and filled orders for same with an inferior quality of goods differing in make and kind from that advertised. It is also charged that respondents advertised spectacles free to prospective users when in fact such spectacles were not furnished free. It is further alleged that respondents represented that an eye-tester sent to customers by them was endorsed by the world's most famous specialist and by eye hospitals and that by its use better glasses could be furnished by mail than the average optometrist could furnish in his own office, as well as other misrepresentations in regard to said device. Respondents filed an answer denying the allegations of the complaint. MISREPRESENTATION OF PATENT MEDICINES A number of complaints were issued involving alleged misrepresentations and exaggerations of the therapeutic effects and uses of so-called "patent" medicines. One such complaint involves a preparation which is alleged to be misrepresented in advertising in that it is represented to be a remedy for or to relieve various diseases and bodily ailments for which said medicine is not adapted, or only to a slight extent or in a very limited way. It is also alleged that by the use of the word "health" in the name of the product it is represented as being a general health restorative when in fact it has only a limited therapeutic use. Respondent in his answer denied that his representations are misleading and alleged that they truthfully and accurately state the medicinal value of his medicine. MISNOMER OF FLOOR FINISH The question of misleading use of the name to describe a floor finish is involved in a complaint issued by the Commission in July 1932. The product in question is described as "liquid wax", but it is alleged that the liquid, which contains in solution a certain percentage of solids other than wax, when applied, does not leave a film of pure wax, or one of the same characteristics as pure wax, and thus is not properly named. It is alleged that the expression "liquid wax" as applied to a preparation for application to floors is commercially and popularly known as a product composed solely of wax in solution with some solvent which leaves a film of pure wax on the surface to which it is applied. The respondent filed an answer denying generally the allegations of the complaint and contending that the use of said expression was justified by general usage and that it truly and accurately describes its product. RADIOACTIVE DEVICE On October 24, 1932, a complaint was issued charging a corporate respondent with misrepresenting that a container manufactured and sold by it would cause water placed therein to become radioactive and that the use of the same would cure or benefit persons suffering from numerous ailments, when in fact said device did not contain radium or any radioactive substance in sufficient quantity to impregnate water placed therein with sufficient radioactive substance to cause it to have any therapeutic effect when used as directed. It is further alleged that radio active substances are dangerous and apt to result in harm when taken internally unless taken under the direction and care of a competent physician. An answer signed by the former secretary of respondent company alleges that the company has quit business and asserts that the allegations of the complaint could be refuted if hearings should be held. REPRESENTING WINDOW SHADE "SECONDS" AS "MILL RUN" A respondent corporation engaged in the sale and distribution of window shades in interstate commerce is alleged in a complaint issued by the Commission to have represented window shades sold by it as having been made from first-quality cloth when in fact such shades were made from defective or partially defective cloth known to the trade and purchasing public as "seconds." This representation is alleged to have been made by use of the expression "mill run" in labeling and describing the shades. Respondent in its answer says that it has discontinued the term "mill run" in connection with its shades and consented to the issuance of an order to cease and desist from the use of the term in connection with "window shades which do not represent the entire and true run of the mill." OTHER TYPES OF MISREPRESENTATION Other cases in which the Commission during the year has issued complaints involving misrepresentations include a wide range of commodities among which are renovated second-hand hats sold without disclosure of the fact that they are second-hand, men's shirts, shoes, plants, flowers and bulbs, seed potatoes, health foods, rat and mice exterminators, malt sirup, tackers and staples, corn cure, treatment for venereal and blood diseases, substitute coffee seed, candy lottery schemes, olive oil, dog medicines, device and medicine for deafness, scissors, poultry remedies, stock and animal medicines, proprietary medicines, men's furnishings, flower seeds, hosiery, alfalfa seed, depilatory products, encyclopedias, and mattresses.. PENDING CASES AT CLOSE OF YEAR At the end of the fiscal year 144 formal, public records cases involving charges of unfair methods of competition in violation of section 5 of the Federal Trade Commission Act, as well as acquisition of stock in violation of section 7 of the Clayton Act, were pending. Among the practices embraced in such cases under said section 5 16326-33 were combinations and agreements to fix prices, suppress competition and restrain trade, lottery schemes, commercial bribery, and various forms of misbranding and deceptive representations. ORDERS TO CEASE AND DESIST SIXTY-SIX ORDERS ARE ISSUED IN FISCAL YEAR The Commission issued orders to cease and desist in 66 cases during the year. As in past years, respondents upon whom the commission served. its orders have, in a great many cases, accepted the terms and filed reports with the Commission signifying compliance therewith. In some of the cases the respondents opposed the proceeding and probably will file petitions for reivew of the Commission's findings and orders with the United States Circuit Courts of Appeal. ORDERS TO CEASE AND DESIST ISSUED DURING YEAR Location Altoona, Pa. Los Angeles. Baltimore. Reading, Pa. Pemberton, N.J. Fleck Cigar Co.. Gilman Hat Co.. Grand Hat Co.-- Guerlin, Arthur, Inc.. H. & H. Hat Manufacturing Co H. & S. Publishing Co., Inc... Havatampa Cigar Co., Inc.. Do. Do. Do. Do. Chicago. Orders to cease and desist issued during year—Continued Southern California Laundry Owners Association et al... Los Angeles. A number of representative cases resulting in orders to cease and desist issued during the fiscal year are described below. Unless otherwise indicated these orders pertain to violations of the Federal Trade Commission Act. RESALE PRICE MAINTENANCE Armand Co., Inc., Des Moines.-The Commission in its findings of fact found that during the years 1920 and 1921 and until July 1, 1922, the Armand Co. requested its dealers to make to it a written and signed declaration of intention as to the manner in which they intended to resell the Armand Co.'s products and refused to sell such dealers until and unless it received the signed declaration of intention to observe the resale prices suggested by the Armand Co. The Commission found that during this period of time a number of large wholesale dealers handling cosmetics were unable to obtain Armand products from the Armand Co. until they had given that company assurance that its suggested resale prices would be maintained. The Commission also found that beginning on or about July 1, 1922 and continuing to the time the Commission's complaint was issued the Armand Co. required the wholesale and retail dealers to enter into agreements or understandings with it that they would resell the Armand products at prices suggested by the Armand Co. and would refuse sales to any dealer who would not maintain such resale prices, and many wholesale dealers and one mail order house were required to enter into such agreements or understandings before they could obtain a supply of Armand products to sell to their trade. It was also found by the Commission that the direct effect and result of the practices of the Armand Co. has been and now is to suppress competition among wholesalers and retail dealers in the distribution and sale of the Armand Co. products; to constrain wholesalers and retailers to sell these products at prices fixed by the Armand Co. and to deprive the ultimate purchaser of products of the advantage in price which they otherwise would obtain from an unobstructed flow of commerce. The order of the Commission requires the Armand Co., Inc., its officers, agents, and representatives, to cease and desist from entering into, directly or indirectly with wholesale or retail dealers, contracts, agreements, or understandings, promises or assurances, that respondent's products are to be resold by such dealers at prices specified or fixed by the Armand Co. and are not to be resold to price-cutting retail dealers.3 SHORT FILLING OF CONTAINERS SOLD IN EXPORT TRADE Export Petroleum Co. of California, Ltd., Los Angeles.-This case pertains to a violation of section 5 of the Federal Trade Commission. Act as extended by section 4 of the export trade act. It was alleged in the complaint that respondent sold and shipped gasoline in export trade in cases of 2 cans of standard size with a capacity of 5 gallons per can and 10 gallons per case which were filled only to the extent of 9.6 gallons per case, or in other quantities less than 10 full gallons per case. It was further alleged that in some instances of such sales both the cases and cans were unmarked as to the contents thereof, while in other instances the cases were stamped "2/5 gallon tins," or the cans were stamped "5 U.S. gallons." It was alleged in the complaint that respondent indicated the exact liquid contents of such shipments on quotation blanks and invoices and that the original purchasers were not misled as to the quantity of gasoline received, but it was asserted that said practice placed in the hands of retailers The Armand Co., Inc., has indicated its intention through counsel of filing a petition for review of said order in the proper Circuit Court of Appeals. |