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Resale Price Maintenance

Published online by Cambridge University Press:  07 November 2014

C. A. Curtis
C. A. Curtis*
Affiliation:
Queen's University
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Extract

Resale price maintenance raises not only economic problems but also legal ones. Indeed, much of the material on the subject is legal in origin. These legal aspects are, of course, important in showing the nature of the arguments—economic and other—involved, but their importance is mainly with respect to the technique of maintaining the system. For the immediate purpose one can assume that the economic aspects of resale price maintenance are the same, irrespective of the actual technique of enforcement and therefore the legal aspects, as such, can be ignored here.

It may be pointed out, however, that the methods used to enforce compliance with the system are various. In Great Britain, for example, the trade association with contracts for its members and dealers is common. These may be enforced by legal action or economic action such as refusal to sell. In other cases it may be handled by contracts between the manufacturer and the jobber and then jobber and dealer. The actual technique used is usually dependent upon what the law permits; accordingly it varies from jurisdiction to jurisdiction. Of course, the effectiveness of the scheme depends upon enforcement. Paradoxically enough, the better the system is maintained, the greater are the gains to any one dealer in evading it. Thus success tempts the very forces which if not checked will break it.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 4 , Issue 3 , August 1938 , pp. 350 - 361
Copyright
Copyright © Canadian Political Science Association 1938

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References

1 Grether, E. T., Resale Price Maintenance in Great Britain (Berkeley, 1935)Google Scholar, gives an outline of the situation in many industries in Great Britain.

2 Pigou, A. C., Economics of Welfare (London, 1932).Google Scholar

3 Chamberlin, E. H., Theory of Monopolistic Competition (Cambridge, Mass., 1935).Google Scholar

4 Ibid., ch. v and conclusion.

5 Grether, E. T., Resale Price Maintenance, pp. 317–8.Google Scholar

6 McGarry, E. D., Mortality in Retail Trade (Buffalo, 1930), ch. vii.Google Scholar

7 Grether, E. T., “Experience in California with Fair Trade Legislation” (California Law Review, vol. XXIV, no. 4, 09, 1936, pp. 640–700).CrossRefGoogle Scholar

8 Work Materials No. 57, Special Study Section, Division of Review, National Recovery Administration, M. Merrell, E. T. Grether, and Kittelle, S. S., Restriction of Retail Price Cutting with Emphasis on the Drug Industry (Washington, 1936), p. 440.Google Scholar

9 Grether, E. T., “Resale Price Maintenance and the Consumer” (American Marketing Journal, 07, 1935, p. 146).Google Scholar

10 Resale Price Fixing Under the Fair Trade Laws: Special Report by Business Week, August 28, 1937 (New York, 1937)Google Scholar; see also Trade Regulation Review, no. 3, 03, 1937.Google Scholar

11 See Chamberlin, Theory of Monopolistic Competition, appendix E, for some arguments on the infringements of trade-marks.

12 Roos, C. F., Dynamic Economics: Theoretical and Statistical Studies of Production and Prices (London, 1935).Google Scholar

13 Findings and Decisions of a Committee Appointed to Inquire into the Principle of Fixed Retail Prices (Cmd. 662, London, 1920).Google Scholar

14 Board of Trade, Restraint of Trade: Report of a Committee Appointed by the Lord Chancellor and President of the Board of Trade to Consider Certain Trade Practices (London, 1931).Google Scholar