Evening star., 1939-01-08
Chain Store Dispute
To Plague Congress
By Frederic J. Haskin.

aware that this new Congress is going
to be the arena for epochal political
and economic struggles and among those
certain to be witnessed Is the old strus-
gle regarding the desirability Of chain
stores and even Of their right to exist.
Reasons for the sharp difference Of
opinion on the part of members and
groups Of the American public have
varied springs, but the two principal
ones are economic and sentimental.
Chain stores have existed in America
for very long time. The first was
British, the Hudson's Bay Co., which
still is flourishing organization and,
before there was Canadian border, Of
course, 1t had stores in what now is
United States territory. Even now many
products Of the company are sold in
this country, although no stores are
operated. But on what now is United
States soil there existed a curious type
Of chain store even in Colonial times.
The itinerant peddler who travelled wide
ly. sometimes with only pack, but, in
other cases, with huge wagon or a
pack train or wagon train, had an inter-
est IN the stores he sold to. Indeed,
he might be the only source Of supply.
What is today the oldest and largest
chain store system started through the
establishment of peddler routes That
is the Great Atlantic g. Pacific Tea .
Co., which was founded in New York
in 1858. Starting with tea it later added
coffee, sugar, and spices, but not for
many years did it branch out into the
almost unlimited line of groceries and
meats. The earliest sales figure avail
able is for 1915, when sales amounted
to $44000,000, vast sum for that time.
A peak was reached in 1890, when sales
topped the billion mark.
There were other early foundations.
Woolworth was founded in 1879; the
Kroger and the McCrory chains In 1882;
Kress in 1896 and Kresge in 1897. j.
c. Penney did not come until 1902. w.
T. Grant started in 1906 and Walgreen,
the drug chain, in 1909
In every town where branch or chain
store was started local opinion divided.
In all such places there was almost Ger
tain to be some d-established trades
man, especially grocer, who was popu-
lar and had sold, perhaps, to two or
three generations
Often these Independent storekeepers
had certain local political influence. Also
they formed protective organizations and
made the chain store issue a political
one. Bitter campaigns were carried or
against the chain store no matter what
it sold. The chain grocery, however
always was the especial target. 1t Is
fair to say that men have been elected
to Congress, or defeated, depending upor
their positions on the chain store issue
and the positions Of the people Of their
localities.
For in every town there arose an ele-
ment which welcomed the chain store
This was composed of people who coult
not afford to be sentimentalists and VIII,
found the lower prices charged by tn.
chain store considerable boon. The,
could get more for their money ano.
often, greater variety of goods.
The depression worked to the ad-
vantage Of the chain stores. Many in
dependents would have gone under ever.
in the absence Of chain store competi-
ton while, on the other side, the chains
obtained an entirely new class of Gus
toners People who had scorned chain
stores IN the years of high prosperity
because many regarded patronage of
them as mark Of relative poverty found
themselves glad to take advantage of
the low prices offered. The total VOL
ume Of all retail trade declined, Of course,
during the worst years, but the chains
made the quickest recovery. To take
some examples, the A. & P. had sales OF
s1s4,646 900 in 1918, reached peak of
just over 81 000,000,000 in 1929, declined,
but in 1887, showed 1882 900 ,000 Grand
Union sold $13,561 900 in 1918, $27, $50, 900
in 1928, and $31 $4,000 in 1887. j. C.
Penney sold $21 $4,000 in 1918, $176698,-
600 in 1928, and $275 5000 in 1887.
But. even with startling gains in 50
many cases, the Independents still have
about 10 per cent of the business.
The matter will come before Con-
8AcSS tAuOuSll pIOpOSdlS 1OT CaXaClo0.
The States have gone through many
experiments. Maryland. more than a
decade ago, prohibited any new units of
existing chains and similar laws have
been passed elsewhere. These have been
held unconstitutional. Discriminatory
regulation being frowned on thus, the
cid weapon of taxation was taken up
and now % States have some kind of
special license tax. These laws show
considerable variety. Tennessee imposes
special tax on the second store OF a
chain located in the State based on area
OF floor space used in selling Louisiana
has graduated tax on stores OF a
chain in the State based on the num-
Der OF stores the chain has anywhere
in the United States.
Some Of these taxes or license fees
have been successful in stopping growth
Of chains and some have even put chain
stores to flight The Wisconsin tax is
only 500 per store per year, but Texas
has one Of $3.50. Inasmuch as a sur
vey has shown that, in some regions,
the net profits from units Of chain
grocery stores have averaged only $500
it is obvious that such tax as that i'm
posed by Texas cannot be paid unless
prices are raised to meet independent
prices. OF course, this can be done. II