Granite Arts, Inc

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IN THE MATTER OF GRANITE ARTS, INC.

'COMPLAI~T. FINDINGS, AND ORDER IN REGARD TO THE< ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CO~GRESS APPROVED SEPT. 26, 1914 Doclcet 2610. Complaint, Nov. 2, 1935-Decision, Feb. 16, 1931 Where a corporation engaged in manufacture of monuments, tombstones and graye markers, through mixing granite chips or powder with cement and molding same into cast stone, and in the sale of its said products, which simulated in appearance and were used as a substitute for granted; in a(l\·ertising its said products in farm papers of interstate circulation and through descriptive circulars mailed to prospectiye purchasers- (a) Represented its said monuments, etc., as "Victoria Granite" and featured the corporate nnd trade name adopted by it, In which were Included words '"Granite Arts," in its said advertising and in correspondence with customers and prospective customers, and caused its address in said newspaper ad,·ertisements to appear ns "Graniteway, Omaha," and represented that Its said products constituted "A Permanent Lasting Tribute of Love aud Respect," and that "Our 1\lcmorials Will Endure Far into the Centuries," facts being it did not make any prouucts from true granite, almost everlasting solid rock formation of great strength, etc., and known universally as a substance from which tombstones, monuments, and grave markers have long been made, and of which Victoria Granite Is an old established type and well-known to trade, aforesaid address was purely fictitious, and ufot·esald representations were otherwise false; (b) llept·esented, in its advertising matter, that its memorials were standardized to dimensions which had the official approval of practically every cemetery in the United States, facts being many such cemeteries have rules and rt•gulations prohibiting any such markers, exceping those made of granite, bt"Ouze, or marble, and do not allow cast stone monuments, etc., to be plnced ti-en~in, and such representations were false; and (c) Mailed circulars to prospective purchasers offering discount of 10% for ten d<lys only from price listed in circulars, and sent, thereafter, to such prospects who did not reply, card, nt end of such period, offering 20% discount, and third card thereafter to non-replying customers offering 30%, facts being price thus finally arrived at was not a special one for Its products, but was regular and usual price at which it sold the same; With effect of misleading purchasing public into false and erroneous belief that said rept·esentations were true, and into purchase of substantial quantities of its products on account of such belief, thus induceu, and of unfairly diverting trade to It from competitors who did not make use of same or similar represent>ttlons in manufacture, sale and distribution of aforesaid products; to the injury of competition in commerce: licld, That such acts and practices were to the prejudice and injury of the public and competitors and constituted unfair methods of competition. Before llfr. lV. lV. Sheppard, trial examiner. Mr. Morton Nesmith for the Commission.

698 FEDERAL TRADE COl\!1\IISSION DECISIONS Complaint 24 F. T.C. COMPLAINT 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, having reason to believe that Granite Arts, Inc., a corporation, hereinafter referred to as respondent, has been and now is using unfair methods of competition in commercet as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, states its charges in that respect as follows: PARAGRAPH 1. The respondent, Granite Arts, Inc., is a corporation,. organized, existing, and doing business under and by virtue of the laws of the State: of Nebraska, with its principal place of business at 1909 Leavenworth Street in the city of Omaha, State of Nebraska- It is now, and has been for several years last past,' engaged in the business of manufacturing and selling cast stones which are used as monuments, tombstones, and grave markers. Said product is· designed as and used as a substitute for granite, which it simulates· in appearance. Its process of manufacture is that of mixing gmnite chips or powder with a cement mix, which is cemented sand. Respondent causes said product, when sold, to be transported from its principal place of business into and through numerous States of the United States other than the State of Nebraska, to the purchasers thereof at their respective points of location. PAn. 2. In the course and conduct of its business as aforesaid, respondent is in competition with other individuals, partnerships, and corporations engaged in the manufacture, sale, and distribution of granite monuments, tombstones, and grave markers, in commerce between and among the various States or the United States. PAR. 3. In the course and conduct of its business as aforesaid, respondent, in soliciting the sale of and selling its products in interstate commerce:

1. In advertisements and advertising matter describes its products as "Victoria Granite";

2. Adopted as and for a corporate and trade name under which to carry on its said business, the words "Granite Arts, Inc.," and used and displayed same in its advertising matter and in correspondence with customers and prospective customers in the various Statrs of the United States; and caused in its newspaper advertisements the address "Graniteway, Omaha," to appear;

GRANITE ARTS, INC. 699 697 Complaint 3. Described its product as "A Permanent, Lasting Tribute of Love. and Respect," and "Our :Memorials ·wm Endure Far Into The Centuries"· 4. Represented' in its advertising matter that their memorials are. standardized to dimensions which have official approval of practically every cemetery in the United States; ancl 5. Mailed to prospective purchasers circulars offering a discount of 10% from the price listed in such circulars, and in other cases offered them a discount of 20% from such prices, and in certain cases, when the person circularized. made further inquiry but did not purchase, offered them a special discount of 30% from the list prices. PAR. 4. In truth and in fact :

1. The products which said corporation manufactures, sells, and distributes are not composed of natural stone or granite, but are manufactured by said corporation from cement and other ingredients; 2. The address of said corporation, "Graniteway, Omaha," given in its advertisements, is a fictitious address and one having the tendency and capacity to add to the deception caused by its misuse of the Word "granite," as like\vise is the corporate name of respondent, "Granite Arts, Inc.";

3. Said products are not permanent, nor will they endure for centuries;

4. Respondent's memorials do not have the official approval of practically every cemetery in the United States; and 5. The statement and representation that the discount of 10%, 20%, and 30% was a special price, is false and misleading, and the prices so quoted were and are the regular and usual prices at which said corporation sells its said products, all of which has the tendency and capacity to mislead and deceive many among the consuming public into the belief that respondent's said product is granite, and to purchase said product in that belief, and that they are obtaining a special discount in the purchase of said products. PAR. 5. The above alleged acts and things done by respondent are all to the injury and prejudice of the public and to the competitors of respondent in interstate commerce, and constitute unfair methods of competition 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.

700 FEDERAL TRADE COMl\HSSION DF,CISIONS Findings 24F. T. C.

REPORT, FINDINGS AS TO 'IJIE FACTS, AND ORDER 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 second day of November 1935, issued and on the fourth day of November 1935, served its complaint in this proceeding upon respondent Granite Arts, Inc., a corporation, charging it with the use of unfair methods of competition in violation of the provisions of said act. After the issuance of complaint the respondent failed to file answer thereto, and thereafter testimony and other evidence in support of the allegations of said complaint were introduced by Morton Nesmith, attorney for the Commission, before '\V. ,V, Sheppard, an examiner of the Commission theretofore duly designated by it; and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeuing regularly came on for final hearings before the Commission on the said complaint, testimony and other evidence and brief in support of the complaint; respondent having filed no brief though given an opportunity to do so, and the Commission having duly considered the same and being now 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. The respondent Granite Arts, Inc., is a corporation organized and existing under and by virtue of the laws of the State of Nebraska, with its principal office and place of business at 1909 Leavenworth Street in the city of Omaha, State of Nebraska. The respondent was for several years prior to the issuance of the complaint engaged in the business of manufacturing and selling cast stones which were used as monuments, tombstones, and grave markers. The respondent caused these products, when manufactured, to be transported from its place of business in Omaha, Nebr., to purchasers thereof located in the various other States of the United States. In the course and conduct of its business respondent was in competition with other individuals, partnerships, and corporations engaged in the manufacture, sale, and distribution of granite monuments, tombstones, and grave markers in commerce between and among~ the various States of the United States. PAn. 2. Respondent's process of manufacture was that of mixing granite chips or powder with cement and moulding the same into n GRANITE AHTS, INC. 701 697 Findings <'l\st stone. Its products, 'vhcn manufactured, simulated granite in appearance and were used as a substitute for granite. The president of respondent company was one John Afllerbaugh who was the controlliug and majority stockholder of the corporation. It appears that l\Ir. Affierlmugh left his place of business shortly after the issuance of the complaint in this case and his address is unknown and <.:onld not be ascertained after reasonable inquiry was made. The resi)ondent at one time maintained an agent in Sioux City, Iowa, which agent made sales of respondent's products under the name "Sioux City Granite Arts Company."

PAn. 3. The respondent, in soliciting sale of and selling its product in commerce, as herein described, advertised its products in farm Papt>rs having an interstate circulation and mailed to prospective Purchasers circulars descriptive of its products. In these advertiselllents respondent advertised and represented its products as "Victoria Granite." Respondent also adopted and used as its corporate and trade name "Granite Arts, Inc." which name was conspicuously dis- Played in all of its advertising matter and its correspondence with customers and prospective customers in the various States of the Dnited States. Respondent also caused its address in certain news- Paper advertisements having an interstate circulation to appear as ~'Graniteway, Omaha." Respondent further represented in its ad- ''ertising matter that its memorials were standardized to the dimen- ~ions ''which have the official approval of practically every cemetery 11l the United States; and further, respondent mailed to prospective l~urchasers circulars offering a discount of 10% for ten days only, hom the prices listed in said circulars, and at the end of said ten days respondent sent to said prospective buyers another card offering a 20% discount, and if the customer did not respond, a third card ~Yas. sent offering a 30% discount. Respondent further represented h1 lts advertising matter that its products were "A Permanent Lasting 1'rihute of Love and Respect," and "Our l\femorials 'Will Endure Par into the Centuries."

PAR. 4. Granite is a solid rock formation composed of quartz, feldspar and mica of great strength, almost everlasting, and takes an excellent polish. It is unive.rsally known as a substance from which tombstones, monuments and grave markers have been made for many Years. Granite is taken from quarries in various sections of the country by a mechanical prod'ss and subsequently cut and manufactured into stone markers and tombstones. Respondent's monuments, tombstones and grave markers are not composed of natural granite ()r stone but are made entirely of granite chips and other materi1tl 1467:iflm-39-vol. 24-47 702 FEDERAL TRADE COl\11\IISSJON DECISIONS Conclmdon 24 F. T. C. mixed with cement. Respondent does not manufacture any products· from true granite. Uespondent's products therefore will deteriorate and disintegrate in time and are not permanent, lasting memorials nor will they endure far into the centuries. Respondent's products are not standardized to dimensions which have official approval of cemeteries throughout the United States. On the contrary there aremany cemeteries throughout the United States that do not allow ca.-;t stone monuments, tombstones, and grave markers to be placed therein. These cemeteries have rules and regulations prohibiting any such markers except those made of granite, bronze, or marble. Victoritt granite is a type of real granite which is quarried in the State of :Massachusetts and is an old. established type taken from old established quarries and is well known to the trade. Graniteway, Omahar is a purely fictitious address. There is no post-office known as: "Graniteway, Omaha, Nebraska." The statements and representations of respondent as to allowing first a 10% discount followed by a 20% discount and that followed by a 30% discount was not a special price for respondent's products but was the regular and usual price at which the respondent sold its monuments, tombstones, and gTa,·e markers.

PAn. 5. The aforesaid false and misleading statements and representations used by the respondent in offering for sale and selling its merchallllise have had a tendency and capacity to and have misled the purchasing public into the false and erroneous belief that said representations are true and into the purchase of substantial quantities of respondent's products on account of said belief so induced. As a result thereof tra.de has been unfairly diverted to respondent from competitors in commerce as herein set out who did not make use of the same or similar representations in the manufacture, sale and distribution of tombstones, monuments, and grave markers, all to the injury of competition in commerce among and between the various States of the United States and in the District of Columbia.

CONCLUSION The aforesaid acts and practices of the respondent, Grunite Arts, Inc., a corporation, are to the prejudice of the public and of respondent's competitors, and constitute unfair nwtho1ls of competition in commerce, within the intent a.nd meaning of Section 5 of an ...\.ct of Congress approved September 2G, 1914, entitle1l "An .Ad to create a Federal Trade Commission, to define its powers anll duties, and for other purposes."

GRANITE ARTS, INC. 703 (}97 Order ORUI-:R TO CEASE AND DESTST This proceeding having been heard by the Federal Trade Cummission upon the complaint of the Commission, testimony and other evidence taken before ,V. ,V. Sheppard, an examiner of the Commission theretofore duly designated by it, in support of the allegations of said complaint and brief on behalf of the Commission filed herein by Morton Nesmith, counsel for the Commission, 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, aJHl for other purposes."

. It is ordered, That the respondent, Granite Arts, Inc., a corporation, its officers, representatives, agents, and employees, in connection With the offering for sale, sale, and distribution of cast stone monuments, tombstones, and grave markers in interstate commerce or in the District of Columbia, do forthwith cease and desist from 1'l'presentin 0()' :

1. That its cast stone monuments, tombstones, anl gmve markers are granite;

2. Through usc of any corporate or trade name containing the Word "Granite" or through the use of any other words or phrases containing the word "Granite," alone or in conjunction with any other word or words, or tin·ough any other means, that its cast stone •nonuments, tombstones, and grave markers are granite; 3, That its monuments, tombstones, and grave markers are stnndllt•dized to dimensions which have the official approval of practically every cemetery in the United States, when such is not the fa('t; 4. That its cast stone products are permanent or lasting, or that they will endure fur into the centuries;

l 5. That the prices at which said cast stone products are offered o~· sale and sold are other than its regular and customary retail Ptlccs unless an aetna I discount from its customary retail prices is 01feretl· th 6· ':that' pri<'es at which it sells its cast stone products are other an 1ts custolllnry retail prices, when such is not the fact. It is further ordered, That the respondent shall, within 60 days aft~~ service upon it of this order, file with the Commission a report in ~l'ltmg, setting forth in detail the mnmll'r nnd form in which it as complied1l with the order.

CO.!IIMISSIO~ DECISWNS704 FEDERAL TRADE Syllabn!'l