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THE GARDEN. MAGAZINE 



August 191: 



Brandeis Attacks Price-cutting 



[Note.] It takes courage of the highest order to stand firm against uneducated 

 public opinion — for the public's good. 



Probably in his life of service Louis D. Brandeis, the great People's Lawyer, has 

 never taken a step that will arouse greater comment than the following article. 



Most people who have not studied the subject are against price-maintenance. 

 The consumer thinks it a device to make him pay more; the merchant feels that when 

 he buys the goods of the manufacturer they are his and that it is an infringement of 

 his rights to establish his selling price. 



Careful study of the subject, however, shows that the same price everywhere is 

 for the best interests of the buying public, the independent dealer, and the independent 

 manufacturer. 



Price-cutting on articles of individuality, Mr. Brandeis maintains, would enable 

 men controlling vast combinations of capital to win local markets one by one, and create 

 monopolies on the things we eat and wear, then raise the prices higher than before. 



This article is published by a number of the leading magazines in the belief that 

 by giving wide publicity to the views of so noted a foe to monopoly as Mr. Brandeis 

 the real interests of the enterprising individual manufacturer, the small dealer, and the 

 public will be served. 



Price-maintenance 

 Encourages Individual Enterprise 



By Louis D. Brandeis 



THE American people are wisely determined to restrict the 

 existence and operation of private monopolies. The recent 

 efforts that have been made to limit the right of a manu- 

 facturer to maintain the price at which his article should be sold 

 to the consumer have been inspired by a motive that is good — 

 the desire for free competition — but they have been misdirected. 

 If successful, they will result in the very thing that they seek to 

 curb — monopoly. Price-maintenance — the trade policy by 

 which an individual manufacturer of a trade-marked article in- 

 sures that article reaching all consumers at the same price — 

 instead of being part of the trust movement is one of the strongest 

 forces of the progressive movement which favors individual enter- 

 prise. 



The Article with Individuality 



THERE is no justification in fixing the retail price of an article 

 without individuality. Such articles do not carry the guar- 

 antee of value that identifies them with the reputation of the man 

 who made them. But the independent manufacturer of an article 

 that bears his name or trademark says in effect: 



"That which I create, in which I embody my experience, to which I 

 give my reputation, is my own property. By my own effort I have created 

 a product valuable not only to myself but to the consumer, for I have 

 endowed this specific article with qualities which the consumer desires and 

 which the consumer may confidently rely upon receiving when he purchases 

 my article in the original package. It is essential that consumers should 

 have confidence in the fairness of my price as well as in the quality of my 

 product. To be able to buy such an article with those qualities is quite as 

 much of value to the purchaser as it is of value to the maker to find customers 



for it." •*■•*».. • pv 



The Distinction Drawn 



'TpHERE is no improper restraint of trade when an independent 

 ■*■ manufacturer in a competitive business settles the price at 

 which the article he makes shall be sold to the consumer. There 

 is dangerous restraint of trade when prices are fixed on a common 

 article of trade by a monopoly or combination of manufacturers. 



The independent manufacturer may not arbitrarily establish 

 the price at which his article is to be sold to the consumer. If he 

 would succeed he must adjust it to active and potential competition 

 and various other influences that are beyond his control. There 

 is no danger of profits being too large as long as the field of com- 

 petition is kept open; as long as the incentive to effort is pre- 

 served; and the opportunity of individual development is kept 

 untrammeled. And in any branch of trade in which such com- 

 petitive conditions exist we may safely allow a manufacturer to 



(c) Clinedinst, Washington. 1). C 



maintain the price at which his article may be sold to the consumer. 



COMPETITION is encouraged, not suppressed, by permitting 

 each of a dozen manufacturers of safety razors or breakfast 

 foods to maintain the price at which his article is to be sold to the 

 consumer. 



By permitting price-maintenance each maker is enabled to 

 pursue his business under conditions deemed by him most favor- 

 able for the widest distribution of his product at a fair price. He 

 may open up a new sphere of merchandising which would have 

 been impossible without price protection. The whole world can be 

 drawn into the field. Every dealer, every small stationer, every 

 small druggist, every small hardware man can be made a purveyor 

 of the article, and it becomes available to the public in the shortest 

 time and the easiest manner. 



Price-cutting of the one-priced trade-marked article is frequently 

 used as a puller-in to tempt customers who may buy other goods 

 of unfamiliar value at high prices. It tends to eliminate the small 

 dealer who is a necessary and convenient factor for the widest 

 distribution; and ultimately by discrediting the sale of the article 

 at a fair price, it ruins the market for it. 



Abolish Monopoly but not Price-maintenance 



/"\UR efforts, therefore, should be directed not to abolish price- 

 ^^ maintenance by the individual competitive manufacturer, 

 but to abolish monopoly, the source of real oppression in fixed 

 prices. The resolution adopted by the National Federation of 

 Retail Merchants at its annual convention draws clearly the dis- 

 tinction pointed out above. The resolution declared that the 

 fixing of retail prices in and of itself is an aid to competition; among 

 other reasons, because it prevents the extension of the trust and 

 chain stores into fields not now occupied by them. But the resolu- 

 tion also expresses the united voice of the retailers against monop- 

 oly and against those combinations to restrain trade against which 

 the Sherman law is specifically directed. 



Manufacturers and retailers are getting this distinction clearly 

 in their minds, and it must soon be generally recognized by the 

 public. What is needed is clear thinking and effective educational 

 work which will make the distinction clear to the whole people. 

 Only in this way can there be preserved to the independent manu- 

 facturer his most potent weapon against monopoly — the privilege 

 of making public and making permanent the price at which his 

 product may be sold, in every State in the Union. 



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