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. You might at this point well ask why the outdoor show business, as it is conducted, is in any wise interested in or why it should be opposed to H. R. 6736 or Senate bill 3357. I trust that the following will properly set forth our position. Although none of my clients, nor any one else engaged in the outdoor show business, is engaged in or connected with organized or commercial gambling, nor do they own or operate so-called slot machines on any part of their business, the concessions which are operated by them might, because of the wording of the proposed legislation, be construed as gambling devices as defined in the bills under consideration by your committee. A number of these concessions, which have been used at fairs and celebrations for decades, and with which you are undoubtedly familiar, are machines, or mechanical devices, not, in the language of the bills "designed or adapted for gambling," but might at some time, under a strict interpretation of the definition, be considered designed for "any use by which the user as a result of the application of any element of chance may become entitled to receive, directly or indirectly, anything of value." Some of the concessions referred to consist of the following: Fish pond: Where the public hooks an artificial fish out of a small pond, and receives a merchandise prize indicated by the number on the fish. Merchandise wheels: Where the holder of the number corresponding to the number at which a spinning wheel comes to rest, receives a merchandise prize. Rabbit game: Where the public by bouncing a rubber ball into a receptacle causes an imitation rabbit to advance up an incline and the person whose rabbit first reaches the top is entitled to a merchandise prize. Hoop game: Where the patron tosses hoops over the various pieces of merchandise located in the center of the enclosure and is entitled to the merchandise so encircled (the old game of "The cane you ring is the cane you win"). Bingo games with which you are all undoubtedly familiar. Also other similar concessions of the same general nature. To show how the law, as now written would apply to two of the above games, I submit the following: Fish pond: In this concession there are imitation fish floating around in water agitated by a motor. The player pays 10 cents to catch one of the fish with a hook on a small pole. This equipment is used so that the game is more attractive and entertaining to the public. On the bottom of the fish is a number, which entitles the player to a designated piece of merchandise. Element of chance mechanical device-article of value received-under present wording is "gambling device"-2 years in jail. Now instead of fish in water agitated by motion, use paper cut in form of fish. Player pays 10 cents for privilege of picking up one fish from a table on which the fish are placed. Same number-same prize-same player-same 10 centssame element of chance-no mechanical device, so no violation. Bingo: Numbers are printed on celluloid balls in container which blows balls in air and operator selects one at a time. This device is used to insure the public that the operator has no chance to draw any desired number-player pays 10 cents per card-gets Bingo-receives doll-element of chance-article of value received-mechanical device-violation-2 years in jail. Now numbers are written on pieces of paper and placed in hat and withdrawn by operator. Same player-same 10 cents-same winning card-same prizesame element of chance-no mechanical device, so no violation. The firms manufacturing the merchandise so given away as prizes do a volume of business with the outdoor show operators running into millions of dollars each year, all of which would be lost if these concessions were not allowed to operate. The show owner pays sales taxes or occupational taxes on all such merchandise so distributed in the States where such taxes are 'n effect. Many of the concessions described, consist of machines, or mechanical devices, and we must admit that the player, as a result of some element of chance may become entitled to receive an article of merchandise, which is a thing of value. Also, because of the nature of the outdoor show business, these concessions must necessarily be transported from State to State. Therefore, under the present wording of the proposed legislation, the concession operator, the show owner, the State or county fair board, the American Legion, the labor organization, the chamber of commerce, the church, or the sponsoring unit, could all be charged with a violation of this law and be subject to fine or imprisonment. To strictly comply with the law as now written, all these concessions, which have been operated in this country for decades, and which have become a part and parcel of the State fair, county fair, or other celebration enjoyed by the public, would have to be discontinued, and, as we have pointed out before, without them the outdoor show business cannot operate, and millions of dollars would be lost to business firms, wage earners, fairs, veterans' committees, and the others. Surely this is not the intent of this legislation. The foregoing may be lengthy and redundant but do you really think that the outdoor show business is any part of or connected with organized or commercial gambling? Should its activities, as above outlined, be stopped entirely or curtailed by this legislaton? We respectfully state that such certainly is not the intention of Congress. In all publicity, in all statements made by Members of Congress, and by this committee itself, this legislation is referred to as the slot-machine law. We submit that it should be so worded that it pertains to slot machines, and does not include the legitimate operation of the outdoor show business. In this connection, we call the attention of this committee to the wording of the definition of "gambling devices" in the Internal Revenue Code pursuant to which the Government collects a tax on slot machines. This wording is as follows: "UNITED STATES INTERNAL REVENUE CODE, SECTION 3267 "b. Definition: * * * (2) so-called slot machines which operate by means of insertion of a coin, token, or similar object and which, by application of the element of chance, may deliver, or entitle the person playing or operating the machine to receive cash, premiums, merchandise, or tokens." We also call attention to a portion of the analysis of the provisions of the bill, submitted to the Senate committee when it was considering Senate bill 3357. ANALYSIS OF THE PROVISIONS OF THE BILL "Section 1: This section defines 'gambling device.' A definition would probably have been unnecessary if the problem were limited only to describing a machine or mechanical device (or parts thereof, because they may be shipped unassembled or as parts for replacement or repair), 'designed or adapted for gambling.' The meaning of 'gambling' is well understood in every jurisdiction, and no definition of it is required. However, there are a number of types of the coin-operated machines which incorporate, along with the gambling, some element of skill or return of fixed value which in the past has been argued as distinguishing them from outright gambling machines. The States have usually rejected such evasions in court decisions or by statutes drawn to meet the situations. Accordingly, the definition has been expanded along the lines of the prohibitions made by the States, incorporating the basic distinguishing element that differentiates gambling devices from legitimate vending machines, namely, the application of any element of chance in their use by which the user may become entitled to receive anything of value. (Cf. Federal tax statute relating to slot machines, 26 U. S. C. 3267 (b).) By this comprehensive definition a rather simple means of evasion otherwise afforded to manufacturers and dealers in gambling machines is greatly reduced if not eliminated. "It is of course clear that ordinary vending machines and music boxes are not within the scope of the definition or the intendment of the statute." You will notice that in both the section of the Code and the analysis, reference is made to "coin-operated machines," and we submit that the intention of Congress is and should be to limit this proposed legislation specifically to slot machines. In the analysis, the point is made that the definition has been expanded to include the application of "any element of chance," instead of "the element of chance," as stated in section 3267 of the Code. This all could be accomplished by defining "gambling devices" in this legislation the same as defined in said section 3267 but by changing the words "the element of chance" to "any element of chance" as suggested in the analysis. By doing this, we are convinced that the real purpose of the proposed legislation would be accomplished, and the outdoor show business and other businesses that might be brought under the present wording of the proposed legislation would not be put out of business or unduly hampered. We respectfully request that the foregoing or other suitable changes be made in this bill so that it will refer to slot machines and organized or commercial gambling, and will not prohibit the farmer or his wife from attending the State fair, legion carnival, or church bazaar, paying 25 or 50 cents for the thrill of trying for a blanket or a toy panda to bring home to the children. Respectfully submitted. Figures obtained from the Billboard magazine, based on a current survey made by that publication. The figures are approximate, but believed to be substantially accurate. Fairs (State, county, and local). Attendance at fairs per year. Amusement parks (with concessions) Attendance per year--- Investment in equipment-- Carnivals: 2,500 70, 000, 000 700 Traveling on own railroad cars (over 400 cars) - Total investment in equipment (not including merchandise). All carnivals, 32-weeks-per-year average number attending---Circuses: Number Number of wage-earning employees.. Concession operators-- Number of persons patronizing concessions (including repeated patronage) 100, 000, 000 $50, 000, 000 11 285 10, 000 $30, 000, 000 100, 000, 000 35 3, 500 10, 000 200, 000, 000 Mr. BYE. I state that I represent the Railroad Show Owners Association and others. That association consists of nine owners and operators of carnivals and midways that travel on railroads. They own their own railroad cars and equipment, and they own over 400 railroad cars and have perhaps 10 or 15 million dollars invested in their equipment. In addition, there are in the country about 285 so-called truckoperated carnivals, or approximately 300 operating in the United States. Carnivals have been operated in the United States for over 100 years. They started back in the days of the Roman Empire and they have come down through history ever since. Undoubtedly all of you gentlemen have attended your State fair and your county fair or some Legion convention or labor meeting or church bazaar where the carnival held forth. In addition, I have letter and we represent the Pacific Coast Showmen's Association of Los Angeles. That is an association of outdoor showmen. They are carnival owners and concession operators and others interested in the show business. They have over 1,000 members. Also George A. Hamid & Sons, of New York City, they are general amusements and the ones that operate the Atlantic Pier at Atlantic City. The O'Henry Tent & Awning Co., of Chicago, manufacturers of tent and other canvas goods, all of which is used in the outdoor show business, is another one. We have the Lewis Diesel Engine Co., of Memphis, Tenn., that represent merchandise and equipment sold to carnivals, fairs, and other celebrations. Another is the M. A. Singer Co., of Dallas, Tex., also wholesalers of general merchandise sold to the fairs, carnivals, and other Legion conventions and things of that kind. Clemens F. Schmitz, broker, of New York City, who handles perhaps $100,000 in insurance of this class of amusement. The Showmens League of America, at Chicago, has over 2,000 members and belong to this industry. B. Palmer Sales Co., of Dallas, Tex., manufacturers of merchandise. The Midwest Merchandise Co., at Kansas City, Md., also is selling merchandise. The Downey Supply Co., of St. Louis, Mo., sells light |