Greening Nursery Co

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IN THE MATI'ER OF GREENING NURSERY COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGimSS APPROVED SEPT. 26, 1914 Docket 8673. Complaint, Dec. 23, 1938-Decision, Mar. 10, 1943 Where a corpot·ation, engaged in competitive interstate sale and distribution of fruit trees and other nursery products; to induce purchase thereof and salesmen and agents to sell its said products to the purchasing public- Represented that it was the only nursery which used the bud-selection method of grafting in the propagation of fruit trees, and that fruit trees thus propagated could only be procured from it and its salesmen, through such statements in circulars, newspaper advertisements, and other publica· tlons as "Bud Selection, that· remarkable, exclusive Greening feature!"; "For 26 years, Greening • • • have been propagating fruit trees by bud selection, exclusive, amazing, scientific discovery unduplicated in the field"; "Only Greening men' can sell Bud Selected fruit trees"; and "Noncompetitive field all to yourself";

The facts being that trees propagated by the bud-selection method of grafting are sold by many of its competitors; said method has been known from earliest times and was practiced in some form or other by practically all nurserymen; its methous varied from those followed by practically all commercial nurserymen only in the keeping of records of selected trees or limbs which were observeu from year to year prior to and after the selection of buds for the grafting process; and extent to which its methods might be or might not be more scientific was dependent upon the nature and extent of the records kept, and the tree observation followed by 1 competitors concerned;

With effect of misleading and deceiving a substantial portion of the purchasing public Into the mistaken belief that such representations were true, tlJ,ereby inducing, its purchase of said products; and of inducing a substantial number of salesmen and agents to denl in said nursery products because of such mistaken belief; whereby trade was diverted unfairly to lt from afot·esaid competitors who truthfully advertised thefr products: lleld, That such acts and practices, under the circumstances set forth, were all to the prejudice and injury of the public and competitors, and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices there.in.

Before Mr. John lV. Addision and Mr. 1V. lV. Sheppard, trial exammers.

Mr. Jesse D. l{a8h for the Commission.

Smith, Ri.stig & Smith, of 'Vashington, D. C., for respondent. 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 Complaint 3GF. T. C.

Trade Commission, having reason to believe that Greening Nursery Co., a corporation, hereinafter referred to as respondent, has violated the provisions of the said act, and it appearing to the Commission that a proceeding by it in respect. thereof vmuld be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Greening Nursery Co., is a corporation, organized, existing,' and doing business under and by virtue of the laws of the State of :Michigan, and having its office and principal place of business in the city of Monroe, State of Michigan. PAR. 2. The respondent is now, and has been for more than 1 year last past, engaged in selling and distributing fruit trees and other nursery products. Respondent sells said products to members of the purchasing public situated in various States of the United States and causes said products, when sold by it, to be transported from its aforesaid place of, business in the State of Michigan to the purchasers thereof at their respective points of location in various States of the United States other than the State of Michigan and in the District of Colmpbia. Respondent maintains, and at nil times herein has maintained, a course of trade in said products in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 3. Respondent is engaged ii;! substantial competition in commerce among and between the various States of the United States and in the District of Columbia with other corporations, and with partnerships, firms, and individuals selling and distributing fruit trees and other nursery products. Among such competitiors in such commerce are many who do not in any manner misrepresent their said products and who do not make any false statements in connection with the sale and distribution of their said products. PAn. 4. In the course and conunct of its said business and for the purpose of inducing the purchase of its nursery products said respondent has made and makes by means of circulars, pamphlets, folders, and by means of ad\·ertisements inserted in newspapers and other publications, all of which are circulated betwefln and among the various States of the United States and in the District of Columbia, many representations concerning the nature and quality of its said nursery products and results that may be expected from the use thereof. Among and typical of such representations made by respondent are the following:

Largest Grower;~ of Trees In the World.

World's Largest T1·ee Growers.

GREENING NURSERY CO. 275 273 Complaint World's Leading CDmpany.

Right now I'm writing monthly lay checks from $110 Spare Time to $882 lull Time Non-Competitive field all to yourself.

BUD SELECTION, that remat"kable, exclusive Greening feature/ For 2G years, Greening • • • • • • • have been propagating fruit trees by Bud Selection, exclusive, amazing, scientific discovet·y Undupllcated in the Field. · Bud selection gives fruit trees what blood lines are to livestock "pedigreed" Known Performance characteristics, which eliminate chance or gamble fot· fruit tree buyers.

Only Greening men can sell Bud Selected fruit trees. We paid Pifer, month aftt>r month $248, $413, $445, $375, $282, and he's still going strong! Lorimer earned $502 one month, then $882-yes almost one thousand dollars in a month.

Amazing new nursery development.

Greening famous SU[1er-selected Fruit Trees, propagated by our exclusive Bud-Selection method.

My offer is di:fierent than any nursery company's o:fiber which you may have considered before • • • wlll be associated with the largest and olde.~t tree nursery in the world. • • • will have as his line, nursery stoclc ot a decidedly different character.

Weekly earnings up to $75.

Greening producers average from $25 to $75 a week in Commissions the year 'round.

PAn. 5. Through the use of the statements and representations hereinbefore set out and others similar thereto not herein set out, all of which purport to be descriptive of the nature and quality of respondent's products and the effectiveness of its products, as above described, respondent has represented directly and by implication, among other things that respondent is the largest grower of fruit trees in the world; that it is the world's leading company; that its salesmen earn from $110 part time to $882 full time per month; that the sale of its products is a noncompetitive field which its agents and salesmen will have all to themselves; that bud selection is an exclusive feature of the respondent company only; that· respondent has been propagating fruit trees by bud bClection exclusively for 26 years and that its bud-selection discovery is unduplicated in the nursery field.; that its budselection method gives fruit known performance characteristics which eliminate any chance or gambling on the part of fruit-tree growers; that only its salesmen can sell bud-selected fruit trees; that the large 276 FEDERAL TRADE COJiviMISSION DECISIONS Complaint 86F.T.C.

incomes received by the salesmen mentioned are examples and truly indicative of the salary its salesmen would ordinarily make; that its products are an amazing new development; that its fruit trees are superselected; that the Greening Nursery is the oldest in the world; that its line of nursery stock is of a decidedly different character from others; that its salesmen average $25 to $75 a week as commissions the year around.

PAR. 6. The aforesaid representations made by the respondent in the manner above described are grossly exaggerated, false, misleading, and untrue. In truth and in fact the respondent is not the largest grower of fruit trees in the world; respondent is not the world's leading ·company; respondent's salesmen do not earn from $110 part time to $882 full time per month; the sale of respondent's products is not a field which offers no competition and which its salesmen have all to themselves; and bud selection is not a remarkable exclusive :feature of the Greening Nursery Co. alone. Respondent's bud selection is not an amazing, scientific discovery which is not duplicated in the nursery field, nor are there known performance characteristics which eliminate any chance or gambling on the part of fruit-tree growers; Greening salesmen are not the only salesmen who can sell bud-selected fruit trees. The large incomes allegedly received by the Greening salesmen are not truly indicative of the earnings a salesman would make under usual and ordinary circumstances. Respondent's products are not an amazing new nursery development, nor are its fruit trees supersclecteu or propagated by an exclusive bud selection method. Respondent's nursery is not the oldest or largest nursery in the world, neither is its line of nursery stock of a decidedly different character from that of other nurseries. Respondent's salesmen do not average from $25 to $75 in commissions a week the year around. PAn. 7. The use by the respondent of the foregoing false, deceptive, and misleading statements anu representations with respect to said products has had, and now has, the capacity and tendency to, and docs, mislead and deceive a substantial portion of the purchasing public into the errone.ous and mistaken belief that such statements and n'presentations are true and that respondent's said products possess the properties claimed and represented and willnccomplish the results indicated, and that agents selling its nursery stock will earn the sums indicatedt and causes a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase substantial quantities of respondent's said products.

As a result, trade has been diverted unfairly to the respondent from its competitors in said commerce who truthfully ndvertise their products and the earnings of their agents. In CQnsequence thereof, GREENIN'G NURSERY CO. 277 273 Findings injury has been done, and is now being done, by respondent to com· petition in commerce among and between the various States of the United State.s and in the District of Columbia. PAR. 8. The aforesaid acts and practices of the respondent as herein alleged are aU to the prejudice and injury of the public and. of re. spondent's competitors and. constitute unfair methods of competition and unfair and d.eceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commis£ion Act. REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on December 23, 1938, issued and subsequently served its complaint in this proceed.ing upon the respondent, Greening Nursery Co., a corporation. charging it with the use of unfair methods of compe,tition in commerce and unfair and deceptive acts and practices in commerce in violation of the pro· visions of said act. After the issuance of said complaint and the filing of respondent's answer thereto, testimony and other evidence 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 recorded and filed in the office of the Commission. Thereafter, this proceeding regularly came on :for final hearing be:fore the Com· mission upon said complaint, answer thereto, testimony, and other evidence, report of the trial examiners upon the evidence and excep· tions filed thereto, briefs in support of the complaint and in opposi· tion thereto, and oral argument of counsel; 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 ami its conclusion drawn therefrom.

FINDINGS AS TO TUE FACTS PARAGRAPH 1. Respondent, Greening Nursery Co., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of Michigan and has its office and principal place of business in the city of Monroe, State of Michigan. PAR. 2. The respondent is now, and for several years last past has been, engaged in selling and distributing fruit trees and other nur· sery products. Respondent sells said products to members of the purchasing public situated in various States of the United States, and causes said products, when sold by it, to be trafisported from its Findings 36F. T. C.

aforesaid place of business in the State of )!ichigan to the purchasers thereof located in various other States of the United States. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in said products in commerce among and between the various States of the United States. PAn. ·a. Respondent is engaged in substantial competition in com· merce among and between the various States of the United States and in the District of Columbia with other corporations and with partnerships, firms, and individuals selling nnd distributing fruit trees and other nursery products.

PAR. 4. In the course and conduct of its said business and for the purpose of inducing the purchase of its nursery products and for the purpose of inducing salesmen and agents to sell said nursery products to the purchasing public, the respondent has made false, deceptive and misleading statements, and representations concerning its said nursery products by means of circulars and pamphlets and by means of advertisements inserted in newspapers and other publications, all of which are circulated between and among the various States of the United States. Among and typical of such representations made by the respondent are the following:

Dud Selection, that remarkable, exclusive Greening featui'e! For 26 years, Gre£>ning • • • have been propagating fruit trees by hud splectlon, exclusive, nmazing, scientific discovery urHlnplieated in the flelll. Only Greening men can sell llud Selected fruit trees. Non-competitive field all to yourself.

PAn. 5. Through the use of the statements and representations hereinabove set forth and others similar thereto not set out herein, respondent has represented directly and by implication that the respondent is the only nursery which uses the bud-selection method of grafting in the propagation of fruit trees and that fruit trees propagated by the bud-selection method of grafting can only be procured from the respondent and its salesmen.

PAR. 6. The aforesaid representations made by the respondent in the manner above described are grossly exaggerated, false, and misleading. Bud selection is not an exclusive feature of the respondent company only, and the sale of trees propagated by the bud-selection method of grafting is not limited to respondent or its salesmen, but, instend, trees propagated by the bud-selection method of grafting are sold by many of respondent's competitors. The selection of buds from trees of known charnctc>r or type and grafting them onto seedlings in the variety propagation of citrus and deciduous frutt trees has been known and practiced from earliest times, and literature as far back as the sixteenth century describes GREENIKG NURSERY CO. 279 273 Findings the pi·ocess of budding and grafting just exactly as nurseries in the United States are doing today. In the ordinary propagation of fruit trees it has Icing been known that when they are grown from seeds they do not come true to name. Seedlings are different from the plant from which they are taken in many respects, and in order to get them to come true to name, a bud is taken from a tree which it is desired to propagate. This bud so selected is grafted onto the seedling by inserting it under the bark of the seedling, where it grows fast when properly inserted. 'Vhen it st~rts to grow, the part of the stalk above the grafted bud is cut away, and the above-ground part of the tree is grown from the cutting or bud. The tree so grown from such grafted bud will have the characteristics of the tree or limb from which such bud is taken. The characteristics having been thus established in the grafted tree, the tree is either sold or itself used for bud wood in grafting other seedlings.

One of the sources of variety· in fruit trees ''which has been long recognized is the existence of the mutation or sport, which is a limb on a tree that bears fruit that is different in some respects from ,the fruit on the rest of the tree. The buds from such a limb can be grafted to a see<.lling in the manner above described, and the tree so grafted will bear fruit having the characteristics of the mutation or sport limb.

The methods of bud grafting hereinabove described are followed by practically all commercial nurserymen, including the respondent. The mechanics of the actual selection of vegetal ive buds for grafting may vary with the ideas of the individual doing the selecting. Some may go to an orchard and find an exceptionally productive tree that is bearing very fine fruit of the variety desired and select or obtain their fonnLlation buds from that particular tree. Others may select the buds from a particular limb of a tree that is producing exceptionally large or exceptionally highly colored or attractive fruits. The metho~s followed by the respondent in its bud selection vary from the above only in that records are kept of selected trees or limbs and they are observed from year to year prior to and after the buds are · selected for the grafting process. While the method of bud selection followed by the respondent may be more scientific than the method which may be employed by some of its competitors, bud selection is not exclusive with the respondent but, instead, is practiced in some form or other by pru.ctically all nurserymen. The extent to which respondent's methods of tree propagation may or may not be more scientific than those of competitors is dependent upon the nature and extent of the records lrept, and the tree observation followed by such competitors.

Order 3GF. T. C.

PAR. 7. The use by the respondent of the foregoing false, deceptive, and misleading statements and representations with respect to the exclusive nature of its bud-selecting process has had and now has the capacity and tendency to and does mislead and deceive a substantial portion of prospective purchasers, salesmen, and agents into the erroneous and mistaken belief that such statements and representations are true and causes a substantial portion of the purchasing public to purchase, and a substantial number of salesmen and agents to deal in, respondent's nursery products becaus~ of such erroneous and mistaken belief. As a result, trade has been diverted unfairly to the respondent from its competitors in said commerce who truthfully advertise their products. ' CONCLUSION The aforesaid acts and practices of the respondent as herein found are all to.the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce ·within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, answer of the respondent, testimony, and other evidence, in support of and in opposition to the allegations of the complaint, taken before trial examiners of the Commission thel'etofore duly designated by it, report of the trial examiners upon the evidence and exceptions filed thereto, briefs filed in support of the compla~nt and in opposition thereto, and oral argument of counsel; and the Commission having made its findings as to the facts and its conclusion that said respondent has riolated the provisions of the Federal Trade Commission Act. It 1.8 ordered, That the respondent, Greening Nursery Co., a corporation, nnd 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 fruit trees and other nursery , products in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing directly or by implication that the respondent is the only nursery which uses the bud-selection method of grafting in the propagation of fruit trees.

2. Representing directly or by implication that :fruit trees propagated by the bud-selection method of grafting can only be procured :from the respondent or its salesmen.

GREENING NURSERY CO. 281 273 Order 3. Representing either directly or by implication that the bud-selection method of grafting is an exclusive feature of respondent's nursery stock. · It is 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.

~28713--43--vol.36----21 Complaint 36F. T.C.: