New Blows for "Fair Trade"

Advocates of "fair-trade" laws did not lose heart after the U.S. Supreme Court knocked out fair-trade price-fixing laws in 1951. Last year they got a bill through Congress which nullified the court's decision. It made state fair-trade laws binding on retailers, whether or not they had signed agreements to observe manufacturers' list prices. This seemed to fix everything up nicely.

But last week, holes were being knocked in the fair-trade fence all around the lot. In New Jersey, the state supreme court handed down a decision that merchants who had not signed such agreements could disregard them. Fair-trade lobbyists said the decision was meaningless because it applied to injunctions which had been issued prior to the new 1952 federal law. Some Jersey merchants thought otherwise. The big chain of Kings Super Markets (20 stores) immediately started cutting fair-traded prices.

Fair trade was having a tough time in four other states. In Louisiana, John Schwegmann Jr., a longtime foe of fair trade (TIME, June 4, 1951), was the first to start new trouble last fall, by selling insulin at $2.08 a vial v. the fair-traded price of $2.83. The drug firm of Eli Lilly won an injunction against Schwegmann, but the court was critical of fair-traded philosophy, holding that the Supreme Court would have to decide if the new 1952 law is constitutional. Schwegmann is selling items affected by the injunction at fair-trade prices, but everything else at what he calls "free-enterprise" prices.

In Michigan last June, the state supreme court ruled that the state fair-trade act violates Michigan's constitution. Three weeks ago, the supreme court of Georgia gave a similar ruling on Georgia's fair-trade law. West Virginia's fair-trade law is now under heavy fire from John L. Lewis's United Mine Workers and their ally, U.S. Senator Matthew M. Neely. It looked as if the fair traders who thought they had won the war, had actually won only a battle.

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