Music Trade Review

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THE MUSIC TRADE REVIEW, AUGUST. U)hl
lessly in competition with another in the same
community. We have dealers (of well known
standing, too) who berate and falsely represent a
competitor's product or reputation. We have
dealers whose advertising is questionable and
whose merchandising methods are subject to
scrutiny.
"To cure these evils, we need more than Con-
ventions and speeches. That is one reason I pro-
pose to offer practical, workable suggestions and
a procedure which will put force behind out
ideals.
PROFESSIONAL DISCOUNTS
"Permeating the entire blood stream of the
music industry are the infecting poisons of teacher
and professional discounts and sales direct to
schools and institutions. Because the industry as
a whole and esoeriailv ihe i.i'n'
\ L t *_, am
wholesalers have failed to take a unified, courage-
ous stand on these issues, and because dealers
themselves have been lacking a strong local and
national organization, there has been little at-
tempt to correct the vicious and pernicious evils
created in these fields. However, today they are
recognized as evils. Today there is general
agrement as to how to handle these problems.
Backed by the power of a united organization, I
really believe they can be remedied.
COMPLIMENT TO TRADE PRESS
"I wish to go on record to the effect that real
and substantial progress has already been made
in all phases looking to the uplifting of our indus-
try. One of the greatest causes for the improve-
ment in the trade has been the fact that we have
perhaps the finest and most ethical principles be-
hind our leading trade magazines than that of any
industrv. Onr he=>r*s should be enconracr^'i be-
cause of the fearless, honest and frank editorial
policies of our outstanding trade editors and their
staff. More power to them !
CONSTRUCTIVE SUGGESTIONS
"1. Establishment of fair tr^de nrices under the
Fair Trade Laws of each of the forty five states
that have them. The Miller-Tydings Amendment
to the Sherman Anti-Trust La^r n^rnvts s'ates *o
pass laws authorizing the establishment of mini-
mum prices on nationally advertised and trade
marked merchandise. In Ohio we started oper-
ating under this Fair Trade Law less than a year
ago.
MINIMUM PRICES
"The plan is so easy to initiate that it sounds
too good to be true. All that needs to be done is
for a manufacturer to sign an agreement with a
dealer setting forth the minimum prices of his
goods. Here for example, are some five cent
cigars registered under th Fair Trade Laws of
Ohio and other states, and sold in New York. Try
to buy them at less than the minimum price of 5
for 23£1
"Ohio is showing the wayl Especially in the
last five years the Ohio Association has been mak-
ing progress along lines which reallv offer specific
protection to dealers. Already fourteen firms
(who constitute the honor roll of legitimate mini-
mum price leaders) have signed to maintain fixed
minimum prices on their merchandise.
"At the last annual meetim of the Ohio Asso-
ciation, a Resolution was adopted to help carry
out the observance of these minimum prices
throughoutout the State. In this way we intend to
set up in every city and county of the State a
group of men who will check continuously to
see that Fair Trade prices are maintained.
"The specific agency which has done so much
of the practical work in the State of Ohio is the
Fair Trade Committee of the Ohio Music Mer-
chants Association. This has been a Committee
of five merchants geographically selected from all
parts of the state, who have met every month and
fearlesslv attacked the oroblem of bo*h uneth ; cal
advertising and unethical merchandising. It is
they who created our Code of Ethics as well as
our Code of Advertising. They unearthed and
prosecuted violations with great thoroughness,
under our Executive Secretary who is a trained,
experienced lawyer.
"This practical cooperative legal device to elim-
inate the chiselers forever from our midst, is an
activity which alone will mean thousands of dol-
lars in the pockets of music merchants every-
where. Join in the fight in your city and it will
help weld a link so strong that the forces of price
cutting v/ill be eliminated.
PROTECTING PIANO PRICES
"If you ?re an exclusive piano dealer, »r"\ mav
ask, "Do Fair Trade Laws protect me?" This is
a fair question. As you have noted, we in Ohio
are just beginning to take up this all important
question. Our greatest concern has been the
mail order chiseler and the wholesale-retailer. We
have concentrated our attention in those direc-
tions for a year now, and have made remarkable
progress. Yes! We believe we can establish
minimum prices on pianos. Already a number
of piano manufacturers have asked to have their
pianos protected by minimum prices.
WURLITZER SIGNS FAIR TRADE LAWS
"I am proud and happy to announce that this
week the Rudolph Wurlitzer Co. has become the
first piano manufacturing company to sign up
under the Fair Trade Laws of the State of Ohio.
So far as I know, Wurlitzer pianos are the first
pianos listed under fair trade price laws any-
where in the United States. I make this state-
ment modestly, yet sincerely, because it is well
known that personally I have for two years led
in a fight to establish fair prices and honest
practices in this industry, and naturally I am
gratified that my own company is endorsing this
battle by listing its own pianos under minimum
price laws. I had hoped today to announce that
other leading piano companies have done like-
wise. Already a number of the outstanding ones
have had the matter under discussion. We hope
sincerely that you dealers in Ohio especially
and other states as well, will prevail upon piano
manufacturers to sign up before fall.
"The third constructive problem facing the
music industry has also been suggested by oui
Ohio Music Merchants Association. It is "to re-
vitalize and enforce the Voluntary Code of Ethi-
cal Trade Practice under the Federal Trade Com-
mission."
"Minimum price maintenance under the Miller-
Tydings Amendment to the Sherman Anti-Trust
Act and the State Fair Trade Laws enacted in
conformance thereto, depend upon voluntary ac-
tion by manufacturers and wholesalers in initia-
ting fair trade prices. However, they do not cure
other evils which need desperately to receive at-
tention from the trade.
"A history of the efforts of the trade to coop-
erate in standardizing ethical trade practices is an
interesting one. It shows that two separate efforts
were made. It also shows that both fell down
either through neglect of the National Associa-
tion to enforce the Code, or lack of intelligent
legal advice and cooperation at National head-
quarters.
"In 1924 the National Association of Band In-
strument Manufacturers including such well
known firms as Buescher, Conn, Fred Gretsch,
Holton, Martin, York, Leedy, Selmer, and the H.
N. White Co., presented to the Fedral Trade Com-
mission and had accepted by it, a Code of Ethics
which opposed secret subsidies to musicians.
Practically the entire industry was represented in
an agreement accepted and approved by the
Federal Trade Commission, and of which it
stated it would take cognizance of violations
thereof.
"It was a remarkable document 1 The Band
Instrument Manufacturers seventeen years ago
published a common catalog showing all their
prices, and in it actually fixed the maximum
prices for the allowance on second hand mer-
chandise ! They publicly stated that secret sub-
sidies and excessive discounts, cash or through
trade-in allowances, constituted price discrimina-
tion, and are conducive to misleading and un-
fair trade practices 1
"But through failure to properly police the in-
dustry, nothing came of this noble endeavor 1
The National office undoubtedly did not have the
legal aid needed to endorse before the Federal
Trade Commission, the ideals and standards they
had adopted and soon chiselers, cut throats, and
bandits, began their nefarious activities to tear
down and destroy.
"Again in 1934 the industry as a whole includ-
ing the dealers, wholesalers, and manufacturers,
adopted a Voluntary Code which was approved
by the Federal Trade Commission. It was an ex-
cellent statement of ethical operation. The music
industry can well be proud of the program it out-
lined. This group of manufacturers included the
piano industry as well. All factions in the entire
music industry were in agreement on these
standards. It agreed to eliminate misleading ad-
vertising, paying of outside commissions and re-
bates, cutting prices to hurt competition, libeling
a competitor through false statements, and many
other evils.
"A committee on trade practices was created
to cooperate with the Federal Trade Commission
and to perform such acts as might be proper to
put these rules into effect.
"What a fine program to follow 1 What a
shame that these principles were never effect-
ively enforced. The Federal Trade Commission
is not a policing body. It is a judicial aqency,
and when no agency or group of ethical music
merchants presented complaints to them, the
whole Code fell into disuse.
"Today the Federal Trade Commission is more
anxious than ever to assist our industry to estab-
lish a voluntary code of fair practice. Commis-
sioner R. E. Freer, sneaking at the recent Conven-
tion of the Ohio Music Merchants Association
said, 'Rules under Tra^o Co—«T-U«IS'O«\ nr^- ^ u n
are divided into two classes—Group I and Group
II. The Group I rules are mandatorv and mav be
said to have the force of law behind them. They
cover as "unfair" trade practice tvpes of com-
petitive conduct which fall behind the broad in-
hibitions in acts of Conqress. The obliaation to
observe thes rules are binding on all irrespective
of the fact that the alleged oM-n-W n a - h—'<*
refused to take part in the establishment of the
rules or failed or refused to pledge obedience
thereto".'
"My plea to this Association ?nH 'n a'l *h" * 1 ' ; - J
Music Associations meeting here, is to re-estab-
lish rules of Fair Trade procedure—revitalize them
to meet today's need. The method of so doina is
for each Association to appoint a member who
shall serve as a representative of a Coordinating
Committee on Fair Trade procedure, with power
to act in cooperation with the Federal Trade Com-
mission, to definitely complete and put into force
the ethical practices believed in bv all legitimate
and honest music dealers, wholesalers, and manu-
facturers.
"Into this Code of Fair Tr=*rte P'Of-p J »r^ sh~"H
be written standards of fair trade advertising so
eloquently advocated by the recent editorial in
the Piano Trade Magazine for August.
"The Oh'o Music Merchants Ass^ciat ; on has a
Code for Fair Advertising which includes in part
the following:
1. Copy practices disapproved bv the National
Ass'n. of Advertising Agencies.
2. Copy that violates accepted standards of
practices as interpreted by the National
Better Business Bureaus.
3. Bait adverti store throuc-h insincere statements of fact
and intended to fool or mislead the con-
sumer.
4. It is unethical to advertise the phrase
"wholesale and retail" in direct mail or
display advertising.
5. It is unethical to advertise special discounts
to special groups such as professionals,
patriotic societies, schools or teachers.
6. Loss leader advertising is disapproved.
7. False statements and misleading exaggera-
tions and price claims that are misleading
are copy practices which are disapproved.
"This Code is an excellent one. It bcks, how-
ever, that one fundamental PSS^IMAI ih-»t in the
past has caused all previous Codes in our indus-
try like all international peace treaties, con-
ferences, and conventions to fail—THERE ARE
NO SANCTIONS! There is no way of policing
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