Boehm, Alfred

Text (OCR of the scan at left; may contain errors)

IN THE MATI'ER OF ALFRED BOEHM DOING BUSINESS AS LYNX KNITTING ' ·company COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 8286. Conbpla·int, Dec. 2Z, 193"1-Decision, Apr. 13, 1938 '\Vb'-'re an individual engaged in sale and distribution of hosiery through houseto-bouse canvassers, principally, in the l'arlous Stutes and in the District of Columbia- (a) Represented himself to be the manufacturer thereof, through inclusion of Word "Knitting" in his trade name and display thereof on his letterheads, oruer blanks, and in advertising matter in l'arious magazines and otherwise, facts being he did not make same, nor own and operate nor directly and absolutely control any mill and factory in which same was made, but pur- "Wi chased said products from various hosiery manufacturers; th tendency and capacity to mislead and deceive purchasers thereof into false llnd erroneous belief that in buying from him they were dealing with manufacturer and t11ereby gaining an admntnge in price by saving middleman's (b Profit and in other ways; and ) Represented, in advertising for distributors in the "Agents Wanted'' columns of various magazines of interstate circulation, and through form letters and otherwise, and to the purchasing public generally, that his said hosiery was proof against spots, splashes, and snagging, facts being it was (c) neither spot, splash, nor snag proof;

Represented, as aforesaid, that said hosiery was composed wholly of silk, facts being It was not composed wholly of silk, as long definitely and spe- CI..ticaiiy understood by substantial number of purchasing public, as meaning Product of cocoon of silkworm, employed for many years in manufacture of various articles of wearing apparel, considered, when thus made, of supe- ~lor quality, and in great public demand, and commonly thus described and (d) hus understood, as and when made wholly therefrom; and Uepresented, as aforesaid, that he furnished his distributors with free sample outfits, facts being he did not thus furnish such outfits to his canvassers, but such outfits were paid for by them in cash and by services rendered· '\With e:tiect o~ misleading retailers, distributors, and substantial portion of pur- chas· 1ll mg public Into erroneous belief that said representations were true and to purchase of substantial quantities of such hosiery because of said erroneous belief, and of unfairly diverting trade to him from competitor lllanufacturers and distributors of hosiery who do not misrepresent. character or type of business in which engaged, quality, nature, and composition of their products, nor inducements offered to prospective distributors, in ~dverUslng, seiUng and distributing their said products among various lield t~tes and in the District of Columbia: ' hat such acts and practices were to the prejudice and injury of the PUblic and competitors and constituted unfair methods of competition. Complaint 26 F. T. C. Before Mr. W. W. Sheppard, trial examiner.

Mr. Dewitt T. Puckett for the Commission.

Complaint .

Pursuant to the provisions of an Act of Congress, approved Sep· tember 26, 1914, entitled "An Act to create a :Federal Trade Corn,~ mission, to define its powers and duties, and for other purposes,d the Federal Trade Commission, having reason to believe that Alfre Boehm, an individual, doing business as Lynx Knitting Company!, hereinafter referred to as respondent, has been and is using unf~rr methods of competition in commerce, as "commerce" is defined 111 said act of Congress, and it appearing to said Commission that a. proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. The respondent, Alfred Boehm, is an individuaj doing business as Lynx Knitting Company. His office and place 0d business are at 5-7 ·white Street, New York, N. Y. He is now, 111•1 for several years last past has been, engaged in the sale and drs· tribution of hosiery, principally through house-to-house canvassers£ in the various States of the United States and in the District 0 Columbia.

'Vl1en orders are received by respondent, his said products are shipped from his place of business in New York, N. Y., to the pur· chasers thereof located in the various States of the United States other than the State of New York. There is now, and has been. for several years last past, a course of trade in commerce, in said hosr.ery, sold and distributed by respondent, between and among the varrous States of the United States and in the District of Columbia. Respondent is now, and at all times mentioned herein has been, in substantial competition with other individuals, and with part~er· ships and corporations engaged in the sale and distribution of hos~er{ in commerce between and among the various States of the Unrtet States and in the District of Columbia. . 111 PAR. 2. In the course and conduct of his business, as described re·paragraph 1 hereof, the respondent has represented and now rep£ . sents himself to be the manufacturer of the hosiery he offers 0{ sale and sells. Said representation is made by respond.ent throu~ 1 use of the word "Knitting" in his trade name which appears on. }lrs letterheads, order blanks, in advertising matter appearing in varrons magazines, and through other means. h In truth and in fact, the respondent does not manufacture t 0 hosiery he offers for sale and sells, nor does he own and operate or LYNX KNITTING CO. 1097 101)5 Complaint dir~ctly and absolutely control the mill or factory in which said hosiery is manufactured. Respondent purchases said hosiery from Golden Belt Manufacturing Company, Durham, N. C., Great American Knitting Mills, Bechtelsville, Pa., Newnan Hosiery Company, Newnan, Ga., Best Made Hosiery Company, Quakertown, Pa., and other hosiery manufacturers.

PAn. 3. It is the common belief among wholesalers, retailers, and the Purchasing public, that a superior grade of merchandise can be Purchased direct from the manufacturer thereof at a considerable s~ving in price, and that other advantages can be secured by dealing direct with the manufacturer. The representations made by respondent, as alleged in para()'raph 2 hereof, have the tendency and ~apacity to deceive and mislead the purchasers of respondent's hosiery ~nt~ the false and erroneous beliefs that when they purchase said osle~y from respondent they are dealing with the manufacturer of ~a1d hosiery and are thereby gaining an advantage in price by saving the middleman's profit and are gaining other advantages. } ~ AR. 4. Respondent's said hosiery is offered for sale and sold c llefly through house-to-house canvassers. As an inducement to per- ~ons to become his distributors and offer his said hose for sale, and ~ the. purchasing public to buy said hosiery, the respondent has af vert~sed and is now advertising in the "Agents 'Vanted" columns ~ various magazines having an interstate circulation, through form letters, and in various other ways, as follows: PnLoYNX HOSE ONCE llOUGIIT ALWAYS SOUGIIT-RINGLESS-SPLASII OF-ANTI-SNAG PROCESS.

cu;t~ese unusual features create immediate int<:>rest, quiek soles and satisfi<:>d W rners. 14 years of !':quare dealing with our customers and sale10:people. Ollderful 1' f ('O! me o men's and women's hosiery. Large variety of styles and staors. Liberal commission. Prompt delivery. Free outfit with sample hose .,.:ts You off. ·write us at once. · .~..,e\v "o t' , • ,., • .. n I-snag silk hose • • • They are also rain and splash-proof. '"h... e ra·10 Every woman will want those hose made by the anti-snag process . ,., • may splash on these hose but there will be no spots on them. ;lou • : ;ou can get samples of Lynx guaranteed hose free of cost to 1 None of o~r ladies' silk lease coutuin any rayon, celanese or any artificialI! Ik ot any kind. to m.cans of the foregoing statements, the respondent represents lJ.ge Istrlbutors, prospective distributors, and the purchasing public sn ner~lly that his said hosiery is proof against spots, splashes and fu ag?~g; that said hosiery is composed wholly of silk; and that he fa r~ 18 es his distributors with free sample outfits. In truth and in no~ ' respondent's said hosiery is not spot' splash or snag proof; it is composed wholly of silk, the product of the cocoon of the silk Findings 26F. r.c.

worm, but is composed in part o£ a material or materials other tha.n silk. Respondent does not in fact furnish free sample outfits to }us canvassers but said outfits are paid £or by the said canvassers in cash and by services rendered.

PAR. 5. The word "silk" has long had to the minds o£ a subst~n­ tial number o£ the purchasing public, and still has, a very defin~t~ and specific meaning, i. e., the product o£ the cocoon o£ the sll d worm. Said product is now, and £or many years has been, emplo~e in the manufacture o£ various articles o£ wearing apparel including hosiery. ·wearing apparel manufactured from silk is regarded ge~· erally as apparel o£ a superior quality and is in great public deman · At all times mentioned herein, the term "silk" has been common~Y used to describe articles of wearing apput·el manufactured whol Y £rom silk and as a result thereof the purchasing public has come ~ 0 understand that the apparel so described is manufactured whol Y from silk, the product o£ the cocoon o£ the silk worm. 1 PAR. 6. The use by respondent o£ the representations set .fort~ herein has had, and now has, the capacity and tendency to mislea f and does mislead retailers, distributors, and a substantial portion ° the purchasing public into the erroneous beliefs that such represent~d tions are true and into the purchase o£ substantial quantities of sal hosiery because o£ such erroneous beliefs. . There are, among the competitors of respondent, as mentioned : paragraph 1 hereof, manufacturers and, distributors of hosiery "' 0 do not misrepresent the character or type of business in which they are engaged, the quality, nature, and composition of their produc.ts, nor the induc~ments offered to prospective distributors, who Iike:"1se advertise, sell and distribute hosiery in commerce among the varlo~S States o£ the United States and in the District o£ Columbia. By u~e of the representations aforesaid, trade has been, and is now being: unfairly diverted to respondent from said competitors. Thereby su stantial injury is being, and has been, done by respondent to corn· petition in commerce as herein set out. Il PAR. 7. The above alleged acts and practices of respondent are 11• to the injury and prejudice of the public and respondent's compe~l­ tors and constitute unfair methods of competition in commerce wlthl~ the intent and meaning of Section 5 of an Act of Congress entitle 5 "An Act to create a Federal Trade Commission, to define its pow~ and duties, and for other purposes," approved September 26, 19 · REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission A.cj the Federal Trade Commission, on December 22, 1937, issued, an LYNX KNITTING CO. 1099 1095 Findings on December 23, 1937, served its complaint in this proceeding upon respondent, Alfred Boehm, an individual, doing business under the trade name Lynx Knitting Company, charging him with the use of u~~air methods of competition in commerce in violation of the pro- VIsions of said act. After the issuance of said complaint and the filing of respondent's 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 0~ 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 Con;tmission on the said complaint and the substitute answer, briefs havmg been waived and oral argument not having been requested, and the Commission having duly considered the same and being now ~ully advised in the premises, finds that this proceeding is in the ~nterest of the public and makes this its findings as to the facts and Its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS ~ ARAGRAPH 1. The respondent, Alfred Boehm, is an individual doing business under the trade name Lynx Knitting Company. His office and place of business are at 5-7 'Vhite Street, New York, N.Y. lie is now, and for several years last past has been, engaged in the sale and distribution of hosiery, principally through house-to-house canvassers, in the various States of the United States and in the District of Columbia.

~Vhen orders are received by respondent, his said products are shipped from his place o£ business in New York, N. Y., to the purchasers thereof located in the various States of the United States other than the State of New York. There is now, and has been for se~eral years last past, a course of trade in said hosiery sold and distributed by respondent, in commerce between and among the various States of the United States and in the District of Columbia . . Respondent is now, and at all times mentioned herein has been, In. substantial competition with other individuals, and with partner- . shlps and corporations likewise engaged in the sale and distribution of hosi~ry in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, the respondent has represented and now represents himself to be the manufacturer of the hosiery he offers for :sale nnd sells. Said representation is made by respondent through Findings 26F. T.O.

use of the word "Knitting" in his trade name which appears on his letterheads, order blanks, in advertising matter appearing in various magazines, and through other means.

In truth and in fact, the respondent does not manufacture the hosiery he offers for sale and sells, nor does he own and operate or directly and absolutely control any mill or factory in which said hosiery is manufactured. Respondent purchases said hosiery ut wholesale from Golden Belt Manufacturing Company, Durhanlt N. C., Great American Knitting Mills, Bechtelsville, Pa., Newnan Hosiery Company, Newnan, Ga., Best Made Hosiery Company, Quakertown, Pa., and other hosiery manufacturers. PAR. 3. It is the common belief among wholesalers, retailers, and the purchasing public, that a superior grade of merchandise can be purchased direct from the manufacturer thereof at a considerable saving in price, and that other advantages can be secured by dealing direct with the manufacturer. The representations made by respondent, as alleged in paragraph 2 hereof, have the tendency:f and capacity to deceive and mislead the purchasers of respondenf~ hosiery into the false and erroneous beliefs that when they purchase said hosiery from respondent they are dealing with the manufacturer of said hosiery and are thereby gaining an advantage in price by saving the middleman's profit and are gaining other ad vantages. PAR. 4. Respondent's said hosiery is offered for sale and sold chiefly through house-to-house canvassers. As an inducement to persons to become his distributors and offer his said hose for sale, and to the purchasing public to buy said hosiery, the respondent bas advertised and is now advertising in the "Agents vVanted" columns of various magazines having an interstate circulation, through form letters, and in various other ways, as follows: LYNX HOSE ONCE BOUGHT ALWAYS SOUGHT RINGLESS-SPLASH PROOF-ANTI-SNAG PROCESS These unusual features create immediate interest, quick sales and satisfied customers. 14 years of square dealing with our customers and salespeople. Wonderful line of men's and women's hosiery. Large variety of styles and colors. Liberal commission. Prompt delivery. Free outfit with sample hose starts you off. Write us at once.

New "anti-snag" silk hose • • • They are also rain and splash-proof~ • • • Every woman will want these hose made by the anti-snag process· The rain may splash on these hose but there wlll be no spots on them. • • • You can get samples of Lynx guaranteed hose free of cost tO' you • • •.

None of our ladies' silk hose contain any rayon, celanE>se or any artificial silk. of any kind.

LY~X K~ITTING CO. 1101 1095 Conclusion . B~ means of the foregoing statements, the respondent repres~nts to distributors, prospective distributors, and the purchasing pubhc gene~ally that his said hosiery is proof against spots, splashes and snagg~ng; that said hosiery is composed wholly of silk; and that he furlUshes his distributors with free sample outfits. Such representations are false, misleading, and deceptive. In truth and in fact, respondent's said hosiery is not spot, splash, or snag proof. It is not composed wholly of silk, the product of the cocoon of the silkworm, but ls composed in part of a material or materials other than silk. Respondent does not in fact furnish free sample outfits to his canvassers but ~aid outfits are paid for by the said canvassers in cash and by services rendered .

. par. 5. The word "silk" has long had to the minds of a substantial number of the purchasing public, and still has, a very definite ~n~l specific meaning, i. e., the product of the cocoon of the silkworm. 'Uld product is now, and for many years has been, employed in the 1,nanufacture y . of various articles of wearin()'0 apparel including hosiery. · earlllg apparel manufactured from silk is regarded generally as ~,Pllarel of a superior quality and is in great public demand. At all dlnles. mentioned herein, the term "silk" has been commonly used to escnbe a1iicles of wearing apparel manufactured wholly from silk ~~ld as a result thereof the purchasing public has come to understand at the apparel so described is manufactured wholly from silk, the Pr~duct of the cocoon of the silkworm.

~R. 6. The use by respondent of the representations set forth1 ~erem has had, and now has, the capacity and tendency to mislead and p oes mislead retailers, distributors and a substantial portion of the a Urchasing public into the erroneous beliefs that such representations true and into the purchase of substantial quantities of said hosierybl'e ecanse f h . '11 ° sue erroneous beliefs. p Jere are, among the competitors of respondent, as mentioned in '\V;ragraph 1 hereof, manufacturers and distributors of hosiery 10 th <lo not misrepresent the charactev or type of business in which llc~ are eng~ged, the quality, nature and composition of their prod- "Wi 'nor the mducements offered to prospective distributors, who like- -.a~~ advertise, sell and distribute hosiery in commerce among the By lous States of the United States and in the District of Columbia. bei llse of ~he representations aforesaid, trade has been, and is now ng unfairly diverted to respondent from said competitors. CONCLUSION The afo, 'd ·indi 'd Iesa1 acts and practices of respondent, Alfred Boehm, an Vl nal, doing business under the trade name Lynx Knitting 16041\lm --89--vol.26----72 1102 FF.DERAL TRADE COl\I:VIISSION DECISIONS 2G F.'l'· c. Order -Company, are to the prejudice and injury of the public anJ of r~­ spondent's competitors, and constitute unfair methods of competli tion in commerce within the intent and meaning o:f the Federa 'Trade Commission Act.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Comn1is· sion upon the complaint of the Commission and the answer of re· spondent, in which answer respondent admits all the material a~Ie· gations of the complaint to be true, and states that he waives hearii1~ on the charges set forth in said complaint and that, without furthei evidence or other intervening procedure, the Commission may issue and serve upon him findings as to the facts and conclusion and an order to cease and desist from the violations of law charged in the complaint, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act. 1 It is ordered, That the respondent, Alfred Boehm, an individtHt: doing business under the trade name Lynx Knitting Company, 01 under any other trade name, his agents, representatives, and .ent: ·ployees, in connection with the offering for sale, sale and distri~tl tion of hosiery in interstate commerce or in the District of Cohunbiil, -do forthwith cease and desist from: . 1. Representing, through the use of the word "Knitting" in .)tis · J)Hf tra d e name or through the use of any word or term of sun . import and meaning, or through any other means or device, 01' ~~ any manner, that said respondent is the manufacturer of the pro ucts sold by him, unless and until he actually owns and operat~s, -or directly and absolutely controls, a manufacturing plant wheretll said products are manufactured by him;

2. Representing that said hosiery is proof against spots, splashe:3 and snagging; . 1 3. Representing that he furnishes his distributors or agents "· 1~1 free samples or outfits, when in fact said samples or outfits are P111 for by the distributors in money or in services·, · ')ar 4. The use of the word "silk," or any other word or words of S!U11 t import and meaning, to describe or designate hosiery which is Jlo composed wholly of silk, the product of the cocoon of the silkW0r 111£ unless, in the case of hosiery composed in part of silk and in part 0 rayon or material or materials other than silk, there is used in ii11n1 e~ diate connection and conjunction therewith, and in letters of at.l~!l 511 equal size and conspicuousness, a word or words accurately descrJbi~Y the fiber, material or materials from which said hosiery was actual LYNX KNITTING CO, 1103 Order made; and provided, that the fiber or material content of such hosiery b~ accurately disclosed by designating each constituent fiber or materr~l thereof, in the order of its predominance by weight, beginning 'With the largest single constituent.

It ~ further ordered, That the respondent shall, within 60 days ~after service upon him of this order, file with the Commission a report In writing setting forth in detail the manner and form in which he has complied with this order.

Syllabus 26 F. T. C.