavy equipment Tractors, Scrapers, Graders, Bulldozers, etc. State in letter if you are experienced operator ortrainee. Also untrained men needed to learn heavy equipment operation. You don t have to relocate to learn. ::Ien are needed now everywhere. (Under "Help 'Wanted" columns in newspapers) Men Wanted to Move the Earth.

Trained mell are needed now to operate construction equipment * * * 900 000 men ,,,il be needed in tlle ever expanding heavy equipment operating. field.

(Radio-Television Script) 1\en are needed no'" in your hometown.

Get Ahead Fast with Top Pay.

IJeal' to operate Big Construction gquilJment. You can be one of Amerka s high-llay operators of giant Earth Moving Equipment * * * A short knowledge course ,,,which you can complete in your own home plus actual field training wil enable you to operate the largest dozers, graders and tournapulls.

If you qualify Heayy gquipment & Gas Turbine Training Di-vjsion wil even help you finance your training as yon learn. Today contractors throughout the country watching Kational graduates at \vork kilo-W that these llen have learned their jobs well * The ational School of Construction, first of the kind in the nation, has proved to the indust.ry that it is needed. . . that it is turning out graduates who step into their jobs. . . "moving earth the very first day" , . . in an effcient manner.

Learn the SURE ,VAY by DOING Practical Resident courses of 220 to 440 hours give you the actual practice you Deed.

Did :you know the men operating heavy equipment earn up to $10 OOO? So can you.

Operators with time off for winter have been earning $7 000-$10 000! Advancemcnt to foreman earns up to $12 000 t.o $15,000 , .

Complaint 60 F. T.

I make myself up to $225 per week or $10 000 per year and work only 11 months, all because of one simple reason. I signed up with National Schools to take a short knowledge course and spent 3 weeks of intensive training at their resident training grounds.

!\Tational Schools are GI Approved.

Approved by Commission on Adult Education.

Approved by the Immigration and Naturalization Department of the Justice Department.

National Schools of Construction, Inc. Offces in Milwaukee, 'Visconsin- Charlotte, N ortb Carolina.

Students learn by Doing-Photos taken at our Training Grounds. We wil train you to become a heavy equipment operator or field mechanic. Our huge proving grounds are staffed 'with qualified instructors * '" * Write now.

National School of Construction, Iuc.

10852 'Visconsiu Ave., :tIilwaukee Wisconsin. Printed seals used by respondents on their agreements, etc., contain the following wording:

Carolinas Branch AGC Associl-te ::lembel' Liccnsed By State Dept.

Of Public Instruction American Road Builders Assn.

R B J902 PAR. 5. Through t.he use of the aforesaid statements and representations, and others of similar inlport not specifically set forth herein ,with respect to their courses of instruction in the operation and maintenance of heavy equipment, respondents represent and have represented, directly or by implication, that: 1. Respondents offer employment in the operation of construction equipment including tractors, scrapers, hTraclers, buJJdozcrs, and other earth movjng equipment.

2. The.re is a shortage of heavy equipment operators .and men lte needed everYTi'here to operate construction equipment, and that purchasers of respondents' courses ,Will secure employment as heavy machine operators.

3. Respondents' courses provide aU the necessary inst.ruction and experience to qualify persons ,, ho complete the. courses for immediate employment as operat.ors of heavy construction equipment. THE :-TATIOKAL SCHOOL OF CONSTRrCTION, INC. , ET AL. 111 107 Complaint 4. Completion of respondents' courses "\vill ,assure purchasers thereof of earnings of up to $10 000 yearly, or $7 000 to $10 000 without working in the winter, or high pay as an operator of earth moving equipU1ent.

5. Respondents will aid in finaneing t.he training of persons who purchase their courses.

6. Respondents' school is GI Approved, approved by the Commission on .Adult Education and by the Bureau of Immigration and N aturaJization of the. Department of Justice. 7. Respondents' school is licensed by the Korth Carolina State Department of Public Instruction; is an associat.e member of the Associated General Contractors of America and of the American Road Builders Association.

8. Respondents operate more than one school, with branches in several locations.

9. Respondents own facilities for practical training and students will be trained at the school's proving grounds. In soliciting the s de or said courses, respondents' sa.lesmell repeat in substance the statmnents made in the foregoing advertisements and scripts, and in addition represent, directly or by implication, that: 1. Stndpnts will be placed in jobs or t.their names furnished to companies or others needing heavy equipment operators. 2. Persons who purchase and complete said courses win earn $9 000 to S15 OOO yearly, ;1. minimum of 8165.00 a week, or from $7 000 to 000 a year 'ivithout working during the winter. 3. Purchasers or the courses will receive from 80 to 220 hours of practice on heavy equipment.

PAR. 6. The aforesaid statements a,nd representations are grossly exaggerated, raise, misleading and deceptive. In truth and in fact: 1. Respondents do not offer employment. Their sole purpose in advertising is to interest prospects in purchasing their said courses of instrudion.

2. There is no shortage of heavy equipment operators in many areas of the United States, and purchasers of respondents' eonrses arc not assured of securing employment as heavy equipment operators. 3. Respondents' courses do not provide all the necessary instrudion and expcrienc.e to qualiry persons who complete the courses for i1nmediate employment as operators of heavy const.ruction equipment. 4. Completion of respondents' courses will not assure the purchasers thereof earning up to $10 000 or high pay as an operator of heavy equipment, and in most instances will not assure any such employment.

112 FEDERAL TRADE COMMISSIO!\T DECISIOKS Complaint 60 P.

5. Respondents do not aid in financing the training of persons who purchase their c.nurses.

6. Respondents' school is not GI Approved, nor approved by the Commission of Adult Education or the Bureau of Immigration and aturalization of the Department of Justice. 7. Respondents' school is not licensed by the North Carolina State Department of Public Instruction, is not an associate member of the Associated General Contractors of America nor of the American Road Builders Association.

8. R.respondents operate only one school, the residence school in Iil"Waukee, and have no other branches.

9. Respondent.'i do not own any facilities for practical training or training growlds. Purchasers of their courses are trained by other schools, under contract, which are not owned by or affiated with respondents.

10. Respondents do not place students or purchasers of their courses in jobs, nor do they furnish such persons with the names of contractors: or others who will employ them.

11. Persons who purchase and complete respondents' courses do not earn from $0 000 to $15 000 yearly, or a minimum of $165.00 a week nor do they earn from $7 000 to $0 000 a year without working during the winter.

12. Purchasers of respondents' courses do not receive from 80 to 220 hours of practice on heavy equipment.

PAR. 7. At all times lTIentionec1 herein respondents have been, and are, in substantial competition, in commerce, with corporations, firms and individuals also selling and distributing courses of instruction of the same general kind and nature as those sold by respondents. PAR. 8. The use by respondents of the aforesaid false, misleading and deceptive: statements and representations and the acts and practices engaged in by them, as aforesaid, have had, anclnow have, the tendency and capacity to mislead and deceive members of the purchasing public into the erroneous belief that said statements and representations were true and by reason of said erroneous and mistaken belief to induce the purchase of respondents' said courses of instruction. PAR. 9. The aforesaid acts and practices of respondents, as herein alleged, were, and are, all to the prejudice and the injury of the public and of respondents' competitors and constituted, and nm"\ constitute unfair 11lethocls of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5(a) (1) of the Federal Trade Commission Act.

THE :\ATIONAL SCHOOL OF Construction, INC. , ET AL. 113 107 Decision and Order DECJSIO AXD ORDER The Commission having heretofore determined to issue its com,. plaint charging the respondents named in thb caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a. proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an f1cl1nission by respondents that the jaw has been violated as set forth in the complaint, and waivers and provisions as required by the Commssion s rules; and The COlIDnission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional iindings, and enters the following order:

1. Hesponclent The National School of Construction, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of vVisconsin, with its offce and principal place of business located at 10852 west vVisconsin Avenue, in the city of cvIiwaukce, State of vVisconsin.

Hespondents Raymond F. vVatt and Richard Kolpin are offccrs of said corporation, and their address is the same as that of said corporation.

Respondent James Haig Advertising is a corporation organized existing and doing business under and by virtue of the laws of the State of ",Visconsin, with its offce and principal place of business located at 3707 North 02nd Street, in the city of Milwaukee, State of \Visconsin.

Respondent anles Haig is an offcer of. corporate respondent James I-Iaig Advertising, and his address is the same as that of said corporation.

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 orde?' That The National School of Construction, Inc. , a ,corporation, and its offcers, and respondents Raymond F. Watt and Decision and Order 60 F.

Richard Kolpin, individually and as offcers of said corporation; and James Haig Advertising, a corporation, and Hg offcers, a.nd James I-Iaig, individual.ly and as an offcer of said corporation, and respond ents' representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution in eommcrce., as "commerce" is defined in the Federal Trade Commission Act, of courses of instruction in the operation and maintenance of heavy construction equipment, or any other courses of instruction containing substantially the same material, do forthwith cease and desist from representing, directly or by implication that:

1. Respondents offer employment in the operation of construction or earth moving equipment.

2. There is a shortage of heavy equipment operators or that men are now needed everywhere to operate const.ruction equipment. 3. Persons -who purchase and complete said courses of inst.rnetion will find employment as heavy machi.ne operators or operators of construction equipment.

4. Said courses provide the necessary instruction and experience to secure immediate employment. as operators of hen.vy construction equipment.

5. Persons who have completed said courses win be able to earn from $7 000 to $15 000 a year, or $165.00 a week, or any amount in excess of the amount that is usually and customarily earned by said persons.

6. H,esponclents win finance or assist in financing the training of persons "\ho purchase their courses.

7. Jiespondents' school is GI Approved, or approved by the Commission of Adult Education or by the Bureau of Immigration and Naturalization of the Depart.ment of .Justice, or by any other agency of the 1Jnited States Government.

8. R.respondents' school is licensed by the North Carolina State Department of Public Inst.ruction, or is an associate member of the Assoeiated General Contractors of America. or of the American Road Builders Association.

9. Respondents operate Inore than one school or have branches in several locations.

10. Respondents own facilities for practical t.training or that students will be trained on proving grounds owned by the respondents. 11. Respondent.s will place persons who complete said courses in jobs or furnish the names of contractors or others 'idle will employ sa.jd persons.

, RICHARDSON-MERRELL, INC. , ETC. 115 107 Complaint 12. Purchasers of respondents' courses will receive from 80 to 220 hours of actmll practice on heavy equipment, or any number of hours in excess of the number of hours actually given in the operation of such equipment.

It i8 further ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting fort.h in detail the manner and form in which they have complied with this order.