Evening star., 1926-05-02
CHAIN STORE FIGHT
GROWING Stronger
Manufacturers and Inde-
pendent Merchants Seeking
to Curb Cut Rates.
BY HARDEN COLFAX.


Manufacturers and independent re-
tell merchants, fighting what they de-
scribe as a menace to their continued
existence in the growing systems of
chain stores and in certain classes or
Cut-rate stores, appear to have lost,
temporarily at least, their fight for
legislative assistance. 1t is not prob
able that the House committee on in
terState and foreign commerce will
report the so-called price maintenance
bill. on which intensive hearings have
been concluded.
But the fight over what methods of
distribution shall be followed in the
United States will be continued. it is
entirely safe to prophesy, whether
within the halls OF Congress or with
out and with rather strong indica-
tions that there will result radical
changes in settled practices and pol
icies of selling merchandise 10 the
consumer.
Terror Of Chain Store.
over the head of the independent
merchant there bangles the terror or
the spreading chain store, with its
enormous buying power and reserve
resources. over the head or the IN
dependent manufacturer there Is
sword in the form Of fear that the day
may come when the outlets of his
products VIII be limited to few
2reat systems, which he must please
on their terms or so out OF business.
This is the picture painted by auvo-
Gates of such measures as the price
maintenance bill. Opponents OF this
and other legislative proposals declare
any such picture entirely too futurls-
tic and the result of Nightmares, TO
hc laughed away with the coming OF
dawn.
out of the increasing struggle
which marks the retail field, the con-
sumner is much more likely to receive
benefit than injury, for the search to
lower costs of distribution, which now
accounts for an average or nearly 90
cents of the purchasers dollar, IS
progressing in a dozen different dl-
rectionS.
The price maintenance bill IS TO
stranger to Congress, but ii has been
pressel before The House committee
recently with unprecedented Nlgor
and opposed with an equal intensity.
The bill. in brief, would permit the
producer of trade-marked merchan-
disc 10 fix by contract with the dis
tributor the price at which the goods
should be sold to the consumer.
May Refuse to Sell.
Under the oresen. law, any such
contract is in restraint of trade, al
though a producer may refuse to sell
10 anv one he chooses and thus may
eliminate from his list price cutters if
he desires, but he cannot threaten
them with this action in advance.
Powerful firms, for whose goods there
is strong demand, thus already can,
and do, dictate resale prices by their
known policy, but less powerful man
ufacturerS and those who distribute
through jobbers have difficult time
enforcing their desires in such mat
terS.
1t is contended by the American
Fair Trade League, supporting the
price maintenance bill. that only
through a fixed resale price on stand
ard, trade-marked goods can the pro
ducer protect his good will and the
independent distributor protect hlm-
self against cut-rate sales by COM
petitors on standard goods. 1t is
argued that the competitors make up
losses or low profits in this direction
by high prices on goods whose normal
price the consumer does not know.
On the other hand. it is contended
by opponents of such measures, not
able among whom are the members OF
the National Retail Dry Goods AS
sociation, representing several thou
sand department stores and specially
shops. that such a law would give a
few producers the power to combine
in secret and control the price of any
given commodity, and that merchants
would lose their individuality and be-
come mere agents for manufacturers.
Opposing the bill also are the Ameri-
can Federation of Labor, the National
Grange and the American Farm
Bureau Federation, which fear the
result of such legislation would hit
the consumer in his pocketbook.
Many Chain Stores.
Whatever the merits Of the contro-
Versy, it is plain that there Is a
change in merchandising. Figures
given the House committee showed
that whereas 20 years ago there were
few chain stores in this country, tho
latest statistics established that there
are now 1900 systems Of grocery
stores, 1879 systems Of drug stores,
J .o5S systems of dry goods and mil
linery stores, 215 systems OF cloak and