REPORT, FINDINGS AS TO THE FACTS, AND ORDER.

Pursuant to the provisions of an Act of Congress approved September 26, 1914, the Federal Trade Commission issued and served a complaint upon the respondent, C. D. Higgins, trading under the name and style of C. D. Higgins Manufacturing Co., charging him with unfair methods of competition in commerce in violation of the provisions of said Act.

The respondent having entered his appearance and filed his answer herein, and having stipulated and agreed in writing that an agreed statement of facts signed by the respondent and W. H. Fuller, Chief Counsel for the Federal Trade Commission, are the facts in this proceeding and may be taken and considered in lieu of testimony before the Commission in support of the charges stated in the complaint or in opposition thereto, and that the Federal Trade Commission may proceed further upon said statement of facts to make its report in this proceeding, stating its findings as to the facts and its conclusion, and entering its order disposing of this proceeding, and thereupon this proceeding came on for final hearing, the respondent and counsel for the Commission not desiring to file briefs or present oral arguments, and the Commission having duly considered the record and being fully advised in the premises, makes this its findings as to the facts and conclusion:

FINDINGS AS TO THE FACTS.

PARAGRAPH 1. The respondent, C. D. Higgins conducts his business under the name "C. D. Higgins Manufacturing Company" at 2033 Dwight Way, Berkeley, Calif., and is engaged in manufacturing and selling razor hones, and causes the products sold by him to be transported to the purchasers thereof from the state of California through and into other states of the United States in interstate commerce, and carries on such business in direct and active competition with other persons, firms and corporations similarly engaged. The respondent began to operate this business in July, 1919, and has been conducting it continuously since that date. PAR. 2. From July, 1919, until the date of the service of the Commission's complaint herein the razor hones manufactured by the respondent were packed in cartons each of which cartons was branded on the face thereof as follows:

(Original) Higgins Hone

Price $3.00

Manufactured by the

C. D. Higgins Manufacturing Company

1721 Alcatraz Avenue,

Berkeley, Cal.

and each hone manufactured by the respondent was branded on one side thereof as follows:

Original Higgins hone-Price $3.00.

PAR. 3. Sales of said razor hones have been made by the respondent to customers and purchasers in the states of California, Oregon, Washington, Arkansas, and many other states of the United States. Respondent's sales of hones have been made to barber supply houses at $9 per dozen, or 75 cents each, and to barbers at $1.50 each. Said hones were and are usually sold by said barber supply houses at prices substantially less than $3, the average price for each hone being $1.50.

PAR. 4. Since the service of the Commission's complaint in this proceeding, the respondent has obliterated from said hones and cartons the price mark "Price $3.00," and an effort has been made by the respondent to cause dealers to change said marks on the supply which said dealers had on hand at the time of the service of the Commission's complaint in this proceeding.

PAR. 5. The said price of $3.00 was printed upon said hones and cartons as a false, fictitious and misleading proposed retail price, and does not represent the price at which it was contemplated by the respondent or his customers that said hones would be sold to the ultimate purchasers, and such indicated price was placed upon said hones and containers for the purpose of creating in the minds of the purchasers at retail an erroneous impression as to the value of such hones.

PAR. 6. The said hones so marked with such false and misleading price come into direct competition in interstate commerce with hones which are not so marked. The respondent did not originate the practice herein described but followed a custom which has grown up in the razor-hone trade of marking hones with false and fictitious prices at the request of dealers in order that the misleading prices so marked upon said hones may be reduced or undercut by retail dealers and the hones still sold at a substantial profit and at a price materially less than that marked upon sich hones and containers, thereby deceiving the public into believing that it is obtaining for a much less price a hone worth at least the price marked thereon.

PAR. 7. The respondent consented in writing to the entry of an order against him, commanding that he cease and desist from the practice of marking said razor hones, or the cartons containing the same, with any false, fictitious or misleading statement concerning the price or value of said razor hones.

The practices of the respondent, under the conditions and circumstances described herein, are unfair methods of competition in interstate commerce and constitute a violation of the Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST.

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, answer of the respondent and agreed statement of facts filed herein, and the Commission having made its findings as to the facts and its conclusion that the respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,"

It is now ordered, That the respondent, C. D. Higgins, trading under the name and style of C. D. Higgins Manufacturing Company, his agents, servants, representatives and employees, cease and desist from selling or offering for sale in interstate commerce razor hones upon which, or the cartons containing the same, is marked or imprinted any false, fictitious or misleading prices or representations as to the value of said hones.

It is further ordered, That the respondent within sixty (60) days after the service upon him of this order file with the Commission a report in writing setting forth in detail the manner and form in which the respondent has complied with the order to cease and desist as hereinbefore set out.

Complaint.

FEDERAL TRADE COMMISSION

v.

JUVENILE SHOE COMPANY, INC.

COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF SECTION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914.

SYLLABUS.

Docket 752-July 1, 1922.

Where a corporation engaged in the manufacture and sale of infants', children's and misses' shoes under the style of Juvenile Shoe Corporation of America, (1) carried on a large business under said name and so advertised at large expense in publications of nation-wide circulation and in trade journals, and (2) in so advertising featured a reproduction of a trade-mark tag attached to all shoes sold by it through its authorized distributors, and sold its shoes under a trade-mark consisting of the words "Juvenile Shoe System," displayed upon the representation of a seal; and thereafter a competitor dealing in inferior grades of such shoes, (a) Adopted the corporate name Juvenile Shoe Co., Inc.," with the effect of confusing the trade and with a capacity and tendency to induce retail dealers to purchase its shoes as and for those of said corporation, and to induce and enable them so to sell the same to the purchasing public; and

66

wax

(b) Packed its shoes in cartons with labels consisting of the picture of a child with the words "Juvenile" and "Shoe Co., Inc.," closely resembling in size, typographical arrangement, and general appearance said corporation's registered trade-mark and the tags attached by it to its shoes as above set forth; with a capacity and tendency to confuse the trade and to enable retail dealers to sell its shoes as and for those of said corporation to the purchasing public:

Held, That such simulation of corporate name, and such simulation of trademark, under the circumstances set forth, constituted unfair methods of competition.

COMPLAINT.

The Federal Trade Commission, having reason to believe from a preliminary investigation made by it that the Juvenile Shoe Company, Inc., hereinafter referred to as the respondent, has been and is using unfair methods of competition in commerce in violation of Section 5 of An Act of Congress, approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," and it appearing that a proceeding by it in respect thereof would be to the interest of the public, issues this complaint, stating its charges in that respect on information and belief as follows:

PARAGRAPH 1. That the respondent is a corporation, organized and existing under the laws of the State of California, with principal place of business at the City of Los Angeles, in said State.

PAR. 2. That the respondent was organized on the 26th day of May, 1919, and thereafter engaged in the business of selling shoes, in interstate commerce, for children exclusively, to retail dealers in wholesale quantities, in the State of California and states adjacent thereto, and to the public in such states on mail orders, and causes the shoes sold by it to be transported to the purchasers thereof from the State of California, in and beyond said State, and carries on such business in direct, active competition with other persons, partnerships and corporations, similarly engaged.

PAR. 3. That on June 8, 1918, there was organized under the laws of the State of Missouri, the Juvenile Shoe Corporation of America, that the said corporation succeeded to the business of two other corporations which had theretofore been engaged in the business of manufacturing and selling shoes; that continuously since its incorporation said Juvenile Shoe Corporation has manufactured and sold shoes, for children exclusively, and in the various states of the United States and more particularly in California and states adjacent thereto, and has caused shoes sold by it to be transported to the purchasers thereof from the State of Missouri through and into the other said states of the United States and has carried on such business in direct, active competition with other persons, partnerships and corporations similarly engaged; that said Juvenile Shoe Corporation has built up an extensive business in the sale of its product in the State of California and states adjacent thereto, and the shoes manufactured and sold by it are of greater value and of superior quality and sell for higher prices than the shoes sold by respondent.

PAR. 4. That the corporate name of the respondent, the junior corporation, so nearly resembles the corporate name of the senior corporation, the Juvenile Shoe Corporation, described in Paragraph Three hereof, that the trade name or design of the respondent so nearly resembles the registered trade-mark of the Juvenile Shoe Corporation, in sight, sound and meaning, and that both the respondent and the Juvenile Shoe Corporation deal in and sell children's shoes exclusively, in competition in interstate commerce in California and States adjacent thereto are facts which are calculated to cause and have caused and are now causing confusion in the trade and have induced and are inducing purchasers of children's shoes to believe that the shoes offered for sale by the respondent are shoes manufactured and sold by the Juvenile Shoe Corporation.