Best & Company

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IN THE MATI'ER OF BEST & COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2359. Complaint, Apr. 11, 1935-Decision, Feb. 19, 1936 Where a corporation engaged in the sale and distribution of a general line of merchandise Including women's hats, made use of words "Toyo Panama" and "Panama", in newspaper advertising describing and offering certain hats, notwithstanding fact that said products were not the genuine superior Panama hat woven moist in South American countries by natives skilled in the distinctive type of hand weaving concerned, and made of material from the tropical jipljapa or paja toquilla plant, but were made of rice paper and imported from au island of Japan; with capacity and tendency to Induce purchasing public to buy said hats as and for the genuine Panama product and to divert trade unfairly from competitors engaged in the sale of "'toyo" hats, Japanese meaning of which designation is not popularly known or under'3food by purchasing public, and from those engaged in sale of Panama hats, truthfully and rightfully advertised and represented by said competitors: Held, That such practices, under the conditions and circumstances set forth, were all to the injury and prejudice of the public aiJd competitors and constituted unfair methods of competition. Before Mr. William 0. Reeves, trial examiner. Mr. Astor Hogg for the Commission.

Mr. M. J(JJlnes Spitzer of Strauss, Reich & Boyer, of New York City, for respondent.

COMPLAINT Pursuant to the provisions of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission, having reason to believe that Best & Company, a corporation, hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it would be in the public interest, states its charges in that respect as follows:

PARAGRAPH 1. Respondent is, and at all times hereinafter mentioned has been, a corporation duly organized, created, and existing under and by virtue of the laws of the State of New York, with its principal place of business located in the city of New York in the State of New York. It is now, and for a number of years last BEST & CO. 191 190 Complaint past has been, engaged in the sale and distribution of a general line of merchandise, including hats. Its sales are made directly to the purchasing public located throughout the various States of the United States and in the District of Columbia, and pursuant to such sales shipments are made from respondent's place of business in New York, N. Y., into and through various States of the United States other than the State of the point of origin of such shipments, and in the District of Columbia. In so carrying on its said business, respondent maintains a constant current of trade and commerce between the State of New York and other States of the United States. There are in the United States other persons, firms and corporations engaged in the business of selling and distributing a general line of merchandise, including hats, who, pursuant to such sales, ship their products into and through the various States of the United States other than the States of the point of origin of such shipments, and with such other persons, firms and corporations respondent is, and at all times hereinafter mentioned has been, in active and substantial competition.

PAR. 2. In the course and conduct of its business, as described in Paragraph 1 hereof, respondent, in soliciting the sale of and selling certain of its merchandise, namely, hats, causes same to be advertised in newspapers having circulation in the various States of the United States, wherein said hats were represented, designated and referred to by the following language: Get under the shady brim of a Toyo* Panama. Panamas are more talked about than ever this summer because notlllng beats them for chic, cool comfort and V'ersatility. Here are three very new Best versions to wear with print or Pastels in town or at a resort. In white only. Exclusive with Best's. and • Okinawa Toyo, the Best Quality.

As a part of said advertisement there are three pictorial representations of three different styles of hats, and one of them is referred to as "Maria Guy uses a long quill to give this Panama dash." PAn. 3. The word "Panama," when used in connection with hats, llleans to the trade and purchasing public hats imported from Central or South America, made from the leaf of the paja toquilla or jipijapa plant which has been woven by hand while in a saturated condition and then dried in the sun.

PAR. 4. The statements and representations made by respondent in the advertising, as set forth in paragraph 2 hereof, are false and misleading because said hats were not made from the leaves of the paja toquilla or jipijapa plant, or in accordance with the process used in the manufacture of Panama hats, but were manufactured in accord- Findings 22F.T.C.

ance with a process other than that used in the manufacture of Panama hats and from materials other than those of which Panama hats are made.

PAR. 5. There is a preference on the part of many wearers of hats located throughout the United States for Panama hats, and the false and misleading statements and representations used by respondent in aid of the sale of the hats sold and distributed by it as aforesaid had and have the capacity and tendency to induce the purchasing public to purchase and use respondent's hats in the belief that said statements and representations made as to them are true, and had and have the capacity and tendency to unfairly divert trade from competitors of respondent engaged in the sale in interstate com· merce of Panama hats, which said competitors truthfully and honestly advertise and represent their said Panama hats. On account of the aforesaid practices of respondent, substantial injury has been done and is being done by respondent to substantial competition in interstate commerce.

PAR. 6. The acts and things done by the respondent are 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.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress, approved Sep· tember 26, 1914, entitled "An Act to create a Federal Trade Com· mission, to define its powers and duties, and for other purposes", the Federal Trade Commission on April 11, 1935 issued and served its complaint in this proceeding upon respondent Best & Company, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer thereto, testimony and evidence in support of the allegation of said complaint were introduced by Astor Hogg, attorney for the Com· mission, before 'William C. Reeves, an examiner of the Commission theretofore duly designated by it, and in defense of the allegations of the complaint by M. James Spitzer, attorney for the respondent; and said testimony and evidence was duly recorded and filed in the office of the Commission. Thereafter the proceeding regularly came on for final hearing before the Commission on the said complaint, the answer thereto, testimony and evidence, briefs in support of BEST & CO. 193 190 Findings the complaint and in defense thereto, and oral argument of counsel aforesaid; and the Commission having duly considered the same, and being fully advised in the premises, finds that this proceeding is in the interest of the public, and makes this its findings as to the facts, and its conclusion drawn therefrom, FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Best & Company, is a corporation organized, existing, and doing business under and by virtue of tho laws of the State of New York, with its principal office and place of business in the city of New York in said State. For several Years last past respondent has been engaged in the business of selling and distributing a general line of merchandise including hats for women. Sales are made by respondent directly to the purchasing public located throughout the various States of the United States. Respondent causes said merchandise, including women's hats when so sold, to be transported from its place of business in the State of New York, into and through other States of the United States to said vendees at their respective points of location. In the course and conduct of its said business respondent is in active and substantial competition with other corporations and with partnerships, firms, and individuals engaged in the sale and distribution of merchandise, including: women's hats, in commerce between and among the various States of the United States. PAR. 2. In the month of June 1931, respondent, through newspapers having interstate circulation, advertised and offered for sale women's hats made in Japan of rice paper as "Toyo Panama" hats and as ''P aper Panama" hats.

Subsequently in, to wit, the year 1934, respondent in soliciting the sale of and selling its said hats advertised in newspapers having circulation in the various States of the United States certain of its Women's hats .with the following language: Bl!J ST & 00.

Fifth Avenue at 35th Street Garden City Mamaroneck East Orange Brookline Ardmore advises you to Get Under The Shady Brim Of A TOYO• PANAMA Panamas are more talked about than ever this Summ~r because nothing beats them for chic, cool comfort and versat111ty. Here are three very new Best versions to wear with prints or pastels, 1n town or at a resort. In white only. Exclusive with Best's, •okinawa Toyo, the best quality.

(Illustration of ladf's hat.) Findings 22F. T. C. LINEN FACING and band to match your linen coat or dress, on this widebrimmed beauty-17.50 (Illustration of lady's bat) MARIA GUY uses a long quill to give this Panama dash.

Best's copy-15.00 (Illustration of lady's bat) DUNLAP SAILOR with good looking new scoop brim and smart tassel band-11.75 PAR. 3. Panama hats are made from material derived from tropical plants known as jipijapa or paja toquilla. They are woven entirely by hand while in a moist condition, in South American countries, by natives skilled in the distinctive type of weaving, of which such hats are produced. There are various grades of hats made in Japan of rice paper which resemble Panama hats in appearance and type of weave. The correct name of these hats made in Japan, and made of rice paper, is "Toyo", but the purchasing public does not understand the meaning of the word "Toyo" when used in connection with hats. The word "Panama", as applied to hats, carries with it the idea of quality. The superiority of Panama hats over Toyo hats is due to the quality of material from which Panama hats are made. Toyo hats resemble Panama hats to such an extent that the purchasing public cannot readily distinguish between them. The respondent admits by its answer that the hats advertised by it as Toyo Panama hats were not in fact Panama hats, but were hats made of paper and imported from the Island of Okinawa, Japan. PAR. 4. Said statements and representations made by respondent in its advertising as set forth in paragraph 2 hereof, are false and misleading because said hats so advertised were not Panama hats, and were not made from the leaves of the paja toquilla or jipijapa plant, or in accordance with the process used in the manufacture of Panama hats, but on the contrary said hats so advertised and sold were made of rice paper and imported from Japan. Said representations used by respondent in aid of the sale of said hats sold and distributed by it as aforesaid, had and have the capacity and tendency to induce the purchasing public to purchase said hats in the belief that they were in fact Panama hats, when such was not and is not the fact, and said representations in said advertisement had and have the capacity and tendency to unfairly divert trade from competitors of respondent engaged in the sale in interstate commerce of Toyo hats and Panama hats, which said competitors truthfully and rightfully advertise and represent their said hats. BEST & CO. 195 190 Order CONCLUSION The practices of said respondent, under the conditions and circumstances described in the foregoing findings, are all to the injury and prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce in violation of the 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 the respondent, testimony and evidence taken before William C. Reeves, an examiner of the Commission, theretofore duly designated by it, in support of the charges of said complaint and in opposition thereto, briefs filed herein, and oral arguments by Astor Hogg, counsel for the Commission, and M. James Spitzer, counsel for the respondent, and the Commission having made its findings as to the facts and its conclusion that said 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 ordered, that respondent Best & Company, its officers, agents, servants, and employees, in connection with the sale, offering for sale, or distribution of Toyo hats made from rice paper, in interstate commerce, do cease and desist :

(1) From representing or advertising in any manner whatsoever that its "Toyo" hats are "Panama" hats;

. (2) From using the word "Panama", in designating or describing Its said "Toyo" hats, standing alone or in connection or conjunction With any other word or words, so as to import or imply that the said "Toyo" hats are Panama hats;

(3) From representing, designating, or advertising as "Panama" any other hat or hats, unless such hats so designated and advertised are genuine Panama hats, woven by hand in a saturated condition, and made from the leaf of the paja toquilla or the jipajapa plant. It is further ordered, That the respondent shall, within 60 days after the service upon it of this order, file with the Commission a report in writing, setting forth in detail the manner and form in Which it has complied with the order to cease and desist hereinabove set forth.

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