Joseph Jayko

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF JOSEPH JAYKO TRADING AS CRAMWELL INSTITUTE, ETC.

ORDER, ETC., IN REGARD TO 'THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 66, Complaint, Dec. 1.956-Dec-ision, Sept. , 1.958 Order requiring an individual in Adams, Mass., engaged in selling printed tests designed to determine the knowledge and ability of persons regarding certain subjects, and awarding to persons passing them degrees such as Bachelor of Science, Bachelor of Arts, and Bachelor of Laws, and diplomas designated as " College Equivalent Diplomas " and "High School Equivalency Diplomas " to cease representing falsely that he had authority to award such degrees and diplomas; that the educational qualifications of recipients were equivalent to those acquired by attendance at accredited institutions of learning; that his diplomas were recognized by industry, commerce and Government, had been awarded to thousands of persons, and would guarantee better paid jobs; and to cease misrepresenting the nature of his business by use of the word "Institute" in his trade name.

MT. Mo1'ton Nes1nith and t'. John Jlilo.,thias for the Commission. Mr. A nd1'ew J. Dilk of Adams, l\iass., for respondent. INITIAL DECISION BY LOREN H, LAUGHLIN, HEARING EXAMINER This proceeding, in substance, involves charges that respondent has violated the Federal Trade Commission Act by advertising, soliciting, and selling commercially in interstate commerce various types of alleged educational material, such as tests of the knowledge and ability of pel sons and unauthorized and unrecognized diplomas, including so-called high school "equivalency diplomas" and college level "equivalency diplomas " awarding the college degrees of "Bachelor" and "Master in a large and practically unlimited variety of academic, professional, scientific and business subjects. It is charged that the said material has deceived and has the tendency to deceive the public into believing that respondent' s diplomas and degrees are in fact equivalent to those issued by recognized institutions of learning. In short, respondent is charged \with running "a diploma mill." Respondent, while admitting certain matters charged, denies others and, in substance, denies that he has violated the Act in any way. This initial decision finds generally that the allegations of the CRAMWELL INSTITUTE, ETC. 243 242 Decision complaint are amply sustained upon the whole record by a preponderance of the reliable, probative, and substantial evidence as required by Section 7 (c) of the Administrative Procedure Act and the Commission s Rules of Practice for Adjudicative Proceedings adopted pursuant thereto, and that the respondent has violated the Federal Trade Commission Act in each of the several particulars charged. A cease and desist order is issued appropriate to the findings and conclusions which are hereinafter set forth.

This case was instituted by the filing of a complaint on December 26 , 1956, legal service of which \vas duly had upon the respondent, who in due course filed his answer on March 7 , 1957. Thereafter, hearings wherein evidence was presented were held in Boston, Mass., on March 28 and 29, 1957, and in New York , on May 6, 1957, at which latter time Commission s counsel rested their case-in-chief and respondent also completed the presentation of evidence in his defense and rested. On June 19 1957, Commission s counsel elected not to present any rebuttal evidence and upon their motion to close the case for the taking of evidence, such an order was entered on July 11, 1957, the parties being given to and including August 1, 1957, in which to prepare and file of record their respective proposed findings of fact, conclusions of law, and order.

Commission s counsel filed their proposals on July 24 , 1957 and thereafter respondent's counsel filed a document entitled, "Respondent's Summary of Law and the Evidence. " Since the evidence supports the proposed findings, conclusions and order submitted by Commission s counsel, the examiner has adopted them either in haec veTbae or in substance and effect. The contentions of respondent made in his counsel's said filing, however, are not presented in such an orderly form as to admit of their being considered or passed upon as specific proposed findings of fact and conclusions of law. Such filing consists essentially of an argument ending in a prayer for dismissal of the complaint the ground that the complaint is not sustained by a fair preponderance of the evidence. Such presentation is, therefore, not a set of findings, conclusions, arid order as is required by Section 19 of the Commission s Rules of Practice for Adjudicative Proceedings, and it is rejected in toto as such, although it has been given full consideration.

The complaint charges, in substance, that respondent as individual, trading and doing business under several trade names Decision 55 F.

at Ad- Cramwell Institute" and "Cramwell Research Institute" ams, Mass., has printed, used and sold certain testing material allegedly designed to determine the knowledge an ability of persons regarding certain specific subjects, and, if the purchasers such asthereof pass respondent's said tests, alleged degrees, Bachelor of Science, Bachelor of Arts, and Bachelor of Laws, are awarded to such persons, and diplomas certifying such alleged are issueddegrees designated as "College Equivalency Diplomas" to such persons as purportedly valuable evidence of the awarding of such degrees and the attainments of the respective holders thereof. It is further charged that high school "Equivalency Diplomas" are likewise so awarded and issued by the respondent. It is alleged that respondent causes certain of his printed material, including advertising matter, testing materials and diplomas, to be transported in interstate commerce from Adams Mass., to such purchasers in various States of the United States other than the Commonwealth of l\iassachusetts. Respondent in his answer admits certain allegations of the complaint and denies denials of theothers. The specific allegations, admissions, and pleadings and the issues thereby raised are each hereinafter fully discussed and decided.

The hearing examiner, after hearing and observing the witnesses, has given full, careful, and impartial consideration to the testimony and to all the other evidence presented on the record , asand to the fair and reasonable inferences arising therefrom well as to any and all facts pleaded in the complaint which are admitted by the answer. He has also given proper recognition to relevant matters of official notice as to which "any party shall on timely request be afforded an opportunity to show the contrary, as provided by Section 7 (d) of the Administrative Proc~dure Act and Section 3. 14 (c) of the Commission s Rules of Practice for Adjudicative Proceedings. All arguments and contentions of counsel have likewise been fully considered. Upon the whole record thus evaluated and weighed, it is found that the material allegations of the complaint are each and all fully and fairly established by the preponderanc.e of the evidence, the examiner specifically finding as follows:

Respondent, Joseph J ayko, is an individual trading and doing business as "The Cramwell Institute" and "The Cramwell Replace of business search Institute " \with his office and principal loc.ated in the First National Bank Building, 26 Center Street , CRAMWELL INSTITUTE, ETC. 245 242 Decision Adams, Mass. (Complaint, Par. One, Answer, Par. One. ) The evidence also not only precisely supports this finding but further discloses that respondent, more or less in conjunction with and as a part of his business complained of in this proceeding, has operated for several years and now operates collaterally from the same place under other trade names, such as "Cramwell Institute Educational Testing Service Cram\vell Cramwell Books Cramwell Books: Publications " and "Cramwell Publications. He also formerly operated under the name of "Air Institute which he testified is now merged into and under his present trade names of "Cramwell Institute " and "Cramwell Research Institute.

It is the testimony of respondent, Joseph J ayko, that he was born in Adams, Mass., in 1917; that he attended Cheshire Grammar School, from which he graduated, thereafter enrolling in the Adams Junior High School, which he left after probably one year or so while he was still in the seventh grade because, as he stated it I was a little bored with the situation and I decided that I could do a better job myself and I studied at home; that he then worked on the family farm, taking home study courses, some of which lasted a few months; that he later took short courses in a vocational training school at Pittsfield, M':ass., which he believes was a "joint operation between the General Electric Company" and "The Federal Government or the State Government," it being an evening program that lasted some 6 or 8 months; that just prior to World War II he took an examination and qualified for pilot training under a reserve scholarship at the University of Massachusetts, passing the examinations at three different places and being notified he was qualified to enter "either Amherst or Massachusetts State" College; that after a quarter enforced wait he enrolled at his first opportunity in "Massachusetts State" College, where he spent one semester; that subsequently he was assigned to Northeastern University in Boston as a student of aeronautical science in connection with pilot training and where he took an accelerated 12-week course, receiving a certificate of completion in aeronautical science; that (for some undisclosed reason) his "health was failing at that time and about two months later he was discharged from the program, He contends that finding it difficult to obtain employment while on the reserve list he resigned therefrom. He ,vas never regularly inducted into the military service but went to work on a govern- 1'Y1ent project in an aircraft factory in Cleveland. Ohio. as a flight , Decision 55 F.

test inspector in the experimental division where he stayed for a few months; that since that project terminated around 1943, he then, about 1944, first became interested in his "Institute Testing Service; that in 1945 he took the college entrance examination as a student for a degree at North Adams Teachers College, North Adams, Mass., where he spent 2 years, after which he took a year off to vlOrk, some 4 years later finally acquiring a Bachelor of Science degree from said college in 1951; and that after one full semester as a regular student plus some summer courses he received on August 31 , 1955, his Master of Science degree from the College for Teachers at Albany, N. , which institution is a part of the State University of New York. Having first conceived the idea of his "Institute Testing Service" as it particularly related to air navigation, he testified that he engaged in business as "Air Institute " compiling and selling courses in air navigation upon \which he states he worked from about 1944 to about 1950 or 1951. \Vhile he contends in his testimony that the " Air Institute" had the approval and "blessing" of the lVIassachusetts Department of Education (R. 139to credit140), his testimony in this regard is clearly not entitled by reason of respondent's exhibit No. , which is a letter to respondent fronl E. Everett Clark, director of the University Extension Division of the Department of Education of the Common- 17, 1947,wealth of Massachusetts. This letter, dated December addressed to respondent, acknowledges receipt from him of a Report of Correspondence Schools" relating to his "Air Institute work, but states that there is no provision in law in Massachusetts for approval of a correspondence school as such, the respondent being also advised It is not possible to authorize you to use in your advertising such a statement as you suggested." This letter in effect, definitely refuses to grant any official approval to respondent' s "Air Institute" or its advertising. It must be inferred therefrom that respondent desired to advertise that his program was officially recognized by the Massachusetts Department of Education, thereby qualifying him to receive Government payments for tuition, books, etc., for such veterans as might become his aviation course students under the so-called "GJ. Bill Rights " which had been enacted near the close of the war to aid such veterans in their post-war education and in other .ways. It nowhere appears in the record, however, that respondent' s aeronautical correspondence courses were ever officially recognized by the United States Veterans Administration. CRAM WELL INSTITUTE, ETC. 247 242 Decision And that Jayko s claim to official recognition by the Massachusetts Department of Education is false is further confirmed by respondent's letter of some years later, and long after he had merged" his "Air Institute " \with "Cran1well Research Institute. s Exhibit 14- C, dated February 22,In this letter, Commission 1956, respondent states that his "Institute, due to the nature of its operation is under Federal rather than State control." By this letter he himself has interpreted the position of the Massachusetts Department of Education to be that it has refused to officially recognize his business. There are also abundant other matters in evidence and of official notice referred to later herein showing that respondent never had any official recognized status under the sanction and blessing either of State or of Federal law but to the contrary was falsely advertising and offering diplomas of no value contrary to both the Federal Trade Commission Act and the criminal statutes of Massachusetts. It appears that his "Air Institute" was largely a guidance and counseling program, which he had begun after his discharge from the aeronautical program at Northeastern University. continued this "Institute" during the period he spent as a student at Massachusetts State Teachers College and later at the College for Teachers at Albany, N.Y. About 1951 , however, he states he began to broaden out his program on certain educational testing theories he claims to have evolved himself, \vherebyhe ultimately abandoned the name "Air Institute," merging it 'with what he had by then decided to call and did call "Cramwell Institute" or Cramwell Research Institute " the former name being only a convenient contraction of the latter. The exact time that respondent began to advertise in interstate commerce by offering his alleged "tests" and so-called "equivalency" degrees and diplomas under either the name of "Cramwell Research Institute or that of "Cramwell Institute" in many fields of advanced learning is rather vague although most of such matter in evidence was published and circulated during the years 1955 and 1956. Respondent' office only consists of a sort of foyer and two larger rooms, comprising in all an area approximately 40 to 50 feet by 25 feet. In this limited space he not only handles his testing" and "equivalency diploma" business but also handles his publishing business, \which is done under the various trade names of "Cra1l1well Books " or "Cramwell Publishing Company, Cramwell Books: Publications, " or "Cramwell" He meets here Decision 55 F.

occasionally with one or more of those whom he dignifies as his consultants. " He has no classrooms. His meagre library he esti- 111ates to consist of from 300 to 500 volumes, most of which material is related to his work some being kept in the, office and some at his home where he works after hours. He also states that the town library is used when needed. Since his town of Adams, l\-iass., is a town the census sho\vs has a population of approximately 12 000 , it is reasonably inferred that it is the usual town library J ayko has access to and not one with a large and varied assortment of specialized books relating to such technical subjects as law, aeronautical, civil, electronics and mechanical engineering, business administration, accounting, and other advanced and specialized but unnamed subjects which respondent purports to be sufficiently proficient in to qualify him to grant degrees to others in such subjects. Neither does Jayko have a laboratory in which to conduct any scientific experiments but claims that his "consultants" can do so, since each of the two alleged engineer "consultants" work for large concerns whose facilities are available for daily routine work. These "consultants however, have no independent laboratories of their own and they themselves were not called to testify that they are permitted to use or have used their employers' laboratories, equipment or materiel, with which to prepare scientific engineering test questions or to in any way evaluate the ans\vers students submit in response to such questions in order to obtain their "equivalent" engineering degrees. Therefore, it is only out of respondent's small office, which \vould scarcely qualify as a single classroom in even a small college, that all the diplomas and degrees awarded by him emanate throughout the United States. There is no claim that respondent has desisted from or abandoned the advertising practices complained of in this proceeding. The complaint alleges (par. one) and the evidence shows that he is now and for more than one year prior to the filing of the complaint has been engaged in the sale, among other things, of printed material consisting of certain alleged "tests" which are designed to determine the kno\vledge and ability of persons taking such "tests regarding specific subjects. Just what the tests" \were which the respondent compiled are shrouded in mystery as he does not disclose their nature in his testimony, claiming, in substance, they are kept confidential and are destroyed after being used. It is indicated by the evidence, however, that some of them at least are pirated from examinations conducted by , CRAMWELL INSTITUTE, ETC. 249 242 Decision various authorities. Respondent testified that he provided his engineering "consultants with materials and the library, for example, materials which I use as much as I can tell. Material is usually taken from professional engineering examinations. We draw on those quite a bit. The New York State professional examination is the most difficult in the country, and I have copies of those and use those for reference and we Te'wTite the exa1nination . . . and we use those quite a bit." (Emphasis supplied. ) In other words, J ayko himself improved upon the most difficult professional examination in engineering in the entire country! does not indicate, however, whether this is by making it easier or more difficult for the ones taking his "tests. In the record J ayko s operations are repeatedly referred to as an "educational service educational testing service, educational testing system " and "educational guidance and counselling service." The examiner has painstakingly studied the entire record to ascertain just what concrete service, if any, the respondent actually does render to his customers. His "service, " by \vhatever name, appears to consist entirely of his so-called "tests" which are merely written examination questions, and his so-called equivalency" diplomas and degrees. J ayko s testimony is so vague, uncertain, and wrapped up in an obscuring cloud of meaningless words that he expresses nothing that is positive on this lllain issue. He testified that he prepares certain "test" questions with the aid of certain of his alleged "consultants; that these tests" are then sent to a so-called proctor, a friend selected any given purchaser of the "educational service," who then propounds the questions in the "test" and forwards the answers and questions back to respondent. There is no official supervision of the examinees nor any rules covering their use of answers already copied off, etc. Such transactions occur by means of mail between J ayko in Adams, l\iassachusetts, and the various places where such purchasers live and take their "tests" throughout the entire United States. J ayko says the majority (of his customers) are outside of l\.iassachusetts." He says they are located in "all forty-eight" States. Upon receiving the answers, Jayko then evaluates them and upon payment of the balance due him and not until then, he issues his "equivalency" diplomas. The tests" are then destroyed as already stated. He contends that he will not accept students who do not appear to have certain basic educational qualifications, but what he considers to be the criteria in such regard are likewise not clearly disclosed by him. Decision 55 F.

He says that "if" on the application blank "they claim a high school education, they have to present some kind of evidence either state it on the application blank or if there is any question then I ask him to send some verification." He does not clarify \vhat he does where the applicant claims no high school education and in any event in many cases he accepts at face value the representations made to him respecting the alleged educational background of the applicant. The receipt by J ayko of the required $20 advance fee which must accompany the application completes the applican(s qualification and enrollment. J ayko takes the position that in each of his "tests" both the test:' and the customers ' answers are confidential and are not submitted to the customer s employer unless specially released by the customer himself. He further states that no record is made concerning the marks achieved by students who for any reason fail to pass his "test " and that even the reports of those who are successful are considered confidential. It is true that respondent claims to prepare his "tests" \-with the very occasional and irregular aid of his said alleged "consultants." He is not clear as to the extent to which the services of such "consultants are used by him. At most their services are employed by him only a few times a year. He claims that two engineers who are college graduates with degrees in their respective fields of mechanical and electrical engineering are among his "consultants. One is a boyhood and life-long friend vlho he claims " likes to crack out examinations." There are also two local teachers used by J ayko, evidently from the public or parochial schools of Adams. He does not delineate the qualifications of these two in any way. N one of the four alleged "consultants" was called by J ayko as a witness to his or her own qualifications or to the work each did as a "consultant" for J ayko. This is probably immaterial in any event particularly since J ayko does not consider the possession of degrees by anyone in his employ material. His counsel appropriately asked with reference to the many professional and technical subjects in which J ayko issues degrees and diplomas: You have no personal knowledge of these subject matters? J ayko answered:

Well, I have a staff of consultants; these people are college graduates, holding degrees from accredited colleges although I don t take a degree as evidence of their qualification to work for me. I usually put them through a test.

CRAMWELL INSTITUTE, ETC. 251 242 Decision J ayko contends he pays fees to each "consultant" for his assistance but does not divulge the amounts thereof. It is not claimed that any of such "consultants" possesses a Master s degree. In any event, J ayko is the final judge of the qualification of those to whom he awards any degrees, however advanced they may be, and the "equivalency" diplomas evidencing the same. Also, in the matter of original evaluation of the students, there is no evidence that he uses any "consultant." He determines for himself from the applicant's own presentation of his prior education and training just what his qualifications to take the alleged "test" are. The real qualification is the applicant's ability to pay the initial fee for the "test" and later to pay whatever balance is required for the " equivalency degree" and "diploma to be awarded in that case.

He uses the word "psychometrics" freely in his advertising to describe his "service" and also employs it in his testimony. Since he does not even see, let alone personally interview, his customers, it is self-evident that he cannot measure the speed and precision of their mental processes. The applicability of the first two syllables to J ayko s methods, hmvever, is indubitable. In summary, Jayko s so-called "educational testing system " is not educational and has no system. There evidently is no keeping of permanent test records and related data. J ayko claimed with reference to one point in his testimony that he did not bring his records and he \vollld "have to make a guess " although he had a brief case containing some papers, such as alleged testimonials, at the hearing. And just ho\v the competency of anyone desiring take such a "test" from J ayko can be compared by J ayko to college standards is apparently a dark secret that will die with J ayko. Since he professes to reduce his customers to an "average " he would undoubtedly be able by some legerdemain to qualify self-educated men of the calibre of Lincoln, Franklin, and Andre\v Jackson as "average " provided, of course, they could pass his "test" and pay the price. It would no doubt be an honor for such superior persons to be so rated by J ayko. The examiner takes official notice that there are approximately 1 000 institutions in the United States of the collegiate or university level and that they have about 200 000 educated and qualified teachers possessing varying degrees of competency and advancement in particular subjects obtained after long and arduous courses of study and training in established educational institutions. It is also officially noticed that in 1955 such recognized , Decision 55 F.

colleges and universities granted nearly 300 000 bachelor degrees some 58 000 Master and second professional degrees, and nearly 000 Doctorate degrees. It is the sheerest fantasy to believe that a one-man business such as J ayko is can make competent comparative tests of his customers with the average college graduate at any level. He has no apparent standing with any accredited institution whereby he can receive the latest up-to-date relevant information, and even if he did it would be a mental and physical impossibility for one man, by any mechanical formula by remote control or otherwise, to arrive at what was the knowledge and ability of the "average" college graduate. The respondent, who uses the high-sounding title Director of Education " in all his correspondence and on his "equivalency diplomas " says that in granting degrees and issuing such diplomas to any individual: "We evaluate the individual '" we evaluate the person s background and give the test." And in the determination of what customer is entitled to his degree and diploma, J ayko also decides to award the same to "the person I feel is qualified." It must necessarily be inferred that respondent is the sole, ultimate authority who determines whether the applicant is sufficiently proficient in any of the numerous technical, scientific, professional, and general subjects wherein J ayko offers to award a diploma and degree. Notwithstanding J ayko s possession of both a Bachelor s and a l\laster of Science degrees, the examiner from his own background and experience is unable to believe, for example, that J ayko is qualified to evaluate any applicant and award him a degree as a "Bachelor of Laws " even in business law, which J ayko does not profess to have studied. The evidence shows particularly that Jayko was wholly ignorant and unacquainted with the commonly used legal term "eleemosynary institution." When asked as to whether his business was for profit or an "eleemosynary institution " his very confused answer was: I wouldn t know \vhat eleemosynary meant (sic); you got (sic) to get down to earth. You have to use more practical terms; you mean we are a technical institute dependent upon personal education acquired elsewhere? (Rec. 265) It is evident that J ayko is conducting what he calls an "institute" sans buildings, sans campus, sans classrooms, sans library worthy of the name, sans laboratories, sans faculty, sans courses of study either in residence or by correspondence, and sans students. Stripped to its bare bones, it might as well have been called by him "J ayko s Institute" because there is nothing to it but Jayko. His own counsel said at one point in the record, with .;: , CRAMWELL INSTITUTE, ETC, 253 242 Decision reference to one of the various "Cramwell" names it is one and the same thing-Joseph J ayko, director, owner, proprietor, anything you want to call it." But he cannot even legally use the term "Institute" and has deceptively and unlawfully misused the word. He certainly cannot pretend to be "equivalent " for example, to Massachusetts Institute of Technology, vVooster Polytechnic Institute, or Babson Institute, all in l\1:assachusetts, to mention but a few of the highly recognized "Institutes " of the entire country. Jayko actually compares himself to Princeton Testing Institute. But misuse of the word "institute" has been frequently condemned by the Commission as well as by the judiciary. In BTanch v. C. (C. A. , 1944), 141 F.2d 31 , affirming 36 FTC 1 and 38 FTC 857, the facts were very similar to the case at bar. The respondent there offered many types of courses in engineering, scientific subjects, and law among many others, and issued diplomas under the name of "Joseph G. Branch Institute of Engineering and Science." The court referred to the business as a " diploma mill" (141 F. 34) and sustained the Commission s cease and desist order against the use of the word "intitute" as well as the word "university" by said respondent, the Commission having determined that the use of either word implied that said respondent operated an educational institution of higher learning vvith the power to confer degrees and to authenticate diplomas and degrees, as well as doing many other acts similar to those of the respondent herein. The distinction urged by respondent that Branch sold correspondence courses while Jayko does not is of no aid to Jayko here. If the offering both of pretended courses and of sham diplomas is worthless in the BTanch case, the entire absence of courses here can hardly add value, weight and lustre to respondent's diplomas. Other cases in which the COlnmission has forbidden the misuse of the yvord institute" are Preparatory T7"a1~ning Institute v. FTC 712 720 (1941 , appeal dismissed by A. , 1945) ; v. Ca1'eer T1'aning Institute, et al. 44 FTC 968, 969, 976 (1948); C. v. No.,Uonal Coaching Institu, , Inc., et al.. 48 FTC 1214, 1219-1220 , 1223 (1952); and C. v. Federal Coaching Institute, Inc. , et a1., 49 FTC 1138, 1152 (1953). As the Commission well said in Fede1"o.,l Coaching Institute, supra: (T)he word "Institute * '" implies the operation of a resident institution of learning with a staff of competent, experienced, and qualified educators offering instruction in philosophy, the arts and sciences, and other subjects of higher learning.

::: ::: ::

Decision 55 F.

The evidence manifestly shows that J ayko in no Ilianner can qualify as an "institute" and that his use of the \~/ord "Institute in connection \with the sale of his alleged "tests" and fake and unlawful "equivalency diplomas" and "degrees" is in itself false misleading, and deceptive.

J ayko has conducted the business of selling his so-called "tests and "equivalency" diplomas and degrees for several years last past in commerce throughout the United States, obtaining his customers by reason of certain advertising which is in the record entirely without objection. In this advertising he has n1ade many statements, representations, and claims \with respect to th'3 nature and value of his printed materials and the results to be obtained therefrom in newspapers and magazines having national circulation, such as "Popular Science, Business lVlanagement and "Army" and "Air Force Times," as well as in letters, circulars, pamphlets, and other advertising material circulated generally through the mails by said respondent: \Vhile his advertising media holds forth high promises to the prospective buyers of his so-called "system 01' " service " it is false, misleading, and deceptive in so many particulars as to be a complete tissue of falsehoods. The complaint specifically charges, however, but six general types of false statements in respondent's advertising, only one of which respondent denied making in his ans\ver and continued to deny in his testimony, although he c1denied generally in his answer that any of such statements, representations, and claims were false, misleading, and deceptive. In his HSummm' y or La-wand the Evidence" at its very beginning, inconsistently with his ans\ver, he admits, however: "The individual respondent :1.c1mits that he personally conducts such an institution under the two trade names (Cram\:vell Institute and Cram\vell Research Institute) and accepts full responsibility for any evidence ad"' duced at the hearing of the case. This would seem to be a broad waiver of any and all denials in respondent's answer, but the examiner, nevertheless, because of the specific issues drawn by the pleadiugs, has careful1!y considered each of the alleged misstatements of respondent in the particular frame\vork in which it appears, with due consideration to the elements of the public to whom it appeals. \Vhile J ayko disclaims ' any attempt to mislead the young, he does offer high school "equiva)ency" diplomas and it must be recognized th~t most of those seeking these are still lacking in maturity. Further, Jayko s advertising must considered in the light in which it is written, not to be dissected . .

CRAMWELL INSTITUTE, ETC. 255 242 Decision with a dictionary at hand and weighed carefully, sentence by sentence, clause by clause, and word by word. See A1' onbe1' C. (C. A. , 1942), 132 F.2d 165, 167. It is so well established that if the advertising has the capacity or tendency to deceive the ordinary purchaser that voluminous citation upon the subject is UlHvarranted. See Charles of the Ritz, et al. v. (C. A. , 1944), 143 F.2d 676, 679-680. The Federal Trade Commission s duty is to protect the unwary and unsuspecting as well as the kno\vledgeable and \vorldly-wise-those who are trusting as well as the suspicious. C. v. Stand-a;l'd Education Society, 302 U. S. 112, 116 (1937). The fact that informed and sophisticated persons would readily recognize, laugh off, or even be amused by, obviously false and absurd statements in an advertisement does not detract from their power to deceive the ignorant, gullible, and less experienced. See Gottlieb v. Schaller Poshnaste?' (V. , N. , 1956), 141 F. Supp. 7 16. But J ayko urges that his advertising is directed to businessmen who cannot be deceived. He produced two volunteers, allegedly of such character, \\'ho were permitted to testify only on the theory that they might establish J ayko s contention that his diploma was generally recognized by industry and commerce. Among other similar statements, J ayko advertised specifically, l\lost employers regard self-educated people holding college equivalency diplomas with far greater esteem than they regard those \vho drifted through formal college courses under someone else s motivating influence" (CX 9 , p. 9, CX 13, p. 2) ; "Recognition is accorded Cramwell Institute equivalence diplomas by the majority of employers. " (CX 9 , p. 10, CX 13, p. 4). See also similar claims in CX 14-c; and "Honored by business men" (CX 12). These sweeping claims are in no way established or justified upon the tecord here. See Bristol-Mye?' s Co. v. C. (C. A. 1950), 185 F.2d 58, 60, \-vhere an advertisement as to the results of an actual survey of only part of one profession \vas held misleading and deceptive. The testimony of these two witnesses completely n1issed the mark of general business recognition and amounted only to the usual inane statements of purportedly satisfied customers whose testimony is entirely irrelevant. See Independent Directory CO'I')). v. C. (C. A. 2, 1951), 188 F.2d 468 471. One of these \vitnesses Ruxton Fox, a social investigator in the New York City Department of Correction, testified, in substance, that he had purchased J ayko s service after becoming interested in it through a friend and that while he had not yet , , Decision 55 F.

completed his tests he was hopeful that his "Master of Arts in Psychology Equivalency Diploma" would be accepted by the School of Social Studies, a newly established adult education school, and qualify him therein for more advanced studies in psychology, as his specialized sociology studies in the Graduate School of Fordham University \vould not so qualify him in psychology. He had not put his "equivalency" diploma as a "Master of Arts" in psychology from "Cramwell Institute" to any trial since he had not even completed his "test" nor "vas he even proposing to submit his "equivalency diploma" to an accredited institution of learning. His need for adequate instruction in psychology is self-evident. The other witness, Norman Strand, who also voluntarily appeared for respondent, testified that he was a plant engineer and machine designer for a textile manufacturer at a very substantial salary. In January 1957, he read an advertisement of J ayko in a periodical, sent in his background data and took Jayko s "test" for a Bachelor of Science degree in mechanical engineering. He had passed the "test" and had received his "equivalency" diploma about the last of April 1957, just before testifying. It is, indeed, remarkable that he, without study and by merely taking J ayko s "test" could achieve an engineering degree in 3 months equivalent to what a regular academic student requires at least 4 long years of college attendance to accomplish! On cross-examination Strand admitted that he had written a letter of inquiry (Comm. Exh. 28) on February 11 1957, to the Board of Education of Massachusetts which inclicated his suspicion of J ayko s offer, and that he had been advised by John J. Desmond, Jr. Commissioner of Education, by letter dated February 15, 1957 (Comm. Exh. 29) that "the diploma described in your letter would have no value in any institution under the Department of Education. " Strand, however, disregarded this and spent his money with J ayko. This witness, who also came to sing J ayko s praises, brings to mind an old English adage Who is so deafe or so blinde as is he that wilfully will neither heare nor see." It is evident that both of these witnesses were afflicted with a vain desire to acquire a diploma the easy way'. J ayko appealed cunningly to their egos and that was his intention. J ayko was asked that if his "tests" do not admit to an accredited college, as he concedes (W) hat does it do? 'V'hat does it render to the public?" He answered: "It gives a person an idea of how he compares 'with other people. * * * I go on the basis CRAM WELL INSTITUTE, ETC. 257 242 Decision of what people tell me. * * * I assume the person would have the survey form which I send out and they will say they are satisfied." In these two witnesses' admiration for J ayko, they are like the village yokels who heard the declamations of the local parson in Goldsmith' Deserted Vivo.,ge \-vho lost all his street debates And still they gazed, and still the wonder grew that one small head could carryall he knew.

Two witnesses produced by Commission s counsel, rather young and quite intelligent men, were also deceived and taken in J ayko s advertising. Robert J. Rocheleau, a high school graduate who during his military service had taken educational courses offered in the Army, after returning to his home in Pawtucket , read J ayko s advertisement in the Popular Science magazine, and being attracted by his college "equivalency diploma references, subscribed to J ayko s service, paying an advance fee of $20 to $25 to take the "test " took such a "test" in the liberal arts field, and received one of J ayko s "equivalency diplomas. Upon taking it to the University of Rhode Island, he found it had no recognition. He also learned from Dr. Michael F. Walsh Commissioner of Education of Rhode Island, that the diploma he had received was worthless. Sergeant Albert Bedross, an Air Force recruiting sergeant stationed in Newark, N. , who had an official "equivalency high school diploma" from the State of New York, similarly subscribed to, took . respondent' s "tests" successfully, and received his alleged degree as a "Bachelor of Science in Personnel l\lanagement." He had paid $50 for this service and had received an "equivalency diploma" signed by J ayko. He had read respondent's advertising, pamphlets and purported testimonials before subscribing, having first read Jayko s lead ad in the "Air Force Times," a publication circulated widely among military personnel. Desiring to proceed with his education, he wrote the Department of Education of l\lassachusetts for information about the "Cramwell Institute," which department forwarded him a copy of the complaint theretofore issued in the instant proceeding. He had previously made inquiry of the Director of Admissions of Rutgers University and was advised they had no information about Cramvvell Institute as it was not listed in any of the standard directories or evaluation manuals relating to higher educational institutions recognized by official authorities throughout the United States and suggested to Bedross that he make further inquiry. Unlike the two \vitnesses called by J ayko, these hvo young military men, after some real , :

Decision 55 F.

investigation, believed and testified that the money they had spent on J ayko s "tests" and diplomas \vas utterly \\Tasted and valueless. The four witnesses taken together demonstrate clearly how gullible the American public are \with respect to "bait" advertising. And that the silly vanity of some will not permit them to admit that they have been hoodwinked and defrauded even when the real facts become kno\vn is well demonstrated by J ays two satisfied cllstomers, Fox and Strand. J ayko s advertising consists of two general classes, that which appears in publications of national circulation which brings in leads" (Commission s Exhs. 11 and 12, for example), and his follo\vup literature such as Commission s Exhibits 5 - 8, 10- 19 - 23 , 9, and 13. All of such advertising is pregnant with puerility, for one example only-in Commission s Exhibit 5, J ayko has advertised, among other things:

In these institutions of learning, you do not spend long tedious hours listening to lectures; you do not even attend classes, for there aren t any. The only qualifications you must have to take advantage of the many opportunities offered by these institutions is a DESIRE to acquire a higher education and the ability to learn. TVhe;'~ you sign up, yon ?'ceeive a "lIlembersh. " canZ which penJlits yon to take out whatever reading 01' study 'I//(/Jerinl1fou choose. You take the material heme and do your studying in the comfort of your easy chair, These hLstitlltio'm: are Pilblic Lib'I"Cwies where you will find much of the same material that is used in high schools and colleges, and it is available to you free of charge. ':' (Emphasis supplied, It is indeed a unique service J ayko renders that gives his customer a membership card which permits such customer to receive free the service and materials available in a public library! Andrew Carnegie most probably never imagined that it would require J ayko s membership card for members of the public to receive the benefits of his magnificant gifts to countless cities and to\vns throughout the land.

Jayko s ads, which were published in "Air Force Times Army and Navy Times Popular Science " and "Business l\1anagement all publications of nationwide circulation, also held forth to the llll\Vary many intriguing promises, such as "Double your chances for promotion with a College Equivalency Diploma-business administration, liberal arts, etc. Wonderful opportunities and " Get ahead faster! Increase your salary. Gain promotion and prestige. Qualify for executive opportunities with college equivalency certification in business administration, business law; personnel management, advertising, English, liberal arts CRAMWELL INSTITUTE, ETC. 259 242 Decision etc. Diplomas granted. Honored by businessmen." As an additional inducement in these advertisements, those desiring an easy short-cut to education are told: "Qualify by comprehensive examination at home. No courses" and "Comprehensive examinatiolls based on your on-the-job experience, administered in your locality. Further study usually unnecessary. In the succeeding follow up literature, which is sent upon the prospect' s making inquiry of J ayko in response to the said "bait" advertisements there is much loose and suggestive language pertaining to the merits of respondent's plan and the results obtainable therefrom. Emphasis is cleverly placed upon the "equivalency diploma" to be issued to the applicant, mostly relating to the fine quality of paper on which it is printed, like regular college diplomas, and also it flatteringly draws attention to the fact that it can be enlarged and hung upon the \vall where all can see the competency of any such applicant who successfully passes Jayko s "tests. This advertising not only draws innocents into Jayko s net but is also attractive to others with fraud in their hearts \vho need a diploma of some sort in order to assist them in deceiving the public as to their qualifications. To loosely sell unscrupulous and , in-unqualified persons these worthless diplomas \vithout a close telligent, personal survey of their moral and professional capacities is like selling masks and burglar s tools to safebreakers. One who places in the hands of another a means of consummating a fraud or competing unfairly is responsible therefor under the Goodm(~n v. C. (C.Federal Trade Commission Act. See 9, 1957), 244 F. 2d 584, and cases cited in footnote 16. It is particularly charged in the complaint that respondent's advertisements state and imply that respondent has authority to award degrees and diplomas and that the educational qualifications of persons awarded such degrees and diplomas are equivalent to those acquired by attendance at accredited institutions of is ad- learning (Complaint, par. two, subPars. 1 and 2). This mitted by respondent (Answer, par. two, subpar. 1), although he quite inconsistently denies that he represented his service as being in effect a college education. Respondent' s advertisements fully sustain the complaint' s said allegations. The ordinary person reading such advertisements would believe that J ayko was a regular "Institute," with its usual concomitance of highly qualified teachers, library, scientific equipment, etc., and such person would also believe that J ayko had authority to award degrees which Decision 55 F.

would certify that their possessors had education equivalent to those who received authentic degrees from accredited institutions of learning. The record is replete with evidence that these claims are false, misleading, and deceptive. See Commission s Exhibits 27, and 29. Dr. R. A. Fitzgerald, Deputy Commissioner of Education for the Commonwealth of Massachusetts, testified generally with respect to the laws of Massachusetts pertaining to the granting of diplomas and that respondent's diplomas are not recognized by the Commonwealth as entitled to accreditation although the Department of Education itself has no control over respondent' s issuance of such diplomas, matters of this kind being for the Attorney General. He agrees with the definitions in ~Vebster s Diction(~TY that a diploma is "a document bearing record of graduation from, or of a degree conferred by an educational institution; and that an institute is "an organization for the promotion of learning, philosophy, art, science, or the like, as a society, college, or technical school" ; and that the phrase diploma mill" means "an institution or sometimes a business concern that grants diplomas \which are fraudulent or because of lack of proper standards are worthless." He further testified that by the \vord "equivalent" or the like respondent purports to say to the public that such "equivalency diploma" holder possesses an education equal in all respects to that represented a diplon1a from a recognized degree-granting educational institution. He further testified that in compliance with l\lassachusetts laws, Commission s Exhibit 16, before the Commissioner of Corporations of l\lassachusetts will approve a certificate of organization in connection with the proposed incorporation of a college, junior college, or university, with power to grant degrees, such certificate is referred to the statutory Board of Collegiate Authority which makes a thorough investigation as to the applicants and their qualifications, including the nature of the institution financial organization, its faculty, equipment, courses of study, leadership, etc. Public notice is given of a public hearing, and, after investigation by the Board following such hearing, it adit will approve vises the Commissioner of Corporations whether the certificate or organization, and in the event of disapproval stating reasons therefor, in which case the aggrieved party has recourse to the superior court. He says IVlassachusetts now has some 60-odd degree-granting institutions of collegiate or university level, and that not more than 10 of them have been au- CRAMWELL INSTITUTE, ETC. 261 242 Decision thorized since 1943 to engage in educational activities which warrant the issuance of legally authorized diplomas and degrees. Dr. Roger S. Hamilton Dean of the College of Business of Northeastern University in Boston, with which institution he has been connected for more than 25 years, testified in this case as the authorized representative of the New England Association of Colleges and Secondary Schools which are qualified for accreditation in work at the high school level and above and to award diplomas and degrees therefor. He testified that an "equivalency diploma would mean that the person receiving the diploma had pursued a program of study that \vas a satisfactory substitute for a regular education at recognized schools and at the collegiate level or above \vas essentially the same as that pursued at Northeastern University or any comparable institution. would mean something equal to what other students receiving that type of degree from accredited institutions \vould receive. He further testified that J ayko, under either of his trade names of "Cramwell Institute" or "Cramwell Research Institute" was not a member of the New England Association of Colleges and Secondary Schools and that J ayko was in no \vay an accredited institution or association, and that in fact there is no such thing as a college "equivalency" diploma. He had examined certain tests" used by the Cram well Institute (which fortunately in some way had escaped J ayko s destruction) and in his opinion the student passing such "tests" would show he possessed certain knowledge but that this \Nould not be the equivalent of a college education, and that the value of the diplomas issued by J ayko would be only a personal value in the sense of accomplishment to the individual taking the test but entirely worthless for the purpose of accreditation. He testified that the educational qualifications of an individual receiving Jayko s "College Equivalency Diploma would not be the equivalent of a diploma acquired by one who had attended an accredited institution of learning," and that a testing service merely records grades received by a student on examination but does not certify or issue any diploma or award any degree. He further testified that within his knowledge no recognition had ever been afforded J ayko sdiplon1as by the Commonwealth of lVlassachusetts, and, after personally hearing Jayko testify as to what his limited place of business and equipment \vas, he had the opinion that "Cramwell Institute" or "Cramwell Research Institute" was not an institution of higher learning with a staff of competent, experienced, and qualified educators. Decision 55 F.

Although Dr. Fitzgerald stated that the Commonwealth did issue , hehigh school equivalency diplomas to persons who qualified testified that these were issued only by institutions which were qualified under the laws of Nlassachusetts, J ayko admittedly has no such recognition under the laws of Massachusetts to even issue any high school equivalency diplomas. It is contended by respondent that "the statutory law of Massachusetts is absolutely barren so far as the issue" in the instant case is concerned and that "no adjudication known to him has exposed any case where a court of record has dealt \-with 'equivalency diplomas or degrees'" (Respondent's "Summary of Law and the Evidence " p. 9). J ayko s counsel quite overlooks the fact that the Federal Trade Commission Act, as amended by the Wheeler-Lea amendment of 1938, fully empowers the Commission in the public interest to proceed against those who commit what are now designated in Section 5 of the Act as " unfair or deceptive acts or practices in commerce. This very important and useful amendment was intended to afford and in fact has afforded an appropriate remedy on behalf of the public against those numerous charlatans, fakirs, and quacks who falsely and deceitfully promise through any media in interstate commerce a purported educational and related business advantage to prospective purchasers of any service. The public is to be protected from this type of exploitation just as much as against those who purvey worthless or harmful nostrums or useless gadgets. The hundreds of successful proceedings brought by the Commission collated in 2 CCH against "diploma mills" of various types are T?'(~de Regulcdion Reports ~5083 , pages 10,501-10,506. Many of these cases relate "to fraudulent correspondence courses. It would serve no useful purpose to recite in detail any of such precedents as the general 'principles announced therein are controlling here and have been \vell established for many years. J ayko further seeks to avoid the application of these principles and their thrust upon him, howe\!er, by claiming he no longer as to offers correspondence courses but only performs "tests" the competency of individual purchasers of his service and that he does not issue regular high school or college diplomas or award collegiate degrees, only issuing so-called "equivalency deems com- diplomas and degrees to those \"hom he personally petent and qualified. But' the sweeping breadth and comprehension of Section 5 of the Act is such that J ayko alleged 110 precise distinctions are wholly without merit. That there are , CRAMWELL INSTITUTE, ETC. 263 242 Decision precedents covering "equivalency" diplomas and degrees is immaterial In fact, there could be none as J ayko claims to have been the discoverer, initiator, and founder of the terms "equivalency diplomas" and "equivalency degrees." Whether by his own ingenuity or by accident, the fact that J ayko has used the term equivalency " is of no avail to him.

It is to be inferred that the term "high school equivalency diploma" became known to J ayko at the time he received such a diploma from Adams High School in 1951 when he acquired his Bachelor of Science degree from North Adams Teachers College. He claims, however, that the terms "college equivalency diplomas and "college equivalency degrees" are his own invention and that he has "developed this technical term which has not yet been used in the field of education, to my knowledge, before, I have a copyright privilege on it :j: * in my name, in publications; in other words, a trademark which is worthy of registration and consequently I have a common la\v property right in this term." While the examiner properly ruled J ayko s alleged definition of college equivalency degree or diploma " out of the record it is quoted by respondent in his " Summary of Law and the Evidence (p. 8). This alleged definition was devised by Jayko between:n the hearings of this proceeding although he claims he had been using it in different language in his advertising literature for a long time prior to that. He claims this definition is so clear that a grammar school child can understand it. According to him, there are two valid systems of education first in the classic manner of class-room education and second, the kind espoused by the theories of Cramwell Institute (id. p. 9), that respondent "is pioneering honorably in 'unorthodox' education (id. p. 7) ; and he urges that the l\1:assachusetts Department of Education should present clarification data on the comparative values of the two systems for legislation which will recognize the respondent's theories (id. p. 9). What Friedrich Froebel did for the kindergarten and Horace l\1:ann did for the comn1on schools, Jayko now proposes to do for higher education by his new, rapid streamlined "system of tests equivalency diplomas" and "equivalency degrees. " Mean\vhile, lacking legal recognition of his system for want of a better way, he is obliged to refer in his own "equivalency diplomas:' that any holder thereof "having satisfactorily completed the requiren1ents CO1l1parable to accredited college curricula in" (any course) with a Degree of Bachelor or Master of Arts or Science as the case may Decision 55 F.

be "prescribed for certification by this Institution, is awarded this College Equivalency DIPLOMA as an honorable testimonial of attainment." With an ambivalent attitude toward formal education and degrees, he explains that his own creative terms equivalency diploma" and "equivalency degree are used distinguish them from the "formal type of diploma" and "as a reference. \Ve have to compare with something. We used it as a frame of reference. It is clear from this testimony of J ayko that the documents as purported evidences of attainment cannot stand upon their own merits but must be compared with an accepted and \vell-known standard, namely, legitimate degrees and diplomas from accredited institutions of higher learning. His claimed resourcefulness and ingenuity in this new field of education has utterly, failed to develop a distinctive new name for the printed sheet of paper which will describe adequately what he offers and sells as a solemn testimonial to his customers. It is quite evident that what he sells the paper with consists of the words "diploma" and "degree comparable to accredited college curricula " without which language he would make no sale. In offering his own definition of "equivalency diplomas and degrees, " respondent rejects a standard dictionary definition of the word "equivalency" as well as of other words. "Equivalency, Webster defines as a noun meaning, "a state of being equivalent; equality of worth, value, means, or force." This noun is evidently used in its adjectival sense of "equivalent, " which according to the dictionary means "virtually or in effect; tantamount." :lVIassachusetts has judicially defined the term as meaning "equal in worth or value. Vianco v. Lay (1943), 313l\iass. 444, 48 N. E. 2d 36, 40. The term to be "equivalent to" means "to be equal in value, to be the same, corresponding to " and "to be worth. Desoe v. Desoe (1939), 304 l\'Iass. 331 23 N. E. 2d 82, 84. Other Brien (1950),courts have similarly defined it. In Knox v. 7 N. J. Super. 608, 72 A. 2d 389, 391 , the court held: The word "equivalent" appears not to have been directly construed by our courts, but Mr, Justice Schaffer, speaking for the Supreme Court of Pennsylvania In re Bonsall' s Estate 288 Pa, 39 , 135 A. 724, 725 (Sup. Ct. 1927), placed a judicial interpretation upon the import and meaning of the word by giving it the following effect: " Equal in worth or value, force, power, effect import and the like. " (Quoting from McLean v. M 0)'0'11 38 Mont. 298 , 99 P. 836).

Therefore, the accepted dictionary meaning and the judicial interpretation of the word contradict any contention by J ayko that he in no manner has claimed that his diplomas and degrees , CRAMWELL INSTITUTE, ETC. 265 242 Decision are not represented by him in his advertising to be in all respects as valuable, useful, and acceptable as the diplomas and degrees awarded by authentic institutions of higher learning. disputes vainly, therefore, that evidence of accreditation by such recognized institutions is not an element of his advertising although in smaller type he has stated therein that his "equivalence diplomas are not intended to take the place of formal academic credits.

He makes no explanation as to what the ,vord "Cramwell" means. It is not his own name, the examiner infers that respondent has adopted it as a foxy colloquial indication to the purchasers of his service that they may "well" "cram" or condense into a very short time the equivalent of what students at legitimate institutions of learning could acquire through long and patient study with resident attendance. Such matters J ayko belittles in his advertising, such as the expression above quoted that his "equivalency" diploma holders do not need to "spend long tedious hours listening to lectures.

Long prior to the establishment by Congress of the Federal Trade Commission, the evil of the "diploma mill" had already become evident to the people of l\iassachusetts. In 1892 , that Commonwealth' s legislative body, the General Court, had adopted an act prohibiting such practices and making the violation thereof a crime. The act is no\-\' Chapter 266 , Section 89 Annotated Laws of l\fassachusetts as amended. In 1915 the Supreme Judicial Court of l\'lassachusetts spoke unanimously through a great jurist, its then Chief Justice Rugg, who in sustaining a conviction construed this act in a case involving fraudulent chiropractic degrees. In language singularly applicable to J ayko s fraudulent operations in this proceeding, the Court held:

The provision of R.L. c. 208, ~ 75, material to the present prosecution is: :" Whoever, without the authority of a special act of the General Court granting the power to give degrees, offers or grants degrees as a school, college or as a private individual, '" '" '" shall be punished. * 0;: * Its obvious purpose is to suppress the kind of deceit which arises from the pretense of power to grant academic degrees, and to protect the public from the evils likely to flow from that variety of misrepresentation and imposition. The earlier part of the section deals with the simulated possession of educational distinctions, including college degrees. The section as a whole is an effort to punish the issuing and holding of sham degrees from colleges and other educational institutions. It aims to insure to the people of the commonwealth freedom from deception when dealing with those who put forward :::

Decision 55 F.

professions of educational achievement such as ordinarily is accompanied by a collegiate degree from an institution authorized to grant it and to make certain that those who use such symbols have had the opportunity of being trained according to prevailing standards in some school of recognized standing, under teachers of reputation for learning, Wright v, Lanckton, 19 Pick. 288, 291. The statute should be interpreted in the light of its design to effectuate its purpose so far as the words used reasonably construed permit of this result. Considered historically and 3ccording to present practice, there are three general grades of such degrees, namely, Bachelor, :Master and Doctor; although by some institutions intermediate distinctions are granted. * * * It is not to be assumed that the stat11te was intended to relate only to such degrees as were in use at the time it was enacted. It is comprehensive in its terms and includes whatever properly may be described as a degree at any time. Degree," as used in this statute, is any academic rank recognized by colleges and universities having a reputable character as institutions learning, or any form of expression composed in whole or in part of words recognized as indicative of academic rank, alone or in combination with other words, so that there is conveyed to the ordinary mind the idea of some collegiate, university or scholastic distinction. This decision and this statute are still the law of lVJ:assachussetts Official notice is also taken that l\iassachusetts has a law prohibiting untrue and misleading advertisements by any person. This act has been held constitutional in Co1runonwco.,lth v. Riley (1924), 248 Mass. 1, 142 N. E. 915, and has also been construed in Attorney Genel'al v. Pel1etier (1922), 240 Mass. 264, 134 N. E. 407 , 420, both opinions also by Chief Justice Rugg. The reccitizen of l\iassachusetts hasord does not disclose that any paid any money to respondent although one resident of the nearby city of Springfield Edward A. Dunn, who had read respondent' s "Bulletin" (which is not in evidence), made viritten inquiry of J ayko as to "Crannvell Institute " standing as an educational institution (Comm. Exhs. 14 and 14- to C). Commonwealth v. New England Collellc of Chirop1"Clctic, /11C. (1!J15) , 221 Mass. 190, 108 N, E. 895-897.

2 Chapter 266, S 91, Annotateel Laws of Massachusetts as amended, provides: Any person who, with intent to sell or in any way dispose of merchandise, securities, senice or anything offered by such person, directly or indirectly, to the public for sale or distribution. or who, with intent to increase the consumption of or demand for such merchandise, securities, service or other thing or to induce the public in any manner to enter into any obligation relating thereto, or to acquire title thereto, or an interest therein, mal,es, publishes, disseminates, circulates or places before the public, or causes, directly or inrlirectly, to be made, published, disseminated, circulated or placed before the public within the common\veaJth, in a ne\";spaper or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet or letter, or in any other way, an ad\"ertisement of any sort regarding merchandise, securities service or anything so offered to the public, which advertisement contains any assertion, representation or statement of fact which is untrue, deceptive or misleading, and which such person knew, or might on reasonable investigation have ascertained to be untrue, deceptive or misleading, shall be punished by a fine of not less than ten nor more than five hundred dollars; , . , :/: , / / CRAMWELL INSTITUTE, ETC. 267 242 Decision The general reputation of New Englanders for canniness is apparently well justified since of the several hundred "equivalency" diplomas sold by respondent, he admitted that only five had been sold (as of August 29, 1955) to people located in New England (Comm. Exh. lO-A). The Federal Trade Commission jurisdiction, of course, relates only to respondent's practices in interstate commerce, and J ayko s intrastate relations with others in Massachusetts are entirely matters for the appropriate authorities of that Commonwealth. Dr. Fitzgerald testified that the Department of Education, while not recognizing illegal diplomas and degrees, is not a law-enforcing agency and has no authority to and does not, take action in matters such as Jayko s issuance of equivalency" diplomas and degrees, but that if the Massachusetts law is violated in such respects such violators "\'Iiould be subject to action by the Attorney General." The record is silent as to any action having been taken as to J ayko by that official, although J ayko did refer briefly to some sort of prior hearing as hereinafter set forth. While Dr. Fitzgerald testified that the Department of Education had itself made no complaint against respondent, the record shows that many complaints had been received by that Department concerning the value of respondent's alleged "tests and "diplomas.

Despite J ayko s glaring deficiencies in many other regards, which are shown upon the record, he does seem to have an aptitude for charging sufficient fees to his customers to keep himself in business and is willing to seek business anywhere he can get it. His own testimony discloses that while his prices for various degrees, as they are stated in his advertising, are fixed originally at amounts to "cover expenses of the program (but if at the end of the year the program is in the red, well, \ve figure we better (sic) raise the price a little bit." He wrote to the Commissioner of Education of l\iassachusetts with reference to his so-called "educational service" that "it is financed by funds derived from a privately operated business, not a corporation. The fees charged in conjunction with the testing service are utilized for educational research purposes, and do not meet the expenses ineurred. " In his advertising he also professes in some cases the fees charged fail to cover the operational costs involved. Money received is used not only to pay the operational costs but to further research in psychometrics. Thus the money you :;::,: :;: , p. Decision 55 F.

pay in fees constitutes an important contribution to scientific research in this field. (See Comm. Exh. 9, p. 6) For reasons hereinafter stated, the hearing examiner does not believe these statements as to the eleemosynary character of J ayko s business. J ayko charges a fee of $47.50 now "for an educational rating at * * the undergraduate level," $20 of which is payable upon the filing of the application. "The price or the fee on a high school level is '" $27,50; '" on the l\1astel' rating it's $57.50. * He offers in special cases by arrangement to give examinations in various nonlistec1 subjects which will Jead to co))ege equivalence certification and indicates higher charges may be made in such case. The evidence shows that J ayko s wife acts as his secretary, and that ",while he does not enumerate any of his expenses it is quite evident that the business is run more or less on a shoestring, in a small office in a small town, so far as expenses go. Since he also sells courses and tests, and in the comparatively short time he has been in the "equivalency diploma and degree granting business he has according to his testimony, had 302 paying customers, although only about "200 somen were actually issued diplomas, it is infelted that his earnings are substantial. \Vhile it is yet a long way from having become an enterprise of monumental proportions, it is still a business of sufficient size and interstate spread as well as of character to justify this proceeding in the public interest. J ayko does not confine himself to the retail business selling equivalency diplomas and degrees but he is also a wholesaler of such products. He offers "club rates" to all sorts of organizations ,which may use his "testing sei'vice " such as eommercial, industrial, civic, social, educational, and other groups, and states in his advertising: "Special discounts are available to candidates applying in groups of two or more. " (See Comm. Exh. 9 13) Since those \vho successfully pass his "tests" ate then entitled to their "equivalency degrees and diplomas" upon paying the required additional amount mass graduation even at a discount \vould be profitable to the individual applicants therefor as \vell as to J ayko. There is no evidence that this extensive program has yet been successful, hmvever, but Jay1\:o continues to offer it. his advertising he slyly invites attention to the cheapness of his equivalency degrees and diplomas " by so-called "comparison of costs (not including loss of income while attending classes), purporting to show how expensive it is on an annual basis to be educated by various types of accredited educational institutions CRAMWELL INSTITUTE, ETC. 269 242 Decision which give either residence or correspondence instruction to their students. See Comm. Exh. 13 , p. 4, where for one example only attendance at an "Ivy League" university is stated by Jayko to cost an annual average of $2 000. In 4 years this would amount to $8,000, plus loss of income as against Jayko s "college equivalency diplomas and degrees" obtained for a very nominal sum. It is the policy of the Federal Trade Commission Act and the duty of the Con1mission to prevent potential injury to the public by stopping unfair and deceptive acts and practices in their very inception. See Goodman v. , supra; Lichtenstein v. (C. A. 1952), 194 F. 2d 607, 610; Progress Tailo1'ing Co v. (C. A. , 1946), 153 F. 2d 103, 105. See also, C. v. Ralaclam, Company (1942), 316 U. S. 149 , 152 and Fashion Originator Guild v. C. (1941), 312 U.S. 457, 466, as to stopping unfair methods of competition in their inception. The evidence shows that degrees are lawfully conferred only by duly authorized, accredited and recognized educational institutions of higher learning as evidence of, and in recognition of, prescribed and substantially standardized scholastic attainments in various fields by students of said institutions. Unless such degrees are so \vell earned and conferred, they do not constitute degrees in the accepted 111meaning of said term and are of no meaning and effect whatever. A diploma is a mere paper evidence of the attainment of the degree, All of the evidence in this connection not only shows that respondent has no authority to award degrees or diplomas but also shmliTs that the educational qualifications of persons receiving respondent' s "equivalency degrees and diplomas" are in no manner equivalent to those acquired by attendance at accredited institutions of learning, as alleged in the second charge of paragraph 2 of the complaint. The evidence also shows that the use of the word "Institute as a part of respondent's trade names and references to the words "Institute" and "institution" in his advertising make false representation that respondent is conducting an institution of higher learning with an adequate and competent staff offering instruction in subjects of higher learning, as alleged in the sixth charge of paragraph 2 of the complaint.

The third charge of paragraph 2 of the complaint further alleges that respondent has falsely represented in his advertising that his "equivalency diplomas" are recognized by industry, commerce, and by federal and state organizations. Reference to such representations has already been made herein. Certainly such a :/: , Decision 55 F.

broad statement is not sustained. The respondent was unable to establish the acceptance of his "equivalency diplomas and degrees by commerce and business, and the evidence not only shows his operations are not recognized by Federal and State authorities but establishes that they are in violation of both Federal and State laws. In the fifth charge of the second paragraph of the complaint, it is alleged that respondent represents his degrees and diplomas will guarantee better paid positions. Respondent' answer admits that he made such representations but in his evidence he denies that he ever guaranteed anything in such regard. Respondent's advertising states: "Recognition is accorded Cram\vell Institute equivalence diplomas by the majority of employers * ; set out under a larger printed heading: "Employer recognition * 'j: * or your money refunded. (See Comm. Exhs. 9, p. 10, and 13 , p. 4. ) This is merely the old "Satisfaction guaranteed or money refunded" dodge \which has been -employed by the unscrupulous for ages past. Carefully studied in connection with the correlated language under the foregoing exhibits, pages 7 and 3, respectively, "our guarantee" in large print, it would appear that the only so-called guarantee is a warranty of return of money "if at any time within 30 days from date of issue" the applicant feels he does "not wish to keep * * * (hisJ college equivalency diploma, return it and your money will be refunded in full." Of course, the advertisements as read by the average person convey the idea and impression that jobs are guaranteed as a result of obtaining such "equivalency diplomas and degrees. But J ayko apparently does not even live up to this money guarantee strictly construed. Despite his advertising that money would be refunded if the customer is dissatisfied even after the diploma is issued, he testified that he had had only one complaint in his experience, and that the money was promptly refunded, but in his later testimony he indicates that it is only the $20 initial payment that is returned. He says that after the examination has been scored a notice goes to the person that he has either passed or failed; if he has passed, \ve will notify him that has passed and he is at liberty from that point on either to send us the rest of the money if he wants to complete his examination or he can drop the matter * * * I can t think of anyone failing to come back with the balance if he has passed. In other words, if he passes and wants his diploma he pays the rest of the money due J ayko and gets the diploma. In his "Summary of Law and the Evidence, " page 6, respondent CRAMWELL INSTITUTE, ETC. 271 242 Decision urges as to his customers that it "was their constitutional prerogative to part with their money, and a lllOdest fee at that just as they please without the intercession of the Federal Trade Commission." He also urges that his advertising is mere "puffing language" which "has long been accepted and certainly * * * (is) not the subject of any policing action by this Commission or any other enforcement agency, State wise or Federal wise. The respondent is sadly in error in both of these contentions. The advertising far exceeds legitimate "puffing and "in sum capacity to deceive and not actual deception is the criterion by which practices are tested under the Federal Trade Commission Act. Goodn~an v. , sup1'a at page 604. And it is well established that the old rule of "caveat emptor" does not apply in Federal Trade Commission proceedings and even in the realm of civil torts it "has been abandoned, in favor of the more ethical attitude that one dealing with another in business had the right to rely upon representations of facts as the truth. Goodmwn , sup1'a also at page 604.

Respondent advertised that "Cramwell Institute of Massachusetts has devised an Educational Testing Systenl that has helped thousands of students and mature adults to obtain evidence of their educational level and specialized knowledge * * * this test, if passed successfully leads to the College Equivalency Diploma Bachelor degrees in several subjects of higher learning. Respondent, in the face of this plain advertisement which he ac1ll1itted he published, denies it totally in his testimony. He was asked if through the medium of oral or written advertising" he ever represented to the public that he had issued thousands of diplomas, and his answer was: "Never; nowhere in our literature is that statement made and I have never stated such thing with reference to diplomas. It is the printed word against his selfserving denial. This establishes the truth of the fourth charge in paragraph 2 of the complaint.

The evidence sho\vs that all of the charges of the complaint are fully established and that respondent has made fraudulent claims respecting his authority to award degrees and diplomas that those receiving his diplomas have educational qualifications equivalent to those granted from accredited institutions of learning, that his business is not an institute but is a commercial enterprise awarding degrees and diplomas for profit, that he has grossly exaggerated the number of persons who have been awarded his diplomas and degrees, that such diplomas are not Decision 55 F.

generally recognized by industrial, commercial, Federal or State organizations, and respondent does not in fact guarantee his customers better paid positions when they receive his "equivalency diplomas.

The evidence shows further that in the course and conduct of his business respondent is in direct and substantial competition in commerce with other individuals and with corporations, firms and accredited institutions of learning which are engaged the sale of legitimate printed test materials, and is particularly in competition with accredited institutions of learning in selling his false and pretended "equivalency diplomas and degrees. The use by the respondent of the several false, misleading, and deceptive statements, representations, and claims set forth in his advertising matter has had, and now has, the tendency and capacity to mislead and deceive members of the public into the belief that such statements, representations, and claims were and are, true and to induce substantial number thereof to subscribe to, and to purchase, respondent's said printed test materials. The evidence also sho\vs that members of the public have actually been misled to their damage by respondent's said advertising. As a result thereof, substantial trade in commerce , has been, and is being, unfairly diverted to respondent from his competitors, and substantial injury has been, and is being, done to competition in commerce.

The examiner has already recited much of the testimony and statements of J ayko which clearly disclose his lack of competence and ability to conduct his business which is challenged in this proceeding. It also sho\vs his desire to operate such business free from any State or Federal regulation. In evaluating these matters however, the examiner has had the additional advantage of an excellent opportunity to observe the respondent closely, both on and off the witness stand throughout the three days of hearing. Respondent testified extensively on three occasions, once on each day of the hearing. The cold record does not reveal respondent's deficiencies as a \vitness. Giving due credit to J ayko for the tension which is usually attenchl11t upon one under charges such as those in this proceeding, he \vas, nevertheless, unusually vague, hesitant, and uncertain in his testimony, and the record itself is replete \with answers which show that he did not seem to understand some of the simplest and clearest questions put to him by either counsel. His own counsel was frequently and somewhat testily required to stop his "speeches" and get him back ::: :::

CRAMWELL INSTITUTE, ETC. 273 242 Decision to answering the question. In substance, he evaded many pertinent inquiries by long, irrelevant, and equivocal answers. This , was undoubtedly because he was attempting to discuss and explain something which was so speculative and nebulous that he could not give true responses. Even a wise man cannot make something out of nothing. Frequent recesses \were required because of J ayko s uncertainties and his inability to find certain documents he thought \were in his brief case and to which he \vished to refer, which documents were apparently poorly arranged. By permission of the examiner ::md with generosity on the part of counsel supporting the complaint, his own counsel used leading questions extensively in order to ultimately terminate his evasive, lengthy, and largely irrelevant testimony. ' His wife was near at hand to assist hin1 and frequently did so with suggestions and promptings. His testimony with respect to the material matters inquired of him was so vague, rambling, and uncertain as to fully \-varrant the finding, and the examiner does find, that it is not of credible value on material matters except in such few particulars as it is corroborated by other reliable toevidencedeterminein the hereinrecord. that\Vhiletheit isrespondentunnecessaryhasunderdeliberatelythe law sought to deceive the public, it is certainly evident from the record that he has succeeded in deluding himself as to his own importance in the field of education. From the most charitable viewpoint, J ayko s testimonial assertions, by and large, indicate that Truth and he are utter strangers. There are many instances in the record of his recklessness with the facts in his advertising in addition to those already discussed in this initial decision. For example, mnong such representations, he blatantly told the public: "Remember: This system of service advancement is guaranteed :;: it helps you toward promotions and better pay, or your money is refunded in full. This guarantee is backed by the U.S. Government Postal Laws. (See Commission s Exhibit 21A. ) The examiner takes official notice that there is no such guarantee.

Again, in another advertisement (Exhibit 9 , a booklet purporting to be copyrighted in 1956 , on p. 8), he boldly asserts: The college equivalency diplomas awarded by this Institution are backed by an enviable reputation in human resources engineering, a field in which members of its staff have pioneered for over a quarter of a century." This is patently false since J ayko, who is the "Institution " testified that he \vas born in 1917. A quarter Decision 55 F.

of a century back of the 1956 copyright date of the said advertising booklet takes one back to the year 1931. The respondent, who claims credit for originating the unique development of "college equivalency diplomas" and "college equivalency degrees" was at that time only about 14 years of age and out on the farm after leaving school in the seventh grade in disgust and' boredom. J ayko is certainly entitled to defend himself in this proceeding and nothing is taken against him by that fact alone. But vvishes to operate entirely free from any regulation. The record shows that he was continuing his advertising even between the hearings when he, for the first time, sent out with his other literature his new definition of "equivalency diplomas and degrees." The examiner also takes official notice that in a further effort to circumvent and to avoid the impact of any decision of the Commission upon him, J ayko has, since the last hearing, filed his application for incorporation of the "Cramwell Research Institute. See North Adams (l\iassachusetts) T1' anscript" July 29 1957.

Respondent has generated within himself an afflatus which is astounding. He offers his "equivalency college diplomas and degrees" not only in liberal arts and sciences but in many specific areas of professional specialization, in addition to aeronautical science, with which he started and continued for some years although the record does not show that he ever operated an airplane or had any more than a few n1months of theoretical or practical contact with flying. He offers Bachelors and Masters degrees in accounting, business administration, business law, personnel Inanagement building construction engineering, aeronautical engineering, electronics, mechanical engineering, and general science, as well as a liberal arts education consisting of language social studies, general science, world literature, and mathematics. (See Commission s Exhibit 9, pages 10-12. ) With boundless ambit he also offers college equivalent certification in any areas not specifically listed by him (id. p. 13). He is now developing tests" in civil engineering and has already flirted with the idea of qualifying students of chiropractic. With his claim to almost universal knowledge, left unrestrained, under his present intentions, as one purportedly learned in physiology he may offer equivalency" degrees in medicine, and as an alleged physicist he may offer "equivalency" degrees in the development and use of fissionable materials. while he himself offered correspondence courses in the field of aeronautics for some years, he dropped these CRAMWELL INSTITUTE, ETC. 275 242 Decision about 1951 , so he claims, in favor of his superior alld quicker tests " as he says, because "the superior individual, the people we found didn t need courses. They needed guiding and counseling, which eventually resulted in his "tests. " Jayko now looks with strong disfavor on correspondence schools. Furthermore, he has but little regard for, or patience with, regular courses of study in accredited institutions. Although he achieved his own collegiate degrees the hard way and over a very long period of time established andhe deprecates the students and faculties of recognized colleges and universities. For example, after very mildly suggesting to his prospects they should attend college if they could, he then says: "Most employers regard self-educated people holding College Equivalency Diplomas with far greater esteem than they regard those who drifted through formal college courses through someone else s motivating influence. (Com. Exhs. 9, p. 9 , and 13, p. 2) Respondent continues to insist upon his right to operate his business free frolll any public regulation. He has disclosed in this record that he believes this proceeding is a part of a persecution against him by or on behalf of "certain groups" and not a justified prosecution. He seems to have no conception of the fact that this Commission acts only in the public interest. In his testimony he vaguely states: "It was just about 1951 I was investigated in the other hearing." There is nothing in the record to indicate what this other hearing \vas, but it may be inferred that since Jayko in 1951 desisted from pushing his correspondence courses in Hcronautical science and took a teaching position for a time to develop his theories that some authority, State or Federal, had conducted a hearing vvith reference to the validity of his said correspondence courses. In referring to the development of his current business, he stated that "because of certain interference from certain groups, our prog-rese has been somewhat slo\ver than what I planned. " In line with this testimony and shortly after it was given on the seeoEd day of the hem"ing, \"vhile J ayko was still testifying on direct examination, a long recess was necessitated by reason of his suddenly breaking into an apparently unconhad been stopped trollable flo\v of tears. After his '.veeping finally by the soothing comfort of his vv'ife, he suddenly strode about the hearing 1'00111. 11luttering threats and illlprecations against L10 years of age, his r.ttitude unnan1ec1 enemies. Although nO\N toward authoritative regulation has not changed in more than a quarter of a century. He is still the young boy who after "one ( Conclusion 55 F.

year or so" in the seventh grade refused to proceed further in school and went home because he knew more than his teachers did. It would be a travesty upon public rights to permit the respondent, as one who admits he has "difficulty in rationalizing his position as to the use of the words ' equivalency degree Summary of Law and the Evidence " pp. 8-9), to continue selling such degrees under any corporate cloak or otherwise. The public interest in this proceeding is manifest since it involves a pollution of the whole stream of American educational standards by respondent' s false, misleading, and deceitful practices in commerce in regard thereto. This proceeding is not instituted on behalf of either or both of the two categories of competitors which respondent refers to ("Summary of Law and the Evidence," p. 6) as the lVlassachusetts Department of Education and so-called competitors of his in the testing service business. The evidence relating to the substantial volume of respondent's interstate business and advertising practices fully justify the issuance of the following order.

There being jurisdiction of the person of the respondent, upon the findings of fact hereinbefore made, the hearing examiner makes the follo\ving conclusions of law: 1. The acts and practices of the respondent hereinabove found to be false, misleading, and deceptive are all to the prejudice and injury of the public and constitute unfair and deceptive acts or practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. 2. The Federal Trade Commission has jurisdiction over all of the respondent's acts and practices which have been hereinabove found to be false, misleading, and deceptive. 3. The public interest in the proceeding is clear, specific and substantial.

Upon the foregoing findings of fact and conclusions of la\v the following order is hereby entered:

ORDER It is ordered That respondent, Joseph J ayko, individually and now doing business under the names of Cram well Institute and Cramwell Research Institute, or under any other name, and respondent's representatives, agents and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution in commerce, as "commerce CRAMWELL INSTITUTE, ETC. 277 242 Opinion is defined in the Federal Trade Commission Act, of printed test material or other printed matter, do forthwith cease and desist from:

1. Representing, directly or by implication: (a) That respondent has authority to award degrees and diplomas;

(b) That the educational qualifications of persons awarded degrees and diplomas, or either of them, are equivalent to the educational qualifications acquired by those attending accredited institutions of learning;

(c) That the certifications or diplomas issued are recognized by industry or commerce or by Federal or State organizations; (d) That the degrees and diplomas, or either of them, awarded by respondent will guarantee better paid positions and jobs. 2. Misrepresenting the number of persons who have purchased respondent' s tests or the number of diplomas which have been awarded.

3. Using the word "Institute" as a part of any corporate or trade name or in any other manner, or any word of similar import and meaning in connection with his business. OPINION OF THE COMMISSION By GWYNNE, Chairn1an :

This matter is before the Commission on (1) the appeal of respondent from the initial decision a11d order, and (2) respondent' s motion to set aside the initial decision and remand the case, , in the alternative, reopen the case for the receipt of newly discovered evidence.

Appeal From the Initial Decision and Order The complaint charges respondent with violation of the Federal Trade Commission Act by the making of false representations in connection with the sale of printed material, consisting of tests designed to determine the knowledge and ability of persons regarding certain specific subjects. The passing of such tests was made the basis for issuance of "equivalency diplomas" and degrees as hereinafter described.

The false statements charged against respondent in the complaint and which are the basis of the initial order are as follows: 1. That respondent has authority to award degrees and diplomas. Opinion 55 F.

2. That the educational qualifications of persons awarded degrees and diplomas by respondent is equivalent to those acquired by attendance at accredited institutions of learning.

3. That the certification or diploma issued by respondent is recognized by industry, commerce and by Federal and State organizations. ' 4. That thousands of persons have purchased respondent's material and have been awarded diplomas.

5. That the degrees and diplomas awarded by respondent \vill guarantee better paid positions and jobs.

6. Through the use of the word "Institute " as a part of the trade names Cramwell Institute" and "Cramwell Research Institute" and references to the use of the words "Institute" and "Institution" in his advertising, that respondent is conducting an institution of higher learning with a staff of competent, experienced and qualified educators offering instruction in the arts sciences and subjects of higher learning. In his answer, respondent admits the allegations contained in paragraph 2, subparagraphs 3 and 6, but denies, in \-whole or part, the remaining allegations. He also denies in toto that such allegations were false, n1misleading and deceptive. The initial decision reviews the evidence'2 as to each matter in controversy. Only a brief summary thereof \vill be given here. From about 1944 to 1950 or 1951 , respondent engaged business as "Air Institute. This business consisted of compiling and selling courses in air navigation. In about 1951 respondent broadened his program to include testing procedures and abandoned the name " Air Institute" and adopted the names Cramwell Institute " or "Cramwell Research Institute." Respondent also' claims to have operated a publishing business with various trade names, such as "Cram well Books Cramwell Publishing Company, " etc.

At the time of the hearing, respondent operated his testing service in an office consisting of t\vo rooms and a foyer, loc.ated in Adams, l'/Iass. He had a reference library of 300 to 500 volumes. He had no laboratory and no class rooms. The staff consisted of his wife as secretary, and four consultants on a part-time basis, two of \whom were employed full time commercially as electrical engineers, and the other two as full time teachers. The amount of time and money spent by respondent on these consultants appears to have been relatively small.

Upon receipt of app1icatiol1s, respondent prepares written tests which are mailed to applicants and the questions thereon ans,vered in vvriting, usually before a designated impartial person. Respondent then grades the papers and in some cases, issues his equivalency diplomas. He has tested 302 persons and issued 200 diplomas.

CRAMWELL INSTITUTE, ETC. 279 242 Opinion Respondent offers "college equivalency diplomas" in the following, among other, areas: business administration, business law personnel management advertising, English language, aeronautical science and engineering, and general science. The type of docurnent issued is indicated in the following in evidence as an exhibit.

CRAMWELL INSTITUTE Educational Testing System To all before whom these letters may come, greeting Be It Known That JOHN ZELEM having satisfactorily completed the requirements comparable in accredited college curricula in GENERAL SCIENCE Degree of Bachelor of Science prescribed for certification by this Institution, is awarded this College Equivalency DIPLOMA as an honorable testimonial of attainment. Given at Adams, Massachusetts, this 4th day of Nov. 1954 (s) Joseph Jayko Di1' ect01' of Education.

In the educational field, the words "diploma" and "degree have come to have a \-vell-established meaning. A diploma is a document issued by an educational institution witnessing the fact that the grantee has met certain requirements of the institution. These are often the passing of examinations, together with attendance at classes and compliance generally with the established discipline. It is a matter which is handled by the respective states, either through general law or by agencies to whom the power has been delegated. The respondent does not claim that he has authority to issue diplomas within the above meaning of the tern1. He claims that through his method of testing, he is able to detern1ine whether an individual' level of intelligence is equivalent to that of a person who has completed the requirements for a standard diploma and that his "diplomas" are issued on that basis. However, his representations go beyond that, and either expressly or impliedly assert that his equivalency diplomas are comparable to those issued by educational institutions and are equally acceptable to interested parties. For example, in connection with his operations, respondent disseminated in commerce advertising brochures, letters, etc. in which he made statements, of which the following are typical: :j: :;: ::::;: :;:: ::::;::. ::::;:::: :;::;:.: :;: :;: ; ::: Opinion 55 F.

Would you like a raise in salary? Would you like a better job? Are you interested in a promotion? Are you always left behind when promotions are made in your department? Do you feel secure in your present job? Are you in constant fear of being laid off to make room for someone else? Do you want more social prestige? * ::: You know the answers. But regardless of how you answer these questions, your employment status can be improved improving your educational status. Have you ever taken the trouble to provide your employer with evidence showing your educational growth since leaving school or coming to work for him? :I: :I:

You may possess the equivalent of a college education in your field of endeavor. The Cramwell College Equivalency Diploma will provide the evidence you need to prove you have superior ability and help put you in line for real promotion.

Remember: This system of self-advancement is guaranteed. ::: It helps you toward promotions and better pay or your money is refunded in full. This guarantee is backed by the U. S. Government Postal Laws. DOUBLE YOUR CHANCES for promotion with a College Equivalency Diploma-A warded through certification of your on-the-job educational development. Business Administration, Liberal Arts, etc. '~londerful opportunities. Qualify by comprehensive examination at home. No courses. Free details, Cramwell Institute, A.B.-7, Adams, Massachusetts. :I:

Cramwell Institute has devised an educational testing system that has helped thousands of students and mature adults to obtain educational level and specialized knowledge by taking a monitored test \Ve agree with the finding of the hearing examiner that the false and deceptive character of the statements alleged in paragraph 2 of the complaint have been established by the evidence. II.

Respondent' s Motion The motion to set aside the order and remand the case was based in part on the claim that the findings in the initial decision are not made in accordance 'with the Administrative Procedure Act. We think that the findings cover the ultimate facts and are adequate. Alab(//lua G?'ent Smrthern R. R. Co. S. (1950), 340 U. S. 216; Capital, Transit Co. v. S. (1951), 97 F. Supp. 621; Coyle Lines S. (1953), 115 F. Supp. 272. Respondent also objects to the general tone of the initial de6s1on, objects to certain statements and "innuendoes" contained therein and refers to it as "decision by assumption conclusion and innuendo." We have examined the record with CRAMWELL INSTITUTE, ETC. 281 242 Opinion care, and conclude that respondent had a fair hearing, that the examiner gave him adequate opportunity to present his case and to cross-examine witnesses testifying for the complaint. conclude that the ultimate findings are well supported by the record. We do not, however approve of some of the language contained in the initial decision.

Respondent' s motion to reopen the case for the receiving of newly discovered evidence is based on three documents. ( 1) Copies of portions of the Federal income tax returns respondent showing that Cran1well Institute operated at loss. (2) "Meaning and Use of the Term Institute" prepared by Donald O. Bolander, M. Director of Education, Career Institute.

(3) Copies of certificate from the Secretary of Massachusetts showing that, as of July 19, 1957, respondent Joseph Jayko and six others incorporated as Cramwell Research Institute for the following purpose:

To conduct research in the fields of education industry and commerce. To promote the development of better methods for the identification, evaluation and classification of human aptitudes and achievements related to commercial industrial, and national defense needs. To develop more efficient methods for the utilization of the educational resources in the United States through human resources engineering.

The Federal income tax returns were obviously known to respondent at all times, or at least the, information contained therein could have been discovered by the exercise of reasonable diligence. In any event, the proposed evidence would not material. The evidence in the record shows that respondent' representations had the tendency and capacity to deceive and that an action to prevent them is in the public interest. Whether respondent made 01' lost money in carrying on his business would have no bearing on any of the issues in the case. The document above referred to prepared by Donald O. Bolander \-vas received as an exhibit in Docket 6515 Chicago School of Nursing, Division of Cm' ee?' Institute. It contains a list of 629 organizations using the term "institute" as part of their trade name. Included in the list are a large number listed as "Technical Trade, Vocational and l\1iscellaneous Private Schools. Included are some correspondence schools. Other organizations are grouped under the heading, "Trade Associations Research and Product Promotion Groups, Etc.

The word "institute" both as a verb and as a noun has a wide , Opinion 55 F.

variety of meanings. It is often used by organizations in the strictly educational field. However, it is also used by other organizations as an examination of the telephone directory of any large city will demonstrate.

When used in the educational field, the 'word seems to connote a group of people organized for the purpose of education and carrying out that purpose as schools ordinarily do. For example in B1'a:nch v. Fede?' al Trade Cmrnnission 141 F. 2d 31, in which respondent was charged with n1isrepresentation by the use of the term in connection with its courses, the Court said: Petitioner s school is neither a university nor an institute. It has no entrance requirements, no resident teachers, no library, no laboratory, and no faculty.

The word "institute" by itself does not necessarily connote an educational institution, although it is often used by organizations in the educational field. The inquiry in the instant case is limited by the issues presented by the pleadings. The complaint charged that by the use of the \\lord "institute " respondent represented that he " is conducting an institution of higher learning with a staff of competent experienced and qualified educators offering instructions in the arts, sciences and subjects of higher learning. In his answer, respondent admitted that through the use institute," he had made the representations as alleged. As to the truth or falsity of the representations, there is no substantial dispute. Respondent admitted that he did not provide any courses of instruction in connection with his examination procedure other than recommending titles of books available to applicants through public libraries, etc. His services are limited exclusively to the evaluation of an individual' s educational background and intellectual potentialities.

Subsequent to the closing of the case and taking of testimony, respondent joined with others in organizing under Massachusetts law Cramwell Research Institute " a corporation not for profit. The right to issue educational diplomas and degrees in Massachusetts is regulated by the laws of that State viThich l3Y down progrmn and procedure in regard thereto. Unf~ir methods of competition in commerce, and unfair or deceptive acts or practices in commerce are by Federal la\\' n1ade matters over which the Federal Trade Commission has jurisdiction. This is true of the acts of respondent in regard to his equivalency diplomas and degrees which are the subject matter of the present complaint. A photostatic copy of the incorporation of Cramwell Research CRAMWELL INSTITUTE, ETC, 283 242 Order Institute which respondent now asks to present as newly discovered evidence would have no bearing on the issues in the present case. Nor would any of the documents referred to in his motion have any bearing.

Respondent's motion and appeal are denied. The findings and order of the hearing examiner are adopted as the findings and order of the Commission. It is directed that an order issued in accordance with this opinion.

FINAL ORDER This matter having been heard by the Conlmission upon respondent' s appeal from the hearing examiner s initial decision as well as respondent's motion to set aside the initial decision and remand or to reopen for the receipt of newly discovered evidence, and upon briefs anJ oral argument in support thereof and in opposition thereto; and the Commission having rendered its decision denying the appeal and the motion and adopting the initial decision as the decision of the Commission: It is o?'dcred That the respondent, Joseph Jayko, shall, within sixty (60) days after service upon him of this order, file with the Con1mission a report, in \writing, setting forth in detail the lllanner and form in which he has complied with the order cease and desist contained in the initial decision. , Dec,ision 55 F.