Evening star., 1936-03-06
CHAIN STORE CURB
| HELDPR|CE LIT TER
Wholesale Grocers Say
Legislation Is Subsidy at
Consumers Expense.


which about 20 independent groups
are pressing is designed Ito subsidize
q small group of middlemen at the
expense of the consumer" according
to memorandum put out by the
chain interests.
Attacking the Robinson bill, now
before the Senate with favorable
report from the Judiciary Committee,
and the Patman and Utterback bills
in the House. the statement declares
that should the principles they en-
body be enacted into law. practically
every business in the United States
will be affected"
Meanwhile, proponents Of the leg
islation, who yesterday went to the
White House and asked President
Roosevelt's support for "the little
man in business" were today con-
tinuing their efforts to interest ad-
ditional members of Congress in the
measures.
Changes in Marketing Practices.
Dealing primarily with the Robin
son and Patman bills, the statement
analyzes these.
With reference first to the Robin
son bill, the chains point out 1t would
amend section of the Clayton act
by making the following changes in
established marketing practices:
81. It would prohibit price differ
entails based on different quantities of
goods sold unless Justified by an actual
difference in cost of manufacture, sale
or delivery. This would prohibit the
manufacturer from making the guam
tity discounts which experience has
demonstrated results in lower prices to
all customers, small as well as large.
and are necessary to the operation Of
the business on a stable basis. (The
Utterback bill goes further and elm
mates discounts based upon a differ
ence in cost of manufactured
Patman Bill Hit.
1.-THE Patman bill eliminates entirely
the provisions of Section 2 of the Clay
| ton act as it now stands which makes
| quantity discounts unlawful only If
they tend to create q monopoly or
lessen competition; the Robinson bill
as reported restores those provisions
and adds others which prohibit guam
| tity discounts where the effect may be
| to prevent competition with any per-
son who either grants or receives the
benefit of such discrimination, or with
customers OF either of them The
Robinson bill proposes in addition the
setting up of the Federal Trade Com
mission as an agency to establish
| quantity limits which can in no event
be exceeded, irrespective of differences
in selling or manufacturing COSTS
.. 1t would prohibit the payment
Of brokerage fees to any one connected
directly or indirectly with the buyer.
IS. 1t would prohibit the paying of
any service compensation advertising,
sales promotion. etc) unless propor-
tionately available to all customers
alike, or unless the customer is in no
way associated by name or otherwise
with the goods advertised.
"The latter two prohibitions are
completely independent of any find
ings of monopolistic tendency OF
lessened competition"
e. Two Principal Results.
The chain interests set out two
principal results" that would follow
such law:
THE place Of the middleman and
broker in our system of distribution
would be established and maintained
by legislative fiat. As q consequence
there would be a material increase in
the spread between the producer and
consumer.
THE consumer cost Of living
would be substantially increased, be-
cause it is he who must finally pay
all costs Of distribution, whether nec-
| essary or unnecessary.
Before the House Judiciary Com
mittee 1t was testified that the en-
actment of the Patman bill would in
crease the cost of food alone to the
consumer by approximately $3.50, ,000,-
600. The consumer would pay COM
mensurate increased costs for other
commodities"
Other Results Cited.
Other results, 1t says, would be:
1.-THE elimination of stabilized pro-
duction which so often makes it DOS
sible for manufacturers, particularly
small ones, to produce goods for large
buyers during the off-peak season,
thereby lowering prices to all buyers
and consumers; and the emphasis of
peaks and valleys of production with
attendant seasonal lay-ofIs of labor.
THE freezing Of the price level,
with much greater attendant advan-