525 ME FRISTEL. That association has submitted a brief on almost all of these "mplaints. But we want to hear them out in the field. We had some rivance notice of these complaints, however. M. Lax. These are things that have come up in our local assoann von hare been passed on to our national association. Va my awdler preciem of quantity discounts which under the -Fan At are allowed; nevertheless, it puts the small Independent beter in a bad position. I might cite several companies Tampere Kat Cheese Co., for one. They have a one-case price. Then in 200 pounds, there is a 3-percent discount. On a truckload. I do not know what it is on a carload or beyond that. harrers: Somebody, like A. & P., can buy a truckload hese rust an put them in their stores, and sell them at Long the z beving price. Yet, they are 2 percent lower than mie inderendent can buy one, two, or five cases for, which probabamare in the eyes of the consumer because Her paret inderstand why he has to get 4 cents more for art male sold for in the larger store. Rose De Faiers. Imale Commission has been authorized rax y mi yangjay iscounts. They have never gotten There has been soce pressure brought lately and DE DELS DICEN it will happen. Same Psvents are possibly all right. I think, if legislative sh fan extra earned income and could not be by weer veris, the bigger the fellow got and be more taxes be would pay, which will be anders that ande. r steald be. They are entitled to an manned and if they can save money the aw sherbi be so that cannot mit the cher fellow can buy a case by buying a carload, that » her things, and possibly some en the parture. That is a thought What merit it has. rade law. But unless me porper machinery st as yet happened. I have talked to some of the soap company representatives and coffee representatives and they do not seem to be too much in favor of a fair trade law. The figure it would put them at a disadvantage. That is all I have to offer at this time. (Witness excused.) STATEMENT OF E. J. MALLOY ON BEHALF OF WISCONSIN WHOLESALE FOOD DISTRIBUTORS ASSOCIATION AND WISCONSIN WHOLESALE TOBACCO DISTRIBUTORS Mr. FORISTEL. State your name and your connection. Mr. MALLOY. E. J. Malloy; secretary of the Wisconsin Wholesale Food Distributors Association and Wisconsin Wholesale Tobacco Distributors. Mr. FORISTEL. You may proceed. Mr. MALLOY. We are affiliated with both national associations, the National American Wholesale Association and the United States Wholesalers. We have an outline of some of the things that have been presented to you in reply to a questionnaire that you evidently sent to them. Of course, we took part in drafting some of these things. We have in the State of Wisconsin both a fair trade practice law and an unfair trade practice law. Under the fair trade practice law, of course, it is up to a manufacturer as to whether or not he wants to file his prices. Under our unfair trade practice law there is a definite mark-up of 2 percent for a wholesaler, three-quarters of 1 percent for a delivery, and 6 percent for the retailer. We find that while the law works in intrastate commerce, the towns around the border of the different States are confronted with the fact that the dealers in those States will not obey our law. So we believe, in order to help us enforce an unfair trade practice act, we ought to have a supplemental act by the Government. In other words, we ought to have a national act to take care of interstate commerce. There are 45 States now that have these unfair sales acts. I believe that more attention should be paid to our antitrust laws. I agree with the remark you made that we ought to have an antitrust court. In this State here I know at the present time of a big operator who had made a bid on eight of our canneries. The bid that he made is absolutely absurd, but if he can control those eight canneries, he will control our canned corn output of the State. Mr. FORISTEL. Is it high or low? Mr. MALLOY. High. Mr. FORISTEL. A very enticing bid? Mr. MALLOY. Very enticing. Incidentally, in making the bid he notified the canner he would like to get this deal over before Congress convened, because he thought Congress might strengthen the anti-trust laws; therefore, the deal could not be made. I believe we are up against a tough proposition, as Mr. Larson told you, with our manufacturers and their deals. I believe that one law that ought to be strengthened more than anything else is truth in advertising. Today we listen to the radio. These cereal companies are not selling cereals. They are appealing to the children to buy guns Mr. LARSON. Yes. Mr. FORISTEL. That association has submitted a brief on almost all of these complaints. But we want to hear them out in the field. We have had some advance notice of these complaints, however. Mr. LARSON. These are things that have come up in our local association which have been passed on to our national association. We have another problem of quantity discounts which under the Robinson-Patman Act are allowed; nevertheless, it puts the small independent dealer in a bad position. I might cite several companies that I recall offhand. We have the Kraft Cheese Co., for one. They have a one-case price. Then on 500 pounds, there is a 5-percent discount. On a truckload, it is 8 percent. I do not know what it is on a carload or beyond that. But here is what happens: Somebody, like A. & P., can buy a truckload of these cheese items; can put them in their stores, and sell them at 6 percent above their buying price. Yet, they are 2 percent lower than what the little independent can buy one, two, or five cases for, which puts him to quite a disadvantage in the eyes of the consumer because the consumer cannot understand why he has to get 4 cents more for that item than it can be sold for in the larger store. Mr. FORISTEL. The Federal Trade Commission has been authorized by law to set maximum quantity discounts. They have never gotten around to do it. There has been some pressure brought lately and I hope possibly in the near future it will happen. Mr. LARSON. Quantity discounts are possibly all right, I think, if they can buy 10 cases or a hundred cases. But I believe the discount law should be in the form of an extra earned income and could not be used to cut the price. In other words, the bigger the fellow got and the more profits he made, the more taxes he would pay, which will be easier on the working class. Mr. FORISTEL. We have not heard that angle. Mr. LARSON. That is the way it should be. They are entitled to an earned discount if this is to be granted and if they can save money by buying a carload, but I believe the law should be so that cannot be used to cut the price below what the other fellow can buy a case for. If he wants to make some extra money by buying a carload, that is all right, but let him pay taxes accordingly. There may be other solutions to other things, and possibly some type of fair trade law may enter into the picture. That is a thought I had anyway. We have discussed it somewhat. What merit it has, I do not know. What we need is a Federal fair trade law. But unless it is set up so that it can be enforced and the proper machinery set up to take care of it, that also would be worthless. Mr. FORISTEL. That would appear to be a rather cumbersome proposition. Mr. STEVENSON. Could you move under your State Fair Trade Act? I mean the Wisconsin law? Mr. LARSON. It is possible. Mr. STEVENSON. Could you have your Wisconsin fair trade law modified? Mr. LARSON. Perhaps. We will not know that until after our next legislative session, which is after the first of the year. No doubt something will come up along that line there. I know in the drug field there are items that are fair-traded. In the grocery field, that has not as yet happened. I have talked to some of the soap company representatives and coffee representatives and they do not seem to be too much in favor of a fair trade law. The figure it would put them at a disadvantage. That is all I have to offer at this time. (Witness excused.) STATEMENT OF E. J. MALLOY ON BEHALF OF WISCONSIN WHOLESALE FOOD DISTRIBUTORS ASSOCIATION AND WISCONSIN WHOLESALE TOBACCO DISTRIBUTORS Mr. FORISTEL. State your name and your connection. Mr. MALLOY. E. J. Malloy; secretary of the Wisconsin Wholesale Food Distributors Association and Wisconsin Wholesale Tobacco Distributors. Mr. FORISTEL. You may proceed. Mr. MALLOY. We are affiliated with both national associations, the National American Wholesale Association and the United States Wholesalers. We have an outline of some of the things that have been presented to you in reply to a questionnaire that you evidently sent to them. Of course, we took part in drafting some of these things. We have in the State of Wisconsin both a fair trade practice law and an unfair trade practice law. Under the fair trade practice law, of course, it is up to a manufacturer as to whether or not he wants to file his prices. Under our unfair trade practice law there is a definite mark-up of 2 percent for a wholesaler, three-quarters of 1 percent for a delivery, and 6 percent for the retailer. We find that while the law works in intrastate commerce, the towns around the border of the different States are confronted with the fact that the dealers in those States will not obey our law. So we believe, in order to help us enforce an unfair trade practice act, we ought to have a supplemental act by the Government. In other words, we ought to have a national act to take care of interstate commerce. There are 45 States now that have these unfair sales acts. I believe that more attention should be paid to our antitrust laws. I agree with the remark you made that we ought to have an antitrust court. In this State here I know at the present time of a big operator who had made a bid on eight of our canneries. The bid that he made is absolutely absurd, but if he can control those eight canneries, he will control our canned corn output of the State. Mr. FORISTEL. Is it high or low? Mr. MALLOY. High. Mr. FORISTEL. A very enticing bid? Mr. MALLOY. Very enticing. Incidentally, in making the bid he notified the canner he would like to get this deal over before Congress convened, because he thought Congress might strengthen the anti-trust laws; therefore, the deal could not be made. I believe we are up against a tough proposition, as Mr. Larson told you, with our manufacturers and their deals. I believe that one law that ought to be strengthened more than anything else is truth in advertising. Today we listen to the radio. These cereal companies are not selling cereals. They are appealing to the children to buy guns and rings and cut-outs. They do not tell what a wonderful proposition they have to sell to the housewife. It is an appeal they make to the children. These 1-cent deals are absolutely wrong, too. I think it is a nice method of deceiving the public. If you advertise that you are going to sell something for 1 cent, it ought to mean that you can walk into your place of business and buy it for a cent. Mr. FORISTEL. Do they not violate your laws with respect to selling below cost? Mr. MALLOY. The funny part of it is that the manufacturer is not covered by the laws. That is one of the weaknesses in the law. Mr. FORISTEL. That is why you want a Federal act? Mr. MALLOY. That is why we want a Federal enabling act that will help us enforce these laws. The fact of the matter is, the manufacturers even under our State law can do almost anything they want to because they are engaging in interstate commerce. Mr. FORISTEL. And if he is a manufacturer and a retailer he has double coverage? Mr. MALLOY. Yes. He can do anything he wants and we have no way to stop it. As we go along, we find out that our fair trade practice act and our unfair trade practice act have to be amended. We amended our unfair sales act in our State last year, increasing the fine and the term of imprisonment, but I do not believe that part of the law is worth anything at all. Mr. FORISTEL. Have you ever imprisoned a man? Mr. STEVENSON. You have to convict them first. Mr. MALLOY. Yes. Here is the bad part of that: A chiseler would like to be arrested every week because it is good advertising. We arrested a big operator here in this State. He was fined, and the very next day he ran a big ad saying the State had him arrested for selling too cheap. The advertising was worth more than the fine he paid. In other words, I think he would like to have been arrested every week under that kind of a proposition. I believe there is a way out of this. If you are going to set up a fair sales trade act, nationally, you should have your antitrust division or court handle that thing, too. And what it should be by is injunction. In other words, get an injunction against a person who is violating the act and if he violates the injunction, take his license away from him. Just have him licensed and if he violates the injunction, take his license away from him. That is much more effective than telling him, "We are going to fine you," or "We are going to put you in jail," because they know you are not going to put a corporation in jail. They will figure, "I want the public to know I sell cheap." Mr. FORISTEL. That is all. Mr. MALLOY, I know that the national associations are working with the State associations to try to help the Small Business Committee draft bills that will be satisfactory to everybody. Mr. STEVENSON. We thank you. (Witness excused.) Mr. STEVENSON. I note that Mr. Frederick A. Wand, representing Naional Federation of Small Businessmen is present. We are glad to have you with us, Mr. Wand. |