years to improve pharmacy has now been diverted by a wicked mot ge pressure group to exert force on the Congress of the United States to independent drug retailers out of business by passing evil monopoustie a The very name "fair trade" is a cheap counterfeit label tied up with the Men.. bill to hide its deadly monopolistic purpose which is to destroy all in-dep drug retailers with limited capital resources located off the main streets and all the business to monopolistic giants commanding all the choice corter re locations. Ironical as it may seem, many thousand small independent retailers have been doped by this propaganda for the economic sedate c "fair trade," because every trade drug magazine and pharmacy journal o mouthpiece for greedy manufacturers, kept retailers, and monopolistic-m" > trade associations.

It would be just as fitting to call the wicked monopolistic powers cu in the McGuire bill "fair trade" as it would be to call a house of ill farne `a of virgins." This I have proven in the brief which I submit herewith fo record of your committee and whoever claims that the enactment of the M-6. bill will promote the survival of the small-business man, is an econom.e ramus, to put it in the most charitable terms.

Very truly yours,

W. LEE SMITH, President

FAIR TRADE LAWS AS PROPOSED IN H. R. 5767 ARE UNSOUND PUBLIC PO:: 1

I

So-called fair trade laws, such as the proposals set forth in the MeG, rel are nothing more nor less than attempted legalized conspiracies of veste i in tamat pressure groups directed against unorganized consumers.

Should the bill become law, vested interest pressure groups will again, b able to soak the unorganized consuming public with exhorbitant mot, in fixed minimum prices for branded merchandise not obtainable in a free s' i petitive market, which has prevailed in the United States only since the N Court decision of May 1951 knocking out the infamous nonsigner cly:s the era from about 1937 to May 1951, the fair-trade conspiracy operated. and billions of dollars were mulched from the pockets of housewives, w.te. workers, farmers, and the millions of common working people who carry pails. With the use of the illegal nonsigner clause as a club, ruthless trade tions such as NARD forced every distributor in fair-trade law States to e the same identical price for branded merchandise, no matter how bitterly to such price fixing that the majority of distributors and the consuming might be. The same price hits every consumer in the face no matter wi of store he might go into, and for 15 years not a single customer co 114 from this monopolistic blackmail which carried the flashy label of "fair tra Fair-trade laws were lobbied and liquored through State lezisla ires 1930's by greedy manufacturers, kept retailers, and monopolistic-" i d. : associations using Washington bureaucrats as convenient tools. Not a 1 of the 45 fair-trade State laws were written by the people of the States model bills were prepared in Washington and mailed out to local ee, sp and paid lobbyists, flying squadrons followed through with them to help t the heat and get them through State legislatures. It is unthinkab Congress of the United States will again arm these monopolistie bat, 1's w infamous nonsigner clause so they can start legally to rob millions of pr fixed fair-trade prices. Fair-trade brands in the past have carried t unreasonable mark-ups ranging from 33 to 49 and 50 percent, plus some taxi free goods occasionally thrown in by the manufacturer. Many of these ting am now able to sell in my Omaha drug store and make money on at n ranging from 20 to 25 percent. Lazy, stupid, and indolent drug op "at in even make money at 50 percent mark-up but why force me to rebra est prop up these parasites and line the pockets of greedy manufacters?

II

The proposed fair-trade provisions of the bill will rob the media-a" income groups of people and simultaneously subsidize people in the higher

groups.

(NOTE. In the 15-year fair-trade era ending in May 1951, one must from the list of those cheated, residents of the country club oasis ar 1

ne but in addition they received gratis valuable services and free credit not. labie to the average person.)

I he average workingman is paid his wages weekly and he shops from store to tore with his wife and children in search of bargains, attempting to make ends beet out of his limited pay envelope. He pays spot cash, waits on himself, and ten commandeers his wife and kids to help lug the merchandise to a distant parkg lot or to the family home on the bus or streetcar. The family finds bargains az‹i specials in the best brands of nationally known merchandise when there is free and open competition, and they are able to raise their standard of living. Fair rade price fixing kills all of this opportunity of the average family to exercise -ft and raise their standard of living, and in every store they are hit in the face 6th the same fixed price, regardless of the services rendered in selling the mer

On the other hand, people in the higher income brackets have adequate credit **** gs to warrant charge accounts and it is not uncommon for them to have free arging privileges ranging from 30 days to 6 months, when purchasing branded 25 mark-up fair traded merchandise. They can get their orders filled over the • phone and have free delivery made to the suburbs daily or three times a week. tese people pay the same identical price as the lower income family, which means at the lower income family is actually paying the credit carrying charges and the • xp nsive delivery services extended to the families in the higher income brackets. is it fair and just to rob the man of limited means and simultaneously furnish ...xurious free services and credit without charge to the man in the higher income ap? This is exactly what the proposed bill will do should it become law, and "an't conceive of the Congress of the United States becoming a party to such a -gantic swindle of the people.

III

These so-called fair-trade laws give an unfair advantage to large entrenched competitors with choice corner street locations, and drive into bankruptcy small repreneurs attempting to start their own business, and also undermine estabed small stores who have only capital resources enough to afford an unhandy - 26 or back street location.

Many well intentioned people have paraded before the Congress, as well as paid arbyists of greedy manufacturers and monopolistic-minded trade associations, advocating passage of the McGuire bill to protect the small independent retailer. Lese very proposals which they advocate will help the little man, in reality of everyday practice will drive millions of small shops into bankruptcy. I speak from the bitter realities of actual business experience in attempting to start my an drug business in Omaha, Nebr., in 1944, on the meager savings which I had aimliated as an average white-collar worker. Fair trade was a millstone ato and my neck as I wish to point out below; it is also the same for every little

An industrious and aggressive small retailer can operate much more efficiently der free and open competition than a large bureaucratic organization such as a w store or large independent store set up to render luxurious customer services, ka sinail retailer can draw customers away from large competitors even on maia street corner jocations, to his unhandy side or back street location, if he can offer star price advantage for cash and carry customers who want to save. Likewise, a young man who wishes to start his own small shop can draw customers away from trenched competitors if he can offer some advantage of saving to his potential stomers, over and above that extended by competitors. Nobody, even inuding a friend, will walk out of their way to an unhandy location to trade with a Proprie for merely because he is a good fellow. They must offer to the customer se defitute, tangible inducement over and above what entrenched competitors The quality of branded merchandise is now so standardized and of such form quanty that about the only inducement that can be offere i is the one of paer price

Fair trade minimum prices sought in the bill will rob the new and the estabed mail stores of these advantages available under free and open competition, • aise the smail store on the back street is forced to seli at the same price as the z entrenched competitor on the main street corner location, which the masses if people pass every day in the course of their normal routine As a result, few we will walk out of their way to the unhandy location of the snail store when ey can buy the leading brands at the same fixed fair trade price from the big * on the corners in the handy main shopping district. The new store goes foke because the young proprietor is never able to attract a large enough clien

tele to carry the overhead, and the small established store is hardly able to eke ou a living from the few passers-by on his back street.

Under fair trade, large operators can further intensify the pressure on the smal independent, by being able to sell at the same price as the little man and at the same time extend luxurious services such as free charge accounts, free delivery service, and give disguised rebates and bribes to his clientele in the form of premium bounties, trading stamps, green stamps, and many other kinds of rebates The little man doesn't have the organization or capital facilities for extending the rebates and bribes; yet he is clubbed over the head by the fair trade monopolst when he tries to meet this underhanded competition, by offering above boar lower prices to those who wish to save.

Strange to say, the so-called fair traders have never frowned upon tradin stamps, green stamps, and other forms of rebates and bribery which big st operators indulge in wholesale.

The hypocrisy of paid lobbyists and soft-headed do-gooders who claim the fair trade price fixing laws are necessary for the survival of the small independer: retailer is the most gigantic lie ever spoken, including the big lie of Hitler's day They use the old bug-a-boo of the big giant gobbling up the little merchant bi price wars, etc., so that they can kill of the little man in silence by the method I have outlined above.

If the Congress of the United States wants to help the little merchant, I ca tell them the best way to do it:

1. Stop passing multitudinous rules and regulations which take the little ms: away from the actual operations of his business 50 percent of his time to figh with bureaucrats riding on his shoulder; to fight off boycotts and threats of trade association monopolists, kept retailers, and greedy manufacturers. Big guys ar wine and dine such people with great ease.

2. Quite bleeding him white with taxes and special fees for licenses which or rupt politicians and crooked bureaucrats graft away in Washington.

3. Set the little man free and he will carve out his own destiny as he always ha in the past.

IV

The most fraudulent claim of "fair traders" is the allegation that such laws necessary in order to protect valuable trade-marks, patents, and brand names of manufacturers, so as to enable them to avoid paying sweatshop wages to ear ployees.

There are many thousand manufacturers in this country who own some of the most valuable trade-marks and brand names, but they have not chosen to reister these products under fair-trade laws for protection. Just to name a fes one might mention Camels, Lucky Strikes, Tide, Crisco, Hersheys, Juicy Fri and Maxwell House, and the workers who manuafcture and sell these famous brands are among the highest paid in the world. Distributors large and S cannot afford to be without many of these products and the public benefits to t greatest extent possible as well as the owners, from the wide distribution afforded without benefit of fair-trade price fixing.

Not every manufacturer can avoid fixing the price of his product under trade regulation, because of the "lead pipe" treatment given him by powerf trade associations and vested interested pressure groups, under the threat of powerful boycott against displaying and selling his products. He is forced to bribe the retailers by offering an exorbitant profit margin in order to get distributie: along with competitor's products.

In many instances where manufacturers had the backbone to resist the far trade price fixers, they were given an even more vicious "lead pipe" going ov indirectly. The monopolist pressure groups merely switched banners in parso ing before State legislatures from the slogan "Fair Trade" to "Unfair Sales A which is even more vicious. The pressure groups have turned the heat on latures so ruthlessly that in many States laws have been passed fixing the pre and profit margins to the fraction of a cent on many such products as cigarette. candy, and tobaccos, regardless of the manufacturers wishes.

(NOTE.-I would refer you to the "Unfair Sales Act" in the State of lowa any distributor can have his tobacco and cigarette license taken away from h and put out of business if he fails to sell at specified legal prices. Bribery

petitors These price fixers invaded our own State of Nebraska 2 vears ago *spert large sums of money in an effort to lobby such a law through our legislaI formed a group of native Nebraskars and defeated these mercenary Topolists and drove them back across the Missouri River.) Greedy manufacturers, kept retailers, and monopolistic-minded trade associa- « will spare no forms of hypocrisy to devise schemes for rigging prices to the ement of the whit -collar workers, housewives, farmers, and the millions of next toners who carry dinner pails.

V

It is alleged that fair-trade laws are necessary to protect the public from price that the public supports fair-trade laws because they p prices down. After dealing with the public over many vers in stores ranging from New York 5th Avenue department stores, to spečit stores in Boston, procery stores in ra, and in my own retail drug store in Omaha, Nebr., I can't recall a customer who ever thanked me erthusiastically for soaking him the vortant fixed fair-trade price carried a branded art: le of merchandise. the extrary, every retailer Frs Frd cs of customer many times a day anx the question "Can't you make me e beer price than that on this piece of *n, andise?” It is also Elleged that when retailer cuts the price on one item • advertises it to the public, be si vultz recusly marks up many other items and juggling prices, the shopper is elérter. That statement is simply a gross abood end cannot be validsted by any disciple of frir trade in the everyday actice of retail stores. It is ridiculous to say t'at shoppers are too stupid to the difference between a good value and a poor one when they come into a reap or the invitation of an advertisement. The shrewdest judges in the world arel andise are the everyday shoppers and not the so-called price jugglers and the counter. If you don't believe it, get behind a bargain counter on a rosy seles day rid try to match your wits agginst crowds of shoppers. A wet art may be able to outsmart some few customers for a time by “come on ads” vid trickery, but he can rever outsmart enough of them in the long run to build a profit: Fle retril business. You can shear a sheep many, many times; f you can't skin bi ́n but once." That is even more true in the case of dealing *** _a_ret:il shopper. If he is abused, he will not come back for more and no stad store ever made a go of it on one-time customers,

Fair-trade laws caused inflation in many branded articles long before there was any increase in commodity prices generally and consequently they could at go up as much as commodity prices generally. In the drug-manufacturing ndustry, there have been formed investment trusts to hold in their portfolios ares of such drug manufacturers as rigidly enforced fair-trade prices. As an stration of the increase in their profits during the fair-trade era, one major g company increased its profits from almost zero in the 1930's to a gross jht of 34 percent on sales of $100,000,000 before Federal income taxes in 1951. my own retail drug store, I would be pleased to have gross profits of 17 per**t before deducting either Federal income taxes or any single item of operating €sj*»fu**%£

VI

Fair-trade laws work against the public interest and inevitably will lead to destruction of our competitive free enterprise system and lead to collectivism. The volume of goods distributed and consumed are restricted by high fixed la-trade monopolistic prices. This in turn reduces the number of jobs at the *aw material source on the farms, in the forests, and in the mines, and also reduces "e number of people employed at the manufacturing level, and in the channels f retail trade. As a result, the general standard of living for everybody is held to a lower level. The lesson of mass production and mass distribution taught Henry Ford more than 30 years ago has never been put into practice generally, a1 fair trade is the very antithesis of the Henry Ford philosophy. When profit margins are guaranteed by law, business management becomes ent, arrogant, and contemptuous of customers. The people rebel against ith tyranny and arrogance of parasites and then the State takes over all instry and trade with the promise of free and easy living for the masses. Engand is a typical example today of the result of such initial monopolistic policies. Freedom of the people has been lost, austerity and scarcity of every day necessitics of de prevail, and the standard of living of all the people is lowered.

tele to carry the overhead, and the small established store is hardly able to eke es a living from the few passers-by on his back street.

Under fair trade, large operators can further intensify the pressure on the independent, by being able to sell at the same price as the little man anir⠀ same time extend luxurious services such as free charge accounts, free deliver service, and give disguised rebates and bribes to his clientele in the form of pr mium bounties, trading stamps, green stamps, and many other kinds of reha The little man doesn't have the organization or capital facilities for extenda rebates and bribes; yet he is clubbed over the head by the fair trade moye when he tries to meet this underhanded competition, by offering above boar lower prices to those who wish to save.

Strange to say, the so-called fair traders have never frowned upon trade: stamps, green stamps, and other forms of rebates and bribery which big sc operators indulge in wholesale.

The hypocrisy of paid lobbyists and soft-headed do-gooders who clain t fair trade price fixing laws are necessary for the survival of the small independe retailer is the most gigantic lie ever spoken, including the big lie of Hitler's da They use the old bug-a-boo of the big giant gobbling up the little merchant hy price wars, etc., so that they can kill of the little man in silence by the meth I have outlined above.

If the Congress of the United States wants to help the little merchant, I a tell them the best way to do it:

1. Stop passing multitudinous rules and regulations which take the little ma away from the actual operations of his business 50 percent of his time to with bureaucrats riding on his shoulder; to fight off boycotts and threats of tra association monopolists, kept retailers, and greedy manufacturers. Big guys a wine and dine such people with great ease.

2. Quite bleeding him white with taxes and special fees for licenses which e rupt politicians and crooked bureaucrats graft away in Washington.

3. Set the little man free and he will carve out his own destiny as he always wr in the past.

IV

The most fraudulent claim of "fair traders" is the allegation that such laws an necessary in order to protect valuable trade-marks, patents, and brand name manufacturers, so as to enable them to avoid paying sweatshop wages to ployees.

There are many thousand manufacturers in this country who own some of most valuable trade-marks and brand names, but they have not chosen to ister these products under fair-trade laws for protection. Just to name a few. one might mention Camels, Lucky Strikes, Tide, Crisco, Hersheys, Juicy Fr and Maxwell House, and the workers who manuafcture and sell these fam brands are among the highest paid in the world. Distributors large and s cannot afford to be without many of these products and the public benefits te greatest extent possible as well as the owners, from the wide distribution stores. without benefit of fair-trade price fixing.

Not every manufacturer can avoid fixing the price of his product under trade regulation, because of the "lead pipe" treatment given him by pow trade associations and vested interested pressure groups, under the threst powerful boycott against displaying and selling his products. He is forced to tr the retailers by offering an exorbitant profit margin in order to get distribut.... along with competitor's products.

In many instances where manufacturers had the backbone to resist the trade price fixers, they were given an even more vicious "lead pipe" going indirectly. The monopolist pressure groups merely switched banners in pars ing before State legislatures from the slogan "Fair Trade" to "Unfair Sales A which is even more vicious. The pressure groups have turned the heat on latures so ruthlessly that in many States laws have been passed fixing the pr and profit margins to the fraction of a cent on many such products as cigaretin candy, and tobaccos, regardless of the manufacturers wishes.

(NOTE. I would refer you to the "Unfair Sales Act" in the State of Iowa wh any distributor can have his tobacco and cigarette license taken away from and put out of business if he fails to sell at specified legal prices. Bribery