TRADING STAMPS. Slips of engraved or printed paper usually in the form of gummed stamps, which are given by merchants to pur ehasers of goods. and which may be presented to some person or corporation in exchange for arti cles of value. The trading-stamp companies usually agree to distribute books containing the names of their subscribers among the residents of the city and surrounding country. The scheme amounts to an advertisement and various forms of it are in operation in many States. The statutes of a number of States prohibit these 'gift enterprises' as being a form of lottery. In New York such a statute was held unconstitu tional on the ground that there was no element of chance in the scheme, and that the pro hibition was an interference with legitimate trade. The United States court took a contrary view in passing on en act of Congress prohibiting gift enterprises in the District of Columbia. The court held that the statute was a valid exercise of the police power, on the ground that the trading stamp scheme by which the enterprise was conducted was a burden on both the mer chants and purehaseq of their goods. The as
sumption is that a merchant who buys the trad ing stamps from some corporation introducing them will make up the amount he is thus com pelled to pay either in the price of his goods or their quality, and thus in the end the public are deceived into thinking that they are ob taining something for nothing. An additional objection to the scheme advanced by the court was that the trading stamp companies profited by the fact that many persons did not present their stamps for the premiums offered. The decisions of the various States are not uniform on this question. the two views above presented illustrating the diversity of opinion. Where there is an element of chance as to the value of the article which a certain number of trading stamps may draw, the general view is that the scheme is akin to lottery, and illegal. See LOT TERY.