Hargo Woolen Mills, Inc.

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IN THE MATTER OF HARGO WOOLEN MILLS, INC., ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION AND THE WOOL PRODUCTS LABELING ACTS Docket 8665. Complaint, Aug. 13, 1.965-Decision, Sept. , 1966 Consent order requiring four affliated New Hampshire and Vermont fabric manufacturers to cease violating the Wool Products Labeling Act by deceptively labeling and falsely invoicing their products. CO:\!PLAINT Pursuant to the provisions of the Federal Trade Commission Act, and the Wool Products Labeling Act of 1939, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that Hargo Woolen Mils, Inc" a HARGO WOOLEN MILLS , INC. , ET AL 717 716 Complaint corporation, WalJsford Mils, Inc., a corporation, and WalJsford Mills of Vermont, Inc., a corporation, and Benj amin H. Erskine and Walter T. Ransburg, individually and as offcers of said corporations; and Peter borough Mils, Inc. , a corporation, and Charles J, McGowan, individually and as an offcer of said corporation (all said corporations and said individuals hereinafter referred to as respondents) have violated the provisions of said Acts and the Rules and Regulations promulgated under the Wool Products Labeling Act of 1939, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1 . Respondent Hargo Woolen Mils, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal office and place of business located at Keene, New Hampshire. Respondent Wallisford Mils, Inc. , is a corporation organized existing and doing business under and by virtue of the laws of the State of J\ ew Hampshire, with its principal offce and place of business located at Keene, X ew Hampshire. Respondent Wallisford Mils of Vermont, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Vermont, with its principal offce and place of business located at North Montpelier, Vermont. Individual respondent Benjamin H. Erskine, and individual respondent Walter T. Ransburg are offcers of each of the foregoing corporate respondents. Said individual respondents cooperate in the formulation, direction and control of the acts, practices and policies of the corporate respondents. The offce and principal place of business of these individual respondents is the same as that of corporate respondent Hargo Woolen Mils, Inc. Respondent Peterborough Mills, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Hampsbire, with its principal offce and place of business located at Peterborough, New Hampshire. This corporation is owned by the principals of Hargo Woolen Mills, Inc. Individual respondent Charles J, McGowan is president-treas- , Inc., and to-urer of corporate respondent Peter borough Mils gether with tbe aforesaid individual respondents, formulates, directs and controls its acts, practices and policies. The offce and principal place of business of this individual respondent is the same as that of corporate respondent Peterborough Mills, Inc. Complaint 70 F.

PAR. 2. Subsequent to the effective date of the Wool Products Labeling Act of 1939, and more especially since January 1, 1962 respondents have manufactured for introduction into commerce offered for sale in commerce, sold, transported, distributed, delivered for shipment, and introduced into commerce, as "commerce is defined in said Act, wool products, as "wool products" are defined therein.

PAR. 3. Certain of said wool products were misbranded by the respondents within the intent and meaning of Section 4 (a) (1) of the Wool Products Labeling Act and the Rules and Regulations promulgated thereunder, in that they were falsely and deceptively labeled or tagged with respect to the character and amount of the constituent fibers contained therein, Among such misbranded wool products, but not limited thereto were wool products, namely, woolen fabrics, which contained substantially different amounts and types of fibers than were set forth on the labels thereto affxed.

PAR. 4. Certain of said wool products were further misbranded by respondents in that they were not stamped, tagged or labeled as required under the provisions of Section 4 (a) (2) of the Wool Products Labeling Act and in the manner and form as prescribed by the Rules and Regulations promulgated under said Act. Among such misbranded wool products, but not limited thereto were wool products with labels on or affxed thereto which failed to disclose the percentage of the total fiber weight of tbe wool product, exclusive of ornamentation not exceeding 5 per centum of the total fiber weight of (J) woolen fibers; (2) each fiber other than the woolen fibers if said percentage by weight of such fiber is 5 per centum or more; and (3) the aggregate of all other fibers. PAR. 5. The aforesaid acts and practices of respondents, were, and are, in violation of the Wool Products Labeling Act and the Rules and Regulations promulgated thereunder, and constituted and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act. PAR. 6. Respondents are now, and for some time last past, have been engaged in the offering for sale, sale and distribution of certain products, namely, woolen fabrics, to manufacturers and jobbers. In the course and conduct of their business, respondents now cause, and for some time last past, have caused, their said products, when sold, to be shipped from their place of business in New Hampshire and Vermont to purchasers located in various other BARGO WelOLEX MILLS , INC. , ET AL. 719 716 Decision and Order States of the United States, and maintain, and at all times mentioned herein, have maintained, a substantial course of trade in said products, in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 7. Respondents in the course and conduct of their business as aforesaid, have made statements on invoices and shipping memoranda to their customers misrepresenting the fiber content of certain of their said products.

Among such misrepresentations, but not Jimited thereto, were statements representing certain fabrics to be "90% Reprocessed Wool, 1070 Nylon 6071, Reprocessed Wool, 25% Manmade Fibers, 40% Wool, 4071, Reprocessed Wool, 1070 Acrylic 1070 Other Fibers " and 50ro Wool, 50% Rayon " whereas, in truth and in fact, the said fabrics contained substantially different amounts of woolen and other fibers than the amounts represented. PAR. 8. The acts and practices set out in Paragraphs Six and Seven have had, and now have, the tendency and capacity to mislead and deceive purchasers of said fabrics as to the true content thereof, and were, and are. all to tbe prej udice and inj ury of the public and of respondents' competitors, and constituted, and now constitute, unfair and deceptive acts and practices, in commerce within the intent and meaning of the Federal Trade Commission act.

DECISION AND ORDER The Commission having issued its complaint on August 13, 1965, charging the respondents named in the caption hereof with violation of the Wool Products Labeling Act of 1939 and the Federal Trade Commission Act, and the respondents having been served with a copy of that complaint; and The Commission having (July determined that in the circumstances the public interest would be served by waiver here of the provision of Section 2.4 (d) of its rule that the consent order procedure shall not be available after issuance of the complaint; and The respondents, except Charles J. McGowan, having executed an agreement containing a consent order, an admission of a11 the jurisdictional facts set fol.th in the complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and waivers and provisions substantially as required by the Con1mission s rules; and 720 FEDERAL TRADE CmIMISSION DECISIONS Decision and Order 70 F.

The Commission having considered said agreement and the affidavit attached thereto which affdavit states, among other things, that respondent Cbarles J, McGowan terminated his employment with respondent Peterborough Mils, Inc. , in 1962 and had no part during his employment in formulating, directing or controlling the acts, practices or policies of such corporate respondent: and The Commission having determined that the aforesaid agreement provides an adequate basis for appropriate disposition this proceeding, the agreement is hereby accepted, the following jurisdictional findings are made, and the following order is entered :

1. Respondent Hargo Woolen Mills, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal offce and place of business located at Keene, New Hampshil' Respondent Wallisford :Vlils of Vermont, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of New Hampshire, with its principal offce and place of business located at Keene, New Hampshire. Respondent Wallsiford Mills of Vermont, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Vermont with its principal offce and place of business located at North Montpelier, Vermont. Respondents Benjamin H, Erskine and Walter T. Ransburg are offcers of each of the foregoing corporate respondents and their address is the same as that of said corporate respondent Hargo Woolen Mills, Inc.

Respondent Peterborougb Mills, Inc" is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Hampshire, with its principal offce and place of business located at Peterborough, New Hampshire. This corporation is owned by the principals of Bargo Woolen Mils, Inc, 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ol'del'ed That respondents Bargo Woolen Mils, Inc., a corporation, and its offcers, Wallisford :viJs, Inc. , a corporation , Inc., a corpora-and its offcers, and Wallisford Mills of Vermont tion, and its offcers, and Benjamin B. Erskine and Walter T. HARGO WOOLEN MILLS, INC" ET AL 721 716 Dccision and Order Ransburg, individually and as offcers of said corporations; and respondent Peterborough Mils, Inc. , a corporation, and its offcers: and respondents' representatives, agents and employees directly or through any corporate or other device, in connection with the introduction or manufacture for intl'duction into commerce, 01' the offering for sale, sale, transportation or distribution in commerce of fabrics or other wool products, as "commerce and "wool product" are defined in the Wool Products Labeling Act of 1939, do forthwith cease and desist from misbranding such products by:

1. Falsely 01' deceptively tagging, labeling or otherwise identifying such products as to the character or amount of the constituent fibers contained therein. 2, Failing to securely affx to, or place on, each such product a stamp, tag or label or other means of identification showing in a clear and conspicuous manner each element of information required to be disclosed by Section 4 (a) (2) of the Wool Pl'ducts Labeling Act of 1939.

It is furthe1' orrlel' ed, That respondents Hargo Woolen Mills Inc., a corporation, and its offcers al1isford Mills, Inc., a corporatiou, and its offcers, and Wallisford Mills of Vermont, Inc. , a corporation, and its offcers, and Benjamin H. Erskine and Walter T. Ransburg, individually and as offcers of said corporations; and cspondent Peterborough Mills, Inc. , a corporation, and its offcers; and respondents' representatives, agents and employees directly or through any corporate 01' other device, in connection with the oti"el' ing for sale, sale, or distribution of woolen fabrics 01' other products in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting the character and amount of constituent fibers contained ill such products on invoices or shipping memoranda applicable thereto, or in any other manner. It i8 further ordered That the complaint insofar as it relates to respondent Charles J. McGowan be, and the same hereby is, dismissed.

It is fl",ther ordend That the respondents named in the order to cease and desist shall, within sixty (60) days after service upon them of this order, fie with the Commission a report in writing setting forth in detail the manner and form in whicb they have complied with this Dreier.

Complaint 70 F.