Allen, Marion

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IN THE MATTER OF MARION ALLEN, TRADING AS TRIANGLE SALES COM· PANY, AND ALFRED J. LANDAY COMPLAINT, FI~DINGS, AND ORDER IN REGARD TO Tile ALLEGED VIOLATIO~ OF SEC, 5 OF AN ACT OF CO~GRESS APPROVED SEPT. 26, 1914 Docket 45"16. Complaint, Aug. 25, 1941-Decision, Dec. 4, 1941' Where an individual engaged in the competitive interstate sale and distribution of radios, bedspreads, cameras, fountain pens, and other articles, by means of lottery devices, and one "A. L.," engaged in distributing for her 'sllleS literature, etc., as below set forth, to pushcard operators and the purchasing public- Furnished, among other things, pushcards and circulars explaining her plan of selling such merchandise and allotting it as premiums or prizes to the operators of the cards and the purchasing public, a typical pushcard being printed with 16 feminine names for use under a plan providing that th8 person selecting the name corresponding to that concealed under· curds master seal received a camera, the three persons securing, by chance, certain numbers concealed by discs bearing feminine names, received "a genuine LEATHER BILLFOLD," and the amount paid by different customers was depend· ent upon numbers secured; and thereby Supplied to and placed in the hand~ of others the means of conducting lotteries or game of chance to procure an article at much below its normal price, contrary to an established public policy of the Unit~d States Government, and in competition with many who, unwllling to use any method involving chance or contrary to public policy, refrain therefrom; With the result that many persons were attracted by said sales plan and the element of chance involved therein, and were thereby Induced to buy and sell said merchandise in preference to that of aforesaid competitors who dO not use such methods, and with tendency and capacity to unfairly divert' substantial trade In commerce to them from their said competitors: Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the pu!Jlic and competitors, and consti· tuted unfair methods of competition in commerce• and unfair acts and practices therein.

Mr. J. W. Brookfield, Jr., for the Commission. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Commission having reason to believe that Marion Allen, an individual trading as Triangle Sales Co., and Alfred J. Landay, an individual, hereinafter referred to as respondents, have violated the provisions of said act, and it appearing to the Commission that a. proceeding by and in respect thereof would be in the public interest, TRIANGLE SALES CO., ET AL. 283 282 Complaint hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, l\Iarion Allen, is an individual, trading and 'doing business as Triangle Sales Co., with her principal office and place of business located at 530 ,'West Adams Street, Phoenix, Ariz. Respondent, Alfred J. Landay, is ·an individual,_ with his Qffice and principal place of business located at 2129 Campbell Street, Chicago, Ill., and is engaged in the mailing of pushcards and litera- ~ure for the respondent, l\Iarion Allen. Both respondents have acted 1n concert and in cooperation with each other in performing the Practices hereinafter alleged.

Respondent, Marion Allen, is now, and more than 6 months last Past has been, engaged in the sale and distribution of radios, bedspreads, cameras, fountain pens, and other articles of merchandise, and has caused said merchandise when sold to be transported from her place of business in Phoenix, Ariz., to purchasers thereof at their respective points of location in the various States of the United States, other than Arizona and in the District of Columbia. There is now, and has been, for several years last past, a course of trade by respondent, Marion Allen, in such 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 her business respondent, Marion Allen, is and has been in substantial competition W-ith other individuals and with firms 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.

PAn, 2. In the course and conduct of her business -'as described in Paragraph 1 hereof, respondent, 1\farion Allen, in soliciting and in selling her merchandise, furnishes, and has furnished various devices and plans of merchandising which involve the operation of game of ?hance, gift enterprises, or lottery schemes, when such merchandise ls sold and distributed to the ultimate consumers thereof. Tlle ~ethod or sales plan adopted and used by respondent Marion Allen,ls substantially as follows:

Respondent, Marion Allen, furnishes and has furnished respondent, Alfred J. Landay, with certain literature and instructions, including, among other things, pushcards, order blanks, illustrations of said merchandise, and circulars explaining respondent Allen's sales plan or method of selling said merchandise and of allotting it as premiums or prizes to the operators of said pushcards and to the Purchasing public, and respondent Lunday causes and has caused the said literature and pushcards above described to be distributed Complaint 34F.T.C.

through the United States mails and otherwise to operators and the purchasing public located in the various States of the United States and in the District cif Columbia.

One of said pushcards bears 16 feminine names with ruled columns opposite each for writing in the name of the customer opposite the feminine name selected. ·Said pushcard has 16 partially perforated disks, on the face of each of which is printed one of the feminine· names corresponding to those' printed opposite the ruled columns above referred to. . Concealed within each disk is a number which is disclosed only when the disk is pushed or separated from the card. The pushcard also has a large master seal and concealed within the master seal is one of the feminine names appearing on the face of said card. The person selecting the feminine name corresponding to the· one under the master seal receives a camera. The pushcard bears a legend as follows :

4 PRIZES CLEANER! (Picture of camera) ]' FASTER! DETTER! NAME UNDER SEAL RECEIVES A PICKWICJr CANDID CAMERA AND CARRYING CASlt.

~fl Pictures for the price of 8. WITH SHOULDER STRAP Quality Featur~s New High-Speed Nos. 1, 9 and 19 each receive a genuine Ground Len>:: fast shutter. Fixed LEATHER BILLFOLD Focus, eliminnting focusing operat· No.1 pays 1¢ Push ing. Stanuard Film used. Kodak No. 9 pays 9¢ out 127 or Agfa AS Level View Finder. No. 18 pays 18¢ with Just look and snap shutter. Fully No. 19 pays 19¢ pencil Guaranteed. Finely built with gen· uine TENITE case. All others pay only 29¢. None higher. 'Vrite your name on reverse side opposite name you select Sales of said merchandise by means of said pushcards are made in: accordance with the above-described legend or instructions. Said prizes or premiums are allotted to the customers or purchasers in accordance with the above-described legend or instructions. The fact as to whether a purchaser receives an article of merchandise or· nothing for the amount of money paid is thus determined wholly by lot or chance.

Respon.dents furnish and have furnished various other pushcards accompanied by order blanks, instructions, and other printed matter· for use in the sale and distribution of said merchandise by means of a game of chance, gift enterprise, or lottery scheme. The sales plan or method involved in the sale or distribution of all of said merchandise by means of said other pushcards is the same as that hereinabove described, varying only in ·detail. TRIANGLE SALES CO., ET AL. 285 282 Findings PAn. 3. The persons to whom respondents furnish, and have furnished, the said pushcards use the same in purchasing, selling, and distributing said merchandise in accordance with the aforesaid sales r.Ian. Respondents thus supply to, and place in the hands of others, the means of conducting lotteries in the sale of said merchandise in accordance with the sales plan hereinabove set forth. The use by respondents of said sales plan or method in the sale of said merchandise and the sale of said merchandise by and through the use thereof, and by the aid of said sales plan or method, is a practice of a sort Which is contrary to an established public policy of the Government of the United States. · PAn. 4. The sale of merchandise to the purchasing. public in the tnanner above alleged involves a game of chance or the sale of a chance to prof!ure one of the said articles of merchandise at a price much less than the normal retail price thereof. Many persons, firms, and corporations who sell or distribute merchandise in competition With the respondents, as above alleged, are unwilling to adopt and 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 that is contrary to public policy, and such competitors refrain therefrom. Many persons are attracted by said sales plari or method employed by respondents in the sale and distribution of said merchandise and the element of chance involved therein, and thereby are induced to buy and sell said merchandise in preference to merchandise oflered for sale and sold by said competitors of respondents who do not use the same or an equivalent method. The use of said method by re- ~pondents, because of said game of chance, has a tendency and capac- Ity to unfairly divert substantial trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from their said competitors who do not Use the same or an equivalent method.

PAn. 5. The aforesaid acts and practices of respondents, as herein alleged, are all to the prejudice and injury of the public and of re- . ~pondents' competitors and constitute unfair methods of competition 1D commerce and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO Tile FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on August 25, 19U, issued and there- ~after served its complaint in this proceeding upon respondents .Mar- 10n Allen, an individual, trading as Triangle Sales Co., and Alfred Findings 34F.T. 0.

J. Landay, an individual, 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 November 10, 1941, 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 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 THE FACTS PARAGRAPH 1. Respondent, Marion Allen, is an individual, trading and doing business as Triangle Sales Co., with her principal office and place of business located at 530 w·est Adams Street, Phoenix, Ariz. Respondent, Alfred J. Lanclay, is an individual1, with his office and principal place of business located at 2129 Campbell Street, Chicago, Ill., and is engaged in the mailing of pushcards and literature for the respondent, Marion Allen. Both respondents have acted in concert anu in cooperation with each other in performing the practices hereinafter found.

Respondent, Marian Allen, is now, and for more than 6 months last past, has been engaged in the sale and distribution of radios, bed spreads, ·cameras, fountain pens, and other articles of merchandise, and has caused said merchandise when sold to be transported from her place of business in Phoenix, Ariz., to purchasers thereof at their respective points of location in the various States of the Uni~ed States, other than Arizona, and in the District of Columbia. There is now, and has been for several years past, a course of trade by respondent, Marion Allen, in such 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 her business respondent, Marion Allen, is and has been in substantial competition with other individuals and with firms 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.

1'An. 2. In the course and conduct of her business as described in paragraph 1 hereof, respondent, )!arion Allen, in soliciting and in selling her merchandise, furnishes and has furnished various devices and plans of merchandising which involve the operation of games of TRIANGLE SALES CO., ET AL. 287 282 Findings chance, gift enterprises, or lottery schemes, when such merchandise is sold and distributed to the ultimate consumers thereof. The method or sales plan adopted and used by respondent, Marion Allen, is substantially as follows:

Respondent., l\farion AJlen, furnishes nnd has furnished respondent, Alfred J. Landay, with certain literature and instructions, including, among other things, pushcards, order blanks, illustrations of ~aiel merchandise, and circulars explaining respondent Allen's 8alel> plan or method o£ selling said merchandise and of allotting it as Premiums or prizes to the operators of said pushcards and to the Pur<:hasing public, and respondent Lunday causes a11d has caused the Said iliterature and push1cards above described to be distributed through the United States mails and otherwise to operators and the Purchasing public located in the various States of the United States nnd in the District of Columbia.

One of the said pushcards bears 16 feminine names with ruled c?lunms opposite each for writing in the name of the customer oppo- Site the feminine name selected. Said pushcard has 16 partially perforated disks, on the face of each of which is printed one of the feminine names corresponding to those pdnted opposite the ruled columns above referred to. Concealed within each disk is a number '"which is disclosed only when the disk is pushed or separated from the card. The pushcard also has a large master seal and concealed Within the master seal is one of the feminine names appearing on the fuce.of said card. The person selecting the feminine name corresponding to the ,one under the master seal receives a camera. The Pllshcard bears a leO'end as follows: "' . i PRIZES CLE.·tner I (Picture of camera) F'A.Slen! l::Ellen! NAME UNDER SEAL RECEIVES A PICKWICK CANDID CAMERA CARRYING CASE WITH l6 PlCTURES for the price of 8. SHOULDER STRAP . Nos. 1, 9 and 19 each receive a genuine Quality Features LEATHER BILU'OLD :N~\v High-Speed Ground Lens; fast No. 1 pays 1¢ Push Rhutter. Fixed Focus, eliminating No. 9 pays 9¢ out focusing operating Standard Film No. 18 pnys 18¢ with ~Sed. Kouak 127 .or Agfa AS Level No. 19 pays 19¢ pencil lew Finder. Just look and snap All others pay only 2Dc. None higher. ~h~tter. Fully Guaranteed. Finely Write your name on reverse side llllt With genuine TENITE case. opposite name you select Sales of said merchandise by me.ans of said pushcards are made in accordance with the above-described legend or instructions. Said Findings 34F. T. C.

prizes or premiums are allotted to the customers or purchasers in accordance with the above-described legend or instructions. The fact as to whether a purchaser receives an article of merchandise or noth· ing for the amount of money paid is thus determined wholly by lot or chance.

Respondents furnish and have furnished various other pushcards accompanied by order blanks, instructions, and other printed matter for use in the sale and distribution of said merchandise by means of a game of chance, gift enterprise, or lottery scheme. The sales plan or method involved in the sale or distribution of all of said merchan· dise by means of said other pushcards is the same as that hereinabove described, varying only in detail.

PAR. 3. The persons to whom respondents furnish, and have fur· nished, the said pushcards use the same in purchasing, selling, and distributing said merchandise in accordance with the aforesaid sales plan. Respondents thus supply to, and place in the hands of others, the means of conducting lotteries in the sale of said merchandise in accordance with the sales plan hereinabove set forth. The use bJ respondents of said sales plan or method in the sale of said merchan· dise and the sale of said merchandise by and through the use thereof, and by the aid of said sales plan or method, is a practice of a sort which is contrary to an established public policy of the Government of the United States.

PAR. 4. The sale of ~erchandise to the purchasing public in the manner above found involves a game of chance or the sale of a chance to procure one of the said articles of merchandise at a price much less than the normal retail price thereof. Many persons, firms, and corporations, who sell or distribute merchandise in competition with the respondents, as above found, are unwilling to adopt and 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 that is contrary to public policy, and such competitors refrain therefrom. Many persons are attracted by said sales plan or method employed by respondents in the sale and distribution of said mer· chandise and the element of chance involved therein, and thereby are induced to buy and sell said merchandise in preference to merchandise offered for sale and sold by said competitors of respondents who do not use the same or an equivalent method. The use of said method by respondents, because of said game of chance, has a tendency and capacity to unfairly divert substantial trade in commerce between and among the 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 an equivalent method.

TRIANGLE SALES CO., ET AL. 289 282 Order CONCLUSION The aforesaid acts and practices of respondents as herein found 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 Ineaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST . This proceeding having been heard by the Federal Trade Commis- Slon upon the complaint of the Commission and the answer of respondents, in which answer respondents admitted all the material allegations of fact set forth in said complaint and stated that they 'Waived 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 i8 ordered, That the respondents, Marion Allen, individually and trading aS' Triangle Sales Co. or trading under any other name, and Alfred J. Landay, an individual, either jointly or severally, their representatives, agents, and employees, directly or through any cor- Porate or other device, in connection with the offering for sale, salel. and distribution of radios, bed spreads, cameras, fountain pens, or any other merchandise, in coinmerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling ~r 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 placiqg in the hands of, others punch boards, PUsh or pull cards, pull tabs, or other lottery devices, either with assortments of merchandise or separately, which said punchboards, Push or pull cards, pull tabs, or other lottery devices are to be used, Qr rnay be used, in selling or distributing said merchandise to the Public.

3. Selling or otherwise disposing of 1xny merchandise by means of a game of chance, gift enterprise, or lottery scheme. It is further ordered, That the respondents shall1 within 60 days after service upon them of this order, file with the Commission a ref\Ort in writing setting forth in detail the manner and fonn in "'which they have complied with this order. 466506m--42--vol.34----19 Syllabus 31li'. T.C.