Signed by Pennsylvania's Governor George Earle in Harrisburg last week was another chain-store tax bill. It was not of the Louisiana variety, in which the graduated levy is calculated not on the number of stores within the State but on the total number of units in the system (TIME, May 31). But the Pennsylvania tax will be even harder on the chains than the Louisiana levy, because Pennsylvania is a more important chain-store State. Great Atlantic & Pacific Tea Co., for instance, has 2,100 stores in Pennsylvania, only 106 in Louisiana. And the Pennsylvania tax rises from $1 on a single store to $500 for each unit in a system with more than 500 stores in the State. The A. & P.'s bill $1,050,000 a year.
Not without a tussle had the Pennsylvania tax been jammed through at the personal command of Governor Earle. The chains amassed petitions from their customers, lined up the press and the farmers in almost solid opposition. Once last spring after Columbia Broadcasting System refused to allow speakers to blast the bill in an A. & P. broadcast, big advertisements appeared with the scarehead: THIS is THE STORY THE RADIO KEPT FROM You. Below the condensed versions of undelivered speeches were the signatures not only of the principal chains but also of the Chester County Dairymen's Co-Operative Association, the Lehigh Valley Co-Operative Farmers' Association and the South York County Dairymen's Association.
Meantime the chains hammered with a joint advertising campaign of their own with themes like these:
Will you be better off if your food bills are increased?
Will the Pennsylvania Legislature raise the price of food?
Legislators meeting in Harrisburg: Will you take the responsibility for cutting the wage of every worker in Pennsylvania?
At one time the unhappy legislators showed a disinclination to accept any such responsibility, and the measure was defeated in committee in the Democratic Senate. The chains thought they had won. Suddenly Governor Earle put the so-called Store Tax Bill on his list of "must" legislation, turned on the kind of bone-crushing political pressure for which Pennsylvania, Democratic or Republican, is justly famed. The Governor's philosophy: "Let's have many small capitalists instead of a few large ones."*
But Governor Earle, whose personal share of the country's un-redistributed capital is considerable, was to hear from the chains once more. Last week in what looked like an adaptation of the Sit-Down, the chains closed hundreds of their Pennsylvania stores with a bang, After turning the key on 80 stores in & around Philadelphia, an A. & P. official announced bluntly: "The stores we have closed couldn't have operated at a profit under the tax. Those where the volume of business is such that the business will show a profit after including the tax will be kept open." P. H. Butler Co. shut down one-fourth of its 200 units. American Stores closed about 70 stores and stated: "Moreover, the stores will not be reopened. We have removed the goods and fixtures, locked the stores up and returned the keys to the owners in the hope they may be able to find some new tenants."