Evening star., 1952-05-25
Senate Urged by FTC
10 Reject House Bill
Backing Price Fixing

4ne feQeral TRADE COMMISSION
has urged the Senate to reject 81
House-paSsed bill which would
strengthen price-fixing agree
ments allowed in IS States.
Commission Chairman James M.
Mead filed an opposition state
ment last week with the Senate
Commerce Committee, which viii
open hearings June 2 on the
price-fixing measure. It swept
through the House three weeks
ago by a 196-to-10 vote.
The so-called fair trade" laws.
passed in IS States. allow manu-
facturers and retailers to agree to
minimum retail prices for specific
brand-name items. Congress pre-
viously has exempted such agree
ments from Federal and anti
trust laws.
However, the Supreme Court
ruled last year that the exemption
applied only to specific retailers
who signed the agreements. I'll
ruled, in effect, that non-signing
retailers could not be held liable
for cut-rate selling.
Arguments Outlined.
The main result of the House.
passed bill is to make the con-
tracts apply to all retailers in
''fair trade" States. Proponents
argue that the agreements are
needed to keep large competitors
from running small merchants
out of business by cut-rates on
brand-name products.
The FTC, however, said the bill
would impose the fixed prices on
dealers and the consuming public
without ANY public supervision as
to reasonableness."
Mr.. Mead said the courts have
been "circumspect in recognizing
even the authority of governments
to fix prices =" And such
price-fixing, he said. is invalid
unless taken for public purpose
and by reasonable means" He
added:
In these (fair trade), however.
fixing power is entrusted not to
the Government. but to private
persons. The purpose to be served
by the price fixing presum-
ably (would be- that Of serving
their own pecuniary interest,
rather than that of the public
interest"
Mr.. Mead said the proposal goes
"much further" than the power
Congress gave the Government in
the NRA in 1888. In that act, he
said, representatives of both labor
and the public participated in fix
ing certain prices.
The FTC head said the proposal
by binding all retailers. would
make the price-fix agreements the
same as "the most rigid horizon
tai price-fixing conspiracy" He
argued that nothing is clearer
than the Federal policy againstl
horizontal price-f1xing.
The State laws apply to vertical
price fixing. This means agree
ments between two levels of |
dealers, such as manufacturer and
retailer. Horizontal agreements
would be those between dealers on
the same level. such as between
retailer and retailer.
Conditions Changed.
Mr.. Mead said conditions have
changed since Congress gave anti
monopoly exemption to the State |
laws in 1887. Since. he said, Con-
gress has prohibited price dis
elimination and other unfair
methods Of competition" He
added:
ut is the elemination Of these
evils rather than the legislation
legalizing ice-fixing which will
minimize the inequities between
the smaller businessman and his
more powerful competitor.
Meanwhile. aides pointed out,
the Commerce Committee may
face a time problem in handling
the fair trade" bill. with political
conventions scheduled in July.
However, Committee Chairman
johnson said there would "be time
to get the bill out If the commit
tee wants to do it," The Colo
RADIO Democrat said he would ire
main minded on the issue |
until I hear both sides"
Seven organizations already |
have asked to testify in support Of
the bill. They are headed by the(
American Fair Trade Council and
the National Association Of Retail |
Druggists.
A similar number want to tes-
tify against 1t. They include farm
groups. the CIO. university econ
omistS and independent mer-
chants.
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