Edelsohn, Meyer

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IN THE MATTER OF MEYER EDELSOHN, INDIVIDUALLY, AND TRADING AS UNITED ADVERTISING SERVICE COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. II OF .AN .ACT OF CONGRESS .APPROVED SEPT. 26, 1914 Docket 8738. Complaint, Mar. 16, 1989-Decision, May 9, 1989 Where an individual engaged in selling and distributing clocks, desk lighters and other articles or merchandize in commerce llmong the various State& II:; and In the District of Columbia; in soliciting the sale or and in selling and distributing his merchandise-- Furnished various devices and plans of merchandising which involved operation of games of chance, gift enterprise, or lottery schemes through which said merchandise was sold and distributed to ultimate consumers wholly by lot or chance and in accordance with which he distributed to the purchasing public certain literature and instructions including, among other things, push cards, order blanks, illustrations of his merchandise and circulars explaining his plan of selling same and of allotting it as premiums or prizes to the operator of said cards for use in sale of his products under a plan and in accordance with cards' explanatory legend, pursuant to which amount paid, if any, for chance by customer was dependent upon number pushed by chance, and two numbers and last sale entitled purchaser securing numbers or making sale to "chrome desk lighter", and receipt or failure to receive "numerical clock" or article being thus disposed of, was depend· ent upon success or failure In selecting from list of feminine names on card, name corres-ponding to that concealed under card's master seal; and Supplied thereby and placed In the hands of others means of conducting lotteries in the sale of his merchandise in accordance with aforesaid or similar sales plans under which fact as to whether purchaser received an article of merchandise or nothing for amount of money paid and which of aforesaid articles, it any, he was to receive was determined wholly by lot or chance, and involving game of chance or sale of a chance to procure article of merchandise at a price much less than normal retan price thereof; contrary to an established public policy of the United States Government and in violation of the criminal laws, and in competition with many who are unwllling to adopt and use said or any method involving game of chance or sale of a chance to win something by chance or any other methods contrary to public policy and refrain therefrom; With result that many persons were attracted by said sales plan involved in sale and distribution of his merchandise and element of chance involved therein and were thereby induced to buy and sell such merchandise in preference to that offered and sold by said competitors who do not use such or equivalent method, and with effect, through use of such method and because of such game of chance of diverting unfairly trade to himself from his competitors aforesaid who do not used such or equivalent method; to the s_ubstantial!njury of competition In commerce: Complaint 28F.T. C.

Held, That such acts and practices were all to the prejudice and injury of the public and competitors and constituted unfair methods of competition in commerce.

Mr. L. P. Allen, Jr. for the Commission.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Meyer Edelsohn, individually and trading as United Advertising Service, hereinafter referred to as respondent, has violated the provisions of said Act, and it appearing~ to the Commission that a proceeding by it in respect thereof would be in the interest of the public, hereby issues its complaint, stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Meyer Edelsohn, is an individual trading as United Advertising Service with his principal office and place of business located at 5715 Florence Avenue, Philadelphia, Pa. Respondent is now, and for some time last past has been, engaged in the sale and distribution of clocks, desk lighters and other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said products when sold to be transported from the city of Philadelphia, Pa., to purchasers thereof in the various other States of the United States and in the District of Columbia at their respective points of location. There is now, and has been for some time past, a course of trade by respondent in such merchandise in commerce between and among the various States of the United States and in the District of Columbia. In the course and conduct of said business, respondent is, and has been, in competition with other individuals and with partnerships and corporations engaged in the sale and distribution of like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, respondent in soliciting the sale of and in selling and distributing his merchandise furnishes, and has furnished, various devices and plans of merchandising which involve the operation of games of chance, gift enterprises, or lottery schemes by which said merchandise is sold and distributed to the ultimate consumers thereof wholly by lot or chance. The method or sales plan adopted and used by respondent was and is substantially as follows: Respondent distributes and has distributed to the purchasing public certain literature and instructions, including, among other UNITED ADVERTISING SERVICE 1577 1575 Complaint things, push cards, order blanks, illustrations of his said merchandise ij and circulars explaining respondent's plan of selling merchandiseand of allotting it as premiums or prizes to the operators of said push t! cards. One of respondent's push cards bears 48 feminine names with I'Uled columns on the reverse side thereof for writing in the !Iname of the customer opposite the feminine name selected. Said • j ; push card has 48 small, partially perforated disks on the face of 1 which is printed the word "push." Concealed within each disk is a 1:number which is disclosed when the disk is pushed or separated from I the card. The push card also has a large master seal, and concealed I. within the master seal is one of the feminine names appearing on lthe reverse side of said card. The push card bears legends or I 1 ' instructions as follows: 1' 4' This 20th Century NUMERICAL CLOCK l: E 1\I L 0 (Picture D E E c R of a N T I j R Clock) s I T I 0 0 To the Person Selecting the Name Under the Seal Nos. 1 to 29--Pay 1¢ to 29¢ Nos. over 29--Pay only 20¢ Nos. 31, 41, and Last Sale Each Receive A Beautiful Chrome Desk Lighter Write Your Name on Reverse Side Opposite Name You Select Sales of respondent's merchandise by means of said push cards are made in accordance with the above-described legends and instructions. Said prizes or premiums are allotted to the customers or purchasers in accordance with the above legends and instructions. The fact as to whether a purchaser receives an article of merchandise or nothing for the amount of money paid, and which of said article3 of merchandise the purchaser is to receive, if any, is thus determined wholly by lot or chance.

Respondent furnishes and has furnished various push cards accompanied by said order blanks, instructions, and other printed FEDERAL TRADE COMMISSION DECISIONS. 1578 Complaint 28F.T.C.

matter for use in the sale and distribution of his merchandise by means of a game of chance, gift enterprise, or lottery scheme. The ,sales plan or method involved in connection with the sale of all of said merchandise by means of said push card is the same as that hereinabove described, varying only in detail. P .AR. 3. The persons to whom respondent furnishes the said push cards use the same in purchasing, selling, and distributing respondent's merchandise, in accordance with the aforesaid sales plan. Respondent thus supplies to, and places in the hands of, others the means of conducting lotteries in the sale of his merchandise in accordance with the sales plan hereinabove set forth. The use by respondent of said sales plan or method in the sale of his merchandise and the sale of said merchandise by and through the use thereof and by the aid of said sales plan or method is a practice of a sort which is contrary to an established public policy of the Government of the United States and in violation of the criminal laws. P .AR. 4. The sale of merchandise to the purchasing public in the manner above alleged involves a game of chance or the sale of a chance to procure an article of merchandise at a price much less than the normal retail price thereof. Many persons, firms, and corporations, who sell or distribute merchandise in competition with the respondent, as above alleged, are unwilling to adopt and use said metho<l; 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, and such competitors refrain therefrom. Many persons are attracted by said sales plan or method employed by respondent in the sale and distribution of his merchandise and the element of chance involved therein, and are thereby induced to buy and sell" respondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or an equivalent method. The use of said method by respondent, because of said game of chance, has a tendency and capacity to, and does, unfairly divert trade to respondent from his said competitors who do not use the same or an equivalent method, and as a result thereof substantial injury is being, and has been, done by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 5. The aforesaid acts and practices of respondent, as herein alleged, are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

! ' I UNITED ADVERTISING SERVICE 1579 l I1575 Findings J REPORT, FINDINGS AS TO THE FACTS, AND ORDER l Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on March 16, 1939, issued, and on March 17, 1939, served, its complaint in this proceeding upon respondent, Meyer Edelsolm, individually, and trading as United Advertising Service, charging him with the use of unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of the provisions of the said act. On April 11, 1939, the respondent filed his answer; in which answer he admitted all the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to said facts. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said complaint and answer thereto, and the Commission having duly considered the matter a.nd being I now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts andits conclusion drawn therefrom. r' FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Meyer Edelsohn, is an individual trading as United Advertising Service with his principal office and place of business located at 5715 Florence A venue, Philadelphia, Pa. Respondent is now, and for some time last past has been, engaged in the sale and distribution of clocks, desk lighters, and other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said products when sold to be transported from the city of Philadelphia, Pa., to purchasers thereof in the various other States of the United States and in the District of Columbia at their respective points of location. There is now, and has been for some time past, a course of trade by respondent in such merchandise in commerce between and among the various States of the .United States and in the District of Columbia. In the course and conduct of said business, respondent is, and has been, in competition with other individuals and with partnerships and corporations engaged in the sale and distribution of like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of his business, as described in paragraph 1 hereof, respondent in soliciting the sale of and in selling and distributing his merchandise furnishes, and has furnished, various devices and plans of merchandising which involve the opera- 2003·l6m-4o-voi. 28-102 1580 FEDERAL TRADE COl\IMJSSION DECISIONS Findings 28F.T.C.

tion of games of chance, gift enterprises, or lottery schemes by which said merchandise is sold and distributed to the ultimate consumers thereof wholly by lot or chance. The method or sales plan adopted and used by respondent was and is substantially as follows: Respondent distributes and has distributed to the purchasing public certain literature and instructions, including, among other things, push cards, order blanks, illustrations of his said merchandise and circulars explaining respondent's plan of selling merchandise and of allotting it as premiums or prizes to the operators of said push cards. One of respondent's push cards bears 48 feminine names with ruled columns on the reverse side thereof for writing in the name of the customer opposite the feminine name selected. Said push card has 48 small, pa,rtially perforated disks on the face of which is printed the word "push." Concealed within each disk is a number which is disclosed when the disk is pushed or separated from the card. The push card also has a large master seal, and concealed within the master seal is one of the feminine names appearing on the reverse side of said card. The push card bears legends or instructions as follows:

This 20th Century NUMERICAL CLOCK E l\:1 L 0 E (Picture D c E T of a R R N I Clock) I c s T I.

c To the Person Selecting the Name Under the Seal Nos. 1 to 29--Pay 1¢ to 29¢ Nos. over 29-I'ay only 29¢ Nos. 31, 41, and Last Sale Each Receive A Beautiful Chrome Desk Lighter Write Your Name on Reverse Side Opposite Name You Select UNITED ADVERTISING SERVICE 1581 1575 Findings Sales of respondent's merchandise by means of said push cards are made in accordance with the above-described legends and instructions. Said prizes or premiums are allotted to the customers or purchasers in accordance with the above legends and instructions. The fact as to whether a purchaser receives an article of merchandise or nothing for the amount of money paid, and which of said articles of merchandise the purchaser is to receive, if any, is thus determined wholly by lot or chance.

Respondent furnishes and has furnished various push cards accompanied by said order blanks, instructions, and other printed matter for use in the sale and distribution of his merchandise by means of a game of chance, gift enterprise, or lottery scheme. The sales plan or method involved in connection with the sale of all of said merchandise by means of said push card is the same as that hereinabove described, varying only in detail.

PAR. 3. The persons to whom respondent furnishes the said push cards use the same in purchasing, selling, and distributing respond- jent's merchandise, in accordance with the aforesaid sales plan. Respondent thus supplies to, and places in the hands of, others the means of conducting lotteries in the sale of his merchandise in accordance with the sales plan hereinabove set forth. The use by respondent of said sales plan or method in the sale of his merchandise and the sale of said merchandise by and through the use thereof and by the aid of said sales plan or method is a practice of a sort which is contrary to an established public policy of the Government of the United States and in violation of the criminalla ws.

PAR. 4. The sale of merchandise to the purchasing public in the manner above found involves a game of chance or the sale of a chance to procure an article of merchandise at a price much leis than the normal retail price thereof. Many persons, firms, and corporations, who sell or distribute merchandise in competition with the respondent, as above found, 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, and such competitors refrain therefrom. Many persons are attracted by said Sttles plan or method employed hy respondent in the sale and distribution of his merchandise and the element of chance involved therein, and are thereby induced to buy and sell respondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or an equivalent method. The use of said method by respondent, because of said game of chance, has a tendl'ncy and capacity to, and does, unfairly divert trade to respondent from his 1582 FEDERAL TRADE COl\Il\USSION DECISIONS Order 28F.T.C.

said competitors who do not use the same or an equivalent method, and as a result thereof substantial injury is being, and has been, done by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia.

CONCLUSION The aforesaid acts and practices of respondent, as herein found, are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and answer of the respondent, in which answer respondent admits all the material allegations of fact set forth in said complaint, and states that he waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, Meyer Edelsohn, individually and trading as United Advertising Service, or trading under any other name or names, his representatives, agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of clocks, desk lighters or any other merchandise in commerce, as commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Supplying to or placing in the hands of others push or pull cards, punchboards or other lottery devices for the purpose of enabling such persons to dispose of or sell such merchandise by the use thereof. 2. Mailing, shipping or transporting to his agents or to distributors or to the public push or pull cards, punchboards or other lottery devices so prepared or printed as to enable said persons to sell or distribute any merchandise by the use thereof. 3. Selling or otherwise disposing of any merchandise by the use of push or pull cards, punchboards or other lottery devices. It is further ordered, That within 60 days from the service of this order upon said respondent he shall file with the Commission a report in writing setting fQI"th in detail the manner and form in which this order has been complied with.

MIDWEST STUDIOS, INC., ET AL. 1583 Syllabus 1: 'j j