Dollar Crystal Co

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IN THE MATTER OF DOLLAR CUYSTAL COMPANY COMPLAINT, FINDINGS, AND OP.DEI: IN REGARD TO Tile ALLEGED VIOT,ATION OF SEC. I! OF AN ACT OF CONGRESS APPROVED SEPT. 26, l 914 Docket 2919.-Complaint, Sept. 8, 1936-Deeision, Feb. 1U, 1!JJ7 'Vherc a corporation engagt>d in the offer and sale of mineml water crystals lllHler such trade n:.lines ali "Geuuiue 'l'exus l\Iinerol Crystals"llepresented, through radio broadcasts and other-rwise, that drinldug water in which Sllid product had been dissolved would relieve he:Hlaches, nervons- Dt>ss, irtitability, and fatigue, and that such crystals would remove poisouous waste matter that lutd accumulated in the system and the cause of disease and of most human ailments, and inability to eat certain foods, and that they contained essential minerals necessary for good health, and wonltl impart pep and energy and accomplish various beneficial results, lllld were uot a medicine or habit-forming drug, and that dissolving thereof in drinking water produced solution identical with the mineral water as it came from the springi'l, and made H~"~e of ilo-called testimonial letters in its said advertising;

Facts being such letters wt>re used by it without any investigation or knowledge as to whether statements therein were in fact true ot• us to whether writN'S thereof were sufficiently informed in proper diagnosis us to be able accurutely to state facts of use of such product, sole ronstiltwut of which, practlrally, wal the saline laxative and purgative Glauber's Salts, nnd only therapeutic effect of which wail rl'llef of temporary constl{llltlon, many ot. symptoms and ailments for wllkh it rt>prel'!enter!l Its said product ns a relief or cure arise from cam;es which said salts, 'or hydrtttell sodium sulpha·te, will uot cure or relieve, but will positively aggravate, principal active constituent of such crystals was in fact a medicine, and hnltit-forming, and solution of. crystals in dtinking water does not result in pt·oduct ldentienl with the original mineral water, due to the removal and tlie<'lading of certain constituents in process of producing the crystals in qtll'!ltion ; 'Viti! eftet1 of misleadiug aud 1lereiving vurchnsPrs and pt·o~1wctire lHU'dJIISt'l';l into the erroneous belief that sud1 representations were true and into purchase of its said products in sudt belief, and of tlu•relty unfairly diverting trade to It from comrx<t:itors euguged in produdug and selling !<nline purgatives and in shlpplug same in commerce nmoug the varioul'i Stntt•s, alll who truthfully advertise and repres<>nt the thPrnpentlc value of thcil' protlucts, and compt"tltors who make and sell rl'Ilwllies for the reli!'f of Ute ailments involved as altove !let forth aJ•Il ln(licated, and who truthfully represent said rcmeuies' therapeutic dfect; to the snhstautinl injnt·y of competition in cornmet·ce:

llcld, '!'hat such acts aud practlc(•s were to the prejudice of the public nnl competitors and constituted unfair methods of comr•etition. Before Mr. Roberts. Hall, trial examiner . .l/r. John Darsey for the Commission, Crofoot, Fraser, Oonnollty & Strykr-r, of Omaha, Nebr., for 1·respondent.

DOLLAR CRYSTAL CO. 705 70-!. Complaint 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 the Dollar Crystal Company, a corporation, hereinafter referred to as respo!ldent, 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 in respect thereof would be to the interest of the public, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent is, and was at all times hereinafter mentioned, a corporation organized. and existing under and by \'virtue of the laws of the State of Nebraska, with its principal place of business in Redick Tower Building, Omaha, Nebr. It is now and has been engaged in offering for sale, and selling, a product designated by it as "Genuine Texas Mineral Crystals," "Genuine Texas Crystals," "Real Texas Mineral "\Vater Crystals," and. "Texas 1\Iineral Water Crystals."

To a substantial extent sales of said product have been made by respondent to persons, partnerships and corporations located in States other than Nebraska, pursuant to which sales, and as a part thereof, shipment is and has been made by it from the State of :Nebraska, and from points in Texas, through and into other States of the Union to said purchasers.

PAR. 2. In connection with offering for sale and selling said Product in interstate commerce, and as an inducement for the purchase of said product, respondent is and has been making, and is causing and. has causeu to be made, the following representations, by means of radio broadcast and otherwise, of and concerning its said product:

1. (a) That the drinking of water in which said product haFl been dissoh•ed Will relieve lwndache, nen·onsness, irritability, 11nd fntigue; (b) That It will remove the cause of disease; (c) That it will remove poisonous waste matter that has accumulated in the system;

(rt) That it hns reliPYl'll thonsnnd~> of cases of nilments that nre PIIUSI'<l by a ~;Jnggi:o;h !<yfltPm;

(e) That it will remove the cause of most of the human ailments; (f) That in its n"e thonsnndfl hare found lasting relief f•·om such ailment!; as rlwuuwtl~m, arthritis, n<>nritis, lndlgPstlon, constipation, nervonsne~s. sick heartaches, a nrl HWOllPn joints, and many other common aliments which may "" caused Ly n ~;Jngglsh system or faulty elimination; ( fl) 'fhut It will remove lnnl.ollity to eat certain foods; Ootn11laint 24F.T.C.

(h) That it will neutralize acid conditions that cause 95% ot suffering; (i) That it contains the essential mineral:s from the earth that the body demands In order for 1t to enjoy good health; (/) That it cleanses the system and strengthens the natural functions In l'f'Sistfng disease;

(k) That it will ln1part pep and energy;

( l) That the minet·als contained therein are blended in just the light way to cleanse, purity and wash away the poisons and impurities that cause so many of our aches and pains, and that it contains natural minerals that supply a bnl:mce to the diet.

2. (a) That "GE.'tmine Texas Mineral Water Crystals" are not a medicine; (b) That they are not a habit forming drug; (c) That by dissolving the crystals in drinking water that·e is produced a solution lih•nticnl in results with the mineral water as it comes from the mineral springs.

PAR. 3. In truth and in fact, practically the sole constituent of respondent's crystals is hydrated sodium sulphate, or Glauber's Salts. This drug is a saline laxative and purgative and its only therapeutic effect is the relief of temporary constipation; many of the symptoms and ailments for which respondent represents its product to be a relief or cure, arise from causes which hydrated sodium sulphate or respondent's crystals, will not cure or relieve, but which it will positively aggravate; and for none of the ailments or symptoms mentioned in paragraph 2 hereof is it effective in producing a lasting relief or cure; nor will it produce results as represented by respondent. The principal active constituent of the crystals is in fact a medicine and is habit formin~r, in that its continued use will produce the condition known as laxative habit. The solution of the crystals in drinking water does not produce a solution identical with the original mine.ral water from which the minerals are derived, but in the process of produdng the crystals some relatively insoluble constituents, and some very soluble constituents and some constituents presl'nt in a small proportion are removed and discarded.

Some of the crystals which respondent designates and sells as "Genuine Texas Mineral Water Crystals," are derived from mineral water produced at or near Mineral '\Veils, Tex., and other crystals, so designated and sold, are from water produced at or near Marlin, Tex., although the mineral waters from said localities differ substantially in their constitupnts.

PAR. 4. In advertising its said product by radio broadcast and othHwise, respondent has used and is using letters, commonly known as testimonials, of and concerning its product written by users thereof, containing statenwnts of actual effects from the use of such product, without any investigation or knowledge on the part of respondent as to whether the statements in said letters contained are in fact true DOLLAR CRYSTAL CO. 707 Findings -or as to whether the writers of the letters were sufficiently informed as to be able to truthfully make such statements. PAR. 5. There are and were at all times hereinabove mentioned, fJerJ:;ons, partnerships, and corporations engaged in the business of producing and selling saline purgatives and pursuant to such sales .shipping the same in commerce among the States, who truthfully advertise !tnd represent the therapeutic qualities of their products; and other persons, partnerships and corporations who make and sell in interstate commerce, remedies for the relief of the ailments hereinabove mentioned who truthfully represent the therapeutic effect of said remedies; and with such other persons, firms, and corporations, respondent has been and is in active, substantial competition. PAR. 6. Respondent's false and misleading representations of and ·concerning its said product, as hereinabove set forth, have the capacity and tendency to mislead and deceive, and have misled and deceived, and do mislead and deceive purchasers and prospective purchasers into the belief that such representations are true and to purchase re- ~pondent's product in such erroneous belief. Thereby the aforesaid false and misleading representations have dinrted business from its· aforesaid competitors to itself, to the substantial injury of substantial competition in interstate commerce.

PAR. 7. The acts and practices of respondent, as aforesaid, are to the prejudice of the public interest, and constitute unfair methods of -competition in commerce, within the intent and meaning of Section 5 of the Acto£ Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, .and for other purposes."

REPORT, FINDINGS AS TO THE 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 Pederal Trade Commission, on September 8, 1936 issued, and on S!>ptember 10, 1936, served, its complaint in this proceeding upon t('spondent, Dollar Crystal Company, charging it with the use of Unfair methods of competition in commerce in violation of the pro- Visions of said act. After the issuance of said complaint and the filing of respondPnt's answer, the Commission, by order entered her!'in, granted respondent's motion for permission to withdraw said nn!:iwer and to substitute therefor an answer admitting all the material allegations of the complaint to be true and waiving the taking of fm·t hpr Pviclence and all other intervening procedure, which sub- 708 FEDERAL TRADE CO:\Il\IISSIOX DI:ClSIOKS Findings 24 F. T. C. siitnte answer was duly filed in the office of the Commission. There· after, this proceeding regularly came on £or final hearing before the Commission on the said complaint and the substitute answer, briefs and oral arguments of counsp] having been waived, and the Commis· sion having duly considered the same and being now fully advisell 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, Dollar Crystal Company, is a. Nebraska corporation "·ith its principal place of business in Redick Tower Building, Omaha, Nebr. It has been and is now engaged in offering for sale and selling mineral water crystals under the trade names "Genuine Texas Mineral Crystals," "Genuine Texas Crystals," "Real Texas Mineral ·water Crystals," and "Texas Mineral 'Vater Crystals." The respondent sells its products to customers located in the various States of the United States other than Nebraska and causes its products when sold, to be shipped from the State of Nebraska into and through the various States of the United States to said purchasers, maintaining a constant current of trade in its said products in such commerce.

PAn. 2. In connection with offering for sale and selling its products in interslate commerce, and as an inducement for the purchase of said products, the respondent has made and makes, anrl has caused and causes to be made, representations by means of radio broadcasts and otherwise, of and concerning its products, to the following effect, gist, or meaning:

1. (a) That the drinking of water in which said products have been dissolved will relieve headache, nervousness, irritability and fatigue;

(b) That they willremm·e the cause of disease; (c) That they will remove poisonous waste ma.tter that has accumulated in the system;

(d) That tlwy have relieved thousands of cases of ailments that are cans<'d by a sluggish system;

(e) That they willremoYe the cause of most oft he hmnan ailments; (f) That in their use thousands have found lasting relief from sneh ailments as rheumatism, urthritis, neuritis, indigestion, constipation, 11ervommess, sick headaches, and swollen joints, and many other common ailments which may he can:j('d by a sluggish system or faulty elimination;

(.q) That tl1ey will remove inability to eat certain foous; DOLLAR CRYt;TAL CO. 709 704 Findings (h) That they will neutralize acid conditions that cause 93% of suffering;

(i) That they contain the essential minerals from the earth that the body demands in order for it to enjoy good health; (j) That they clear11Se the system and strengthen the natural functions in resisting uisease;

( k) That they will impart pep and energy; (l) That the minerals contained therein are blended in just the light way to cleanse, purify and wash away the poisons and impurities that cause so many of our aches and pains, and that they contain natural minerals that supply a balance to the diet. 2. (a) That "Genuine Texas Mineral 'Vater Crystals" at;e not 11 medicine;

(b) That they are not habit forming drugs; (c) That by dissolving the crystals in drinking water there is produced a solution identical in results with the mineral water as it comes from the mineral springs.

PAR. 3. Practically the sole constituent of respondent's crystals is hydrated sodium sulphate, or Glauber's Salts. This drug is a saline laxative and purgative and its only therapeutic effect is the relief of temporary constipation. Many of the symptoms and ail .. ments for which respondent represents its products to be a relief or cure, arise from causes which hydrated sodium sulphate will not cure or relieve, but which it will positively aggravate. Respondent's ,Products are not effective in producing a lasting relief or cure for any of the ailments ot symptoms mentioned in paragraph 2 hereof, and they will not produce results as 1·epresented by respondent. The principal active constituent of the crystals is in fact a medicine and is habit forming, in that its continued use will produce a condition known as laxative habit. The solution of the crystals in drinking water does not produce a solution identical with the original mineral water :from which the minerals are derived, but in the process of producing the crystals some relatively insoluble constituents, and some very soluble constituents and some constitllents present in a small proportion are removed and discarded. PAR. 4. In ad vert ising its said products by radio broadcasts and otherwise, respondent has used and is using letters, commonly known as testimonials, of and concerning its products written by purported Users thereof, containing statements of actual effects from the use of such products, without any investigation or knowledge on the part of respondent as to whether the statements in said letters are in fact true or as to whether the writers of the letters were sufficiently informed in the proper diagnosis o:f ailments and conditions of the hu- Df~CISJONS710 FEDERAL TRADE COl\Il\IISSION Order 24 F. T. C. man body as to be able to accurately state the effect of the use of such products.

PAR. 5. There are persons, partnerships, and corporations engaged in the business of producing and selling saline purgatives andt pursuant to such sales, shipping the same in commerce among the various States, who truthfully advertise and represent the therapeutic qualities of their products; and other persons, partnershipst and corporations who make and sell in commerce, as herein set out, remedies for the relief of the ailments hereinabove mentioned who truthfully represent the therapeutic effect of said remedies. With all of such other persons, firms, and corporations, respondent has been, and is, in active and substantial competition in such commerce. PAR. 6. Respondent's false and misleading representations of and concerning its said products, as hereinabove set forth, have the capacity and tendency to mislead and deceive, and have mislead and deceived, and do mislead and deceive purchasers and prospective purchasers into the erroneous belief that such representations are true and into the purchase of respondent's products in such erroneous belief. Trade is thereby unfairly diverted from respondent's aforesaid competitors to respondent to the substantial injury of competition in commerce among and between the various States of the United States and in the District of Columbia.

CONCLUBION The aforesaid acts and practices of the respondent Dollar Crystal Company, are to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce, within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duti.es, and for other purposes."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commis.<iion and the answer filed herein on December 15, 1936, by respondent admitting all the material allegations of the complaint to be true and waiving the taking of further evidence and all other intervening procedure, 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 DOLLAR CRYSTAL CO. 711 i04 Order Traile Commission, to define its powers and duties, and for other purposes."

It is ordered, That the respondent, Dollar Crystal Company, its officers, representatives, agents, and employees, in connection with the offering for sale, sale, and distribution of its water crystal products in interstate commerce or in the District of Columbia, do forthwith cease and desist from representing through the medium of radio continuity, advertising matter, testimonial letters or in any manner: {a) That the aforesaid. products have any therapeutic value in the treatment of any disease or ailment other than as a laxative or purgative;

(b) That they are not a habit forming drug; (c) That the dissolution of the products in drinking water will produce a solution identical with the mineral water from which they are obtained as it comes from the mineral springs. It is further ordered, That the respondent shall, within 60 days a.after 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 this order.

712 FEDERAL TRADE CO:\DIISSIO~ DECISIOXS ~yllubu~