have been made by respondent without the knowledge and consent of anyone having legal authority to consent thereto and were intended. by respondent to be appropriated to the personal use and ownership of said purchasing officials. It was also alleged that this practice prevented and tended to prevent such purchasing officials from discharging their duties of buying for the public without the bias of self-interest, and has caused and tended to cause those officials to purchase respondent's goods in excess of the reasonable needs of the institutions and to be wasteful of the goods after purchase, all in order to receive gifts offered by respondent; that it has caused and tended to cause such officials to purchase respondent's goods without proper regard for the comparative quality, suitability, and price of goods offered for sale by respondent's competitors; that respondent includes the sums expended for said premiums and gratuities in its cost of doing business and adds to the fair and reasonable market value of its commodities an amount sufficient to offset, either wholly or partially, the sums so expended, which added cost and excessive price the respondent recovers out of the public funds from which the purchasing officials make their purchases. Respondent filed its answer to the complaint denying the above mentioned allegations. On February 17, 1927, and before trial, the complaint was dismissed in view of the fact that respondent had since the issuance thereof subscribed to a code of ethics adopted by the industry and approved by the commission condemning the above alleged practices and agreeing to discontinue them. Misrepresentation of tools.-During the year the commission issued two complaints charging respondents with the use of unfair methods of competition in violation of section 5 of the Federal Trade Commission act by the advertising, labeling and selling as "Cast Steel," "All Steel," or "New Process Converted Steel," certain hammers and other tools which, in truth, were not composed of steel, but were made of metal other than steel such as malleable iron. Answers to these complaints were filed by the respondents denying the misrepresentations, and at the close of the fiscal year the cases were pending the usual procedure on complaint and answer. Castile soap-Misrepresentation-Violation of section 5 of the Federal Trade Commission act.-The commission issued four complaints during the year charging certain manufacturers with misbranding and misrepresenting soaps containing animal fats and vegetable oils other than olive oil by one or more of such terms as Crystal Cocoa Hardwater Castile," "Cocoa Castile," "Defender Castile," "Rainbo Castile," "Castile Soap," "Plurality Castile," "Crown Castile," "Olive Castile," "Fontaine Castile," "Lion Castile," "Dona Castile," "Stork Castile," "Carrara Sapone Cas tiglia," "Broadway Bath Olive Castile," "Castile Styles." It was charged in these complaints that the above mentioned practices have the tendency and capacity to confuse, mislead, deceive and defraud dealers and the public into believing that said soap is in truth genuine Castile soap which, it is alleged in the complaints, takes its name form Castile, a Province of Spain, the place where it was first made five or six centuries ago; is a hard soap made of olive oil exclusively, saponified by lye, and has the reputation among the trade and consuming public as being of superior quality, free from substances harmful to the human skin or delicate fabrics, and possessing desirable qualities not found in other soaps. Answers have been filed, these cases were put upon the suspense calendar in compliance with a stipulation to abide by the decision of the court in the case of James S. Kirk & Co., which involves the matters presented by these cases. Acquisition of stock of competitors-Violation of section 7 of the Clayton Act.-Complaint was issued by the commission on April 5, 1927, against a cigar-manufacturing corporation having plants in New York, Pennsylvania, and Michigan, charging it with acquiring the capital stock of two of its competitors. It is alleged in the complaint that such acquisitions may be, and are, violative of section 7 of the Clayton Act, and that the effects are (1) to substantially lessen competition between the acquiring and acquired companies; (2) to restrain commerce in the sale of cigars among the several States; (3) to tend to create a monopoly. Answer to the complaint was filed by the respondent, denying that the law has been violated, and at the close of the fiscal year the case was pending the taking of testimony with respect to the issues raised by the complaint and answer. Misrepresentation of furniture-Violation of section 5 of the Federal Trade Commission act.-During the fiscal year the commission issued complaints by which furniture manufacturers were charged with using unfair methods of competition in the practice of advertising and describing veneered furniture by one or more of such terms as "Walnut," "Mahogany," "Genuine Walnut," "American Walnut," "French Walnut," "Walnut Combination," "Mahogany Combination," "Red Mahogany," " Brown Mahogany," "Walnut Decorated," "Georgian Walnut Decorated," "Walnut and Gumwood," and "Mahogany and Gumwood," without disclosing that the only walnut or mahogany contained in such furniture consists of a thin covering or veneer with which the exposed surfaces are faced. It was also alleged that the use of such designation under the abovementioned circumstances results in placing in the hands of the retail dealers the means whereby such dealers can commit a deception and fraud upon the public by merely describing such furniture to custom ers by said designations given to it by the manufacturer without disclosing that the mahogany or walnut wood used in the construction of such furniture consists only of a thin veneer or facing, thus inducing numerous persons to purchase such veneered furniture in the belief that the exposed portions thereof were made of solid mahogany or solid walnut. Answers to these complaints were filed by respondents denying the charges of misrepresentation and deception, and at the close of the fiscal year testimony was being taken with respect to the issues thus raised. At a conference of retail furniture dealers held under the auspices of the commission in November and December, 1925, to consider the proper trade practices affecting the sale of furniture, rules of what were considered fair and proper ways to describe furniture to the consuming public were adopted. To the close of the fiscal year 938 manufacturers of furniture throughout the United States had signified their willingness to abide by said rules by subscribing to the same. The manufacturers against whom complaints have been issued have not recognized or subscribed to these rules. "Havana" cigar cases-Misrepresentation and misbranding-Violation of section 5 of the Federal Trade Commission act.-Nine complaints have been issued during the fiscal year against an equal number of manufacturers of cigars charging them with the use of unfair methods of competition by representing and branding cigars, of domestic manufacture and which contain no, or in minor part only, Cuban or Habana tobacco, by the use of such brand names or terms as "Havana brown," "Hoyo de Cuba," "Havana," "Mild Havana,” "Mild Havana Cigar," "Havana Cadet," "Rose-O-Cuba," "Havana Darts," "Havana Sweets," "Havana Fruit," "Havana Velvet," and "Spana-Cuba." It was charged in these complaints that the use of the above-mentioned terms has the capacity and tendency to mislead and deceive the public into buying such cigars in the erroneous belief that they are composed wholly, and, in some instances, in greater part, of Cuban or Habana tobacco, which tobacco is alleged to be considered by the consuming public as, and for a long time had the reputation of, being of superior quality and excellence. Answers to many of these complaints have been filed denying the misleading and deceptive character of the brands, with respect to which issues the cases are awaiting the taking of testimony. ORDERS TO CEASE AND DESIST The final expression of the commission in a case where respondent is found to have violated the law, as alleged, is an order upon such respondent to cease and desist the particular practices alleged and proven under the complaint. The commission, during the year here reported upon, issued 52 separate orders to cease and desist. All of the 52 orders covered violations of section 5 of the Federal Trade Commission act relating to unfair methods of competition, except one, namely, the order entered July 14, 1926, against Armour & Co. to divest itself of the capital stock of the Eau Claire Creamery Co. and the Pacific Creamery Co, acquired in violation of section 7 of the Clayton Act. However, on April 13, 1927, the commission vacated this order. As in past years, the respondents upon whom the commission served orders to cease and desist have in a great many cases accepted their terms and filed reports with the commission signifying compliance therewith. Orders to cease and desist were issued during the year as follows: Method of competition involved Falsely representing to be manufacturers of fountain pens and labeling fountain pens with false and fictitious prices in excess of customary prices. (1) Resale price maintenance; (2) making false Acquiring part of the capital stock of Eau Claire Combining to prevent certain jobbers from pur- Selling lace not made in Ireland as Irish lace. Falsely representing caps to be union made. Falsely representing by the use of the word "Quadruple" silver-plated ware to be coated or plated four times with silver. Using the word "Sheffield" in connection with Falsely representing by slogans and otherwise to Using the word "Sheffield" in connection with (1) Using the word "Sheffield" in connection with the sale of silver-plated ware not made in Sheffield, England; (2) falsely representing by the use of the word "Quadruple" silver-plated ware to be coated or plated four times with silver; (3) using the word "Dutch" and the words "Dutch Silver" in connection with the sale of silver-plated ware not made in Holland. The use in a corporate name by dealer not a manufacturer of the word "Manufacturing"; (2) the use of labels and brands indicating that shoes sold bearing such labels or brands are made for and under the supervision and specifications of the Government of the United States when they are not so made. 1 On Apr. 13, 1927, by an order of that date, the commission vacated the order of divestment previously entered July 14, 1926. Method of competition involved False representations as to the nature and extent of business conducted. Using the terms "Patent Leather" and "Patent Leather Fabric" in connection with the sale of hat bags not made of leather but of a cloth material resembling in appearance patent leather. Resale price maintenance. (1) Use of the words "Grand Rapids" in trade Using the word "Sheffield" in connection with Using the term "Mahogany" and the term "Philippine Mahogany" in connection with the sale of lumber not derived from the trees of the mahogany or meliaceae family. False and misleading advertising and representations in the sale of books. Using the term "Mahogany" and the term "Philippine Mahogany" in connection with the sale of lumber not derived from the trees of the mahogany or meliaceae family. Deceptive use of the terms "Mahogany" and "Walnut" in connection with advertising and selling furniture. Keystone Metal Spinning New York, N. Y...... (1) Using the word "Sheffield" in connection with Stamping Co. the sale of silver plated ware not made in Sheffield, England; (2) falsely representing by the use of the word "Quadruple" silver-plated ware to be coated or plated four times with silver. Using the words Grand Rapids" in a trade name and corporate name of a business engaged in selling furniture not manufactured in Grand Rapids, Mich.; (2) false representations that furniture dealt in has been manufactured in Grand Rapids, Mich.; (3) falsely representing to be manufacturers, factory distributors, agents, or warehousemen of manufacturers; (4) falsely representing prices to be factory prices. False representations and false advertising in connection with the sale of a course of educational instruction. The use of misleading labels and false representa- Selling lace made in China as Irish lace. Northwestern Traffic & Serv-| Minneapolis, Minn... Combining to restrain trade in coal by confining ice Bureau (Inc.) et al. distribution thereof to channels agreeable to respondents and excluding by numerous means and methods from the distribution of coal any one not satisfactory to the respondents. Using the word "Sheffield" in connection with the sale of silver-plated ware not made in Sheffield, England. P. & Q. Furniture Store... Philadelphia, Pa... (1) Use of the slogan "Direct from Factory to Powe, Thomas E., Lumber St. Louis, Mo...... Progress Paint Manufacturing Louisville, Ky.. You" by a dealer who is not a manufacturer; (2) other false representations by advertising and otherwise that respondents are manufacturers; (3) false representations that purchasers buy from respondents without being burdened with the costs and profits of middle men. Using the term "Mahogany" and the term |