Little Rock Tent & Awning Co

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IN THE Matrer OF LITTLE ROCK TENT & A'VNING COMPANY, TRADING AS TUF-NUT GARMENT MANUFACTURING COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ·ALLEGED VIOLATION OF SEC. l5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4181. Complaint, Apr. 4, 1941-Decision, Feb. 24, 194:2 Where a corporation, which was engaged in the manufacture and competitive Interstate sale and distribution of its "Tuf-Nut" work garments to wholesalers, jobbers, and retailers, and which, during a recent 8-month period sow about llh million pants, shirts, and overalls and awarded about 1,000 suits or garments as below described- Sold its said products through use of a scheme which Involved a lottery in the sale and distribution thereof to consumers, it furnishing dealers with a display poster card explaining their plan, pursuant to which purchasers became entitled to "Join the Khaki Suit Club," and thlt one of the 60 provided for whose number corresponded to that under the poster's master seal, received a "Tuf-Nut Khaki Suit" consisting of matching shirt and pants; and thereby Supplied to and placeu In the hands of others means of conducting a lottery in the sale of its products, through use of aforesaid sales plan by retail dealers who exposed and sold Its garments to the purchnsing public in accordance with game of chance to procure suit or other garment without cost, contrary to the established policy of the United States Government, and In competition with many who do not use methnds Involving chance; With the result that many persons were attracted by Its said sales plan and the element of chance Involved therein, and were thereby lnduced to buy Its· garments In preference to those of its aforesaid competitors, with tendency and capacity thereby to divert trade unfairly to it from them: Held, That such acts and practices, under the clrcumsta'lces set forth, were all to the prejudice and Injury of the public and competitors, and constituted unfair methods of competition In commerce, and unfair acts and practices therein.

Before 11/r. lVilliam 0. Reeves and Mr. Lewis 0. Russell, trial examiners.

Mr. J. lV. Brookfield, Jr., for the Commission. House, :uoses & ll olmes, of Little Rock, Ark~, for respondent. CO:M:PLAINT Pursuant to the provisions of the Federal Traue Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission, having reason to believe that Little Rock Tent & Awning Co., a corporation, trading as Tuf-Nut Garment Manufacturing Co., hereinafter referred to as respondent }!us viohted the pro- TUF-NUT GARMENT MANUFACTURING CO. 727 i26 Complaint visions of said act, and it appearing to the Commission that a proceeding by it in respect thereto would be in.the interest of the public, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Little Rock Tent & Awning Co., is a corporation, also trading as Tuf-Nut Garment Manufacturing Co., with its office and principal place of business locate:d at Third and Commerce Streets, Little Rock, Ark. Respondent is now and for more than 1 year lnst past has been engaged in the m:J.nufacture of 'Work garments and in the sale and distribution thereof under the trade name "Tuf-Nut" to wholesale dealers, jobbers, and retail dealers, located at various points in the various States of the United States and in the District of Columbia. Respondent causes and has caused said garments, when sold, to be transported from its principal place of business in the city of Little Rock, Ark., to purchasers thereof at their respective points of location in various States of the United States other than Arkansas, and in the District of Columbia. There is now and has been for more than 1 year last past a course of trade by respondent in such garments in commerce b~twcen 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 corporations and with partnerships and individuals engaged in the sale and distribution of work garments in commerce betwe.en and among the various States of the United States and in the District of Columbia. PAR. 2. In the course lmd conduct of its business, m; described in paragraph 1 hereof, respondent sells and has sold its garments to dealers by means of a method involving the use of a lottery scheme When such garments are sold and distributed to the consumers thereof. Said method of sale consists in furnishing dealers who purchase respondent's garments with a display poster bearing the following I ' legend:

Fru:l!l TUF-NUT KHAKI SUIT (The Mark of Quality) JOIN THE KHAKI SUIT CLUB Tuf-Nut T F uf-Nut Khaki Absolutely F'REE U Absolutely Free Khaki Suit N T Suit AU You Have To-----Do Jut register your name FREE wltb each Tuf-Nut garment you purchase. It you buy five Tuf-Nut garments you will stlll get to register your name five 728 FEDERAL TRADE COMMISSION DECISIOKS Complaint 34F.T.C.

times. When this card is filled out with names your Tuf-Nut dealer will break open the Tuf-Nut label in the lower corner and check the hidden number against the name that is registered opposite that number below. If you pick the lucky number you wlll receive absolutely FBEE a Tuf-Nut Khaki Suit (shirt and pants to match).

Name Address Name Address 1 ----------------------------------- 31---------------------------------- 2 ----------------------------------- 32----------------------------------- 3 ----------------------------------- 33----------------------------------- 430____________________________________etc·-------------------------------- 60-----------------------------------34 etc·------------------------------- THE HIDDEN LUCKY NUMBER Register your name for each Tuf-Nut garment you purchase. The LUCKY NUMBER wins a Tuf-Nut Khaki Suit FREE, , T F If you are the winner you wlll be notified by U your Tuf-Nut dealer, N T The dealers to whom the said poster is furnished display the same to the purchasing public. The card contains 60 blank spaces for registration of the names of purchasers of respondent's garments and each space is accompanied by a number, the numbers running consecutively from 1 to 60. Each purchaser of a garment makes a choice of a number and writes his name in the blank opposite such number selected. On the poster is a master seal under which is concealed a number. "When the card is completely filled with the names of purchasers, the master seal is broken, revealing a number from 1 to 60 and the purchaser whose name is registered opposite the number corresponding with the number found under the master seal is entitled to receive for his award a Tuf-Nut Khaki Suit (shirt and pants to match) without additional charge. The number printed under the master seal is effectively concealed from purchasers and prospective purchasers until all of the numbers on the poster have been chosen. The said Tuf-Nut Khaki Suit is thus awarded to the purchaser of other of respondent's garments wholly by lot or chance. PAR. 3. Retail dealers who purchase respondent's garments directly or indirectly, expose and sell the same to the purchasing public in accordance with the aforesaid sales plan. Respondent thus supplies to and places in the hands of others the means of conducting a lottery in the sale of its products in accordance with the sales plan hereinabove set forth. The usc by respondent of said sales plan or method in the sale of its garments and the sale of said garments by and through the use thereof and by the aid of said sales plan or TUF-NUT GARMENT MANUFACTURING CO. 729 726 Findings method is a. practice of a sort which is contrary to an established policy of the government of the United States. • PAR. 4. The sale of said garments to the purchasing public in the manner above alleged involves a game of chance or the sale of a chance to procure a suit of other garments without cost. Many persons, firms, and corporations who sell and distribute work garments or similar merchandise in competition with respondent 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 contrary to• public policy and such competitors refrain therefrom. Many persons are attracted by said sales plan or method employed by respondent in the sale and· distributioh of its garments and in the element of chance involved therein and are thereby induced to buy and sell respondent's garments in preference to garments of said competitors of respondent who do not use the same or equivalent methods. The use of said method by respondent because of said game of chance has a tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent methods.

PAR. 5. The aforesaid acts and practices of respondent as herein' alleged 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 and deceptive 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 April 4, 1941, issued and subsequently served its complaint in this proceeding upon the respondent, Little Rock Tent & Awning Co., a corporation, trading as Tuf-Nut Garment Manufacturing Co., charging it with the use of unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation o~ the provisions of said act. On April 24, 1941, respondent filed its answer in this proceeding. A hearing was held in this matter on October 1, 1941, at which time a stipulation as to the facts entered into by and between counsel for the Commission and counsel for the respondent was read into the record in lieu of testimony in support of the char..c:es stated in the Findings 34F.T.C.

complaint, or in opposition thereto, and which stipulation further provided that the Commission may proceed upon said statement of facts and written briefs, without oral argument, to make its report stating its findings as to the facts and its conclusion based thereon and enter its order disposing of the proceeding. Respondent expressly waived the filing of a trial examiner's report upon the evidence. Thereafter, this proceeding regularly came on for final hearing before the Commission upon said complaint, answer, testimony and other evidence in the form of a stipulation as to the facts upon the record, and briefs in support of the complaint and in opposition thereto; and the Commission having duly considered the matter and bei,ng 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 FACTS PARAGRAPH 1. Respondent, Little Rock Tent & Awning Co., is a corporation, also trading as Tuf-Nut Garment Manufacturing Co., with its office and principal place of business located at Third and Commerce- Streets, Little Rock, Ark. Respondent is now, and for more than 1 year last past has been, engaged in the manufacture of work garments, and in the sale and distribution thereof under the trade name "Tuf-Nut," to wholesale dealers, jobbers, and retail dealers located in the various States of the United States and in the District of Columbia. Respondent causes, and has caused, said garments, when sold, to be transported from its principal place of business in the City of Little Rock, State of Arkansas, to the purchasers thereof located in various other States of the United States. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in such garments 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 its said business, respondent is now, and has been, in competition with other corporations, and with partnerships and individuals, engaged in the sale and distribution of work garments in commerce between and among the various States of the United States and in the District of Columbia . . PAR. 3. In the course an<l conduct of its business, respondent sells, and has sold, its garments to dealers by means of a method involving the use of a lottery scheme when such garments are sold and distributed to the consumers thereof. Said method of sale consists in TUF-NUT GARMENT MANUFACTURING CO. 731 726 Findings furnishing dealers who purchase respondent's garments with a display poster bearing the following legend:

FREE Tuf-NUT KHAKI SUIT (The Mark of Quallty) JOIN THE KHAKI SUIT CLUB Tuf-Nut T F Tuf-Nut Khaki Absolutely FREE U Absolutely Free Khaki N T Suit Suit All You Have To Do Just register your name FREE with each Tuf-Nut garment you purchase. If you buy five Tuf-Nut garments you will still get to register your name five times. 1Vhen this card is filled out with names your Tuf-Nut', dealer will break open the Tuf-Nut label in the lower corner and check the hidden number against the name that is registered opposite that number below. If you pick the lucky number you will receive absolutely FREE' a Tuf-Nut Khaki Suit (shirt and pants to match.) Name Address Name Address 1----------------------------------- 31-----------------------------------32 __________________________________ _ 2-----------------------------------· 33 ___________________________________ , 3-----------------------------------4 etc·-----------------------.-------- 34 etc. ___________ _: __________________ _ Bo____________________________________ 60----------------------------------- THE IliDDEN LUCKY NUMBER Register your name for each Tuf-Nut garment you purchase. The Lucky Number wins a Tuf-Nut Khaki Suit FREE. T F If you are the winner you will be notified U by your 'tuf-Nut dealer. N T The dealers to whom said poster is furnished display the same to the purchasing public. The card contc.ins 60 blank spaces for registration of the names of purchasers of respondent's garments, and each space is accompanied by a number, the numbers running consecutively from 1 to 60. Each purchaser of a garment makes a choice of a number and writes his name in the blank opposite such number selected. On the poster is a master seal, under which is concealed a number. 'When the card is completely filled with the names of the purchasers, the master seal is broken, revealing a number from 1 to 60, and the purchaser whose name is registered opposite the number corresponding with the number found under. the master seal, is entitled to receive for his reward a Tuf-Nut Khaki Suit consisting of shirt and pants to match, without additional charge. The. number printed under the master seal is effectively concealed from the purchasers and prospec- Conclusion 34F. T.C.

tive purchasers until all of the numbers on the poster have been. chosen. The said Tuf-Nut I~haki Suit is thus awarded to the pur• chaser of other of respondent's garments wholly by lot or chance. PAR. 4. Retail dealers who purchase respondent's garments, directly or indirectly, expose and sell the same to the purchasing public in accordance with the aforesaid sales plan. Respondent thus supplies to, and places in the hands of, others the means of conducting a lottery in the sale of its products in accordance with the sales plan hereinabove described. The use by the respondent of said sales plan or method in the sale of its garments, and the sale of said garments 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 the established policy of the Government of the United States. · PAR. 5.. The sale of said garments to the purchasing public in the manner above described, involves a game of chance or the sale of a chance to ·procure a suit or other garment without cost. Many persons, firms, and corporations who sell and distribute work garments or similar merchandise in competition with the respondent in commerce among and between the various States of the United States do not use said method or any similar method involving a game of chance or the sale of a chance to win something by chance. Many persons are attracted by said sales plan or method employed by respondent in the sale and distribution of its garments and in the element of chance involved therein, and are thereby induced to buy respondent's garments in preference to the garments of said competitors of respondent who do not use the same or equivalent methods. The use of said method by respondent, because of said game of chance, has a tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia, to respondent from its competitors who do not use the same or equivalent methods.

PAR. 6. During the period from January 1, 1941, to October 1, 1941, respondent has sold approximately llh million pants, shirts, and overalls ~nd has awarded, under the plan of merchandising described herein, approximately 1,000 free suits or garments. CONCLUSION The aforesaid acts and practices of the respondent, as herein 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 commerce within the intent and meaning of the Federal Trade Commission Act. TUF-NUT GARMENT MANUFACTURING CO. 733 726 Order ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, answer of the respondent, stipulation as to the facts entered into by and between counsel for the Commission and counsel for the respondent upon the record, and briefs filed in support of the complaint and in opposition thereto; and the Commission having made its findings as to the facts and its conclusion that said respondent has violated the provisions of the Federal Trade Commission Act:

It is ordered, That the respondent, Little Rock Tent & Awning Co., a corporation, trading under the name of Tuf-Nut Garment Manufacturing Co., or under any other name, its officers, representatives, agents, and employees, directly or through any corporate or Qther device, jn' connection with the offering for sale, sale, and distribution of work garments, or any other merchandise, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forth with cease and desist from :

1. Supplying to, or placing in the hands of, retail dealers or others, display posters or any other sales plans or devices which are to be us.ed, or may be used, in the sale or distribution of work garments or any other merchandise to the public by means of a game of chance, gift enterprise, or lottery scheme.

2. 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 60 days after service upon it of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with this order.

734 FEDERAL TRADE COMM:ISSION DECISIONS Syllabus 34F. T. C.