New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-04-03
National Chamber of Com
MERGE Submits Referen-
dunn to Business Men.
SUGGESTS u. S. LAW
ON PRICE CUTTING
Minority of Committee Opposes
Hampering Trade by Fed.
eral Restrictions.

Washington, April 1.-The attitude OF
business on the question Of whether
there shall be legislation permitting
maintenance OF resale prices is being
sought by the National Chamber Of
Commerce. which has just sent out
referendum on the subject. The bust
ness men OF the country receive an op-
portunity TO express their opinions by
voting on the following two recon-
mendations:
+ I. There should be Federal legisls-
ton permitting the maintenance Of re-
sale prices, under proper restrictions,
purchase. made and sold under com
petitive conditions.
.. Federal legislation should take the
form Of an amendment 20 the trade
commission act defining the conditions
under which price cutting IS an unfair
method Of competition and authorizing
the Federal Trade Commission to pre-
vent such price cutting in interstate
and foreign commerce.
This referendum puts up 20 the
country a. large the much discussed
question as 70 whether American bust
ness needs legislation permitting pro-
ducers Of identified merchandise" 10
fix the price al which such goods shall
be resold.
The committee Of the chamber which
drew up the recommendations was d.
vided. seven members favoring legisla-
ton permitting price maintenance. two
OF these. in supplementary report,
further recommending that injurious
price cutting be included in the scope
Of the jurisdiction Of the Federal
Trade Commission over unfair methods
Of competition.
Court Rulings Are Cited.
The members Of the committee op-
rosed 10 this legislation take the
ground that the recommendation Of the
majority is directly contrary 70 the
conclusions Of the Federal and state
courts on matters OF principle; that the
right TO fix resale prices, supposed 20
exist for short time. was never un-
Cerstood 10 eXis,, except AS an incident
&C. patents. They also hold that anti
trust provisions in the constitutions
and laws of twenty-nine states indicate
Il policy expressly inconsistent with the
idea Of maintenance OF resale prices
The minority dwell upon the i'm
portance Of trade being "unhampered
and unshackled by the requirement or
commands Of any man. or combina-
lions Of men, OF any systems Whatso-
ever" recalling the well known prime
pie of common law that there could
be no valid restrictions governing the
transfer OF articles OF trade from hand
10 hand. Finally they take the stand
that legislation legalizing price main
tenance will make Il difficult for men
who seek 10 enter manufacturing and
small merchants 20 establish them
selves.
The conclusions Of the majority are
that the advantages OF price mainten-
snce are partly economic and partly
social. They say:
l.. properly regulated system O.,
price maintenance on identified mer-
chandise made and sold under com
petitive conditions puts the emphasis
in competition upon quality and ser
vice, while a. the same time II pro
vides for the public adequate protec-
ton against eXtortion.
Incentive 10 Invention.
.. Price maintenance under these
conditions preserves the social advhn-
tage OF an adequate incentive 10 IN
vent and devise new products.
g. Price maintenance under these
conditions serves 10 prevent monopoi-
istic control OF production processes
By powerful distributors.
1 Price maintenance under these
conditions preserves the social advan-
tages Of such distribution convenience
as are represented by nelghborhood
stores and by small but skilful mer-
chants. In some trades II is the soie
guarantee OF the preservation OF The
accepted system OF distribution. For
instance. il assures the preservation OF
book stores as individual enterprise.
II the social value OF such factors as
these is less than their economic cost
they are not worth preserving. But
who is ready a. this time 20 encour-
age their humiliation? Il is note
worthy that the agitation in favor OF
restoring 70 producers the control OF
resale prices originated with the small
independent retailers and that most OF
the opposition 20 il comes from the
large and powerful retail concerns.
5-The right Of the producer 70 set
resale prices is an accepted principle
o, business law. II has been restricted
recently in this country by close deci-
sons Of the Supreme Court, none o.
which was decided on the basin OF the
general principle alone. We believe
that in the long run the public interest
will be best served by legislation spe-
officially permitting this method OF do
ing business in identified articles made
and sold under competitive conditions