Stetson China Co. Inc

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

IN THE MATI'ER OF STETSON CHINA COMPANY, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket .H77. Oomplaint, Mar. 26, 1941-Deoision, July 14, 1941 Where a corporation engaged in the Interstate sale- and distribution o! dinner· ware, including china ware and glassware; by means of cards, letters, circulars, and other printed and written matter circulated generally among dealers and supplied to them for distribution to the purchasing public; directly or by Implication- ( a) Represented that certain of its said products were a reproduction of expensive imported china ware; and (b) Represented that the prices at which such products were oiTered for sale represented special or reduced prices which were much less than those at which they were customarily offered and sold, through such statements as "Lady Evette Set. You may have one of these test sets at only $9.95 for the entire 54 pieces, service for 8. This set was made to retall regularly at $16.75. Tbe complete 1QO..piece service is be1.ng specially priced at $19.95 which is $10 less than the regular retail price"; The facts being said chinaware was not a reproduction o! Imported or expensive chinaware, but was of ordinary grade and quality, and the prices at which they were o1fered for sale were the regular retall prices at which th~y were customarily o1fered and sold; $0.95 was the customary retail price o! the set in question which never sold for $16.75, and the price of $19.95 <?n the larger set did not represent any saving, but was the customary retail price ;

With the eflect of misleading and deceiving a substantial portion of purchasing public with respect to Its products, and of placing in the hands of uninformed or unscrupulous dealers a means whereby they were enabled to mislead and deceive such public, and o! causing substantial portion thereof to purchase substantial quantities of said products because of the erroneous belief thus engendered:

Ileld, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public, anl\ constituted unfair and deceptive acts and practices in commerce.

Mr. B. G. Wilson for the Commission.

Mr. J. L. /{aufmann, of Chicago, Ill., for respondent. Complaint Pursuant to the provisions of the Federal Trade Commission Act, :md by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Stetson China Co., Inc., a corporation, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public STETSON CHINA CO., INC. 657 656 Complaint •interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Stetson China Co., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its office and principal place o:f business at 1801 'Vest Severity-fourth Street, Chicago, Ill. PAR. 2. Respondent is now, and has been for more than 1 year last past, engaged in the business of selling and distributing dinnerware, including chinaware, glassware, and other tableware, in commerce between and among the various States of the United States and in the District of Columbia.

Respondent causes and has caused its said products, when sold, to be shipped or transported from its place of business in the State of Illinois to the purchasers thereof located in various other States of the United States and in the District of Columbia. . Respondent maintains, and at all times mentioned herein has maintained, a course of trade in its said products in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its aforesaid business, and for the purpose of inducing the purchase of its products, the respondent has disseminated false and misleading statements and representations with respect to the character, quality, and prices of its products, such representations being made by means of cards, letters, circulars, and other -printed Jlnd written matter circulated generally among dealers and supplied to dealers for distribution to the purchasing public. Among and typical of the false and misleading representations so used and disseminated as aforesaid are the following: A fine reproduction of very expensive Imported cblna. Lady Evette Set. You may have one of these test sets at only $9.95 for the entire 54 pieces, service for eight. This set was made to retail regularly at $16.75.

The complete 100-piece service is being specially priced at $19.95 which Is $10 less than the regular retail price. · PAR. 4. Through the use of the foregoing statements and representations, and others of similar import not specifically set out herein, the respondent represents directly or by implication that certain of its said products are a reproduction of expensive imported chinaware, and that the prices at which such products are offered for sale 1-epresent special or reduced prices which are much less than the prices at which such products are customarily offered for sale and f:old in the usual and normal course of business. PAR. 5. The foregoing statements nnd r£'presentutions are grossly exaggerated, false, and misleading. In truth and in fact, the china- Findings 33F.T. C.

• ware so designated is not a reproduction of imported or expensive chinaware, but is chinaware of ordinary grade and quality. The prices at which said products are offered for sale do not represent special or reduced prices but are the regular retail prices at which such products are customarily offered for sale and sold in the normal and usual course of business. The set of chinaware offered for sale at $9.95 has never sold for $16.75 but the customary r!ltail price of such chinaware has been and is only $9.95. The price of $19.95 on the 100-piece set of said chinaware does not represent a saving of $10 or any other amount from the regular retail price of such chinaware, but in fact the customary retail price of such set of chinaware is and has been $19.95.

PAR. 6. This practice on the part of respondent serves also to place in the hands of uninformed or unscrupulous dealers a means and instrumentality whereby such dealers are enabled to mislead and deceive members of the purchasing public with respect to the value and customary retail prices of respondent's products. PAR. 7. The use by the respondent of the acts and practices herein . set forth has the tendency and capacity .to, and does, mislead and deceive a substantial portion of the purchasing public with respect to the character, quality, and value of respondent's products, and to cause the purchasing public to purchase substantial quantities of respondent's products as a result of the erroneous and mistaken belief so engendered.

par. 8. The aforesaid acts and practices o£ the respondent as herein alleged are 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 Federal Trade Commission Act. REPORT, FINDINGs As To THE FAors, AND OnoER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commissio~, on. the 26th day of 1\farch 1941, issued and subsequently served its complaint in this proceeding upon respondent, Stetson China Co., Inc., a corporation, charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint the respondent filed its answer admitting all the material allegations of fact set forth in the complaint and waiving- all intervening procedure and further hearing as to said facts. Thereafter this proceeding regularly came on for final hearing before the Commission on the said complaint and the answer thereto; and the Commission, having duly considered the matter and being now fully STETSON CHINA CO., INC. 659 656 Findings advised in the premises, finds that this proceeding is in the interest o£ the public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Stetson China Co., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its office and principal place o£ business at 1801 'West Seventy-fourth Street, Chicago, Ill. PAR. 2. Respondent is now, and has been for more than 1 year last past, engaged in the business o£ selling and distributing dinnerware, including chinaware, glassware, and other tableware, in commerce between and among the yarious States of the United States and in the District of Columbia.

Respondent causes and has caused its said products, when sold, to be shipped or transported from its place of business in the State of Illinois to the purchasers thereof located in various other States of the United States and in the District o£ Columbia. Respondent maintains, and at all times mentioned herein has. maintained, a course o£ trade in its said products in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of its aforesaid business, and for the purpose of irrducing the purchase of its products, the respondent has disseminated by means of cards, letters, circulars, and other printed and written matter circulated generally among dealers and supplied to dealers for distribution to the purchasing public various representations with respect to the character, quality, and prices of its products. Among and typical of the representations so used and disseminated as aforesaid are the following : A fine reproduction of. very expensive Imported china. Lady Evette Set. You may have one of these test set$ at only $9.95 for the entire 54 pieces, service for eight. This set was made to retail regularly at $16.75.

The complete 100-piece service Is being specially priced at $19.95 which Is $10.00 less than the regular retail price. PAR. 4. Through the use of the foregoing statements and representations, and others o£ similar import not specifically set out herein, the respondent represents directly or by implication that certain of its said products are a reproduction of expensive imported china.waret and that the prices at which such products are offered for sale represent special or reduced prices which are much less than the prices Order· 33F.T.C., at which such products are customarily offered for sale and sold in the usual and normal course of business.

PAR. 5. In truth and in fact, the chinaware so designated is not a reproduction of imported or expensive chinaware, but is chinaware of ordinary grade and quality. The prices at which said products are offered for sale do not represent special or reduced prices but are the regular retail prices at which such products are customarily offered for sale and sold in the normal and usual course of business. The set of chinaware offered for sale at $9.95 has never sold for $16.75 but the customary retail price of such chinaware has been and is only $9.95. The price of $19.95 on the 100-piece set of said chinaware does not represent a saving of $10 or any other amount from the regular retail price of such china ware, but in fact the customary retail price of such set of chinaware is and has been $19.95. PAR. 6. This practice on the part of respondent serves also to place in the hands of uninformed or unscrupulous dealers a means and instrumentality whereby such dealers are enabled to mislead and deceive members of the purchasing public with respect to the value and customary retail prices of respondent's products. PAR. 7. The use by the respondent of the acts and practices herein set forth has the tendency ilnd capacity to, and does, mislead and deceive a substantial portion of the purchasing public with respect to the character, quality, and value of respondent's products, and to cause the purchasing public to purchase substantial quantities of respondent's products as a result of the erroneous and mistaken belief so engendered.

CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to the prejudice and injury of the public and constitute unfair and deceptve acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of respondent, in which answer respondent admits ali the material allegations of fact set forth in said complaint, and states that it waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

STETSON CHINA CO., INC. 661 656 Order It is ordered, That the respondent, Stetson China Co., Inc., a corporation, its officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of chinaware, glassware, and other tableware in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing as the customary or regular retail prices or values of respondent's products prices and values which are in excess of the prices at which such products are regularly and customarily sold at retail in the normal and usual course of business. 2. Representing that the prices at which respondent's products ar£> offered for sale constitute a discount to the purchaser, or that such prices are special or reduced prices, when in fact such prices are the usual and customary prices at which such products are offered for sale in the normal and usual course of business. 3. Representing that respondent's chinaware is a reproduction of expensive imported chinaware.

4. Representing that the character, grade, or quality of respondent's products are other than the actual character, grade, or quality of such products.

It is further ordered, That the respondent shall, within GO days after service upon it of this order, fiJe with the Commission a report in writing, setting forth in detail the manner and form in which it· has complied with this order.

Syllabus 33F.T.C.