Fair Trade?

In many a radio store last week, hired snoops shopped busily for bargains. They were paid to hunt radio & television sets selling for less than the manufacturer's factory list price. Stores that made cut-rate sales were summarily cut off from factory shipments. Something called "fair trade" was at work.

Time was when any U.S. merchant was free to sell anything in the house at any price he set. But now, for a steadily growing list of "brand-name" products, such free competition is forbidden by law in 45 U.S. states. In addition to radio & television sets, the list includes drugs, books, jewelry, liquor, sporting goods, kitchenware, cigars, cosmetics, electric appliances.

Cut Rate. This hobbling of free competition began with retail druggists, who feared that cut-rate chains would put them out of business. In 1931, they rammed the first effective fair-trade act through the California legislature; it gave manufacturers and retailers the power to fix the resale price of commodities bearing a trademark. Later, the National Association of Retail Druggists lobbied the same law through other state legislatures. Fearing a clash with federal antitrust laws, the druggists in 1937 drummed the Miller-Tydings Act through Congress. It enabled many others besides druggists to fix prices.

Competition was reduced, pricewise; but it was increased in an unexpected way. The attraction of "sure profits" on fixed prices lured thousands of new merchants into business. As they scrambled for customers, price-cutting returned in another form. Now, in order to undersell the "protected" independents, most large chain stores put out their own brands. R. S. Macy & Co. has over 1,400 such items. Gimbels offers its own brand of bonded liquor.

High Prices. The American Fair Trade Council, Inc., now one of the chief Washington lobbyists for all fair-traders, insists that price-fixing benefits the consumer: "It enables him to buy . . . without haggling over prices ... It protects him from so-called 'bargain' sales."

But in Washington, D.C., a tube of brand-name shaving cream sells for 23-c- v. the Baltimore "fair-trade" price of 39-c-. A diabetic pays $1.65 for insulin that costs $2.47 in Baltimore. And the fair-traders are working hard to wipe out even these few remaining islands of price competition.

This file is automatically generated by a robot program, so reader's discretion is required.