Fair trade laws
Encyclopedia
A fair trade law was a statute
that permitted manufacturers the right to specify the minimum retail price of a commodity, a practice known as "price maintenance
". They first appeared in 1931 during the Great Depression
in the state of California
. They were ostensibly intended to protect small businesses to some degree from the competitions of the very large chain stores during a time when small businesses were suffering. Many people objected to this on the grounds that if the manufacturers could set the price, consumers would have to pay more even at large discount stores. The complexity of the market also made the enforcement of these laws almost impractical. As the chain stores became more popular, and bargain prices more common, there was a widespread repeal of the laws in many jurisdictions. In 1975, the laws were repealed completely.
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
that permitted manufacturers the right to specify the minimum retail price of a commodity, a practice known as "price maintenance
Resale price maintenance
Resale price maintenance is the practice whereby a manufacturer and its distributors agree that the latter will sell the former's product at certain prices , at or above a price floor or at or below a price ceiling...
". They first appeared in 1931 during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
in the state of California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. They were ostensibly intended to protect small businesses to some degree from the competitions of the very large chain stores during a time when small businesses were suffering. Many people objected to this on the grounds that if the manufacturers could set the price, consumers would have to pay more even at large discount stores. The complexity of the market also made the enforcement of these laws almost impractical. As the chain stores became more popular, and bargain prices more common, there was a widespread repeal of the laws in many jurisdictions. In 1975, the laws were repealed completely.