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September 20, 1924.
B.I.M.A.CODEISLAW
Federal Trade Commission Accepts and Ap-
proves Code of Ethics Relating to Secret
Subsidies to Musicians Framed by
Band Instrument Mfrs. Assn.
At the request of the manufacturers of band in-
struments a trade practice submittal was held before
Hon. Vernon W. Van Fleet, Commissioner represent-
ing the Federal Trade Commission, at Chicago, on
July 15, for the purpose of affording those engaged
in the industry an opportunity to express their views
relative to alleged unfairness of certain practices
which had prevailed in the industry. Those present
at the meeting were:
F. A. Buescher, representing the Buescher Band
Instrument Company, Elkhart. Ind.; James A. Bell,
representing the Buescher Band Instrument Com-
pany, Elkhart, Ind.; C. H. Taylor, representing
Frank Holton & Company, Elkhorn, Wis.; J. C. Cox,
representing Frank Holton & Company, Elkhorn,
Wis.; A. P. Bassett, representing the Martin Band
Instrument Co., Chicago, 111.; C. H. Flint, represent-
ing the E. A. Couturier Band Instrument Co., Lyon
& Healy, Inc., William Frank Co., Chicago, 111.;
Alfred L. Smith, representing the National Associa-
tion of Band Instrument Manufacturers, New York
City. •
It appeared that the industry had theretofore
agreed upon a code of ethics for the government of
their business, which was announced on January 1,
1924, in a bulletin entitled "Announcement of Elim-
ination of Secret Subsidies to Musicians," which
bulletin, dated January 1, 1924, is in words and fig-
ures as follows:
The Code of Ethics.
The use, ownership, or recommendation of any
make of band instrument by a professional musician,
or by any other person who for some reason may
be supposed to be specially well informed about or
have an exceptional opportunity to judge the real
merits of band instruments, is accepted by the buy-
ing public as indicating honest preference for that
make of instrument, based solely on merit. Thus
a false and misleading impression is created when
there has been a secret inducement of any kind.
The subsidizing secretly of prominent musicians
and others by manufacturers and dealers in band in-
struments for the advertising value to be derived
therefrom, has developed or tended to develop unfair
competition, improper trade practices and unfair
price discrimination to buyers, and has misled the
public. Such condition of affairs is detrimental to
the best interest of both the industry and the buying
public.
There are various methpds of subsidizing profes-
sional musicians. It has been a more or less com-
mon practice to give to bands, orchestras, and indi-
vidual musicians the instruments they require pro-
fessionally. Sometimes the instruments have been
merely loaned. Also in a few cases prominent pro-
fessional musicians have been paid salaries to induce
them to use certain instruments.
Not all subsidies, however, are direct. Preferential
discounts, special instruments at regular prices, extra
plating or engraving on instruments without charge,
"abnormal allowances for used instruments taken in
exchange, i. e. 'traded in,' " special terms of credit,
subscriptions to or payments of advertising or other
expenses of musical enterprises or organizations are
typical indirect subsidies.
Subsidizing Barred.
The granting of subsidies has been by no means
confined to prominent professional musicians. A se-
cret special discount to an influential member of the
village band is no different in effect from the pay-
ment of a large salary to an artist of international
reputation. He may be any person whose ownership
or advocacy of a particular make of band instrument
for some special reason adds to the reputation of that
instrument in the community.
Even when no subsidy is involved, the granting
of excessive allowances for used instruments taken
in exchange is against public interest. It constitutes
price discrimination, and is unfair to customers who
have no instruments to exchange or who trade in
their instruments at a fair valuation. Over allow-
ances are conducive to the development of mislead-
ing and improper trade practices, such as quoting
fictitiously high prices and making false reductions
on new instruments when no used instrument is taken
in exchange. Furthermore, a consistent policy of
granting over allowances on used instruments leads
inevitably to either business failure or to a regular
policy of over pricing of new instruments to the con-
sequent detriment of the buying public. The evil of
granting over allowances is frequently promoted by
ignorance of the real value of the instrument taken
in exchange and the difficulty of obtaining accurate
information on that subject.
The Agreement.
In view of these facts and in the public interest,
the undersigned manufacturers and dealers in band
instruments do hereby agree not to subsidize musi-
cians or others in any manner whatsoever, and to this
end they agree specifically:
1. That they will not give away instruments to
prominent musicians or others;
2. That they will not loan instruments for the pur-
pose of having them used by prominent musicians
or others;
3. That they will not pay salaries, fees, or gratui-
ties to induce prominent musicians or others to use
or recommend their instruments;
4. That they will not grant to prominent musi-
cians or others secret discounts or rebates, or spe-
cial terms not available to retail customers gener-
ally; and
5. That they will not grant allowances in excess
of the actual value of second hand instruments taken
in exchange for new.
The announcement was signed by C. Bruno &
Sons, Buegeleisen & Jacobson, Buescher Band In-
strument Co., C. G. Conn, Ltd., E. A. Couturier Band
Inst. Co., Cundy-Bettoney Co., W. J. Dyer & Bro.,
Carl Fischer, William Frank Co., Fred Gretsch Mfg.
Co., Frank Holton & Co., J. W. Jenkins' Sons Music
Co., Leedy Mfg. Co., Ludwig & Ludwig, Lyon &
Healy, Inc., Martin Band Instrument Co., Pan-
American Band Inst. & Case Co., Harry Pedler Co.,
Inc., H. & A. Selmer, Inc., The Vega Co., H. N.
White Co., Rudolph Wurlitzer Co. and J. W. York
& Sons.
Mr. Greenleaf's Letter.
At the meeting July 15, there was also presented
the following letter from C. G. Conn Co., Ltd., signed
by C. D. Greenleaf, president of the company, and
also president of the Association of Band Instrument
Manufacturers, to the Federal Trade Commission,
dated Elkhart, Ind., July 14, 1924:
"Gentlemen: I regret very much that I am pre-
vented by illness from appearing before the Commis-
sion at this time. I wish to assure the Commission
that this company is in hearty accord with the so-
is your guide for unfailing quality.
The high quality which has characterized
the Strauch Bros. Piano Actions and Ham-
mers for almost sixty years, distinguishes
our latest product, the
Simple in construction they are
dependable in every particular.
STRAUCH BROS., INC.
New York City
OTIS B. JOHNSON,
Secretary.
U. S. MUSIC CO. CO-OPERATION.
The United States Music Co., Chicago, made a
success of its large exhibition at the recent Ohio
dealers' convention in Cleveland. The co-operative
plan of helping the dealers has taken hold in popular
manner, and business with the United States music
rolls has been greatly augmented by it. Sales Man-
ager Ames says that this fall promises to exceed all
preceding seasons in the demand for the U. S. Music
rolls.
CHANGE IN WAVE L E N G T H S .
It is likely that many of the present broadcast wave
lengths will be changed by the radio conference
called by Secretary Hoover. Building of more high
power class B stations during the last year has ex-
hausted the wave lengths from 303 to 546 meters as-
signed to class B stations. Wave lengths for class A
stations are fast nearing saturation.
Announcement is made of the opening of the
Melody Shoppe at 117 East Wayne street, Fort
Wayne, Ind., under the management of Lloyd Gros-
venor.
The outstanding phonograph for any occasion. Enables
you to retail a PORTABLE of QUALITY as low as $25.00.
Size 11^4x14; weight 13 pounds.
Built of QUALITY and SERVICE
There will be a greater demand for Portables this season
than ever before. Don't delay in sending in your orders.
STRAUCH BROS.
STRAUCH BROS.
PNEUMATIC ACTIONS
called Code of Ethics as adopted by the leading man-
ufacturers and jobbers of musical instruments, copy
of which is enclosed.
"I believe that this agreement marks the beginning
of a very desirable reform which will be entirely in
the public interest in every way and that if the
Federal Trade Commission sees fit to give to this
agreement its formal approval, this approval will be
of great assistance in securing adherance to the pro-
visions of this agreement by the retail trade. The
signatories to this agreement may be depended upon
to carry it out, but of course, there is no way by
which the manufacturers can prevent their dealers
from continuing these very vicious practices, if they
so desire. The approval of these principles, however,
by the Federal Trade Commission would have a very
great effect in bringing about the compliance on the
part of the retail trade in general, and if this can be
done, I believe that these practices which have been
so long an evil and a detriment to the public interest
can be finally stopped."
The Commission Acts.
It was represented to the Commissioner that prac-
tically the entire industry was represented in the
agreement set forth above. The parties undertaking
to observe this code of ethics are composed of manu-
facturers and importers of band instruments and they
requested and petitioned the Federal Trade Commis-
sion to give its approval to the principles laid down
in the bulletin and to announce the same to the in-
dustry and the public. After consideration of the
matter, it was concluded by the Commission as
follows:
1. That the Commission accepts and approves the
code of ethics so adopted by the manufacturers of
band instruments so far as the same relates to the
subsidizing of musicians, and will take cognizance of
violations of the same, and
2. That as to other matters covered by said code
of ethics the Commission receives and takes note of
the same as representing the views and opinions of
the industry.
By the Commission:
TRAVELPHONE PORTABLE
A Pneumatic Action bearing the name
327 Walnut Ave.
23
PRESTO
The Specialty Phonograph and Accessories Company
210-212 East 113th Street, NEW YORK, N. Y.
C. G. CONN, Ltd., Elkhart, Ind.
C. D. GREENLEAF, Pres.
J. F. BOYER, Sec'y
World's largest manufacturers of High Grade Band and Orchestra Instruments. Employs 1,000
expert workmen.
AH of the most celebrated Artists use and endorse Conn Instruments.
Famous Bandmasters and Orchestra Directors highly endorse and recommend the use of the
Conn Instruments in their organizations.
Conn Instruments are noted for their ease of playing, light and reliable valve or key action;
quick response, rich tonal quality, perfect intonation, tone carrying quality, artisticness of design,
beautiful finish and reliable construction.
Conn Instruments are sent to any point in the U. S. subject to ten days free trial. Branch store
or agencies will be found in all large cities. Write for catalogues, prices, etc.
C. G. CONN, Ltd.
DEPT. MS.
ELKHART, IND.
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