Max A. Wasserman, trading as Excel Merchandise and Novelty Co.

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IN THE l\L-\TTER OF MAX ..:\.. WASSER~L\N, TR.\DING AS EXCEL MERCHANDISE AXD ~OVELTY CO.

C0:\1PLAI:-IT, FIXDI:\'GS, .-\XD OHDEP. I:>J REG.\RD TO THE ALLEGED YIOL.\TIO:>J OF SEC. a OF AN ACT OF COXGRESS APPROVED SEPT. 26, 1914 Docket 4029. Complaint, Feb. 9, 1940-Dec-ision, Nov. 4, 1941 Where a corporation engaged In the competitive Interstate sale and distribution of sauce pans, dripolators, coffee percolators, pillows, smoking stands, electric table lamps, fountain pens, ash trays and other articles of merchandise in commerce- (a) Supplied its customers with assortments of said merchandise together with Bingo sets, by means of which such merchandise was sold and distributed to the consuming public In a manner involving the operation of a game of chance, gift enterprise or lottery scheme under a plan providing that a plnyer securing, by chance, necessary numbers, as drawn by game's operator, to call "Bingo" became entitled to receive as prize one of said articles, value of which exceeded cost of participation to players; and thereby Supplied to and placed In the hands of others means of conducting lotteries in the ~ale of its merchandise, in accorLlanee with afore,:aid sales plan or method, Involving game.of chance to procure article of merchandise at much less than normal p1·iee thereof, contrary to established public policy of the United States Government, and In competition with many who, unwilling to use such or other method contrary to public policy, refrain therefmm; With result that many persons were attracted by its said sales plan anll the element of chance involved therein and were thereby induced to buy and sell Its mer<'handil"e in preferen('e to that of its ~aid tompetitors, and tmde In commerce was unfairly diverted to it from thl'm; an<l (b) Sold and distributed devices commonly known as push cards and punchboards separate and apart from any other merchandise In )nterstate commerce including (1) push cards and punchboards with the legends or Instructions printed on the face thereof explaining the manner In which they were to be used in the !!ale of various specified articles of merchandise, and that purchasers punching disks in the cards and thereby revealing certain lucky numbers received articles of merchandise without additional cost at prices much less than the normal retail price, and that others receiverl nothing for their money other than the privilege of making a punch; and (2) similar devices for similar purposes bearing no Instructions or legends th£>reon !Jut having blank spaces provided therefor on which purchasers plac£>d instructions of the same import as those printed on the aforesaid dey Ices; and Intended to be, and used only by ultimate purcha~ers thereof for diiiltrlbutlon of other merchandise by lot or chance as above set forth; With result that- (1) Many who sold or distributed candy, cigars, nnd other articl<'R of mpr· chandL~e In commerce bought said pn<:h card and punchboard dt>ylces and EXCEL MERCHAKDISE AXD NOVELTY CO. 19 18 Complaint packed and assembled assortments comprised of various articles of such merchandise, together with such cards and boards, and retail dealer buyers of such assortments, either as direct or indirect purchasers, and retailers who made up their own assortments, exposed same to purchasing public and sold or distributed such articles through use of said push cards or punchboards and in accordance with sales plans as above described; involving game of chance or sale of a chance to procure articles in question at prices much less than normal retail price thereof, and teaching and encouraging gambling among members of public, all to the injury thereof, and contrary to an established public policy of the United States Government, and in violation of criminal laws;

(2) l\Iany nwmbers of purchasing public, because of element of chance lnvolyed in sale and distribution of said merchandise by means of said push cards and punchbourds, and many retailers, were thereby Induced to deal or trade with manufacturers, wholesalers, and jobbers selling and tllstt·ibuting their met·clmndise, together with said devices, in competition with many who, faced with alternative of descending to use of said cards ami boards or other similar devices which tlwy were untler a powerful moral compulsion not to use, or suffrr loss of substantial trade, did not thus sell and distribute their products, because of element of chance or lottery features therein involved, and because practices thus im·olved were contrary to public policy of United States; and refrained from supplying to or placing in hands d others such cards, bonrds or any other similar de>ices for such use; wherei.Jy substantial trade was unfairly diverted from said competitors to those purchasing and using Its said devices; and (3) It supplied thereby to and placed In the hands of others, throu~h sucl sale or distribution of said push cards and punchboards, means of conducting lotteries, games of chance, or gift enterprises ln the sale or distribution of merchandise to members of public, and means and instrumentalities for engaging In unfait· methods of competition and unfair nets and practices: Held, (1) That such acts and practices In selling and distributing assortments of merchandise, together with said "Bingo" sets, us above set forth, were all to the 11rejudice and Injury of the public, and competitors, and constituted unfair methods of competition In commerce and unfair acts and practices therein; and I 2) 'that its nets and practices In selling and diil· tributing said vush card and puncllboard devices, :separate and apart from any otlwr mPrchnndi~e. to dealrrs for use In sale and distribution of their products, under ciremnstauees set forth, were all to the prejudice and injury of public and C(>ll"'tltuted unfair acts and practices In commt:>rce. Mr. L. P . .Allen, Jr. and .llr. J. V. J.1!ishou for the Commission. Levin & Mar~lwll, of Omnhn, Nebr., for rei'pondent. Co:\IPLAINT I>ur~uant to tlw pro,·il'-ions of the Ft•deml Tratle Commission Act nnd by virtue of the authority w~t{'tl in it Ly ~aid net, the FC'U\'ral Truth• Commi:-.... itlll having rt•n:-on to ht•lit've that ~{ax. .\. 'rn~sl'rm:m 20 FEDERAL TRADE COMMISSIO~ DECIS'IOXS Complaint 3-!F. T. C. indiddu:1lly nnd trading ns Excel :Merchandise & No,·elty Co., hereinafter referred to as respondent, has violated the provisions of the !':aid 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: Count 1 PAR-\GR.!PH 1. Respondent, l\Iax A. 'Vasserman, is an individual trading as Excel ::\lerchandise & Novelty Co., with his principal office and place of business located at 1316 Farnam Street, Omaha, Nebr. Respondent is now and for some time last past has been engaged in the sale and distribution of saucfl pans, dripolators, coffee percolators, pillows, smoking stands, electric table lamps, fountain pens, ash trays, 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 merchandise when sold to be transported from his aforesaid place of business in Omaha, Xebr., to purchasers thereof, at their respective points of location, in the various States of the United States other than the State of Xebraska and in the District of Columbia. There is now and for some time last past has been a course of trade by resi)ondent in said 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 partnership~ 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 Gnited States and in the District of Columbia. PAR. 2. In the course and conduct of said business; as described iri paragraph 1 hereof, the respondent in selling an<l distributing his said met·chandise has supplied his customers with as~ortments of said merchandise together with certain paraphernalia known as Dingo f:ets, by means of which ~aij merchandise is sold and distributed to the consuming public in a manner which imolns the operation of a game of chance, gift enterprise, or lottery scheme. One of said Ding-o sets consists of a tally sheet, containing 75 numbrrs; a number of llingo cards on each of which appear 25 numbers nrrangeJ in n. 8qnare, which numbers corrr!'pond to the numbers on the tally sheet~ and a number of small woollen squares on each of which appears 1\ EXCEL MERCHANDISE A...l'\D NO\"EL TY CO. 21 18 Complaint number. Each of said Bingo cards has a different group of numbers thereon, and 1 of said cards appears substantially as follows: Kos. 1 to 15 Kos. 16 to 30 Kos. 31 to 45 ~os. 46 to 60 Kos. 61 to 75 BINGO .

1 16 33 46 66 6 27 35 55 61 Free 5 23 0 58 68 Free 13 21 37 53 67 2 20 43 56 63 START WITH LETTER 0 IN CENTER, FREE 6 Nt:MBERS ACROSS A:SY LI:SE WINS 2 12 DIFFERENT WAYS TO BINGO One Star Series. Total Sets 1,365 Cards. Printed in U.S. A. Dy means of said Dingo set, said merchandise is distributed to the purchasing public in subl-'tantially the following manner: Respondent's cu:4omer, or someone desi~nated by such customet·, nets us an op('rator in the sale or distribution of suit merchandi~. The operator of the Bingo set places in the hands of ('ach participant one of the said llin~o cards, and each participant .pays the operator a d~signate.J sum of money for the privilege of participating in the <ltstribution of each of said articles of merchandi~e. The ope>rator 22 FEDERAL TRADE COMMISSION DE'CIS'IOXS Complaint 3-!F. T. C. then places the said wooden squares in a container and so mixes them that the numbers thereon are concealed until one of said wooden E>quares is withdrawn from the container by the operator. In the center of the participant's Bingo card is a square marked "Freen and each participant places a marker thereon before the aforesaid drawing of said numbers is begun. The operator then proceeds with the drawing of numbers from the aforesaid mixing container and calls out the number appearing on each wooden square as said square is withdrawn from said container and the person on whose card such number appears places one of said markers over such number. This same procedure is followed until one of the participants has succeeded in marking fh·e numbers on said card, which numbers form a straight line across the card. either horizontally, nrtically or diagonally. The sequence or distribution of the numbers which control the placing of the markers is determined ·wholly by chance. Upon marking the last of said five numbers the participant calls out the word "Bingo." The marked numbers are called out by the operator who checks the. same with the numbers on said tally sheet, and if such numbers have been correctly marked the participant is entitled to and receives one of said articles of merchandise as a prize. The other pa1ticipants receive nothing for their money. This same procedure is repented until all of said articles of merchandise or prizes have been distributed. The articles of merchandise therein vary but each of said articles of merchandise is of greater value than the amount paill by each participant for participation in the distribution of said merchandise as above described. The said articles of merchandise are thus distributed to the purchas· ing public wholly by lot or chance.

Re::pondent has sold and distributed Yarious Bingo sets and other devices for use in the sale and distribution of his merchandise to the consuming public by lot or chanee, but the principle of operation in connection with £>ach of said Dingo sets or dHices is similar to the one her£>inabove df'scrib('cl, Yarying only in detail. P.\R. 3. The persons who ha,·e purrhnsetl respo111lent's !'aid OS!'ortments of merchandise, together with said Dingo ~f't!', either directly or indit·£>ctly, IHl\"e usf'd said Bingo sets in ~('lling anll 1listributin~ re~pondent's mercharJ•lise in acconlanc(' with the afore ... aitl sa1£>s plan or method. Respomknt thus supplif'" to llllll pJacf's in the humls of 0thrr-. the mrnns of conducting lottt'rie'> in the "ale of his mHchandi"f' in accordance with th(' c:ales plan or methotl her£'innbove d('· R'ribetl. The U~f' by J'f''-poncl£>nt of c:aid c:ales plan or nwthotl in the sale and 1li"'tribution of hi" nwrchaiH]i ... e and tlw c:ale of "'aitl m<'rchan· di"'e by and through the use tlter£>of, and by th(' aid of '-aid c:alf'q plan EXCEL l\IERCHAXDISE AXD :::\OYELTY CO. 23 18 Complaint or method is a practice of a sort which is contrary to an establislwd public policy of the Government of the United States and in violation of criminal laws.

PAR. 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. )fany persons, firms and cor· porations who sell or distribute mHchnndise in competition with the respondent, as above alleged, are unwilling to adopt and use said sales plan or method or any sales plan or method involving a game of chance or the sale of a chance to win something by chance or any other sales plan or method that is contrary to public policy, and such competitors refnlin therefrom. )fany persons are attracted by said sales plan or method employed by respondent in the sale and distribution of his merchandise, and by the element of chance involwd therein, and luwe been and are 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 equivalent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has the tendency ami capacity to and does unfairly di,·ert trade in commerce between and among the various States of the Unitell States and in the District of Columbia to respondent from his said competitors who do not use the same or equivalent sales plans or methods.

PAR. 5. The aforesaid acts and practices of respondent, as hereinabove allegrd, are all to the prejudice and injury of the public anJ of respondent's competitors, and constitute unfair methods of com- Petition in commerce and unfair and deceptive acts and practices in colllmerce within the intent and meaning of the Federal Trade Co111mission .\ct.

Count 2 l)AnAcn.\rJI 1. Hespondrnt, ~lax .\. 'Yassennan, is an individual trading as Excel )!erchamlise & Xon•lty Co., with his principal office anJ place of business }orated nt 1316 Farnam Stred, Omaha, Nebr. Rt>spondent is now, anll for some time ]a~t past has been, engaged in the sale and distribution of device~ commonly known as push card;; ?11J punchboard~ to dealer~ in ,·arion:,. other artid<'s of merchanllise, ~ 1 romme1·rc Lcbn•en nnd among the various States of the United dntrs and in tlu• Di~trict of C'olumbin.

t HrspontlC'nt cau~rs nnd hn~ cau ... ed said devices, when soltl, to b<' l'flll!';portrtl from his a forr ... aitl plnre of bu-.inrss in Omaha, Xebr .• to lHlrthn:,.t•rs t h£>rrof, at t hrir l'l' ... lWCt i ve point::. of location, in various 24 FEDERAL TRADE COl\!l\II~SION DE'CIS'IOXS Complaint 3-!F.T.C.

States of the United States other than the State of N"ebraska and in the District of Columbia. There is now and has been for some time last past a course of trade by said respondent in such push cards and punchboards, 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 sells and distributes, and has sold and distributed, to dealers push cards and punchboards so prepared and arranged as to involve games of ch;mce, gift enterprises or lottery schemes when used in making sales of merchandise to the consuming public. Respondent sells and distributes and has sold and distributed, many kinds of said push cards and punchboards, but all of said push curds and punchboards im·olve the same chance or lottery feattfres, when used in connection with the sale or distribution of merchandise and vary only in detail.

l\Iany of said push cards and punchboards have printed on the faces thereof certain legends or instructions that explain the manner in which said devices are to be used or may be used in the sale or distribution of -mrious specified articles of merchandise. The prices of the sales on push cards and punchboards vary in accordance with the individual device. Each purchase'!:' is entitled to one punch or push from the device, for the amount of money paid, and when a push or punch is made a disc or printed slip is separated from the push card or punchboard and a number is disclosed. The numbers are effectively concealed from purchasers and prospective purchasers until a selection has been made and the push or punch completed. Certain specified numbers entitle purchasers to designated articles of merchandise. Persons securing lucky or winning numbers receive articles of mer· chandise without additional cost at prices which are much less than the normal retail price of said articles of merchandise. Persons not obtaining one of the lucky or winning numbers receive nothing for their money other than the privilege of making a push or punch froll said card or board. The articles of merchandise are thus distributed to the consuming or purchasing public wholly..r by lot or chance. Others of ~aid push card and punchboard devices have no instructions or leg-ends thereon but have blank spaces provided therefot·. On those push cards nnd punchboanls the purchasers thereof place instructions or leg-ends which han• the same import and meaning- ns the instructions or lt'gends placed by the n•spondents on said push card and punchboanl devices first hereinabove described. The only use to be made of said push canl and punchbonnltlevices, atlll the only man· ner in which they nre u:-;pt} by the ultimate purchasers th<>reof, is in EXCEL UERCHAXDISE AXD XOVELTY CO. 25 18 Complaint combination with other merchandise so as to enable said ultimate purchasers to sell or distribute said other merchandise by means of lot or chance as hereinabove alleged.

PAR. 3. l\Iany persons, firms, and corporations who sell and distribute, and have sold and distributed, candy, cigarettes, and other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia, purchase and have purchased respondent's said push card and punchboard devices ami pack and assemble, and hare packed an assembled, assortments comprised of various articles of merchandise, together with said push card and punchboard devices. Retail dealers who have purchased s:~id assortments, either directly or indirectly, or retail dealers Who have purchased said devices direct from respondent and made up their own assortments, have exposed the same to the purchasing })Ublic and have sold or distributed said articles of merchandise by lllf'ans of said push cards and punchboards in accordance with the sales plans as J.rscribed in paragraph 2 hereof. Because of the elenwnt of chance involved in connection with the sale and distribution of said merchandise by means of said push cards and punchboards, hlany members of the purchasing pubhc have been induced to trade or deal with retail dealers selling or distributing said merchandise by 1neans thereof. As a result thereof, many retail dealt'rs have been induced to tleal with or trade ~ith manufacturers, wholesale dealers and jobbers who sell and distribute said merchandis(', together with ~aid devices. Said persons, firms and corporations lun·e many competitors ~ho s£>11 or distribute like or similar articles of merchandise in comm£-ree betwe£-n and nn1on~ the various States of the United Stnt£-s and in the District of Columbia. Said competitors are faced With the altf'rnative of d£-scending to the use of said push card and Pnnchboartl devices, or other similar devices, which thf'y are under a l)owerful moral compulsion not to use in connection with the sale or distribution of their merchandise, or to suffer the loss of substantial h·atle. Said competitors do not sell or distribute their merchandise by hlenns of pu~h canls and punchlJonnl device~, or simibr device~, because of the element of chance or lottery featurps involnd then•in, and Ot•cause such practices are contrary to the public policy of the Gov- E>l·nnwnt of the Unih•d Stat£'s and in violation of criminal laws. and 811C'h compditors n•frain from supplying~ to, or placing in the l~antls of, oth<'rs push cnnl and pnnchhoanl devices, or any other similar dnic£'s, which are to be u~t-d, or which may be U~£'d in connection with the sale or tli~tribution of the m<'rchantli~e of such competitors to tho gent•rnl public Ly nwnns of a lott<'ry. game of chance or gift e11trr- 26 FEDERAL TRADE CQ).Uii';SIOS DE'CIS'IOXS Findings 3-!F. T. C. })rise. As a result thereof, substantial trade in commerce between and among the various States of the United States and in the District of Columbia has been unfairly dinrted to said pe.rsons, firms and corporations from said competitors, who do not sell or use said devices. PAR. 4. The sale of merchandise to the purchasing public through the use of, or by means of, such devices in the manner above alleged, inmlves a game of chance or the sale of a chance to procure articles of merchandise at prices much less than the normal retail price thereof, and teaches and encourages gambling among members of the public, all to the injury of the public. The use of said sales plans or methods in the sale of merchandise, and the sale of merchandise by and through the use thereof and by the aid of said s_ales plans or methods, 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 criminal laws, and constitutes 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.

The sale or distribution of said push card and punchboarcl devices by the respondent, as hereinabow alleged, supplies to and places in the hands of others the means of conducting lotteries, games of chance, or gift enterprises in the sale or distribution of merchandise. The respondent thus supplies to and places in the hands of said persons, firms and corporations the means of, and the instrumentalities for, engaging in unfair methods of competition in commerce1 and unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission .\.ct.

PAR. 5. The aforesaid acts and prac.tices of respondent, as hereinabove alleged, are all to the prejudice and injury of the public, and constitute unfair and deceptive acts and practices in commerce "·within the intent and meaning of the Federal Trade Commission Act. nEronT, F1~o1xcs As To nre F.\crs. Axo OnoEn Pursuant to the provisions of the FPdl't·al Trade Conunission Act, the Federal Trade Commission on February 9, 1910, issucd and thereafter Stl'\'ed its complaint in this proceelling upon rC'spoiHlC'nt, l\Iax .A. Wasserman, individual1ly and trading- as Excel )[erch:mdise & Novelty Co., charging- him with the use of unfair methmls of comp('tition in ronunerce and unfair acts and practie('S in commerce in violation of the provb;ions of sn i1l •\ct. Suh.;prpwntly, the rrsponllt'nt fi lltl nn answer to the Commission'~ complaint tHlmitting all the material ullegations of fact "t•t forth in ~aid {'complaint and wniring nil interwning EXCEL ~IERCHAXDISE AND NOVELTY CO. 27 18 Findings procedure and further hearings as to the 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 and being 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 and its conclusion drawn therefrom: FINDINGS AS TO Tile F.\CTS P"\RAGR.\PH 1. Respondent, ~lax A. 'Vasst'rman, is an individual trading as Excell\Ierchandise & Novelty Co., with his principal office and place of business locateu at 131G Farnam Street, Omaha, Xebr. Respondent is now and for some time last past has been engaged in the sale and distril.motion of sauce pans, dripolators, coffee percolators, pillo"·s, smoking stands, electric table lamps, fountain pens, ashtrays, and other articles of merchandise in conunerce between and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said merchandise when sold to be transported from his aforesaid place of business in Omaha, Nebr., to purchasers thereof, at tht.>ir respective points of location, in the various States of the United States other than the State of Xebraska and in the District of Columbia. There is now and for some time last past has been a course of trade by respondent in said merchandise in commerce between and among the various States of the United States and in the District of Columbia. In the course and comluct 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 aml conduct of said business, as described in paragraph 1 hen•of, the respondent in selling and distributing his said l11erchandise has supplied his customers with as~rtments of said nwrchandiso together with C('rtain parupheruali:l known ns Bingo sets, by means of which said merchnndi~ is sold and distributed to the consuming public in a mannH which involn•s the operation of a game of ehancc, gift enterpri~e, or lottery scheme. One of said Bingo ~·ts consists of n tnlly sheet, containing 75 numbers; a numbrr of Bingo cards on each of which nppenr 2.> numbers nrrangt:>d in t\ squat'(', which llumbers ('Othet-pond to the muubt.•rs on the tully blW<'t; nnd n nmnl)('r of small wmKll'n Sf!Unres on each of which nppt>nrs n nmnl~r. Each 28 FEDERAL TRADE COMl\IISSIO:X DECIS'IO::\S Fimlings 3-! F. T. C. of said Bingo cards has a different group of numbers thereon, and one of said canls appears substantially as follows: Xos. 1 to 15 Xos. 16 to 30 Nos. 31 to 45 Xos. 46 to 60 :s-os. 61 to 75 BIXGO 1 16 33 46 G6 6 27 35 55 61 Free 5 23 0 58 68 Free 13 21 37 53 67 2 20 43 56 63 START WITH LETTER 0 IN CENTER, FREE 5 NUMBERS ACROSS ANY LINE WI:\'S 2 12 DIFFERENT WAYS TO BINGO One Star Series. Total Sets 1,365 Cards. Printed in U.S. A. nv means of said Ding-o set, saiu merchan(lise is di:;tributed to the pur~hasing public in substantially the following manner: Respmulent's customer, or someone designated by such cu~tomer, acts as an operator in the sale or distribution of said merchandi~e. The operator of the Dingo set places in the hands of each participant one of the said lling-o cards, and each participant pays the operator a designated sum of money for the april'ilf'ge of participating in the distt·ibution of {'ach of said articles of ffi{'l'Chanllise. The opl'motor then places the saitl wooden squares in ll container nnd so mixrs them that the numbers tlwreon are concealed until one of said woo,len squares is withdrawn from the <"ontainer Ly the operator. In the EXCEL :MERCHANDISE L'\'D NO\'ELTY CO. 29 18 Findings center of the participant's Bingo card is a square marked "Free'' nnd each participant places a marker thereon before the aforesaid drawing of said. nu~1bers is begun. The operator then proceeds "·ith the drawing of numbers from the aforesaid mixing container and calls out the number appearing on each wooden square as said square is withdrawn from said container, and the person on whose card such number appears places one of said markers over such number. This same procedure is followed until one of the participants has succeeded in marking five numbers on said card, which numbers form a straight line across the card, either horizontally, vertically, or diagorally. The sequence or distribution of the numbers which control the placing of the ma!."kers is determined wholly by chance. Upon marking the last of said five numbers the participant calls out the word "Bingo." The marked numbers are called out by the operator who checks the same with the numbers on said tally sheet, and if such numbers haxe been correctly marked the participant is entitled to and receives one of said articles of merchandise as a price. The other participants receiw nothing for their money. This same proc·pdure is repeated until all of said articles of merchandise or prizes have been distributed. The articles of merchandise therein vary but each of said articles of merchandise is of greater value than the amount paid by each participant for participation in the distribution ·of said merchandise as above described. The said articles of merchandise are thus distributed to the purchasing public wholly by lot or chance. Respondent has sold and distributed various Bingo sets and other devices for use in the sale and distribution of his merchandise to the consuming public by lot or chance, but the principle of operation in connection with each of said Bingo sets or devices is similar to the one hereinabove described, varying only in detail. PAR. a. The persons who hase purchased respondent's said assortments of nwrrhandise, together with said Bingo sets, either directly or iwlirectly, han used said Dingo sets in selling and distributing respondent's merchandi~e in ncconlance with the aforesaid sales plan or metl\l)d. HPspondent thus supplies to nnd places in the hands of others the nwuns of conducting lotteries in the sale of his merchan· elise in acronlance with the sales plan or nwthod hereinabove <le· scribers Till' use by respotHlent of said !'ales plan or nwthotl in the sale and distribution of his nwrchunJise anJ tfw sale of sni<l merdlfltHlise by nn1l through the use then'of, and by the aid of said sales plan or mrthotl is n pmdil'e of n solt which is contl'llry to an <>stahlishl'll pul,Jic policy of the Gonrnment of the rnitt>d Stutes and in violation \If criminal laws.

30 FEDERAL TRADE C01\IMT5SIO~ DE'CISIO~S Findings 34F. T. C.

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 less than the normal retail price thereof. l\Iany persons, firms, and corporations who sell or distribute merchandise in competition with the respondent, as above found, are unwilling to adopt and use said sales plan or method or any sales plan or method involving a game of chance or the sa.le of a chance to win something by chance or any other sales plan or method that is contrary to public policy, and such competitors refrain therefrom. l\Iany persons are attracted by said sales plan or method employed by respondent in the sale and distribution of his merchandise, and by the element of chance involnd therein, and have been and are induced to buy and sell repsondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or equivalent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has 'the tendency and capacity to and does unfairly divert trade in commerce between and among the nrious States of the United States and in the District of Columbia to respondent from his said competitors who do not use the same or equivalent sales plans or methods.

PAR. 5. In the course and conduct of his business, the respondent is now, and for some time last past has been, engaged in the sale and distribution of devices commonly known as push cards and punchboards separate and apart from any other 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 devices, when sold, to be transported from his aforesaid place of business in Omaha, Nebr., to purchasers thereof, at their respeeth·e points of location, in Yarious States of the United States other than the State of Nebraska and in the District of Columbia. There is now and has lwen for some time last past a course of tratle by said respondent in Htch pu::<h ennis nnd punchboanls, in commerce between nml:nnon~ the various Stat{'S of the United States and in the District of Columbia. PAR. G. In the course and conduct of his bu:-;in('ss, a'i (lescrihed in paragraph 5 hereof, respondent sells and distributes, and has Fold m11l distributed, to dealers push card,- and punchboanl'i so pr('pnr('d and anangPd as to involn• gam<'S of dutne<', ~ift <'nterpri"t•s, m·lott('ry l"Ch<'m('S wh('n used in making~ sales of nwrchandise to tlw consnmin~ public. Hespomlent s('lls and distributes and has sold and distributl'tl, many kind!> of said push cards antl punchboard.;, but all of said pu~h canb and punchboartb involve the same chance or lottHy fNitures, EXCEL ~1ERCHA:\'DISE AXD XOYELTY CO. 31 18 Findings when used in connection with the sale or distribution of merchandiseand vary only in detail.

Many of said push can1s and punchboards have printed on the faces thereof certain legends or instructions that explain the manner· in which said devices are to be used or may be used in the sale or distribution of various specified articles of merchandise. The prices of the sales on push cards and punchboards vary in accordance with the individual device. Each purchaser is entitled to one punch or push from the device, for the amount of money paid, and when a push or punch is made a disc or printed slip is separated from the push card or punchboard and a number is disclosed. The numbers are effectively concealed from purchasers and prospective purchasers until a selection has been made and the push or punch completed. Certain specified numbers entitle purchasers to designated articles of merchandise~ Persons securing lucky or winning numbers receive articles of merchandise without additional cost at prkes which are much less than the normal retail price of said articles of merchandise. Persons not obtaining one of the lucky or winning numbers receive nothing for their money other than the privilege of making a push or punch from said card or board. The articles of merchand.ise are thus distribute<.l to the consuming or purchasing public wholly by lot or chance. Others of said push card and punchboard devices have no instructions or legends thereon but have blank E'paces provided therefor. On those push cards and punchboanls the purchasers thereof place in- ~tructions or legends which have the same import and meaning as the- Instructions or legends placed by the respondent on said. push cant and punchboarcl devices first hereinabove described. The only use tobe made of said push card and punchboard devices, and the only manller in which they are used by the ultimate purchasers thereof, is in. combination with other merchandise so as to enable said ultimate Pllrchasers to sell or distribute saill other merchandise by means of lot or chance as hereinabove found .

.PAn. 7. Many persons, firms, nnd corporations who sell nnd distribute, nnd have sold and cli:,tributed, candy, cigarettes, and otller articles of merchandi~e in commN'C'e Letw£'£'11 and among~ the various States of the United States and in the Di~trict of Columbia, purchasea?d have purchased respondent's said push card and punchbnurd de- ,.1<'es nnd pnl'k ond ossl•mble, and han• pa<"ke1l and assemblt•1l, a~sort­ lll(>nts romprisetl of various articl!.'s of merl'handise, togethl•r with saill push card nwl punchboanl devices. lll'tnil dealt.'rs who han• Pllrtha~(·ll said as~ortment .. , eith<'r dir<'ctly or indirect!~·, or rt•tnil d(>a lers who haw purdut~l·ll ~aid tlevie{'.;; din•ct from re~p<nlll<'nt anll 111Ul]e up their own a-...,ortuwnt-., han• l'XJlO"<'Il the ~ame to tlw pur('hn,.~ CO:\I::UW~IOX DECISIOXS32 FEDERAL TRADE Finllin~s 34 F. T. C. ing public and ha,·e sold or distributed said articles of merchandise by means of said push cards and punchboards in accordance with the sales plans as described in paragraph G hereof. Because of the element of chance involn•d in connection with the sale and distribution of said merchandise by means of said push canis and punchboards, many members of the purchasing public have been induced to trade or deal with retail dealers selling or distributing said merchandise by means thereof. As a result thereof, many retail dealers han been induced to deal with or trade with manufactmers, wholesale dealers, and jobbers who sell and distribute said merchandise, together with said devices. Said persons, firms and corporations have many competitors who ~ell or distribute like or similar articles of merchaw.li:;e in commerce between aiH1 among the various States of the United States and in the District of Columbia. Said competitors are faced with the alternative of descending to the use of said push card and punchboard devices, or other similar devices, which they are under a powerful moral compulsion not to u~e in conne<"tion with the sale or distribution of their merchandise, or to suffer the loss of substantial trade. Said competitors do not sell or distribute their merchawli~e by means of push cards and punchboanl devices, or similar devices. because of the element of chance or lottery features involved therein, awl because such practices are contrary to the public policy of thr Government of the United States and in violation of criminal laws, and such competitors refrain from supplying to, or placing in the hands of, others push canl anti puuC"hboard devices, or any other simi· Jar devices, which are to l>e u~etl, or which may he used, in con· nertion with the sale or distribution of the merchandise of such com· petitors to the general public by means of a lottery, game of chance, or gift enterprise. As a result thereof, substantial trutle in com· merce between and among the various States of the United States und in the District of Columbia has been unfairly diverted from said competitors who do not sell or u..;e said devices to persons, firms, nnd corporations who purchase und u~ said th•vices of the re~p<HHlt>nt. PAR. 8. The sale of merchandise to the purchasing public through the \l"e of, or by meath of, such dt>vkes in the manner above found, invoh·es a gam~ of chunce or the sule of a d1ance to procurt> nrtic~es of mPrehantlise at prices much h•ss than the normal rPtnil pr1cr then'of, nn<l tt•inches nml eucout·uges gamblin~ among uwmlwrs of the public. all to the injury of the public. The use of f-iaid sal('s pinus or methotls in the sale of mereluwdi ... <'. nml the sale of lllt>l'chnn<li..;e bY and through the IN' tlwn•of, nllll hy the aid of sahl !'alt•s plans c•~ 11wthod-:, is a prartice of n ~ort whirh i~ routrary to nn l·~tnbli:,IH'l EXCEL MERCHANDISE AND NOVELTY CO. 33 18 Order public policy of the Government of the United States, and in violation of criminal laws, and constitutes unfair methods of competition in commerce, and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. The sale or distribution of said push card and punchboard devices by the respondent, as hereinabove found, supplies to and places in the hands of others the means of conducting lotteries, games of chance, or gift enterprises in the sale or distribution of merchandise. The re- ~pondent thus supplies to and places in the hands of said persons, firms, and corporations the means of, and the instrumentalities for, <'ngaging in unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and meaning of tha Federal Trade Commission Act.

CONCLUSION . The aforesaid acts and practices of the respondent in selling and distributing his said assortments of merchandise, together with Dingo sets, as hereinabove 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 acts and practices in comlr_lerce within the intent and meaning of the Federal Trade Commis- Sion Act, and the aforesaid acts and practices of respondent in selling and distributing said push card and punchboard devices separate and a~art from any other merchandise to dealers for use in the sale and distribution of said dealers' merchandise, as hereinabove found, are aU to the prejudice and injury of the public and constitute unfair acts ~nd practices in commerce within the intent and meaning of the ederal Trade Commission Act.

ORDER TO CEASE AND DESIST . 'I'his proceeding having bel>n heard by the Federal Trade Commis- Sion upon the complaint of the Commision and the amwer of I't'spond- ~nt, in which answer respondent admits :~.II the material all<.'gations of "ac~ set forth in said complaint and statrs that he waives all inter- ~~I~g procedure and further hearings as to said facts, and the ComthissJo~ having made its findings as to the facts and its conclusion Coat sn.1d respondent has violated the provisions of the Fcdrral Trade lllmission Act.

an~ is o~dercd, That the rro:pondent, ?!fax A. 'Vas.--erman, individually oth tradmg as Excel Mrrchn'ndise & Nowlty Co., or trading under any ~'r name or names, his reprcsentntin-l>, ngl'nts, or employl'Cs, directly 4(11J:;06•• 42 \ol. 34-3 34 FEDERAL TRADE COMMISSION DE'GIS'IONS Order 34F.T.C.

or through any corporate or other device, in connection with the . offering for sale, sale, and distribution of sauce pans, dripolators, coffee percolators, pillows) smoking stands, (llectric table lamps, fountain pens, ashtrays, or any other articles of merchandise in commerce, as "commerce" is defined in the Federal Trade Commission Act, do 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 be made by means of a game of chance, gift enterprise or lottery scheme. 2. Supplying to or placing in the hands of others any merchandise, together with Bingo sets, punchboards, push or pull cards, or other devices, which said Bingo sets, punchboards, push or pull cards or other devices are to be used or may be used in selling or distributing said merchandise to the public by means of a game of chance, gift enterprise or lottery scheme.

3. Supplying to or placing in the hands of others Bingo sets, punchboards, push or pull cards or other devices, either with assortments of merchandise or separately, by which said Bingo sets, punchboards, push or pull cards or other devices are to be used or may be used ·in selling or distributing said merchandise to the public by means of a game of chance, gift enterprise, or lottery schem~. 4. Supplying to or placing in the hands of others punchboards, push or pull cards or other devices which are to be used or may be used in selling or distributing any merchandise to the public by means of a game of chance, gift enterprise, or lottery scheme. 5. Selling or otherwise disposing of any merchandise by means of a game of chance, gift enterprise, or lottery scheme. It is further ordered, That the respondent shall, within GO days after service upon him of this order, file with the Commission a report in writing setting forth in detail the manner and form in which he has complied with this order.

• BERLAND SUPPLY CO., INC., ET AL.

' I' Syllabus