The Main Streets of America are becoming our modern ghost towns. Every "store to let" sign is a symbol of a hope destroyed, a taxpayer and civic support lost to his community.

To me the fair-trade price is the lowest, the minimum price for which I could sell the item and still remain in business and make a fair, honest livelihood.

Fair trade is a fair fight, with Marquis of Queensberry rules against hitting below the belt. I've never been afraid of big business competition and I hope it All I ask for is fair play.

never ceases.

If emasculation of fair trade will make it profitless to carry the many items which are the bread-and-butter of the retail pharmacy, it is almost inevitable that many, many pharmacies, not only in the high-overhead areas of the big cities, but also in the low-volume farming and small-town areas as well, will either be plunged into insolvency or be driven down to an increasingly lower standard of living. Besides the impact of the local retailer who needs the trading fair of fair trade, the entire local community would be adversely affected.

Can the absentee owner of a chain operation be available when sickness strikes very inconsiderately after business hours? Our rank-and-file independent pharmacy owners could fill your records with heart-warming incidents of indispensable aid rendered when and where it was desperately needed-of prescriptions filled and delivered at night-of innumerable services which cannot be assessed and appraised in dollars and cents. But plaudits do not pay rent or provide a living. A healthy economy is a balanced economy. The decentralized distribution network of the little retail stores, providing an American livelihood for our American middle-class citizens can be despoiled and destroyed only at the peril of our American way of life. The keystone to the arch of our economy is balance. Balance in Government, where the judiciary should not encroach on the legislature in establishing economic policy. Balance in the legitimate pursuits of happiness and livelihood, where concentration of capital by giant retail operations should not be permitted to overwhelm the little-business man who has his own contribution to make to our country's economy.

It is my own contention that present circumstances pose a great peril to the small-business man. Indeed, the peril confronts not only him but our entire free-enterprise system, of which he is an integral part.

The issue may best be summed up by asking whether we want an economy dominated by absentee ownership and hired hands, or an economy in which the little-business man has an equal opportunity with the big-business man to work, prosper and make his contribution to this great country of ours.

We are certain as to the answer which the members of this committee, and of the Congress as a whole, will give.

Without becoming fulsome about the good old days, we feel that fair trade preserves what is best in our national economy, fortifying the proud, independent spirit which has made the Main Streets of America the principal factor in our march forward. If the Harris bill is not passed, we fear that small business will be severely damaged, making the independent, self-reliant merchant as extinct as the cigarstore Indian or any of the other symbols of days gone by.

We in New York State consider the contribution made to the economy by the small businessman too important and too valuable to permit unrestricted pricecutting and jungle warfare to dominate the market place. We consider fair trade too vital a part of our distribution system to permit a repetition of the price wars that shook New York and other large cities after the Schwegmann decision of the Supreme Court in 1951.

Signs are already appearing that point to a recurrence of damaging, senseless price warfare. The rising numbers of bankruptcies and failures, which can be attributed only in part to the current recession, can be charged to the sabotage of fair trade.

Without the bulwark of fair trade, it is our contention that many retail pharmacies would have to curtail their services, and a sizable number would have to close their doors.

I believe that because of my more than half-century association and interest in the little, independent retailers of our Nation I can and do speak for them. I feel privileged in their behalf to respectfully urge this committee to give favorable consideration to the Harris bill, H. R. 10527.

Mr. DOLLINGER. Do you wish to submit your statement. If you do, I will give you that opportunity.

Mr. GREENBERG. Did you ask that I submit my statement?

Mr. DOLLINGER. Yes, sir.

Mr. GREENBERG. I would like to make one quick comment, if possible. STATEMENT OF EMIL GREENBERG, GENERAL COUNSEL, PHARMA

CEUTICAL SOCIETY OF THE STATE OF NEW YORK

Mr. GREENBERG. One of the gentlemen who just stepped out-I didn't get his name asked the prior witness as to whether in New Jersey she wished now Federal legislation because of the fact that New Jersey itself or the individual States found that although they do have fair trade legislation they can't enforce it.

I do want to just state this for the record, and it is important.

In New York State we have a similar experience and within the State of New York we do have such enforcement as New York can have. But because of the complex economy of our country, we cannot have a Balkanization and despite the efforts of any individual States, unless there is a pattern throughout the Nation, national distributors could not come into any State that does have an enforcement and give them permissive enforcement because as General Electric had, whether we had enforcement in New York State, because of other national effects, they had to abandon their policy, and because of permissive legislation, we must have a Federal pattern and the State can then take care of themselves.

Mr. DOLLINGER. Thank you very much.

(Mr. Greenberg's prepared statement follows:)

PRESENTATION SUBMITTED BY EMIL GREENBERG, GENERAL COUNSEL, PHARMACEUTICAL SOCIETY OF THE STATE OF NEW YORK

Mr. Chairman and gentlemen, my name is Emil Greenberg and I reside at 25 Dover Street, Brooklyn, N. Y. I am the general counsel for the Pharmaceutical Society of the State of New York.

I wish to emphasize a number of points which, on the basis of our experience in New York State, seem to us of great importance and deserve your earnest consideration.

The first point is that recent fair-trade cases show that our courts are making policy judgments based on the economic theories or predilections of their judges. In situations that are obviously identical, we have seen one court hand down one decision and another court a diametrically opposite decision, thus creating a patchwork of enforcement that is wholly inequitable and unfair.

Economic policy decisions are highly inappropriate for the courts since they are the province of our legislature. In connection with fair trade, it is most significant to note that, despite the many adverse court decisions that have been promulgated, no State fair trade law has ever been repealed. Indeed, in one State Virginia-the legislature has reenacted a fair-trade law that had been rendered ineffective by the State courts, making certain, at the same time that it will henceforth remain tamperproof.

Congress, for its part, has demonstrated overwhelmingly-and on a bipartisan basis-its consistent support of the principle of protecting the status of the selfrespecting, self-supporting small-business man-adopting first the Miller-Tydings Act and, when this statute was to a certain extent invalidated, the McGuire Act. Since we can expect continued efforts by the courts to whittle away and undermine the fair-trade structure, we sincerely believe that this structure must be shored up and strengthened by the adoption of the Harris bill.

A loophole was found in the Miller-Tydings Act; the Congress remedied the situation by adopting the McGuire law. Further chipping away, indeed erosion, is occurring with respect to the McGuire law; the Congress should now take steps to rectify this situation.

It is my considered opinion that the adverse decisions recently handed down by certain State courts require a restatement of Federal economic policy restoring to the owners of branded products the right to preserve hard-earned

goodwill and restoring to the independent small merchant the opportunity to compete in the market place on equitable terms with his giant competitor who would otherwise destroy him.

I therefore respectfully urge the passage of the Harris bill, H. R. 10527. Mr. DOLLINGER. Mr. Herbert Randell, I understand you wish to submit a statement.

Mr. RANDELL. May I reserve my time? Will this committee be meeting this afternoon?

Mr. DOLLINGER. I don't think so. The House will be in session all afternoon. I don't think the committee will get permission to sit. Under the 5-minute rule we do not have permission to sit this afternoon. I think we will sit until 12:30 and then again next Tuesday. Mr. RANDELL. May I wait until the close of this morning's session? Mr. DOLLINGER. Yes, you may do so.

Mr. Dave Plesser, do you wish to submit your statement?
Mr. PLESSER. Sir, I would like to make a statement.

STATEMENT OF DAVID PLESSER, ROSLYN HEIGHTS, N. Y.

Mr. PLESSER. I don't have a formal statement. My name is David Plesser and I reside at 19 Wagon Road, Roslyn Heights, N. Y., and I appear before this committee as a representative of no organization or of no group. I appear as citizen Dave Plesser, and I was born and raised in a country store out in Long Island. My father ran a pretty good retail store, raised five children, put them through school, and all of them are pretty good people.

I think that the average increase in bankruptcies throughout the Nation's small retailers is due to unfair practices brought to bear by the larger retailers, and these retailers are all-inclusive, using standard-brand merchandise as loss leaders.

The independent retailer, whether corner grocer or corner hardware store, appliance store, is doomed to oblivion unless the trade practices are initiated on a national basis. A decrease in bankruptcies will show up in Dun & Bradstreet reports only because there won't be any more stores left to go bankrupt.

It is my feeling that when independent merchants can make a legitimate profit, they add more to the prosperity of the whole community. By this I mean there will be better wages and better living standards for all because with the mass movements of retailers, we find that salesmanship is on the wane and they do not pay wages that are conducive to good salesmanship.

I believe with fair-trade prices we can increase wages for the salesmen of America. America was built on good salesmanship and if the merchants have to prostitute merchandise, there is no room for selling expense.

No matter how long the manufacturers of America make goods, how well the manufacturers advertise the goods, there is that last 3. feet that takes that merchandise to make a sale. There is only 3 feet. that actually makes and moves the goods. The more goods we sell,. the more goods are manufactured and the more factory workers there are employed, and around it goes.

The factory worker buys the goods we sell and manufacture.

I heard this morning an economist and college professor, and I don't pretend to be an intellectual, but I think the economists and the

intellectual slide-rule theorists who appear before you people against trade are theorists, but not practical. I have sold goods ever since I was a boy.

Thank you, Mr. Dollinger.

Mr. DOLLINGER. Thank you very much.

Dr. Stewart Lee, I understand wants 3 minutes to make a state

ment.

Dr. LEE. That is right.

STATEMENT OF STEWART M. LEE, CHAIRMAN, DEPARTMENT OF ECONOMICS AND BUSINESS ADMINISTRATION, GENEVA COLLEGE, BEAVER FALLS, PA.

Mr. LEE. My name is Stewart M. Lee. I wish to thank the committee for permitting me the opportunity of presenting this statement in opposition to bill H. R. 10527, Federal price-fixing bill. I live at 206 Oakville Road, Beaver Falls, Pa. Since June 1950, I have taught economics and business courses at Geneva College. At present I am chairman of the Department of Economics and Business Administration. My doctoral dissertation, accepted at the University of Pittsburgh, summer 1956, was entitled "Some Economic Implications of

Resale Price Maintenance With Particular Attention to the Discount House."

Since that time, I have been a contributor to the Council on Consumer Information, headquarters at Colorado State College, Greeley, Colo. I received my A. B. from Geneva College, and the M. A. and Ph.D. from the University of Pittsburgh.

This statement is made in behalf of the Consumer Conference of Greater Cincinnati, the largest and oldest consumer group anywhere, which is composed of active and contributing members, women's clubs and business firms. The organization has over 1,000 members. It is nationally known for its educational work and support of legislation in the interest of consumers.

The Consumer Conference of Greater Cincinnati would like me to register its opposition to H. R. 10527, or any other resale price-fixing bill. As an economist, I would like to register my opposition also.

As an economist, I am disturbed at attempts to build rigidities into our free-price system, and particularly at this time when we are in the midst of a recession. The Temporary National Economic Committee of the 1930's showed evidence of the problems created when prices are not permitted to fluctuate more readily in recessions.

We have laws to prohibit horizontal price fixing and yet in reality this bill would sanction various types of horizontal price fixing under the disguise of vertical price fixing. Let me illustrate this point. In my hometown there are eight pharmacies. If the owners of those pharmacies would agree to sell all brands of toothpaste at the same price to avoid price competition, the law would declare this horizontal price fixing, but if the pharmacists would persuade each manufacturer to fair trade his products, the end result is horizontal price fixing.

This fair-trade law would compel retailers to follow a parallel price policy, demanding private conduct which the Sherman Act forbids. When the retailers are forced to abandon price competition, they are driven into a compact in violation of the proviso which forbids hor

izontal price fixing. As the law stands today, horizontal price fixing is still illegal, but horizontal price fixing through a vertical process of resale price maintenance is legal.

The free and open competition necessary in order to permit resale price maintenance raises many questions as to when competition is free and open. If there are only eight national brands of photographic light meters, does that represent free and open competition? If one lives in a community in which only one store handles only one brand of light meters, is that free and open competition? If persuasive advertising sways a buyer, even though quality difference is absent, is that free and open competition? I ask you gentlemen, what is free and open competition? Does it really exist in the market place?

Ward S. Bowman, Jr., in an article, The Prerequisites and Effects of Resale Price Maintenance, University of Chicago Law Review, summer, 1955, goes so far as to state that resale price maintenance tends to work only when fairly strong monopoly elements exist at retail and/or manufacturing levels. "This is so whether a particular use of resale price maintenance has come about through coercion by dealers, as a result of bargaining between organized dealers and/or organized manufacturers, or as a means of assuring performance of essential service."

Resale price maintenance legislation is not needed to prevent predatory price cutting. The Sherman Act and the Robinson-Patman Act, particularly section 3, have been passed by previous sessions to prohibit such predatory price cutting. Instead of shackling the freeenterprise system any more, maybe Congress should investigate why so many proponents of this bill feel endangered by predatory price cutting which is already illegal.

It has been argued that price protection should be given through the enactment of this bill because there are other forms of manufacturers' control of prices at retail such as selling on consignment and manufacturer-owned retail stores. If a manufacturer is really interested in controlling the retail price then maybe that same manufacturer should assume some of the risks which manufacturers assume when selling on consignment or when owning the retail outlet. Risk and responsibility are part of consignment selling and owning retail outlets, but what are the additional responsibilities and risks which will be assumed by the manufacturer under this resale price maintenance bill?

The rise of the so-called discount house is used as an argument for enacting a Federal fair-trade bill, but an empirical study made with regard to the discount house indicates rather strongly that fair-trade laws stimulated its growth.

I think a comment or two about discount houses may be in order. I have shopped discount houses in New York City, Philadelphia, Pittsburgh, Chicago, Cincinnati, and St. Louis in doing research on this subject and I am hoping to shop the discount houses in the District of Columbia. The discount house has been called an illegal price cutter, a black market of sorts, bootleg competition, quasiwholesale outlets, backdoor selling, discount menace, discount disease, legitimate bootlegger, illegitimate bootlegger, percent-off-list chiseler, upstairs retailer, speakeasy type of operation, and profit pirate.