Havana-Florida Cigar Co., Inc

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IN THE MATTER OF HAVANA-FLORIDA CIGAR COMPANY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1014 Docl;;et 2661. Complaint, Aug. 5, 193G 1-Decision, Mar. 29, 1931 Where the finest quality or cigar tobacco was grown in Cuba near Havana, and the word "Havana," or "Habana," had been used and understood since time immemorial by cigar purchasing and consuming public and cigar manufacturers and dealers of the United States as meaniug said tobacco, which had long been imported therein and was widely and extensively there used and consumed in cigars made in whole, and in part only, from such tobacco, and which had the reputation, among the cigar consuming and purchasing public ot the United States, as cigar tobacco of highest quality and excellence, with cigars made in whole or in part therefrom In large demand, and preferentially purchased by many cigar dealers and many ot the consuming public, with many believing that use ot such to· bacco in cigars increases the quality and desirability thereof; and there· after a corporation engaged in Florida in the manufacture, packing, branding, and labeling of various brands of cigars, for sale and distribution by It and its dealers to the purchasing and consuming public in the United States, through personal solicitation, circular~. and other communications wlth customers and p1·ospective customers, and In competi· tlon with many who sell and distribute cigars composed In whole, and also cigars composed In part only, of Havana tobacco, and who rightfully and truthfully advertise, represmt and label their said cigars as containing such tobacco, and with many who sell and distribute among tle States cigars containing no such tobacco, but composed wholly or said product grown in the United States, or elsewhere than on the Island of Cuba, and who do not bra11d, label, advPrtlse, or otherwise represent their said cigars ns made of Havana or Cuban tobacco- Sold and distributed, through personal solicitation of salesmen and through circulars and written correspondence, in large and substantial quantities, under such names and brands as "Garcia's Havana Smoker," cigars ronde by it to be sold at a price of two or five cents, and featured said name on the labels ot the pap<•r cigar bands and on various places upon the cigar bo:oteS or containers in wbleh sold in varying quantities, and so packed its twotor-five-cents "IIav-a-Good Cigar" in contalnerR that word "IIavana" 111 Its corporate name ap1Jeared in jnxtapmlltion with letters ''IIav-n" or said last-named cigar's brand name, notwithstanding fact that cigars tbU9 branded, labeled, nnd sold were made from a eheap grade of to!Jncco alleged to contain 1 percent or Cuban, but purchased ready-mixed from factories and dealers and consisting largely or clippings gathere«l from cigars In process of manufacture, and aforPsnid cigars, thus branded, labeled, de· scribed, and advertised, contained no Havana tobacco nor tobacco grown on Island ot Cuba In appreciable amount;

• Amended and supplemental.

HAVANA-FLORIDA CIGAR CO., INC. 859 858 Complaint With effect of misleading and deceiving a large and substantial number of the purchasing and consuming public into buying its aforesaid cigars in the erroneous belief that they were composed, in whole or in large part, of Havana tobacco, or that grown on said Island of Cuba, and of placing In the hands of its dealers and distributors an instrumentality through which they might and did mislead and deceive the purchasing public, and with result, from such false and misleading representations, that consuming public was injured and trade was diverted to it from aforesaid competitors; to their injury and that of retail dealers and to the substantial injury of substantial competition In commerce, and to the prejudice of the buying public :

lleld, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Mr. Marshall Morgan for the Commission.

AMENDED AND SurrLEl\IENTAL Complaint Whereas, The Federal Trade Commission did heretofore, to wit, on December 20, 1935, issue its complaint herein charging and alleging that the respondent corporation is, and has been, guilty of 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 Fedeml Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914: And whereas, This Commission, since the issuance of said complaint, has been advised that the respondent therein is, and has been, using unfair methods of competition in interstate commerce other than, and in addition to, those in relation to which the Com- Inission issued its complaint aforesaid on December 20, 1935, in violation of the provisions of Section 5 of said Act; Now, therefore, Acting in the public interest, pursuant to the pro- '\'isions of the Act of September 2G, 1914, aforesaid, the Federal Trade Commission charges that Havana Florida Cigar Company, !nc., has been, and now is, using unfair methods of competition in ~nterstate commerce in violation of Section 5 of said Act, and states Its charges in that respect as follows:

• PARAGRAPH 1. Respondent, Havana Florida Cigar Company, Inc., Is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Florida, with its principal office and place of business at 501 North Madison Street, Quincy, Fla. U.respondent is now and for more than three years last past has been engaged, as hereinafter described, in the business of manufacturing "arious brands of cigars and selling and distributing the same to ?ealers in various parts of the United States, more particularly In the States of Alabamn., Tennessee, Georgia, and New York. The 860 FEDERAL TRADE COl\IMISSION DECISIONS Complaint 24F.T.O.

said cigars are manufactured by respondent in Quincy, Fla., where they are packed, branded, and labeled by respondent for sale and distribution by it and by its dealer-customers to the purchasing and consuming public of the United States. In consummating such sales and in distributing such products, respondent causes the cigars so sold to be transported and delivered from its place of business in Quincy, Fla., through and into various other States of the United States to the respective purchasers thereof at their respective points of location. In the course and conduct of its business, the respondent has been and is now engaged in direct and substantial competition with various corporations, partnerships, and individuals likewise engaged in the sale and distribution of cigars, and offering such products for sale in commerce between and among the various States of the United States and within the District of Columbia. PAn. 2. The cigar originated in the Spanish West Indies. The finest quality of tobacco for cigar purposes is grown jn Cuba, not far from the city of Havana. The word "Havana," also spelled " Habana," is the name and designation of the tobacco grown on the Island of Cuba, which name and designation is and has been since time immemorial used and understood by the cigar-purchasing and consuming public of the United States, and by cigar manufacturers and dealers throughout the United States, as meaning and del'ignating tobacco which has been grown on the Island of Cuba. Said tobacco has long been imported into the United States and widely and ex· tensively used and consumed therein in cigars manufactured in whole and in part only from such tobacco. Such Havana tobacco has the reputation among the cigar consuming and purchasing public of the United States as being cigar tobacco of highest quality and excel· lence, and cigars made in whole or in part from said tobacco are in large demand throughout the Unit('d States. Many of the cigar dealers and many of the consuming public of the United States prefer to purchase cigars containing Havana tobacco and have believed, and still believe, that the use of such Havana tobacco in cignrs adds to and increases the quality aud desirability of fluch cigars. The outer leaf, or wrapper, of a cigar comprises about five per cent of the entire cigar, while the filler and binder, constituting ninety-five per cent of the cigar, are the controlling factors in it9 size, strength, ancl flavor. The fillt>r controls, primarily, the designed length, thickness, and shape of the cigar ns rolled into a binder or binder. wrapper of desired size. A dark ciO'ar,.., can be mild if it has. a 1mld filler and binuer, while a light colored cigar can be quite s.strong if the filler nnd binder are of a strong grade of leaf. 'fhe ftller of the cheapest grad('s of cigars, such as "2 for 5's'', is com· HAVANA-FLORIDA CIGAR CO., INC. 861 838 Complaint Posed principally of what is known as "scrap," being clippings from cigars in the process of manufacture.

PAn. 3. For a long period of years prior to the time respondent engaged in its said business, cigars composed wholly of Cuban tobacco were made in both Cuba and in the United States: and are now so made, for sale and consumption in the United Stares by manufacturers whose surname was "Garcia," and who respe(otlvely used and d.isplayed., and still use and. d.isplay, the said surn:.tme, either alone or in combination with the rest of their name, or with other Words, on the bands of their cigars, or on the boxes or containers thereof, and on labels used in connection with the sale thereof. For many years, persons in the cigar and tobacco trade, and. many of the public purchasing cigars for consumption, have believed, and still believe, that cigars in connection with the sale of which the name" Garcia" so appeared or appears, were or are made by manufacturers named. "Garcia," and of Cuban nationality or descent, and of Cuban grown tobacco exclusively, and that said cigars were and are of a quality superior to those made by many other manufacturers an<J. superior in quality to cigars made wholly or in part of tobacco g.rown elsewhere than on the Island of Cuba, and in purchasing such Cigars became accustomed. to and still call for them either by the name of " Garcia " alone, or in combination with the remainder of ~he name of a manufactmer of that surname, or with the word Havana," or other word. or words denoting Cuban or Havana tobacco.

<l PA~. 4. In the course and conduct of respondent's business, as escnbed in paragraph 1 hereof, sales of cigars are made and purchase Ol'~e~·s therefor obtained through and as a result of the personal Sohcitation of salesmen, the use of circulars and by means of written ~ol'respondence and other communications with respondent's cusomel's and. prospective customers. The said cigars, manufactured, Sold and distributed competitively by respond.ent in interstate comltl.erce, as set forth in paragraph 1 hereof, are and for several years last Past have J.x.en sold. and distributed by respondent in large and sub- ~tantial quantities under such names and brands, among others, as Garcia's Havana Smoker," a brand manufactured. to be sold at a price ~f 2 for 5¢. The following hereinafter described brands and labels t~ave been affixed by respondent to the said cigar and to the containers tereof. The labels attached to the cig-ars themselves consist of a I>aper band placed by respondent around each cigar and bearing conf:~Jcuously the words "Havana Garcia's Smokers," printed in letters0 re<J. upon a label of yellow. The containers for such cigars are the usual .1 • • f · · anu customary cigar boxl's or cigar contamers o varymg capacil-Hl750m-so ,ol. 2-t :11 Complaint 24F, T. C.

ties, holding from fifteen cigars up to fifty and a hundred. The labels and brands attached to each box or container have been designed and affixed thereto by respondent, and are as follows : ( 1) Centered on the outside of the lid of the box is a label or brand bearing the words "GARCIA'S HAVANA SMOKER" in large black letters, on a background of brown. In the center, between the word "Garcia's" and the words "Havana Smoker", appear the following: "H. F. Co. Mild and Fragrant".

This same brand or label appears again on the inside of the top of the box, and in either of the two upper corners, printed on a black background, appears the legend "2 for 5¢". On the outside of the box front, in black letters on a background of brown, appears the following: "Havana Smoker Claro 2 for 5¢". This same 'vording is also found on either end of the larger boxrs used by respondent in the sale and distribution of its above described cigars.

(2) Centered on the outside of another box or container is a band or label reading:

2 f /if 2 f 5¢ 0 0 r r GAHCIAS SMOimUS No Fancy Labels-Bands or Boxes All the quallty in the Cigars.

Said respondent also manufactures and sells the same or a similar brand under the name and designation:

Garcia Smoker Refills Respondent also under the brand name "Hav-a-Good Cigar" sells two kinds of cigars, one made of genuine "Havana" tobacco, retailing for 5¢, and the other made wholly from domestic tobacco treated with a certain process hereinafter referred. to and described, and retailing 2 for 5¢. The said cigars made of domestic tobacco, especially treated ns nfor£>said, nre pack£><1 by respondent in a Lox in such a manner 119 to leave visible immecliat£>ly to the left of the centered brand name, the first word of respondent's corporate name, that is, the ""ord "Havana," the said word "Havana" bein..,. used in connection with, ~ 'dand nppearin~ in juxtaposition with the first four letters of sal brand name, that is, "IIav-a.'' The. said ci~ars, branded, labeled, and sold by respondent, r~· spectiwly, as ''Garcias Havana Sm(Jker," "Garcias Smoker," '•GarcH~ Smoke>r TI£>fills," and the nforesai<l "IIav-a-Goo<l" Lrand made 0 domestic tobacco are and haw LPen made from n che>ap ~trade of HAVANA-l~FLORIDA CIGAR CO., INC. 863 8::i8 Complaint tobacco alleged to contain 1% of Cuban tobacco. Tobacco used for this type of cigar .may be purchased ready mixed from factories and dealers, and consists largely o£ clippings gathered from cigars in the Process of their manufacture.

PAR. 5. Respondent's use o£ the word "Havana" in its corporate name and as a brand or label or part o£ a brand or label for cigars, and its use of the words "Garcia's" and "Garcia" are alleged to be r)J·edicated by respondent upon the following facts and circumstances: Respondent company is now and for sometime past has been located at Quincy, Fla. Respondent at one time employed as foreman of its Quincy factory a man by the name of Raymond Garcia, who had theretofore operated a cigar factory at Havana, Fla. Some two and one-half years ago Garcia discovered a process of treating uomestic tobacco with a solution made in the following manner: Stems of Havana tobacco remaining after the tobacco is stripped from the lea£, and technically known as "Petroli," are purchased in bulk at Tampa, Fla., by respondent. Quantities o£ these stems are l)laced in barrels and water is added. The mixture is then allowed to ferment for three weeks, the liquid forming in the barrel becoming a 80l't of tobacco brew or vinegar. A quantity of uomestic tobacco is then sprayed with such liquid, after which the domestic tobacco is allowed to heat. After the tobacco thus sprayed and treated is heated, and carefully watched for a number of days, it is sprayed again, then heated again, until in the view of respondent it develops the "certain mellowness'' and "true flavor of real Havana tobacco." Saiu domestic tobacco so treated is thereafter used respectively as \\'rappers, binders, and filler in the manufacture of cigars. Said respondent, as a result of said spraying procedure, employs the Word "Havana" in its corporate name and the words "Havana" and "Garcia's" and "Garcia" singularly and in combination as brands ~r_Iabels for cigars manufactured by it and advertised and sold by t In commerce.

<l :PA~. G. In truth and fact respondent's cigars, branded, labeleu, ,, escrthetl, and alh·ertised, respectively, as "Garcias Havana Smoker," 0Garcias Smoker," "Garcia Smoker Uefills," and "2 for 5¢ Hav-a- oou," and solo by the respo11dent and by dealers to the pun·hasing i~lll consuming public, as hereinbefore described, do not contain a,·ana toltacco, nor tolmcro gt·owll on the Island of Cuba, in any ap- J'reciable amount, nor ha,·e t.hey ut any time contained such tobacco ln any appr('ciable amount, hut nn•, awl have been, manufacturetl {'ntirely from, and wholly composed of, tolJilcco ~row11 el:;;ewhere than ?n the Island of Cuba. The mm of the word "Havana" in saill dpslg;llntion "Garcia's Havana Smoker" in respond<'nt's corporate name 864 FEDERAL TRADE 001\Il\HSSION DECISIONS Complaint 24F. T. C.

and in connection with respondent's "2 for 5¢ Hav-a-Goou" brand, anu the use of the words "Garcia's" and "Garcia" in said designations "Garcia's Havana Smoker," "Garcia Smoker," and "Garcia Smoker Refills" in bra11ding, labeling, describing, and advertising said cigars containing no Havana tobacco, or no Havana tobacco in appreciable amount, as hereinabove set forth, is misleading and has, tmd has had, the capacity and tcnuency to, and docs and diu, misle:1d anll deceive a large and substantial number of the purchasing and consuming public into purchasing said cigars in the erroneous belief that they are and were composed, in whole or in large part, of Havana tobacco, that is, tobacco grown on the Island of Cuba. PAn. 7. Among the competitors of respondent, referred to in para· graph 1 hereof, there are many who sell anu distribute, in competition with respondent, cigars composed in whole and also cigars corn· posed in part only of Havana tobacco, and who rightfully and truthfully adverdse, represent, sell, and label such cigars as containing said Havana tobacco. Tl1erc are also many of said competitors who Rell and distribute between and among the several states in conl· petition with respondent cigars coniaining no Havana tobacco and being composed wholly of tobacco grown in the United States ol' elsewhere than on the Island of Cuba, aml who do not brand, bbel, advertise, or otherwise represent that said cigars arc maue of Havanll or Cuban tobacco. There are also among the indiviuuals, firms, an~ corporations referred to above who are and have been in competl· tion with the respondent, some whose names are not "Gar-cia/' and some who manufacture and sell cigars made of tobacco part of which only is grown in Cuba, or of tobacco grown elsewhere than in Cuba, and who do not brand or label, and have not been. branding or· labeling, the cigars made by them or the containers thereof, with the words "Garcia's" or "Garcia."

Respondent's so-called "Garcias Havana Smoker," "Garci!tS Smoker," "Garcia Smoker Refills," and "2 for 5¢ Ilav-a-Good." nre displayed, offered for sale, anu sold to the consuming public by re· spondent, and in and by cigar stores anu other dealer-establishmen~g in competition with the said cigars of competitors. The respondent 5, . 'usc of the word "Havana" aml of the words ''Garcia" anu "Garcws, as hereinabove described, in relation to a cigar having no Havan~ tobacco, or no appreciable amount of Havana tobacco, is false nn misleading. As a result of such false anu misleading representations on the part of respondent the consuming public is being, and }1!1: been, injured, trade is being, and has been, diverteu to responden from such competitors in interstate commerce, and thereby substan· tial injury is done, and has been done, by the respondent to substan- HAVANA-FLORIDA CIGAR CO., INC. 865 858 Findings tial competition in interstate commerce, and there is, and has been, placed in the hands of respondent's dealers and distributors an instru- Inent by means of which they mislead and deceive, and have misled and deceived, the purchasing public.

P A.n. 8. Said representations of respondent, contained in its brands, labels, advertisements, circulars, or other media through which the trade and consuming public are reached, have resulted in injury to respondent's competitors and to retail dealers and to the prejudice of the buying public, and constitute unfair methods of competition Within the intent and meaning of Section 5 of an Act of Congress, entitled "An Act to create a Ij'ederal Trade Commission, to uefinc its po,vers and duties, and for other purposes." REronT, FINDINGS AS TO THE Facts, AND Onder Pursuant to the provisions of an Act of Congress approved Septe~nber 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." the Feueral Trade Commission, on December 20, 1935, issued and thereafter served its original complaint in this proceeding on respondent, Havana-Florida Cigar Company, Inc., charging it with the use of tl?fair methods of competition in commerce in violation of the pro- VIsions of said Act, and on August 5, 1936, issued and served its ~Inenued and supplemental complaint on the said respondent, charg- Ing it with the use of unfair methods of competition in commerce other than, and in addition to, those in relation to which th~ Com- Inission issued its original complaint as aforesaid. After the issuance of said complaints and the filing of respondent's answer to the said amended and supplemental complaint, the Commission, on December 2~, 1936, entered an order closing the case with respect to the use of the term "Garcia".1 Thereafter, the Commission, by fu.lther order entered herein granted respondent's motion for perlnlssion to withdraw its said answer and to substitute therefor an answer admitting all the material allegations of the complaint as ~odified by the order of the Commission entered in this matter on ecember 24, 193G, and waiving the taking of further evidence and nll other interwning procedure, which substitute answer was duly 1 f'lnld or<1f'r rPails as follow~:

lnl'l'bls mutter coming on to bP h<'ard hy the ('ommls~lon upon thf' r(•cord, and the Com- Sslon ha vlng duly con~idf'red the same and bf'lng now fully advised In the prPmlsf'S:----b. It Ia ordered, Tl•at the cnso gro\\lng out of the amended and supplemental complaint -~telnuefore Issued on the l"ith day of August, 10~6. insofar as said case relates to the ege11 unfair or misleading use of the word "Garcia" be, aud the snme herrby Is, closed, l It (s further ordered, That as to all other all<"gatlons growing out of the aforf'sald t llleniled and supplemental complaint, the case proceed to trial In accordance with the regular procedure of the Commission.

FEDERAL TRADF. COl\11\USSION DECISIONS866 Findings 24 F. T.C. filed in the office of the Commission. Thereafter this proceeding came on for final hearing before the Commission on the said amended .complaint and the answer the~;eto; 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 PARAGRA.PH 1. Respondent, Havana-Florida. Cigar Company, Inc., is a corporation organized, existing, and doing busines under and by virtue of the laws of the State of Florida, with its principal office and place of business at 501 North Madison St., Quincy, Fla. Respondent is now, and for more than 3 years last past has been engaged, as hereinafter described, in the business of manufacturing various brands of cigars and selling and distributing the same to dealers in various parts of the United· States,· and more particularly in the States of Alabama, Tennessee, Georgia, and New York. The said cigars are manufactured by respondent in Quincy, Fla., where they are packed, branded, and labeled by respondent for sale and distribution by it and by its dealer-customers to the purchasing and consuming public of the United States. In consummating such sales and in distributing such products respondent causes the cigars so sold to be transported and delivered from its place of business in Quincy, Fla., through and into various other States of the United States to the respective purchasers thereof at their respective points of location. In the course and conduct of its business, the respondent has been, and is now, engaged in direct and substantial competition with various corporations, partnerships, and individuals likewise en· gaged in the sale and distribution of cigars, and offering such prod· ucts for sale in commerce, between and among the various States of the United States and within the District of Columbia. PAR. 2. The cigar originated in the Spanish 'Vest Indies. The finest quality of tobacco for cigar purposes is grown in Cuba, not far from the city of Havana. The "·oru ''Havana," also spelled "Jia· bana," is the name and designation of the tobacco grown on the Island of Cuba, which name and d<'siO'nation is and has been since time immemorial used and understood by the cigar-purchasing and consuming pul;>lic of the United States, aml by cigar manufacturers and dealers throughout the United States, as meaning and designat· ing tobacco which has be<'n grown on the Island of Cuba. Said to· barco has long been imported into the United States and widely and extensively used and consumed therein in cigars manufactured ijj. HAVANA-FLORIDA CIGAR CO., INC~ 867 858 Findings whole and in part only from such tobacco. Such Havana tobacco has the reputation among the cigar consuming and purchasing publio of the United States as being cigar tobacco of highest quality and excellence, and cigars made in whole or in part from said tobacco are in large demand throughout the United States. Many of the cigar dealers and many of the consuming public of the United States prefer to purchase cigars containing Havana tobacco and have believed, and still believe, that the use of such Havana tobacco in cigars adds to and increases the quality and desirability of such cigars. The outer leaf, or wrapper, of a cigar comprises about five percent of the entire cigar, while the filler and binder, constituting ninety-five percent of the cigar, are the controlling factors in its size, strength, and flavor. The filler controls, primarily, the designed length, thickness and shape of the cigar as rolled into a binder or binder wrapper of desired size. A dark cigar can be mild if it has a mild filler and binder, while a light-colored cigar can be quite strong if the filler and binder are of a strong grade of leaf. The filler of the cheapest grades of cigars, such as ''2 for 5'," is composed principally of which is known as "scrap," being clippings from cigars in the process of rnanufacture.

PAR. 3. In the course and conduct of respondent's business, as described in paragraph 1 hereof, sales of cigars are made and purchase orders therefor obtained through and as a result of the personal solicitation of salesmen, the use of circulars and by means of written correspondence and other communications with respondent's customers and prospective customers. The said cigars, manufactured, sold, and distributed competitively by respondent in interstate comlb.erce, as set forth in paragraph 1 hereof, are and for several years last past have been sold and distributed by respondent in large and substantial quantities, under such names and brands, among others, as "Garcia's Havana Smoker," a brand manufactured to be sold at a Price of 2 for 5¢. Brands and labels, as hereinafter described, have been affixed by respondent to the said cigar and to the containers thereof. The labels attached to the cigars themselves consist of a Paper Land placed by responuent around each cigar and bearing conspicuously the words "Havana Garcia's Smokers," printed in letters of red upon a label of yellow. The containers for such cigars are the• Ual and customary cigar boxes or cigar containers of varying capac- ~ties, holding from fifteen cigars up to fifty and a hundred. The labels and brand::; attached to the box or container of respondent's ''G arcia's Havana Smoker" have been designed and affixed thereto by respondent, and are as follows:

Findingfl 24F.T.O.

Centered on the outside of the lid of the box is a label or brand bearing the words "GARCIA's Havana SMOJ>:ER" in large black letters, on a background of brown. In the center, between the word ''Gar· cia's" and the words "Havana Smoker," appear the following: "H. F. Co. Mild and Fragrant." This same brand or label appears again on the inside of the top of the box, and in either of the two upper corners, printed on a black background, appears the legend "2 for 5¢." On the outside of the box front, in black letters on a background of brown, appears the follm,ving: "Havana Smoker Claro 2 for 5¢." This same wording is also found on either end of the larger boxes used by respondent in the sale and distribution of its above-described cigars.

Respondent also under the brand name "IIav-a-Good Cigar" sells two kinds of cigars, one made of genuine "Havana" tobacco, retailing for 5¢, and the other made wholly from domestic tobacco ancl retailing 2 for 5¢. The said cigars made of domestic tobacco are packed by respondent in a box in such a manner as to leave visible immediately to the left of the centered brand name, the first word of respondent's corporate name, that is, the word "Havana," the said word "Havana" being used in connection with, and appearing in juxtaposition with the first four letters of said brand name, that is, "llav-a." , The said cigars, hranclc<l, labeled, and. sol<l by respondent, respec· tively, as "Garcia's Havana Smoker" and the 2 for 5¢ "llav-a-Good" brand, are and have been made from a cheap grade of tobacco alleged to contain 1% of Cuban tobacco. Tobacco used for this type of cigar may be purchased ready-mixed from factories and dealers, and con· sists largely of clippings gathered from cigars in the process of their manufacture.

PAR. 4. In truth and fact respondent's cigars, branded, labeled, described, and. ad. vertised, respectively, as "Garcia's Havana Smoker," and "Hav-a-Good."-"2 for 5¢," and sold. by the respondent and by dealers to the purchasing and consuming public, as herein· before described., do not contain Havana tobacco, nor tobacco grown on the Island of Cuba, in any appreciable amount, nor have they at any time contained such tobacco in any appreciable amount, but are, and have been, manufactured entirely from, and. wholly ('Oill" posed of, tobacco grown elsewhere than on the Island. of Cuba. The use of the word. "Havana" in said brand. designated as "Garcw.'s Havana Smokl'r" and as used on containers in front of and. in con· junction with the word, words or expression "Ilav-a-Good" as printed. or appearing on the container of the 2 for 5¢ brand. of such cigars in branding, labeling, describing, and ad.vertising said. cigars containing no Havana tobacco, or no Havana tobacco in appreciable HAVANA-FLORIDA CIGAR CO., INC. 869 858 Findings amount, as hereinabove set forth, is misleading and has, and has had, the capacity and tendency to, and does and did, mislead and deceive a large and substantial number of the pmchasing and consuming public into purchasing said cigars in the erroneous belie£ that they are and were composed, in whole or in large part, of Havana tobacco, that is, tobacco grown on the Island of Cuba. PAR. 5. Among the competitors of respondent, referred to in paragraph 1 hereof, there are many who sell and distribute, in competition with respondent, cigars composed in whole and also cigars composed in part only of Havana tobacco, and who rightfully and truthfully advertise, represent, sell, and label such cigars as containing said Havana tobacco. There are also many of said competitors who !'!ell and distribute between and among the several states in competition with respondent cigars containing no Havana tobacco and being composed wholly 'of tobacco grown in the United States or elsewhere than on the Island of Cuba, and who do not brand, label, advertise, or otherwise represent that said cigars are made of Havana or Cuban tobacco.

Respondent's so-called ''Garcia's Hanma Smoker," and 2 for 5¢ "liav-a-Good" brand are displayecl1 offered for sale, and sold to the consuming public by respondent, and in and by cigar stores and other dealer-establishments in competition with the said cigars of competitors. The respondent's use of the word "Havana" as hereinabove described, in relation to cigars having no Havana tobacco, or no appreciable amount of Havana tobacco, is false ancl misleading. As a result of such false and misleading representations on the part of respondent the consuming public is being, and has been, injured, trade is being, and has been, diverted to respondent from such com- Petitors in interstate commerce, and thereby substantial injury is ?one, and has been done, by the respondent to substantial comr-etition ln interstate commerce, and there is, and has been, placed in the hands of respondent's dealers and distributors an instrument by lh.cans o£ which they mislead and deceive, and have misled and deceived, the purchasing public.

PAR. 6. Said representations of respondent, containell in its brands, labels, advertisements, or other media through which the trade and eonsuming public are reaclwd, have resulted in injury to respondent's competitors and to retail dealers and to the prejudice of the buying Public, and constitute unfair methods of competition 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, llnd for other purposes."

Order 24 F. T. <J. CONCLUSION The aforesn,id acts and practices of the respondent, Havana,-Florida Cigar Compn,ny, Inc., are to the prejudice of the public n,nd 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 duties, and for other purposes."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the original and amended and supplemental complaints of the Commission and the answer filed herein on March 26, A. D., 1937, Ly the respondent admitting all the material allegations of said complaints, including the allegations of the said amended n,nd supplemental complaint !1.'3 amended by order of the Commission duly entered on December 23, 1936,t and waiving the taking of further evidence and all other intervening procedure, and the Commission having mn,de 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 i.j ordered, That the said respondent, Havana-Florida Cigar Company, Inc., itself, its servants, employees, or agents, individual or corporate, in connection with the offering for sale, sale and distribution of cigars in interstate commerce or in the District of Columbia, do forthwith cease and desist from:

1. Using the word "II~vana" as descriptive of cigars unless such cigars be made entirely from tobacco grown in the Island of Cuba. 2. Representing in any manner that cigars other than those manufactured entirely from tobacco grown in the Island of Cuba, are Havana cigars.

It i.~ further ordered, That the respondent shall, within GO days 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.

1 See footnote on page 80:!.

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