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All this is not in any way to criticize the Lipton product, but it does demonstrate that the Tenderleaf jar of tea cannot fairly be described as a "deceptive package."

I believe that most persons in possession of the above information would agree that the Tenderleaf package is not a "deceptive package," and yet this was offered as a glaring example of why S. 985 is needed and should be passed. In fairness to the manufacturer of Tenderleaf tea, I believe the record should be set straight. I respectfully request, therefore, that this letter be printed as a part of the hearings on S. 985 as a supplement to my testimony.

Respectfully yours,

R. L. CHENEY.

Senator NEUBERGER. The next witness is Ernest Giddings, legislative representative for the National Retired Teachers Association and the American Association of Retired Persons. Mr. Giddings, we are glad to have you. You may make your statement.

STATEMENT OF ERNEST GIDDINGS, LEGISLATIVE REPRESENTATIVE; ACCOMPANIED BY MICHAEL MILLER, LEGISLATIVE ASSISTANT, NATIONAL RETIRED TEACHERS ASSOCIATION, AMERICAN ASSOCIATION OF RETIRED PERSONS, WASHINGTON,

D.C.

Mr. GIDDINGS. Madam Chairman, accompanying me is Mr. Michael Miller, legislative assistant of our two organizations.

I am the legislative representative of these two nonprofit organizations, the National Retired Teachers Association and the American Association of Retired Persons. I appear before you today on behalf of the 950,000 members of these two organizations, which represent a cross section of the 18 million elderly persons in the United States today, to voice our support of S. 985, the "Fair Packaging and Labeling Act."

The membership of NRTA consists of approximately 200,000 retired teachers. The membership of AARP consists of approximately 750,000 retired persons age 55 or over. National, State, and local or chapter officers of the two organizations number between 500 and 600 persons.

Of the many services performed by these organizations, the most significant are: (1) the preparation of bimonthly publications which contain information of interest to our members, (2) a low-cost travel service, (3) a hearing aid service, (4) low-cost health insurance plans, (5) a low-cost drug service, (6) a full program of educational courses offered through the Institute of Lifetime program, (8) low-cost accommodations plus information for members visiting in Florida or California, (9) a consultant service to private and government groups on preretirement and retirement programs and (10) a consultant service to churches on programs and problems of older people.

As the above services indicate we have worked and will continue to work for the mitigation of the particular problems of the aged. Our past and present support of legislative efforts to eliminate deceptive packaging and labeling is one way in which we have worked in the best interests of our members. We shall continue to support all such efforts.

INCOME LIMITATIONS OF THE AGED

In serving their membership, NRTA and AARP are constantly striving to find ways to increase, and to eliminate practices that place further limitations on, the income and purchasing power of the aged. We believe that the deceptive practices at which this legislation is directed do place limitations on the income and purchasing power of the aged. Our concern for this legislation can readily be seen from the statistics I will now present.

The population aged 65 and over reached 17.6 million at the end of 1963 and the proportion of persons aged 65 and over to the total population has more than doubled since 1900. Today, one out of eleven persons has passed his sixty-fifth birthday.

The median income of families headed by persons aged 65 or over was $3,204 in 1962, just $200 over the "poverty line," and considerably lower than the median income for families headed by younger persons. Three million elderly families live on the wrong side of the poverty line with incomes of less than $3,000 a year. At least 1.9 million aged couples live on less than $2,500 a year. Over 5 million aged individuals live on less than $1,800 a year.

Seventy-two percent of the population aged 65 or over were receiving OASDI benefits at the end of 1963. The average monthly benefits paid to ASDI beneficiaries in 1962 were as follows:

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Having just made a reference to the benefits received by a widowed mother and two children, this is an appropriate time to note that 1 out of 3 persons 65 or over is supporting an aged relative.

In 1963 over 2 million aged persons were receiving old-age assistance under the Federal-State public assistance programs and the average monthly payment received under those programs in 1963 was $77.

According to a survey of the aged conducted in 1963 by the Social Security Administration with the Bureau of the Census carrying out the field collection of data, between 16 and 17 percent of the married couples and 5 percent of the nonmarried persons in the United States were receiving income from private pensions in 1963. Furthermore, for many of the persons who received them, private pensions provided a substantial part of retirement income. At the end of 1962 approximately 5 million persons were receiving average monthly benefits of $137 a month under State and local public retirement systems.

We present the above statistics to show and emphasize the fact that most elderly persons have a fixed, low level of income, and that the income and purchasing power problems of the elderly have been and will continue to be of increasing significance as this population group increases in size unless preventive measures are taken.

This legislation is of more significance to the elderly than to any other age group, we believe. This is so because not only do the elderly generally have an income that is lower and more static than the income of other persons, they also spend, generally, a larger proportion of their income than other persons on the packaged and labeled goods with which this legislation is concerned.

In 1963, Esther Peterson, the Assistant Secretary of Labor, testifying before the Senate Subcommittee on Antitrust and Monopoly on legislation of the type being considered now, stated that the Bureau of Labor Statistics had estimated that:

* family expenditures in 1960 for the packaged articles which would be covered *** took a sizable share of the budget. They accounted, on the average, for about 38 percent or nearly two-fifths of family expenditures for all nondurable goods or 17 percent of total expenditures for all goods and services bought by families * *

The largest part of the expenditures for packaged products are, as you know, for foods of various kinds. In 1960, food bought to be eaten at home took about 18 percent of total living expenses, with 11 of the 18 percent going for packaged and canned goods. For low-income families, food represents a larger share of the total than these average figures indicate.

As I said, on the average, food bought to eat at home is about 18 percent of the total expenditures. But for families with incomes between $1,200, and $2,000 a year, this figure goes up to as high as 25 or 30 percent. So again I want to emphasize the extreme importance of this item for the low-income families of our society.

From all of these statistics it can be seen that the aged bear the heaviest burden where deceptive consumer practices are being employed. Where the aged are concerned, the deceptive practices which this legislation seeks to eliminate should be called regressive, deceptive, anticonsumer practices. These practices are all of these.

The income limitations of the aged make it necessary for the aged to be able to select quality goods at a reasonable price for the quantity purchased. The elderly are now unable to make reasonable selections among competing goods because of deceptive packaging and labeling practices. The aged individual is now being unfairly pressured into purchasing something other than what she thinks she is paying for while at the same time she is presumably being deprived of a better bargain. The law of most States, if not all States, prohibits express or implied fraudulent representations about a product where the seller is animate; the same prohibitions should apply to inanimate sellers, package and labeling.

As long as this legislation continues to be stifled in Congress, the packagers who engage in unfair packing and labeling practices will continue to receive an unearned subsidy paid for primarily by the aged. The honest packager also suffers.

LIMITATIONS OF AGE

The limitations imposed by age on one large group of prospective customers should not be ignored when the manufacturer plans his package sizes, his advertising, his printed price, his net weight labeling and his statement, if any, of the unit price. Impaired vision is one of the characteristics of old age. The 75-year-old customer may have no trouble reading the cents off inducement since, in most cases,

it will glare at her in red letters 2 inches tall, but she may not be able either to find or read the net weight on the box of soap flakes, cereal, or other merchandise. This legislation would help the aged in this respect.

At this point I would like to point out that our members are not at all interested in buying a fancy canner which they will throw away at once anyway. Our older members would rather spend their food dollars for quality and quantity, rather than for a fancy package which the manufacturer may prepare.

LOOKING AT THE FACTS

The legislation that this committee is considering would eliminate deceptive packaging and labeling. No one can reasonably deny that these practices are being engaged in by some packagers. All that one has to do to find examples of all of the deceptive practices alluded to in S. 985 is to spend 10 or 15 minutes in any local supermarket.

In our testimony 2 years ago on this legislation, we reported the results of an excursion into a supermarket made by one of our staff members. We found several of the deceptive practices referred to in this bill. We gave a report on these practices in our testimony presented to the Senate Antitrust and Monopoly Subcommittee on March 20, 1963, by our president, Dr. Ethel Percy Andrus.

I see no evidence today that the industry has policed itself in the past 2 years to make any improvement in the deceptive practicing which we reported at that time.

No one can reasonably deny that these deceptive practices should be eliminated. The elimination of these unfair packaging practices will not interfere with the type of competition on which our economy thrives. This legislation, like the basic antitrust legislation, was written with the recognition that a competitive economy such as has existed and exists today in the United States can operate efficiently and successfully only if competition is kept fair. This legislation only restricts deceptive packaging and labeling. Thus, packagers can still perform, without restrictions, their most important function, the designing and making of attractive and functional packages.

NRTA and AARP believe that most manufacturers and all consumers, aged or young, benefit when the consumer can make reasonable choices among competing goods. When, through deceptive packaging and labeling, the consumer cannot make an intelligent choice among competing goods, only the dishonest packager or manufacturer benefits.

We believe that the honest manufacturer does not want to engage in deceptive consumer practices, but that many are forced to engage in these practices to compete with the dishonest packager. In other words, dishonest packagers are forcing otherwise honest packagers into an economic life of deception.

This legislation is needed to liberate those packagers who do not want to and who do not need to compete in a manner that is unfair to the consumer. This legislation is also needed by those honest packagers who have continued to package their products honestly, even though at a competitive disadvantage, to give the consumer a fair deal by selling the product that is represented on the package and the label.

Most important, this legislation is needed by the consumer, particularly the aged consumer with his limited income and fixed purchasing power.

Let me emphasize this point: There may be valid objections to the means employed by this legislation-we know of none-but there can be no valid objection to what this legislation is intended to do.

Therefore, since S. 985 will benefit the honest manufacturer, the consumer, particularly the aged consumers, and the economy, only to the detriment of packagers engaging in practices injurious to the consumer, the honest packager, and the economy, we respectfully urge the committee to give this legislation a favorable report as soon as possible.

Senator NEUBERGER. Thank you.

I really wonder if there are very many deceptive packagers. I have a feeling that most of the suppliers of our markets are really pretty honest. I think a lot of the things we object to are brought about more by competition. If they are really deceptive-if there is intent to defraud-which they don't think they are, they are probably easier to get after by law than this sort of deceitful practice.

There is one thing I might point out which is that actually the aged person has a little more time to pause and look for the fine print— if she has good glasses-to find the poundage and figure the cost per unit, than the busy parent with several children and low income who also needs to think about the cost.

The point you make is very well taken. Which of these packages do you think your members would be likely to pick up off the grocery shelf (indicating)?

Mr. GIDDINGS. Well, the larger of the two is probably the one they would pick.

Senator NEUBERGER. They see it is the same product, instant tea. I don't know whether "free" is more appealing than "cents off" or not. Yet they are getting cheated, I think, because they would be gettingI forget whether it couldn't be a half pound, it is so many ounces less. One is a full ounce, and the other is one-half ounce.

the better buy.

This is

Senator CANNON. For the same price? Are those identically priced items?

Senator NEUBERGER. Yes. We can't tell whether it is 45 or 49.

I would like to know from your shoppers that you refer to, what is their reaction to the "cents off"? Do your members really think that they are getting a bargain?

Mr. GIDDINGS. No. They are irritated by it. It is like some of the reaction you get when you drive along a highway, highway 1, between here and Baltimore, the way it has been in the last 10 years, you are confused by it, you are irritated by it. It is an imposition on the person to have to go along and look at the labels on 20 packages of soap, and have each one blaring out the fact that it has so many cents off from some price that nobody knows about.

Senator NEUBERGER. The original price, in other words, is lost in the shuffle?

Mr. GIDDINGS. Yes.

Senator NEUBERGER. I presume the only way to really give full information is if the retailer would indicate what the original price was and what it is now selling for.

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