Ohio Art Co

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IN Tile MATT.Eil OF OHIO ART CO~IPANY CmrT'L.\INT, FI!':DINGS, A:XD ORDF:R I:'ii REGARD TO THE ALLEf:ED YIOLATIUN OF SE\', i> OF A:-< ACT 01<' CONGI!ESS APPROVED SEPT. ~0. lOH Doekct 418./. Complai11t, July 12, 19.VJ-Decision, Oct. 28, 194l \VhPI'P a corporatinn e11ga,:{etl ill inter~tate ~nle and distribution of toy muSICIU top,;, anti, in :<aitl cOIHIPdiou, iu imvorting mn,;i('al reads made in G£'rmnny, stmupetl with the word "Germnny" as indic:tting their foreign origin, which, in Pncln,;ing !<aid rPeth; in its top.,, was hid<len from view- Stamped or imprinh'd upon its said top.;, containing ><nch imported ree<l!<, leg· PIIcl ":\lade in t:. S. _\..," and placed upon the carton or container eucloRing the top notation '':\lade by The Ohio Art Co., Bryan, Ohio," with no dis· do,;ure of any kin<! npou its said protltTct informing members of the vur· ehnsing public that the mnRicnl reeds containetl therein w£'re of German origin;

\\'ith h•ndPncy anti cnpadty to miHlt'ad and dPcPil·e a sub~tantial pm·tion of tllf> pnrdtH~iug public into the mistaken belief that its :;;aid products were wholly~· of dunw~tic origin and mannfadnre, !lt'C'itledly prefl'ITetl on•r pro· llm·ts tn:Hle in Gt't'llJ:luy awl many other foreign c·onutrie~. with result that n snb><tantial pot·tion of th!' puhlk wa~ )lll11H'Ptl to 1111(1 tlitl pnrl'h>H'e its· laid tops, und with effect of pladng in the hands of unscrupulous and un· informetl dPnl('rs means wher('by they were enabiP(l to mi;;lend and deceive llj('IHbPt'~ of the pnrl'iut~ing pniJ!iC:

lldd. That snell utls anu prnt'tice~. tmder the cln·umstancPs ~pt forth, WPl'l' all to the prPjndi<'e ant! injury of the pub:ic, mHl constituted unfair and dect'Vti>e acts and practic£'s in commerce.

Before J/r. LPII'i8 0. /lu.~~dl, trial examiner. J!r. R. A. 11fcOuat and J/r. Mmuice C. Pc:trce for the Commission. {;fbhard & llogue, of Bryan, Ohio, for respondent. CO:\JPL,\INT Pursuant to th<' provi,.,ion'i of the FE>dPral Tnule Conuuission Ad, and Ly virtue of the authority nsted in it Ly saitl act, the Federal Trade Commission, having reason to believe that Ohio Art Co., a corporation, lwreinafter refenecl to as respondent, has violaleu the provisions of <mid act, and it appearing to the Commission that a pro- Cle<ling hy it in respect thereof would be in the public interest, h~re~y issues its eomp!:tiut, stating its charges in that respect ns follows: PAn.\GIL\I'II 1. Respondent, Ohio Art Co., iH a corporation orga•lite(l Jlld doing busine"s under and Ly Yirtne of the laws of the S:ate of Ohio, with its principal place of Lusines<> at Bryan, Ohio. PAR. 2. Respondent is now, and for more than 1 year last past has iwen, engngetl in the sale and di,..tribution of toy musical tops. Respondt•nt causes its said products, \Yhen <-old, to be tran:-.ported from omo ART co. 1597 1596 Complaint its place of business in the State of Ohio to purchasers thereof lo- <~ated in various other States of the United States and in the District of Columbia. At all times mentioned herein respondent has maintained a course of trade in said products in commerce among and between the various States of tht\ United States and in the District of Columbia.

P Alt. 3. Respondent uses constituent parts of materials of both foreign and domestic origin in its aforesaid toy musical tops. Such foreign parts and materials when imported and received by the respondent bear marks and imprints indicating the country of their origin. Among such foreign-made parts used by respondent are the tnusical reeds within the top which are imported from the country of Germany, and stamped thereon is the word "Germany." PAR. 4. In the course and conduct of its business, it has been, and is, the practice of respondent in assembling the toy musical tops to conceal or hide from view of the prospective purchasers of the assembled. tops the word "Germany," and such toy musical tops are th~n sold and distributed by the respondent in commerce as afore- ~aid without any marking thereon to inform members of the purchas- Ing public that the musical reeds of said tops are of German or for- €ign origin.

PAR. 5. A further practice of respondent in connection with the sa~e and distribution of its toy musical tops is the stamping or im- Printing upon such toy musical tops the legend "Made in U. S. A." The carton in which the top is contained bears the words "Made by The Ohio Art Co., Bryan, Ohio," representing that such tops are :manufactured at the respondent's place of business in Bryan, Ohio, and that such tops are wholly of domestic origin and manufacture rather than foreign origin and manufacture. In truth and in fact, such tops are not wholly of domestic origin and manufacture, as the musical reeds therein which constitute the musical part of the tops .are made in Germany.

PAR. 6. For many years last past there has been maintained among :manufacturers in the United States an established custom and practice Qf marking products of foreign origin in such manner as to indicate .that such products are in fact o£ foreign rather thll.n domestic origin. 'I'he purchasing public is familiar with and relies upon such custom and practice and when products bear no :marking indicating that they are of foreign origin the purchasing public assumes that such Products are of domestic origin.

PAn. 7. There ·is among the members of the purchasing public .a decided preference for products which are manufactured in the 435526•--42~ol.8~101 1598 FEDERAL TRA.DE COMMISSION DECISIONS .Finding!· 33F.T.C• United Stat~s over products manufactured in Germany or any other foreign country.

PAR. 8. The practice of the respondent of obliterating or obscuring the word "Germany" appearing on the reeds used in the manufacture of its tops, and of imprinting on its tops the legend "Made in U. S. A.," and of using on the cartons in which said tops are packaged and offered for sale the words "Made by The Ohio Art Co., Bryan, Ohio," without disclosing to prospective purchasers that the musical reeds used in such tops are made in Germany, has a tendency and capacity to and does mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that respondent's toy musical tops ate wholly of domestic origin and manufacture. As· a result of such erroneous and mistaken belie£, engendered as herein set forth, a substantial portion of the purchasing public is induced to, and does, purchase respondent's product.

Through the practices herein set forth, the respondent places in the hands of unscrupulous or uninformed dealers a means and instrumentality whereby such dealers have been and are enabled to mislead and deceive members of tfie purchasing public as to the source ·or origin of said tops and the parts thereof. PAn. 9. The aforesaid acts and practices of 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 FACTS, AND ORDER ' Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on July 12, 1940, issued and subsequently served its complaint in this proceeding upon the respondent, The Ohio Art Co., a corporation (designated in the complaint as Ohio Art Co.), 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 and the filing of respondent's answer thereto, testimony and other evidence in support of the allegations of said complaint were introduced by R. A. McO•·dt, attorney for the Commission, and in opposition to the allegations of the complaint by Messrs. Gebhard and Hogue, attorneys for the respondent, before Lewis C. Russell, a trial examiner of the Commission theretofore duly designated by it, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on for final hearing before the Commission on said complaint, answer thereto, testimony and other OHIO ART CO. 1599 1596 Findings evidence, report of the trial examiner upon the evidence and exceptions filed thereto, briefs in support of the complaint and in opposition thereto and oral argument before the Commission, and the Commission having duly considered the matter 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. 1 FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, The Ohio Art Co., is a corporation organized and doing business under and by virtue of the laws of the State of Ohio, with its principal place of business at Bryan, Ohio. PAR. 2. Respondent is now, and for more than 2 years last past has been, engaged in the sale and distribution of toy musical tops. Respondent causes its said products, when sold, to be transported from its place of business in the State of Ohio to purchasers thereof located in various other States of the United States and in the District of Columbia. At all times mentioned herein respondent has maintained a course of trade in said products in commerce among and between the various States of the United States and in the District of Columbia.

PAn. 3. In the course and conduct of its business, the respondent PUrchased and imported musical reeds manufactured in the country of Germany, which reeds were used in the manufacture of responde~t's musical tops. These reeds consisted of a small metal plate or disk containing a number of slots or openings over which brass strips Were riveted. "When such reeds were imported into the United States they bore the word "Germany" stamped thereon to indicate the foreign origin of said reeds. The use of such reeds in a musical top operates to make a wind instrument, and in the manufacture of such tops it is necessary to so construct them that a current of air Passes through the reeds to give the desired musical effect. In manufacturing such tops and enclosing the reeds therein, the word "G. ermany" stamped on such reeds and indicating their foreign origin, Is concealed or hidden from view.

PAR. 4. It was the practice of the respondent, in connection with the sale and distribution of its musical tops containing reeds imported from Germany, to stamp or imprint thereon the legend "Made In U. S. A.," and also to place upon the carton or container in which the rr.usic~l top is marketed, the notation "Made by The Ohio Art Co., Bryan, Ohio." No marking of any kind appears upon said Products informing members of the purchasing public that the musical reeds contained in said tops are of German or foreign origin. 1600 FEDERAL TRADE COJ.\:U.HSSION DECISIONS Conclusion :J3l!~. T. C. PAR. 5. In addition to the reeds imported from Germany, the re· spondent also purchases reeds made in the United States, and as of December 5, 1940, the respondent had on hand 7,049 gross of teeds made in Germany and 78:5 gross of rMds tnanufactmed in the United States.

PAR. 6. There is ani.ong members of the J:mrchasing public a decided preference for products which are manufactured iJ;'t the United States over products manufactured in Germany and many other foreign countries. When the unqualified legend ''Made in U.S. A." or words of similar import ot tneaning are stamped upon or attached to an article of :merchandise, it is understood by members of the purchasing public to indicat~ that such article of merchandise is wholly of do· mestic origin and mttnufacture. I~ lik~ manner the unqualified use of the ·words "Made by" or words bf similar import and tneaning in conjunction with trade names of geographic signifi,cance in the United States or with geographi~ locations within the United States, is understood by members of the purchnsitrg public to indicate that such articles of merchandise are \wholly of domestic origin and manufacture. , P.AR. 7. The practice of the respondent in obscuring the legend "Germany" appearing on the reeds used in the manufacture of its musical tops and in offering for sale, selling, and distributing such musical tops bearing the notations "Made in U. S. A.'' and "Made by Tile Ohio Art Co., Bryan, Ohio," without disclosing that the reeds contained therein were made in Germany, has the tendency and capacity to mislead and deceive a substantial portion of the purchasing publit into the erroneous and mistaken belief that respondent's tops are wholly of domestic origin and manufacture. As a result of such erroneous and mistaken belief engendered as herein set :forth, a substantial portion of the public are induced to, and do, purchase respondent's products.

By the use of the practices herein set forth, respondent has also placed in the hands of unscrupulous and uninformed dealers a means and instrumentality whereby such dealers have been enabled to mislead and deceive members of the purchasing public. CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to the prejudice and. injury o'f the public and constitute unfair and deceptive acts and practices in Mmtnerce within the intent and meaning of the Federal 'trade Commission Act. .OHJO ·ART CO. · . ' . 1601 1596 Qr<ler ORDER TO CEASE AND DESIST .Thi.s ~ro.ceeding having l;letlP. Mard by the Fe.de~:al Trade Commission upon th~ coroplaint of t.h~ Coro:mispion, answer of the respondent, testimony, and other evidence taken before Lewis C. Russell, a trial e;x:ajj;liner o£ the Commi~sion theretofore} duly designated by it, in support of the allegations of said complaint and in opposition thereto, report of the trial examiner thereon and excep- ~Ions filed thereto, and briefs filed in support of the complaint and Ill, opposition thereto, and oral arguments of counsel, 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.

• It iB ordered, That the respondent, The Ohio .;\rt Co., a corporat~on, its officers, diree<tors, agents, representatives, and employees, directly or through any corporate or, other device, in connection with t~e offering for sale, sale, and distribution o£ musical tops and other Similar products in commerce as commerce is defined in the Federal Trade Commission Act, do· forthwith cease and desist from: . 1. Using the term "Made in U. S. A." or any other term of similar Import or meaning, on labels, containers, or in advertising of musical tops or other similar products which contain reeds manufactured in Germany, or any other foreign country, without clearly disclosing the foreign origin of such reeds.

2. Using the ·unqualified words "Made by'' or any other word or Words of similar import or meaning in conjunction with trade names ~aving a geographical significance in the United States or in con- Junction with geographic locations within the United States, on labels, containers, or in any other manner, so as to imply that respondent's musical tops or other similar products which contain reeds manufactured in Germany or any other fOJ;eign country, are ~holly of domestic origin and manufacture without clearly disclos.- Ing the foreign origin of such reeds.

3. Representing in any manner whatsoever that respondent's musical tops or other similar products are made in the United States ~hen ~n fact such products are manufactured, in whole or in part, lll Germany,_ Of any other fpreign country. . It i8 fwrther orde'f'ed, 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.

1602 FEDERAL TRADE ·COMMISS'ION DE:CTSI'ONS Syllabus 33F. T. C.