Evening star., 1951-05-23
Blow to Fair Trade Laws

Forty-five States including Maryland and
Virginia, have enacted so-called fair trade laws
to permit manufacturers and retailers to fix
minimum resale prices for nationally advertised
products. All Of these laws have been knocked on
the head by the Supreme Court decision an
nounced on Monday.
This Is subject which has produced no end
OF conflicting claims. Those opposed to the laws
say, probably correctly, that they serve as bar
rier to lower prices to the consumer. The mon
signer" clauses in all of these laws also have
been roundly condemned These clauses generally
provide that once manufacturer has made a
minimum price agreement with one retailer all
retailers in the State, If they have notice of the
agreement, are bound by it. This is the clause
that was struck down by the Supreme Courts
decision.
Those on the other side of the proposition
have their arguments. They say that minimum
price fixing on nationally advertised products
is necessary to protect the public against such
merchandising stunts as Gloss leader" sales-a
device to lure customers into an establishment
by advertising few well-known items at cut
price. Another argument is that, without some
kind of minimum pricing big retailers could sell
items at loss in order to drive small competitors
out Of business
The Supreme Court however, presumably
pros and cons. The question before the court
was what Congress intended to do when it passed
the Miller -Tydings Act in 1887.
Under the Sherman Antitrust Act any
contracts fixing minimum resale prices would
have been outlawed. So the Miller-Tydings Act
was passed to except from the Sherman law
contracts or agreements" prescribing minimum
prices for trade-marked goods where such con-
tracts or agreements were valid under State
statute or policy
The majority opinion, written by Justice
Douglas, took the position that while this pro-
tected contracts agreed to by retailers, it did not
cover the so-called non-signers-retailers who
had not entered into any contract or agreement
with the manufacturer. The majority view was
that Congress did not intend the Miller-Tydings
Act to apply to the non-signers, and that they
could cut prices if they wanted to do so.
The minority opinion, written by Justice
Frankfurter, with Justices Black and Burton con-
curing, took the opposite view. Justice Frank
furter summed up their position in these words:
Every one of the AZ State acts which the
Miller-Tydings amendment was to back up"-
the acts on which the Mier-Tydings amendment
was to place stamp Of approval"-contained
"non-signer" provision. AS demonstrated by
experience in California, the State acts would
have been futile without the "non-signer" clause.
The court now holds that the Miller-Tydings
amendment does not cover these "non-Signer'
provisions. Not only is the view Of the court
contrary to the words Of the statute and to the
legislative history It is also in conflict with the
Interpretation given the Miler-Tydngs Act by
the Federal Trade Commission, by the Depart
ment of Justice, and by practically all persons
adversely affected by the "fair trade" laws
The "fair trade" laws may well be unsound
as matter of economics. Perhaps Congress
should not pass important measure dealing
with an extraneous subject as rider to a revenue
bill Gas was done in this case) with the coercive
influence it exerts in avoiding veto; perhaps it
should restrict legislation to single relevant
subject, as required by the constitutions ofthree
fourths Of the States. These are matters beyond
the courts concern Where both the words of a
statute and its legislative history clearly indicate
the purpose of Congress- it should be respected
We should not substitute our own notion of what
Congress should have done.
This is the proper view of the courts func-
tion And 1t looks as though the majority, in this
instance has departed from it. For If the ma
jority opinion is right, then it follows that Con-
gress, in passing the Miller-Tydings Act was
pretending to reinforce the fair trade laws of a
States, while actually reducing them to i'm
potency.
Fifty Years of Armstrong
The celebration of the 50th anniversary o1