Business: Pep Boys v. Fair Trade

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BUSINESS & FINANCE

Among those seeking justice at the august bar of the U. S. Supreme Court fortnight ago was a string of automobile accessory stores doing business under the corporate name, "The Pep Boys, Manny, Moe and Jack of California." The Pep Boys wanted to overthrow California's so-called Fair Trade Act, which forces retailers to maintain the price of trademarked goods at levels fixed by manufacturers. Challenged at the same time by other appellants was a similar Illinois statute. In a unanimous decision the Supreme Court turned down the Pep Boys, held that such price-maintenance legislation by states was not in conflict with the Constitution.

By last week the implications of this Fair Trade ruling had become the hottest topic in the Nation's retail trade. Many states beside Illinois and California have price-maintenance laws, and in those which do not enormous pressure will be brought to have parallel legislation enacted. Only possible obstacles now are state constitutions. A New York law identical with Illinois' was disallowed by state Courts on state constitutional grounds this year.*

To the little fellow, 'to the inefficient, the Supreme Court's decision looked like the happy end of price competition. To the public it meant only one thing: higher prices. In Illinois last week face powder formerly selling as low as 63¢ could not be legally retailed below $1.10. Even Major Benjamin H. Namm, head of Brooklyn's big Namm department store and a loud advocate of anti-loss-leader legislation, cried in alarm: "Price-fixing as a cure for predatory price-cutting is far worse than the disease itself."