United Woolen Mills

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IN THE MATTER OF UNITED WOOLEN MILLS CmiPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOJ,ATIO:-i OF SEC. l'i OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3312. Complaint, Jail. 23, 19.38-Decision, Mar. 2, 1938 ""here a corpomtion E>ng;lged In sale of men's snits aml clothing, to purchasers in other States, in competition with others likewise engaged in sale and distribution of such products in commerce as aforesaid, and including many who distribute and sell such suits aud clothing, uot manufactured by them, and who do not in any way repre!:ient themselves as manufacturers thereof- Adopted and used corporate and trade name including word ":\lllls," and repre· f;enter>d, through !;tH:h l'tatements ns "UNITJ<."TI \'\"ooj.E;<~ llfiLJ.S 'failors-to-1\Ien", etc., displayed on lettet·heads, bill!H!ads, cards, invoices, labels, and news· paper advet·tising matter of interstl\te distribution, that it was the manufacturer of the garments sold in commerce by it, notwithstanding fact it did not manufacture said garments, as understood by trade and purchasing public generally, nor own and operate, or directly and absolutely control, any mill or mills making same;

With capacity and tendency to mislead nnd deceive substantial portion of purchasing public into erroneous belief that such representation was true, and that it actually was the manufacturer of the garments sold by it, and with result, as direct com;equence of mistaken and erroneous beliefs thus induced, that number of commming public purchased substantial volume of its said suits and clothing as and from clothing manufacturer, for direct dealing with whom a substantial portion of wholesale and retail purchasers of such products haf! preference, llf! securing closer prices, superior quality, and other advantages not had through selling agency or middleman or anyone else, and trade was unfairly diverted to it from competitors likewise engaged in sale and distribution of men's snits and clothing ami who truthfully advertise and represent the nature and character of their busine;;;>:; to the substantial injury of competition in commerce: Held, That such acts and practices were to the prejudice of the public and com· petitors and constituted unfair methods of competition. :J[r. [(arl Stecher for the Commi;;;sion.

Mr. A. Leo Oberdorfer, of Birmingham, Ala., for respondent. 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 United. "\Voolt>n :Mills, 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 of Congress, and it appearing to said Commission that a proceeding by it in respect thereof would be in the rXITED WOOLEX 1\IILLS 853. 852 Complaint public interest, hereby issues its complaint stating its charges in that respect as follows :

PARAGRAPH 1. The respondent, United Woolen Mills, is a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal plac€ of business at 315 North 19th Street in the city of Birmingham, State of Alabama. It is, and for morethan 3 years last past has been, engaged in the sale of men's suits and clothing, in commerce between the vario11s States of the United States~ It causes said garments, when sold, to be shipped from its place of business in the State of Alabama to purchasers thereof located orresiding in various States of the United States other than the Stateof Alabama. In the course and conduct of its business said respondent is, an<l has been, in competition with other corporations and with individuals, firms, aml partnerships Jikewise engaged in the sale and distribution of men's suits and clothing in commerce among and between the various States of the United States. PAR. 2. In the course and conduct of its business as described m paragraph 1 hereof, said respondent adopted as and for its corporate and trade nam€, the words "United 'Voolen Mills," under which to carry on its business, and which corporate and trade name it has used rontinuously for several years last past, and is now using, in soliciting the sale of and selling its said men's garments in commerce among and hE>tween the various States of the United States. Respondent has caused its saitl corporate and trade name, "United 'Voolen Mills," to appear on its ]ptterheads, billheads. cards, invoices, labels, and news- Pal)E>r advertising matter having interstate distribution. The said letterheads, billheads, cards, invoices, labels affixed to said garrnpnts, and newspaper ndrertising matter distributed by respond- E>nt, as aforesaid, contain misleading representations and statements concerning its business status, of which the following is representative: CNITED WOOLEN l\IILLS Tailors-to-1\Ien 315 North NhwtPPnth Strr<>t Blrmlnghnm, Ala.

UNITED WOOLEN MILLS (Trade-Marl>) Blrmingham-Anuif;tou UNITED WOOLEN MILLS 854 FEDERAL TRADE C0::\1:!.\USSIOX DECISIOXS Complaint 26 .I!'.'!.'. c. Such statements as hereinabove set out serve as representations to the purchasing public that the respondent is the manufacturer of the garments which it sells in commet·ce as herein detailed. PAR. 3. Respondent does not, in truth and in fact, make or manufacture the garments which it sells and distributes in commerce as herein detailed as those terms are understood by the trade and purchasing public generally, nor does it own and operate or directly and absolutely control any mill or mills wherein the garments sold by it are made or manufactured. The garments sold by respondent are made or manufactured in a mill or mills or factories which respondent does not own, operate, or control in any way. PAR. 4. A substantial portion of the wholesale and retail purchasers of men's suits and clothing have expressed, and have, a preference for dealing direct with the manufacturer of products being purchased. Such purchasers believe that they secure closer prices, superior quality, and other advantages in dealing direct with the manufacturer rather than a selling agency or' middleman or anyone else.

PAn. 5. Many of the respondent's competitors who distt·ibute and sell men's suits and clothing do not manufacture products sold by them and do not in any way represent that they are the manufacttuers of said products.

PAR. 6. The false and misleading representation made by the respondent as aforesaid, through the use of the name "United \Voolen Mills," that it is the manufacturer of the garments which it distributes and sells had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that said representation is true and that the respondent is actually the manufacturer of the garments which it sells. As ~~ direct consequence of the mistaken and erroneous beliefs, induced as aforesaid, a number of the consuming public have purchased a substantial volume of men's suits and clothing sold by the respondent with the result that trade has been unfairly diverted to the respondent from its competitors likewise engaged in the business of distributing and selling men's suits and clothing who truthfully advertise and represent the nature and character of their business. As a result thereof, substantial injury has been, and is now being, done by respondent to competition in commerce among and between the various States of the United States.

PAR. 7. The above and foregoing acts, practices, and representations of the respondent have been, and are, all to the prejudice of the public and respondent's competitors as aforesaid, and have been, and are, unfair methods of competition within the meaning and intent UNITED WOOLEN :MILLS 855 Findings of Section 5 of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Conm1ission, 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 Sept~miler 26, 191-!, entitled "An Act to crf'ate a Federal Trade Com-. rnission, to define its powers and Lluties, and for other1· purposes," the Fetleral Trade Commission, on January 25. 1938, i::;sued, and on January 27, 1938, served its complaint in this proceeding upon respondent, United w·oolen Mills, charging it with the use of unfair lllethods of competition in commerce in violation of the provisions of said act. .After the issuance of said complaint and the filing of respondents answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of the complaint to be true and waiving the taking of :further evidence and all other intervening procedure, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answer, briefs having been waived, and the Commission, having duly considered the lnatter and being 11ow fully advised. in the premises, finds that this Proceeding is in the interest of the public and makes this its fin<lings as to the facts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS P .ARAGRAPH 1. The respondent, 'United \Voolen )!ills, is a corporation organized and existing under and by virtue of the laws of the State of Alabama, with its principal place of business at 315 North 19th Street in the city of Birmingham, State of .A.labama. It is, and for more than 3 years last past has been, engaged in the sale of lnen's suits and clothing, in commerce between the various States of the United States. It causes said garments, when sold, to be shipped from its place of business in the State of Alabama to purchasers thereof located or residing in various States of the United States other than the State of Alabama. In the course and conduct of its business said respondent is, and has been, in competition with other corporations and with individuals, firms, and partnerships likewise engaged in the sale and distribution of men's suits and clothing in commerce among and between the various States of the United States. PAR. 2. In the course and conduct of its business as described in Paragraph 1 hereof, said respondent adopted as and for its corporate 856 FEDERAL TRADF. COMMISSION DECISIONS Findings 26F. T. C.

and trade name the words ""Guited 'Voolen Mills" under which to carry on its business, and which corporate and trade name it has used continuously for senral years last past, and is now using, in soliciting the sale of and selling its said men's garments in commerce among and between the various States of the United States. Respondent has caused its corporate and trade name, '~United Woolen Mills," to appear on its letterheads, billheads, cards, invoices, labelsr and newspaper advertising matter having interstate distribution. The said letterheads, billheacls, cards, invoices, labels affixed to said garments, and newspaper advertising matter distributed by respondent, as aforesaid, contain misleading representations and statements concerning its business status, of which the following is representative:

UXITED WOOLEN MILLS Tailors-to-Men 315 North Nineteenth Street Birmingham, Ala.

UNI'J'ED WOOLEN MILLS (Trade-Mark) Birmingham-Anniston UNITED WOOLEN MILLS Such statements as hereinabo"e set out serve as representations to the purchasing public that tlw respondent is the manufacturer of the garments which it sells in commerce as herein detailed. PAR. 3. Respondent does not, in truth and in fact, make or manufacture the garments which it sells and distributes in commerce as herein detailed as those terms are understood by the trade and purchasing public generally, nor does it own and operate or directly and absolutely control any mill or mills wherein the garments sold by it are made or manufactured. The garments sold by respondent· are made or mannfaetured in a mill or mills or factories which respondent does not own, operate, or control in any way. PAR. 4. A substantial portion of the wholesale and retail purchasers of men's snits and clothing have expressed, and have, a preference for dealing direct 'with the manufacturer of products being" purchased. Such purchasers believe that they secure eloser prices, superior quality, and other ad,·antages in dealing direct with the manufacturer rather than a selling agency or middleman or anyone else.

UNITED WOOLEN MILL:-3 857 Order PAR. 5. Many of the respondent's competitors who distribute and sell men's suits and clothing do not manufacture products sold by them and do not in. any way represent that they are the manufacttJrers of said products.

PAR. 6. The false an.d misleading representation made by the re~pondent as aforesaid, through the use of the name "United 'Voolen Mills," that it is the manufacturer of the garments which it distributes and sells had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that said representation is true and that the respondent is actually the manufacturer of the garments which it sells. As a direct cousequence of the mistaken and erroneous beliefs, induced as aforesaid, a number of the consuming public have purchased a substantial volume of men's suits and clothing sold by the respondent with the result that trade has been unfairly diverted to the respondent from its competitors likewise engaged in the business of distributing and selling men's suits and clothing who truthfully adwrtise and represent the nature and chamcter of their business. As a result thereof, substantial injury has been, and is now being, done by respondent to competition in commerce among and between the various States of the United States.

CONCLUSION The aforesaid acts and practices of the respondent., United 'Voolen Mills, are to the prejudice of the public and of respondent's com- Petitors, and constitute unfair methods of competition in commerce, Within the intent and meaning of Section 5 of an Act of Congress, approved September 2G, 1914, entitled "An Act to e1·eat{l 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 and the substitute answer of respondent, in which substitute answer respondent admits all the material allegations of the complaint to be true, and states that it Waives hearing on the charges set forth in said complaint and that, Without further evidence or other intervening procedure, the Com- :tniiision may issue and serve upon it findings as to the facts and conelusion and an order to cease and desist from the violations of law ~charged in the complaint, and the Commission having made its find- Ings as to the facts and conclusion that said respondent has violated the provisions of an Act of Congress, approved September 26, 1914, 858 FEDERAL TRADE COMMISSION DECISIOXS Order 26F. T. C.

entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes." It is ordered, That the respondent, United 'Yoolen Mills, a corporation, its officers, representatives, agents, and employes, in connection with the offering for sale, sale, and distribution of clothing for men, suits, pants, and overcoats in interstate commerce or in the District of Columbia, do forthwith cease and desist from: Representing, through the use of the word ''Mills'' or any otlwr word or phrase of similar import and meaning as part of its corporate name or in any other manner, or through any .other means or device, that it is the manufacturer or maker of the products which it sells unless and until it actually owns and operates or directly and absolut«:>ly controls a plant or mill wherein said products are manufactured by it.

It is further ordered, That the respondent shall, within 60 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.

PREXDF.RGAST-DAVIES CO., LTD. 859 Syllabus