Mr. JENNINGS. All I would have to do to make a gambling machine out of that machine would be to put a card on it, probably drop some berries of different colors, or capsules that had a number and say No. 3 gives you one dime, and if you did not get any capsule out, why, you wouldn't get the dime, and No. 7 would give you 25 cents, and No. 9 would give you 50 cents, and No. 11 might give you $10 or something else.

I am in the slot machine business, and I do know something about the slot machine business, and I know something about how much it takes away from the public on every machine that we make; and I know, gentlemen, that the public has got the wrong idea.

If you want to pass a law that will put all slot machines out of business for all time to come, pass one that a slot machine must not pay out over 60 or 70 percent, and you won't be bothered with any slot machines any more. don't care where they go. People won't play them. You might get a crazy man to play one once in a while, but they will never make any money.

I would like to get hold of the law for just a moment and see if my interpretation stacks up with your judgment here. I am going to start at line 3 on S. 3357. It says:

As used in this Act the term "gambling device" means any machine or mechanical device or parts therefor designed or adapted for gambling or any use by which the user as a result of the application of an element of chance may become entitled to receive directly or indirectly anything of value.

Now, there must be some line drawn between gambling machines and other machines, and I am thinking that you draw the line right here, that the man through the element of chance must get something of value, through the element of chance. That is what the wording says here, and that is where I think you draw the line here, and I just wondered if my interpretation was all right. I think that that is the only place where you do draw the line.

I think that you have got a lot of other things in there that are quite questionable, when you say about design or something of that kind. Take this table. I don't think this table was designed for for gambling. You gentlemen don't think it was designed for gambling. You talk about design in your law. I don't think the table was designed for gambling. Start a red-hot poker game on it and call the police and see if they don't take the table, and they will even take the water pitcher and the chairs around, and they will put a lock on the building and say that they will lock the building.

Mr. WOLVERTON. I wish it were possible for you to use something else than a congressional table as a basis for that.

Mr. JENNINGS. Congressman, I have a shotgun, and I like to hunt birds, and I have hunted a lot of birds in my time, but I don't feel like I have I have never been charged with murder because I had a shotgun, you understand, and I don't think that you should charge a fellow with gambling until he gambles. That is my thinking. I think that I have taken up all of the time that you gentlemen want me to take up.

I am very much obligated to you for giving me this permission, and I am not in the very best of health, and I would like to stay here and listen to all of the testimony. I think the thing for me to do is to go back to my hotel and if you will say that that is all right, I will leave you with a smile.

Mr. HARRIS. I do want to ask you a question or two before you leave, Mr. Jennings. In the first place, I should like to know if you are a member of the Coin Machine Institute?

Mr. JENNINGS. I was. I was the founder of that institute, and they threw me out of there because I made slot machines.

Mr. HARRIS. Are you a member of any other association?
Mr. JENNINGS. Yes, I am; the one that has come up here.

Mr. HARRIS. You organized another one, did you, when you got thrown out of the first one?

Mr. JENNINGS. No, I didn't have anything to do with it. They asked me to join it.

Mr. HARRIS. What is the name of it-the name of the one that you do belong to?

Mr. JENNINGS. It is the American Coin Machine Association.

Mr. HARRIS. I assume that you wanted, for the record, this letter which is addressed to the clerk of the committee, explaining your position. You want this included in the record; do you not?

Mr. JENNINGS. If it is all right, if the committee wants to include it in the record, it is all right, and if they don't, it is all right. I just simply wrote the letter to let you know that I was willing to appear here and willing to tell you my little story.

Mr. HARRIS. Of course, the committee is glad to accommodate you if you want this information to go in the record, and we would be glad to let it go in there, and if you are not particular about it, there is no need of us increasing the record.

Mr. BECKWORTH. You have no objection to its being included in the record?

Mr. JENNINGS. No.

Mr. BECKWORTH. Without objection, it will be made a part of the record.

(The letter is as follows:)

O. D. JENNINGS & CO.,
Chicago, Ill., May 1, 1950.

Subject: Statement against bills S. 3357 and H. R. 6736.
Hon. ELTON J. LAYTON,

Clerk of Committee on Interstate and Foreign Commerce,
House Office Building, Washington, D. C.

HONORABLE SIR: I am the founder of O. D. Jennings & Co. In the late fall of 1906 we started in business in a small way and we were incorporated in the spring of 1907. In the year 1920 the corporation was given my name, and I have been active in the business from the time it started to date.

One of my reasons for asking to testify before the Interstate and Foreign Commerce Committee holding hearings on S. 3357 and H. R. 6736 is that I want the committee to have first-hand information from someone who has knowledge of the manufacture and sale of coin-controlled devices, not only of the gaming type but of other types, and who has been directly associated with and has kept abreast of the activities of the business for a great number of years. I shall be pleased to supply, to the best of my ability, information the committee desires and I shall attempt to answer all questions put to me.

I would like to start out with the committee by showing them photographs and circulars of coin-controlled machines other than the gaming type; such as milk and beverage dispensers, cigar and cigarette vendors, vendors for shelled nuts and small confections, personal weighing scales, phonographs, parking meters, etc., which we have built in the past, or which we contemplate building in the near future.

A coin-controlled machine of any kind must have a coin intake known to us as a coin chute. Whether a machine dispenses or vends merchandise or money automatically or otherwise, it must have a dispensing unit or a delivery unit. Since it has a delivery unit, in the majority of cases, where it requires as much

as 2 or 3 seconds to make delivery or the merchandise is bulky, it must have a timing unit. When a coin is dropped into a machine it reaches a contact point, before the machine can be put into operation, either by pushing a button, pulling a handle, or starting a motor. These and many other similar features are the same in both gaming machines and in the other machines mentioned above. In other words, the principles and many parts are the same in both the gaming machines and in other coin-controlled machines. This being the case, I should like to get the thinking of the committee as to what would happen to all coincontrolled machines in the event the proposed legislation as now written is enaced into a law.

I also want to advise the committee as to the type of business people who purchase coin-controlled gaming machines. One would imagine after reading items in the newspapers and in other publications in connection with chance devices, that organized gambling syndicates are the principal buyers of slot machines. Our records will prove that this is not the case. I should like to take just a few moments of the committee's time to glance at one or two of the news items for the purpose of showing them that, in my opinion, the news items are not based on facts.

I would like to discuss with the committee the proposed legislation and see whether or not my interpretation parallels that of the committee. I would like to discuss with the committee for a short period the Federal tax on coin machines of 1940 and 1941.

If I have the time, I would also like to refer to a recent law passed by the State of Mississippi, which provides "That coin-operated machines which do not return to the operator anything but additional free games or free plays, shall not be construed to be gambling devices." I would also like to show the committee the draft of a bill prepared by the attorney general of the State of California which is proposed for adoption as an amendment to the Constitution of the State of California, legalizing and licensing gambling.

I have many other subjects I would like to talk over with the committee, but I believe by the time I have answered the questions the committee puts to me, and I have fully covered the subjects herein mentioned, I will have taken up all the time allotted to me.

Very truly yours,

O. D. JENNINGS & Co.,
O. D. JENNINGS, President.

Mr. HARRIS. Now, I wanted to refer to this statement that is made in the letter:

I would like to start out with the committee by showing them photographs and circulars of coin-controlled machines other than the gaming type; such as, milk and beverage dispensers, cigar and cigarette vendors, vendors for shelled nuts and small confections, personal weighing scales, phonographs, parking meters, etc.

Mr. JENNINGS. That is right.

Mr. HARRIS. Now, do you have reference there that many parts are interchangeable?

Mr. JENNINGS. Well, I will tell you. You try to do this in manufacturing anything, I don't care how many you make, you try to use the same screws and the same nails and the same holders and the same everything in every machine, and the same lock and the same everything. If you didn't you got a storeroom bigger than your place. Mr. HARRIS. Do you make all of these machines that you refer to? Mr. JENNINGS. I have made them all or I think I have made all of them.

Mr. HARRIS. Are you manufacturing a good many of them now? Mr. JENNINGS. No; we are revamping quite a few, and the conditions in connection with metal has changed since the war, and most all of them have to be revamped.

Mr. HARRIS. Do you mean by this that to make this type of a machine you use the same mold as you make in the slot machines?

Mr. JENNINGS. Not the same mold, but you use the same screw and you use the same lock and you use the same coin chute and you use the same timing mechanism and the same escapement mechanism.

Mr. HARRIS. In other words, many of them are interchangeable? Mr. JENNINGS. They are the same parts.

Mr. HARRIS. The same parts?

Mr. JENNINGS. They are the same; yes. If you are going to put a coin chute on one of these meters that you buy, an ice box or a television, you will use the same coin chute, or some one similar to the one that I use on the slot machine. If you are going to put a counter, which you would call a meter, on there to count the coins that go in there, you would use the same make that I would use. Mr. HARRIS. That is all. Thank you.

Mr. BECKWORTH. Thank you very much, Mr. Jennings.

The next witness we shall have is Mr. Herbert W. Bye, representing the Railroad Show Owners Association. You may proceed, Mr. Bye. STATEMENT OF HERBERT W. BYE, REPRESENTING THE RAILROAD SHOW OWNERS ASSOCIATION, CHICAGO, ILL.

Mr. BYE. Mr. Chairman, I have here my statement which I would ask permission to be made a part of the record, if the committee is willing

Mr. BECKWORTH. That will be done.

(The statement is as follows:)

GENTLEMEN: My name is Herbert W. Bye, and I am an attorney at law of the firm of Bye, McNeill & McElroy, of Chicago, Ill., and I am appearing before this committee, as secretary and attorney for the Railroad Show Owners Association, and as attorney for clients whose names are shown at the end of this statement, and other firms engaged and connected with the outdoor amusement business, for the purpose of voicing their opposition to the passage as now written of H. R. 6736 and Senate bill 3357, relating to the transportation of so-called "gambling devices."

First, allow me to state that my clients have always understood and have been led to believe, by press reports, by statements of Members of Congress, and by reports of all proceedings involving these bills, that the real purpose of Congress was to prohibit the transportation of so-called slot machines, in order to control and eliminate the activities of organized gambling, or gambling on a commercialized basis, whereby those operating such activities can, or might be able to exert undue influence politically or financially, or both, and who, because of the wide extent of their activities, and their influence, could not be controlled by the State, county or city law-enforcing agencies. In other words, we believed, and still believe, that the real purpose of this legislation is to eliminate the so-called slot-machine racket. With this purpose, we are heartily in accord, and have absolutely no opposition to any legislation that will accomplish this result.

None of my clients, nor any one engaged in or connected with the legitimate outdoor amusement or entertainment business, to our knowledge, have ever been, are now, or have the slightest intention of ever being, operators of slot machines or similar gambling devices, or engaged in or connected with any form of commercial or organized gambling.

Unfortunately, as the proposed legislation is now written, the strict enforcement of the same, if passed, would seriously affect the business being operated by my clients and the conduct of the whole outdoor amusement and entertainment business for reasons which I wish to now point out to you.

The outdoor amusement and entertainment business consists of furnishing outdoor amusement and entertainment to all of the public, in every State of the United States. This is done by the producing and holding of State fairs, county fairs, local city fairs and celebrations, carnivals, and bazaars sponsored by the numerous posts of the American Legion, Veterans of Foreign Wars, American Veterans, labor unions and organizations, fraternal orders, chambers of

commerce, churches, charities, and others, at which funds are raised for the worthy purposes of these organizations.

In a large majority of instances, this amusement and entertainment is supplied by traveling carnivals, circuses, and other mobile units, which travel from State to State, and city to city. It is also furnished by permanent amusement parks located in all parts of the country.

These carnivals, circuses, amusement parks, and other enterprises furnish outdoor shows, thrill rides, educational exhibits, and other things for the amusement and entertainment of the general public, and this procedure has been followed in this country for more than 100 years, and has become a part of the entertainment life of our people, to many of whom, especially those living in rural communities, this form of relaxation is the only one they can afford or is available to them. In addition to these shows and rides, there always has been included the operation of concessions whereby those attending the fair, celebration or Legion or other sponsored event may, with a small expense, play the concession games, and in return have the opportunity of obtaining some article of merchandise as a prize.

To indicate to this committee the extent of this outdoor business, there is atached hereto an exhibit showing approximate figures obtained through a recent survey of the outdoor show business made by the Billboard, which is a national magazine devoted almost exclusively to the outdoor show business. These figures, I believe, reflect approximately the present magnitude of the business engaged in by my clients, and the others engaged in this industry, and by an examination of which you can readily ascertain that such business is substantial, and one that should not be destroyed or unduly hampered. The method of operation is as follows:

The State fairs, county fairs, veterans' organizations, labor organizations, fraternal organizations, and others listed above, enter into contracts with the owner of a carnival, circus, or other outdoor amusement unit, to furnish the shows, rides, and concessions for the fair, celebration or sponsored event. In return for this contract, the show agrees to pay to the fair or other sponsoring entity an agreed percentage of the gross receipts, after admission taxes, received by the show at the particular location, and in addition pay either an agreed amount for space occupied by the concessions, or a percentage of the concession receipts, or a percentage of the net profits received from the operation of each concession. In turn, the carnival or show operator has agreements with the individual operators of various concessions whereby the concession operators pay to the show an amount for each concession, based either on a flat rate for the amount of space occupied, or on a percentage basis. The difference between the amount paid by the show to the fair or other sponsor, and the amount received from the concession operator by the show constitutes the show's revenue from the concessions. During the 1949 season, the members of the Railroad Show Owners Association, who operate carnivals traveling on more than 400 railroad cars owned by them, paid to various fairs, veterans' committees, labor organizations, fraternal orders, chambers of commerce, and other sponsors, a total sum in excess of $1,000,000, and it is estimated that the remainder of the outdoor show operators paid to similar organizations at least another $3,000,000. These amounts include percentage on receipts from shows, and rides, as well as concessions.

The fact is, and it can readily be established, that, in order to operate profitably (which very few of the carnivals have done in the past 2 years), they must have the income received from the operations of concessions, and they cannot operate at all if this revenue is not received.

The concessions are operated in tents purchased by the concession operators from tent manufacturers, and this item alone runs into hundreds of thousands of dollars each year.

The midways and concession tents are lighted by mobile Diesel generators, and the show owners have over a million dollars invested in such equipment, and each year purchase thousands of dollars of new lighting equipment and parts.

In addition, the outdoor show business has collected many millions of dollars for the Government in admission taxes, paid millions in wages, and also pays to the various States sales taxes, license fees, State admission taxes, gasoline taxes, income taxes, and many other items, and has given employment to thousands of workers, who in turn pay their taxes on wages, etc.

The foregoing is submitted for your consideration to convince you that the outdoor show business is a substantial one, and certainly cannot be considered in any way as being carried on for the purpose of commercialized or organized gambling.