Retailers & Discrimination

To Washington last week to put the screws on Congressmen and Senators went a delegation of independent U. S. grocers, druggists, jobbers and their lawyers. Their purpose was to lobby for anti-chain-store legislation, particularly the so-called Robinson-Patman Bill, one of a score of measures introduced in this session of Congress with the avowed intention of undercutting the advantages of large-scale merchandising. The "little businessmen" were received with vociferous sympathy. Senator Borah marked the occasion by introducing still another bill intended to forbid selling more cheaply to large buyers than to small ones. Texas' Representative Patman cried: "You are the first victims of monopoly." Said Maryland's Senator Tydings: "Small business is being crushed to the wall in a deliberate campaign."

Very little was said about John Consumer, who is the chief beneficiary of the lower prices made possible by mass buying. Smart, efficient independent merchants, able to offer quality and service which chains cannot afford to provide, do not worry about chain-store competition. But merchants of this type are rare. And while the ethics of chain-store purchasing are certainly elastic, the average storekeeper merely wants his competitive position restored without improving his merchandising methods--at the consumer's expense.

The little businessmen arrived in Washington last week just in time to hear another piece of news sweet to the ears. After more than two years of hearings in various cities of the land, the Federal Trade Commission ordered Goodyear Tire & Rubber to cease and desist from granting special favors to Sears, Roebuck & Co. in return for the privilege of making the tires that Sears sells under its own brand names. This mail-order business has often accounted for 10% of Goodyear's total sales.

Present Goodyear-Sears contract calls for at least 1.800 tires per day at cost plus 6% or 6 1/2% depending on rubber prices (TIME, Jan. 29, 1934). After Goodyear has had time to figure its costs accurately, the contract permits "adjustments," which have worked with remarkable regularity in Sears' favor. The Trade Commission now says these are nothing more nor less than "secret rebates," a fighting phrase since the days of John D. Rockefeller Sr.

For Goodyear's President Paul Litchfield the Trade Commission's findings were just another problem in his currently harassed life. For the past fortnight Mr. Litchfield had been living in his Akron, Ohio plant, besieged by striking rubber workers. Emerging from his industrial fortress for the first time in two weeks, President Litchfield found time to declare: "We will appeal the decision of the Federal Trade Commission to the Federal courts. Were it permitted to stand, the decision would wipe out a widely used trade practice under which a substantial proportion of the country's total retail business is done. . . . This practice itself is on trial, not Goodyear."

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