The broad ax., 1916-05-06
STEPHENS BILL
PROTECTS PUBLIC
Aimed at Dishonest AdVertiS-
=, ing and False PretenSeS.
TO AID HONEST BUSINESS.

er Cities and Towns From Cutthroat
MonopoIistic Methods of Mail Order
Houses and Big City Stores-Will In
sure Uniform Prices and High Quality
BY w. BOB HOLLAND.
"A bill to protect the public
against dishonest advertising and
false pretenses in advertising"
This is the comprehensive title of
measure introduced in the present con-
gress by Representative Dan V. Ste
phens of Nebraska. \ similar bill has
been introduced in the senate by Sena-
tor Ashurst of Arizona. No one can
find fault with legislation that will
achieve the objects stated in the titles
of the Stephens-Ashurst bill. The pub
lie certainly needs protection against
dishonest advertising and false pre-
lenses in merchandising"
The bill now under consideration is
the successor of the Stevens bill, a
measure introduced in the last con-
gress by Representative Stevens of
New Hampshire. 1t was widely dis
cussed and died in committee after
several public hearings. at which its
merits and dement's were considered.
The Stephens bill embOdies the changes
that seemed advisable after these
hearings and discussions, and it is be-
heved that in its present form it safe
guards the producer, the merchant and
the consumer.
For many years the right of a pro-
Queer to contract with merchants for
the resale of his products at standard,
uniform prices was generally recog-
niZed and its legality was not ques-
toned. Then the supreme court Of the
United States held that such a contract
was Gin restraint of trade" and
against public policy" The court di-
vided on the question, ) to 4, and the
majority found no specific law forbid
ding the practice that had long been
intended the Sherman law to prohibit
such business methods.
Agency System Is Legal.
This court made law upset long es-
tablished custom, but it does not pre-
vent the end sought from being reach
ed by other means. Producers who
wish to have no discrimination shown
to favored individuals can insure uni
form prices for their goods by estab-
fishing branch establishments or by
appointing agents. This is the method
followed by manufacturers of automo-
biles. Bakers who sell their products
within a restricted area can also regu-
late their prices by making grocers
their agents and thereby retaining title
to their bread and rolls until they
reach the consumer.
Producers of other articles, goods
sold in small quantities and which
must depend on established merchants
for their distribution, are denied the
right that men in other lines have
The Stephens-Ashurst bill is designed
to restore to these producers a protec-
ton they had before it was taken
away from them by the supreme court
Cut rate department stores, so called
''chain" drug and grocery stores in the
large cities, and mail order houses use
cut prices on standard, well known
articles to draw trade away from
small stores and small towns. The
loss they may suffer on these standard
articles is more than made up by the
high profits on anonymous goods or
goods put up under their own brands.
In this way the producer is injured
because the reputation of his product
is ruined; the retail merchant is dam
aged because he ctinnot afford to adj
'vertise widely a special bargain bait
to attract customers TO whom other
goods may be sold ut profit; the con-
sumner is damaged because producers
are not encouraged to maintain quality
and because inferior articles are sub
stituted.
Ample Protection Afforded.
The Stephens-AShurst bill is not
compulsory. To take advantage Of its
provisions the producer must register
his trademark or special brand with
the bureau of corporations in Wash
ington and must pay fee Of $40. He
must not have a monopoly of articles
belonging to the same general class Of
merchandise, and he must not agree
with any competitor to control prices.
The producer must also file a sched-
ule giving the prices at which his listed
article is sold to wholesalers, to retail
ers and to the consumer. This sched-
'ule of prices becomes Il public dOcu-
lment. The prices scheduled must be
uniform to buyers under similar cir
'cumstances. This permits reduction in
prices for quantity purchases and al
lowances to equalize freight rates.
A merchant who decides to quit bust
ness, who wishes To discontinue any
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