The famous Cracker Jack confectionery treat was created by Frederick Rueckheim along with another man whose business had been destroyed in the great Chicago fire. The business was started with a single molasses kettle and a hand popper. The next year, after buying out his partner, he sent for his brother, Louis, and the two of them formed Rueckheim & Bro. They were quite successful as they expanded their line to include new products. It wasn't until 1896 that the first Cracker Jacks were produced, and then only as a minor concern. At first, they were sold in bulk form until 1899 when an old friend, H.G. Eckstein invented the wax-sealed package which allowed the product to be shipped across great distances. The result was that the product could sell more easily. After this, the demand shot up until Cracker Jack became the company's number one product.
The prize concept came along during the time of bulk packaging, as a method to inspire sales. Prizes were occasionally included in the wax packages, but it wasn't until the 1920s that "a prize in every package" was realized. For a while, the company was afraid that the prize might accidentally be mistaken for a piece of popcorn, which could choke a customer and inspire an unpleasant law suit. They decided to put it into a separate compartment, and eventually it was packaged in its own protective wrapper. Prizes have included pencils, tricks, bracelets, games, stick-on patches, and disguises. Today, some of the older prizes comand high prices from collectors. One of the highest is for a 1914 Joe Jackson baseball card that is valued at more than $11,000. You can research the subject in books such as "Crack Jack Toys, the Complete Unofficial Guide for Collectors," by Larry White.