National Remedy Company

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IN THE MATI'ER OF NATIONAL REMEDY COMPANY COMPLAINT AND ORDER IN REGARD TO THE ALLEGED VIOLA'I.'ION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2136. Complaint, Dec. 13, 1933-order, Sept. 5, 1935 Consent order requiring respondent corporation, its officers, etc., in connection with the sale in interstate commerce of its preparation known as "Japanese Oil" or "En-Ar-Co Japanese (style) Oil" or substantially the same -preparation under any other name, to cease and desist from representing that such preparation is a cure or adequate treatment for sore throat, colds, or congestion connected therewith, or for congestion, aches and pains, rheumatism, neuralgia, neuritis, or stiff joints, or for baldness or dandruff, or that it will cause new hair to grow, subject to the proviso, however, that nothing contained in such order shall be construed to prevent respondent from representing that said preparation is beneficial in the treatment of minor throat and bronchial irritations, or that it is beneficial in the treatment of sprains, stiffness and muscular aches and soreness due to fatigue and exposure, or that it is beneficial in the treatment of simple neuralgia, or that it is beneficial for removing loose dandruff by its cleansing effect upon the scalp, or that It is beneficial to the scalp and hair by aiding the superficial circulation. Mr. Harry D. Michael for the Commission.

Brashears, Townsend, O'Brien & Beasley, of Washington, D. C., and Mr. Frederic Damrau,, of New York City, for respondent. Complaint Acting in the public interest, pursuant to the provisions of an Act of Congress approved September 26, 1914, e:ntitled "An Act to create a Federal Trade Commission; to define its powers and duties, and for other purposes", the Federal Trade Commission charges that National Remedy Company has been and is using unfair methods of competition in interstate commerce in violation of the provisions of Section 5 of said Act, and states its charges as follows: PARAGRAPH 1. That said respondent, National Remedy Company, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York and has its office and principal place of business in the city of New York in said State. PAR. 2. That said respondent is now and has been engaged for more than ten years last past in the sale and distribution in interstate commerce of a preparation known and described as "Japanese Oil" or "En-Ar-Co Japanese (style) Oil", which said preparation respondent causes to be transported in interstate commerce from its Complaint 21F.T. C.

said place of business in New York to, into, and through States o£ the United States other than New York to persons, firms, and corporations to whom or to which it is or has been sold. That respondent generally sells its said preparation to wholesale and retail druggists and to other dealers for ultimate resale to members of the public in the various States where said product is ultimately sold. PAR. 3. That during the time above mentioned other individuals, firms, and corporations in the various States of the United States are and have been engaged in the sale and distribution in interstate commerce of preparations similar in kind to that of respondent and also of other preparations adapted to and used for the purposes for which respondent's preparation is recommended to be used in the advertising matter hereinafter referred to, and such other individuals, firms, and corporations have caused and do now cause their said preparations, 'vhen sold by them, to be transported from various States of the United States to, into, and through States other than the State of the origin of the shipment thereof. Said respondent has been, during the aforesaid time, in competition in interstate commerce in the sale of its said preparation with such other individuals, firms, and corporations.

PAR. 4. Respondent, in advertising its said preparation, causes advertisements to be inserted in newspapers and other publications circulated to the purchasing public in the various States of the United States which represent or imply that "Japanese Oil" is a cure or a competent and adequate treatment for sore throat, chest colds, and congestion, baldness, dandruff, aches and pains, rheumatism, neuralgia, neuritis, and stiff joints, and that said preparation will cause new hair to grow. Among such representations made by respondent and contained in such advertisements referring to said preparation are the following:

Quick relief, sore throat ... Japanese Oil rubbed on sore throat gives quick relief. For chest colds, congestion, rub in vigot·ously. Getting bald? You can gt·ow new hair.

Getting bald? Troubled with dandruff? Ask your druggist for free booklet, "The Truth About Hair" wllich tells how Japanese Oil . , . can overcome these conditions. Prevent baldness tlle way others do.

Aches and pains-Quick relief with Japanese 011 . . . . For rheumatism, neuralgia, neuritis, , .. stiff joints .•• PA~. 5. That in truth and in fact, said preparation is not a coi~­ petent and adequate treatment for sore throat, colds, or congestion connected therewith generally, but is adapted to the treatment of minor throat and bronchial irritations only; that it is not a competent and adequate treatment for congestion, aches and pains, NATIONAL REMEDY CO. 255 253 Order rheumatism, neuralgia., neuritis, or stiff joints, but is adapted to the treatment of simple neuralgia only; tha.t said preparation is not a competent and adequate treatment for baldness or dandruff and the use of the same will not cause new hair to grow. That all of ~aid statements, representations and implications a.re either not true and wholly beyond the therapeutic effects of said preparation or are greatly exaggerated and grossly inaccurate. PAR. 6. That the representations of respondent, as aforesaid, have had and do have the tendency and capacity to confuse, mislead, and. deceive members of the public into the belief that respondent's said preparation is a cure or a competent and adequate treatment for sore throat, chest colds and congestion, baldness, dandruff, aches and pains, rheumatism, neuralgia, neuritis, and stiff joints, and that it will cause new hair to grow when in truth and in fact such are not the facts, or only to a limited extent. That said representations of respondent have had and do have tendency and capacity to induce members of the public to buy and use said preparation because of the erroneous beliefs engendered as above set forth, and to divert trade to respondent from competitors engaged in the sale in interstate commerce of preparations adapted to the treatment of the ailments above mentioned.

PAR. 7. The above acts and things done by respondent are all to the injury and prejudice of the public and the competitors of respondent in interstate commerce within the intent ·and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", approved September 26, 1914.

ORDER TO CEASE AND DESIST 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, on the 13th day of December 1933, issued its complaint against National Remedy Company, a corporation, respondent herein, and caused the same to be served upon respondent as required by law, in which complaint it is charged that respondent has been and is using unfair methods of competition in interstate commerce in violation of the provisions of Section 5 of said Act.

On January 18, 1934, said respondent filed herein an answer in writing to said complaint. Subsequently, said respondent filed herein a petition to withdraw its said answer and asking that a new answer 1136a3m--38--vol.21----19 Order 21 F. T. C. therewith submitted be filed in lieu thereof, which said petition was granted by the Commission and said new answer was accordingly filed. By said new answer respondent elected to refrain from con· testing this proceeding and consented to the issuance of an order to cease and desist from the practices set forth in the complaint herein. Thereafter this proceeding came on regularly for disposition and decision by the Commission under subdivision (b) of Rule V of the Rules of Practice and Procedure adopted by the Commission, and the Commission being fully advised in the premises- It is (YI'aered, That respondent, National Remedy Company, its officers, directors, agents, representatives, servants, and employees, in connection with the sale, offering for sale, or distribution in interstate commerce and the District of Columbia of its prepara· tion known and described as "Japanese Oil" or "En-Ar-Co Japanese (style) Oil", or of a preparation of the same or substantially the same composition under any other name or names, cease and desist from representing by any statement or statements or other methods which represent or imply that such preparation is a cure, remedyr or competent and adequate treatment for sore throat, colds, or congestion connected therewith, or for congestion, aches and pains, rheu· matism, neuralgia, . neuritis, or stiff joints, or for ·baldness or dandruff, or that it will cause new hair to grow. Provided, however, That nothing contained in this order shall be construed to prevent respondent from representing that said prepa· ration is beneficial in the treatment of minor throat and bronchial irritations, or that it is beneficial in the treatment of sprains, stiffness, and muscular aches and soreness due to fatigue and exposurer or that it is beneficial in the treatment of simple neuralgia, or that it is beneficial for removing loose dandruff by its cleansing effect upon the scalp, or that it is beneficial to the scalp and hair by aiding the superficial circulation.

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

tyr-FYTER CO. ET AL. 257 Complaint