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4, 1924
THE
MUSIC TRADE
11
REVIEW
What Trade Practice Submittals Mean
Policy Followed by the Federal Trade Commission in Solving Disputed Points of Practice in Industry and
Its Effect Upon the Music Industries—Its Efficiency as a Remedy Through Elimination of Litiga-
tion—Written Exclusively for the Music Trade Review by Waldon Fawcett
"TRADE practice submittal" of the band
instrument trade was recently completed.
Following close on the heels of the sub-
mittal wherein music publishers came to an
understanding with regard to the pricing of
sheet music, this latest development is well
calculated to do more than stir passing curiosity
in the trade. Rather will it prompt searching
inquiry as the character and the purpose of the
trade practice submittal and what it is doing
or is capable of doing for the music trades.
Right at the threshold, it ought to be asserted
most emphatically that there is nothing of men-
ace to the trade in the idea of the trade prac-
tice submittal—nothing to frighten the indus-
try. Quite the contrary. The fraction of the
musical outfitting community that has already
sat in at submittal sessions realizes full well
that the aim is wholly constructive, not destruc-
tive. But members of groups in the music
trades for whom the new agency has just ap-
peared upon the horizon may need reassurance.
If any members of the music clan are appre-
hensive regarding this new manifestation of
government in business, it may be because the
Federal Trade Commission is the promoter of
the scheme. Granting that the Trade Commis-
sion has done much for the music trades, as,
for instance, in disciplining "gyp" dealers and
frowning upon the practice of marketing used
instruments as new, the bald fact remains that
not a few members of the trade look upon the
Federal body as prying and meddlesome. Hence
any project that originates with the so-called
"supreme court of business" is likely to be
looked upon with suspicion.
Involves No Authority
To set matters right, forthwith, it should be
stated that while the "trade practice submittal"
is a by-product of the activities of the Trade
Commission it involves no exercise of the Com-
mission's authority. There is nothing compul-
sory about it for the business men who are
invited to attend. Trade practice submittal is
simply a pleasant name for a conference or
council of the forces of a trade or industry.
It cannot be described as an open forum. It
is a free-for-all in the sense that every factor
in the trade has a chance for his say. But only
the opening session of the average submittal
is open to the public or to interested bystanders.
After that, the participants in this round table
affair go into executive session where they may
speak their minds free of eavesdroppers. Not
even are representatives of the Commission
present at such closed sessions.
Now for a statement of the Trade Commis-
sion's part in the average submittal, of which
ten have already been held in various lines of
business and five more are slated. The invita-
tions are issued in the name of the Commis-
sion. When you come to examine the situation
there is very good reason for this. Indeed from
the keynote of disinterested impartiality thus
struck may spring whatever success attends the
project. Coming from the Trade Commission,
the invitation to parley is likely to be accepted
by the members of an industry who are outside
the trade organizations. Usually it is a simple
matter, if a submittal promises correction of
trade irregularities, to secure the co-operation
of the trade associations in the field to be
covered. But however thoroughly a trade may
be organized, there are always some independ-
ents who, for one reason or another, remain
outside the fold. The very essence of reform
via trade practice submittal is unanimous con-
cert of action. Hence there is a start in the
A
proper spirit if the Trade Commission is ac-
cepted as "next friend" by all parties.
Washington Initiative
There are also practical, material reasons why
the initiative at Washington is not to be
scorned. The Trade Commission foots the bills.
It sends out the invitations, provides a meeting
place, furnishes stenographic and secretarial
services, reports the result of the meeting to
non-participants in the trade and, finally, carries
out the routine correspondence necessary to
the acceptance by all hands of whatever agree-
ment as to ethical practices shall have been
reached at the submittal. Also the Trade Com-
mission's staff specialists are always available
to work out the program and procedure for
visiting business men if the latter find them-
selves somewhat at sea in carrying out a sub-
mittal.
If, by way of proving the detachment of the
Federal Trade Commission in the premises, you
say that almost never has a trade practice sub-
mittal been held at the instigation of a trade
body your business friend will smile cynically.
How then does it happen that Washington
seems always to start such things? The an-
swer is that the Trade Commission gets the
blame or the credit, as the case may be, because
the Commission acts in the open. It has already
been pointed out that the Federal body acts
as trade crier to get the forces of an industry
together to agree upon standards of practice.
But in virtually every instance the Trade Com-
mission has been asked, by forces within the
industry, to do just what it is doing.
To be entirely frank, it should be stated that
in one respect the Trade Commission must
plead guilty to applying indirect pressure to
bring about a trade practice submittal. More
often than not the desire within a trade for a
trade practice submittal comes after the Federal
Trade Commission has commenced to inquire
into the legality of certain practices that are
rife in the trade. There may have been no
formal indictment. Probably the Trade Com-
mission has not issued a complaint in any case,
much less a "cease and desist" order. But let
the field agents of the commission so much as
start a preliminary investigation and the news
travels fast. It is sound common sense which
makes a trade prefer to set its own house in
order rather than to wait for the Trade Com-
mission to do it with all the attendant unpleas-
ant publicity.
Certain Instances
In certain instances—and there are rumors
that this is to apply to certain branches of the
music trades—the Trade Commission is asked
to conduct a trade practice submittal personally
when the trade body has not so much as lifted
a corrective finger. Self-starting projects are
due to the deepening realization in all lines that
it is a pretty good thing for a trade or industry
to have a code of ethics or set of principles to
tie to. Backing up this first realization is recog-
nition that the trade practice submittal is a
convenient and inexpensive means to the end.
There is no question but what the presence of
Uncle Sam as host to the arbitration meeting
has a wholesome effect. It has happened more
than once that the Federal Trade Commission's
bid persuaded to sit down together, like the lion
and lamb, antagonistic business enemies who
could never before be induced to remain in the
same room.
One advantage of the trade practice submit-
tal scheme has been unfolded only as the move-
ment has made progress. This is the facility
afforded for rooting in the commercial world
at large what might be termed a basic code
of business ethics. Fundamentally, the trade
practice submittal is an adventure in specializa-
tion. It could not well be otherwise, seeing
as how every trade and industry has its special
weaknesses, abuses, and border-line practices.
But for all the urge of these "local issues" it
is becoming apparent, as the trade practice sub-
mittal marches on, that there are certain basic
principles of fair dealing that may profitably
be declared by all lines and that when publicly
subscribed to, with Uncle Sam as witness, will
operate to reassure the purchasing public.
As a Remedy
In the guise of a remedy, of which large or
small doses may be taken at will, the trade
practice submittal is an agency that will make
it easy for the various sections of the music
trades to cultivate trade "consciences." Better
than that, though, it gives the trade a chance
to lay before the Trade Commission a round
robin expressive of trade sentiment regarding
practices which may have justly or unjustly
been called in question. In discussing the use-
fulness of the trade practice submittal it is cus-
tomary to assume that almost every line of
business has a few secret sins which the sinners
(Continued on page 14)
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