APPENDIX EXHIBIT No. 503 A PROPOSAL FOR AN INVESTIGATION TO ANALYZE THE WAYS AND MEANS BY WHICH CURRENT PRACTICES, AND HOW FAR THESE PRACTICES, LEAD 10 UNDERCONSUMPTION, INADEQUATE RETURNS TO FARM AND FACTORY WORKER, AND TO BUSINESS BANKRUPTCY [This Investigation to be conducted by a joint committee which is to be appointed onethird by the President of the Senate, one-third by the Speaker of the llouse, and one-third by the President of the United States] Submitted by a delegation of consumer, civic, and labor representatives under the sponsorship of the Consumers National Federation, 110 Morningside Drive, New York City, February 24th, 1938. All our national life we have put our faith in production as the road to public welfare. We have studied production and set up federal agencies to further it. Today we have a productive system that is the envy of the world. It can do much—but it does not create sustained welfare. In our concern for production we have allowed it to exploit consumption and, in the process, to cripple its customers for whom, and for whom alone, it confessedly exists. So exclusive has been our emphasis upon production that we have believed consumer welfare to flow antomatically from business prosperity. We have neglected largely to ask: How effectively do our elaborate productive and merchandising structures really serve the consumer? We know today virtually nothing with accuracy as to the scores of points at which "business competition," "monopoly," "administered prices," and other routine aspects of business and financial processes cripple the consumer. In a democracy no economic system makes sense which is not run so as to maximize consumption. Yet our economic system is primarily run to maximize profits-and the consumer takes the hindmost. The underlying assumption has been that "free competition" affords the best possible protection to the consumer. Actually, no candid person today pretends that "free competition" controls our economic life. Such competition as does remain is dwarfed by the price and other control policies and devices of dominating elements in the business community. No one knows precisely how free or un-free our economy is. What we know is that there is a network of arbitrary interference with competition whereby production is rendered wasteful and insufficient, and consumers-if indeed they are lucky enough not to be unemployed-pay tribute to it in the form of a sizeable deduction from their purchasing power. The long-run test of "business efficiency" is the kind of living it can build for the public, for whom business patently is run. A major need at present is to put current business under the microscope to ask: How does it operate and, operating as it does, how and where does it promote or curtail the welfare of our people who live by it and its products? We believe that a major investigation by a special commission should be set up to analyze how current business structure and practices lead to underconsumption, inadequate returns to farm and factory workers and to recurrent business bankruptcies. Not until such a detail analysis is available can effective remedial legislation be planned in the public interest. Furthermore, this understanding is essential if court action against monopolies is to be more than a temporary palliative. Until such knowledge is available to the public, the goal of self regulation of their economic destiny by the American people is impossible. Self-regulation at a round table must include self-regulation by the whole people through government participation. Government can only plan an effective role if its policies are based upon an understanding of what is wrong and what needs to be done. The consumer can only play an intelligent role at that table when he knows the facts and how they affect him, and he is powerless to collect these facts himself. One thing should be made unmistakably clear: We want all the abundance that lies within our grasp, but we do not want that abundance to be wrung out of sweated labor or dispossessed farmers. American abundance means abundance for all the people. We suggest that such an investigation be carried on by a thoroughly staffed special commission, one-third to be appointed by the President of the Senate, one-third by the Speaker of the House, and one-third by the President of the United States. EXHIBIT No. 504 [From the Journal of Marketing, July 1938, pp. 4-5] Recently an estimate was made by the Crowell Publishing Company that more than 5,000,000 women in various organizations are affected by consumer educational material and are more or less active in efforts to secure legislation favorable to consumers. These organizations are as follows: Women's Joint Congressional Committee consisting of American Association of University Women__ American Dietetic Association--- Council of Women for Home Missions_. Approximate membership 55,000 12,000 131,000 The group of women making up the membership of this committee is one of the most potent organizations in the country in obtaining the support of women's organizations for legislation of interest to women. In addition to these there are the following who may be moved to aid in securing action: American Association for Adult Education. Consumers' National Federation__‒‒ Approximate membership 1,100 Federal Council of the Churches of Christ in America. General Federation of Women's Clubs- League of Women Shoppers- National Council of Catholic Women_ National Women's Relief Society International Garment Workers Union_-_-. 20, 000, 000 2, 000, 000 25,000 1, 000, 000 69, 700 250,000 It will be noticed some of these groups contain men and if full strength is given to all of them the number affected may reach nearly a third of the total population. These groups are not yet as closely organized as they could be and therefore their effectiveness is not what it may possibly become. But even at the moment to treat the movement lightly would be a mistake. Members of many of these organizations are leaders in other organizations and as such may be powerful factors in canalizing consumers' thoughts along specific lines. As examples. Helen Hall, director of Henry Street Settlement in New York, is president of Consumers' National Federation; Mary K. Simkovitch, director of Greenwich House, has just been elected chairman of the newly formed Lower West Side Congress for consumers, and Louis Waldman, a member of the New York State Executive Committee of the American Labor Party, is working strenuously for a Consumers' Bureau for the State of New York. The first two movements are marked by consumer dependence on aid from outside forces to secure the desired ends. The next three movements are marked by direct action on the part of the consumer himself to secure changes in business conduct which might give him better goods for his expenditures. "EXHIBIT NO. 505" appears in text on p. 3292 "EXHIBIT NO. 506" appears in text on p. 3296 "EXHIBIT No. 507" appears in text on p. 3297 "EXHIBIT NO. 508" appears in text on p. 3299 "EXHIBIT NO. 509" appears in text on p. 3300 "EXHIBIT NO. 510" appears in text on p. 3302 "EXHIBIT NO. 511" appears in text on p. 3315 "EXHIBIT No. 512" appears in text on p. 3317 "EXHIBIT No. 513" appears in text on p. 3321 "EXHIBIT NO. 514" appears in text on p. 3324 "EXHIBIT NO. 515" appears in text on p. 3334 "EXHIBIT NO. 516," introduced on p. 3343, appears in Hearings, Part VI, appendix, p. 2745 "EXHIBIT NO. 517" appears in text on p. 3348 "EXHIBIT NO. 518" appears in text on p. 3350 "EXHIBIT NO. 519" appears in text on p. 3355 "EXHIBIT NO. 520" appears in text on p. 3357 "EXHIBIT No. 521" appears in text on p. 3358 "EXHIBIT NO. 522" appears in text on p. 3359 "EXHIBIT NO. 523" appears in text on p. 3361 "EXHIBIT NO. 524" appears in text on p. 3362 EXHIBIT No. 525 QUOTATIONS FROM TRADE PRESS ON RESALE PRICE MAINTENANCE 1. PRESSURE ON CONGRESS, AND PRESIDENT There is ample evidence that druggists, through the National Association of Retail Druggists, have used a concerted campaign of pressure on Congressmen and the President in the form of legislative contact committees, and barrages of letters and telegrams in order to obtain passage of the Robinson-Patman, and Miller-Tydings Bills. As early as October 1935 we find indications of the pressure machine that was being built up. Writing in the association's Journal for October 3, 1935, pp. 1223-4, Rowland Jones, Jr., its Washington representative, reported as follows on the formation of Congressional Contact Committees, which were to play an important part in druggists' lobbying activities. "At the time of the opening of the present Washington office, a careful study was made of the methods used in the past in attempts to influence the legislative mind. After examining all the facts and the results obtained, we came to the inescapable conclusion that a new approach was not only in order but absolutely necessary if we were to expect results. "With this opinion crystallized, we conceived the idea of the Congressional Contact Committees in every Congressional District and in every state. This was based on the theory that in every such political subdivision there resided several retail druggists who were close personal or political friends of their Congressman or Senator and that an appeal or a request from one or two such individuals would be of far greater value than a hundred letters or telegrams from persons unknown to the legislator. "In many states the response was prompt and enthusiastic; in others half-hearted; and in some, I regret to say, negligible. But we did succeed in building up a list of some eight hundred names after eliminating a great many whom we found upon inquiry to be unknown to the specific legislator. "These men have been asked from time to time to write their man in Congress on various legislation. From the start we realized that our first task was to educate the legislator in the problems which face the American independent businessman. This process has been slow but it has been extremely effective. There are many evidences of this in the record of the session just closed." Pressure on Congressmen got under way in this month, when druggists were urged, in the Journal for October 17, 1935, p. 1274, to make it their personal business to see their legislators and to get their pledge to support the National Fair Trade Enabling Act, before they returned to Washington for the 1936 session. According to the Journal "This is a task that must be accomplished by individual druggists in their own home territories. These legislators are now at home, and their ears are keenly attuned to the things their constituents desire. Do not overlook the fact that every Congressman and at least one-third of the Senators are keenly aware of the fact that there will be an election in 1936-and this will make them particularly attentive to your message." This was only the start of the widespread pressure campaign directed by the Association's Washington office to influence Congressmen. Representative statements taken from the N. A. R. D. Journal show the constant bombardment on Congressmen. Ten days after the Fair Trade Erabling Act was introduced, druggists were warned in the January 16, 1936, p. 77, issue of the Journal, that— * * No "Officers and members of state and local associations and members of Congressional Contact Committees from these states should be prepared to use every influence at their command to bring to the attertion of their Senators, the justice and the economic necessity for this legislation as soon as it is called for by the Washington office. At least one thousand communications should be placed in the hands of each of these Senators [on the judiciary committee] when the call comes from Washington. threatening statements should be included, but the letter should be written in the strongest possible language. Stress the plight of the small man in business and the fact that he is numerically supreme at the polls." As soon as the Fair Trade Enabling Act was referred to the Judiciary Committees of both houses, J. W. Dargavel, executive secretary of the N. A. R. D., in an open letter to members published in the February 20, 1936, issue of the Journal pointed out that "N. A. R. D. members, and particularly those from states from whom these committeemen come, should concentrate their efforts upon members of the Judiciary Committees. A favorable report from these Committees will aid greatly in the passage of this bill. Write to these Committeemen today!" When there was a prospect that the 1936 Congress would adjourn without passing the Tydings Bill, the 20,000 members of the N. A. R. D. were told, in the April 16, 1936, issue of the Journal, p. 480, to write "a letter or a telegram to each of their Senators and their Representative telling them to pass the Robinson-Patman bill and the Tydings-Dies bill BEFORE CONGRESS ADJOURNS. * ** * We ask that you comply 100% with this request during the week of Apri! 90 to 24." The Robinson-Patman bill became law June 19, 1936. Because of the failure of the 1936 Congress to approve the Tydings bill, the N. A. R. D. remobilized its pressure activities in the latter part of 1936 in an effort to open the way for passage of this bill in 1937. Referring to the reorganization of the Congressional Contact Committees on a county-unit basis, instead of a Congressional District basis, the November 5, 1936, issue of the Journal, p. 1552, points out that * * * "On September 1 the N. A. R. D. asked the state and local associations, and the members of the Congressional Contact Committees to contact every candidate whose name appears on the ballot for election to the Senate and the House of Representatives. ** * We now ask again that every state and local association ** * select a qualified man in every county in every state to serve on the Congressional Contact Committees. * ** We further ask that when these county selections are made complete that an organized effort be made to contact personally every Congressman and every Senator upon the Tydings-Miller bill. The average Congressional District is not large. Usually they cover only four or five counties. Officers of state and local associations are urged to make this contact work their primary function during the next two months." When Congress convened in January 1937, the reorganized Congressional Contact Committees were ready to place pressure on Congressmen on a nationwide basis. According to January 7, 1937. issue of the Journal "Forty-four states of the Union are now organized as never before in history for the purpose of furthering legislation. We have the proper contact men in this country. They now number over two thousand. We are now asking that each of these 2,000 men form a committee of their own in their own local community consisting of ten other independent business men who will work and move as a unit when called upon by the N. A. R. D. Washington office." |