The Local Economic Impact of Wal-Mart
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The Local Economic Impact of Wal-Mart By Michael J. Hicks

Chapter 1:  The Chain Store Historically Considered
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This odd admixture was remarkably effective at motivating legislative change. It also bears an uncanny resemblance to the present-day critics of Wal-Mart, with perhaps a little less fringe participation.

In 1927, 13 state legislatures saw bills regulating chain stores either by restricting the legal number (Maryland) or specific type (drug stores in Pennsylvania) of chain or imposing graduated license taxes (GLTs) on subsequent stores in a single state. The first to see litigation was Maryland’s law, which limited chain stores to five and levied a $500 fee on each of the second through fifth stores. The case against the state was brought by the Keystone Grocery and Tea Company in the circuit court of Allegheny County. The law was struck down in April 1928 by Judge Albert Doub, whose stinging rebuke of the legislature provides a distant echo to today:

The plaintiff is engaged in an innocent, ordinary, useful and necessary business, permitted and authorized by the laws of this State and every other State. It has made substantial investments in merchandise, stock, legal obligations and commitments for leases and intangible property. One store in the city of Cumberland may pay a tax of twenty dollars [a tax levied on all retailers based on amount of inventory carried] while the chain store will be required to a pay a license tax of five hundred and twenty dollars. … It is impossible to declare that both of them will receive, if this Act is to be enforced, the equal protection of the laws as required by the Fourteenth Amendment of the Constitution (Lebhar, 1952, pp. 117–119, in Keystone v. Huster ).

Judge Doub was particularly strong in his ruling and went further in clearly articulating the benefits to commerce. However, anti-chain legislation continued. The banner year was 1933, during which time state legislatures and assemblies proposed 225 and passed 13 anti-chain laws. See Figure 1.5.