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Inconsistency? Another Macy's rebuttal to Major Namm and the National Retail Dry Goods Association was to ask why they were thumping for "price-control" in the Retail Code at the same time that they were fighting price-fixing provisions of the Drug Code.
The Drug Code said that no branded drug product or cosmetic might be sold at less than 21% below the retail price fixed by the manufacturer. Thus if E. R. Squibb & Sons stamped $1 on a bottle of mouthwash, no one could sell it below 79¢. Most big department stores sell branded drugs and cosmetics, many of them as "loss-leaders." Because of the heavy, steady demand, they are willing to sell them at little or no profit or even a loss simply to bring people into their stores. Under their own code the department stores could not sell them for less than cost plus 10%, but that in most cases would establish prices below those permitted by the 21% clause of the Drug Code.
Disclaiming any inconsistency, Major Namm & friends stoutly retorted that the Drug Code was out & out price-fixing, that theirs was no more than a limitation of loss. But when the N. R. D. G. A. suddenly realized that the manufacturers under cover of the retailers' hullabaloo were quietly passing codes containing similar restrictions against selling below cost, it was highly indignant. Last week it announced that representatives would henceforth attend all hearings on manufacturers' codes to see that nothing was put over on the retailer.
Consumers to Arms-The price-fixing squabble grew so noisy that the din passed beyond conference-room walls. Percy Straus's sidelong argument that retail selling should be a balanced function which, when efficiently performed, passes along price benefits to the consumer, reached the ears of Mrs. Mary Harriman Rumsey, head of NRA's Consumers' Advisory Committee. She perked up her ears and flatly denounced the whole fair practice section of the Retail Code. It was learned that Dr. Alexander Sachs of NRA's Research Division had confidentially reported to General Johnson that "stop-loss" was price-fixing and nothing more. Consumers' leagues, Granges, the American Farm Bureau Federation sniffed a rat and began to howl. To these groups price-fixing in any form meant only one thing: a deliberate attempt to gouge the public.
Agricultural Adjustment Administrator Peek, who is responsible for the Food & Grocery Wholesale & Retail Trades Code, was also alarmed. Retail price-fixing would make it more difficult for him to bring farm prices up to parity with manufactured goods. Though the Food Code went into hearings last week with a price-fixing clause—a 10% mark-up like the Retail Code but split 2¢% to the wholesaler and 7¢% to the retailer—few observers believed that it would get by Mr. Peek.