Complaint

IN THE MATTER OF

HAMMACHER SCHLEMMER & CO., INC.

MPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SECTION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914 Docket 5410. Complaint, Dec. 27, 1945–Decision, Nov. 28, 1947

here a corporation engaged in the interstate sale and distribution of its “Gasconomy" device, designed to be clamped on the end of the exhaust pipe of automobiles and trucks, and, after discontinuing the sale thereof, in the sale and distribution of a similar exhaust pipe attachment which it called "Vacudex"; through advertisements in New York newspapers circulated generally among the purchasing public

Falsely represented that its said device, when attached to the exhaust pipe, would save gasoline and oil and increase the mileage obtained from a gallon of gasoline 10 to 20 percent, and even more in some instances; and would canse the motor to have quicker acceleration and to give better performance; and

›) Represented that the device had been installed upon hundreds of New York City official cars after exhaustive tests had proven its worth; when in fact no such tests had been conducted by the city or any department thereof, nor use thereof authorized or directed upon any official cars of the city; Fith capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the mistaken belief that such representations were true and into the consequent purchase of substantial quantities of said device:

leid, That such acts and practices were all to the prejudice and injury of the public, and constituted unfair and deceptive acts and practices in commerce. Mr. Joseph Callaway for the Commission.

Mr. Irving D. Lipkowitz, of New York City, for respondent.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Hammacher Schlemmer & Co., Inc., a corporation, trading and doing business as Hammacher Schlemmer, hereinafter referred to as respondent, has violated the provisions of said act and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Hammacher Schlemmer & Co., Inc., is a corporation, organized, existing and doing business under and by virtue of the laws

of the State of Delaware, with its principal place of business located 145 East Fifty-seventh Street, New York, N. Y. Respondent trad and does business under the name of Hammacher Schlemmer.

PAR. 2. Respondent is now and for more than 2 years last past, h been engaged in the sale and distribution of an exhaust muffler attac ment designated as "Gasconomy," advertised as a device to save gas line and effect other economies in the operation of automobiles a trucks. The device consists of a cone-shaped metal tube which clam on to the end of the exhaust pipe and in which are placed vanes set angles so that as the vehicle moves forward and air is forced into u cone, it presumably creates a spiral motion of the air in the exha pipe.

In the course and conduct of its business, the respondent causes sa product, when sold, to be transported from its place of business in t State of New York, to the purchasers thereof located in various oth States of the United States and in the District of Columbia. Respons ent maintains, and at all times mentioned herein has maintained, course of trade in said product in commerce among and between t various States of the United States and in the District of Columbia. PAR. 3. In the course and conduct of its business and for the purpo of inducing the purchase of said product in commerce, respondent ha made, and is now making, certain false, deceptive and misleadin statements and representations regarding said product by means o circulars and in advertisements inserted in New York newspapers cir culated generally among the purchasing public. Typical representa tions are as follows:

Definite tests of GASCONOMY by attaching it to all makes of autos of variou ages, show increases in mileage per gallon of from 10% to 20%-and even more in some instances also faster pick-up and smoother performance.

After exhaustive tests, several City Departments are using GASCONOMY on hundreds of their cars.

Does your car buck at low speed? Does the motor act sluggish when you want quick pickup? If so, your car is wasting gasoline. GASCONOMY attached to the exhaust pipe will correct these conditions.

PAR. 4. Through the use of the foregoing statements and representations and others similar, not specifically set out herein, respondent has represented, and is now representing, that the device designated as

ASCONOMY" when attached to the exhaust pipe of an automobile truck, will save gasoline and oil and increase the mileage obtained om a gallon of gasoline 10 to 20 percent and even more in some inances; that it will cause the motor to have quicker acceleration and ve better performance; that the device has been installed on hundreds New York City official cars after exhaustive tests had proven its orth.

PAR. 5. The foregoing representations are false, deceptive, and misading in the following respects: The device does not save gasoline oil or increase the mileage obtained from gasoline. It does not cause motor to have quicker acceleration or give better performance. No ficial cars of the city of New York have been authorized or directed use the device, nor has the city or any department thereof, conducted by tests of the device.

PAR. 6. The use by the respondent of the foregoing false, deceptive, nd misleading statements and representations, disseminated as aforeaid in connection with the offering for sale and sale of its said product, n commerce, has had, and now has, the capacity and tendency to, and loes, mislead and deceive a substantial portion of the purchasing public nto the erroneous and mistaken belief that said statements and repreentations are true and into the purchase of substantial quantities of aid product in commerce, because of such erroneous and mistaken belief.

PAR. 7. The aforesaid acts and practices of the respondent are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce, within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER

Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on December 27, 1945, issued and subsequently served its complaint in this proceeding upon respondent Hammacher Schlemmer & Co., Inc., charging it with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of said act. The respondent filed its answer, and thereafter a stipulation was entered into whereby it was stipulated and agreed that a statement of facts signed and executed by the respondent and Daniel J. Murphy, assistant chief trial counsel of the Federal Trade Commission, subject to the approval of the Commission, may be taken as the facts in this proceeding and in lieu of testimony in support of the charges of the complaint and in opposition thereto, and that the

Commission may proceed upon said statement of facts to make its report stating its findings as to the facts and its conclusion based thereon and enter its order disposing of the proceeding without any intervening procedure. Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint, answer, and stipulation, said stipulation having been approved, accepted, and filed; and the Commission, having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS

PARAGRAPH 1. Respondent Hammacher Schlemmer & Co., Inc., is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business located at 145 East Fifty-seventh Street, New York, N. Y. Respondent trades and does business under the name Hammacher Schlemmer. For a considerable period of time immediately preceding March 1943 respondent sold and distributed an attachment for the exhaust pipes of automobiles and trucks. This attachment was designated as "Gasconomy" and was advertised by respondent as a device to save gasoline and to effect other economies in the operation of automobiles and trucks. The device consisted of a conical metal tube which was clamped on the end of the exhaust pipe. In the conical tube were vanes set at angles so that as the vehicle moved forward and air was forced into the cone, it presumably created a spiral-motion of the air in the exhaust pipe. After respondent discontinued the sale of this "Gasconomy" device in March 1943, it began and continued until 1947 the sale and distribution of another exhaust-pipe attachment of similar construction called "Vacudex."

PAR. 2. In the course and conduct of its aforesaid business, respondent caused its said "Gasconomy" device, when sold, to be transported from its place of business in the State of New York to purchasers thereof located in various other States of the United States and in the District of Columbia and, during the time said device was marketed, maintained a course of trade in said device in commerce among and between the various States of the United States and in the District of Columbia.

PAR. 3. In carrying on its said business, and for the purpose of inducing the purchase of said device in commerce, respondent made certain false, deceptive, and misleading statements and representations

regarding its said "Gasconomy" device by means of advertisements inserted in certain New York newspapers circulated generally among Among and typical of such representations

the purchasing public.

Definite tests of GASCONOMY by attaching it to all makes of autos of various ages, show increases in mileage per gallon of from 10% to 20%-and even more in some instances-also faster pick-up and smoother performance.

After exhaustive tests, several city Departments are using GASCONOMY on hundreds of their cars.

Does your car buck at low speed? Does the motor act sluggish when you want quick pickup? If so, your car is wasting gasoline. GASCONOMY attached to the exhaust pipe will correct these conditions.

PAR. 4. Through the use of the aforesaid statements and representations, and others similar thereto but not specifically set out herein, respondent represented that its said device, when attached to the exhaust pipe of an automobile or truck, would save gasoline and oil and increase the mileage obtained from a gallon of gasoline 10 to 20 percent, and even more in some instances; that it would cause the motor to have quicker acceleration and to give better performance; and that the device had been installed upon hundreds of New York City official cars after exhaustive tests had proven its worth. These representations were false, deceptive, and misleading in that the device does not save gasoline or oil or increase the mileage which may be obtained from gasoline. It does not cause a motor to have quicker acceleration or give better performance. The use of said device has not been authorized or directed upon any official cars of the city of New York, and no tests of the device have been conducted by the city of New York or any department thereof.

PAR. 5. The use by respondent of the aforesaid false, deceptive, and misleading statements and representations in connection with the offering for sale of its "Gasconomy" device in commerce had the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous and mistaken belief that such statements and representations were true and into the purchase of substantial quantities of said device in commerce, because of such erroneous and mistaken belief.