THE MANUFACTURER AND DOMESTIC MARKET 127 



wise, take the form of requests that the manufacturers should control 

 the retail price at which their goods are sold, and in so doing protect 

 and regulate the profit which the dealer is to receive. There has 

 been considerable response to these appeals, since the manufacturer 

 has a direct interest in the soundness and profitableness of the busi- 

 ness engaged in distributing his products. 



From this has resulted a variety of plans by which the manu- 

 facturer can regulate retail prices and profits. One method is 

 through the establishment of Exclusive Agencies. By this I do 

 not mean the practice of giving an extra cash discount to dealers 

 who handle no rival goods, a practice pursued by some concerns 

 which are trying to perfect a monopoly, but I refer to the plan of 

 choosing a dealer as agent in each market and making it impossible 

 for his near-by competitors to secure the goods in question. The 

 retail exclusive agency is the application of an arrangement long 

 common between manufacturers and jobbers. The manufacturer 

 regulates the price at which the goods are sold, and, since the outlets 

 are restricted in number, keeps up an aggressive advertising cam- 

 paign to drive trade to them. Some articles sold in this way are 

 tools, men's linen, dress-patterns, shoes, and silks. The 'exclusive 

 agency prevents goods from being made common upon the market 

 as leaders, and this pleases a certain exclusive element of the buying 

 public. Its chief service, however, is to limit competition by pro- 

 viding one dealer only with the goods on each market. 



A second way of regulating retail profits is by means of a Price 

 Contract. This involves an agreement regulating the selling prices 

 and signed by manufacturers, jobbers, and retailers. Such agree- 

 ments have been freely used in the sale of patent medicines under 

 the name of the " N. A. R. D. Plan," named from the National Associ- 

 ation of Retail Druggists. When there is printed upon the goods 

 or their labels directions as to retail price and terms of sale, and 

 these are worded to form a contract with any dealer who may 

 purchase the goods, the arrangement is known as the "Worcester 

 Plan." In the attempt to enforce these contracts by law different 

 interpretations have been encountered in various courts. In Massa- 

 chusetts the Supreme Court has held that the fixing of the price 

 of proprietary medicines is not contrary to public policy and that 

 as between the manufacturer and dealer the acceptance of goods as 

 billed makes the printed contract on their labels regulating distri- 

 bution binding on the dealer as a part of the contract of purchase. 

 In Rhode Island and Pennsylvania it has been held that the mere 

 purchase or acceptance of goods by a dealer without specific assent 

 to a contract printed on them does not bind him. Price contracts 

 have been used freely in the sale of patent medicines, books, and in 

 the case of at least one celebrated brand of soap. 



