the respondent has violated the provisions 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,"

Now, therefore, it is ordered, That the respondent, The HenkelClauss Company, its officers, directors, agents, representatives, servants and employees, cease and desist, from directly or indirectlySelling or offering for sale, razors or other cutlery upon which is etched or otherwise imprinted the word "Sheffield," as a brand name, label, trade-mark or trade name, or as a part thereof, unless the blades or cutting part of such cutlery or the steel from which same is made, be manufactured in Sheffield, England.

Selling or offering for sale in interstate or foreign commerce, razors bearing upon the containers in which same are packed, fictitious and misleading price marks greatly in excess of the prices at which such razors sell in the usual course of retail trade.

Selling or offering for sale in interstate and foreign commerce, razors of inferior quality, seconds, or razors for any reason unsuitable for the general trade, packed in containers upon which are printed the words "Special Quality. Fully Warranted," or words of like import.

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

5 F. T. C.

Syllabus.

FEDERAL TRADE COMMISSION

v.

S. E. J. COX ET AL.

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

SYLLABUS.

Docket 402-June 24, 1922.

Where concerns organized for the purpose of dealing in oil and oil stocks, and where two individuals, promoters, organizers, stockholders and officers of said concerns, in advertising for sale their stocks, separately and in conjunction with one another,

(a) Falsely represented that one of said concerns had producing wells in the best part of the shallow territory of a well known oil producing section, that said wells adjoined some of the oldest and best producers of said section, and that it had leases in the midst of said section's most prolific deep well gusher district;

(b) Falsely represented that some of said concerns owned or had the use of an instrument, device, or formula by means of which they could locate and had located oil beneath the surface of the earth;

(c) Falsely represented that one of said concerns had brought in a 30,000 barrel gusher on a certain lease, the fact being that said gusher was brought in by another company in which none of them had any interest and that said concern had no interest in the particular portion of the aforesaid lease on which said gusher was developed;

(d) Falsely represented that 10 per cent of the production from the rich producing properties of said concern would be placed in a special fund to pay purchasers of the stock $2 for every $1 invested, displaying in connection with such advertisement pictures of a lake of ofl described as the production of the aforesaid gusher from "Lucky Cox's" property;

(e) Falsely represented that said concern had obtained a lease in a certain well known oil field;

(f) Falsely represented in a monthly magazine called "Truth," which they published without disclosing their connection therewith, that successful producing properties of several companies operating in the Burkburnett and Ranger oil fields were being organized into a large company under one head, for the purpose of economy and efficiency, and that the new company, one of the aforesaid concerns, had sufficient producing property at Burkburnett to enable it to pay a dividend of 2 per cent per month on all stock issued at the time of organization;

(g) Falsely represented that the aforesaid producing property was situated in the heart of the Burkburnett field, and that oil therefrom was flowing into the said concern's tank in sufficient volume to pay easily 4 per cent a month, although only 2 per cent would be paid until more production was secured;

(h) Widely advertised the payment of dividends by said concern, the fact being that the moneys so paid were paid out of funds not properly avail

able therefor and that said concern had no income properly applicable to dividend purposes;

(i) Falsely represented that said concern's operations included the purchase of a refinery with a capacity of 2,500 barrels per day, to be increased to 6,000 barrels as soon as said refinery was taken over, the fact being that the capacity of the same was only 1,500 barrels when in good repair, and that its condition was such during the time owned by said concern that its output was limited to 750 or 800 barrels per day;

With the effect of misleading and deceiving the public and of injuring competitors in the sale of other securities:

Held, That such false and misleading advertising, under the circumstances set forth, constituted an unfair method of competition.

COMPLAINT.

The Federal Trade Commission, having reason to believe from a preliminary investigation made by it that S. E. J. Cox, whose given name is to the Commission unknown, Prudential Oil & Refining Company, Prudential Trust & Securities Company, General Oil Company, (Mrs.) N. E. Cox, whose given name is to the Commission unknown, and Napoleon Hill, hereinafter referred to as the respondents, have been and are using unfair methods of competition in interstate commerce in violation of the provisions 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 thereto 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 S. E. J. Cox is a resident of the State of Texas with his principal office and place of business in the City of Houston, in said State; that the said S. E. J. Cox for several years last past has been engaged and is now engaged in the promotion of the respondent companies, the Prudential Oil & Refining Company, the Prudential Trust & Securities Company and the General Oil Company, and various other associations and organizations; that the said respondent claims and has claimed that the purposes of promoting the said respondent companies was and is that of creating organizations for the development and promotion of oil wells on oil leases located generally in the Mid-Continental and Gulf Oil Fields; that the respondent companies, Prudential Oil & Refining Company and the General Oil Company are promotions organized and being organized for the purpose of developing oil wells in said fields; that the respondent the Prudential Trust & Securities Company is a corporation organized for the pur

pose of holding and selling stock and shares of these said oil companies and other organizations and associations.

That the respondent, the Prudential Oil & Refining Company, is a common law corporation or association organized in the year 1917 in the City of Chicago, in the State of Illinois, with a capital stock of $3,000,000, having a par value of $1 per share; that the capital stock of the said company was later increased to $10,000,000, having a par value of $1 per share; that at the time of its organization the principal office and place of business of the company was in the City of Chicago, in the State of Illinois, and that about January, 1918, the principal office and place of business was transferred to the City of Houston, in the State of Texas, in which City the respondent now has its principal office and place of business; that the president of the respondent, the Prudential Oil & Refining Company, is S. E. J. Cox.

That the respondent, the Prudential Trust & Securities Company, was organized in the State of Delaware, in 1916, under the name Prudential Securities Company and that subsequently the corporate title was changed to Prudential Trust & Securities Company; that it is now existing under and by virtue of the laws of the State of Delaware; that its present principal office and place of business is in the City of Houston in the State of Texas; that the respondent S. E. J. Cox is the president of the same; that the activities of said respondent are largely confined to promoting new organizations and associations.

That the General Oil Company, formerly known as the Texas Ranger Oil Company, is a pre-organization association with headquarters in the City of Houston, in the State of Texas; that the same is being promoted by respondent S. E. J. Cox and his associates partly through the respondent, the Prudential Trust & Securities Company, which company is selling the stock thereof; that the capitalization of the said respondent, General Oil Company, is to be $750,000 divided into shares of the par value of $10 each; that the officers of the said company are to be respondent S. E. J. Cox, president, G. Aven and L. B. House, whose given names are to the Commission unknown; that G. Aven and L. B. House are employees of respondent S. E. J. Cox; that the headquarters of the pre-organization association are in the City of Houston, in the State of Texas. That the present address of each of the said respondents is 212 Scanlan Building, Houston, Tex.

That the respondent, N. E. Cox, is the wife of the respondent S. E. J. Cox; that she has been associated with S. E. J Cox in the promotions and undertakings above described; that her residence is in the

City of Houston, State of Texas; that respondent, Napoleon Hill, has been in the employ of the respondent S. E. J. Cox and the respondent companies and associations at a salary of $5,000 per year as advertising agent for said respondents; that the said respondent professes to be an expert psychologist and has a school of applied psychology and advertising in the City of Chicago, and also publishes there a magazine called "Hill's Golden Rule."

PAR. 2. That respondents S. E. J. Cox, N. E. Cox, Napoleon Hill and the Prudential Trust & Securities Company for themselves and in behalf of the respondent oil companies and other companies and associations in the conduct of the business of promoting the respondent oil companies and the various other unnamed companies and associations and in advertising for sale and selling stock of the same, and in inducing and procuring subscriptions for stock of said companies and of other companies promoted by these respondents, and in selling such stock have procured such subscriptions to stock and purchasers for stock from various persons, firms corporations and copartnerships in various States of the United States; that numerous letters and circulars and much advertising matter have been distributed through the mails by and on behalf of said respondents in various States of the United States; that many such stocks and subscriptions for such stock have been sold to various persons, firms, corporations and copartnerships in various States of the United States and that the same have been transported from the City of Chicago, in the State of Illinois, and from the City of Houston, in the State of Texas, and from various other places to the purchasers thereof, located in other States than in the States from which they were sent; that in the conduct of their said business as aforesaid the respondents, S. E. J. Cox, N. E. Cox, Napoleon Hill and Prudential Trust & Securities Company have carried on a constant current of trade and commerce between various states of the United States in competition with numerous other persons, firms, corporations and copartnerships engaged in the sale and distribution of various stocks and securities.

PAR. 3. That the respondent, S. E. J. Cox for himself and on behalf of the respondent oil companies, the Prudential Oil & Refining Company and the General Oil Company and on behalf of the Prudential Trust & Securities Company, and while acting as president and agent of such respondents and in the line of his duties as such president and agent, and the respondent, the Prudential Oil & Refining Company and Prudential Trust & Securities Company and the General Oil Company through their president and agent S. E. J. Cox, and the respondents N. E. Cox and Napoleon Hill for themselves