American Candy Co

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IN Tile :MATTER OF AMERICAN CANDY COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 1807. Complaint, Dec. 24, 1935 '-Decision, Oct. 19, 1936 Where a corporation engaged in manufacture and sale of so-called "breakand-take," "draw," or "deal" assortments, principal trade demand for which comes from the small retailers, with stores in many instances near schools and patronized by the school children, and sale and distribution of which, or similarly sold candy, offering opportunity of obtaining a prize or becoming a winner by lot or chance, teaches and encourages gambling among children, largest class by far of purchasers and consumers of sucb candy, who buy same in preference to so-called "straight" candy when displayed side by side, by reason of lottery or gambling feature connected with former, and sale of which in market of the other, 1. e., the "straight'' candy, sold exclusively by many manufacturers, has been followed by a marked decrease in sale of such "straight" candy due to the gambling or lottery feature of so-called "break-and-take," "draw," or "deal" candy~ Rold to wholesale and retail dealers, together with explanatory display cards for latter's use, or "push cards," as the case might be, (1) assortments of penny candies, in which the procuring of oue of the larger pie<'PS, or bars, included as prizes along with majority of uniform pieces making up assortments, was contingent upon chance sel€'ction of one of such pieces, concealed color of which differed from that of the majority, and in which purchaser of last piece in assortment also received such a pr·lze, and, (2) assortments in which the fortunate five-cent push from card secured such chauce selector a box of candy, in addition to burs received by the others; so packed and assembled that such various assortments could be displayed and offered, and with knowledge and intent that such assortments would and could be sold, without alteration, addition, or rearrangement, to public by lot or chance by such retail df'alers therein; in violation of public policy, and in competition with many who regnrd such methods of sale and dis· tributiou as morally bad and as encouraging gnmbllng, and especially among children, as injurious to the industry in question through resulting in the merchandising of a chance or lottery instead of candy, and as providing retail merchants with the means of violating the laws of the several States, and some of whom, for such reasons, refuse to sell candy so packed and assembled that It can thus be sold;

With result that competitors refusing, as aforesaid, to sell candy so paclmd and assembled that it could be sold to the public by lot or chance, and who could compete on even terms only by giving the s:1me or similar de· v_lces to retailers, were put to a disadvantage and their sales of "straight" candy showed a continued decrease, some competitors began the sale and distribution of candy for resale to the public by lot or chance, to meet the competition of those who sold and distributed candy resold by such t Amended and supplempntal.

Al\IERICAX CA~DY CO. 577 576 Complaint methods in response to demand therefor, public and comp('titors were prejudiced and injured, and trade was diverted to it from its said competitors, and there war a restraint upon and a detriment to the freedom of fair and legitimate competition in industry in question: lield, That such acts and practices, under the conditions and circumstances set forth, were all to the prejudice of the public and competitors and con· stituted unfair methods of competition.

Before Mr. Miles J. Furnas, trial examiner. Mr.llenry C. Lank and Mr. P. C. [(oUnski for the Commission. Beach, Fathohild & Scofield, of Chicago, Ill., for respondent. AMENDED AND Supplemental Complaint Whereas, the Federal Trade Commission did heretofore, to wit on May 1, 1930, issue its complaint herein charging and alleging that respondent herein is and has been O'uilty of unfair methods of competition in interstate commerce wUhin the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other Purposes," approved September 26, 1914, and Whereas, this Commission having reason to believe that respond- ~nt herein has been and is using unfair methods of competition ~n commerce, as "commerce" is defined in said act, other than and ~n addition to those in relation to which the Commission issued Its complaint as aforesaid, and it appearing to said Commission th~t ~ further proceeding by it in respect thereof would be in the pubhc Interest:

Now, therefore, acting in the public interest, pursuant to the Provisions of the Act of September 26, 1914, aforesaid, the Fed- ~ral Trade Commission charges that the American Candy Company as been and now is using unfair methods of competition in com- ~erce, as "commerce" is defined in said act and states its charges In that respect as follows: ' P ARAGRAPII 1. Respondent is a corporation organized under th'1baw~ of the State of Illinois, with its principal office and place ~f Usiness located in the city of Milwaukee State of ·wisconsin. It 19 no ' f w, and for several years last past has been, engaged in the mannacture of candy and in the sale and distribution thereof to whole- ~l~ and retail dealers located at points in the various States of the lllted States, and causes said product, when so sold, to be transe;~ted from its place of business in the city of :Milwaukee, State of Isconsin, to purchasers thereof in other States of the United StatNl at their respective places of business, and there is now, and has been .578 FEDERAL TRADE COl\IMISSION DECISIONS Complaint 23 F.T.C. for several years last past, a course of trade and commerce by said respondent in such candy between and among the States of the United States. In the course and conduct of said business respondent is in competition with other corporations, and with partnerships and individuals engaged in the sale and distribution of candy and -candy products in commerce between and among the various States .of the United States.

P \R. 2. In the course and conduct of its business, as described in paragraph 1 hereof, respondent sells and has sold to \vholesale anti retail dealers various packages or assortments of candy so packed and assembled as to involve the use of a lottery scheme when sold anrl -distributed to the consumers thereof. Certain of said packages are hereinafter described for the purpose of showing the methods used by respondent, but this list is not all-inclusive of the various packages, nor does it include all of the details of the several sales plans which respondent has been or is using in the distribution of candy by lot or chance :

(a) One of said assortments is composed of a number of pieces of chocolate-covered candy of uniform size, shape, and quality, together with a number of larger pieces of candy, and one still larger piece of candy. These larger pieces of candy are to be given as prizes to purchasers of said chocolate-covered candy of a uniform srze, shape, and quality in the following manner: The majority of the said chocolate-covered candies contained in the said assortment have centers of the same color, and a small number of said chocolate-covered candles have centers of a different color. Said pieces of candy of a uniform size, shape, and quality in said assortment retail at the price of 1¢ each, but the purchasers who procure one of the said pieces of candy having a center of a different color than the majority of said candies are entitled to receive and are to be given free of charge one of the said larger pieces of candy heretofore referred to. The purchaser of the last piece of the aforesaid chocolate-covered candies of a uniform size, shape, and quality jn said assortment is entitled to receive and is to be given free of charge the said largest piece of candy heretofore referred to. The -color of the center of said pieces of candy of uniform size, shape and quality is effectively concealed from purchasers and prospective pur- -chasers until a selection has been made and the piece of candy select- -ed broken open. The aforesaid purchasers of said candies who procure a piece of candy having a center colored differently from the majority of said pieces of candy, and the purchaser of the last piece of candy in said assortments, thus procure one of the said larger' pieces of candy wholly by lot or chance.

AMERICAN CANDY CO. 579 576 Complaint Respondent furnishes to said wholesale and retail dealers with sai<l ~ssortment of candy a display card to be used by the retail dealer In offering said candy for sale to the public. The display card bears a legend or statement informing the prospective purchaser which color of the said colored-center candies contained in said assortment 1lntitles the purchaser to one of the larger pieces of candy, nncl a legend or statement advising that the purchaser of the last piece of <:andy will receive the largest piece of candy free of charge. (b) Another assortment manufactured and distributed by the ,respondent is described as "Play Ball". This assortment consists of a number of candy marbles, together with a number of bars of candy· These bars of candy are to be given as prizes to purchasers of the candy marbles in the following manner:

The majority of said candy marbles contained in said assortment :are of one color, but a small number are of a different color. Said <'andy marbles in said assortment retail at the price of 1¢ each, but the purchasers who procure one of the candy marbles colored differ- ~ntly from the majority are entitled to receive and are to be given free of charge one of the said bars of candy heretofore referred to. The, candy marbles are concealed in a compartment at the bottom of the box within which the entire assortment is packed and the pri~e candy bars are placed in the upper compartment of the box. There IS a small opening at one corner of the box leading into the lower com- Partment. · Inserted in this opening is a wooden plunger which, when operated, withdraws one of the candy marbles. The opening and the plunger are so arranged that it is impossible to perceive the color of the marble which the purchaser is about to receive until the plunger has been withdrawn. The aforesaid purchasers of said candy marbles who procure one colored differently from the majority thus procure one of the said bars of candy wholly by lot or chance. (c) Another assortment manufactured and distributed by the respondent is composed of a number of candy bars and a number of boxes of candy together with a device commonly called a push card. ~he bars of candy vary in weight from 1% ounces to 21/s ounces. to 151he boxes of candy are of varyin()'~ wei()'hts~ from 4 ounces . ounces. The candy in said assortment is to be distributed m the following manner:

The push card has a number of partiaUJ perforated discs and when a push is made and the disc separated from the card, a number is dis- ~closed. Sales are 5¢ each and the card bears statements or legends ll1forminrr the customer and prospective customer as to which numbers(l t' 0 n I~le the purchaser to one of the boxes of candy. All other numbers receive a bar of candy. The last push or punch receives the largest 7&03:>'"--3!)-vol 2!l-39 U, TRADE COMMISSION DECISIONS580 FEDER Complaint 23 F. T. C. box of candy. The numbers on the discs are effectively concealed from customers and prospective customers until a selection has been made and the push separated from the card. The fact as to whether a customer receives one of the bars of candy or one of the boxes of candy for the price of 5¢ is thus determined wholly by lot or chance. PAR. 3. The wholesale dealers to whom respondent sells its assortments resell said assortments to retail dealers, and said retail dealersr and the retail dealers to whom re!:ipondent sells direct, expose said assortments for sale and sell said candy to the purchasing public in accordance with the aforesaid sales plans. Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of its products in accordance with the sales plans hereinabove set forth, as a means of inducing purchasers thereof to purchase respondent's said products in preference to candy offered for sale and sold by its competitors.

PAR. 4. The sale of said candy to the purchasing public in the manner above alleged involves a game of chance or the sale o£ a chance to procure (a) larger pieces of candy; (b) additional bars of candy; or (c) packages or boxes of candy.

The use by respondent of said method of the sale of candies, and the sale of candies by and through the use thereof and by the aid of said method is a practice of the sort which the common law and criminal statutes have long deemed contrary to public policy; and is contrary to an established public policy of the Government of the United States. The use by respondent of said method has the dangerous tend.ency unduly to hinder competition or create monopoly in this, to wit: that the use thereof has the tendency and. capacity to exclude from the branch of the candy trade involved in this proceeding competitors who do not adopt and use the same method or an 6quivalent or similar method involving the same or an equh·alent or similar element of chance or lottery scheme. 'Vherefore, many persons, firms, and corporations who make and sell candy in competition with the respondent, us above alleged, are unwilling to offer for sale or sell candy so packed. and assembled as above alleged, or otherwise arranged and packed for sale to the purchasing public so as to involve a game of chance, and such competitors refrain therefrom.

PAR. 5. Many dealers in• and ultimate purchasers of candy are attracted by respondent's said method and manner of packing said candy, and by the element of chance involved in the sale thereof in the manner above described, and are thereby induced to purchase said candy so packed and sold by respondent, in preference to ca.nrly offered for sale and sold by said competitors of respondent who do AMEIUCAN CANDY CO. 581 576 Findings not use the same or equivalent methods. The use of said method by respondent has the tendency and capacity, because of said game of chance, to divert to respondent trade and custom from its said competitors who do not use the same or an equivalent method; to e:xclude from said candy trade all competitors who are unwilling to and who do not use the same or an equivalent method because the same is unlawful; to lessen competition in said candy trade, and to tend to create a monopoly of said candy trade in respondent and such other distributors of candy as use the same or an equivalent method, and to deprive the purchasing public of the benefit of free competition in said candy trade. The use of said method by the respondent has the tendency and capacity to eliminate from said candy trade all actual competitors, and to exclude therefrom all potential competitors, who do not adopt and use said method or an equivalent method.

PAn. 6. Many of said competitors of respondent are unwilling to adopt and use said method or any method involving a game of chance or the sale of a chance to win something by chance or any other method that is contrary to public policy.

PAR. 7. The aforementioned methods, acts, and practices of the respondent are all to the prejudice of the public and of respondent's competitors as hereinabove alleged. Said methods, acts, and practices constitute unfair methods of competition in commerce within the intent and meaning of Sectioi1 5 of an Act of Congress, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPouT, FINDINGS AS TO THE FACTs, AND OuoER Pursuant to 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," the Federal Trade Commission, on May 1, 1930, issued and served its complaint upon the respondent, American Candy Company, a corporation, charging that the respondent had been and was using Unfair methods of competition in commerce, as "commerce" is defined in said Act of Congress. Respondent filed answer thereto on June 6, 1930, and thereafter on March 28, 1934, filed a substitute answer, dated February 28, 1934, consenting that the Commission might make, enter, issue, and serve an order to cease and desist from the practices complained of, after first having obtained leave to withdraw its answer filed on June 6, 1930. Subsequent thereto, on April 3, 1934, the Commission entered an order to cease and desist against respondent from the practices complained of in said complaint. 582 :FEDERAL 'TRADE COMMISSION DECISIONS Findings ~F.T.C.

On September 14, 1935, the Commission entered and served its order vacating and setting aside the aforesaid order to cease and desist theretofore entered on April 3, 1934, and thereafter on Decem· her 24, 1935, the Commission issued and served on the respondent an amended and supplemental complaint, charging that the respond· ent had been and was using unfair methods of competition in com· merce., as "commerce'' is defined in said Act of Congress. Respondent filed answer thereto, and testimony and evidence in support of the allegations of the complaint were introduced by Henry C. Lank and P. C. Kolinski, attorneys for the Commission, before Miles J. Furnas, an examiner for the Commission, theretofore duly designated by it. Respondent was represented by Irving H. Fathchild, Esq., and while no witnesses were called to testify in opposition to the charges in the complaint, it was stipulated formally on the record by and between counsel for the Commission and for the respondent that the. testimony and evidence taken and filed with the Federal Trade Com· mission in the matter of Walter H. Johnson Candy Company, Docket No. 1817, beginning with page 105 of the original transcript of the testimony and continuing to the end thereof, might and should be considered as testimony on behalf of the Commission and of the 1-respondent, respectively, in the instant proceeding. All the said testimony and evidence hereinabove referred to including the said stipulated testimony and evidence were duly recorded and filed in the office of the Commission.

Thereafter, this proceeding regularly came on for final hearing before the Commission on the said amended and supplemental com· plaint, the testimony and evidence duly recorded and filed in the office of the Commission, including the said stipulated testimony and evidence and brief in support of the complaint, respondent through its counsel having indicated that it did not desire to file any brief nor to orally argue the matter, and the Commission having duly considered the foregoing and being fully advised in the premises, finds that this proceeding is in the interest o£ the public, and makes this itg findin~s as to the £acts and its conclusion drawn therefrom: FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, Americ.an Candy Company, is a c.or· poration oq~anized under the l1nvs of the State of Illinois with its principal office and place of business located in the city of :Milwaukee, State of "\<Visc.onsin. Respondent is now and for several years last. past has been engaged in the manufacture of candy in Milwaukee, Wis., and in the sale and distribution thereof to wholesale and retail dealers located at points in the various States of the United States, AMERICAN CANDY CO. 583 Findings ~nd causes said candy when so sold to be shipped or transported from lts principal place of business in Milwaukee, Wis., to purchasers thereof in other States of the United States, at their respective places of business. In so carrying on said business, respondent is and has been engaged in interstate commerce and is and has been in active competition with other corporations and with partnerships and individuals engaged in the manufacture of candy and in the sale and distributioll thereof in commerce between and among the various States of the United States.

PAn. 2. Among the candy manufactured and sold by respondent is an assortment composed of a number of pieces of chocolate covered candy of uniform size, shape, and quality together with a number of larger pieces of candy and one still larger piece of candy. These larger pieces of candy are given as prizes to purchasers of said chocolate covrred candy of uniform size, shape, and quality in the following manner:

The majority of the said chocolate covered candies contained in said assortment have centers of the same color, but a small number of said chocolate covered candies have centers of a different color. Said pieces of candy of uniform size, shape, and quality retail at the Price of 1¢ each, but the purchasers who procure one of the said pieces of candy having a center of a different color than the majority of said candies are entitled to receive, and are given fr~e of charge, one of the said larger pieces of candy heretofore referred to. The purchaser of the last piece of the aforesaid chocolate covered candies of Uniform size, shape, and quality is entitled to receive, and is given free of charge, the said largest piece of candy heretofore referred to. The color of the center of said pieces of candy of uniform size, shape, and quality is effectively concealed from purchasers and prospective Purchasers until a selection has been made and the piece of candy selected broken open. The aforesaid purchasers of said candy who Procure a piece of candy having a center colored differently from tho lnajority of said pieces of candy, and the purchaser of the last piece of candy in said assortment, thus procure one of the said larger pieces of candy wholly by lot or chance.

Uespondent furnishes to said ·wholesale and retail dealers a dis- Play card to be used by the retail dealer in offering said candy for ~ale to the public. The display card bears a legend or statement lnforming the prospective purchaser which color of the said colored centered candies contained in said assortment entitles the purchaser to one of the larger pieces of candy, and a legend or statement advising that the purchaser of the last piece of candy will receive the largest Piece of candy free of charge.

584 FEDERAL TRADE COl\IMISSION DECISIONS Findings 23 F. '1.'. C. PAR. 3. Another assortment manufactured and distributed by the respondent is designated as ''Play Ball". This assortment is com· posed of a number of red and. black candy marbles together with a number of bars of candy. These bars of candy are given as prizes to purchasers of the candy marbles in the following manner: The majority of the said candy marbles contained in said assort· ment are red, but a small number are black. Said candy marbles retail at the price of 1¢ each but the purchasers who procure one of the black candy marbles is entitled to receive, and is given free of charge, one of the said bars of candy heretofore referred to. The purchaser who procures one of the red candy marbles receives only that particular marble. The candy marbles are concealed in a com· partment at the bottom o£ the box within which the entire assort· mentis packed, and the prize candy bars are placed in the upper com· partment of the box. There is a small opening at one corner of the box leading into the lower compartment. Inserted in this opening is a wooden plunger which when operated withdraws one o£ the candy marbles. The opening and the plunger are so arranged that it is impossible to perceive the color of the marble which the purchaser is about to receive until the plunger has been withdrawn. The aforesaid purchasers of said candy marbles who procure one of the black marbles thus procure one of the said bars of candy wholly by lot or chance. · Respondent furnishes to wholesale and retail dealers a display card to be used by the retail dealer in offering said candy for sale to the public. The display card bears a legend, or statement, or statements, informing the prospective purchasers that the candy contained in said assortment is being distributed in accordance with the above de· scribed sales plan or method.

PAR. 4. Another assortment manufactured and distributed by the respondent is composed of a number of candy bars and a number of boxes of candy together with a device commonly called a "push card". The candy in said assortment is distributed in the :following manner:

The "push card" has a number o:f partially perforated disks, and when a push is made and the disk separated :from the card, a number is disclosed. Sales are 5¢ each and the card bears statements or legends, informing customers and prospective customers as to which numbers entitle the purchasers to one of the boxes of candy. All other numbers receive a bar of candy. The numbers on the disks are effectively concealed from purchasers and prospective purchasers until a selection has been made and the particular disk separated from the card. The fact as to whether a purchaser receives one o£ 1\ I AMERICAN CANDY CO. 585 -ii76 Findings the bars of candy or one of the boxes of candy for the price of 5¢ is thus determined wholly by lot or chance.

PAR. 5. The candy assortments involving the lot or chance feature .as described in paragraphs 2, 3, and 4 above, are generally referred to in the candy trade or industry as "break and take", "draw", or "deal':· assortments. Assortments of candy without the lot or chance feature, in connection with their resale to the public, are generally referred to in the candy trade or industry as "straight" goods. Theso terms will be used hereafter in these findings to designate these types ·of assortments.

PAR. 6. Numerous retail dealers purchase and have purchased the assortments described in paragraphs 2, 3, and 4 above, direct from respondent or from wholesale dealers and jobbers who in turn have PUrchased said assortments from the respondent. Such retail dealers display said assortments for sale to the public as packed and as- ~embled by the respondent, and the candy contained in said assortl11ents is sold and distributed to the consuming public as suggested by the respondent or by means of the "push card" furnished by the respondent, and in accordance with the legends printed on the display cards or on the "push card".

PAR. 7. The respondent sells its merchandise to retail dealers and Wholesale dealers and jobbers in the north, south, and middle west- ~rn parts of the United States; t~1e greater bulk of its merchandise lS sold between Colorado and western New York State. Respondent's merchandis~, both "straight," and "break and take," or "draw," or "deal" assortments, is resold in practically all stores where candy is sold. It was stipulated at the hearing in this case that the 5¢ '" push card" assortment, referred to in paragraph 4 hereof, has a substantial distribution among retail dealers where the consumers are predominantly but not exclusively adults, as distinguished from 'Children. It was also stipulated at the hearing in this case that there are certain instances where the assortments described in paragraphs 2, 3, and 4 hereof have been purchased by dentists, or barbers, or in some cases by grocery stores where the proprietor of the office or store distributed the candy gratuitously among children of Patrons or callers and gives them the prize piece or package if they select the prize winning smaller piece or number. It was further stipulated that this distribution was not extensive. All !:'ales made by the respondent are absolute sales, and the respondent retains no control over the goods after they are d~livered to the retail dealers or to the wholesale dealers and jobbers. The assortments are packed in such manner that they can be displayed and offered for sale, and are designed to be displayed and offered Findings 23F. T.C.

for sale without alteration, addition, or rearrangement to the consuming public by means of a lottery, gaming device, or gift enterprise.

The sale and distribution of candy by retail dealers by the methods described herein is the sale and distribution of candy by lot or chance and constitutes a lottery, gaming device, or gift enterpnse. In the sale and distribution to retail dealers and wholesale dealers aml jobbers for resale to retail dealers of assortments of candy assembled and packed as described in paragraphs 2, 3, and 4 hereinr respondent has knowledge that the majority of said assortments will be resold to the purchasing public by retail dealers by lot or chance and it packs and assembles such candy in the way and manner described so that it may, without alteration, addition, or rearrangement, be resold to the public by lot or chance by said retail dealers. PAR. 8. Many competitors of respondent regard such methods of sale and distribution as morally bad and as encouraging gambling, especially among children; as injurious to the candy industry because it results in the merchandising of a chance or lottery instead of candy; and as providing retail merchants with the means of violating the laws of the several States. Because of these reasons, some competitors of respondent refuse to sell candy so packed and assembled that it can bo sold to the public by lot or chance. These competitors ure thereby put to disadvantage in competing. Said competitors ran compete on even terms only by giving the same or similar devices to retailers. This they are unwilling to do and their sales of "straight" candy show a continued decrease. There is a demand for candy which is sold by lot or chance and in order to meet the competition of manufacturers who sell and disi ribute candy which is resold by such methods some competitors of respondent have begun the sale and distribution of candy for resale to the public by lot or chance. The use of such methods by respondent in the sale and distribution of its candy is prejudicial and injurious to the public and respondent's competitors, and has resulted in the diversion of trade to respondent from its said competitors, and is a restraint upon and a detriment to the :freedom o:f fair and legiti· mate competition in the candy industry.

PAR. 9. The principal demand in the trade for the "break and take," or "deal," or "draw" candy comes from the small retailers. The stores of these small retailers are in many instances located near schools and attract the trade of school children. The consumers or purchasers of the lottery or prize candy assortments are principally children and because o:f the lottery or gambling feature connected with the "break and take," or "draw," or "deal" assortments and the Al\IERICAN CANDY CO. 587 576 Order possibility of becoming a winner, it has been observed that the children purchase them in preference to the "straight" candy when the two types of assortments are displayed side by side. The children prefer to purchase the lotte1y or prize assortments of candy because of the gambling feature connected with its sale. The sale and distribution of "break and take," or "draw," or "deal" assortments of candy or of candy which has connected with its sale to the public the means or opportunity of obtaining a prize or becoming a winner by lot or chance teaches and encourages gambling among children who comprise by far the largest class of purchasers and consumers of this type of candy.

PAR. 10. There are in the United States many manufacturers of candy who do not manufacture and sell lottery or prize assortments of candy and who sell their "straight" candy in interstate commerce in competition with the "break and take," or "draw," or "deal" candy, and manufacturers of the "straight" type of candy have noted a Inarked decrease in the sales of their product whenever and whereenr the lottery or prize candy has appeared in their markets. This decrease in the sales of "straight" candy is principally due to the gambling or lottery feature indicated with the "break and take," or "draw," or "deal" candy.

PAn. 11. The Commission further finds that the sale and distribution in interstate commerce of assortments or packages of candy so packed and assembled as to enable retail dealers without alteration, addition, or rearrangement to resell the same to the consuming public by lot or chance is contrary to public policy. CONCLUSION The aforesaid acts and practices of the respondent, American Candy Company, a corporation, under the conditions and circumstances set forth in the foregoing findings of fact are all to•the prejudice of the public and respondent's competitors and constitute unfair methods of competition in commerce and constitute a violation of Section 5 of an Act of Congress 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 amended and supplemental complaint of the Commission, the answer of the respondent, the testimony and evidence taken and the testimony and evidence stipulated as a part of the record before Miles J. Furnas, an examiner of the Commission, there- Order 23F.T.C.

tofore duly designated by it, and the Commission having made its findings as to the facts and its conclusion that the respondent has violated 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 i8 ordered, That the respondent, American Candy Company: a corporation, its officers, agents, representatives, and employees, in the offering for sale, and sale and distribution in interstate commerce of candy and candy products, do cease and desist from: (1} Selling and distributing to retail dealers, and to jobbers and wholesale dealers for resale to retail dealers, candy so packed and assembled that sales of such candy to the general public are to be made, or are designed to be made, by means of a lottery, gaming device, or gift enterprise;

(2) Supplying to, or placing in the hands of retail and wholesale dealers and jobbers, packages or assortments of candy which are used, or are designed to be used, without alteration, or rearrangement of the contents of such packages or assortments, to conduct a lottery, gaming device, or gift enterprise in the sale or distribution of the candy contained in said assortments to the public; (3) Packing or assembling in the same package or assortment of candy for sale to the public at retail pieces of candy of uniform size, shape, and quality, of different colors or having centers of a different color together with larger pieces of candy which said larger pieces of candy are to be given as prizes to the purchaser procuring a piece of candy of a particular color or with a center of a particular color; (4) Supplying to, or placing in the hands of, retail and wholesale dealers and jobbers, assortments of candy together with a device commonly called a "push card" for use, or which is designed to be used, in the distribution of said candy to the public at retail; (5) Fumishing to retail and wholesale dealers and jobbers a display card, or a device commonly called a "push card", either with assortments of candy or separately, bearing a legend or legends or statements informing the public that the candy is being sold by lot or chance, or in accordance with a sales plan which constitutes a lottery, gaming device, or gift enterprise;

And it is further ordered, That the respondent, American Candy Company, within 30 days after the service upon it of this order shall 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 hereinabove set forth.

DOMINION DISTILLERIES, INC, 589 Syllabus