HILLMAN PERIODICALS, INC., ALEX L. HILLMAN, PHIL KEENAN, AND MORRIS B. LEVINE, AND NOVEL SELEC-] TIONS, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATI Y OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 5440. Complaint, May 29, 1946-Decision, Apr. 13, 1948

Where a corporation, three officers thereof, who controlled its advertising på cies and business activities, and its wholly owned subsidiary, engaged i the interstate sale and distribution of magazines, books, and other publice tions, including reprints of published books from which, in the course reprinting, they had deleted or caused to be deleted portions of the text usually condensing the books from some 75,000 words to 55,000 words m or less, so that their said reprints were abridged editions— (a) Falsely, deceptively, and misleadingly made use of such typical statements as "complete and unabridged," "a full-length novel," on the front cover of said abridged editions, without indicating in any way in the publication that the books were not complete reprints of the original, and thereafter while discontinuing the use of the former statement, continued the use the latter, without giving adequate and sufficient notice to the purchas public as to said reprints being abridgements, through the statement, is small and inconspicuous type on the reverse of the title page, of some sui statement as * * has been cut to speed the story" or

represents an abridgement of the original to speed the action”;

(b) Failed to disclose in advertising materials issued by them with reference to said reprints which they sold and distributed, that the publications advertised were in fact abridged editions; and

(c) Substituted new or altered titles which differed from the original titles reprints of books published by them from time to time, without giving any adequate and sufficient notice of said fact to the purchasing public throug use of some such statement in small and inconspicuous type on the revers of the title page as * * was originally published under the tite

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of," etc.; with tendency thereby to cause purchasers to buy said books, titles of which had been changed, as different publications; Capacity and tendency of which false, misleading, and deceptive representations were to mislead and deceive a substantial portion of the purchasing publie into the mistaken belief that books and publications offered for sale by them were complete and unabridged editions of those published theretofore, and had not been previously published under any other title than that which appeared thereon:

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

Before Mr. Randolph Preston, trial examiner.
Mr. John M. Russell for the Commission.

Complaint

Ir. Henry E. Schultz and Mr. Joseph Schultz, of New York City, respondents.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act 1 by virtue of the authority vested in it by said act, the Federal de Commission, having reason to believe that Hillman Periodicals, .. a corporation, Alex L. Hillman, Phil Keenan, and Morris B. ine, individually and as officers of Hillman Periodicals, Inc., a poration, and Novel Selections, Inc., a corporation, hereinafter rered to as respondents, have violated the provisions of said act, and appearing to the Commission that a proceeding by it in respect reof would be in the public interest, hereby issues its complaint, ing its charges in that respect as follows:

PARAGRAPH 1. Respondent, Hillman Periodicals, Inc., is a corporaa organized, existing, and doing business under and by virtue of laws of the State of New York, and respondents, Alex L. Hillman, l Keenan, and Morris B. Levine, individuals, are president, vice sident, and secretary, respectively, thereof. Respondent, Novel ections, Inc., is a corporation organized and existing under the laws the State of New York and is a wholly owned subsidiary of rendent, Hillman Periodicals, Inc. The individual respondents have ninant control of the advertising policies and business activities the corporate respondents and all of the respondents have corated with each other and have acted in concert in doing the acts things hereinafter alleged. Respondents' office and principal ce of business is located at 1476 Broadway, New York, N. Y. PAR. 2. Respondents are now and for more than 2 years last past e been engaged in the business of selling and distributing magaes and books. Respondents obtain from publishers or authors of tain books the right to sell reprints thereof, and in reprinting them having them reprinted, delete or cause to be deleted portions of the t so that such reprints are abridged.

Respondents cause their said products when sold, to be transported m their place of business in the State of New York to the purchasers reof at their respective points of location in various other States the United States and in the District of Columbia. Respondents intain, and at all times mentioned herein have maintained, a course trade in their said products in commerce between and among the ious States of the United States and the District of Columbia. PAR. 3. In the course and conduct of their aforesaid business in contion with the sale and distribution of their said books in commerce

and as an inducement for the purchase thereof by members of the purchasing public, respondents caused to be printed on the front covers of their books statements of which the following are typical:

COMPLETE AND UNABRIDGED

A FULL LENGTH NOVEL

and prior to about February 1943 failed to indicate in any way that they are not complete reprints of the original books from which they were copied; however, respondents have subsequently to said date caused to be printed on the reverse side of the copyright pages of their abridged books in small and inconspicuous type, statements of whi the following is typical:

This detective novel has been cut to speed the story.

Respondents have also disseminated advertising material concern ing their said abridged books which contains no disclosure that they are abridged. Respondents in certain instances have substituted new or altered titles on their said books for the original titles of the book from which they were copied, and have failed to disclose said origina titles other than by the use of a statement in small and inconspicuous type on the reverse side of the copyright pages of their books, of which the following concerning their book entitled "Death Wears A Bridal Veil," is typical:

This novel was published originally under the title "Seven Were Veiled."

PAR. 4. The disclosures on the reverse side of the copyright page of respondents' books, that they are abridged and of the titles of the original books from which they were copied, do not constitute adequate notice thereof, as they appear in small, inconspicuous type not notice able to the average purchaser.

PAR. 5. Through said use of the expressions "complete and una bridged" and "full-length novel," and others similar thereto, and br their failure to disclose conspicuously and completely on the covers and title pages of their said books and in the advertising thereof, that they are abridged and the titles of the original books from which they were copied and that in certain instances new or altered titles have been substituted for the titles of said original books, respondents represent, directly and by implication, that their books are unabridged: that they are complete reprints of the original books from which they were copied; that they are books that have not been previously published.

PAR. 6. The statements and representations used and disseminated by the respondents in the manner above described are deceptive, false,

Findings

misleading. Respondents' said books are not unabridged; they not complete reprints of the original books from which they were ied; they are not books that have not been previously published. n truth and in fact, the books respondents sell are usually condensed n about 75,000 words in the originals thereof to about 55,000 words, na possible variation of 5,000 words, more or less.

"AR. 7. The use by the respondents of the foregoing false, misleadand deceptive statements and representations disseminated as esaid has had and now has the capacity and tendency to, and does, lead and deceive a substantial portion of the purchasing public into erroneous and mistaken belief that all of such representations are , and induces a substantial portion of the purchasing public, bese of such erroneous and mistaken belief, to purchase respondents' idged books in said commerce.

AR. 8. The aforesaid acts and practices of respondents as herein ald are all to the prejudice and injury of the public, and constitute air and deceptive acts and practices in commerce within the intent meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER

ursuant to the provisions of the Federal Trade Commission Act, Federal Trade Commission on May 29, 1946, issued and subsently served its complaint in this proceeding upon the respondents, Iman Periodicals, Inc., a corporation; Alex L. Hillman, Phil Kee, and Morris B. Levine, individually and as officers of Hillman iodicals, Inc.; and Novel Selections, Inc., a corporation, charging m with the use of unfair and deceptive acts and practices in comce in violation of the provisions of said act. After the issuance said complaint and the filing of the answer of the respondents reto, testimony and other evidence in support of and in opposition The allegations of said complaint were taken before a trial examiner the Commission theretofore duly designated by it, and said testimy and other evidence were duly recorded and filed in the office the Commission. Thereafter, this proceeding regularly came on final hearing before the Commission upon said complaint, answer reto, testimony, and other evidence, recommended decision of the al examiner and exceptions filed thereto by the respondents, brief d in support of the complaint, and oral argument of counsel; and Commission, having duly considered the matter and being now ly advised in the premises, finds that this proceeding is in the erest of the public and makes this its findings as to the facts and conclusion drawn therefrom:

PARAGRAPH 1. Respondent, Hillman Periodicals, Inc., is a corpora tion organized, existing, and doing business under and by virtue of the laws of the State of New York, with its office and principal pla of business now located at 535 Fifth Avenue, New York, N. Y.

Respondents, Alex L. Hillman, Phil Keenan, and Morris B. Levite are individuals and are president, vice president, and secretary, re spectively, of respondent Hillman Periodicals, Inc.

Respondent, Novel Selections, Inc., is a corporation organized and existing under the laws of the State of New York and is a wholly ow subsidiary of respondent Hillman Periodicals, Inc.

The individual respondents have dominant control of the adver tising policies and business activities of the corporate respondents, and all of the respondents have cooperated with each other and have acted in concert in doing the acts and things hereinafter described.

PAR. 2. Respondents are now, and for several years last past have been, engaged in the business of selling and distributing magazine books, and other publications. Among the publications sold and distributed by the respondents are reprints of published books from which the respondents, in reprinting or in having them reprinted delete or cause to be deleted portions of the text so that such reprint are abridged editions.

Respondents cause said publications, when sold, to be transporte from their place of business in the State of New York to the par chasers thereof located in various other States of the United State and in the District of Columbia. Respondents maintain, and at a times mentioned herein have maintained, a course of trade in thei said publications in commerce among and between the various State of the United States and in the District of Columbia.

PAR. 3. In the course and conduct of their aforesaid business ia connection with the sale and distribution of their said reprints of abridged editions of various books and as an inducement for the pur chase thereof by members of the purchasing public, respondents, prior to 1943, caused to be printed on the front covers of said abridgededitions statements, of which the following are typical:

Complete and Unabridged

A full-length novel

In the publication of said books, the respondents failed to indicate ia any way that said books were not complete reprints of the original books from which they were copied.