Peter Anastasoff and James Anastasoff

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IN THE MATTER OF PETER ANASTASOFF AND JAMES ANASTASOFF, TRADING AS PURITY CANDY CO~IP ANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATION OF SEC. II OF AN ACT OF' CONGRESS APPROVED SEPT. 26, 1914 Docket ~872. Complaint, Nov. 23, 1912-Decision, Jan. 5, 1913 Where two .individuals, engaged in the manufacture and competitive interstate sale and distribution of candy, including certain assortments which were so packed and assembled as to Involve the use of a game of chance, gift enterprise, or lottery scheme when sold and distributed to the consumer; typical assortment consisting of 20 candy bars and 130 small caramels, together wlth a three-section push card for use In sale and distribution of said candy under a plan, as explained thereon, by which those securing by chance certain numbers concealed within the card received for the .penny paid, in addition to a caramel, one of said bars, and maker of last punch in each section received, in addition to the caramel received by all, two candy bars;

Sold such assortments to wholesalers, jobbers, and retallers by whom they were exposed and sold to the purchasing public in accordance with aforesaid sales plan, under which fact as to whether purchaser received one of the candy bars or one o! the small caramels for his penny was deter· mined wholly by lot or chance; and thereby supplied to and placed In the hands of others means of conrln<"tlng a lott!'ry In sale of their merchandise in accordance with aforesaid plan, involving the sale of a chance to procure candy bars at much less than their normal retall price; contrary to an established public policy of the United States Government, and in competition with many who do not use such or any method Involving game of chance to win by chance, or other method contrary to publlc policy; With the result that persons w<'re attracted by said plan C'mployed by such Individuals in sale and uistrlbution ot their product and by element of chance Involved therein, and were thercby Induced to buy and sell their candy in preference to that of said competitors, with tendency nnd capacity to divert unfairly trade lu commel·ce to them from their competitors aforesaid; to the substantial injury of competition: lleld, That such acts and practlcC's, under the clrcumstancc~t set forth, were all to the pr<'Judice and Injury of the public and competitors, nnd constituted unfair methods of competition in commerce and unfair nets and practices therein.

Mr. J. lV. Brookfield, Jr. for the Commission, CoMrLAINT Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said net the Federal Trade Commission, having reason to believe that Peter Anastasoff' .· I ! i. PURITY CANDY CO. 19 18 ComplaintII and James Anastasoff, individually, and trading under the name I latedPuritytheCandyprovisionsCo., hereinafterof said act,referredand it appearingto as respondents,to the Commissionhave viothat a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint and states its charges in that respect as follows :

PARAGRAPH 1. Respondents, Peter Anastasoff and James :Anastasoff, are individuals, trading as copartners under the name of Purity Candy Co., with their principal office and place of business located at 1135 N. Sixth Street, St. Louis, Mo. Respondents are now and for more than 1 year last past have been engaged in the manufacture and in the sale and distribution of candy to wholesalers, jobbers, and dealers. Respondents cause and have caused said candy when sold to be shipped or transported from their aforesaid place of business in the State of Missouri to purchasers thereof at their respective points of location in various other States of the United States and in the District of Columbia. There is now and for more than 1 year last past has been a course of trade by said respondents in such candy in commerce between and among the various States of the United States and in the District of Columbia.

In the course and conduct of their business respondents are and have been in competition with other individuals and with firms, and corporations engaged in the sale, and distribution of like or similar products 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 their business as described in paragraph 1 hereof respondents sell and have sold to dealers, wholesalers and jobbers certain assortments of the said candy so packed and assembled as to involve the use of a game of chance, gift prize or lottery scheme when said candy is sold and distributed to the consumers thereof. One of the said assortments is sold and distributed the purchasing public in the following manner: This assortment consists of 20 candy bars and 130 small pieces of caramel candy with which is packed a device commonly called a. push card. The push card is divided into three sections and each of said sections contains 50 partially perforated disks on the face of which is printed the word "Push." Concealed within each of said disks is a number which entitles the purchaser thereof to one of the candy bars without additional cost when said number corresponds with any of the numbers set out in the legend at the top of said push card. The last disk pushed out of each section also entitles the purchaser thereof to receive two candy bars. The sales are 1 cent I each and those not securing n number entitling them to one of the I l I Complaint 36F.T.C.

candy bars receives on{l of the pieces of caramel candy. The said card bears a legend as follows :

JOBBER'S ADVERTISER Nos. 2, 5, 8, 11, 16, 19, 24, 27, 30, 33, 36, 39, 42, 45, Each Receive ONE CANDY BAR ALL OTHER NUMBERS RECEIVE ONE PIECE LAST PUNCH IN EACH SECTION RECEIVES 2 CANDY BARS Notice-This is not a gambling device. Every punch receives full value. Extra awards for advertising. 150-20B.

Sales of respondents' candy by means of said push card are made in accordance with the above legend. The numbers are effectively concealed until a purchase has been made and the disks separated or removed from the said card. The fact as to whether the purchaser receives one of the candy bars or one of the small caramels for his purchase price is thus determined wholly by lot or chance. The respondents sell and distribute various assortments of candy involving lot or chance features when said assortments are sold and distributed to the purchasing public by such assortments and the methods of sale and distribution thereof are similar to the ones above described.

PAn. 3. Retail dealers and others who purchase respondents' candy directly or indirectly expose and sell the same to the purchasing public in accordance with the sales plans aforesaid. Respondents thus supply to and place in the hands of others a means of conducting a lottery in the sale of their merchandise in accordance with the sales plan hereinabove set forth. The use by respondents of said sales plans or methods in the sale of their merchandise and the sale of said merchandise by and through the use thereof and by the aid of said sales plans or methods is a practice which is contrary to an established public policy of the Government of the United States. PAn. 4. The sale of the merchandise to the pu~chasing public by the method or sales plan hereinabove set forth involves a game of chance or the sale of a chance to procure candy bars at a price much less than the normal retail price thereof. Many persons, firms, and ~orporations who sell and distribute candy in competition with respondents as above alleged do not 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 which is contrary to public policy. Persons are attracted by said sales plans or methods employed by respondents in the sale and distribution of their candy and by the element of chance involved therein and are thereby induced to buy and sell respondents' candy in preference to candy of said com- PURITY CANDY CO. 21 18 Findings petitors of respondents who do not use. the same or equivalent methods.

The use of said methods of respondents because of said game of chance has a tendency and capacity to 'unfairly divert trade in commerce between and among various States of the United States and in the District of Columbia to respondents from their said competitors who do not use the same or equivalent methods and as a result thereof substantial injury is being done and has been done by respondents to competition in commerce betwJC>en and among various States of the United States and in the District of Columbia. PAR. 5. The aforesaid acts and practices as herein alleged are all to the prejudice and injury of the public and of respondents' competitors and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on November 23, 1942, issued and thereafter served its complaint in this proceeding upon respondents, Peter Anastasoff and James Anastasoff, individuals, trading as Purity Candy Co., charging them with the use of unfair methods of competition and unfair acts and practices in .commerce in violation of the provisions of said act. On December 18, 1942, the respondents filed their answer, in which answer they 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 the answer thereto, and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this pro~eding is in the interest of the public and makes this its findings as to the facts nnd its conclusioh drawn therefrom.

l'INDINGS AS TO Tile FACTS PARACRArii 1. Respondents, Peter .Anastasoff and James Anastasoff, are individuals, tt·ading as copartners under the name of Purity Candy Co., with their principal office and place of business located at 1135 N. Sixth Street, St. Louis, Mo. Respondents are now and for more than 1 year last past have been engaged in the manufacture and in the sale and distribution of candy to wholesalers, jobbers, and dealers. Respondents cause and have caused said candy when sold. to be shipped or transported from their aforesaid place of business Findings 36 F. T. C.

in the State of Missouri to purchasers thereof at their respective points of location in various other States of the United States and in the District of Columbia. There is now and for more than 1 year last past has been a course of trade by said respondents in such candy in commerce between and among the various States of the United States and in the District of Columbia.

In the course and conduct of their business respondents are and have been in competition with other individuals and with firms and corporations engaged in the sale a~d distribution of like or similar products 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 their business as described in paragraph 1 hereof respondents sell and have sold to dealers, wholesalers, and jobbers certain assortments of the said candy so packed and assembled as to involve the use of a game of chance, gift enterprise, or lottery scheme when said candy is sold and distributed to the consumers thereof. One of said assortments is sold and distributed to the purchasing public in the following manner: This assortment consists of 20 candy bars and 130 small pieces of caramel candy with which is packed a device commonly called a push card. The push card is divided into three sections and each of said sections contains 50 partially perfornted disks on the face of which is printed the word "Push." Concealed within each of said disks is a number which entitles the purchaser thereof to one of the candy bars without additional cost when said number corresponds with any of the numbers set out in the legend at the top of said push card. The last disk pushed out of each section also entitles the purchaser thereof to receive two candy bars. The sales are 1 cent each and those not securing a number entitling them to one of the candy bars receive one of the pieces of caramel candy. The said card bears a legend as follows:

JOBfiEll.'S ADVERTISER Nos. 2, ~. 8, 11, 16, 19, 24, Z1, 30, 33, 36, 30, 42, 45, Each Receive ONE CANDY BAll. ALL OTIIEn. NUl\IDEllS RECEIVE ONE PIECE LAST PUNCH IN EACH SECTION llECEIVRS 2 CANDY BARS Notice-This is not a gambling device. Every punch receives full value. Extra awards for advertising. 1~20D.

Sales of respondents' candy by means of said push card are m~de in accordance with the above legend. The numbers are effectively concealed until a purchase has been made and the dish:s separated or removed from the said card. The fact as to whether the purchasl'r .receives one of the candy bars or one of the small caramels for his purchase price is thus determined whoUy by ]ot or chance. PURITY CANDY CO. 23 18 Conclusion The respondents sell and distribute nrious assortments of candy involving lot or chance features when said assortments are sold and distributed to the purchasing public, but such assortments and the methods of sale and distribution thereof are similar to the ones above described.

PAn. 3. Retail dealers and others who purchase respondents' candy directly or indirectly expose and sell the same to the purchasing public in accordance with the sales plans aforesaid. Uespondents thus supply to and place in the hands of others a means of conducting a lottery in the sale of their merchandise in accordance with the sales plan hereinabove set forth. The use by respondents of said sales plans or methods in the sale of their merchandise and the sale of said merchandise by and through the use thereof and by the aia of said sales plans or methods is a practice which is contrary to an established public, policy of the Government of the United States. PAR. 4. The sale of the merchandise to the purchasing public by the method or sales plan hereinabove set forth involves a game of chance or the sale of a chance to procure ca,ndy bars at a price much less than the normal retail price thereof. Many persons, firms, and corporations who sell and distribute candy in competition with respondents, as above found, do not 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 which is contrary to public policy. Persons are attracted by said sales plans or methods employed by respondents' in the sale and distribution of their candy and by the element of chance involved therein and are thereby induced to buy and'sell respondent's candy in preference to candy of said competitors of respondents who do not use the same or equivalent methods.I The use of said methods by respondents because of said game ofi ! chance has a tendency and capacity to unfairly divert trade in coml merce between and among various States of the United States and in I the District of Columbia to respondents from their said competitors who do not use the same or equivalent methods, and as a result thereof substantial injury is being done and has been done by respondents to competition in commerce between and among various States of the United States and in the District of Columbia. CONCLUSION I prejudiceThe aforesaidand injuryacts ofandthepracticespubHc andas hereinof respondent'sfound arecompetitorsall to their and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and meaning of then II Federal Trade Commission Act.

II 24 FEDERAL TRADE COMl>fiSSION DECISIONS Order 36F. T. C.

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission 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 waive 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 respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, Peter Anastasoff and James Anastasoff, individually, and trading as Purity Candy Co., or trading under any other name, and their representatives~ agents, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of candy 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, either with assortments of candy or other merchandise or separately, with said push or pull cards, 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. 2. Selling or distributing candy or any merchandise so packed and assembled that safes of said candy or other merchandise to the public are to be made or, due to the manner in which such merchandise is packed and assembled at the time it is sold by respondents, may be made by means of a game of chan.ce, 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 i.9 further ordered, That the respondents shall, within GO 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.

THE SHERWIN-WILLIAMS CO., ET AL. 25 Syllabus