Evening star., 1939-02-26
Trade Commission Defends
Penny Candy Lottery Fight
Right to Bor Practice to Be
Defended in Court

ters of distinguishing color, which
entitle the purchaser to a prize of
larger piece of candy. and those
in which some of the pieces of candy
have pennies concealed in them.
A recent decision by the Third Cir
cult Court of Appeals, upholding an
F. T. C.. order against such practices
by Philadelphia candy company,
denounced this sort of selling scheme
in vitrolic terms.
1T is, so to speak" the court de-
clared, "a lottery with trimmings,
and one might observe that lottery
by any other name will smell as
bad.
This selling by lottery seems to
have prevailed largely where it least
should have prevailed, in the sale of
penny candy to little children.
The practitioners of this type of
merchandising have followed that
ancient precept of the sea, women
and children first except that they
pervert instead of protect weakness
Taking candy from children has
never been highly regarded. Fore
ing it upon them through their
possession of an instinct that the
adult world recognizes and has al
ways recognized as at the bottom of
many of its troubles, seems to us
shameful"
The court said the scheme en-
couraged children to try to get
something for nothing" pointing
out that the consequences of too
enthusiastic a pursuit of this prin-
ciple ARE known to judges in their
official capacities"
Justice Stone delivered the Su-
preme Court opinion that estab-
llshed the lottery selling schemes as
unfair methods of competition with
IN jurisdiction of the F. T. c. in
1884, declaring that this COMPETE
tive method is shown to exploit con-
sumers, children, who are unable to
protect themselves.
He took cognizance of commits
sion findings then that the sale OF
candy by lot or chance "is a lottery
or gambling device which encour-
ages gambling among children" and
that many manufacturers of COM
peting candies refuse to engage in
the distribution of the break and
take type of package because they
regard 1t as a reprehensible en-
couragement of gambling by chill
dren."
In the Bunte case, the F.. T. C,
found that sales of the break and
take assortments constituted ap-
proximately % per cent of the COM
pany's total of $314,4OO in penny
candy sales in Illinois during 1896.
1t also said that 48 other manufac-
turers. shipping annually more than
$l,44O.OOO worth Of straight" candy
into Illinois, found that their fail
ure to carry chance assortments was
a decided handicap in obtaining
business in that State.
Regulating Power Upheld.
Commission attorneys SAID the
authority of a Federal agency to
regulate intrastate business prac-
tices that have a direct burdensome
effect on interstate commerce was
upheld by the Supreme Court as
applied to the Interstate Commerce
Commission in the famous "Shreve-
port cases" some Is years ago, and
they felt confident the courts would
uphold application of this theory
to the candy business in Illinois.
1t was emphasized, however, that
the commission did not consider
most small, local business could be
shown to have a direct bearing on
interstate commerce. The commits
sion has investigated many COM
plants along this line previously
without finding that the facts SUBJ
stantiated Federal action, it was
said.
The commission does no Spying
or initial investigation in its efforts
to stamp out the perennial lottery
selling schemes, officials said, but
acts only after investigating specific
complaints that the methods of some
particular company constitute un-
fair competition.