counsel for respondent and counsel supporting the complaint, the recommended decision of the trial examiner and exceptions thereto filed by counsel for respondent, and briefs in support of and in opposition to the allegations of the complaint (oral argument not having been requested); and the Commission having made its findings as tę the facts and its conclusion that the respondent has violated the pr visions of the Federal Trade Commission Act:

It is ordered, That the respondent, Kenite Laboratory, Inc., a curs poration, and its officers, agents, representatives, and employe directly or through any corporate or other device, in connection w the offering for sale, sale or distribution in commerce, as "commere" is defined in the Federal Trade Commission Act, of the respondent product designated "Kek," or any other product of substantially sin ilar composition or possessing substantially similar properties, forthwith cease and desist from representing, directly or b implication:

1. That said product is an effective cure for defective heating, d that it can be depended upon to separate the foreign matter from thị water in a boiler.

2. That the use of said product will increase steam pressure in boiler or heating system, create dry steam, or cause an abundang of steam to fill and heat radiators, or that it will otherwise eliminat defective steaming conditions in cast-iron or steel boilers when any of such conditions are caused by mechanical defects in the boilers. 3. That said product will completely remove the scale from eastiron or steel boilers.

4. That said product will correct the inefficiency of a steam-heating system as indicated by its inability to raise steam pressure, water leaving the boiler when the pressure rises, hammering in pipe lines and radiators, water in radiators, ejection of water by air valves, or exces sive fuel consumption, when any of these conditions are caused by mechanical defects of the boiler or heating system.

5. That defective steaming conditions are prevalent in cast-iron or steel boilers.

6. That the use of the testing chemicals supplied by respondent to prospective users of its product can be depended upon to determine whether the water content of a boiler contains ingredients deleterious to the boiler or heating system.

It is further ordered, That the respondent shall, within 60 days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with this order.

Syllabus

IN THE MATTER OF

IRVING HECHTMAN TRADING AS CENTRAL
MERCHANDISE CO.

PLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914

Docket 5257. Complaint, Dec. 5, 1944-Decision, Mar. 31, 1948

re an individual engaged in the competitive interstate sale and distribution of bedspreads, comforters, fountain pens, cameras, clocks, billfolds, and other merchandise

Made use of a selling plan or method under which he distributed to individuals named on mailing lists purchased by him, certain literature and instructions, depictions of various articles, explanatory circulars, order blanks, and push cards for use in accordance with a scheme through which the cost of a chance was determined by the number revealed by a "push,” the person selecting by chance the feminine name corresponding with that eoncealed in the master seal received a "Swiss Weather House" or "weather forecaster," the person securing a certain number received "a genuine leather billfold," and the operator of the card was compensated with one of the "forecasters," following his remission of the sum received from the sale of the chances on the cards; and

Distributed further to operator-recipients who made use of said push cards and material, and remitted to him as aforesaid described, other sales cards which were similar but usually larger, with more partially perforated discs, and prepared for use in the sale of bedspreads, fountain pens, cameras, table cloths, and other merchandise, along with literature describing and illustrating the particular article thus offered; and

ereby supplied to and placed in the hands of others means of conducting lotteries in the sale of merchandise, in accordance with his aforesaid plan involving a game of chance or sale of a chance to procure an article of merchandise at much less than the normal retail price thereof, contrary to the established public policy of the Government of the United States and in violation of the criminal laws, and in competition with sellers unwilling to use sales methods contrary to public policy;

ith the result that many were attracted by said sales plan with its element of chance, in preference to those of his said competitors, and trade in commerce was diverted unfairly from them to him, and with capacity and tendency so to divert trade, to the substantial injury of such competitors;

) Falsely and misleadingly represented, through such statements in his said literature in further pursuance of his sales plan as "extra gift," "extra free gift," "Want a 4-Star Fountain Pen As A Gift?," that the merchandise referred to was distributed free or given without consideration or cost; when in fact it was provided only as compensation to the operators of his said sales plan and was in no instance given without the rendering of services; ith effect of misleading and deceiving a substantial portion of the purchasing public into the erroneous belief that the merchandise referred to was

"free," or given without cost or the rendering of services therefor, at thereby of inducing it to purchase his merchandise, and with tendency 21 capacity so to do:

Held, That such acts and practices, under the circumstances set forth, were to the prejudice and injury of the public and of his competitors, and cre stituted unfair methods of competition in commerce and unfair and decepon acts and practices therein.

Before Mr. John P. Bramhall, trial examiner.

Mr. J. W. Brookfield, Jr. for the Commission.

Mr. Gordon L. Bazelon, of Chicago, Ill., for respondent.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission A and by virtue of the authority vested in it by said act, the Feder Trade Commission having reason to believe that Irving Hechtman, & individual trading as Central Merchandise Co., hereinafter referto as respondent, has violated the provisions of said act, and it appeal ing to the Commission that a proceeding by it in respect there would be in the public interest, hereby issues its complaint, stating charges in that respect as follows:

PARAGRAPH 1. Respondent, Irving Hechtman, is an individual tra ing under the name of Central Merchandise Co., with his office an principal place of business located at 161 West Huron Street. in the city of Chicago, Ill. Respondent is now, and for more than 6 mont last past has been, engaged in the sale and distribution of bedspreads comforts, novelties, pocketbooks, and other articles of merchandis and has caused said merchandise, when sold, to be transported from his place of business in Chicago, Ill., to purchasers thereof at the respective points of location in the various States of the United State other than Illinois and in the District of Columbia. There is now, and has been for more than 6 months last past, a course of trade by respon ent in such merchandise in commerce between and among the various States of the United States and in the District of Columbia.

In the course and conduct of his business respondent is and has been in substantial competition with other individuals and with partnerships and corporations engaged in the sale and distribution of like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of his business as described in paragraph 1 hereof respondent, in soliciting the same of and in selling and distributing the sale of his merchandise furnishes and has furnished various plans of merchandising which involve the operation of

Complaint

es of chance, gift enterprises or lottery schemes when said merdise is sold and distributed to the consuming public. The method ales plan adopted and used by respondent is substantially as fol

espondent distributes, and has distributed, to operators and to bers of the public, certain literature and instructions including, ng other things, push cards, order blanks, illustrations of his said. chandise and circulars explaining respondent's plan of selling meradise and of allotting it as premiums or prizes to the operators of push cards and to the purchasing and consuming public. One of ondent's said push cards bears thirty feminine names with ruled mns on the back thereof, for writing in the name of the customer osite the feminine name selected. Said push card has 30 partially forated disks; each of said disks bears one of the feminine names responding to those on the list. Concealed within each disk is a ber which is disclosed only when the disk is pushed or separated n the card. The push card also has a large master seal or "red "and concealed within the master seal is one of the feminine. es appearing on the disk. The person selecting the feminine name responding to the one under the master seal receives a bedspread or forter. The push card bears the following legend or instructions.

4 PRIZES

LUCKY NAME UNDER LARGE RED SEAL RECEIVES CHOICE OF A BEAUTIFUL

Sales of respondent's merchandise by means of said push cards are ade in accordance with the above-described legend or instructions. id prizes or premiums are allotted to the customers or purchasers accordance with the above-described legend or instructions.

s to whom respondent furnishes, and has fu cards use the same in purchasing, selling, an ent's merchandise in accordance with the afor pondent thus supplies to, and places in the han s of conducting lotteries in the sale of his mercha with the sales plan hereinabove set forth. The u said sales plan or method in the sale of his mercha se of said merchandise by and through the use there said sales plan or method is a practice of a sort whi -established public policy of the Government of t

sale of merchandise to the purchasing public in t - alleged, involves a game of chance or the sale of a chat e of the said articles of merchandise at a price much l mal retail price thereof. Many persons, firms, and o o sell or distribute merchandise in competition with t , as above alleged are unwilling to adopt and use s any method involving a game of chance or the sale of to win something by chance, or any other method that is c public policy, and such competitors refrain there from. Ma s are attracted by said sales plan or method employed by ent in the sale and distribution of his merchandise and the e et of chance involved therein, and thereby are induced to buy a

respondent's merchandise in preference to merchandise offer or sale and sold by competitors of respondent who do not use the sa or an equivalent method. The use of said method by responde because of said game of chance, has a tendency and capacity to unfai divert substantial trade in commerce between and among the varic States of the United States and in the District of Columbia to : spondents from their said competitors who do not use the same or equivalent method.