Consolidated Royal Chemical Corp

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IN 'THE MATIER OF BATTLE CHEEK DRUGS, INC., AND CONSOLIDATED ROYAL CHEMICAL CORP., TRADING AS CONSOLIDATED DRUG TRADE PRODUCTS, AND AS BONKORA CO.MPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. li OF AN ACT OF CONGRESS APPROVED SEPT, 26, 1014 Do£·ket 4541. Complaint, July 11, 19~1-Decision, Feb. 17, 19~2 Where a corporation aud its exclusive sales agent engaged in interstate sale and distribution of former's "IIonKora" preparation, offered as a reducing agent· and obesity treatment; by advertisements in newspapers, periodicals, pamphlets, circulars and other advertising literature of general c].rculatlon, and by radio brondeasts- (a) Representc•d, directly and by Implication, that said "BonKora'' was a popular cocktail preparation wllirh would relieve obesity and reduce excess weight without the aid of a starvation diet, reducing measurements of designated parts of the body, such as hips, waist and bust, and which contained no dangerous drugs and might safely be taken repetitiously; The facts being said product, a saline cathartic containing magnesium sulphate and buckthorn and cascara bark, would not accomplish the results claimed therefor, and might be useu with safety only for the temporary evacuation of the bowels; repetltious use might result in df'Ilendence upon a laxative~ contrary to being harmless, use thereof by one suffering from nausea, vomiting, abdominal pains or other symptoms of appendicitis was dangerous; and (b) Falleu to reveal facts material in light of such representations, in that, while· sald advertisements referred to the "dc·licious foous as shown in the BonKora package," and cautionary warning appeared on package in close proximity to such list, said advertisements failed to warn or apprise reader as to dtrngProus possibility involved in use of preparation, or specifically to direct reader's attention to cautionary statement referred to; With the effect of misleading and deceiving a substantial portion of the purchasing public into the mistaken belief that such rrpresentations were true, and thereby causing lt to purchase their said "DonKorn": Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public, and constituted unfair and deceptive acts and practices In commerce.

Mr. James I. Rooney for the Commission.

Rosen, Fmncis & Cleveland and Mr. Roland J. Dooley of Chicago'O lll., for respondents. ' e. ' Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of tbe•authority vested in it by said act, the Federal Trade Commission, having reason to believe that Dattlc Creek Drurrs Inc., a corporation, and Consolidated Royal Chemical Cc•rporation~ ~ ti52 FEDERAL TRADE COMMISSION DECISIO:XS Complaint 3!F. T. C.

corporation, trading and doing business as Consolidated Drug Trade Products, and as BonKora Co., hereinafter referred to as respondents, have 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 interest, hereby issues its complaint, stating its charges in that respect as follows :

P ARAGRAPII 1. The respondent, Battle Creek Drugs, Inc., is a corp<;>i ration organized, existing, and doing business under and by virtue of the laws of the State of Michigan, and maintaining its principal office and place of business in the First National Bank Building in the city of Battle Creek, State of Michigan. The respond<:>nt, Consolidated Royal Chemical Corporation, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, and maintaining its principal office and place of business at 544 South Wells Streetj in the city of Chicago, State of Illinois. The respondent, Consolidated Royal Chemical Corporation, is trading and doing business under the name Consol:Jated Drug Trade Products and also under the name BonKora Co.

PAR. 2. The respondents are now, and for more than 3 years last past have been, engaged in the business of selling and distributing a drug preparation designated "BonKora," which preparation has been offered for sale and sold by respondents, as a reducing agent and as a. treatment for obesity. The respondent Battle Creek Drugs, Inc., causes said preparation to be made up or manufactured £or it in Detroit, Mich., according to the said respondent's formula. The said respondent then causes said product to be transported' from Detroit, Mich., to its exclusive sales agent, in Chicago, Ill., the} respondent, Consolidated Royal Chemical Corporation, trading as Consolidated Drug Trade Products. The respondents have caused and now cause, said preparation, when sold, to be transported :from the place of business of respondent Consolidated Royal Chemical Corporation in Chicago, Ill., to purchasers thereof located in various States ·of the United States other than the State o£ Illinois, ~n'd in the District of Columbia. The respondents maintain, and at all times mentioned herein have maintained, a course of trade in s~id preparation in commerce among and between the several States o£ the United States, and in the District of Columbia. ' · PAR. 3. In the course and conduct of their aforesaid business, the l"E>spondents ha\·e disseminated and are now disseminating, and har-e raused and are now causing the dissemination of, false advertise~ ments concerning their said preparations by the United States mails ~nd. by various other means in commerce, as commerce is defined BATTLE CREEK DRUGS, INC., ET AL. 653 Complaint in the Feueral Tr,aue Commission Act; and respondents have also disseminated and are now disseminating, and have caused and are now causing the dissemination of, false advertisements concerning their said preparation, by various means, for the purpose of inducing and which are likely to induce, directly pr indirectly, the purchase 'of their said preparation in commerce, as commerce is defined in the Federal Trade Commission Act. Among, and typical of, the false, inmisleadingsaid falseandadverth:ements,deceptive statementsdisseminatedand representationsand caused to becontaineddisseminated, as hereinbefore set forth, by the United States mails, by advertisements in newspapers and periodicals, by pamphlets, circi.tlars and other advertising literature of general circulation, and by broadcasts :from radio stations with sufficient power to convey the programs emanating therefrom into the various Stutes of the United States, are the :following:

Did This New ORANGE JUICE and BO:SKOR..l. COCKTAIL WAY To Help Eliminate Wastes from the Digestive System And eating Her Fill of the Delicious Foods as Shown in the BonKora Package MAKE; HEB Lose 45 Pounds Excess Fat? •· • • the thing one finds many a fashionable New Yorker drinking e\'ery· 'IVhel'e you go these days Is a BonKOl'/1. Co('kt&il, maa~ from OI·ange Juice ·aud lJouKora.

Its rage SPPms to ha,·e started when' it became noised about that n registered nurse, who could no longer world on account of ller weak, fatty condition, lost 45 pounds 'und 10 inches off her hips with the result that she was able to go back to work again mainly by resorting to this pungeut BonKora Cocktail lllt>thoil.

No Dangerous Drugs; No Thyroid;

No ntnltrophenol No Starvation DrluldJJg a glnssfnl or chilled Ornnge Juice mixed with a table;;poontul of BonKora, two times n d11y, aml t>ating tlwit" fill ot the dcliciou<l foo<ls, as shown In the DonKora packnge. it is claimed, has made many p(>ople loe from 7 tn 67 pounds. and has mntle their waist nntl bust mPasm·pments go down !1·om 3 to 11 inCIIeS.

Complaint 34 F.. T. C. Don't delay. Test the BonKora and Orange Juice Addition to Your Reducing Program. Today! Euy a bottle of BonKora at any drug or department store today, under tbe maker's guarantee of satisfaction or your mom~y back. PAn. 4. Through the use of the statements and representations hereinabove set forth, and other similar statements and representations not specifically set out herein, which purpOlt to be descriptive of the therapeutic value of respondents' preparation "BonKoraM and of the benefits to be derived from its use, the respondents reprcseht, directly and by implication, that said "BonKora" is a popular cocktail preparation; that it is preparation which, if taken as directed, will relieve obesity and reduce excess fat without the aid of a starvation diet; that the use of said preparation will reduce fat from designated parts of the body, such as the hips, waist and bust and reduce the measurements of such parts of the body; and that said preparation contains no dangerous drugs and may be taken repetitiously with safety.

PAR. 5. The foregoing advertisements and representations, and .others similar thereto but not specifically set out herein, are grossly exaggerated, false, and misleading. · In truth and in fact respondents' preparation "BonKora" is not a popular cocktail preparation. It is not a preparation which, if taken as directed, will relieve obesity and excess fat without the aid of a starvation diet. The use of said preparation will not reduce fat from designated parts of the body, such as the hips, waist, and bust and will not reduce the measurements of such parts of the body. Said preparation does contain drugs which may be dangerous under certain conditions or if used repetitiously. PAR. 6. The responden~s' advertisements disseminated as aforesaid constitute false advertisements for the further reason that they fail to reveal facts material in the light of such representations, OL" material with respect to consequences which may result from the use of the preparation to which the advertisements relate under the con- <litions prescribed in said advertisements, or under such conditions us are customary or usual. · In truth and in fact said preparation "BonKora" is a saline cathartic containing magnesium sulphate, supplemented by the laxative action of buckthorn bark and cascara bark, and may be used with safety only for the temporary evacuation of the bowels. Its repetitious use may be habit-forming in that the user may become dependent upon a laxative for the evacuation of the bowels. Furthermore, said advertisements are false and misleading in that they represent "DonKorn." as a harmless cocktail preparation, whereas its use, by one suffering from BATTLE CREEK DRUGS, INC., ET AL. 655 <l51 Findings nausea, vomiting, abdominal pains, or other symptoms of appendicitis, is dangerous.

PAR. 7. The use by said respondents of the foregoing false, deceptive and misleading representations and advertisements, and others of similar nature disseminated .as aforesaid, has had, and now has the tendency and capacity to, and does, mi~lead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such false representations and advertisements are true, and has caused, and now causes a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase respondents' preparation "BonKora."

PAR. 8. The aforesaid acts and practices of the respondents 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 Conunission 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 17, 1941, issued and thereafter served its complaint in this proceeding upon said respondents, Battle Creek Drugs, Inc., and Consolidated Royal Chemical Corporation, trading as Consolidated Drug Trade Products and as BonKora Co., charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. On August 6, 1941, the respondents filed their answer in this proceeding. Thereafter, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts signed and exe<:ukd by the respondent Battle Creek Drugs, Inc., and its counsel, Rosen, Francis and Cleveland and by respondent Consolidated Royal Chemical Corporation by James Hirshfield, its president, and Richard P. Whiteley, Assistant Chief Counsel for the Federal Trade Commission, subject to the approval of the Commission, may be taken as the facts in this proceeding and in lieu of testimony in support of the charges stated in the complaint, or in opposition thereto, and that the Sttid Commission may proceed upon said statement of facts to make its report, stating its findings as to the facts and its conclusion based thereon and enter its order disposing of the proceeding without the presentation of argument or the filing of Lriefs. Thereafter, this proceeding regularly came on for fintil hearing before the Comm~ssion on said complaint, answer and stipulation, said stipulation havmg been approved, accepted and filed, and the Commission having duly considered the same and being'0 now fully advised in the premises, finds that this proceeding is in the interti56 FEDERAL TRADE COMMISSION DECISIONS Findings 34F.T.C.

est o£ the public and makes its findings us to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THF. FACTS P .ARAGRAPH 1. The respondent, Battle Creek Drugs, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Michigan, and maintaining its principal office and place of business in the First National Bank Building, in the city of Battle Creek, State of Michigan. The respondent, Consolidated Royal Chemical Corporation, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, and maintaining its principal office and place of business a.t 544: South 'Veils Street, in the City of Chicago, State o£ Illinois. The respondent, Consolidated Royal Chemical Corporation, is trading and doing business under the name Consolidated Drug Trade Products and also under the name BonKora Co.

PAR. 2. The respondent, Consolidated Royal Chemical Corporation, is now, and for more than three years last past, has been engaged in the business of selling and distributing a drug preparation designated "BonKora," which preparation has been offered for sale and sold by said respondent, Consolidated Royal Chemical Corporation, as a reducing agent 'and as a treatment for obesity. The said respondent, Battle Creek Drugs, Inc., until May 17, 1940, caused said preparation to be made up or manufactured for it in Detroit, Mich., according to said respondent's formula. The said 1·respondent, Battle Creek Drugs, Inc., until the said :May 17, 1940, then caused said product to be transported from Detroit, Mich., to its exclusive sales agent in Chicago, Ill., tlie respondent, Consolidated Royal Chemical Corporation, trading as Consolidated Drug Trade Products. The respondents, until said May 17,1940, have caused, and since said date the said respondent, Consolidated Royal Chemical Corporation, now causes, said preparation when sold, to be transported from the place of business of respondent, Consolidated Royal Chemical Corporation, in Chicago, Ill., to purchasers thereof located in various States of the United States other than the State of Illinois, and in the District of Columbia. The respondents have maintained a course of trade in said preparation in commerce among and between the several States of the United States, and in the District of Columbia.

PAR. 3. In the course and conrluct of their aforesnid business, the re,.pondents have disseminated, and have cau!"ed the dissl'rnination of, ad\·ertisements concerning their sai.rl prrparntion by the United States mails and by Yarious other means in commerce, as comml'rcc is defined in the Feuerul Trade Commission Act; and responue11ts BATTLE CREEK DRUGS, INC., ET AL. · 65T Gtil Findings have also disseminated, and have caused the diss~mination of, advertisements concerning their said preparation, by various means, for· the purpose of inducing, and which are likely to induce, directly orindirectly, the purchase of their said pre-paration in commerce, as commerce is defined in the Federal Trade Commis~ion Act. Among and typical of the misleading and deceptive statements and representations contained in said advertisements, disseminated and caused to be disseminated, as hereinbefore set forth, by the United States tnails, by advertisements in newspaper-rs and periodicals, by pamphlets, circulars, and other advertising literature of general circulation, and by broadcrrsts from radio stations with sufficient power to convey the programs emanating therefrom into the various States. of the United States, are the following:

"Did This New ORANGI!l JUICE and BONKORA COCKTAIL WAY To Help Eliminate Wastes from the Digestive System Ami eating Her Fill of the Delicious Foods as Shown in the BonKora. Package MAKE HER Lose 45 pounds Excess Fat? • • • the thing one finds many a fashion-able New Yorker drinking everywhet·e you go these days Is a llonKora Cocktau, made from Orange Juice and Bonkora. Its rage seems to have started. When it became noised about that a registered nurse, who could no longer work on account of her weak, fatty condition, lost 45 p~unds and 10 inches off her· hips with the result that she wns able to go buck to work again mainly by resorting to this pungent nonKora Cocktail method. No Dangerous Drugs; No Thyroid; No Dinitrophenol-No Starvation Drinking a glassful of chilled Orange Juice mixed with a tablespoonful of DouKora, two times a day, and eating their fill of the delicious foods, as. Shown in the BonKora package, it is dnimed, has made many people lose from 7 to 67 pounds, and has made their waist and bust measurements go down frotU 3 to 11 inches. Don't delay. •.rest the DonKora and Orange Juice'Addltion to Your Roouclng Program. Today! Buy a bottle o! nonKora at anychug or department store today, unrler the maker's guarantee of sntlsfaetion or your money back.

PAn. 4. Through the use of the statements and representations hereinabove set forth which purport to be descriptive of the thera- Peutic value of respondents' }H'Ppnration "BonKom '' and of the benefits to be derived from its use, the respondents represented directly and by implication, that sai,l "llonKora" is a popular coektail prepa- 46G:iog"'-42-\'ol. 34-42 Findings 3-lF.T.C.

ration; that it is a preparation which, if taken as dirt>cted., will relieve obesity and reduce excess fat without the aid of a starvation diet; that the use of said preparation will reduce fat from d('signated parts of the body, such as the hips, waist, and bust and reduce the measurements of such parts of the body; and that said preparation contains no dangerous drugs and may be faken repetitiously with safety.

PAR 5. The foregoing advertisements and representations are grossly exaggerated and misleading.

Respondents' preparation "BonKora" is not a popular cocktail preparation. It is not a preparation which, if taken as directed, will relieve obesity and excess fat ,without the aid of a starvation diet. The use of said preparation will not reduce fat from designated parts of the body such as the hips, waist, and bust and will not reduce the measurements of such parts of the body. Said preparation does contain drugs which may be dangerous under certain conditions or if used repetitiously. · PAR. 6. The respondents' advertisements disseminated as aforesaid constitute misleading advertisements for the furthe!' reason that they fail to reveal facts material in the light of such representations, or material with respect to consequences which may result from the use of the preparation to which the ad\·ertisements relate under the conditions prescribed in said advertisements, or under such conditions as are customary or usual.

Although the respondents' advertisements make reference to "the delicious foods as shown in the BonKora package" and a cautionary warning appears on the package in close proximity to such list referred to in respondents' advertisements, such advertisements contain no adequate or sufficient warning to apprise the reader thereof of the dangerous possibility involved in the use of said preparation or to specifically direct the reader's attention to the cautionary statement on the package.

The preparation "BonKora" is a saline cathartic containing magnesium sulphate, supplemented by the laxative action of buckthorn bark and cascara bark, and may be used with safety only for the temporary evacuation of the bowels. Its repetitious use may be habit-forming in that the user may become dependent upon a laxa· tive for the avacuation of the bowels. Furthermore, said advertise· ments are false and misleading in that they represent "BonKorn." as a harmless cocktail preparation, whereas its use, by one suffering from nausea, vomiting, abdominal pains, or other symptoms of appendicitis, is dangerous.

BATTLE CREEK DRUGS, INC., ET AL. 659 ~\51 Order PAn. 7. The use by said respondents of the foregoing deceptive and misleading representations and advertisements has had and now 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 representations and advertisements are true, and has caused a substantial portion of the purchasing public, becansa of such erroneous and mistaken belief, to purchase respondents' preparation "BonKora." · CONCLUSION The aforesaid acts and practices of the respondents as herein found 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. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of the respondents and a stipulation as to the facts entered into by counsel for respondents herein and counsel for the Commission, which provides, among other things, that without further evidence or other intervening procedure the Commission may issue and serve upon the respondents herein findings as to the facts and its conclusion based thereon and an order disposing of the proceeding, and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, Battle Creek Drugs, Inc., a corporation, and Consolidated Royal Chemical Corporation, a corporation, trading as Consolidated Drug Trade Products, and as BonKora Co., or under any other name, their officers, representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of their product now named BonKora or any other product containing the same or similar ingredients, whether sold under the same name or any other name, do forth with 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 defined in the Federal Trade Commission Act, which advertisement represents, directly or through inference, that their pr('parution "BonKora" is a popular cocktail preparation; that it is a preparation which, if taken as directed, will relieve or 660 FEDERAL TRADE COMMISSION DECil:iiOXS Oruer 3-!F.T.C.

overcome obesity or reuuce excess fat without dieting; that the use of said prepnration will reduce fnt from designated parts of the body such as the hips, waist and bust and reduce the measurements of such parts of the body; that said preparation contains no dangerous drugs aml may hi' taken rl'pl'titiously with safety; or which advertisement fails to reveal that said preparation should not be used by persons suffering from nausea, vomiting, abdominal pains, or other symptoms of appendicitis, provided, however, that if the directions for use, wherever they appear on the label, in the labeling, or both on the label and in the labe.Jing, contain a warning of the potential dangers in the use of said prl'paration as hereinabove set forth, such advertisement need contain only the cautionary statement: C:AUTION, Use only as directed. · 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 Feueral Trade Commission Act, of said preparation, which advertisement contains any of the representations prohibited in paragraph 1 hereof, or which fails to reveal the affirmative cautionary statement required in paragraph 1 hereof. It is further ordered, That respondents shall within 60 clays after service upon them of this order file with the Commission a report in writing setting forth in detail the manner and form in which they have complied.d with this order.

THE HARDWOOD INSTITUTE, ET AL. 661 Syllabus