New-York tribune., 1916-01-30
Car Sales Plan Attacked.

The District Attorney for the State OF Texas
has started a campaign TO test the legality of re-
stricted territorial selling districts. The move
threatens 10 upset the whole plan Of automobile
distribution. Test cases have been entered against
one Of the largest distributors Of In Texas
and several manufacturers of cars who have dis
trbuters and agents in that state.
The plan by which automobiles have been dis
trbuted is not peculiar TO the motor car indus
try. II has been employed by machinery, wagon
and other manufacturers for generations and its
legality has never been questioned until law was
recently passed in Texas to prohibit territorial
restrictions to all classes OF dealers.
Each automobile maker divides up the United
States, and other countries where there is mar
ket for cars, according to his ideas Of selling
districts. Factory representatives. are sent out
into the districts TO contract with distributors.
The amount OF territory allotted to given dis
tributer is governed entirely by the number Of
cars he is willing TO contract for in one, two or
more years.
1t often happens that will contract for
an entire state. lie then has the exclusive right
dispose of the cars made by that particular
factory within the borders of his state He in
turn sublets the state to county, town and city
agents. They frequently sublet parts OF their ter
ritory but the car builder deals only with the state
distributor
A constant battle wages all over the country re-
garding infringement of territory. Bill Jones, Of
Poodledog County finds out that Sam Smith of an
adjoining county has sold a to a man resid
ing in Poodledog. Under the agreement between
factory, distributors, dealers and sub-dealers the
agent in Poodledog is entitled TO commissions on
all cars sold in his territory But there is no
redress for him in the courts which do not recog-
nize the territorial rights Of agents established
between themselves.
The only comeback Bill Jones has is to complain
TO the distributor controlling the state. The lat
ter tries 20 force Sam Smith 20 pay at least
part Of his profits on the car sold out OF his ter
ritory TO Bill Jones. # Smith refuses to settle
with Jones it is up to the distributor to act. He
refuse to let Smith have any more cars that
year and dispose Of Smiths territory to another
sub-agent Smith having violated his contract to
stick to a prescribed district
The new Texas law does not recognize the right
OF manufacturer or distributor to refuse to sell
cars to any one who has the money TO pay for
them. 1t is a question which may be carried to the
United States supreme Court Any state court
decision would not be vitally important to the
industry at large. but, OF course, if the highest
national court should view an automobile in the
light of necessity of life as food, clothing medi-
cal attention, etc, the decision would be far reach
ing in its effect and overturn the whole plan of
motor distribution.
The manufacturer is in peculiar position be-
cause he has been maintaining Of late years tina.
tho Is no longer toy but a necessity. If he
faced in court with his printed advertisement
asserting this he could hardly contend that il was
not the right Of every citizen TO be able 10 buy
car from him at the market price