Bonita Company

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IN THE M~'ITEB 0}' BONITA COMPANY COMPLAINT, FINDINGS, .AND ORDER IN REG~RD TO THE .ALLEGED VIOL~TION OF SEC. G OF .AN .ACT OF CONGRESS APPROVED SEPT. 26, 1914, AND AN ~CT OF CONGRESS APPROVED JUNE 16, 1933 Docket !263. Comptaint, Dec. 15, 1934-Decislon, -tune !1, 1935 Where a corporation engaged in the manufacture and sale of candy Including, among other break-and-take merchandise, (a) assortments of penny candles of uniform size, shape, and quality, together with a number of larger pieces or small boxes of candy, to be given as prizes to chance purcha~ers of a few of the aforesaid smaller pieces, the color of the enclosed, concealed centers of which differe~ from that of the majority, and to the purchaser of the last of ·said penny pieces therel1;1. contained, together with explanatory display cards for retailer's use, (b) assortments and display cat·ds Involving a similar plan in which chance selection of one of a few of the lnuivldually wrapped pieces composing the assortment, the enclosed, conceaieu color ()f which differed from that of the majority, entitled purchaser to one of the prizes, (c) assortments composed of large and small pieces, or of uniform pieces and box of candy, and push cards or punch boards, with explanatory legends, in which acquisition of large or small piece, or one, two, or more pieces, or box of candy, as case might be, was <lepenuent upon a I)-cent chance punch and number thereby secured, and (d) assortments consisting of two boxes containing, respectively, (1) pieces of uniform size, shape and quality, the color of the enclosed, concealed centen of a few of which dltrered from that of the majority, and (2) larger pieces or bars of candy, the number of which corresponded approximately with that of the diflerent colored centers In the other, so packed that they might be displayed as a single ~ssortment In which the larger pieces wer(l to be distributed as prizes to chance purchasers of the smaller candles with the different colored centers- Sold such assortments, together with explanatory dl!<play cards or push cards or punch boards, as the case might be, to wholesalers and jobbers, so packed and assembled that they could be displayed for sale and distribution to the purchasing public, as hereinbefore set forth, without alt(lratlon or t·earrangement, and could not be resold to the public {except In the case of said last-named two-box assortments) except as a lottery or gaming device, without unwrapping, unpacking, disassembling, or rearranging the same, with knowledge and Intent that said candy would and should thus be resold by the retailer; in competition with concerns who regard such a method of sale and distribution as morally bad and one which encourages gambling, and especially among children, and as injurious to the industry in merchandising a chance or lottery rather than candy, and providing retailers with the means of violating the laws of the several States, and who refuse to sell candy so packed and assembled that 1t can be resold to the public by lot or chance ; With the result of putting at a disadvantage, by reason of their said refusal to adopt such a practice, said competitors, who can compete on even terms only through following the same to meet the demand and preference for such candy from: certain dealers and small retailers, chiefly, and that of BONITA CO, 455 454 Complaint the children from, the frequently nearb7 schools, who purchase said candy by reason ot the gambling 'feature connected ~erewlth, In preference to the so-called "straight ~oods", and who constitute by fur the largest class of 'purchasers and consumers thereof, and who supply the principal demand therefor, some competitors begun the sale and distribution of candy for resale to the public by lot or chance, to meet the constant demand and preference for candy tbus sold, trade was diverted to said Individual from competitors declining to follow such a practice, to thel~ prejudice and Injury and that of the public, freedom of fair and legitimate competition 1n the industry concerned was restrained and harmed, sales of those dealing In the "straight goods" products exclusively were markedly decreased whenever and wherever the competition of the break-and-take assortments, with their necessarily smaller pieces or Inferior quality, was encountered, by reason, principally, of the gambling or lottery feature connected with the latter, gambling among children was taught and encouraged, and the public policy of many ol' the States, some of which have laws making the operation of lotteries and gambling devices penal otTenses, Was violated:

Held, That such acts and practices, under the conditions and circumstances set forth, were all to the prejudice of the public and competitors and constituted unfair methods of competition.

Mr. He'fl./1"]/ 0. Lank for the Commission. Beach, Fathchud & Scofield, of Chicago, Ill., for respondent. Col\IPLAINT Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", the Federal Trade Commission, having reason to believe that the Bonita Company, a corporation, hereinafter referred to as respondent, has been and is using unfair methods of competition in com- ~er:e, as "commerce" is defined in said Act of of Congress, and In VIOlation of the Act of Congress approved June 16, 1933, known as the National Industrial Recovery Act, and it appearing to said ~ommission that a proceeding by it in respect thereof would be !n the public interest, hereby issues its complaint stating its charges In that respect as follows :

0 O'l.llnt 1 1 PARAGRAPH 1. Respondent is a corporation organized under the laws of the State of ·wisconsin, with its principal office and place 1 Count 'lwo ot tho complaint, ttot published, charges respondent with violating Section 3 of the National Industrial Recovery Act and the practice of unfair methods of com· Petition ill violation of Section 6 of tb' Federal Trade Commission Act, In that the ~etbodl, acts and practice• alleged ln Count One violate the standard of fair competition or the Candy Manufacturing Industry of tile United States, namely, Rule 19, Article VIII, of the code of fair competition for aald Industry, prohlbltlng the sale or dlstrlbutlon by any Complaint 20F.T.C.

of business in the City of Fond du Lac, State of 'Wisconsin. Re· spondent, for more than ten years last past, has been engaged in the manufacture of candy and in the sale and distribution thereof to wholesale dealers and jobbers located at points in the various States of the United States, and causes said. products when so sold to be transported from its principal place of business in· the City of Fond du Lac, Wis., to purchasers thereof in other States of the United States and in the District of Columbia, at their respective places of business, and there is now and has been for more than ten years last past a course of trade and commerce by the said respondent in such candy between and among the States of the United States and in the District of Columbia. In the course and conduct of the said business, respondent is in competition with other corporations, individuals, and partnerships engaged in the manufacture of candy and in the sale and distribution thereof in commerce between and among the various States of the United States and within the District of Columbia. PAR. 2. In the course and conduct of its business as described in paragraph 1 herein, respondent sells and has sold to wholesale dealers and jobbers various packages and assortments of candy so ·packed and assembled as to involve the use of a lottery scheme when sold and distributed to the consumers thereof. Certain of said packages are hereafter described for the purpose of showing the methods used by the respondent but this list is not. all-inclusive of the various sales plans which the respondent has been or is using to distribute candy by lot or chance. (a) Several of said assortments of candy are composed of anumber of pieces of candy of uniform size, shape, and quality together with a number of larger pieces of candy or small packages of candy, which larger pieces of candy or small packages of candy are to be given as prizes to purchasers of saiel candy of uniform size, shape, and quality in the following manner:

The majority of said candies of uniform size, shape, and quality in said assortment have centers of the same color but a small number of said candies have centers of different colors. The color of the center of these candies is effectively concealed from the prospective purchasers until a selection or purchase has been made and the piece of candy broken open (other assortments use the same plan but are composed of a number of small pieces of candy, the majority of member thereof ot "break-and-take" merchandise. The averments of aald count 2, paragraph 1 of which repeats the averments of paragraph 1 of count 1, are In other respecte similar to those In count 2 In the complaint against Curt A. Schwartz, Individually, and trading as Akron Candy Co., Docket 2251, In which case tlndlnge and order also Issued as ot the same date. See supra, at page 440. BONITA CO. 457 454 Complaint which are the same color but with a small number of pieces of different colors, all of which pieces are contained within wrappers and the color of the pieces of candy is effectively concealed from the prospective purchaser until a selection has been made and the wrapper removed). The said candies of uniform size, shape, and quality in said assortment retail at the price of 1 cent each, but the purchasers who procure one of the said candies having a center of a different color (or a piece of candy of a different color contained within a wrapper) than the majority of said candies, are entitled to receive and are to be given free of charge one of the said larger pieces of candy heretofore referred to. The purchaser of the last piece of candy in said assortments is entitled to receive and is to be given free of charge a larger piece of candy or a small package of candy. The aforesaid purchasers of said candies who procure a candy having a center colored differently from the majority (or a piece of candy within a wrapper colored differently from the major- It!) of said pieces of candy thus procure one of the said larger Pleces of candy wholly by lot or chance.

Respondent furnishes to said wholesale dealers and jobbers with ~aid assortments of candy, display cards to be used by retail dealers In offering said candies for sale, which display cards bear a legend or statement informing the prospective purchaser that the said assortments of candies are being sold in accordance with the sales plan above described.

(b) Other assortments of candy are composed of a number of bars of candy and a box of candy together with a device commonly known as a push card. The candies contained in said assortment are to be given to purchasers of pushes from said card in the following manner:

Pushes from said card are 5 cents each, and when a push is made ll. number or legend is disclosed. The card bears a statement or statements informing the prospective customer as to which numbers or legend receive bars of candy and the number of such bars. All purchasers of pushes from said card receive one bar of candy but certain pushes, depending upon the. number or legend printed thereon, entitle the purchaser to additional bars of candy. The purchaser of the last push from said card is entitled to receive, in addition to a bar of candy, the box of candy above referred to. The numbers or legends on said card are effectively concealed from the purchasers or prospective purchasers until a push or selection has been made and the particular push separated from the card. The candy contained in said assortments is thus distributed to purchasers of pushes from said cards wholly by lot or chance.

Complaint 20F.T.O.

PAR. 3. The wholesale dealers and jobbers to whom respondent sells its assortments, resell said assortments of candy to retail dealers and said retail dealers expose said assortments for sale in connection with the aforesaid display cards or push cards and sell said candies to the purchasing public in accordance with the aforesaid sales plans. Respondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of its products in accordance with the sales plans hereinabove set forth, as a means of inducing purchasers thereof to purchase respondent's said product in preference to candies offered for sale and sold by its competitors. PAR. 4. The sale of said candy to the purchasing public as above alleged, involves a game of chance or the sale of a chance to procure such larger or additional pieces of candy or packages of candy in the manner alleged. Such game of chance and the sale along with the sale of such candy of such chance to procure such larger or additional pieces of candy or packages of candy in the manner alleged are contrary to the established public policy of the several States of the United States and the District of Columbia and of the Government of the United States, and in many States of the United States are contrary to loco1 criminal statutes.

By reason of the said facts, many persons, firms, and corporations who make and sell candy in competition with respondent as above alleged, are unwilling to offer for sale or sell candies so packed and ossembled as above alleged, or otherwise arranged and packed for sale to the purchasing public so as to involve a game of chance, or the sale with such candy of a chance to procure larger or additional pieces of candy by chance; and such competitors refrain therefrom. PAR. 5. Many dealers in and ultimate purchasers of candies are attracted by respondent's said methods 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 respondent in preference to candies offered for sale and sold by competitors of the respondent who do not use the same or equivalent methods. Many dealers in candies are induced to purchase said candies so offered for sale and sold by respondent in preference to all others because said ultimate purchasers thereof give preference to respondent's said candies on account of said game of chance so involved in the sale thereof. P .AR. 6. The use of said methods by respondent has the tendency and capacity unfairly, and because of said game of change alone, to divert to respondent trade and custom from its competitors who do not use the same or equivalent methods; to exclude from said candy trade all competitors who arc unwilling to and do not use the BONITA CO. 459 454 Findings same or equivalent methods; to lessen competition in said candy trade, and to tend to create a monopoly of said candy trade in re· spondent and such other distributors of candy as use the same or equivalent methods, and to deprive- the purchasing public of the benefit of free competition in said candy trade. The use of said methods by respondent has the tendency and capacity unfairly to eliminate from said candy trade all actual competitors, and to exclude therefrom all potential competitors, who do not adopt and use said methods or equivalent methods that are contrary to public policy and to criminal statutes as above alleged. Many of said competitors of respondent are unwilling to adopt and use said methods, or any method involving a game of 'Chance ol,' the sale of a chance to win something by chance, because such methods are contrary to public policy or to the criminal statutes of certain of the States of the United States, or because they are of the opinion that such methods llre detrimental to public morals and to the morals of the purchasers of said candy, or because of any or all of such reasons. PAR. 7. The aforementioned methods, acts, and practices of the respondent are all to the prejudice of the public and of respondent's competitors as hereinabove alleged. Said methods, acts, and practices constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", approved September 26, 1914. • REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to defi:ne its powers and d·duties, and for other purposes", the Federal Trade Commission issued and served a complaint in two counts upon the respondent, Bonita Company, charging in count 1 of the aforesaid complaint that the said respondent had been and was using unfair methods of competition in commerce as "commerce" is defined in said act of Congress and charging in count 2 of the aforesaid complaint that the said respondent had been and was using unfair methods of competition in commerce in violation of the Act of Congress approved June 16, 1933, lrnown as the National Industrial Recovery Act, and thereafter respondent duly filed answer thereto. Testimony and evidence were received, duly recorded and filed in the office of the Commission and subsequently the proceeding came regularly on for a final hearing before the Commission on said complaint, answer, testimoney, and evidence, briefs of counsel for the Commission and counsel for the respondent. Oral argument was Findings 20F.T.C.

waived and. the Commission having duly considered. the matter and being 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 as to count 1 of the aforesaid complaint and its conclusion drawn therefrom:

FINDING AS TO THE FACTS PARAGRAPH 1. Respondent, Bonita Company, is a corporation organized under the laws of the State of Wisconsin with its principal office and place of business in the City of Fond du Lac, Wis. Respondent is now and for several years last past has been engaged in the manufacture of candy in Fond du Lac, Wis., and in the sale and distribution of said candy to wholesale dealers and jobbers in the State of 'Wisconsin and other States of the United States. It causes said candy when sold to be shipped or transported from its principal place of business in the State of Wisconsin to purchasers thereof in Wisconsin and in the States of the United States other than the State of Wisconsin. In so carrying on said business, respondent is and has been engaged in interstate commerce and is and has been in active competition with other corporations and with partnerships and individuals engaged in the manufacture of candy and in the sale and distribution of the same in interstate commerce. PAR. 2. Among the candies manufactured and sold by respondent were several assortments of candy each composed of a number of pieces of candy of uniform size, shape, and quality, together with a number of larger pieces of candy or small boxes of candy to be given as prizes to purchasers of said candies of uniform size, shape, and quality in the following manner:

The majority of the said pieces of candy of uniform size, shape, and quality in said assortments have centers of the same color, but a small number of said candies have centers of a different color. The color of the centers of these candies is effectively concealed from the prospective purchasers until a purchase or selection has been made and the candy broken open. The said candies of uniform size, shape, and quality in said assortments retail at 1 cent each, but the purchasers who procure one of the said candies having a center of a different color than the majority of said candies, are entitled to receive and are to be given free of charge one of the said larger pieces or small boxes of candy heretofore referred to. The purchaser of the last piece of candy in said assortment is entitled to receive and is to be given free of charge a larger piece of candy or a small box of candy. , The aforesaid purchasers of said candy who procure a candy having a center colored differently from the majority of said pieces of candy BONITA CO. 461 454 Findings thus procure one of the said larger pieces or small boxes of candy wholly by lot or chance.

Other assortments use the same plan as above described but are composed of a number of small pieces of candy, the majority of which are the same color but with a small number of pieces with different colors· all of which pieces are contained within wrappers and the color of said pieces of candies is effectively concealed from the prospective purchasers until a selection has been made and the wrapper r:~oved. The prospective purchasers procuring one of the said Pieces of candy 9f a different color is entitled to receive as a prize one of the larger pieces of candy or small boxes of candy. Respondent furnishes to said wholesale dealers and jobbers with ~aid assortments of candy, display cards to be used by retail dealers ln offering said candies for sale, which display cards bear a legend or statement informing the prospective purchasers that the said assortments of candies are being sold in accordance with the sales plan above described.

PAR. 3. Respondent also manufactures, sells, and distributes several assortments of candy, each of which is composed of a number of small pieces of candy together with a number of larger pieces of candy and a device commonly referred to as a push card or punch board containing a definite number of pushes or punches. The candy contained in said assortments is sold or distributed in the following manner:

The push card or punch board, is a piece of paper board having a definite number of partially perforated discs and concealed within each disc is a number. These numbers correspond to the number of discs there are on the board but they are not arranged consecu~ tively. Such numbers are so concealed that they can not be ascertained until a push or selection has been made and the disc separated from the board. The push cards or punch boards bear legends giving prospective customers information as to which numbers concealed on the board receive one of the small pieces of candy and which numbers receive one of the larger pieces of candy. It is usual for the last push on a card to receive a. prize in addition to the merchandise called for by the number obtained and the said push card, ordinarily, has a label informing the prospective purchaser ns to what additional candy will be rElceived for such last push. Sales are 5 cents each and purchasers procuring a number calling for one of the small pieces of candy receive the same and purchasers receiving a number calling for one of the larger pieces of candy receive the same without payment of additional money. The fact as to whether a purchaser obtains one of the small pieces of candy Findings 20F.T.C.

or one of the larger pieces of candy for the purchase price of 5 cents is thus determined wholly by lot or chance. Respondent distributes numerous assortm~nts which involve the same principle or sales plan in the sale and distribution to the consmning public of said assortments, and these various assortments are composed of different types of candy; some of them contain small pieces of candy with larger bars as pdzes and some of them give varying numbers of bars and small boxes of candy as prizes. These assortments are described by respondent by various trade names. One of such assortments is the Times-Square assortment. The push card or punch board in said assortment bears the following legend:

5¢ TIMES-SQUARE ASS'T. 5¢ Nos. 1-5-1~15-20-25 receive a box of !udge Nos. 30-35-40-45 receive 2 bars of candy Nos. 5()-55--60 receive 3 burs of candy All other numbers receive 1 bar of candy Last purchase receives large box: of fudge The fact as to whether a purchaser receives ·a box of fudge, one, two, or three bars of candy for the purchase price of 5 cents, is thus determined wholly by lot or chance in the same manner as described above.

PAR. 4. Another assortment which respondent manufactures, sells and distributes is contained within two boxes, one box having pieces of candy of uniform size, shape, and quality, the majority of which have centers of the same color but a small number of which have centers of a different color. The other box contains larger pieces or bars of candy and the number of bats is approximately the same as there are pieces of candy with centers' colored differently from the majority in the first box above mentioned and the two boxes are so packed that they may be displayed by the retail dealers as a single assortment and the larger pieces or bars of candy are distributed as prizes to purchasers of the smaller pieces of candy in the same manner as where they are packed in the same assortment and as describe<.l in paragraph 2 herein. Larger pieces or bars of candy are thus <.listributed to the purchasing public wholly by lot or chance and the respondent in so packing said assortment knows that the same may and will be used as' a .lottery or chance assortment when sold bv the retail dealer. · ' v r ~AR. 5. The lottery, prize, or draw packages described in paragraphs 2, 3, and 4 a.bove, a:t;e generally referred to in the candy trade or industry as "break-and-take" or "draw" packages. The packages ~r assortments of candy without the lottery, prize, or draw features BONITA CO, 463 454 Findings in connection with theil' resale to the public are generally referred to in the candy trade or industry as "straight goods." These terms will be used hereafter in these findings to describe these respective types of candy.

PAn. 6. Numerous retail dealers purchase the assortments described in paragraphs 2, 3, and 4 above, from wholesale dealers or jobbers who in turn have purchased said packages from respondent and such retail dealers display said assortments for sale to the public as packed by the respondent and the candy contained in said assortment is sold and distributed to the consuming public by lot or chance. PAR. 7. All sales made by respondent are absolute sales and re· spondent retains no control over the goods after they are delivered to the wholesale dealer or jobber. The assortments are assembled and packed in such manner that they can be displayed by the retail dealer for sale and distribution to the purchasing public, as above described, without alteration or rearrangement. An examination of the assort· lllents of candy described in paragraphs 2 and 3 herein, as packed, assembled, and sold by respondent, shows that said assortments can .. not be resold to the public by the retail dealers e:xcept as a lottery or gaming device, unless said retail dealers unwrap, unpack, disassem· hie, or rearrange the said assortments.

In the sale and distribution to jobbers and wholesale dealers for resale to retail dealers, of assortments of candy, assembled and packed as described in paragraphs 2, a, and 4 herein, respondent has knowledge that said candy will be resold to the purchasing public by :etail dealers, by lot or chance and it packs and assembles such candy 1D the way and manner described so that it may and shall be resold to the public by lot or chance by said retail dealers. P .A.R. 8. The sale and distribution of candy by the retail dealers by the methods described in these findings is the sale and distribution of candy by lot or chance and constitutes a lottery or gaming device. Competitors of respondent appeared as witnesses in this proceeding and testified, and the Commission finds as a fact that many competi .. tors regard such method of sale and distribution as morally bad and encouraging gambling, especially among children, as injurious to the candy industry, because it results in the merchandising of a chance or lottery instead of candy, and as providing retail merchants with the means of violating the laws of the several States. Because of these reasons rome competitors of respondent refuse to sell candy so packed and assembled that it can be resold to the public by lot or chance. These competitors !re thereby put to a disadvantage iii competing. Certain retailers who find that they can dispose of more candy by the "break-and-take'' method; buy respondent's prod~ I . I Findings 20F.T.O.

nets and the products of others employing the same methods of sale, and thereby trade is diverted to respondent, and others using similar methods, from said competitors. Said competitors can compete on even terms only by giving the same or similar devices to retailers. This they are unwilling to do, and their sales of "straight goods'' candy show a continued decrease.

There is a constant demand for candy which is sold by lot or chance, and in order to meet the competition of manufacturers who sell and distribute candy which is sold by such methods, some competitors of respondent have begun the sale and distribution of candy for resale to the public by lot or chance. The use of such methods by respondent in the sale and distribution of its candy is prejudicial and injurious to the public and its competitors, and has resulted in the diversion of trade to respondent from its said competitors, and is a· restraint upon and a. detriment to the freedom of fair and legitimate competition in the candy industry. PAR. 9. The principal demand in the trade for the "break-and-take" or "draw" candy comes from the small retailers. The stores of these small retailers are in many instances located near schools and attract the trade of the school children. The consumers or purchasers of the lottery or prize package candy are principally children, and because of the lottery or gambling feature connected with the "breakand-take" or "draw" package, and the possibility of becoming a winner, it has been -observed that the children purchase them in preference to the "straight goods" candy when the two types of packages are displayed side by side.

Witnesses from several branches of the candy industry testified in this proceeding to the effect that children prefer to purchase the lottery or prize package candy because of the gambling feature connected with its sale. The sale and distribution of "break-and-take" or "draw" packages or assortments of candy or of candy which has connected with its sale to the public the means or opportunity of obtaining a prize or becoming a winner by lot or chance, teaches and encourages gambling among children, who comprise by far the largest class of purchasers and consumers of this type of candy. PAR. 10. The pieces of candy in the "break-and-take" or "draw" packages Qf all manufacturers of that type of candy are either smaller' in size than the corresponding pieces of "straight goods" candy, or the quality of the candy in the "break-and-take" or "draw" packages- is poorer than that in the "straight goods" assortments. It is necessary to make this difference between either the size of the individual pieces of candy or the quality of the candy in order to compensate. for the value of the prizes or premiums which are distributed with the· "break-and-take" or ''draw" goods. BONITA 00. 465 Order PAn. 11. There are in the United States many manufacturers of candy who do not manufacture and sell lottery or prize assortments of .candy and who sell their "straight goods" candy in interstate commerce in competition with the "break-and-take" or "draw" candy, and manufacturers of the "straight goods" type of candy have noted a marked decrease in the sales of their products whenever and whereever the lottery or prize candy has appeared in their markets. This decrease in the sales of "straight goods" candy is principally due to the gambling or lottery feature indicated with the "break-and-take" or "draw" candy, PAn. 12. In addition to the assortments described in paragraphs 2, 3, and 4 herein, the respondent manufactures candy which it sells to wholesalers and jobbers without any lottery or, ch_ance features. PAR. 13. The sale and distributjon o! candy by lot or chance is against the public policy of many o~ the States of th~ United States and some of said States have laws making the operati<?n of lotteries and gambling devices penal offenses.

' CONCLUSION The aforesaid ~c·ts and practices of respondent, Bonita Company, under the conditions and circuinstances set forth in the foregoing findings of fact are all to the prejudice of the public and respondent's competitors and constitute violations· of Section 5. of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes". 1 ORDER TO CEASE AND Desist, ETC•.

This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission (in two counts, count 1 thereof charging a violation of Section 5 of an Act of Congress approved· September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", and count 2 thereof charging a violation of the National Industrial Recovery Act), the answer of the respondent, the testimony taken, and the briefs filed, and the Commission having niade its findings as to the facts and conclusion that as to count 1, the respondent has violated the provisions of an Act of Congress approved September 26, 1914, entitled ''An Act tO create a Federal Trade Commission, to define. its powers and duties, and for other purposes"- , •1t is hereby ordered, That the respondent, Bonita Company,· its officers, directors, agents, representatives, and employees, 'in the Order 20F.T.C.

manufacture, sale, and distribution in interstate commerce, of candy and candy products; do cease and desist from: (1) Selling and distributing to jobbers and wholesale dealers for resale to retail dealers, candy so packed and assembled that sales of such candy to the general public are to be made or may be made by means of a lottery, gaming device, or gift enterprise. (2) Supplying to or placing in the hands of wholesale dealers and jobbers, packages or assortments of candy which are used or may be used without alteration or rearrangement of the contents of such packages or assortments, to conduct a lottery, gaming device or gift enterprise in the sale or distribution of the candy or candy products contained in said assortment to the public. (3) Packing or assembling in the same package or assortment of candy for sale to the public lit retail, pieces of candy of uniform size, shape, and quality having centers of a ·different color ot being of a different color and contained within wrappers, tbgether with larger pieces of candy which said larger pieces of candy are to be given as prizes to the person procuring a piece of candy with a center of a particular color or a piece of candy of a particular color. ( 4) Supplying to or placing in the hands of wholesale dealers and jobbers assortments of candy together with a device commonly called a push card or punch' board, for use or which may be used in distributing or sellin~ said candy to the public at retail. (5) Furnishing to wholesale dealers and jobbers a device commonly called a push card. or a punch board either with packages or assortments of candy or candy products or separately, bearing a legend or legends or statements informing the purchaser that the candy or candy products are being sold t9 the public by lot or chance or in accordance with a sales plan which constitutes a lottery, gaming device, or gift enterpris~. . {6) Furnishing to wholesale dealers and jobbers disp~ay cards either with assortments of candy or ,candy products or separately bearing a legend or legends or statem~nts informing the purchaser that the candy or candy products are being sold to the public by lot or chance or in accordance with a. sales plan which constitutes a lottery, gatning device or gift enterprise. (7) Furnishing to wholesale dealers and jobbers display cards or other printed matter for 1 use in connection with the sale of candy or candy products,. which said advertising literature informs the purchasing public that upon the obtaining, by the ultimate pur· chaser, of a piece of candy of a particular color or with a particular colored center, a larger piece of candy or $ll\all box of candy will be given free to said purchaser.

.BONITA CO. 467 454 Order It is further ordered, That respondent, Bonita Company, within 30 days after the service upon it of this order, shall file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist hereinabove set forth. 1 And it is hereby further ordered, That by reason of the decision of the Supreme Court of the United St~ittes in A. L. A. Schechter Poultry Corporation v. United States of Arnerica, decided May 27, 1935,1 count 2 of the com:tJlaint in this proceeding be and the same hereby is dismissed.

1 295 u. s. 405.

Syllabus 20F.T.C.