Now this group has added another purpose: It is out to defeat a price-fixing bill presently before the House Commerce Committee. This is the perennial fair trade measure dressed up as a "quality stabilization" bill. The NCSC probably can do more to help many of its members-it claims 1.5 million-by this action than by pushing medicare. The intent of the "quality stabilization" bill is to fix prices-at quality levels, of course. Congressman Emanuel Celler, long-time chairman of the House Judiciary Committee, testified on this point last week. Maryland has a so-called fair trade law. The District of Columbia doesn't. Celler said he went shopping in Maryland for toothpaste, aspirin, milk of maguesia, insulin, and other drugs. He paid $10.89 for six items. Then he purchased the exact same items in the District of Columbia-total price, $7.20. This prevention of price competition is precisely the purpose of the Quality Stabilization bill, despite the fog of euphemisms, as Celler described it, in which it is garbed. In the elderly years, drug prices become vital items. But this bill would apply to everything, so long as the manufacturer wanted to fix the prices for his retailers. And this price fixing would have the law behind it. No wonder the National Council of Senior Citizens is alarmed. [From the AMA News, Apr. 1, 1963] Utah ruling: Drug discounts for elderly persons-or any special groupviolate both the Utah unfair practices act and the Federal antitrust laws, Utah Attorney General A. Pratt Kessler said in an opinion issued at the request of the Utah Council on Aging. Two drugstore chains in the State have been granting 15-percent cash discounts on prescription drug prices to Utah residents 65 and over. [From the New York World-Telegram, Apr. 29, 1963] "TODAY'S WASHINGTON REPORT"-SENIOR CITIZENS FIGHT MINIMUM PRICE PLAN The National Council of Senior Citizens is joining the fight against legislation that would allow manufacturers to set minimum retail prices on their brandname products sold throughout the country. The legislation has the support of organized druggists, jewelers, clothing retailers and other small business. The price maintenance bill is pending before the House Commerce Committee. [From the Houston, Tex., Press, May 2, 1963] "QUALITY" PRICE FIXING When the National Council of Senior Citizens was organized a couple of years ago its chief aim was to push for something like President Kennedy's medicare program. Now this group has added another purpose. It is out to defeat a price-fixing bill presently before the House Commerce Committeee. This is the perennial fair trade measure, dressed up as a quality stabilization bill. The NCSC probably can do more to help many of its members-it claims 1.5 million-by this action than by pushing medicare. The intent of the quality stabilization bill is to fix prices-at quality levels, of course. Congressman Emanuel Celler, long-time chairman of the House Judiciary Committee, testified on this point last week. Maryland has a so-called fair trade law; the District of Columbia doesn't. Mr. Celler said he went shopping in Maryland for toothpaste, aspirin, milk of magnesia, insulin, and other drugs. He paid $10.89 for six items. Then he purchased the exact same items in the District of Columbia-total price, $7.20. This prevention of price competition is precisely the purpose of the quality stabilization bill, despite the fog of euphamisms, as Mr. Celler described it, in which it is garbed. In the elderly years, drug prices become vital items. But this bill would apply to everything, so long as the manufacturer wanted to fix the prices for his retailers. And this price fixing would have the law behind it. No wonder the National Council of Senior Citizens is alarmed. [From the Knoxville, Tenn., News Sentinel, May 1, 1963] When the National Council of Senior Citizens was organized a couple of years ago, its chief aim was to push for something like President Kennedy's medicare program. Now this group has added another purpose. It is out to defeat a price-fixing bill presently before the House Commerce Committee. This is the perennial fair trade measure, dressed up as a quality stabilization bill. The NCSC probably can do more to help many of its members-it claims 1,500,000-by this action than by pushing medicare. The intent of the quality stabilization bill is to fix prices-at "quality" levels, of course. Representative Emanuel Celler, Democrat of New York, longtime chairman of the House Judiciary Committee, testified on this point last week. Maryland has a so-called fair trade law. The District of Columbia doesn't. Representative Celler said he went shopping in Maryland for toothpaste, aspirin, milk of magnesia, insulin and other drugs. He paid $10.69 for six items. Then he purchased the exact same items in the District of Columbia-total price, $7.20. This prevention of price competition is precisely the purpose of the quality stabilization bill, despite the fog of euphemisms, as Representative Celler described it, in which it is garbed. In the elderly years, drug prices become vital items. But this bill would apply to everything, so long as the manufacturer wanted to fix the prices for his retailers. And this price fixing would have the law behind it. No wonder the National Council of Senior Citizens is alarmed. [From the Machinist, Apr. 11, 1963] "FAIR TRADE" UNDER NEW NAME A new price-maintenance law is slipping through Congress unnoticed and unprotested by the public which would have to pay higher prices as the result. This was the frank warning sounded at the annual conference of the Council on Consumer Information in Washington recently, by a group of consumerminded Congressmen. The proposed measure is called the quality stabilization bill. It is really the old fair trade law under a new name, and fair trade itself is really price fixing. If passed quality stabilization would enable manufacturers to revoke the right of a retailer to sell their brand-name products if the retailer cut the prices. "Quality stabilization" sounds like something desirable. But like the "right to work" name on antiunion legislation, it is an attempt to fool the public as to its real intent. In this case, the real intent is to limit competition among retailers, and require all retailers to sell a manufacturer's brand at the same price if the manufacturer so desires. The reason some manufacturers and retailers, especially in the drug industry, are pushing to get this new law, is that the State fair trade laws have been declared unconstitutional in about half the States. In the other States, fair trade either was never enacted or is being ignored to a large extent by pricecutting retailers and manufacturers. But quality stabilization could damage your pocketbook even more than the fair trade laws ever did, because it would make it even easier for manufacturers to fix prices. The manufacturer would not even have to seek price agreements with retailers State by State. His fixed price would apply in all States, including those that previously never had a fair trade law. The effect on prices you pay would be drastic. Congressman John Dingell, Democrat, of Michigan, warned the educators and organizations at the consumer conference that a shopping survey by the U.S. Justice Department indicated that prices of such goods as household equipment could be raised as much as 271⁄2 percent. Another serious effect would be to freeze prices of medicines at their present high levels. The alarming fact is the speed at which the quality stabilization bill is moving through the U.S. House of Representatives with no protest from the public. The public itself has had no warning and does not realize the danger that has suddenly developed. Congressman Dingell reported that he has had heavy mail from his own district in favor of the bill, but not a single letter in opposition. Congresswoman Leonor Sullivan, Democrat, of Missouri, also reported heavy mail in favor of the pricefixing measure but no opposition; Mrs. Sullivan warned that once the bill gets out of committee it will pass the House of Representatives. Senators Estes Kefauver, Democrat, of Tennessee, and Lee Metcalf, Democrat, of Montana, also warned that the new price-fixing bill could be enacted before the public knew what had hit it, and that they too got heavy mail from businessmen against consumer legislation but little from consumers, supporting their own interests. The quality stabilization bill is being sponsored by Representative Oren Harris, Democrat, of Arkansas, chairman of the House Interstate Commerce Commitee. He has been trying for some years to get a price-fixing law passed. His bill is known as H.R. 3669, but 20 other identical price-fixing bills also have been introduced by other Congressmen. The critical stage will come late in April when a House Interstate Commerce subcommittee, headed by Representative Harley Staggers, Democrat, of West Virginia, holds hearings on it. The Government agencies which have the responsibility for fighting price fixing of the things you buy, are strictly against such laws. The Federal Trade Commission, Justice Department, and Commerce Department all have attacked the quality stabilization bill as a price-boosting measure. Lee Loevinger, Assistant Attorney General in Charge of the Antitrust Division, last year told a Senate Commerce subcommittee, that quality stabilization would let manufacturers fix prices at high, noncompetitive levels "calculated to yield what the traffic could bear." Moreover, under the proposed measure price fixing could be extended to fresh produce, canned goods, clothing, gasoline, building materials, even meat and potatoes, Loevinger warned. Some retailers themselves are opposed to price-fixing laws. Writing in Home Furnishings Daily, Maurice M. Cohen, a leading Massachusetts retailer, pointed out that manufacturers would protect quality for their own sakes without the quality stabilization measure, and that even though appliance prices have been reduced by sharp competition, recent models have been improved. The danger, however, is that several influential Senators often otherwise considered among the Senate liberals, do support price fixing. These include Hubert Humphrey, Democrat, of Minnesota, himself a former druggist; Mike Monroney, Democrat, of Oklahoma, a former furniture merchant, and William Proxmire, Democrat, of Wisconsin. Thus, unwary shoppers may pay several dollars more for an iron under one name than for a similar iron under another name. In this case the manufacturer has worked out a way to fix prices on the theory that he still owns the merchandise even when it is in the hands of the retailer. Mr. HUTTON. That concludes the statement of the National Council of Senior Citizens, sir. Mr. DINGELL. Colonel Hutton, it was a privilege to have you before the committee this morning for this very fine statement. Mr. Van Deerlin? Mr. VAN DEERLIN. I agree, Mr. Chairman. I wonder only if Mr. Hutton might be induced to read all the statements that are submitted to this committee. He has the virtuosity of Charles Laughton. Mr. HUTTON. Thank you very much, Mr. Van Deerlin. Mr. DINGELL. Colonel, it was a privilege to have you with us this morning. We are most grateful to you for your help. We know you have to catch a plane. We look forward to seeing you from time to time on matters of interest to your very fine organization. Mr. HUTTON. Thank you very much, sir. I am very grateful for the opportunity. Mr. DINGELL. The Chair notes the presence in the room this morning of our good friend and colleague, the Honorable John Dent. of Pennsylvania, who appears this morning to testify on this legislation. I am sure, on behalf of the committee, it would be appropriate for me to observe that you are not only welcome but highly regarded by the members of this committee for your high ability and dedication and purpose. It is indeed a pleasure to have you. STATEMENT OF HON. JOHN DENT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. DENT. Thank you, Chairman John. Members of the committee, I requested this time because I am a little disturbed. Perhaps my disturbance and worry goes deeper than the contents of this bill alone; it is because of related matters. I would say. I am worried, too, that we are suffering from a disease in this country that seems to be bent upon weakening the entire structure. I have always promoted, even as a member of the Senate of Pennsylvania for many years, legislation along the lines of the quality stabilization bill for what I feel to be obvious and yet very good reasons. I believe right now enactment of this bill is necessary as a hypodermic of penicillin to arrest some of the poison infesting our bloodstream of the national economy. I cannot understand why many Americans can find reasons to condemn this bill by epithet; to bandy words, phrases, and semantics comparing quality stabilization with fair trade and price fixing, as though they were dirty words. The quality stabilization bill in actuality is no more fair trade or price fixing under the accepted understanding of those phrases than are wages and rents and phone bills, airplane and train fares, farm subsidies, gas, light, water, all utility fixed costs. Regardless of what anyone wants to call this precise and, I think simple, single-purpose bill, it is essential that it have its chance to stave off a fatal cancer gnawing at the very spinal cord of the Nation. We are drifting into more and more unemployment-this in spite of figures; in spite of the efforts of Congress; in spite of the efforts of the local governments and alltime high investment by the Federal Government in local government for rehabilitation; in spite of every attempt made by the Federal Government to cure the growth of the cancer that has been gnawing at our employment for better than a decade now. In reality, unemployment is not receding, in spite of the fact that some sets of figures tend to show by percentages that it is. Because all you have to do is to take a list of the unemployed of a year ago, 2 years ago, 6 months ago, and now, and you will find that in the main the changes have been to a greater number of unemployed rather than a lesser. Cheap prices, in my opinion, no matter where they start or where they are offered, cannot do anything but hurt an industrial community. Cheap prices as such are not healthy unless their cheapness car ries within it the ingredients of aiding the economy in both the production and the distribution of the product. Where the cheap price is created by reducing the contribution of the producer to the economy or the contribution of the distributor to the total economy, then that cheap price is no bargain. In plain language, every bit of product in this country, whether it be a service, whether it be a consumer product, a utility product, or an industrial-commercial product, must carry its share of the national total economic need of the country. And as I go along-and I am just roughing through this presentation so that you will have it-I would like to just talk in a commonsense fashion, if I can, and from my own economic viewpoint. I can see very little logic in a $3.50 rubber worker or automobile worker, whom I now just heard is against this legislation. Mr. DINGELL. If the gentleman will yield, I know the individual to whom he is referring. He is an old friend of mine and he happens to be a retired auto worker who is existing on social security pension with no other income. His entire income runs about $320 a month. Mr. DENT. Well, the witness announced that an automobile worker or somebody was the president of it. Mr. DINGELL. No; he is a retired auto worker. I just want to keep the record straight. Mr. DENT. We will keep the record straight along that line, and right at this point say, as to the retirees, that most items that would come under this bill are not the items that are purchased daily in large sums by retired persons, because, if my memory serves me right, under the so-called old fair trade laws in the businesses my father was in, most of the fair-traded items were those used normally and in greater amount by the younger folks-maintaining and building a home and having a family of children to raise. As to the retirees, they would be hit-probably they would call it "hit"-in the drug fields, and so on. And yet when you stop to think about it, most of the drugs that the old people buy are prescription drugs. And those drugs, as you know, are specifically exempted from this bill. I do not believe that my regard for, my respect for, and my desire to help the older citizen is diminished by my support of this piece of legislation. These retirees should not be the prime witnesses arguing against this bill. The prime witnesses against this bill are those who would eliminate a necessary aid and necessary share of the economic load of the country by eliminating the help required to properly service. and properly distribute a reasonably priced product made by workmen paid reasonable wages. I go back to the price structure. Let us talk about a $3.50 automobile worker or steel worker or rubber worker who feels that he has a so-called inherent right, which right is maintained under this legislation, to buy a cheap shirt. If this cheap shirt is made by a worker at 7 to 15 cents an hour in an area that we will not mention for the record at this point, how can the inequitably paid shirt worker in turn buy the product of the $3.50 automobile worker? It is this vicious cycle that takes place when price alone becomes the determining factor in the distribution of goods. Price alone can |