Evening star., 1933-10-11
MARX Up" of Wholesale
Quotations Is Alleged by
Retailers Here.
DENY CLERKS WERE TOLD
TO PUT BLAME ON TAX
Receipt of Complaints From Buy
ers That Boosts Are Unjusti6ed
by N. R. A. Disclosed.

Increased retail costs of cotton goods
was laid today to manufacturers who
arbitrarily in many cases are alleged
to have added blanket charges to their
wholesale quotations.
This was developed at hearing held
before DR.. Frederic C. Howe, consumers
counsel for the Farm Adjustment Ad-
ministratlon, before whom Washington
retail merchants have been called to ex-
plain why their clerks attribute in
creased prices solely to the processing
assessment.
Adolph Weyl, treasurer Of Lansburgh
Il Bro, cited a number OF invoices and
qucSed manufacturers to show the in
creased cost resulted from four ele-
ments. These he listed as the pro-
cessisy tax, textile mill labor costs,
manufacturers factory costs and dis
counts. Mr.. Weyl added that the
amount of the processing tax was so
small it is being disregarded in fixing
retail prices.
Additional Employees Cited.
He cited, however, the number of
added employees in the retail store as
one cause for the advances. For eX-
ample, he said, his firm now employs an
average of 842 persons, whereas in Sep
tember year ago only 713 were en-
ployed
Weyl also said that on some specific
items of cotton goods the increase IL
price to the retailer has been IS per
cent or higher This, he said, had been
protested to the manufacturers without
honafPio1 q
bought in for September delivery had
been quoted at As per cent higher. More
recently another 10 per cent had beer
added and attributed to labor strikes
1T appears" he said, that mani
facturers in some cases have arbitraril
arrived at an agreement to raise tt
prices. We would not object to 10
is per cent increases, but retailers a.,
forced to bear the burden of this add
tional cost. We understood there would
be reasonable increase due to the ta>
but We did not expect 35 to As p
cent"
Weyl also said sales clerks have +
been instructed to explain the high
cost by reference to the processing ta
Deny Instructing Clerks.
Harold Levi, vice president and gen.
d. b
Burgunder, president of the S. Kann
Sons Co., also said no instructions were
given their clerks to refer to the process
Ing tax. In fact, they said, their sales
forces were told to avoid any such ref
erence. These two merchants also at
tributed part of their higher costs to in
creaSes in the sizes of their sales forces
under the N. R. A. code.
In reply to questions by Frederick W
Waugh of the Bureau of Agricultural
Economics, specific increases were cited
by the merchants.
In one case, charge of S26 was made
to cover the processing tax on a bill
totallng $780, another showed So per
third showed 43 per cent on a bill
for $50
Before the witnesses began their
testimony, Mrs. John J. Boyle. jr.,
chairman of the consumers counsel
for the District of Columbia. said she
had received number of complaints
from Washington buyers that the
higher prices were not justified by the
tax or the N. R. A. code
She called upon the merchants to
make clear to the public just why
the increases have been made
DR.. John A. Ryan. president of the
vice president of the District con-
sumers council, also called upon the
merchants for an explanation.
Additional Documents Promised.
Testimony supporting that given by
Weyl, Levi and Burgunder was also
given by William Davies, merchandise
manager, and John Davies, controller of
Woodward & Lothrop; Radford Moses,
president of w. B. Moses & Co.; A. C.
Case, general manager of Palais Royal.
and Harry E. Ulman, vice president OF
Goldenberg's Department Store.
The merchants agreed to supply ad-
ditional confidential documents on in
creased operating costs under the N. r.
A. code, copies of invoices received
within the last few weeks and bills on
similar goods purchased a year ago.
These figures are to be studied by econ
omistS, who will determine whether the
investigation will be continued on a
national scope.
All the retail stores represented VOL
unfairly offered to issue instructions to
their sales forces giving clear expla
nation of price markups in order that
they may satisfy any buyers inquiring
as to their cause.
Investigators Visit Stores.
The hearing was called after investi-
gators for the Consumers Counsel
"shopped" in stores here and found
clerks had been instructed in some in
stances to explain the higher prices as
attributable solely to the AZ cents
processing tax
Similar investigations have been and
are being made in other cities, and Ad-
ministrator Peek has announced the in
vestigation will be broadened to include
the whole country if it is found to be
warranted.
DR.. Howe issued statement several
days ago to purchasers of cotton goods,
warning them to keep the amount of the
processing tax in mind. It is his opin-
ion that the tax alone is an insufficient
explanation of advances. He cited the
higher retail prices of sheets, hosiery
and other cotton goods and contended
the tax by itself was far too small to
explain the mark-up in prices.
When Peek summoned the District
merchants he made it plain the stores
here are by no means under suspicion
of wrongdoing. In some cases. he said,
the retailers have been fair in their ef-
forts to explain tine higher prices, in
cluding as a reason the higher pay
scales under the N. r. A. textile code as
we'll as the tax It is his hope to trace
the higher costs from the raw cotton to
the consumer and actually determine
all factors affecting the present prices.