Mr. BALLINGER. That is the important point. You are asking for a law to impose maximum discounts. The Federal Trade Commission has the power to do so, but has failed to exercise it.

Mr. ANDE. Let us go on record as an organization and request the Federal Trade Commission, for Heaven's sake, to do it.

In the matter of tires, and the tire industry, you have testimony this morning from one of our members in the tire industry. To supplement that testimony, I would like to let you know that here in Oklahoma City, in the State and the city, in 1935 there were approximately 25 men who had business dealing in tires alone; there are now 8.

Mr. STEVENSON. You mean men like Fredrickson?

Mr. BALLINGER. What was the population of the State at that time?

Mr. ANDE. In 1935?

Mr. BALLINGER. Have you grown?

Mr. ANDE. Actually I do not know what it may be. Probably 200 to 250-probably about 190,000.

Mr. BALLINGER. You have grown 25 percent; is that right? Mr. ANDE. Oh, yes; 280,000, I believe, they claim now. Of course, you understand those are chamber of commerce figures here.

Now, we have eight and of the eight, one man who had been in the tire business for 22 years is moving out of the tire business into other business because the tire business is no longer attractive.

Why? Because competition from the rubber companies themselves in their own factory-owned stores are causing the boys to leave the business.

Not only are there discounts in this particular case away above what may be called a maximum quantity discount, but the factory itself is giving a discount greater than their own dealers in a community receive. That discount is going to someone who is not a dealer at all, but who is a consumer who actually should buy from the dealer.

An instance? Our own Oklahoma Railway Co. Prior to 1942 and 1943 they bought their tires for their busses from local dealers. In those years Goodyear took an account on a mileage contract from the Oklahoma Railway Co., but the independent dealers were not given the opportunity to bid on it. By whom? It went to Goodyear The approximate business of the railway company is about $50,000, in excess of $50,000 for tires. They are a consumer. They are a large consumer, true. They could be serviced by a local dealer, by an independent operator, by a small businessman, but instead they are serviced directly from the factory. The tires do not come through any dealer of any sort here. The same happened with the trucking companies. The Yellow Transit have the same sort of an account, dealing direct with the factory.

Now, we contend that the large companies do not qualify for a discount, a maximum discount above what a dealer can have. They are not dealers. They do not operate a dealer organization or any type of organization representing the tire manufacturer. They are

a consumer. It is indicated that these large consumers have a better price than the large dealers.

I cannot substantiate the next statement because the man who was directly involved is now dead. One of the tire dealers had this chap make the proposition to one of the local companies who was buying direct from the manufacturers whereby he could have a price at 10 percent below the dealer's cost, and it was turned down because it was still too expensive.

Mr. Chairman, in one other instance I have a quotation I would like to read to you in the case of office supply companies who are also retailers.

When I received this letter back from inquiry, I began calling various supplies of this nature and I found from all of them that they had the same grievance, that a sales agency is maintained by a factory to enter the region in which there are franchises let to deal with the large organizations in that region direct with the factory and ship from the factory to the consumer and the dealer who holds the franchise is out.

May I quote this letter in closing.

The two outstanding nuisances to us, as retailers, and particularly in the furniture and of our business, is, first, to make contracts with so-called large accounts, such as the large insurance companies and concerns of this character. The manufacturers, in most cases, on merchandise shipped into our territory, where we have a franchise, allow us a small overwriting commission.

The second nuisance is a selling agency that sells most of the State schools and colleges steel furniture at practically our cost. This merchandise is shipped direct from the factory to the various schools and is a type of competition which we, as merchants, cannot compete.

That will present as much of a picture as we wish to give right now. Mr. STEVENSON. You have given a very graphic and a very interesting and very helpful picture. It represents a lot of trouble and effort on your part and we want to thank you for it.

Mr. ANDE. We have one of our members who is here this afternoon who has what I believe a case of very definite interest to you. Not only that, there are a number of men in the audience who are here to hear this one particular case. I do not present it as a part of the association's testimony, because I don't have the details. He has all the details.

Mr. Cunningham will present them to you.

Mr. STEVENSON. We thank you.

(Witness excused.)

TESTIMONY OF ROBERT 0. CUNNINGHAM

(The witness was duly sworn.)

Mr. BALLINGER. What is your name?

Mr. CUNNINGHAM. Robert O. Cunningham.

Mr. BALLINGER. What is your business?

Mr. CUNNINGHAM. I am in the advertising agency business, and the publishing business.

Mr. BALLINGER. What is the name of your company?

Mr. CUNNINGHAM. I operate under my own name, Robert O. Cunningham, advertising; and in the publishing end of it, the Oklahoma Bulletin.

Mr. BALLINGER. You may proceed.

Mr. CUNNINGHAM. If I may, I would like to start from the beginning and I will try to make it as concise as possible.

I used to be an employee of the local daily paper here, the Oklahoman Times and the Daily Oklahoman, on the advertising staff. Now I know I made the biggest mistake I ever made in my life to quit them, for I had the money and maybe the ability to go into business for myself. But, nevertheless, I had a wife and a couple of kids to support. I had had a lot of experience in radio and newspaper advertising. I was fresh out of the Army. I really thought I had it on the ball. So I quit them and went into business for myself in January of 1947 to find out that Hitler was a piker in Germany compared to some of the gentlemen you contend with in Oklahoma City. I mean, talking strictly from a business standpoint.

I opened up an office with the employees being myself and a secretary, a couple of desks and a typewriter. I was very fortunate to secure a nice contract that was worth about $80,000 the first year. The business went off very nice. We did a nice job on it. We secured an exclusive contract for handling advertising for a new radio station, KLRR, one of the largest stations in Oklahoma. A man by the name of Mr. Reese gave me the contract.

We started selling advertising in January and up through the 1st of September we had sold something around 75 to 80 thousand dollars' worth of advertising. I sold all of it with the exception of about $7,000 worth myself. As I said, I was one of the employees.

Mr. STEVENSON. You mean you sold it; you got the merchants to buy the time from the station?

Mr. CUNNINGHAM. Yes. Everything went along just swell. I was making money; I was building a little organization; and, of course, I had increased my staff to include continuity writers and so forth and so on. Mr. Reese purchased my contract back from me in September, about the 10th of September, and I went into the publishing business.

You will understand, I worked for a number of radio stations in Oklahoma City as commercial manager of the station and advertising salesman. I never had any trouble selling advertising as long as I had an idea or project. That is the way I make my living, which I think is legitimate.

I opened up an advertising agency at 21 West Main Street shortly after I quit handling the radio exclusively, and formed an organization which consisted of about 95 percent veterans of World War II. We went to the different veteran organizations in the State of Oklahoma and asked them if they had any objections to us publishing a publication, a newspaper that would cater to the veterans and their facilies. Nobody had any objections. We were not playing Santa Claus; we did not intend to turn any part of it over to the VFW, the veterans, or anybody else. We did not intend to use their name to sell advertising and we have not.

We went to the Better Business Bureau. They gave us an okay and we thought we were set.

I had 32 people on the pay roll, on the road doing the labor of sell ing, a secretary, a writing staff, and so forth. I hired the commander of the Disabled Veterans to do my editorial work and a former Associated Press man or UP man. Everything went along just swell

until I found out when I was selling advertising to downtown stores, to men I sold since I was a kid, all at once they began to cancel contracts. So I went down to a couple of them that had canceled out. I said, "What is the matter? What is the deal here? You cannot buy this, Miss Blanchard?"

"We cannot buy from you because Mr. Emmett Barbee, who is secretary-manager of the Retailers Credit Association, has ordered us or suggested or told us not to buy from you until you get an advertising permit to sell advertising on Main Street, Grand, First, and Second between Broadway and Western Avenue."

I had never heard of that before, so I went down to see Mr. Barbee. So he hands me this little deal here which says, "Application for investigation," supposed to be sworn to before a notary public. I filled that out and wrote a little letter on the back which gave a complete history of myself, which I will not bore you with, telling them I was residing here, that I was employed by radio stations, and the Oklahoman-Times.

I thought the thing was all right.

He was very, very nice to me. That was an old song and dance he gave me.

About 2 weeks later I called him on the phone. We had stopped selling advertising downtown overnight; overnight, I repeat. I got him on the phone. He said he is off today. I called him at home. He was very much disturbed, about 11 o'clock. I got him out of bed. I said, "Mr. Barbee, I am sorry to bother you."

He said, "You will have to catch me at the office." I said, "I am paying out good money. I have men on the pay roll. I am losing $200 a day." And that was the truth.

He said, "I do not have time to fool with that today." I said, "That is the point where we are going to have time to fool with it. Have you got somebody who will tell me whether it has been approved

or not?"

"The secret committee has not approved it."

I forgot to tell you about the secret committee. They have a secret committee which approves ads in the newspapers that operate here. The only ones that are approved are the Oklahoman Times, the Daily Oklahoman, and the Oklahoma City Advertiser. Then they have another little number which is called the Shopping News. They own that and they control that.

We are on the black list. In the department stores our names are on the list not to buy from. No reason not to buy from us.

I finally got this Mr. Barbee, who was always very courteous. I go him in his office with all of our associates in the firm, about 8 or 10 of us, or 6 or 7. We went down there to find out what we had done, but he said, "We are not mad at you; we are not sore at you; just too many newspapers in Oklahoma City; too many men on the streets selling ads."

He said, "We do this to protect the businessmen."

I said, "If I make a deal with one of the department stores, it is my business. If he does not think he is getting a square deal he does not have to buy. I am not in there with a shotgun. I do not even collect in advance. I bill on the first of the month. We show him the proof of his ads."

Here is where I really got him. I had cooperative dealers with national firms. I have been in the advertising business since I have been 18 or 19, since I was well-connected with the national firms. I had sold them on the idea of going to 18,000 veterans and their families in one county, for instance. They are all young, aggressive men with families. I sold them on the idea of getting important cooperatives on a 50-50 basis; but the local dealer cannot pay the other 50 percent because Mr. Barbee says I am not fair-trading with them.

I do not get the 50 percent from them if I do run it. I do not run it unless I get the other 50 percent. We fell off from a 32-page paper to I believe 12 pages. I did $75,000 in business last year. Up until today I did $12,000 in business this year.

Mr. BALLINGER. How does this Mr. Barbee get all the power that he gets over these advertisers?

Mr. CUNNINGHAM. Here is what gentlemen tell me who are my friends, who have sold before in other positions, either from the Oklahoman or radio stations: The members are of this retailer association, which is chartered under the Oklahoma laws to solicit credit information and do collection work. There is nothing mentioned in their charter about having secret investigations on advertising firms or newspapers. They say they are afraid not to deal with Mr. Barbee because if they broke the chain, then they will have no real organization for seeking this credit information.

You see, it is a commercial organization, that is all it is.

There are gentlemen in this crowd who belong to it. I kicked in. We joined the organization. We paid them and found out it was going to do no good, and we stopped it.

Mrs. Blanchard is the advertising manager of one of the firms here. One of my men went down there in January and sold her a half-page ad.

Mr. STEVENSON. Do you have a Shopper's News?

Mr. CUNNINGHAM. No, sir; I have it here. Let me show you a copy of it.

Mr. STEVENSON. Is it a daily?

Mr. CUNNINGHAM. No; it comes out twice a week.

Mr. STEVENSON. It is an advertising medium?

Mr. CUNNINGHAM. No. We cover Scripps-Howard features and cater strictly to veterans. We carry all the congressional bills. Mr. BALLINGER. It is a new idea?

Mr. CUNNINGHAM. It is new in this part of the country. We started to offer a service to the veteran. We do not charge the GI for it.

Mr. BALLINGER. You are a veteran yourself?

Mr. CUNNINGHAM. Yes.

Mr. BALLINGER. Service overseas?

Mr. CUNNINGHAM. No, sir. I have been overseas. I didn't see any combat. I am vice commander of the Disabled Veterans. I got mine before I got there.

Last January I had an idea. I cannot think of the general's name or Marine Corps or the division that operates out of Dallas, Tex. But I asked the commander of the Marine Corps if he would contact this paper in January of this year, and if they could use this paper as their official organ for 1 month in their drive for civilian recruits. A captain came to me and took up my idea. I told him I would give