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Thursday, August 24, 1950

FEDERAL REGISTER

5655

porate or other device, do forthwith 12, 16 c and 23 a thereof, and cease and desist from :
deeming such action necessary and ap Selling or distributing In commerce, as propriate in the public interest and for Chapter I Federal Trade Commission commerce is defined in the Federal the protection of investors and necessary Trade Commission Act, punch boards, to carry out the provisions of the act, Docket 4879
push cards, or other lottery devices, hereby adopts the following rule:
which are to be used, or may be used, in P art 3 Digest of C ease and D esist 240.16c-3 Exem ption o f sales o f se the sale or distribution of merchandise O rders curities to be acquired. Whenever any to the public by means of a game of HARLICH MFG. CO. ET AL.
person is entitled, as an incident to his chance, gift enterprise, or lottery ownership of an issued security and scheme.
SubpartUsing or selling lottery d e without the payment of consideration, It is fu rth er ordered, That said re vices: 3.2475 Devices for lottery selling;
to receive another security when is 3.2480 In merchandising. I. Selling or spondents and their agents, representa sued or when distributed, the se distributing in commerce, punch boards, tives and employees, directly or through curity to be acquired shall be exempt any corporate or other device, in con push cards, or other lottery devices, nection with the offering for sale, sale or from the operation of section 16 c :
which are to be used, or may be used, in distribution in commerce, as commerce Provided, That:
the sale or distribution of merchandise to a The sale is made subject to the is defined in the Federal Trade Commis the public by means of a game of chance, same conditions as those attaching to sion Act, of cigarette chests or boxes, or gift enterprise, or lottery scheme; and, the right of acquisition, and other articles of merchandise, do forth II, in connection with the offering for b Such person exercises reasonable sale, sale or distribution in commerce, of with cease and desist from;
diligence to deliver such security to the 1. Supplying to or placing in the hands cigarette chests or boxes, or other arti cles of merchandise, 1 supplying to or of others punch boards, push car$s, or purchaser promptly after his right of acquisition matures, and other lottery devices, either with assort placing in the hands of others punch c Such person reports the sale on ments of cigarette chests or boxes or boards, push cards, or other lottery de the appropriate form for reporting other merchandise, or separately, which vices, either with assortments of ciga transactions by persons subject to sec said punch boards, push cards, or other rette chests or boxes or other merchan tion 16 a.
lottery devices, are to be used, or may dise, or separately, which said punch This section shall not be construed as be used, in selling or distributing such boards, push cards, or other lottery de exempting transactions involving both a cigarette chests or boxes or other mer vices, are to be used, or may be used, in sale of a security when issued or when chandise to the public.
selling or distributing such cigarette distributed and a sale of the security by 2. Selling or distributing cigarette chests or boxes or other merchandise to virtue of which the seller expects to re chests or boxes, or other articles of mer the public; 2 selling or distributing ceive the when-issued or when-dis chandise, so packed or assembled that cigarette chests or boxes, or other articles of merchandise, so packed or assembled sales thereof to the public are to be made tributed security, if the two transactions or, due to the manner in which such combined result in a sale of more units that sales thereof to the public are to be than the aggregate of those owned by merchandise is packed or assembled at made or, due to the manner in which the seller plus those to be received by such merchandise is packed or assembled the time it is sold by the respondents, may be made by means of a game of him pursuant to his right of acquisition.
at the time it is sold by the respondents, may be made by means of a game of chance, gift enterprise, or lottery scheme.
The Commission finds that the fore 3. Selling or otherwise disposing of chance, gift enterprise, or lottery going rule grants or recognizes an ex any merchandise by means of a game of emption and, therefore, may be made scheme; or, 3 selling or otherwise dis chance, gift enterprise, or lottery posing of any merchandise by means of effective immediately upon publication.
scheme.
a game of chance, gift enterprise, or lot Accordingly, the rule shall be effective tery scheme; prohibited.
It is fu rth er ordered, That the re August 14, 1950.
spondents shall, within sixty 60 days See. 6, 38 Stat. 722; 15 U. S. C. 46. Interpret Sec. 23, 48 Stat. 901, as amended; 15 U. S. C.
after service upon them of this order, file or apply sec. 5, 38 Stat. 719, as amended; 15
78w, sec. 16, 48 Stat. 896, as amended; 15
with the Commission a report in writing, U. S. C. 45 Cease and desist order, Leo U. S. C. 78p Lichtenstein et al trading as Harlich Manu setting forth in detail the manner and By the Commission.
facturing Company, etc., Docket 4879, June form in which they have complied with 30, 1950
this order.
seal O rval L. D uB ois , By the Commission, Commissioner In the M atter o f Leo Lichtenstein, Libbie Secretary.
Mason concurring in the findings as to Lichtenstein, and Byron J . L ichten
A ugust 11, 1950.
the facts and conclusion, but not con stein, Individually and Trading as H ar F. R. Doc. 50-7357; Filed, Aug. 23, 1950;
curring in the form of order to cease and lich M anufacturing Company, and 8:46 a.m .
desist, for the reasons stated in his Loomis Manufacturing Company opinion concurring in part and dissent This proceeding having been heard by ing in part in Docket 5203Worthmore the Federal Trade Commission upon the TITLE 21 FOOD AND DRUGS
Sales Company.
amended complaint of the Commission, Issued:
June 30,1950.
Chapter I Food and Drug Adminis the respondents answer thereto, testi seal
D. C. Daniel , tration, Federal Security Agency
mony and other evidence in support of and in opposition to the allegations of Secretary.
P art 1 E nforcement of the F ederal the amended complaint introduced be F. R. Doc. 50-7368; Filed, Aug. 23, 1950;
F ood, D rug, and C osmetic A ct fore a trial examiner of the Commission 8:49 a. m.
LABELING REQUIREMENTS OF CHEESES THE
theretofore duly designated by it, the CURING OF WHICH HAS NOT BEEN
trial examiners recommended decision, COMPLETED
and briefs and oral argument of counsel, TITLE 17 COMMODITY AND
and the Commission having made its By virtue of the authority vested in SECURITIES EXCHANGES
findings as to the facts and its conclusion the Federal Security Administrator, by that the respondents have violated the Chapter II Securities and Exchange the provisions of the Federal Food, Drug, Provisions of the Federal Trade Commis Commission and Cosmetic Act sections 405, 701 a , sion Act:
52 Stat. 1049, 1055; 21 U. S. C. 345, 371
P art 240 G eneral R ules and R egula It is ordered, That the respondents, a 1.13 F ood ; exem ptions from label tions , S
ecurities E
xchange A
ct of Loo Lichtenstein, Libbie Lichtenstein, ing is amended by adding the following 1934
and Byron J . Lichtenstein, individually new paragraph:
and trading as Harlich Manufacturing EXEMPTION OF CERTAIN SECURITY TRANS
f The word processed shall in Company and as Loomis Manufacturing ACTIONS MADE BY INSIDERS
clude the holding of cheese in a suitable Company, or trading under any other The Securities and Exchange Com warehouse at a temperature of not less name or trade designation, and said re mission, acting pursuant to authority spondents agents, representatives and vesting in it by the Securities Exchange than 35 F, for the purpose of aging or curing to bring the cheese into compli employees, directly or through any cor Act of 1934, particularly sections 3 a ance with requirements of an applicable
TITLE 16 COMMERCIAL
PRACTICES