standing that that would likely meet the problem to which you refer? Mr. BATT. I am rather certain it would. Mr. O'HARA. Mr. Batt, there is one point that is not clear to me. You operate what is called the merry-go-round, is that right? Mr. BATT. That is a flying horse or carrousel. That is a riding device that has been used, I suppose, for a century or more, sir. Mr. O'HARA. In what way, if any way, is it connected with gambling devices? Mr. BATT. It is a mechanical device. If, in the catching of the brass ring, you give the child or party catching the brass ring a free ride, you would be giving them the value of something, and very exact interpretation of the Senate bill 3357, according to my interpretation, I would say that you are receiving the value of something and you violate a Federal law. Mr. O'HARA. What I was trying to get at was just what the operation was, so that we would understand it and have it in our minds. Mr. BECKWORTH. That is all, Mr. Batt. Thank you very much. Mr. BATT. Mr. Chairman, since completing my statement, I have been given the opportunity to read the amendment to which the chairman referred, and which was submitted by Herbert W. Bye, attorney for clients engaged in or connected with the outdoor show business, and I approve of the amendments. (The amendments referred to appear following Mr. Bye's statement.) Mr. BECKWORTH. At this point in the record, I should like to insert the following communications: A letter from Mr. Edward W. Welliver, of the American Trucking Associations, dated May 2, 1950. A letter from Nathan Cohn, of the Western Showowners Association, dated April 27, 1950; The prepared statement of George Jenkins, dated May 4, 1950; Statements by Robert E. Webb, for the National Carloading Corp.; Roland Rice, for the Association of American Railroads; Thomas J. McCloy, for the National Veterans Council; and the reports from the Federal Trade Commission, dated May 1, 1950; the Interstate Commerce Commission, dated May 2, 1950; and the Department of State, dated April 28, 1950; and May 3, 1950. (The communications referred to are as follows:) Mr. ELTON LAYTON, AMERICAN TRUCKING ASSOCIATION, INC., House Interstate and Foreign Commerce Committee, MY DEAR MR. LAYTON: S. 3357, to prohibit the transportation of gambling devices in interstate commerce, meets with the approval of this organization except for one very minor detail. * * * "" Section 5 makes it unlawful "to manufacture, recondition, repair, sell, transport, possess, or use any gambling device in the District of Columbia In each of the cases described by these seven verbs, except in the matter of "transport" the party so doing could not help but know that the object in interest was a gambling device. But suppose that some device or other was handed to a truck or rail operator in Chicago, for transportation into the District of Columbia, and that it was crated. If the actual article carried should be termed a gasoline pump on the bill of lading, but in reality should be a slot machine, the carrier, no matter how innocent, would have violated the law. Knowledge as to what he carried should be a prerequisite to guilt in this case. Therefore, I wonder if you will be so kind as to advise the committee as to this oversight, which can easily be cured by striking the word "transport" before the word "possess", and the word "or" after the "possess", insert a comma after the word "use" and insert immediately thereafter the phrase "or knowingly transport". This would prevent any possible miscarriage of justice, which might result from the other verbiage. Very truly yours, EDWARD M. WELLIVER. WESTERN SHOWOWNERS ASSOCIATION, HOUSE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, House of Representatives, Washington, D. C. GENTLEMEN: It has been brought to my attention that Senate bill 3357 is being heard by your committe on Thursday and Friday, May 4 and 5. I would like at this time to file this statement in opposition to said bill. This organization represents the carnivals and circuses on the west coast, their employees and concessionnaires. Senate bill 3357 could be interpreted in such a manner as to prevent the interstate commerce of many concessions which travel with carnivals. These concessions, while not gambling concessions, could in some instances come under the provisions of Senate bill 3357. Carnivals provide relaxation, employment, and income, consequently it would be detrimental to a great number of people and business concerns should this bill be passed. They provide a great amount of income for such organizations as the Shriners, the Sciots, and other fraternal groups. Carnivals provide income for fairs, veterans organizations, fraternal groups, fire departments, churches, and hundreds of organizations which use carnivals as a means of raising money for worthy causes. Carnivals are a mode of entertainment which is enjoyed by the entire family. Fathers, mothers, and offspring go to carnivals together to enjoy clean, healthy entertainment. The family can be entertained as a unit thereby advancing family ties. Hundreds of carnivals travel throughout the United States. These shows all pay taxes, their employees own homes, pay rents, and live in all of the States during the off season, or winter months. Many shows own their own winter quarters and employ men and women in their shops the entire year. When a carnival plays a town the show patronizes local hotels, restaurants, stores, etc. That show purchases its supplies from the local butchers, bottling plants, garages, printers, bakers, etc., and uses the local banks, repair shops, laundries, barbers, and other places of business. The show pays local licenses, rents lots, uses utilities, and usually plays under the auspices of a local group, adding to that organizations treasury. The show hires extra help in each town giving local men employment. Without carnivals small fairs would have nothing with which to draw people. The carnival is necessary to the color and excitement needed to entertain at all fairs and celebrations. Americans have millions of dollars invested in carnivals and they pay millions of dollars per year in taxes to the United States Government. This bill, was I understand, introduced to prevent the interstate movement of slot machines. I do not appear for or against slot machines as carnivals do not carry them, but I am asking that the bill be so amended so as to exempt carnival and circus devices from this bill. Should this bill pass in its present form, many American citizens will loose lifetime savings and thousands of American citizens will be put out of work. Thank you for your consideration and I trust that you will amend this bill so as to prevent this unnecessary injury to the outdoor amusement industry. Very truly yours, NATHAN COHN. STATEMENT OF GEORGE JENKINS, VICE PRESIDENT, LION MANUFACTURING CORP. Mr. Chairman and members of the Interstate and Foreign Commerce Committee: My name is George Jenkins. I am speaking as a vice president of the Lion Manufacturing Corp., an Illinois corporation, which manufactures coin-operated amusement games such as coin-operated pin-ball games, coin-operated bowling games, coin-operated consoles, which are a form of slot machines. From time to time we have also been engaged in the manufacture and sale of coin-operated beverage dispensers. We have made coin-operated devices continually during the last 20 years with the exception of the war period, when all of our efforts were devoted to war production and in which period our company secured Army and Navy E awards. We have large investments in machinery and equipment that have been placed in jeopardy by the proposed legislation. The jobs of almost 2,000 workers in our plant and subsidiary plants are also at stake, as well as the jobs and investments of many distributors, operators, and location owners and their employees throughout the country who derive income from our products. I must first say that our company is most confused by what is intended to be covered by the definition appearing in the suggested legislation. We cannot ascertain whether it is intended to cover all coin-operated products such as our pin-ball games and bowling games. Based upon our previous experiences, the reference to "anything of value" would be subject to many different interpretations. There are a substantial number of court decisions throughout the country holding that the free play games that are made available as part of the amusement features of pin-ball games are entirely legal. I would like to call your attention to the case of Washington Coin Machine Association, et al., v. Callahan, et al. (60 App. D. C. 106, 48 F. (2d) 1016). I would like permission to read just one sentence from the Washington Coin Machine Association case: "The decisions of the courts of the different States determining what character of 'slot machines' are and what are not gambling devices are far from uniform, nor are they always helpful in the problem we have because of the diversity of statutes under which they are applied." * * I am not a lawyer but realizing that the above decisions and many other decisions find free play games to be legal and also realizing that there are other cases that hold free play games illegal, I do not know how we could reach any positive conclusion as to the legality of all our coin-operated devices. I might add that one of our distributors at one time gave us a copy of an opinion by the Minnesota attorney general which pointed out that * The decisions of the supreme courts of various States are divided on the question as to whether the allowing of a right to a so-called free play constitutes the return of a thing of value so as to make such operation a lottery or a gambling transaction. When you consider the tremendous burden that would be upon us in attempting to draw fine distinctions the courts cannot always agree upon, it must be apparent that the proposed definition is unworkable. I might also give another simple example of the problems that we would be confronted with if either the Johnson or Preston bills ever became law. We were recently refused a license by the commissioner of licenses of Chicago on one of our bowling games because the commissioner apparently believed that such game might possibly be used for gambling and therefore within the prohibition of a city ordinance. After taking the matter to the courts, we succeeded in securing an injunction permitting the use and operation of such game throughout the city of Chicago. We sincerely believe that the definitions of the proposed legislation would be subject to numerous and varied interpretations. Again referring to the definition, I wonder how many of you gentlemen happened to notice the article in Friday, April 28, 1950, Washington Times-Herald referring to the Solicitor of the Post Office Department in connection with fish derbies having stated, "It is the position of this office that although skill is undoubtedly present in fishing in the selection of one's equipment and the place to fish, in the handling of one's equipment, et cetera-yet the size of the fish caught is a matter of chance." Therefore, isn't the rod and reel a mechanical device upon which the fishermen may be entitled to receive something of value? We would like to call to the committee's attention that the four Supreme Court of the United States decisions referred to by Mr. Preston as being definitive of a thing of value are unknown to us and certainly we in the industry and our attorneys would be aware of any such decisions and we do not think the committee should expect or take for granted that such definite legal interpretations exist when they do not. I think that every member of this committee during the course of the discussion last Friday became fully aware that the present definition can be subject to innumerable different constructions. Another section of the Johnson bill that appears to be entirely unworkable is the provision providing that the legality of a device must be certified by the governor of a State to the Attorney General of the United States and published by the Attorney General in the Federal Register before the transportation of that device becomes legal. As we understand it, if such governor vacillates or refuses to certify a device, no matter how legal, then the same is automatically presumed to be illegal. Our business encompasses novelty phases whereunder games change in design as often or much more often than styles do in clothing, and if we were compelled to wait for long periods of time before each certification is made, any potential sales market would be largely destroyed. There are many, many games made not only by ourselves but by our competitors that reach the market at very frequent intervals and there would be a tremendous burden upon a State governor and any fact finding body that might be appointed by him to continuously examine each and every game as the same is presented. In this connection how can we even ship a sample game to the governor or his appointees without violating the law because as we understand it the mere act of shipping the same would be illegal until such game is first certified. It certainly must seem unfair that if a governor is slow in acting or refuses to act that we should then become criminals through no fault of ours by reason of this presumption of illegality. I might say, to use the expression of one of the committee members, that the tendency will be for most governors to just plain "pass the buck" and do nothing. How can a legitimate manufacturer stay in business under such conditions? With the uncertainty of the definition and not knowing whether a Governor may certify, and when if ever, it seems to us from day to day we have no way of knowing whether we are law-abiding citizens or criminals. Furthermore, as we see it, even though we ship a game which is perfectly legal a subsequent illegal use would probably make us criminally liable. It is common knowledge that many people play games solely for amusement while others may wager something or other of value with another player which would probably make such device illegal because of the use it was put to. That isn't only true of coinoperated games but all other games and it seems that such complete regimentation of the entire people and all their amusement habits should not be given support. We have been told by some of our public-carrier representatives with whom we have discussed the proposed legislation that they would hesitate transporting our games without the Governor's certification first taking place. I presume therefore that each carrier would probably want to inspect the actual shipment prior to transporting the same so as not to be unwittingly subject to the penalties of the act. Again I ask could we do business under such conditions? In connection with the alleged assumption that the coin-machine industry is a tool of any organized crime syndicate, are we to believe that the approximately half million local businessmen in communities throughout the entire country are criminally participating in a Nation-wide scheme involving the operation of a wide variety of types of coin operated amusement machines. Actually these machines are installed as the trade practice of the local operator in operating equipment on a share-the-earnings basis with the local business establishments. I know as director of sales for our company that our sales are not made to or dependent on any alleged national crime syndicate; to the contrary they are all to independent businessmen known and respected in their communities. In connection with these rumors about a national crime syndicate our company welcomes any investigation of its methods of doing business. Most slot machines are operated in not-for-profit clubs. Most pin games and other amusement devices are in the hands of small-business people. These are facts which cannot be disputed. I hope the committee will give consideration to the great power and responsibility that will rest in the Attorney General's office in attempting to determine whether each and every device may or may not be within the definition of this legislation. This responsibility will exist every time a Governor fails to certify which we believe will be most often. It looks like we would have to be entirely dependent on the whim of the Attorney General's office. The statement was made by Mr. Plaine that the Government is not an ogre. A fine differentiation would have to drawn as to whether or not it is an ogre if we had to live from day to day waiting for governmental rulings. Please remember that our business existence and the livelihood of many people are at stake. STATEMENT BY ROBERT E. WEBB FOR NATIONAL CARLOADING CORP. My name is Robert E. Webb. I am a member of the law firm of Norman, Quirk & Webb, which has offices in the Continental Building, Washington, D. C., and in the Kentucky Home Life Building, Louisville, Ky. This statement is made by me as attorney for the National Carloading Corp. My purpose is to point out certain ambiguities in the bill which, as a practical matter, will create insurmountable difficulties for companies engaged in transporting commodities in interstate commerce. The National Carloading Corp. is a freight forwarder whose rates, charges and practices are subject to regulation by the Interstate Commerce Commission under part IV of the Interstate Commerce Act. It is engaged in the transportation of less-than-carload and less-than-truckload merchandise shipments between practically all points of the United States, including the District of Columbia. This type of forwarder is a common carrier at common law. As attorney for the National, I do not appear either for or against the merits of the bill in question or of its objectives. As stated, my purpose is to attempt to show that by reason of the ambiguities and broad language of the bill it would be difficult, if no impossible, for a transportation agency such as the National or any carrier to comply with the bill in its day-to-day work should it be approved by Congress. Moreover, the prohibitions in S. 3357 are inconsistent with the duties imposed upon freight forwarders by section 404 (a) of part IV of the Interstate Commerce Act and other provisions of that act. Under the terms of S. 3357, a bill to prohibit the transportation of gambling devices in interstate and foreign commerce, as passed by the United States Senate on April 19, 1950, it is unlawful knowingly to transport or cause to be transported in interstate or foreign commerce any gambling device, and so forth, except to a State where the use of such device is legal as certified by the Governor of the State to the Attorney General of the United States and published in the Federal Register. Section 5 of the bill makes it unlawful to transport a gambling device, as defined in the act, in the District of Columbia and the Territories and possessions of the United States, and so forth, knowingly or otherwise. The definition of a gambling device in the bill is ambiguous and rather broad. It is defined as a machine or mechanical device designed or adopted for gambling or any use which will enable the user to become entitled to anything of value as a result of any element of chance. As shown, S. 3357 makes it unlawful to knowingly transport in interstate or foreign commerce a mechanical device that may be used in a game of chance which may result in the user receiving anything of value. The qualifying adverb "knowingly" does not apply to the transportation of such devices in the District of Columbia or Territories, and so forth. Under the terms of the bill it would be necessary for a carrier to determine whether the device would be used to enable the user to obtain something of value as the result of any element of chance. The mere transportation of a game of chance is not unlawful. Such is the view of the courts in construing similar statutes. (See Dills v. Com., 287 Ky. 582; 54 SW (2) 543.) Under the proposed bill it would be necessary for the National or any common carrier to determine whether a mechanical device tendered for shipment was adapted for gambling and that it would be used for such purpose. It would result in an unreasonable requirement by the National in policing the enforcement of the proposed law not only in determining the use of the device, but the legality of such devices in the respective States. For example, if a mechanical device was tendered to an agent of the National, it would be difficult for the agent to determine whether the use of such devices is unlawful in a particular destination State. The courts themselves are divided on this question. Some courts have held that a mechanical device which involves skill to operate does not fall within the prohibitions against the sale or use of such devices. (See Steely v. Conn., 291 Ky. 554, 164, SW (2) 977.) One of the fundamental infirmities from a carrier's standpoint in the bill is the fact that it does not appear to prohibit the transportation of a gambling device as defined in the bill, unless such device is used as a result of the application of any element of chance in which the user is entitled to receive directly or indirectly anything of value. A moment's consideration should convince the members of the committee that it is unreasonable to expect a transportation agency to determine whether a coin-operating machine, for example, will be used as a game of chance in which the user is entitled to anything of value. |