1. The Federal Trade Commission Act makes the Commission's
findings of fact conclusive if supported by evidence, and, upon
appeal from the Commission's order, the Circuit Court of Appeals is
not at liberty to make its own appraisal of the testimony and pick
and choose for itself among uncertain and conflicting inferences.
P. 291 U. S.
2. The Commission ordered Pacific Coast lumber dealers to desist
from the practice of selling, under the tradename of "California
White Pine," lumber made from "Western Yellow Pine" (Pinus
), finding it an unfair and prejudicial method of
competing with lumber made from the true White Pines (Pinus
and closely related species), a product of better
quality and commanding a higher price.
(1) That the evidence supported the Commission (a) in finding
that the lumber sold by the tradename "California White Pine" is
inferior to the true white pine lumber; (b) in finding that the
tradename is misleading and causes both confusion and prejudice to
retailers, architects, builders, and consumers. Pp. 291 U. S.
(2) The fact that "California White Pine" is listed as a trade
equivalent of Pinus polderosa
in a list of standard
commercial names for lumber, forming part of a report of
"Simplified Practice Recommendations" issued by the Bureau of
Standards, is of little weight as evidence, considering the nature
of the Bureau's function and the basis and purpose of its
recommendations. P. 291 U. S.
Page 291 U. S. 68
3. In being sold a substitute in the name of a better article,
the consumer is prejudiced, even though he save money by it; the
public is entitled to get what it chooses, though the choice may be
dictated by caprice, or by fashion, or perhaps by ignorance. P.
291 U. S.
4. The practice of marketing a cheaper kind of lumber under the
name of a better and more expensive kind is prejudicial to honest
dealers and manufacturers; orders that would come to them if the
lumber were rightly named are diverted to others whose methods are
less scrupulous. P. 291 U. S.
5. The facts that a deceptive tradename was adopted without
fraudulent design and has long been in use are not a defense under
the Act if its continued use is, in the circumstances, unfair and
prejudicial to the public interest. P. 291 U.S. 79
6. In this case, the evidence contradicts the proposition that
the name "California White Pine," misleading in the beginning, had
acquired an independent or secondary meaning rendering it
innocuous. P. 291 U. S.
7. A tradename, legitimate in one territory, may generate
confusion when carried to another, and must be given up. P.
291 U. S.
8. A method of competition may be unfair without being
fraudulent in law, but equity perceives a kind of fraud in clinging
to a benefit begot of misrepresentation, however innocently made.
P. 291 U. S.
9. The contention that the proceedings of the Trade Commission
in this case were not "to the interest of the public," based on the
thought that, by encouraging the use of Pinus ponderosa,
the eastern forests of Pinus strobus
would be conserved,
is rejected. P. 291 U. S.
10. In requiring that the word "White" be omitted from the name
of respondent's product, the Commission did not abuse its
discretion. P. 291 U. S.
64 F.2d 618 reversed.
Certiorari, 290 U.S. 607, to review a judgment of the Circuit
Court of Appeals annulling an order of the Federal Trade
Page 291 U. S. 69
MR. JUSTICE CARDOZO delivered the opinion of the Court.
In May, 1929, the Federal Trade Commission filed and served
complaints against a group of fifty manufacturers on the Pacific
Coast charging "unfair competition in interstate commerce" in
violation of § 5 of the Federal Trade Commission Act. 38 Stat. 717,
719, c. 311, § 5, 15 U.S.C. § 45.
After the service of answers, the proceedings were consolidated
and many witnesses examined. The outcome was a series of reports
sustaining the complaints as to thirty-nine manufacturers, with
orders to "cease and desist" from the practice challenged as
unfair. Twelve companies thus enjoined petitioned the Circuit Court
of Appeals for the Ninth Circuit to review the orders of the
Commission. Such review being had, the orders were annulled. 64
F.2d 618. A writ of certiorari brings the case here.
The practice complained of as unfair and enjoined by the
Commission is the use by the respondents of the words "California
white pine" to describe lumber, logs, or other forest products made
from the pine species known as "Pinus ponderosa.
findings as to this use and its effect upon the public are full and
circumstantial. They are too long to be paraphrased conveniently
within the limits of an opinion. We must be content with an
The respondents are engaged in the manufacture and sale of
lumber and timber products which they ship from
Page 291 U. S. 70
California and Oregon to customers in other states and foreign
lands. Much of what they sell comes from the species of tree that
is known among botanists as "Pinus ponderosa.
respondents sell it under the name of "California white pine," and
under that name, or at times "white pine" simply, it goes to the
consumer. In truth it is not a white pine, whether the tests to be
applied are those of botanical science or of commercial practice
Pine trees, the genus "Pinus,
" have for a long time
been divided by botanists, foresters, and the public generally into
two groups, the white pine and the yellow. The white pine group
includes, by common consent, the northern white pine (Pinus
), the sugar pine, and the Idaho white pine. It is much
sought after by reason of its durability under exposure to weather
and moisture, the proportion of its heartwood as contrasted with
its sapwood content, as well as other qualities. For these reasons,
it commands a high price as compared with pines of other species.
The yellow pine group is less durable, harder, heavier, more
subject to shrinkage and warping, darker in color, more resinous,
and more difficult to work. It includes the long leaf yellow pine
), grown in the southern states, and the
a far softer wood, which is grown in the
Pacific Coast states, and in Arizona and New Mexico as well as the
"inland empire" (Eastern Washington, Oregon, Idaho, and Western
Of the varieties of white pine, the northern, or Pinus
has been known better and longer than the others. It
is described sometimes as northern white pine, sometimes as white
pine simply, sometimes with the addition of its local origin, as
Maine white pine, Michigan, Wisconsin, Minnesota, Canadian, New
Brunswick. It is native to the northeastern states and to the Great
Lakes region, as far west as Minnesota. It is found also in Canada
Page 291 U. S. 71
along the Appalachian highlands. It was almost the only building
material for the settlers of New England, and so great is its
durability that many ancient buildings made from it in the
seventeenth and eighteenth centuries survive in good condition. The
sugar pine is native to the upland regions of California, Southern
Oregon, and parts of Nevada. The Idaho white pine grows in the
mountainous sections of Idaho, Washington, and Oregon, and in parts
of British Columbia. The white pine species "still holds an exalted
reputation among the consuming public," and, "in general esteem, is
the highest type of lumber as respects the excellences desired in
soft wood material."
"It is coming more and more to be a specialty wood, largely
devoted to special purposes, as it becomes scarcer and higher in
price. It is in great demand."
About 1880, the Pinus ponderosa,
though botanically a
yellow pine, began to be described as a white pine when sold in the
local markets of California, New Mexico, and Arizona, the
description being generally accompanied by a reference to the state
of origin, as "California white pine," etc. By 1886, sales under
this description had spread to Nevada and Utah, with occasional
shipments farther east. About 1900, they entered the middle western
states, and, about 1915, had made their way into New England,
though only to a small extent. The pines from the inland empire
traveled east more slowly, and, when they did, were described as
western white pine, a term now generally abandoned. The progress of
the newcomers both from the coast and from the inland empire was
not wholly a march of triumph. In their movement to the central and
eastern markets, they came into competition more and more with the
genuine white pine with which those markets had been long familiar.
Mutterings of discontent were heard. In 1924, partly as a result of
complaints and official investigations, many of the producers,
notably those of the "inland empire," as well as
Page 291 U. S. 72
some producers in California and Arizona, voluntarily gave up
the use of the adjective "white" in connection with their product,
and adopted the description "pondosa pines," pondosa being a
corruption or abbreviation of the ponderosa
botanists. "Pondosa pine is the term employed for
by the representatives of producers of slightly
more than half of the ponderosa
marketed." The respondents
and others, however, declined to make a change. During the next
five years, California white pine and its equivalents became an
even more important factor in the lumber markets of the country.
Accumulating complaints led to an inquiry by the Commission, which
had its fruit in this proceeding.
The confusion and abuses growing out of these interlocking names
have been developed in the findings. Many retail dealers receiving
orders for white pine deliver California white pine, not knowing
that it differs from the lumber ordered. Many knowing the
difference deliver the inferior product because they can buy it
cheaper. Still others, well informed and honest, deliver the
genuine article, thus placing themselves at a disadvantage in the
race of competition with the unscrupulous and the ignorant. Trade
has thus been diverted from dealers in white pine to dealers in
masquerading as white pine. Trade has also
been diverted from dealers in Pinus ponderosa
name Pinus pondosa
to dealers in Pinus ponderosa
under the more attractive label. The diversion of trade from
dealers of one class to dealers of another is not the only
mischief. Consumers, architects, and retailers have also been
misled. They have given orders for the respondents' product,
supposing it to be white pine and to have the qualities associated
with lumber of that species. They have accepted deliveries under
the empire of that belief. True indeed it is that the woods sold by
the respondents, though not a genuine
Page 291 U. S. 73
white pine, are nearer to that species in mechanical properties
than they are to the kinds of yellow pine indigenous to the south.
The fact that, for many purposes, they are halfway between the
white species and the yellow makes the practice of substitution
easier than it would be if the difference were plain.
Misrepresentation and confusion flourish in such a soil. From these
findings and others, the Commission was brought to the conclusion
that the respondents compete unfairly in transacting business as
they do, and that, in the interest of the public, their methods
should be changed.
"The findings of the Commission as to facts, if supported by
testimony, shall be conclusive." 15 U.S.C. § 45. The Court of
Appeals, though professing adherence to this mandate, honored it,
we think, with lip service only. In form, the court determined that
the finding of unfair competition had no support whatever. In fact,
what the court did was to make its own appraisal of the testimony,
picking and choosing for itself among uncertain and conflicting
inferences. Statute and decision (Federal Trade Commission v.
Pacific States Paper Trade Assn., 273 U. S.
, 273 U. S. 61
forbid that exercise of power.
The argument is made that unfair competition is
disproved by the "simplified practice recommendations" of the
Bureau of Standards when read in conjunction with the testimony as
to the comparative utility of the genuine white pine and Pinus
The Court of Appeals concedes that the recommendations of the
Bureau will not avail, without more, to control the action of the
Commission. Cf. Brougham v. Blanton Mfg. Co., 249 U.
, 249 U. S. 499
Piedmont & Northern Ry. Co. v. Interstate Commerce
Comm'n, 286 U. S. 299
286 U. S. 312
The view was expressed, however, that alone they are in a high
degree persuasive, and that, in conjunction with other evidence,
they are even controlling. In
Page 291 U. S. 74
particular, that result was thought to follow in this case
because the substituted wood, in the judgment of the court, is so
nearly equal in utility that buyers are not injured, even though
misled. [Footnote 1
Such a holding misconceives the significance of the Government's
endeavor to simplify commercial practice. It misconceives even more
essentially the significance of the substitution of one article for
another without notice to the buyer.
(a) The Bureau of Standards is a branch of the Department of
Commerce. At its instance, representatives of manufacturers,
sellers, and users of lumber, as well as architects, engineers, and
others, met in conference at various times between 1922 and 1928 in
an endeavor to simplify methods of business in the lumber industry.
Following these conferences, the Bureau, in 1929, issued a report
entitled "Lumber, Simplified Practice Recommendations." Many
subjects that were considered are without relation to this case.
The report dealt with standards of size, of inspection, of
structural material, and other cognate themes. One of its
subdivisions, however, enumerates the standard commercial names for
lumber of many types. Sixteen names of pines are stated in the
list, and among them is the name "California white pine," with its
botanical equivalent, Pinus ponderosa
The recommendations of the Bureau of Standards for the
simplification of commercial practice are wholly
Page 291 U. S. 75
advisory. Dealers may conform or diverge, as they prefer. The
Bureau has defined its own function in one of its reports. The
Purpose and Application of Simplified Practice, National Bureau of
Standards, Department of Commerce, July 1, 1931, pp. 2, 7, 10,
"Simplified practice is a method of eliminating superfluous
variety through the voluntary action of industrial groups. . . .
The Department of Commerce has no regulatory powers"
with reference to the subject, and hence "it is highly desirable
that this recommendation be kept distinct from any plan or method
of governmental regulation or control." There is nothing to show
that, in making up the list of names, the Bureau made any
investigation of the relation between Pinus ponderosa
the white pines of the east. Certainly it had no such wealth of
information on the subject as was gathered by the Commission in the
course of this elaborate inquiry. There is nothing to show to what
extent its advice has been accepted by the industry. The record
does show that the recommendation does not accord with the practice
of other governmental agencies. For example, the United States
Forest Service, in its publications and forest signs, describes the
species as western yellow pine. In such
circumstances, the action of the Bureau was, at most, a bit of
evidence to be weighed by the Commission along with much besides.
It had no such significance as to discredit in any appreciable
degree a conclusion founded upon evidence otherwise sufficient. The
powers and function of the two agencies of government are
essentially diverse. The aim of the one is to simplify business by
substituting uniformity of methods for wasteful diversity, and, in
the achievement of these ends, to rely upon cooperative action. The
aim of the other is to make the process of competition fair. There
are times when a description is deceptive from the very fact of its
Page 291 U. S. 76
(b) The wood dealt in by the respondents is not substantially as
good as the genuine white pine, nor would sales under the wrong
name be fitting if it were.
The ruling of the court below as to this is infected by a
two-fold error. The first is one of fact. The supposed equivalence
is unreal. The second is one of law. If the equivalence existed,
the practice would still be wrong.
The Commission found as a fact that the genuine white pine is
superior for many reasons to Pinus ponderosa,
because of its greater durability. The court held the view that the
difference in durability had not been proved so clearly as to lay a
basis for the orders, and this, it seems, upon the ground that,
though the superiority exists, the evidence fails to disclose its
"What the testimony appears to establish is that Northern white
pine has relatively a greater durability for exterior use without
establishing any comparative degree of such durability."
64 F.2d 618, at 622.
Court and counsel for the respondents lean heavily at this point
upon the testimony of the Director of the United States Forest
Products Laboratory at Madison, Wisconsin, and his assistant, Mr.
Hunt. The Director testified that he did not know the comparative
durability of the pines, and would refer any inquirer to
specialists, of whom Mr. Hunt was one. The testimony of Mr. Hunt is
that there have been no tests in a strict sense, but that the
comparison between the white pines and Pinus ponderosa
been based upon observation and opinion. He continues:
"The general experience with the use of the white pines during
the two hundred years since they began to be used indicated that
those pines had moderately high durability. The general experience
with Pinus ponderosa
indicated that that wood had low
durability in contact with the ground or any place favoring the
growth of decay. That is a matter of common knowledge."
Inquirers at the Laboratory were accordingly advised that
Page 291 U. S. 77
heartwood of the white pine has more decay resistance, will give
longer service under conditions favoring decay than the heartwood
of Pinus ponderosa,
and "the mill run of the white pine probably would average
higher in durability under decay producing conditions."
This testimony, even if it stood alone, would tend to sustain,
rather than to discredit, the findings by the Commission that the
genuine white pines are materially superior to the woods that the
respondents are selling as a substitute. It is fortified, however,
by evidence from many other sources. To be sure, there is
contradiction which we have no thought to disparage. For present
purposes, we assume the credibility of those who spoke for the
complainants. Wholesalers, retailers, manufacturers, lumber
graders, laboratory experts, and others bore witness to the
comparative merits of the woods, stating their own experience as
well as common opinion among their fellows in the industry. If all
this may be ignored in the face of the findings of the Commission,
it can only be by turning the court into an administrative body
which is to try the case anew.
What has been written has been aimed at the position that
is as good or almost as good as the white
pines of the east. We have yet to make it plain that the
substitution would be unfair though equivalence were shown. This
can best be done in considering another argument which challenges
the finding of the Commission that there has been misunderstanding
on the part of buyers. To this we now turn.
The argument is made that retailers and
consumers are not shown to have been confused as to the character
of the lumber supplied by the respondents, and that, even if there
was confusion, there is no evidence of prejudice.
Both as to the fact of confusion and its consequences, the
evidence is ample. Retailers order "white pine" from
Page 291 U. S. 78
manufacturers and take what is sent to them, passing it on to
their customers. At times, they do this knowing or suspecting that
they are supplying California white pine instead of the genuine
article, and supplying a wood that is inferior, at least for the
outer parts of buildings. Its comparative cheapness creates the
motive for the preference. At times, they act in good faith without
knowledge of the difference between the California pines and
others. Architects are thus misled, and so are builders and
consumers. There is a suggestion by the court that, for all that
appears, the retailers, buying the wood cheaper, may have lowered
their own price, and thus passed on to the consumer the benefit of
the saving. The inference is a fair one that this is not always
done, and perhaps not even generally. If they lower the price at
all, there is no reason to believe that they do so to an amount
equivalent to the saving to themselves.
But saving to the consumer, though it be made out, does not
obliterate the prejudice. Fair competition is not attained by
balancing a gain in money against a misrepresentation of the thing
supplied. The courts must set their faces against a conception of
business standards so corrupting in its tendency. The consumer is
prejudiced if, upon giving an order for one thing, he is supplied
with something else. Federal Trade Comm'n v. Royal Milling
Co., 288 U. S. 212
288 U. S. 216
Carlsbad v. W. T. Thackeray & Co.,
57 F. 18. In such
matters, the public is entitled to get what it chooses, though the
choice may be dictated by caprice, or by fashion, or perhaps by
ignorance. Nor is the prejudice only to the consumer. Dealers and
manufacturers are prejudiced when orders that would have come to
them if the lumber had been rightly named are diverted to others
whose methods are less scrupulous. "A method inherently unfair does
not cease to be so because those competed against have become aware
of the wrongful practice." Federal Trade Commission v.
Page 291 U. S. 79
Hosiery Co., 258 U. S. 483
258 U. S. 494
] The careless and
the unscrupulous must rise to the standards of the scrupulous and
diligent. The Commission was not organized to drag the standards
The argument is made that the name for the
respondents' lumber was adopted more than thirty years ago without
fraudulent design, and that a continuation of the use is not unfair
competition though confusion may have developed when the business,
spreading eastward, attained national dimensions.
The Commission made no finding as to the motives animating the
respondents in the choice of the contested name. The respondents
say it was chosen to distinguish their variety of yellow pine from
the harder yellow pines native to the southern states. We may
assume that this is so. The fact remains, however, that the pines
were not white, either botanically or commercially, though the
opportunity for confusion may have been comparatively slight when
the sales were restricted to customers in local markets, buying for
home consumption. Complaints, if there were any, must have been few
and inarticulate at a time when there was no supervisory body to
hold business to its duty. According to the law as then adjudged,
many competitive practices that today may be suppressed
(Federal Trade Comm;n v. Winsted Hosiery Co., supra
not actionable wrongs, the damage to the complainants being
classified often as collateral and remote. American Washboard
Co. v. Saginaw Mfg. Co.,
103 F. 281, 286. [Footnote 3
] The Federal Trade Commission was not
organized till 1914, its jurisdiction then as now confined to
interstate and foreign commerce. Silence up to that time is
Page 291 U. S. 80
not even a faint token that the misapplied name had the approval
of the industry. It may well have meant no more than this -- that
the evil was not great, or that there was no champion at hand to
put an end to the abuse. Even silence thereafter will not operate
as an estoppel against the community at large, whatever its effect
upon individuals asserting the infringement of proprietary
interests. French Republic v. Saratoga Vichy Spring Co.,
191 U. S. 427
There is no bar through lapse of time to a proceeding in the public
interest to set an industry in order by removing the occasion for
deception or mistake, unless submission has gone so far that the
occasion for misunderstanding, or for any so widespread as to be
worthy of correction, is already at an end. Competition may then be
fair irrespective of its origin. This will happen, for
illustration, when, by common acceptation, the description, once
misused, has acquired a secondary meaning as firmly anchored as the
first one. Till then, with every new transaction, there is a
repetition of the wrong.
The evidence here falls short of establishing two meanings with
equal titles to legitimacy by force of common acceptation. On the
contrary, revolt against the pretender, far from diminishing, has
become increasingly acute. With the spread of business eastward,
the lumber dealers who sold pines from the states of the Pacific
Coast were involved in keen competition with dealers in lumber from
the pines of the east and middle west. In the wake of competition
came confusion and deception, the volume mounting to its peak in
the four or five years before the Commission resolved to act. Then,
if not before, misbranding of the pines was something more than a
denial wrong. The respondents, though at fault from the beginning,
had been allowed to go their way without obstruction while the
mischief was not a crying one. They were not at liberty to enlarge
the area of their business without adjusting their methods to the
needs of new conditions.
Page 291 U. S. 81
An analogy may be found in the decisions on the law of
trademarks where the principle is applied that a name legitimate in
one territory may generate confusion when carried into another, and
must then be given up. Hanover Milling Co. v. Metcalf,
240 U. S. 403
240 U. S. 416
United Drug Co. v. Rectanus Co., 248 U. S.
, 248 U. S. 100
More than half the members of the industry have disowned the
misleading name by voluntary action, and are trading under a new
one. The respondents who hold out are not relieved by innocence of
motive from a duty to conform. Competition may be unfair within the
meaning of this statute and within the scope of the discretionary
powers conferred on the Commission, though the practice condemned
does not amount to fraud as understood in courts of law. Indeed,
there is a kind of fraud, as courts of equity have long perceived,
in clinging to a benefit which is the product of misrepresentation,
however innocently made. Redgrave v. Hurd,
L.R. 20 Ch.D.
1, 12, 13; Rawlins v. Wickham,
3 De G. & I. 304, 317;
Hammond v. Pennock,
61 N.Y. 145, 152. That is the
respondents' plight today, no matter what their motives may have
been when they began. They must extricate themselves from it by
purging their business methods of a capacity to deceive.
Finally, the argument is made that the
restraining orders are not necessary to protect the public interest
(see Federal Trade Commission v. Royal Milling Co.,
), but, to the contrary, that the public interest will be
promoted by increasing the demand for Pinus ponderosa,
though it be sold with a misleading label, and thus abating the
destruction of the pine forests of the east.
The conservation of our forests is a good of large importance,
but the end will have to be attained by methods other than a
license to do business unfairly.
The finding of unfair competition being supported by the
testimony, the Commission did not abuse its discretion in reaching
the conclusion that no change of the
Page 291 U. S. 82
name short of the excision of the word "white" would give
The judgment is
"It would not necessarily follow . . . that a yellow pine might
be sold as a white pine if such sales were unfair to the trade and
injurious to the public, notwithstanding the Bureau of Standards
had specified a name such as 'California white pine' in a list of
'Standard commercial names' for pine lumber. It would be different,
however, if the particular lumber sold under such name possessed
substantially the same qualities possessed by the white pines of
commerce, as distinguished from certain well known commercial
64 F.2d 618, at p. 620.
The many cases in which the Federal Trade Commission has acted
to prevent misbranding or like misrepresentation will be found
collected in Henderson, The Federal Trade Commission, p. 182 et
The cases are reviewed by Henderson, The Federal Trade
Commission, p. 179, et seq.