^Ifc-NRLF ri o * B ^ S?S o O GIFT OF Digitized by the Internet Archive in 2007 with funding from Microsoft Corporation http://www.archive.org/details/digestofrepliesiOOunitrich APR 29 1921 US FEDERAL TRADE COMMISSION DIGEST OF REPLIES IN RESPONSE TO AN INQUIRY OF THE FEDERAL TRADE COMMISSION RELATIVE TO THE PRACTICE OF GIVING GUARANTEE AGAINST PRICE DECLINE MAY 27, 1920 WASHINGTON GOVERNMENT PRINTING OFFICE 1920 Victor Mubdock, Chairman. Huston Thompson. William B. Colver. Nelson B. Gaskill. John Garland Pollard. J. P. Yoder, Secret urn GIFT TABLE OF CONTENTS. Page. Questionnaire 6 Alphabetical list of individuals, firms, corporations, and commercial and trade associations 61 REPLIES FAVORING GUARANTEE AGAINST PRICE DECLINE. (Arranged by industries.) Agricultural implements 7 Automobile equipment 9 Canning 9 Cotton 9 Drugs 9 Dry goods 10 Fly paper 10 Food manufacturers and foodstuffs 10 Gas and gas engines 11 Grocers 11 Hardware 20 Ice 25 Iron and steel 26 Lighting equipment 27 Lumber _:_ 27 Machinery 28 \ Machine tools 28 Mill supplies 29 Oil, edible 29 Overalls : , 29 Paint and varnish 29 Paper manufacturers 31 Plumbing supplies 33 Roofing J 33 Screens \ 33 Shirts 1 33 Shovels 34 Silos 34 Tents, awnings, etc 34 Toilet articles 34 Walnut growers 35 Woolen textiles 35 (3) 456561 Miscellaneous : Page. Attorneys representing different industries 36 Axes i .36 A. B. Jones Co 36 Barn fixtures 36 Engineering 36 Exporters and importers 35 Fairbanks Co 36 , Wind engines and pumps 37 REPLIES OPPOSING GUARANTEE AGAINST PRICE DECLINE. Alfalfa 38 Automobile accessories and tractors 38 Blacksmith supplies 38 Box makers . 39 Brass and bronze 39 Cereals 39 Chemicals 39 Chocolate , 39 ^ Cloth 40 Coffee, extracts, and spices 40 Cordage and rope__ 41 Cotton goods, thread, etc 41 Dyestuffs . 42 Electrical supplies 42 Filing equipment, metal 42 Food manufacturers (animal, grain, etc.) 42 Glycerine refineries 43 Grocers 43 Hardware 43 Honey 44 Hosiery : 44 House furnishings . 45 Implements and carriages 46 Iron and steel 45 Jellies 46 Knit goods 46 Live stock 47 Lumber 47 Machinery 47 Machine tools 48 Milling, grain, flour, corn 48 Molasses 49 Nuts, edible 49 Oil and petroleum 49 Overalls 50 Paints and varnishes . 50 Paper and paper products . : 51 Boxes and box boards 52 Roofing 52 Peanuts 52 Plumbers' supplies 52 Page. "Rope 41 Salt 53 Saws 53 Shoes, rubber 53 Soap 53 Solder 54 Tacks •— — 54 Tin plate 54 Tires 55 Typewriter ribbons 55 Miscellaneous : Construction industries 56 Lamp standardization ; 56 Manufacturers' agents 55 Manufacturers and exporters 55 Merchandise, wholesale jobbers _, 56 Novelties 56 Sulphonapthol 56 NONCOMMITTAL REPLIES. Containers 57 Cotton mills i 57 Hardware 57 Hardwood • 57 Livestock 57 Machinery 58 Paper 57 Stoves 58 Textiles 58 Vulcanized fiber products 58 Wire rope 50 FAVORABLE REPLIES WITH RESERVATIONS. Agricultural implements 59 Cranberries 59 Hardware 59 Machine tools 60 Paint 60 Windmills { gas engines, etc 60 QUESTIONNAIRE. The following is copy of circular letter sent out by the Federal Trade Commission on December 26, 1919, to those interested in the subject of guarantee against price decline : Gentlemen: The question of guarantee against decline in price has been the subject of so many complaints before the commission and opinion seems to be so diverse that the commission has determined to go into the whole matter thoroughly. As a basis for the necessary expenditures attending upon such an inquiry such formal complaints have been issued presenting various phases of the subject. To the end that every party at interest may be fully represented the commission is inviting generally producers, manufacturers, merchants (whole- sale and retail), and consumers to declare their interest, so that the commission may know what parties should be represented. The commission is asking you therefore to communicate as speedily and as widely as possible with your membership, advising them of the invitation and to notify the commission of the nature of their interest in the subject, if any. As soon as this list of the parties at interest in the matter can be compiled it is the purpose of the commission to invite each or any of them to submit his observations in writing. This follows the custom of the commission in numer- ous other similar cases. A reasonable time limit for the filing of written statements will be given, after which they will be assembled and as far as possible classified and each correspondent will be furnished with a copy of the whole document. As soon thereafter as is possible it is the purpose of the commission to call a general hearing at Washington, at which parties at interest may be present in person, by representative, or by counsel, and an orderly method for hearing the matter will be laid out. As in everything where the public interest is involved, the utmost expedition consistent with care and full opportunity for the presentation of all sides is to be desired. Letters similar to this are being sent to various associations and ' concerns, but the commission feels that its present list by no means includes all those whose interests may be touched by a final determination of the question. May we ask you therefore to give the widest possible currency to this invitation? By direction of the commission. Very truly, yours, Victor Muedock, Chairman. (6) REPLIES FAVORING GUARANTEE AGAINST PRICE DECLINE. AGRICULTURAL IMPLEMENTS. American Seeding Machine Co., Springfield, Ohio. Manufacturers. We favor continuation of principle, conditions of guarantee to be such as to safeguard interests of buyer and seller. In most cases safeguards interests of buyer and encourages freer purchases. The Appleton Manufacturing Co., Batavia, 111. Manufacturers. At present time feel quite desirable. Encourages dealers to carry normal stock and enables shipments in advance of time needed. Saves delays in transit and allows manufacturer to ship goods early. D. F. Avery & Sons Co., Louisville, Ky. Manufacturers. Much in favor of this custom as believe principle, as applied to un- delivered portion of contracts, such as steel bars, steel plates, etc., has tendency to insure regular and continuous factory operation and gives manufacturer opportunity to buy on less fluctuating market. How- ever, such guarantee should be permissive and not mandatory. A. D. Baker Co., Swanton, Ohio. Manufacturers. Favor continuance of this principle, but as applying only to un- delivered portion of contracts covering steel plates, bars, lumber, etc. Practice regarded as beneficial to business in general. Beeman Tractor Co., Minneapolis, Minn. Manufacturers. Favors continuance of guarantee and expresses belief that it is a much-needed safeguard in business, especially in times like this, and works no hardship at any stage of the business. Case Plow Works Co., Racine, Wis. Manufacturers. Tends to stabilize business and creates confidence. Jobbers able to anticipate needs in advance, giving manufacturer more accurate knowledge as to his own needs. Is accorded this privilege in its busi- ness and extends same to customers. Challoner Co., Oshkosh, Wis. Manufacturers. Manufactures horseshoes, chains for motor trucks, etc., and finds it necessary to give guarantee in order to encourage jobbers to order sufficiently in advance to permit of best factory operation and proper distribution of shipments. Does not believe business could be con- ducted on any other basis. (7) •;/:-.• :• ..I^-'.- Deere & Co., Moline, III. Manufacturers. Believes guarantee essential to conduct of agricultural implement business. Manufacturer's storage facilities limited to two months' output and jobbers will not buy season's requirements in advance without guarantee. Present practice permits more even distribution of shipments. Guarantee should be limited to following conditions : To definite date, immediately preceding farmers' demand ; only to de- clines in manufacturers' own price ; and cover only goods on hand at specified date. Sole object of extending guarantee should be to bring about better factory operations and more even spread of ship- ments. Dempster Mill Manufacturing Co., Beatrice, Nebr. Manufacturers. As applied to season's requirements for iron and steel, believes practice should be continued. Does not comment with reference to guarantee to jobber. R. Herschel Manufacturing Co., Peoria, 111. Manufacturers. As applied to unfilled part of contracts, believe practice should be continued; that is extent to which this concern is the beneficiary of such custom. Moore Plow & Implement Co., Greenville, Mich. Manufacturers. Beyond expression that approval is given to practice does not make comment. Owensboro Wagon Co., Owensboro, Ky. Manufacturers. Following recent hostilities, to encourage placement of orders, manufacturers resorted to guarantee against decline and thereby greatly stabilized conditions. Do not believe guarantee works harm to either buyer or seller. Southern Plow Co., Columbus, Ga. Manufacturers. As a general proposition, opposed to price guarantee, but believe that guarantee should be given as related to unshipped portion of contract. Swayne, Robinson & Co., Richmond, Ind. Manufacturers. Provides means by which manufacturer may operate plant more continuously and does not impose hardship on anyone. Towers & Sullivan Manufacturing Co., Rome, Ga. Manufacturers. Believe that guarantee as applied to raw materials would facilitate factory operation and provide adequate stocks to meet demand. Ought to lower unit cost. Winona Wagon Co., Winona, Minn. Manufacturers. Believe manufacturers should have benefit of price guarantee as applied to unfilled portion of contract and feels that no hardship is imposed on anyone. AUTOMOBILE EQUIPMENT. Bright & Co., Reading, Pa. Jobbers. Guarantee induces buyer to stock up for a long period, such stock- ing insuring adequate flow of goods through retailer. Helps manu- facturers to handle business. CANNING. Warrensburg Canning Co., Warrensburg, 111. Canners. Seldom practice custom. Some manufacturers extend guarantee and others, where crop has been large and cost to pack lower than estimated at time of taking order, rebate jobbers at end of season. Seems to be no ground for complaint from any one as to practice. ■ COTTON. Lauderdale Cotton Mills, Meridian, Miss. Manufacturers. In our business we need the right to enter into contracts for annual supply of dyestuffs, with guarantee against decline as applied to undelivered portion of contract. This practice enables manu- facturers the better to gauge their sales. DRUGS. National Wholesale Druggists' Association, Trade Association. New York, N. Y. Opinion furnished by members of this trade expresses approval for following reasons : Encourages jobbers to carry adequate stocks, stabilizes relations between manufacturer and jobber and assures more continuous operation of factories, with resultant steady em- ployment of labor. Manufacturer in touch with primary markets and able to closely estimate future conditions. Jobbers' profit too small to permit assumption of possible loss. Approximately 70 per cent of goods handled by wholesale druggists subject to price fixed by manufacturer. Practice is aid to manufacturer in providing com- plete and quick distribution to consuming market. Do not believe guarantee results in higher prices. In cases of epidemic, if insufficient stocks in hands of jobbers, abnormal demand quickly drives up prices. Smith, Kline & French Co., Philadelphia, Pa. Wholesalers. To order discontinuance of practice would disarrange business and in some instances result in higher prices to consumers. Two cases in point as related to their business are here given : Naphthalene, of which this company claims to be the largest dis- tributor in the United States, is purchased by them from the manu- facturer under such guarantee, with the same protection extended by 11403—20 2 10 them to the retail dealer. If manufacturer not able in advance to calculate annual volume of business, which can not be assured with- out price being fixed subject to guarantee, he will be obliged to curtail production, and the resulting shortage of this commodity will lead to a higher price, aside from the fact that a large part of the public demand will go unsatisfied. The second case cited is that of the commodity aspirin, of which commodity this company claims to be the second largest dealer in the United States. Contracts made by this company with retailers for their aspirin requirements contain a guarantee clause and this has resulted in assuring adequacy of supply and fixed and favorable price to the consumer. DRY GOODS. Wm. R. Moore Dry Goods Co., Memphis, Tenn. Wholesalers. In instances where assumption of such responsibility was war- ranted have guaranteed prices against decline. Believe should be universally practiced, especially in seasonal lines. Custom makes for more even factory operation. Spinners have opportunity to "hedge" on purchases of raw materials and should pass such pro- tection along to dealers. Southern Wholesale Dry Goods Association, Trade Association. Richmond, Va. Concensus of opinion in jobbing trade supports practice of guar- antee. FLY PAPER. O. & W. Thum Co., Grand Rapids, Mich. Manufacturers. Provides adequate stock in hands of jobbers and has resulted in material increase in annual volume of business. Examination of our accounts from 1898 to date shows that such expense has im- posed a burden of but one-fourth of a cent per case of 250 double sheets of our product. Have not found that jobbers are encouraged to speculate. Expense incident to guarantee incurred during one year not added to cost of product succeeding year. FOOD MANUFACTURERS AND FOOD STUFFS. Baker Food Products Co., Chicago, 111. Manufacturers. Has always been their practice to guarantee prices only to date of shipment. No comment made. OHver-Finne Co., Memphis, Tenn. Manufacturers and Jobbers. Enables jobber to safely contract for supply of staple goods to properly meet demand. When declines occur at primary markets, 11 consumer gets immediate benefit, but frequently in case of advance in price full amount of increase is not imposed upon consumer. GAS AND GAS ENGINES. Citizens Gas Co., Indianapolis, Ind. Gas Works. In contracts executed for purchases of coke gives guarantee. New- Way Motor Co., Lansing, Mich. Manufacturers. Practice fair to both seller and buyer and secures maximum results as to production and delivery. GROCERS. Anthony Wholesale Grocery Co., Anthony, Kans. Jobbers. Candid opinion that manufacturers' guarantee on staple items use- ful arrangement for benefit of all concerned. Experience in whole- sale grocery business that items carrying guarantee sold on narrower margin than otherwise. Under present conditions lack of guarantee causing wholesale grocer to be overcautious. In the past, have car- ried reasonable amounts of merchandise and there has been no speculation among wholesale grocers on guaranteed items. Atlanta Wholesale Grocers, Atlanta, Ga. Jobbers. To abandon policy would lessen car-lot shipments, adding cost to consumer and would eliminate cooperative plan by which manu- facturer has free use jobber's floor space in exchange for guarantee, adding to manufacturer's cost, paid by consumer. Large dealers in season of plenty would stock on speculative basis, taking advan- tage of markets as they advance. Small dealers at a disadvantage with firms of large resources unless price guaranteed to all. Loss dealers sustain, without guarantee made up in some other way and consumer pays. Present plan affords consumer supply at correct prices; also affords carriers even freight movement. To prohibit guarantee would congest stocks at manufacturing plants. Barnes Grocer Co., Popular Bluff, Mo. Wholesalers. Guarantee has been advantageous to jobbers and retailers. Believes consuming public not adversely affected, as jobbers and retailers, in turn, sell at lower prices upon notification from factory. Bell-Wayland Co., Oklahoma City, Okla. Wholesalers. Enables small jobbers to buy in large units and secure benefit of lower price for goods and transportation. All price reductions im- mediately pass to consumer. John N. Bey & Co., Vincennes, Ind. Wholesalers. Insures large jobbing stocks and narrow margin jobbing profit. Believes fair to dealers and consumers, and regarded as satisfactory method. 12 Blaui's Sons Co., Burlington, Iowa. Wholesalers. While guarantee in canned milk extends over period of 12 months, actually operates only in spring months when fresh milk is scarce [?] and price of canned milk declines. If guarantee not given, too great caution would be exercised by jobbers and sufficient stock would not be available to adequately supply the trade. Booming ton Wholesale Grocery Co., Bloomington, Ind. Wholesalers. Favors guarantee against price decline to prevent manufacturers from selling direct at lower prices than jobbers able to quote. Need guarantee of some sort. Boniface, Weber & Allen, Muncie, Ind. Wholesalers. Withdrawal of guarantee would unsettle business, disturb estab- lished custom, and create uncertainty. Buckley-Terry Co., Laurel, Miss. Wholesalers. To supply retail trade, wholesale dealers are obliged to carry full stocks. Generally aided by a guarantee against decline. Retailers carry small stocks and look to jobbers for quick deliveries. Jobber ought to have guarantee for at least 30 to 60 days, which admits of no speculation. F. C. Bushnell Co., New Haven, Conn. Wholesalers. Does not believe practice a menace to trade. Calhoun Grocery Co., Anniston, A'a. Wholesalers. Believes sound business practice which permits jobbers to carry adequate stocks. The C. Callahan Co., La Fayette, Ind. Wholesalers. Through former guarantee on canned milk manufacturer able to induce wholesaler to carry adequate stock. Decline in price di- rectly affects farmers. Farmers are being encouraged to increase herds, which adds to milk supply and, by the rotation of crops, in- creases grain output. Induces jobbers to take surplus stocks held by manufacturers with knowledge that no loss will result through price decline. Margin of profit to jobbers not sufficient to justify large capital tied up unless subject to guarantee. William D. Cleveland & Sons, Houston, Tex. Wholesalers. At present time inadequate transportation facilities require job- bers to buy in large quantities and exact guarantee. If goods were in manufacturer's possession, loss would be absorbed by them and even though goods are shipped to jobber in advance of time needed, liability on account of decline should not be transferred. Columbus Grocery Co., Columbus, Ga. Wholesalers. Practice might encourage some jobbers to overbuy, but advantages by trade in general are so many that believe practice should be con- tinued. 13 Colvin, Atwell & Co., Pittsburgh, Pa. Wholesalers. Believes consumer beneficiary of guarantee, and not wholesale or retail dealer. This custom enables wholesaler to carry sufficient supply of canned milk, which he can purchase and store in the spring and summer months, at lowest prices. Guarantee insures minimum price and without such guarantee adequate stocks will not be carried. Cooper-Dickinson Grocery Co., Little Rock, Ark. Wholesalers. In support of view, recites recent decline in canned milk, when jobbed promptly, so it says, reduced price. Looking to packer for guarantee. J. W. Crook, Baltimore, Md. Wholesaler. Asserts that in recent canned milk decline consumer immediately benefited 2 cents per can and that guarantee was passed back to packer. Dabney Bros., Florence, Ala. Wholesalers. Beyond statement that guarantee should be given to jobbers, com- ment is not made. Faucette Co., Bristol, Tenn. Wholesalers. Guarantee does not deprive consumer of lower price when decline occurs in primary market. Guarantee encourages jobbers to buy in pooled car shipments, which provides quicker transportation. Do not believe jobbers would carry sufficient stock to meet demand unless they enjoyed this privilege. Federated Merchants, Cleveland, Ohio. Wholesalers. Under system of guarantee any reduction in primary market is immediately passed to consumer. Believe would be unfair to inter- fere with practice where jobber is given 50 or' 60 day guarantee sub- sequent to receipt of goods in his warehouse. Encourages jobbers to carry adequate stock. Gilbert Grocery Co., Portsmouth, Ohio. Wholesale Think concession one entirely within jurisdiction of manufacturer to refuse or extend and does not believe operates to disadvantage of consumers. Practice assists manufacturers of new brands to get goods on market. Goddard Grocer Co., St. Louis, Mo. Wholesalers. Does not encourage jobber to overstock speculating on advance in price. Receives 50-day guarantee on all canned milk, and believes practice entirely proper. A. Grafe Co., Terre Haute, Ind. Wholesalers. Without guarantee would be obliged to increase margin of profit as offset to additional hazard assumed, Guarantee does not operate 14 to disadvantage of consumer, as all declines are immediately passed on to public. Griffin-Goodner Grocery Co., Tulsa, Okla. Wholesalers. Emphatically in favor of guarantee on floor stocks. Past obser- vation indicates that such guarantee results in lower average price to consumers. When price of staple foodstuffs declines, retail trade immediately notified by jobbers, salesmen, -who desire to make sales at lower prices. Do not believe that practice encourages speculation or overstocking. Heisig & Norvell, Beaumont, Tex. Wholesalers. Enables jobbers to conduct business freely and keep merchandise moving on the basis of the maximum of service at a minimum cost. When manufacturer gives notice of price decline jobber passes bene- fit to retailer. Practice does not work hardship on the manufac- turer, as moving stock from his possession to jobber's relieves ware- house congestion and reduces insurance liabilities. James W. Houston Co., Pittsburgh, Pa. Wholesalers. Believes fair to jobber in that he does not possess knowledge of primary markets and costs of ingredients composing manufactured articles. Believes manufacturer should be so posted on cost of raw materials entering into his product as will enable him to safely ex- tend guarantee. So far as observation goes this practice chiefly relates to proprietary articles. Jobber's profit small and he would be unable to suffer price decline. Consumer benefits when price de- clines and manufacturer shoulders loss. Illinois Wholesale Grocers' Association, Trade Association. Peoria, 111. Interview had by G. A. Stephens, representative, Federal Trade Commission, with D. H. Bethard, president; A. Trefzger, treasurer; Ross P. Seaton, secretary; and A. S. Oakford, member of advisory committee, Illinois Wholesale Grocers' Association, elicited the fol- lowing opinion: Believe in limited guarantee which would work equitably for all parties concerned, such limited guarantee applying only to unsold parts of grocer's stocks and not to undelivered por- tions. Does not believe that it would encourage overbuying, and speculative element would be eliminated. Manufacturers have more complete knowledge of market conditions and better able to assume liabilities. Indiana Wholesale Grocers' Association, Trade Association. Indianapolis, Ind. Association favors practice, but makes no further statement. 15 Iowa-Nebraska-Minnesota Wholesale Grocers' Associ- Trade Association, ation, Council Bluffs, Iowa. Extension of guarantee encourages dealers to carry sufficient stocks and withdrawal of same would likely drive jobbers to concentrate on fewer brands, thus narrowing the selection of the public. En- courages introduction of new articles on the market, which could not get foothold without such guarantee. Enables jobbers to buy in carload lots, thus lowering unit cost of commodities and permits them to operate on smaller margin of profit. Jett & Wood, Wichita, Kans. Who'esalens. To abolish practice would work serious injury to business. As offset to price guarantee, lower trade discount is given purchaser under such contract. Permits jobber to buy in carload lots and re- sultant decrease in unit cost is passed to consumers. Where jobber's capital is involved in large stocks, loss in interest would be borne by them, so price guarantee really offsets such charge upon the jobber. Jobbing competition is keen and decline in primary market promptly accrues to consumer. Guarantee was recently withdrawn from sales of soap, but did not bring about a reduction in the price of that commodity. Kentucky Wholesale Co., Pikeville, Ky. Wholesalers. Beyond statement that policy is favored, no comment is made. Los Angeles Grocery Co., Los Angeles, Calif. Jobbers. Guarantee makes it possible for jobbers to carry sufficient stock to care for trade. Milk is frequently shipped great distances and is long time in transit, necessitating large stocks in hands of jobbers. Believe guarantee serves interests of all concerned if given for rea- sonable time, say 30 days. J. E. Lynd, Russell, Ky. Wholesaler. Does not believe has bad effect on either producers or consumers. Jobber can not be expected to carry stock in advance of sale at own liability against decline. Samuel Mahon Co., Ottumwa, Iowa. Wholesalers. Enables wholesale dealers to render efficient service. Inclination to get greatest turnover of capital, provides necessary incentive to keep goods moving, but without guarantee jobbers would hold stocks for higher prices. Malone & Hyde, Memphis, Tenn. Wholesalers. Permits jobber to operate on smaller margin and to that extent is benefit to consumer, 16 The C. M. Miller Co., Cornelia, Ga. Wholesalers. Beyond statement that guarantee should be given to jobbers, com- ment is not made. Moore-Shenkberg Grocery Co., Sioux City, Iowa. Wholesalers. Interview had by G. A. Stephens, representative, Federal Trade Commission, with Mr. O. J. Moore, president, Moore-Shenkberg Grocery Co., Sioux City, Iowa, elicited the following opinion: Even under unlimited guarantee does not believe manufacturer assumes unfair risk. As offset to service thus rendered to jobber, the jobber provides storage facilities for manufacturer's goods in advance of demand. Believes that removal of guarantee would restrict volume of business. A. P. Moore's Sons (Inc.), Tyler, Tex. Wholesalers. Jobber operates on small margin of profit and ought not be ex- pected to assume liability against decline as applied to goods he is actually carrying for manufacturer. Manufacturers familiar with market conditions and ought to be able to make reasonably accurate cost and price calculations. Practice does not result in higher prices. William D. Mullen Co., Wilmington, Del. Wholesalers. Scarcity of milk at certain seasons and uncertainty of delivery due to inadequate transportation facilities have compelled jobbers to order large stock in advance of need, but practice does not encourage them to carry excessive stocks. Believes that the existence of stocks larger than normal would tend to keep prices from fluctuating. Guarantee especially needed during these abnormal times. National Grocery Co., Seattle, Wash. Jobbers. Practice chiefly applies to proprietary or much-advertised brands of foods, which assures adequate stock in hands of distributors, on which the distributor and the retailer make smallest profit, a profit established by the manufacturer or by keen competition. Retailers usually operate with limited capital and the obligation is imposed upon jobber to keep sufficient stock for quick demand, entitling him to guarantee against decline in price. Distance of jobbing centers from manufacturing regions additional reason for distributors carry- ing heavy stocks. Guarantee prevents losses otherwise occurring in wholesale jobbers' trade. Does not believe practice operates to dis- advantage of small manufacturer. Oklahoma Wholesale Grocers' Association, Trade Association. Oklahoma City, Okla. Majority Oklahoma grocers favor guarantee, believe that it bene- fits consumers, enables jobbers to buy in larger quantities, thus secur- ing lower freight rate, and makes it possible for jobber to distribute 17 on smaller margin of profit. Practice chiefly followed by manufac- turers of proprietary articles, which permits manufacturer to oper- ate plant full time; for which assurance manufacturer willing to guarantee such protection to jobber. Guarantee is also means by which new article may find a place in the market. L. Patterson Mercantile Co., Mankato, Minn. Wholesalers. As affecting consumer believes guarantee more advantageous than disadvantageous. When jobber is guaranteed against decline there is no incentive to sell at higher prices. Besides, under keen competi- tive conditions, the refusal of one jobber to raise prices will deter others from doing so, and the same uniformity of action may be looked for if one jobber lowers prices. Enables jobber to carry suffi- cient stock, makes for better service to the public and, in our opin- ion, is objected to by manufacturers who desire loss to fall on job- ber, retailer, and consumer. A. H. Perfect & Co, Fort Wayne, Ind. Wholesalers. When taking jobbers' orders manufacturers calculate cost of raw material and ought to be in a position to safely estimate guarantee. If stock were retained in possession of manufacturer loss through decline in prices would have to be taken by him. Do not believe such practice encourages excessive buying with speculative intent. Expense of guarantee would not be more than shrinkage in value if stock were held by manufacturers. Enables jobbers, through large purchases, to lower unit cost of goods and transportation. Powell-Sanders Co., Spokane, Wash. Wholesalers. Stabilizes market by encouraging buying at times when demand is slow and makes available adequate stocks for consuming public. Gives manufacturer ready use of money and exempts him from pay- ment of storage charges or expense. Transfer of goods from manu- facturer to jobber in advance of season would not justify liability for decline. J. M. Radford Grocery Co., Abilene, Tex. Jobbers. Enables small retailers to carry adequate stocks. When decline occurs in primary market, benefit passes to consumer, although some- times on advancing markets full increase is not charged consumer. Rapides Grocery Co. (Inc), Alexandria, La. Jobbers. Practice has long been in use in grocery trade and do not believe it wise to discontinue. M. E. Reeve, Peoria, 111. Wholesaler. Interview had by G. A. Stephens, representative, Federal Trade Commission, with Mr. M. E. Reeve, of Peoria, 111., elicited the fol- 11403— 20 3 18 lowing opinion: Believe in limited guarantee which would work equitably for all parties concerned, such limited guarantee applying only to unsold parts of grocer's stocks and not to undelivered por- tions. Does not believe that it would encourage overbuying and speculative element would be eliminated. Manufacturers have more completed knowledge of market conditions and better able to assume liabilities. Ridenour-Baker Grocery Co., Kansas City, Mo. Jobbers. A selling device of doubtful efficiency, but a matter for deter- mination by each individual seller. When price decline takes place in preliminary market, manufacturer notifies the jobber, who im- mediately makes reduction to retailer and latter gives benefit to con- sumer, which practice does not prevent the functioning of the law of supply and demand. At one time custom did result in overbuying, but caused no injury to public. J. H. Riggs, Peoria, 111. Wholesaler. Interview had by G. A. Stephens, representative Federal Trade Commission, with Mr. J. H. Riggs, of Peoria, 111., elicited the fol- lowing opinion: Believe in limited guarantee which would work equitably for all parties concerned, such limited guarantee applying only to unsold parts of grocer's stocks and not to undelivered por- tions. Does not believe that it would encourage overbuying and speculative element would be eliminated. Manufacturers have more complete knowledge of market conditions and better able to assume liabilities. J. W. Rowe Co, Hampton, Va. Wholesalers. Declines in primary market are passed on through various stages of trade to consumer. Do not believe practice hurtful to interests of public. Sales Extension Co., Indianapolis, Ind. Wholesalers. Practice not unfair. Aids small jobber, who otherwise would be unable to compete with the jobber of large capital. Retailer imme- diately gets benefit from decline. Saunders' Sons Co., Richmond, Va. Wholesalers. Guarantee against decline enables jobbers to buy in car lots at lower unit cost for goods and transportation and provides consumer with ready supply from which to draw. Packers' reductions are immeditely made effective for benefit of retailer. Sentney Wholesale Grocery Co., Hutchinson, Kans. Jobbers. Margin of profit on list goods so small that jobber will not handle without guarantee. Where guarantee accorded, jobbers buy with the 19 object of securing best unit prices and carload freight rate, enabling them to handle with small profit. Since guarantee withdrawn from soap and lard small purchases are made, with resultant increase in unit cost. Besides dealers not being protected hold stocks for higher prices. au Southern Georgia Grocery Co., Quitman, Ga. Jobbers. Unless guarantee given, wholesale grocers would be compelled to increase profit to offset additional hazard involved. Straud-Dockum Grocery Co., Corsicana, Tex. Wholesalers. Enables manufacturer to make better and more economic distri- bution. E. S. Street & Co., Dublin, Ga. Wholesalers. All stages of business are benefited by this practice, which tends to reduce the cost of living and to stabilize prices. Tidewater Wholesale Grocers' Association, Norfolk, Va. Trade Association. With present small margin of profit jobber would be unable to carry adequate stock unless given guarantee. Guarantee encourages larger purchases which result in lower unit cost. Such practice does not tend to maintain prices. Tucker & Goodwin, Hartford, Conn. Wholesalers. Guarantee permits jobber to purchase larger stocks at lower unit cost and thereby take better care of the trade. Declines in primary markets are automatically and promptly passed to consumer. If guarantee withdrawn, jobbers obliged to increase margin of profit to offset additional hazard. Tyleri Grocery Co., Birmingham, Ala. Jobbers. Practice might lead to overbuying if not checked by manufac- turer, who ought to know something of jobbers' needs. Guarantee enables jobber to operate on closer margin. Tyler & Simpson Co., Gainesville, Tex. Wholesalers. Does not encourage overstocking but does provide adequate stock, obtained at lowest unit cost and transportation at lower cost than for smaller shipments. Ullmann, Stern & Krausse, San Antonio, Tex. Wholesalers. Guarantee against decline does not tend to maintenance of prices, as all declines in primary markets are promptly passed to consumer. Wash, Davie & Co., New Orleans, La. Wholesalers. Protests against discontinuance of custom. Contends that no jobber, through guarantee, is given unfair advantage over com- petitor, as competition regulates all differences in price. Believes 20 that inadequate stocks will be carried by jobbers if privilege with- drawn. The Wiles Grocery Co., Zanesville, Ohio. Jobbers. Cites canned milk as illustrating benefit of guarantee. States that packers declines are immediately given to consumer through retailers. Guarantee enables jobbers to carry sufficient stock to meet demand. HARDWARE. Ainslie-Martin Co. (Inc.), Lynchburg, Va. Jobbers. If guarantee not accorded, unable to anticipate wants and order for future shipment. Albany Hardware & Iron Co., Albany, N. Y. Jobbers. Emphatically favor plan, especially in days of underproduction, when merchant is forced to order 6 to 12 months in advance, to preserve business, running risk of depreciation from big prices at time consignment is received. Few of us believe in overtaxing either our credit or warehouses, but are obliged to have goods if we are to hold trade; therefore, protection given by guarantee removes large element of risk. If manufacturers lower costs, prices fall and mer- chant gets guarantee for unshipped portion contract. Fear of de- cline deterred merchants from keeping stocks normal. As a con- sequence became stripped of goods and prices were bid up by con- sumers. Allen & Jemison Co., Tuscaloosa, Ala. Jobbers. Feel practice essentially necessary on seasonal goods bought long in advance of season. Would be very hazardous to purchase with- out guarantee. Do not believe jobbers would carry sufficient stock unless guaranteed against decline. Anniston Hardware Co., Anniston, Ala. ■ Jobbers. As jobbers can not buy full requirements in some lines, believe business of country would be hindered if guarantee were withdrawn. Baker & MacDowell Hardware Co., Natchez, Miss. Jobbers. Practice has been of inestimable value to jobbers past two years. Do not consider that manufacturer who does not resort to practice is at disadvantage with manufacturer who extends privilege. A. Baldwin & Co., New Orleans, La. Jobbers. Believes practice concerns only manufacturer, and if he is willing to give guarantee, in order to move his product freely, feels he should be allowed to do so, as the custom stimulates business and removes fear. 21 Barker, Rose & Clinton Co., Elmira, N. Y. Jobbers. Does not believe any more unfair to guarantee prices to date of shipment than at date of order. The Bronson & Townsend Co., New Haven, Conn. Jobbers. Guarantee permits jobbers to operate with smaller margin of profit. Brown-Rogers Co., Winston-Salem, N. C. Jobbers. Practice stabilizes market and makes it possible for jobbers to buy goods sufficiently in advance of season to have supply ready when demand is made. Chapman & Bangs Co., Bridgeport, Conn. Jobbers. Articles such as tool steel sold by jobber on such narrow margin that slightest decline inflicts heavy loss. Does not believe that grant- ing of concession by one manufacturer operates to disadvantage of another manufacturer. Believes manufacturer should restrict obli- gation to specific proportion of orders placed, to obviate speculation on part of jobber. Expresses belief that such practice does not deter manufacturers from putting reductions into effect. Charlotte Hardware Co., Charlotte, N. C. Jobbers. On specified amount of goods bought in advance of season abso- lutely essential for manufacturer to give guaranty. Otherwise can not buy for future delivery. Enables jobbers to assure prices to retailers. Corpus Christi Hardware Co., Corpus Christi, Tex. Jobbers. In order to calculate prices at which goods are to be sold jobbers must rely upon guarantee from manufacturers. Crancer Hardware Co., Leavenwoth, Kans. Jobbers. Believes would be mistake to stop practice, as it serves to stabilize market. Crumley-Sharp Hardware Co., Atlanta, Ga. Jobbers. Under present conditions, do not see how business could be intel- ligently or safely conducted without guarantee. A. Deutz & Bro., Laredo, Tex. Jobbers. Believes practice to best interest of public, especially at this time,, when materials are scarce and freight transportation congested. Dinkins-Davidson Hardware Co., Atlanta, Ga. Jobbers. Enables manufacturers to estimate needs, operate plant more evenly, and place in jobbers' hands adequate stocks to take care of trade. Do not believe jobbers would be disposed to buy under other circumstances. 22 Doherty Hardware Co. (Ltd.) , Baton Rouge, La. Jobbers. Practice makes it possible for factories to better plan their opera- tions, gives jobbers advance knowledge of prices, and enables re- tailer to place order with jobber and be assured of getting goods on time. Griffin-Cantrell Hardware Co., Rome, Ga. Jobbers. If guarantee extends, permits jobbers to go to retailers with sufficient advance knowledge of prices to fix profit and move intel- ligently. Griffin Manufacturing Co., Erie, Pa. Manufacturers. As manufacturer, does not particularly care for system, but sees no objection and does not believe that it operates to disadvantage of manufacturer or jobber. Harper & Mclntire Co., Ottumwa, Iowa. Jobbers. Practice began in hardware trade about two years ago. The fol- lowing illustration for need of such guaranty is cited : In January jobbers usually purchase gun shells from manufac- turers for shipment about April 1, which are delivered by jobbers to retailers subsequent to July 1, subject to October 1 dating. If guarantee not given jobber could not purchase that far in advance and take chances on decline in price. Do not believe practice operates to disadvantage of anyone. It establishes confidence and enables jobbers to carry adequate stock. Huey & Phiup Hardware Co., Dallas, Tex. Jobbers. Were it possible to receive goods one week or so after order had been placed necessity for guarantee would be eliminated, but under present conditions guaranty is necessary. Interstate Hardware & Supply Co., Bristol, Tenn. Jobbers. Believe manufacturer should give such guarantee to jobber and jobber extend privilege to retailer, permitting more intelligent pur- chasing. Absence of guarantee discourages dealers from making adequate purchases, and when decline occurs compels them to resist reduction. Actual practice demonstrates that reductions made by manufacturers are promptly passed to consumers. Removes uncer- tainty from business. Keith, Simmons & Co., Nashville, Tenn. Jobbers. Guarantee provides more even factory operation and will not result in speculation to any great extent, but does insure adequate stocks in hands of jobbers. Insufficient stocks would operate against proper conduct of business. Manufacturers able to calculate expense of such concession and therefore not apt to suffer loss. 23 Knapp & Spencer, Sioux City, Iowa. Jobbers. Approves guarantee against decline to date of shipment. One- third to one-half of year's business sold three to six months ahead of season and must assure retailers that price will stand, which unable to do unless jobbers accord guarantee by manufacturers. Does not believe practice gives one manufacturer advantage over another. Krakauer, Zork & Moye's Successors (Inc.), El Paso, Tex. Jobbers. Believes jobbers ought to be permitted to contract for adequate stock in advance of time needed with assurance of guarantee against decline ; otherwise would not be able to do so. The Lee Hardware Co. (Ltd.), Shreveport, La. Jobbers. Believe guarantee only method for stabilizing market and do not regard as an unfair practice. Lewis Mill Supply Co., Helena, Ark. Jobbers. Believe manufacturer should give jobbers 60 to 90 days' notice of decline in order to give the latter time to dispose of stock without loss. Such practice would not compel jobbers to buy meagerly. C. M. McClung Co., Knoxville, Tenn. Jobbers. Believe wholesale dealer entitled to this measure of protection against decline in view of heavy stocks carried. McLenden Hardware Co., Waco, Tex. Jobbers. Believe guarantee should be given on seasonal goods, especially in view of time taken to make deliveries after orders are entered. Monroe Hardware Co., Monroe, La. Jobbers. Jobbers usually a long distance from the manufacturers and are obliged to buy seasonal goods much in advance of selling season and ought to be accorded guarantee. Manufacturer should be able to grant such concessions in view of the fact that he knows his raw material and labor markets. J. W. Murchison & Co., Wilmington, N. C. Jobbers. Would not be willing to purchase some articles, in large quantities and in advance of season, unless accorded guaranty. Nixon Hardware Co., Rome, 6a. Jobbers. Jobbers unable to give price assurance to retailers unless accorded guarantee by manufacturers. Norton Hardware Co., Norton, Va. Jobbers. Many articles sold by hardware jobbers are purchased and de- livered to them long in advance of their selling season and retailers will not place orders unless prices may be definitely given them. 24 Odell Hardware Co., Greensboro, N. C. Jobbers. Guarantee provides better factory operation and more even flow of goods to jobber. Manufacturer required to have jobbers' orders in hand 6 to 10 months in advance of retail demand and jobber will not assemble large stocks at his liability. Permits manufacturer to produce and ship in sufficient time, serves interest of jobber to have ready supply and makes for prompt delivery to retailer upon de- mand. Unless practice permitted, would demoralize trade as now conducted and be distinct advantage to mail-order houses. Penick-Hughes Co., Stamford, Tex. Jobbers. To assure jobbers adequate stocks necessary for them to make purchases months in advance of call upon them. Without guar- antee few jobbers could make proper provision for trade. The prac- tice stabilizes prices, enables manufacturers to ascertain the kinds and styles of goods desired, and prevents profiteering. W. H. Richardson & Co., Austin, Tex. Jobbers. Would be suicidal for jobbers to attempt to carry adequate stocks without guarantee. This policy enables manufacturers to make even distribution of output in advance of time needed by consum- ing market. If manufacturers were obliged to concentrate ship- ments in short period of time freight congestion would result. Roanoke Hardware Co. (Inc.), Roanoke, Va. Jobbers. Regards as important that manufacturers in certain lines give guarantee to cover period required for jobbers to dispose of goods, otherwise declines would result in great loss to jobbers. Russell Hardware Co., McAlester, Okla. Jobbers. A question to be determined by seller. Jobbers will not buy seasonal goods in advance unless so protected. Permits manufac- turers to dispose of output by steady flow of jobbers. Manufacturers in closer touch with general trade conditions and able to more intel- ligently set future prices. Sterling Hardware Co., Bluefield, W. Va. Jobbers. Does not regard as unfair method of competition and practice not calculated to encourage overbuying. Jobber not financially able to assume liability of advance for goods purchased prior to need. W. M. Tatum Hardware Co., Corsicana, Tex. Jobbers. Without guarantee could not provide for future business, espe- cially as regards seasonal goods. Thompson-Miller Hardware Co., Charleston, S. C. Jobbers. Unless guarantee given would be difficult for jobbers to buy in adequate quantities and in advance of season's needs. Practice may encourage overbuying to some extent but not enough to offset advan- tages of system. The Walter Tips Co., Austin, Tex. Jobbers. Jobbers are obliged to purchase goods, usually from long distances, much in advance of demand upon them and ought to be given guar- antee so they and retailers may be able to estimate prices for the following season. Townley Metal & Hardware Co., Kansas City,*Mo. Jobbers. Regards as economical expedient looking to proper distribution of goods and absolutely necessary on seasonal goods, to encourage job- bers to buy and store in advance of demand. Makes for more even distribution of transportation burden. Tullis-Gamble Hardware Co, Montgomery, Ala. Jobbers. Unless guarantee given jobbers will be obliged to buy from month' to month or would be forced to gamble on an uncertain market. Placing orders at prices ruling on dates of shipment puts jobbers at mercy of manufacturers. Jobbers' margin of profit very small on staple lines. The Wagner Hardware Co., Mansfield, Ohio. Jobbers. Of decided advantage to dealer and consumer to have prices guar- anteed. When we are apprehensive that market is tending upward urge retailer to buy on future dating at market price date of order. Declines in price are covered by telegraphic notice to salesmen and have reason to believe that other jobbers follow same practice. Watkins-Cottrell Co., Richmond, Va. Jobbers. Regard as entirely fair practice whereby manufacturer gives to jobber guarantee for certain period. J. D. Weed & Co., Savannah, Ga. Jobbers. Essential that manufacturer guarantee certain commodities sold for future shipment. Otherwise jobbers unable to take care of trade. E. L. Wilson Hardware Co., Beaumont, Tex. Jobbers. Believes that certain staple lines and seasonal goods should be subject to guarantee. Wimberly & Thomas Hardware Co., Birmingham, Ala. Jobbers. Guarantee against price decline enables jobbers to buy seasonal needs in adequate quantities and in sufficient time to meet demand, which would not be done unless afforded protection. Nonseasonal goods purchased by us are bought subject to price at date of shipment and constitute about 90 per cent of our business. ICE. Mountain Grove Creamery, Ice & Manufacturing Co., Manufacturers. Mountain Grove, Mo. Expresses need for stabilization of some sort to protect future market and avoid losses. 11403—20 4 26 IRON AND STEEL. Advance-Rumely Co., Chicago, 111. Manufacturers. Practice long tried successfully among manufacturers steel bars, plates, etc., and has been beneficial to steel manufacturer and to pur- chasing manufacturer. It permits fabricator to plan beforehand without handicap of uncertainty as to price at time of delivery. Any different rule would, in time of serious price fluctuation, require fabri- cator to practice hand-to-mouth policy, thus hindering production. In recent years agricultural machinery companies adopted similar policy. Prices were high during and at close of the war and dealers hoped prices would decline. Manufacturer believed this was hazard •he should assume and give the dealer guarantee applied to com- modities contracted for but not delivered, thereby enabling the manu- facturer to go ahead. Believes practice should be encouraged. Brown- Wales Co., Boston, Mass. Jobbers. Approves custom because encourages jobbers to carry normal stock and evenly distributes demand upon manufacturer. Columbia Tool Steel Co., Chicago Heights, 111. Manufacturers and Retailers. Has never accorded guarantee to great extent, but where long- time sales of definite quantities have been sold, has executed contracts with this provision. Believes that proposition is one sided, but recog- nizes virtue in aiding dealers to anticipate requirements and thus stabilize prices. Do not believe generally practiced in their trade. Illinois Wire & Manufacturing Co., Joliet, 111. Manufacturers. Believes matter not one of public interest, but solely concerns manufacturers and their customers. No further comment. French & Hecht, Springfield, Ohio. Manufacturers. Does not believe guarantee violates any sound business principle or works hardship against any one as applied to unshipped portion of contracts. Custom facilitates better factory operation. Goodell-Pratt Co., Greenfield, Mass. Tool Manufacturers. Grants guarantee only to date of shipment. For past three years obliged to sell at price prevailing at date of shipment. Havana Metal Wheel Co., Havana, 111. Manufacturers. Receives and dispenses guarantee privilege. Guarantee given by it relates only to unshipped goods. Disapproves of guarantee on goods shipped unless shipped on consignment. Do not believe custom de- moralizes trade, but permits jobber to meet competition when price decline sets in. Martin Steel Products Co., Mansfield, Ohio. Manufacturers. Practice results in more even factory operation and provides for better distribution of output from manufacturer to jobber. 27 New England Chain Works, Boston, Mass. Manufacturers. Manufacturer gives guarantee to assure better plant operation and not injurious to public interests. Does not operate against small competitor or one who does not give guarantee, unnecessarily in- crease jobber's stocks, or encourage manufacturer to keep up prices. Niles & Scott Co., La Porte, Ind. Manufacturers. Executes contracts which give a guarantee against decline as ap- plied to undelivered portion of raw materials. Would be hardship to operate without such guarantee and are in favor of practice being continued. St. Louis Iron Store Co., St. Louis, Mo. Jobbers. Have operated under such guarantee from manufacturer, but never encouraged to overbuy. Prevents manufacturer from seeking to overload jobber. J. R. Stone Tool & Supply Co., Detroit, Mich. Jobbers. Does not regard as unfair or that it encourages overbuying. Western Steel & Iron Works, De Pere, Wis. Manufacturers. Expresses judgment that guarantee against price decline, under certain conditions, to date of shipment should be accorded, but does not indicate whether this should apply to its purchases or its sales. LIGHTING EQUIPMENT. Benjamin Electric Manufacturing Co., Chicago, 111. Manufacturers. Approves practice and expresses belief that any manufacturer with sufficient foresight to provide raw material and have labor situation in hand ought to be permitted to offer such guarantee on goods subject to future delivery, up to the date of delivery, but does not believe that such privilege should extend to include goods on shelves. Believes latter an abuse and should be regulated, as it imposes a hardship on weaker merchants and is to the advantage of financially stronger ones. Babcock, Hinds & Underwood (Inc.), Binghamton, N. Y. Jobbers. At present jobbers ought to have price guarantee on account slow deliveries and slow transportation. Retail dealers depend upon jobbers, requiring latter to carry larger stock than under other cir- cumstances. Under ordinary circumstances jobbers' stocks can be re- plenished in a few days. If guarantee not permitted, large capital will be required for jobbers' stocks and losses taken when market declines. LUMBER. Estes Lumber Co., Birmingham, Ala. Wholesalers. Guarantee would stabilize market and protect jobbers and con- sumers. 28 Gloster Lumber Co., Gloster, Miss. Manufacturers. Believe in times like present would stabilize market. The Allied Machinery Co. of America, New York, N. Y. Jobbing Exporters. Have never received payments of this character but believe firmly in practice as one calculated to promote export business by lessening risk exporter is obliged to assume. MACHINERY. Banks Supply Co., Huntington, W. Va. Jobbers. Stabilizes markets and encourages large buying, in addition to exciting confidence and enabling manufacturers to do business in larger units of sales. Harron, Rickard & McCone, San Francisco, Ca'if. Jobbers. During present high price period deflation in currency restricts volume of purchases, and if guarantee were not granted could not carry usual sized stock. Does not see any objection to such practice. A. M. Lockett & Co., New Orleans, La. Jobbers. Under guarantee jobbers do not speculate on price changes but are encouraged to cany adequate stocks. We protect retailers. Con- sumer is benefited by stabilization of market, being assured that no increase in price will occur after he has made a purchase. Do not believe manufacturers object to paying rebates, as refusal to do so would place them at disadvantage with competitors who, by reason of declining prices, would get the market. Queen City Supply Co., Cincinnati, Ohio. Jobbers. Regards as good business practice and does not tend to maintain high prices. Southern Supply & Machinery Dealers' Association, Trade Association. Richmond, Ya. Inquiry of members indicates that consensus of opinion supports the practice of granting guarantee to date of shipment, but not as applied to unsold goods. Swind Machinery Co., Philadelphia, Pa. Jobbers. Permits prompt service, enables jobber to anticipate needs, and promotes better manufacturing schedule, the latter reducing the unit cost. In our line selling prices are fixed by the manufacturer and jobbers would be embarrassed without the guarantee. Know of no better stabilizer than this guarantee. MACHINE TOOLS. Purinton & Smith, Hartford, Conn. Jobbers. Manufacturer's commission to machine tool jobbers, which ranges from 10 per cent to 15 per cent affords such narrow margin of profit 29 that guarantee against price decline is necessary. For instance, a jobbing concern carrying $100,000 worth of machinery, if obliged to assume a 20 per cent reduction in price, would likely suffer loss of year's profits. Best plan would be to give jobber credit for all de- clines and charge against for all increases. Cole Manufacturing Co., Memphis, Tenn. Jobbers. Except in one or two instances has never received this privilege. However, is compelled to make large purchases to which are applied prevailing prices on date of shipment, with right to cancel if price not satisfactory. MILL SUPPLIES. Hardwicke-Etter Co., Sherman, Tex. Manufacturers. Supports approval of guarantee by following illustration: Ninety-five per cent of one article handled by this concern is sold in July and August, for which they are obliged to place order in early part of year. If dealers did not buy until just before goods are needed, manufacturers would have to bear loss resulting from price decline; consequently, the manufacturer feels nothing additional is lost by taking care of price decline after goods have passed out of his hands. Practice stabilizes market, but does not result in high prices. OIL— EDIBLE. E. T. Bedford, New York City, N. Y. Manufacturer. All reductions in price pass to consumer as soon as drop occurs in primary market. Does not operate to disadvantage of middlemen in this line since they are largely engaged in putting up private brands, while we manufacture for the trade generally and, so far as possible, try to maintain a uniform average price. Encourages more liberal purchases and thus enables manufacturer to operate more con- tinuously and economically. OVERALLS. Crown Overall Manufacturing Co., Cincinnati, Ohio. Manufacturers. While practice is regarded as a necessary evil, would like to see custom eliminated. Chief object, inducement to merchants to place orders ahead. Prevents " bunching " of orders and keeps plant in operation the year round. Guarantee is only extended to date of shipment. While it is true that practice is chiefly for benefit of mer- chants, in no other way can they be encouraged to buy until goods actually needed. PAINT AND VARNISH. The Armstrong Paint & Varnish Works, Chicago, 111. Manufacturers. In our business appeals as splendid practice, and we do it regularly, particularly in winter. Do not believe well-run manufacturing es- 30 tablishment can afford to operate part time full blast and balance half time. In many lines is positive benefit to purchaser and dealer. If can get dealer to take goods dull months, can run factory full time and sell closer. De Soto Paint Manufacturing Co., Memphis, Tenn. Manufacturers. Practice absolutely necessary in paint business during certain period of the year. During first three months of year demand for paint at minimum, and in order to keep plant operating and stock moving toward jobbers, manufacturers obliged to date sales April 1, subject to guarantee. If jobbers not given assurance as to future prices, will not purchase until actually needed. As manufacturers in paint line contract for raw materials at set prices, no loss results. Louisville Paint, Oi! & Varnish Club, Louisville, Ky. Trade Association. By resolution above-named club expressed itself as follows : " Use of paint confined to certain seasons, and unless guarantee permitted orders would be received within too short time to handle, compelling forced operation of factory at one period of the year, and result in partial idleness the balance. Believe ought to be re- garded as matter of policy to be determined by each concern. Such guarantees or contracts obviate misunderstandings." T. H. Nevin Co., Pittsburgh, Pa. Manufacturers. Dealers in seasonal commodities, which must be sold to jobbers long in advance of resale to retailer, require extension of this privi- lege. Makes for more even factory operation and better distribu- tion of shipments. Seidlitz Varnish Co., Kansas City, Mo. Manufacturers. Paint and varnish business of seasonal character. Eaw materials, particularly those used in varnish, secured from foreign countries and the manufacturers are compelled to contract for their supplies six months to one year in advance of use, which to some extent sta- bilizes the raw market. Jobbers or agents will not take goods in advance of need unless protected by guarantee. Imposes no finan- cial hardship on manufacturer, especially since the advent of the trade acceptance in payment for goods delivered to jobbers. U. S. Gutta Percha Paint Co., Providence, R. I. Manufacturers. Formerly dispensed product through sales force, but in recent years has disposed of some through jobbers, on commission, guar- anteeing unsold portion of stock against price decline, in the belief that such concession was a fair exchange for capital invested in our products by jobber. If prices advance, require jobbers to accept increased billing. Do not believe practice operates to disadvantage of consumer. 31 C. A. Woolsey Paint & Color Co., Jersey City, N. J. Manufacturers. To maintain reasonably continuous factory operation obliged to extend guarantee. If jobbers postponed purchases until just prior to seasonal demand, usual transportation facilities would not admit of proper deliveries. Elimination of guarantee would operate dis- advantageous^ to manufacturer. PAPER. The Hamersley Manufacturing Co., New York, N. Y. Manufacturers. Where manufacturer grants such concession he makes arrange- ment for his protection. Eliminates all disputes following sales. Schmidt & Ault Paper Co., York, Pa. Manufacturers. Guarantee insures manufacturer maximum production, lessens his need for warehouse facilities, and gives labor steady employment at uniform wages. Have not adopted such policy, but believe proper practice for those who desire to resort to it. Aids small manufac- turer with restricted warehouse space to operate plant efficiently. Writing Paper Manufacturers' Association, New York City. Manufacturers. Henry A. Wise, attorney for the Writing, Cover, Book, and Tissue Paper Manufacturers' Associations, submitted printed brief dated March 15, 1920. His argument has been summarized as follows: ■Such practice does not prevent all purchasers from securing same privilege, and even though guarantee is extended by some manu- facturers and not by others, it would not result in monopoly. Any benefit accruing to part}' giving guarantee is the natural result of better business judgment. If seller willing to assume risk practice does not adversely affect the public; in fact, consumer gets goods at lower prices. So-called guarantee against price decline is really a guarantee that prices will not go up. The argument that guaran- tees establish more or less inflexible prices is not borne out by trend of prices in guaranteed commodities, which move upward and down- ward. The belief that such practice inures to the benefit of con- cerns with large capital ought not to be argument against the prac- tice, as the law does not contemplate the view that size, unless demon- strably monopolistic, is unlawful. Congress has never legislated against business establishments because of their size and resources; in fact, the Clayton Act provides, in part, that discriminations in prices between purchasers, based on difference in quantities sold, are lawful discriminations. Regards guarantee against price decline as similar to a conditional sale, which is lawful, and in support of that view quotes the following cases : See Wing v. Wadhams Oil & Grease Co., supra. In M. & E. Solomon Tobacco Co. v. Cohen (184 N. Y., 308), the facts were that a sale of bonded tobacco was made under contract 32 at a certain sum, including 70 cents per pound estimated duty, with an agreement that if the tobacco was appraised at less the duty should be allowed to the buyer. The buyer paid for the goods, in- cluding duty, and on a protest as to the rate of duty the protest Wis sustained and the duty was reduced to 35 cents. The court held that the buyer was entitled to a portion of the sum of duties returned. In Thomson v. McCaldin (8 N. Y. Supp. 71), the action was on a contract for the sale of lumber with a condition that the pur- chaser should have the benefit of any fall in the market price, and the court held that this was an enforcible contract under which the vendee was entitled to the benefit of the decline in the market price. In D. R. Vivion Mfg. Co. v. Robertson (75 S. W. 644; 176 Mo. 219), the action was on a contract for the sale of manufactured ar- ticles. The language of the contract was " This price ($1.75) is to be increased or diminished in proportion to the rise or fall of price of material of which they are made, etc." The court found that the price had increased and permitted recover}' upon the basis of the advanced price. It says, among other things (75 S. W. at p. 645) : When July 1st canre and the bill was due either party had a right to demand that the price, $1.75, should be scaled up or down according to the market at the several dates of deliveries. In many other cases the courts have been called upon to construe contracts attempting to provide for fluctuation in prices. In Bass v. Veltun (28 Minn. 512; 11 N. W. 65), and Parker v. Adams (47 Vt. 139), there were provisions for variation in price according to fluctuation of the market. In Champion Machine Co. v. Gorder (30 "Neb. 89; 46 N. W. 253), there was a provision covering subsequent reduction in prices by the seller. Similarly Lutty v. Waterbury (140 111. 164; 30 N. E. 351), and Owen v. Mathews (19 N. Y. Supp. 813). See also Rutledge v. McAfee, supra. In none of these cases has any court intimated that there was any- thing unfair or illegal in such contracts, or that for any reason the courts should refuse to enforce the contracts or refuse to permit a recovery which the facts disclosed might justify. ******* In Spang v. Rainey (79 Fed. 250), the United States Circuit Court of Appeals for the Second Circuit had for consideration a contract providing for an increase in price when " there may be a general ad- vance in the market price." The court affirmed a judgment permit- ting a recovery at a rate in excess of the contract price due to an increase in the market price, and there is no hint that such a contract is illegal. 33 PLUMBING SUPPLIES. Cyler & Mohler, Baltimore, Md. Manufacturers. Enables jobber to carry larger and more diversified stock, placing him in a position the better to serve his customers. Guaranteeing makes it possible for jobber to sell on closer margin. On market decline jobber immediately passes advantage to customers. Guaran- tee aids manufacturer in placing orders for his requirements and works for better and more evenly distributed factory operations. Express view that guarantee is in the interest of manufacturer, jobber, and consumer. Pacific Pipe & Supply Co., Los Angeles, Calif. Jobbers. To meet market conditions jobbers obliged to carry large stocks, an investment that would not be justified unless manufacturer ac- corded guarantee against price decline. Immediately upon notifi- cation by manufacturer jobbers reduce prices of stock on hand for benefit of consumer. Without guarantee jobber would be inclined to hold up prices as long as possible. Samuel S:oane & Co., Rochester, N. Y. Jobbers. Manufacturers are familiar with primary market conditions and should intelligently estimate selling price. Practice permits maxi- mum and efficient factory operation. Transfer of goods in advance of season's call for benefit of manufacturer, and there is no reason why we should not be willing to accord protection to jobber for reasonable period, say 60 to 90 days. ROOFING. The Philip Carey Co., Cincinnati, Ohio. Manufacturers. Have extended guarantee against decline in its own price to date of shipment, but not thereafter. SCREENS. American Wire Fabrics Co., Chicago, 111. Manufacturers. Manufacture wire cloth for screen doors and windows, a season- able commodity, and is necessary to give dating at outset of season to get distributors to take goods several months before needed. Sea- son ends latter part July. Many sections these goods are not needed again until following year. Have established rule of giving Feb- ruary first dating on goods shipped after September. Dealers would not take unless guaranteed. If practice not followed, we would have to build warehouses, as not able to ship in short time all goods required. Better to distribute shipments evenly over year. SHIRTS. Oppenheim, Oberndorf & Co., Baltimore, Md. Manufacturers. Guarantee not necessary except when prices at abnormal level. Assurance excites confidence in buyers, enables manufacturer to at- 11403—20 5 34 tain maximum production without interruption, and produces sta- bilizing effect on market. Through greater production lower unit prices are obtained by presence of greater volume of goods in mar- ket With inflated market, do not believe jobbers overbuy. With- out guarantee during high-priced period jobbers will curtail orders, with resultant partial suspension of production activities. Do not believe practice operates to disadvantage of manufacturer unwill- ing or unable to extend privilege. Guarantee does not act as bar to price reduction, as nature of practice suggests otherwise. SHOVEL^ The Conneaut Shovel Co., Conneaut, Ohio. Manufacturers. As a general practice do not accord guarantee but feel would stabil- ize market in this industry and would work to interest of public and manufacturer, in that it would provide normal stocks in hands of dealers and give them assurance that nothing would be lost by making purchases in advance of needs. SILOS. Lansing Silo Co., Lansing, Mich. Manufacturers. In sales of silos price is set when order is solicited, and guarantee against decline seems fair to first purchasers. McClure Co., Saginaw, Mich. Manufacturers. Guarantee facilities buying during periods of doubt and does not impose hardship on anyone. When conditions warrant, be- lieve proper to extend protection for reasonable period on unde- livered portion of contract. TENTS, AWNINGS, ETC. Clifton Manufacturing Co., Waco, Tex. Manufacturers. Are forced to guarantee prices because products dealt in are of seasonable character, and merchants will not assume price obliga- tion on future shipments. This practice enables them to better gauge their own requirements. Express the view, however, that on nonseasonal goods likely practice could be eliminated. To illus- trate (their letter dated Jan. 6, 1920), orders booked during past 60 days are for shipment up to September 1, carrying guarantee against decline. Practice of dating and guaranteeing necessary, as customers could not be supplied if they were obliged to wait until about 30 days before goods were needed. Does not guarantee against decline subsequent to. date of shipment. TOILET ARTICLES. The Mennen Co., Newark, N. J. Manufacturers. Guarantee as applied to undelivered portion of orders contracted for in advance of season enables jobber to figure costs more accurately, 35 stabilizes his business, keeps him out of the market in periods of shortage, prevents destructive fluctuations, and distributes carrying charges equitably. Under above guarantee, seller will know his volume of output, be able to reduce cost of operation by more even distribution of output, make production more uniform and less ex- pensive, and reduce carrying charges and investment expense on account of storage facilities. Protects manufacturer against heavy orders when declines occur, with consequent shortages of materials. If guarantee goes to unconsumed material on former deliveries it invites a speculative element and brings higher costs, preventing natural reduction in prices. Under above practice, small operator does not operate at disadvantage with large operator, unless latter rebates for stock on hand. Wisdom of above contract was demon- strated to us during the war. Where we did not have such contract we were compelled to become speculators, not daring to wait or buy in normal quantities but entered the market during temporary breaks and bought large quantities, advancing the market for the next buyer. Guarantee upon single purchases or a series of single, unrelated purchases invites abnormal orders, creating a vicious circle of over- selling, shortage of production, and higher prices not based upon normal consumption but upon speculative demand. To illustrate: Where a manufacturer makes 10 per cent on an article, the unit cost of which is $1, and subsequent costs permit him to sell a similar article for 90 cents, with the same percentage of profit, if he rebates 10 cents on account of former articles sold, his profit is wiped out. Such guarantee tends to establish artificial prices and encourages the making of inordinate profits. WALNUT GROWERS. California Walnut Growers' Association, Trade Association. Los Ange!es, Calif. Association believes such guarantee on certain products would re- sult in benefit to all parties from producer to consumer. WOOLEN TEXTILES. The Beckman Co., Cleveland, Ohio. Manufacturers. Guarantees customers against decline only in its own prices to date of shipment. MISCELLANEOUS. Douglas & Evans, New York, N. Y. Exporters and Importers. As applies to export business believes practice would be helpful. Would stimulate purchasing. Foreign buyers accustomed to this concession. 36 Fairbanks Co., New York, N. Y. Jobbers. For many years manufacturers have protected us with guarantee as related to stock on hand at time of price decline. George E. Farrand, Attorney, Los Angeles, Calif. Attorney. On behalf of several business concerns in California favors con- tinuance of policy of guaranteeing against decline in price. A. B. Jones Co., Jonesboro, Ark. Stabilizes prices. Declares that guarantee saves margin which job- ber would otherwise be obliged to add to selling cost. Makes lines not guaranteed less attractive. Without guarantee dealers will cancel orders and manufacturer or producer faces alternative of bringing suit and losing customers' business, which procedure would be more expensive than the granting of this concession. Kelley Axe Manufacturing Co., Charleston, W. Va. Manufactures seasonal goods, which are sold the first three months of year, for delivery in fall and winter. Fearing decline in price between date of order and time of delivery jobbers will not place orders unless accorded guarantee. Under such circumstances with- out guarantee, manufacturers unable to plan for jobbers' needs suf- ficiently in advance to properly take care of the market. Guarantee provides for continuous factory operation and results in holding organization intact. Manufacturers do not particularly care for custom, but conditions in trade require adherence to same. Would be ruinous to business to uproot such old established practice. Lakewood Engineering Co, Cleveland, Ohio. Manufacturers. Believe practice necessary in certain industries, particularly basic industries. Practice perhaps not necessary with trade-marked goods, except that seller of such articles ought to treat all customers alike and give rebate to purchaser who bought in advance of decline as offset to lower price at which sold to those purchasing subsequent to decline. Guarantee necessary and fair in export trade with dis- tant countries, where wide fluctuations may take place between date of sale and receipt of goods in consignees' countries. Would stabilize production and make for more ecective relations between buyer and seller. C. A. Libbey, Oshkosh, Wis. Barn Fixtures Manufacturers. Guarantee against decline has made unnecessary a second trip of our salesmen to solicit business, as dealers bought season's require- ment in one order, thus saving expense of such trips. Kerr & McCord, Seattle, Wash. Attorneys. Attorney for Federal Milk Co., Seattle, Wash. Newly estab- lished businesses need guarantee as lever to enter market. Permits 37 shipping greater number solid carloads, thereby reducing unit cost of transportation. Jobbers able to dispose of well-known brands of milk more quickly than brands less known ; consequently, manufac- turers of latter required to give longer guarantee against decline. If not able to place large stocks, subject to guarantee, in hands of jobbers, alternatives are more expensive less than carload shipments or the maintenance of storage facilities in jobbing centers at expense of producers. Refusal to permit guarantee would operate to ad- vantage of large manufacturers. Scovel Iron Stove Co., San Francisco, Calif. Jobbers. Believe practice does not constitute unfair competition, and wherever manufacturer's capital enables him to offer customers such inducement and protection, feel he should not be prevented from ex- tending privilege. Excites buyers' confidence, but not to degree that they will buy beyond normal requirements. As the law of supply and demand usually sets price levels, manufacturers would not be able to postpone passing price decline benefit to trade, especially as such action might result in lessened sales and the imposition of greater loss than would be represented by the allowance paid under guarantee. United States Wind Engine & Pump Co., Batavia, 111. Jobbers. Guarantee greatly assists in selling goods, especially on high market, and exercises a stabilizing influence. Purchasing in large quantities from distant manufacturers lowers unit cost as compared with smaller purchases from local sources. REPLIES OPPOSING GUARANTEE AGAINST PRICE DECLINE. ALFALFA. Haywood Alfalfa Warehouse Co., Kansas City, Mo. Millers desire to enter strong protest against practice, expressing the opinion that it is an evil custom and ought to be stopped by legis- lation. AUTOMOBILE ACCESSORIES. Eclipse Manufacturing Co., Indianapolis, Ind. Manufacturers. Handle trade-marked articles, which is sold on percentage profit basis. Selling price moves in sympathy with cost of production. If jobber is given guarantee, manufacturer should also be protected. Hudson Motor Specialties Co., Philadelphia, Pa. Manufacturers. Really a form of rebating and results in unfair competition. Man- ufacturer not so protected and must pocket loss if decline occurs. Practice might lead manufacturer to overstock dealers and thereby eliminate competitors. AUTOMOBILE TRACTORS. Fageol Motors Co., Oakland, Calif. Manufacturers. Does not give guarantee — has done so once or twice when obliged, but will not continue practice. Not sound business. BLACKSMITH'S SUPPLIES. Champion Tool Co., Meadville, Pa. Manufacturers. Believes unfair practice. Is hardship on manufacturers with small capital. Gives jobbers unfair advantage, and encourages them to take too great risk in placing orders. Creates speculative buying. Also makes for disadvantage as between large and small jobbers, former being able to secure such concessions which are denied latter. Guarantee tends to maintain artificial level of prices — certainly does not provide incentive for manufacturers to reduce prices, as would take place were they free to do so. When decline takes place in (38) 39 primary markets, this practice delays passing of decline on to con- sumer. BOX MAKERS. Mid- West Box Co., Chicago, 111. Manufacturers. Practice unfair in that any resultant loss is absorbed by one party to the contract. Stockton Box Co., Stockton, Calif. Manufacturers. Does not guarantee and is opposed to practice, refusing to grant this concession to anybody. t BRASS AND BRONZE PRODUCTS. Kingwell Bros., San Franicsco, Calif. Manufacturers. Do not believe in practice. CEREALS. Atlas Cereal Co., Kansas City, Mo. Manufacturers. In rolled-oats business there are a few large operators and a few small operators — entire business possibly in hands of 10 corpora- tions. Our experience indicates guarantee is injurious to small operators and a vicious practice. Believe jobber should buy in ade- quate quantities to meet requirements and that speculative element should be removed. Are opposed to guaranteeing prices beyond date of sale and delivery. CHEMICALS. Butterworth-Judson Corporation, New York, N. Y. Manufacturers. Competition has sometimes forced them to extend guarantee, but decidedly opposed to such custom. H. K. Mulf ord & Co., Philadelphia, Pa. Manufacturers. Guarantee against price decline unfair method of competition, resulting in abuses. CHO^O^ATE. Riesener Chocolate Co., San Francisco, Calif. Manufacturers. Makes no guarantee on either contract or open orders. Believes practice unfair to manufacturer as he purchases raw materials in open market and has no way of preventing loss through price decline. Price guarantee will, of course, induce jobbers to stock ahead and unless adequate stocks are carried by jobbers in this line will re- quire establishment of manufacturers' warehouses in jobbing centers, which they regard as uneconomical. Practice would also work hard- ship against small manufacturer, who is not able to support stocks in hands of jobbers through price guarantee. Believes price should be set at time of sale and no readjustment made. 40 CLOTH. New Jersey Cloth Co., Trenton, N. J. Manufacturers. Opposes guarantee and believes commission should formally dis- approve. In normal times have afforded protection to customers through means of cancellation under certain conditions. Western Shade Cloth Co., Chicago, 111. Manufacturers. Guarantee imposes hardship upon the seller and encourages jobbers to purchase speculatively. A one-sided agreement. Practice natu- rally restrains competition for only manufacturers of large capital can afford to take such chances on future prices. COFFEE. American Coffee Co., New Orleans, La. Jobbers. Actual experience many years guaranteeing against our own ad- vance or against decline (60 to 90 days) to cover period date of sale to date of shipment, have observed great abuse and sustained sub- stantial losses. To cite specific case: April and May, 1919, when coffees were undergoing substantial advances, had 60 and 90 day contracts outstanding and sustained in June, 1919, operations net deficit of $7,988. During July and August, 1919, market declined rapidly. Submit that this policy one of the most abominable and expensive customs in merchandising. July o, 1919, withdrew 60 and 90 day and substituted 30 day guarantee. One customer offered con- tract for 1920 requirements at fixed price. We declined their busi- ness on such basis. Practice leads to overstocking on roasted coffee. MacGowan Coffee Co. (Inc.), Jackson, Miss. Wholesale. Custom wrong in principle, tending to encourage speculation and leading to overstocking in perishable products. In perishable goods actually constitutes certain proportion of wastage, which loss must be calculated in fixing profits. Practice acts as bar to coffee roasters reducing prices. Maury-Cole Co., Memphis, Tenn. Manufacturers. Against better judgment have been obliged to guarantee price to date of shipment, which necessitates calculating wider margin of profit than figured on straight sales. Unbusinesslike, encourages speculation, and leads to overbuying. Also gives unfair advantage to those extending privilege as against those who do not follow practice. Olson Coffee Co., Omaha, Nebr. Roasters. Guarantee encourages retailer and wholesaler to carry unneces- sarily large stocks and practice ought to be discontinued. To illus- trate: On last rise in coffee market retailers inflated purchases 8 or 41 10 times, withdrawing large quantity of coffee from manufacturers' market, causing manufacturers to replenish stocks, artifically stimu- lating market and forcing increase in prices. CORDAGE AND ROPE. Columbian Rope Co., Auburn, N. Y. Manufacturers. Believes provision unfair and unjust to manufacturer. Expresses opinion that so-called contracts are merely options to jobbers and carry no advantage to manufacturer. Manufacturer does execute and live up to real contracts for raw materials. Plymouth Cordage Co., North Plymouth, Mass. Manufacturers. Raw materials, much of which are shipped long distances in ad- vance of use, not bought subject to such guarantee and do not be- lieve fair to impose obligation on manufacturer. E. T. Rugg & Co., Newark, Ohio. Manufacturers. Market conditions would be better if practice were discontinued. Tubbs Cordage Co., San Francisco, Calif. Manufacturers. Manufacturers do not get guarantee on raw materials and if obliged to extend guarantee to jobbers would mean introduction of another element of risk in business. Price guarantee operates to advantage of large dealers. Small dealers not able to buy large quantities and therefore less sought by manufacturers who extend guarantee. Discontinuance of practice ought to benefit business. Whitlock Cordage Co., New York City. Manufacturers. Although manufacturers in our industry have extended guarantee generally to date of shipment, but sometimes beyond, do not be- lieve practice rests upon good business principle. Custom has be- come so ramified that it is difficult for a manufacturer to refuse such courtesy. We are obliged to purchase raw materials in open market, subject to any future change in price. COTTON. Cotton Thread Manufacturers' Exchange, Trade Association. New York City, N. Y. While practice is not followed in this industry, members of the Exchange voted to put organization on record as adverse to practice. Eagle & Phenix Mills, Columbus, Ga. Manufacturers. Believe guarantee unsound and unreasonable. Besides, it is a one- sided contract. We buy raw materials in market subject to fluctua- tion and see no reason for granting our customers such favors. J. Milton Hagy Waste Works, Philadelphia, Pa. Manufacturers. Guarantee against price decline worthless to manufacturer — a one- sided proposition. Considered sharp practice resorted to by sellers overanxious to make sales. 42 Albert D. Smith & Co., New York. Manufacturers and Distributors. As manufacturers and commission merchants desire to enter pro- test against practice of selling with guarantee. DYESTUFF. Atlantic Dyestuff Co., Boston, Mass. Manufacturers. We discourage practice, but in some cases have been obliged to protect our customers against our own reduction. Have tried to keep contracts free of such objectionable terms. ELECTRICAL SUPPLIES. Johnson Electric Supply Co., Cincinnati, Ohio. Jobbers. Practice encourages jobbers to carry too much stock and has tendency to keep up prices. METAL FILING EQUIPMENT. Baker- Vawter Co., Benton Harbor, Mich. Manufacturers. Does not give guarantee, but believes practice is not good for business. FOOD. Aspegren & Co., New York City. Manufacturers. Practice fundamentally unsound. Would inject speculative fea- ture. Contracts for raw materials not subject to protection against decline. If we guarantee prices, we assume risk and find ourselves "playing the market," with attendant evils. Have found, even at higher price, jobbers give business to those who guarantee prices. Under guarantee system jobber assumes no risk; encourages him to contract for more than legitimate needs in anticipation of speculative profits. Overbuying puts greater quantity products than necessary in trade channels. Guaranteeing prices means expense to manu- facturer, same as other costs of selling, and consumer pays it. When prices raw materials decline manufacturers reluctant to reduce prices because of contracts at higher prices. Atlanta Refining & Manufacturing Co., Atlanta, Ga. Manufacturers. Are much opposed to policy of selling lard substitute against de- cline. Have been forced by larger interests to sell on this basis past five years. Memphis Milling Co., Memphis, Tenn. Manufacturers. Do not sell with guarantee, as not believed legitimate way to con- duct business. Has tendency to maintain artificial price level. Ani- mal foodstuffs, with little food value, subject to guarantee, would place at disadvantange superior goods without guarantee. 43 Purity Oats Co., Keokuk, Iowa. Manufacturers. Regards as a vicious practice and fundamentally unsound, work- ing hardship upon manufacturer and bringing no relief to consumer. Experience leads to belief that consumer will not get benefit unless jobber is driven by keen competition to reduce price. Encourages speculation and overanticipation of needs. Southern Corn Mills (Inc.), Memphis, Tenn. Manufacturers. In order to meet competion obliged at times to give such protection, but do not approve practice. Do not regard as legitimate conduct of business, as it tends to force up prices and sometimes gives a market to inferior brands of feeds and with guarantee as against superior brands that do not carry guarantee. GLYCERIN. Black, Varian & Simon, New York, N. Y. Attorneys for Refiners. Trade custom in the glycerin industry has given approval to this guarantee, but it is believed that it jeopardizes the existnece of the small producer and, in the long run, is unfair to the consumer. If one refiner does not meet conditions offered by another, the only alternative left is closing down his plant. The practice leads to speculation and unstabilization. Observation shows that practice leads to control of this industry by a few large concerns, and if per- mitted to grow, will suppress competition. Prevents refiner from offering lower price than specified in outstanding contracts. GROCERS. Coleman- Clark Grocery Co., Paducah, Ky. Wholesalers. Regards as detrimental to business and has tendency to inflate prices. C. W. Cooper Co., Thomasville, Ga. Wholesalers. Practice should be abolished so as to remove temptation to speculate in food commodities. Guarantee acts as incentive for salesmen to oversell customers. HARDWARE. Henkle & Joyce Hardware Co., Lincoln, Nebr. Jobbers. A discriminatory practice and ought to be forbidden by law ; pre- vents genuine competition. While we have never refused to accord such privilege, still do not believe a proper way to distribute mer- chandise. Lorick & Lowrance, Columbia, S. C. Jobbers. Regards as unfair practice which encourages jobber to carry larger stock than he would risk if obliged to go into the open market. If 44 privilege is ever withdrawn it will be at a time when jobber is heavily- stocked and will cause him great loss. Mitchell-Powers Hardware Co., Bristol, Tenn. Jobbers. Hope for lower prices, but do not believe will come as long as manufacturers are permitted under price guarantee to load up job- bers, a practice which results in elimination of competition. Nelson Hardware Co., Roanoke, Va. Jobbers. Believe that custom, if practiced universally, would tend to innate prices and restrain manufacturers from making reductions while guarantees were out. However, recognizes that under existing cir- cumstances it is necessary for manufacturer to guarantee prices in order to market goods for entire season. Summers Hardware Co., Johnson City, Tenn. Wholesalers. Practice has tendency to continue higher prices longer than where guarantee not accorded. It is true, however, that in some lines job- bers can not be induced to buy without the guarantee. The A. I. Root Co., Medina, Ohio. Manufacturers. Believe practice should be discontinued, in that entire burden is placed upon manufacturer. Of course, practice enables jobbers to carry large stocks. HONEY. Rosenberg Bros. & Co., San Francisco, Calif. Manufacturers. Regards as device resorted to by manufacturers to stimulate buy- ing, which practice results in overstocking and economic loss. If manufacturer intends to fulfill obligation, he is obliged to protect himself by increasing his margin of profit. HOSIERY. Berkshire Knitting Mills, Reading, Pa. Manufacturers. Guarantee is unbusinesslike and unsound, and there is no need for such practice. Responsible manufacturers are obliged to obtain their materials without guarantee, and payment of jobbers' losses would react unfairly upon manufacturers. Richmond Hosiery Mills, Rossville, Ga. Manufacturers. Unequivocally opposed to practice, which places unfair burden upon manufacturer instead of distributing the loss through the vari- ous stages of trade. Union Manufacturing Co., Union Point, Ga. Manufacturers. Unless abnormal profits are made under guarantee, such practice will lead to bankruptcy. 45 HOUSE FURNISHINGS. Otis Hidden Co., Louisville, Ky. Jobbers. Where such protection is afforded, profit must be set at figure to offset the hazardous undertaking and tend to keep up prices. To be fair, jobbers who receive guarantee should guarantee retailers, but such guarantee might wipe out jobbers' profits. Would operate to unfair advantage of wide-awake retailer and favor less progressive merchant, the latter receiving guarantee on large unsold stock which would not have moved due to lack of enterprise. IRON AND STEEL. T. R. Almond Manufacturing Co., Ashburnham, Mass. Tool Manufacturers. Practice of guaranteeing against decline should be discontinued. Bolt, Nut & Rivet Institute, Pittsburgh, Pa. Trade Association. Expresses belief that such guarantee is practically option given buyer to accept or reject goods, depending upon prices at date of delivery as against prices at date of sale. Encourages speculative buying and inflates orders, creating artificial prices. Guarantee beyond date of shipment is vicious, as rebate in most cases is really additional profit. Such form of guarantee does not prevail in bolt, nut, and rivet industry. Guarantee effective until date of shipment is practiced in this industry and is not regarded as being so per- nicious, although it does introduce a speculative element in business. The Institute would welcome the abolition of this practice. They do not believe reform can be brought about within the trade. Detroit Range Boiler & Steel Barrel Co., Detroit, Mich. Manufacturers. An evil practice. Gives large manufacturers unfair advantage over small manufacturers, creates fictitious demand, and leads to speculation. Dikeman Manufacturing Co., Norwalk, Conn. Tool Manufacturers. Dealers should so estimate requirements as to make this practice unnecessary. Guarantee could only be given by manufacturers of large resources. Drill & Reamer Society, New York City. Trade Association. Society by resolution is on record as disapproving guarantee. Ohio Falls Iron Co., New Albany, Ind. Manufacturers. Guarantee operates to disadvantage of small concerns in steel in- dustry. Large steel manufacturers own ore deposits, but small man- ufacturers obliged to buy in open market, with purchase made sub- ject to fluctuating price. Peden Iron & Steel Co., Houston, Tex. Jobbers. Jobbers do not rebate manufacturers where prices advance and larger profits are taken, and believe that guarantee against price de- 46 cline is a question for determination by the manufacturer, without any demand being exerted upon him by the jobber. D. M. Sechler Implement & Carriage Co., Moline, 111. Manufacturers. Argument that price guarantee stimulates business is not convinc- ing. Believe better to rely upon moderate volume of trade, with the guarantee that price bargained for will be paid. H. D. Taylor Co., Buffalo, N. Y. Jobbers. Prefers to buy in open market on most favorable terms and take chances on future market conditions. Do not believe manufacturers who practice custom secure unfair advantage as liability so assumed must be taken into their unit price. Do not believe public hurt should jobbers make excessive purchases. Trimont Manufacturing Co., Roxbury, Mass. Tool Manufacturers. Unfair to guarantor, sometimes requiring absorption of consider- able loss. Regards as unethical. While manufacturer secures ad- vantage through advance acceptance of stock by jobbers, still do not believe that the former should guarantee against decline unless per- mitted to increase prices when market advances. JELLIES. Phez Co., Salem, Oreg. Manufacturers. Makes emphatic protest against such guarantee and believes prac- tice should be stopped. The following illustration of the operation of guarantee to grower by canner is cited : Take an average supply of 1,000 tons of strawberries in one district, two-thirds of which can- ning establishments have agreed to take at specified price. Each concern feels it should obtain part of the remaining available supply not contracted for, and bidding for such supply commences, with result that the price is driven up 6 or 7 cents, which automatically raises the price of supply previously contracted for, because growers are given benefit of market advances. Above custom will result, this year, in 15-ounce jars of jam being sold f. o. b. factory $4.50 to $5 per dozen, instead of $3 to $3.50 per dozen, as last year. This situa- tion could be remedied by making straight price for two-thirds of available tonnage, and should competition for the remaining one- third force up prices the resultant increase, averaged for the whole supply, would not be too great a burden upon the consumer. Guar- antee against decline operates to keep up prices, from which we are now suffering. KNIT GOODS. Knit Goods Manufacturers of America, Utica, N. Y. Trade Association. Gives large concerns unfair advantage, encourages gambling as to prices and results in jobbers overbuying. Raw materials entering 47 into manufacture of underwear not guaranteed; labor can not be relied upon to produce uniform output nor, unless wage scale in effect is covered by agreement as to time, will cost of labor be known. Expense of guarantee is added by manufacturer to cost of goods and passed to consumer. Declines in manufacturers' market are not immediately felt by consumers, but simply mean loss to manufac- turer, gain to jobber and retailer, and no compensation to consumer. Unfair to manufacturers who do not give and to dealers who do not receive such protection. Works hardship on small manufacturers and small dealers. Underwear manufacturers must contract six months to one year in advance for raw material, without guarantee, in order to insure continuous supply of raw material to keep labor regularly employed. LIVE STOCK. Market Committee of American National Live Stock Trade Association. Association, Denver, Colo. Expressing what is believed to be opinion of stockmen, feel that majority favor open market without artificial restrictions. LUMBER. Deal Saw Mills Co., Tuscaloosa, Ala. Manufacturers. Oppose any policy of fixing prices. Paterson & Edey Lumber Co., Mobile, A?a. Manufacturers. Believe that the law of supply and demand should rule and market not made subject to artificial influence. Practice would cause ad- vance in price if such contracts would commit buyer to one year's requirements and preclude possibility of his being sold by other con- cerns, a circumstance that would encourage competitors to raise prices to level set by those who give guarantee. Lumber manufac- turers can not give such protection as all articles contributing to final cost are bought in current market and labor expense is not stable. R. W. Wier Lumber Co., Houston, Tex. Jobbers. Buy in open market and do not guarantee customers against de- cline. Such practice unsound and uneconomical. MACHINERY. Smith- Courtney Co., Richmond, Va. Manufacturers and Jobbers. Believe that distributors should make purchases based upon their estimated requirements upon which they should calculate fair profit and not look to manufacturer for protection should prices decline. Guarantee encourages speculative buying. 48 MILLING. American Corn Millers' Federation, Chicago, 111. Trade Association. Following resolution unanimously adopted : " Opposed to practice of guarantee in prices against decline and favor such legislation as will prohibit." Arcady Farms Milling Co., Chicago, 111. Millers. Through Winston, Strawn & Shaw, of Chicago, above firm ex- presses opinion that guarantee is against the public interest, tends to keep up the cost of living, and ought to be discontinued. Under such competition some concerns are unwillingly drawn into custom. El Reno Mil? & Elevator Co., El Reno, Okla. Millers. Practice unfair and do not believe followed by many flour millers. Wheat not bought with guarantee. Consumers interest better served if guarantee not given. Kansas Milling Co., Wichita, Kans. Millers. Regards as bad practice and not practical in milling and grain business. Millers obliged to buy grain regardless of market's ac- tion. Guarantee tends to hold up prices. Millers' Milling Co., Enid, Okla. Millers. In general terms expresses disapproval of practice and relates fact that as Secretary of the Oklahoma Millers' Association, seven years ago, succeeded in getting 87 per cent of Oklahoma millers, 60 per cent of Kansas and Nebraska and 37 per cent of Texas millers to sign agreement that practice would not be followed. Nebraska Millers' Association, Omaha, Nebr. Trade Association. Regards as a pernicious practice amounting to gambling. Should be discountenanced' by Government. Association adopted resolution January 20, 1920, in opposition to practice. Nowak Milling Co., Hammond, Ind. Millers. Not able to purchase raw materials with such guarantee and therefore opposed to granting such concession to its customers. Re- gards as speculative and unsound. However, in order to meet such competition, have at times been obliged to extend courtesy. States that American Feed Manufacturers' Association at last convention agreed to discontinue practice. Oklahoma Millers' Association, Oklahoma City, Okla. Trade Association. With 95 per cent of mills represented, Oklahoma Millers' Associa- tion adopted resolution in opposition to practice. M. C. Peters MiU Co., Omaha, Nebr. Millers. A malicious practice, substituted for the exercise of better buying judgment, in which purchaser has all the advantage. Manufacturers 49 of by-product mixed feeds, who largely set their prices, have fol- lowed the practice without harm to business, but in the manufacture of mixed feed products, where raw ingredients are subject to supply and demand, practice is dangerous. Manufacturer who guarantees obliged to arrange for excessive supply of raw materials, creating artificial demand and tending to lead to control of market. Southeastern Millers' Association, Nashville, Tenn. Trade Association. Regards as unfair practice and has tried for some time to uproot evil. Westbrook Grain & Milling Co., Pine Bluff, Ark. Millers. From standpoint of good business practice do not see how manu- facturer, regardless of financial ability, is able to extend guarantee unless able to control the price of his raw materials. MOLASSES AND SIRUPS. Penick & Ford (Ltd.), New Orleans, La. Manufacturers. Disapprove of such method of merchandising as it would tend to increase rather than diminish cost to consumer and would place weapon in hands of large manufacturers to the detriment of smaller manufacturers. NUTS. Barnhart Mercantile Co., St. Louis, Mo. Jobbers. Until a few years ago guarantee practice was general, but found to be pernicious. National Peanut Cleaners & Shellers Association adopted rule prohibiting on the ground that such guarantee was an unfair method of doing business. Leads jobbers to buy in large quantities as pure speculation. If prices advance, they secure addi- tional profit; and if prices go down, the original dealer's guarantee protects them. Large orders sometimes bring about short selling by original dealers, projecting them into the buying market with re- sult of increase in prices, which increase is passed on to the whole- sale distributors of nuts. Operates to distinct advantage of dealers with large capital and extensive lines of credit. Creates indisposi- tion on part of guarantor to permit, if he can prevent, a recession of prices. OIL AND PETROLEUM. Independent Oil Men's Association, Chicago, 111. Trade Association. Opinions of 47 firms have been submitted to this Association, 32 opposed to and 15 in favor of the practice. Analysis indicates that the small dealer is almost unanimously against the custom. Re- finers do not extend such privilege to small jobber, but do execute 50 such contracts with large jobbers, thereby placing small jobber at disadvantage not only in the buying end, but also in the selling field. Practice manifestly unfair. Enables large competitors to make clear diagnosis of future conditions. Matter ought to be decided definitely for benefit of legitimate business. National Petroleum Association, Cleveland, Ohio. Trade Association. Petroleum industry does not guarantee against decline in price. Does not regard as businesslike. In fairness to both parties to con- tract, prices should be subject to market fluctuations. Puente Oil Co., Los Angeles, Calif. Producers and Refiners. Guanrantee pernicious practice and not in keeping with good busi- ness. Unless seller deals in speculative commodity and able at times to make favorable purchases, unable to recoup if guarantee is ac- corded. Emphatically a disadvantage to small operators. Union Oil Co. of California. Producers and Refiners. Does not give guarantee. Business done on annual-contract basis at specified price, subject to no readjustment. Waverly Oil Works Co., Pittsburgh, Pa. Refiners. A demoralizing practice, which gives potent weapon to big manu- facturers, particularly those controlling raw materials, to use against small manufacturers who are dependent on raw material at market prices. OVERALLS. Sweet-Orr & Co. (Inc.), New York, N. Y. Manufacturers. Guarantee increases expense of distribution, encourages jobbers to buy speculatively, and creates shortage in manufacturing market. PAINT AND VARNISH. Boydell Bros. White Lead & Color Co., Detroit, Mich. Manufacturers. Does not approve guarantee and tries to obviate necessity for in- auguration of such practice by having salesmen caution customers not to overload. Eberson-Iindsley Paint Co., St. Louis, Mo. Manufacturers. Guarantee only to date of shipment. Louisville Varnish Co., Louisville, Ky. Manufacturers. Regards practice as unsound but makes no further statement. Benjamin Moore & Co., St. Louis, Mo. Manufacturers. Regards as unfair competition and believes should be prohibited by law, as neither seller nor buyer gains anything. O'Brien Varnish Co., South Bend, Ind. Manufacturers. Imposes assumption of uncertain liability and therefore makes accruate calculations impossible. At all times customers average two 51 months' supplies of their paints on hand, representing about one- sixth of annual production, a proportion too large for taking such burden. Expense of guarantee could, of course, be absorbed in selling price, but do not believe such practice fair to consumers. Pecora Paint Co., Philadelphia, Pa. Manufacturers. Detrimental to business generally, and even though manufacturer would be protected on some raw materials he had purchased there would be some portion of his stock not subject to guarantee, which he would be obliged to sell at lower sum than justified by price at which purchased. As applied to guarantee against own reduction on undelivered part of contract, believe would be fair to so protect jobber. Sewall Paint & Glass Co., Kansas City, Mo. Manufacturers. Can only result in unsettling busines. Sherwin-Williams Co., Cleveland, Ohio. Manufacturers. Expresses opinion that guarantee is economically unsound. Robert Shoemaker & Co., Philadelphia, Pa. Manufacturers. Beyond statement that is opposed to practice does not make com- ment. True-Tagg Paint Co., Memphis, Tenn. Manufacturers. Opposed to practice but makes no other comment. Wadsworth, How land & Co. (Inc.), Boston, Mass. Manufacturers. Price guarantee not founded on sound business principles and op- erates to force competitors to resort to same practice. PAPER. Eaton-Dikeman Co., Lee, Mass. Manufacturers. Do not guarantee prices. At present do not sell for delivery be- yond 30 days. Robert Gair Co., Brooklyn, N. Y. Manufacturers. Guarantee does not harmonize with rudiments of business. Can not conceive of seller pursuing practice unless possessed of gambling temperament. Hartford City Paper Co., Hartford City, Ind. Manufacturers. As manufacturers can not control prices of raw materials and as jobbers would object to contract permitting manufacturer to increase price; believe practice too one-sided to be sound. Manufacturing concern not granting concession could deliberately quote lower price to jobber in order to disturb relations between manufacturer who guarantees and his customer. Lawrence Paper Manufacturing Co, Lawrence, Kans. Manufacturers. Believes unfair practice and no need for same in their line. 52 John Strange Paper Co., Menasha, Wis. Manufacturers. Practice unfair and unbusinesslike. PAPER BOXES. Columbia Box Board Mills (Inc.), Chatham, N. Y. Manufacturers. Believes a great abuse. At variance with sound business princi- ples and works hardship upon manufacturers. Expresses hope that practice may be declared unlawful. Continental Paper Co., Bogota, N. J. Manufacturers. Believes absurd practice and hopes Commission will rule against. Gardner & Harvey Co., Middletown, Ohio. Manufacturers. Do not believe sound policy, as in time of great decline might mean bankruptcy for concerns extending such concession. Not able to buy its raw material on such basis. Smeallie & Voorhees, Amsterdam, N. Y. Manufacturers. Manufactures paper box boards. Expresses opposition to guar- antee but does not give any reasons. Western Paper Box Co., San Francisco, Calif. Manufacturers. Can not and does not give guarantee. Most orders taken subject to price at time of delivery. PAPER ROOFING. Richardson Paper Co., Cincinnati, Ohio. Manufacturers. One of the worst evils in American business. Nothing could induce us to resort to such weak policy, although very trying to meet such competition. During times of brisk demand practice not so injurious, but when output exceeds current demand injects artificial influence in market. Causes waste of material and is dis- astrous to wage earners. PEANUTS. National Peanut Cleaners & Shelters' Association, Trade Association. Suffolk, Va. Association adopted resolution in opposition to guarantee. PLUMBERS' SUPPLIES. N. O. Nelson Manufacturing Co., Memphis, Tenn. Manufacturers. Manufacturers should not be called upon to give such protection, as their raw materials are purchased in open market. Unless manu- facturers able to secure similar protection results in loss to them. Do not believe practice results in saving to consumers. Encourages speculative buying. 53 SALT. Diamond Crystal Salt Co., St. Clair, Mo. Manufacturers. Experience indicates bad method of doing business. Would create liability on which there is no way to estimate and would result in careless buying. Union Salt Co., Cleveland, Ohio. Manufacturers. Except as applied to a concern's own prices and only to date of shipment, believe practice a dangerous one, especially as it affects smaller concerns. Worcester Salt Co., New York, N. Y. Manufacturers. If subsequent to sale to jobber, prices declined before shipment of order had been completed, give jobber advantage of reduction to enable him to meet competitor, but think very poor business policy to rebate for goods on hand. SAWS. E. C. Atkins & Co., Indianapolis, Ind. Manufacturers. Do not make shipments with guarantee. This method exceedingly dangerous, unfair, and unbusinesslike. During period of price ad- vances jobbing trade and dealers take advantage of advance. Profit secured in that manner sufficient to reimburse for losses on falling market. Manufacturer in no position to stand as buffer against loss. If manufacturer guaranteed unsold stocks in hands of dealers, lack of caution on part of dealers would involve manufacturers in untold obligations. Principle wasteful and encourages loose business prac- tices. Practice operates against manufacturers of small resources und against those who have more costly labor understandings. SHOES, RUBBER. Converse Rubber Shoe Co., New York City, N. Y. Manufacturers. Believes guarantee violates fundamental business principle. After title to goods passes from seller to buyer does not believe price read- justment should be made. Produces careless buying and ties up un- necessarily large stocks in hands of dealers. SOAP. West Coast Soap Co.,Oakland, Calif. Manufacturers. Have recently withdrawn such protection and believe practice should be prohibited by law. Encourages jobbers, at expense of manufacturers, to make heavy purchases with speculative intent, and the existence of such large stocks under guarantee acts as a partial bar to new enterprises coming into the market. This effect upon new enterprises constitutes stifling of competition. 54 SOLDER. SoMer Manufacturers' Association, New York, N. Y. Trade Association. At last general meeting of above association, members expressed opinion that the guarantee against decline constituted a pernicious practice and resulted in unfair competition. TACKS. Atlas Tack Co., Fairhaven, Mass. Manufacturers. Our belief that practice detrimental to public interests. Tends to high prices and buyers so protected order beyond needs and make no effort to secure lower prices. Where this practice is in vogue manufacturers rarely, if ever, make purchaser voluntary quotations. Manufacturers who give guarantee resist in every way decline in prices. Absence of guarantee brings greater caution and intelligence in buying. Roberts Corporation, Whitman, Mass. Manufacturers. Regards as unfair competition and does not practice. TIN PLATE. Association of Tin Plate Manufacturers, Pittsburgh, Pa. Trade Association. After thorough discussion, officers of this association instructed that it is the firm conviction of its members that practice is vicious and detrimental. No good reason why manufacturer should assume further responsibility after making sale in good faith and on ac- ceptable terms. Practice is inimical to best interests of those willing to back business judgment with their own money. It places premium upon ignorance, inexperience, and incompetency, and encourages ex- pansion beyond financial resources. No question but practice en- courages speculation. Believe it encourages newcomers to attain in brief time position it has taken others years to attain. Carnahan Tin Plate & Sheet Co., Canton, Ohio. Manufacturers. A disastrous habit, sometimes resulting in loss of dividends to stockholders of manufacturing concerns. Successful business ought to be on solid foundation and not bolstered up through guarantee. National Association of Sheet & Tin Plate Manufacturers, Trade Association. Pittsburgh, Pa. By resolution adopted Januarj' 6, 1920, this association went on record in opposition to guarantee, expressing belief that it placed undue burden on seller, resulting in overbuying and speculation on part of purchaser, undermines confidence, is unfair competition, not good business practice, and subversive of the fundamental principle of contracts, and generally harmful. (Submitted pamphlet contain- ing written expression from some of its members in opposition to practice.) 55 TIRES. Hawkeye Tire & Rubber Co., Des Moines, Iowa. Manufacturers. Now executes contracts with guarantee for period of 90 days from date of invoice. Guarantee encourages reckless buying and tends to hold up prices. Such contracts are a contingent liability to man- ufacturer, and whatever losses ensue must be taken into cost of pro- duction. Stifles competition to the extent that old and powerful companies may exclude prospective newcomers from the field. For illustration: If price declines and rebate is given on goods sold by manufacturer during the year 1918, and such goods are still on hand in 1919, rebate could properly be treated as a loss accruing during the conduct of business in 1918, and would therefore be subject to an amended return and claim for refund of tax, entailing a loss to the Government. Recent decline in tire prices was openly talked about in the trade, and charged to the intention of larger companies displacing smaller ones. If practice is prohibited will have imme- diate effect of reducing prices and toning business generally. Republic Rubber Co., Youngstown, Ohio. Manufacturers. Practice injurious to trade and carries no benefit for public. Lever by which large manufacturers may assume control of market to disadvantage of smaller units. Tremendous rebates paid in past a heavy burden upon business, an obligation too great for small manufacturers to bear. TYPEWRITER RIBBONS. Bestwall Manufacturing Co., Chicago, 111. Manufacturers. Manufacturer forced into position of maintaining high prices, even against his wish. Public suffers from such guarantee. Prac- tice encourages speculation on part of jobbers. MISCELLANEOUS. Geo. M. Bentley Co., Boston, Mass. Manufacturers' Agents. Regards as economic waste and demoralizing to proper conduct of business. The amount guaranteed is actually added to cost of pro- duction and passed on to consumer. Encourages merchants to buy for speculative purposes and does not call for exercise of good busi- ness judgment in fixing volume of purchases. Also causes discrimi- natory favors to important distributors through the payment of rebates in excess of sum actually due them. Experience indicates this latter a prevalent custom. Exerts a demoralizing influence on business ethics. Practice frequently delays reduction of prices and public suffers to such extent. Expresses hope that custom may be made illegal in view of trade's inability to compel such reform. 56 E!ggren Bros. & Co., Salt Lake City, Utah. Wholesalers. Practice unfair and should be prohibited by law. Fred Fear & Co., New York, N. Y. Manufacturers of Novelties. Practice unjust to manufacturers and operates to advantage of large corporations who carry big surplus and can afford to extend guarantee. Encourages jobbers to speculate instead of basing pur- chases on best judgment. John W. Hall, Chicago, 111. Manufacturer's Agent. Sells lard compound ; does not give guarantee and finds it difficult to sell against concerns of large capital that are able to accord this concession. Lamp Standardization Exchange, New York, N. Y. Trade Association. Hy vote of members of above-named exchange this organization has gone on record as opposed to guaranteeing against price decline. Marden, Orth & Hastings Corporation, Manufacturers and Exporters. New York, N. Y. Have had to contend with this vicious practice for years and be- leive should be declared illegal. National Federation of Construction Industries, Trade Organization. Philadelphia. Practice was formally rejected by this organization as imprac- ticable. Sulpho-Napthol Co., Boston, Mass. Manufacturers. Unsound economically and an encouragement to overbuy, creating artificial shortage in manufacturer's market. However, in seasonal goods, can see necessity for such practice. NONCOMMITTAL REPLIES. CONTAINERS. Columbia Package Co., Memphis, Tenn. Manufacturers. Does not pursue practice. Sells at price on date of delivery. COTTON MILLS. Fuller E. Callaway, La Grange, Ga. Manufacturers' Agent. Cotton mills we represent do not guarantee prices, in belief that it is detrimental in periods of inflation. When trade is dull, in cer- tain lines of business, it may be expedient to grant such concession. Believe to be a matter that should be determined by heads of each particular business. HARDWARE. Todd-Donigan Iron Co., Louisville, Ky. Jobbers. Do not purchase with guarantee. Manufacturers stopped practice long since. HARDWOOD. Michigan Hardwood Manufacturers' Association, Trade Association. Cadillac, Mich. Do not believe practice resorted to by hardwood manufacturers nor is it believed to be practicable. Northern Hemlock & Hardwood Manufacturers' Associ- Trade Association, ation, Oshkosh, Wis. . Manufacturers in this industry do not give such guarantee and association not interested in subject. LIVE STOCK. Omaha Livestock Exchange, Omaha, Nebr. Practice not followed in their business. MACHINERY. Mill & Mine Supply Co., Akron, Ohio. Jobbers. Practice followed in lines where jobbers must be encouraged to carry adequate stocks to care for trade. Loss falls upon ultimate consumers. (57) 58 PAPER. Philadelphia Paper Manufacturing Co., Philadelphia, Pa. Manufacturers. Never found necessary to sell goods on such basis and practice not followed in this industry. STOVES. Michigan Stove Co., Detroit, Mich. Manufacturers. Does not give guarantee. Recently its salesmen have been per- mitted to take orders and assure delivery at reasonable advance date at specified prices. TEXTILES. American Textile Co., Atco, Ga. Manufacturers. Have never guaranteed prices. All contracts at fixed price whether for spot or future delivery. VULCANIZED FIBER PRODUCTS. Campbell Fibre Co., Stanton, Del. Manufacturers. Does not reply to specific inquiry, but expresses following view: That Government should regulate all prices. Predicates this view upon observation that competition at times becomes destructive. WIRE ROPE. John A. Roebling's Sons Co., Trenton, N. J. Manufacturers. Our products mainly furnished on special order, not requiring the maintenance of stocks either in our own possession or in hands of agents. FAVORABLE REPLIES, WITH RESERVATIONS. AGRICULTURAL IMPLEMENTS. Thomas Manufacturing Co., Springfield, Ohio. Manufacturers. When trade conditions unsettled believe users of raw material should be protected against decline, as applied to undelivered por- tion of any contract. Facilitates continuous operation of factory and gives manufacturer more intelligent look into the future. In normal times no need for such practice. CRANBERRIES. American Cranberry Exchange, New York, N. Y. Jobbers. There is a custom among shippers and manufacturers of perishable or nonperishable products to guarantee prices. Believe practice tends to stabilize market, increase volume of business, and estab- lish confidence, also lessening spread of prices between producer and consumer. Dealers can work on closer margin, but if subject to loss due to decline of market they are required to get sufficient profit to equal loss that might occur in market decline. On other hand, observation is that shippers and manufacturers generally establish higher prices to enable them to guarantee price. Our association deals entirely with fresh fruit and can not guarantee against decline. We try to fix price that will consume whole crop while in prime condition. HARDWARE. Dunlap Hardware Co., Macon, Ga. Jobbers. At present time on account of delayed shipments believe that man- ufacturer should accord guarantee to date of shipment, but do not stress need in normal times. Fox Bros. Hardware Co., Pine Bluff, Ark. Jobbers Seasonal goods should be purchased under guarantee, but do not see how manufacturer, as a rule, could give guarantee in face of ad- vancing market. (59) 60 Teague Hardware Co., Montgomery, Ala. Jobbers. Favors in abnormal times. In normal times would not favor guar- antee, but in these abnormal times believe that guarantee is justified in view of unusual fluctuations, long delays in transit, and shortage of production. MACHINE TOOLS. National Machine Tool Builders' Association, Trade Association. Worcester, Mass. Following the armistice, fearing disturbed business conditions some jobbers could not be encouraged to buy without guarantee, which did not extend beyond six months. Practice is not now fol- lowed in this trade and is not believed to be good business. PAINT. Lowe Bros. Co., Dayton, Ohio. Manufacturers. Do not approve except as applied to goods sold for future delivery, where manufacturer's convenience is served by permitting more continuous and economical factory operation. By this means job- bers are assured adequate stocks. Paint is a seasonal commodity and we feel that the jobber should be protected, at least until the time when his demand commences. As applied to commodities the price of which can not be controlled by manufacturers the practice would be dangerous to manufacturers, unfair to competitors who did not give guarantee, and would encourage reckless buying. On exclusive agency articles do not believe practice would result in harm. WINDMILLS— GAS ENGINES. Baker Manufacturing Co., Evansville, Wis. Manufacturers. Secures guarantee on raw materials. Price guarantee encourages purchase of adequate future supply raw materials and makes for capacity operation of plant. If such protection were not afforded doubt that season's requirements would be purchased in one order. The Baker Co. has not extended similar privilege to its customers, indicating that their supply is at all times sufficient to accomplish the prompt filling of orders. ALPHABETICAL LIST OF INDIVIDUALS, FIRMS, CORPORATIONS, AND COMMERCIAL AND TRADE ASSOCIATIONS. Replies favoring guarantee against price decline. Page. Advance-Ruinely Co 26 Ainslie-Martin Co. (Inc.) 20 Albany Hardware & Iron Co 20 Allen & Jemison Co 20 Allied Machinery Co. of America 28 American Seeding Machine Co 7 American Wire Fabrics Co ; 33 Anniston Hardware Co 20 Anthony Wholesale Grocery Co 11 Appleton Mfg. Co 7 Armstrong Paint & Varnish Works 29 Atlanta Wholesale Grocers 11 Avery & Sons Co., D. F 7 Babcock, Hinds & Underwood (Inc.) 27 Baker Co., A. D 7 Baker Food Products Co 10 Baker & MacDowell Hardware Co 20 Baldwin & Co., A 20 Banks Supply Co ,. 28 Barker, Rose & Clifton Co 21 Barnes Grocer Co 11 Beckman Co 35 Bedford, E. T 29 Beeman Tractor Co 7 Bell-Wayland Co 11 Benjamin Electric Mfg. Co 27 Bey & Co., John N ^ 11 Blaul's Sons Co., John 12 Bloomington Wholesale Grocery Co 12 Boniface, Weber & Allen 12 Bright & Co 9 Bronson & Townsend Co 21 Brown-Rogers Co 21 Brown-Wales Co 26 Buckley-Terry Co 12 Bushnell Co., F. C 12 Calhoun Grocery Co 12 California Walnut Growers' Association 35 Callahan Co., C 12 Carey Co., The Philip 33 (61) Page. Case Plow Works Co w 7 Challoner Co 7 Chapman & Banks Co 21 Charlotte Hardware Co 21 Citizens' Gas Co 11 Cleveland & Sons, William D 12 Clifton Manufacturing Co 34 Cole Manufacturing Co 29 Columbia Tool Steel Co 26 Columbus Grocery Co 12 Colvin, Atwell & Co 13 Conneaut Shovel Co., The 34 Cooper-Dickinson Grocer Co 13 Corpus Christi Hardware Co 21 Crancer Hardware Co 21 Crook, J. W — — l— 13 Crown Overall Manufacturing Co 29 Crumley-Sharp Hardware Co 21 Cyler & Mohler ' 33 Dabney Bros 13 Deere & Co 8 Dempster Mill Manufacturing Co S De Soto Pal&t Manufactring Co 30 Deutz & Bro., A 21 Dinkins-Davidson Hardware Co 21 Doherty Hardware Co. (Ltd.) 22 Douglas & Evans u 35 Estes Lumber Co 27 Fairbanks Co 36 Farrand, George E 36 Faucette Co 13 Federated Merchants 13 French & Hecht 26 Gilbert Grocery Co 13 Gloster Lumber Co 28 Goddard Grocer Co 13 Goodell-Pratt Co , 26 Grafe Co., A 13 Griffin Cantrell Hardware Co 22 Griffin-Goodner Grocery Co 14 Griffin Manufacturing Co 22 Hamersley Manufacturing Co 31 Hardwicke-Etter Co 29 Harper & Mclntire Co 22 Harron, Rickard & McCone 28 Havana Metal Wheel Co 26 Heisig & Norvell 14 Herschel Manufacturing Co., R 8 Houston Co., James W 14 Huey & Philip Hardware Co _ 22 63 Face. Illinois Wholesale Grocers' Association 14 Illinois Wire & Manufacturing Co 26 Indiana Wholesale Grocers' Association 14 Interstate Hardware & Supply Co 22 Iowa-Nebraska-Minnesota Wholesale Grocers' Association 15 Jett & Wood 15 Jones Co., A. B 36 Keith, Simmons & Co 22 Kelley Axe Manufacturing Co 36 Kentucky Wholesale Co 15 Kerr & McCord 36 Knapp & Spencer '__. 23 Krnkauer, Zork & Moye's Successors (Inc) 23 Lakewood Engineering Co '. : 36 Lansing Silo Co , 34 Lauderdale Cotton Mills 9 Lee Hardware Co. (Ltd.) 23 Lewis Mill Supply Co 23 Libby, C. A 36 Lockett & Co., A. M 28 Los Angeles Grocery Co 15 Louisville Paint, Oil & Varnish Club 30 Lynd, J. E 15 McClung Co., C. M 23 McClure Co j 34 McLenden Hardware Co 23 Mahon Co., Samuel 15 Malone & Hyde 15 Martin Steel Products Co 26 Mennen Co . 34 Miller Co., C. M 16 Monroe Hardware Co . 23 Moore Dry Goods Co., Wm. R 10 Moore Plow & Implement Co 8 Moore-Shenkberg Grocery Co 16 Moore's Sons (Inc.), A. P 16 Mountain Grove Creamery 25 Mullen Co., William D 16 Murchison & Co., J. W 23 National Grocery Co 16 National Wholesale Druggists' Association 9 Nevin Co., T. H 30 New England Chain Works 27 New-Way Motor Co 11 Niles & Scott Co 27 Nixon Hardware Co 23 Norton Hardware Co 23 Odell Hardware Co 24 Oklahoma Wholesale Grocers' Association , „ 16 64 Page. Oliver-Finne Co 10 Oppenheim, Oberndorf & Co 33 Owensboro Wagon Co 8 Pacific Pipe & Supply Co 33 Patterson Mercantile Co., L 17 Penick-Hughes Co 24 Perfect & Co., A. H 17 Powell-Sanders Co 17 Purinton & Smith 28 Queen City Supply Co 28 Radford Grocery Co., J. M 17 Rapides Grocery Co. (Inc.) 17 Reeve, M. E 17 Richardson & Co., W. H 24 Ridenour-Baker Grocery Co 18 Riggs, J. H 18 Roanoke Hardware Company (Inc.) 24 Rowe Co., J. W 18 Russell Hardware Co 24 St. Louis Iron Store Co 27 Sales Extension Co 18 Saunders Sons Co 18 Schmidt & Ault Paper Co 31 Scovel Iron Stove Co 37 Seidlitz Varnish Co 30 Sentney Wholesale Grocery Co 18 Sloane & Co., Samuel 33 Smith, Kline & French Co 9 Southern Georgia Grocery Co 19 Southern Plow Co 8 Southern Supply & Machinery Dealers' Association 28 Southern Wholesale Dry Goods Association 10 Sterling Hardware Co 24 Stone Tool & Supply Co 27 Straud-Dockum Grocery Co 19 Street & Co., E. S 19 Swayne, Robinson & Co 8 Swind Machinery Co 28 Tatum Hardware Co., W. M 24 Thompson-Miller Hardware Co 24 Thum Co., O. & W 10 Tidewater Wholesale Grocers' Association 19 Tips Co., Walter 25 Towers & Sullivan Manufacturing Co 8 Townley Metal & Hardware Co 25 Tucker & Goodwin 19 Tullis-Gamble Hardware Co „ 25 Tyler Grocery Co 19 Tyler & Simpson Co 19 65 Page Ullman, Stern & Krausse 19 U. S. Gutta Percha Paint Co 19 U. S. Wind Engine & Pump Co 37 Wagner Hardware Co 25 Warrensburg Canning Co 9 Wash, Davie & Co 19 Watkins-Cottrell Co 25 Weed & Co., J. D 25 Western Steel & Iron Works 27 Wiles Grocery Co 20 Wilson Hardward Co., E. L 25 Wimberly & Thomas Hardware Co 25 Winona Wagon Co S Woolsey Paint & Color Co., C. A 31 Writing Paper Manufacturers' Association 31 Replies opposing guarantee against price decline. Almond Manufacturing Co., T. R 45 American Coffee Co 40 American Corn Millers' Federation 48 American National Live Stock Association, Market Committee of 47 Arcady Farms Milling Co 48 Aspegren & Co 42 Association of Tin Plate Manufacturers 54 Atkins & Co., E. C 53 Atlanta Refining & Manufacturing Co 42 Atlantic Dyestuff Co 42 Atlas Cereal Co 39 Atlas Tack Co 54 Baker- Vawter Co 42 Barnhart Mercantile Co 49 Bentley Co., Geo. M 55 Berkshire Knitting Mills 44 Bestwall Manufacturing Co 55 Black, Varian & Simon (attorneys for certain glycerine manufacturers) — 43 Bolt, Nut & Rivet Institute 45 Boydell Bros., White Lead & Color Co 50 Butterworth-Judson Corporation 39 Carnahan Tin Plate & Sheet Co 54 Champion Tool Co 38 Coleman-Clark Grocery Co 43 Columbia Box Board Mills (Inc.) 52 Columbian Rope Co 41 Continental Paper Co 52 Converse Rubber Shoe Co 53 Cooper Co., C. W 43 Cotton Thread Manufacturers' Exchange 41 66 Paga. Deal Saw Mills Co 47 Detroit Range Boiler & Steel Barrel Co 45 Diamond Crystal Salt Co 53 Dikenian Manufacturings Co 45 Drill & Reamer Society 45 Eagle & Phenix Mills 41 Eaton-Dikeman Co 51 Eberson-Lindsley Paint Co 50 Eclipse Manufacturing Co 38 Elggren Bros. & Co 56 El Reno Mill & Elevator Co 48 Fageol Motors Co 38 Fear & Co., Fred 56 Gair Co., Robert 51 Gardner & Harvey Co 52 Hagy Waste Works, J. Milton 41 Hall, John W 56 Hartford City Paper Co 51 Hawkeye Tire & Rubber Co 55 Haywood Alfalfa Warehouse Co 38 Henkle & Joyce Hardware Co 43 Hudson Motor Specialties Co 38 Independent Oil Men's Association 49 Johnson Electric Supply Co 42 Kansas Milling Co 48 Kingwell Bros 39 Knit Goods Manufacturers of America 46 Lamp Standardization Exchange 56 Lawrence Paper Manufacturing Co 51 Lorick & Lowrance 43 Louisville Varnish Co 50 MacGowan Coffee Co. (Inc.) > 40 Marden, Orth & Hastings Corporation 56 Maury-Cole Co 40 Memphis Milling Co 42 Mid-West Box Co 39 Millers' Milling Co 48 Mitchell-Powers Hardware Co 44 Moore & Co., Benj 50 Mulford & Co., H. K 39 National Association of Sheet & Tin Plate Manufacturers 54 National Federation of Construction Industries 56 National Peanut Cleaners & Shelters' Association 52 National Petroleum Association 50 Nebraska Millers' Association 48 67 Page Nelson Hardware Co 44 Nelson Manufacturing Co., N. O 52 New Jersey Cloth Co 40 Nowak Milling Co 48 O'Brien Varnish Co 50 Ohio Falls Iron Co 45 Oklahoma Millers' Association 48 Olson Coffee Co 40 Otis Hidden Co 45 Paterson & Edey Lumber Co ■ 47 Pecora Paint Co 51 Peden Iron & Steel Co 45 Penick & Ford (Ltd.) 49 Peters Mill Co., M. C 48 PhezCo 46 Plymouth Cordage Co 41 Puente Oil Co 50 Purity Oats Co 43 Republic Rubber Co 55 Richardson Paper Co 52 Richmond Hosiery Mills 44 Riesener Chocolate Co 39 Roberts Corporation, G. G 51 Root Co., The A. I 44 Rosenberg Bros. & Co 44 Rugg & Co., E. T 41 Sechler Implement & Carriage Co., D. M 46 Sewall Paint & Glass Co 51 Sherwin-Williams Co 51 Shoemaker & Co., Robert 51 Smeallie & Voorhees 52 Smith & Co., Albert D 42 Smith-Courtney Co 47 Southern Corn Mills (Inc.) 43 Southeastern Millers' Association 49 Solder Mfrs.' Association 54 Stockton Box Co 39 Strange Paper Co., John : 52 Summers Hardware Co 44 Sweet-Orr & Co. (Inc.) J 50 Sulpho-Nathol Co 56 Taylor Co., H. D 46 Trimont Manufacturing Co 46 True-Tagg Paint Co 51 Tubbs Cordage Co 41 Union Oil Co. of California 50 Union Manufacturing Co 44 Union Salt Co 53 68 Page. Wadsworth, Howland & Co. (Inc.) 51 Waverly Oil Works Co 50 West Coast Soap Co 53 Westbrook Grain & Milling Co 49 Western Paper Box Co ^ 52 Western Shade Cloth Co 40 Whitlock Cordage Co 41 Wier Lumber Co., R. W 47 Worcester Salt Co 53 Noncommittal replies in re guarantee against price decline. American Textile Co 58 Callaway, Fuller E 57 Campbell Fibre Co 58 Columbia Package Co 57 Michigan Hardware Mfrs.' Association '. 57 Michigan Stove Co 58 Mill & Mine Supply Co 57 Northern Hemlock & Hardwood Mfrs.' Association 57 Omaha Livestock Exchange 57 Philadelphia Paper Mfg. Co 58 Roebling's Sons Co., John A 58 Todd-Donigan Iron Co 57 Favor guarantee against price decline, tvith reservations. American Cranberry Exchange 59 P>aker Mfg. Co 60 Dunlap Hardware Co 59 Fox Brothers Hardware Co 59 Lowe Bros. Co 60 National Machine Tool Builders' Association 60 Teague Hardware Co — 60 Thomas Manufacturing Co 59 ADDITIONAL COPIES OF THIS PUBLICATION MAY BE PROCURED FROM THE SUPERINTENDENT OF DOCUMENTS GOVERNMENT PRINTING OFFICE WASHINGTON, D. C. AT 15 CENTS PER COPY Subscription Price, 20 Cents Per Year TTT T " LOAN DEPT. " N 5WAl$ONlY-IU. NOMM LD 2lA-38m-5 . f-U01slO)476B General Library University of California Berkeley YF 00504 7 /• 1