Evening star., 1936-05-05

Tne dppIelleI-
sion which many thoughtful people IN
this country feel about the passing OF
the small individual merchant rests on
the belief that political democracy
will only survive in the long run, II
the widespread distribution OF proprle-
torship also survives. They reoel
against the country being reduced 10
q uniform Main Street OF shops owned
nv absentee trusts, irresponsible as lar
as the local community is concerned
run by hired managers VINO can De
moved about at will. They shudder
before the menace of bigness. Ana
thev realize that the fields OF services
and distribution are the last stand OF
the small man under the corporation
system. Many of these will no DOUBT
welcome this bill. But l think tnat
even inside their own principles ana
aims they will be wrong. 1t will not
oroduce the end which they desire
Nor can it be produced by an attempt
to set the clock back, to substitute, for
sentimental reasons, inefficient mer-
chandising practices for efficient ones.
Measures of this kind will not break
monopolies. What they will do is
penalize the consumer and whatever
else hermay be, the small man, like the
big one, is invariably consumer.
Chain Store Innovation.
Why have chain stores been sue
cessful? Prior to their institution the
average small town grocery was a
shambles. The cat was, literally, in
the cracker barrel: stale goods were
often on the shelves. and the choice
of goods was limited. The village or
small town merchant did business on
credit. AS a merchant he was in
efficient among inefficient competitors.
The chain stores introduced a uni
formly higher standard Of hygiene,
equipment, display and variety, and
sold for cash while the individual mer-
chant hoped that his neighborly con-
facts and easy-going tradition OF
credit would keep him going. He was
wrong. People buy where they can
buy best and cheapest. 1t is true
that the chain stores enjoy buying
advantages. but they are probably OF
secondary Importance. More lmpor-
tant is selling power and selling abil-
ity. The chain stores displayed their
goods. turned their stocks over faster,
introduced innovations and sold spe-
cial items, often at loss.
The same buying advantages were
oper to the independent merchants,
provided that they would cooperate
with each other. Many Of them,
under pressure Of the chain stores,
have done so and are eminently sue
cessful They have set up pools to
buy in such quantities as will insure
reduced wholesale prices, which they
can then pass on to the consumer.
Thousands Of Independently owned
drug and grocery stores now buy CO.
operatively at relatively the same
prices enjoyed by the chains. We,
therefore, have three classes of mer-
chants-avowed chain stores. inde-
pendent merchants buying co-opera-
lively but acting independently and
individualists operating all on their
own.
This bill will initiate against the
first two groups in favor of the third,
The first two can, let us say, pur-
chase 10000 cases of ketchup at $3.50
per case, whereas the individualist
will have to pay So apiece for his two
or three cases. Under this bill. the
latter is going to dictate the price
which you and I pay for ketchup.
But the chain stores will still have
the advantage Of more flexible mer-
chandising and they will still beat
him, at the cost of every one who
buys ketchup.
New Vertical Trusts Seen.
There are innumerable facets to
the problem. The bill is aimed against
monopolies, but large-scale merchants
have often been among the most ef-
fective stimulators Of competition in
production. To take specific in
stance: Some time ago large mer-
chandising firm which sells millions
of shotgun shells to hunters, at
very low price, was held up by a COM
bination of the half dozen or so chief
ammunition manufacturers of the
country, who lacked up the price in
collaboration The firm Immediately
lent large sum of money to small
factory to expand production and pro-
vide shells which could be sold at the