Madison Mills, Inc

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IN THE MATTER OF MADISON MILLS, INCORPORATED COMPLAINT (SYNOPSIS), FINDINGS, AND ORDER IN REGARD TO THill ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1999. Complaint, Jan. 23, 1932-Decision, Jan. 24, 1933 Where a corporation engaged in sale of cotton, and cotton and rayon, men's shirts to consuming public through house-to-house solicitors, set forth upon same)le swatch cards for customers' selection, the words "Satin Ribbed lladioux Shirts", "Satin Striped Broadcloth Shirts", and "Normandy Flannel Shirts", notwithstanding fact that the garments supplied in response to selections thus invited, were not composed of fabrics striped or ribbed with silk woven in the satin weave, or made entirely of wool with nap surface, as understood by trade and public from the words employed; with tendency and capacity to mislead and deceive public and induce pur· chase of said shirts as and for garments composed of silk or wool, as above set forth, and divert trade to it to the injury of competitors engaged in the sale of accurately labeled and advertised shirts made of cotton, silk, or wool, as the case might be:

Held, That such practices, under the circumstances set forth, constituted unfair methods of competition.

Mr. Henry 0. Lank for the Commission.

SYNOPSIS OF Complaint Reciting its action in the public interest, pursuant to the provi· sions of the Federal Trade Commission Act, the Commission charged respondent, a New York corporation engaged in the sale of men's shirts and other garments to the purchasing and consuming public throughout the United States, through numerous salesmen, agents, and house-to-house canvassers, through sales promotional literature such as letters, leaflets, sample cards, etc., and through advertisements in newspapers and similar publications of general circulation, and with principal office and place of business in New York City, with misrepresenting product as to composition or source or origin, and advertising falsely or misleadingly in said respects, in violation of the provisions of section 5 of such act, prohibiting the use of unfair methods of competition in interstate commerce. Respondent, as charged, engaged as aforesaid for more than two Years last past has advertised, offered, and sold shirts dealt in by it, and made in the United States of cotton and rayon also there Inade, under the designations "Satin Striped Broadcloth Shirts "; "Satin Ribbed Radioux Shirts"; Navarre Flannel Shirts "; and "English Broadcloth Shirts", respectively, notwithstanding the fact Complaint 17F.T.C. that the shirts referred to by the first two aforesaid designations contained no satin or silk, the so-called " Navarre Flannel Shirts " contained no wool, and the " English Broadcloth Shirts " contained no English broadcloth or fabric made in or imported from England.1 Respondent's aforesaid "advertising, describing, representing, offering for sale and selling the said respective shirts as Satin Striped Broadcloth Shirts, Satin Ribbed Radioux Shirts, Navarre Flannel Shirts, and English Broadcloth Shirts, * * * are false, misleading, and deceptive, are and have been calculated, and have and had the capacity and tendency, to mislead and deceive large or substantial numbers of the purchasing and consuming public into purchasing said garments in the erroneous beliefs that (a) said so-called Satin Striped Broadcloth Shirts and Satin Ribbed Radioux Shirts contain silk and satin; (b) that said so-called Navarre Flannel Shirts are made of flannel and contain wool; and (c) that said so-called English Broadcloth Shirts are made of broadcloth manufactured in or imported from England."

Respondent further, as charged, in advertising, representing, describing, offering and selling its said merchandise to the purchasing and consuming public, has caused and still causes, divers and sundry other false statements, representations, and assertions to be made of and concerning its shirts and the fabric from which they are composed, to the effect that certain of said shirts contain silk or satin, or wool and flannel, or are made of fabrics or cloth made in or imported from England, as the case may be; with the effect of misleading and deceiving members of the purchasing and consuming public into buying said garments in an erroneous belief in the truth of such representations, statements and assertions. Use by respondent, as charged, of such "false, misleading, and deceptive representations, statements, and assertions as hereinabove set forth constitutes practices or methods of competition which tend to and do (a) prejudice and injure the public, (b) unfairly divert trade from and otherwise prejudice and injure respondent's competitors", many of whom sell and distribute shirts and other garments without misrepresenting the same and the fabrics and cloth of which they are composed, "and (c) operate as a restraint upon and a detriment to the freedom of fair and legitimate competition in the business of the marketing of shirts ", and " said false, misleading and deceptive acts, practices and methods of respondent, under the circumstances and conditions hereinabove alleged, are unlawful 1 .As alleged In the complaint, "the said word 1 satin 1 and the word 1 flannel' as usetl by respondent in the designation, description, and representation of its shirts as herein· above set forth, are, to the- purcbnslng and consuming public, Indicative of a silk or wool oontent of the fnbrlc or cloth and mean. respectively, silk and wool." MADISON MILLS, INC. 203 201 Findings and constitute unfair methods of competition in commerce within the intent and meaning of section 5 ".

Upon the foregoing complaint, the Commission made the following REPORT, FINDINGS AS TO THE FACTS, AND Onder Pursuant to the provisions of an act of Congress approved September 26, 1914, entitled ''An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission issued and served a complaint upon the respondent, Madison Mills, Inc., a corporation, charging said respondent with the use of unfair methods of competition in inter- &tate commerce in violation of the provisions of the said act. Respondent filed its answer to the said complaint and hearings were had before an examiner of the Commission theretofore duly appointed and testimony was heard and evidence received in support of the charges stated in the complaint. The respondent offered 110 testimony or evidence in opposition to the said complaint. Thereupon this proceeding came on for final hearing on the brief of the Commission and oral argument of counsel for the Commis· sian, respondent having been duly notified and not having filed any brief and not having appeared to present oral argument. The Commission, having duly considered the record and being fully advised jn the premises, makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO TIIE FACTS PAR.\GRAPH 1. The respondent, Madison Mills, Inc., is a corporation organized and existing under and by virture of the laws of the State of New York, with its principal place of business in the city of New York, in said State. It is now and for several years last past has been engaged in the business of selling men's shirts and other articles of wearing apparel to the consuming public located throughout the different States of the United States. In the course of its said business respondent was and still is in competition with other corporations, partnerships, and individuals engaged in selling in interstate commerce to consumers and to the trade men's shirts and similar articles of wearing apparel.

PAR. 2. The respondent employs representatives located throughout the different States of the United States, who go from house to house soliciting and accepting orders for its said shirts and other articles of wearing apparel. In response to orders taken by its Findings 17 F.T.C. representatives, respondent ships its said products from its place of business in the city of New York to the purchasers thereof located throughout the different States of the United States or to its repre· sentatives, who deliver said products to the purchasers thereof. PAR. 3. In the course of its aforesaid business the respondent is· sued to its representatives for use in soliciting orders of its said products sample outfits including swatch cards to which are at. tached samples of materials out of whuch respondent's shirts are made. These swatch cards are shown and displayed by respondent's representatives to prospective buyers of shirts who examine said sample materials and make such selections as they desire. PAR. 4. The respondent caused to be printed and represented on said swatch cards to which samples of material are attached the words "Satin Ribbed Radioux Shirts", "Satin Striped Broadcloth Shirts", and" Normandy Flannel Shirts". The content of the said sample material represented as "Satin Ribbed Radioux Shirts" and "Satin Striped Broadcloth Shirts" was cotton with a rayon stripe or rib. The content of the sample materials represented as " Nor· mandy Flannel Shirts " was all cotton.

PAR. 5. The trade and the consuming public understand the word "Satin", when unqualified without reference to content, to indicate an all silk fabric woven in the satin weave, i.e., made of a thick close texture and overshot woof having a glossy surface. The terms " Satin Ribbed Radioux Shirts " and " Satin Striped Broadcloth Shirts " are understood by the trade and the consuming public to indicate shirts containing a stripe or rib of silk woven in the satin weave. The trade and the consuming public understand the word "Flannel" and the words" Normandy Flannel" to indicate a woolen fabric with a nap surface.

PAR. 6. The representations " Satin Ribbed Radioux Shirts " and "Satin Striped Broadcloth Shirts" on said cards to which was attached shirt materials composed of cotton with a rayon stripe had the tendency and capacity to deceive the public into purchasing respondent's shirts under the belief that such shirts were made out of fabrics containing a stripe or rib of satin content. The representation "Normandy Flannel Shirts" on said cards to which was attached shirt materials composed of cotton had the tendency and capacity to mislead and deceive the public into purchasing respondent's shirts under the belief that such shirts were made of flannel. The term "Normandy Flannel " used by the respondent, in connection with the sale of cotton shirts, a combination of the name of a wool fabric and the name of a section in France noted for producing such fabric, is strongly misleading and deceptive. MADISON MILLS, INC, 205 201 Order PAR. 7. Respondent's aforesaid shirts have been sold by it under the above-mentioned representations in competition with shirts made of cotton and sold under labels indicating that fact; in competition with shirts made of silk under labels indicating that fact, and in competition with shirts made of wool and sold under labels indicating that fact. The use by the respondent of the terms "Satin Ribbed Radioux Shirts", "Satin Striped Broadcloth Shirts" and " Normandy Flannel " to designate and describe shirts made of cotton or cotton with a rayon stripe or rib had the tendency and capacity to mislead and deceive the public and to divert trade to the respondent to the injury of respondent's said competitors engaged in selling shirts accurately labeled and advertised. CONCLUSION The practices and methods of competition of said respondent, under the conditions and circumstances described in the foregoing findings, are unfair methods of competition in interstate commerce and constitute a violation of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondent and the testimony and evidence taken, and the brief and oral argument of counsel for the Commission, and the Commission having made its findings as to the facts and conclusion that the respondent has violated the provisions of an act of Congress approved September 26, 1914, entitled "An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes ", It is now ordered, That the respondent, Madison Mills, Inc., its officers, agents, representatives, and employees do cease and desist from- (1) Employing or using directly or indirectly on swatch cards, labels, or in advertising, or otherwise, in connection with the sale in interstate commerce of shirts or other wearing apparel composed of cotton with rayon stripes or ribs, the words "Satin Ribbed Radioux Shirts " or "Satin Striped Broadcloth Shirts ", unless there be added in letters equally conspicuous and on the same side of the swatch card, label or advertising matter on which said words appear, the words" Rayon Order 17F.T.C.

Satin Ribbed Radioux Shirts", "Rayon Striped Broadcloth Shirts " or equivalent modifying terms.

{2) Employing or using directly or indirectly on swatch cards, labels, or in advertising, or otherwise, in connection with the sale in interstate commerce of shirts or other wearing apparel composed of cotton, the words " Normandy Flannel " or the word "Flannel."

It is further ordered, That the said respondent within 60 days after date of service upon it of this order shall file with the Commission a report in writing setting forth in detail the manner and form in which it is complying and has complied with the order to cease and desist hereinabove set forth.

NATIONAL IMPORTING CO. 207 Complaint