Resale Price Maintenance

May 6, 1937

Report Outline
State Laws for Retail Price-Fixing
Efforts to Fix Resale Prices, 1880–1934
Recent Drive for State Fair Trade Laws
Opposing Views on Price Maintenance

State Laws for Retail Price-Fixing

The Way Cleared by a favorable Supreme Court decision in December, 1936, no less than 22 state legislatures so far this year have enacted laws permitting resale price maintenance. This flood of legislation raises to 37 the total number of states which have placed such laws on their statute books during the depression—all except two since the beginning of 193;). Aimed chiefly at predatory price-cutting, these “fair-trade” acts allow manufacturers to fix the minimum resale price of branded goods to consumers through contracts with wholesalers and retailers. A minimum price fixed in a contract with one dealer is binding on all other dealers selling the same article within the state.

Under federal anti-trust laws, contracts for resale price maintenance are illegal in interstate commerce as restraints of trade. State fair trade acts legalize only such contracts as are executed between manufacturers and distributors within the state. In consequence, unless national manufacturers establish agencies in each of the states in which they enforce minimum resale prices, they are subject to federal prosecution. Sponsored by Senator Tydings (D., Md.) and Rep. Miller (D., Ark.), a bill to exempt resale price maintenance contracts executed under state fair trade acts from the operation of federal anti-trust laws is now before Congress. The bill was passed by the Senate of the last Congress but failed to receive consideration in the House.

President's Opposition to Retail Price-Fixing

Action on the Tydings-Miller bill was postponed, late in April, at the request of the President. Favorably reported by the Judiciary committees of both the House and Senate, the bill was to have been taken up in the lower body on April 27. In a letter to Vice-President Garner made public on that date, President Roosevelt said:

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Commercial Law
Retail Trade