merce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential, effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination, or with customers of either of them: Provided, however,

(1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this paragraph shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered:

(3) That nothing contained in this paragraph shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade;

(4) That nothing contained in this paragraph shall prevent price changes from time to time where made in response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect con

trol, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce to pay or contract for the payment of advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such member, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling. sale, or offering for sale of such commodity so purchased upon terms not accorded to all competing purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(f) Exemptions. The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.

NOTE: In complaint proceedings charging discrimination in price or services or facilities furnished, and upon proof having been made of such discrimination, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged: and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing contained in this section shall pre

vent a seller rebutting the prima facie case thus made by showing that his lower price, or the furnishing of services or facilities to any purchaser or purchasers, was made in good faith to meet an equally low price of a competitor or the services or facilities furnished by a competitor.

§ 198.18 Discriminatory returns.

It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one customer-purchaser against another customer-purchaser of industry products, bought from such member of the industry for resale, by contracting to furnish, or furnishing in connection therewith, upon terms not accorded to all competing customer-purchasers on proportionally equal terms, the service or facility whereby such favored purchaser is accorded the privilege of returning products so purchased and receiving therefor credit or refund of purchase price: Provided, however, That nothing in any of the sections in this part shall prohibit or be used to prevent the return of merchandise by purchaser, for credit or refund of purchase price, when and because such merchandise has been falsely or deceptively represented, or when and because such merchandise is defective in material, workmanship, or in any other respect is contrary to warranty or purchase contract.

(a) The industry approves the practice of each individual member of the industry independently publishing and circulating to the purchasing trade his own price lists.

(b) The industry approves the practice of making the terms of sale a part of all published price schedules.

§ 198.102 Repudiation of contracts.

Lawful contracts are business obligations which should be performed in letter and in spirit. The repudiation of contracts by sellers on a rising market, or by buyers on a declining market, is condemned by the industry.

§ 198.103 Maintenance of accurate records.

It is the judgment of the industry that each member should independently keep proper and accurate records for determining his costs.

1 See footnote to § 198.17.

The industry approves the practice of handling business disputes between members of the industry and their customers in a fair and reasonable manner, coupled with a spirit of moderation and good will, and every effort should be made by the disputants themselves to compose their differences. If unable to do so they should, if possible, submit these disputes to arbitration. § 198.105 Coercion in sales.

The use of buying power to force uneconomic or unjust terms of sale upon sellers, and the use of selling power to force uneconomic or unjust terms of sale upon buyers, are condemned by the industry.

Sec.

199.101

GROUP II

Disclosure of manufacturer's identity.

199.102 Return of merchandise. 199.103 Repudiation of contracts. 199.104 Manner of disclosure of type of canvas material.

AUTHORITY: The provisions of this Part 199 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45.

SOURCE: The provisions of this Part 199 appear at 16 F.R. 3382, Apr. 18, 1951, unless otherwise noted.

§ 199.0 Definitions.

"Canvas cover"; For the purpose of this part the term "canvas cover" as used in this part shall mean a cover, made wholly or principally of canvas material, which is adapted for use as a portable or stationary shelter or protection from the sun, water, rain, weather, or other condition, such as tarpaulins, truck covers, flat covers, drop cloths, tents, canopies, awnings, and similar articles.

(b) "Canvas material": As used in this part the words "canvas material" shall be deemed to mean all kinds and types of canvas, including, but not limited to, all kinds of duck, drill, jean, twill, osnaburg, sheeting, or any substitute fabric from which a canvas cover may be made.

GROUP I

§ 199.1 Misrepresentation

respecting ability to resist fire and flame, water passage, and deterioration due to the sun, weather, or mildew.1

(a) In general. In the sale, offering for sale, or distribution of canvas covers, it is an unfair trade practice to use any mark, brand, tag, label, advertisement, or other representation, which has the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the public into the belief:

(1) That such covers have been treated so as to be immune or resistant to fire or flame when such is not the fact, or into the belief that covers so treated have a greater degree of resistance to fire or flame, or will retain their fire or

1 Specific guidance to industry members respecting the use of words, terms, or representations importing resistance to fire, water, weather, and mildew as descriptive of canvas covers is dependent upon formulation of minimum standards and test methods which will afford adequate consumer protection. When such have been established, the Commission will give consideration to amending this part by incorporating the same.

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flame-resistant properties for a longer period of time, than is in fact true; or

(2) That such covers have been so treated as to be impermeable or resistant to water passage when such is not the fact, or into the belief that treated covers have a greater degree of resistance to water passage, or will retain their resistance to water passage for a longer period of time, than is in fact true; or

(3) That such covers have been so treated as to be immune or resistant to deterioration due to exposure to the sun, weather, or mildew when such is not the fact, or into the belief that treated covers have a greater degree of resistance to such deterioration, or will retain their resistance to such deterioration for a longer period of time, than is in fact true.

(b) Misuse of the term "proof." In accordance with the provisions of paragraph (a) of this section, the following requirements respecting use of the term "proof," or similar representations, shall apply:

(1) The term "fireproof,” “flameproof," or any other word, term, or representation of similar import, shall not be used as descriptive of any canvas cover unless such cover is incombustible and will remain so throughout its expected life under normal use.

NOTE: It is the consensus of the industry that there is no commercial treatment for canvas material which, when applied in quantity and manner as to assure of an optimum of efficiency, will render such fabric incombustible for any substantial length of time when exposed to direct flame.

(2) The term "waterproof," or any other word, term, or representation of similar import, shall not be used as descriptive of any canvas cover unless such cover is impermeable to water and moisture and will remain so throughout its expected life under normal use.

(3) The terms "weatherproof," "sunproof," "mildewproof," or any words, terms, or representations of similar import, shall not be used as descriptive of any canvas cover unless such cover is immune to deterioration due to the action of the weather, sun, or mildew, respectively.

§ 199.2 Disclosure as to size of product and kind and weight of fabric.

(a) In connection with the offering for sale, sale, or distribution of canvas covers, it is an unfair trade practice to deceptively conceal the true size or di

mension of such covers or the kind and grey-goods weight of the fabric; or to advertise, mark, brand, stamp, tag, label, or otherwise represent or describe, any canvas cover in a manner having the capacity and tendency or effect of confusing, misleading, or deceiving the purchasing or consuming public as to the size or any dimension of such canvas covers, or as to the kind, grey-goods weight, or other grade or quality of the fabric.

(b) To the end that confusion, misunderstanding, deception, and unfair competitive practices may be avoided and prevented, canvas covers (other than tents or awnings which are "custom-made" or "tailor-made" as defined in § 199.4)' shall be properly marked so that the size and dimensions, and the kind and grey-goods weight of the fabric, may be effectively disclosed to purchasers and consumers in a manner which is truthful, definite, unambiguous, and in no way misleading or deceptive. The following provisions for proper marking shall be applicable for the purposes stated in this section:

(c) Disclosure of size of tarpaulins and flat covers:

(1) Finished size. Each tarpaulin or flat cover shall be so marked as to disclose plainly the actual size or dimensions thereof at the time of completion of manufacture. Such size shall be designated "finished size" and shall be accompanied by a statement clearly indicating that such "finished size” is the size at the time of completion of manufacture and revealing the fact, when such is the case, that the product is subject to shrinkage due to varying climatic conditions and possible retraction from tension applied in the course of manufacture, as for example:

Finished size (size at time of completion of manufacture): 8 feet by 10 feet.

This product is subject to shrinkage due to varying climatic conditions and possible retraction from tension applied in the course of manufacture.

(2) Cut size. The term "cut size" as used in this part shall mean the size or dimensions of a canvas cover before the making of its seams, hems, or reinforce

2 Tents or awnings which are "custommade" or "tailor-made" as defined in § 199.4 need not under these rules be marked as to size, or as to the kind and weight of the fabric, where no deception is practiced in connection therewith.

ment turn-overs. Nothing in this part shall be construed as prohibiting truthful disclosure of the cut size of a canvas when such cut size is shown in conjunction with, and with no greater conspicuousness than, any marking of the "finished size," and when explanation is made of the meaning of "cut size." Such conjunctive marking of finished and cut size shall be accompanied by a statement clearly indicating that the product is subject to shrinkage due to climatic conditions and possible retraction from tension applied in the course of manufacture. The following is an example of proper size marking when cut size is shown:

Finished size (size at time of completion of manufacture): 8 feet by 10 feet.

Cut size (size before making seams, hems, and reinforcement turn-overs: 8 feet 6 inches by 10 feet 6 inches.

This product is subject to shrinkage due to varying climatic conditions and possible retraction from tension applied in the course of manufacture.

(d) Disclosure of size of tents:

(1) (1) Each tent' shall be so marked as to disclose plainly the finished size at the time of the completion of manufacture. The ground or base dimensions and the center height shall be given and, where pertinent, the wall or eave dimensions. Other dimensions of the tent may also be given, provided they are given as finished dimensions at the completion of manufacture thereof.

(ii) Where it is desired to show the "cut size" in addition to the "finished size," the same shall be shown in conformity with paragraph (c) (2) of this section.

(iii) A qualifying statement shall also accompany the size marking revealing the fact, when such is the case, that the product is subject to shrinkage due to varying climatic conditions and possible retraction from tension in accordance with the applicable example following paragraph (c) (1) or (2) of this section. (e) Disclosure of size of awnings:

(1) In disclosing size or dimensions of awnings,' the width, drop and extension (exclusive of valance) shall be stated in the finished size at the time of completion of manufacture. The valance, where given, shall be stated as an additional item to the drop, as for example:

Drop 36 inches, Valance 8 inches.

Where it is desired to show the "cut size" in addition to the "finished size," the same shall be shown in conformity with paragraph (c) (2) of this section.

NOTE: Nothing in this section shall be construed as prohibiting nondeceptive representation of an awning as having been made to it a certain size window or opening, provided such awning will satisfactorily and fully fit such designated opening without the necessity of any stretching, distortion, or other material adaptation.

(f) Disclosure of kind and weight of fabric:

(1) Each canvas cover' shall be so marked as to disclose clearly and unambiguously the commercial type of fabric (such as "Army duck," "double filling duck," "drill," "jean," "osnaburg," etc.) and the original grey-goods weight of the fabric. Such weight shall be shown in ounces per square yard to the nearest 1/100 of an ounce subject to recognized mill tolerance and tables of conversion as shown in Commercial Standard CS28-46 of the National Bureau of Standards. (See also § 199.104.)

(2) No marking or sales description referring to the loaded weight of the fabric after treatment shall be used which creates or tends to create confusion or deception in the merchandising of the products. Nothing in this section, however, shall be construed as prohibiting the marking or stamping of other additional information on the canvas cover, or on the tag or label affixed thereto: Provided, That such additional marking or stamping shall be in accord with true facts and with all provisions of this part: And provided further, That the same shall in no way tend to confuse or mislead with respect to the above-mentioned required markings, or otherwise.

(g) Type of marking to be used:

(1) The marking in the several respects provided for in this section shall be clearly and conspicuously set forth either upon the canvas cover itself, or upon a durable tag or label securely sewed or attached to the canvas cover in such manner as to carry through to the ultimate consumer; and the information to be disclosed shall be written or printed with such permanency as to remain legible throughout the marketing of the product in the channels of trade and delivery to the ultimate consumer.

'See footnote 2 to § 199.2.

§ 199.3

Resort to harmful and excessive stretching prohibited.

The practice of unduly or excessively stretching cloth in finishing, treating, or processing operations reduces the quality of the cloth and of the product made therefrom and induces harmful and undesirable contraction, shrinkage, and undersize after completion of manufacture of the product; and it is an unfair trade practice for any member of the industry to cause or promote any such harmful and undue or excessive stretching or tension with respect to the canvas material or canvas cover, either in his own processing, manufacturing, or treating operations, or by any other processing, manufacturing, or treating concern. The limited ordinary and necessary tension which is required under good manufacturing, processing, and treating operations carefully applied shall not, under this section, be construed as coming within the term "undue or excessive stretching" as herein used.

§ 199.4

Misuse of term "custom-made” or "custom-tailored."

In the sale, offering for sale, or distribution of canvas covers, it is an unfair trade practice to use the term "custommade" or "custom-tailored." or terms or representations of similar import, as descriptive of any canvas cover when the same has not been cut and made pursuant to individual specifications for a specific opening or specified place of use by the ultimate consumer or purchaser (as distinguished from a ready-made or stock canvas cover).

§ 199.5 Use of terms "shrunk," "preshrunk," etc.

In offering for sale, advertising, selling, or distributing any canvas cover or canvas covers, it is an unfair trade practice to use the terms "preshrunk," "shrunk," "full shrunk," "shrinkproof," "double shrunk,” or any word, term, or phrase of similar meaning, import, or scope, as descriptive of any canvas cover, unless the same has in fact been preshrunk to the extent that there remains no residual shrinkage therein: Provided, That nothing in this section shall prohibit the use of the term "shrunk" or "preshrunk" as descriptive of canvas covers (though some residual shrinkage remains therein) if the same have in fact been substantially preshrunk and there is stated in conjunction with such terms, and with equal