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SENATE

71st CONGRESS

2d Session

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REPORT No. 950

FIXING PENALTIES FOR USE OF MAILS IN CONNECTION

WITH FRAUDULENT DEVICES, ETC.

June 17, 1930.--Ordered to be printed

Mr. ALLEN, from the Committee on Post Offices and Post Roads,

submitted the following

REPORT

[To accompany S. 1446)

The Committee on Post Offices and Post Roads, to whom was referred the bill (S. 1446) to amend section 213, act of March 4, 1909 (Criminal Code, title 18, sec. 336, U. S. C.), asfixing penalties for use of mails in connection with fraudulent devices and lottery paraphernalia, having considered the same, report favorably thereon with amendments and recommend that as amended the bill do pass.

On page 2, line 3, strike out the word “unfair”.

On page 2, line 9, after the word “thing" insert the words "or component parts thereof,.

On page 2, line 12, strike out the word “unfair".
On page 3, line 1, strike out the word "unfair".

As to these amendments, the committee thought best to strike out the word “unfair," believing the term so general that it might be oppressively interpreted.

This measure, which is similar to one which received the approval of the Senate during a previous Congress, would amend existing law so as to bar from the mails lottery paraphernalia and cheating gambling devices, along with the other lottery and fraud matter which now comes under the ban of the statute.

The changes sought to be made in section 213 of the act of March 4, 1909, are given in italics below. As amended by the present bill, that section would read as follows:

Sec. 213. No letter, package, postal card, or circular concerning any lottery, gift enterprise, or (similar] scheme of any kind offering prizes dependent in whole or in part upon lot or chance, or concerning any article, device, or thing so constructed as to have for its principal and primary use the risk of money or property by lot or chance, or concerning any dishonest, or cheating gambling article, device, of thing; and no lottery ticket or part thereof, or paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon the event of a lottery, gift enterprise, or (similar] scheme of any kind offering prizes dependent in whole or in part upon lot or chance; and no article, device, or thing, or component parts thereof, so constructed as to have for its principal and primary use the risk of money or property by lot or chance, or matter relating thereto; and no dishonest, or cheating gambling article, device, or thing; and no check, draft, bill money, postal note, or money order for the purchase of any ticket or part thereof, or of any share or chance in any such lottery, gift enterprise, or scheme; and no newspaper, circular, pamphlet, or publication of any kind containing any advertisement of any lottery, gift enterprise, or scheme of any kind offering prizes dependent in whole or in part upon lot or chance, or containing any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes, or containing any advertisement of any article, device, or Thing so constructed as to have for its principal and primary use the risk of money or property by lot or chance, or containing any advertisement of any dishonest, or cheating gambling article, device, or thing, shall be deposited in or carried by the mails of the United States or be delivered by any postmaster or letter carrier. Whoever shall knowingly deposit or cause to be deposited, or shall knowingly send or cause to be sent, anything to be conveyed or delivered by mail in violation of the provisions of this section, or shall knowingly deliver or cause to be delivered by mail anything herein forbidden to be carried by mail, shall be fined not more than $1,000 or imprisoned not more than two years, or both; and for any subsequent offense shall be imprisoned not more than five years. Any person violating any provision of this section may be tried and punished either in the district in which the unlawful matter or publication was mailed, or to which it was carried by mail for delivery according to the direction thereon, or in which it was caused to be delivered by mail to the person to whom it was addressed.

The Postmaster General has made a favorable report on the bill in a letter reading as follows:

Post OFFICE DEPARTMENT,

Washington, D. C., June 19, 1929. Hon. LAWRENCE C. Phipps, Chairman Committee on Post Offices and Post Roads,

United States Senate. MY DEAR SENATOR PHIPPS: With your letter of the 13th instant you transmit a copy of the bill (S. 1446) to amend section 213 of the act of March 4, 1909 (18 U.S. C., 336), and request my views thereon.

This bill would amend the present statute which declares unmailable all matter relating to lottery enterprises by also making unmailable any article, device, or thing designed for the conduct of a lottery, and any unfair, dishonest, or cheating gambling article, device, or thing, or matter relating thereto.

Proposed legislation similar to this has for a number of years past been submitted to this department for its views by committees of Congress, and favorable reports thereon have been made for the reason that the experience of the department shows that it would be to the interest of the public to have legislation barring lottery paraphernalia and cheating gambling devices from the mails, along with the other lottery and fraud matter that comes under the ban of existing law.

I therefore advise that the proposed legislation has the approval of this depart. ment.

The bill as drawn appears to be in proper form for accomplishing the purposes desired, except that the phrase reading “or matter relating thereto" appearing in line 11 of page 2 is surplusage and should be omitted. Sincerely yours,

WALTER F. BROWN,

Postmaster General. In reference to the changes made by the committee Mr. Harold A. Davis, executive assistant to the Postmaster General, wrote Senator Sheppard, the author of the bill by direction of the Postmaster General as follows:

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'or

Post OFFICE DEPARTMENT,

Washington, D. C., May 27, 1930. Hon. Morris SHEPPARD,

United States Senate. MY DEAR SENATOR SHEPPARD: Referring to your request at the hearing yesterday on bill S. 1446, to amend section 213 of the act of March 4, 1909 (18 U. S. C. 336), I beg to advise you that on June 19, 1929, the Postmaster General advised the chairman of the Senate Post Offices and Post Roads Committee that this proposed legislation has the approva! of this department. I am inclosing a copy of the Postmaster General's letter in which is set forth the reason for this proposed legislation. The addition in line 9, page 2, of the bill after the word “thing" of the words

component parts thereof” and the elimination of the word “unfair” in line 1, page 3, are changes acceptable to this department. By direction of the Postmaster General. Yours very truly,

HAROLD A. Davis,

Executive Assistant to the Postmaster General. At the hearing on this measure which was not taken down by a stenographer a representative of the Post Office Department was present, and gave expression to the concurrence of the department.

Mr. H. N. Pringle, assistant superintendent of the International Reform Federation, was also present at the hearing and spoke in behalf of the bill. He presented many interesting and informative facts in connection with the subject matter of the measure and it is deemed helpful now to present a summary of Mr. Pringle’s remarks prepared by him after giving his testimony.

Summary of Mr. Pringle's remarks follows:

This bill, S. 1446, to amend section 213, act of March 4, 1909 (Criminal Code, title 18, sec. 336, U. S. C.), affixing penalties for use of mails in connection with gambling devices and lottery paraphernalia, will lift the standard of United States law toward the moral level of the statutes of the various States of the Union, all of which have outlawed gambling machines, implements, and devices. The bill does not apply to ordinary vending machines for stamps, confections, toilet articles, etc., which return an equal value for each play, and therefore do not involve the element of gambling.

As assistant superintendent of the International Reform Federation (206 Pennsylvania Avenue SE., Washington, D. C.) and in charge of its law-enforcement activities during the past 18 years, I have observed throughout the United States that the greatest obstacle to the enforcement of State antigambling laws by the duly constituted officials is the ceasless campaign of the great manufacturers of gambling mplements in Chicago and other cities, whose letters and alluring catalogs induce shopkeepers, billiard-room owners, hotel men, and others to install various gambling implements as great money makers.

Probably 95 per cent of the people operating gambling devices in our country have been induced to install these implements and violate the laws by the manufacturers' advertising and their traveling agents, or by local jobbers of confectionery and tobacco, whom these manufacturers have induced to combine crime and merchandising on a large scale. Agents or patrons of these great manufacturers of gambling implements often arrange with small groups of local gamblers to control the gambling of a city, through single ownership of scores or hundreds of slot gambling machines, leased to the operators on the basis of a 50-50 division of the "take.” Almost invariably the controlling group try to corrupt some of the police for protection of the devices, and to exclude other racketeers by prompt seizure of their gambling devices.

If local officials are deaf to such proposals, the controlling group petitions a judge to issue an injunction restraining the officials from interfering with their alleged vending machines. Of course the judges hear only one side of the case, when they grant temporary injunctions, nearly all of which are dismissed a few weeks or months later.

I submit a partial list of 22 police departments thus enjoined and you will notice that the slot gambling machine interests secured injunctions against six Connecticut police departments in 1930. Some of the greatest political scandals in the

United States (Chicago, Detroit, Pittsburgh, Scranton, and Hazelton) have originated indirectly by the financial inducements of these agents and distributors of gambling devices.

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New Britain.
New Haven.
New London.
New Orleans.
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Norfolk
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St. Louis.
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Washington

1924 Albert C. Glass, distributor.
1928 Frank Cate, distributor.
1929 Bergen Point Gambling Concession.
1930 Eastern Mint Vending Machine Co.
1924 Triangle Novelty Co.
1916 Alma Manufacturing Co.
1927 United States Vending Co.
1928

Clarence McLean.
1929 Do.
1930 Distributor.
1930 | Royal Mint Vending Machine Co.
1930 Eastern Mint Vending Machine Cou
1930 Distributor.
1927 Mr. Ashcraft.
1923 Triangle Novelty Co.
1925 Tepee Democratic Club.
1925 Steamer Club.
1930 Baltimore Resident.
1930 Distributor.
1930 Central Vending Machine Co.
1930 Eastern Mint Vending Machine Co.
1920 Skiffington Vending Machine Co.

The British Premier, Ramsay MacDonald, in a pamphlet on gambling, says that the Government ought to place various checks on this growing evil of gambling and that an effective restraint is the exclusion of this business from the mails. Our Federal Government has gone only so far as to close the mails and interstate commerce to lotteries then in operation; but, every week, tons of lottery material for future lotteries, such as baseball pools, clearing-house pools, and other drawing schemes, use the mails and interstate commerce. I show the Post Office and Post Roads Committee a photograph of 10 tons of lottery materials, ready for the parcels post and express, and in packages varying from a pound to the size of a tea chest, which were seized at one establishment, with the confiscation of $50,000 worth of the most modern printing presses in the adjoining room.

If it pleases the Congress to enact this measure, in harmony with all existing State legislation, it will greatly diminish the difficulties of enforcing State laws. No longer will mailed inducements and secret agents cause installations of gambling implements twice as fast as city and county officials can seize them and deal with the offenders. I also show the committee 15 photographs of huge seizures and destruction of gambling implements in as many different States and cities, where public officials in good faith are endeavoring to deal with this problem of gambling devices, which corrupt the young and partially thwart the purpose of the school, church, and home. After the Federal law against the Louisiana lottery, 18 States enacted constitutional amendments forbidding lotteries, and nearly all States passed statutory restrictions on the same, showing the profound influence of wholesome legislation by our Federal Government.

I have here an interesting package of 11 catalogues marked "Private," Confidential,”! “For the trade only,” etc., which offer cheating devices such as marked cards, loaded dice, 10 kinds of hold-outs, shiners, secret retards to wheels, plugs, and knee springs. Swindling mechanisms are provided for nearly every gambling device. One catalogue reads: “These special dice are filled in such a manner as to make the numbers 4, 6, 8, and 10 come up more often than they ordinarily would. The dice sound and roll natural and will give the shooter a small percentage when used on a hard, smooth surface”. Another catalogue says: “This line work, placed in the upper right corner, reading ace to deuce, is a poplar number easily visible to the initiated, but is mighty hard to be detected." Gambling murders in great numbers are the direct and inevitable results of these gambling frauds. This proposed legislation was voted by the Senate of the Seventieth Congress and by the House of two previous Congresses. It has been repeatedly urged by the Post Office Department and printed with commendation in several annual reports of the Postmaster General. We have not sought the opinions of the police departments of the United States on this bill, but I subjoin a letter from a single department.

DEPARTMENT OF POLICE,
CITY OF LOS ANGELES, CALIF.,

February 28, 1930. DEAR SIR: In reply to your letter of the 20th instant, regarding bill known as S. 1446, an act to prohibit the use of the United States mails in connection with any gambling paraphernalia, please be advised that this department is in favor of such an act being passed by our Representative in Congress, and we also wish to go on record as saying that if the source of supply of all gambling paraphernalia can be erased by the enactment of law, this is the natural and lawful thing for us to do to prohibit gambling within the various States throughout the Union. You are privileged to use this letter for whatever purpose it may serve in bringing about any reform to the best interests of our people. Very respectfully,

R. E. STECKEL,

Chief of Police. By J. FINLINSON,

Assistant Chief of Police. The financial magnitude of three items coming under this bill, punch boards, slot-gambling machines and pool lotteries on baseball, stocks, and clearings, aggregate about $375,000,000 a year in our country. The manufacturers of gambling devices (four-fifths of this business in Chicago) will tell you how their gambling machines do not cheat the players, or that each one has a built-in or attached vender for gum or mints and therefore it is not a gambling machine. When a $15 vender is attached to a $100 slot-gambling machine, what does common sense say as to the real intent of the manufacturer, who claims that the machine is made for vending?

In the case of Moberly v. Deskin (169 Mo. App. 627, at p. 678) the court, in speaking of a pretended legitimate slot machine device, said: “In no field of reprehensible endeavor has the ingenuity of man been more exerted than in the invention of devices to comply with the letter but to do violence to the spirit and thwart the beneficent objects and purposes of the law designed to suppress the vice of gambling. Be it said to the credit of the expounders of the law that such fruits of inventive genius have been allowed by the courts to accomplish no greater result than that of demonstrating the inaccuracy and insufficiency of some of the old definitions of gambling that were made before the advent of the era of greatly expanded, diversified, and cunning mechanical invention.” Other cases of the same class are the following:

Alabama, Cagle v. State (1922) (18 Ala. App. 553, 93 So. 206).1
Arkansas, Sheets v. State (1922) (156 Ark. 255, 245 S. W. 815)."
Georgia, Brockett v. State (1924) (Ga. App. 125 S. E. 513).'

Indiana, Ferguson v. State (1912) (178 Ind. 568, 42 L. R. A. (n. s.) 720, 99 N. E. 806, Ann. Cas. 1915C 172).!

Kentucky, Welch v. Com. (1918) (179 Ky. 125 L. R. A. 1918C, 651, 200 S. W. 371).1

Louisiana, Tonahill v. Molony (1924) (156 La. 753, 101 So. 130). 1 Maine, Lang v. Merwin (1905) (99 Me. 486). 1 Maine, State v. Googin (1918) (117 Me. 102, 102 Atl. 970). Maryland, Gaither v. Cate (1929) (Md. App., 144 Atlantic 238). 1 New Jersey, Pure Mint Co. v. Labarre (1924) (N. J. Eq., 126 Atl. 29). 1 New York, People ex rel. Verchereau v. Jenkins (1912) (163 App. Div. 512, 138 N. Y. Supp. 449). 1

North Carolina, State v. Lipkin (169 N. C. 265). 1

Rhode Island, State v. Certain Gambling Instruments of Samuel 0. Paul (128 Atl. 12). 1

South Carolina, Griste v. Burch (1919) (112 S. C. 369, 99 S. E. 703).
Tennessee, State v. McTeer (1914) (129 Tenn. 535, 167 S. W. 121). 1
All these cases and the Missouri case, cited above, are State appellate court

At a recent court hearing in Washington, D. C., when a temporary injunction against city officials interfering with a distributor's slot gambling machines was dismissed, a representative of the Chesapeake & Potomac Telephone Co. testified that, during eight months 1,318 slot machine slugs were removed from a single pay telephone, representing a loss of $65.90. A larger item of loss by the gambling

1

cases.

1 Indicates a "vending" machine case.

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