James, Vinton T

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IN THE Matler OF :\TINTON T. JAMES AND GEORGE E. JAMES, TRADING AS J & J CANDY COMPANY CO!riPLAINT, FINDINGS, AND ORDER IN REGARD TO THE .ALLEGED VIOLATION OF SEC. Ci OF .AN .ACT OF CONGRESS ..APPROVED SEPT, 26, 1914 Docket .fl'69. Oomplaint, June ~. 191!-Decision, Aug. ~. 1942 Where a firm, engaged in competitive interstate sale and distribution of candy, Including certain assortments which were so packed and assembled as to Involve and make use of lottery schemes and games of chance, typical one being composed of 60 uniform bars, toget11er with a push card for use tn 's. rangingtheir salefromand1 distributionto 3 cents, wereunderdetermineda plan byby whichnumberamountssecuredpaid,by chance--if any, Old such assortments for resale to purchasers, by whom they were exposed ~ and sold to the purchlislng public ln accordance> with afore>sald sales plan lnvolvlug sale of chance to procure candy bars without cost or at less than their normal retail price;· and thereby supplied to and placed In their hands the means of conducting lotteries ;

· 'V'Ith the result that many persons were attracted by 1mch sales plan and the element of chance Involved that·ein, and were thereby induced to buy and sen said candy In preference to that of competitors who do not use such , .. methods; whereby trade was diverted from such competitors to them, to the 1I Injury of competition: · ·. eld,, That such acts and practices, under the circumstances set forth, were all · · to the prejudice and Injury of the public and competitors, and constituted . Unfair methods of competition. . 1 Mr. J. V. Mishou and Mr. J. W. Brookfield, Jr., for the Commission. lt[cDougle·& Ervin, of Charlotte, N.C., for respondents. · · Co:r.rrLAIN'r · Pursuant to the provisions of the Federal Trade Commission Act ;nd by virtue of the authority vested in it by said act, the Federal · raue Commi.;;sion, having reason to believe that Vinton T. Jame!!J and George E. James, individually and trading as J.& J Candy Co., he.reinafter referred to as. respondents, have violated the provisions of said act, and it appearing to -the Commission that a proceeding by it in .respect there.of would be in the public interest, hereby issues its com- Plaint, stating its charges in that respect as follo:ws i PARAGRAPH 1. Uespondents, Viriton T. James atid G~orge E. James, .nre copartners, doing busines~ under the firm name and 'style of J & J Candy Co., with principal office and phwe. 9£ business located at. ,1507 West Trade Street, Chartotte, N.C." ,Respondents are now and for more than 2 years last past .have been engaged iri the business of Inanufact.uriri.g, distributing,' and selling candies.- . · ~09749m--43--vol.3~----21 ,286 FEDE.RAL TRADE CO~ISSION DE·CISIONS Complaint 35F.T· c.

PAR. 2. In the course and conduct of their~ said business responden~s cause and have caused their candies to be transported from their . p~incipal place of busine~s in Charlotte, N. C., into .the State ?£ 'South Carolina, for sale in. the latter State, and sell' and have sold in South Carolina the candies so transported. · · In said business re· , ~P.<?.I!-~ents are engaged in competition with other persons and corp~ra· tions, located both within and without the State of South Carolina; selling candies and offering . the same for sale to customers in South Carolitia: ·" · · · .'. PAR. 3. Respondents accomplish the distribution and sale of their ·1>aid candies by the following· method, among others: Respondents ·transport their candies by automobile from Charlotte, N. C., to variou~ 'part.s of South Carolina and there place said candies in the hands 0 various consignees of respondents for sale on behalf of respondents at ·retail. Said consignees, upon selling the consigned candies and collect· •ing the purchase price therefor (which price is {ixed by respondents~ 'retain an agreed commission as compensation for their services an ·pay the balance of the proceeds of such sales to respondents. . . PAR. 4. A substantial portion of the candies which respondents trans·. ;port to and sell in South Carolina, as aforesaid, are assorted, packedd .and assembled so as to involve and make use of lottery schemes an games of chance in connection with and to promote the sale thereof to consumers. The following description of one of such candy assort· ;~ents with its accompanying lottery scheme illustrates the method of sale used by respondents: . ' This assortment is composed of 60 bars of candy of uniform size ~nd shape; together with a device commonly called a push card. ~he said push card has 60 partially perforated disks, on the face of ~hich is printed the word "Push." Concealed within the said disks are nuJll· hers ranging from 0 to 3 inclusive. When the disks are pushed or separated from the card a number is disclosed. Purchasers punching 'numbers 1, 2, and 3 pay 1, 2, and 3 cents, respectively. Purchaset'S punching number '0 pay nothing. The numbers are effectively concealed from purchasers and prospective purchasers until the disks nre pushed or separated from the card.. The prices of said bars cif candy are thus determined wholly by lot or chance. · · · , The respondents furnish, and have furnished, various push cards to purchasers and consignees for use in connection. with, and to promote, the sale and distribution of respondents' said candies by means· of ~ game of chance or lottery scheme ..' Such .cards are similar to the oP,e ' herein described and vary only in detail. ', ·, , '',< ' " , , 1 ',. f 1 ''P.An.. 5. Purchasers and consignees of respondents' candies eip0~~ ·a11d sell the same to the purchasing public ~n accordance with the-sf~~.:. : l.j., 1, •'"~ , , I , , . , • • , ~~ '""' '""4 t ·,:.

J & J CANDY: CO •. 287 285 Findings :Pl~n aforesaid. Respondents thtis supply to and place in the hands of :~ld purchasers and consignees the means of conducting lotteries in: le sale of their products in accordance with the sales plan hereinabove ~et forth.

:PAR. 6. The sale of candy to the purchasing public by the method ~1' Plan employed by respondents, as hereinabove described, involves a gu:me of chance or the sale of a chance to procure bars" of candy without cost or at prices less than the· normal retail pric(l thereof~ · Many Persons are attracted by such a sales plan or method and in the element of chance involved therein, and are thereby induced to buy and sell _respondents' candy in preference to candy of competitors of respondents who do not use the same or equivalent methods.:· The use of such ~ethods by respondents has a t~nde~cy and c~pacityto unfair(y divert · lade to respondents from their said competitors who do not use· the sa· me or equivalent methods. · · :P.\R, 7. The aforesaid acts and practices of respondents as herein 1a leged are all to the prejudice and injury of the public and of re- ~Pondents' competitors and constitute unfair methods of competition ~1 commerce within the intent and meaning of the Federal Trade 01nmission Act. ' REPORT, FINDINGS AS TO THE F ACI'S, AND ORDER th :Pursua~t to the provisions of the Federal Trade .Commission Act, e Federal Trade Commission on June 4, 1942, issued and thereafter ~served its complaint in this proceeding upon respondents Vinton T. !Unes and George E. James, individuals and copartners, doing business as J & J Candy Co., charging them with the use of unfair meth- Ods of competition in commerce in violation of the provisions of said aet. On July 8, 1942, the re5.pondents filed their answers, in which an.s,Yer they admitted all the material allegations of fact set forth in hUid. complaint and waived. all intervening procedure and further earlllg as to said facts. Thereafter, the proceeding regularly came on for final hearing before the Commission on the said-complaint and the answer thereto, and the Commission, having duly coi1sidere.d the lnatter, and being now fully advised in the premises1 finds that this lll·oceedings is in the interest of the public, and makes this its findings as to the facts and its conclusion drawn therefrom. . FINDINGS AS TO THE FACTS :Paragraph 1. Respondents, Vinton T. James and George E. James, ~;e copart~er~, doing~ bus~ne~s under the firm name and. style ofJ & J andy Co., Wlth their prmcipal office and place of busmess located at . i 288 FEDE.RAL TRADE COMMISSION DE.CISIONJS Findings 35ll'. '.I'~ c. 1507 West Trade Street, Charlotte, N. C. Respondents are now and ·for more than two years last past have been engaged in too business ef :manufacturing, distributing, and selling candies. PAn. 2. In the course and conduct of their said business responde~ts cause and have caused their candies to be transported from their pr1Jl~ cipal place of business in Charlotte, N. C., into the State of South .Carolina, for sale in the latter State, and sell and have.. sold in Sotttb Carolina the candies so transported. In said business respondents ur~ engaged in competition with other persons and corporations, Jocnt: both within and without ths Stare of South Carolina, selling cand)es .and offering the same for sale to customers in South Carolina. . :. PAR. 3. Respondents accomplish the distribution and sale of thetf said candies by ths following method, among others: Uespondents transport their candies by automobile from Charlotte, N. C., to variou; parts of South Carolina and there place said candies in the hands 0 .various consigness of respondents for sale on behalf of respondents at .retail. Said consignees, upon selling the consigned candies and col· lecting the purchase price therefor (which price is fixed by respo?d· ents) ,· retain an agreed commission as compensation for their sen" lees and pay the balance of the proceeds of such sales to respondents. PAn. 4. A substantial portion of the candies which respondents transport to and sell in South Carolina, as aforesaid, are assorted, packed and assembled so as to involve and make use of lottery schemes .and games of chance in connection with and to promote the sale thereof to consumers. The following description of one of such candy 'assortments with its accompanying lottery scheme illustrates the method of sale used by respondents: . ;': This assort.ment is composed of 60 bars of candy of uniform s~z: '-itnd shape, together with a device commonly called a push ·card. 1.h 'said push card has CO partially perforated disks, on the face of which _',is printed the word "Push." Concealed within the said disks a.r~ numbers ranging from 0 to 3, inclusive. When the disks are pushe '<>r separated from the card a number is disclosed. Purchasers punch· ing numbers 1, 2, and 3 pay 1, 2, and 3 cents, respectively. Purchasers punching number 0 pay nothing. The numbers are effectively con- ;cealed from, purchasers and prospective purcha~ers until. the disk~ ~re pushed or separated from the card. The prices of said. bars 0 -candy are thus determined wholly by lot or chance .. The respondents furnish, and have furnished, various push catd:3 to purchasers and consignees for. use in connection with, and to plo- .mote, the sale and distribution of respondents' said candies by menJJS <Jf a game of chance or lottery scheme. ·such cards are similar to the ft>:ll~ herein described and vary only in detail. J & J CANDY. CO. 289' Order PAll. 5. Purchasers and consignees of respondents' candies expose 8.~d sell the same to the purchasing public in accordance with the sales .I P an aforesaid. Respondents thus supply to and place in the hands ' ?f said purchasers and consignees tlle means of conducting lotteries ·, lnhothe sale of their products in accordance with the sales plan herein- 11 V'e set forth. · · · · Pan. 6. The sale of candy to the purchasing public by the method ()r Plan employed by respondents, as h~reinabove found, involves a game of chance or the sale of a chance to procure bars of candy with2 Qut COst or at prices less than the normal retail price thereof. Many ~;rsons ar~ ~ttracted by s~lch a sales plan or m~thod and in the element · chance mvolved therem, and are thereby mduced to buy and sell . =spondents' candy in preference to camly. of competitor~ l1i respondlts Who do not use the same or Pquivalcnt methods. The. use of said lnethods by respondents, because of said game of chance, has a tendency .:nd a capacity to, and does, unfairly divert trade in commerce between tn~ among various States of the United States to respondents f~om said competitors who do not use the same or equivalent methods. :lr8 t a result thereof, injury is being, and has been, done by respondents ~0111petition in commerce between n11d among yarious States of theb lltted States.

CONCLUSION 11'he aforesaid acts and pr.actices of respondents, as herein found, are ~ 1 ~ the prejudice and injury of the public and of respondents' com· ll~titors, and constitute unfair methods of competition in commerce \\'!thin the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE Al\'0 DESIST . 1'his proceeding having been heard by the Federal Trade Commis- Sion upon the complaint of the Commission and the answer of respondents, in which answer respondents admit all the material allegations of fact set forth in said complaint and state that they '"aive all intervening procedure and further hearing as to said facts, d .the Commission having made its findings as to the}acts and con- ~ Usion that said respondents have violated the provisions of the ederal Trade Commission Act. , J It is ordered, That the respondents, Vinton T. James and George E. nn1es, individually and as copartners trading as J & J Candy Co., or trading under any other name, their representatives, agents and elnployees, directly or through any corporate or other device, in. conllection with the offering for sale, !:'ale and distribution of eandy or any iI ·290 FEDERAL TRADE COMMISStON: DECISIONS Order; 35F. T.C.

other merchandise in comme~ce, as "commerce" is defined in the Fed· eral Trade Commission Act, do :forthwith cease and desist :from: · 1. Selling.or distributing candy or any merchandise so packed an.d assembled that sales of such candy or other merchandise to the pubhc are to be made, or may be made, by means of a game of chance, gi:ft enterprise, or lottery scheme. . . _ · 2. Supplying to or placing in the hands of others push or pull cards, punchboards or other lottery devices, either with assortments of candy or other merchandise or separately, which said push or pull canl5, punchboards or other lottery devices are to be used, or may be used, . in selling or distributing such candy or other merchandise to the public. . ' - 3. SelliiJg or otherwise disposing o:f any merchandise by means of a game of chance, gift enterprise, or lottery scheme. It is 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 Ill which they have complied with this order.

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' THE': RUDOLPH. WURLITZER .CO." . 29f .' '. r:··-:- ·. Complaint ' ·(