Thomas Manage11Ent Corporation

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IN THE MATI'ER OF THE THOMAS MANAGEMENT CORPORATION, ET AL.

COMPLAINT, FINDINGS, .AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC, 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Doc1eet H~. Complaint, Dec. 18, 1940-Decision, June 5, 1942 Where two organizations and six individuals, engaged in sale and distribution of hair preparations for rxternal and Internal ui"e, to wlt- I. A corporation to which, in consideration of certain payments, a com· mon law trust granted the exclusive right to manufacture ond Sf'll all chemicals, products, and supplies used In the ndmlnlslratlon of the !IO• called "The Thomas Hair and Scalp Treatment," acd whl<-h, in turn, ngrPed to sell and deliver supplies to any one licensed or Ruthorlzed by said trust to give such treatments, and to no other, exce.pting saler by mail to indi· vi duals for home treatment; and which, furthermore, prepnred newspaper advertisements to be purchased and use<l by owners of the varlouf! hair treatment offices, and, when desired, for a fee also performed services of selecting advertising media, Rejecting advertisements to be run, preparing financial statements, nnd buying certain supplies for such owners; II. Said common law trust, owner of all the stock of said corporation and holder also of certain trade names, copyrights, formulae, and secr<!t processes used by Its licensees In tbe treatment of the hair and scalp according to "The Thomas'" system, and which, . as above noted, granted said corporation exclusive right to manut'actnr<! and sell all chemlclll!':, etc. used In administration of hair 'llnd scalp treatment in question, and which also granted to others the exclusive right in designated tgrrltorles to use said formulae, etc., In the administration of the treatment to the purchasing public; and III. Six individuals, namely, the president of said corporation and Ute beneficiary of said trust, and five others, 1. e., his wife, two sons and two daughters-in-law, themselves engaged, either separately or with Clthcrs, in operating hair treatment offices in various cities under the name "The Thomas," which offices bought from said corporation all their supplies and all the borne treatment kits which they sold; In advertisements purchased by said !ndividuflls and widely disseminated through the mails, In newspapers and periodicals, by radio continuities, and by circulars, leaflets, pamphlets, and other advertising literature, dl· rectly and by !implication- (a) Ueprf'sented that snld preparations and treatments c·onf;titnted n cure or remedy for dandruff or itching scalp and were effective in destroying the ''flask bacillus of Unna," which was responsible for dandruff; would stop abnormal loss of hair, cause new hair to grow, and promote hair growth on thin and bald spots, preventing and curlng_baldness; The facts being they bad no therapeutic value In treatment of dandruff ln excess ot removal of dandruff scales, were not an effective treatment £>X· cept in furnishing relief In cases which were not caused In systemic or constitutional conditions; would not dc~stroy the germ ln question, which, Complaint 34F. T. C.

furthermore, had not been proven to be an etiological factor of dandruff: and had no therapeutic properties which would otherwise be effective in bringing about the results above set forth: and (b) Falsely represented that their preparation "Trichovita" for internal use supplied elements essential to healthful grl)wth of l1air, and that tbei.r other preparation for such use, "Trkhotone," rejuvenated the 'formative cells from which the hair grows, and that both were effective in stimu· lating hair growth :

With effect of misleading and deceiving a substantial portion of the purchasing public into the belief tllat such statentents we1·e true, thereby inducing it, because of such mistal~n belief, to purchase the treatments and prod· ucts In question :

Held, That such acts anll prurtices, un<ler the clr~uiHstances ~et forth, were all to the prejudice of the public, and const!tutl•d unfair and deceptive acts and practices In com~erce.

Before Mr. 0. A. Vil118, trial examiner.

Mr. Karl Stecher, for the Commission.

Pope, Ballard & Loos, o£ Washington, D. C., and Rogers, Wood· son & Rogers and Eckert & Peterson, o£ Chicago, Ill., £or respondents. 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 The Thomas Man· agement Corporation, a corporation, and Paul A. Thomas, Sr., Cath· erine M. Thomas, Paul A. Thomas, Jr., and _Norbert J. Thomas, as individuals, and as officers of said corporation; Paul A. Thomas Trust, and Paul A. Thomas, Sr., Catherine M. Thomas, and Nor bert J. Thomas, as individuals, and as trustees of said trust; and Ruth Thomas and Madeline Thomas, as individuals, 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. The Thomas Management Corporation, is a corpo· ration, organized, existing, and doing business under and by virtue of the laws of the State of Illinois, with its principal office and place of business in the city of Chicago and State of Illinois. All of the stock of said corporation is owned by Paul A. Thomas Trust, hereinafter referred to. Paul A. Thomas, Sr., is president, Catherine 1\I. Thomas is vice president, Paul A. Thomas, Jr., is treasurer, and Norbert J. Thomas is secretary of said corporation. Paul A. Thomas Trust, is a common law trust, of which Paul A. Thomas, Sr., Catherine M. Thomas, and Norbert J. Thomas are trustees. Paul A. Thomas, Sr. is the sole beneficiary of said trust. THE THOMAS MANAGEMENT CORPORATION, ET AL. 1307 1305 Complaint The principal office of said trust is in Chicago, Ill. Said trust owns all of the stock of The Thomas Management corporation, hereinabove referred to.

Paul A. Thomas, Sr., as an individual, operates places of business under the name "The Thomas" in the cities of Denver, Colo., Atlanta, Ga., Seattle, Wash., l\Iinneapolis, Minn., Toledo, Ohio, and Portland, Oreg. · Paul A. Thomas, Jr. and Ruth Thomas, his wife, trading as copartners operate a place or places, of business under the name "The Thomas" in the city of Cleveland, Ohio.

Norbert J. Thomas, and Madeline Thomas, his wife, trading as <'copartners, operate a place, or places, of business under the name "The Thomas' " in the city of Detroit, Mich.

Catherine M. Thomas, as an individual, operates a place or places of business under the name "The Thomas'" in the city of l\Iilwaukee, Wis.

Norbert J. Thomas and Paul A. Thomas, Jr., trading as copartners, operate places of business under the name "The Thomas' " in the cities of Chicago, Ill., New York, N. Y., Brooklyn, N. Y., Buffalo, N. Y., Rochester, N. Y., Los Angeles, Calif., Oakland, Calif., San Francisco, Calif., Baltimore, Md., Newark, N. J., Philadelphia, Pa., Pittsburgh, Pa., St. Louis, Mo., and Washington, D. C.

The respondent, The Thomas Management Corporation, also maintains and operates retail stores in the cities of Cincinnati, Ohio, Columbus, Ohio, Dayton, Ohio, Indianapolis, Ind., Louisville, Ky, Albany, N.Y., Boston, Mass., Milwaukee, \Vis., New Orleans, La., Providence, R.I., and Syracuse, N.Y., which places of business are operated under the name "The Thomas'" and which deal exclusively in the products sold and distributed by the respondents.

The individual respondents, acting in conjunction and cooperation with the corporate respondent, direct and control all the business activities and policies of the various retail stores including the various stores operated by the individual respondents, either individually or as copartnerships. In connection with the control of the business activities of the various stores, the respondents prepare all advertising copy to be used by such stores which is forwarded by the corporate respondent to the various stores for insertion in newspapers and periodicals as directed by the respondents. Other and similar advertising is placed with newspapers and periodicals directly by the respondents.

PAn. 2. In the course and conduct of their business the respondents, f~r several years last past, have been engaged in the sale and distribution of various cosmetic and medicinal preparations for external and Complaint 34F. T. C.

internal use in the treatment of conditions of the hair and scalp. Respondents cause said preparations, when sold, to be transported from the place of business of the corporate respondent in the State of Illinois to the various retail stores, owned and operated as hereinabove set forth and to the 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 cosmetic and medicinal preparations in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. Respondents' methods of sale of their cosmetic preparations for the hair for external use fall into two classes. In the first class, respondents through extensive advertising to the effect that they can diagnose and cure scalp trouble, stop falling hair, and re-grow hair, i11duce persons to come to their places of business where the various cosmetic preparations for the hair are administered and sold to the purchaser. In the second class of cases, where it is not possible to· have the purchaser come to their place of business at intervals to purchase their cosmetic preparations or have them administered by respondents, an assortment of products known as "Home Treatment Kits" are sold. These "Kits" contain the same cosmetic preparations for the hair as are sold and administered to the first class of customers herein referred to, and the purchaser of the Home Treatment Kit then administers the preparation himself. Respondents likewise sell to their customers medicinal preparations for internal use. PAR. 4. In the course and conduct of their aforesaid business the respondents have disseminated, and are now disseminating, and have caused, and are now causing, the dissemination of, false advertisements concerning their said products 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 are now disseminating, and have caused and are now causing the dissemination of, false advertisements concerning their said products, by various means, for the purpose of inducing, and which are likely toinduce, directly or indirectly, the purchase of their said products in commerce, as commerce is defined in the Federal Trade Commission Act.

Among and typical of the false, misleading and deceptive statementsand 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, by radio continuities, and by circulars, leaflets, pamphlets, and other" advertising literature, are the following:

THE THOMAS MANAGEMENT CORPORATION, ET AL. 1309 1305 Complaint (At the side of this printing is a picture of a man in laboratory attire looking into a compound microscope.) SO YOU WILL NEVER BE BALD.

Eighteen years ago Paul A. Thomas devised the first accurate, reliable method ot treating local scalp disorders. Then, as today, Thomas treatment endell dandrun:, stopped abnormal halrfall and promoted hair growth on thin and buld spots. It consistently produces these results-and because of its success, The Thomas' have grown to an organization with 45 offices throughout the United States and Canada.

Today Thomas treatment Is more effective than It has ever been. New lllethods are constantly being tested and when something is proved to be uf definite value, Thomas clients are the first to receive benefit. Basically, however, Thomas treatment remains the same, because no method has ever been found Which produces results as consistently as does the original Thomas method. Call for a free scalp examination today and see for yourself just how Thomas treatment end!il dandrulf, stops falling hair and promotes hair growth.· Examination and treatment are always in private.

THill THOMAS World's Leading Hair and Scalp Speciallsts-Fot"ty-Five Offices TIIESE l\IEN KNOW HOW TO END YOUR SCALP TROUBLES Thomas Experts know that 14local scalp conditions cause 90% of all baldness. They know how to recognize and overcome these local causes of hair-loss. They know how to effectively treat the three types of dandruff; how to rl•l Your scalp of the causes of Intense itching; and how to help promote normal hair growth on thin and bald spots.

Why continue, then to worry and waste your hair experimenting with "curenails?'' Consult a Thomas expert today. See for yourself how The Thomas' twenty years of experience In treating a quarter-million persons has endowed Thomas experts with unmatchable skill and ability In solving your portlculut· SCalp problem. Learn how Thomas treatment ends dandruff and promotes normal hair growth. No charge Is ever made for a complete scalp examination. Comp in today.

THill THOl\IAS' 'World's Leading Hair & Scalp Experts Forty Five Ofllces WIIY nE nALD? . SEE THOMAS TODAY Modern science has made It unnecessary for any man to fear baldness. It is known that baldness results from one or more of 14 local scalp disorders. Thomas experts recognize each of these 14 conditions and adapt the relluble, proved Thomas treatment to overcome the ones which are specifically causing your loss ot hair. • • • Complaint 84F.T.C.

Within a remarkably short time after you start Thomas treatment your dandruff disappears, hair-fall stops, and new hair starts to grow in the thin and bald spots.

WHY BECOME BALD? HEED THESE DANGER SIGNALS BALDNESS can be prevented! 'Vhen your scalp becomes sick, obvious danger signals snc:h as (1) thinning hair, (2) itchiug scalp, and (3) dandruff, warn you that a baldness-producing condition exists. You can prevent baldness by heeding these positive warnings and ridding your S('Hlp of the local causes of hair loss which are attacking your hair-growing structure • .Mot·e than a quartet·-million persons have avoided baldness by permitting The Thomas' to t·id their scalps of local scalp ills. The Thomas' 20 years of experience endows them with unusual knowledge, skill, and ability to overcome any of the 14 local conditions which cause 90% of all baldness. Over one-quarter m!llic.n persons had Thomas' treatment. Today they enjoy healthy heads of hair.

It has been clearly demonstrated for twenty years that THOMAS' can re-grow hair.

BALDNESS FOLLOWS DANDRUFF Eight of the next ten bnld-healed persons you meet became bald because they failed to rid their scalps of dandruff infection. THO:\las ENDS DANDRUFF GROWS HAIR Dandruff clogs the hair follicle, causes Itchy scalp, falling hair, and keeps new hair from replacing hair which bas dropped out. Because there are sevt-ral IYJJPS of 1lamlruff, cure-all surface remedies usually do not correct the trouble. One of the most dangerous types of dandruff is caused by a germ !lePp In the scalp, known as flask bacillia of Unna I . Thomas trPotment attacks this destrnctive germ by modern therapeutic agents ani! restores the scalp to a normal healthy condition. When your scalp Is once rid of baldness producing germs, hnirfall stops, and new hair starts to grow again.

BALD:-."ESS IS NOT INHERITED Scientists who study the laws of Inheritance have found that "acquired characteristics" are not inherited. Baldness is in all cases acquired many years after birth and it Is therefore agreed that it is not inherited . • • • • • • • Forget the superstitious notion that hair can NEVER be regrown on thin or bald spots. Hair roots seldom die. ~cience tells us that more than 85% of all cases of hair loss are the "local" type-and consequently will respond to proper scalp treatment.

THE THOMAS MANAGEMENT CORPORATION, ET AL. 1311 1305 Complaint (A picture of a man with a beautiful head of dark hair, dressed in a white coat, beneath which is the following:) BALDNESS WORRY YOU SEE ME TODAY l I am a Thomas scalp expert. I know how to recognize and treat the 14 local scalp troubles which cause 90% of all baldness. I know how to end your dandruff; how to stop your abnormal hair-fall; and how to promote normal hair growth for you. My knowledge and skill in treating local scalp conditions is based on The Thomas' 20 years of success. Quit worrying about baldness! Thomas treatment bas helped a quartermillion other persons to end scalp troubles, and Thomas can help you, too. With respect to respondents' medicinal preparations for internal use, respondents make the following representations: TRICHOVITA LIFE FOR Tile HAIR A scientifically prepared mineralization product. Taken as directed remineralizes the system, supplying those elements essential to the healthful rrowth of the hair.

TRICHOTONE A scientifically prepared hair stimulant. Taken as directed rejuvenates the matrix (the mother of the hair) from which the hair of the scalp grows. PAR. 5. Through the use of the aforesaid statements and representations and others similar thereto not specifically set out herein, respondents represent directly and. by implication that said preparations constitute a cure or remedy for dandruff and constitute a competent and effective treatment for all forms of dandruff and itching scalp; that said preparations have therapeutic properties Which are effective in destroying the germ causing dandruff; that the Use of said preparations will stop abnormal loss of hair, and cause new hair to grow, and promote the normal growth of hair on thin or bald spots; and that the use of said preparations will revive the growth of hair, prevent baldness and constitutes a cure or remedy for baldness and a competent and effective treatment therefor. Reepondents further represent that the internal use of their preparation "Trichovita" supplies elements essential to the healthful growth of hair and that the internal use of their preparation "Trichotone" stimulates the hair and rejuvenates the formative cells from which the hair grows; and that both of said preparations are effective in stimulating the growth of hair.

DECI~IONS · 1312 FEDERAL TRADE COl\IMISSlON Complaint 34F.T.C.

PAR. 6. The aforesaid representations used and designated by the respondents as hereinbefore set out are grossly exaggerated, misleading and untrue. Respondents' preparations are composed of the following ingredients in various combinations: Petrolatum, Soft Soap, Wool fat, Resorcinol, Mineral 011, Alcohol, Castor Oil, Phenolic material, Glycerine, Salicylic Acid, Sulphur, Boric Acid, Calomel, Quinine Blsulphate, Oxyqulnollne Sylphate, Capsicum, Pilocarpine, Cantharides. Respondents' preparations do not constitute a cure or remedy for dandruff or a competent or effective treatment for any form of dandruff or itching scalp in excess of furnishing temporary relief from the symptoms of itching and the temporary removing of dandruff scales. Said preparations, while having some therapeutic and germicidal qualities will not destroy the germ which allegedly causes dandruff. Said preparations have no therapeutic properties which would be effective in causing new hair to grow and their use will not stop the abnormal loss of hair IQr promote a normal growth of hair on thin and bald spots. Respondents' preparations will not revive the growth of hair and will not prevent baldness and are not a cure or remedy for baldness and have no therapeutic value in the treatment of baldness.

Respondents' preparations "Trichovita" and "Trichotone" do not e:upply elements essential to the growth of hair and have no therapeutic value whatsoever in stimulating the growth of hair and will not rejuvenate the formative cells from which hair grows. PAR. 7. The use by the respondents of the foregoing false, deceptive and misleading statements and representations, disseminated as aforesaid, has had, and now has, the capacity and tendency to, and does, mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that all such statements and representations are true, and induces a substantial portion of the purchasing public to purchase respondents' products hereinabove referred to because of such erroneous and mistaken belief, engendered as above set forth.

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 Commission Act. THE THOMAS MANAGEMENT CORPORATION, ET AL. 1313 1305 Findings REPORT, FINDINGS AS TO THE FACTS, AND ORDF..R Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on December 18, 1940, issued and subsequently served its complaint in this proceeding upon respondents, The Thomas Management Corporation, a corporation, and Paul A. Thomas, Sr., Catherine M. Thomas, Paul A. Thomas, Jr., and Norbert J. Thomas, individually, and as officers of said corporation; Paul A. Thomas Trust, and Paul A. Thomas, Sr., Catherine l\I. Thomas, and Norbert J. Thomas, individually, and as trustees of said trust; and Ruth Thomas and Madeline Thomas, individuals, charging them 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 answers thereto, testimony and other evidence were introduced before an examiner of 'the Commission theretofore duly designated by it. Thereafter, a stipulation Was entered into whereby it was agreed that a statement of the facts signed and executed by counsel for respondents and Richard P. Whiteley, assistant chief counsel for the Federal Trade Commission, subject to the approval of the Commission, may be taken as facts in this proceeding in lieu of the taking of additional testimony and evidence in support of the cha~ges stated in the complaint, or in opposition thereto, and that the said Commission may proceed upon said statement of facts and the record herein to make its report, stating its ~ndings as to the facts and its conclusion based thereon (including Inferences which it may draw from said stipulated facts and the evidence and record already made herein), and enter its order disposing of the proceeding without the presentation of argurnent or the filing of briefs. Respondents expressly waived the filing of a report upon the evidence by the trial examiner. Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint, answer, stipulation, and record,. said stipulation having been approved, accepted, and filed; 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. FINDINGS AS TO THE FACTS • PA.RAoRAPII 1. Respondent, The Thomas l\fanagement Corporation, 1S a corporation, organized and existing under and by virtue of the laws of the State of Illinois, having its principal place of business and office in Chicago, Ill.

466~06m--42--vol.34----8S Findings 34F.T.C.

Respondent, Paul A. Thomas, Sr., is president of The Thomas Management Corporation and a trustee of respondent, Paul A. Thomas Trust.

Respondent, Catherine 1\I. Thomas is vice president of The Thomas Management Corporation, and a trustee of respondent, Paul A. Thomas Trust.

Respondent, Paul A. Thomas, Jr., is treasurer of The Thomas Management Corporation.

Respondent, Norbert J. Thomas is secretary of The. Thomas Management Corporation, and a trustee of the respondent, Paul A. Thomas Trust.

Respondent, Paul A. Thomas Trust is a common law trust having its principal office in Chicago, Ill. Paul A. Thomas, Sr., Catherine 1\I. Thomas, and Norbert J. Thomas are trustees of said respondent and Paul A. Thomas, Sr., is the beneficiary for life of said trust. Said trust owns all of the stock of respondent The Thomas Management Corporation, and controls and directs, and has controlled and directed the policies and operations of said corporation. Respondent, Paul A. Thomas, Sr., is the father of Paul A. Thomas, Jr., and Norbert J. Thomas, and is the husband of respondent, Catherine M. Thomas. Madeline Thomas is the divorced wife of Norbert J. Thomas. Ruth Thomas is the wife of Paul A. Thomas, Jr. PAR. 2. Respondent, Paul A. Thomas Trust, in addition to owning all of the stock of respondent The Thomas Management Corporation, is the holder of certain trade names, copyrights, formulae, and secret processes used by its licensees in the treatment of conditions of the hair and scalp according to a system usually designated as "The Thomas'." In consideration of certain payments, it has granted to respondent The Thomas Management Corporation the exclusive right to manufacture and sell all chemicals, products, and supplies used in the administration of The Thomas' hair and scalp treatment. The Thomas Management Corporation has agreed that it will sell and deliver the necessary chemicals and supplies to any person, firm, or corporation licensed or authorized by the Paul A. Thomas Trust to give Thomas treatments for hair and scalp and will not sell any of such chemicals or supplies to any person, firm, or corporation not so licensed or authorized by said trust, except that this does not prohibit The Thomas Management Corporation from selling chemicals or supplies by mail to individuals for home treatment. In return for certain specified payments, the Paul A. Thomas Trust grants to others the exclusive right in designated territories to use the formulae, trade names, copyright names, and secret processes THE THOMAS 1\fANAGEMENT CORPORATION, ET AL. 1315 1305 Findings owned by the Trust in the conduct of the treatment offices for the administration of The Thomas' hair and scalp treatments to members of the public. Such agreements provide that the licensee shall use in such business only chemicals, products, and supplies furnished or authorized by said trust and that the licensee shall not charge less than certain minimum prices for various hair and scalp treatments offered to the public. The agreement contains provisions for securing payment of amounts which may be due under the terms thereof to the Paul A. Thomas Trust.

Pursuant to licenses from Paul A. Thomas Trust, the individual respondents in this proceeding, either separately or in conjunction with other respondents or in conjunction with others not respondents in this proceeding, operate hair treatment offices under the name The Thomas' in the following places:

Paul A. Thomas, Sr ________ Atlanta, Georgia; Seattle, Washington; Minneap.. olis, 1\Iinnesota; Toledo, Ohio; and Portlanll, Oregon.

Paul A. Thomas, Jr., and RuW Thomas____________ Cleveland, Ohio.

Norbert J. Thomas and l\Iadeliue Thomas ________ Detroit, Michigan. Norbert J. Thomas, Paul A.

Thomas, Jr., and Paul A.

Thomas, Sr ______________ Chicago, lllino!s. Norbert J. Thomas, Paul A. Thomas, Jr., and F.

1\Iills-------------------- Brooklyn, Rochester, Buffalo, and New York, New York.

Norbert J. Thomas, Paul A.

Thomas, Jr., and Ruth Thomas----------------- Los Angeles, Oakland, and San Francisco, Cali. fornia.

Norbert J. Thomas, Paul A.

Thomas, Jr., and C. R.

Swinehart_______________ Baltimore, Maryland. Norbert J. Thomas, Paul A.

Thomas, Jr., and Catherine l\1. Thomas __________ Newark, New Jersey. Norbert J. Thomas, Paul A. Thomas, Jr., and L.

Mms-------------------- Pittsburgh, and Philadelphia, Pennsylvania. Norbert J. Thomas, Paul A. Thomas, Jr., and E.

1\leyer------------------- St. Louis, Missouri. Norbert J. Thomas, Paul A. Thomas, Jr., nod J.

Kroll-------------------- Washington, D. C. Findings 34F.T.C.

Also pursuant to licenses from Paul A. Thomas Trust, the following parties conduct hair treatment offices under th~ name The Thomas' in the places designated:

G. L. McClellan ___________ Cincinnati, Columbus, and Dayton, Ohio; Indianapolis, Indiana: and Louisville, Kentucky.

M. F. GerrgatY-----------------------------------· Albany, New York. F. Mills---------------------------------------... -- Boston, Massachusetts. J. G. Stample------------------------------------ New Orleans, Louisiana. W. T. Graham------------------------------------ Providence, llhode Island. H. P. Phares------------------------------------- Syracuse, New York. Respondent, The Thomas Management Corporation, prepares advertisements relating to The Thomas' hair and scalp treatments and offers the same for sale to the owner or owners of the various hair treatment offices listed above, but does not itself advertise to the general public. Such of the advertisements so offered as may be desired by the owner or owners of the various treatment offices are purchased by them and run in newspapers of their selection. The owner or owners of some of the treatment offices employ The Thomas Management Corporation to select adve~:tising media, select advertisements to be run, prepare financial statements, and buy certain supplies. For some offices the ser:vices performed by The Thomas 1tfanagement Corporation include all those mentioned, and for other offices they are more limited. The services rendered to individual treatment offices are determined by the owner or owners thereof, and when The Thomas Management Corporation is employed it charges a fee for the services rendered.

Pursuant to the license from Paul A. Thomas Trust, the· local treatment offices buy from The Thomas :Management Corporation all of the products used by them in rendering hair and scalp treat· ments and also all of the "Home Treatment Kits" which they sell. The Thomas Management Corporation, pursuant to license from the Paul A. Thomas Trust, pays to said trust royalties on such sales for said license privileges.

Paul A. Thomas Trust does not control the business activities, policies, or advertising of the hair treatment offices owned by respondents, or by respondents and others not respondents except to maintain such inspection and supervision as may be necessary to insure that licensees conform to the terms of the license and pay the said trust such royalties as may be due it thereunder. PAR. 3. Respondents who own and operate hair treatment offices have purchased from The Thomas Management Corporation advertisements prepared by that corporation, and the respondent purchasers have caused the advertisements so purchased to be run in THE THOMAS MANAGEMENT CORPORATION, ET AL. 1317 1305 Findings newspapers circulated by the United States mails and in States other than the States in which such newspapers are published. As a result of such advertisements some persons have and do, come from States other than the State in which such treatment offices are located to respondents' treatment offices to purchase Thomas treatments, and after coming to such treatment offices some of them purchase Thomas '·Home Treatment Kits."

PAR. 4. The persons rendering Thomas treatments for the respondents operating treatment offices at the places heretofo"re specified, and the individual respondents themselves, are not doctors, dermatologists, hair and scalp specialists, or experts in the medical sense; cannot diagnose scalp and hair diseases; do not of ,themselves know that fourteen local scalp conditions cause ninety percent of all baldness; and do not of themselves know how to recognize the etiological factors of hair loss.

PAR. 5. In the course and conduct of its business, respondent, The Thomas Management Corporation, for several years last past has been engaged in the sale and distribution of various cosmetic and medicinal preparations for external and internal use in the treatment of conditions of the hair and scalp. Said respondent, causes said preparations, when sold to be transported from the place of business of the- said respondent in the State of Illinois to the various treatment offices located, owned, and operated as hereinabove set forth.

Said respondent, The Thomas Management Corporation, has also shipped direct from its place of business in Chicago, Ill., to the ultimate purchasers or consumers thereof some "Home Treatment Kits" to persons in the State of Illinois, and has also shipped a few "Home Treatment Kits" to the ultimate purchasers or consumers thereof in States other than the State of Illinois who had previously pur- • chased treatments or products from some one of the aforesaid Thomas treatment offices.

PAR. 6. Through extensive advertising to the effect that they can diagnose and cure scalp trouble, stop falling hair, and re-grow hair, respondents who operate treatment offices induce persons to come to their treatment offices. This business falls into two classes: (a) The sale of a course of t:treatment to persons coming to the treatment offices, in the course of which treatment most of the various preparations for the hair and scalp are administered and a few cosmetic Preparations are given to the persons to be self-administered at home between treatments; and (b) the sale of an ~ssortment of products Findings 34F.T.C, known as -a "Home Treatment Kit" to persons who are unable to come to their place of business at intervals to have the cosmetic prepara· tions administered by said respondents. These kits contain the same preparations for the hair and scalp as are sold and administered to the first class of customers herein referred to, and the purchaser of the "Home Treatment Kit" administers the preparations himself. In addition to the preparations hereinabove referred to, respond· ents sell and deliver medicinal preparations for internal use known as "Trichotone" and "Trichovita."

PAR. 7. In the course and conduct of their aforesaid business, re· spondents who operate treatment offices have disseminated and are now disseminating, and have caused and are now causing the dissemination of, advertise~ents concerning their said treatments, as specified in paragraph 3; and said respondents, by the United States mails, and by various means in commerce, as "commerce" is defined in the Federal Trade Commission Act, have also disseminated and are now disseminating, and have caused and are now causing the dissemination of, advertisements concerning their said treatments for the purpose of inducing, and which are likely to induce, directly or indirectly, the purchase of their said treatments and products. Among and typical of the statements and representations contained in said advertisements prepared by respondent, The Thomas Management Corporation, and disseminated and cause to be disseminated, as hereinabove set forth, by advertisements in newspapers and periodicals, by radio continuities, and by circulars, leaflets, :ramphlets, and other advertising literature, are the following: So you will never be (Picture of man in laboratory attire BALD looking Into a compound microscope) Eighteen years ago Paul A. Thomas devised the first accurate, reliable method of treating local scalp disorders. Then, as today, Thomas treatment ended dandrufl', stopped abnormal bairfall and promoted hair growth on thin and bald spots. It consistently produces these results-and because of its success, The Thomas' have grown to an organization with 45 offices throughout the United States and Canada.

Today Thomas treatment is more effective than it has ever been. New methods are constantly being tested and when something Is proved to be of definite ' value, Thomas clients are the first to receive benefit. naslcally, however, Thomas treatment remains the same, because no method bas ever been found which produces results as consistently as does the original Thomas metlwd.

Call for a free scalp examination today and see for yourself just how Thomas treatment ends dandruff, stop falling hair and promotes hair growth. Examlna· tlon and treatment are always in private.

THE THOMAS !vtANAGEMENT CORPORATION, ET AL. 1319 1305 Findings THE THOMAS' World's Leading Hair and Scalp Specialists-Forty Five Offices • • • • • • • THESE MEN KNOW HOW TO END YOUR SCALP TROUBLES Thomas Experts know that 14 local scalp conditions cause OOo/'o of all baldness. They know how to recognize and overcome these local causes of hair-loss. They know how to effectively treat the three types of dandruff; how to rid your scalp of the causes of Intense itching; and how to help promote normal hair growth on thin and bald spots.

\Vhy continue, then to worry and wnste your hair experimentiug with "cureails?" Consult a Thomas expert today. See for yourself bow The Thomas' twenty years of experience in treating a quarter-million persons has endowed Thomas Experts with unmatchable skill and ability in solving your particu)ar scalp problem. Learn how Thomas treatment ends dandruff and promotes normal hair growth. No charge is ever made for a complete scalp examination. Come In today.

Tile THOMAS' World's Leading Hair & Scalp Experts. Forty-Five Offices • * • • • • • Wily DE DALD? SEE THOMAS TODAY Modern science has made it unnecessary for any man to fear baldness. It ls known that baldness results from one or more of 14 local scalp disoruers. Thomas experts recognize each of these 14 conditions and adapt the reliable, proved Thomas treatment to overcome the ones which are specifically causing your loss of hair.

Within a remarkably short time after you start Thomas treatment your dandruff disappears, hair-fall stops, and new hair starts to gt·ow on the thin and bald spots. • • * • * • • • • • WHY BECOME BALD? Heed these Danger Signals- Avoid the Road to Daldness BALDNESS can be prevented! When your scalp becomes sick, obvious danger Signals such as (1) thinning hair, (2) Itching scalp, and (3) dandruff, warn you that a baldness-producing condition exists. You can prevent baldness by heeding these positive warnings and ridding your scalp of the local causes of hair loss 'Which are attacking your hair-growing structure. More than a quarter-million persons have avoided baldness by permitting The Thomas' t.o rid their scalps of local scait> ills. The Thomas' ::!0 years of experience endows them with unusual knowie<lge, skill, and ability to overcome any oC the 14 local conditions which cause 00% of all baldness. • • • • • • • Over one-quarter million persons had TIIOl\fas' treatment. Today they enjoy healthy heads o:t hair.

• • • • • • • Findings 34F.T.C.

It has been clearly demonstrated for twenty years that THOMAS' can re.grow hair.

• • • • • • • BALD~ESSFOLLOWSDANDRUFF Eight of the next ten bald-headed persons you meet became bald because they failed to rid their scalps of dandruff infection. • • • • • • • THOl\IAS E!\'DS DANDRUFF GROWS HAIR Dandruff clogs the hair follicle, causes itchy scalp, falling hair, and keeps new hair from replacing hair which bas dropped out. Because there are several types of dandruff, cure-all surface remedies usually do not correct the trouble. One of the most dangerous t.types of dandruff is caused by a germ deep in the scalp, known as flask bacilli of Unna.

Thomas treatment attacks this destructive germ by modern therapeutic agents and restores the scalp to a normal healthy condition. When your scalp is once rid of baldness producing germs, hair-fall stops, and new hair starts to grow again.

• • • • • • • BALDNESH IS NOT INHERITED Scientists who study the laws of Inheritance have found that ''acquired characteristics" are not lnh('rited. Baldness is in all cases acquired many years after birth and it is therefore agreed that it Is not inherited . • • • • • • • Forget the superstitious notion thlit hair can NEVER be regrown on thin or bald spots. Hair roots seldom die. Science tells us that more than 85o/o of all cases of hair loss are the "local" type--and consequently will respond to proper scalp treatment.

• • • • • • • BALDNESS WORRY YOU? ~Picture of white-coated man wltb a beautiful head of dark hair) SEE ME 'today., I am a Thomas scalp c·expert. I kno-tv how to recognize and treat the 14 local scalp troulles which cause 90o/o of all baldness. I know how to end your dandruff; how to stop your abnormal hair-fall; and how to promote normal hair growth for you. l\Ir knowledge and skill In treating local scalp conditions is based on The Thomas' 20 years of success. Quit worry.ing about baldness! Thomas treatment has helped a quartermillion other persons to end scalp troubles, and Thomas can help you, too. 'With respect to respondents' medicinal preparations £or internal use, respondents make the following representations: TRICHOVITA LIFE FOR THE HAIR A scientifically prepared mineralization product. Taken as directed remlnerallzes the system, supplying those elements essential to the healthful growth of the hair.

• • • • • • • THE THOMAS MANAGEMENT CORPORA~ION, ET AL. 1321 1305 Findings TlliCHOTONE A scientifically prepared hair stimulant. Taken as directed rejuvenates the rna trix (the mother of the hair) from which the hair of the scalp grows. The advertisements and excerpts from advertisements set out above are not all-inclusive but are merely illustrative of the statements and representations contained in respond~nts' advertising matter. PAR. 8. The ingredients contained in various combinations in respondents' preparations for external application for the hair and scalp herein referred to are ac; follows:

Acid Boric Coconut Oil Soap ~cld Lactic Liquor Carbonis. Acid Linoleic and Methyl Salocylate. Linolenic 1\Ienthol. Acid Salicylic on-castor. Alcolwl-Denzyl Oil-Sulphonated Castor. Alcohol-cetyl Oil-Cadeberry. Balsam Peru Oil-1\Ilneral lletanapthol-Mediclnal Alcohol-Ethyl Calomel Oil-Olive Edible Cantharides Oil-Olive Sulphonated Capsicum Oil-Pine Needles (Siberian) Ceresin ' ' Oil-Theobroma · . Cbolestrln Osyqulnoline ·Sulphate·. Ethyl Acetate Petrolatum Eucalyptol Pilocarpine Hydrochloride Glycerin Quinine Sulphate Glycerin 1\Ionosterate Resorcinol Lanolin Resorcinol l'l!onacetate Lecithin Sulphur Vitamin "D'' Thymol The ingredients contained m the preparations for internal use are as follows :

'l'richotone: Trlchovita : Calcarea Phos. 3x. Calcium Phosphate. 1\Iagnes!a Phos. 3x. Precipitated Sulphur. Ferrum Phos. 3x. Silica. Nutrum Phos. 3x. Reduced Iron. Kali thos. ax·. Calcium Fluoride. Magnesium Phosphate.

Magnesium Peroxide.

PAR. 9. Through the use of the aforesaid statements and representations, and others similar thereto not specifically set out herein, respondents represent directly and by implication, that said preparations and treatments constitute a cure or remedy for dandruff and ;onstitute a competent and effective treatment for dandruff and itch- Ing scalp; that said preparations and treatments have therapeutic Findings 34F.T.C.

properties which are effective in destroying the germ allegedly causing dandruff (the flask bacillus of Unna); that the use of said preparations and treatments will stop abnormal loss of hair, cause new hair to grow, and promote the normal growth of hair on thin or bald. spots; and that the use of said preparations and treatments will revive the growth of hair, prevent baldness, and constitute a cure or remedy for baldness and a competent and effective treatment therefor. Respondents further represent that the internal use of their preparation "Trichovita" supplies elements essential to the healthful growth of hair, and that the internal use of their preparation "Trichotone" stimulates the hair and rejuvenates the formative cells from which the hair grows; and that both of said preparations are effective in stimulating the growth of hair. PAR. 10. Respondents: preparations do not constitute a cure or remedy for dandruff, or have therapeutic value in the treatment of dandruff in excess of the removal of the dandruff scales; nor are they an effective treatment for any form of itching scalp in excess of furnishing relil!.f'(in pises which are not caused by systemic or constitutional rpnditions, .,·-f\n.id preparatipns will not destroy the germ which allegeulf'.:Cau~es~':clandruff {tht..,Jlask l;>acillus of Unna), nor has it beenlprqtft\)Fft!~- 'e. flask)bach\18 of;Unna is an etiological factor of danih\iit .·Sitid'p~~epari1tiofis·have,:rio therapeutic properties which WOUld be effecti'\,ein ca.'4sing llew liair'to grow and their USe Will not prevent the abnormal loss of hair or promote a normal growth of hair on thin and bald spots. Respondents' preparations will not induce the growth of hair, will not pre\'ent baldness, are not a cure or remedy for baldness, and have no effective thert"~peutic value in the treatment of baldness.

Respondents' preparations "Trichovita" and "Trichotone" do not supply elements essential to the growth of hair, have no therapeutic value whatsoever in stimulating the g-rowth of hair, and \Vill not rejuvenate the formative cells from which the hair grows. PAR. 11. The use by the respondents of the foregoing false, deceptive, and misleading statements and representations, disseminated us aforesaid, has had, and now has, the capacity and tendency to, and does, mislead a, substantial portion of the purchasing public into · the belief that all such statements and representations are true, and because of such mistaken and erroneous belief engendered ns above set forth, induces a substantial portion of the purchasing public to purchase respondents' treatmep.ts and products hereinabove referred to. THE THOMAS MANAGEMENT CORPORATION, ET AL • 1323 .1305 Order CONCLUSION The aforesaid acts and practices of the respondents, as herein found, are all to the prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meanillg of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST I This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answers of the respondents, testimony and other evidence taken before an examiner of the Commission theretofore duly designated by it, a:nd a stipulation as to the facts entered into between counsel for tle respondents herein and Richard P. 'Vhiteley, assistant chief counsel for the Comlllission, which provides, among other things, that without further evidence or other intervening pro<:edure the Commission may issue and serve upon the respondents' findings as to the fact-, and its conclusion based thereon and an order disposing ·of. fJi~fproi·eeding, and the Commission having maq~ .its finding:.F~tt's J!l.~thc. ~-!\\cts and its conclusion that the respond,G~ft\h~ve. vi()l~tfil::~h.~; p'i;~visions of the Federal Trade Commfssion ..A.cL .;: ' .,.:::; i·;}'/t ::'~~r.-<::,;s It is ordered, That the responl.l~I)fs, The:'i'homa~~J\1:lnagement Corporation, a corporation, and Paul A.~~thomas,' Sr., Catherine M. Thomas, Paul A. Thomas, Jr., and Norbert J. Thomas, individually, and as officers of said corporation; Paul A. Thomas Trust, and Paul A. Thomas, Sr., Catherine 1\I. Thomas, and Norbert J. Thomas, indi- -v-idually, and as trustees of said trust; and Ruth Thomas and Madeline Thomas, individuals.; jointly or severally, their representa- • tives, agents, and employees, directly or tl1rough any corporate or other device, in connection with the, offering for S!l.ie. sale, and distribution of various cosmetic and medicinal preparations for external and internal use in the treatment of conditions of the hair and scalp, or any other preparations of substantially similar compo- ~.:ition or possessing substantially similar properties, whether sold Under the names now used or any other name or names, do forthwith cease and desist from directly or indirectly: 1. Disseminating or causing to be disseminated, by means of the Dnited States mails, or by any means in commerce, as "('commerce" is defined in tile Federal Trade Commission Act, any advertisement Which represents, directly or through inference: (a) That respondents' preparations constitute a cure or remedy for dandruff, or have therapeutic value in the treatment of dandruff, Order 34F.T.C.

in excess of the removal of dandruff scales; or are an effective treatment for any form of itching scalp in excess of affording temporary relief from the symptom of itching when such itching ~s not caused by systemic or constitutional conditions. · (b) That dandruff is caused by the flask bacilli of Unna m.1d that said preparations will destroy such germs.

(c) That said preparations have therapeutic properties which are effective in inducing the growth of hair or in causing new hair to grow.

{d) That the use of said preparations will prevent the abnormal loss of hair or induce a normal growth of hair on thin and bald spots. (e) That said preparations will prevent baldness, or ~tre a cure or remedy for baldness, or have any effective therapeutic value in the treatment of baldness.

{f) That respondents' preparations "Trichovita" and "Trichoton" supply elements essential to the growth of hair, or have any therapeutic value in stimulating the growth of hair. (g) That said preparations "Trichovita" and "Trichotone" will rejuvenate the. formative cells from which hair grows. 2. Disseminating or causing to be disseminated, by any means, any advertisement for the ·purpose of inducing, or which is likely to induce, directly or. indirectly, the purchase of said preparations in commerce, as·"commerce'1 is defined in the Federal Trade Commission Act, which advertisement contains any of the represel!tations prohibited in paragraph 1 hereof.

It is further ordered, That the respondents shall, within 60 days 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 with this order.

ULTRA-VIOLET PRODUCTS, INC. 1325 Syllabus