Evening star., 1961-08-06
Trading Stamp Ban
Repeater Is Offered
Doctored' Bill
Would Allow
Use in District
BY JOHN McKELWAY
Star Staff Writer

A House District subcommit-
tee has quietly doctored a bill
which would permit the use of
trading stamps in the District.
Approved sometime last
week, by a telephone poll. was
an amended version of a bill
which originally sought to re-
move what a number of mer-
chants thought was an irksome
law-passed in 1871 under
home rule.
Because the law was still on
the books, national manufac-
turers ran into difficulty with
the District Corporation Coun-
sells office in trying to inSti-
tute premium sales" here
the free" tube of tooth paste
with the purchase of, say, a
dishrag.
Noting what is known as the
Gift Enterprise Law" District
government lawyers warned
manufacturers that premium
sales in the District were not
allowed.
Their attempts TO enforce che
law resulted in a bill authored
by Representative Matthias, Re-
publican of Maryland, which
would have repealed the an
cient statute. But by wiping
out the law, it was later dis
covered. trading stamps final
ly would be allowed in the DIS
trict. A number of merchants
testified against such a devel-
opment, yet still maintained
they would like to be rid of the
1871 law.
Stamp People Step In
Trading stamp interests,
which saw in the situation the
possibility of a vote by Con-
greSs on the use of stamps in
the Nations Capital, went to
work.
The Matthias bill - which,
once rewritten, specifically out
laWed the use of trading
stamps in the District--landed
in the laps of Subcommittee No,
S of the House District Com
mittee-headed by Representa-
tive Dowdy, Democrat Of Texas.
Mr.. Dowdy, who said he
looked on the bill as a "gratui-
tous slap" at the trading
stamp business, sat on the
measure for number of weeks.
He referred the matter to
Chester Gray, District corpo-
ration counsel.
Eventually, Mr.. Gray came
up with a bill-approved by
the District Commissioners
which would have removed the
gift enterprise statute and ap-
proved the use of trading
stamps locally. But Mr.. Gray
recommended that persons
licensed to engage in the busi-
ness of issuing trading stamps"
be bonded.
Some sources took the bond
ing recommendation as an at
tempt to discourage trading
stamp operators from operat-
ing locally. And in another
draft of the bill. which was
ready as yet another subSti-
tute measure for the original
Matthias bill, the wording was
such as to prevent anyone
from making a profit out of
trading stamps.
Simple Repeater ReOffered
Mr.. Dowdy'S subcommittee,
without a formal meeting, ap-
proved what may be the final
version of the bill. AS it is now
written, it would simply repeal
the gift enterprise law.
The bill goes to the full
House District Committee,
probably sometime later next
week. By the middle of August,
it should reach the House floor.
1t is not expected that a ma
jority of members will stand
against the use of stamps in
the District-an opportunity
offered by the bill, now less
than 10 lines long.
The stamps are now issued
in Maryland and Virginia, and
at a variety of stores in at
least As States. State Legisla-
lures across the country have
repeatedly failed to place some
control on the practice.
Some businessmen claim the
stamps not only create furious
competition but create a gen.
eral rise in prices.
But in a release issued Just
last week by a national trading
stamp outfit, referring to the
District, there appears this
statement:
Trading stamp companies
are no fly-by-night economic
phenomenon, but a long -eStab-
lished and growing business.
an outstanding example of
modern competitive practices in
retailing. . Authoritative and
legal and economic studies, in
cluding those conducted by the
Federal Trade Commission and
the United States Department
of Agriculture in cooperation
with the Bureau of Labor Sta
tistics, show that the issuance
of trading stamps is a legiti-
mate trade device, and offer no
possible basis in public policy
for a law discriminating against
their issuance in the District
of Columbia"