Cinader, Mitchell, et al

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IN THE MATTER OF POPULAR PRODUCTS CORPORATION, MITCHELL CINADER, AND ESTHER CINADER .

co.. • "•PLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. fi O? AN ACT OF CONGRESS APPROVED SEPT. .26, 1914 Docket 31,79. Complaint, July 9, 1938-Deci&ion, Aug . .t,, 1942 'Where a corporation and its president, who owned virtually all of its stock and controlled its policies and practices, engaged In the competitive interstate sale and distribution of novelty merchandise such as pen and pencil , ( sets, cigarette lighters, electric lamps, chinaware, silverware, and camerasa) Distributed through the mails to prospective sales representatives through· out the United Stutes advertising circulars which depleted and described certain articles offered as compensation fo·r the sale of merchandise, also depicted, and which contained also a pull card for use in sale of articles listed and priced thereon, under a scheme In accordance 'with which the Particular article to be received and the price to be paid therefor were disclosed after removal from the card of the tab selected by the customer, and the operator, after sale of all articles listed, was compensated by his 'l'l, choice of a premium or cash; and I I 1 lereby suppUed and pl(lced means {)f conducting lotteries in the hands of such Operators who, notwithstanding notice purportedly offering custo¥Ier right to buy any article involved at price shown on back of slip, made use of said pull card In sale of their merchandise; contrary to an established PUblic policy of the United States Government and In violation of the criminal laws; and in competition with many who, unwilling to use a !I, '\\7 lllethod involving chance or contrary to public policy, refrain therefrom; lth the result that many persons were attracted by said sales methou and the element of chance involved therein, and" were thereby induced to buy 1 and sell said merchandise in preference to that offered and sold by com· Detitors who did not use such methods, whereby trade was diverted unfairly (b from said competitors to them; and ' lI ) Represented that the articles offered to sales representatives were free I and without cost to them through such: statements on their circulars as lI ''Free gifts for all" and "Beautiful, useful household gifts at absolutely cost"; . · i W no ~ hen in fact the articles thus designated were supplied to representatives only for services rendered in sale of merchandise in question, and price thereof 'Wi Was Included In that of the other articles which they wereJequired to sell; th effect of misleading and deceiving a substantial number of members of ~ '·i. the public and causing them to undertake the sale of said corporation's and i individual's products in preference to those of competitors, whereby trade I! ][ \Vas diverted from competitors to them: ' eld, That such acts and practices, under the circumstances set forth, were au to the prejut.lice of the public and competitors, and constituted unfair lllethods of competition in comme_rce.

Complaint 35F.T.C· As respects the insistence of those charged with the operation of a lottery scheme through persons whom they. supplied with descriptive circulars. including pull card· devices fqr use in selling by chance to members of t!Je: public goods, the pric:;es and values of some of which were In excess of those shown therefor on such cards, tliat the lottery or chance element was removed from the scheme by a notice purportedly offering any customer . tile right to buy any article at price shown for it on the back of its slip: Such notice was inconsistent with the sale of the articles called for under"' the plan by the operator-who. aft£>r sale of all ch11nc£>s, was to remit to sellers and' receive from them said goods for distribution to purchasers 119 shown on card, and who was corupeusateu, at his option, by deduction of cash premium or receipt of merchandise premium along wit!JO aforesaid other goods-was inconsistent vdth the instructions to the operator whicb. made no provision for any such conting£>ncy, was inconsister.tt with tb~ effective working of the plan, and was, it appeared, taken advantage 0 only in exceptional and isolated cases, and, as a pra~tical ~atter, bad nosubstantial effect upon the operation of the plan and did not serve to reinove the lottery element from sellers' .sales method. Defore Mr. Rarulolph Preston,. Mr. Miles J. Furna._~, Mr.. John lf.Addison and.Mr. Andrew B. Duvall, trial examiners. . · 11/r. D. 0. Daniel and Jh. J. W. Brookfield, Jr., for the Commission· Mr. Arthur D. Herrick, of New York City, for respondents. \ . . Col\IPLAINT Pursu~nt to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federlll Trade Commission having reason to believe that Popular Products Corporation, a corporation, and Mitchell Cinader and Esther Cinader, individually, and as officers of the Popular Products Cor· poration, hereinafter referred to as respondents, have violated the provisions of the said act, and. it appearing to the Commissio~1 that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect lls follows:

PARAGRAPH 1. Respondent, Popular Products Corporation, ls n corporation organized, existing, and doing business under and b~ virtue of the laws of the State of New York, with its office an principal place of business located at 104 'Vest Seventeenth Street, New York, N.Y. Respondent, Mitchell Cinader, is president, secre· tary and treasurer of said corporation, and respondent, Esthe~ Cinader, is vice president of said corporation. The individual respondents have their offices and principal place of business at the same address as the corporate respondent. Said individual respond· ents, as officers of said corporation, control and direct the policies, , POPULAR PRODUCTS CORP. ET AL. 275 273 ·, Coii).plaint acts, and practices thereof. Said respondents act together and in cooperation with each other in doing the acts and things hereinafter alleged. Respondents are now, and for some time last past have ~en, en~aged in the sale and distribution of pen_ and Pl?ncil sets, ~lgaret lighters, electric lamps, china and silverware, cameras, clocks, Jewelry, cosmetics, bedding, kitchenware, and other articles of mercha?dise, 'in commerce between and among the various States of the lJnlted States and in the District of Columbia. Respondents cause and have caused said products when sold to be shipped or trans- Ported from their place of business in the State of New York t<) b~rc~a~ers thereof in other States of the United States and in the . lstrlct of Columbia, at their respective points of location. There Is now, and has been for some time last past, a course of trade in commerce by said respondents in such merchandise between and n~ong the various States of the United States and in the Di~trict 0 · Columbia: In the course and conduct of said business, responde~ts are in competition with other corporations and individuals and ~~th partnerships engaged in the sale and distribution ,of similar or 1 6. articles of merchandise, in commerce between and among the "nrlous 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 he~;eof, respondents sell and distribute said articles of lrlerchandise by means of a lottery scheme or game of chance. The resp?ndents uistribute or cause to· be distributed to representatives ~nd Prospective representatives certain advertising literature, includ- Ing a sales circular. Respondents' merchandise is distributed to the· I Purchasers thereof in the following manner: . Id ~ portion of said sales circular consists of a list on which are- .t\es~gnated a number of items of merchandise and the prices thereof. . dJacent to the list is printed and set out a device commonly called i It card. Said pull card consists of a number of tabs, under each I 0 lull I .Which is concealed the name of an article of merchandise and the 'I Rl'lce thereof. The name of the article of merchandise and the price '' thereof are so concealed that purcluisers. or prospective purchasers of ' _1' e tabs or chances are unable to ascertain which article of mer- 1~;andise they are to receive,-or the price which they are to pay, until I,, t ter the tab is separated from the card. 'When a purchaser has deaUcheu a tab and learned what article o£ merchandise he.is to-receive i lllld the price thereof, his name is written on the list opposite the ''' h anled article of merchandise. Some of said articles of merchandise· a~e purported and represented retail values and reguiar prices ~heater th~n the prices designated for them, but are distributed to e consumer for the price designated on the tab which he pulls. 1. ' 276 FEDERAL TRADE COMMISSION DE·CISIONIS Complaint 35 F. T. a. The apparent greater values and regular prices of some of said articles of merchandise, as compared to the price the prospective purchaser will be required to pay in the event he .secures one of said articles, induces members o'f the consuming public to purchase th~ tabs or chances in the hope that they will receive articles of merchandise of far greater value thim the designated prices to be paid for same. The fact as to whether a purchaser of one of said pull-card tabs r~cei"ves un article of greater value than the price designated for same on. such tab, which of said articles of merchandise a 'purchaser is to recei"V'e, and the amount of money which a purchaser is required to pay are determined wholly by lot or chance.

When the person or representative operating the pull card has succeeded in selling all of the tabs or chances, collected the amoul~ts <!ailed for, and remitted the· said sums to the respondents, the sa.1d respondents thereupon ship to said representative the merchandise designated on said card, together with a premium for the represent~d tive as compensation for operating the pull card and selling the sal merchandise.. Said operator delivers the merchandise to the pur· chasers of tabs from said pull card ·in accordance with the list filled out whe~ the tabs were detached from the pull card. Respondents sell and distribute various assortments of said me~­ chandise and furnish various pull cards for use in the sale and distrl· bution of such merchandise by means of a game of chance, gift enter· prise or lottery scheme. Such plans or methods vary in detail, but the above described plan or method is illustrative of the principle involved.

PAR. 3. The persons to whom respondents furnish the said pull · cards use the .same in purchasing, selling, and distributing respond· ents' merchandise in accordance with the aforesaid sales plan. :Re· spondents thus supply to and place in the hands of others the means of conducting lotteries in the sale of their merchandise in accordance with the sales plan hereinabove set forth. The use by respondents of said method in the sale of their merchandise, and the sale of su~~ merchandise by and through the use thereof and by the aid of sal method, is a practice of the sort which the common law and criminal statutes have long deemed contrary to public policy and is contrary to an established public policy of the· Government of the United States. .

PAR. 4. The sale of merchandise to the purchasing public in the manner above alleged involves a game of chan~e or the sale of a chance to procure an article of merchandise at a price much less than the 3apparent normal retail price thereof. :Many persons, firms, and cor· porations who sell or distribute merchandise in competition with th_e POPULAR PRODUCT~ CORP. ET AL. 277 273 Complaint respondents, as above alleged, are unwilling to adopt and use said tnethod, 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, and such competitors refrain therefrom. Many persons are attracted by respondents' said method and by the element of chance' involved in the sale thereof, in the manner above described, and are thereby induced to buy and sell respondents' ~erchandise in preference to merchandise offered for sale and sol<} Y ~aid competitors of respondents who do not use the same or an equlvalent method. The use of said method by respondents, because of said game of chance, has the capacity and tendency to, and cloPs,. Unfairly divert trade and custom to respondents from their said com- Petitors who do not use the same or an equivalent method. PAR. 5. In the course and conduct of their business, as hereinabove rela~ed, respondents have caused various false, deceptive, and miseadmg statements to appear in their advertising matter as aforesaidt of Which the following are examples, but are not ·all-inclusive: Gifts for all at no cost to you.

Additional Surprise Gift.

~bsolutely free.

li' ree. You get Two Premiums with Each Order. 'ree Additional Premium.

Given Free.

Others of said statements and respresentations appearing in ro-· spondents' said advertising matter are as follows: ·~I! Shipping Charges are Paid by Us.

an Ve Pr~pay all Shipping Charges Right to your door on all Mercha;ndlse and Premmms. . ' .PAR, 6. In truth and in fac~, none of respondents' so-called pre- In~ums or gifts are given away "free" or without cost, but said pre- :nuums or gifts, which are represented as being "free" to said representatives, are either purchased with labor by them or the price of said premiums or gifts is included in the price of other articles of ~erchandise which the representatives must sell or fiecure the sale of before said premiums or gifts can be procured by them. For a number o.f lhe premiums or gifts certain sums of money must be paid Y sal!} representatives, in addition to the labor performed or services rendered; respondents do not pay all shipping charges on their said Products, but said representatives are required to pay certain specified :~n:s of money as shipping charges on a number of respondents' said hcles of merchandise .

. PAn. 7. The use by respondents of the false, deceptive and misleadln.g statements and representations set forth herein has had, and now 278 FEDERAL TR.ADE COMMISSION DE,CISIONS Findings 35F. T.C.

has, the capacity a~d tendency to mislead and deceive, and has misl~d, a substantial portion of the purchasing public into the erroneous behef that such statements and representations are true, . and into the purchase or sale o£ substantial quantities o£ said respondents' products, as a result of such erroneous belie£. There are, among the conlpetitors o£ respondents as mentioned in paragraph 1 hereof, manu· facturers and distributors of like and similar products who do not :r;nake such false, deceptive and misleading statements and representa· tions concerning their products. By the statements and representations aforesaid trade is unfairly diverted to respondents from such competitors and, as a result ther~of, substantial injury is being done nnd has been done by respondents to competition in commerce an1o~g and between the-various States of the United States and in the Distrlct of Columbia.

PAR. 8. The aforesaid acts and practices of respondents as herein alleged are all to the prejudice of the public and of respondents' corn· petitors and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Coll}mission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, ' the Federal Trade Commission, on July 9, 1938,· issued and sub· sequently served its complaint in this proceeding upon the respond· 1 ents, Popular Products Corporation, a corporation, and Mitchell Cinader and Esther Cinader, individually and as officers of Popular Products Corporation, charging them with the use of unfair methods I of competition in commerce in violation of the provisions of th~t 1 act. No answer was filed by the respondents to the complaint. 'festl· ·1I mony and other evidence in support of the allegations of the co~plaint were introduced by the attorneys :for the Commission, and lll opposition thereto by the attorney :for the respondents, before trial examiners of the Com~ission therHofore duly designated by it, which testimony and other evidence were duly recorded and filed in the. office of the Commission. Therea~te;r, the proceeding regularly can:e on for final hearing before the Commission on the complaint, testt· mony, and other evidence, report of the trial examiners upon the evidence and the exceptions to such report, briefs in support of and in opposition to the complaint, and ora.l argument; and the Corn· mission, having duly considered the matter and being now fully advised in the premi>;es, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its con· elusion drawn therefrom: \ I POPULAR PRODUCTS CORP. ET AL. 279 / Findings I FINDINGS .AS TO TIIE FACTS ,, . .PARAGRAPH 1. Respondent, Popular Products Corporation, is a ., <!~t·poration organized, existing, and doing business under the laws 0 the State of New York, with its office and princi})al place of busi- '',, ~ .f ss now located at 243 West Seventeenth Street, New York, N. 'X'· Its I''I I, '' orrner address was 104 West Seventeenth Street, in that city.· Respondent, Mitchell Cinader, is president of the corporate re-, I i ?ondent. He is the owner of virtually all of the capital stock of ,.~fe corporation, an~ formulates, direc~s, and controls all of the polies, acts, and practices of the corporation. · I I-d. While the complaint herein also named Esther Cinader, vice presie~t of the corporation, as a respondent in this proceeding, the ~Yldence discloses that this respondent has not participated actively 111 .t~e management of the corporation, and the Commission is of the QPlhlon that the proceeding should be dismissed as to this respond- :nt. The te~m "respondents," therefore, as used hereinafter, will not lnclud.e respondent Esther Cinader· unless the contrary is indicated . • PAn. 2. The respondents are now -and since 1921 have been engaged 111 the sale and distribution of merchandise generally designated as novelty merchandise and including such articles as pen and pencil s~ts, cigarette lighters, electric lamps, chinawarc, silverware, cameras, t ocks, jewelry, cosmetics, bedding, and kitchenware. Respondents ~cause and have caused their products, when sold, to be transported t~orn their place. of bu~iness in the State of New Y_' ork to purchase:s thereof located. m varwus other States of the Umted States and m i' e District of Columbia. Respondents maintain, and at all times ~entioned herein have maintained, a course of trade in their products ~n Commerce among and between the v~rious' States of the United states and in the District of Columbia.

PAR. 3. In the course and conduct of their business respondents )~'e! and have beent in competition with other corporations and' int r~duals and with part?erships engaged in the sale ~nd distribution ~ s.nnilar articles of merchandise in commerce among and between thb a~ous States of the United States and in the District of Columbia. llt AR. 4. In promoting the sale of their products respondents distribt e advertising or sales circulars through the United States mails I' 0 Prospective sales representatives located at various points through- ~~t the United States. These circulars contain pictorial representa- ~ns and descriptive matter with respect to certain articles of mer- I. e andise offered by r~spondents as compensation for the sale of their lllerchandise, and also pictorial representations and descriptive mat- 280 FEDERAL TRADE COMMISSION DECI.SiiONS Findings 35F.T.0· ter as to certain of the articles of merchandi~~ which respondents offer for sale.

Each. of these circulars also contains what is commonly' known as a. pull-card device. The pull-card device consists of a number of tabi under each of which is concealed the name of one of the articles 0 merchandise offered for sale by respondents and the price thereof. Neither the name of the article nor the price thereof is disclosed to • the purchaser or prospective purchaser until after the tab has bee~ separated or removed from the card. Adjacent to the pull tabs 1 a list of all of the articles of merchandise offered for sale and the price thereof, which corresponds to the articles and prices concealed under the various pull tabs. When a purchaser has detached a t.ab and there is thus disclosed which article he is to receive and the prtce to be paid for it, his name is written on the list opposite the particu• Jar article of merchandise. .1 Some of the articles of merchandise offered for sale have reto.l values greater than the prices so designated for th,em, but all of the articles are distributed to the purchasers at the prices on the ta~S· The fact that some of such articles of merchandise have values lfl excess of the designated prices induces members of the· purchasing or consuming public to pull the tabs in the hope that they will ob· tain such articles. Moreover, some of the articles offered for sale are represented through pictures and reading matter in the circular 119 having values greater than their actual val~1e, which serves as a. further inducement to prospective purchasers to pull. the tabs in o.n effort to obtain such articles. The specific article which the pur· chaser receives, ihe amount of money he is required to pay for such article, and the question whether the purchaser will receive an articl~ having an actual or apparent value greater than the price designate therefore are thus 'determined wholly by lot or chance. When the individual operating the pull card has succeeded in selling all of the articles of merchandise listed under the tabs, and has collected the respective amounts charged therefor, the total of such amount~ · is remitted to respondents. Upon receipt of such total amount, re· spondents ship to their representative the merchandise sold, together with a premium for the representative as compensation for operating the device and selling and distributing the merchandise, such premium~· having been selected by the representative from articles pictured Ill the circular. If the representative so desires, he may deduct a cash premium in lieu of the merchandise premium. Upon receipt of the merchandise from respondents, the representative delivers'the various POPULAR PRODUCTS CORP. ET AL. 281 Findings ~ticles to the purchasers in accordance with the list prepared when e tabs were pulled. · . PAn. 5. In connection with the pull-tab device the following read- Ing matter appears:

~NOTICE TO PURCHASER-On back of e~ch slip Is printed the price of an ~ticle. It after delibet·ation you decide that you want to buy the article, pay e holder of this book the price shown on slip. If you do not want the article )'ou need not buy it. • Respondents insist that the insertion of this notice has the effect of ~lt!moving the lottery or chance element from their sales method. The 0ltlrnission finds, however, that despite this notice, the articles of ier~handise are in fact sold and distributed by means of the pull-card ev1ce in accordance with the sales plan or method hereinbefore described. The successful operation of respondents' sales plan is dependent upon the ability of the operatio~ to sell all of the articles listed, so to Permit remittance of the required amount to respondents in order :s to obtain the merchandise purchased, and in order for the operator ~obtain the premium for the sale of the merchandise. The operation 0h the plan strictly in accordance with the so-called "Notice to Pur- ~ aser'' would not tend to net the operator a return sufficient to a warrant completion of the plan, and as a result the plan would, from Practical viewpoint, become inoperative. · th lhe record discloses that it is only in exceptional and isolated cases f at Persons who pull a tab from the qevice refuse to accept and pay i or the merchandise designated on the tab. Moreover, in respondents' t~stru?tions to their representatives, which appear on the circular, a e;e Is no direction as to what shall be done in the event all of the ~ t"tlcles of merchandise are not sold. The circular likewise fails to . ~ntain any information as to the premium or compensatim~ which )l n he obtained by the representative in the event that some of the )l U.rchasers refuse to accept the article listed on the particular tab )l~lled. On the contrary, it is apparent from the instructions that the e an contemplates that all of the articles listed are to be sold. For ~atn,ple, the instructions contain the following: · ou"iou nsk your friends and neighbors to pull on~ or more of the Purchase Receipts andthe next page. On tM back of each slip you will find the name of an article lb Its Price plainly marked. You collect from the purchasers the price stated on ate!!)sup for which they will receive the .article mentioned on it. The prices start ~0 ¢ nnd no article costs more than 3fr¢. When all the articles have been sold, ~ou \VIU have collected $7.39. '.,rhen detach ~nd fill out order blank and ~e sure 4 U Inark the premium you want for your size and send it to us together with '~~t~oney order for $7.39. We will immediately mail you the 21 articles together nr h the premium which you have selected and a beautiful and valuable surprise %~ . 282 FEDE,RAL T;TRADE COMMISSION DECISIONS Findings 35F. T.C.

The order blank ref~rred to in these instructions r~ads in part a!'l follows:

After you have sold the 21 articles of merchandise and collected $7.39, fill 0.~~ this blank, stating the correct number ·or premium you have selected. Also wrJ your name and address plainly, and· mail it to us. Popular Products Corp., 104 W. 17th St., New York, N.Y. Please ship at one~ all charges prepaid, the 21 articles of merchandise I sold amounting to $7.39 nil one of the valuable premiums.

REWARD PREMIUM NO. ------------ Color _______ ...__: __________ .:.---· The Commission therefore finds that, as a practical matter, the so· called notice has no substantial effect upon the operation of the sales plan, that it does not serve to remove the lottery element from respond· ents' sales method. ·d PAR. G. The persons to whom respondents furnish their puU-cttl device use such device in selling and distributing respondents' ~e~­ chandise in accordance with the sales plan or method herein ~escr1be ~ Respondents thus supply to and place in the hands of others a me~ll of conducting lotteries in the sale and distribution of their merchandise in accordance with such sales plan or method. Such merchandise is thus sold or distributed by means of a game of chance, gift enter· prise, or lottery scheme, and respondents reap the benefits therefro~· The use oy respondents of such sales plan or method in the sale of thelr merchandise; and the sale of such m,erchandise by and through ~he use thereof and by the aiel of such sales plan or method, is a prnd1ce of a sort which is contrary to an established public policy of .th~ Government of the United States and in violation of the crin1111fl laws. · PAR. 7. Many persons, firms, and corporations who sell or distribtltt merchandise in competition with respondents, as set forth in paragrap; 3 hereof, are unwilling to adopt and use such method or any metl;o involving a game of chance or the sale of a chance to win someth~llg by chance, or any other method which is contrary to public pohC~ and such competitors refrain therefrom. Many persons are attracted by respondents' sales method and by the element of chance involve therein, and are thereby induced to buy and sell respondents' mer· chandise in preference to merchandise offered for sale and sold bY those com,petitors of respondents who do not use the same or !lily equivalent method. The use of such method by respondents has the· tendency and capacity to, and does, divert trade unfairly to respondents from such competitors. · PAR. 8. In addition to the foregoing acts and practices, the respond· ·ents represent, through the use on their circulars of such legends t1S 1"FREE GIFTS FOR ALL" and "Beautiful Useful Household G·fts at Absolutely No Cost," that the articles of merchandise offered .to POPULAR PRODUCTS CORP. ET AL. 283 273 Order :~eir sales representatives·are free and without cost to such representalves. These representations 01,1 the part of respondents are deceptivt~ ~nd misleading. None of the articles of merchandise sp designated is 1il. fact given away free by respondents, but all of such ~articles are s_up- Phed to respondents' representatives only as compensation for services tendered in the sale of respondents' merchandise, and the price of such att~cle~ is included in the price of the other articles of merchandise '>'Inch the representative must sell.

·PAR. 9. The use by respondents of the deceptive arid. misleading statements and representations set forth above has had and now has the tendency and capacity to, and does, mislead and deceive a subst~ntial number of members of the public into tJ1e erroneous and !lllstaken belief· that such articles of merchandise are given by re- . 8POildents to their representatives free and without cost, and the tend- ~ncy and capacity to cause such members of the public to Ul).dertake he sale of respondents' products in preference to the products of ~respondents' competitors. In consequence thereof, substantial trade as been diverted to responden~s from their competitors. . CONCLUSION . th The ~cts. and practices ?f the respondent!3 as herein f~und are all to ·. ~ prejudice of the pubhc and of respondents' competttors, an<.l con- Stitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. OllDER TO CEASE AND DESIST · .This proceeding having been heard by the Federal Trade Comlb.J.ss~on upon the complaint of the Commission, testimony and other ~VIdence taken before trial examiners of· the Commission theretofore llly designated by it, in support of the allegations of the complaint ~ ~nd in opposition thereto, report of the trial examiners upon .the evience and the exceptions to such report, briefs in support of and in hPP?sition to the complaint, and oral argument, and the Commission uv1ng made its findings as to the facts and its conclu~ion that certain ~f the respondents have violated the provisions of. the Federal Trade 01llmission Act; . . . It is•ordm·ed, That respondents, Popular Products Corporation, a Cotporation, its officers, and Mitchell Cinader, individually and as nn officer of said corporation,. and respondents' agents, representatives, ~lld employees, directly or through any corp.orate or· other device, 111 connection with the offering for sale, sale, and distribution in comlb.erce, as "commerce" is defined in the Federal Trade Commission Act, . I 284 FEDE.RAL TRADE COMMISSION DE-CISIONS Order 35F.T.C· ' . !()f pen and pencil sets, cigarette lighters, electric lamps, chinaware, :silverware, camera-s, ·clocks, jewelry, cosmetics, bedding, and kitchen· ·ware, or any other merchandise, do forthwith cease and desist frolll: 1. Supplying to or placing in the hands of others pull cards or ·other devices which are to be used, or may be used, in the sale or distribution of respondents' merchandise to the public by means of Jl. gatq.e of chance, gift enterprise, or lottery scheme. . 2. Shipping, mailing, or transporting to agents or distributors, or to members of the public, pull cards or other devices which are t~ be used, or may be used, in the sale or distribution of respondents merchandise to the public by means of a game of chance, gift enterprise, or lottery scheme. • · 3. Selling or otherwise disposing of any merchandise by means of n. game of chance, gift enterprise, or lottery scheme. 4. Using the' word "Free,"· or any other word of similar import, to designate, describe,. or refer to any merchandise which is furnished as compensation for services rendered. . It is further ordered, That said respondents shall, within 60 dt1Y9 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.

It is further ordered, That this proceeding be, and it hereby is, dis· missed as to respondent, Esther Cinader.

J & J CANDY CO. 285 Complaint