D. M. Alachuzos Co

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IN THE l\1A 'ITER OF D. l\f. AL:ACHUZOS CO:MP ANY .COJIIPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC, I> OF AN ACT 01~ CONGRESS APPROVED SEPT. 26, 1914 Docket 1,051. Complaint, Mar. 1, 191,0-Ifecision, Feb. 17, 19"3 Where a corporation, engaged In Interstate sale and distribution of SJlOnge and chamois-skin productsnepresented that it was a ~ponge "prouncer" nn<l place<l said term upon Us letterheads, price lists, cards, and other advertising material; when In fact It was not such, but purchased raw sponges from the captains ot various sponge-fishing boats and cleaned, graded, and compressed them Into bales for sale to the trade;

With tendency and capacity to mislead and deceive a substantial number of Jlurchasers and prospective purchasers as to tbe nature and extent of Its business and thereby cause purchase of Its said pro<luct: Held, That such acts and pmctices, under the circumstances set forth, were all to the prejudice and injury of the public and constituted unfair and deceptive acts and practices in commerce.

Before• llfr. Janzes A. Purcell and llfr. Adkur F. Thomas,• ~ trials .exummers.

Mr. llferle P. Lyon and Jfr. Carrel F. Rlwdes for the Commission. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that D. M. Alaclm?os Company, a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows :

PARAGRAPH 1. Respondent, D. M. Alachuzos Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of tlie State of Pennsylvania, with its principal office and place of business located at 336 South Fourth Street, in the city of Phila- <l.elphia, of said State. Respondent now is, and for more than 1 year last past has been, engaged in the business of offering for sale, selling, -and destributing sponge and chamois-skin products in commerce :among and between the various States of the United States and in the District of Columbia. Respondent has maintained, and maintains, a course of trade in said pr<Xlucts in said commerce and has D. M. ALACHUZOS CO. .203 202 Complaint caused, and now causes, said products, when sold or ordered, to be shipped and transported from its place of business in the State of Pennsylvania to jobbers, retailers, and purchasers thereof located in various States of the United States other than the State of Pennsyl- . vania and in the District of 0columbia.

PAR. 2. In the course and conduct of its business, as aforesaid, and for the purpose of inducing the purchase of its said products ;from 1·respondent, it has been, and is, the practice of respondent to state and represent to prospective purchasers and purchasers located in the various States of the United States and in the District of Columbia that respondent is a "producer" of sponges; that it is a "packer" of sponges; that it maintains and operates its own packing houses for the processing and packing of its sponge products at Tarpon Springs in the State of Florida, at Nassau in the Bahama Islands, and at Calymnos in the Aegean Sea; that it maintains its own force of trained workmen expert in selecting and grading sponges and that it is a "member of sponge exchange markets." Demonstrative of the said statements and representations, among others, so made by respondent, and appearing on its letterheads and price lists, are the following:

packing JlOUSF.S AT Tile FISHI':IUES Nassau, Bahamas, N. P. Calymnos, Aegean Sea Island Tarpon Springs, Florida.

D. 1\I. Al.ACHUZOS COMPANY Sponge Producers-Importers of Chamois 336 South Fourth St., Philadelphia, Pa., U. S. A. lHEMHERS OF SroNoE ExcHANOIJ: 1\IABKETS Demonstrative of said statements and r~presentations, among others, . so made by respondent in the body of ]letters to prospective purchasers is the following:

We are P1·oducers and Packers of !<ponges. We maintain in our own Packing House nt the Sponge Fisheries with a force of trained workmen expert iu sdectlng and grading sponges.

PAR. 3. The aforesaid statements and representations are false and misleading in that respondent has not been and is l).Ot a "producer'' of sponges; has not been, and is not, a "packer~' of sponges and has not maintained or operated, and does not maintain or operate, its own packing houses for the processing aJl(l packing of its sponge products ,at the places mentioned or elsewhere; has not maintained, anu does not Findings 36F.T.C.

maintain, a force of trained workmen expert in the selecting and grading of sponges and was not a member of any ·market exchange at points where it purchased sponges or sponge products at the time said representation was made.

Among buyers and sellers of sponge products, the term "sponge producer," or "producer," as applied to the sponge trade, means and signifies, and has heretofore meant and signified, one who engages in all the functions of gathering or harvesting sponges ·from marine beds and thereafter processing the same into a finished commercial product and who owns or controls and operates all the equipment and facilities therefor. A "processor" of sponges is one who merely performs the function of cleaning and otherwise converting the raw sponge product ihto a finished commercial sponge product and who owns or controls and operates all the equipment and facilities therefor. At no time during the making of the statements and representations here com· plained of has respondent owned or controlled and operated the facilities and equipment of a ·producer or processor of the facilities and equipment employed in the production, processing, finishing, and packing of the sponges respondent offered for ·sale and sold. PAR. 4. The aforesaid false and misleading statements and representations made by respondent, .as hereinabove alleged, have had, and have a tendency and capacity to mislead and deceive a substantial number of purchasers and prospective purchasers of sponge products into the false and erroneous belief that the said statements and representations are true and into the purchase of respondent's sponge products in reliance on such erroneous belief. PAR. 5. The aforesaid acts and practices •Of respondent, as herein alleged, are all.to the prejudice of the public and .constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FlNDINos .As TO :rae F .Ac:rs, and .Orner Pursuant to the provisions of the Federal Trade Commission Actr the Federal Trade Commission on March 7, 1940, issued and subsequently served its complaint in this proceeding upon the respondent~ D. M. Alachuzos Co., a corporation, charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's nnswer thereto, testimony and other evidmce in support of, and in opposition to, the allegations of said complaint were introduced before trial examiners of the. Commission theretofore duly designated by it, and said testimony and -other evidence were duly D. M. ALACHUZOS CO. 205 202 Conclusion -recorded and filed in the. office. of the- Commission. Thereafter this proceeding regularly came on for final hearing before the Commission llpon said complaint, answer thereto, testimony and· other evidence, report of the trial examiners upon the evidence and exceptions filed thereto, and briefs in support of the complaint and in opposition thereto' (oral argument not having been requested); and the Commission, having duly considered the matter and being now. fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAmtAi·H 1. Respondent, D. M. Alachuzos Co.~ is a. corporation, Qrganized and existing under, and by virtue of, the laws of. the State Qf Pennsylvania, with its principal office and place of business located ut 336 South Fourth Street in the city of Philadelphia, State of Pennsylvania. Respondent is now, and for several years last past has been, €ngaged in the business Of offering for sale, selling, and distributing sponge. and chamois-skin products in commerce among and between the various States of the United States and in the District of Columbia. Respondent maintains, and at all times. mentioned herein bas maintained, a course of trade in said products in commerce -among and between the various States of the United States. PAR. 2. In the course. and conduct of its business and for the purpose. of inducing the purchase of its said products, the respondent represents that it is a sponge producer and causes such term "sponge producer'' to be placed upon its letterheads, price lists, cards, and other advertising material.

PAR. 3. In truth and in fact, respondent is not a sponge producer, but, instead, the respondent purchases raw sponges from the captains ()f various sponge-fishing boats, which sponges the respondent then cleans, grades, and compresses into bales for sale to the trade. PAR. 4. The aforesaid false and misleading statements and representations made by the respondent have had a tendency and capacity to mislead and deceive a substantial number of purchasers and prospective purchasers of sponge products as to the nature and extent of respondent's business and to cause the purchase of respondent's sponge products.

CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. - ---·- - J Order . 86 I<'. ·r. c .. : ORDER TO CEASE ..AND DE.'list This proceeding having been heard by the Federal Trade .Commis- ., .... s,ion upon the complaint of the Commission, answer of the respondentr iestimony and other evidence, in support of and in opposition to the allegations of the complaint, taken before trial examiners ·of the Commission theretofore duly designated by it, report of the trial examiners upon the evidence and exceptions filed thereto, and briefs filed in support of the complaint and in opposition thereto; and the Commission having made its findings as to the facts and its conclu- · sion that said respondent has violated the provisions of the Federal Trade Commission Act.

It ill ordered, That the respondent, D. M. Alachuzos Co., a corporation, and its. officers, representatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of sponge ·products in commerce as "commerce" is defined in the Federal Trade Commis..sion Actr do forthwith cease and desist from: · · • 1 1. Representing in any manner that the respondent is a producer; of sponges. ;\ r 2. Using the term "producer" in advertising or in any other manner when such use i·represents that respondent is a sponge producer. It i'j further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it' has complied with this order.

NORTHWEST FILM AD SER\'~CE, INC., ET AL. 2QT Syllabus