Lorraine Smart Shops, Inc.

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IN THE MATTER OF LORRAINE S:\fart SHOPS, INC. ET AL.

COMPLAINT, FINDINGS, AKD ORDERS IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914, AND OF AN ACT OF CONOHESS APPROVED OCT. 14, 1940 Docket 5669. Cornpla-int, June 1949-Decision, Sept. , '1951 Where a corporation engaged in the purchase from manufacturers in other States of wearing apparel which it caused to be shipped to its New York address for checking, sorting, and shipment to its approximately 23 retailers in various States, or direct from said manufacturers to said retail stores for sale to the purchasing public, one of said retail stores, and a managerial employee of said corporation;

After delivery to said corporation or its stores of articles of wearing apparel which were wool products subject to the 'Vaal Products Labeling Act of 1839 and the rules and regulations prolllligated thereunder, including women s coats, sweaters, and suits, and before offer for sale thereof to the general public, and 'with intent to violate the provisions of said act and rules- Removed and partcipated in, and caused, the removal of the stamps, tags, labels. or other means of identification required by said act and which has been affxed to said products by the manufacturer, and did not replace them with substitute stamps, etc.

With the result that said wool products when offered for sale and sold by them to the general public at their said stores did not have affed thereto stamps, etc., required by said act and rules: Held That said acts and practices of respondents, under the circumstances set forth, were in violation of the Wool Products Labeling Act of 193D and to the prejudice and injury of the public, and constituted unfair and de. ceptive acts and practices in commerce.

As respects the allegations of the complaint that respondents offered for sale and sold wool products in commerce which were misbranded with theintent and meaning of said act and said rules and regulations: there ,vas no evidence that they manufactured, delivcred for shipment, shipped, sold or offered for sale in commerce any wool products which were thus mis branded, so that said allegations were not sustained. Before Mr. John W. Addison trial examiner. Alr. De Witt T. PUG/cett and Mr. Randolph W. Bmnch for the Commission.

Conrad Smith of New York City, for respondents. CO:iUPLAIKT Pursuant to the provisions of the Federal Trade Commission Act and the "Wool Products Labeling Act of 1939, and by virtue of the authority vested in it by said acts, the Federal Trade Commission LORRAINE SMART SHOPS , INC., ET AL. 331 330 Complaint having reason to believe that Lorraine Smart Shops, Inc., a corporation, Lorraine R.oanoke Shop, Inc., a corporation, and 11rs. R.uby Shepherd, individual11y and as a managerial employee of Lorraine Smart Shops, Inc., hereinafter referred to as respondents, have violated the provisions of said acts and the rules and regulations promulgated under the 'W 001 Products Labeling Act of 1939, and it appearing to the Commission that a proceeding by it in respect there,of would be in the public interest, hereby issues its complaint stating its charges in that respect as follo\vs: P AR.,\GRAPll 1. Respondent Lorraine Smart Shops, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York and has an offce or place of business at 270 'West Thirty-ninth Street, New York, N. Y. It also maintains an offce or place of business at 260 ,Ycst Forty-first Street in New York City.

Respondent Lorraine Roanoke Shop, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Virginia and has its ollce and place of business at 12 ,Yest Campbell A venue, Roanoke, Va.

Respondent Mrs. Ruby Shepherd is a managerial employee of respondent Lorraine Smart Shops, Inc., and is vested with authority to dictate policies ;nd practices engaged in by the aforesaid corporate respondents.

PAR. 2. R.respondent Lorraine Smart Shops, Inc., is now, and for more than 1 year last past has been engaged in purchasing wearing apparel from various manufacturers thereof located in various States of the United States and having said apparel shipped either to said respondent's N c\v York address where said apparel is checked sorted, prepared for shipment, and shipped from said address in :New York to approximately 23 reta.il stores, including respondent Lorraine Roanoke Shop, Inc., Jocated in various States of the United States, a1l of which retail stores are owned by respondent Lorraine Smart Shops, Inc., or its stockholders, or the merchandise is shipped direct from said manufacturers to said retail stores at which plac.e said merchandise is offered for sale and sold to the ultimate purchasing public by respondent's said stores.

PAR. 3. Respondent Lorraine Roanoke Shop, Inc., is one of the aforesaid retail stores and is engaged in offering for sale and selling said wearing apparel to the ultimate purchasing public. PAR. 4. A substantial portion of the articles of wearing apparel offered for sale and sold to the purchasing public by the respondents as aforesaid, are wool products as such products are defined in the Wool Products Labeling Aet of 1939 in that said products are com- 332 FEDERAL TRADE COM"nSSION DECISIONS Complaint 48F. T. C. posed in whole or in part of wool, reprocessed wool, or reUBed wool as those terms are defined in said act.

PAR. 5. Among the wool products purchased and transported in commerce as aforesaid and also among the wool products manufactured for introduction into said commerce and thereafter offered for sale and sold by respondents as aforesaid since July 15, 1941, were women 8 coats, sweaters, and suits and other garments. All of said wool products purchased and transported in commerce as aforesaid and all of said wool products manufactured for introduction into said commerce, were subject to the provisions of the .W 001 Products Labeling Act of 1939 and the rules and regulations promulgated thereunder.

PAn. 6. Some of the aforesaid wool products were misbranded within the intent and meaning of the Wool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder when offered for sale and sold by respondents, in that said products, when offered for sale and sold by respondents, did not have affxed thereto a stamp, tag, label, or other means of identification showing (a) the percentage of the total fiber weight of the wool product, exclusive of ornamentation, not exceeding 5 percent of said total fiber weight of (1) wool, (2) reprocessed wool, (3) reused wool, (4) each fiber other than wool where said percentage by weight of such fiber was 5 percentum or more, and (5) the aggregate of all other fibers; (b) the maximum percentage of the total weight or the wool product of nollfibrous loading, filling, or adulterating matter; (c) the name of the manufacturer of the wool product, or the manufacturer s registered identification number and the name or a subsequent seller or reseUer of the product, as provided for in the rules and regulations promulgated under such act, or the name of OTIe or more persons subject to section 3 of said act with respect to such wool product; (d) the percentages in words and figures plainly legible, by weight of the wool contents of said wool product where said wool product contained a fiber other than wool.

PAR. 7. The aforesaid wool products, when received by respondent Lorraine Smart Shops, Inc., at its New York address or at the said retail stores, direct from the manufacturers thereof, had affxed thereto stamps, tags, labels, or other means of identification purporting to contain the information required by the V 001 Products Labeling Act of 1939. After said wool products were delivered to the respondent' said stores, as aforesaid, and before said wool products were offered for sale or sold by respondents to the general public, said respondents with intent to violate the provisions of the .W 001 Products Labeling Act of 1939 and the rules and regulations promulgated thereunder LORRAINE SMART SHOPS , L,C. , ET AL. 333 330 Decision did remove, and participate in and cause removal of, the stamps tags, labels, or other means of identification which purported to contain the information required by the provisions of said act and said rules and regulations affxed to said wool products by the manufacturer thereof or by some person authorized or required by said act to aff such stamps, tags, labels, or other means of identification to said wool products.

PAn. 8. Said respondents did not rephce said stamps, tags, labels, or other means of identification with substitute stamps, tags, labels, or other means of identification conta.ining the information required under the provisions of the "Wool Products Labeling Act of 1939 and the rules and regulations thereunder. As a result of respondents said acts and practices in removing said stamps, tags, labels, or other means or identification affxed to said wool products, said wool products, when offeree! for sale and sold by respondents to the general public at their said stores and places of business, did not have affxed thereto stamps, tags, labels, or other means of identification containing the information required by said act and said rules and regulations. PAR. D. The aforesaid acts, practices, and methods of the respond ents, as herein alleged, were and arc in violation of the \V 001 Prod nets Labeling Act of 1939, and the rules and regulations promulgated thereunder, and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

DECISION OF THE COllBnSSION AND Onder TO FILE REPORT OF CO:\IPLIANCE Pursuant to the provisions of the Federal Trade Commission Act and the IVool Products Labeling Act of 1930, ane! by virtue of the authority vested in it by said acts, the Federal Trade Commission, on June 28 issued and subsequently served its complaint in this proceeding upon the respondents named in the captjon hereof, charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said acts and the rules and regulations promulgated under the IVool Products Labeling Aet of 1939, in connection with the sale of women s wearing apparel. After the filing of respondents' answer, hearings were held before a trial examiner of the Commission theretofore duly designated by it, at which testimony and other evidence in support of and in opposition to the allegations of the complaint were introduced, and said testimony and other eyidenee were duly recorded and filed in the offce of the Commission. On May 14, 1951, the trial examiner filed his initial decision.

334 FEDERAL TRADE CO:\MISSIQX DECISIO Findings 48 F. T. C. The Commission, ha.ving reason to believe that the illi6al decision did not constitute an adequate disposition of the matter, subsequently placed this case on its own docket for review, and on August 17, ID51 it issnecl, a.nd thereafter seryecl upon the parties, its order affording the respondents an opportunity to show cause why said initial decision should not be altered in the manner and to the extent shown in a tentative decision of the Commission attached to said order. Hespondents having filed no objections in response to the leave to show cause the proceeding regularly came on for final consideration by the Commission upon the record herein on review; and the Commission, having duJy 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, conclusion dra-wn therefrom, and order the same, to be in lieu of the initial decision of the trial examiner. FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent Lorraine Sma.rt Shops, Inc., is a corporation organized, existing, and doing business under and by virtue of the Jaws of the Stale of Xcw York, and has an offce or place of business at 270 "Vest Thirty-ninth Street ew York, N. Y. It also maintains an offce or place of business at 260 "Vest Forty-first Street in New York City.

Respondent Lorraine Roanoke Shop, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Virginia, and has its offce and place of business at 12 Divest Campbell A venue, Hoanoke, Va.

Respondent Mrs. Ruby Shepherd is a managerial employee of respondent Lorraine Smart Shops, Inc., and is vested \with authority to fire and hire employees and to dictate policies and practices engaged in by the aforesaid corporate respondents, but is now closely supervised.

PAR. 2. Respondent Lorraine Smart Shops, Inc., is now, and for more than 1 year last past has been, engaged in purchasing -wearing upparel from various manufacturers thereof located in various States of the United States and having said apparel shipped either to said respondent' s New York address \\'he.re said app tre1 is checked, sorted prepared for shipment, and shipped from said address in Kew York to approximately 23 retail stores, including respondent Lorraine Roanoke Shops, Inc. , located in various States of the l.nitecl States, all of which retail stores are owned by respondent Lorraine Smart Shops Inc., or its stockholders, or direct from said manufacturers to said retail stores at which places said merchandise is offered for sale and sold to the ultimate purchasing public uy respondent's said stores. LORRAIXE S IAHT SHOPS INC. ET AL. 335 330 Findings PAR. 3. Respondent Lorraine Hoanoke Shop, Inc., is ono of the aforesaid retail stores and is engaged in offering for sale and selling sa.id wearing apparel to the ultimate purchasing public. PAll. 4. A substantial portion of the articles or ",-caring apparel offered for sale and sold to the purchasing public by the respondents as aforesaid, are wool products as such products are defined in the \Vool Products Labc1ing Act of 19:- : in that said pro(l11cts arc composed in whole or in part of wool, reprocessed wool, or reused wool, as these terms arc defined in said act.

PAR. 5. Among the wool products pllrcl1ased and transported in commerce as aforesaid and also among the wool products manufac tured for introduction into said commerce rmel thereafter offered for sale and solel by respondents as afore ;aiel since July 15, 1941, were women s coats, swea.ters, and suits, flnd other garments. All of said wool products purchased and transported in commerce as aforesaid and all of said wool products manufactured for introduction into said commerce, were subject to the provisions of the 'V 001 ProcludE Labeling Act of 1939 ancl the rules and regulations promulgated thereunder.

PAR 6. The aforesaid wool products when received by respondent Lorraine Smart Shops, Inc., at its N mv York address, or at the said retail stores direct from the manufacturers thereof, had affxed thereto stamps, tags, labels, or other means of identification purporting to contain the information required by the "'Vaal Products Labeling Act of 1939. After said ""001 products were delivered to the respondent' said stores as rtforesa.id, anel before said wool products "were offered for sale or sold by respondents to the general pub) ic, said respondents with intent to violate the provisions of the ",Yool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder did remove, and participate in aud Cfluse the removal of, the stamps tags, labels, or other means of identification which purported to contain the information required by the provisions of said act and s Lid rules and regulations, affxed to said wool products by the manufacturer thereof or by some person authorized or required by said act to affx such stamps, tags, labels, or other means of identification to said wool products.

\H. 7. Said respondents did not replace said stamps, tags, labels 01' other means of identification with substitute stamps, tags, 1labels or other means of identification containing the information required under' the provisions of the 'Vool Products Labeling Act of 1939 and the rules and regulations thereunder. As a result of respondents said acts and practices in removing said stamps, tags, labcJs, or other means of identification affxed to said wool products, said wool prod 21:-3S-fO-;)-f- - :W Order 48 F.

ucts when offered for sale and sold by respondents to the general public a.t their said stores and pla.ces of business did not have affxed thereto stamps, tags, labels, or other means of ident.ific,ltioll containing the information required by said act and said rules and regulations. PAR. 8. There is no evidence that. t.he respondents manufactured delivered for shipment, shipped, sold, or offered for sale in commerce any wool products which were misbranded within the intent and meaning of the Wool Products Labeling Act of 1939 and the rules and regulations promulgated thereunder. Consequently, the allegations of the complaint that the respondents offered for sale and sold wool products in C011merce which were misbranded within the intent and meaning of said act and said rules and regulations arc not sustained. CDXCLUSION The acts and practices find methods of respondents as found in paragraphs 6 and 7 hereof were and are in violation of the Wool Products Labeling Act of 19 , and ate io the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce wit.hin the intent and meaning of the Federal Trade Commission Act.

OImER It is ordered That the respondent Lorraine Smart Shops', Inc. , a corporation, its offcers, respondent Lorraine Roanoke Shop, Inc. , a corporation, its offcers, and respondent :Mrs. Rub y Shepherd, individually and as a managerial cmp10yee of Lorraine Smart Shops Inc., trading under the name of Lorraine Smart Shops, Inc., Lorraino Roanoke Shop, Inc., or any other name, their respcctive representatives, agents, and employees, directly or through any corporate or other device, in connection with the purchase, offering for sale, saJe or distribution of wearing apparel or any other "wool products" as such products are defined in and subject to the Wool Products Labeling Act of 1939, do forthwith cease and desist from causing or participating in the removal or mutilat.ion of any stamp, tag, label, or other means of identification affxed to any such " wool product' pursuant to the Wool Products Labeling Act of 1930, with intent to violate the provisions of said \Vool Products Labeling Act and which stamp, tag, label, or other mca,ns of identification purports to contain all any part of the information required by said act. It is further ordered That the respondents shah, within sixty (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 comj)lied with this order.

, MORRIS HESSEL, INC.) ET AL. 337 Syllabus Ix THE :MATTER O :\WRRIS HESSEL, INC., ET AL.

-COMPLAI:KT, FINDlKGS, AXD ORDERS I~ REGARD TO '!' HE ALLEGED VIOLATIO~ OF SEC. 5 OF AN ACT OJj CONGRESS APPROVED SEPT. 26, 1014 Docket 5870. Cmnpla,int, Apr. 4, 1951-Decision, Sept. 2"1, 1951 Many members of the purchasing public are l1Ja\Hlre of the fact that "mouton is the 1, rench word for lamb a1l1 beIicye that saw word stam1s for the fur for some other animal-a belief enhanced by the fact that the fur, correctly designated as "monton dyed lamb", is dyed so that it resembles other furs. Where a C0l1JOration and its three ofTcel's, engaged in the interstate sale and distribution of fur, fur coats, jackets, scarfs, and related fur garments, in competi lion with many similarly engaged, who do not misrepresent theirbusiness status or the prices charged for their merchandise; in advertising in newspapers, circulars, and other rnedia- (a) Represented that said corporation was a manufacturer of fur products. manufactured such products sold by it, and had been in the fur business continuously for a period of 37 years, through such statements as "Manu. facturing furrier, Over 30 years in fur manufacturing, " etc. The facts iJing that while its president had 38 years of experience in the fur business, said corporation had been in business only since its incorporation in 1040; and while it did for a limited period manufacture a small portion of the fur products sold by it, the great majority of its products had been at all times bought from others;

(b) Hepresented falsely that said corporation was a wholesaler and s01d at wholesale prices, and that its prices were 30 percent less than those charged by an y retail store, through such statements as "He conceived the plan of sellng furs directly to the illdiyidual at the wholesale level available to big oi * \Vholesale to you, You know our regular prices store buyers * are 30 percent below those of any retail furrier * " etc. (c) Uepresented falsely that its said products were sold at special sales at prices as much as 50 percent less than the regular prices, that certain of its sales were private and for selected customers only; and that the merchandise offered at such sales was not available for purchase by the public generally, through such statements as " Please keep this private sale a secret! This is a private sale for regular Morris Hessel patrons only. It is not open to the general public * " etc. ; and (cl) Hepresented that its president was the author of books entitled "Fur Book of Knowledge" and "Facts You Should Know About Furs " and by reason thereof an outstanding authority on furs;

The facts being that wIJile he supplieu the 'material for the former and cause!) it"l publication, and distributeu the latter, he was the author of neither; and (e) Advertised as "mouton " certain of their furs cOITectly described as "mouton dyed lamb"

Wit.b t.tendency and capacity to mislead and deceiye a Sllbstantial portion of thepurchasing public with respect to t eir products and tll€reby cause its purchase thereof:

Complaint 48 F. T. O. Held, That such acts and practices, under the circumstances set forth, were all to the prejudice of the public and their competitors, and constituted unfair methods of competition in commerce and unfair and deceptive acts and practices therein.

Before 2lft. 1Yillimn L. Pack; trial exa.miner. J1 r. C harZos S. Cox for the Commission. Lllr. Jacob N. Uoidshein of New York City, and Mr. HO"Wa.d ill. Lawn of Newark :N. J., for respondents.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by s(Lid act the Fedeml Tra.de Commission, having reason to belie,vB that )'101'1'i8 Hessel, Inc. a corporation; and :Morris Hessel, Lee 11c58c1, and Tillie Hessel, individually and as offcers of said corporation, hereinafter referred to as respondents, ha VB 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 cha.rges in that respect as follows:

PARAGR.,\PH 1. Respondent :Morris Hessel, Inc., is a. corporation, organized, existing and doing business under and by virtue of the laws of the State of N e\v York, with its offce and principal place of business located at 231 "IV est Twenty-ninth Street ew York, N. Y. Morris Hessel, Lee 1-Iossol, and Tillie I-Iessel are president, secretary-treasurer and vice president of corporate re.spondent. All of the individual respondents also have offces and a principal place of business at 231 "IV est Twenty-ninth Street, !'ew York, N. Y. The individtml respondents in their offcial capacities as offcers of corporate respondent have ncteel and now act in conjunction and cooperation with each other in formulating, directing, and controlling the business, acts, practices and policies of corporate respondent including the advertising claims made by said corporate respondent in connection with the sale of its products.

PAR. 2. Respondents have for several years last past been engaged in the sale and distribution of furs, fur coats, jackets, scarfs, and related fur garments. Respondents cause and have c llsed t.he aforesaid products, when sold, to be transported from tl1eir aforesaid place of business in the State of New York to purchasers thereof at their respective points of location in various States of the United States ancl in the District of Columbia. Respondents maint(Lin, and at all times mentioned herein have maintained, a course of trade in said products in commerce among and between the various States of the MORRIS HESSEL, INC., ET AL. 339 337 Complaint United States and in the District of Columbia. Their volume of business in said commerce has been and is substantial. PAR. 3. Respondents, during the period herein stated, in the course and conduct of their aforesaid business and for the purpose of inducing the purchase of their said merchandise have made many statements aud representations with regard to the quality and price thereof, the dHLracter of their said business and the method aud plans employed by them in connection with the sale of their said merchandise. The statements and representations so made by respondent have appeared in advertisements published in newspapers, circulars, and other advertising media of general circulatjon jn various States of the United States. Typical of said advertising representations of respondents, but not aU inclusive, are the following:

Manufacturing Furrier A manufacturing furrier who sells direct to the public. UFACTUHER' S CLOSE-OUT. . .

100 Hollander Blended LET-OUT MUSKHA'l' S . .. * * O.er 30 ;years in fur llflnufac:ruling:

We were able to buy the ra\v skins of these furs at prices 25% less than they now cost to replace.

So 1 beat the gun by bu;ying fresh, beautiful skins while the market was 10w, and making them into coats so typical of :.Iorris Hessel quality. He conceived the plan of sellng furs directly to the individual at the wholesale level available to big store buyers, of saving on the many expensive operations between manufacturers and customers. Thus, he became one of the first manufacturing furriers to thro\y open his door to all women. Wholesale-To-You America s foremost manufacturing furrier now celebrating our 37th anniversary WITH THE GREATEST AUGUST FUR SALE IN OUR HISTORY! OfCOUli:ie, you know our normal low prices are 30% less than any retail store.

Introductory card o! * o! The bearcr of this card is interested in buying a coat at 30% below retail.

You know our regular prices are 30% below those of any retaij furrier FL"R ::lanufactnrer ENTIRE STOCK REDcCED 50% Right now, we must make room for the Spring furs soon to be rushed in from our workl'rooms-AKD WE ARE CLOSING OUT HUNDREDS OF BEAUTIl' FUR COATS BELOW OUR COST! * * .

Please keep tJds Private Sale a secret! 'l' his is a private sale for regular Morris Hessel patrons only. It is not open to the general public-so please keep it a secret.

Bessel has written se.eral books on furs. . . One of them "Facts You Should Know About Furs" is available. A penny postcard or a phone call wil get you a FREE copy! 340 FEDERAI TRADE CO:'CvIISSION DECISIONS Complaint 48 F. T. C. Morris Hessel is the author of books used by both the trade and by the customer who wants to learn about furs in order to make the best possible investment. These books, "The Fur Book of KnD'vledge PAR. 4. Through the use of the statements aforesaid and others of the same import but not specifically set out herein, respondents represented that J\forris Hessel, Inc., is a manufacturer of fur products and manufactured all of the fur products sold by it; that;t buys the raw skins used in the manufacture of its fur products; that it is a wholesaler and sells at wholesale prices; that it has been jn the fur business continuously for a period of 37 years; that the prices charged for its fur products are 30% less than those charged by any reta;l store; that its fur products are sold at sales price,s as much as 50% less than regular prices and at times below cost; that eerta;n of ;ts sales are private and for selected customers only and the merchandise offered at such sales is not available for purchase by the public generally; find that respondent Mor6s Hessel ;s the author of the books entitled "Fur Book ()f Knowledge" and "Fads Yon Should Know About Furs," and by reason thereof is an outstanding authority on furs. PAR. 5. The aforesaid statements and representations are false, mis- 1cading and deceptive. In tn1th and in fact, while corporate respond ent for a. limited time manufactured some fur coats sold by it, the great major.jty of its fur products were at an times bought from others. It bought raw furs only dul';ng the Emited hme when the small portion of its fur products ",were manufactured by it. Corporate respondent is a retailer and not a wholesaler and does not sell at wholesale prices. J\10r1'is JIessd, Inc., was incorporated in 1940 and has been in business only since that time. It does not sell its fur products for less than many retailers and its sale prices arc not 50 percent less than ;ts regular prices and ;t docs not seu at prices below its costs. Sale represented as be;ng private and for selected customers only are in fact open to the pubEe generally. Respondent Morris Hcssel;s not the author of the books Fur Book of Knowledge or Facts You Should Know About Furs.

PAR. 6. Respondent advertises certain of its furs as "mouton. This is the word in the French language for lamb. :Many members of the purchasing pubhc arc unaware of this fact and beEeve that this is the fur of an a.animal o1:he,r than a lamb. This belief is cnhanced by the fact that the fur ;s dyed so that it resembles other furs. The correct designation of such iur is "mouton dyed lamb." The failure of respondents to designate t.he said fur by its proper English name confuses and misleads t.he public and constitutes an unfair and deceptive praebee.

MORRIS HESSEL , I:NC. . ET AL. 341 337 Decisions PAR. 7. Respondents, in the conduct of said business, as aforesaid l1ave been and are in substantial competition, in commerce, with other corporations, individuals, partnerships and others engaged in the sale of the same kinds of merchandise as that sold by respondents. .Among such competitors arc many who do not make any misrepresentations concerning their practices, the prices charged for their merchandise or otherwise.

PAR. 8. The use by respondents of the foregoing false, misleading and deceptive statements and representations has had, and now has the tendency a.nd capacity to mislead and deceive the purchasing public into the erroneous and mistaken belief that such representations were and are true and has caused and causes the purchasing public, because of such erroneous and mistaken belief, to purchase substantial quantities of respondents ' merchandise.

r AR. 9. The aforesaid acts and practices of respondents, as herein alleged, are all to the prejudice and injury of the public and constitute unfair methods of competition and unfair and deceptive acts and practices in commerco within the intent and meaning of the Federal Trade Commission Act.

Dt;CISION OF THl:. COMMISSION Purswtnt to rule XXII of the Commission s rules of practice, and as set. forth in the Commission s "De-cision of the Commission and Order tD File Report of Compliance " dated September 27, 1951, the initial decision in the instant matter of trial examiner William L. Pack, as set out as follows, became on that date the decision of the Commission.

INITIAL DECISION BY WILLIAM L. PACK, TRIAr.. RXAJ\:UNEH Pursuant to the provisions of the Federal Trade Commission Act the Fedeml Trade Commission on April 4, 1951, issued and s11hsequently served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with the use of unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of the provisions of that act. No aIlswer was filed by respondents to the complaint. Thereafter, a stipulation was entered into whereby it was stipulated and agreed that a statement of facts executed by counsel supporting the complaint and the respondents might be taken as the facts in- this proceeding and in Jiell of evidence in support of and in opp08itjon to the charges stated in the complaint, and that the trial examiner might proceed upon such statement of facts to make his initial decision, stating his 342 FEDERAL TRADE COMMISSION DECISIOKS Findings 48 F. T. C.

findings as to the facts including inferences ,,,hieh he might draw frolll the stipulated facts, and his conclusion ba ed thereon and enter his order disposing of the proceeding without the filing of proposed findings and conclusions or the presentation of oral argUlTlCnt. The stipulation further provided that upon appeal to or review by the Commission, the stipulatiolllnight be set aside. by the Commission and this matter remanded for further proceedings under the complaint. 'subsequently, the proceeding regularly came on for final consideratjon by the trial examiner, theretofore duly designated by the Commission, upon the complaint and stipulation, the stipulation having been approycc1 by the trial examiner, who, after duly considering the record herein, finds that this proceeding is in the interest of the public and makes the following fincllng as to the facts, Collclusion drawn therefrom, and order:

FIXDIXGS AS TO THE FACTS P.ARAGRAl'II 1. Respondent ::UoITis Hessel, Inc. , is a corpomtion organized, existing and doing business under and by virtue of the. la of the State of New York, \\ith its offce and principal place of business located at 231 ,Vest Twcnt:' ninth Street, N( \y York, K. Y. Respondents :Mo1'1'is Hessel, Lee IIessel, and Tillie Hessel are president, secretary-treasurer and vice president, respectively, of the carpm' ate respondent. TI1B individual respondents in their capacities as offcers of the corporate respondent have acted and now act in conj UllC- 60n and cooperation \fith each other in formulating, directing and controlling the business, acts, practices, and policies of the corporation, including the advertising claims made by it in connection with the sale of its products.

PAR 2. Respondents have for several years last past been engaged in the sale and distribution of furs, fur coats\ jackets, scarfs, and related fur garments. Hespondents cause and ha.ve cause.d their products, \dlCl1 sold, to be. transported from their place of bU5'iness in the State of XC" York to purchasers thereof at their respective points of location in yarious States of the United States and in the District of Columbia. Respondents mflintnin, and at all times mentioned herein have maintained, a course of trade in their products in commerce among and bebveen the various Sta.tes of the United States and in the District of Columbia. Their volume of business in such commerce has been and is substantial.

PAR. 3. In the course and conduct of their business and for the purpose of inc1ueing the purchase of their merchandise, respondents have made various statements with respect to themselves and their :'dORRIS HESSEL ) INC." ET .\L, 343 337 Findings mel':hand1ise, such statements being di8scminatetl among prospective purchasers by means of newspaper advertisements, cjrcnlars, and other advertising me,din. Typical of such statements are the follo\ving:

Manufacturing Furrier' A mrilufatturing furrier who sells dirf'ct to the public MANGFACTURER' S CLOSE-OUT.

100 Hollander Blended LET-OUT l\:USKHATS . .. * * ()yer 30 years in fur manufacturing"

We \were able to huy the raw skins of these furs at prices 25% less than they no\v cost to replace.

'1 '" * So I beat the gnn by buying fresh, beautiful skins while the market was low, and making them into counts so typical of Morris Hessel quality. He conceived the plan of sellng furs directly to the indi,idual at the wbolesale level available to big store buyers, of saying on the many expensive operations betweeIl manufacturers and customers. Thus, he became one of the first manufacturing furriers to th1'O\v open his door to all women, Wholesale-To-You America s foremost manufacturing furrier now celebrating our 37th anniversary ,yrTn THE GRJiJATES'r AUGUST FUR SALE IN OTJR HISTOHY! Of course, you know our normal low prices fire 30% less than any retail store. Introductory card * * * The bearer of this card is interested in buying a coat at 30% lJelow retail.

You know our regular prices are 30% below those of any retail furrier Fun Manufacturer E);Tlre STOCK REDTJCED 50% Hight now, we must make room for the spring furs soon to be rushed in from our workrooms-AND WE ARg CLOSING OUT HUI\'DREDS OF BEAUTIFUL FUR COAT"S BELOW OUR COST! * * * Please keep this Private Sale a secret! This is a private sale for regular Morris Hessel patrons only. It is not open to the general public-so please keep ita sl.x:ret.

Hessel has \written several books on furs, , , One of them "Facts You Should Know About Furs" is available. A penn)' postcard or a phone call wil get you a FREE Cop;)' ! Morris Hessel is the author of books used by both the trade and by the customer who wants to learn about furs in order to make the best possible in,estment. These books, "The Fur Book of Knowledge PAll. 4. Through the use of these statements and others of the same import, respondents have represented that :Morris IIesscl, Inc. is a. manufacturer of fur products and manufactures all of the lur products s01d by it; that it is a wh01es"1er and seUs at wh01csa1e prices; that it has been in the fur business continuously for a period of 37 years; that the prices charged for its fur prouucts are 30 percent less than those charged by any retail store; that its fur products are sold at special sales at prices as much as 50 percent less than regular prices; 344 FEDERAL TRADE COMMISSION DECISIO Findings 48 F. T. C.

that certain of its sales are private and for selected customers only and the merchandise ouered at such sa.les is not available for purchase by the public generally; and that rospondent Morris Hessel is the author of the books entitled "Fur Book of ICnowlcclgc" and "Facts You Should ICnow About Furs " and by reason thereof is an outstand ing authority 011 furs.

PAR. 5. These representations were erroneous and misleading. The corporate respondent :Morris Hessel, Inc., was not incol'poratBd until 1940 and has been in business only since that time, although the record indicates that the individual respondent J\Iorris Hessel has personally had some 38 yea.rs of experience in the ful' business. while the corporate.ion did for a limited period of time manufacture a smal) portion of the fur products sold by it, the great majority of its products have been at a.l times bought froni others. The corporation is a retailer and not a wholesaler. It does not sen at wholesale prices nor are its products normally sold at special sales at prices 50 percent less than its regular prices. Its prices are not lower than those of an other retailers. Sales represented as being private and for selected customers only IVere in fact open to the public generally. Respondent Morris Hessel is not the authorof the book, Facts You Should Know About Furs, but merely distributed it. The book, Fur Book of Know ledge, was not written by respondent j)lorris 11essel but was written by Anna Bird Stewart, although the record indicates that respondent Hessel supplied the material for the book and caused the publication of the book.

PAR. 6. Respondents advertise certain of their furs as "mouton. This is the word in the :B-'rench language for lamb. J\iany members of the purchasing public arc unawarc of this fact and believe that this is the fur of an animal other than a lamb. 1'hi5 belief is enhanced by the fact that the fur is dyed so that it resembles other furs. The correct designation of such fur is "mouton dyed lamb." The failure of respondent.s to designate such fur by its proper English name con. fuses and misleads the public.

PAR. 7. In the course and conduct of their business respondents are and have been in substantial competition in commerce with other corporations and individuals and with partnerships engaged in the sale of merchandise similar to that, sold by respondent.s. Among such competitors are many'tvho do not misrepresent their business status or the prices charged for their merebandise. PAR. 8. The use by respondents of the representations set forth above has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public with respect to respondents products, and the tendency;v and capacity to cause such portion of the MORRIS HESSEL, INC., ET AL. 345 3,7 Order public to purchase such products as a result of the enoneous and mistaken belief so engendered.

CONCLUSION The acts and practices of the respondents, as hereinabove set out are all to the prejudice of the public and of respondents' competitors and constitute unfair methods of competition and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER It is ordered That the respondents, Morris Hessel, Inc., a corporation, and its offcers, ancll\forris He,ssel, Lee lIessel, and Tillie Hessel individually and as offcers of said corporation, and respondents agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribu60n of furs and fur garments in commerce, as "commerce is defin d in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly 01' by implication: (a) That respondents manufacture all of the products sold by them; or that respondents manufacture any of such products, unless respondents do in fact manufacture the products in connection with which such representation is made.

(b) That respondents are wholesalers, 01' that the prices of respondents' products are 'wholesale prices or are lower than the prices of all other retailers.

(0) That the prices at which respondents' products are offered at special sales are lower by 50 percent, or any other designated percentage or amount, than the regular prices of such products, unless such is the fact.

(d) That any sale conducted by respondents is a private sale and for selected customers only, or that the merchandise offered is not available for purchase by the general public, when such sale is in fact open to the public generally.

(e) That respondent corporation was organized or began business prior to 1940; provided however, that this shall not prohibit the individualrespondent Morris Hessel from representing truthfully that he personally has had a longer period of experience in the fur business. (I) That respondent Manis HeBSeI is the author of the books, Facts You Should Know About Furs 01' the Fur Book of Knowledge. 346 FEDERAL TRADE CO:\Jl'vIISSION DECISIOXS Order 48 F.

2. Using the word "mouton" to designate or describe furs or fur products made from lamb peltries, un1css such word is immediately followed by the words "dyed lamb " as mouton dyed Jamb. ORDER TO FILE REPORT OF CO:MPLIAKCE It is ordered That the respondents herein shall, within sixty (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 the order to cease a.nd desist (as required by said declaratory decision and order of September 27, 1951). PREMIEH KNITTING CO. 347 Order Ix TH:l' l\iA' !'ER OF AR:WLD A. SALTZl\A AND lRVI G SALTZMAN TRADING AS PRK\IER KNITTING CO.

)fODIFIED CEASE AND DESIST ORDER Docket -,059. Order, September, 1.951 Order modifying original order of .Tuly 20, 1951 (48 F. '1. C. 72), so as to rerluire respondent, iu unl1ection with the offer, etc. , of sweaters or other knitwear in commerce, to cease and desist from the use of tlle word "Shetlanu " or the nse of tlle word "Kittn-Gora " or any simulations of said wurds, etc., as in said order belon: set furth and subject to tlw qualificatiuns there noteu, Before Mr. John -VV. Addison trial examiner. MT. R. A. Jllc01wt and Jlh. Jesse D. Kash for the Commission.. Rothstein K01,zenilc of Ne,,' York City, for respondents. J\1UDH' IED OHDEH TO CEASE AXD DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the. Commission, the respondents' answer thereto, testimony and other e,'idence in support of and in opposition to the allegations of the complaint introduced before a trial examiner of the Commission theretofore duly designated by it, the trial examiner s recommended decision and exceptions thereto by counsel for respondents, and briefs and oral argument of counsel, and the Commission having ruled on the exceptions to the trial examiner s recommended decision and having made its findings as to the facts and its conclusion that the respondents had vioInted the provisions of the Federal Trade Commjssion Act, on J nly 20, 1931, issued and subsequently served upon the respondents said findings as to tile facts, COIlclusion, and its order to cease and desist. Thereafter, this matter came on for reconsideration by the Commission upon its Q'vn motion to reopen this proceeding Tor the purpose of modifying the order to cease and desist herein, an order to show cause. why the ordcr to cease and desist should not be 111Odified, served upon respondents by the Comlnission, and respondents) a11S\\81' thereto and the Commission having reconsidered tJw matter and being of the opinion that its order to cease and desist issued here. in SIWllJd be modified in certain respr:cts it is 01'dcred That the I't'spondents Arno1cl A. Saltzman and Irving SaHzrnan, inc1iyidual1y nlld trading under the nml1e of Premier Knitting Co., or trading under nny other' name, and their agents, repre-. Order 48F.

sentatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of sweaters or other knitwear in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. "Gsing the word "Shetland " or any simulation thereof, either alone or in connection with other "words, to designate, describe, or refer to any product which is not composed entirely of wool of Shetland shcep raised on the Shetland Islands or the contiguous mainland of Scotland:

Provided, however That in the case of a product composed in part of wool of Shetland shcep and in part of other fibers or materials such word may be used as descriptive of the Shetland wool content if there atc used in immediate connection therewith, in letters of at least equal conspicuousness, words truthfully describing such other constituent fibers or materials.

2. Using the term "Kittn-Gora " or any other form or simulation of the word "Angora," to designate, describe or refer to any product which is not composed entirely of hair of the Angora goat: Provided however That such term may be used (a) in the case of a product composed in substantial part of hair of the Angora goat and in part of other fibers or materials if such other fibers or materials are truthfully described in immediate connection therewith; or (b) in the case of a product composed in whole or in substantial part of hair of the Angora rabbit if the fact that such part consists of Angora rabbit hair and a truthful description of the other fibcrs or materials in the product are clearly stated in immediate connection therewith. It is further ordered That the respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report in wri ting setting forth in detail the manner and form in which they have complied with it.

Note: The modification has to do with thc proviso which follows paragraph two prohibiting the use of the term "Kittn-Gora" etc. Said proviso in the original order of July 20, 1951, read: Provided, however' That in the case of a product composed in part of hair of the Angora goat and in part of other fibers or materials such term or word may be used as descriptive of the Angora fiber content if there are llsed in immediate connection or conjunction therewith, in letters of at least equal size and conspicuousness, words truthfully describing such other constituent fibers or materials. NEW YORK FEATHE.H CO. , INC'. ET AL. 349 Complaint