may consider them and you may not. Now, why do you consider them or why do you not?

Mr. NEWMAN. Well, I would say this: That, as I said before, in some instances I think it is necessary and in others I don't.

The VICE CHAIRMAN. Why do you think it is necessary ever to consider your competitors price?

Mr. NEWMAN. With the master prices ?
The VICE CHAIRMAN. Yes.

Mr. NEWMAN. Well, in that instance I would say where the market is on an average and the price would be equal all through.

The VICE CHAIRMAN. You used some remarks you may understand but I don't. You say you go in and find the prices about equal, and then some other things. Let me see if I can help you. You are now at the point where we are interested.

Mr. NEWMAN. I understand that.

The VICE CHAIRMAN. This is something you know and we don't. In one State you are influenced by competitive prices and in another State you are not. Do you mean that in some States you go in and you find the competitive price about what you would sell for anyhow?

Mr. NEWMAN. Yes.
The VICE CHAIRMAN. I am helping you out, am I not?
Mr. NEWMAN. A little bit.

The VICE CHAIRMAN. The next place you find them not what you think they ought to be, and there you fix the price.

Mr. NEWMAN. That is the idea.

Mr. BALLINGER. Mr. Newman, you think the producers of liquor should compete on price in the manufacture of liquor.

Mr. NEWMAN. What do you mean?

Mr. BALLINGER. There must be price competition between manufacturers of liquor.

Mr. NEWMAN. Absolutely.

Mr. BALLINGER. Then why don't you think there should be price competition between the distributors? Why should you sort of stop price competition on that front, and tolerate it on the other? What is the special advantage of that?

Mr. NEWMAN. You are talking now to the consumer?

Mr. BALLINGER. I mean you are perfectly willing that the manufacturers of liquor should compete on price, but if you believe in resale price maintenance you don't want your distributors to compete on price. I want to know what is the special advantage of that. If competition is good here, why isn't it good there?

Mr. NEWMAN. Well, I would say that in selling to the consumer that the retailer requires a certain mark-up in order to make his profit.

Mr. BALLINGER. Then why wouldn't you say it would be a good thing if the manufacturers would get together and agree on what their profit should be? Mr. NEWMAN. It couldn't be done.

Mr. BALLINGER. It could be done much more easily than the other way. You would have only four people to get together.

Mr. NEWMAN. It couldn't be done. On account of the extreme competition that would be impossible.

Mr. BALLINGER. I am asking you if it could be done.

Mr. NEWMAN. I don't see how it could.

Mr. BALLINGER. If it could be done, do you think it would be a good thing for the manufactures to fix prices?

Mr. NEWMAN. I don't think so.

Mr. BALLINGER. But you think it is a good thing for the manufacturer to prevent the distributor from competing, saying “You can't compete on price any longer."

Mr. NEWMAN. Yes.

Mr. BALLINGER. There is some inconsistency, then, in what you are saying.

Mr. Buck. What you know about it is that this system gives you a good profit and insures the payment of your accounts properly, and so forth. That is what your interest is. After all, your interest is in good, solid profit straight through.

Mr. NEWMAN. Yes. Mr. Davis. I understood you to say your selling price on White Horse is uniform to all wholesalers.

Mr. NEWMAN. Yes.
Mr. Davis. What is that current price, the present price?
Mr. NEWMAN. To the wholesaler?
Mr. Davis. Yes, sir.
Mr. NEWMAN. $21.50.
Mr. Davis. $21.50 a case of 12 fifths ?
Mr. NEWMAN. That is correct.
Mr. BUCK. What is your resale price fixed on that in New York?
Mr. NEWMAN. What do you mean?
Mr. BUCK. What is the retailer's price to the consumer on that same
whisky in New York?

Mr. NEWMAN. $3.39.
Mr. BUCK. A bottle?

Mr. NEWMAN. Yes. That is exclusive of the State tax. Of course, that is to the wholesaler.

Mr. BUCK. That gives the retailer a profit of $1.59 on a fifth of whisky?

Mr. NEWMAN. Don't forget he has $1 a gallon tax.
Mr. BUCK. That gives him $1.34 profit on one bottle of whisky.
That is all.

The VICE CHAIRMAN. The Chair is advised that counsel for Park & Tilford have tendered their contracts for the record, to be admitted.

(The Park & Tilford agency contracts were marked "Exhibits Nos. 423 and 424” and are included in the appendix on pp. 2709 and 2711.)

Mr. BUCK. Are there any other contracts to come in at this time? Mr. NEWMAN. I want to correct that. That is $26.10. Mr. Buck. Mr. Newman, did the price change since you left here? Mr. NEWMAN. No; that was the price. Mr. Bock. Is Mr. Williams here, of Canada Dry? The VICE CHAIRMAN. Do you solemnly swear to tell the truth, whole truth, and nothing but the truth, in the testimony you are about to give, so help you God?

Mr. WILLIAMS. I do.

TESTIMONY OF WILLIAM J. WILLIAMS, SECRETARY AND GENERAL

COUNSEL, CANADA DRY GINGER ALE, INC., NEW YORK, N. Y. Mr. BUCK. Will you state your name and business connections?

Mr. WILLIAMS. William J. Williams, secretary and general counsel, Canada Dry Ginger Ale.

Mr. Buck. I didn't know you were a lawyer or I wouldn't have summoned you. [Laughter.]

Do you know about the contractual arrangements between Canada Dry and Johnnie Walker?

Mr. WILLIAMS. Yes, sir.
Mr. BUCK. Johnnie Walker is a Scotch whisky?
Mr. WILLIAMS. Johnnie Walker is a blended Scotch whisky.
Mr. Buck. It is all blended, isn't it?
Mr. WILLIAMS. That is what you tell us.
Mr. BUCK. Who owns the Johnnie Walker company abroad?

Mr. WILLIAMS. On information, I believe the D. C. L. own the Johnnie Walker Company.

Mr. BUCK. The same aggregation we have been discussing here? Mr. WILLIAMS. I think so.

Mr. BUCK. You have seen the contract that we offered for the record ? 1

Mr. WILLIAMS. I didn't examine it but I would like to, and I think in all probability it is about the same. I would like to have an opportunity to glance through it after the examination.

Mr. BUCK. Is Johnnie Walker a popular Scotch brand in the United States?

Mr. WILLIAMS. I think so.
Mr. BUCK. What are its gross sales?
Mr. WILLIAMS. In dollars?
Mr. BUCK. In dollars.

Mr. WILLIAMS. I don't know exactly, but I will guess between four and five million dollars a year.

Mr. BUCK. Not as large as Haig & Haig?

Mr. WILLIAMS. I don't know what the Haig & Haig sales are. Johnnie Walker gross sales may approximate $6,000,000.

SOLE AGENCY CONTRACT FOR JOHNNIE WALKER AND HAIG & HAIG WHISKIES

Mr. BUCK. And Canada Dry Ginger Ale Corporation holds the sole distributor's contract for that brand in the United States?

Mr. WILLIAMS. That is right.
Mr. BUCK. It can't be purchased from anyone else?

Mr. WILLIAMS. That is substantially correct. Under certain conditions Johnnie Walker can be purchased direct from the parent company, but those conditions are not very important.

Mr. Buck. In the event I should place an order with Johnnie Walker abroad for a case and they were kind enough to send it to me, would you get a profit on it under your contract?

Mr. WILLIAMS. We would get an agent's profit.

Mr. Buck. Whether you sold it to me or not?
Mr. WILLIAMS. That is right.

Mr. BUCK. Does D. C. L. contribute to the advertising of the brand in this country?

Mr. WILLIAMS. No; John Walker & Sons, Ltd., do.

Mr. Buck. My mind doesn't break down to fine parts. It is all D. C. L. with me.

Mr. WILLIAMS. We don't have any relationship with the D. C. L. company whatsoever.

Mr. BUCK. All right, I will take your view of it. Johnnie Walker contributes?

Mr. WILLIAMS. Yes.
Mr. Buck. How much do they contribute each year?

Mr. WILLIAMS. I think it fluctuates from year to year, but the current appropriation is around thirty or thirty-five thousand pounds.

Mr. BUCK. Thirty or thirty-five thousand pounds. Are you required to make a contribution to that under your agreement ? Mr. WILLIAMS. Not specifically in our existing agreement. Mr. BUCK. Do you, as a matter of fact? Mr. WILLIAMS. Yes. Mr. BUCK. How much do you contribute toward it?

Mr. WILLIAMS. On information from our accounting department, I believe it is around $1 a case.

Mr. BUCK. The same as Mr. Newman testified to?
Mr. WILLIAMS. I believe so.
Mr. Buck. For every case you sell you must spend that dollar?
Mr. WILLIAMS. That is right.
Mr. Buck. That is passed on to the consumer, of course ?
Mr. WILLIAMS. I suppose it is a component part of the price.

Mr. Buck. In turn, you distribute, throughout the United States, Johnnie Walker whisky?

Mr. WILLIAMS. That is correct.

Mr. Buck. And you distribute it under resale price-maintenance agreements? Mr. WILLIAMS. In some States. Mr. BUCK. In most open States?

Mr. WILLIAMS. No. I am guessing now. There are, I should say, about six States in which we have fair-trade contracts.

The VICE CHAIRMAN. Can you name those States ?

Mr. WILLIAMS. California; Arizona; New York State, of course; New Jersey and Illinois; and either Wisconsin or Minnesota, I don't know which. I think it is Wisconsin.

The VICE CHAIRMAN. I wish you would ask Mr. Newman to remain. I want to ask him a question when you get through with the witness.

Mr. BUCK. Mr. Newman, will you remain in the room after we finish with this witness, please, sir?

Mr. BUCK. I hand you a contract, together with a letter that accompanies it, referring to a court decision in the State of New York, and ask you if that is typical of your resale price maintenance contracts on that brand of whisky?

Mr. WILLIAMS. Yes.
Mr. Buck. And you send this letter along with it?
Mr. WILLIAMS. That is correct.

Mr. BUCK. What is the purpose in sending the letter? Mr. WILLIAMS. Well, in the present contract there is a provision which was validated by a subsequent decision of the New York Court of Appeals, and as a consequence we amended the original contract to conform with the decision.

Mr. BUCK. You feel that it had a little coercive value ?
Mr. WILLIAMS. No; I don't think so.
Mr. BUCK. To send the court decision along with the contract.

Mr. WILLIAMS. I didn't send the court decision. I just referred to it in a memorandum.

Mr. Buck. I will ask that the contract and other attached papers be filed.

The VICE CHAIRMAN. They will be filed.

(The documents referred to were marked "Exhibit No. 425” and are included in the appendix on p. 2714.)

QUESTION OF ENFORCING PRICE MAINTENANCE BY LARGE RETAILER Mr. BUCK. Mr. Williams, just as a matter of developing this subject, do you sell to Macy & Co. in New York?

Mr. WILLIAMS. Yes; I believe so.

Mr. BUCK. Do you require Macy to charge a price more than they wish to charge on your whisky?

Mr. WILLIAMS. We request that they maintain our suggested resale price.

Mr. Buck. Notwithstanding the fact that they wish to sell your whisky at a less price.

Mr. WILLIAMS. They have been pretty good; they have followed our suggestion quite well. At times they have cut'a little.

Mr. BERGE. You call it a suggestion. Isn't it a definite obligation?

Mr. WILLIAMS. Of course, if you want to construe it strictly. Macy has not signed a fair-trade contract. Consequently it isn't a contract price; it is a suggested price.

Mr. Davis. If they didn't observe your fixed resale price you would quit selling to them, wouldn't you?

Mr. WILLIAMS. We would do that or we might bring an action to enjoin them from cutting the price.

Mr. Davis. What is your price on Johnnie Walker to the wholesalers in New York at the present time?

Mr. WILLIAMS. We have various prices on various sizes under various conditions. We have “in bond," "out of bond,” all sizes. Take the fifth. Is that satisfactory?

Mr. BUCK. Take the fifth, "out of bond,” for distribution.
Mr. WILLIAMS. About $25.34 a case.
Mr. Davis. What is your fixed resale price of that in New York?
Mr. WILLIAMS. Three dollars and thirty-nine cents.
Mr. BUCK. A fifth?
Mr. WILLIAMS. A fifth; we are talking about fifths.

Mr. Davis. Do you charge a little more than the White Horse wholesale ?

Mr. WILLIAMS. I don't know what White Horse charges except from what I heard Mr. Newman say.

Mr. Davis. But the resale price to the consumer is the same?