Now, I have no way of joining them in one lawsuit if I had to sue them. So suppose there were 100 of them or 500 of them. Then the problem comes from enforcement. How do you get fair law enforce ment? How do you escape the accusation that-When I was up here working with the Judiciary Committee I saw many such letters, and it impressed me. It is one of the reasons when I went to the Commission I suggested we step back and take industry approaches. because so many letters were coming up to the Congressmen and Senators that "Maybe I am transgressing the law, but why pick me out alone? Why just me?" Well, it has been done for 40-some-odd years within the limitations set by the Congress. I think the Congress must have perhaps thought that was all right. This is one way you make an example of somebody and everybody else would perhaps pay attention to it. Well, this just was not happening, so we have tried to devise some kind of an industry approach. The reason I applaud this bill is because this is basically an industry approach. It has written in it fairness as far as I can see, because no one will be singled out. It will be by groups, by problems. Senator COTTON. Now, No. 2: "establishing standards of prominence or conspicuity for the net contents statements." That is really an elaboration of No. 1, is it not? Mr. DIXON. It is just where you are going to put it and how big, what kind of type. Senator COTTON. You do not have that authority now? Mr. DIXON. We could, again upon an individual basis, where we have required warnings and other things, to say that it must be placed in an equally conspicuous spot, and then they come to compliance and we say, "Well, that is equally conspicuous. That is all right. So it is potentially possible, sir, but again I come to the same answer to No. 1. Senator COTTON. It is potentially possible that you already have the authority in No. 1 and No. 2, but there is a question about it, and the question is about your being able to do it as a mass, affecting all manufacturers and sellers of a certain commodity instead of just one. that your answer? Mr. DIXON. That is correct basically, sir. Senator COTTON. And you want this authority in 1 and 2? Is Mr. DIXON. Well, hearings have been held. This bill was put in, and since the day it was put in we have supported it and applauded it because we think this fits the American system and does not do any harm to it but supports it. Senator COTTON. It will not add to your duties nor will it add to the delay occasioned in dealing with actual deceptive practices? Mr. DIXON. It will add to our duties materially, sir, I will tell you that. There is no doubt about that. I am not up here trying to get another building and fill it up full of people. I will tell you if this bill is passed I want the people to enforce it with. Senator COTTON. In other words, if it is passed you are going to need a much larger force? Mr. DIXON. Obviously, sir. Each time you try to do anything for the consumer or businessman in this direction you need people to do it with. Senator COTTON. And if you do not have a much larger force it will contribute to the slowing up of action by your Commission and the growing backlog? Mr. DIXON. I could say what we can do in this field. Basically, there will be materially, and is today materially less than what we could do than if this bill passes. Now, there are some Senator COTTON. I beg your pardon? Will you say that over again? I am sorry. Mr. DIXON. Well, as I would understand the full purpose of this bill, under the requirements of the administering agency, what must be done, there are six affirmative requirements. You have talked about the first two. There are four more. No. 4, of course, is the exception. You would have to take affirmative action still to make an exception. You can say that. But these would be required of the agency if this bill passes into law. What is required of the Federal Trade Commission today is to proceed basically against unfair acts or practices or deceptive practices, or in the food, drug, devices, and cosmetics field against false and misleading advertising, which is more delineated, a little finer than the broad sweep of the unfair or deceptive practice words. I have tried to say to you that we have broad responsibility here, Each time this subject has come up, Senator, I have felt a little bit like a boy going to a woodshed when I come to testify, because of the responsibility we already have. How good a job are we doing? How good a job has Food and Drug done? I do not think it is a good enough job, frankly, but I say to you that within the scheme of things, of our procedures, our limitations, I think we may be doing about as much as we can do. Senator COTTON. Well, I would agree with you, and I would like to say for the record that I think you are doing a remarkably fine job for the responsibilities you have, and no Commission could possibly operate and obtain universal endorsement. If so, you would be supermen. I just want to say that you have no reason to feel like a boy going to the woodshed as far as this member of the committee is concerned, because I have nothing but commendation for you. Mr. DIXON. I am reminded of some-I do not know what the figure is. Say there are 10,000 items or 6,000 to 10,000 items on the grocery shelf. This is all right. And within the ability of our system to produce new ones there will be more next year and the year after that. Now, we are talking about, I think, changes that have taken place in the marketing and buying practices in the grocery basket field. When I was a boy my mother sent me down to the store in Nashville, Tenn., and said, "I want 20 cents worth of beans and 10 cents worth of this and a quarter's worth of that." You went to the grocery store and told the man what you wanted, and he explained it to you and he did it. There is not anybody around that grocery store to talk to you any more. The only thing that is there to talk to you is this shelf as you walk down it, and everybody in the production field is trying to get on that shelf and trying to get as much of it as he can, even by making 15 different sizes, because it means you have to put 15 different sizes on that shelf. The supermarket is fussing about this. What do those 15 sizes do to the consumer? Now, I see the contest here. When Senator Morton was in business he had to make just as many sizes as he could make. It is just good excellent business, because if you advertised it enough the grocery store had to carry it. Just multiply that by 20 competitors and all 20 have 15 sizes. What do you think this fellow is going to do? He is fussing about it now. But take yourself. You are the buyer. You walk in the store and try to figure out which one of those 15 is the best buy. You try it yourself. Senator COTTON. I will not try it myself because, unlike our distinguished chairman, my wife would never dream of sending me to the store. But let me say to you that my wife goes to the store and she buys a package, and if the manufacturer and distributor of that product are wise it better be full, because when she gets home and finds it half empty you never heard such a row as she puts up, and she never buys that particular brand again. And she may be unjust to the manufacturer. Mr. DIXON. She might be, because as I have tried to say it might be that she ought to have a rule read to her that this is necessary. I am not saying it can be sustained or not, but what I am saying here is there is a basic fairness here in this bill that would run both ways. If it is not justifiable, I myself under my system of thinking about our law procedures would not try to condone it. I would not call it romance marketing, and I know when I say this it is bad for the system to say "Stop it." Senator COTTON. But if you are going to undertake to help industry by being fair to those who are putting out a product that is full when they make the package but it shrinks down, if you are going to convince a housewife of that by issuing a rule, the Federal Trade Commission is going to be even busier than I thought, because you cannot tell my wife that and I cannot. All the rules you promulgate will not tell the housewife that. She sees that empty space, and she knows it is empty and she does not like it. Mr. DIXON. I have got several cases this way. My wife has been to the store, too. I went myself. I go myself, and I find them every now and then. I remember opening one up and going down and I could hardly find anything in it. It made me so mad I had to find out why. And that has been changed, by the way, sir. Senator COTTON. I do not want to take any more time, except I want to be sure I understand the situation. Now, if it is an addition to the authority and to the duties of the Federal Trade Commission, including (1) the requirement of statement of quantity, (2) establishing of standards of prominence of the statement, (3) prohibiting addition to net contents statements of qualifying words or phrases. (4) specifying exceptions to the foregoing requirements, (5) prohibiting "cents off" or other statements of price reduction or price advantage, and (6) prohibiting placing on packages of illustrations which misrepresent the contents of the package-if adding all these responsibilities and power to your Commission is going to simplify or in any way expedite work of the Commission, it boils down to the fact that by a general rule standardizing every product, cutting out all competition in the particular field-that is the only way that this can militate to simplify and expedite your duties. Otherwise it is going to greatly multiply your duties. Is that right or wrong? Mr. DIXON. I think your first premise is correct. It will not be easy, certainly to enter this broad field and perform these requirements, but somewhere, sometime, they will be performed if the law is passed. Once that time is reached, Senator, the job will be much simpler than it is now. It will be much easier to understand and basically much fairer, in my opinion. I know and have a great deal of sympathy for the fears that I believe that some of the businessmen that will appear here will express. They will say this just simply falls in the area of foolishness and in a sense that the consumer is a lot smarter than you characterize them and you ought to let them alone, that this is competition, this is what competition is about, and you ought to not go too far because you will kill the goose that lays the golden eggs. But I decipher this need predicated upon hearings that I have read that were held here in this Congress, and I think there is justification for the bill. I think if it is properly administered it will bring a great deal of order out of chaos, and I think that basically when it is all over industry will find it is not near as bad for them as they thought it was. Senator COTTON. I have just one more question, Mr. Chairman, and I thank you for your patience with me and for the very fair and full answers you have given me. I have some other responsibilities besides membership on this committee. I happen to be a member of the Appropriations Committee and a member of the subcommittee of the Appropriations Committee that deals with the appropriations for your Commission. Now, I have studied this bill. You have considered and studied it and testified regarding its administration if it becomes law. You have said that it would require some additional staff. From your studies of the bill and from your experience and your knowledge, will you give me a general estimate of how many more people you are going to need and how much more money you are going to have to have if we pass this bill, if this bill is passed into law? Mr. DIXON. May I supply this in the record at this point, sir? Senator COTTON. Certainly. Mr. DIXON. I would be willing to, but I would rather listen to some of these staff people before I do it. Senator COTTON. Thank you very much. That is all, Madam Chairman. Senator NEUBERGER. Thank you. (Mr. Dixon subsequently furnished requested information.) FEDERAL TRADE COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: At the hearing on April 29, regarding the so-called fair packaging and labeling bill, S. 985, Senator Cotton asked that the Commission furnish an estimate of the cost of administering the bill should it be enacted into law. Assuming that the various affected industries afford maximum cooperation in developing regulations and educating their members in their responsibilities thereunder, it is estimated that additional funds in the amount of $1 million per year would be required to administer the provisions of the bill, if the Commission were the sole administering agency; $250,000 if it were not responsible for the packaging and labeling of food, drugs, devices, and cosmetics. These estimates are based upon a need for 100 or 25 additional personnel, respectively. With best wishes, I am, Sincerely, PAUL RAND Dixon, Chairman. Our next witness will be Mr. Max Banzhaf, who will speak for the Chamber of Commerce of the United States. Mr. Banzhaf, do you wish to introduce your associates? STATEMENT OF MAX BANZHAF, VICE PRESIDENT, ARMSTRONG CORK CO., ON BEHALF OF CHAMBER OF COMMERCE OF THE UNITED STATES; ACCOMPANIED BY FRED BYSET, ATTORNEY, U.S. CHAMBER OF COMMERCE; AND WILLIAM F. NOBLE, ATTORNEY, ARMSTRONG CORK CO. Mr. BANZHAF. My name is Max Banzhaf. I am staff vice president of the Armstrong Cork Co. We manufacture resilient flooring and other building materials and industrial products and packaging materials. My company is a long-time member of the Chamber of Commerce of the United States, which is the Nation's largest business federation with more than 3,700 organizations members and more than 30,000 business members. A very large share of the latter are medium- and small-size businesses. Along with other Armstrong officials, I have been active in various chamber functions over the years. I am here today to present the national chamber's views on S. 985, the packaging and labeling controls bill. The formal brief has been submitted in advance and states in detail our views on the proposed legislation. To conserve your time, I intend now to present only a brief summary of it and comment on a few of the major points. Let me state at the outset that manufacturers of packagers' and consumer goods believe in serving the consumer. We wholeheartedly support the principle that the merchant should truthfully represent his wares, since this is morally and ethically sound and also good business. At the same time, we recognize that an orderly society in a complex world requires reasonable regulation and sanction against misleading, unfair, or deceptive business practices, where there are always a few who do not recognize the importance of ethical conduct, so that the question before you in considering S. 985 is whether present regulatory powers under the FTC Act and the Food, Drug, and Cosmetics Act are adequate to curb unfair or deceptive practices in today's marketplace. Our position is that the present regulatory powers of the FTC Act and FDC Act are adequate to the job and no new legislation is needed. We therefore oppose S. 985 for this reason, and also because its side effects would increase production costs, raise consumer prices, retarding packaging improvements, and restrict the variety of choice in the marketplace. All these things would harm rather than help the consumer. Permit me to document briefly these points. The formal |