There is no State law on the books to protect us here and I have no money to fight him. Mr. BALLINGER. In the advertisements you obtained for your paper, do they advertise products sold in interstate commerce? Mr. CUNNINGHAM. Yes, Mr. BALLINGER. So that you are doing business interstate, not intrastate? Mr. CUNNINGHAM. Let me show you this. Mr. BALLINGER. If your business is entirely within the State of Oklahoma, we cannot be of much help to you. Mr. CUNNINGHAM. Here is a Musterole ad. Here is a kidney-pills ad. I sold both of them. Mr. BALLINGER. You are in interstate advertising for your paper? Mr. CUNNINGHAM. Yes. Mr. STEVENSON. The witness refers to a copy of his paper called The Oklahoma Bulletin of Thursday, May 20, 1948. A moment ago he referred to the World War II honor roll of Oklahoma County. Mr. BALLINGER. Will you give us the full name of Mr. Barbee? Mr. BALLINGER. What is his name? Mr. CUNNINGHAM. He is with the Oklahoma City Retailers Association; Emmett E. Barbee, secretary-manager. It is in the High Tower Building. On what floor, I do not know. That building is at Main and Hudson Street, Oklahoma City. Gentlemen, that is my story. Mr. BALLINGER. Have you told your Congressman, Mr. Monroney? Mr. CUNNINGHAM. No; we have never even published it in the paper. I have been waiting for some action. I am trying to get myself elected to the House of Representatives for this one reason: If we do not have any laws on the books, we need some. I am willing to help myself, but we are going to have to close up if we cannot find a buyer. I hope, if Congress cannot do something, that the State legislature will enact a law where no one man or one group of stores on Main Street can tell one man what he may or may not do. Mr. BALLINGER. That is restraint in trade. Mr. CUNNINGHAM. It is definitely a restraint in trade; that is right. Mr. BALLINGER. It should be investigated by the Department of Justice. Mr. CUNNINGHAM. I do not know who to go to. I talked to my attorney. But I got broke. Mr. BALLINGER. Why do you not file a case asking for triple damages? Mr. CUNNINGHAM. He said "Go and get along with him." My attorney happened to be a very good friend of his. He is a good friend of mine, too. He said, try to get along with him. I have tried to get along with the man. He has been very courteous to me. He has always been very fine to me. But, then, he could talk a Chinaman out of his teeth. Mr. STEVENSON. We thank you. (Witness excused.) TESTIMONY OF DWIGHT HAGEE (The witness was duly sworn.) Mr. BALLINGER. Give your full name. Mr. HAGEE. Dwight Hagee. Mr. BALLINGER. You live in Oklahoma City? Mr. BALLINGER. Where? Mr. HAGEE. 1803 Northeast Twenty-third Street, Oklahoma City, Okla. Mr. BALLINGER. What business are you in? Mr. HAGEE. Retail grocery business. Mr. BALLINGER. And that is the location of it? Mr. HAGEE. Yes. Mr. BALLINGER. What is your complaint? Mr. HAGEE. Prior to being in the grocery business, I was a bank clerk, and decided I would go into business for myself. In 1937 I bought a small store across the street from where I am now located. For 8 years I ran a small grocery there. I bought soap from the jobber. The salesman would come around once in a while and wanted to put it on the shelf, or the specialty man wanting to put the price on it, and one thing and another. I was never offered any soap at any discount. Then I built a store across the street. After the war was over I was not offered any discounts, neither was I offered any discounts during the war. After the war was over I was offered discounts on soap. The salesman would come in, he would look around and say "Now, I believe you can use about 50 to 75 cases. I am here only about once every 6 weeks. That will tide you over until I am here again." He said, "We have several brackets." Then there would be an allowance of 2 cents on this case, and 3 cents on that case, and it would run up to around 7 cents, probably an average of 7 cents on different items. Then he would say "If you can run a handbill we can give you 7 to 12 cents a case on our items. If you can run a newspaper ad we can give you from 12 to 15 cents a case on items." In order to get this little discount that they offered which you do not know how much you are going to get until he was back the next time, you would buy a 6-week supply. When they were back the next time, why, they would settle up for the discount. You buy a 6-week supply, and if the price of soap would go down, you lost. They definitely would not guarantee your floor stock. If you were a large operator, a multiple operator, and you bought a 6week supply and the price went down, they would refund you on that stock that you had left on hand, as to what you lost. When I turned the order in, I would write the order and turn it in to the jobber I designated. The order would come out. So I bought 50 cases and they would send me out, due to a shortage of some kind, 30 cases, 20 cases short. Well, to keep from being out of items, I would order back what I needed to keep my stock up. When he would come around to settle up for the discounts after taking another order, why, I would have to go back and secure the invoice I had given him for the particular amount and bring it out. These cases were short, and he would not pay me a discount, although I had invoices from their houses where I had purchased his soap, but he could not pay the invoice because he did not write the order. The cases in the meantime I had bought to fill in he could not pay discount on that because I had not bought from him. He had to write the order. At the present time, soap would cost me $7.57 a case. That makes it cost 31.24 cents per box. When I sell a box of it, I make 36 cents profit. In the multiple operation of buying you get 15 cents a case discount for advertising. That will give them 51 cents profit per case, or it gives them 41 percent more profit than it does me on a case of soap. I think that is discriminatory against small business to have these brackets set up that way. Mr. BALLINGER. The brackets are too wide? Mr. HAGEE. They are too wide; yes. Mr. BALLINGER. There should be a gradation going up? Mr. HAGEE. I do not know if there should even be a discount. I do not know why the little store should subsidize the big store so they can sell cheaper. If I meet competition now I am supposed to sell at 6 percent above cost. I cannot sell 6 percent above cost and meet competition. Mr. BALLINGER. Have you ever complained to the Federal Trade Commission? Mr. HAGEE. No, sir. Mr. BALLINGER. Do you know what you can do in that respect? Just sit down and write them a letter. That is what they are chartered by the Congress to do-to come out and find out whether what you say exists; whether it is true or not. The name of the complainant is not revealed. There is a very severe penalty for revealing the name of any complainant. That is the only remedy. Mr. STEVENSON. It is a pretty good remedy. Mr. BALLINGER. If we would get the laws enforced, which is quite a problem. No further questions. (Witness excused.) TESTIMONY OF LUTHER F. DICK (The witness was duly sworn.) Mr. BALLINGER. State your full name for the record. Mr. DICK. Luther F. Dick. Mr. BALLINGER. Where do you live? Mr. DICK. Tulsa, Okla. Mr. BALLINGER. You are in the grocery business? Mr. DICK. Yes, sir. Mr. BALLINGER. You may proceed. Mr. DICK. I am beginning to wonder if we have any problems after hearing some of these. As the gentlemen who preceded me gave you the facts, I want to state our greatest difficulty. I want to deal with tobacco and specialty candy and gum and go into the paper tissue matter. Some of them are in short supply, so it is hard to tell what the actual outcome will be. Most of our difficulty seems to come from direct buying by multiple units. Now, by direct buying, I mean selling directly to the retailer. Under the Fair Sales Act in Oklahoma we are fairly well protected on the retaining price of tobacco. We have conceded long ago we are not going to make any profit on tobacco. For instance, to give you an example, on Prince Albert tobacco I handle a dozen cans for 5 years, and have done that for 4 years. That is due largely to the fact that these multiple units buy this directly, set retail prices at under the Fair Sales Trade Act we are permitted to meet. Mr. BALLINGER. What do you sell Prince Albert for? Mr. DICK. Two for a quarter. It costs me $1.45. It brings me $1.50. Mr. BALLINGER. How much profit do you make? Mr. DICK. Five cents. Mr. BALLINGER. Per can? Mr. DICK. For a dozen cans. Less than a half a cent a can. On cigarettes, of course, we are making one and a half cents a package. But gum and candy is fast becoming a problem to us, due to the fact, in a good many instances, it is being sold at a considerable percentage less than we can buy it for. As to Wrigley's gum, there is a shortage. It has not come back on the market completely. We are in and out of it, in other words. There is no surplus of that commodity. The same is true of Hershey bars, chocolate bars. Those bars and that gum are being sold in Tulsa for three for a dime. That means for Hershey's candy, which costs me 95 cents, the jobber is selling for 90 cents a box. There are 24 bars to the box. I heard one of the gentlemen say he had his first offer to buy it. He did not say whether it was Wrigley's or not. I doubt it. So far, we have not had any opportunity to do that, unless you could buy it direct. Gum is costing us 65 cents. You see, there are 20 packages, and they cost you less than 70 cents a carton. Mr. STEVENSON. How can you stay in business? Mr. DICK. You cannot do it. It does not make sense. Mr. BALLINGER. For what? Mr. DICK. Twenty packages. They are selling it for 70 cents, less than 70 cents. There are 20 packages in there. for a dime. There are not quite 70 units in it. ing them 66% cents. They are selling three Mr. BALLINGER. What are they paying for gum? Mr. DICK. That we do not know. We think they are buying it on a direct basis. I mean, a multiple operator. I will use Safeway Stores for example. They have the same problem price here with other multiple buyers here. Mr. BALLINGER. What is the answer to that problem, if you know? It comes up many times. Mr. DICK. That is our chief problem in the food industry today. It is to combat that, and how we are going to do it. It is necessary that we maintain volume stores, and most of us who are operating stores of any size in the food business today realize it is fast coming to that. You must be a volume operator to stay in business. Today you must meet this competition in order to do it. Now, in many instances there are discounts existing that unless we learn of them through some slip we are never given the opportunity to participate in those discounts. I heard the gentleman who testified on meat this morning. I want to ask a question in regard to that. He testified that his order was less than a multiple operator. I have seen the same thing. I happened to be between an A. & P. store and a multiple operator. I have seen my meat order come off the back of a Wilson & Co. truck, and it was larger than the one going next door. Mr. BALLINGER. How many stores are there in Tulsa, Okla.? Mr. BALLINGER. Why do you not find out from people who sell the gum what is their maximum quantity discount, and how much you have to buy in order to get that maximum quantity discount? Why do you not go around and get 10 other grocery stores and all pool your orders? Mr. DICK. I cannot understand why the discrimination of selling. It would be utterly impossible for us to buy a drop shipment of Wrigley's gum. I believe the same is true that the same condition would exist on Hershey's. Mr. BALLINGER. They will not sell you a drop shipment if you buy as an individual store, but suppose you have 10 or 12 other stores so that you would have a central pool agency, they would buy the gum from Wrigley and distribute it. Mr. DICK. That is the point I am trying to bring out to you. I do not think they would let them send the shipment down to me. I do not think I could get the shipment. Mr. BALLINGER. I grant you it is a very vicious problem. You do not want to abolish direct selling if there is any economy if a man can sell directly to the retailer. Should he not be permitted to do that? Mr. DICK. That is presenting a jobber's problem, too, the jobbing end of it. The jobber would be in favor of abolishing direct selling. But here is what direct selling has done. Of course, in one sense of the word it has reduced the consumer prices, yet in some instances, such as candy and gum, it has reduced it so low it is not a safe and sane business. In other words, they are using it for a loss leader. Mr. BALLINGER. It is a matter of dispute as to whether direct selling should be abolished or not. If we are going to have direct selling you would certainly be in favor of permitting everybody to get on the direct selling who wanted to get in on it? Mr. DICK. Yes, sir. Mr. BALLINGER. Provided they made certain standard requirements for quantity purchases? Mr. DICK. Here is the question I wanted to ask you about the Robinson-Patman Act: For instance, where they are delivering to multiple units, and not to their warehouse, but door to door, just as they do to my door, then are they any more eligible for special discounts than I would be, or any other merchant? |