Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-07-25

WOulo ike 70 Know uy Wuht IASub
and on what basis the proponents
Of this legislation believe they are
entitled to take 500 year out OF
my pocketbook by eliminating
wholesale and retail price compete
ton on q number Of products that
my family needs and wants.
IT the proponents are on
the average poverty stricken. or
even near the bottom OF the eco-
nomic ladder, ! would be glad to
contribute to their relief directly
in taxes, or by having the Congress
set support prices at less than long,
run compensatory levels as we have
in agriculture"
Justice Department
Enactment OF q "fair trade" law
for the District was opposed on be-
half Of the Justice Department by
Stanley N. Barnes, Assistant At
torney General In charge Of the
Antitrust Division. He charged that:
Under the so-called fair trade.
q contract between q manufacturer
and q single retailer hxes the price
of q commodity for all other nom
signing retailers within State.
Price competition among retailers
Is thus eliminated. without COM
petitive pricing. the form Of conn
petition may remain, but the sub
stance Is lost
THE suggestion has been made
that this resale price maintenance
system permits competition ct the
manufacturing level. where 1t be-
longs the implication being that
retailers should be insulated from
competition. Experience has richly
demonstrated, however. that compe-
tition at all levels Of our economy
Is In the national interest. Compe-
tition has kept our free enterprise
system strong and viable. Its sup
preston by either governmental
regulation or private agreement is
inconsistent with basic American
principle.
%. The great impetus behind
so-called fair trade comes from re-
failing groups, not from manufac.
turers. Fair-trading has. In fact.
been most effective In those fields
in which trade associations are
strong enough to persuade manu-.
facturers to fair-trade -.
Under so-called fair trade. price,
fixing arrangements are entered
into by private parties without pub
lie regulation or supervision. The
public interest is not represented
at any stage of the negotiations.
The result. Of course. Is higher
prices for the consumer.
Questionable Surveys
"While fair-trade proponents refer
to statistical studies purporting to
show that prices are lower under
fair trade. 1t Is suggested that the
use made Of these studies ID Of
questionable validity -.
"A comparison of prices Of Drug
store items in April-June, 1854, OBJ
tanned from the advertisements Of
drugstores in the District Of Co
lumbia, showed that on 1856 items of
ordinary drugstore business the fair
trade price totaled $2,241.10. and
the non-fair-trade price on the same
items totaled $1,602.l4. or O saving
Of 28.4 per cent.
I'm the appliance field, q similar
comparison of so-called fair-trade
prices and the prices Of low mark
up outlet in the District on 245
items showed total Of $6,142.33 I'M
der fair trade and $4.442.69 for the
same items under the latter's prices,
or saving to the consumer of 27.7
per cent.
1.-THE retailers selling at the lower
price are not using these items as
loss leaders; even at the lower price
they are taking their mark-up and
making profit.
For instance, q certain mixer
costing retailers $2s.70 in 1852 was
fair-traded at $46.50. while nom
fair-trade retailers sold it for $34.7o.
Certain razor blades have q gross
margin Of about SO per cent as COM
pared with non-fair-trade margin
Of about rs per cent.
"A certain vacuum cleaner shows
q gross margin of 93.4 per cent az
compared with 20 per cent for nom
fair-trade areas.
Consumer Loses
The list could be extended, but
1t Is evident that there is q con-
siderable area for price competition
below so-called fair-trade prices
and above retailer-cost prices.
1T is evident that fair trade
does not benefit the consumer. At
the same time. 1t deprives q busi-
nessman of his right to decide
whether he shall compete by lower
prices and less service or by higher
prices and more elaborate service.
BY fixing the price high enough to
profit the less efficient. 1t takes
away the incentive Of the more
enterprising businessman to increase
his efficiency.
ct has been noted that among
the proponents of so-called fair
trade for the District of Columbia
are representatives Of national
organizations. Obviously, so long
as the District Of Columbia is OUT
side the fair-trade orbit. it affords
consumers basis for price COM
parison and makes 1t little more
difficult to increase mark-ups
under fair trade, so it is not sur
prising that business groups outside
Of the District are anxious to elini-
nate this basis for comparison
Civic Groups Oppose Bill
Support for the bill at three days
Of Senate hearings came chiefly
from retailers and their associations.
Opposition was conferred In civic