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The Huron Expositor, 1951-12-28, Page 54 • I' • m 4 3 . 28,.1951 Resale Price (Continued from Page 2) R.P.M. may provide an effective .substitute for combines. If a group ,of distributors agreed among .themselves or with a manufactur- er or manufacturers to maintain prices, that would be a combine. If throagh trade pressure one or more manufacturers can be induced to adopt R.P.M., virtually the same re- sult may be achieved within the law, but with all the harmful ef- fects, as far as •stifling competition is concerned, as were •present in the combine. Evidence heard by the Parliamentary Committee indi- cated that the movement. toward R. P.M. came as often from the retail trade as from manufacturers and its purpose was to achieve by indi- rect means that which, if .achieved by horizontal price fixing, agree- ment, would be illegal. The supporters of R.P.M. say it is necessary to keep the independ- ent retailer in business. But does it give him the protetcion that is commonly claimed? Without it will he really be placed ih a more difficult position? Do not the broader implications of uniform 1 rice fixing possess inherent dan- gers for all concerned including the independent retailer? There is no convincing evidence that the independent retailer has been substantially affected by the absence of. R.P.M. in the past or will be by the removal of it now. If anything, the independent has the smallest share of 'business in Great Britain where R.P.M. is most strongly entrenched. Figures in- dicate that where retailers operate efficiently iii a competitive market they are in no danger of dis- appearing. is- ap•pearing. The present - prosperous condi- tion of retailers is not substantial- ly a result of price maintenance, but of the general level of econo- mic activity. Insofar as R.P.M. has made possible a higher markup Lai- sale, rrsale, it by no means follows that this has necessarily operated to the profit of the retailer. Profit de- pends on turnover and margin per unit. It would be a brave or reck- less man who would insist that lower prices would not lead (and have not led in post-war years) to a. substantial increase of turnovers still very probably to higher profits. Without R.P.M. prices would be determined by competition among distributors. and this would re- q ire the individual retailer to watch costs more closely and work out selling prices on a com- petitive basis. R.P.M. relieves the retailer of such problems, and hype him into a false impression of security. What he too often •fails to see is that this curtailment of his freedom to determine his own 1•riciug Policy will limit ails ability to alter that policy as conditions may require. R.P.M." offers nd pro- tection against the entry of new competitors, cutting down the volume of trade for each retailer, so he must compete in greater service, steadily raising his costs, whittling away his "security." Profit figures show that the in- dependent stands in a very strong competitive position. The ,big store. has some advantage as a buy- er, but this is neutralized by the greater operating efficiency of the independent. Operation expenses of the big stores have increased at a -faster rate than those of the independent The latter, unless he is incorporat- ed, pays no corporation tax, and, is less affected by the increased la- bor abor costs, etc. In addition, many Leople prefer to pay something ex- tra for the local convenience and personal service of the independ- ent. The use of predatory price -cut- ting tactics with the aim of driv- ing competitors out of business and establishing a monopoly is contrary to the public interest—and is il- legal. Such cases are comparative- ly omparatively rare and the fears ordinarily ex- ressed about loss -leaders appear to contemplate something much less, including any striking reduction in price which is widely advertised to attract customers to a particular tore. It is not certain that R.P.M. by t rohibiting loss -leaders is more favorable to the small merchant !than to the large. When t` ere was only one large store in r. commute ity, there was some aciv::n''ge in cutting prices to atm: t c d; 10111- ers. Now there arc usually two or more in a district. Ex es, ve price - cutting as a device For i,t:ractin.g businers. q:sickly readies the stage of dirninish'ng returns. There are only three ways in -;ic•h the Prices of goods can be "':e.; ty competition, by govern- e::t cctt:•ol and by •private inter- s .interests may fix ••••, 11y illegal price-fixing com- '•e- ;r by R.P.M. R.P.M. under r :0 •m circumstances is already :z 1. This Bill is being intro- uced to make it illegal under ell its forms. 11 R.P.M. is allowed to continue to eliminate competition• we shall have to answer four vital ques- timtS by consumers. Is there any 1-c. sc 1c why the independent re- tcri1er who will not take the 'rouble to make himself reason- ,b1y efficient, should be protected rtmder R.P.M.? Why does the little fellow in some trades need pro- tect'on from R.P.M. whereas in :'rocery and hardware trades, in- Jrpendents. when they are rea- •nnably efficient, have kept their •,dare of the trade and profits? 'f the government will not control •'rices itself, is there any, reason why wholesale and retail profit mark-ups should be left to a substantial extent under the priv- Stu Solution to High Cost of Living (From The News Letter of The Canadian Chamber of Inflation is an ahnormal increase • in the money supply in relation to the amount of goods and services available. That inflation has oc- curred in Canada as elsewhere cam not be denied. Since 1939 there has been a great expansion of money in relation to goods. Ac- cording to the Bank of Canada, the active money supply on May 31, 1951, amounted to $4,7.54 millions, 3.5 times the comparable figure of $1,370 millions at the end of 1939. The current increase in the physi- cal volume of services available to Canadians has been, according to the Bank of Montreal, roughly of the order of 85 per cent. Otte of the results of inflation has been a rapid increase in prices --a natural and inevitable result. The most rapid rise in the active money sup- ply occurred between 1939 and 1945 when the war program, requiring at its peak over 40 per cent of the country's gross national produc- tion, was greater than could be met by taxation and saving out of cur- rent income. Since the war, the money supply has continued to grow but at a much slower rate and arose largely out of an in- crease in bank credit for industrial and commercial purposes. Prior to the Korean crisis, there was evidence that inflm- t onary pressures had been absorb - .ed by increased production and by '.higher prices. However, new pres- sures were built up when consum- ers and producers alike embarked upon a splurge of stocking -up in anticipation of shortages. The Gov- ernment moved quickly to put a brake ori inflation. Increased tax- ation, deferred depreciation, higher interest rates and credit restric- tions were all aimed at reducing the amount of money in circulation, the demand for goods and hence, the upward pressure on prices. There are indications now that ate control of manufacturers? Should consumers tolerate R.P.M., whereby the distribution costs and the prices of goods themselves are fixed by manufacturers with- out the safeguard of price com- petition amongst wholesalers and retailers? In the Government's view the answer to each of these questions is "No." This Bill is to make it an offense for a manufacturer or dealer to prescribe fixed or mini - muni resale prices. He may stili prescribe and enforce maximum resale prices. He may also 'indi- cate resale prices as long as he does not require or induce another person to maintain them. 'Commerce) these actions are having the desir- ed effects. Forget 1939 Prices All this, however, is far too tech- nical for the average Canadian. Prices, he feels, are still high and indications are that some prices are going higher. The time has come for Canadians to take a re- alistic view of the situation and to look at the matter of high prices in the light of present day condi- tions. First of all, what is the stand- ard by which we judge the prices of the things, we buy? It is, we think, generally true that we be- lieve the price of butter or the price of a new suit or the price of an automobile is too high In rela- tion to the price of the same art- icle prior to World War II. We do not relate the prices of these things to our present income nor do we think of the cost to us be- ing a •partial payment of the cost of winning the greatest war in his- tory. The sooner we realize that we cannot ever expect to go back to the standards Of prices and wag- es of pre-war days, the sooner we will devote our energies to the more im,portant task of continuing the development of a higher stand- ard of living. In a completely free economy, the law of supply and demand, op- erating without check or hindrance gives full flexibility to prices. We must realize, however, that our economy is no longer completely free. For better or for worse, cer- tain rigidities have been introduc- ed which will tend to maintain prices, of manufactured goods at least, at levels which, from the viewpoint of 1939, are high. Spiralling Labor Costs The three main factors going in- to the cost of manufacture, are sal- aries and wages, raw materials and taxes. In the days of the freemar- ket, taxes were almost negligible and the other two factors were ex- tremely flexible. Today, due large- ly to the operations of organized labor, wages and salaries to a con- siderable extent have become in- flexible. Almost the only adjust- ment and changes which can be made in this respect are upward. Due to the demand of the public for increased welfare services, tax- es too are likely to remain at pre- sent levels or to climb even higher unless some drastic action is tak- en. (In 1952, some $250 million additional revenue must be found to pay for Old Age Pensions). The cost of raw materials consists largely of labor and. to some ex- m•ye A w;i1N At; ti^,'Pr ,l r WsYfiiu 1T Tw HappP New Year It is a pleasure to extend to you, our customers and friends, a most sincere wish for a Happy, Healthy and Prosperous New Year. We wish, also, to say how much we have appreciated the loyal support of all our custom- ers during 1951. It is our firm resolve to try and give even better service dur- ing 1952. HAPPY NEW YEAR ! STEWART BROS, d°�w`IFe�iir�4 •N F.•a` .,r cT•A c .a: .,h i .,Ay ..v'T..N 1-T.;£ rf%•t 'T. %'T • tent, reflects inflation in other lands" Therefore, raw materials, too, become an inflexible cost fat,• tot. With little or co "oss'bility at the present time ,of a downward revision in labor costs, and the costs of raw material and taxes. where must we look for any hope of lower priers? Two possibilities must be explored. The cry of the leftist, echoed by certain elemc pts of the labor movement, is that cur- tailment of profit will provide the answer to both higher wages and lower prices. Labor Points indig- nantly to the fact that profits be - ARMY YEAR-END ROUNDUP Vallaglialaiemearaaneteameaseeeseee For the Canadian Army, the. year 1951 was filled with expansion and far-flung tictivity. Dc*cdti1- ber, 1951. found troops scattered half -way around the world—lighting for the cause of freedom in the F'ar Enst and standing on guard for the cause of peace in Europe. Above, (1) Canada's 25th Brigade sailed acrnsa the Pacific for Korea and the 27th Brigade sailed across the Atlantic for Germany; (2) Across Canada recruits flecked tothe colors as the call went out for men to serve with the Canadian Army ih Germany; (3) In far-off Korea, Canadian Infantrymen fought the Communists almost the year 'round; (4) Also in Koren, Canadian Artillery joined United• Nations forces in laying down the heaviest artillery barrage in battle since the Second World War; (5) General of The Army Dwight Eisenhower and Defence Minister Brooke Claxton are teen on a reviewing stand in Rotterdam as they welcomed troops of 27th Brigade arriving to join N,A.T,O. forces in Germaine; (6) Recruiting opened in the Canadian Wo- men's Army Corps (13.F) for the first time since disbandment after the Second World War; (7) The memorable visit of Princess Elizabeth and the Duke of Edinburgh was felt by the Canadian Army every- where. In this picture the Royal Party board a white jeep •to inspect. the Europe -bound 27th Brigade on historic Plains of Abraham; (8) Rest and relaxation in Japan Is always a highlight for battle weary troops frtii`YI •icbrea; (9 On sh4as at sea, as well, 'rela'tation and fun le symbolic of the high morale that sails on every troopship; (10) Troops from all United Nations fighting in Korea visited Canada in 1951. • On Wednesday, Jan. 2, the of- ficial opening of the Seaforth Curl- ing Club season will be held from 2 p.m. to midnight. There will be lunch. Please leave your ne.me with P. Kling or J. L. Slattery. Teams will be chosen by draw end Fore taxes, earned by industry as! la whole in 1950, were $2,270.000,000 mrre than in 1946 --conveniently, forgetting that salaries, wages and supplementary labor income in-! creased during the same period by $2,978,000,('(10, Actually, Canadian manufacturers earn something less than sev,-n ler cent on the sales. I.r'oe of their goods and, in an ex- panding economy, this is certainly not too much to supply the needed capital for expansion and develop- ment. A drop from this levet of profit to any marked extent would necessitate the use of additional credit, time adding to itlfijttionary te;ssr The $6"0tli) and only other means or lowering prices is by way of in- creased productivity and this must ';e brought about by the workers' themselves, by management, or, rel'erubly, •ty the co-operation of Loth, The record of labor in the ost-war years in the field of in- '•reased productivity, is far from orouraging. Production per work- s' in the civilian labor force, in constant dollars of 1935-1939 pur- chasing power, dropped from $1,857 in 1946 to $1,844 in 1949. ',r skips appointed. Turn outif at all possible. HURON COUNTY'hROia REPORT There would a soar:. ''be as many cattle ,being•Itt*liedits tibia area as in past. year% With all farm- ers having adegtl .�,�Ssffpnlies of both roughage4 ds 1tiid cereal grain.s The supply; .of ,., hielcens, ducks and tuakeyseearaltealotal market is fairly plentliaatailaa average prices are: Turkeys, 69c to &5c; ducks, 49c to 51c, and chickens, 56c to &Se. .a. Hard Work is Answer Lower prices then depend upon :''e increased productivity of the walker, made possible by his un- derstand;ng of the Problem and his willingness to co-operate, and upon he efficiency of management in making all possible technological improvements and developing more o f'lent methods. Junior Hockey Big Opening Carrie! WELLESLEY vs. SEAFORTH SATURDAY, DEC. 29th 9 p.m. Seaforth Community Centre Admission — 50r It is time we did away with the' constant efforts being made to shift the blame for high prices from one group to another, and to face the fact that. to a large extent. what appear to be high prices are but al reflection of our own weak ten -I dency to look at the past instead of the future. Let us face the fact that gen-' erally speaking we are better off, .now than we were in the "thirties" and, at the same time" let us re- alize that we cannot stop now, rest! on our oars and drift to Utopia.! Now is no time for leisure but for; Lard* 'xork and co-operation. We; have the twin tasks before us nfj completing an essential defence program and endeavoring to Ina C prove the standard of living of all Canadians. Try Huron Expositor Want Ads. Phone 41, Seaforth. 'The difference between a cutie am an old maid is that the cutis steps crit with the pohnnies and the old maid stays home with the willies. • A lad applied for a job at a drug store. His interviewer in filling in the form noted his name was - Henry Ford, "hat's a pretty well-knovrlm name, isn't it?" "it ought to be," said the boy. "I've been delivering groceries around this neighborhood for two $'P.a1-Q," The year ahead is fraught with many problems. It will re- quire patience, insight, humility and hard work to solve them. We feel confident that they can and will be solved if we are willing to dedicate our- selves to the task. We hope that 1952 will bring you and yours joy and fulfillment- and to the world a lasting• and secure peace. Ball - Macaulay a 1-j, 1-i, i"i re )1a ; , 4,}r ekaaa 14 ,c.•-„• p We cannot let this Joyous Season pass without extending to you our sincere wishes for a . . . HAPPY NEW YEAR ! The Management and Staff Seaforth Motors Massey -Harris Sales & Service Phone 141 Seaforth taXag-IMO F:. aat ara 1 t— s