The Beauty & Barber Supply Institute, Inc., is a trade association with principe offices at 19 West Forty-fourth Street, New York, N. Y. It represents some 650 wholesale dealers of beauty and barber supplies located throughout the country In addition, approximately 320 manufacturers of beauty and barber supplies & associate members of the institute. All of these members are small-busines enterprises. So far as we are able to learn, all of them favor H. R. 5767, which would restore the effectiveness of fair-trade laws in 45 States. This statement is submitted principally for the purpose of indicating the sup port of this segment of industry for H. R. 5767 as passed by the House of Repr sentatives, and we do not deem it necessary to set forth in detail all of the are ments which we might advance in favor of fair trade. The following three arements seem to the institute the most fundamental and compelling: 1. Fair trade legislation has been approved by almost unanimous consent the people of the United States, speaking through the legislatures of 45 Star This expression on the part of the people through their legislatures should not be ignored. Suitable enabling legislation, such as H. R. 5767, ought to be enacte by Congress to permit these States laws to operate with full force and effect. 2. Fair-trade laws, if permitted to operate as enacted, nurtures and encoura small business enterprise by enabling it to compete on an equitable basis with business and by protecting it from destructive price wars of whatever origin. 3. Fair trade, by encouraging and protecting small business, constitutes a bu wark against economic collectivism and fosters democracy at its grass roots. H. R. 5767 would restore the effectiveness of State fair-trade laws and leave the administration with the States where we think it belongs. The Beauty at Barber Supply Institute, Inc., therefore, respectfully urges speedy and favorab committee action on this measure. The institute respectfully requests that this letter be incorporated in and made a part of the printed hearings of the committee on this measure. Very truly yours, CHARLES N. FORD, Beauty & Barber Supply Institute, Inc. STATEMENT PERTAINING to MCGUIRE BILL, H. R. 5767 Hon. Senator JOHNSON of Colorado, Washington, D. C. DEAR SENATOR: I deeply regret foregoing the privilege of appearing before 100 in person due to previous arrangements. However, I am extremely happy ha I saw your very efficient committee in action. For 2 days I observed and listened to testimony on both sides and must corr mend you on your vigilance, patience, politeness, and above all the sincerity y displayed in seeing that justice is done, that most people can benefit from you recommendations and the Senate's decision. I feel very gratified that you are interested in the little merchant who is th original backbone of the American enterprise, but has been long forgotten. 1 not believe, as you will note in my testimony, that there is any hope for us, giant organizations have surrounded us like an octopus and to remove his some human organs will have to be destroyed and a lot of blood lost. I noted your keen interest in the jeweler from Pennsylvania who lost his volum because of unfair tactics used by an unscrupulous merchant, who cut the la trade price. Senator Hickenlooper was very much impressed, but the Senat must realize that it is hard to shoot a criminal on the main street without hurti many innocent bystanders. Rather than subdue the criminal, let's look to causes that gives him the opportunity to do criminal deeds. Is it not a fact tha the so-called fair-trade manufacturers have more tricks behind them than Car has liver pills? I can testify to the fact that we have completed arrangem with Crosley for $40,000 in appliances on a direct dealer's basis with an advertel. allowance of 14 percent. A friend of mine, a smaller dealer, pays 6 to 10 per more for his goods and receives no advertising, and I cannot sell him any applian to protect the distributor. What chance does he have under fair trade? The appliance manufacturers will make a refrigerator under your name at price to compete and under his name at a terrifically higher price and a milli tricks used to juggle it between the distributor, retailer, and consumer. Macy's incident was premeditated and the appliance dealers instigated t Motorola sets at half price, which would not do us any good. They stuck us with the big sets and kept the smaller sets off the market, then they began to offer the small sets after it was too late for public acceptance. I noted with interest the gentlemen whose photographic business was ruined by Sears and Roebuck, who sold film at $3.95, 5 cents less than it cost them, I am sorry for him. Was he keen enough to investigate how much profit Sears made, and why the Kodak people sanctioned it? The answer lies in the problem of how much is it worth to protect the honest-man's built up, nationally advertised product, providing he has clean hands and does a one-way business. Is there such a firm? We are too small to enjoy all the benefits and too little to be ignored, yet we only come in on the rebound in some of the secret deals. To summarize it all, bear in mind that if fair trade is passed, every manufacturer will fair-trade a name and will try to sell the profit motive rather than the actual value and at the first sign of a slump it will wipe the little fellow off clean, and that is what I feel, the swimmer must always be mindful of the undertow. I contend that this is premeditated scheme to get the little drug stores and the little merchants out of the merchants out of the way when the whistle stops blowing. Fair trade condemns the retailer into the manufacturers bands at will, to raise prices, lower prices, change models, stick him with undesirable patterns, and he has nothing to say about it. Some of the tricks that chain stores have developed and apply at the first sign of a depressed market are listings, what their orders amount to, because there is no obligation or responsibility to accept the goods from the manufacturer. Laundry systems, which means the manufacturer must keep the goods and supply him at will. Cut, make, and trim, which turns the manufacturer into a contractor, and all they pay him is for labor; guaranteed recale basis and a few more techniques not publicized. All these tricks are the evasive part of the Robertson-Pitman Act. I hope you will add this to my previous statement which is already in your possession. Very truly yours, HENRY LUCKOFF. STATEMENT OF SAMUEL MOSKOWITZ, GENERAL COUNSEL AND EXECUTIVE SECRETARY OF THE HUDSON BERGEN COUNTY RETAIL LIQUOR STORES ASSOCIATION AND THE NEW JERSEY RETAIL LIQUOR STORES ASSOCIATION DOES FAIR TRADE PROTECT THE PUBLIC INTEREST? Who are the opponents of fair trade? Not the manufacturers, because they have a completely free hand to establish as low a consumer price as they desire. They can establish a price below cost if they want to and the fair-trade law will not interfere with thein. Not the retailers, because 99 percent or more of the retailers (who are the backone of the economic life of our Nation) are not opposed to fair trade. Certainly not the consumer, because the consumer is not opposed to fair trade n any commodity where there is honest competition and where he has a choice of various price levels for the same class of merchandise. The consumer knows air trade protects him ultimately in quality and in price. The opponents of fair trade are few in number. The obvious purpose of such infair trade practice on the part of certain misguided merchants is to take a ertain brand for which the manufacturer has created public acceptance and slash he price in order to accomplish two selfish purposes, namely: (1) To take customrs away from legitimate fair-trade retailers; and (2) To create the illusion in the ustomer's mind that other items sold by such unfair trade practice merchants are priced lower than the same merchandise sold by his competitor. Such merchants totally disregard the unfair damage that they cause the manufacturer who has spent years of time and sometimes millions of dollars manufacturing a good product and in creating public acceptance of such product. Such unfair nerchants want to take unjust advantage of a favorable condition created by the abor of someone else and appropriate it to their own interests notwithstanding he injury done to the public. In discussing questions dealing with the public welfare, we must remember that what was good in former times may not be good today. Fair-trade restrictions n the old days might have been unnecessary because the bulk of commerce was peal and sales in trade-mark packages constituted a very small portion of our otal commerce. Today, a large portion of commerce is Nation-wide in scope and a great per centage of our goods is sold in trade-marked packages. To say that because fair trade was not needed 100 years ago, it is not needed today, is to ignore the enor mous progress made during the last century. Nation-wide communications are the foundations of our modern commercial life. The welfare of each citizen today is tied to the commercial activities of our national industries. America is no longer a conglomeration of small settlementswe are a great nation of 140 millions and we must gear our business methods to the times in which we live. Let us consider what a manufacturer has to do today to obtain national distribution for his product and by so doing make his contribution to the commercial activities of the Nation. First, he must adopt a plan of distribution. That plan must be as sound as it is humanly possible to make it. After the plan is adopted, the finances for advertising and for employment must be provided. How could such a plan be adopted and where could one find the people to finance it if a few merchants in each community were given the privilege to wreck it for their own selfish purposes. To carry out a plan of national distribution successfully, the participation of a great many people both at the wholesale and at the retail levels is required. Enough people cannot be found who would be willing to participate unless they can see reasonable stability in its execution and unless they can feel reasonably certain that their positions will not be undermined overnight. In my opinion, no such stability and security can be obtained without fair-trade laws. The few opponents of fair trade refer to this good system as a price-fixing law which, if true, would mean that no price competition exists in a given commodity and the consumer would have no chance to obtain a fair deal. Opponents of fair trade sometimes use the expression "price fxing" in opposing standards in business practices because they know that price fixing" is a bad word in the public mind. But that is merely name calling. Opponents of fair trade know that fair trade can be applied only to brands which are in fair and open competition with other brands for the same or similar commodities. They also know that fair-trade practice does not permit diferent brand owners to conspire to fix prices. Because of these accepted provisions of fair trade, we are justified in saying that its opponents' charge of price fixing is not sound. Fair trade is nothing more than an orderly solution in marketing trade-marked goods within the framework of our progressive civilization. The rule of thumb by which our fathers did business would not get us very far today because the marketing of an item today often involves the welfare of literally thousands of people whose interests cannot be protected without some orderly sales system. I am definitely opposed to monopolies and I believe that fair trade is the best means of preventing monopoly. Fair trade prevents the big fellow from elini nating the little fellow by unfair practices and thereby establishing a monopoly I also believe that fair trade provides more employment because when one is permitted to market a product on a national basis under a plan which must meet competition but which is not subjected to destruction by cut-throat methods. more employment is provided to people who manufacture, to people who trans port, to people who distribute to people who advertise, as well as to those who finance such products and, of course, to those who work for our local, State and Federal Governments. The wages earned by those employees in turn are spent with other merchants and the entire national economy is thereby advanced. On the other hand, if we prevent people from developing new businesses and 'f we put present businessmen out of business, by allowing unfair trade practices, we create unemployment instead of more employment, and of course unemploy ment is disastrous to the taxpayer and to the Nation. I believe that fair trade good business practice and I hope that this short discussion will satisfy you and the members of your all-important committee, that my position is sound. I trust your committee will report favorably on the McGuire fair-trade bill, H. R. 5767. r EDWIN C. JOHNSON, nate Office Building, Washington, D. C. THE CAL-DAK Co., Colton, Calif., June 5, 1952. R SENATOR JOHNSON: I came to Washington, at the expense of our small acturing company, to urge the Senate Committee on Interstate and n Commerce to report favorably on H. R. 5767 (the McGuire bill). In n to presenting my statement, I thought it advisable to listen to the ony of the opponents of this legislation. I have now sat through 3 days hearings and have heard many proponents and opponents. I write this because opponents have referred to proponents' testimony and I feel we have the same opportunity. a single opponent has testified that he was against the McGuire bill beair trade had injured him. All of the opponents came to you as if they he chosen protectors of the public against, what they consider, the vicious de scheme. I don't believe for a minute that Schwegmann Bros. are I prices because of their charitable desire to share their profits. I believe is supermarket cuts prices because they feel that this policy attracts ers and builds volume and for no other reason. It seems strange to me the Miller-Tydings legislation was so vicious and unfair that it could be w of the land for 15 years before challenged, strange to that it was chalby a company that grew from a corner grocery store to a huge superduring a period that no price cutting on fair-trade name-brand merchandise rmitted in Louisiana. opponents of the McGuire bill appear to believe that it is unfair for a acturer to create consumer demand for its brands through national adverThey feel that the retailer should be the only one that should influence sumer in her choice of merchandise and that the retailer should have the cut prices to destroy a particular brand if the merchant so desires. one asked or urged me to come to your committee. My trip was motiy my one desire to see what one very small manufacturer could do in Washto stop cut-rate stores from using our good name to promote their interest iously damage ours. I go back to the west coast with the feeling that, r or not this legislation is passed, I have had an opportunity to present ts to a most considerate and attentive committee of the Senate. Sincerely, LLOYD C. NELSON, President. ENT IN SUPPORT OF H. R. 5767 BY THE NATIONAL CONGRESS OF PETROLEUM RETAILERS, INC., DETROIT, MICH., JUNE 5, 1952 Chairman and members of the Committee on Interstate and Foreign ree of the United States Senate, the National Congress of Petroleum rs, Inc., the national trade association of service station operators, joins mall business groups across the country in supporting the McGuire bill, 5767, now before your committee. There are four principal reasons why anization and the service station operators whom we represent favor the e bill and the restoration of fair trade in interstate commerce: fair trade in interstate commerce prevents one of the unfair methods of ition most widely employed to destroy independent small business, price juggling to deceive and confuse the public, initiate destructive ar and thereby erish small competitors. To be sure, price juggling is e unfair method of competition, but it ranks with price discrimination, prohibited by the Robinson-Patman Act, and sales below cost as one of t treacherous methods used for the destruction of small business. Price ange t'rough fair trade is the rational a'ternative to, and only secure ive a ait, suc price juggling. ad, it is our conclusion based on widespread experience in our industry ir trade in interstate commerce is the best, most free, and most demomethod for attaining price maintenance and preventing price juggling. rast to exclusive dealing, consignment selling and other methods of price hance which restrict and repress the retailer, fair trade in interstate comprotects the retailer, fosters his independence and business initiative, and es his opportunities for successful competition based on efficiency. 1, it has been demonstrated in hearings before the House committees and mony and statements to this committee that resale price maintenance a fair trade in interstate commerce is in harmony with the economic theory of our democracy because it helps to preserve small business. We endorse this principle. We believe it to be the theory of our society that widely owned private commercial property and facilities are the substance and the best defense of economic liberty and the free enterprise system. Just as there is a kind of liberty which destroys all liberty, so it has been shown there is a kind of competition which destroys all competition. These are the excesses which Congress wisely restrains. In order that our system of liberty and economic opportunity for all may continue to be supported and attested by the security and prosperity of small business generally, we ask your committee to approve the measure now before it. Fourth, fair trade has saved the public money as exhaustive studies filed with this committee have shown. As consumers with limited incomes, service station operators need this protection too. For the foregoing reasons, the National Congress of Petroleum Retailers, Inc., and the Nation's service station operators whom we represent request your approval for the McGuire bill and fair trade in interstate commerce. Respectfully submitted. JOHN W. NERLINGER, Jr., Secretary. STATEMENT OF HARRY PERSKY, EXECUTIVE DIRECTOR, NEW JERSEY RETAIL LIQUOR STORES ASSOCIATION, NEWARK, N. J. Senator EDWIN C. JOHNSON, Wasyington, D. C.: JUNE 2, 1952. My name is Harry Persky. am the executive director of the New Jersey Retail Liquor Stores Association, a nonprofit organization in existence since repeal, representing approximately 80 percent of all the retail package liquor stores in the State of New Jersey. In my capacity as director, I have been in a position to view commerce in both fair-trade and non-fair-trade markets. This statement is being written in lieu of a personal appearance before your committee to project what we believe to be the salient reasons for the passage of the McGuire bill, H. R. 5767. Our request that this bill be supported by all Senators is in harmony with the the many bills that have already been passed by the lawmakers of our country. The history of fair-trade pricing can be used as a common denominator by which to measure the economic soundness of the proposal that the McGuire bill be enacted into law. The survey made by the McKesson Robbins & Co., as outlined in Maurice Mermey's statement at hearings before a subcommittee of the Commit tee on Interstate and Foreign Commerce, House of Representatives, disproves the contention that fair trade is price hiking or price fixing. To further disprove any contention that fair trade is a vehicle for high prices, I cite the following history of whisky prices under fair trade in the State of New Jersey since 1943. As you wil see, these prices show that they have remained practically stationary from 1943 to 1951, instead of following the spiralling trend of most other commodities which were not fair-traded: In 1943 approximately 60 percent of all the whiskies sold in the State of New Jersey were priced at $3.38 per fifth. In 1944 the Federal Government increased the tax rate on whiskey exactly 52 cents for this particular category. The new selling price became $3.38 plus cents, or $3.90 per fifth. Please note that there was no additional profit for this 52 cent outlay by the liquor dealer. In 1948 this same whisky was again burdened with a tax, this time by the State, which increased the cost to the consumer by 10 cents. In 1951, on November 1, the Federal Government again increased the tax on whisky, this time adding 26 certs to the cost of this item. This item now sells for $4.42, an increase of $1.04 above the 1943 consumer price. This increase is accounted for by Government taxes of 88 cents. The difference between 88 cents and $1.04 is exactly 16 cents, a 4% percent increase to the consuming public over a period of 8 years. The above example holds true for almost all of the remaining 40 percent the whisky sales in the State of New Jersey, as well as in New York and may other States where fair-trade laws were in force. This we feel is the common denominator by which we should both measure the economic soundness of our |