Before our association actually functioned, the registrar was officially informed by the association of its intention, and of the character and scope of its proposed operations. Without being requested so to do, the association from the outset submitted to the registrar its constitution and rules, copies of its minutes and all of the material circulars issued by it, together with its prices. This was done quite voluntarily. The association took this course because it considered it right to supply the registrar at first hand with the fullest information of what the association was doing.

NO OFFICIAL NOTIFICATION.

In letters from the registrar, from start to finish no reference was made to the fact that even an informal, much less an official, inquiry, either by the registrar or commissioner, was in fact being proceeded with. So far as such an inquiry is concerned, the only information which reached the association was in advertisements appearing in the Evening Telegram, of Toronto.

The report presented by the registrar and his colleague, and, as the association submits, prematurely published, involves issues of supreme politicoeconomic importance, amongst others, whether the present methods of distribution, not only of proprietary articles but of all commodities, through the present recognized trade channels of wholesale and retail stores, should, in the public interest, be abandoned.

Attention is drawn to the following extracts from the report:

Page 13. "One of the main reasons for the slowness of the turnover of the average druggist is the large number of druggists in the business. The retail grocery business and other branches of trade are suffering from the same plethora of distributors, both wholesale and retail."

Page 14. "Since the public demand for the goods which once were regarded as the appropriate stock of the drug store is not sufficient to keep all the drug stores profitably active, the remedy has been, not to reduce the number of drug stores, but to change the character of the business to such an extent that the modern druggist is competing with the grocer, the hardware merchant, the florist, the confectioner, the stationer, the tobacconist, the restauranteur, and a host of others.

"Of these retailers also there are already too many, and public needs are more than adequately served by them. But the druggist supplements their services by his own, even though he cannot ordinarily buy to the same advantage, and even though his general operation costs are higher.

"This kind of competition, the competition of excessive numbers, may be the death rather than the life of trade; certainly the public suffers from it more than it benefits.

"In the face of these changing conditions, which

represent a revolution in merchandising methods, the Proprietary Articles Trade Association proposes a rigid system of price-fixing and price-maintenance which would keep trade in the traditional channels of manufacturer to wholesaler to retailer to consumer."

In the view of the registrar, the public are at present being served by too many storekeepers. He clearly wishes to support that small section of the trade in their efforts to kill off as many as possible of what he calls "unit" retailers or "neighborhood stores" by methods which, in his report, he admits are unjustifiable.

It would appear that the registrar is of the opinion that these retailers and wholesalers are a useless excrescence on the body politic, but, despite that expression of opinion, they must be expected to resist extermination.

It is worthy of note that whilst the registrar fears detriment to the public if the number of druggists and other storekeepers is not reduced by ruthless and unrestrained cutting, he has not appreciated the danger to the public which might ensue when the cutters, having wiped out all possible competitors, obtain the monopoly of the distributing business. It is that competition which is resorted to for the purpose of destroying competition and of eliminating a competitor and of introducing monopoly, which is the "unfair competition" that this association is fighting.

ADVERSE CONDITIONS.

The report clearly admits that we are justified in attempting to meet the adverse conditions prevailing. The following extracts from the report show this:

Pages 16 and 17.-"Undoubtedly the unit retailer has a strong case in his protest against the frequent practice of the chain store in selling below cost. This type of price-cutting does not depend on the greater efficiency of the distributor making use of it, but on the advertising value which an extreme price-cut has for the sale of other goods. The dealer's only benefit is through its influence on his other sales. The 'bargain' in one article may create a presumption in the mind of the customer that other articles in the store are equally cheap, and thus general sales will be promoted. The advertised 'bargain' (usually a well-known proprietary) may simply impress the name of the dealer on the mind of the public as a trade-mark is so impressed.

"Such price-cutting has an immediate benefit for the dealer though it may have a bad effect in the long run. As far as the manufacturer is concerned, it increases his sales in the price-cutting establishments, but hinders his sales in those establishments which maintain prices. His product may have the good-will of the public but it lacks the good-will of the dealer since it is a 'cut-price article,' an article which can only be sold in small quantities at the

Page 21. "Where prices have been cut down to or nearly to the cost of the article to the retailer, there has been justifiable complaint."

Page 22. "The conclusions to be drawn from these facts are that a very considerable proportion of the widely-known proprietary articles are cut and cut seriously by the low-price drug stores of the larger cities. This price-cutting is done for advertising purposes and cannot be justified on the ground of large turnover and low operating expense."

Page 23.-"Predatory price-cutting does exist then and to a considerable extent, particularly in the largest centers. Even in those centers, however, all dealers need not and do not meet the prices of the price-cutters. Without doubt such price-cutting is disturbing to the trade and unfair to the manufacturer of proprietaries, but equally, without doubt, its extent is exaggerated. It does not follow, in any case, that the P. A. T. A. is a suitable remedy.'

It will be noticed that the registrar says, "It doesn't follow, in any case, that the P. A. T. A. is a suitable remedy."

In this connection it should be pointed out that as far back as March 30, five months before the P. A. T. A. commenced operations, we voluntarily furnished the registrar officially with information of what we proposed to do. Our letter of that date ends up with the following paragraph:

"If at any time you or the minister have any suggestions to make as to our operations, the committee would be grateful for an opportunity of considering them. Or if the department desires any information about our work, we should be pleased to afford every opportunity, and to place our books and records entirely at your disposal."

THE REGISTRAR'S REPORT.

Without giving us the least indication as to what modification in our methods the department considered we should make in order to meet the evil he now admits exists, and keep within the law, the registrar presented, within nine days after the plan came into force, an incomplete "interim" report to the minister, with a view to its being adopted by him, made public and sent to the attorney-generals of the provinces with intent to place us in the dock as criminals, without, as we have already indicated, giving us the least intimation that he was doing so, or giving us any opportunity to state our case.

If the deductions in the registrar's report are right, it would appear that thousands of retailers and wholesalers are condemned to extinction.

It is obvious that the great trading community of Canada will wish to know whether the view of the registrar, "that there are already too many retailers" is shared by the government.

Again on page 28, the report says "the consumer would welcome a reduction in the number of druggists." What is probably meant by the sentence is that in the opinion of the registrar and his colleague the public should welcome such a reduction. There isn't the vestige of evidence that the consumer in fact would do so.

If the government adopts the views contained in the interim report, are they further pledged to the policy that wholesale and retail storekeepers, unlike any other class of the community, are to be deprived of the right to combine to resist the efforts of those who want to put them out of business?

POLITICO-ECONOMIC ISSUES.

The policy underlying the registrar's report is directed to support a revolution in the whole trading community of Canada. The public at large and the traders in particular will look to the government and parliament not to adopt it on the ipse dixit of a single government official supported presumably, in some degree at least, by one professor of economics.

Issues of such enormous importance should not, it is contended, be dealt with by straining the meaning of the Combines Investigation act far beyond the intention of parliament. The issues raised in that report are politico-economic rather than legal and are of such magnitude that before the government commits itself to them the whole position should be inquired into, preferably by commissioners, say three in number to be appointed under section 10 of the Combines Investigation act, 1923.

It will be clear to the government that if the Combines Investigation act can be strained to the extent which we allege the registrar has strained it, there would be from the traders of Canada of all classes a demand which, in the opinion of the association, would be irresistible, for an amendment of the act which would make it possible that the evils condemned in the registrar's report might be effectively

dealt with.

Here you have a case where the persons involved have acted with perfect bona fides, in the light of day, voluntarily supplying to the authorities full particulars of what they were doing.

In view of any doubts which may be present to the minds of the authorities, we wrote to the registrar in our letter of March 30 (months before we commenced operations) saying:

"If at any time you or the minister have any suggestions to make as to our operations, the committee would be grateful for an opportunity of considering them.”

The object of these preliminary inquiries under the Combines Investigation act is to enable the minister to decide whether he will take the responsibility

of placing in the dock, upon criminal charges, those whose action is called in question.

In this case the people involved are the representatives of a practically united trade who have faithfully rendered services of the utmost value to the whole community.

We are certain that the registrar will not advise you that anything we have done is malum per se. At the most it can only be malum prohibition of the most technical character.

Our objects are commendable from the standpoint of business ethics. What we have done can only be "wrong" if it is found (as we think will not be the case) that a rule of statute intended to correct an abuse did in terms, but not in intention, apply to our activities.

We can only have acted in contravention of the law if our activities have, in the words of the statute, "operated or are likely to operate to the detriment of the public."

Some combines palpably operate to the detriment of the public, but there must be border-line cases where on balance it is exceedingly difficult to decide.

The decision depends upon what constitutes being to the detriment of the public, and this is a question upon which the most divergent opinions might honestly be held.

We contend it is not a question which should be decided by placing us on trial as criminals. The resources of the government for the settlement of the issue, make so manifestly cruel and unjust a proceeding unnecessary. A specially constituted civil tribunal is obviously the more fitting procedure. We desire to refer specially to the following sentence in your letter of October 12th:

"As I read the report, the registrar appears not to have overlooked the arguments advanced by the druggists in favor of price-maintenance, but to have concluded that the method of maintaining minimum resale prices which has been adopted by the P. A. T. A. is to the detriment of the general public."

AN IMPORTANT PRONOUNCEMENT.

We attach immense importance to this pronouncement. There are many indications in the report that it is price-maintenance per se which the registrar condemns. For instance, on page 27 he adopts the following quotation:

"This would seem to be decisive reason against encouraging the fixed price system. It stands in the way of the experimenter. As regards the spread between the producer and the consumer, it looks to the maintenance of the status quo.'

Again on page 29 he says:

"Granted that some retailers have been suffering from their competitors cutting prices below cost, the public is much more seriously affected by a remedy which will establish prices in all stores at an irreducible minimum."

And on page 30:

"From the point of view, therefore, of the evo

lution of new and improved methods of merchandising, collective action resulting in the fixing, for the entire drug trade, of an irreducible minimum price, even though it be based on the operating costs of the most efficient, must be regarded as against the public interest."

These seem to show that the fixing of minimum prices is the mischief which the registrar claims to be to the detriment of the public.

Therefore, what is really in issue is whether "Price Maintenance" on proprietary or branded articles is illegal.

THE POINT IN DISPUTE.

It is the fixing of a minimum retail price for such articles which the registrar declares to be to the detriment of the public-not the methods by which adherence to such prices are ensured.

No resale price can be fixed without something being done which constitutes an actual or tacit contract, agreement, arrangement or combination which has the effect of so fixing such a price.

If the fixing of resale prices is to the detriment of the public, all the methods adopted by the numerous manufacturers of proprietary articles, not only in the drug but in almost every other distributive trade, are illegal under the Combines Investigation act.

In your opinion, it is the method of maintaining minimum resale prices which has been adopted by the P. A. T. A. which the registrar has concluded is to the detriment of the general public.

If you consider that it is our methods of maintaining resale prices, as distinguished from the actual maintaining of those prices which is to the detriment of the public, then we repeat our intimation in our letter of March 30, that we will gladly consider any suggestions you may make to us on this point.

As yet we are in the dark as to where or to what extent the government considers we are wrong.

We trust that if you are inclined to reject our appeal for a new and impartial inquiry, you will refrain from taking action until a responsible deputation, representing not only the association but the trading community of Canada, has been given an opportunity of stating their case to the prime minister and yourself in person or, if that in your opinion involves too much delay, then to yourself and the acting prime minister.

We have in this statement dealt only with general principles and questions of policy, anticipating that you would not desire that we should deal seriatim with all the statements, deductions and expressions of opinion in the report.

We earnestly trust that methods will be found of removing any misgivings the government may have as to our work, and we would like to assist to attain this end.

Signed in behalf of the executive committee.
W. S. GLYN-JONES, Chairman.

The Farmacia Urrutia, San Antonio, Texas, was completed recently and the features embodied reflect a thorough knowledge of the high-class Mexican population for whom the store is designed. Dr. Auriliano Urrutia, the head of the organization, has practiced medicine in San Antonio for the past ten years and has catered especially to the Mexican population of the city. As a result he has built up an enviable following.

Fifteen years ago, when Dr. Urrutia was first beginning the study of medicine, he attended one of the largest medical schools in Mexico. Following his graduation, he traveled through most of the countries of the European Continent and studied in France for a number of years. He first began practice in San Antonio some ten years ago, and the Farmacia Urrutia, designed and erected under his supervision, is the latest step in his long series of efforts at attracting a specific clientele.

The drug store is located on West Houston Street in a district largely populated by Mexicans. The building is of unusual construction, being of tinted, marbleized stone and reflecting, inside and out, a Spanish influence. The drug store is adjoined by a clinic, the interior of which is finished in tile and plaster and decorated in a light green shade. A stained glass window, eight feet wide by ten feet high and costing in excess of $1000, is at one end of a corridor of the clinic. The window is handled in a religious manner and depicts the Virgin of Health. The inscription reads, “I Am The Health and the Life."

The pharmacy proper is finished in white plaster and mahogany, and has some carvings in oak more than 300 years old. In the center of the store, surrounded by antique carvings, is an original oil painting done by the old Spanish master, Dominguez. The painting is insured for $5000, as is another work in oil that hangs in the clinic. These paintings hung originally in the chapel of Carlos the Third of Spain. They were painted in 1528, or nearly 400 years ago.

The store building cost $75,000 without the interior fixtures or stock.

In installing the valuable art objects and in building such features into his store, Dr. Urrutia has set an example that could hardly be followed by the average druggist. But the pleasanter the drug store surroundings, the more business the place does; and this thought is one that should not be lost sight of

by druggists who are erecting new buildings or altering old ones.

Dr. Urrutia has three charming daughters who are in charge of the store. Miss Maria Urrutia is business manager, and Miss Louisa Urrutia is in charge of stock. Another daughter, Miss Dolores Urrutia, is a graduate pharmacist and handles the prescription compounding. Under this staff the store is conducted. A strong sense of hospitality and courtesy prevails in the place.

The doctor's office was formerly in another location, but since the erection of the drug store he has conducted his examinations in the clinic adjoining the store. Pleasant surroundings make for a lot in the client's mind, and this has been borne in mind in the planning of the drug store and clinic. The appeal has been directly to the higher-class Mexican trade and the success of the appeal is demonstrated in the growing popularity which the Urrutia establishment enjoys.

Most of the labels in the store are in Spanish, as are also the soda fountain menus. Many other features are likewise especially for the Mexican trade.

Plate-glass windows cover two walls and invite the passer-by to enter. The abundant sunshine lighting combined with the white interior makes an especially attractive store. Medicines and other stock are well arranged and all standard lines are carried. Cigars, tobacco, candies in bars and boxes, perfumes and other toilet goods are included in the

stock.

The store, although established only a short while, is already proving a paying proposition. The Mexican population of San Antonio is a considerable per cent of the total population, and most of the Mexicans are numbered in the clientele of the place. The importance of class appeal is growing in the drug-store line, and if this establishment is to be taken as typical, specific appeal would seem to be a better business policy than general appeal.

A company in Los Angeles has brought out a soda fountain which appears to be the last word from the standpoint of compactness. Encased in an attractive porcelain case with nickel fittings, it measures 28 inches one way by 36 the other, and is 31 inches high.