We note that section 3 (c) (1) authorizes the promulgation of regulations to establish reasonable weights or quantities in which commodities shall be distributed for retail sale. Since standardization could, in some instances, be an anticompetitive factor, the provision appropriately confers a discretionary authority which, in its exercise, may take into account the impact of any such regulations on competition. The Department of Justice favors the enactment of this legislation which will implement the recommendations contained in the President's Consumer Message of February 5, 1964 (H. Doc. 220, 88th Cong.). The Bureau of the Budget has advised that enactment of this legislation would be in accord with the program of the President. Sincerely, RAMSEY CLARK, Deputy Attorney General. DEPARTMENT OF STATE, Washington, April 28, 1965. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: This report on S. 985, a bill "to regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities distributed in such commerce, and for the purposes" is submitted in response to your letter of February 23, 1965. S. 985 would provide for the promulgation of packaging and labeling regulations by the Secretary of Health, Education, and Welfare for foods, drugs, and cosmetics, and by the Federal Trade Commission for other consumer commodities, excluding certain products, such as meats, alcoholic beverages, and seeds, for which labeling and packaging requirements are imposed under existing law. Any violation of the regulations issued by the Secretary of Health, Education. and Welfare would be subject to certain of the penalties provided in the Federal Food, Drug, and Cosmetic Act with respect to misbranding, and violations of regulations issued by the Federal Trade Commission would be subject to penalties prescribed by the Federal Trade Commission Act for unfair or deceptive acts or practices in commerce. The provisions of S. 985 as presently drafted do not appear to relate significantly to the responsibilities of the Department of State. The Department wishes to refrain, therefore, from making any recommendation with respect to the bill at the present time. The Bureau of the Budget advises that from the standpoint of the administration's program, there is no objection to the submission of this report. Sincerely yours, DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations, (For the Secretary of State). COMPTROLLER GENERAL OF THE UNITED STATES, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: By letter dated February 23, 1965, you requested our comments on S. 985, 89th Congress. The stated purpose of this measure is: "To regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities distributed in such commerce, and for other purposes." We have no special information as to the desirability of such legislation, and since such measure would not affect the functions of this Office, we have no comments to make concerning its enactment. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. The CHAIRMAN. Senator Hart has a short statement. Senator HART. Mr. Chairman, members of the committee, thank you, Mr. Chairman, first of all, for scheduling these hearings at a time when I know the press of the Appropriations Committee bears heavily upon you. I do have a statement. It is brief. I shall read it literally, rather than attempt to summarize it, because the summary is usually longer than the prepared statement. The truth-in-packaging bill has become a symbol. To the consumer it is an outlet for pent-up frustrations resulting from the packaging revolution of the past two decades. To many manufacturers it represents undue governmental influence. Actually, and I think the chairman stated it so well, the bill is in the tradition of other labeling bills which have originated in this committee and are now the law of the land. Like those other bills, it seeks to meet a real need with a tested and reasonable approach. The need for this bill grows from the package's role as salesman in today's supermarket. This the chairman has commented on. It is a need multipled by the approximately 8,000 consumable items on today's shelves as compared to 1,500 about 20 years ago. The need is for sufficient information presented in a way that will allow and encourage the shopper to make rational price comparisons among competing products. Our free enterprise economy, like our political system, rests on one pivotal point-that the voter-consumer will reward the most deserving candidate. But to reward the manufacturer who offers the best buy necessitates the first step of easy computation of price per unit. It is to this end that this bill is addressed. It is no answer to say the consumer is too smart to be fooled. Even the most complex computer must be fed the basic information before it can come up with a responsible answer. This bill will help to make that information available to the consumer in a way that can be rapidly digested. At stake are purchasing decisions affecting an $80-billion-a-year industry-our largest. The nickels and dimes involved add up to big money, not only in terms of our total economy but in the pay envelopes of each and every one of our citizens. To say that present law is adequate is to repeat the arguments against all the labeling bills that are now accepted as wise supplements to the law of this land. This argument ignores the evidence piled up in the six volumes of congressional hearings of more than 2,000 pages of testimony during the past 3 years. It ignores the thousands of letters sent to me, and I suspect to my colleague who sits to my right. Mrs. Neuberger. Many of those letters describe personal experiences with insufficient packaging and labeling. It can be refuted by one shopping trip to any supermarket. If the law were adequate, the practices at which the bill is aimed would not persist. The bill's reasonableness is the outgrowth of hundreds of discussions with affected persons and numerous amendments made to the bill the past 3 years. Criminal penalties have been removed. Comprehensive procedural safeguards have been added. Provisions to allow utilization of existing stocks and to permit the manufacturer to participate in the decision-making process are included. The mandatory sections will guarantee that the net weight stand by itself in conspicuous fashion on the front of the package and provide for ground rules to stop deceptive illustrations. They also ban "cents off" type promotions by the manufacturer-not the retailer. Previous hearings indicated a need for these basic provisions to apply across the board. Passage of the bill would activate regulations in these areas and these areas alone. The discretionary provisions recognize that the need and feasibility of the problems covered by these sections exist only in some produ lines and would make no sense in other product lines. So they can be activated only when necessity is shown and then on a product-line basis. Directions to the agencies involved are clear, we think, and precise. They were told when and how they must act and under what conditions. Yet they are allowed sufficient flexibility to meet changing marketing conditions. A case-by-case approach has become inadequate to meet needs of modern consumers and manufacturers. The prior-groundrule approach of this bill will certainly benefit the consumer, and I believe with equal certainty it will benefit the responsible manufacturer who will know the rules of the game and who will know that his competitor will be held to the same standards. Certainty is obtained for presentation of basic information bearing on unit price. Flexibility is maintained for imaginative marketing. As one witness said: "It is time the housewife has the same information and protection in buying basic necessities that her husband has when buying liquor." It is time that the symbol this bill represents to the American consumer be given substance by the Congress of the United States. Mr. Chairman, the bill that is before us as you may have noted, is cosponsored by our colleague on this committee, Mrs. Neuberger, who is here this morning. The CHAIRMAN. The Chair forgot to mention that the bill, which was introduced by yourself, is cosponsored by 12 other Senators. We will put those names in the record in full. Our first witness is the Honorable Esther Peterson, Assistant Secretary of Labor. We will be happy to hear from you. STATEMENT OF MRS. ESTHER PETERSON, SPECIAL ASSISTANT TO THE PRESIDENT FOR CONSUMER AFFAIRS Mrs. PETERSON. I am glad to be with you to testify on this. I would like to introduce the people with me. I have on my left, Mr. David Swanson, executive assistant, at my Consumer Office, the President's Committee on Consumer Interests, and on my left is Mrs. Ethel Hoover, who is the chief of the Division of Price and Index Number Research of the Bureau of Labor Statistics. The CHAIRMAN. We are glad to have you both here. Mrs. PETERSON. As you know, I am very pleased to be here today to testify on S. 985, the Fair Packaging and Labeling bill. Two years ago I testified in support of S. 387, the truth in packaging bill. At that time, in my capacity as Assistant Secretary of Labor, I stated: it is a pleasure for me to be here with you today to speak on behalf of the Department of Labor in favor of legislation to ensure truth in packaging. We support it strongly. We think it is needed for the benefit of all of us as consumers. Two years, one month and sixteen days later, I strongly reaffirm that statement. I reaffirm it not only as a spokesman for the Department of Labor but also as Special Assistant to the President for Consumer Affairs. Much has transpired since my testimony 2 years ago. For the past 16 months, I have had the honor to serve as the President's Special Assistant for Consumer Affairs, and as the chairman of his Committee on Consumer Interests, in addition to my duties as Assistant Secretary of Labor. At the same time, I have continued to hold my lifetime job of housewife. It is in this area that, perhaps, I have my greatest experience. But it is an experience buttressed by my official positions. During the past year, I visited almost every State in the Union, conducted four regional consumer conferences, participated in many other consumer conferences, discussed consumer problems with Federal, State, and local government officials, and have exchanged views with representatives of industry. I have also received valuable guidance from the members of the Consumer Advisory Council, a group of experts selected to advise the Government on consumer affairs. I, too, have been the recipient of thousands of communications from consumers all over these United States, and no subject has been talked about more in these communications than packaging and labeling of household commodities. I speak today, then, as a housewife tapped by President Johnson to perform a challenging and exciting assignment; who has had the opportunity to hear the views of many of her colleagues, male and female, and to work intensively in the field of consumer affairs for almost a year and a half. Last month I presented to the President and the Cabinet my report of the four regional consumer conferences held by the President's Committee on Consumer Interests last year. In that report, I stated that the conferences were not designed to examine in detail either legislation now pending before Congress or new legislative ideas. Therefore, no legislative proposals appear in the report. I would not be fulfilling my responsibility, however, if I failed to report to you today the wide support that the conferences evinced for some action to end the particular difficulties which buyers encounter because of some types of packaging and labeling. During the past 16 months, I have met with representatives of trade associations and individual firms. I have visited factories and gone through retail stores. Some firms have instituted voluntary improvements in packaging and labeling. About this there can be no question. I think Senator Hart deserves much of the credit for inspiring the interest which led to this action. The fact is, however, that not enough has been done. Why? Because, as many leading businessmen have told me, competition will permit them to go only so far. If a competing firm institutes a questionable practice and succeeds, then others suffer if they fail to follow. It is clearly time, therefore, for Government to assist both consumers and business by helping maintain the ground rules which enable the best practices of a free, competitive market to flourish, strengthening competition by outlawing shoddy merchandising practices which, if allowed to go unchecked, could interfere with the satisfactory functioning of the competitive system, and making sure that its laws are current with the time, and adequately meet the needs of the modern marketplace. The modern shopper, be it housewife or househusband, as one correspondent referred to himself in a letter, is an intelligent person. Because she is intelligent, she is asking the kinds of questions, and seeking the kind of information that will help her make intelligent decisions. She wants a package that she can examine "on the fly." She marvels, as do we all, at our wonderful food distribution system. In general, she knows that she spends a smaller proportion of her husband's take home pay for food than she would in any other country, or at any other time. One of the conclusions we reached as a result of our consumer conferences was that consumers harbor many more complaints than they attempt to register, for there is an unmistakable fatalism toward what is regarded as the futility of individuals expressing themselves effectively in the maze of the marketplace. Mr. Herbert M. Cleaves, senior vice president of the General Foods Corporation, was quoted in the press as saying "perhaps there is more than a grain of truth in that" [statement]. If I have learned anything this past year it has been that these problems are real and widespread. America's high standard of living, which most of us enjoy, rests not only on how much we earn but also on what we buy, the quantity and the quality of all the goods and services we use in daily living. We are justly proud of the fact that "food is a bargain" in the United States with less than 20 percent of the average worker's paycheck spent for it. But for the poor, and let's remember there are about 35 million of them, the percentages are significantly higher. Families with incomes under $3,000 spend around 30 percent for food, according to Bureau of Labor Statistics figures. For these families, particularly, every penny is important. I think it highly fitting that S. 985 is entitled the Fair Packaging and Labeling bill. Since 1962, when the first consumer message was sent to Congress, there has been widespread recognition of the need for fair and full disclosure of pertinent facts to consumers, in order to facilitate rational choice. President Kennedy stated: consumers have a right to expect that packages will carry reliable and readily usable information about their contents. And those manufacturers whose products are sold in such packages have a right to expect that their competitors will be required to adhere to the same standards. President Johnson stated: The shopper ought to be able to tell at a glance what is in the package, how much of it there is, and how much it costs *** Packagers themeslves should |