Victoria Chemical Company

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IN THE MA'ITER OF VICTORIA CHEMICAL COMPANY, SCHWARZ DRUGGIST, INC., SCHWARZ DRUG COMPANY, SCHWARZ DRUG STORES, INC., HIRAM SCHWARZ, INC., ET AL.

<:COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket #03. Complaint, Dec. 6, 191,0-Dccision, JJfar. 12, 19.}1 Where tl.ve corporations, with principal offices and places of bmdness, as case might be, in Newark and Bloomtl.eld, N. J., and White Plains, N. Y., and nine individuals, who were general officers of one or more of said corporations and formed their policies and directed and controlled their acts and practices, engaged in compounding, and in interstate sale and distribution of, their "Anti-Drink" drug-containing medicinal preparation, and cooperating in carrying out acts and practices below set forth; in advertisements which they disseminated and caused to be disseminated through the mails, in newspapers and periodicals, and through pamphlets, circulars, and other advertising matter, and by various other means in commerce and otherwise-- (a) Represented, directly or by implication, that their said "Anti-Drink" pt·eparation was a cure or remedy and competent and effective treatment for alcoholism and the liquor habit, through use of which desire for alcoholic stimulants was eradicated, and that such preparation was safe for use; Facts being it was neither a cure or remedy nor competent or effective treatment for said condition or habit, and would not emdicate desire for said stimulants, and was not safe for use, by virtue of tartar emetic content in quantity sufficient to cause serious injury to health if used under conditions prescribed in said advertisements or under such conditions as are customary ot• usual, and thus used, mig·ht result in inflammatory disturbances of the stomach and intestinal tract, excessh·e depression of the cardio-vascular system and metabolic disturbances arising from the central nervous system; and (b) Failed to reveal facts material in the light of the representations contained in their said advertisements, and that use of their said product under the conditions l)rescribed In said advertisemer;ts or under such conditions as are customary or usual, might result in serious injury to the stomach, intestinal tract, heart, and nervous system;

With the effect of misleading and deceiving substantial portion of purchasing public into erroneous and mistaken belief that such false advertisements were true, and of inducing such public to purchase substantial quantities of their said product as result of such belief: Held, That such acts and practices, under the circumstances set forth, were all to the pt·ejudice of the public and constituted unfair and deceptive acts and practices in commerce.

Mr. Jesse D. [(a.sh for the Commission .

.Jir. Bertram S. Grand and .Mr. Michael Sokol, of Newark, N. J., for respondents.

Com:plaint 32F.T. C.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Victoria Chemical Co., a corporation, Schwarz Druggists, Inc., a corporation, Schwarz Drug Co., a corporation, Schwarz Drug Stores, Inc., a corporation, Hiram Schwarz, Inc., a corporation, and Sarah Schwarz, Esther Schwarz, Joel J. Schwarz, Samuel Schwarz, Ira I. Schwarz, Sylvan Schwarz, Hiram Schwarz, Oscar Katz, and Jacob Eisen, hereinafter referred to as respondents, have violated the provisions of said act, and it appearing to the 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. Respondent, Victoria Chemical Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its office and principal place of business located at 887 Broad Street, Newark, N. J. Respondent, Schwarz Druggists, Inc., is a corporation organized, (~existing, and doing business under and by virtue of the laws of the State of New Jersey, with its principal office and place of business at 887 Broad Street, Newark, N. J.

Respondent, Schwarz Drug Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its office and principal place of business at 565 Bloomfield Avenue, Bloomfield, N.J.

Respondent, Schwarz Drug Stores, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its principal office and place of business at 457 Clinton A venue, Newark, N. J.

Respondent, Hiram Schwarz, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business at 158 Main Street, White Plains, N. Y.

Respondent, Sarah Schwarz, is an individual and is president of the corporate respondent Victoria Chemical Co. Her principal office and place of business is located at 887 Broad Street, Newark, N.J. Respondent, Esther Schwarz, is an individual and is secretary of the corporate respondent Victoria Chemical Co. Her principal office and place of business is located at 887 Broad Street, Newark, N.J. Respondent, Joel J. Schwarz, is an individual and is treasurer of the corporate respondent Victoria Chemical Co., secretary of the corpo- VICTORIA CHEMICAL CO. ET AL. 859 857 Complaint rate respondent Schwarz Druggists, Inc., and secretary of corporate respondent Hiram Schwarz, Inc., with his principal office and place of business located at 887 Broad Street, Newark, N.J. Respondent, Samuel Schwarz, is an individual and is president of the. corporate respondent Schwarz Druggists, Inc., vice president of the corporate respondent Schwarz Drug Co., vice president of the corporate respondent Schwarz Drug Stores, Inc., and president of the corporate respondent Hiram Schwarz, Inc., with his office and principal place of business located at 887 Broad Street, Newark, N. J. · Respondent, Ira I. Schwarz, is an individual and is treasurer of corporate respondent Schwarz Druggists, Inc., president of the corporate respondent Schwarz Drug Co., secretary of the corporate respondent Schwarz Drug Stores, Inc., and vice president of the corporate respondent Hiram Schwarz, Inc., with his office and principal place cf business located at 887 Broad Street, Newark, N.J. Respondent, Sylvan Schwarz, is an individual and is vice president of the corporate respondent Schwarz Druggists, Inc., secretary of the corporate respondent Schwarz Drug Co., and president of the corporate respondent Schwarz Drug Stores, Inc., with his office and principal place of business located at 887 Broad Street, Newark, N. J. Respondent, Hiram Schwarz, is an individual and is treasurer of the corporate respondent, Hiram Schwarz, Inc., with his principal office and place of business located at 158 :Main Street, White Plains, N.Y.

Respondent, Oscar Katz, is an individual and is treasurer of the corporate respondent Schwarz Drug Co., with his principal office and place of business located at 565 Bloomfield Aven•1e, Bloomfield, N.J. Respondent, Jacob Eisen, is an individual and is treasurer of the corporate respondent Schwarz Drug Stores: Inc., with his office and principal place of business located at 457 Clinton Avenue, Newark, N.J.

The individual respondents formulate the policies and direct, control, and dominate the acts and practices of the corporate respondents. All of the respondents have acted in conjunction and cooperation each with the other in carrying out the acts and practices hereinafter set forth.

PAR. 2. The respondents are riow and for more than 2 years last past have been engaged in the business of compounding, selling, and distributing a certain preparation containing drugs designated "Anti- Drink" and recommended by respondents for use as a treatment and cure for alcoholism and the liquor habit. Respondents cause their said preparation, when sold, to be transported from their aforesaid Complaint 32F.T.C.

places of business in the States of New York and New J~rsey to purchasers thereof located in various other States of the United States and in the District of Coumbia. Respondents maintain, and at all times mentioned herein have maintained, a course of trade in said preparation in commerce among and between the various States of the United States and in the District of Columbia.

PAR • .3. In the course and conduct of their aforesaid business, respondents have disseminated and have caused the dissemination of false advertisements concerning their said product by the United States mails and by various other means in commerce, as co.mmerce is defined in the Federal Trade Commission Act; and respondents have also disseminated and have caused the dissemination of false advertisements concerning their said product by various means for the purpose of inducing and which are likely to induce, directly or indirectly, the purchase of their said product in commerce, as commerce is defined in the Federal Trade Commission Act.

Among and typical of the false, misleading, and deceptive statements and representations contained in said false advertisements disseminated and caused to be disseminated as hereinabove set forth by the United States mails, by advertisements in newspapers and periodicals, and by pamphlets, circulars, and other advertising matter, are the following:

DRINK HABIT CAN BE STOPPED Have you a loved one who drinks more than is good for him? If so, you can help him with Anti-Drink. This highly effective preparation makes liquor distasteful to the most habitual drinker. .Anti·Drlnk may be obtained at any Schwarz Drug Store.

Through the use of the statements and representations hereinabove set forth and others similar thereto not specifically set out herein, respondents have represented, directly or by implication, that their preparation Anti-Drink is a cure or remedy and a competent and effective treatment for alcoholism and the liquor habit; that by its use the desire for alcoholic stimulants is eradicated; that said preparation is safe for use.

PAR. 4. The foregoing representations are grossly exaggerated, false and misleading. In truth and in fact, respondents' preparation is not a cure or remedy nor a competent or effective treatment for alcoholism, or the liquor habit. The use of such product will not eradicate the desire for alcoholic stimulants.

Respondents' preparation is not safe for use, as it contains the drug tartar emetic in a quantity sufficient to cause serious injury to health VICTORIA CHEMICAL CO. ET AL. 861 857 Findings if said prep;tration is used under the conditions prescribed in said advertisements or under such conditions as are customary or usual. Such use of said preparation may result in inflammatory disturbances of the stomach and intestinal tract, excessive depression of the cardio-vascular system, and metabolic disturbances arising from the central nervous system.

PAR. 5. Further, the adn•ttisements disseminated by respondents, as aforesaid, constitute false advertisements for the reason that they fail to reveal facts material in the light of the representations contained therein, and fail to renal that the use of said preparation under the conditions prescribed in said advertisements, or under such conditions as are customary or usual, may result in serious injury to the Htomach, intestinal tract, heurt, and nervous system. PAR. 6. The use by the r£>spondents of the foregoing false and misleading advertisements, diss£>minate<l as aforesaid, has the tendency antl capacity to, and doe.;, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such fall'e adrertisements are true and to induce the purchasing public to purchase substantial quantities of respondents' product as a result of such belief.

PAR. 'l. The aforesaid acts and practices of respondents as herein allP~erl an' all to the prejudice and injury of the public, and constitute unfair and -deceptive acts and practices in commerce within the intent and meaning of the FNlenil Trade Commission Act. REPORT, FINDINGs As TO THE FACTs, AND ORDER Pur~uant to the provisions of tlw Federal Trade Commission Act, the Federal Trade Commission on the 6th day of December 1940, isst1e1l and served its complaint in this proceeding upon said respondents, Victoria Chemieal Company, Schwarz Druggists, Inc., Schwarz Drug Co., Schwarz Drn~ Stores, Inc., Hiram Schwarz, Inc., corporations, and Sarah Schwarz, Esther Schwarz, Joel J. Schwarz, Samuel Sehwarz, Ira I. Schwarz, Sylvan Schwarz, Hiram Schwarz, Oscar Katz, and· Jacob Eisen, indi,·iduals, charging them with the use of unfair methods of comp-:tition in commerce in violation of the provisions of said act. On December 26, 1940 the respondents filed their answer in this proceeding. Thereafter, a stipulation was entered into whereby it wus stipnlntPd and agreed that a statement of facts signed and exrentrd by the respomlents through their attorneys, Bertram S. Gmnd and l\Iiehael Sokol, and W. T. Kl'lley, chief counsel of- the l<'r1l£>ral Trade Commis-,ion, subject to the approval of the Commission, may he taken lls the fads in this pro<"erding and in lieu of testimony !t2~0'H')m 41 \'OL. !~2-5~ Findings 32 F. T. 0. in support of the charges stated in the complaint or in opposition thereto; and that the said Commission may proceed upon said state· ment of facts making its report, stating its findings as to the .facts and its conclusion based thereon and enter its order disposing of the proceeding without presentation of argument or the filing of briefs. Thereafter, this proceeding came on for final hearing before the Com· mission on said complaint, answer and stipulation, said stipulation having been approved, accepted and filed 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 its findings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO Tile FAC'TS PARAGRAPH 1. UespoliClent, Victoria Chemical Co., is a corpomtion organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its office and principal place of business located at 887 Broad Street, Newark, N. J. Respondent,. Schwarz Druggists, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its principal office aml place of business at 887 Broad Stre~t, Newark, N.J.

Respondent, Schwarz Drug Co., is a corporation organized, existing, and doing business under and by virtue o~ the laws of the State of New Jersey, with its· office and principal place of business at 565 Bloomfield Avenue, Bloomfield, N.J.

Respondent, Schwarz Drug Stores, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey, with its principal office and place of business at 457 Clinton A venue, Newark, N. J.

1 Respondent, Hiram Schwarz, Inc., is a corporation organized, exist ing, and doing busines:~ under and by virtue of the laws of the State of New York, with its office and principal place of business at 158 l\Iain Street, White Plains, N. Y.

Respondent, Sarah Schwarz, is an individual and is president of the corporate respondent Victoria Chemical Co. Her principal office and place of business is located at 8R7 Broad Street, Newark, N.J. Respondt>nt, Esther Schwarz, is· an individual and is secretary of the corporate respondent Victoria Chemical Co. Her principal office and place of business is located at 887 Broad Street, Newark, N. J. Respondent, ,Joel J. Schwarz, is an individual and is treasurer of th~ corporate respondent Victoria ChPmicnl Co., sPcretury of the corporate VICTORIA CHEl\liCAL CO. ET AL. 863 8.'57 Findings respondent Schwarz Druggists, Inc., and secretary of corporate respondent Hiram Schwarz, Inc., with his principal office and place of business located at 887 Broad Street, Newark, N.J. Respondent, Samuel Schwarz, is an individual and is president of the corporate respondent Schwarz Drugg:ists, Inc., Yice president of the corporate respondent Sclnrarz Drug Co., vice pz·esitlent of the corporate respondent Schwarz Drug Stores, Ine., and president of the corporate respondent Hiram Schwarz, Inc., with his office and principal place of business located at 887 Broad Strf'et, Newark, N.J. Respondent, Ira I. Schwarz, is an imlividual and is treasurer of corporate respondent Schwarz Druggists, Inc., president of the corporate respondent Schwarz Drug Co., secretary of the corporate respondent Schwarz Drug Stores, Inc., and vice president of the eorporate respondent Hiram Schwarz, Inc., with his office and principal place of bnsinef's located at 887 llrond Street, Newark, N.J. Respondent, Sylvan Schwarz, is an indh·idualnnd is vice president of the corporate respondent Schwarz Druggists, Inc., secretary of the corporate respondent Schwarz Drug Co., and president of the corporate respondent Schwarz Drug Stores, Inc., with his office and prin-· cipal place of business located at 887 Broad Street, Newark, N.J. Respondent, Hiram Schwarz, is an indh·idual nlld is tn'asurer of the corporate respomlent Hiram Schwarz, Inc., with his principal office and place of business located at 158 l\Inin Street, 'Vhite Plains, N.Y.

Respondent, Oscar Katz, is an individual and is treasurer of the corporate respondent Schwarz Drug Co., with his principal office and place of business located at 565 Bloomfield Avenue, Bloomfield, N. J. Respondent, Jaeob Eisen, is an individual and is treasurer of the corporate respondent Schwarz Drug Stores, Inc., with his office and principal place of business located at 457 Clinton Awnue, Newark, N.J.

The individual respondents formulate the policies and direct, contml, and dominate the acts and practices of the corporate respondents. All of the respondents have acted in conjunction and cooperation each with the other in carrying out the acts and practices hereinafter set forth.

PAR. 2. The respondents are HOW and for more than 2 years last past have been engaged in the business of compounding, selling, and distributing a cert~in preparation containing drugs d-esignated ".\.nti- Drink" nnd recommended by respondents for use as a treatment and cure for alcoholism and the liquor habit. Respondents cause theit· said preparation, \\"hen sold, to he trnnsported from their aforeslli(l Findings 321!'. T. C. places of business in the States of New York aml New Jersey to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents maintain, and at all times mentioned herein have maintained, a course of trade in said preparation in commerce among and between the various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of their aforesaid business, respondents have disseminated and have caused the dissemination of false advertisements concerning their said product by the United States mails and by various other means in commerce, as commerce is defined in the Federal Trade Commission Act; and respondents have also disseminated and have caused the dissemination of false advertisements concerning their said product by various means for the purpose of inducing and which are likely to induce, directly or indirectly, the purchase of their said product in commerce, as commerce is defined in the Federal Trade Commission Act. Among and typical of the false, misleading, and deceptive statements and representations contained in said false advertisements disseminated arid caused to be disseminated as hereinabove set forth by the United States mails, by advertisements in newspapers and periodicals, and by pamphlets, circulars and other advertising matter, are the following :

DRINK HARIT CAN BE STOPPED Have you a lon•d one who drinks more than is gootl for him? If so, you can help' him with Anti-Drink. This highly effective preparation makes liquor distasteful to the most habitual drinker. Anti-Drink may be obtained at any ~chwarz Drug Store.

Through the use of the statements and representations hereinabove set forth and others similar thereto not specifically set out herein, respondents have represented, directly or by implication, that their preparation Anti-Drink is a cure or remedy and a competent and effective treatment for alcoholism and the liquor habit; that by its use the desire for a1eoholic stimulants is eradicated; that said prepamtio11 is safe for use.

PAR. 4. The foregoing representations nre grossly e,xaggerated, false, and misleading. In truth and in fact, respondents' preparation is not a cure or remedy nor a competent or effective treatment for alcoholism, or the liquor habit. The use of such product will not ('radicate the desire for alcoholic stimulants. Respondents' preparation is not safe for use, as it contains tltc drug tartar emetic in a quantity sufficient to cause serious injury to VICTORIA CHEMICAl, CO. ET AL. 865 857 Order ' health if said preparation is used under the conditions prescribed in said advertisements or under such conditions as are customary or usual.

Such use of said preparation may result in inflammatory disturbances of the stomach and intestinal tract, excessive depression of the cardiovascular system, and metabolic disturbances arising from the central nervous system.

PAR. 5. Further, the advertisements disseminated by respondents, as aforesaid, constitute false advertisements for the reason that they fail to reveal facts material in the light of the representations contained therein, and fail to reveal that the use of .said preparation under the conditions prescribed in said advertisements, or under such conditions as are customary or usual, may result in serious injury to the stomach, intestinal tract, heart, and nervous system. PAR. 6. The use by the respondents of the foregoing false and misleading advertisen1ents, disseminated as aforesaid, has the tendency and capacity to, and does, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such false advertisements are true and to induce the purchasing public to purchase substantial quantities of respondents' product as a result of such belief.

CONCLUSION~ The aforesaid acts and practices of respondent, as herein found, are nll to the JWPjudicc of the public nnd cm1o;;titute unfair :mtl deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDI.:R TO CEASE AND DESIST This proct>cding having bt>en henrd by the Federal Trade Commission upon the complaint of the Commission, the answer o£ the respondents and a stipulation as to the facts entered into by Bertram S. Grand and ~Iichael Sokol, attorneys for the respondents herein, Victoria Chemical Co., Schwarz Druggists, Inc., Schwarz Drug Co., Schwarz Drug Stores, Inc., Hiram Schwarz, !nc., corporations, and Sarah Schwarz, E~ther Schwarz, Joel J. Schwarz, Samnt>l Schwarz, Ira I. Schwarz, Sylvun Schwnrz, Hiram Schwarz, Oscar Katz, and Jacob Eisen, individuals, nml 1V. 'f. Kelley, chief counsel for the Commission, which provides, among other things, that without ~nrther evidence or other intervening procedure the Commission may 1issue and serve upon the respondents herein findings as to the facts and conclusion ba:o,cd thereon an<l an order disposing of the proceed- 866 FEDERAL TRADE CO!.Il\JISSION DECISIONS Order 32l<'.T.C. ing, and the Commission having made its findings as to the fact;; and conclusion that said respondents have violated provisions o£ the Federal Trade Commission Act.

It i'l ordered, That the respondents, Victoria Chemical Co., Schwarz Druggists, Inc., Schwarz Drug Co., Schwarz Drug Stores, Inc., Hiram Schwarz, Inc., corporations, their officers, representatives, agents, and employees, and Sarah Schwarz, Esther Schwarz, Joel J. Schwarz, Samuel Schwarz, Ira I. Schwarz, Sylvan Schwarz, Hiram Schwarz, Oscar Katz, and ,Jacob Eisen, individuals, their representatives, agents, and employees, directly or through any corporate device in connection with the offering for s~de, sale, and distribution of their medicinal preparation designated "Anti-Drink" or any other preparation composed of substantially similar ingredients or possessing substantially similar properties, whether sold under the same name or names or under any other name, do forthwith cease and desist from: 1. Disseminating or causing to be disseminated. any advertisement (a) by means of the United States mails, or (b) by any means in commerce, as "commerce" is J.efined in the Federal Trade Commission Act, which advet·tisements represent, directly or through implication, that said preparation is a cure for or remedy or a competent or effective treatment for alcoholism or the liquor habit; that the use of said 1)reparation will eradicate the desire for alcoholic stimulants; that said preparation is harmless, or may be safely used, or which fail to reveal that the use of such preparation may result in inflammation of the stomach and intestinal tract and disturbance of the heart and nervous system.

2. Disseminating or causing to be disseminated any advertisement by any means for the purpose of inducing or which is likely to induce directly or indirectly the purchase in commerce, as "commerce" is defined in the Federal Trade Commission Act, of said proj.uct, which adnrtisement contains :my of the representations prohibited in paragraph 1 hereof, or which fail to reveal that the use of such preparation may result in inflammj\tion of the stomach and intestinal tract and disturbance of the heart aml nervous system. It is Ju.rthe1· ordered, That the respondents shall, 'within 10 days after service upon them of this order, file with the Commission an interim report in writing stating whether they intend to romply with this order, and if so, the manner and form in which they intend to comply and that within (i0 llays aftpr service upon them of this orJ.er, said respondents shall file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

J. H. CAMP, ETC. 867 l::lyllabus