broad definition of gambling devices there
would be no way of getting them shipped
here. For states, any machines certified by
the governors would be okay, but no such
provision is made for Washington, D. C.
Business, generally, has been enjoying the
usual post - Easter gains, but the annual
anxiety of government employees over
whether or not Congress will appropriate
enough money for th eir jobs is at hand
,!nd may cut down spending.
Expansion has been the keynote in recent
weeks. G. B. Macke Corp. has made the
big news by going into numerous operating
field s_ Formerly, tbe firm had specialized
almost entirely in cigarettes, candy, and
nuts. Now, however, Macke has coffee,
doughnut, ice cream and cup vendors. A
new subsidiary has been set up to handle
chocolate covered ice cream sticks-mark-
ing the only such enterprise in the area.
Also uniq ue is the doughnut operation,
which utilizes a candy vendor to vend at a
nickel stick doughnuts prepared by a local
bakery. Things are also looking up at
Spacarb of Washington. Showing the su-
periority of multi-drink vendors over single
drinks, Spacarb grabbed a whole theater
chain from a competing firm. Spacarb also
latched onto a contract with a branch store
of Sears, Roebuck & Co. to install cup dis-
pensers in place of the old refreshment
stand.
Ar cades a r e spring ing ..... so fast ,
th is rep o rte r i s una ble to k eep up
with them. In a ddition to a total o f II
in the downtown area, others a re mush·
rooming in other business sections,
u su a lly a dj acent to movie theate r s.
A r cad es a r e p roviding m o st of the o ut·
lets fo r n ew amusem en t gam es. Ne w
machines a r e a dde d in most su ch
EMPTIES
MACHINES
FASTER!
Leaf's fam ous tradem ark RAIN·
BLO is k nown to ope rato rs a ll
over th e world as a g uarantee of
quality, u niformity and consumer
acceptance. O th er Leaf p roducts
in clud e a co m p l e t e l i n e ~of fa st·
selling vending candies_ '-
LEAF GUM CO.
Div. of Leaf Brands. Inc .
Chicago. U. S. A .
32
Cig. Sales Watched Closely
NEW YORK-The cigarette industry turned its eyes to the possibility of a
shift in federal tax policy when the House Ways and Means Committee tenta-
tively approved a red uction in the tax rate on economy brand cigarettes_ The
move carried by only one vote in a 25·member committee, suggesting that the
action may later be reversed. But the action did cause some thinking in the
industry.
Official reports on the first quarter of the year were being watched carefully,
because the 9-month report of the Internal Revenue Dept. had shown that
the rate of cigarette consumption seemed to be losing its high rate gain
maintained for so many years. Employment in cigarette factories has shown
slight declines in recent months but automatic machinery may make up the
slack here.
Tobacco jobbers did better in March and reversed a declining trend of a
few months. Some of the states that had been reporting declines in their
cigarette taxes reported increases for the month of March.
sp o ts as fast as they come o ut of the
factory.
Candy machines are being switched for
the summer by many operators. Some are
putting in cookies; others, dropping choco-
lates and concel)trating on hard candies.
A rise in the number of cup dispensers is
apparent on every hand , but the bottle dis-
penser is holding its own.
Strongly supported by members of the
Washington Music Guild, Kittie Kallen's
Juke Box Annie on Mercury is moving up
on the local hit parade_ Third Man Theme
by Guy Lombardo on Decca has been tops
for several weeks. Music etc. by Teresa
Brewer on London is slippi ng from its peak,
but still rates plays. For taverns, Red Foley
singing almost anything on Decca is a
nickel grabber.
What of Cig. Prices
If Tax Is Changed?
At d time when the cigarette price pic-
ture seemed to have hit a pretty stable
level, and likely to stay that way, Congress
seems about to finally consider the plea
of makers of economy cigarettes to grant
them a tax break. Some say this would
bring about a reshuffle in cigarette price
levels. A newspaper in the "tobacco coun-
try" editorializes on the question as follows:
"Why Tax Economy Cigarettes? No one
in his right mind would argue that a man
who buys a Ford should pay the same
amount of tax as the man who buys a
Cadillac. You expect the tax on an ex,-
pensive diamond ring to be mpre than the '
tax on a dime-store model, and when you
buy an expensive suit you expect to pay a
proportionately greater tax than you would
pay on a cheap one. But for some reason
this obvious logic stops when it comes to
cigarettes. And as a result millions of
people who smoke the cheaper brands have
to pay the same tax as do the people who
buy the standard, more expensive brands_
"For 16 long years the makers of cheaper
cigarettes have contended wi thout success
that this system of taxation was as illogical
as it was unfair, and have asked, instead,
an ad valorem tax based on the selling
price of the cigarette. But make~s of the
standard-priced cigarettes (Camels, Luckies,
Chesterfields, Old Golds, etc.) have fought
their proposal, claiming that the ad va-
lorem tax would enable the economy brands
(Wings, Avalons, Dominos, etc.) , to estab-".
lish unfair competition. Congress has
agreed with this urmsual position, and still
levies a tax of seven cents per pack, re-
gardless of q uality or price.
"This is clearly unfair. It means that
makers of economy-price cigarettes are
taxed 165 per- cent on their net sell ing
price, whereas makers of standard-price
cigarettes are taxed only 104 per cent on
their net. And since the cigarette tax is
strictly a consumer tax, this means that th e
man who smokes an economy brand must
pay a proportionately higher tax than the
man who can afford the higher-priced
standard brand.
"By taxing cigarettes on a straight seven-
cents-per-pack basis, Congress makes it im-
possible for the economy brands to offer
any real competition for the standard
brands. Before state taxes, standard brands
retail for 17 cents, whereas economy brands
retail for 14 cents. Thus, standard brands
can still pay state taxes and retail for 20
cents or less, and to the customer there is
little attraction in the 17-cent economy
cigarette over the 19-cent standard brand.
But a straight ad valorem tax, which would
permit the economy. brands to retail at 15
cents or two for a quarter, would put the
economy brands in a truly competitive
position. It would also be a break for the
less well-heeled smoker.
"The makers of economy brands have
proposed, rather than the straight seven-
cents per pack tax, an ad valorem tax of
41.17 per cent on all cigarettes. T his would
not increase the price of th e standard
brands, but would enable the manufacturers
to offer the smokers a real differential in
price, an economy cigarette that promised
economy. After 16 years of battle, the
House Ways' and Means Committee has
finally approved this plan. We hope a simi-
lar sense of fairness and concern for the
smoker will persuade the ,House and Senate
to fo llow suit."
From the Louisvill e Courier·lournal, May 6.
The fact that Congress might take action
to lower taxes on the economy brands of
cigarettes raises some discussion question s
for operators of cigarette machines.
Do you as a n o p e rator of cig are tte
mach in es think the f ed e r a l tax on the
econ om y brands slio uld b e lowe r e d ?
D o you think a lo we r tax on the
econom y b rand s would cau se a g e n e r a l
lowering o f cigar e tte prices ?
Do you think ciga r e tte prices sh o uld
b e a djuste d d own ward ?
Welco ... e
Tobacco Jobbers
Hundreds of Tobacco Jobbers
are reading this iss u e for the
first time and to them w e say
"Welcome to THE REVIEW
family_"
It is our program to thoroughly
cove r the field you are inte r·
ested in and give you a com-
plete and intelligent interpre-
tation of events as they affect
cigarette and cigar operating.
COIN MACHINE REVIEW