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Mr. EBERHARTER. Now, your concern is very particular to guard your good will and the faith of your people and your customers that have faith in your product. Now, suppose you were not so scrupulous about that and you would have an opportunity to assign the use of this trade-mark to many different shoe companes, say, manufacturing shoes. Do you claim that you have the right to assign the use of this red cross name to other shoe companies?

Mr. STERN. You mean to other shoe companies?

Mr. EBERHARTER. Yes.

Mr. STERN. I do not believe it. Do you mean other manufacturers? Mr. EBERHARTER. I mean other manufacturers, manufacturing shoes, say, having no label whatsoever.

Mr. STERN. No; that is why we did not do it.

Mr. EBERHARTER. Do you feel that you have the right?

Mr. STERN. We do not feel as though we have any right except for the use of the mark in connection with our own shoe business.

Mr. EBERHARTER. You do not have the right to assign that right to other manufacturers of shoes?

Mr. STERN. Well, now, if we had sold our business I rather imagine that the rights to that would go right along with it.

Mr. EATON. Up to 1919 you were not registered; this was not a registered trade-mark.

Mr. STERN. This has been used, of course, since 1898, and in 1919 it was registered.

Mr. EATON. Between 1898 and 1919 if a rival firm had used this trade-mark you could not have had any recourse in law.

Mr. STERN. Oh, yes; just the same recourse, as I understand it, whether your mark is registered or not, you have the same recourse at law identically.

Mr. EBERHARTER. I have just one or two more questions. Now, of course, the name "Red Cross" is valuable because of the advertising and the goodwill that you have established in giving value, and so forth. Do you not think, in addition to that, that the name "Red Cross," because of what it generally symbolizes in the minds of the people in the country, is also valuable!

Mr. STERN. No; I do not, Mr. Eberharter, if you will pardon the expression; I know it is not so. It is the continuous effort put behind that name on a shoe year after year that women go into a shoe store, and they know that they have had satisfaction from a pair of Red Cross shoes that fits them well and looked well, and they go back and ask for a pair of Red Cross shoes.

Mr. EBERHARTER. Do you not think, Mr. Stern, that many people in the country, once they see the name "Red Cross," have the opinion in their mind that the American National Red Cross have approved that product?

Mr. STERN. Well, Mr. Eberharter, I can only answer you this way: That to our knowledge we have never in any manner to the slightest degree intimated any association with the American Red Cross.

Mr. EBERHARTER. Do not you think a lot of people in the country really believe that the name "Red Cross" on any product, not alone on shoes, but on any product, helps to induce the sale because the people think that the American National Red Cross had something to do with it?

Mr. STERN. No; I do not.

Mr. EBERHARTER. I have one other question. If your company was compelled to adopt a different name, if this proposed legislation becomes law, and you adopted a different name, and put right under it "Formerly Red Cross Shoe," do you think it would be so terribly damaging to your company then? Suppose that you said "Red Star shoe, formerly Red Cross shoe"?

Mr. STERN. We cannot use Red Star.

Mr. EBERHARTER. Well, some other name; any name that you felt would be a very fine name.

Mr. STERN. If we could be allowed to use the same symbol, the same mark that has been used since 1898, and call it any similar type of name, and put underneath it "Formerly Red Cross shoes," that is your question?

Mr. EBERHARTER. Yes, sir.

Mr. STERN. I think that there would be considerable damage; there would be a much greater damage I am afraid to our customers where women go into the stores and know the shoes.

This shoe is important in the industry to the retail merchants of America, and it is regarded as the best known trade-mark item of any kind in any store, and accounts for the largest volume of any shoe in practically any store in which it is sold.

Take for instance here in Washington, the shoes have been sold here for a great many years, it is now sold by the Hecht Co. They do a quarter of a million dollars annually of Red Cross shoes.

Now take that name away from that company, or go over here to Alexandria, there is a merchant much smaller selling Red Cross shoes there, but take that name away from him and it is going to be a real hardship. It is going to be a bigger hardship to the Alexandria man than it is to Mr. Washington man, because he cannot stand it as well. Mr. EBERHARTER. I have one more question. Do you object to adding to your label or trade-mark the words "not endorsed by any organization"?

Mr. STERN. Well, I think that that would be, and do not you think that that would be rather unfair? It might put a little stigma on the name "not endorsed." I do not think that that would be quite fair. Mr. EBERHARTER. I can see exactly what you mean.

Mr. STERN. We have done nothing wrong in this; we have stuck to the letter of the law with all our customers; maybe possibly a digression here and there, that is bound to happen in any family.

Mr. EBERHARTER. One reason I am asking these questions is to give you an opportunity to place on the record any objections that you may have to any suggestions that might come about, you see.

Mr. STERN. Thank you, sir.

Mr. EBERHARTER. I agree with you that "not endorsed" might create a wrong impression in the minds of the general public, if you could say something less positive, such as "We do not claim the endorsement of any organization," or some other wording which would not be so positive, would you have less objection to that?

Mr. STERN. If the wording would be a fair wording, so as to give protection to the American Red Cross, if needed, and the wording was so that it would not create an unfavorable impression upon the millions of women who do read the Red Cross shoe advertising.

Mr. EBERHARTER. That is all, Mr. Chairman.

Mrs. BOLTON. Mr. Stern, I do happen to be a woman, and I do hear a good deal of conversation on the subject of shoes, and it has been my experience to find that a great many women who have not been accustomed to buying Red Cross shoes when they buy them the first time they are very apt to buy them because it has the red cross there, they think that it has the endorsement of the Red Cross from the point of view of a shoe which is good for the foot, and when they get to the time when their arches begin to drop, and their feet begin to hurt them, they go in with the idea that the Red Cross certainly must know about feet, and therefore the Red Cross shoe must be the answer.

That is just a comment on your saying that you think that that never is the case. It has been my experience to find that it has been the case with a great many women.

Mr. STERN. Might I interrupt you and answer that, please?

I am sure that the women come in and ask for a Red Cross shoe, but I will leave it up to your good sober judgment. Here is a typical advertisement that I think just was in Vogue. I think it is in Vogue this month. Could there be any possible connection with the statement that these women that you have stated made to them between shoes of this kind, in smart summery Red Cross shoes.

Now, these certainly are not the types of shoes to which you were referring, and this is a typical Red Cross shoe advertisement.

Yes; they will come in and ask for Red Cross shoes, and that is the point I have been trying to make, and they will ask for Red Cross shoes in preference to any shoe on the market, because they have read about Red Cross shoes in the advertisements, their friends have told them about them, and they are good shoes.

Mr. EBERHARTER. In other words, the indication that I get from your display of that advertisement is that if anybody looks at the advertisement they will immediately conclude that you cannot have stylish shoes and classy shoes and healthy shoes at the same time?

Mr. STERN.. That probably would answer Mrs. Bolton much better than I can, but certainly there is not anything in our business—you see, I am an ingenue at this. I do not know anything about committee hearings.

The CHAIRMAN. I think that you are a prima donna.

Mr. STERN. I wish that that might go into the record for my wife. We know that a demand has been created because of this Red Cross shoe, and we know what would happen to our business, I am not concerned about myself, nor are you concerned about yourself, you are concerned about others, and to justice. I know that this faith and good will has been built into the minds of millions of women, and those women who spoke to you said that they had heard about the Red Cross shoe, and if they look at our advertising, which goes on month after month in many leading women's magazines, we are the largest national advertisers of any shoe in the world, bar none, and I venture to say that you know many shoes better than you do the Red Cross shoe, but we cater to the masses, and I can tell you over 2,500,000 pairs of Red Cross shoes are sold annually, and you can see the kind of person whom we cater to.

Mrs. BOLTON. May I ask you if you do make a comfortable health shoe?

Mr. STERN. All of our shoes are comfortable.

Mrs. BOLTON. How about answering the health end of it? Mr. STERN. I would like to answer that facetiously. There are lines of shoes that are so-called corrective shoes which people think need a lot of correction. As to the health angle of shoes, between you and me, unless the shoes are made to order, it is the bunk.

A shoe is only as good as the last on which that shoe is made-and the work on it; just remember that, and you too, gentlemen, when you are buying a pair of shoes.

Mrs. BOLTON. Your original shoes were not then built on the idea of really comfort, weren't they comfort shoes?

Mr. STERN. As I said before, Mrs. Bolton, back in 1898 I imagine all shoes were of that kind, but still, look at how this shapes up here. Mrs. BOLTON. I know, because I used to wear them.

Mr. STERN. Look at how this came into fashion, how could a shoe like this be comfortable-just think of it--but this came into fashion. Mrs. BOLTON. But you are not answering my question, or I have not put it very plainly, there was a shoe which was known as the Comfort shoe, was there not?

Mr. STERN. Every factory made a comfort shoe, I would say; every factory made a comfort shoe; yes. It was a general name, the same as walking shoes.

Mrs. BOLTON. You had nothing to do with that.

Mr. STERN. You mean nothing to do with comfort?
Mrs. BOLTON. Yes.

Mr. STERN. I do not want to evade your question, but

Mrs. BOLTON. I do not mean to be quibbling at all, I am really asking for a purpose.

Mr. STERN. But the primary shoes did two things in 1898. One, they gave comfort, and the other, they wore. Shoes back in 1898 wore like iron, they were good, fine shoes, and the other thing they did was to give comfort.

As you know—I do not mean as you know-but in those days shoes were made on what you called D and E lasts, and today we make them from AAAAA's all the way down to EEE's.

Now, they try to give comfort in this D and E lasts, they were broadtoed shoes look at some of the advertisements; that might answer your question.

Mrs. BOLTON. I do not mean to spend undue time on this, but I do have another question which I think perhaps is more to the point on the whole matter under discussion. You sell to other countries, not?

do

you

Mr. STERN. No; we only sell to retail stores.

Mrs. BOLTON. You only sell to retail stores?

Mr. STERN. Yes; in the United States.

Mrs. BOLTON. You have no foreign trade whatsoever?

Mr. STERN. None at all, in Red Cross shoes.

Mr. JONKMAN. Just to keep the record straight, I would like to ask Mr. Stern if you were to use a trade-mark which was Red Star shoes, formerly the Red Cross shoe, would not you be guilty of just as palpable a violation of the law as you are now, assuming that it is unlawful? Mr. STERN. My guess would be "Yes."

Mr. EATON. If 44 years ago your organization had chosen Blue Cross instead of Red Cross, would that have been as effective?

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Mr. STERN. If we would have continued to advertise Blue Cross shoes in the same manner which we have advertised Red Cross shoes, and had the same management, it would have been equally as effective, just as well. It would be the same with any name of shoes, take the names of shoes that you know such as Walk-Over shoes, you know the Walk-Over shoe, and if you take that name off the shoe what have they got? They have nothing.

You probably wear I. Miller shoes, and if you take the name off the shoe what have you got? If any of you men wear Stetson shoes, if you take the name Stetson away, you would not go in and pay the same price for that shoe unbranded even though you were told it was a Stetson shoe.

We could have Blue Cross, Red Circle, or anything, and spent the millions of dollars that we did in building up the goodwill on that mark, and the business would have been the same today in my judgment.

Mr. EATON. Just when did you turn over from comfortable shoes to making uncomfortable shoes?

Mr. STERN. As the times demanded it.

The CHAIRMAN. Are there any further questions?

Mr. VORYS. Do you authorize or direct department stores to be called the Red Cross Shoe Shop, or when you see a store that is labeled Red Cross Shoe Shop, do you grant a franchise to that effect?

Mr. STERN. Well, now, that is an interesting question. That was brought up by Mr. Hughs to us, and probably Mr. Allen, our counsel, can answer that considerably better than I can. What I can tell you and what I want to tell you is this, and get it straight: We try to play the game square.

Mr. KEE. Do you have any stores that handle your line exclusively? Mr. STERN. Yes, sir.

Mr. KEE. And they are known as a Red Cross Shoe Store?

Mr. STERN. Yes, sir.

Mr. KEE. That is all.

The CHAIRMAN. Are there any further questions?

Mr. JOHNSON. I have one question. As I interpret the testimony, the success of the Red Cross shoes have been dependent upon quality and advertising rather than on the name, has it not?

Mr. STERN. Absolutely, sir.

Mr. JOHNSON. That is all. Thank you.

Mr. STERN. I appreciate your asking that question, because it says everything that I have tried to say in all of these 12 or 13 minutes. The CHAIRMAN. If there are no further questions, we thank you very much.

STATEMENT OF DWIGHT G. W. HOLLISTER, PRESIDENT OF A. P. W. PAPER CO., ALBANY, N. Y.

Mr. HOLLISTER. Mr. Chairman and members of the Foreign Affairs Committee, my name is Dwight G. W. Hollister; I am a legal resident of Wellesley Hills, Mass. ; and I am president of the A. P. W. Paper Co., of Albany, N. Y. I am down here at the invitation of your chairman without counsel.

The A. P. W. Paper Co., a New York corporation, was established in 1877. It is engaged in the manufacture and sale of toilet papers

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