Success Portrait Co., Etc

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IN THE MATTER OF SUCCESS PORTRAIT COMPANY, ETC., ET AL.

CO!.fPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. '"26, 1914 Docket ~522. Complaint, Mar. 31, 19.~2.'-Decision, Aug. 3, 1942 A.. dt·awlng ls a representation produced by the art of drawing, a work of art Produced by pen, pencil, or crayon; a crayon dmwing is the act or art of dr~wing with crayons; the pastel, in art, is a colored crayon made of pigments ground with chalk and compounded with water into a paste; and a drawing made with colored chalk or crayon is called a pastel, as is also the art of drawing with colored crayons.

A.. Painting is understood by artists who paint pictures, photographers who color Photographs, and the general public, as\ an original representation by the Painter of a design, image, or object on a surface by means of paints, water color, or oil; a freehand image painted directly on the surface without the intervention of any mechanical means, such as a camera; a water color is a Palutlng with pigments for which water is used as a solvent; and an oil Painting is a painting done by hand with brushes in plastic oil colors on canvas, or other materials, without the aid of photography. '\\there a corporation, engaged in producing and in selling an~ distributing colored or tinted enlargements and miniatures of photographs and snapshots, nnd frames therefor; the officers and directors thereof, who exercised a substantial measure of control over the other associates as hereafter set out: some fifteen "operators" who cooperated with said corporation in the sale and distribution of said products, employing numerous persons in Yarious capacities such as "crew' managers", "sales agents", "record managers", "pt·oof passers", "field artists" and ''delivery' men" to contact the Purchasing public; and some 30 "sales agents" of one or more of said "operators", who visited homes in cities,. tow us, and rural communities of l other States, carrying puported typical samples and soliciting orders; 11 carrying on the competitive sale of said products under a sales plan in which all cooperated and under which said corporation (1) furnished to said "operators" and "sales agents", upon their order, as well as to prospective agents, equipment including catalogs, order blanks, daily report forms, i receipts, and, in many instances, sample cases; (2) caused orders or con- I I tracts for its products to be entered on printed forms provided by it, which ,. contained, in some cases, .its own corporate name and address as well as I the name or trade name of the "operator" through whom the order was secured, and, in other instances, only the trade name of the operator, using the corporation's address, and also stated, In some cases, that the "operator" was "affiliated" with or a "subsidiary" of said corporation; (3) furnished "operators'' and "sales agents", if desired, with identification and credential certificates and letters; ( 4) was in possession at all times of the names and addresses of customers whose J?lctures it was making: (5) when so 1Amended.------- Syllabus 35 F. ·r.C. requested, handled the mail from customers of "operators" and "sales agents," which was addressed to many of them at said corporation's own ad· dress: (6) paid visits to various "operator" organizations, instructing tbelll regarding sales tethnlque and the obtaining and improving of business; (7) required daily reports from salesmen in the field covering the canvassing 6f customers, proof passing, and the delivery of products; and (8) on occa· sion wrote types of sales tall{S deemed appropriate for use by "sales agents" or "operators," confeneu with latter regarding trade names to be employed by them and contract forms to be used; and handled post office money orders payable to various trade name companies sent in by the "operators'~ making use thereof, and also open accounts and financial transactions for such "qperators," maintaining close supervision over their business afl'<lire .and those of the "sales agents," anti on occasion urging the discharge of the latter- (a) Made use in order blanks and contracts and otherwise of such terms as "Hand Painted Portrait" in soliciting orders for and designating and refer· ring to its aforesaid tinted or colored enlargements or miniatures; Notwithstanding the fact said pr&ducts were not paintings as understood bY . the general public as being free-band Images painted in water colors or oil without the Intervention of any mechanical means, but were accomplish~d through spraying powdet·ed pigment in solution upon the photographic reproduction through use of a mechanical air brush and a camel's hitir brush; and Where said "operators," selling and distributing said colored enlargements, miniatures, and flames, under the aforesaid general plan and progt·am-- ( b) 1\Iade use of such trade names as "Old Master Portrait Company," "Superior Art Studio,.," "Colonial Air Institute,". and numerous others, along witll words, In some Instances, "subsidiary of" or "affiliated with," followed bY name of. said corporation; and ernt1loyed therewith as the addt·sells that of said corporation; • Notwithstanding the fact that with the exception of one or two, none of thelll bad owned, operated or conducted, directly or Indirectly, any "art studio," "Institute of art," or place of business at Chattanooga· or elsewhere, or tile equipment essential in producing photographic enlargements or min,iatures, or employed or controlled artists ot· operators skilled in the use of air or paint brush, or In drawing or pastel, or maintained an office or office 'force at address In question, with the exception of two who employed a seer~ tary and conducted correspondence therefrom; said trade names were use merely to promote the sale of products actually produced by such corpor~; tlon; and In no Instance was operator a business "subsidiary" or "affiliate thereof, but said terms were employed to induce customers to believe they were dealing with an operating established bouse, and served to refer cus· tomers to corporation in question for a financial rating of the trade-uaJlle company and the opet·ator using it;

With result that p1·ospective pm·chasers were led to believe that they were deallng with representatives of sales studios or associations or art institutes., and therel::iy confusing the businesses conducted by sald "operators" with genuine art associations, art studios, or art institutes, and with further result that Jili.bllity to purchasers for the representations, acts and practices of "operators" and "!lales agents" was evaded, and business rating, credit, prestige, and standing to which they were not entitled were giv-en to the trade names employing the same business address ns that of afore· SUCCESS PORTRAIT CO.; ETC., J£·T AL. 229 Syllabus said corporation, and particularly to those which were represented as lts \ subsidiaries or affiliates; and \'here "sales agents" visiting homes and carrying with them samples which had been reproduced and built up from carefully selected subjects of highest photographic value, the colored enlargements of which had been skill- ,.i . fully done with great care and detail and resembled closely, in many cases, Paintings done by hand; · {c) Represented that the company which the particular agent represented Was prepared to duplicate or reproduce such type of work and that the "studio's" or "art institute's artist" would "paint" or "make a painting" or "hand painted portrait'' or "band painteu stream-lined portrait" of the Picture or snapshot of some member of the customer's family, and that an "oil painting" would be made to be fini><hed in oil by hand on linen, silk or Japanese silk, the agent referring from time to time to the "portrait Painting" as being made by the trade-name company which he represented, and address of which was the same as that of aforesaid corporation; 'rhe facts being that corporation in question in v11rlous instances, due to being furnished with pl10tographs or snapshots of inferior quality, incapable of producing good enlargements, was unable to produce finished products equal in appearance to. the samples displayed; customers complained that the "paintings" or "pictures" made for them were inferior to ·the samples; and, as aforesaid, they were not paintings or finished in oil by hand on linen, silk, or Japanese silk;

(d) Falsely represented at times that an art studio or academy of art was being :q~aintained in which art classes were being held, and that if the prospective purchaser would lend to the agent a photograph or snapshot, it would be copied by hand in oil colors by an art student attending such classes; and {e) Falsely represented In many instances that the sale was an "introductory offer" only; that only a limited number of painting:i was to be placed in any given town or locality, that the customer would pay only for the work dorie by the artist, the picture to cost nothing; that. the "painting" was being offered at a reduced price and,that, in consideration of such fact, it was expressly agreed that it was to be "protected and exhibited"; and in other instances designated the price named as an "advertising price". or .represented that the picture was being offered merely at the "cost of production"· and \Vhere some ~f said "operators" and "sales agents"- (!) Represented to custmPrs and prospective customers that a drawing_ contest would be held in a certain community for the purpose of deciding who should be one of the few "lucky persons" to have "paintings" placed on exhibition in their homes In connection with a "special advertising offet·" or "special i i introductory offer," and represented that the sealed envelope produceli In I said connection by the "sales agent" contained various slips of paper, most of Which were blank, but a few of which were certificates or coupons entit- I ling the holder to two genuine hand-painted portraits finished in oil for the sum of $10 or one for $7-::iO-or at various times at· different prices under which the "lucky" drawer got a picture for half price or two for the price of one; · 'rhe facts being that the slips were so manipulated that all acceptable customers Invariably drew a '.'lucky" coupon; the allrged contest was a deceptive scheme, the sole purpose and result of which, were to induce prospective purchasers to believe that if they were lucky they would obtain pictures at FEDERA~ TRADE COMMISSION DECISIONS230 Complaint 35F. T.C.

prices greatly below those which other customers had to pay and were thus induced to enter into contracts for purchase in which the coupon gave_ them no advantage whatsoever; and Where a second sales agent, designated as "field artist" or "instructing artist," following the transmission of an order by the first salesman, upon his appear· ance with an uncolored rough proof 9r "sketch" of the enlarged photograph. for which bff collected the agreed cost- ( g) Informed the customer for the first time that a frame for the picture, which was finished in octagonal shape, could not be purchased from any source other than through hts company and that the portrait would not bold Hs color and be of any value unless frnmed, calling the customers attention from time to time to his agreement to "protect" and "exhibit" the portrait and to his "obligation" under the contract to buy a frame, which In various instances bad not been m£-ntioned before, and, In the event of the c.customers refusing to buy a frame, repeated through a third agent aforesaid reasons why a frame must be b6t1ght, and In some Instances refused to deliver the completed picture regar<lless of whether or not 1t bad been paid for In full, and refused to return the original pbo~ograph loaned by customer until tbe frame was ordered ;

The facts being that said sales agent represented as a "field·artist" or "instructing artist" was merely a delivery man or frame salesman; and "operators" in many instances concealed from purchasers at time of order the fact that finished product would be delivered In a frame of peculiar octagonal conve:S: shape, and that it would be impossible to obtain a frame to fit said picture except from or through said corporation or others at prices fixed by them i their efforts were directed largely to the sale of frames, and their sales plan, and the various <'ails or the sales agents, were primarily for the purpose and with the effect of forcing the customer to buy something he did not originally intend to buy; and (h) Represented as regular price or value for frames, prices, and values which were in fact substantially In excess of those at which frames of similar type and quality are usually sold; . · With the result that tbe use of said typical representations, acts, and practices, employed as aforesaid, led purchasers mistakenly to believe that said repre· sentations and implications were true, and caused a substantial number to buy substantial quantities of their said products: Held, That such acts and practices, as above set forth and effected through tbc use. of a sales plan In which said corporation and others cooperated, as aforesaid, were all to the prejudice and Injury of the public, and constituted ' unfair and deceptive acts and practices In commerce. Mr. Marshall Morgan for the Commission.

Whitaker, llall, Haynes & Allison, of Chattanooga, Tenn., for the corporate respondent and the officers and directors thereof. llfr. Frank J. W idema'(l, of 'Vasl~ington, D. C., for the individual operators and salesmen. · AMENDED Col\IPLAINT Pursuant to the provisions of the Federal Trade Commission Act, · and by virtue of the authority vested in it by said act, the Federal SUCCESS PORTRAIT 00.; ETC., ET AL. 231 227 Complaint ~rnde Commission, having reason to believe that the parties named 111 the caption hereof, and more particularly hereinafter designated and referred to as respondents, have violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest,' hereby issues its com- Plaint, stating its charges in that respect as follows: P ARAGR,\PH 1. Respondent, Succe:;;s Portrait Co. (hereinafter refe~re.d to as corporate respondent), is a corporation organized and doing business under and by virtue of the laws of the State of Ten- ~essee. Said corporate respondent also trades as Chattanooga Art Iedallion Co. and as Art Trade Studios. ' . Respondent, J amer :Morton McConnell, is president and a director of corporate respondent, Success Portrait Co. Respondent, Ozro Absolem Brammer, is vice president and a director of said corporate respondent, Success Portrait Co. Respondent, George Nathan McConnell, is secretary and a director . of said corporate respondent, Success Portrait Co. . Respondent, Jesse Roy Hodge, is treasurer and a director of said corporate respondent, Success Portrait Co. · The above individual respondents have their principal offices and place of business with corporate respondent at 1301 McCallie Avenue 111 the city of Chattanooga, State of Tennessee, and they direct and ?0ntrol the business polldes and activities of said corporate respondent 111 carrying out the acts and practices hereinafter alleged . . Respondents, W. S. Edwards and Ida Lillian Wilson Edwards,. are llldividuals, trading as Superior Art. Studios and as Colonial Art Institute and as Old English Art Co., and as such, are associated with lind are representatives of said corporate respondent, Success Por- ~~ili ' ' 1.·Respondent, Jack E. Bramley, is an individual, trading as Stream~ lne Art Co. His address is box 242, Little River Station, 1\Iiami, l<'Ia., and he is associated with and a representative of said corporate respondent.

li~respondent, C. A. Hicks, is an individual, trading as H. B. Art Co: Is address is San Antonio, Tex., and he is associated with and a representative of said corporate respondent. . Respondent, N. '\V. Fr11zier, is an individual, trading as Federal Art Co. His address is box 720, Tarboro, N. C., and he is associated with lind a representative of said corporate respondent. · Respondent, J. E. '\Voods, is an individual, trading as Paramount Art Co. His adddress is route 1, Shelby, N. C., and he is associated '\with and a representative of said c9rporate respondent .. 232 FEDERAL TRADE co:MMISSION DE.CISIQ.KS Complaint 35F. T. C.

Respondent, J. P. Kennington1 is an individual, trading as J{el~­ llington Art Rtud1o. His address is Kershaw, S. C., and he is assoct· nted with and a representative o£ said corporate respondent. Respondent, S. C. Porter, is an individual, trading as Peerless Studio. His address is Corpus Christi, Tex., and he is associa_ted with and a representative o£ said corporate respondent. Respondent, R. H. Page, is an,individual, trading as Page Art Co. His Bddre:-:s is 135 ·west Second Street, 1Vashington, N. C., and he is associated with and a representative o£ said corporate respondent• Respondent, S. P. Rogers, is an individual, trading as Rogers .Art Co. His address is Union, S. C., and he is associated with and tL representative o£ said corporate respondent. . Respondents, H. F. 1Vilson and Jack Howard, are individuals, and their addresses are Grenada, Miss., an'd Fair 1\Iount, Ga., respectively· Said respondents are associated with one another and are trading as ·wilson Portrait Co. and as 1Vilson Art Association, and they are associated with and representatives o£ said corporate respondent, Success Portrait Co.

Respondent, T. F. Keegan, is an individual, trading as 1Vorld Art Co. His address is V ero Beach, Fla., and he is associated with and a representative of said corporate respondent. · Respondent, R. L. Gaddis, is an individual, trading as Artcraft Portrait Co. His address is Bartow, Fla., and he is associated with and a representative of said corporate respondent. Respondent, E T. Greenwood, is an individual, trading as Vogue Art Studio. His address is Paces, Va., and he is associated with tllld a representative of said corporate respondent. The above-named respondents, 1V. S. Edwards, Ida Lillian Wilson Edwards, Jack E. Bramley, C. A. Hicks, N. 1V. Frazier, J. E. ·woods, J.P. Kennington, S.C. Porter, R. H. Page, S. P. Rogers, H. F. Wil· t:.on, Jack Howard, T. F. Keegan, R. L. Gaddis, and E. T. Greenwood lire hereinafter on occasion referred to as respondent representatives. Respondents, Neal Allen, Rutl~ Attix, Henry Acie Barrentine, r..,ee Beaver, Tom Bell, Earl Bigby', H. P.llingham, R. S. Bishop, James W· Boulware, Ted Bramley; Catherine llroward, N. B. llroward, Lloyd Brown, H. V. Caton, L. Clark, 0. D. Clayton, Robert Dodd, George f. Dcinehue, Joseph Durrance, Edith Eclmondsqn, Jack Edwards, Willis G. Edwards, J. F. Evans, Thos. Gaddis, V. Gantt, Jimmy Greenwood, Juanita Holland, R. F. Jones, A. S. King, L. H. Marsden, Thelm:lr Marshall, J. II: McCoy, F. H. McGaughey, H. D. McGaughey, Elizn.· beth 1\Ielviri, 0. R. Melvin, Carl Newton, Grayce Nix, J~ W. Parker, Letha Revels Putney, Jack Ritchi~, T. E. _Savage, Mary Schultz, Lll· · lian Shepard, G. C. Sours, R. C. Speece, Marshall Steadham, John Q-. SUCCESS PORTRAIT 00. 1 ETC., Ell', AL, 233 Complaint ' .Tierney, Stelhi Timmerman, C~ J. \Vallentelsz, Kay Harriet "Whitten, 0. A. Willocks and. Chester Wofford, are individuals and are sales ttgents and employees of one or more of the respondents hereinbefore 11UU1ed and described. Said respondents are hereinafter on occasion l" f !' erred to as respondent sales agents. · . AU of said individual responuents maintain their principal office and lllace of business at 13.01 McCallie Avenue, Chattanooga, Tenn . . All of the respondents are engaged in the sale and distribution of tinted or colored enlargements, or tinted or colored miniatures, of :Photographs and snapshots and frames therefor. Respondents cause :nd at aU times.mentioned herein have caused said products, when sold, 0 be transported from the State of Tennes~ee to the purchasers·therebf· located in various other States" of the United States and in the !strict of Columbia.

t .respondents maintain and at all times ~1entioned herein have main~ blllned a course of trade in said products in commerce among and Cetween the various States of the United States and in the District of columbia. . ·h ~)AR. 2~ In the co~rse az1d .con~uct of s~id busine.ss, respon~e_nts h~ve e"n, and are now engaged ill chrect and substantial competition With ~arious corporations, par:nerships and individuals likewise engaged ln the sale and di:-.tribution in commerce between and among the ''.arious States of the United States and in the District of Columbia of tinted or colored enlargements and tinted or colored miniatures of Nlotographs and snapshots and frames therefor. ' PAR. 3. Respondents, during the 3·years· or more last past, bav~ tered into and carrie1l out varjous understandings, agreements, com~ illations and conspiracies with each other to sell tinted or colored enlargements and ti~ted or colored miniatures of photographs and ~n . . upshots and frames therefor to the purchasing publi.c through the l.!se of false, misleading, and deceptive acts, practices, and p)ethods., PAn. 4. In the course and conduct of said enterprise, said corporate~ respondent is engaged in the business of producing and distributing Colored or tinted enlargements and miniatures of photographs and :~upshots and the sale of frames therefor, and in the sale and distribu- .10n thereof the officers. and directors of said corporate respondent' ln their individual and respective official capa~ities, dominate, direct, llttd control the corporate policies, affairs, .and activities of said corllorate respondent and exerc.ise a substantial measure of direction and ~ntrol over the organization, management, policies, operation, and f l:ancing of the remaining respondents hez;ein in carryig out the unhUlt·nwthocls of competition and unfair and deceptive acts and practices · erei~ alleged.

' • J 234 FEDE~AL 'frade COMMISSION DE·CIS.IQ.NS Complaint 35F. T.C.

Associated with said corporate respondent are various operators, associates, or representatives who, through the medium of various and sundry trade names, offer for sale, sell and distribute corporate respondent's products to the consuming public. Respondent repre· sentatives are such operators, associates, or representatives of .said corporate respondent.

The respondent representatives employ numerous persons in vari· ous capacities such as "crew manaaers" "road mana(lers '' "proof ' passers," "delivery' men," and salesmen"' or' sales agents,"' who contact the purchasing public in the sale, distribution and delivery of the products produced by the corporate respondent and sold and dis· tributed by the corporate respondent and the respondent representa· tives. Respondent sales agents are connected with the respondent representatives in some capacity in connection with the sale and dis· tribution of said corporate respondent's products. PAR. 5. Pursuant to said understandings, agreements, combina· tions, and conspiracies and in furtherance thereof, said respondents, acting in concert and cooperation with each other and with divers other persons whose names are to the Commission unknown, have engaged in various unfair and deceptive acts and practices in coJll• merce and various unfair methods of competition in commerce, of which the following are typical: · 1. In buying respondents' products, purchasers and prospective pur· · chasers are led to believe by respondent representatives and respond· · ent sales agents that ·they are contracting or dealing with duly constituted representatives or sales agents of existing studios or art coJll· ·panies whose names appear on the various contract forms, ordet blanks, or identification certificates produced by said representativ-es or sales agents in contacting said purchasers. In truth and in fact, the names of such studios or art companies are wholly fictitious in that there are no such studios or art companies .in existence, but to the contrary these are merely trade names used bY the various respondent representatives engaged in the sale of products produced and distributed by Success Portrait Co. These various contract forms, order blanks, and identification certificates give the street address of Success Portrait Co. as their own. Respondent represent!\• tives and respondent sales agents do not in any way operate art coJll• panies, art associations, or studios; nor do they in any manner engage in the business of making, enlarging, or the tinting of photographs· The Success Portrait Co.'s products are sold by such agents, repre· ~entatives and canvassers operating under various fictitious names, thereby misleading the public as to the real name of the manufacturet of the product. Respondent representatives and respondent's sales SUCCESS PORTRAIT CO., ETC., ET AL. 235 227 ·Complaint agents are ·furnished with identification certificates and credentials Which are pu-rportedly signed by one of the fictitious studios or art companies. These are exhibited by respondent representatives and respondent sales agents when interviewing various prospective purchasers. On occasion also respondent representatives and respondent ' I,, sales agents are furnished with identification certificates and credentials signed by corporate respondent Success Portrait Co., which are 8Jchibited by them when interviewing various prospective purchasers. Equipment, including catalogs, order blanks, daily report forms, receipts,~ and, in many instances, sample cases enclosing samples of Corporate respondent's products, is furnished by corporate respondent to said respondent representatives and respondent sales agents. 'I'he corporate respondent, in many instances, causes orders or contracts for its products to be entered on printed forms provided by it for that purpose. These order blanks or contracts contain corporate respondent's name and address, as well as the name or trade name of the respondent representative through whom the order is secured. In such order blanks it is variously stated that said respondent representative is affiliated with or is a subsidiary of said corporate respondent. 1Vhen an order is secured, said order blanks or contracts are signed by the respondent representative securing the order as "representative" or "company representative" on a line provided therefor.

· . Typical of "the :form of order blank or 'contract used by the respondents under the trade names mentioned herein, and under various other trade names to the Commission unknown, is the following: SUPERIOR ART STUDIOS Subsidiary of Success Portrait Company Home Office, 1301 McCallie Ave.

CHATTANOOGA, TENN.

1 Sketching and Portrait Painting THIS CERTIFICATE entitles the bolder to one HAI\"'D-PAINTED STREAM: LINE PORTRAIT, size 9 x 14, for the producing cost of $2.98 unframed. To Introduce this grade of art, we are placing only a limited number under this offer. You will be notified by mail when proof of your portrait Is ready. It WII then be shown at your residence when the $2.98 must be paid. In consideration of the reduced price at which this portrait Is 'placed, It is eJCpressly ngt·eed that It shall be properly protected and exhibited. Ve,·tial agreements, other than he1·eln stated, will not be recognized. We guarantee the return of your photograph with the finished work. COUNTERMANDS NOT RECOGNIZED PAY THE MAN WHO SHOWS THE PROOF Date____________________ Representative_..:----------------------------------. 236 FEDERAL TRADE COMMISSION DE.CISJONS Complaint· 35F. T. C.

The foregoing business arrangement is used by the respondents for the purpose of evading liability to purchasers for various false and misleading statements and representations which are made in the sale of respondents' products and to give prestige to the various trade names used by respondent representatives and respondent sales agents. The so-called "paintings," "hand-painted portraits," "poly· chrome portraits," "streamline portraits,"· or "miniatures" produced, sold and distributed by respondents are not portraits, miniatures, or paintings finished or produced by hand in oil colors in any sense of the word, but, to the contrary, are merely cheap, quickly made photo· graphic reproductions costing in the neighborhood of $1.25 each, which are tinted or colored by the use of pastel or crayon, water color or other powden:id pigments soluble in water, sprayed upon the photographic reproduction in solution largely through the use of 11 mechanical air brush and compressed air.

2. Respondents exhibit to purchasers and prospective purchasers samples of attractively colored and finished specimens of the pur· ported type of work to be done. Prospective purchasers are told that they may buy similar "paintings" or "p<:>rtraits" from respond· ents at a "reduced price," "advertising price," "special introductory price," or for the "cost of production."

In truth and in fact, the so-called portraits or tinted photographic reproductions produced, sold and distributed by respondents are dif· ferent from and greatly inferior in quality, workmanship, and ap· pearance to the samples exhibited by respondents when obtaining orders for ·such products. In truth and in fact, such products are not sold at a "reduced price," "advertising price," "special introductory price," or for the "cost of production" but, to the contrary, the price at which respondents sell unframed tinted photographic reproductions is in excess of and above the regular and customary price' for which said products usually and customarily sell in the ordinary course of business.

3. Said respondents in some instances induce the customer to lend them a photograph or kodak snapshot of the party or parties whose portrait is to be "painted" and represent that such photograph is to be used as a model or guide to the artist who is to "paint" the "portrait" and that said photograph will be returned to the purchaser with the completed work. In some instances, n~spondents represent that they maintain an· "art institute," "art studio," or "academy of art" in which art classes are held for the pur;pose of giving experience to young artists and that respondents desire to obtain various photo-. grahs from which hand-painted portraits or hand-painted miniatures are to be copied and, further,·that if the prospective purchaser will SUCCESS PORTRAIT CO., ETC., E.T AL. 237 227. Complaint ~o~n t? th.e respondents a photograph or s~apshot it will be copied by . f and m ml colors by an art student attendmg such classes. Respond- ~nts further represent to the prospective purchaser that the so-called portrait" or "oil painting" will be 'finished in oil by hand on linen, Silk, or "Japanese" silk. · . In truth and in fact, corporate respondent, Success Portmit Co., 18 not and never has been an art association, art studio, art institute, ~r acallemy of art, ancl sud: institutions are not now, ancl have not cen during the times mentioned herein, owned or operated by any ~f the re.spondents herein. On the contrary, the buf)iness conducted Y rcsponclents in the production, distribution and sale of said portr·aits and frames is and has been nothing more, in fact, than a comnlercial business enterprise selling to 'the purchasing public for profit ~heap colored or tinted photographic enlargements or miniatures and ~·ames therefor. The use by respondents of the terms "art association,'' "art studio," "art company," art institute," "academy of art" and other terms of similar import and meaning misleads and deceives the purchasing public as to the character of the business actually condttcted by the i·respondents and has caused the purchasing publiy to Confuse respondents' business with various organizations similar in ~an1e or designation which conduct an "art association," "art studio," art institute," "art 'company," or "academy of art," and which are Properly designated as such. . · In truth and in fact, the products produced by resi)ondents are not Portraits or oil paintings, as such terms are ordinarily understood, finished in oil, by hand, on.linen, silk, or "Japanese" silk, but, to th~ contrary, are made with water colors, as hereinabov~ described, on a ~Pe of photographic pri1_1t paper containing no linen or silk materials llt so finished that the surface has the appearance of cloth. · , . 4. \Vhen an order is secured, the delivery of the finished product ls lllade at It subsequent date by a respondent representative or respondent sales agent or some individual associat.ed with respondents other than the respondent or associate who secured tlie original order. 'the person making the delivery is represented by: the 1;respondents to be a "field artist" or "instructing artist." The picture is presented to the ·purchaser in a frame of peculiar octagonal, convex sllape, re- /:tardle£s of whether or not a frame has been previom;ly ordered. ·In the event the purchaser objects to the quality, design, or price of the frame, or does not desire to purchase the frame, although previously a.dvised that there is no obligation to buy a frame, he is for the first time informed that a frame for the product may not be purchased from any source other than through the respondents; that the portrait \ViU not hold its colors or be of any, valu~ unless it is framed; and that :5097-H)m-43-ml. 35-18 238 FEDERAL TRADE COMMISSION DE·CISIONS Complaint . 35 F. T. C. the customer has agreed in the contract to "protect" and "exhibit'' the portrait and consequently under the contract must buy a :frame· In the .event the purchaser refuses to buy a frame, the respondents in. many instances refuse to deliver the completed pitcure, regard· less of whether or not it has been paid for in full, or to return the original photograph loaned by the customer until a frame is ordered or a claimed balance due is paid in full. . In truth and in fact, the sales agent represented by respondents to be a. "field. artist" or "instructing artist" is not an artist in the sense that such term is ordinarily understood by the consuming public. On the contrary, said so-called artist is nothing more than delivery a man or frame salesman operating :for and on behalf of respondents. Purchasers are not advised and there is no such understanding or agreement in connection with said contracts that photographs or snap· shots loaned or submitted by purchasers are to be retained by respond· ents until payment of any sum alleged by respondents to be due the!11· To the contrary, purchasers are advised by respondents that photo· graphs loaned to respondents will be returned by respondents at the time the finished product is submitted, regardless of'whether or not such product or a frame therefor is purchased. Respondents conce~l and have concealed :from purchasers at the time the "portrait" l5 ordered the fact that the finished product will be cut in an octagonol shap~ and will be,delivered in a frame of peculiar octagonal, convet form and shape; and that it will be impossible for the customer there· .after to obtain a frame to fit said portrait except from or through respondents at prices fixed by respondents. · ' . 5. The said respondents in other instances further represent that 11 drawing contest will be held in a certain community for the purpose of deciding who shall be one of the few lucky persons to have respond· ents place paintings on exhibition in their homes in connection 'with a "special advertising offer" or "special introductory offer." In con· nection with said drawings, respondents produce a number of sealed envelopes containing various slips of paper. It is represented that most of said slips are blank and of no value but that a few are. certifi· .cates or coupons -which will entitle the holder thereof to two genuine hand-painted portraits finished in oil for the sum of $10 or one such painting for $7.50 (at various times similar offers are made at dit· ferent prices). The said envelopes containing said slips are so manip· ulated by respondents that all prospective customers invariably dra\'\" a "lucky" coupon or certificate, of which the following is typical: SUPERIOR ART STUDIO .1301 McCALLIE A VENUE, ·CHATTANOOGA, TENNESSEE.

SUCCESS PORTRAIT. 00. 1 ETC., ET AL. 239 227 Complaint .. '~or the purpose of advertising the SPECIALLY DESIGNED STREAMLINE ' RTRAITS in full colors and extending our business. The Original Holder of This RED SEAL CERTIFICATE 'Ia entrtled to receive and take advantage of Our Special Introductory Ofler. .AC(!eptable Photographs must be furnished our representative. This certificate Is non-negotiable and redeemable only as stipulated above. Right' Is reserved to withdraw cettlficate if Photographs are not suitable for Portraits.

Issued tO------------------------------ SUPERIOR ART STUDIO 'Various other types of certificates not specifically set out herej,n are llstld by the respondent representative~ and respondent sales agents in carrying out said so-called drawing contest scheme. The holders of said "red setil certificates" or other so-called "lucky" coupons are led by the false and deceptive statements and representations of respondents and by the "fake" drawings in which the holders were "lucky" to believe that said coupon or certificate places .holders at a distinct advantage 'in purchasing a painting or portrait and such holders are thereby induced to' enter into contracts for the Purchase of a so-called "painting" or "portrait." · In truth and in ~act, said coupon or certificate gives the holder thereof no advantage ln price whatsoever, for practically all prospective purchasers are Permitted to secure a "lucky" certificate or coupon and all purchasers lllay purchase said "paintings" or "portraits" at the price used by respondents in making the so-call~d "special introductory offer." ' The aforesaid false . and . misleading statements, representations, .acts, practices, and methods used by the respondents in connection ~~th. the conduct of their business enterprise, as aforesaid, are not au inclusive but are illustrative of the character and type of state- ·lnents, representations, acts, practices, and methods used by respond- ~nts to mislead and deceive members of the purchasing public and to lndnce the purchase of their said products. t PAR. 6. A crayon is a pencil-shaped piece of colored clay, chalk or charcoal used:for drawing upon paper. A crayon drawing is the act or art of drawing with crayons. A drawing is a representation Produced by the art of drawing; a work of art produced by pen, ' l>encil, or crayon. The pastel, in art, is a colored crayon made of Pigments ground wit~ chalk and comp!lunded with water into a ,Sort of paste. A drawing made with a colored chalk or crayon is Called a pastel, as is also the art of drawing with colored crayons.· ' A painting is a likeness, image, or scene depicted with paints withtlUt the aid of photography. A water .color is a painting with pig- 240 FEDERAL TRADE COMMISSION DE·CISIONS Complaint ments for which water, and not oil, is used as a solvent. A portrait in its ordinarily accepted meaning, is a picture of a person d;rawn from life, especially a picture or representation of a face; a likeness, par· ticularly in oil. An oil painting is a painting done by hand with brushes in plastic oil colors on canvas, or other material, without .the aid of photography. . . PAR. 7. In the course and conduct of their business, respondents' selling and distributing methods are directed primarily to accomplish the sale of a picture frame at an exhorbitant price and the respondents ' various activities and representations in securing contracts for por· · traits are used to enable respondents to contact the pmchaser fQr an opportunity to sell picture frames of cheap and inferior quality at prices which are far in excess of the prices at which frames of similar' quality usually and customarily sell ~or in the ordinary course of business.

PAR. 8. Each of said respondents herein has acted and does act in concert and cooperation with one or more of the other respondents herein in doing and performing the acts and practices herein alleged and in furtherance of said understandings, agreements, combinations, and conspiracies.

PAR. 9. The use by the respondents of the aforesaid acts, practices, and methods in connection with the offering for sale and sale of said products in commerce, as aforesaid, has had, and now has, the tend· ency and capacity to, a_nd does, mislead and deceive the purchasing' public concerning the quality .and value of respondents' products and the pature· of the business conducted by respondents, and has led, and does lead, purchasers erroneously and mistakenly to believe that the representations and implications so made and used by respondents are tr11e, and cause a substantial number of the purchasing public to purchase said products under the mistaken and erroneous belief that they are securing high grade, quality portraits or paintings and picture frames of exceptional value.

The use by respondents of the aforesaid acts, practices, and methods has the tendency and capacity to, and does unfairly divert trade to respondents from their competitors engaged in the sale and distribu· tion of tinted or colored enlargements or miniatures of photographs and snapshots in commerce among and between the various States of the United States and in the District of Columbia, who truthfully represent their said products. As a consequence thereof, substantial injury has been done, and is now being done, by. respondents to competitors in said commerce.

PAR. 10. The aforesaid acts and practices of respondents as herein alleged, including said understandings, agreements, combinations and ·.SUCCESS PORTRAIT 00., ETC., ET AL. 241 Findings Conspiracies, and the things done thereunder and pursuant thereto and. in furtherance thereof, as hereinabove alleged, are all to the Prejudice and injury of the public and of respondents' competitors, and constitute unfair methods of competition in commerce and unfair and deceptive acts and practkes in commerce within the intent and llleaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Ptirsuant to the provisions of the Federal Trade Commission Ac;t, ~he Federal Trade Commission on the 31st day of March 1942, issued Its amended complaint in this proceeding charging the above named respondents with the use of unfair methods of competition in comlnerc;e in violation of the provisions of said act. On April 4, 1942, through their counsel Frank J. 'Wideman, appearance was· entered and answer to said amended complaint was filed by the following l'~spondents: ·w. S. Edwards and Ida Lillian Wilson Edwards, indil'Idnally and trading as Old :Master Portrait Co. and formerly trading Colonial Art Institute and Superior Art Studios and Old Englishi rt Co.; Jack E. Bramley and Grayce Nix, individually and trading ~ Streamline Art Co.; N. ,V, Frazier, individually and trading as ederal Art Co.; ,J. E. '\Voods, individually and trading as Paramount -Art Co .. ; J. P. Kennington, individually and trading as Kennington ~rt Studio; S. C. Porter, individually and trading as Peerless Studio; . ·II. Page, indivitlually and trading as Page Art Co.; II. F. Wilson, I~dividually and tl'Uding as Wilson Portrait Co.; Jack Howard, indi- VIdually and trading as Portrait Art Agency; T. F. Keegan, individually and trading as '\Vorld Art Co.; R. L. Gaddis, individually and tr!lding as Artcraft Portrait Co.; E. T. Greenwood, individually and trading as Vogue Art Studio; Ted Bramley, individually and trading 118 llembrandt Portrait Co.; and R. F. Jones, II. P. Bingham, F. H. ~cGaughey, N. B. Broward, James ,V, Boulware, Neal Allen, Elizaeth Melvin, Catherine Broward, Letha Revels Putney, Edith Edmonson, Carl Newton, Juanita Holland, Joseph Durrance, '\Villis G. Ed- "'ards, Jack Edwards, 0. A. Willocks, H. D. McGaughey;-n. S. Bishop, R. Melvin, Jack Ritchie, Lee Beaver, Marshall Steadham, :Mary ., chutz, C. J. '\Vallentelsz, Tom Bell, G. C. Sours, R. C. Speece, and ~· S. King. On April 7, 1942, through their counsel, Whitaker, Hall, aynes & Allison, appearance was entered and answer to said amended ~0ll1plaint was filed by the following respondents: Success Portrait o:, a corporation, unci Success Portrait Co., trading as Chattanooga Art Medallion Co. a11d as Art Trade Studios; James l\Iorton 1\IcConlleld, individually and as president and a director of Success Portrait 242 FEDERAL TRADE COMMISSION DE·CISIONS · Findillgs 35F. T.C.

Co.; Ozro Absolem Brammer, individually and as vice president and!" director of Success Portrait Co.; George Nathan McConnell, indt~ vidually and as secretary and a director of Success Portrait. Co.; and Jesse Roy Hodge, individually and as treasurer and a director of. Success Portrait Co. Thereafter', a stipulation was entered into whereby it was stipulated and agreed that a. statement of facts signed and executed by the aforementioned respondents through their respec· tive counsel, Frank J. 'Wideman, and Messrs. Whitaker, Hall, Haynes . I & Allison, and by Richard P. Whiteley, Assistant Chief Counsel for the Federal Trade Commission, subject to the approval of the Cont· mission, might be taken as the facts in this proceeding and in lieu ?f testimony in support of the charges stated in the complaint, or J.1l opposition thereto, and that th~ Commission might 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 procefldings without the presentation of argument or the filing of briefs, counsel for said respondents expressly waiving the filing of report upon the evidence by the trial examiner. Following service of said amended complaint upon him, respondent, S. P. Rogers, individually and trading as Rogers Art Co., on Apri120, 1942, filed his answer to said amended complaint .. The Commission thereafter, by order entered herein, granted the motion of respondents, S. P. Rogers, for permission to withdraw his said answer and to sub· stitute therefor an answer admitting all of the material allegations of , fact set forth in said amended complaint and waiving all inte:r:vening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on said amended complaint, answers thereto, nnd stipulation, said stipulation having been approved ·and accepted and filed, and the Commission having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes i.ts findings as to the facts and its conclusion drawn therefrom as follows: FINDINGS AS TO THE FACTS ' ' PARAGRAPH 1. Respondent, Success Portrait Co. (hereinafter re· ierred to as corporate respondent), is a corporation organized and doing business under and by virtue of the laws of the State of Tennes~ see. Said corporate respondent also trades as Chattanooga Art :Medal~ lion Co. and as Art Trade Studios.

Respondent, James Morton McConnell, is president and a director of corporate respondent, Success Portrait Co. SUCCESS PORTRAIT 00., ETC., ET AL. 243 227 Findings Itespondent, Ozro Absoleni Brammer, is vice president and a director of said c<_>rporate respondent, Success Portrait Co. Itespondent, George Nathan McConnell, is secretary and a director of said corporate respondent, Success Portrait Co. ltespondent, Jesse Roy Hodge, is treasurer and a director of said corporate respondent, Success Portrait Co. · 'I'he above-named individual respondents have their principal office ~nd.place of business with corporate respondent at 1301 McCallie Avelie In the city of Chattanooga, State of Tennessee . . Respondents, W. S. Edwards and Ida Lillian "Wilson Edwards, are ~!ldividuals, trading as Old Master Portrait Co., and formerly ~adi~g as Colonial Art Institute, as Superior Art Studios and as Old nghsh Art Co., 13011\fcCallie Avenue, Chattanooga, Tenn. 1. ltespo1,ident, Jack E. Bramley, is an indiv.idual, trading as Stream-.1ne Art Co., 13011\fcra:Ilie Avenue, Chattanooga, Tenn. His address 18 llox 242, Little River Station~ Miami, Fla .. C Itespondent, N. W. Frazier, i~ an individual, trading as Federal Art h o., · 1301 McCallie A venue, Chattanooga, Tenn. His address is ox 720, Tarboro, N.C.. . Altesporident, J. E. 'Voods, is an individual, trading as, Paramount llrt Co., 1301 McCallie Avenue, Chattanooga, Tenn. His address is oute, 1, Shelby, N. C.

t Resp<lndent, J. P. Kennington, is an individual, trading as Kenning.; don Art Studio, 1301 McCallie Avenue, Chattanooga, Tenn. His adless is Kershaw, S. C.

S Itespondent, S. C. Porter, is an individual, trading as Peerless 0tudio, 1301 :McCallie Avenue, Chattanooga, Tenn. His address is orpus Christi, Tex. llespondent, R. H. Page, is-an individual, trading as Page Art Co.,13S 01 McCallie A venue, Chattanooga, Ten11. His address is 135 West econd Street, 'Vashington, N. C. • th ~respondents, H. F. Wilson and Jack Howard, are individuals, and S ~lr addresses are Grenada, Miss., and Fair Mount, Ga., respectively. ;~d respondents are or were associated with one another ti:ading as .2\. llson Portrait Co. and as 'Vilson Art Association, 1301 McCallie Venue, Chattanooga, Tenn. Respondent, Jack Howard, also trades or has traded as Portrait Art Agency. · C ltespondent, T. F. Keegan, is an individual, trading as "\Vorld Art ll o., 1301 McCallie A venue, Chattanooga, Tenn. His address is Vero each, Fla.

~Respondent, R. L. Gaddis, is an individual, trading as Artcraft i ortrait Co., 1301 McCallie Avenue, Chattanooga, Tenn. His address s :Oartow, Fla.

244 FEDERAL TRADE COMMISSION DE·CISION'S Findings 35F. T.C. · Respondent, E. T. Greenwood, is an individual, trading as Yogne Art Studio, 1301 McCallie A venue, Chattanooga, Tenn. His address is Paces, Va. · Respondent, Ted Bramley, is an individual, trading as Rembrandt Portrait Co., 1301 McCallie A venue, Chattanooga, Tenn. Respondent, S. P. Rogers, is an individual, trading as Rogers Art Co., 13011\fcCallie A venue, Chattanooga, Tenn. His address is J{an· napolis, N. C. .

The above-named respondents, to wit: ,V, S. Edwards, Ida Lillian Wilson Edwards, Jack E. Bramley, N. ,V. Frazier, J. E. Woods, J.p. Kennington, S.C. Pbrter, R. H. Page, H. F. Wilson, Jack Howaril, T. F. Keeg~tn, R. L. Gaddis, E. T. Greenwood, Ted Bramley, and S.l'· Rogers are hereinafter on occasion referred to as "operators." Respondents, Neal Allen, Lee Beaver, Tom Bell, H. P. Bingham, n. S. Bishop, James ,V, Boulware, Catherine Broward, N. B. Bro"\Vard~ Joseph Durrance, Edith Edmonson, Jack Edwards, 'Villis G. Edwards, Juanita Holland, R. F. Jones, A. S. King, F. H. 1\IcGang· hey, H. D. McGaughey, Eliz~beth Melvin, 0. R. Melvin, Carl Newton, Grayce Nix, I;"etha Revels Putney, Jack Ritchie, l\Iary Schutz, G.C. Sours, R. C. Speece, Marshall Steadham, C. J. 'Vallentelsz, .and 0 . .A.d 'Villocks, are individuals, some of whom are or were sales agents an employees of one or more of the respondent "operators" hereinpefore named and described. Said respondents are hereinafter referred to as "sales agents.'' Many of said individual respondents represent and have represented the address 1301 McCallie Avenue, Chattanooga, Tenn., to be the location of their place of business. Several of the individual respondents named in the complaint herein are unknown to the corporate respondent and "operators" and said corporate respondent and "operators" are without know ledge of the business connections of such individuals.

All of the respondents executing said stipulation a.nd respondent, S. P. Rogers, are engaged in the sale and distribution of tinted or colored enlargements or tinted or colored miniatures of photographs and snapshots, and in the sale of frames therefor. Respondents cause and at all times mentioned herein have caused said products, ' when ~old, to be transported fro·m the State of Tennessee to the puf! chasers thereof located in various other States of the United States and in the District of Columbia. · Respondents maintain, and nt all times. mentioned herein }lave maintained, a cour~e of trade in said 1~roducts in co~erce ~1110~1 and between the varwus States of the Umted States and m the Dtstrt<: of Columbia. · ' SUCCESS PORTRAIT 00.~ -ETC., ET AL. 245 227 Findings . Pan. 2. Said corporate respondent is engaged in the busine.ss of producing, selling, and distributing among other things, colored or tinted ~nlargements and miniatures of photographs and snapbhots and selllng frames therefor, and in the sale and distribution thereof the officers and directors of said corporate respondent, in their individual and respective official capacities, dominate, direct and control the cor- Porate policies, affairs and activities of said corporate respondent and e:x:ercise a substantial measure of direction and control over the organi- ~ation, management, policies,· operation and financing of the remainlng respon~ents herein in carrying out the methods of competition and acts and practices herein described.

Cooperating with said corporate respondent in connection with the .~al~ of its aforesaid products are the various individuals heretofore es1gnated as "operators," who, through the medium of various and Sllndry trade names, sell and distribute corporate respondent's prod- .ucts in commerce to the consuming public.

. 'I'he aforesaid "sales agents" are connected with the "operators" !n. varying capacities in connection' with the sale and distribution of ~ald corporate respondent's products.

b P Ait 3. In the course and conduct of said business, respondents have een, and are now, engaged in direct and substantial competition with Various corporations, partnerships and individuals also engaged in -the ~ale and distribution in commerce between and among the vari.ous · states of the United States and in the District of Columbia, of tinted or colored enlargements and tinted or colored miniatures of photographs and snapshots, and of frames therefor. PAn. 4. The business of selling corporate respondent's said enlarge- ~en~s and miniatures of photographs and snapshots and frames thereor 1s and has been effected and accomplished by the following well- . coordinated sales plan of procedure in which all of said respondents Participate and cooperate.

~aid corporate respondent, Success Portrait Co., under the direction, gu 1~ance, and control of its aforesaid officers and directors, operates and for several years last past has operated an art studio at the said address, 1301 :McCallie Avenue, Chattanooga, Tenn. The said tinted or colored enlargements and miniatures sold by Success Portrait Co., and by said "operators" and "sales agents" are made here. At said atlldio are also kept and maintained stocks or frames for said enlarge- ~ents and miniatures, also sold by corporate respondent and the operators" and "sales agents."

.In effecting the sale of corporate respondent's said enlargements and llllniatures and frames therefor; the said "operators" employ immerous pe1·sons in various capacities such as "crew managers," "sales . Findings s5F.T.0· acrents" "road manaO'ers" "proof passers" "field artists" and "deliv· eryI:> men,"' to contact the,purchasingI:> ' pubiic.' Said employees,' .including• "sales agents" are connected with and render services to the "operators'' as a result of oral understandings or arrangements entered into cover· ing the sale of the aforesaid enlargements and miniatures and frames therefor.

Equipment, including catalogs, order blanks, daily report forms, receipts, and, in many instances, sample cases containing samples of corporate respondent's products, is furnished by corporate respondent to said "operators" and "sales agents" upon their order~ The corporate respondent, in many instances, causes orders or contracts for its products to be entered on printed forms provided by it for that pur· pose., Some of these order blanks or contracts contain or have con-· tained corporate respondent's name and address as well as the name or trade name of the "operator" through whom the order is secured. Many of the order blanks. or contracts used by various "operators " f:contain and have contained only the trade name of the "operator"· using the address of corporate respondent, Success Portrait Co., 1301 McCallie A venue, Chattanooga, Tenn. In other order blanks or co.ntracts used by said "operators" it is or has been variousfy stated that said "operator',' is "affiliated with" or is a "subsidiary of" said corporate respondent, but not all of said "operators" have used the terms "affiliated with" or "subsidiary of." 'When an order is obtained, said ordt>r Llank or contract is signed bY the "operator" or "sales agent" obtaining the order as "representative'' .or "company representative" on a line provided therefor. Among and typical of the form of order blank or contract used bY the "operators" i,n connection with the trade names mentioned herein ·and various other trade names to the Commission unknown, other _than and excluding the wording "subsidiary of Success Portrait Coill" pany" as stated hereinabove, is the following: SUPERIOR ART STUDIOS • • * • * * Home.. Office, 1301 McCallie Ave CHATTANOOGA, TENN.

Sketching ana Portrait Painting THIS CERTIFICATE entitles the holder to one IIAND-P AINTED STREAlll· LINE PORTRAIT size 9Xl4, for the producing cost of $2.98 unframed. To introduce this grade of art, we are placing only a limited number under this offer. You will be notified by mail when proof of your portrait is ready· It wlll then be shown at your residence when the $2.98 must be paid. In consideration of the reduced price at which this portrait is placed, it iS expressly agreed that it shall be properly protected and exhibited. SUCCESS PORTRAIT CO., ETC., ET AL. 247 Findings Verbal agreements other than herein stated, will not be recognized. We guarantee the return of your photograph with the finished work. COtTNTERl\IANDS NOT RECOGNIZED PAY THE MAN WHO SHOWS THE PROOF ; Date--------------.-----------r---- Representative ___________________ .! _____ _ In furtherance of th~ conduct of the business arrangements between corporate respondent and said "operators," corporate respondent furnishes "operators" and "sales agents" if desired, with identification and credential certificates addressed to and to be shown to the general ~Ublic, recommending them to the public, and designating each as a customer of ours handling portraits, miniatures, art paintings and ·frames," and certifying to his honesty and dependability. On oc~ casion, also, corporate respondent furnishes letters of similar import to "operators" the same also to be exhibited to prospective customers. · Corporate respondent. is at all times in possession of the names and addresses of customers whose pictures it is making. Corporate re- _SPondent keeps on hand, for the use of "operators" and "sales agents," , eo~ies of order books and of envelopes used for mailing prints ob- •tained from the public in cases where said "operators" or "sales ·~gents" use and are permitted to use corporate respondent's catalog 1~ selling to the public. Corporate respondent, upon request, furnishes its sales catalogs and sales outfits to prospective selling agents, charge being made for sample cases.

· Mail from customers of the "operators" ai1d: "sales acrents" is ad- ~'tl'essed to many of them at 1301 McCallie Avenue, Chattanopga,b ~nn., and in some instances is there opened by someone connected '"'1th corporate respondent,· Success Portrait Co., when so requested by the "operators" or "sales agents." If the contents of a letter are ~ot understood the letter is forwarded out to the field to the particular operator" or "sales agents" involved, for verification and further attention. . , · Officials of corporate respondent, from time to time, pay or have Paid visits to various "operator" organizations instructing them refarding sales technique and methods and as to how business may · e obtained and improved. Daily reports from salesmen in the field ?ave been required by corporate t~respondent, covering the canvass of !CUstomers, on proof passing and the delivery of products sold. Corporate respondent, on occasion, writes or offers to write types of sales ·talks deemed appropriate for use by "sales agents" or "operators." .:corporate respondent, upon occasion, confers. and has conferred with · operators" regarding the use of trade ~ames to be employed by them 248 FEDERAL TRADE COMMISSION DE·CISiiON'S Findings 35F. T.C.

and with respect to contract forms to be used. Officials of corporate respondent, have endorsed over to Success Portrait Co., for deposit to its credit at Ha:wilton National Bank, post office money orders payable 'to various trade name) companies sent in by "operators." Open ac· counts covering the operation of "operators" in the field are kept a.t the office of corporate respondent and from time to time advances are made to those "operators" who submit' orders and remit collections deemed sufficient to justify such office cr(,'dit operations. Other "oper· ators" or ''sales agents" are dealt with on a strict c. o. d. basis. Of· ficials of corporate respondent, maintain and have maintained close supervision over the business affairs and practices of respondent "operators" and "sales agents" and on occasion have urged the dis· charge of "sales agents."

All of the aforesaid "operators" in selling to and· dealing with the consuming public, and in pursuance of an agreement theretofore ' entered into bet\\een them and said corporate respondent, are per· mitted to use and do use corporate respondent's Chattanooga address, 13011\IcCallie Avenue, as and for the address of each trade name and company under which they respectively operate. PAR. 5. The Commission finds that the so-called or designated Old, Master Portrait Co., Superior Art Studios, Colonial Art Institute, Old English Art Co., Streamline Art Co., Federal Art Co., Para· mount Art Co., Kennington Art Studio, Peerless Studio, Page Art Co., "Wilson Portrait Co., \Vilson Art Association, Portrait Art Agency, World Art Co., Artcraft Portrait Co., Vogue Art Studio and Rembrandt Portrait Co., each employing and using the address of 1301 McCallie Avenue, Chattanooga, Tenn., as and for its actual business location and address, are merely trade names assumed and used by said "operators" to· promote the sale by them of products actually produced by corporate respondent Success Portrait Co. The Commission further finds in this relation that no "operator" or "sales agent" herein mentioned·, except in the case of one or two of them, has owned, operated, or conducted, directly or indirectly, any "art studio," "institute of art," or place of business at Chattanooga,_ Tenn., or elsewhere in which tinted or colored enlargements or roinia· tures of photographs or snapshots are or were made, and no such "operator" or "sales agent" owns, operates, or controls the photograph equipment and paraphernalia essential in producing such enlarge· ments or miniatures .. No such "operator" or "sales agent" has had in his employ or under his control or direction, artists, operators; or persons skilled in such photographic technique or in the use o£ the air brush,. paint brush, or skilled in drawing or pastel work. ~0 such "operator" or "sales ag~nt" has in fact maintained an office o~ ' SUCCESS PORTRAIT CO., ETC., ET AL. 249 227 . Findings an office force at the address, 1301 McCallie A venue, Chattanooga, 1'enn., with the exception of respondent, W. S. Edwards, who em- Ploys a secretary and conducts correspondence from that address. 1'he resPfctive trade names used and employed by said "operators;' ~~d. "sales agent" do not actually designate a particular existing Usiness, that is, a place at which a business operation is· actually 1 ocated and conducted. The business operations conducted at said Chattanooga address, 1301 McCallie Avenue, are and hav~ been actually conducted only by corporate respondent, Success Portrait Co. I' 'l'~e Commission finds that no "operator" employing the terms or ~ge~ds "Subsidiary of Success Portrait Co.," or "Affiliated 'With Uccess Portrait Co.," is now or ever has been a business subsidiary or affiliate of said corporate respondent as said terms imply and are ~understood to mean in the field of business or commerce. The said errns, "subsidiary of" nnd "affiliated with" as used in connection ~ith the name "Success Portrait Co." have been employed by "operato.~s" to induce customers to believe that they are doing business ~lth an operating established house, and serve to refer the customers 0 Success Portrait Co. for a financial rating of the trade name company and the "operator" using it.

The Commission finds that as a result of the use of said "operator" of the aforesaid trade names, as herein described, purchasers and Prospective purchasers are led to believe that they are and were contracting or dealing with duly constituted representatives or sales agents of actually existing and operating art studios or associations, or, art institvtcs whose names appear on the ;various contract forms, :der blanks or identification certificates employed by said "operars'' and "sales agents." As a; result of such belief so engendered, ~ur:hasers and prospective purchasers confuse the character of the blls~ness actually conducted~ by sai~ "operator~s" a.nd ha;e .conf~ised the llslness of "operators" with various orgamzatwns similar m name llnd designation which are actually conducting, or which may properly be designated as art associations, art studios or art institutes. b. ~he Commission finds that as . a furtl1er result of the foregoing "Us~n-e~s· arrangements and practices employed by "operators" and Sales agents," liability to purchasers is evaded for their statements, representations, acts, pi·actices, and sales methods in the sale of corr.orate respondent's products, and that business rating, credit, pres- 1.ge, and standing to which they are not entitled are and have been ~\len to said various trade names which employ the same business ~~dress as that of corporate respondent, Success Portrait Co., par- .1C~larly to -trade name companies representing that they are subsid- .laries of or affiliated with corporate respondent, Success Portrait Co.- FEDERAL TRADE COMMISSION DE·ClSJONS250 Findings 35F. T.

. PAR. 6. In connection with the sale of corporate respondent's said colored photographic enlargements and miniatures by said "opera·· tors" employing corporate respondent's business address. at 1301. McCallie A venue, Chattanooga; Tenn., as aforesaid, varioys "s~lcs agents" working under the immediate direction of and in cooperation: with said "operators'' visit the homes of customers and prospective customers located in the cities, towns, and rural. communities of various States of the United States other than the State of Ten"' nessce.. Each "sales agent" carries with him, for use in soliciting orders, samples of the work that is represented as typical of, th~t done by the· trade name company he happt>ns to represent. Said samples are attractively displayed. They have been reproduced and built up from ~arefully selected photographic subjects of highest photographic value. Colored· enlargements and miniatures of such selected photographs are skillfully done with great care and detail· :Many of them closely resemble ·paintings done by hand.. These attractive specimens in colored enlargements or miniatures are e:t~ hibited .by "sales agents" upon entering the· home of a customer• The company represented by the "sales agent," it is stated, is prepared to duplicate or reproduce such type of work. If a customer is inter·· ested, the customer is induced to permit the "sales agent" to inspect photographs or snapshots of some member of the family, dead. or living. Finally, the "sales agent" selects a photograph or snapshot pronounced suitable or satisfactory for reproduction purposes. .Th& photograph or snapshot so selected is represented as a model or guide to the studio's or art institute's artist, who, it is represented, will· "paint" a portrait o£ the same or make a "painting" or "hand-painted portrait" or "hand-painted streamlined portrait." The picture' ot snapshot is to be returned with the completed work, it is further represented. Reference is made by the "sales agent" from time to time to the ''portrait painting" as being made by the· particular trade name company said "sales agent" stated that he represents the salll0 in each instance being a trade name using the Chattanooga address· of corporate respondent, Success Portrait Co. · It is further repre· sented from time to time by "sales agents" selling corporate respond..: ent's said products, that an "oil painting" will be made, to be finished in oil by hand on linen, silk or "Japanese silk." The Commission finds that the attractive samples or specimen~ exhibited to the customer by "sales agents" are· made by corporate respondent, Success Portrait Co., and not by any trade name company using its Chattanooga address for selling purposes. In various in·; stances, due to the fact that "operators" and "sales agents," in obtaining" business, select from customers and approve as suitable for the making SUCCESS PORTRAIT 00. 1 ETC., E.T .AL. 251 227 Findings of colored. enlargement~ or miniatures, photographs or snapshots \vl~ich are inferior in various essentials from a. photographic stand- Point, and. fundamentally incapable . of actually producing· good enlargements, customers find and have complained that the "paintings" <•t· "pictures" made for them are inferior to the samples exhibited and ~lseu by the "sales agents" in obtaining the orders for the said. "paint- ~ngs" or colored enlargements. J?ue to the fact that the respondent, Uc~ss Portmit Co., is furnished, in some instances, with such photographs or snapshots of inferior quality from which to make its finished ~product, said corporate respondent on occasion, is unable to produce atom such photographs or snapshots finished products equal if\ appearnee to the samples which had been displayed to purchasers. PAn. 7. The Commission further finds that a drawing is a repre- S~>ntation produced by the art of drawing, a work of art produced by })~n, pencil, or crayou. A crayon drawing is the act or art of drawing \\'Ith crayons. The pastel, in art, is a colored. crayon made of pigments ground with chalk and compounded. with water into a sort of paste. ~drawing made with colored chalk or crayon is called a pastel, as is ll so the art of drawing with colored crayons. · · ' !he Commission finds that a painting is understood by artists who llatnt pictures, photographers who color photographs, and the general PUblic, as an original representation by the painter of a design, image, ~r object on a surface by means of paints, water color, or oil; a freeland image painted. directly on the surface without tlie intervention of any mechanical means, such as a camera. This is the conception :"which the general public has of the term "painting." A water color 18 a Painting with pigments for which water, and not oil, is used as a ~olvent. An oil painting is a painting done by hand with brushes 1~ Plastic oil colors on canvas, or other materials, without the aid of l> otography. · · i 'I'he Commission finds in this connection that the so-called "paint- ~1gs," "hand-painted portraits," and "hand-painted" miniatures .prollced, sold, and distributed by respondents are not paintings. They a.~e not oil paintings, and are not finished in oil by hand on linen or on ~~ k or on Japanese si)k. Said pictures do not conform to the estab- 18.hed belief o£ the public as to what constitutes a painting, nor do , d pictures constitute paintings as understood by artists who paint lctures, or photographers who. color photographs. Said pictures ~~d. and distributed by respondents are in fact colored photographs, 1hiatures, or enlargements, produced by making a photographi~ ~egative of the photograph furnished by the customer. Through the i se of special photographic equipment an enlargement, or a reduction 11 the case of the miniature, is then made from the negative on spe- 252 FEDE.RALI TRADE COMMISSION DECISION'S Findings 3:iF.T.C· cially prepared paper which will take dry col~r or absorb liquid color. Said enlargements or miniatures are then colored by the use of pastel · or crayon, water color or other powdered pigments soluble in water, sprayed upon the photographic reproduction in solution through the use of a mechanical air brush operated by compressed air, a portion of the colors being supplied by hand through the use of a camel hair brush. 'Vhile corporate respondent does have in its employ artists who are capable of producing genuine oil paintings as such world{s of art are known, and while corporate respondent's studio can fill an order for a genuine oil painting, corporate respondent does not no.''i and has not used oil paint in the finishing or coloring of the said enlarged photographs and the said miniatures sold as hereinabove described.

PAR. 8. Respondent "sales agents," in further connection with sales talks made by them in selling the products produced by corporate respondent, have n;presented at times in such relation that an art studio, an art institute, or academy of art is being maintained in which art classes are held for the purpose of giving experien~e to young artists and that "sales agents" desire to obtain various photographs fi·om which hand-painted portraits and hand-painted miniatures nre to be painted, and further, that if the prospective purchaser will lend to the "sales agent'.' a photograph or snapshot, it will be copied by hand in oil colors by an art student attending-such classes. In many instances, in connection with the sale of said enlargements or miniatures, "sales agents" represent to customers that the sale is n~ "introductory offer" only, that only a limited number of "paintings are to be placed in any given town or locality, that the customer will pay only for the work done by the artist, the picture to cost nothing,! · that the "painting" or portrait is being offered at a ''reduced price~ and that in consideration of such fact it is expressly agreed that it ~s to be "protected and exhibited." In other instances the price named 1s designated as an "advertising price" or it is represented th~\t the picture is being offered merely at the "cost of production." The Commission finds t~at said "operators" do not maintain ~r operate any art studios or academies of art, and that no art Classes . are conducted at any time for the purpose of giving experience to young artists or otherwise. The Commission finds further that cor· porate respondent's said colored enlargements and miniatures are not sold by said "sales agents" at a "reduced price" or at any "advertisinf, price," or "special introductory price" or for the "cost of production or to a selected few in any given place or locality but that on the contrary the prices at which said products are offered· and sold are the SUCCESS PORTRAIT CO., ETC., Err' AL. 253 -227. Findings Usual and customary prices asked of the consuming public by said 1·e spondent "operators" and "sales agents." · " PAR. 9. During the 5 years last past some of said "operators" and sales agents," in some instances, have further represented to cus- ~omc:n:s and prospective customers that a drawing contest would be ~cld in a certain community for the purpose of deciding who should ~ ?ne of the few "lucky persons" to have "paintings" placed on exhibltton in their homes in connection with a "special advertising offer" ~r "special introductory offer." In connection with said drawings, s~les agents" produce a number of sealed envelopes containing various shps of paper. It is represented that most of said slips are blank and of no value but that a few are certificates or coupons which will entitle t~e h~lder thereof to two genuine hand-painted portraits finished in 0,11 for the sum of" $10.00 or one such painting for $7.50 (at various bme~ similar offers are made at different prices,. such as the "lucky" \!rawer getting a picture for half price or two for the price of one). 'I'he said envelope containing said slips are manipulated by "sales ~gents" so that. all acceptable prospective customers invariably draw a lucky" coupon or certificate, of which the following is typical: SUPEniOR ART STUDIO 1301 1\IcCallle Avenue, · Chattanooga, Tennessee. l> For the purpose of advertising the SPECIALLY DESIGNED STREAMLINE. 0 UTUAITS In full colors and extending our business. The Original Holder of This RED SEAL CERTIFICATE ~ entitled to receive and take advantag~ of Our Special Introductory Offer. cceptable Photographs must be furnlsl1ed our representative. This certificate Is non-negotiable and redeemable only as stipulated above. l> Uight is reserved to withdraw certificate if Photographs are not suitable for ortraits.

Issued to ----~------------------------- SUPERIOR AUT STUDIO \7' arious other types of certificates not specifically set out herein are llsed by numerous "operators" and "sales agents" in carrying out said so-called drawing contest scheme. _ , __ . 1'he Commission finds that said alleged drawing contest is a decep- ~lve scheme conceived for tlie sole purpose and with the result of 1~ducing prospective purchasers to believe that if they draw "lucky" llurnbers they will have the advantage of obtaining pictures at prices greatly below prices other customers must and do pay for them. Dy llleans of this "drawing contest" scheme members of the purchasing Public are beguiled into believing that they are the exceptional few 509749m-43-vol. 35-19 254 FEDERAL TRADE · COMMISSION DE-CISIONS Findings 35F. T.O, whom fortune has favored. As a result of the statements and repre· sentations of respondent ''operators" and "sales agents" in relation to said "drawing conrest" the holders of said "red seal certificates" or other so;called "lucky" coupons are led to believe that said coupons or certificates place holders thereof at a distinct financial advantage in purchasing a "painting" or "portrait," and such holders are thereby induced. to enter into contracts for the purchase of a so-called "paint· ing" or "portrait." In truth and in fact said coupon or certificate gives the holder thereof no advantage in price whatsoever, or other· wise, for practically all prospective purchasers sold through the "draw" are permitted to secure a "lucky" certificate or'coupon and all persons considered acceptable customers may purchase said "paint· ings'' or "portraits" at' the price used by respondents in connection with the said "draw" or "special introductory offer." PAR.; 10. In various instances "operators" and "sales agents'' engaged in the sale of said colored enlargements and miniatures as produced by corporate respondent make no reference to or mention of a frame at the first or original contact 'with a customer. The in· formation that it will be necessary to later place the picture in a frame in order to preserve it, that the picture will be of an unusual shape und design, and that later on another "sales agent" will call for the pur· pose of selling a frame for the picture; is not, in various instances, given to the customer by the first or contact "sales agent." A secori.d "sales agent" designated as "field artist" or "instructin::~ artist" later appears with an uncolored rough proof or "sketch" of the enlarged photograph. This "sales agent" collects for the cost of the colored enlargement, usually the sum of $2.98, and endeavors to sell the customer a frame for the picture. In numerous instances the matter of the frame is here mentioned for the first time. The frame ·not being mentioned by the first "sales agent" various customers have assumed at the outset that the frame would be included in the price quoted by the said first "sales agent." If the customer objects to, or refuses to purchase a frarrie on account of t}1e matter of price, qual• ity, or design, the customer then ·on various occasions is informed by the "sales agent" for the first time that a frame for the picture . cannot be purchased from any source other than through his corn· pany; that the company he represents.manufactures the only frame that will fit the picture; that the portrait will not liold its color or be of any value unless it is framed. From time to time the attentipll of the customer is called to the customer's agreement to "protect" and "exhibit" the portrait and to the "obligation" of the customer under the contract to buy n frame. In the event the customer refuses to . buy .a :frame from the second agent or '~.field artist" or "instructing' SUCCESS PORTRAIT 00.1 ETC., ET AL. 255 227 Findings artist" and elects to have the picture finished fqr the sum agreed upon and paid, the matter of the purchase of a frame is further deferred. Until the delivery of the finished colored enlargement by a third "sales agent." The person making delivery of the finished or colored en- Jargement in many instances, presents the same to purchaser in a frame, whereupon the above-described reasons why a fraiife must be bought from "sales agents" will be stated, or .may be repeated, as the ·case' may be. In the event the customer finally refuses to buy a frame, respondent "sales agents" in some instances refuse to deliver the com- Pleted picture, regardless of whether or not it has been paid for in ~ull, and refuse to return the original photograph loaned by the customer; until the :frame is ordered.

The Commission finds that the "sales agent" represented to be a "field artist" or "instructing artist" is not an artist in the sense that such term is ordinarily understood by the consuming public; that actually, said so-called "field artist" or "instructing artist" is a delivery man or frame salesman operating for and on behalf of respondents. The Commission finds that purchasers are not advised, and that there is no such understanding or agreement in connection with Said contracts, that photographs or snapshots loanrd or submitted by Purchasers are to be retained by respondents until a :frame is purchased or payment is made of any sum alleged by respondents to be due them. On the contrary, purchasers are advised· originally by "sales agents" ~hat photographs loaned to them will be returned at the time the fin- ~shed product is submitted. The Commission finds that, in many lnstances, "operators" and "sales agents" conceal and have concealed from purchasers at the time the "portrai~" is ordered the :fact that the finished product will be octagonal in shape and will be delivered in a frame of peculiar octagonal, convex :form and shape; and that it will he impossible for the customer thereafter to obtain a :frame to fit said\ Portrait except from or through respondents at prices fixed by them. The Commission finds that in the course and conduct of their business, the efforts of respondents are and have been directed largely to the sale of frames. The Commission finds, that the sales plan employed ?Y said respondent "operators" and "sales agents," which is character-· lZed by the sale of a picture only by the first or original contact salesman and the subsequent sale or attempted sale of a frame by a second and different party known as "field artist" or "instructing artist" who. calls later, is operated primarily and actually for the purpose of, and has the effect of, misleading and forcing the customer into buying something he did not originally intend buying, namely, a frame; that ~sa result th~ purchaser of a picture is forced to deal with respondents ln connection with the purchase of frames. This method of dealing \.

256 FEDERAL TRADE COMMISSION DE·CISION'S', Findings 35F.T.O.

in frames, the Commi~sion finds, places in the hands of "operators" and ''sales agents" a means whereby, in some instances, they may represent and have represented, as the customary or regular prices or values for frames, prices and values which are in fact substantially in excess of the prices at which frames of similar type and quality are usually and customarily sold in the normal and usual course of business.

PAR. 11. The Commission finds that the aforesaid statements, repre- · sentations, acts, practices, and methods used by various of the respondents in connection with the conduct of their business enterprise, as aforesaid, are not all inclusive, but are illustrative of the character and· type of staten:ents, representations, acts, practices and methods used by respondents in carrying out the well coordinated sales plan in which they have participated and cooperated to induce th~ purchase of their said products. · PAR. 12.. The Commission finds that the use by respondents of the hereinbefore enumerated acts, practices, and methods in connection with the offering. for sale and sale of said products in commerce, ns aforesaid, has had, and now has, the capacity to, and does, mislead and deceive the purchasing public concerning the quality and value of the products sold, the nature, and character of the business conducted by respondents, including the financial standing and responsibility of said "operators" and "sales agents," the origin and identity of the products being sold and as to the sales proposal to be submitted later involving the sale of a frame of peculiar shape and design, and that the use of such acts, and practices and methods further has led, and does lead, purchasers erroneously and mistakenly to believe that the said representations and implications so made and used by respondents are true, and causes and has caused a substantial number of the purchasing public to purchase substantial quantities of respondent's said products. PAR. 13. The follo1"ing persons named as parties respon4ent in the amended complaint issued by the Commission in this matter· on March 31, 1942, were not served respectively with a copy of said coinplaint nor have they entered appearance in the proceeding by counsel or otherwise :

C. A. Hicks, individually and trading as H. B. Art Co.; Ruth Attis, Henry Acie Barrentine, Earl Bigby, Lloyd Brown, H. V. Caton, L . .Clark, 0. D. Clayton, Robert Dodd, George F. Donehue, J. F. Evans, Thos. Gaddis, V. Gantt, Jimmy Greenwood, L. H. Marsden, Thelxnar Marshall, J. II. McCoy, J. ,V. Parker, T. E. Savage, Lillian Shepard, John G. Tierney, Stella Timmerman, Kay Harriet 'Whitten, and Chester 'Vofford.

SUCCESS PORTRAIT 00., ETC., Ea' AL. 257 227 Order CONCLUSION The aforesaid acts and practices of respondents as herein described, effected, and accomplishe<f through the medium of a well-coordinated sales plan of procedure in which said respondents have participated and cooperated, are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce withjn the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST . This proceeding having been heard by the Federal Trade Commis- Sion upon the complai11t of the Commission, the answers of respondents, Success Portrait Co., a corporation and trading as Chattanooga Art Medallion Co. and as Art Trade Studios; James Morton McConnell, individually and as president and a director of corporate re- • spondent; Ozro Abso]em Brammer, individually and as vice president ~nd a director of corporate respondent; George Nathan McConnell, lndividually and as secretary and a director of corporate respondent; Jesse Roy Hodge, individually and as treasurer and a director of corporate respondent; ·w. S. Edwards and Ida Lillian Wilson Ed- '"nrds, individually and trading as Old Master Portrait Co. and forlnel:'ly trading as Colonial Art Institute, as Superior Art Studios, and as Old English Art Co.; Jack E. Bramley and Grayce Nix, individually and trading as Streamline Art Co.; N. ,V. Frazier, individually and ~ading as Federal Art Co.; J. E. Woods, individually and trading 1\S l aramount Art Co.; J. P. Kennington, individually and trading as \enning-ton Art Studio; S. C. Porter, individually and trading as Peerless Studio; R. H. Page, individually and trading as Page Art Co.; H. F. Wilson, individually and trading as lVilson.Portrait Co. lind Wilson Art AS&ociation; Jack Howard, individually and trading us Wilson Portrait Co., Wilson Art Association, and as Portrait ~rt Agency; T. F. Keegan, individually and trading as 'Vorld Art E0·; R. L. Gaddis, individually and trading as Artcraft Portrait Co.; · 1'. Greenwood, individually and trading as Vogue Art -Studio; Ted ~ramley, individually and trading as Rembrandt Portrait Co.; S. P. L ogers, individually and trading as Rogers Art Co., and Neal Allen,. · ee Deaver, Tom Bell, H. P. Bingham, R. S. Bishop, James ,V. Boul- \\7are, Catherine Broward, N. B. Broward, Joseph Durrance, Edith ~dn1onson, Jack Edwards, 'Villis G. Edwards, Juanita Holland, R. F. ~one~, A. S. King, F: H. McGa?ughey, H. D. McGaughey, Elizabeth n~elvm, 0. R. 1\Ielvm, Carl ~ewton, Letha Revels Putney, Jack CItchie, Mary Schutz, G. C. Sours, R. C. Speece, Marshall Steadham, .J. Wallentelsz, and O.A. 'Villocks; upon a stipulation as to the facts ell.tered into between the above-mentioned respondents, with exception 258 FEDERAL TRADE COMMISSION DECISlOI\~ Order 35F. T. C.

of S. P. Rogers~ and Richard P. Whiteley, Assistant Chief Counsel for the Commission, providing that without further evidence or other intervening procedure, the Commission might issue and serve upon E"aid respondents therein named findings as to the facts and conclusion based thereon, and an order disposing of the proceeding; and upon the substitute answer filed in this proceeding by respondent, S. P. Rogers, in lieu of the answer theretofore submitted by him, admitting all of the material allegations of fact set forth in said complaint and waivii1g '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 the respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, Success Portrait Co., a corpo· ration and .trading as Chattanooga Art Medallion Co. and as A.rt Trade Studios, or doing business under any other trade name or • style; James Morton McConnell, individually and as president and· a director of Success Portrait Co.; Ozro Absolem Brammer, indi· vidually and as vice president and a director of Success Portrait Co. i George Nathan McConnell, individually and as secretary and a direc· tor of Success Portrait Co., and Jesse Roy Hodge, individually and as treasurer and a director of Success Portrait Co.; ,V, S. Edwards arid Ida Lillian 'Vilson Edwards, individually and trading as Old Master Portrait Co. and formerly as Colonial Art Institute and OS Superior A'rt Studios and as Old English Art Co.; Jack E. Bramley, individtially and trading as Streamline Art Co. j N. W. Frazier, indi· vidually and trading as Federal Art Co.; J. E. Woods, individually and trading as Paramount Art Co.; J. P. Kennington, individually and trading as Kennington Art Studio; S. C. Porter, individually and trading as Peerless Studio; R. H. Page, individually and trading ns Page Art Co.; H. F. 'Wilson, individually and trading as Wilson Portrait Co. and Wilson Art Association; Jack Howard, individually and trading as 'Vilson Portrait Co., Wilson Art Association and ns Portrait Art Agency; T. F. Keegan, individually and trading ns 'Vorld Art Co.; R. L. Gaddis, individually and trading as Artcrnft Portrait Co.; E. T. G~·eenwood, individually and trading as Vogue Art Studios; Ted Bramley, individually and trading as Rembrandt Portrait Co., and S. P. Rogers, individually and trading as Rogers Art Co.1 or trading under any other name or names, and Neal Allen, Lee Beaver, Tom Bell, H. P. Bingham, R. S. Bishop, James ,V. Doul· ware, Catherine Broward, N. B. Broward, Joseph Durrance; Edith Edmonson, Jack Edwards, Willis G. Edwards, Juanita Holland, R. F. Jones, A. S. King, F. H. :McGaughey, H. D. :McGaughey, Eliza· beth Melvin, 0. R. Melvin, Grayce Nix, Carl Newton, Letha Revels SUCCESS PORTRAIT CO., ETC., Err AL. 259 Order ~utney, Jack Ritchie, :Mary Schutz, G. C. Sour~, R. C. Spe~ce, Marsh.all teadham, C. J. vVallentelsz, and 0. A. '\V1llocks, their respective representatives, salesmen, and employees; directly or through any corpoi·ate or other device in connection with the offering for sale and sale and distribution in commerce, as "commerce'' is defined in the F'ederal Trade Commi;sion Act, of tinted or colored photographic ~nlargements or miniatures of photographs and snapshots and of tames therefor, do forthwith cease and desist from: 1. Representing directly or in any manner, that colored or tinted ~hot.ographs or colored or tinted p!wtographic enlargements or re- Uchon are hand-painted or are paintings.

2.• Using the terms "oil paintin<Y"bl "portrait paintin<Y"1::>1 "hand Palnted," or "hand painted portrait," or the word "painting" either ~lo~e or in conjunction with any other words or terms in any way to 68lgnate, describe, or refer to colored or tinted pictures, photograph, photographic enlargements or reductions, or other pictures Produced from a photographic base or impression. b 3: Representing that pictures being sold in· the regular course of bu~nness at the usual and customary prices therefor are being or will e sold only to a limited number of customers, or as an "introductory Qfl'~r," or at an "advertising price," or at a "reduced price," or repre- ~enting in any manner that a purchaser is receiving an advantage ln Price or other consideration not ordinarily available .. 4. Representing that any specified sum in excess of the actual cost Qf Production is merely the "cost of production." 5. Representing that the picture to be made and delivered will be a reproduction or duplication of the sample displayed to the customer ~nl~ss in fact the picture thereafter delivered is of the same quality, estgn, and workmanship as said sample. - · · · 6. Using the trade names "Art Studios" "Art Institute" "Art ~0ll1pany," "Art Association," or any other fictitious name of' similar 1ll1Port unless the respondent so using such name or names actually 0"'ns, operates, conducts, or controls an organization or establishment of the character indicated and comprehended by the trade name so ll.sed. , . th '7. Misrepresenting, or authorizing, permitting, or~cooperating in e misrepresentation of, the financial responsibility, prestige, or I·standing of the respondents or the character and extent of their busi- I Il1ess by falsely claiming to be a subsidiary or business affiliate of an <' Operating, e..'>tablished house, or by deceptively using the business address of such established house as and for a business allegedly ~[le.rated by them, and from misrepresenting. through the use of r Chtious trade names and misleading street and post office addresses ~~ 260 . FEDERAL TRADE COMMISSION DE-CISION'S Order 35F.T.C· the place, character, and extent of the business actually conducted ~ili~.. . 8". Representing that respondents maintain art studios, art instt· tutes, or art academies in which art classes are held for the purpose of giving experience to young artists and that such students will paint by hand, portraits and miniatures from photographs furnished to sales agents by customers.

9. Using a "draw," "draw contest," or sq-called "lucky" blanks, number slips, coupons, or certificates, or any other device, plan, or scheme, or any prize contest or .special introductory or advertisi~g offer, so as to represent, indicate or, imply that any customer will obtain a financial advantage thereby or be entitled to receive any picture free or to receive a substantial discount or reduction in the price of any picture or pictures.

10. Using the terms "field artist" or "instructing artist" or similar· terms to designate, describe or refer to operators or salesmen delivering pictures or "sketches" of pictures or selling frames. 11. Concealing from or failing to disclose to customers at the tim& pictures are ordered that the finished picture when delivered will be so shaped and designed that it can only be used in a specially designed, odd-style frame which can be procured only from respondents. . 12. Failing or refusing, in cases where a picture ordered has been completed and paid for, to return to the customer the completed pic· ture or the photograph or snapshot previously loaned by the customer for use in producing the picture. ' 13. Representing as the customary or regular prices or values for frames, prices and values which are in fact greatly in excess of the prices at which sald frames are customarily offered for sale and sold in the normal and usual course of business. It is further ordered, That this proceeding, insofar as it relates to C. A. Hicks, individually and trading as H. B. Art Co., Ruth Attis, Henry Acie Barrentine, Earl Digby, Lloyd Drown, H. V. Caton, L. Clark, 0. D. Clayton, Robert Dodd, George F. Donehue, J. F. Evans, Thos. Gaddis, V. Gantt, Jimmy Greenwood, L. H. Marsden, Thelmnr' Marshall, J. H. McCoy, J. ,V. Parker, T. E. Savage, Lillian Shepard, Jolm G. Tierney, Stella Timmerman, Kay Harriet Whitten, anq Chester 'Vofford be, and the same hereby is, closed without prejudicer the Commission being unable to .effect service of complaint upon said respondents. · It is further ordered, That all of said respondents shall, within 6(} 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.

EMPIRE MERCHANDISE CORP. ET AL. 261 Syllabus