Gulf & West Indies Co., Inc.

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IN THE MATTER OF GULF & west INDIES. CO., INC., AND :MILTON COHN- 'COMPLAINT; FINDINGS, AND· ORDER IN REGARD TO THE ALLEGED VIOLATION SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5093. Complaint, J:fall 11, 1'945 1-Decisio-n, July 11·, 1949 'There are basic and fundamental differences between the French and American methods of processing or preparing chamois skins, and there is a preference for the more costly French products, or the-product processed by the French method-made use of by no American tanners-on account of its· superior softness, absorbent qualities and· durability. ·where a corporation and its president, its principal stockholder, engaged in the inte•rstate sale and distribution of chamois· skin, in matter sta:mped or printed on their said product and containers thereof, and on price lists and printed matter supplied to dealers for distribution among prospective purchasers- Represented that their chamois skins were tanned or processed by the French process and . imported from France, or that they had been processed in the United States in accordance with French methods; When in fact all of the skins in question were imported from Iceland, South America, New Zealand, or Australia· and had been tanned by a Philadelphia company, by the domestic process;

With tendency and capacity to deceive a substantial portion of the purchasing public with respect to the origin, method of preparation, character, and qualities of their said product and thereby cause it to purchase substantial quantities thereof; and with result of placing in the bands of dealers means whereby they might mislead and deceive prospective purchasers of such products:

.Held, That such acts and practices, under the circumstances set forth, were all to the prejudice of the public and constituted unfair and deceptive acts and practices in commerce.

Before i1fr. W. lV. Sl~eppar·d and Mr. Andrew B. Duvall, trial 'examiners.

M1'. J. TV. B1·ookjield, Jr. for the Commission. Mr. Louis H. Solomon, of New York City, for respondents. AMENDED 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 Gulf & West Indies Co., Inc., a corporation, and Milton Cohn, individually and as president of Gulf & West Indies, Inc., a corporation, hereinafter referred to 1 .Amended.

Complaint 46 F. T. C. as respondents, have violated the provisimis of the Federal ·Trade Commission Act and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its amended complaint, stating its charged in that respect a& follows:

P .ARAGRAPH 1. Respondent, Gulf & West Indies Co., Inc., is a corporation, organized, existing, and doing business under and by virtue of the laws of the State of New York. Respondent, ~Iilton Cohn, is· president and principal stockholder of the corporate respondent. Said individual respondent, l\iilton Cohn, formulates, directs, and controls the policies, acts, and practices of the corporate respondent. The office and principal place of business of both the corporate and the individual respondent is at 1411iVater Street in the city of New York, N.Y.

PAR. 2. Respondent, Gulf & 1divest Indies Co., Inc., acting under the direction and control of respondent, 1\iilton Cohn, as aforesaid, is ·. now and for several years last past has been engaged in the business of selling and distributing chamois skins designated "Brownie Brain1" and "Napoleon Brand" chamois skins. Respondents cause said products when sold by them to be transported from their aforesaid place of business in the State of New York to purchasers thereof at their \iarious points of location in other States of the United States and in the District of Columbia. Respondents maintain and at all times mentioned herein have maintaineda course of trade in said products in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their said products in commerce, respondents have made and are now making various false,. deceptive, and misleading statements and representations regarding the origin, method of preparation, character, and quality of said prodnets. Said false and misleading statements and representations have· been and are being stamped or branded on their said products, printed on boxes and containers in which they are packaged, and on price lists. and invoices, circulated and distributed among the purchasing public. Respondents further are supplying and have supplied printed matter containing such statements to dealers for distribution by them to members of the purchasing public throughout the United States and in the District of Columbia.

GULF & WEST INDIES CO., INC., ET AL. 41 39 Complaint Among and typical of the respondents' said false, deceptive, and misleading statements and representations, but not all inclusive, are· the following :

Brownie Brand Reg. U. S. Pat. Office CHAMOIS FRENCH PROCESS '.ranned in U. S. A.

Imported Skins.

Napoleon Brand French Chamois (Made in France).

NAPOLEON BRAND Improved French Process CHAMOIS Imported Skins Tanned and Packed in U. S. A.

PAR. 4. Through the use of said statements and representations' and others of similar import not set-out herein, respondents represent directly or by implication that their said chamois skins designated. "Brownie Brand" and "Napoleon Brand," respectively, have been and are tanned or produced by the French process and are imported from France, or have been processed in the United States in accordance with French methods.

PAR. 5. There are basic and fundamental differences between the French and American methods of processing or preparing chamois skins, the genuine French product being superior in many aspects and bringing higher prices on the market. No American tanners produce chamois processed by the French method and there is a preference on the part of the users of chamois for the French product or a product represented as processed by the French method, by reason of its superior softness, absorbent qualities, and durability. PAR. 6. The foregoing statements and representations used and disseminated by respondents in the manner hereinabove described are· false, deceptive, and misleading. Respondents' said products are not now and for many years have not been tanned and processed by the French methods, but by the domestic process. The true facts are that all of the chamois skins sold and distributed by respondents are made of skins imported from Iceland, South America, New Zealand, or Australia and are tanned or processed as finished chamois skins by Drueding Bros. Co. of Phi1ad.e1phia, Pa., which tans or processes all Findings 46F. T. C.

of its chamois skins by the domestic process. Respondents purchase said chamois skins after they have been tanned as above ind:icated and stamp or brand and advertise and represent said skins with the words or expressions stated in paragraph 3 as above. PAR. 7. The use by the respondents of the words and expressions "Chamois French Process" and "Napoleon Branch French Chamois (~fade in France)," as aforesaid, deceives and misleads members of the public into the erroneous and mistaken belief that respondents' said "Brownie Brand" and "Napoleon Brand" chamois skins are tanned and proeessed in France or are tanned or processed by French process and are, therefore, of superior quality when such are not the facts. 1Vhile respondents formerly imported genuine French chamois into the United States, such product has not been obtainable ior several years and has not been handled and sold by respondents for several years.

PAR. 8. The use by the respondents of the aforesaid statements and . representations has had and now has the capacity and tendency to and does deceive and mislead members of the purchasing public into the mistaken and erroneous belief that said statements and representatons are true. Respondents further have thereby placed in the hands of dealers and others a means and instrumentality whereby purehasers of said products may be misled and deceived. As a result of the erroneous and mistaken beliefs engendered by respondents' said acts and practices as herein alleged, substantial numbers of the public have purchased substantial quantities of respondents' said products. P .AR. 9. The aforesaid acts, practices and methods of the respondents as herein alleged are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commissioi1 Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on December 7, 1943, issued and subsequently served its complaint in thjs proceeding upon the respondents named in the caption hereof charging them with use of unfair and deceptive acts and practices in commerce in violation of the provisions of that aet. After the filing by respondents of their answer to the complaint and after certain evidence had been introduced in support of the complaint before trial examiners of the Commission theretofore GULF & WEST INDIES CO., INC., ET AL.

39 Findings duly designated by it, the Commission on May 11, 1945, issued its amended complaint in the proceeding. Thereafter, further evidence in support of the amended complaint was introduced before the trial examiners (no evidence being offered by respondents) and such evidence was duly recorded and filed in the office of the Commission. After the issuance of the amended complaint it was stipulated between counsel supporting the complaint and counsel for respondent that the evidence theretofore introduced under the original complaint should become a part of the record in connection with the amended complaint. Subsequently, the proceeding regularly came on for final consideration by the Commission upon the amended complaint, the answer thereto, evidence, recommended decision of the trial examiner, and brief in support of the complaint (no brief having been filed on behalf of respondents and 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 its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Responde~1t, Gulf & 'Vest Indies Co., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York. Respondent, :Milton Cohn, is president and principal stockholder of the respondent corporation and formulates, directs, and controls the policies, acts, and practices of the corporation. The office and principal place of business of both of the respondents is at 141 vVater Street, in the city of New York, N.Y.

PAR. 2. Respondents are now and for several years last past have been engaged in the business of selling and distributing chamois skins, causing their products, when sold, to be transported from their place of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents maintain and at all times mentioned herein have maintained a course of trade in their products in commerce among and between the various States of the United States and in the District of Columbia.

PAIL 3. In the course and conduct of their business and for the pur- . pose of inducing the purchase of their products in commerce, respond- 44 FEDERAL TRADE COM.YUSSION DECISIONS . Findings 46 F. '1'. C. ents have made certain statements and representations regarding the origin, method of preparation, and character of such products, these statements and representations being stamped or branded on such products and also printed on the boxes and containers in which such products are packaged and on price lists circulated among prospective purchasers. Respondents have also supplied printed matter containing such statements to dealers for distribution among prospective purchasers.

Among and typical of such statements and representations are the :following :

Brownie Brand Reg. U. S. Pat. Office CHAMOIS FRENCR PROCESS Tanned in U. S. A.

Imported Skins Napoleon Brand French Chamois (Made in France).

NAPOLEON BRAND IInproved French Process CHAMOIS Imported Skins Tanned and Packed in U. S. A.

PAR. 4. Through the use of these statements and representations :and others of similar import~ respondents have represented, directly -or by implication, (1) that their chamois skins are tanned or produced by the French process and are imported from France, or (2) have been processed in the United States in accordance with French methods.

PAR. 5. There are basic and fundamental differences between the French and American methods of processing or preparing chamois .skins, the genuine F_reneh product being superior in many respeets and bring higher prices in the market. No American tanners produce chamois skins processed by the French method. There is a pre:ferenee on the part of the users of chamois skins for the French product or the product processed by the French method, such preference being due to the superior softness, absorbent qualities, and durability of the French prod net.

PAR. 6. The statements and representations used by respondents were erroneous, de.ceptive, and misleading. The products so desig- GULF & WEST INDIES CO., INC., ET AL. 45 '39 Order na.ted were not tanned and processed by the French method but by the. domestic process. All of the cha1nois skins in question were made of skins imported from Iceland, South America, New Zealand, or Australia and were tanned or processed as finished chamois skins by a: company in Philadelphia, Pa., which tans or processes all of i.ts chamois skins by the domestic process. PAR. 7. The use by respondents of the erroneous and misleading ·statements and representations referred to above has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public with respect to the origin, method of preparation, character and qualities of respondents' products, and the tendency and capacity to cause such portion of the public to purchase substantial quantities of such products because of the erroneous and mistaken belief so engendered. Respondents' practices serve also to place in the hands of dealers a means and instrumentality whereby such dealers may be. enabled to mislead and deceive prospective purchasers of such ·products.

CONCLUSION The acts and practices of the respondents as herein found are all to the prejudice of the public and constitute unfair and deceptive .acts and practices in commerce within the intent and 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 amended complaint of the Commission, the answer of respondents, evidence introduced before trial examiners of the Commission theretofore duly designated by it, recommended decision o:f the trial examiner and brief in support of the complaint (no brief having been filed on behalf of respondents and oral argument not having been requested), 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 respondent, Gulf & West Indies Co., Inc., a ,corporation, and its officers, and Milton Cohn, individually and as an ·officer of said corporation, and respondents' representatives, agents, and employees, directly or through any corporate or other device, Order 46 F. T. C. in connection with the offering for sale, sale, and distribution of chamois skins in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from : 1. Using the words "French process" or any other words of similar import to designate, describe, or refer to chamois skins not actually tanned or produced by the French process.

2. Representing as having been imported from France any chamois skins which have not in fact been so imported. It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing setting :forth in detail the manner and form in which they have complied with this order.

BANN·ER MANUFACTURING CO.· 47 Order