certain articles are entirely forbidden, notably intoxicating liquors, second-hand clothing and bedding, gold and silver, cards, lottery tickets, shares and bonds, obscene writings, explosives and inflammables, weapons, poisons and drugs. The German restraints on peddling therefore seem to belong rather to the prevention of crime than to the prevention of fraud, and they represent the most liberal and advanced legislation on the subject. $290. Auctioneers.-The characteristic feature of auction sales is the soliciting of competitive bids for the property to be sold, the property going (as a rule) to the highest bidder. The regulation is usually by the requirement of licenses and bonds. The law of New York confines auctioneers to one place of business, and requires of them bonds and periodical accounts; formerly auction sales were also subject to the payment of duties. In Massachusetts the license may contain conditions relative to the place of selling.21 England seems to have no legislation restraining auction sales. France prohibits auction sales at retail of new articles of commerce, specifying a number of exceptions.22 The German Trade Code23 declares the business to be free, but allows the several states to provide for the appointment of auctioneers to be placed under oath. § 291. Ticket brokerage.24-The abuses of this business have been sought to be met in some states by legislation forbidding the sale of passage tickets by persons not having purchased the same for their own use who are not specially authorised agents of transportation companies.25 These acts have been upheld as valid exercises of the police power in Illinois, Indiana, Minnesota and Pennsylvania.26 The opinion in the Illinois case states the theory upon which this legislation may be sustained, viz: that transportation is a business affected with the public interest, that the sale of tickets is an incident thereto, that such business is subject to an ample legislative control, and may be directed to be conducted entirely by 21 Rev. Laws, ch. 64, Sec. 91. 22 Law June 25, 1841. 23 Sec. 36. 24 See, also, § 61. 25 Illinois Act, April 19, 1875; New York Penal Code, Sec. 615. 26 Burdick v. People, 149 Ill. 600; Fry v. State, 63 Ind. 552; State v. Corbett, 57 Minn. 345, 24 L. R. A. 498; Commonwealth v. Keary, 198 Pa. 500. transportation companies or their agents, if such policy is deemed to serve the interests of the public. Similar legislation was declared unconstitutional in New York and Texas for special reasons; in New York on the ground that the acts made the right to engage in the ticket brokerage business dependent upon the designation and appointment by transportation companies, the appointee of any one company having the right to sell tickets generally, whereby the business of independent ticket brokerage instead of being suppressed was merely monopolised at the option of any company;27 in Texas, where the court recognised the validity of such legislation generally, on the ground that the act applied only to tickets upon which a warning was stamped, thus leaving its enforcement entirely optional with the railroad companies. 28 § 292. Bankrupt and fire sales.-The objection to these is that they are not what they pretend to be and that the public is fraudulently led to believe that superior goods can be obtained by a special chance while as a matter of fact inferior goods are offered at their full value. They are often conducted by itinerant vendors as defined by the Massachusetts statute. They are subject to the police power on the same principles as peddlers.29 Questions have chiefly arisen with regard to the license fees. It has been said that under a municipal ordinance power they cannot be made prohibitive.30 But in Vermont and Rhode Island the courts have considered the act of the legislature in fixing licenses for itinerant vendors to be conclusive, though admitted to be oppressive.31 Massachusetts requires a statement under oath regarding the facts represented in the advertisements, which statement is copied in the state license.32 27 People ex rel. Tyroler v. Warden of City Prison, 157 N. Y. 116, 51 N. E. 1006; a new act omitting the particular objectionable feature has since been declared unconstitutional on the ground that the state cannot totally forbid a business of this character; People v. Caldwell, 71 N. Y. Suppl. 654, affirmed without opinion, 168 N. Y. 671, 61 N. E. 1132. 28 Jannin v. State (Texas), 51 S. W. 1126, 1899, 53 L. R. A. 349. 29 Commonwealth v. Crowell, 156 Mass. 215, 30 N. E. 1015. 30 State ex rel. Minces v. Schoenig, 72 Minn. 528, 75 N. W. 711; Ex parte Mosler, 8 Ohio Circuit Court, 324; City of Springfield v. Jacobs (Mo. App.), 73 S. W. 1097. 31 State v. Harrington, 68 Vt. 622, 34 L. R. A. 100; State v. Foster, 21 R. I. 251, 43 Atl. 66, 50 L. R. A. 339. 32 Rev. Laws, ch. 65, Sec. 8. § 293. Gift sales and trade stamps.33-Gift sales were defined by a statute of New York34 as selling or offering for sale "upon any representation, advertisement, notice, or inducement, that anything other than that which is specifically stated to be the subject of the sale or exchange is or is to be delivered or received or in any way connected with or a part of the transaction as a gift prize, premium or reward to the purchaser." The inducement now generally takes the form of a coupon exchangeable for articles to be selected by the purchaser, and these coupons are called trade or trading stamps. The policy of legislation with regard to gift sales and to the business of selling trade stamps is absolute prohibition. In several jurisdictions the prohibition of gift sales and of trading stamps has been declared to be unconstitutional.35 The conclusion is based upon the ground that such sales have no element of chance in it, and can therefore not be treated as forms of gambling, and that it is no function of the police power to protect the public from the temptation to extravagant or unnecessary expenditure offered by special inducements, or to protect conservative dealers from enterprising competition, and that the offering of a premium for a sale is not intrinsically fraudulent. The practice of making small gifts to purchasers or of distributing souvenirs at theatre performances is indeed. entirely harmless. The selling of trade stamps to merchants and the furnishing of premiums may, however, also be organised as a separate business, and it is against this business that trade stamp legislation is directed. The business has been so well described by the Court of Appeals of the District of Columbia, that the words of the court should be quoted at some length: "The Washington Trading Stamp Company and its agents are not merchants engaged in business as that term is commonly understood. They are not dealers in ordinary merchandise engaged in a legitimate attempt to obtain purchasers for their goods by offering fair and lawful inducements to the trade. Their business is the exploitation of nothing more nor less 33 See, also, § 60. 34 Penal Code, 335a. 35 People v. Gillson, 109 N. Y. 389; People v. Dycker, 76 N. Y. Suppl. 111; State v. Dalton, 22 Rh. than a cunning device. With no stock in trade but that device, and the necessary books and stamps and so-called premiums with which to operate it successfully, they have intervened in the legitimate business carried on in the District of Columbia between seller and buyer, not for the advantage of either, but to prey upon both. They sell nothing to the person to whom they furnish the premiums. They pretend simply to act for his benefit and advantage by foreing their stamps upon a perhaps unwilling merchant who pays them in cash at the rate of $5.00 per thousand. The merchant who yields to their persuasion does so partly in the hope of obtaining the customers of another, and partly through fear of losing his own. if he declines. Again, a limited number only (an apparently necessary feature of the scheme), are included in the list for the distribution of the stamps, and other merchants and dealers who cannot enter must run the risk of losing their trade or else devise some scheme to counteract the adverse agency. The stamps are sold at the rate of 50 cents per hundred to the contracting merchants, and yet purport to be redeemable with premium gifts at the assumed value of $1.00 per hundred. Unless, therefore, the so-called premiums to be distributed among the diligent collectors of stamps are grossly overvalued the scheme cannot maintain itself, for in addition to the actual cost of the premiums it has to bear the cost of the books and stamps, and the maintenance of its office and exhibition room. If its premiums should have any fair value, then the stamp company must inevitably rely upon the failure of the presentation of tickets for redemption by reason of its requirement that not less than 990 tickets-representing cash purchases of $99.00-shall be pasted in a book and produced at one time. to entitle the holder to his premium. In this event the company, if it actually contemplates making good its contracts, is relying upon a lottery, i. e. the chances and advantages of its game for its expectations of profit or gain."36 The concluding statement that the business constitutes a lottery cannot be conceded to be correct; for the purchaser may, if he wants to, secure his premium, and the outcome is entirely within his control; and if the company's calculations are justified by the doctrine of probabilities, it does not take any chances, and it is not engaged in gambling. It is 36 Lansburgh v. District of Columbia, 11 App. D. C. 512. not even an ordinary case of exploitation of public credulity, since there is no actual fraud, or misrepresentation. The legislation is in reality for the protection of the merchants who do not want the trade stamps, but are not strong enough to refuse them for fear that they may lose business to a competitor who does take them. It is therefore a case of protection from competition with which the state should have no concern. At the same time it must be admitted that the trading stamp business serves no useful purpose, and the essential constitutional question is whether a useless business may be prohibited. The question cannot be regarded as settled in point of authority. § 294. Peddling, etc., and the freedom of commerce.-The restraint on peddling and auction sales may raise a federal question when it is applied to goods imported into the state. It is clear that the products of other states cannot be discriminated against, and a statute requiring a license only of those who peddle such products has therefore been held unconstitutional.37 The same principle would apply to products of foreign countries, for "if a tax assessed by a state injuriously discriminating against the products of a state of the union is forbidden by the constitution, a similar tax against goods imported from a foreign state is equally forbidden."38 There would thus seem to be a fatal objection to the statute of New York which applies only to the peddling of foreign products.39 But where there is no discrimination against foreign products it is no objection to the requirement of a license of an auctioneer or peddler that he also sells goods from other states,40 at least where these goods have become part of the general 37 Welton v. Missouri, 91 U. S. 275. 38 Cook v. Pennsylvania, 97 U. S. 566. 39 Domestic Commerce Law, Sec. 60; the legislation of Pennsylvania. shows acts discriminating in favor of goods the product or manufacture of the state, but the federal question has not been passed upon by the courts; Commonwealth v. Brinton, 132 Pa. State 69; see, also, Commonwealth v. Gardner, 133 Pa. State, 284, 7 L. R. A. 666 (selling soapine manufactured in Rhode Island). 40 Emert v. Missouri, 156 U. S. 296. In Texas it is held that a license cannot be required from one who travels around selling organs imported from other states and carrying one in his wagon which he disposes of if opportunity offers; French v. State (Texas Cr. App.), 58 S. W. 1015, 52 L. R. A. 160. |