The Baltimore Luggage Company

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Ix THE l\fatter OF THE BALTIMORE LUGGAGE COMPANY ET AL.

ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE co"&onSSION ACT Docket 7683. Oomplaint, Dec. 8, 1959-Deciion, Mar. 15, 1961 'Order requiring the manufacturer of "Lady Baltimore" luggage to cease deceptively pricing' its merchandise by preticketing it with price tags $2. higher than the prices at which it regularly sold. 3fr. Anthony J. Kennedy, Jr. for the Commission. 3ir. Robert L. Sullit'an, Jr. Qnd 3fr. William J. Pittler of Baltimore 1d. , for respondents.

INITIAL DECISION BY JOI-IX B. POINDEXTER, HEARING EXAMINER The Baltimore Luggage Company a corporation and Gertrude Holtzman Qnd Samuel J. Holtzman, indivic1naUy and as offcers of said corporation, hereinafter called respondents, are charged with fictHiolls pricing of luggag.e in violatjon of the Federal Trade Commission Act.

IIearings have been held at which oral testimony and documentary evidence was received in support of and in opposition to the allegations set forth in the complaint. Proposed findings of fact, conclusions of law and order have been submitted by respective counsel and oral aqrument heard thereo11. These have been considered. All proposed findings of fact and conclusions of law not specifically found or concluded herein are rejected. epon the basis of the entire record, the undersigned hearing e,xmniner Inakes the foi1owing findings of fact, conclusion of law and order: FINDINGS OF FACT 1. The Baltimore Luggage Company is a corporation organized and doing business under the laws of the State of Maryland with its offce and principal place of business Joeated at 304 North Smallwood Street, Baltimore, :\1maryland. The individual respondents Gertrude Holtzman and Samuel J. Holtzman are offcers of the corporate respondent and formulate, direct and control the acts 452 FEDERAL TRADE COMMISSIO),T DECISIONS Findings 58 F.

and practices of the corporate respondent. Their address is the same as that of the corporate respondent.

2. The respondents are now and for some t.ime past have b2cn cllfragecl in the nmnufacture, distribution and sale of luggage. to retail dealers for resale to the public. In the course and conduct of their business, the respondents now cause, and for some time last past, have call sed their luggage, when sold, to be shipped from their plrwc of lmsincss in the State of J\:fal'ylancl to purchasers thereof located in the various states of the lJnited States and the District of Columbia. The respondents maintain, and at all times mentioned herein have maintained, ft. substantial course of trade in said luggage, in commerce, as "commerce" is defined in the Federal Trade Commission Act. The respondents are now and have been in substantial competition in commerce with corporations, firms and individuals also engagNl in the sale of luggage of the same general kind and character as that sold by respondents. 3. Respondents manufacture approximate.ly Bight different sizes of lng-gage in eight colors. The luggage is sold under the trade name Lac1y BaltinlOre. ' A pre-ticket, matching the color of the luggage, is placed on find attached to each piece of luggage by rpsponclents prior to final inspection in the factory. On the face of each ticket. is an amount in large figures purporting to re.present t.he reg-ubI' and customary retail price of the par!icuJar piece of luggage. The lnggage is priced according to size. On the reverse side of the ticket, in small figures, is a list showing the purported re,gular retail price for each of the eight sizes of luggage (CX 1-8). These pre-tickets are on each piece of luggage when it is sIli pped from responde11ts' factory to approximat.et ly 1 276 retail store dealers in cities locflted in approximately 46 states of the United States and the District of Columbia, and is still attached to the luggage when it is received by the respective retail dealers. The evidence shows and it is found that respondents' luggage is sold in the metropolitan t.trade areas of New York ew York, Philadelphia Pennsylvania, and \Vashington, D. C. , at approximately $2.00 pe, item less than the price shown on the pre-ticket attached to the item of luggage. One witness, :Mr. John 'V. Greene, an attorney-examiner employed by the Federal Trade Commission, testified that he visited two retail department stores in Philadelphia, Pennsylvania, Strawbridge and Clothier and John \Vannamaker and four stores in 1Vashington, D. C., 1Voodward and Lothrop, Deckers Leather Goods Company, I-lecht Company, and Lansburgh, where respondents luggage vms on display.y for sale to the public, anel respondents tickets were attaeheel to said luggage. The purported regular retail THE BALTIMORE LUGGAGE CO:VrPANY ET AL. 453 451 Fin-clings price, printed on each ticket was approximately $2.00 111 excess of the price at which the store was selling the particular item of lUO"O"i!O"c.bb to 4. In some of the stores which 1r. Greene visited each piece of Lady Baltimore" luggage also had attached to it a store ticket jn addition to respondents pre-ticket. The price shown all the store t.icket was $2.00 less than the price shown on respondents' pre- ticket. Also, in some of these stores, there was a display card which had been furnished to the retail stores by respondents. This display carel listed the purported regular retail price of each size of re.spondent' s luggage which corresponded to the prices listed on respondents' pre- tickets attached to each piece of luggage. In some of the stores, there ,vas a.lso a store display card which showed the store s n,ctua.l reta.il selling price of each piece of luggage which was $2.00 less than the price shown on respondents' pre- ticket attached to the piece of luggage and respondents' display card on the counter. 5. The evide.nce further shows and the examiner finds that, out of approximately 1 276 sales outlets for respondents' luggage, approximately 387 of these retail stores in at least twelve states regularly and cllstomarily sed respondents' luggage at approximately $:2. per item less than respondents ' pre-ticketed price. RX- 1 together with the testimony of :Mr. Rivkin, Director of Advertising and Sa.les for respondent corporation supports this finding. The sales by these retail stores of respondents' luggage represe, nt more than one third and less than one half, i. , 9/24 of the total dollar sales -volume of respondents' luggage. By placing a.nd attaching tickets to their luggage and furnishing retail store customers with display ,cards which contain prices approximately $2.00 in excess of the price at which the retail store regularly and customarily sells said lugg' age at retail, respondents thereby represent that the prices 8ho-\n on said tickets and display cards are the usual and regular retail price for each item of luggage and thereby place in the hands of the retailer the means and instrumentality (the pre-tickct and display card) whereby the retailer may misle.ad and deceive the public as to the regular ami customary retail price of the item of luggage.

G. Counsel for respondents do not deny that in the trading areas of ew York, Kew York, Philac1ephia, Pennsylva.nia and 'iVashington, D. C., and also in those are,as de1-neated on RX- , the retail price at which respondents' luggage is sold in retail stores is approximately 82.00 less than respondents' pre- ticketed price. Hown:r, connsel contend that this practice does not extend to every tra(le area throughout the United States and that, in determining , ,, 454 FEDERAL TRADE COMNIISSIOX DEClSIOXS Findillg,S 58 F.

salesrespondents usual and rep:nlar ret.ail price " respondents' on a national basis should be eonsiclerec1 TRt.her t1Hll1 be. eonfinecl t.o , and Vashington, D.the trading areas of New York, Philadelphia In other words, respondents' counsel contend that the ,vards "usual and regular retail price" mean the price at ,,'which respondents , sellcustomers, taken as a "'hole, throughout the United States ' fictitiousrespondents ' luggage. 1!ncler such a thpory, respondents retail slorepricing practices would have to be followed by their customers in eve.ry section of the -United States or as counsel conof the countrytends, in more t.ha.n 50 percent of the market areas before respondents could bp held to be in violation of the Federal Tra.de Commission Ad. Such a. contention is abSlll'd on its face. 7. Nevertheless, counsel cite The ()r7nfj' Cn.. 111(' .. tt a1.. Docket Xo. 6184: LVent'iUe he.. et rd.. Docket Xo. 040;): end Jla-Ro llosiay G01npa.ny, Inc. , et aI. Docket. Xo. 6:136 , as authorities for t.he above proposition. These, decisions do not support such a, doctrine. In the three cases cited, one, of the allegations in t.he respectiye complaints as here as that respondents misrepresented t.he usual and regular retail sellil1g price of 1yatches and hosiery by pre-tickei ing ,with , the evi..lenr,false and exaggerated prices. In tl10se cases, as lwre shows that the amounts flppe.aring on the tickets ,were substantially in excess of the, prices at which the watches and l1081e1')' ,were ll nally and regularly sold at retail. IIcre the evide,nce shmys and it has been found that, respondents knowingly placed tickets on its lnggage ()() in e.xce3S of the price nt, ,yhiehcontnining' pl':'::c approximately $2, said luggage, was t1H' n nsuaJIy and regu1ntly selling for in retail , D.stores located in New York, Philadelphia, and \Vashington to say nothing of the arlrlitional retail stores located in the trarling areas listed on RX- l. It. is found, therefore, that t11i position of counsel is not wen taken, 8. R.respondents also claim that it is the policy of respondents customer retail stores in the Philadelphia and \Vnshingt"on tradingareas to remove the perforatecl portion aT respondents' pre-ticket cont,aining the pre-ticket eel price prior to the time the luggage is placed in the store and in only a few isolatc(l ins1:mces is t,he, pleticket price permitted to remain attached to the luggage and this is due to the negligence of respondents' retail store enstomers. Irre spective of the policy of respondents' retn.1l customers: the evirlence , in the luggclg:r clepfll'tments ofshows and it. has 1e211 "foUlvl that each of the stores which )11'. Greene visited, with one exception respondent.s' pre-ticket remained intact on eacll piece of "Lady Baltimore" luggage. In the case of the one except,ion, respondents purported regular retail price figure was shown on the ticket. If THE BALTIMORE LUGGAGE COMPA Y ET AL. 455 451 Order respondents intended that the portion of its pre-ticket containing the purported regular retail price be removed prior to its display for sale to the public, why did respondents place the price tag on the luggage in the first place? Respondents' purpose is self-evident to make it appear to the store customer that the store was selling the luggage at approximately $2.00 less than the regular retail price and the customer would believe he or she ,vas getting a reduced price. It is apparent that respondent corporation was aware that its price tags were being used for deceptive purposes. CLl, IONS OF LA'"

The use by respondents of the aforesaid false, misleading and deceptive representations and practices have had and now have the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and ate true and into t.he purchase of substantial quantities of respondents' luggage by reason of said erroneous and mistaken belief. As a consequence thereof, substantial trade in commerce has been, and is being, unfairly diverted to respondents from their competitors a,nd substa.ntial injury has thereby, and is being done to competition in commerce. The acts and practices of respondents as found herein ,,'ere and are to the prejudice and injury of the public and constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. This proceeding is in the public interest..

ORDER It is ordered That respondent.s, The Balt.imore Luggage Company, a corporation, anrl its offcers and Gertrude Holtzman and Samuel J. Holtzman, individually and as offcers of the sa.id corporation, and respondents' agents, representatives, and employees, directly or through any corpora.te or other device, in connection with the offering for sale, sale and distribution of luggage or any other product in commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Representing, directly or by implication, by means of preticketing or in any other manner, that any amount is the usual and regular retail price of merchandise when such amount is in excess of the price at which said merchandise is usually and regularly sold at retail in the trade area or areas where the representations are made. 2. Furnishing to others any means or instrumentality by 01'through which the public may be misled as to the usual and customery prices or respondents' merchandise. 456 FEDERAL TRADE CO:\B-fISSIO DECISIONS Opinion 58 F.

3. Putting any plan into operation through the use of which retailers or others may misrepresent the usual and regular retail price of merchandise.

OPIXIO OF THE COl\nn8SION By Secrest, Commissioner:

The complaint in this matter charges respondents with violation of the Federal Trade Commission Act. The hearing examiner in his initial decision held that the allegations of the complaint were sustained by the evidence and ordered respondents to cease and desist from the practices found to be unlawful. Respondents have appealed from this decision.

Respondents are engaged in the manufacture of luggage which they sen to retail dealers located throughout the United States. This luggage, sold under the trade name "Lady Baltimore, is made in eight sizes and in eight colors. Each piece of luggage, when shipped by respondents, has attached to it a tag or t.icket \'\hieh sets forth the size and color of the nrticle anel an amount in dollars and cents opposite the word "Price . On the back of the ticket the various sizes of luggage manufactured by respondents are listed and opposite t.he name or designation of each size is an amount. -which purports to be the price of that par6cular size. The hea.ring examiner found and respondent.s conceded that the luggage in question is usually and regularly sold at retail in the New York, Philadelphia and 'Washington trade areas for approximlltely $2.00 less per article than the amount printed on the ticket attached to the article. The hearing examiner further found that items of respondents' luggage bearing these tickets were displayed for sale to the public by retailers in the aforementioned trade areas. lie held, therefore, that respondents had falsely represented that the amounts sho\vn on the tickets -were the usual and regular retail prices of their luggage in those trade areas and further that respondents had placed in the hands of retailers the means and instrumentality by which the public could be misled as to the usual and regular prices of respondents merchandise.

,Ve will consider first respondents' argument that the evidence does not support the hearing examiner s finding that pieces of their luggage had the priec tickets attached to them when displayed by retailers. This finding is based on t.he te,stimony of the Commission inycstigfltor ,'\ho shlted tllat he had een the tickets on luggage dis. played in retail stores in Philadelphia and ,Vashingtou. R.espondellts claim that this testimony is relnfttecl by the t.estimony of luggage buyers for two of the stores visited by the investigator. One of the THE BALTI:rl0HIG L"GGGAGE CO:MPAXY ET AL. 457 151 Opinion buyers testified that at the time of the investigator s visit respondents tickets were displayed on only three or four pieces of luggage and had been removed from the remainder. The other buyer testified, in eilect, that respondents' luggage would sometimes " get on the floor without the ticket being torn off_" IVe think tJ.is testimony tends to corroborat.e rather than contradict that of the investigator. Respondents ' further st.atement that they ha,d advised retailers to remove the portion of the ticket. showing the, "price" of the article cannot overcome the direct evidence t.hat ret.ailers had failed to do so. Respondents' argument on this point is, therefore, rejected. Respondents next object to the hearing examiner s fmding that the prices ' preticketed on their luggage were not the usual and regular prices of such h'iggage in certain trade areas. They contend that their entire national retail market, rather than specific trade areas, is the proper basis for determining the usual and regular prices of their luggage. They also point out in this connection that approximately 70% of their retail customers, located in 34 states and reprsenting about 82.5% of respondents' total dollar volume of sales, sen the luggage at the pretieketecl prices. In making this argument, respond ents cite as authority for their posit.on the Commission s decisions in the matters of The Orloff Company, Inc- Docket No. 6184; Neuville Inc. Docket 1\0- 6405; i1fa-Ro Ilo8iery Company, Inc. Docket No. 6436; and Sam S. Goldstein Docket No. 7414- We held in the eases cited by respondents that the preticketing of merchandise wit.h all amount in excess of the price at which such merchandise is usually and regula.rly sold at retail is an unfair trade practice- The issue of whether the usual and regular retail price should be determined on the basis of a national retail market as opposed to a local retail market was not raised, however. :Moreover we did not hold in those cases, nor have we held in any decision, that it is necessary to consider all retail sales of a product on a nationwide basis in determining ,,-whether a certain amount is the usual and regular retail price of that product. Nor have we held that a showing that a pre-ticketed price is the usual and regular price of a product in some sections of the country is suffcient to establish that that price is the usual Hnd regular price of the product throughout the country, including those sections in which it is not: the usual find regular price. :\Iembers of the purchasing pubhc in the a.aforementioned trade a.areas may,ycll believe that the preticketec1 product i being sold at a reduced price by the store in which the article is oftered for sale and that t.he higher amount marked on the ticket is the prevailing price for the, product else' where in the same trade, area not necessarily in some other trade area. Although such a person mat be inte.restecl in knowing the usual and regular price of merchandise in ot.her 458 FEDERAL TRADE CO I:IISSIOX DECISIONS Syllabus 58 F.

sections of the country, he is particularly interested in knowing whether he is getting a bargain in the trade area in which he is making his purchase. It is our opinion that respondents' price tickets have the capacity and tendency to mislead him in that respect. Respondents fina1Jy contend that there is no evidence to support the hearing examiner s conclusion that their preticketing practices have the capacity to mislead members of the purchasing public into the purchase of substantial quantities of their luggage. This argument must also be, rejected. Since it has been repeatedly held that a claim that a product is being offered for sale at a reduced price is an important factor in effecting the sale of that product, we believe that the hearing examiner s conclusion is amply supported by the showing that respondents have misrepresent.ed the n8uo,1 and I'Pgular prices of their products in certain trade areas. Evidence that members of the purchasing public have actual1Jy purchased respondents product as a result of the preticketing practices is not required, Respondents' appeal is denied, and the initial decision wi1 be adopted as the decision of the Commission. FINAL ORUER This matter having been heard by the Commission upon respondents' appeal from the hea,ring examiner s initial decision, and upon briefs in support thereof and in opposition thereto, ond the Commission having rendered its decision denying the appeal: It is ordered That the initial decision of the hearing examiner be and it hereby is, adopted as the decision of the Commission. It is ftlrther ordered That respondents shah, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in debtil the manner and form in which they have complied with the order to cease and desist. I", THE "fatter WREN SALES CmfPANY, INC., ET AL.

ORDER, ETC. , IN HEGAHD TO Tile ALLEGED VIOLA'I'OX OF THE FEDERAL TRADE CO I1\ISSION ACT Docket 7131. Compla.Int, Jan. 1.90-Dec' ision, Mar. , 1961 'Order requiring Chicago distributors of toys, cameras, electrical appliances and other mercbandiRe, to cease furnishing operators and members of the puhlic with pnRb cards and descriptive matter for use in tbe sale of their said merchandise by games of chance or lottery schemes. &, Vi/HEX SALES CO., I , ET AL. 459 458 Decision 21r. William A. Somers for the Commission. , by Jfp. Edwin Kaplan for Bass Friend of New York respondents.

INITIAL DECISION TIY EARL J. KOLB, HEARJNG EXA UNDER This proceeding is based upon R complaint. brought under Section 5 of the Federal Trade Commission Act, charging the respondents wjth violation of the Federal Trade COITmission Act through the use of lottery schemes or games of chance in the sale and distribution of their merchandise.

This proceeding is now before the hearing examiner for final consideration upon the 80m plaint, answer thereto, testimony and otlw.r evidence, proposed findings of fact and conclusions of law filed by both parties, and oral argument. The hearing examiner has given eonsic1e,ration to the proposed findings of fact and conclusions submitted by the parties and oral argument in support thereof, and nJl findings of fact and conclusions of law proposed by the parties, respective.ly, not hereinafter specificaDy found or concluded are hermvith rejected, and the hearing examiner having considered.d the record herein and being duly advised in t.he premises makes the form-dng findings as to the facts, conclusions drawn therefrom, and order:

1. Respondent Wren Sales Company, Inc., is an Illinois corporation located at 537 South Dearborn Street, Chicago Illinois. Respondents TuEus Rosenstein, EJeanor Rosenstein and Cedia Seiden are indivjduals and offc.ers of the. corporate respondent Rnd have dominant control of the policies and sales activity.ies of the corporate respondent. 2. Respondents are engaged in the sale and distribution in intersUlte commerce of toys. cameras, eJcctric appliances and other items of merchandise through the use of a plan of merchandising which involves t.he operation of games of chance or lottery schemes when such merchandise is sold and distributed to the purchasing public. There is no eontroveTsy as to the facts in this proceeding. The rf'spondents mailed push eards to members of the public, t.together plan ofwith inst.ruc.tions and circulars explaining respondents' selling and distrilmting their merchandise through the use of said push cards. For example, one of respondents' said push cards contains 37 partially perfornten discs, each bearing a diffprent feminine namp. Concealed in each disc is the price to be, paid by the person selecting the particular name. The names of the purchasers are noted on the reverse of the canl in the space provided, opposite the feminine name appearing on the disc. The push card also has a lfr!!e master sea) within which is concealed one of the feminine .. .. 460 FEDERAL TRADE COM;ISSIOX DECISIONS Conclusions 58 F.

names appearing on the disc. The person selecting the name corresponding with the one under the master seal receives a doll or other item of merchandise allotted to said card. The recipient Df the card, after selling the chances, remits the money eol1eeted to the respondents and receives both the prize to which the winner is entitled and a duplicate item as compensation for services in selling the chances on the card. The cost of the chances ranges from Ii to 39i. The amount of money the purchaser pays for said chance and whether a purchaser rccciYe-s an article of merchandise or nothing for the amount paid is thus determined wholly by lot or chanee. The artic.es of merchandise have a va.lue substantially greater than the price pa,id for ea.,eh chance or push. In forwarding the prizes to the parties selling the card the respondent generally forwards additional push cards, covering other items of merchandise t.o be disposed of in the same manner.

3. The persons to whom respondents furnish said push cards use the same in selling and distributing respondents' merchandise in accordance with the aforesaid sales plan. Respondents thus supply to and place in the hands of others the means of conducting games of chance, gift enterprises or lottery schemes in the sale of respondents' merchandise.

CONCLUSIONS 1. The aforesaid acts and practices of the respondents as herein found are all to the prejudice and injury of the public and constitute unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

2. The law is now firmly established that the practice of seHing goods through the use of sales plans or methods which involve a game of chance, gift enterprise or lottery, including the use of push cards as in the present ease, is contrary to the established public policy of the United States, and the sale and distribution of such devices designed for the purpose of seHing merchandise by games of chance or lottery is violative of the Federal Trade Commission Act. ' C. v. R. F. Keppel Bro., Inc. 291 U. S. 304; Wa,Iter H. Johnson v. C. (C. 78 F. 2d 717: Hofeller (C. 7) 82 P . 2d (147; TC. F. A. Mrrrtocclo Co., (C. 8) 87 F. 2d 501; C. v. A. McLean cf Son, ct aZ., (C. 7) 84 F. 2d 910; Chicago Silk Co. v. C., (C. 7) 90 F. 2d 689; Minter Brothers, et aZ. v. (C. 102 F. 2d 69; Helen Ardelle Inc. et aZ., v. , (C. 9) 101 F. 2d 718; Bunte Brothers, Inc. Y. (C. 7) 104 F. 2d 996; National Candy Co., et al. v. C., (C. 7) 104 F. 2d 999: qtler Candy Co. et aI. v. (C. I0) 106 F. 2d 962; Benjamin Jade v. (C. 7) 123 F. 2d S14; McAfee Candy Co., et aZ., v. (C. 124 F. 2d 104; David KrUzik tla General Merchandise 00. v. (C. 7) 125 F. 2d 351; Douglas Candy Co. v. (C. S) 125 F. 2d 66 Philp Harry Koolish, et al., tla Standard Distributing Co. v. a., (C. 129 F. 2d 64; Louis Keller, et al., dlb/a Ca, e1J Concessfon Company v. ,. ,. WREX SALES CO. , INC. , ET AL. 461 -ins Conclusions 3. In a number of cases in which the facts were identical with the facts in the present case, the Circuit Courts of Appeal have condemned the sale of merchandise by means of a game of chance or lottery as being in violation of the Federal Trade Commission Act: Chicaqo Sille Co. v. (C. 7) 90 F. 2d 689; Benjamin Jaffe , (C. 7) 123 F. 2d 814; David Kritzile t/a General Jferchandise Co. v. (C. 7) 125 F. 2d 351; Philip Harry Koolish, et al. , t/a Stal1dard Distribution Co. (C. 129 F. 2d 64; Seymour Sales Co. v. (C. ) 216 F. 2d 633, 635.

4. The contention of the respondents that prior decisions were based to a great extent upon the fact that children were involved is ,vithont merit. The same contention was raised in Hofeller v. , (C. 7) 82 F. 2d 647 in which the Court held: It cannot be denied that the persuasi,e argument in the Keppel case was based on the fact that the C'customers of the candy were, in the main, children. V/e are not satisfied, howe,er, that the conclusion there reached is not here applicable. It ""il he noted that the Supreme Court emphasized the factor of lottery and chance in determining what constituted an unfair method of competition, and it spoke in general terms, at times without limitation to iustf'" JlC'es where the consumers were children. It is quite impossible to escape the conclusion that where a competitive method employs a device whereby the amount of the return is made to depend upon chance, such method is condemned as being contrary to public policy.

In adc1ition, it must be noted that the respondents have overlooked that portion of thc present record which shows that in many instances the prizes involved were dolls or toys which appealed to children, and that push cards and other material were actual.lly sent through the ma.il to 1 13-year-old girl, indicating respondents were using a. mailing Est not confined to adults. 5. The respondents offered the testimony of two psychiatrists to show that a casual gambler was not a psychopathic personality, and (C. 7) 132 F. 211 59; wolf (C. 7) 135 F. 2d 5(;4; Jaffe v. (C. 7) 139 F. 2d 112; Lee Boyers Candy v. (C. 9) 128 F. 2d 261; Sweets Company of Am('ricn, TJic. '1. r.T. C.. (C. 2) 109 F. 2d 2n Deer, et lll. (C. 2) 1:'52 F. 2d 65; MorlernistiG Candies. Inc. , et al. v. (C. 145 F. 211 454; Chns. A. Rrcwe,. Solis c., (C. i)) 158 F. 2d 74; Consolid.ated Mfg. Co., et (/1., v c., (C. A.4) 199 F. 2d 417; Globe Cardboard Norelty Go., Tftc. . et al. v. (C. 3) 192 F. 2d 144; ther Zitsermrm tin J. M. Howard Co. (C. S) 200 F. 2d: 519; Rernice Feitler, et a!., tla Gardner 0: C01nij(llll/ v (C. 9) 201 I? 20 790; Gay Games Inc., et al., v. (C. 10) 204 F. 2d 197; Sey1n01l. S(//C8 Co., et ai" Y. (C. ) 216 II'. 2d 633; Hamilton Mfg. Co. (C. ) 194 F. 2d 346; Lichtenstein, et ai" v. (C. g) 194 I" . :!d fi07; Bark Mfg. Co" Inc. , et al. v. (C. 9) 194 F. 2d 011; S. Printintl Novelty Co., Inc., et rl1. , v. (C. ) 204 F. 2d 737; Surf Sales Co., et al. v. (C. 7) 5g F. 2d 744. , . . .

462 FEDERAL TRADE CQ:\lmission DECISIONS Opinion 58 F.

offered the testimony of a former City Magistrate of :I ew York, who had presided in the so-caned Gambler s Court, to show that casual gambling was not contrary to public policy. Gndcr the decisions hereinbefore referred t.o, this proffered testimony is not relevant or material to the issue.s in this proceeding. Testimony of witnesses as to how, in their opinion, the question should be determined \yould , in the l(eppelbe useless and improper. "The Supreme Court has case, declared the law on this subject, not for one State or ODe Circuit. only, but for the entire United States Helen Ardelle Inc., et al. v. (C. 9) 101 F. 2d 718 720. ORDER It is ordered That the respondents 'Wren Sales Company, Inc., a corporation, and it.s offcers, and Julius Rosenstein, Eleanor Rosenstein and Celia Seiden, individually 'and as offcers of said corporation, and their respective representatives, agents and employees directly or through any corporate or other device, in connection with , electricalthe ofiering for sale, sale or distribution of toys, cameras as "com-appliances and other articles of merchandise in commerce merce" is defined in the Federal Trade CornmissionAct, do forthwith cease and desist from:

1. Supplying to, or placing in the hands of others, push cards orany other lottery device, either with merchandise or separately, which are designed or intended to be used in the sale of respondents' merchandise to the public by means of a game of chance, gift enterprise or lottery scheme.

2. Selling or otherwise disposing of any merchandise, wares or goods by means of a game of chance, gift enterprise, or lottery scheme.

OPINION OF THE COloHnSSIQX By Anderson, Commissioner:

The complaint in this matter charges respondents "dt h viobtion of the Federal Trade Commission Act by selling and distributingmerchandise through use of sales plrns involving the operation of games 01 chance, gift enterprises 01' lottery schemes. The hearing examiner held in his initial decision that the allega,tions of the complaint '''ere sustained by the e,:irlence, and ordered respondents to cease and desist from the practices found to be unlawfn1. Respondents have appealed from that decision.

he principal nrgnment presented on this appeal is that. a distinction should be made behyeen '"easua1" gambling and ' professional" gnmbling in matters inyoJving the sale 01 merchandise by a ame of 'VRE SALES CO. ET AL. 463 458 Order chance or lottery scheme. Hesponclents argue in this connection that casual" gambling, as distinguished from "professional" gambling, is not contrary to public policy and that a sales scheme which involves only the former is not. an unfair trade practice. They then contend that t.he sale of their merchandise by use of push cards docs not constitute "professionar' gambling sinre the push card is not designed for exposure to t.he general Pllblic and since the seller of the chances does not expect to make a profit.

Respondents' argument ignore. s both the facts of record and the established law on the subject of lottery merchandising. In the first place, the record clearly discloses that respondents distribute their push cards to the general public and that the seller of the chances does expect to make a profit. fmd is, in fact, compensated for his efforts. In the second place, it makes no difference whether the sale of respondents: merc.handise through use of push cards may be characterized as ''' casuar: gambling or "professional" gambling. The unfairness of the method Jies in the fact that it employs thc clemcnt of chance as a factor in the sale of merchandise to the public. This method of selling, as '\yell as the practice of furnishing to others devices designed or intended to be used in the sa.le of merchandise to the public by chance or lottery, have been repeatedly and consistently condemned by the courts during the past 27 years. Federal Trade C01nmi88ion v. R. F. Keppel cD Hm., Inc. 291 U.S. 304 (1934); Federal Trade Comm':"ion v. F. A. JIartoccio Co. 87 F. 2d 561 (8th Cir. 1937) :Benjamin ,Jaffe V. Federal Trade C011mi88ion F. 2d 814 (7th Cir. 1941); Lichtenstein V. Federal Trade Commission. 194 F. 2d 607 (9th Cir. 1902); Ga.y Games, Inc. V. Federal Trade Commission. 204 F. 2d 197 (10th Cir. 1953); Bernard Rosten v. Federal Trade C01111i8.,ion 263 F. 2d 620 (2d Cir. 1909). Respondents' argument on this point is, therefore rejected V\Te hftve considered the other arguments adva.need by respondents and are of the opinion that they are also without merit. Having examined the entire record we find no error in the ruling made by the hearing e.xftmincr during the course of this proceeding, and 've are in complete accord ,,'ith his findings of fact and conclusions of law as set forth in the initial decision.

Respondents' appeal is denied and the initial decision is adopted as the decision of the Commission.

FINAL GIlDEn This matter having been heard by the Commission upon respond. ents' appeal froln t.he hearing examiner s initia.l decisioll and upon briefs and oral argument in support. thereof and in opposition , )/, , . 464 FEDERAL TRADE CQ:\IMISSIOX DECISIONS Syllabus 58 Jj thereto; and the Commission having rendered its decision denying the appeal and adopting the initial decision: It i8 ordered That respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing, setting forth in detajl the manner and form in which they have complied with the order to cease and desist. Ix THE :\IA'l1'ER OF KAISER STEEL CORPORATIO:' ORDER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 7 OF THE CLAYTON ACT Docleet 8027. Complaint, JUlie 1960 OF(7er JIal' , 1.961 Order dismissing ,,-without prejudice complaint charging the second largest producer of st.eel in the western States .with violation of Sec. 7, Clayton Act, hy acquisition of 45% of the voting stock of a substantial competitor. Defore AI". Erluxl1'(l L. Oreel hearing exa.miner. J(1'. R. D. YOlrng and illr. 3/. E. Richardson for the Commission. Thelen, ilfu., 7'in, John,'wn B1'idge8 of San r, raneisco, Calif. lor respondent.

ORDER DISMISSING CO:JIPLAIXT 1,VITHOUT PREJUDICE This matter having come, on fol" hearing by the Commission upon its own motion, and the Commission having determined that the public interest ,,,ill be better served by instituting a new proceeding 11der a different form of complaint and that the complaint in this matter should therefore be dismissed without prejudice: 1 t is o1'dered Tlmt the complaint herein be, and it hereby is, dismissed without prejudice.