Evening star., 1929-11-30
AID RATE DISPUTE
NEARS DECISION
Federal Trade Commission
Hears Arguments in Case
Pending Several Years.

"LGiLlSI newspaper puUllSIleIS VI JIl-
country should favor direct the adver-
tiser on advertising rates, and allow
him the benefit of all or a part of the
commission. generally Is per cent, col
lected by the agent when advertising
is handled by an accredited advertising
agency was finally argued before the
Federal Trade Commission yesterday
and the case, which has been before
the commission for several years, was
taken under consideration for decision.
An examiners case against five or
ganizations composed of advertising
agencies. publishers and special news
paper representatives charged them
with combining and agreeing upon the
Is per cent rate for, the agencies, on
rational advertising the latter handled,
and with coercion to prevent any
agency from "rebating" all or part Of
their commissions either to publishers
or advertisers.
The commissions examiner alleged
that the defendants thus were sitting
price competition.
The firms against which the action
was taken were: The American Asso-
citation of Advertising Agencies, the
American Newspaper Publishers ASSo-
citation, the Southern Newspaper Pub
fishers Association. the Six Point
League of New York and the American
Press Association.
Claims Interstate Trade.
In rebuttal argument. which closed
the case yesterday afternoon. Eugene
w Burr sought to nullify argument of
the respondents that the Federal Trade
Commission did not have jurisdiction
tracts made for advertising do not con-
stitute interstate trade. He also charged
that in their refusal to give the direct
advertiser, the client who did not use
the services of the advertising agency,
q rate for space less the Is per cent
paid the agency, and IN the agencies
refusal to split commissions there was
unfair competition in restraint of trade.
BY reason of the wide circulation of
newspapers carrying the salesmanlike
advertisements of the advertisers, and
by reason of the interstate shipment Of
the type parts for advertisements, such
as matrixes, cuts and such material,
Burr charged the agents and publishers
were engaging in interstate trade with
respect to their contracts.
The American Association of Adver-
tising Agencies, through its attorney,
Clark McKercher, argued that the
agency commission practice, and the
campaign of education of both publish
agents rebating part or all of their
commission, have been accepted as in
volving the best interests of the pub
fishers and agents for the past 80 years.
He said that these practices had been
In use before the Association of Adver-
tising Agencies was formed in 1920, and
were adopted by the agents organiza-
ton as sound and ethical.
He said the business gathered, the
advertisements
ices rendered the publishers by the
agencies constituted real service for
which the publishers pay on the basis
OF value received. He maintained that
the agents have spent millions of dol
lars in building up this service to the
newspapers. He charged that a mere
handful Of advertisers were trying to
get in at the back door" on the pub
fishers and reap the agents profits
WITHOUT supplying commensurate service
Denies Combination Exists.
j. F. Finlay, attorney for the South
ern Newspaper Publishers Association
argued that there is no combination be-
tween the publisher and agency groups
and that the actual making of an ad-
vertising contract without reference u
the advertisements circulation in In
terstate trade, does not constitute trade
between the States
Robert c. Beatty, counsel for the
American Newspaper Publishers Asso-
citation and the Six Point League OF
New York, attacked the practice OF
agents rebating all or part of their COM
missions in efforts to secure business
He said that rebating always leads &C
bankruptcy for the agent, and cited the
commissions own efforts to have such
practices discarded in other lines OF
business. He also cited State laws which
forbid the rebating by an insurance
agent Of any part Of the commission he
receives Tor writing policy, drawing q
parallel case
Elisha Hanson, also representing the
publishers, denied that any newspaper.
have been coerced by his organization T.
adhere to the organizations statec
principles on the subject of rebatinG
all or part OF the commission generally
paid agents to advertisers who spurr
the "mtddleman" agent, and come direc
TO the publisher seeking all or part O.
the agents commission.
Mr.. Hanson charged that a big ad
vertiser, one of those seeking direct re-
lations with the publishers and a rebatl
on the commission which would havt
been paid the agent, would not sell to
publisher one of the tires he manufac
lures at retail at price less his owl
dealer -middleman's commission tn
publishers, he declared, have one pric
for all in national advertising. Thi
rate, he said, is called the card" rate
and Is available to the person who seek
direct contact with the publisher as vel
as to the agent.
The railroads Of Siam are bette