(c) Concealing from prospective purchaser unusual features involved in purchaser's commitment, the result of which will be to require of purchaser further expenditure in order to obtain benefit of commitment and expenditure already made, such as failure to reveal peculiar or nonstandard shape of portrait or photographic enlargement, so as to make securing of frame therefor from sources other than seller difficult and impracticable, if not impossible.

(d) Obtaining by deceit prospective customer's signature to a contract and promissory note represented as simply an order on approval.

(e) Making use of improper and coercive practices as means of exacting additional commitments from purchasers, through such practices as unlawfully withholding from purchaser property of latter lent to seller incident to carrying out of original commitment, such as practice of declining to return original photograph from which enlargement has been made until purchaser has also entered into commitment for frame therefor.

(f) Falsely representing earnings or profits of agents, dealers, or purchasers, or the terms or conditions involved, such as false statement that participation by merchant in seller's sales promotion scheme is without cost to merchant, and that territory assigned an agent, representative, or distributor is new or exclusive.

(g) Obtaining agents or representatives to distribute the seller's products, through promising to refund the money paid by them should the product prove unsatisfactory, that the agent was granted right to exclusive or new territory, would be given assistance by seller, or would be given special credit or furnished supplies, or overstating the amount of his earnings or the opportunities which the employment offered.

(h) Advertising a price for a product as illustrated or described and not including in such price all charges for equipment or accessories illustrated or described or necessary for use of the product or customarily included as standard equipment, and failing to include all charges not specified as extra.

22. Giving products misleading names so as to give them a value to the purchasing public which they would not otherwise possess, such as names implying falsely that—

(a) The products were made for the Government or in accordance with its specifications and of corresponding quality, or that the advertiser is connected with the Government in some way, or in some way the products have been passed upon, inspected, underwritten, or endorsed by it; or

(b) They are composed in whole or in part of ingredients or materials, which in fact are contained only to a negligible extent or not at all, or that they have qualities or properties which they do not have; or

(c) They were made in or came from some locality famous for the quality of such products, or are of national reputation;

or

(d) They were made by some well and favorably known process; or

(e) They have been inspected, passed, or approved after meeting the tests of some official organization charged with the duty of making such tests expertly and disinterestedly, or giving such approval; or

(f) They were made under conditions or circumstances considered of importance by a substantial part of the general purchasing public; or

(g) They were made in a country, or city, or locality, considered of importance in connection with the public taste, preference, or prejudice; or

(h) They have the usual characteristics or value of a product properly so designated, as through use of a common, generic name, such as "paint," to designate a product lacking the necessary ingredients of paint.

23. Selling below cost or giving product without charge, with intent and effect of hindering or suppressing competition.

24. Dealing unfairly and dishonestly with foreign purchasers and thereby discrediting American exporters generally.

25. Coercing and forcing uneconomic and monopolistic reciprocal dealing.

26. Entering into contracts in restraint of trade whereby foreign corporations agree not to export certain products into the United States in consideration of a domestic company's agreement not to export the same commodity, nor to sell to anyone other than those who agree not to so export the same.

27. Employing various false and misleading representations and practices attributing to products a standing, merit, and value to the purchasing public, or a part thereof, which they do not possess, such practices including—

(a) Misrepresenting, through salesmen or otherwise, products' composition, nature, qualities, results accomplished, safety, value, and earnings or profits to be had therefrom.

(b) Claiming falsely unique status or advantages, or special merit therefor, on the basis of misleading and ill-founded demon

strations or scientific tests, or pretended widespread tests, or of pretended widespread and critical professional acceptance and

use.

(c) Misrepresenting the history or circumstances involved in the making and offer of the products or the source or origin thereof (foreign or domestic) or of the ingredients entering therein, or parts thereof, or the opportunities brought to the buyer through purchase of the offering, or otherwise misrepresenting scientific or other facts bearing on the value thereof to the purchaser.

(d) Falsely representing products as legitimate, or preparel in accordance with Government or official standards or specifications.

(e) Falsely claiming Government or official, or other, acceptance, use, and endorsement of product, and misrepresenting success and standing thereof through use of false and misleading endorsements or false and misleading claims with respect thereto, or otherwise.

28. Failing and refusing to deal justly and fairly with customers in consummating transactions undertaken, through such practices as refusing to correct mistakes in filling orders, or to make promised adjustments or refunds, and retaining, without refund, goods returned for exchange or adjustment, and enforcing, notwithstanding agents' alterations, printed terms of purchase contracts, and exacting payments in excess of customers' commitments.

29. Shipping products at market prices to customers or prospective customers or to the customers or prospective customers of competitors without an order and then inducing or attempting by various means to induce the consignees to accept and purchase such consignments.

30. Inducing the shipment and sale of commodities through buyer's issuance of fictitious price lists and other printed matter falsely representing rising market conditions and demand, and leading seller to ship under the belief that he would receive prices higher than the buyer intended to or did pay.

CASES IN THE FEDERAL COURTS

COMMISSION ACTIONS IN THE UNITED STATES SUPREME, CIRCUIT, AND DISTRICT COURTS

Federal Trade Commission cases pending in the United States courts during or at the close of the fiscal year ended June 30, 1941, are reviewed in the pages immediately following.

During the year, results favorable to the Commission were obtained in 40 cases, of which two were before the Supreme Court of the United States, 26 were before the United States circuit courts of appeals, and 12 were before United States district courts. A commission order was set aside in one case in the circuit court of appeals, and the Supreme Court in another case affirmed a decision of a circuit court of appeals reversing a Commission order.

Cases in the Supreme Court in which the Commission's orders were affirmed involved the Millinery Creators' Guild and others, and the Fashion Originators Guild of America, Inc., and others, both of New York. In both instances the Court unanimously sustained decisions by the Circuit Court of Appeals for the Second Circuit.

Cases in the circuit courts of appeals in which the Commission's orders were affirmed (in three cases with modifications) were: Fashion Originators Guild of America, Inc., and others, Parfums Corday, Inc., Quality Bakers of America and others, and Gimbel Brothers, Inc., all of New York; Modern Hat Works, Jersey City, N. J.; Pep Boys-Manny, Moe and Jack, Inc., Philadelphia; Hershey Chocolate Corporation, Hershey, Pa.; Mentho-Mulsion, Inc., and others, Atlanta; Standard Container Manufacturers' Association, Inc., and others, Jacksonville, Fla.; General Motors Corporation and General Motors Sales Corporation, Detroit; Ford Motor Co., Dearborn, Mich.; Monica M. Rock, Milwaukee; Kidder Oil Co., La Crosse, Wis.; Perma-Maid Co., Cincinnati; Chester L. Thomas, trading as Thomas Quilt Factories, Denver; George G. Neff, Miami, Okla.; California Lumbermen's Council and others, Fresno, Calif.; and Adah Alberty, Los Angeles, Calif.

Petitions for review of Commission orders involving Chanel, Inc., Peter Sanders and others, trading as the Perfect Recondition Spark Plug Co., and Saks & Co., all of New York; Yardley of London, Inc., Union City, N. J.; McKinley-Roosevelt College of Arts and Sciences, Chicago; Albert T. Cherry, trading as A. T. Cherry Co. and as Atco Soap Co., Dayton, Ohio; and the Liquor Trades Stabilization Bureau, Inc., San Francisco, were dismissed by the circuit courts of appeals. A case concerning the Biddle Purchasing Co., New York, was disposed of by a consent decree adjudging the company in contempt for violating a former decree of the circuit court of appeals and imposing a fine of $500.

The Commission successfully opposed a motion made in a circuit court of appeals to strike a modified order issued by it in conformity with the court's decree in a case involving the California Rice Industry.

(For proceedings in injunction and for collection of civil penalties, see pp. 102, 105.)

PETITIONS TO REVIEW CEASE AND DESIST ORDERS

Petitions in the United States circuit courts of appeals to review cease and desist orders issued under authority of section 5 of the Federal Trade Commission Act and section 2 of the Clayton Act are summarized below:

(Except where otherwise indicated, cases involve violations of the Federal Trade Commission Act. United States Circuit Courts of Appeals are designated First Circuit (Boston), etc.)

Adah Alberty, Los Angeles.-The Ninth Circuit (San Francisco) affirmed the Commission's order against misrepresentations concerning the therapeutic value of health foods and other preparations.

Concerning the petitioner's complaint that the Commission rejected the testimony of experts adhering to the homeopathic school of medicine, and thus made an arbitrary choice between schools of healing which are equally recognized under the law, the court said (118 F. 2d 669, 670) :

"Actually, the Commission admitted the testimony of experts who were, and experts who were not, adherents of the homeopathic school of medicine. The Commission's findings are supported in part by the testimony of experts adhering to the homeopathic school, in part by the testimony of other experts. Conflicts in the testimony were for the Commission, not this Court, to resolve. We cannot say that, in resolving such conflicts, the Commission acted arbitrarily.

Petition for rehearing was denied."

Albert Lane, Berkeley, Calif., petitioned the Ninth Circuit (San Francisco) for a review of a Commission order against false claims by a consumers' research organization. Among other misrepresentations, the petitioner claimed affiliation with the United States Government, the Mellon Institute of Industrial Research, and the Massachusetts Institute of Technology. At the end of the fiscal year the case awaited certification and printing of the record.

Associated News Photographic Service, Inc. and others, New York.-Petition was filed with the Second Circuit (New York) for review of an order forbidding the use of the word "News" in the corporate name to designate a business principally that of selling photographic prints. The Commission found that the petitioners are professional photographers, do not operate as the photographic department or agency of any newspaper or news agency, and that through the use of the word "News" they conveyed the impression that they had such newspaper connection. At the year's close, the case awaited certification and printing of the transcript.

Automobile financing: Ford Motor Co., Dearborn, Mich.; General Motors Sales Corporation, Detroit, and General Motors Acceptance Corporation, New York.-During the year two decisions

A petition for writ of certiorari was denied October 13, 1941.

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