This natural elimination is part of the free enterprise system. This system has enabled our food bill to be as low as it is.

Senator HART. I am sure you believe that.

Mr. BICK MORE. Yes, definitely.

Senator LAUSCHE. You may proceed.

Mr. BICKMORE. Let me emphasize that any administratively required changes in the structure of the packages of crackers will lead to price increases.

Higher costs will have to be passed along-and no one can see how the consumer will benefit.

It seems to me, proponents of the bill, in many instances, seem to feel you can change these expensive packaging lines at little or no cost. Of course, this is not the case.

Finally, this bill will have a seriously adverse effect upon packaging research and development.

Doesn't standardization of any kind of inhibit invention? Who will strive to find a more convenient package if Government edict may prevent its use? Who will finance exploration work in the laboratory if rules cannot be changed-or if there is even uncertainty about changing them?

America has progressed by the development and risk taking of new ideas and new ventures-not by mandatory clinging to the old. I worry lest this standardization result in freezing yesterday for our children.

More than 150 Nabisco people spend full time, or part time on package improvement and development.

This spring our technical packaging experts-that is in the fields of materials, machinery, and printing-have put together an exhibition of possible new ideas in functional packaging. They have used new materials, new concepts, new structures. None of these suggestions exist today; the machinery has not been invented, developed, or designed; no costs have been calculated. Much development time and money lies ahead.

We expose these new ideas to our marketing and operating people to determine to which, if any, we should devote efforts to research, perfect, and install.

Let's consider a very common grocery product-frankfurter rolls. Housewives tell us they would like more flexibility in the number of rolls they buy.

So our people have come up with what we believe is a new idea. Here it is!-a long chain of individually wrapped and sealed frankfurter rolls.

The housewife could buy as many as she needed-no more, no less. Since the net weight of each roll is 1/10 ounces. I assume there is, so far, no trouble for us.

Now, the machine that will do this does not exist. But we think it can be built. Also, we know that it will be expensive and that it will have to be permanently installed. That means that all our frankfurter rolls will be so wrapped.

If, besides offering single rolls, we also wish to continue to offer packs of 8, 10, or 12, we will have to bind these units togther-perhaps like this.

Will this be permissible under any finding that only even-ounce packs are legal? Well, the 10-pack would weigh 11 ounces, and I can't even be sure of that, because the total ounces are an uneven number.

Here is another example of forward packaging thinking which Government rulings could imperil. We also sell cup cakes and other soft cakes that are wrapped in film and labeled.

As you can see, they crush easily in handling. Housewives squeeze them, testing for freshness, and the icing frequently sticks to the film. Not very satisfactory-from our standpoint, or from the consumer's. Look at this suggestion. Clear, rigid plastic protecting the cakesand look at the increased appetite appeal both in the store and on the table. Should we proceed with the costly development of this possibility?

It would have other applications, too. Nabisco cookies are often used for picnics and lunch boxes, for school and work. Here is how this same clear, rigid plastic packaging idea could offer cookie buyers more satisfaction.

But some of these will weigh more than 2 ounces and it would be luck indeed if any reasonable number of varieties came out to whole ounces, odd or even.

What then do we do? Take a chance on a favorable ruling sometime in the future? Or do we abandon an idea that promises more convenience and more satisfaction to American households?

Perhaps we should curtail all packaging research until we know it is safe to go ahead.

So to sum up.

Our company is firmly convinced that this bill would not be in the best interests of consumers.

Our basic objections are these:

(1) The legislation would respond to no established or proven need; (2) Many of its provisions overlap existing law;

(3) It would authorize unwarranted and restrictive controls over packaging and labeling practices;

(4) Cost to the manufacturers would be increased which would weigh more heavily against small manufacturers than large ones;

(5) Because costs must be passed along, consumer prices would rise. The objections of our company spring from our firm belief that its restrictive provisions would impose irrational conformity in the name of rational choice.

We believe these proposed controls would be wholly arbitrary and would hamper our ability to respond to changes in customers' needs. It would greatly reduce our incentive for improving packaging; it would lead to the regimentation of grocery shelves and the customer would pay higher prices and at the same time lose the freedom of choice she enjoys today.

Gentlemen, I have given this bill a great deal of thought. I have followed closely the arguments of its proponents. I do not believe it is possible to write into law what they favor without discrimination, by the law or by rulings under it, among competing manufacturers. I think it likely that smaller business would be most hurt.

I am sure the consumer would suffer, both immediately and longterm. I do not believe its passage is in the best interests of the people of the United States.

Thank you.

(The statement follows:)

Lee S. Bickmore was elected president of National Biscuit Co. on April 25, 1960, at the age of 51. In January 1961 he was named chief executive officer of the company.

Mr. Bickmore became president of Nabisco after 27 years of service with the company. Born in Paradise, Utah, in 1908, he attended Utah State University at Logan, 1927-31, where he majored in business administration. He is a graduate of the Harvard Business School's advanced management course, 1949.

Mr. Bickmore began his selling career in 1933 at Nabisco's sales branch in Pocatello, Idaho. Subsequently, he worked as a salesman and special salesman at Salt Lake City, and returned to Pocatello as branch manager in 1943.

In 1946, Mr. Bickmore was transferred to the sales department of Nabisco's general office in New York City, as assistant merchandising manager. Later that year he was named district sales manager, with headquarters at Newark, N.J. In 1949 he returned to the general office as administrative assistant to the vice president for sale.

The following year, 1950, Mr. Bickmore was appointed vice president for sales, advertising, and marketing. In 1957 he was elected a senior vice president and became a member of Nabisco's executive department which directs overall policies and planning. In 1959 he was elected executive vice president and a member of the board of directors.

Active in business and industrial organizations, Mr. Bickmore is chairman of the marketing committee and a member of the economic advisory committee of the National Association of Manufacturers; a member of the planning council of the Presidents Professional Association, Inc.; chairman of the executive committee of the Grocery Manufacturers of America; a member of the finance committee of the Citizens Public Expenditure Survey; a member of the executive committee of Biscuit Bakers Institute, Inc.; a member of the American Bakers Association's National Affairs Committee; chairman of the membership committee of the Food Law Institute, Inc.; a member of the finance committee of the Academy of Food Marketing, St. Joseph's College; a member of the executive committee of the New York chapter of the Arthritis Foundation, Inc.; a member of the industries advisory committee of the Advertising Council.

Mr. Bickmore is also a director of American Motors Corp., Bankers Trust Co., Carrier Corp., the Mutual Life Insurance Co. of New York, and the Western Electric Co.

He is married to the former Ellen McMin. The Bickmores reside in Short Hills, N.J.

STATEMENT OF LEE S. BICKMORE, PRESIDENT, NATIONAL BISCUIT Co.

My name is Lee S. Bickmore. I am president and chief executive officer of National Biscuit Co. I have been associated with the company since 1933, the year after my graduation from college.

I should like to express my appreciation for the opportunity of appearing before the Commerce Committee. National Biscuit Co. has taken a deep interest in the investigation of packaging and labeling practices since it started in 1961. In February of 1962 at the request of the Antitrust and Monopoly Subcommittee of the Judiciary Committee I appeared and stated my views on the investigation of packaging and labeling then being conducted pursuant to Senate Resolution 52. In 1963, I submitted a statement to the Judiciary Committee in which I stated the position of my company in regard to the bill known as S. 387.

We have cooperated with the consumer program inaugurated by the late President Kennedy and since carried forward by President Johnson. Following the appointmnet of Mis. Esther Peterson as Special Assistant to the President for Consumer Affairs, representatives of our company have been present at all the White House consumer conferences held throughout the country in 1964. I have met with Mrs. Peterson as have other Nabisco people and she recently visited our bakery in Philadelphia.

The views I am expressing today, therefore, are the result of thorough study and deliberation and represent sincere convictions based on our years of experience in attempting to meet the wishes and needs of American consumers.

My comments are intended to apply to the food business generally. They will. however, include specific references to the problems and experience of National Biscuit Co.

We of the food industry are gratified that here in America, operating under our free enterprise system, our industry has made this the best fed Nation in the world. Our consumers have a broad selection of fine foods from which they choose, each in accordance with her own tastes and preferences. The abundance, quality, and price of these foods are unmatched anywhere. They represent a splendid value to consumers, who spend a smaller percentage of their income on food than do the peoples of any other country. Our competitive system has kept food prices on a favorable level which has acted as a steadying brake on the cost of living. This abundance and variety of foods has contributed heavily to our high standard of living. The fact that we are a well-fed Nation is certainly one of America's strongest defenses against the worldwide advances of communisim.

The ability of the U.S. food industry to meet the needs and desires of consumers didn't develop by chance or accident. We have seen a tremendous revolution in the industry within a comparatively few years. To meet the needs of a rapidly growing population we have had to rebuild our industry to the concept of the mass production, mass distribution, and mass selling of food products. It is this concept that is responsible for the amazing growth of the American supermarket-the envy of consumers the world over. Model supermarkets, which have been a part of U.S. exhibits at many international fairs in recent years, have been show-stoppers wherever they have appeared. They have, I feel, made a favorable contribution to the image of our country overseas.

Mass production, mass distribution, and supermarket selling are the keys to dispensing food on a low-cost basis. It is not possible to hold the food price line in any other way. And from the standpoint of the producer and manufacturer. perhaps the chief factor is his ability to do his part of the job lies in his packaging operation. You certainly couldn't do it under our old cracker barrel system of the small grocery store, measuring out desired quantities from bulk containers and dropping them into paper bags. Mass packaging is an integral part of mass production. In these modern food plants, the speed of each processing and manufacturing operation is governed by the length of time it takes to get this flood of production into packages.

We at Nabisco are proud of the part our company has played in the development of the food industry. Nabisco was incorporated in 1898. Shortly after that, it introduced "Uneeda Biscuit," the world's first packaged eracker and, in fact, one of the first packaged grocery store products. Uneeda Biscuit ended the unsanitary cracker barrel and heralded the thousands of grocery packages now arranged in thousands of supermarkets everywhere in the United States. These endless rows of packages contain the finest, most sanitary, most nutritious foods in the world.

I would like here to insert a comment on Nabisco's business philosophy. We believe, very strongly, that the principal reason we are in business is to earn the right to make a profit. We earn this right only by giving consumers the best values possible. Nabisco is very much aware that it can succeed as a company only to the degree that it can succeed in satisfying the needs and wants of American consumers.

As a consumer goods company, we are acutely conscious of consumer needs and preferences. We work hard to learn them. We study them. We go to consumers for this information. We believe that in our business we must start with the housewife and then work back, gearing our selling, distribution, packaging. and production practices to those methods best fitted to meeting her requirements. We know of no other way to successfully conduct our affairs.

Since 1945, Nabisco has spent more than $225 million on building and equipping the most modern bakeries in the world. They were designed and built to operate on a straight-line production basis. Raw materials are received at one end and finished product leaves the other. The backbones of these great plants are their continuous ovens. These ovens, which were designed and built by Nabisco engineers, are 300 feet long. Each is capable of producing many millions of crackers and cookies daily.

Such prodigious production is possible only because these ovens are served by high-speed, automatic packaging machinery capable of keeping up with them. A single oven bakes 40,000 pounds of saltines in an 8-hour shift. The packaging line servicing this oven has to be able to handle 40,000 1-pound packages—— better than 83 each minute, more than 1 per second.

Incidentally, Nabisco would be pleased to have this committee and its staff tour one of these bakeries to see how great is Nabisco's interest-and investment-in providing packages to please and satisfy the American family.

With this introduction as background, I should like to present the position of my company with reference to the proposed Fair Packaging and Labeling ActS. 985. A good deal has already been written and spoken about this legislation, and I do not propose to repeat in full the arguments that have been made against it. I am a businessman, not an attorney, and it is as a businessman who has spent his whole business life in the food industry that I should like to give my views on how adversely I believe this legislation would affect my industry.

We are in the food business which is under the jurisdiction of the Food and Drug Administration. All future references in my testimony, will be to this agency.

It must be kept in mind that the Federal Food, Drug, and Cosmetic Act of 1938 was enacted to replace the earlier 1906 law, and that for almost 60 years the Food and Drug Administration has addressed itself to the very problems the proponents of S. 387 are now so concerned about. That act contains an impressive arsenal of prohibitions against deceptive packages and labels. A food is misbranded under that act, for example, (1) if its labeling is false or misleading in any particular; (2) if its container is so made, formed, or filled as to be misleading; (3) unless its label bears an accurate and conspicuous statement of the quantity of the contents; or (4) if it fails to conform to an applicable standard of identity or standard of fill of container adopted under the act. It is our contention that, if fraud and deception are the target of Hart bill proponents, no new law is needed. Under the broad language of the above quoted statute, we are convinced that the Food and Drug Administration has adequate power to deal with any deception.

I urge this committee to satisfy itself on this point. If there has been any lack of execution of these provisions of the Food, Drug, and Cosmetic Act, I think you will find it due, not to inadequacy of the law, but to inadaquacy of staff and opportunity because of lack of sufficient funds for the agency to perform thoroughly. I think this committee should recommend to the Congress that ample funds be granted to the Food and Drug Administration so that they may carry out existing law before adding repetitive and unnecessary language to the agency's task.

At this point I should like to make it clear that my company, along with every other reputable manufacturer in the food business, repudiates any attempt by any manufacturer to defraud or deceive the consumer. As long ago as 1949, Nabisco was a founding member of the Food Law Institute which is dedicated to raising standards in the food industry on a worldwide basis.

Also, Nabisco is a founding member of the Cereal Institute and participated in the development of the principles of good labeling practice developed by that body. We applied those principles to all of our packages-not just cerealsas soon as they were formulated. Also we participated in the development of the model statute endorsed by the National Association of Weights and Measures. This has been adopted by many States and is under consideration in many more. We apply these regulations to all our packages. Whenever the requirements differed, we have chosen to abide by that requiring the larger size type. We do this because we believe it is good business to do so. The growth of our company is based on the fact that consumers recognize that our products are worth what they pay for them. We want them to know what our packages contain.

Being a businessman, not a lawyer, I feel strongly, therefore, that the proposals of the Hart bill in regard to labeling requirements are unnecessary in view of the adequacy of existing law. I have been told that the present FDA regulations do not try to dictate how to design a label. They do point out clearly and explicitly, the points that must be kept in mind, and which if inadequately disclosed, will amount to misbranding.

In my view this is the appropriate way of dealing with the problem. It protects the consumer. It recognizes that packaging is an inmportant and difficult art. It affords the necessary flexibility. It treats each food product and each package on its own facts.