Louis Keller and 'Villiam Carsky, individually and trading as Casey Concession Co.

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IN THE MATTER OF LOUIS KELLER AND \<VILLIAM CARSKY, INDIVIDUALLY .AND TRADING AS CASEY CONCESSION COMPANY CO~IPLAINT, I<'INDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Drwket .1 1/.1. Complaint, JJlay 10, 19J8-Decision, Ort. 28, 1941 ·wlwre two individuals engaged iu 1"he competitive interstate sale and dlstz·ibution, to operators and concessionaires of moving pictures, moving picture and burlesque theaters, teut !;bows, medicine shows and circuses, of ns~oz·tnwuts of cantly and other merchandise, such as toy cameras, ho>'iery, perfnme, etc. so pa('k!.'d and ~ssemblet.l lis to involve the use of 11 lottery sdwme or game of chance, when solt.l and distz·ilmtPtl to the con- ,;uming public, t~·pical assortment being composed of 110 small uniform <·artonil P:H'h ('obtaining an equal number of pi!.'ces of cnudy and an additional article of mPreh:uulise, ~ome of which had n retail value iu excess of the' ;:; PP!lt c·lln rgpd for the cm·ton- Solt1 surh n"sortnwnts to their cnstornPrs, hy whom they wpre resold to t11e rousnmi11g rmhlic in accordance with the aforesai<l salt>s plan, and thez·plly plan•<! in the lwnds of others the m~>ans of r·•mducting lotteries or garnt>s of chanct> in tht> :o;nle of theiz· pro<lucts ;' ·with tht> 1esnlt that many d<'al!.'rs in an<l ultimate ronsnmt>l's of rnn<ly w<>re 11ttrartt>d tliPir said uw!IJo<l of paeking said products and I.Jy +Iw I'IPmPnt of ehance im·olved in the sale ther<>of, anu wpz·e tlwrehy induct>d to purchase such eandy in preference to that of their competitors who · do uot u;;e such methods, and with tendency anu capacity to tli\·ert to tht>msPlve,; trade and eu,;tom fl'OIIl their said comp!.'titors and excln<le tlwm from the caml.v trade, lt>s>:Pn c·oJH!Jf>tition In such trade and erPa te a monopoly t!IPI'Pof in !lwmsP!ves aml in such other1· distributors as do use sneh a methool. and to dPprivt> the purchasing public of tbe benefit of free c·ompPtitinn:

Jif.ld, That such afts and pradices were all to the prpjudice and injury (>f the public- awl tlwiz· competitors, and contmry to established public policy of the U11it••d ~states Gm·erument, and constituted unfair methods of (•ompl'tition in eommel'('('.

Defore Mr. Clwrl(8 F. lh'gg8, illr. John lV, Addison, and Llir. lV. lV. Sheppard, trial examiners.

Jlr. D. C. Dan,icl for the Commission.

Jfr. ilfon·i8 A.llaft, of Chicago, Ill., for respondents. Compl.\INT Pursuant to the provisions of the Fe<leral Trade Commission Act, and by virtue of the authority ,·ested in it by said act, the Federal Trade Conuuission, having rea~on to L-el ihe that Louis Keller and 'Villiam Carsky, individually and trading as Casey Concession Co.: CASEY CONCESSION CO. 1589 Complaint hereinafter referred to as respondents, have ,·iolatrd the prm·isions or the said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows: PAUAGIUPH 1. Re~pondents, Louis Keller and 'Yilliam Cnrsky, are indiriduals doing business as a copartnership under the trade name and style of Casey Concession Co., with their principal oflice and place of business located at 1132 South abash Avenue, Chicago, "T Ill. They arc now, ancl for some time last past have been, engaged in the sale and distribution of candy and other merchandise to operators of and concessionaires "·ith moving picture and burlesque theaters and tent. shows, medicine shows, and rrpertoire companies located nt points in the various States of the United States. Respondents also sell their merchamlise direct . to the consuming Public in theaters located in several of the States of the United States. They cause their said products, when sold, to be transported from their place of business in the city of Chicago, State of Illinois, to purclwst:>rs thereof in the various Statt:>s of the Unitf:>d States other than the State of Illinois and in the District of Columbia at their respective places of business. There is now, awl has been for some time last past, a course of trade by said respondents in such candy and other merchandise in commerce between and among~ the nrious States of the United States and in the District of Columbia, . In the course and conduct of said business, respondents are in competition with other partnerships and with corporations and indiviclnals likewise engaged in the sale and distribution of candy or other merchandise in commerce between and among~ the Various States of the United States and in the District of Columbia. PAn. 2. In the course and conduct of their business, as described in paragraph 1 hereof, respondents sell and have sold to operator·s of and concessionaires with moving picture and burlesque theaters and medicine shows, tent shows, and repertoire comp;,tniPs, assortments of candy and other merchandi!"e so packt>d and assembled as to involve the use of !l lottery scheme whrn sold and distributed to the cons1m1Prs thereof. One of said assortments is composed of a number of packages containiug pieces of candy and other articles of muchanclise. The said packages of candy each have approximately the same number of piPccs of candy therein, but the other articles of merchandise contained in said packages arc of varying Yalue. The said packages at·e identic-al in appearance and the purchaser of one of said packages cannot ascertain what the other article of merchandise contained therein is, or the value thereof, until aft('r a purchase has been made and the package broken open. The sale of said packages of candy and Complaint 33F.'r.c.

other articles of merchandise in the manner above described thus constitutes the operation of a lottery scheme, game of chance, or gift enterprise. Respondents sell and distribute various assortments of said candy and other articles of merchandise by means of a game of chance, gift enterprise, or lottery scheme. Such plan or method varies in detail, but the above described plan or method is illustrative of the principle involved.

PAR. 3. The customers of respondents resell said assortments to the consuming public in accordance with the aforesaid sales plan. Respondents thus supply to and place in the hands of others the means of conducting lotteries in the sale of their products in accordance with the sales plan hereinabove set forth. Respondents have what is commonly referred to as the candy concession in various theaters in several States of the United States, and offer for sale and sell their said products in accordance with the above described sales plan direct to the consuming public in such theaters.' The respondents' merchandise is shipped or transported from their place of business to such theaters at their various points of location for resale to the consuming public.

PAR. 4. The sale of candy and other merchandise to the purchasing public in the manner above alleged involves a game of chance or the sale of a chance to procure packages of candy and other articles of merchandise of varying value. The use by respondents of said method in the sale of candy and the sale of candy by and through the use thereof and by the aid of said method is a practice of the sort which is contrary to an established public policy of the Government of the United States and which is in violation of criminal laws. The use by respondents of said method has the tendency unduly to hinder competition or to create a monopoly in this, to wit: That the use thereof has the tendency and capacity to exclude from the candy trade competitors who do not adopt and use the same method or an equivalent or similar method involving the same or an equivalent or similar element of chance or lottery scheme. Many persons, firms, and corporations who sell and distribute candy in competition with respondents as 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 respondents' said method and manner of packing saia 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 respondents in preference to candy CASEY CONCESSION CO. 1591 1588 Complaint ()ffered for sale and sold by said competitors of respondents who do not use the same or an equivalent method. The use of said method by respondents has the tendency and capacity, because of said game of chance, to divert to respondents trade and custom from their said competitors who do not use the same or an equivalent method, to exclude 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, to create a. monopoly of said candy trade in respondents, and in ~uch 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 respondents 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 the said method or an equivalent method. PAR. 6. In the course and conduct of their business as hereinabove related, respondents cause and have caused various false, deceptive, and misleading statements or representations concerning their said candy to appear in advertising matter distributed or caused to he distributed by respondents, of which the following statements or representations are examples but are not all-inclusive: Hawaiian Health Confection-Rich In Vitamin "D." The candy in this package contains the rare Sunshine Vitamin D. ALOI:J:A, the Hawaiian Confection. A wonderful chocolate sweetmeat contain- Ing the Sunshine Vitamin D, which has the same effect as the Hawaiian sun In building strong, straight bones and bodies. You don't have to go to Hawaii to get this wonderful confection. . 675 U. S. P. units of Vitamin D In every pound, which Is equal to four teaspoonfuls of Cod Liver Oil.

Respondents' advertising matter also contains the following statement: To Introduce this tasty and beneficial confection, we are giving away ft·ee ~lth every package a valuable gift. Here are just a few of the hundreds of Presents given away. The candy is worth many times the price paid for it, so try a package now • • • Buy the Candy • • • Get a valuable gift • • • The effect of the foregoing false, deceptive, and misleading statelllents and representations of the respondents in selling and offering for sale such items of merchandise as hereinabove referred to, is to nlislead and deceive a substantial part of the purchasing public in the various States of the United States and in the District of Columbia. by inducing them to mistakenly believe (1) that respondents' candy contains vitamin D in sufficient amount to be beneficial to the Purchaser's health and that the amount of vitamin D contained in every pound of respondents' candy is equal to that contained in four teaspoons of cod liver oil, and (2) that respondents give away certain 1592 FEDERAL TRADE cm.l:\IISSION" DECISIO~S Findings 33F. T. C.

of tlwir articles of merchanrlise \Yithont cost to the pmchasers of said packages of candy.

PAR. 7. In truth aml in f:tct rpspondents' candy Lloes not contain H. sufficient amount of vitamin D to he twn!:'ficial to the purchaser's health, and evHy· pouml of said can1ly dof's not contain vitamin D in a quantity which is equivalent to that contained in four teaspoons of cod liver oil, as repre~ented by respondent; and none of repondents' so-calle1l premiums or p:gifts or priZ{'S is ~iven away ·'free," but the prices thereof are indnJed in the prices of saill packages of randy. . PAR. 8. Tho· use by respondents of the false, deceptive, and misleading statem('nts and misrepresentations set forth herein has had und now has the capacity aiel tendency to mislead and deceive, aml has misleLl and deceived, a substantial 11ortion of the purchasing public mto the erroneous belie"f that such statements ancl representations :tre true, and into the purchase of substantial quantities of said re- Epondents' products as a result of such enoneous belief. There nre among the competitors of responde11ts, as nwntioned hereinabove, mannfactllren and <li~tributors of like and similar products who do not niake such false, deceptive', and misleading statements and representatior,s concerning their products. By the statements and rer)resentations aforesaid, "trade is unfairly divei·ted to responde"nts from such competitors, and as :t result the"reo( substantial injury is being done and has open done by respondents to competition in commerce between and among the Yarious States of the United States and in the District cif Columbia.

PAn. 9. Tht> aforesaiLl a<'ts ami praetiees of respondents are all to 1he prejudice of the public and of respondents' competitors, and l'Onstitute unfair methods of competition in commerce within the intent and meaning of the Federal Tmde Commission Act. REPORT, Fnmnw~ As TO THE FACTs, AXD Onder Pursna nt to the provisions of the Federa 1 Tnule Commission Act. the Federal Trade Commission, on 111ay 10, A. D., 1938, issue"ll and 1hereafter sened its complaint in this proceeding upon the respondl'llts Louis Keller nml 'Villiam Carsky, individually and as copartners trading as Casey Concession Co., charging them with unfair methods of cmppetition in comme"ree in violation of the provisions of sahl act. After the issuance of the complaint and. the filing of respondents' answer thereto, testimony and. other evidence in support of the allegations of the complaint and in opposition thereto were introduced by the attorneys for the Commission and the at- CA:-iey COXCESSIOX CO. 1593 l5F8 Findings tomey for the re~pomlents before tluly nppuinteJ. trial examiners of the Commi:-:sion designated by it to serve in this proceeding. The testimony and other eviLlenee intrOLlnced were duly recorded and filed in the dfire of the Commi:-;sion. Thereafter the proceeding !·egulady came on for final h('aring before the Commission, on the Lompluint, the answer thereto, the testimony, and o~her evidence, : eport of the trial examiners and except ions thereto, briefs in support ()f anJ in OL)position to the complaint, and oral arguments; and the Commission, having duly considered the matter and being now :ully advised in the premises. finthi that this proceeding is in the ~nterest of tlw public. antlmakes this its findiugs as to the facts nnd lts conclusion drawn therdrom. · Findings AS TO THE FACTS PAMGUAPII 1. Hesponclents, Louis K-eller and 'Villinm Ca.rsky, llave been copartners since December 1, A. D., 19BG, and clnrinr. nil of saitl time l1an tmtled as Casey Concession Co. Their principal !~lace of business during- all of sai<l time has been located nt 1132 ~outlt "··abash .Avenue, Chicago, Ill.

PAR. 2. Respomlents, during all the time herein mentioned, have Le(•Jl and now are engaged in the business of selling and distributing canrly and other nH.'rchandise, consisting in part of cardboard toy ean1eras, women's hosiery, boxt>s of face powder, bottles of perfume, ~Ill all note books and pencils, dolls,. and cigarette cases, to operators and concessionairt>s of moving picture:-;, moving picture nncl burlesque t ~leaters,· tent shmys, nwdicine shows, and circuses located in various States of the United States und in the District of Columbia. Re- ~Pondents cause their prmlucts, when soltl, to be transported from th:ir principal place of business in the city of Chicago, State of llhnois, to purchasers thereof located in various States of the United States and in the District of Columbia. There is now, and during all the period herein mentioned has been, a course of trade by said l"l'spondents in such candy nnd otlwr merchandise between and among · ~l;e various States of the United States anll in the District of Colum- ~Ia. llE'spond_ents, in tl:e. cour·~r and conduct of t_their busin_ess !1a~e ~en and nre' m competition with otlwr partnerships and With 1Illh- '~1<luals and corporations likewise engaged in the sale anti distribution of candy aJHl other>r merchandise similar to that sokl and distributed by r~spondents, in commerce lwtwh'n and among the various States of the Unitell States and in the District of Columbia. ne~pondent:i, in tlJe COlli"<>C Hlll l'OJH}Uct of their business as hereinafter dt>:'CTibed, !'>ell aji\l ha\·e ~old ns<;ortments of cnntly anti other lllerC"haHlli~c so pneked nwl a~::-Pmhletl n~ to involve the Ui"e of 11 Conclusion 33 tt. T. C. lottery scheme or game of chance, when sold and distributed to the consuming public. One of said assortments is composed of 110 small cartons of uniform size, shape and appearance in each of which is placed an equal number of pieces of candy and an additional article of merchandise. Sales are 5 cents per carton. The various additional articles of merchandise vary in retail value, some thereof having a retail value in excess of 5 cents. The said additional articles of merchandise are effectively concealed in said cartons from purchasers and prospective purchasers until a purchase has been made, the carton broken open and the additional article of merchandise removed therefrom. The said additional articles of merchandise are thus distributed to the consuming public wholly by lot or chance. Others of said assortments are similar to the one hereinabove described, varying only in detail. Respondents thus supply to and place in the hands of others the means of conducting lotteries in the sale or distribution of their merchandise in accordance with the sales plan hereinabove described.

PAn. 3. Respondents' customers resell said assortments to the consuming public in accordtmce with the aforesaid sales plan. The l.'respondents thus place in the hands of others the means of con- ,]ucting lotteries, or games of chance in the sale of their product. PAR. 4. 1\:lany dealers in and ultimate consumers of candy are attraded by respondents' 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 respondents in preference to candy offered for sale and sold by competitors of respondents who do not use the same or an equivalent method. The use of said method by respondents lias the tendency and capacity, because of said element of chance, to divert to respondents trade and custom from their !:>aid competitors who do not use the same or an equivalent method, to exclude from said candy trade all competitors who are unwilling to and who do not use the same or an equivalent method,, to lessen c·ompetition in said candy trade, and to create a monopoly of said candy trade in respondents and in such other distributors of candy as use the same or an equivalent method, and to deprive the purchasing public of the benefit of free competitio~ in said candy trade. · CONCLUSION The aforesaid acts and practices of the respondents are all to the prejudice and injury of the public and of respondents' competitors, and are contrary to the established public policy of the Government of the United States of America, and constitute unfair methods of CASEY CONCESSION CO. 1595 1588 Order <:ompetition 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, the answer of the respondents, the testimony, and other evidence taken before duly appointed trial examiners of the Commission designated by it to serve in this proceeding, the report of the trial examiners and exceptions thereto, briefs in support of and in opposition to the complaint, and oral arguments; and the Commission having made its findings as to the facts and its conclusion that the respondents, Louis Keller and William Carsky, individually and as copartners trading as Casey Concession Co., have violated the provisions of the Federal Trade Commission Act.

. It is ordered, That respondents, Louis Keller and 'William Carsky, Individually and trading as Casey Concession Co., or trading under any other name or designation, their representatives, agents, and employees, jointly or severally, directly or through any corporate or other device, in connection with the offering for sale, sale, and distribution of candy, cardboard toy cameras, women's hosiery, face Powder, perfume, note books, pencils, dolls, cigarette cases, or any other merchandise, in commerce as commerce is defined in the Federal· Trade Commission Act, shall forthwith cease and desist from : 1. Selling or distributing any merchandise so packed or assembled that sales of such merchandise to the public are to be made, or may he made, by means of a game of chance, gift enterprise, or lottery scheme.

2. Supplying to or placing in the hands of others any merchan~ dise together with a sales plan or device, or separately, which said sales plan or device is to be used or may be used in the sale or distribution of said merchandise to the public by means of a game of chance, gift enterprise, or lottery scheme. · 3. Selling or otherwise disposing of any merchandise by means of a game of chance, gift enterprise, or ·lottery scheme. . It i8 further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in ·Which they have complied with this order.

Complaint 3:3 F. T. ('.