7 4

•I n

39-8 STEEL CONTAINER MA RK INGS

(T o In di ca te Cou nt ry of Orig in of St

GOVER NMENT

Storage

HEARING

BEFORE TH E

SUBCOMMITTEE ON COMMERCE AND FINA NC E

OF T H E

COMMITTEE ON

INT ERSTA TE AND FOR EIGN COMMERCE 

HOU SE OF RE PRESEN TA TIV ES

EIGH TY -N IN TII CONGRESS

F IR S T SE SS IO N

ON

H .R . 6182, H.R. 6647, H.R . 6775

(BILLS TO P R O H IB IT T H E IN TRODUCTI ON IN TO IN TER STA TE 

CO MMER CE O F AN Y SH IP PIN G CONTAIN ER MANU FA CT UR ED 

IN T H E U N IT E D ST ATE S FR OM IM PO R TED STEEL UNLE SS T H E 

CONTA IN ER IS M ARK ED SO AS TO IN D IC A TE TH E CO UN TR Y 

O F ORIG IN OF T H E S T EE L

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A P R IL 2S, 1965

P ri n te d f o r th e u se o f th e 

C om m itte e on In te rs ta te a nd Fore ig n Comm erc e

Serial No. 89-8

48-161

U.S. GO VE RN MEN T PR IN TIN G O FFIC E 

W AS HI NG TO N : 1965
COM M IT TEE OX IN TER STA TE AN D FO REIG N CO MM ERCE

OREN HARRI S, A rk an sa s, Ch airm an

HAR LE Y O. ST AG GE RS , W es t Virgi nia 

W ALT ER RO GE RS , Te xa s

SA MUE L N. FR IE D E L , M arylan d 

TORBERT H . MACDO NAL D, M as sa ch us et ts 

JO H N JARM AN , Ok lah om a

LE O W. O’BR IE N , New York

JO H N E. MO SS, C al if or ni a

JO H N D. D IN GEL L, Mich iga n

PAUL G. ROGERS, Florida

HO RA CE R. KO RN EG AY , Nor th Car ol in a 

LIO N EL VAN DEER LI N, Cal ifor ni a 

J. J. PIC K LE, Tex as

FR E D B. RO ON EY , Pen ns yl va ni a 

JO H N M. MUR PH Y, New York 

DA VI D E. SA TT E R FIE LD I II , V ir gi ni a 

DANIE L J. RONAN, Il lino is 

J. OL IVA HU OT , New Ham ps hi re 

JA M ES A. MACKAY, Ge orgia 

JO H N J. GIL LI GAN, Ohio 

CH ARL ES P. FA RN SL EY , Ke ntuc ky 

JO H N BELL W IL LI AM S, Miss issip pi

W IL LIA M L. SP RIN GER , Illino is 

J. AR TH UR YO UN GE R, C al if orn ia 

SA MUE L L. DE VIN E, Ohio 

ANCHER NE LS EN , M in ne so ta 

HAST IN GS K EIT H , M as sa ch us et ts 

W IL LARD S. CU RT IN , Pen nsy lv an ia 

GL EN N CU NN INGH AM , N eb ra sk a 

JA M ES T. BR OY HI LL , N or th Car ol in a 

JA M ES HA RV EY , M ichiga n 

T IM L EE CA RT ER , Ken tu ck y 

HO WAR D II. CAL LAWA Y, Geo rg ia

W. E. Will iams on , Cle rk

Kenneth J. P aint er, A ss is ta n t Clerk

P ro fe ss io nal Sta ff

Andrew Stevenson J ames M. Menger, Jr .

Kurt Borchardt William J. Dixon

Subcommittee on Com me rce and F inan ce

TO RB ER T H. MA CDON AL D, M as sa ch us et ts , Cha irman

JO H N D. DIN GEL L, Michig an HAST IN GS K EIT H , M as sa ch use tts

J. OL IVA HU OT, New H am ps hi re W IL LA RD S. CU RT IN , Pen nsy lv an ia

CH ARL ES P. FA RN SL EY , Ken tuck y

H
C O N T E N T S

Text of— P a®6

H.R . 6182___________________________________________________

H.R. 6647___________________________________________________

H.R . 6775___________________________________________________

Rep ort on H.R. 6775 from—

Commerce De partm ent________________________________________

Federal Trade Comm ission____________________________________

Justice Depar tment___________________________________________

State De partm ent____________________________________________

Treasury De partm ent_________________________________________

Sta tem ent of-—■

Curtin , Hon. Willard S., a Representative in Congress from the S tate 

of Pennsylvan ia____________________________________________

Daniels, Michael F., on beh alf of United States-Jap an Tra de Council. _ 7

Er nst, David H., Chief, Special Trade Activities and Commercial 

Treaties Division, Office of Internatio nal Trade, Department of

Sta te _____________________________________________________ 27

Evans, Robert G., preside nt, Evans Cooperage Co., In c___________ 49

Hartk e, Hon. Vance, a U.S. Senator from the Sta te of India na_____ 13

Hershson, Morris, presiden t, National Barrel & D rum Association___ 37

Jacobson, Jerome, Deputy Assistant Secretary for Economic Affairs,

Department of St ate________________________________________ 27

Kent, Robert, counsel, Steel Shipping Container Institut e, In c_____ 42

Keplinger, Livingston, president, Steel Shipping Container Ins titu te,

In c_______________________________________________________ 42

McNeill, Robert L., Deputy Assistant Secretary for Tra de Policy,

Dep artm ent of Commerce___________________________________ 15

Neville, William J., vice presiden t, Florida Drum Co______________ 57

Rogers, Hon. Walter, a Representative in Congress from the State of

Texas_____________________________________________________ 10

Rostenkowski, Hon. Dan, a Representative in Congress from the

Sta te of Illinois____________________________________________ 11

Setser, Vernon G., adviser, Office of I nte rna tional Trade, Department

of S tate___________________________________________________ 27

Staggers, Hon. Harley O., a Representative in Congress from the

Sta te of West Virginia______________________________________ 13

Steinberg, David J., sec reta ry and chief economist, Committee for a

Nation al Trad e Policy______________________________________ 64

St itt, Nelson A., represen ting Japan Iron & Steel Exporters Association and Japan Galvanized Iron Sheet Exporters Association of

Tokyo------------------------------------------------------------------------ ------- 83

Additional inform ation sub mitted for the record by—

American Institut e for Imported Steel, Inc., statem ent of Graubard,

Moskovitz & McCauley_____________________________________ 90

Armco Steel Corp., letter from G. H. McClure, vice president, distribu tio n____________________________________________________ 100

Easte rn Steel Barrel Corp., lette r from Andrew Campbell, vice preside nt ----------------------------------------------- ------- --------------------------- 100

Ind epe nde nt Wire Drawers Association, letter from F. C. Muntwyler, 

president__________________________________________________ 101

Nation al Council of American Importers, Inc., letter from Gerald H.

O’Brien, executive vice pre sid ent_____________________________ 88

h i
IV CONTENTS

Additional information su bmitted fo r the record by—Continued 

Ohio Corrugating Co.:

McKay, Lawrence F., executive vice presid ent: Page

Letter from__________________________________________ 88

State ment of_________________________________________ 43

Republic Steel Corp., telegram from J. D. Kirkwood, general manager 

of sales___________________________________________________ 89

Rheem Manufacturing Co., sta tem ent of Bruce R. Aton, vice president, marketing, containe r division ___________________________ 43

Trilla Steel Drum Corp., telegram from Lester Trilla______________ 90

Youngstown Sheet & Tube Co., lett er from Robert E. Williams,

executive vice presiden t_____________________________________ 89

»
STEEL CONTAINER MARKING 

(To Indi cate Country of Origin of Steel)

W E D N E SD A Y , A P R IL 28 , 19 65

House of Representatives,

S ub co mmit te e on C om me rc e an d F in a n c e of th e

Com m it te e on I nt er st at e an d F or eign C om me rc e,

Waxliing ton, D.G.

The subcommittee met, pursuant to notice, at 10 a.m., in room 2218, 

Rayburn House Office Building, Hon. Torbert I I. Macdonald (cha irman of the subcommittee) presiding.

Mr. Macdonald. The hearing will come to order. This morning, 

the Subcommittee on Commerce and Finance is holding hearings on three bills, all of which deal with the same subject and are substantially identical. The bills are II.R. 6775 by our colleague on this subcommittee, Mr. Curtin, II.R. 6182 by our colleague on the full committee, Mr. Staggers, of West Virginia, and H.R. 6647 by Mr. Rogers 

of Texas. The purpose of the bills is to prohibit introduction into interstate commerce of any shipping containers manufactured in the 

United States from imported steel unless the container is marked so 

as to identify the country of origin of the steel used in the container.

(H.R. 6182, H.R. 6647, and II.R. 6775, and reports on H.R. 6775 

follow:)

[I I. R . G182, 89 th Cong., 1st se ss .]

A B IL L To pro hib it th e in tr o d u cti o n in to in te rs ta te co mmerce of an y sh ip pi ng conta in er m an ufa ct ure d in th e U nited S ta te s from im po rted st ee l unle ss th e co nta in er is m ar ke d 

so as to in dic at e th e countr y of o ri gin of th e stee l

Be it enacted by the Sen ate and Bouse of Rep resenta tives of the United States

of Ame rica in Conyrcss assembled, Th at this Act may be cited as the “Steel 

Shipping Container Identific ation Act”.

DEFINITIONS

Sec. 2. As used in this Act— (a ) The term “person” mean s an individual, partnership , corporation, associatio n, or any other form of business enterprise. (b) The term “commerce” mean s commerce among the seve ral States or with foreign nations, or between two points in the same State but through any point outside thereof, or in any possession of the United State s or in the District of Columbia, or between any such possession and another, or between any such possession and any State or foreig n nation, or between the District o f Columbia 

and any State, possession of t he United States, or foreign natio n. (c) The term “Stat e” includes the Commonwealth of Pu erto Rico. (d ) The term “Commission” means the Fed eral Trad e Commission. (e) The term “shipping container” shall mean all steel drums and pails used 

for shipping products a s defined by the D epartment of Commerce. (1) Drum: Any single wall cylindrical or bilged con tain er having a ca­ pacity of over 12 gallons to 110 gallons, inclusive, constructed of steel sheet 

and inclusive of all gages. (2) P ail : Any steel shipp ing package with or witho ut bail and h and le h av ­ ing a capacity of 1 gallon to 12 gallons, inclusive, constructed of steel shee t 

29 gage or heavier.
2 STEEL CONTAINER MARKING

MARKETING OF STEEL SHIPP ING CONTAINERS

Sec. 3. (a) It shall be unlawful and shall be an unfa ir method of competition 

and an unfair and deceptive act or practice in commerce under the Federal Trade 

Commission Act for any m anufacturer of steel shipping containers to introduce 

any such container into commerce whenever such container is manufactured in 

the United States in whole or in chief value from steel made outside the United 

States, unless such container bears embossed on the top head of the container 

in letters not less than one-fourth of an inch in height the legend “Steel in this

container made i n --------------- with the blank space being filled with the

name of the foreign country in which such steel was made.

(b) It shall he unlawful and shall be an unfair method of competition and an 

unfair and deceptive act or practice in commerce under the Federal Trade Commission Act for any person to deface, destroy, remove, alter, cover, obscure, or 

obliterate any mark placed on a steel shipping container persuant to subsection (a) of this section, if the purpose of defacing, destroying, removing, 

altering, covering, obscuring, or obliterating such mark is to hinder or prevent 

other persons from obtaining the information given by such mark.

RECORDS

Sec. 4. (a) Every manufacturer of steel shipping containers subject to sections 2 to 7 of this Act shall maintain proper records showing the origin of the 

steel used in all steel shipping containers made by him, and shall preserve such 

records for at least three years.

(b) The neglect or refusal to maintain or preserve the records required by 

this section is unlawful, and any person neglecting or refusing to maintain such 

records shall be guilty of an unfa ir method of competition, and an unfair or deceptive act or practice in commerce under the Federal Trade Commission Act.

ENFORCEMENT

Sec. 5. (a) Except as otherwise specifically provided in this Act, this Act 

shall be enforced by the Commission under rules, regulations, and procedures 

authorized for in the Federal Trade Commission Act.

(b) The Commission shall prevent any person from violating the provisions 

of this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the 

Federal Trade Commission Act were incorporated into and made a par t of this 

Act: and any such person violating the provisions of this Act shall be subject 

to the penalties and entitled to the privileges and immunities provided in the 

Federal Trad e Commission Act as though the applicable terms and provisions 

of such Act were incorporated into and made a par t of this Act.

(c) The Commission is authorized and directed to make such rules and regulations as may be necessary and proper for the purposes of administration and enforcement of this Act.

(d) The Commission is authorized to cause inspections, analyses, tests, and 

examinations to be made of any steel shipping container subject to this Act.

CRIMINAL PENALTY

Sec. 6. (a) Whoever willfully violates section 3 or 4 of this Act shall be guilty 

of a misdemeanor, and upon conviction shall be fined not more than $5,000 or 

imprisoned not more than one year, or both, in the discretion of the court: Provided, Tha t nothing in this section shall limit any other provision of this Act.

(b) If the Commission has reason to believe tha t any person has violated section 3 or 4 of this Act the Commission may certify all perinent facts to the Attorney General and. if the Attorney General concurs, he shall cause appropriate 

proceedings to be brought for the enforcement of this Act against such person.

APPLICATION OF OTHER LAWS

Sec. 7. The purposes of this Act shall be held to be in addition to, and not in 

substitution for or limitation of. the provisions of any other Act of Congres.

Sec. 8. This Act shall take effec t______________after the date of its enactment.
STEEL CONTAINER MARKING 3

[H.R. 6647, 89 th Cong., 1st sess. ]

A BILL To pr oh ibit the intro du ction into in te rs ta te comm erce of any shipping conta ine r man ufac tured in the United St ates fro m imported stee l unless th e co ntai ne r is marked 

so a s to indica te th e country of or igi n of the stee l

Be it enacted by the Senate and Hou se of Representatives of the United States

of America in Congress assembled. T ha t this Act may be cited as the “Steel Shipping Container Identification Act”.

DE FINIT IO NS

Sec. 2. As used in this Act—

(a) The term “person” means an individual, partnership , corporation, association, or any other form of business ente rprise.

(b) The term “commerce” mean s commerce among the seve ral States or with 

foreign nations, or between two points in the same State but thro ugh any point 

outside thereof, or in any possession of the United Sta tes or in the District of 

Columbia, or between any such possession and another, or between any such 

possession and any State or foreign nation, or between the D ist ric t of Columbia 

and any State, possession of the United State s, or foreign nation.

(c) The term “Sta te” includes the Commonwealth of Pue rto Rico.

(d) The term “Commission” mea ns the Fed eral Trade Commission.

(e) The term “shipping container” shall mean all steel drums and pails used 

for shipping prod ucts as defined by the D epartment of Commerce:

(1) Drum : Any single wall cylindrica l or bilged container having a capacity of over twelve gallo ns to one hundred and ten gallons, inclusive, constructed of steel sheet and inclus ive of all gages.

(2) P a il : Any steel shipping pa ckage with or w ithout bail and handle h aving a capacity of one gallon to twelve gallons, inclusive, constructed of 

steel sheet twenty-nine gage or heavier.

MA RKING OF STEEL SH IP PI NG CONTA INERS

Sf.c. 3. (a) It shall be unlaw ful and shall be an un fair method of competition 

and an u nfair and deceptive act o r p rac tice in commerce u nde r the Fed eral Trade 

Commission Act for any ma nufac tur er of steel shipping contain ers to introduce 

any such contain er into commerce whenever such contain er is manufactured in 

the United States in whole or in chie f value from steel made outside the United 

States, unless such container bears embossed on the top head of the container 

in letters not less tha n one-fourth of an inch in height the legend “Steel in this 

contain er made in ” ; with the blank space being filled with the name

of the foreign country in which such steel was made.

(b) It shall be unlawful and shall be an unfair method of competition and an 

un fair and deceptive act or practic e in commerce under the Feder al Tra de Commission Act for any person to deface, destroy, remove, alter, cover, obscure, or 

oblite rate any mark placed on a stee l shipping container pu rsu ant to subsection 

(a) of thi s section, if the purpose of defacing, destroying, removing, altering, 

covering, obscuring, or oblite rating such mark is to hin der or prevent other 

persons fro m o btaining the information given by such mark.

RECORDS

Sec. 4. (a ) Every ma nufac turer of steel shipping containers shall maintain 

prop er reco rds showing the origin of the steel used in all steel shipping containers 

made by him, and shall preserve such records for at lea st three years.

(b) The neglect or refusal to m ain tai n or preserve the records requ ired by this 

section is unlawful, and any person neglecting or refu sing to mainta in such 

records sha ll be guilty of an un fair method of competition, and an unfair or 

deceptive ac t or prac tice in commerce und er the Fed era l Trade Commission Act.

ENF ORCEME NT

Sec. 5. (a ) Except as otherwise specifically provided in this Act. this Act shall 

be enforced by the Commission under rules, regulations, and procedures authorized for in the Federal T rad e Commission Act.

(b) The Commission shall pre vent any person from violating the provisions 

of this Act in the same manner, by the same means, and with the same jurisd iction, powers, and duties as though all applicable term s and provisions of the 

Federal Trade Commission Act were incorporated into and made a pa rt of this 

Act; and any such person violating the provisions of this Act sha ll be subject to
4 ST EEL CONTA IN ER M ARKIN G

the penalties and entitled to the privileges and immunities provided in the 

Federal Trade Commission Act as though the applicable terms and provisions of 

such Act were incorporated into and made a part of this Act.

(c) The Commission is authorized and directed to make such rules and regulations as may be necessary and proper for the purposes of administration and 

enforcement of this Act.

(d) The Commission is authorized to cause inspections, analyses, tests, and 

examinations to be made of any steel shipping container subject to this Act.

C R IM IN A L PEN ALTY

Sec. (5. (a) Whoever willfully violates section 3 or 4 of this Act shall he guilty 

of a misdemeanor and upon conviction shall be fined not more than $5,000 or 

imprisoned not more than one year, or both, in the discretion of the court : 

Provided, That nothing in this section shall limit any other provision of this 

Act.

(b) If the Commission has reason to believe tha t any person has violated 

section 3 or 4 of this Act the Commission may certify all pertinent facts to the 

Attorney General and if the Attorney General concurs, he shall cause appropriate 

proceedings to be brought for the enforcement of this Act against such person.

A PP LIC A TIO N OF OTH ER LA W S

Sec. 7. The purposes of this Act shall be held to be in addition to. and not in 

substitution for or limitation of. the provisions of any other Act of Congress.

Sec. 8. This Act shall take effect afte r the date of its enactment.

[H .R . 6775, S9t h Cone., 1st se ss.]

A B IL L To pro hib it th e in tr oduction in to in te rs ta te comm erc e of an y sh ip pin g co nta in er 

m an ufa ct ure d in th e United S ta te s fr om im po rted st ee l un le ss th e conta in er is marke d 

so as to in dic ate th e co un tr y o f o rigi n of t h e s te el

Be it enacted by the Senate and House of Representatives of the United States

of America in Congress assembled, T hat this Act may be cited as the “Steel Shipping Container Identification Act”.

D E F IN IT IO N S

Sf.c. 2. As used in this Act—

(a) The term “person” means an individual, partnership, corporation, association, or any other form of business enterprise.

(b) The term “commerce” means commerce among the several State s or with 

foreign nations, or between two points in the same State but through any point 

outside thereof, or in any possession of the United States or in the District of 

Columbia, or between any such possession and another, or between any such possession and any State or foreign nation, or between the District of Columbia and 

any State, possession of the United States, or foreign nation.

(c) The term “State” includes the Commonwealth of Puerto Rico.

(d) The term “Commission” means the Federal Trade Commission.

(e) The term “shipping container” shall mean all steel drums and pails used 

for shipping products as defined by the Department of Commerce:

(1) Drum : Any single-wall cylindrical or bilged container having a capacity of over twelve gallons to one hundred and ten gallons, inclusive, constructed of steel sheet and inclusive of all gages.

(2) Pail: Any steel shipping package with or without bail and handle 

having a capacity of one gallon to twelve gallons, inclusive, constructed of 

steel sheet twenty-nine gage or heavier.

M ARK IN G OF STEEL S H IP P IN G CONTA IN ER S

Sec. 3. (a) It shall be unlawful and shall be an unfa ir method of competition and an unfair and deceptive act or practice in commerce under the Federal 

Trade Commission Act for any manufacturer of steel shipping containers to 

introduce any such container into commerce whenever such container is manufactured in the United States in whole or in chief value from steel made outside the United States, unless such container bears embossed on the top head 

of the container in letters not less than one-fourth of an inch in height the 

legend “Steel in this container made in ” ; with the blank space
STEEL CONTAINER MARKING 5

being filled with the name of the foreign country in which such steel was made.

(b) It shall be unlawful and shall be an unfair method of competition and an unfair and deceptive act or practice in commerce under the Federal Trade Commission Act for any person to deface, destroy, remove, alter, cover, obscure, or obliterate any mark placed on a steel shipping container pursu ant to sub­ section (a) of this section, if the purpose of defacing, destroying, removing, altering, covering, obscuring, or obliterating such mark is to hinder or prevent other persons from obtaining the information given by such mark.

RECORDS

Sec. 4. (a) Every manufacturer of steel shipping containers shall maintain proper records showing the origin of the steel used in all steel shipping con­ tainers made by him, and shall preserve such records for a t least three years. (b) The neglect or refusal to maintain or preserve the records required by this section is unlawful, and any person neglecting or refusing to maintain such records shall be guilty of an unfair method of competition, and an unfair or deceptive act or practice in commerce under the Federal Trade Commission Act.

ENF ORC EMENT

Sec. 5. (a) Except as otherwise specifically provided in this Act, this Act shall be enforced by the Commission under rules, regulations, and procedures authorized for in the Federal Trade Commission Act. (b) The Commission shall prevent any person from violating the provisions of this Act in the same manner, by the same means, and with the same jur is­ diction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a par t of this Act; and any such i>erson violating the provisions of this Act shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act as though the applicable terms and pro­ visions of such Act were incorporated into and made a par t of this Act. (c) The Commission is authorized and directed to make such rules and regu­ lations as may be necessary and proper for the purposes of administration and 

enforcement of this Act. (d) The Commission is authorized to cause inspections, analyses, tests, and examinations to be made of any steel shipping container subject to this Act.

CR IM INAL PENA LTY

Sec. 6. (a) Whoever willfully violates section 3 or 4 of this Act shall be guilty of a misdemeanor and upon conviction shall be fined not more than $5,000 or imprisoned not more than one year, or both, in the discretion of the cour t: 

Provided, That nothing in th is section shall limit any other provision of this Act. (b) If the Commission has reason to believe that any person has violated section 3 or 4 of this Act the Commission may certify all pertinent facts to the Attorney General and if the Attorney General concurs, he shall cause appro­ pria te proceedings to be brought for the enforcement of this Act against such 

person.

AP PLICAT ION OF OTHER LAWS

Sec. 7. The purposes of this Act shall be held to be in addition to, and not in substitution for or limitation of, the the provisions of any other Act of 

Congress.

Sec. 8. This Act shall take effect three months a fter the date of its enactment.

General Counsel of tiie Department of Commerce.

Washington, D.C., April 29, 1965.

Hon. Oren Harris,

Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Mr. Chairman : This is in further reply to your request for the views of this Department with respect to H.R. 6775, a bill to prohibit the introduction into interstate commerce of any shipping container manufactured in the United States from imported steel unless the container is marked so as to indicate the 

country of origin of the steel.
6 STEEL CONTAINER MARKING

If enacted, thi s bill would requ ire stee l shipping containers manuf actured in 

the United States from imported steel, to be stamped with the country of origin 

of the steel. The term “shipping conta ine r” would mean all steel dru ms and 

pails used for shipping products “as defined by the Dep artm ent of Commerce.” 

Every ma nufac turer of such containers would be required to ma intain proper 

records showing the origin of the steel used in all the steel shipping containers 

made by him.

The Fed eral Tra de Commission would be empowered to enforce the Act and 

to impose the app ropriate penalties for its violation. Provision is made for the 

willful or deceptive alte ration of any ma rk of origin placed on a steel shipping 

container.

Insofar as the marks of origin require ment on imported articles is concerned, 

and except for the deceptive markin g pra ctices covered by the Feder al Tra de 

Commission Act, the basic policy of the United States is embodied in section 304 

of the T ariff Act of 1930, as amended. Under this law each imported artic le produced abroad, and not otherw ise specifically exempted from markin g requ irements, must be legibly marked in a conspicuous place in a manner th at will indicate to an ult im ate purchase r in the United States the English name of the 

country of origin of the article.

Congress intended, and customs cou rt decisions affirm, that the country of 

origin marking requ irement apply only to imported articles which do not lose 

their identity before reaching the ultim ate purchaser. This Departme nt supports the present p ractice under section 304 which does n ot requ ire th at imported 

materials which lose their identity in a prod uct man ufactured in the United 

States be identified in the finished domestic product. To do so would create 

a discrimination aga inst the imported m ate ria ls inasmuch as the burden of m ark ­

ing would tend to deter U.S. ma nufac tur ers from using imported ma terials and 

would thereby insti tute a nontarilf barrier. In the same manner the marking 

requirement would discriminate again st some domestic products on the basis of 

the origin of the materials incorporated there in.

The net effect of excessive marking or labeling requirem ents directed against 

imported products is to either limit their ava ilability or to increase their cost. 

This in tur n increase s the cost of supplies and materials to American manufactur ers and thereby rend ers them less able to compete with imported finished 

products both in the domestic and foreign markets.

Although II.R. 6775 does not specifically amend the Tariff Act of 1930, it s enac tment would cre ate three undesirable effects in term s of the 1930 act. First , the 

bill has the indirect effect of redefining “ultim ate p urchas er” by requiring notification of co untry of origin, not on the article in the form in which it is im ported, 

but on the pro duc t after it has undergone sub sta ntial tran sformation by manufac tur e or processing by U.S. industries.

Secondly, II.R. 6775 s hifts the burden of responsibility for marks of origin to 

all of the manufacturers, processors, or oth ers who hand le the import prior to 

its final use and sale.

Thirdly, II.R. 6775 constitutes special legislation since it requ ires manufacturers of steel shipping containers to comply with the markin g and record keeping requirem ents but permits o ther ma nufac tur ers to incorporate imported materia ls into the ir products without submitting to such adm inistraive burdens.

Under the existing requirements of section 304 of the Tariff Act of 1930, 

shipping containers manufac tured outside the United States, like other finished 

products, must be m arked with the country of origin.

The Dep artm ent believes tha t it is not desirable to exceed the seoi>e or inte nt 

of section 304, as provided for in II.R. 6775. since to do so would place unw arran ted adm inistrative and cost burdens on U.S. handlers and consumers of imported ma terials with no comm ensurate benefits to the final consumers of the 

prod uct into which the imported ma terials have been incorporated. The Department is of the opinion that the Congress in enacting section 304 carefully balanced the need to inform the ultimate purch ase r as to the country of origin of 

the imported artic le in the form in which it is imported against the burden that 

attach es to marking, as represente d by the exemptions to section 304 which recognize th at not all prod ucts can be marketed in the normal manner.

For these reaso ns, the Departm ent of Commerce opposes the enactment of 

II.R. 6775.

We have been advised by the Bureau of the Budget that there would be no 

objection to the submission of this report from the stan dpoint of the admi nis tration’s program.

Sincerely,

Robert E. Giles, General Counsel.
STEEL CONTAINER MARKING 7

F ederal T rade Com m is si on , 

Washington, D.C., May 12,1965.

Hon. Oren Harris,

Chairman, Committee on Inter state and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Mr. Chairman : This is in reply to you r lette r of April 1, 1965, requesting the Federal Tra de Commission to comment on H.R. 6775, 89th Congress, 1st session, a bill “To pro hib it the introdu ctio n into inter sta te commerce of 

any shipping contain er manufactured in the United Sta tes from imported steel unless the container is marked so as to indicate the country of origin of tlie

The subject bill is identical with H.R. 1671, 89th Congress, 1st session, on which the Commission submitted a rep ort to your committe e on March 26, 1965. The bill would make it an unfair method of competition and a deceptive act or prac tice in commerce under the Feder al Trade Commission Act for a manu­ facturer of steel shipping containers to introduce them into commerce when the “con taine r is ma nufac tured in the United Sta tes in whole or in chief value from steel made outside the United Sta tes,” unless the containe r is properly marked to indicate th at the steel is of foreign origin. The bill conta ins specific 

definitions of a “shipping container.” The bill also make s it a violation of the Feder al Trade Commission Act to change or re-m ark such markin g for the purpose of hindering or prev enting other persons from obtaining the info rma tion given by such mark. Records showing the origin of the steel so used would be require d to be kept by manu­ fac turers of such steel shipping containers; the failu re to do so would constitu te violations identical to those above mentioned. The bill furth er prov ides for the imposition of certa in sanctions, inclu ding 

crim inal penalties, for violations thereof. The Commission is of the view that existing provision s of law, as construed and applied by the Commission and the courts, are adequ ate to protect consum ­ ers aga inst any ma terial deceptions aris ing from failu re to disclose adequately the place of origin of imp orted merchan dise or pa rts or components thereof 

and, consequently, adequ ate to protect American pro duc ers as well. In respect to the foreign policy questions rais ed by this proposed legislation, the Commission defers to the views expressed by the Department of State.

By direction of the Commission.

Paul Rand Dixon, Chairman.

N.B.—Purs uant to regulations, this rep ort was subm itted to the Bureau of the Budget on May 5, 1965, and on May 11, 1965, the Bureau of the Budget advised that there is no objection to the submission of this report from the 

stan dpo int of the a dm ini str ati on’s program.

J oseph W. Shea, Secretary.

Department of State, 

Washington, April 5,1965.

Hon. Oren Harris,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives.

Dear Mr. Chairman : T hank you for your letter of April 1, 1965. enclosing for 

the comment of the D epartme nt of Sta te copies of H.R. 6775, a bill “To prohibit the introduc tion into in terstate commerce of any shipping con tainer m anufacture d 

in the United States from imported steel unle ss the c ontainer is market! so as to 

indicate th e country of origin of th e steel.” The Departm ent has tod ay subm itted to you its views and recomm endations 

on a sim ilar bill, H.R. 1671. These views are e qually applicab le to H.R. 6775 and 

for the reasons outlined in th at report, the Department of State is opposed to 

the enactme nt of H.R. 6775.

Sincerely yours,

Douglas MacArthur, II.

Assistant Secretary for Congressional Relations

(For the Acting Secre tary of S ta te ).
8 STEEL CONTAINER MARKING

The General Counsel of the Treasury,

Washington, D.C., April 23,1065.

Hon. Oren Harris,

Chaimuin, Committee on Int ersta te and Foreign Commerce, Hou se of Representatives, Washington, D.C.

Dear Mr. Chairman : Reference is made to your request for the views of this 

Department on H.R. 6775, “To prohibit the introduction into interstate commerce 

of any shipping container ma nufac tured in the United States from imported 

steel unless the container is marked so a s to indicate th e country of origin of th e 

stee l.”

The proposed legislation is intended to requ ire th at the name of the country 

of origin be marked on shipping conta ine rs man ufactured in the United States 

from imported steel.

Since th e bill is concerned with artic les which are manu fac tured in the United 

States, the Department has no enfo rcem ent jurisdic tion. Ra the r the enforcement of th e bill would be vested in the Fed eral Trade Commission.

Imported art icl es which are used by manufac turers in the United States in 

the ma nufac ture of new or different artic les are expected from marking under 

the customs laws, if imported und er circumstanc es which will assure that the 

ma nufac tur er is aware of the cou ntry of orig in of the imported materials, and 

there is no require ment under the custom s laws th at the new articles be marked 

to indicate the foreign origin of t he m ate ria l from which they a re produced. To 

require th at shipp ing containers manufac tur ed in the United State s from imported steel be marked to indicate the cou ntry of origin of the steel would thus 

app ear to discriminate aga inst manufactur ers of shipping con tain ers who use 

impo rted steel.

The De par tment would be opposed to the passage of H.R. 6775. The bill is 

app arently designed to discourage the pu rch ase of con tainers made from imported 

steel. It is our opinion th at thi s would constitute a tra de ba rrier of the kind 

inconsistent with the adm inistration’s policy of trad e expansion and would hinde r 

efforts to sec ure relief for U.S. exports from foreig n non tariff tra de barriers. 

Furth er, it is believed th at special legisla tion is unnecessary in th at relief in 

the form of tra de restrictions and ad justm ent assistance is ava ilab le to a distressed domestic in dustry under th e Trade Expansion Act.

The D epa rtm ent has been advised by the Bureau of th e Budget th at th ere is no 

objection from the stand point of the admi nis tra tio n’s pro gram to the submission 

of this report to your committee.

Sincerely yours,

Fred B. Smi th,

Acting General Counsel.

U.S. Department of J ustice,

Office of the Deputy Attorney General,

Washington, D.C., M ay 7, 1965.

Hon. Oren Harris,

Chairman, Comm ittee on Inters tate and Foreign Commerce, House of Representatives. Washington, D.C.

Dear Mr. Chairman : This is in response to your requests fo r the views of 

the Dep artm ent of Justice on H.R. 1671 and H.R. 6775 “To prohibit th e introdu ction into interstate commerce of any shipping container manuf actured in the 

United Sta tes from imported steel unless the containe r is marked so as to indicate the cou ntry of origin of the ste el.”

The bills, which are almost iden tical, would prohibit the introduction into interstate or foreign commerce of steel drums or pails, of a cer tain size, manufactured in the United States, in whole or in chief value, from imported steel, 

unless they are marked to in dicate the co untry of origin of the steel. They would 

likewise pro hib it the obscuring or des troy ing of any such mark with the purpose 

of hind ering or preventing other persons from obtaining the info rma tion given 

by the mark. Manufacturers of such containers would be required to keep records for at least 3 years showing the origin of the steel. A willful violation of 

the proposed law would constitute a misdemeanor punishable by a fine of up to 

$5,000 and /o r a maximum jail sentence of 1 year. Fu rth er, noncompliance with 

the proh ibitions of section 3 and the requ irem ents of section 4 is characterized 

as un fai r competition and an un fair tra de practice und er the Fed eral Trade 

Commission Act.
STE E L CO NTA IN ER M ARKIN G 9

Section 304 of th e Tar iff Act of 1930 (19 U.S.C. 1304) imp oses the d uty of m ar king eve ry rea dy-to-sell ar ticl e of foreig n origin impo rte d into th e Un ited St ates 

in such ma nner as to in di ca te to an ultim ate pu rcha se r in the Un ited State s the 

En glish nam e of th e co un try of orig in. In addit ion , th er e ar e law s requ iri ng 

th at a par t of an im po rte d artic le or dom estic ar tic le be ma rke d to inform the 

con sum er of qu ality . (See, fo r example, Pu bli c Law 87-354, app rov ed Octobe r 

4, 1961, an ac t “to fa ci lita te the pro tec tio n of consu me rs of a rti cles of merch an ­

dis e composed in whole or in par t of gold o r s ilv er from fra ud ul en t m isrepr es en tatio n con cerning th e qu al ity the reo f, and fo r othe r purposes. ” ) How ever, we ar e 

aw ar e of no provision of ex istin g law which prescribes th e ma rking, as w ould be 

requ ire d by the se bills, of an ar tic le m an uf ac ture d in th e United St ates fro m impo rte d ma teria l. In doing so, the bill s would pla ce upo n the man uf ac tu re rs of 

ce rtain steel co ntaine rs th e burde n and exp ense of marking th e contain ers and 

kee pin g books un de r pa in of crim ina l pe na lti es w hile th e m an uf ac tu re rs of othe r 

co ntaine rs and ot he r pr od uc ts made fro m im porte d m at er ia l would not be so 

burde ned. Th is am ou nts to a dif fer ent tr ea tm en t w itho ut p ers uasiv e distinctive 

fe atur es .

Althou gh we follow ed th e hearing s an d re ad the favo rable re po rt o f y our com ­

mitt ee and the de ba tes in th e House on ide ntical bil ls in th e 88th Cong ress, we 

fee l th at this is unwi se leg isla tion. If it sho uld be ena cte d, eve ry indu stry 

wh ich meets severe pr ice com pet itio n from ab road wo uld be en tit led to th e sam e 

forei gn pro duct lab eling fo r th e purpo se of cu rtai lin g for eig n com petition. The 

bu rden on the fa br ic at or an d th e packager would b e m ult ipl ied . Th is would a lso 

ap pe ar inco nsisten t with pr es en t U.S. policy to rem ove bar rier s to for eig n tra de , 

expressed for example, in th e Tr ad e Ex pansion Act of 1962. Accordingly, we ar e 

unable to reco mmend en ac tm en t of this leg isla tion.

Th e Bu reau of the Bu dg et has adv ised th at there is no obje ctio n to th e sub ­

missio n of thi s re po rt fro m th e sta nd po int of the ad m in istrat io n' s pro gra m. 

Sincerely ,

R amsey Clark,

Deputy Attorney General.

Mr. Macdonald. Sim ilar legislation, II.K. 5662, H.K. 5673, and 

II.K. 5675 was introduced durin g the preceding Congress. Hearings 

on these bills were held by this subcommittee on November 6, 1963, 

and the committee on J uly 9, 1964, reported favorably on H.K. 5673 

(H. Kept. 1552).

The House of Representatives passed th is bill on August 12, 1964. 

No action, however, was taken on this legislation by the other body 

and, therefore, it died with the adjournment of the last Congress.

I think it only fitting tha t the first witness this morning will be our 

distinguished colleague on the subcommittee who has worked so long 

and hard on this subject matter. I am happy to recognize Congressman Curtin, of Pennsylvania.

STATEMENT OF HON. WILLARD S. CURTIN, A R EPRESENTA TIVE IN 

CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. Curtin. Thank you, Mr. Chairman. Mr. Chairman, I have a 

statement on this particu lar piece of legislation which, as you said, is 

one of three bills. My bill is ILR. 6775.

May I ask at this time leave to introduce the statement and have it 

made a part of the record ?

Mr. Macdonald. With out objection, it is so ordered.

(T1 le full, prepared statement of Mr. Curtin follows:)

Statement of H on. Willard S. Curtin on th e Thre e Companion Bills— 

II.R. 6775, II.K . 6182, and II.R. 6647

Air. Ch air man a nd gentlem en of the sub com mittee. I welc ome this op po rtu nity 

to ap pe ar before you toda y in ref ere nce to th e leg islati on which ha s been in troduced fo r the ide ntification of steel shipping contain ers.
10 STEEL CONTAINER MARKING

As you know, H.R. 6775, introduced by myself, is one of thre e sim ilar bills. 

Bills have also been introduced by two oth er members of thi s important committee; the Honorable Harley O. Stag gers has introduced H.R. 6182, and the 

Honorable Walter Rogers of Texas has introduced 11.R. 6647. As mentioned 

above, all of these bills are on this subje ct of labeling of steel containers.

H.R. 6775 was introduced for two basic purpo ses: First, to promote the continued use of domestic steel to the end th at American industry and labo r will not 

suffer th e loss of dollars and man-hours caused by the use of foreign stee l in the 

fabrication of steel drums and pails. Second, to assist the ma nufac tur ers of 

steel drums and pails in continuing to use domestic steel and to alleviate the 

demoralizing price dilemma posed by users of foreign steel, who may underse ll 

the user of A merican steel without hav ing to disclose that the price differen tial 

is not due to sup erio r technology and know-how—but simply due to his using 

foreign steel in drums and pails to be sold to domestic purchasers.

To accomplish these goals, we do not propose to rais e tari ffs or arbitra ril y exclude foreign steels—we merely wa nt to inform the purcha ser of steel drums 

and pails and let him make his decision based upon all of the facts and considerations which p rovide the basis for a business decision as to wh at drums and pails 

he’ll buy.

The a ct would require tha t the ma nufac tur ers of steel shipping containe rs from 

foreign steel indicate the country of origin of the steel on the container. It 

has been suggested tha t, rather tha n merely stamping this information on the 

container, it should be embossd th er on ; thi s would minimize the risks of destruction or concealment of the marking.

The act would authorize the Federal T rad e Commission to enforce the marking 

requirements—t he failur e to comply with the act would be an un fair trade 

practice. The Feder al Trade Coinmisson is partic ularly suited for the administration and enforcement of this act because it is generally sim ilar to other 

labeling acts und er its authority. In add ition, since the marking will tak e place 

after the con tain ers have been fab ricated from the imported steel, the FTC, 

with its nationw ide network of offices, is best suited at present to enforce such 

an act.

The public m ust be able to use American-made steel prod ucts if it wishes. This 

bill leaves the choice entirely up to the priva te sector of the economy. This 

measure cann ot be called an act discriminating against, or restricting , foreign 

trade or impo rted products. It is like the description of ingredients on food and 

drug containe rs—th e purpose of the law is information.

The presen t level of production among American steel producers add s to the 

urgency of the presen t position. Unemployed steelworkers and hard-pressed 

ma nuf acturers cau ght in the cost-price squeeze must be adequately protected 

through the efforts of other citizens to sp ur a demand for the ir product.

This is not a restra int of free trade. The public still makes the decision—but 

with this legislation, a concerned public w ill have the info rma tion so th at it may 

make a mean ingful decision.

I thank you for your atte ntio n and respec tfully requ est th at the legislation 

represente d by these three bills be given ear ly and favorable consideratio n by 

this subcommittee.

Mr. Curtin . I m erely w ant to s ay in a dd ition to the statem en t t ha t, 

as you have ju st sa id, this leg islation, as rep res ented b y the bill in troduced by Mr. Ke nneth R oberts o f th e last C ongress, passed the House 

of Re pre sen tative s, but did not pro cee d any fu rther thr ou gh the C ongress and th is is a rei ntr oductio n of t h at legi slation, with some modification.

W ith th at , sir, I conclude my sta tem en t.

Mr. Macdonald. Th an k you, M r. Cu rti n.

Mr. Rog ers, d o you have a sta teme nt to make ?

STATEMENT OF HON. WALTER ROGERS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS

Mr. Rogers of Texas. Mr. Ch airm an , and Mr. Cur tin , fir st let me 

say this, th at I would ad d my d itt o to th e rem ark s of Mr. C ur tin on this 

suDcommittee, bu t I th in k th at atte nt io n sho uld be called to the fac t 

th at alt ho ug h th is m igh t ap pe ar to some to be an atte mpt to interfe re
STEEL CONTAINER MARKING 11

with world trade, actually I was not prompted in doing this for that reason, nor I am sure was Mr. Curtin prompted by that. The situa­ tion is simply this. It is very similar to the problem we have been faced with in many other products in this country and not only manu­ factured products, but in some of the products that are processed from agriculture and I have in mind especially the sugar situation. I realize, of course, that we have to have foreign trade and we must work with these foreign nations. This bill does not prevent foreign trade. It does not put any halter on foreign trade. It simply outlines the situation where the American people have the righ t to make a choice and I think it is necessary. I think it is fair. I think that it ought to be given consideration in view of the difficulties tha t have been experienced not only in the situation tha t we faced with the steelmills, but all of the facets of tha t industry, including labor and all of the other associated industries t hat are dependent upon it. I would hope that the subcommittee would find the facts in favor of 

the bill and report it out favorably.

Mr. Macdonald. It is a great pleasure to have you here, Mr. Rogers. It is also a great pleasure for me to be on the same side with you on a 

measure such as this.

Mr. Rogers of Texas. May I say tha t I want to compliment the chairman. He is a very distinguished gentleman and certainly has a wonderful new room to meet in. I hope that I may use this room also.

Mr. Macdonald. Tha nk you, sir.

Mr. Curtin. Mr. Chairman, I would just like to say that I am, of course, delighted that Mr. Rogers feels the same as I do about this legislation and I could not have anyone associated with me tha t I 

would be more pleased to have than Mr. Rogers.

Mr. Rogers of Texas. I thank the gentleman from Pennsylvania.

Mr. Macdonald. Tha nk you, Mr. Rogers. The next witness is the Honorable Dan Rostenkowski, from the Eig hth District of Illinois. Mr. Rostenkowski, we will be glad to 

hear you at this time.

STATEMENT OE HON. DAN ROSTENKOWSKI, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. Rostenkowski. I appreciate the opportunity of appearing be­ fore the subcommittee today in support of IT.R. 6182, II.R. 6647, and II.R. 6775 which have been introduced by my colleagues, Mr. Staggers, 

Mr. Rogers, and Mr. Curtin. These bills would prohibit the introduction into interstate com­ merce of any shipping container which has been manufactured in the United States chiefly from imported steel unless the container is marked so as to indicate the country of origin of the steel. This proposed legislation has two main goals; namely, (1) to allow purchasers of steel shipping containers to know when foreign steel is used in the manufacture of these containers, and (2) to promote the 

use of steel produced in this country. In my opinion, these are highly desirable and worthwhile objectives in view of certain grave problems with which the Nation and the steel 

industry are confronted today.
12 STEEL CONTAINER MARKING

For many years after World War II , the United State s enjoyed 

an excess of exports of steel products over the value of steel products 

imported into this country. This favorable position of our domestic 

steel industry has deteriorated as imports have increased at an accelerating rate—by 13 percent in 1963, 18 percent in 1964, and an estimated 15 percent for 1965. Indeed, according to figures set forth in 

the Wall Stree t Journal, on A pril 20, 1965, foreign steel imports in 

1964 amounted to $750 million as against $600 million of American 

steel exports, thus contributing $150 million to the balance-of-payments deficit.

This unpromising imbalance in our steel exports and imports is 

not at all likely to improve-—indeed, if the past few years show anything, they demonstrate an increasingly serious trend away from use 

of domestic steel to foreign steel with the consequent loss of jobs 

for our working people.

According to information supplied to me, the steel shipping container industry consumes about 1 million tons of steel a year. Because of the cheaper foreign steel, manufacturers of steel shipping 

containers who use foreign steel enjoy an important economic advantage over the manufacturers who use American steel. Moreover, due 

to intense competition within the industry and the fact th at the design 

and material content of the products of this industry are generally 

uniform, this competitive advantage cannot be recouped by the users 

of American steel.

In my opinion, the Steel Ship ping Container Identification Act 

affords a reasonable and important incentive for the manu facturer 

of steel shipping containers who desires to continue to use domestic 

steel. This act simply requires t ha t manufacturers of steel shipping 

containers from foreign steel mark the origin of the steel on the container. It does not raise tariffs, or exclude or limit the importation 

of foreign steel in any way.

The act would authorize the Federal Trade Commission to enforce 

the marking requirements—the failure to comply with the act would 

be an unf air trade practice. The Federal Trade Commission is p articularly suited for the administration and enforcement of this act 

because it is generally similar to other labeling acts under its a uthority. In addition, since the marking will take place after the containers have been fabricated from the imported steel, the FTC , with 

its nationwide network of offices, is best suited at present to enforce 

such an act.

In conclusion, I support the Steel Shipping Container Identification Act because I believe tha t it will promote the continued use of 

domestic steel with the consequent benefits to American business and 

labor and to our economy as a whole.

Mr. Macdonald. Are there any questions? If not, we thank you 

for your testimony, Mr. Rostenkowski.

Air. Rostenkowski. Thank you, Mr. Chairman.

Mr. Macdonald. The next witness is our colleague on the full committee, the Honorable Harley O. Staggers. Mr. Staggers, we will 

be glad to hear your testimony.
STEEL CONTAINER MARKING 13

STATEMENT OF HON. HAR LEY 0. STAGGERS, A REPRESENTATIVE 

IN CONGRESS FROM TH E STATE OF WEST VIR GINIA

Mr. Staggers. I strongly urge favorable action on this bill. Its 

purpose is plain and unequivocal enough. It is designed to give pur­ chasers of a given product, namely, steel containers, exact information on what they are buying. The general quality of steel from various sources varies considerably. Its source is a strong indication of its quality. Otherwise, quality is not easily determined by casual in­ spection. Steel from some foreign sources is recognized as high- quality steel. When imported into this country it sells at higher prices than domestic steel, and is deliberately chosen bv some users because of its quality and in spite of its price. Such steel is clearly identified as to its source in order to take advantage of its presumed quality. On the other hand, steel from other foreign sources does not enjoy a reputation for quality. For a number of reasons, it sells in this coun­ try at a lower price than domestic steel. Without an ide ntifying mark, the purchaser cannot distinguish this steel from domestic steel. He is entitled to know the source of the steel. If he wishes to use it, he may be entitled to a price concession. In any event, he should not be deluded by the understanding, express or implied, tha t he is being sold domestic steel. There is no reason whatsoever why the importa­ tion and use of foreign steel should be reduced by this act, unless pur­ chasers are being led to believe that they are being supplied domestic steel when in fact they are sold cheaper foreign steel. The law pres­ ently requires manufactured article s imported from foreign countries to be clearly marked as to country of origin. Sheet steel is a com­ modity whose character is not changed when cut into pieces and shaped into useful products, tha t is, containers. Its quality is inherent in the sheet steel. It should be identified as to country of origin.

Mr. Macdonald. Are there any questions? If not, we appreciate 

your appearance, Mr. Staggers.

Mr. Staggers. Thank you for the opportunity, Mr. Chairman.

Mr. Macdonald. Our next witness is the distinguished Senator from 

Indiana, the Honorable Vance Hartke. Senator, we welcome you to 

the subcommittee.

STATEMENT OF HON. VANCE HARTKE, A U.S. SENATOR FROM THE 

STATE OF INDIANA

Senator Hartke. Mr. Chairman, I am pleased to have the opportunity of supporting before your committee the bills introduced by Congressmen Curtin, Staggers, and Rogers, which would require the marking of shipping containers made of imported steel, in order to show the country of the steel’s origin. I am the author of a com­ panion bill in the Senate, S. 1634, in which Senators Bennett, Domi­ nick, Lausche, Moss, Randolph, and Scott have joined me as ^co- sponsors. I was also the author of an almost identical bill, S. 1342, 

in the 88th Congress. However, since the introduction of my bill, it has come to my a tten ­ tion that there is another important area of international trade which poses for our domestic manufacturers the same problem. That is the area of consumer electronic products, many components of which are now being imported and incorporated, without marking of the finished
14 STEEL CONTAINER MARKING

>roduct, in radio, television, phonograph, sound recording, and reated end products. Consequently, while continuing to support the 

labeling o f steel shipping containers, I am introducing in the Senate 

an amendment in the n ature of a substitute to my own bill, bearing 

the new title “Foreign Components Identification Act.” I submit 

herewith a copy of the expanded bill for your information, and ask 

tha t if possible it will be received as an appendix to my statement.

I do so in order that I may call to the attention of "this committee, 

although the bills before you are confined to steel container labeling, 

to the fact tha t the electronics industry faces the same problem and 

is similarly affected by the lack of a labeling requirement for imported components. Thus, many products of tha t industry today 

appear on the market as domestically manufactured, even though the 

major portion of the components come from abroad. While such a 

bill as my amendment, designed to correct this situation as well as 

tha t in steel containers, is not presently before you, I hope you will 

keep this problem also in mind and tha t you may have opportunity 

at a future time to give it consideration.

As to the bills now before you, I believe such action as is proposed 

is needed. The container manufacturin g industry is exceeded only 

by the auto manufacturing industry in its use of sheet steel. For a 

number of years it has been severely depressed, operating substantially 

below full capacity. Profit margins are at a minimum and price competition is severe. Companies using foreign steel in container manufacture enjoy a significant cost differential.

Importation of steel sheets in 1961 was 57,900 tons, but in the next 

year it tripled, to 172,900 tons. Again in 1963 the figure tripled, to 

527,400 tons, and that amount was doubled in 1964.

The bills before you, and this is true also of my revision to include 

electronic components, does not propose to bar nor limit imports. 

It does not call for new tariffs. It merely makes possible knowledge 

by the ultimate customer of the source of foreign materials used in 

what otherwise appears as an American-made product. While marking of the country of origin is required on the components themselves, 

the information becomes lost in the process of manufacture. Thus, 

the steel drum or grease pail becomes indistinguishable from that pro ­

duced of domestic sheet steel, and the television set whose components 

are to a large extent imported bears only an American label.

You know, of course, that the marking of steel containers as p roposed here is supported by the Steel Shipp ing Container Institute, 

by the United Steelworkers of America, and by others. Its passage 

will have a beneficial effect upon our domestic steel industry, at the 

same time tending to improve our balance-of-trade and balance-ofpayments position.

Air. Chairm an, I trust that your committee in its wisdom will again 

favorably report this measure, an d tha t the House of Representatives 

will once more secure its passage, as it did on August 12, 1964. I further trust that when you have the opportunity to consider the same 

kind of legislation as applied to the electronics industry, tha t for the 

same cogent reasons you will find similar provisions desirable there.

Mr. Macdonald. Senator, we thank you for your appearance and 

testimony.
STEEL CONTAINER MARKING 15

Senator Hartke. Thank you, Mr. Chairman.

Mr. Macdonald. Our next witness is Mr. Robert L. McNeill, Deputy 

Assistant Secretary for Trade Policy, U.S. Department of Commerce.

STATEMENT OF ROBERT L. McNEILL, DEPUTY ASSISTANT SECRETARY FOR TRADE POLICY, U.S. DEPARTMENT OF COMMERCE

Mr. McNeill. Thank you, Mr. Chairman. I appreciate this opportunity to appear before your committee to discuss H.R. 6775 

entitled, “The Steel Ship ping Container Identification Act.”

This bill would require steel shipping containers manufactured in 

the United States from imported steel to be stamped with the country 

of origin of the steel. Every manu facturer of such containers would 

be required to maintain proper records showing the origin of the 

steel used in all steel shipping containers made by him.

The bill also provides for the Federal Trade Commission to enforce 

the act and to impose app ropriate penalties for its violation.

The Department of Commerce strongly supports the long-established requirement now embodied in section 304 of the Tariff Act 

of 1930 tha t articles of foreign origin imported into the United 

State s should be marked in such a way as to indicate to the ultimate 

purchaser in the United States the English name of the country of 

origin of the imported articles.

Under present law and customs practice, country of origin marking requirements apply only to imported articles which do not lose 

their identity before reaching the ultimate purchaser and under section 304, present practice defines the “ultimate purchaser” as the last 

person in the United State s who will receive the article in the form 

in which it is imported.

The Department believes it is not desirable to exceed the scope or 

intent of section 304, as provided for in H.R. 6775, since to do so 

would place u nwarranted administrative cost burdens on U.S. manufactu rers and processors using imported manufactured articles. This 

burden would be imposed without commensurate benefits to the final 

consumers of the product into which the imported materials have 

been incorporated.

Section 304 carefully balances the desirability of informing the 

ultimate purchaser as to the country o f origin of the imported article 

in the form in which it is imported" against the desirability of avoiding impractical, expensive, onerous, or useless requirements which 

would interfere with trade .

Although H.R. 6775 does not specifically amend the act, the Tariff 

Act of 1930, its enactment would have certain undesirable effects in 

terms of the 1930 act.

First, the bill has the indirect effect of redefining “ultimate pu rchaser” by requiring notification of country of origin, not on the 

article in the form in which it is imported, but on the product after 

it has undergone substantial transformation by manufacture or processing by U.S. industries.

H.R. 6775 shifts the burden of responsibility for marks of origin 

from the parties immediately responsible for determining origin, th at 

is, importers, to all of the manufacturers, processors, or others who 

handle the import prio r to its final use and sale.
16 STEEL CONTAINER MARKING

Additionally, H.R. 6775 constitutes special legislation since it requires manufacturers of steel shipping containers to comply with the 

marking and recordkeeping requirements but permits other manufacturers to incorporate imported m aterial into their products without 

submitting to such administrative burdens.

To require such marking is to assume that the consumer will benefit 

from the knowledge tha t the domestically produced article contains 

imported materials, and that the domestic producers of steel will be 

benefited by the consumer’s preference for the domestic product which 

contains no imported material.

Most probably, however, consumer preference for a particular pro duct would be influenced by his needs in terms of quality and price, and 

not necessarily by his knowledge of the origin of the materials in the 

product.

Thus, while there is no assurance th at the marking of domestically 

produced articles containing imported materials would have any effect 

on the consumer’s choice, it is clear tha t the marking requirements pro ­

vided in II.R. 6775 would impose a very considerable and bothersome 

burden on domestic manufacturers using imported steel. Thus, H.R. 

6775 would institute a nontariff trade b arrier which goes considerably 

beyond present marks of origin practice and is inconsistent with the 

trade policy of the United States to seek the removal of unnecessary 

impediments to trade.

Thank you, Mr. Chairman.

Mr. Macdonald. Mr. McNeill, reading your statement, I am not 

100 percent sure whether the Department is for or against the bill.

Mr. McNeill. We are against the bill.

Mr. Macdonald. You are against it ?

Mr. McNeill. Yes, sir.

Mr. Macdonald. Well, is one of the reasons as you state on page 3, 

tha t the consumer preference for a particu lar product would be influenced by his needs and terms of quality and price and not by his 

knowledge of the origin of the materials in the product? I do not 

quite follow t ha t statement.

Mr. McNeill. I believe, Mr. Congressman, we are stating here th at 

perhaps an intention of the bill is through this marking requirement, 

through telling consumers the steel used in the container is imported, 

tha t this perhaps may direct his final choice to a product not so labeled 

which would be a domestic product. Therefore, the bill apparently 

contemplates that it might have the effect of stimulating purchase of 

a product incorporating domestic steel.

Mr. Macdonald. Well, as a representative of the Department of 

Commerce, is there something wrong with that, tha t domestic commerce should be aided and tha t the stimulus in this industry should 

follow ? Is it the position of the D epartment of Commerce that there 

is something wrong with that?

Mr. McNeill. The Department of Commerce’s position, Mr. Congressman, is tha t one particular segment of American industry that 

uses steel would be required to label a product as incorporating foreign steel. The iron ore that is imported from Canada tha t is incorporated into domestic steel, or the nickel imported from abroad and 

incorporated into domestic steel does not have such a requirement. 

Fo r instance, in respect of the flour tha t we ship abroad to be incorpo-
STEEL CONTAINER MARK ING 17

rated in bread in E urope, the Europeans do not require that the loaf 

of bread finally have stamped on it th at this flour was imported from 

the United States, and that therefore, the bread is of foreign origin.

Mr. Macdonald. I s this not because we are mainly giving away 

most of that material and the people who are getting it want to take 

credit for having produced the flour themselves ?

Mr. McNeill. No, sir; I am talking here about Western Europe 

rather than tlie rest of the countries. We do have commercial markets 

for our wheat in Western Europe.

Mr. Macdonald. As I recall the foreign aid bill of last year, there 

was a good deal of foodstuffs, et cetera, which were included and sent 

to such countries as Yugoslavia.

Mr. McNeill. Yes.

Mr. Macdonald. We even sold some to Russia. I do not quite see 

the analogy because those countries obviously are quite content not to 

have “made in the U.S.A.” stamped on the bags that they are 

accepting.

Mr. McNeill. I understand that, Mr. Congressman.

Mr. Macdonald. By charity or by purchase from us.

Mr. McNeill. I was not trying to make an analogy between the 

shipments of U.S. wheat to Russia or Yugoslavia, but rather our commercial trade in wheat with Europe, which is sold on commercial 

terms.

Mr. Macdonald. Which is exactly the same thing. We have been 

selling commercially to Russia. We have not reached the stage where 

we are giving wheat to Russia yet.

Mr. McNeill. Th at is right, sir.

The United States, in the Kennedy round is seeking liberalization of 

a whole panorama of nontariff barriers abroad tha t restrict our ability 

to export and we, on balance, do not think it in the U.S. interest, or in 

the interest of U.S. industry in the case of the Department of Commerce, <o have this particu lar piece of legislation passed, because it 

would frustrate our objectives in having other countries liberalize some 

of their marking requirements.

Mr. Macdonald. I can understand the State Department because I 

have in my 11 or 12 years here in the Congress have known tha t 

they are opposed to anything tha t aids the U.S. manufacturers over 

those of foreign countries, but for the Department of Commerce to 

come here with the same premise that foreign economies and foreign 

producers, foreign manufacturers should be aided ahead of our own 

American producers and manufacturers strikes me as being very surprising and I do not mean to badger you and I do not want to take up 

any more time as I know Mr. Curtin has a number of questions, but 

it does come as a surprise to me.

Mr. McNeill. Mr. Chairman, the United States in its commercial 

trade with all other nations last year earned a net surplus of $6.5 

billion. Tha t is very important, not only to our country’s balance of 

payments but is terribly important to the producers in the United 

States that sell abroad. We sold abroad, last year, nearly $25 billion 

in commercial merchandise. We imported about $18 billion of commercial merchandise. The Department of Commerce has a very distinc t interest in this commercial trade.
18 STEEL CONTAINER MARKING

We feel passage of this particu lar bill would f rustrate our ability 

during the course of the Kennedy round and during the course of 

many bilateral discussions th at we are having with our trad ing partners to seek liberalization of some of th eir impediments to our exports. 

That is the reason we are opposed.

Mr. Macdonald. We went through the Kennedy round routine, socalled Kennedy round of the GATT Conference somewhat with the 

gentleman from the Department of State and I will not go into that 

much more in particular. But I thought it was the duty of the Department of Commerce to encourage American producers and manufacturers. Wh at harm can there be when a bill of this nature is not 

a tariff?

At one point you seemed to skirt on whether or not it is a form of 

tariff. This is merely information, isn 't it? The barrels as I understand it, will merely say, “Made in Japan,*’ or the country of origin.

Mr. McNeill. Mr. Chairman, our constituency is a broad constituency and includes people that manufacture. This would place on 

many of these people a rather onerous burden of perhaps segregating 

the inventories as being imported sheet and domestic sheet. This, in 

turn, would involve many administrative burdens on them. It would 

make it terribly difficult for them to know whether in a particu lar 

barrel the sheet used was domestically produced or produced abroad, 

and this could adversely effect the ir competitive ability in the marketplace.

Our constituency is a broad one here. It is not necessarily the final 

manufacturer and seller of the barrels.

Mr. Macdonald. Well, I will let Mr. Curtin pursue that. I know 

he has introduced the bill and these hearings were held last year although I was not a member of the subcommittee at tha t time, I do not 

believe people within the industry expressed the same feelings tha t 

you have just, expressed.

I vield to Mr. Curtin.

Mr. Curtin. Thank you, Mr. Chairman.

Mr. McNeill, I join with the chairman in feeling some amazement 

tha t the Departm ent of Commerce is so very fearful of making some 

foreign producers unhappy when the matter is to the definite advantage of the American consumer, the American public and the 

American manufacturer.

I presume you will agree that this is p urely marking legislation and 

it is merely informational. Will you go that far ?

Mr. McNeill. I would go that far. Mr. Congressman, but I would 

dispute the contention that the Departm ent of Commerce is interested 

in this particular bill only to protect the foreign producer.

Mr. Curtin. Well, why are you so unhappy with the bill ?

Mr. McNeill. We are unhappy with this bill, not because of the 

interest of foreign producers, but we are unhappy with the bill because 

of the burden it would place on domestic m anufacturers in terms of 

segregating the ir stocks, and in terms of the administrative cost th at 

this would involve.

We are fur the r concerned th at passage of the bill would frustrate 

our efforts in seeking to have other countries liberalize many of the 

impediments that they impose on our exports. We cannot have it one
STEEL CONTAINER MARK ING 19

way—it has to be two ways and if we, in the United States, are going 

to continue to impose additional marking requirements or other forms 

of nontariff b arriers on foreign commerce, other countries can be expected to react and further restrict our ability to export.

Mr. Macdonald. Would you yield ?

Mr. Curtin. Yes.

Mr. Macdonald. What you just said I do not quite understand. 

Why is marking a barrier?

Mr. McNeill. If, Mr. Congressman, I could refer to the bill itself.

Mr. Macdonald. Well, in general, you just said marking is a 

barrier.

Mr. McNeill. Y es.

Mr. Macdonald. "Why do you think it is a barrier?

Mr. McNeill. Why ?

Mr. Macdonald. Yes.

Mr. McNeill. We have in our Department, many, many complaints 

from domestic producers who sell in foreign markets that the require­ ments that other countries impose on their products in the form of 

marking are onerous and severely restrict them, and in some case pr eclude them from selling in the foreign market.

Mr. Macdonald. A product bearing the label “Made in the U.S.A.” 

will prevent the sale of th at product in a foreign market?

Mr. McNeill. I did not say that, sir.

Mr. Macdonald. I s that the complaint that is made?

Mr. McNeill. No. The complaint is what the marking requirements in some instances do.

Mr. Macdonald. Well, give me a for instance, please.

Mr. McNeill. Here are some, Mr. Congressman. Here is one case, 

and I will not identify the domestic producer. It is a food product 

in a particular country in Africa, their packages must be even nu mbered in weight. Fo r example, 2, 4, 6, or 8 ounces.

Mr. Macdonald. What country in Africa ?

Mr. McNeill. This is not identified on my sheet here.

Mr. Macdonald. The country is not identified?

Mr. McNeill. It is case number “Africa, 002.”

Mr. Macdonald. You have no idea?

Mr. McNeill. I have no idea. But in this African country, in 

order to meet this domestically imposed marking requirement this 

particular American company would have to make special packages to 

meet tha t requirement and, therefore, sell in tha t market. It may 

be uneconomical for them to make these special packages, and they, 

therefore, m ight effectively be prohibited from selling in that market.

Mr. Macdonald. What African countries have any dollars or hard 

currency to purchase ?

Mr. McNeill. South Africa would be one.

Mr. Macdonald. I am sure South Africa is one tha t you would not 

have this kind of problem with.

Mr. McNeill. You also have some of the former French and B ritish territories in Afric a that have hard currencies.

Mr. Macdonald. Such as?

Mr. McNeill. Such as Ghana which is, for example, a purchase r 

of U.S. products. Morocco, Tunisia, and Algeria are purchasers of 

American products. In east Africa you find that Ethiopia and
20 STEEL CONTAINER MARKING

Somaliland are customers of U.S. exporters, and tha t they all have 

currency with which to purchase.

To the extent that any country imposes onerous burdens in the form 

of marking or other nontariff kind of barriers is certainly an impediment to our ability to sell.

Mr. Curtin. Would the chairman yield ?

Mr. Macdonald. Yes.

Mr. Curtin. Then, Mr. McNeill, do I understand tha t the Dep artment is against all forms of marking of U.S. products?

Mr. McNeill. No, sir: I said in my statement that we support section 

304 of the Tariff Act of 1930 which does impose marking requirements.

Mr. Curtin. Where do you draw the line ? Wh at do you think is 

good marking and what do you think is bad marking ?

Mr. McNeill. We think that this particular case abrogates the 

purpose of section 304 by requiring that the ultimate consumer of a 

barrel have knowledge that a barrel was manufactured from domestic 

steel. The normal marking requirement is that the sheet steel that 

comes into the United States has a marking as to the country of origin.

Mr. Curtin. That is right.

Mr. McNeill. And tha t is as far as practice normally goes. This 

goes beyond tha t and says tha t people manufacturing pails or barrels out of imported steel must so identify that that pa rticular barrel is 

made from imported steel.

Mr. C urtin. Well, let us pursue that for a moment. Do you mean 

tha t is going to, in some way, affect the market for pails and steel 

drums in the United States? That is, affect it adversely?

Mr. McNeill. I suggested in my statement, Congressman, that it 

perhaps would not, and if it would not then I wonder what the purpose of the bill is.

Mr. Curtin. It would not adversely affect sale of the product at all, 

is that what you mean ?

Mr. McNeill. No; I thought your question, sir, was did I think 

tha t the marking requirement tha t this bill would impose would 

have any marked effect as far as consumers’ choices are concerned. 

I was answering th at question.

Mr. Curtin. Perhaps I did not state the question very well because that, is not what I meant. I meant, do you think the putting 

of the notation required by these bills on a drum or a pail would 

adversely affect the sale of that drum or pail in the United States?

Mr. McNeill. I do not have an answer to that.

Mr. Curtin. Do you thin k it would adversely affect the sale of that 

pail or drum in any foreign country ?

Mr. McNeill. Not necessarily.

Mr. Curtin. So then you have no objection to the marking feature of the legislation on the ground that it was going to adversely 

affect the product, the sale of the product ?

Mr. McNeill. It might affect, sir, the competitive ability of some 

producers of pails and containers to sell in the market; yes.

Mr. Curtin. Tha t is what I thought you were getting at. Now, 

just how?

Mr. McNeill. To the extent that a small manufacturer of pails 

in this country would have to institute a bookkeeping system and record system and a separate inventory system so that he can segregate
STEEL CONTAINER MARKING 21

his basic raw material, which in this case would be sheet steel, as 

1 understand it, tha t this might very seriously affect his ability to 

compete in the market with a larger producer, for example.

Mr. Curtin. Do you not think that every person who purchases 

steel sheeting, whether from a small distributor or a large manu facturer, keeps a record of where he buys tha t product tha t he is selling or processing ?

Mr. McNeill. I do not think, sir, you will find generally that 

American manufacturers, particularly American consumers of steel 

in the manufacturing process, are required to segregate their inventories and to stamp on their final products tha t this particula r product was made with or without foreign steel.

Mr. Curtin. Are you an attorney ?

Mr. McNeill. No.

Mr. Curtin. You answered just like an attorney. I am an att orney and 1 was very proud of you.

Mr. McNeill. The I ’.S. manufacturers of automobiles are not required to stamp on each automobile manufactured or incorporating 

somewhere an imported sheet or imported piece of steel tha t the 

automobile is a foreign product.

Mr. Curtin. That is a bit of information that is not responsive 

to the question.

Mr. McNeill. The principle is the same, Mr. Congressman.

Mr. Curtin. The question is whether it is not a fact tha t everybody tha t buys steel has a record of from where he bought it? Would 

he not have records to show where he bought that steel and to whom 

he made payment for it ?

Mr. McNeill. Yes, sir.

Mr. Curtin. So, he would have records of his purchase, would he 

not ?

Mr. McNeill. He would have records of his initial purchase.

Mr. Curtin. And would he not have a record to show where it 

came from?

Mr. McNeill. Yes, sir.

Mr. Curtin. So, therefore, there would be no additional records to 

be kept, would there?

Mr. McNeill. Yes, sir.

Mr. Curtin. What?

Mr. McNeill. If I were a manufacturer of pails, and if I purchased 

sheet steel that is marked “made in Sweden*’ on it and of my total 

monthly purchases, 7 percent is so marked and 93 percent is not so 

marked, the assumption is then the 93 percent is domestic. After the 

initial purchase, I am not required to keep any further records nor 

am I required to segregate my inventory as between Swedish steel or 

the U.S. steel. It is after the point of purchase tha t this bill imposes 

the administrative burden.

Mr. Curtin. When a processor gets tha t steel and processes it, he 

obviously has a complete record of it—and most American businessmen have very careful records, the Government sees to that because of 

the various matters they have to report to the Government—so tha t 

every manufacturer or processor would know from what steel a pa rticu lar pail or drum is made. I do not think this legislation would 

impose any further burden on him, or any additional recordkeeping.
22 STEEL CONTAINER MARKING

Mr. McNeill. That is an assumption I cannot challenge but I 

would, myself, find it difficult to conceive of a manufacturer using a 

mix of raw material who would know in which of his final products 

tha t mix existed.

Mr. Curtin. Well, is one of your main objections, then, tha t the 

cost of the steel in the finished product of the pail or drum is going 

to lie more if they have to do this ?

Mr. McNeill. Yes; I think it would be more.

Mr. Curtin. And that additional cost would be purely the administrative cost of keeping the records?

Mr. McNeill. Yes; I th ink it would be more.

Mr. Curtin. And do you thin k such additional cost for keeping 

the records would be substantial ?

Mr. McNeill. The administrative cost and keeping the records and 

perhaps keeping separate inventories.

Mr. Curtin. No other cost tha t you can think of ?

Mr. McNeill. The embossing would cost something. IIow much, 

I have no idea.

Mr. Curtin. Another objection that you gave was that the Government is engaged in this liberalization program of all tariffs. Is that 

another objection to this bill; that it goes in the face of tha t policy 

of the Government ?

Mr. McNeill. I believe it does, sir, b ut I do not believe I said that 

this bill is in contradiction to our tariff policy. I was talking about 

our desire during the course of the current negotiations in Geneva 

to seek a meaningful liberalization of access to foreign markets; that 

in this endeavor in a very large way there has been introduced into 

the Kennedy round the new element of nontariff barriers to trade; 

tha t is, barriers tha t are other tha n tariffs. To my knowledge, this 

is the first time tha t this Government has made such a considerable 

effort. Our ability and our credibility with our trading partners in 

seeking from them the liberalization of their nontariff trad e barriers 

would be diluted. Our efforts are diluted to the extent that we refuse 

not only to liberalize our own nontariff barriers, of which we have 

many, but to the extent that at th e same time we add to our inventory 

of nontariff trade barriers. For example, this list tha t I have here, 

this is a list of products that we are working on abroad. These happen to be marking requirements.

Mr. Curtin. They are cases where you are going to try to get 

tariffs reduced on the imports of those countries into the United 

States ?

Mr. McNeill. These are container problems and marking problems. They are not tariff problems.

Mr. Curtin. Of course, as the chairman said, yesterday we went 

into this “Kennedy round” and the liberalization of tariffs, and, in 

tha t connection, I can only repeat what I said yesterday, that it is 

a very glib expression and it sounds wonderful, but as it continues, 

more and more industries in my district are closing up in the face 

of foreign competition. So I do not see how this liberalization, so 

far, has done much good for my particular district because liberalization as I see it should be a two-way street.

Mr. McNeill. Absolutely, sir.
STEEL CONTAINER MARKING 23

Mr. C urtin. And , un fo rtu na tely, I am af ra id t hat yo u peo ple seem 

to feel th at wha t we have to do is to libera lize ev erything th at is 

Am erican made with the hop e th at maybe in the fu tu re it will have 

a very fine effect on the res t of the wo rld and the y will follow suit.

Now, here is a bi ll whe re the only th in g it does is in fo rm ; it does 

not prevent any Am eri can pu rcha ser of steel fro m bu ying the foreign 

steel if he wa nts to do so. T hat is pe rfe ctly all rig ht. All it does 

is let him kno w wh en he buys a drum or a pa il th at it is ma de of 

foreig n steel. T hat is all. I t does no thing else.

Mr. McNeil l. Sir, if I may, it is no t all th at it does. I t does no t 

imp inge on this m an uf ac tu re r of pa ils or ba rre ls ability in iti al ly to 

purchase forei gn or domestic steel, bu t th erea fter, it can very mu ch 

affect his ab ility to survive in a co mp etitive m arke t because of the a ddition al ad min istra tiv e and cost bu rden th at the bill wou ld imp ose 

on him.

Mr. Cur tin . W ell , I ap preciat e and res pect your concern fo r the 

Am erican prod uc er, but when we h ad h ea rin gs on thi s typ e of leg isl ation las t yea r every Am erican p rodu cer of the drum s an d th e steel pa ils 

th at came into the he aring was ve ry m uch in favo r o f thi s leg islation. 

None of the m rai sed these objection s th at now give you so mu ch 

concern.

Mr. McNeill. I re ad the he arings of last year, Mr. Congressman, 

af te r I was ask ed to come up here and testify, and I recall th at th ere 

were several peo ple th at appeare d, bu t I did no t realize th at th e 

totalit y of th e in du stry or all of the va rio us int ere sts wi thin th is 

indu str y testified.

Mr. Cur tin . I di d not say th at e very m an uf ac turer testified. I say 

th at all the man uf ac tu rers th at ap pe ared so testified. Th ere was 

objection, bu t it was not from the Am eri can p rod uce rs.

Tha t is all I hav e, Mr. Ch air ma n.

Mr. Macdonald. Mr. Hu ot?

Mr. H uot. No q ues tion, Mr. Ch air man .

Mr. Macdonald. I have just one las t question. Would the Commerce D ep artm en t h ave any ob jection o r w ould they ca ll i t d isc rim inatory if domestic prod uc ers who use im po rte d steel were to pu t on the 

barre ls “M ade of U.S. qu ali ty steel.” Would th at be discrim ina tory?

Mr. McNeil l. I f eac h prod ucer wou ld be req uir ed to sta mp on his 

ba rre l “M ade of U.S. q ua lity steel” ?

Mr. Macdonald. T o m ark each con tainer made so as to read , “ Made 

of U .S. qu ali ty steel.”

Mr. McNeil l. W ha t does th at mea n, Mr. Con gressm an? Does it 

mean U .S. qu ality steel?

Mr. Macdonald. I thou gh t it was a w ord of a rt.

Mr. McNeill. I do not un de rstand it, sir.

Mr. M acdonald. Well, I thou gh t “U .S. qu ality stee l" was a wo rd 

of a rt w hich design ate d a type st ee l: such as in beef you have d iff eren t 

and various g ra da tio ns of beef. I thou gh t p erha ps the same th in g w as 

tru e of steel.

Mr. McNeil l. Mr. Congr essman, “q ua lity ” implie s a stan da rd an d 

the stan da rds can be met from many dif ferent sources.

Mr. Curtin . Could I ask one ot he r question, Mr. Ch air man, which 

I neglected to ask b efo re ?
24 STEEL CONTAINER MARKING

Mr. M ACDONALD. Y e s .

Mr. Curtin. You also said. Mr. McNeill, and I ’d like to have you 

clarify, if you would, your statement tha t this particular legislation 

would affect adversely the competitive position of certain manufacturers as against other manufacturers. What do you mean by that ?

Mr. McNeill. Well, T implied by th at, sir, that if this industry is at 

all typical of many industries, the smaller producing units within the 

industry try to gain and maintain the ability to compete, sometimes 

finding it necessary to gain tha t ability in the lower cost of raw materials. In some cases, this m ight mean a foreign material. If their 

larger competitors—and Mr. Congressman. I am iust setting up a hypothesis here—if their larger competitors draw solely from domestic 

steel and through buying larg er quantities get lower unit prices and 

larger discounts that the small fellow was not able to obtain, and if 

this bill imposed on him an onerous burden, administrative burden, 

and therefore a cost burden to him. it might simply mean the difference between his staying in or staying out of business. That is what 

I meant to imply.

Mr. Curtin. Do you mean then, that the small manufacturer who 

uses, or might use, this foreign steel might imply to the trade that it 

is ILS. steel he is using and, therefore, the same steel as in his competitor’s product?

Mr. McNeill. No, I did not suggest anything like that , Mr. Congressman. I was suggesting tha t he may find it necessary to buy his 

steel from a nondomestic source if he can get a cost advantage in so 

doing. This may enable him to remain in business.

Mr. Curtin. You are saying that he would buy steel where he could 

buy it cheapest so he could undersell his competitor who was using 

American steel ?

Mr. McNeill. I did not say undersell. T said it might be the difference between his staying in business or not.

Mr. Curtin. I s it not cheaper production if he buys a cheaper steel ?

Mr. McNeill. It is not the same thing. I come from a family that 

operated a small business firm competing with very large business 

firms. The cost of our raw material, which in this case was flour and 

margarine, was $6.75 a barrel because we bought in small lots. Our 

larger competitors were buying the same barrel at $2.50 because they 

bought it in carload lots.

I am simply making an analogy between this kind of situation and 

the situation of a small man ufacturer in this particular industry who 

may be able to offset the disadvantage of his smallness of size and inability, therefore, to buy at the larger discounts t hat his larger competitors get through the purchase of a cheaper material.

Mr. Curtin. Then, of course, it would be following your argument 

a little further, to say that all of the marking requirements of the 

Tariff Act should be eliminated, because then he could buy all kinds 

of foreign products, and at a cheaper price, they would be unmarked, 

and thus he could compete with his bigger competitor by putting them 

on the market at a price which would let him continue in business.

Mr. McNeill. No, sir, I did not suggest any such thing.

Mr. Curtin. Then how f ar down the road should he go before he 

stops notifying his competitor that he is purchasing foreign products?

Mr. McNeill. Well, first of all, I do not think it is a custom in the
STEEL CONTAINER MARKING 25

conduct of business to notify your competitor of what you were doing, 

what you were buying, and what price you were p aying for it.

Mr. Curtin. I will accept that. I meant the consumer ra ther than 

competitor.

Mr. McNeill. I did not at any time suggest and I would not suggest 

tha t we abolish our marking requirements.

Mr. Curtin. If we do abolish them, then such small purchaser could buy his materials cheaper, anywhere lie could find them, and he could more ably compete in the open market with the big competitor.

Mr. McNeill. No, sir ; you are going three steps down the road leaving out the first two. There is nothing tha t now prohibits any domestic producer or manufacturer or domestic consumer from buying 

a foreign product.

Mr. Curtin. That is right.

Mr. McNeill. Mark or no mark.

Mr. Curtin. That is true.

Mr. McNeill. What this bill does is to go a step beyond the normal marking requirement by saying tha t the ultimate consumer should not be treated in this particu lar case as the ultimate consumer in most other cases, but that the ultimate consumer here shall be redefined not to be the purchaser tha t imports the identifiable product, but the person who buys the manufactured product incorporating a non­ domestic material. If you carry this principle, which is embodied in this bill, to its logical conclusion you then would require all domestic manufacturers in corporating in their final produc t any foreign mate­ rial, semiprocessed material, finished material, assembly, or subassem­ bly to let the ultimate consumer in the marketplace know t hat there is incorporated somewhere in tha t product a foreign material. This is something that would be administratively impossible for American 

industry to cope with.

Air. Curtin. Of course, I think you are fighting dragons tha t do not exist and are reaching awfully far. You would suggest tha t when we sell wheat to foreign countries we should mark thereon tha t it was watered with rain that grew tha t wheat and tha t rain came

from heaven. .

Mr. McNeill. Mr. Congressman, I am perhaps exaggerating but I am using as a point of discourse the principle tha t this bill estab­ lishes. I am making a broad and general analogy as to what it would mean if it were followed to its logical conclusion, which would be the logic tha t you should have the same requirement across the board.

Mr. Curtin. What you are saying is that this bill might brin g on other bills tha t would go even further. I do not think we need to worry about that. All we have before us today are these particula r bills. I do not think we need to worry about legislation that might be introduced subsequently to this and would go furth er. All we are saying here is steel plates must be marked if they aie made into these 

pails or drums. Mr. McNeill. No, you are not saying that, Mr. Congressman. Steel 

sheets that are incorporated into drum s now are marked. Steel sheets tha t are imported for use by the manufacturer of containers tha t you are talking about now are marked with the country of origin.

Mr. Curtin. But the product is not.

Mr. McNeill. What we are talking about here is something tha t 

happens at a late r step of manufacture.
26 STEEL CONTAINER MARKING

Mr. Curtin. One step further. When the steel is made into a drum. 

Mr. McNeill. Yes.

Mr. Curtin. Then it is embossed and tha t is the only forw ard step 

we have taken.

Mr. McNeill. That is quite a step. Tha t is all I am saying.

Mr. Curtin. Tha t is all.

Mr. Macdonald. I have just one last question. I take i t tha t one of 

the main reasons that the Commerce Department opposes the bill is 

because of these round of so-called negotiations th at are going on, the 

so-called Kennedy round. Is that so ?

Mr. McNeill. This, Mr. Congressman, is a factor in the Dep artment’s consideration.

Mr. Macdonald. How big a factor ?

Mr. McNeill. Do you want me to attem pt to qualify it? I could 

say it is 40 percent—50 percent. I prefer to say it is a significant 

factor.

Mr. Macdonald. How important do you think the fact tha t these 

negotiations are going on is in the decision reached? Apparently 

they must have reached that conclusion just very recently if they just 

appointed you to come up here last night.

Mr. McNeill. Mr. Congressman, the Department of Commerce has 

submitted reports annually on this bill, which each year has a different 

House bill number before it. Our position has been consistent over 

the years.

Mr. Macdonald. With or without the negotiations going on, you 

are opposed to it ?

Mr. McNeill. That is correct.

Mr. Macdonald. So therefore, if you had been opposed to it before 

the negotiations, the negotiations would not have anything to do with 

it. So when you say 40 or 50 percent in your analysis, actually it is 

zero percent.

Mr. McNeill. No, I would not say it is zero.

Mr. Macdonald. If you say they opposed it before the negotiations 

were on for other reasons, obviously there were no negotiations that 

entered into the decision.

Mr. McNeill. Mr. Congressman, the U.S. Government negotiates 

major tariff liberalizations through the form of the GATT. We now 

are negotiating such a one we call the Kennedy round.

Mr. Macdonald. I hope this is not going to be a lecture. We have 

heard it from the Department for a number of years.

Mr. McNeill. In 1961 and 1962 we were negotiating the Dillon 

round but aside from these major tariff rounds, so-called, we are constantly negotiating on a bilateral basis with out trad ing partners-----

Mr. Macdonald. I understand.

Mr. McNeill (c ontinuing). On such problems as marking, and such 

problems as containers.

Mr. Macdonald. Right.

Mr. McNeill. So th at I think the attempt to quantify was perhaps 

not a wise word that I used bu t the fact is that we constanly are endeavoring to seek liberalization for our exports abroad.

Mr. Macdonald. How does the Department feel t hat these so-called 

negotiations are progressing? Do they feel they are perfectly satis-
STEEL CONTAINER MARKING 27

fied with the progress having been made in the Dillon round and the 

Kennedy round of the GATT?

Mr. McNeill. I would think it fai r to state that we would be more 

delighted at this par ticula r point of time had we made f urther progress in the Kennedy round.

Mr. Macdonald. Do you not think it is unfa ir to come before not 

just this committee of the Congress but many committees of the Con­ gress and say a certain bill is not so bad but the atmosphere th at it will create in the minds of foreign governments is th at we are returning to protectionism and is an adverse climate to our negotiators at GATT 

which so far has been merely a round of conversations. There has been much conversation but I have not seen anything very concrete that helps American in dustry that has come out of any of these rounds.

Mr. McNeill. Mr. Chairman, nothing concrete will come from the 

Kennedy round or any other round until it has been completed and 

signed and the reductions negotiated put into effect.

The Dillon round negotiations were put into effect in 1962 and 1963. Since 1934—I do n ot mean to bore you with history, Mr. Chairman— but since 1934 we have achieved very significant reductions of foreign 

tariffs. The price of this was a signficant reduction in U.S. tariffs. But I think if statistics mean anything, and in this case they do, the fact that we have this very healthy foreign trade and the fact it is so 

largely balanced in our favor is indicative tha t the conduct of the national policy of tariff and trade liberalization has been beneficial to the American economy, and that is the concern of the Department of 

Commerce.

Mr. Macdonald. Thank you. I would like to say in passing, Mr. 

McNeill, that if the Secretary reads your testimony and notes your 

ability to answer questions without really answering them, you will 

appear before many committees of the Congress.

Thank you, very much. Is Mr. Jacobson here? I believe Mr. Jacobson indicated to me yes­ terday that he might find it impossible to be here today, due to a speech 

he was giving someplace.

STATEMENT OF JERO ME JACOBSON, DEPUTY ASSISTANT SECRETARY FOR ECONOMIC AFFAIRS, PRESENTED BY VERNON G.

SETSER. ADVISER, OFFIC E OF INTE RNATION AL TRADE; ACCOMPAN IED BY DAVID H. ERNST, CHIEF, SPECIAL TRADE AC TIVITIES

AND COMMERCIAL TRE ATIES DIVISION, OFFICE OF INT ERNATIONAL TRADE, DEPARTMENT OF STATE

Mr. Setser. Mr. Jacobson is scheduled to address the Millers National Federation. The appointment was made a long time ago and 

it was simply impossible for him to be here.

Mr. Macdonald. That is very understandable.

Mr. Setser. I am Vernon G. Setser, adviser in the Office of In ternational Trade, Bureau of Economic Affairs, Department of State. 

Mr. Jacobson was not able to solve the problem of having to be in 

two places at the same time. I know that he would have liked to 

have been here.
28 STEEL CONTAINER MARKING

Mr. Macdonald. I know that Congressman Curtin indicated yesterday he would like to ask him some questions.

Mr. Curtin. I would have liked to discuss this matter further 

with Mr. Jacobson.

Mr. Setser. David H. Ern st, Chief, Special Trade Activities and 

Commercial Treaties Division, Office of Internatio nal Trade, is also 

present. If we can answer the question, we shall attem pt to do so. 

If not, we shall take them back to the Department to try to obtain 

answers for you, sir.

I shall now read Mr. Jacobson's statement.

Mr. Chairman, I am appearing to testify with regard to H.R. 

618*2. The Department of State has already submitted a written report on a companion bill, H.R. 1671, identical to H.R. 6182 in nearly 

all substantive respects. My statement is supplemental to that report.

This bill declares it to be an unfai r and deceptive act or practice 

in commerce under the Federal Trade Commission Act to introduce 

into interstate commerce any steel shipping container—for example, 

steel drums and pails—if made in whole or in chief value of imported 

steel unless such container bears a die-embossed mark, with letters 

at least one-fourth inch in height, showing the country of origin 

of the imported steel.

Manufacturers of steel shipping containers would be required to 

maintain records showing the origin of all steel used for containers 

and to preserve the records for at least 3 years. Violators of these 

requirements would be subject to a maximum penalty of $5,000 fine 

or imprisonment up to 1 year.

W e are very concerned about laws to impose burdensome marking 

requirements upon imported goods. We are particula rly concerned 

about this steel container m arking bill.

It would create, in effect, a new statuto ry offense, subject offenders 

to severe penalty, and declare certain things to be unfair or deceptive acts or practices in commerce which are neither unfair nor deceptive under any reasonable moral code or standard of business 

conduct. Every day our factories utilize large quantities of foreign 

materials. Yet, it is proposed to single out steel containers to bear 

the mark that foreign materials have been used. The use of imported 

materials is essential to our indu strial economy; it is certainly not 

in our economic interest to place obstacles in the way.

Before discussing the foreign policy problems raised by this bill, 

I should like to refer briefly to more domestic aspects of the matter. 

This new amendment, with its novel definition of unfairness and 

deception, will divert tlie Federal Trade Commission from its familiar 

function of safeguarding the public from fraudulent treatment in the 

marketplace and assuring maintenance of decent standards in business 

competition. Instead, the Commission will be directed to protect a 

domestic industry from perfectly fair competition from imports.

It will also set a precedent. Hitherto marks of foreign origin 

have been called for to distinguish articles produced abroad from 

those produced at home. Now it is proposed to use a mark to distinguish one product made here from another made here solely because 

one has imported material in it. The proposed law would also subject private business to undesirable Government interference and 

restriction.
STEEL CONTA IN ER M ARKIN G 29

It is very clear that the object of H R. 6182 is to restrict the im­ portation of sheet steel and, indeed, this could happen. Manufacturers of containers of imported steel will incur costs to mark their con­ tainers: for stamps or dies, the labor cost of applying the marks of origin, and the administrative expenses involved in storing and using separately and keeping records regarding supplies of sheet from dif­ feren t sources. These added costs amount to an increased tariff on steel. Of probable greater consequence in hindering the free use of imports is the threat of liarrassment of users by competitors and agitators which is invited by such marking and recordkeeping requirements. Now, let me turn directly to the foreign policy side of this matter. The policy of the United' States with respect to foreign trade is established mainly by the Trade Expansion Act of 1962, which continues in many respects the policy of the earlier Trade Agreement Act. Under the auth ority of the earlier act, we made agreements with foreign countries binding the customs duties on sheet steel against increase. This occurred as a part of the bargaining proce­ dure by which we obtained concessions in favor of American exports. The enactment of II.R. 6182 would reduce the tariff benefit gained by our tr ading partners, and could result in claims by them for com­ pensatory tariff adjustments under the terms of the General Agreement on Tariffs and Trade. In any case, new restrictive measures of this sort will damage our 

position in the trade negotiations now in progress in Geneva. Further, new trade restrictions here could stimu late new restric­ tions abroad against our exports. If that happens, we will suffer 

the grea ter harm because of the greater volume of our exports. We must, afte r all, worry about discrimination abroad against our products of the kind proposed in the bill and we have made agree­ ments with many countries providing tha t in matters relating to internal taxation, sale, distribution, storage, and use, imported prod­ ucts shall be accorded equality of treatment with like domestic 

products. These provisions should assure that once imported goods have passed into domestic trade, they are treated just like domestic goods. These commitments may be found in article II I of the General Agreement on Tariffs and Trade, to which over 60 countries besides the United 

States are parties. Similar obligations are included in a substantial number of bilateral commercial treaties of the United States. Legislation such as H R. 6182 is inconsistent with these international agreements because it ap­ plies only to imported products, and it establishes an administrative 

burden of labeling not applicable to like domestic products. Now, we are aware of the concern about imports on the part of 

domestic producers of steel sheet and manufacturer's of containers who wish to utilize only domestic sheet in their products. But Congress undertook to provide a remedy in the Trade Expansion Act for inju ry to domestic industry th at might result from the operation of the policies established by the act. We th ink th at the machinery set up by the act should not be bypassed in favo r of remedies th at contravene the p urposes of the act.

4 8 -1 6 1— 65 ------ 3
30 STEEL CONTAINER MARKING

To recapitulate, Mr. Chairman, the Department of State holds the 

view that H.R. 6182 contains highly objectional features: that it would 

brand as unfair and deceptive acts, practices tha t are quite fair and 

unobjectionable; that it would result in burdensome Government interference in private indu stry; tha t it would make more difficult the 

carrying out of our established foreign trade policy; and that it is inconsistent with our international commitments.

We urge tha t the committee give the most serious consideration to 

these aspects of the proposed law.

Mr. Macdonald. Mr. Huot?

Mr. Huot. No questions.

Mr. Macdonald. Mr. Curtin?

Mr. Curtin. I have listened to your statement, which is in line 

with what has been the policy of the Department of State on all 

legislation such as this for many years, and your main concern, as I 

take it from the statement of Mr. Jacobson, is the fear th at this type 

of legislation is going to impose burdensome restrictions on foreign 

trade for which we are likely to have some form of retaliation put on 

our exports. Is that about it ?

Mr. Setser. That is a possibility, sir.

Mr. Curtin. Now, you say that this bill, among other things will 

raise the tariff because the price of the product will increase by increased administrative costs and also we must consider the cost of 

preparing the die to emboss the product, which is going to be expensive. 

All of this is going to increase cost and therefore, the tariff is going 

to be increased. Is that also your position.

Mr. Setser. Yes, sir.

Mr. Curtin. Well, are you not straining quite hard to arrive at 

that decision ? The purpose of this bill is purely informational; that 

it provide the ultimate user of the steel with knowledge as to the source 

of the steel in that particu lar object, be it a pail or be it a drum.

Does not the Department of State recognize the bill as being for 

tha t purpose?

Mr. Setser. We find it difficult, sir, to fully recognize that object, 

perhaps for two reasons. One is th at here we are not talking about 

the householder who goes to the neighborhood hardware store to buy 

a pail or drum. The people who are going to buy these drums and 

pails are the purchasing agents for oil companies, for chemical companies, and other large producers of materials such as that. To assume that they, if they consider it important to know the source, 

remain ignorant of the source of the m aterial they buy seems to us to 

raise a serious question.

Mr. Curtin. Well, is not tha t just what we do not want them to do? 

We do not want the person who buys these pails or drums to remain 

ignorant of the source of that steel. We want him to know the source 

of the steel.

Mr. Setser. But as I indicated, people in these positions of purchasing agents are not going to need that information. They have it. 

If they consider it important they can easily obtain it. All they need 

do is put on the purchase orde r a requirement and the supplier will 

certainly be prepared rather than lose the sale to furnish whatever 

information they desire.
STEEL CONTAINER MARKING 31

Mr. Curtin. Do I understand then the Department of State feels 

that it is absolutely of no interest to the American purchasers to know 

the source of materials being used in the products they are purchasing?

Mr. Setser. We have no information, sir, that the purchasers of 

steel shipping containers are concerned about the origin of the steel 

they use.

Mr. Curtin. Is not the Department of S tate concerned in knowing 

how much domestic steel is used as against how much foreign steed 

is used ?

Mr. Setser. In containers ?

Mr. Curtin. No.

Mr. Setser. In any pa rticular class of products?

Mr. Curtin. In the use of steel, in general.

Mr. Setser. We have occasion to utilize information as to the use 

of imported steel and of domestic steel, but as far as segregating it, 

in the case of containers, I know of no particu lar interest we would 

have in it.

Mr. Curtin. Then is the ultimate concern of the Department of 

State to protect the Americans or is the ultimate concern of the Department of State to see that relations remain fair and blooming with 

all the other countries of the world ?

Mr. Setser. The Department of State believes that it is doing a 

grea t deal to help protect the economic interest of American producers 

by maintaining the policy established in the Trade Expansion Act and 

that there is a very large concern of American producers and of 

American labor in the sales which result from this international 

exchange of goods.

Mr. Curtin. Now, you mentioned earlier in your statement that 

American manufacturers or processors who feel they are being unjustly h urt by foreign competition should file an appeal or a complaint 

with the Federal Trade Commission. Do you know how many such 

complaints have been filed within the last 2 years?

Mr. Setser. I do not know the exact number. I know there have 

been a considerable number.

Mr. Curtin. Do you know how many of them have received favorable attention, in that the complaint has been favorably acted upon 

and some adjustments have been made ?

Mr. Setser. As I understand it, there have been few, if any, tha t 

have been able to meet the requirements established in the act.

Mr. Curtin. In other words, American business people have filed 

a great number of these complaints and there has been nothing done 

to adjust their grievance in any of them, within the last 2 years?

Mr. Setser. To the best of my knowledge, that is correct. *

Mr. Curtin. Than k you. That is all, Mr. Chairman.

Mr. Macdonald. Sir, I just have one or two questions. We more 

or less went over this ground yesterday on a different matter. One 

thin g that always strikes me in testimony given by the State Department on matters of this nature is the use of adverbs in qualifying the 

word “marking.” Each time the word “marking” appears, it is al ways 

followed by a descriptive adverb such as “burdensome,” “harassing,” 

or it is never just called plain “marking.”

Do I take it the official position of the Sta te Departm ent is that they 

are against marking, in general ?
32 STEEL CONTAINER MARKING

Mr. Setser. I do not know of any position tha t the State Department has taken on the general question of marking. I do not know of 

any. The General Agreement on Tariffs and Trade establishes certain standards. It takes into consideration the matter of marking and 

establishes certain standards, among which are tha t any marking requirements should not be unnecessarily harmful to international trade.

Mr. Macdonald. Well, that is w hat I do not understand and this is, 

of course, where we disagree. If it is just a matter of information that 

such a product is manufactured in the country of origin, be it Japa n, 

Czechoslovakia, or anywhere else. England, how is that burdensome ? What is the criteria th at the State Department uses tha t makes 

that burdensome on trade, because it is stamped “made in England," 

or “made in Czechoslovakia,” in any country of origin.

What is the burden there? Tha t is what I cannot understand, sir.

Mr. Setser. Let me, since we started out to discuss the position of 

the Department of State on marking, in general, let me say I referred 

to these standards in the General Agreement on Tariffs and Trade. 

It is my understanding they ap ply to imported products, not to products manufactured in the United States simply because they contain 

imported material. I think that is a new consideration.

Mr. Macdonald. Yes, sir; in a m atter which is a m atter very similar to this question we were discussing yesterday, wool textile labeling. 

The State Department said this would be burdensome marking because the country of origin had to be included.

Mr. Setser. We join with Mr. McNeill of the Department of Commerce and say we are not objecting to section 304 of the T ariff Act as 

it now stands.

Mr. Macdonald. You would be in the wrong committee if you did, 

since we have nothing to do with that, but we are given the duty of 

looking after matters under the Labeling Act and that is what we are 

talking about now. We are not talking about tariffs. There is nothing 

in this t hat has anything to do with tariffs. This is why I wondered if 

the State Department understand s what the bills under consideration 

do. They have nothing to do with tariffs. They merely inform the 

purchaser where the product was manufactured and what is burdensome about that ?

Mr. Setser. Mr. Ernst would like to reply to that if he may.

Mr. E rnst. I would like to clarify a point, Mr. Congressman. Mr. 

Setser re ferred to section 304 of the Tariff Act. You responded to this 

that it had nothing to do with tariffs. Section 304 of the Tariff Act 

is a section dealing with the marking of imported articles and containers and that is why the reference to the Tariff Act was made and 

as Mr. Setser indicated, we can join as he indicated with the D epartment of Commerce in supporting the reasonableness of the existing 

legislation in section 304.

I hope tha t is a clarification.

Mr. Macdonald. It has been clarified. I understood it when he 

first said it. What I am asking is what is burdensome? You keep 

repeating throughout your statement it is burdensome marking, and 

that was said yesterday a number of times.

I ask again, why does the State Department think tha t because the 

origin, the country of origin is put on a product that t ha t is burdensome ? On whom is it a burden ? Is it a burden on the manufacturer,
STEEL CONTAINER MARKING 33

the consumer, the importer? Whom ? T do not quite understand what 

the State Department’s position is. On whom is it a burden ?

Mr. Setser. On the manufacturer and it creates a burden for the 

purchaser.

Mr. Macdonald. Why ?

Mr. S etser. If the problems resulting from the m arkin g are passed 

on to the user, then it is a burden to him.

Mr. Macdonald. It is a burden for him to read the fact it is manufactured, let us say, in Gre at Britain?

Mr. Setser. Let us look at it generally.

Air. Macdonald. Let us instead of getting into generalities, stick 

to the facts. You said it was burdensome on the purchaser to have 

a thing that he purchases marked with the country of origin. Where 

is the burden ? What constitutes the burden ?

Mr. S etser. Let me say that our general position here is tha t this is 

a burden to international trade, that the burden falls upon-----

Mr. Macdonald. Do you want to retract, sir, tha t it is a burden on 

the purchaser ?

Mr. Setser. No, sir; because the purchaser is involved in the whole 

process.

Mr. Macdonald. Wh at is the burden on him ?

Mr. Setser. The add itional expense we referred to here of utilizing 

the imported sheet.

Mr. Macdonald. H ow much, per barrel, would it cost to emboss 

‘‘Made in Englan d” ?

Mr. Setser. I am not an expert and I could not calculate it.

Mr. Macdonald. I am not an expert either. We are just tryin g to 

learn something from the experts.

Mr. S etser. But I do not think it requires much expertise to recognize that for the man who has to purchase the equipment to do the 

marking, to have workers apply the marking, to give the additional 

care to put the mark upon the article, to keep the materials which 

do not have to be marked separate—I do not thin k it requires any 

expertise to recognize that that is a burden for him. Maybe it is 

not a large burden.

Mr. Macdonald. That is what I was about to say.

Mr. Setser. It is a burden, though, upon the man.

Mr. Macdonald. We should not both talk at once as it will confuse 

the record. How much would it cost and I say you said you did not 

know because you were not an expert and I told you I am not an expert either. 1 am saying tha t it does not take much expertise to see 

tha t in any large shipment, just stamping the country of origin, emboss it on a container as we are talkin g about today and yesterday, 

the expense is infinitesimal in my judgment and I cannot see why 

the State Department is so worried about such a small item.

Mr. Setser. It may be small, but nevertheless, it is an added burden 

for the user, the producer that has to do this in competition with the 

producer that is exempted by law from the requirement that it be 

done. I do not care what it amounts to, if it is only a fraction of a 

cent. It is discrimination if it amounts to even tha t much.

Air. Macdonald. Well, that leads me directly back to the question 

I asked of the previous witness which I got involved in as to what 

quality was. I will ask you the question: If U.S. manufacturers
34 ST EEL CONTA IN ER MARKIN G

using domestic steel for steel containers should decide to mark their 

containers, and I will ju st use this for an example without going into 

what "quality steel'* is, but say they used a phrase like, “Made from 

U.S. quality steel," would your Department then propose legislation to 

prohibit that practice on the theory that you just expressed, that this 

practice would discriminate against imported steel ?

Mr. Setser. Is this to be required by law ?

Mr. Macdonald. Yes, sir.

Mr. Setser. I think we would have to look at i t very carefully. I 

think it would be discriminatory.

Mr. Macdonald. After you looked at it carefully, what would you 

think?

Mr. Setser. I do not know. We have not done so.

Mr. Macdonald. Well, is the State Department position that any 

kind of marking is burdensome ?

Mr. Setser. I do not see tha t there is any reason why the manufacturer should not voluntarily mark his container “Made in the 

United States of U.S.-produced steel.” No objection whatever to 

that. T think it would solve the problem.

Mr. Macdonald. Well, it might be one answer. I would like to 

close out by asking you this question and then I will yield to Mr. 

Keith if he has any questions about it, but you say this bill, and I 

take it similar bills, are inconsistent with our international commitments.

Mr. Setser. Yes, sir.

Mr. Macdonald. I would like to ask you what international commitments did you have in mind when you made tha t statement or 

Mr. Jacobson made it?

Mr. Setser. There is a provision in the General Agreement on 

Tariffs and Trade in article 3 which commits the parties to the agreement to accord to imported products national treatment, afte r entry.

Mr. Macdonald. After entry.

Mr. Setser. After entry, with regard to sales, distribution, storage 

and use, taxation. A similar provision has been included in a considerable number of bilateral commercial treaties, treaties with the 

Federal Republic of Germany, Japan, and with Italy, with the Netherlands, Denmark, and with a number of other countries.

Mr. Macdonald. And what do these international commitments 

have to do with this marking provision ?

Mr. Setser. This marking provision imposes upon imported products a mode of treatment different from—in addition to, and more 

burdensome than, the treatm ent that is required by law for domestic 

products.

Mr. Macdonald. Then we can go to my original question about the 

burdensome marking. Any marking, according to the State Department, is burdensome ?

Mr. Setser. I think that, considering the objective which is sought 

bv this bill, considering the fac t that there was no proposal or consideration given to requiring anv such m arking until foreigners had 

begun to obtain a market in the Un ited States for sheet steel. I would 

have to conclude th at the intent is to place a burden upon the sale of 

imported steel.
STEEL CONTAINER MARKING 35

Mr. Macdonald. Sir, I am not the author of the bill. Mr. Curtin would defend the bill, but it is perfectly obvious th at that is not the intent of the bill, to p ut a burden on anyone. The inte nt of the bill as I read it and as I understand it and as we discussed it is merely for the purpose of information—to let the purchaser know where, indeed, the container was made. It is not a restraint on trade. It is not a ta riff and I wish that the State Department would understand 

that.

Mr. Setser. I have read the testimony on the previous bill. Its support, in large measure, was devoted to the idea of checking the importation of foreign-made sheet steel in order to promote the sale 

of U.S.-made sheet steel.

Mr. Macdonald. Was not the reason advanced, and I was not on the subcommittee at tha t time, that many people were purchasing these containers believing that they were made in the United States and tha t if they had found out they were not, they would not have purchased them? They are entitled to the inform ation to judge for themselves whether or not they wanted a U.S.-made container or one made in Czechoslovakia or one made in Great Britain or any of the other countries tha t you name and then perhaps they would not choose to buy a foreign-made container. Do you say they should not have the right to know where the containers are m anufactured or made, or 

rather where the steel comes from ?

Mr. Setser. We think they can obtain that information through the normal market procedures. They do not need Government intervention to provide it.

Mr. Macdonald. You earlier said you were not an expert and I said I was not either, that we were just talking about it as two individuals, but I do not know what the normal market procedures are where they could find out where this was manufactured, do you ?

Mr. Setser. Yes, sir. If an oil company purchaser wishes to buy containers from a manufacturer and he wishes to say that he wants to have American steel, he can specify he wants these containers made of American steel and the market situation being what it is, there is not 

any producer that would not furnish it to him.

Mr. C vrtin. How is he going to know if that request is honored in the container that he ultimately gets afte r making such a request? There is no way that the processor who makes the steel into the con­ tainer is going to have to tell the buyer, because you say he is not 

going to keep any records.

Mr. Setser. I said he would have no records.

Mr. Macdonald. Well, the thought is that this is going to add a lot of burdensome recordkeeping. Now you say this is easily done, the man that is buying the steel, ordering the steel drums or the pails will say to the manufacturer that they must be made from domestic steel. How does he know, since the person who produces tha t steel and makes those drums is under no obligation to so mark the steel? How is this person when he gets his drums and pails going to know his request 

was honored ?

Mr. Setser. I think tha t the standards of the American business community are such that one can depend upon honesty in treatment. Certain types of deception are now actionable under the Federal Trade Commission Act. That would be deception.
36 STEEL CONTAINER MARKING

Mr. Macdonald. Yes, but this manufacturer of these pails and 

drums can say he has a lot of steel in inventory. He uses the steel 

he has on hand. He does not know where it came from.

Mr. Setser. Then he is deceiving his customer.

Mr. Macdonald. But the statement was made by a previous witness 

that if we did have the steel inventory so that the person who used 

that steel could make it into drums and pails knew where it came from, 

it was going to be burdensome and they were very much against segregation of the source. Now, therefore, you say they should segregate 

the source so that some person who orders steel drums and pails from 

them wants domestic steel, he will know to which pile of steel to go.

Mr. Setser. If, through the normal processes of trade, the purchaser 

wishes to designate the origin of the materials that are used, then if 

the manufacturer wants to maintain that patronage he is going to 

have to adjust his method of doing business to meet the requirements, 

but he will not l>e required to do so by law or by Government 

intervention.

Mr. Macdonald. Then you think the manufacturer should have 

his steel so inventoried that he knows which is from what source?

Mr. Setser. If he receives an order specifying th at this order must 

be filled with containers made of U.S. steel, he should certainly take 

the steps necessary to segregate enough steel so that he knows that 

he is putting in that particu lar order the United States steel.

Mr. Macdonald. You say that this is burdensome.

Mr. Setser. The purchaser would probably have to pay for it if 

he wanted to insist upon having steel of a specified national origin.

Mr. Macdonald. What is burdensome and not burdensome? At 

what point does it become a burden ?

Mr. Setser. Mr. Chairm an, could I reiterate again the general 

policy aspects of the matter ? The State Department and other executive agencies operating the Trade Expansion Act, the Trade Agreement Act, and so on, have made agreements w ith foreign govenments 

containing concessions on trade. When the foreign countries begin 

to obtain a market resulting from any reduction or binding of tariffs, 

it seems there is a tendency then for this type of bill to be proposed 

so as to deny to them the advantages for which they have bargained.

Now, in the process of making international agreements it is simply 

not feasible for the U nited States to have one arm of the Government 

bargain to permit a foreign country to obtain a market in this country and then another arm of Government take steps which will try 

to counter the advantages which are to be obtained by tha t agreement.

Mr. M acdonald. Well, sir, I think either rightly or wrongly, this 

particula r branch of government does not always feel the State 

Department gets quid pro quo in matters of so-called barg ainin g with 

other countries.

Any questions, Mr. Keith ?

Mr. Keith. I have not been here for all of the hearing and my 

question may have been answered earlier. I am not certain, but I 

do think it is appropriate to ask. You say this would be inconsistent 

with our international commitments ?

Mr. Setser. Yes, sir.
ST EEL CONTA IN ER M A RKIN G 37

Mr. Keith. Can you delineate this at all, briefly and specifically ?

Mr. Setser. Yes, sir: I thin k I did so in responding to a question 

by the chairman. In article 3 of the General Agreement on Tariffs and Trade and in provisions in a number of bilateral commercial treaties of the United States, we have engaged with the other country tha t goods, once admitted into the country across the customs bound­ ary, shall be treated in all matters relating to taxation, sale, storage, 

distribution and use as is the competing domestic product.

Mr. Keith. You said “once admitted.” The requirement, as I 

understand it, and I may be incorrect, would have to be implemented 

prio r to admission, would it not ?

Mr. Setser. Only if we impose tariffs on imports. They are imposed at the frontier and that is a distinction from equal treatment with the domestic product because there is no custom duty assessed 

on that, for example.

Mr. Keith. I am talking about the requirement that you call burdensome. Would it have to be executed prior to admission ?

Mr. Setser. After admission.

Mr. Keith. Afte r admission ?

Mr. S etser. Yes. After it has entered into the domestic commerce 

of the country.

Mr. Keith. There is no reservation in this internatio nal agreement 

with reference to permitting this kind of thing?

Mr. Setser. No, si r; not to my knowledge.

Mr. Keith. And you think a case would lie in the World Court ?

Mr. Setser. I think it might, yes, sir.

Mr. Keith. Thank you, Mr. Chairman.

Mr. Macdonald. Thank you. sir.

Our next witness is Mr. Morris Hershson, president of the National 

Barrell & Drum Association.

STATEMENT OF MORRIS HERSHSON, PRES IDENT, NATIONAL 

BARREL & DRUM ASSOCIATION

Mr. Hershson. Mr. Chairman, and gentlemen, my name is Morris 

Hershson. I am president of the National Barrell & Drum Associ­ ation, with headquarters at 1343 L Street NW., Washington, D.C. The membership of this association comprises dealers in and re- conditioners of steel drums in 34 States in the Union. The association represents the vast majority of such reconditioners throughout the United States, whose industry will be most immediately and adversely affected by passage of the above-mentioned bills in their present fonn. When we discuss steel drums, we are in the main, alluding to the 18, or 20/18 gage, 55 gallon steel drum, as that type of container constitutes probably 90 percent of our business, and is the one commonly used by the petroleum, chemicals, paint, varnish, petrochemical, food products, such as shortening, vegetable oils, et cetera, adhesives, print­ ing ink, roofing materials, and similar industries. According to the Bureau of the Census survey of steel drum manufacturers, in the year 1963 there were m anufactured in this country approximately 16 million such drums.
38 STEEL CONTAINER MARKING

The function of the reconditioning industry is, as its name suggests, 

to recondition these drums so tha t they are completely reusable for 

the transportation of the same products for which they were originally 

designed. Due to technological improvements made by our industry 

in the past 30 years, these 18 gage, 55 gallon drums can now be reused 

as many as 10 to 15 times before they are finally scrapped. Our industry estimates that it reconditions between 45 and 50 million of these 

drums annually, thus, in effect, trebling the new drum production. 

Since our drums sell for less than the price of a new drum , and since 

the average savings per drum is between $1.50 and $2, the reconditioned drum saves American industry between $75 and $100 million 

a year in its packaging costs. This savings is reflected and multiplied 

in the prices of the products purchased by the ultimate consumer.

By this continued use and reuse of reconditioned drums, our industry is also conserving natural resources, through making unnecessary the annual consumption of additional millions of tons of sheet 

steel.

The reason for this brief description of our industry and its functions is to place in proper perspective the effect of the proposed bills, 

each cited therein as the “Steel Shipping Container Identification 

Act.’’ I am referring particularly to H .R. 6182, H.R. 6647, and H.R. 

6775. These three bills are practically identical in language, and require tha t every steel container manu factured in the United States 

of foreign steel bear embossed on the top head the legend:

“Steel in this container made i n ------------- .” The blank space is

tilled in with the name of the foreign country which was the source 

of the steel. The bills further provide tha t it shall be a crime for 

anyone to deface, destroy, alter, remove, et cetera, such a mark.

Our industry is not objecting to the basic concept of these bills; 

namely, to give the purchasers of new drums the option of buying 

drums made of domestic steel rather than those of foreign steel. We 

are taking no position, either for or against tha t objective. Our 

objection is to the form of these bills, on two grounds.

1. We believe tha t the bills should be amended, so tha t they will 

exempt from their provisions the reconditioning and sale of used 

drums. The purpose of the act is to discourage the original pu rchaser of the new container from buying one made of foreign steel; 

if the purchaser, despite the marking, buys such an “offending’’ drum, 

that product would then become p art of our industrial economy, and 

the marking would no longer serve any purpose. The drum reconditioner should not be penalized for defacing, or obliterating, or removing any marking, since such removal is pa rt of the process of reconditioning, and thus, an entire industry would become subject to criminal penalties for performing its economic function.

Pa rt of our process is, in some instances, to convert closed head 

drums into full open head containers by removing the top head, and 

if it is damaged, replacing it with another head. Since that top head 

would bear the embossment required by these bills, the reconditioner 

could then be charged with removing the mark, found guilty of a 

misdemeanor, fined up to $5,000 or imprisoned for 1 year, or both. 

It is our opinion, therefore, that section 3 should be amended by the
STEEL CONTAINER MARKING 39

inclusio n of a new subsection (c) which we sug ges t sho uld read as 

fo llo ws:

(c) A steel shipping container manufactured in this country of foreign steel, having once been used and emptied, is outside the purview of this act. and no longer subject to its provisions; any defacing, destroying, altering, removing, covering, obscuring, or obliterating the marking required by subsection (a) of this section, in the process of reconditioning such container for reuse, shall not 

be deemed a violation of this act.

2. Our second objection to the form of these bil ls is in the requ ire ­

me nt th at the m arking con sist of “em bossme nt.5

' We object str en uously to such a metho d of m ark ing. We believe th at t his metho d goes 

fa r bey ond the objective of the bil ls; nam ely, to disc ourag e the purchase of new dru ms made of foreig n steel. Embos sme nt ma rks the drum forev er after, an d c rea tes problems f or the rec ondition er, bo th in 

rec ondit ion ing a nd sale.

Embos sment depre ciates the value of the se dru ms , since buy ers of drum s oppose any kind of embossm ent, except such ma rking s on the 

bottom hea d as are pr esen tly req uir ed by IC C reg ula tio ns, such as 

des ign ation of man uf ac tu rer, gallonage, gag e, and ye ar of manufactur e.

Em bossme nt on the top head would interfe re wi th stenciling . I t is 

also believed by our in du stry th at embossm ent fre qu en tly weakens 

the steel str uctur e, an d is a source of po tential defec ts in the container.

Th us, such a marking would be regu latin g ag ain st the ultimate reuse o f thes e containe rs, a nd agains t the economies effected by such contin ue d reuse. These bills in th eir pr esen t form , re qu iri ng embossment and sim ultan eousl y ma kin g its rem ova l a vio lati on of the act, not only make 

crim ina ls of our en tire indu stry , but also affect the m economically. Th us, the bills are making a cu lprit of an in du stry which is not the 

offender. We do not man uf ac ture the dr um s; we do not import the 

ste el; we do not m ake the decision to buy the new drum fab ric ate d of 

forei gn steel. Suc h decisio ns have been ma de long before the dru m reac hes ou r ind ustry . Our fun ction is sim ply to make this drum, al ­

read y a pa rt of ou r in du strial economy, suita ble fo r reuse, and thu s 

aid in effecting substan tia l sav ing s in pa ck ag ing costs f or a large part 

of A me rican ind ustry .

We believe th at th is act wou ld achieve its purpose if it were 

amend ed, as prev iou sly suggested, first, to e xemp t the used dru m from 

its provisions, and second ly, to substitute the word “s tam ped” or 

“m arke d” in pla ce o f the w ord “ embossed.”

Such sta mpin g or mak in g would fu rn ish exact ly the same notice 

to the pu rch aser of new dr um s as wou ld emb ossmen t, b ut it would n ot 

■work a ha rd sh ip on th e rec ondition ed drum indu str y, nor minimiz e 

the sav ing s effected by the use of many millio ns of thes e dru ms an ­

nuall y.

Tha nk you.

Mr. Macdonald. Mr. H uot ?

Air. H uot. No questions.

Mr. Macdonald. Hoes a nyone have que stio ns of t he witn ess ?

Mr. Cur tin. Yes, I do, Mr. Ch air ma n. Air. He rsh son, I have listen ed to yo ur s tatem ent wi th con siderable int ere st. I shall discuss it 

with the com mittee at such tim e as t here ma y be an exe cutive m eeting,
40 STEEL CONTAINER MARKING

particula rly the suggestion of an amendment regarding the reuse of the 

article. I do, however, have some difficulty following your second 

objection, that the embossment on the container, setting forth the name 

of the country from which the steel came, is a detriment to your trade. 

Why do you think that is so?

Mr. H ershson, Well, in the first place, Mr. Congressman, any embossment of any kind on the drum makes the drum less valuable than 

it would be without the embossment.

For example, if we bought a drum which had embossed on the top 

head. ‘‘Stan dard Oil” we would have a most difficult time getting our 

full price for that drum, no m atte r the quality of the drum because of 

the embossment.

Mr. Ctjrtin. If I could interrupt you, let me say tha t I can understand a situation where a purchaser buying a reconditioned drum to 

ship therein a food product would not want the name of, say, Standard 

Oil Co., on it. But I do not see how that same argument would apply 

if all that is on the drum is the name of the country from where the 

steel came. How is tha t going to adversely affect the purchase?

Mr. Hershson. The top head is generally the place where an industrial filler stencils the material on that drum, the inform ation which 

is needed both for transportation and for the use of the ultimate 

purchaser: for example, the number of gallons, the material weight, et 

cetera. Embossment usually is in the way of stenciling and so on.

Mr. Curtin. If I can again interrupt. Supposing the embossment 

was required to be on the side of the container? Would you still have 

the same objection ?

Mr. Hershson. Not tha t second objection. I would still have the 

first, objection because the customer does not want any embossment on 

his drum.

Thirdly, Mr. Congressman, as indicated in the statement there is 

belief among technical people in our industry tha t embossment 

stretches steel. It weakens steel, at best. We would pre fer a drum 

which is completely unembossed. That we cannot have because of the 

bottom head which has a few symbols on it designating what I have 

stated in my statement,

Mr. Curtin. So you do have some embossment on all drums now?

Mr. I If.rsiison. On the bottom head.

Mr. Curtin. And has it substantially weakened those drums?

Mr. Hershson. May I say, Mr. Congressman, that the leakage claims 

which occur in this country in drums occur because of fissures in the 

bottom head. They do not occur in the top head where there is no 

embossment. They rarely occur in the sides where there is no embossment. They occur in fissures in the bottom head and there is 

belief in our industry th at those fissures are to some extent caused by 

embossment, the weakening of the steel structure. There is a difference 

of opinion on this and I will say so frankly to you, but tha t is the 

belief of some.

May I make one further point? It also causes problems for the 

following reason. As I have indicated we convert bung-type drums, 

closed-head drums to open-head drums especially where by some 

chance the top head has been damaged in being dropped off a truck 

or for some other reason. We cut out this top head and we create an 

open head drum by placing a new lid on th at drum.
STEEL CONTAINER MARKING 4 ]

Now, by cuttin g out this top head and removing it, we might be 

challenged with a violation of the act because we have removed the 

marking.

Mr. C urtin. But if the bill was amended so the embossment was on 

the side, that argum ent would no longer exist.

• Mr. Hershon. No. If we removed the head, the argument would

not exist. May I ask you a question? Is tha t permissible?

Mr. Curtin. Surely.

Mr. Hershson. What is the distinction between giving notice to a 

- purchaser by stamping or giving notice by an embossment?

Mr. Curtin. Well, the main difference is that the stamped marking would be more easily obliterated than the embossment.

Mr. Hershson. Before the purchase, or after the purchase, Mr. 

Congressman ?

Mr. Curtin. Right after the original purchase; yes.

Mr. H ershson. But if the original purchase already took place then 

the marking no longer serves any purpose.

Mr. Curtin. Yes, it does because the person who buys that drum is 

to know whether or not it is made of a foreign steel.

Air. Hershson. Well, he knows it by the notice stamped on the 

drum, lie has already been advised because the stamping on the drum tells him it was made in England or some other country. I fran kly cannot see the distinction from the viewpoint of the objective 

of the act.

Mr. Curtin. I would like to get back to the one thing that is still 

puzzling me somewhat and tha t is your statement that a purchaser of a drum is not going to pay as much for that drum if it has embossed on it that the steel of which its was constructed was made in the 

United States.

Mr. Hershson. I am making tha t statement based on our experience in the past in which purchasers have told our industry they do 

not want any embossment on drums.

' Mr. Curtin. But they were speaking of names of companies on the

drums or a p articular content in them; were they not?

Mr. H ershson. They were speaking of th at and also of the fact th at 

one drum had embossed on it that this drum had originally been used “ for product X and they wanted to use product Y or this drum had

originally been the prop erty of the U.S. Army.

Mr. Curtin. That is a little different argument.

Air. Hershson. They wanted—well, the fact of the matter is, Air. 

Congressman, that they will pay less for en embossed drum than they 

will pay for one that is not embossed.

Air. Curtin. But the embossments of which you are speaking are 

not in line with what we have in mind here. This is not an emboss­ ment that says this drum can only be used to store kerosene, or a deter­ gent, or food matter. This says that this drum was made from steel 

produced in such and such a country.

Mr. Hershson. 1 agree it has a different kind of embossment. To 

get back to the embossment on the side, we, in the conversion of bung drums to open head drums, when we remove the lid previously and put a new lid on, we trea t it as an open head drum and in order to remove the dents from an open head drum, we reroll the surface of the body of this open head drum so that it goes back as far as possible
42 ST EEL CONTA IN ER MAR KI NG

to its original contour and shape. In such rerolling we may obliterate 

or deface the embossment on the side and again would be challenged 

with a removal of the mark.

Mr. Curtin. Tha t would take some pretty fine rerolling.

Mr. II ershson. If you could see our rerolling operation you will 

find that ours is pretty fine. We have very expensive equipment and 

for that very purpose, and so I think firstly tha t your objectives as 

proponents of this bill would be served if you exempted our industry 

from its provisions entirely because we do not handle new drums and 

secondly, the marking or stamp ing would be just as equally effective 

for giving notice to a person as embossment and would therefore get 

by all of this problem.

Mr. Curtin. We will certainly consider your arguments.

Mr. Hersiison. Thank you, sir.

Mr. Macdonald. Our next witness is Mr. Robert Kent who will 

present the statement of Livingston Keplinger, president of the Steel 

Shipping Container Institute.

STATEMENT OE LIVINGSTON KEPLING ER, PRESIDENT OF THE

STEEL SHIPPING CONTAINER INSTITUTE, INC., PRESENTED BY

ROBERT KENT, ESQ., COUNSEL

Mr. Kent. Mr. Chairman, I am Robert K ent; I am an attorney with 

Breed, Abbott & Morgan, counsel to the Steel Shipping Container 

Institute.

Mr. Chairman, Mr. Keplinger, the president of the institute, intended to appear today before the committee, but unfortunately, the 

annual meeting of the institute is tak ing place on the same day and he 

is unable to be here. Therefore, I would like to read his statement 

and make myself available for any questions you may have about this 

bill.

Before turning to his statement, I would like to also make mention 

of two manufacturers of steel shipping containers, representatives of 

which appeared at the hearings in the last session of Congress and 

strongly supported this bill. They also have a prepared statement 

which they wanted to make at this particu lar hearing but likewise, 

they are at the annual meeting. The two t hat I refer to are the statement by Lawrence F. McKay, executive vice president of the Ohio 

Corru gatin g Co. of Warren, Ohio. The Ohio Corrugating Co is a 

small, single company place with about 200 people and it is, of course 

a totally independent small producer of steel shipping containers. It 

is in no way connected with the basic steel producer.

Again, I make mention of the fact tha t his statement which outlines some of the problems arising from the use of imported steel in 

this particular industry.

Likewise, I have a statement from Bruce R. Aton, vice president, 

marketing, of the Container Division of the Rheem Manufacturing 

Co. This is also an independent producer of steel shipping containers; a larger one. They have nine plants located from coast to 

coast and employ about 1,300 persons. I would like to emphasize 

these companies are in no way connected with the basic steel industry. 

They are independent producers of the steel shipping containers. 

They have to purchase their steel on the marketplace eithe r from
STEEL CONTAINER MARKING L

43

producers in the United States or (in the future) possible from foreign steel producers if the tre nd continues. I would like to introduce these for the record, if I may.

Mr. Macdonald. Without objection, it is so ordered.

(The statements of Messrs. McKay and Aton follow:)

Statement of Lawrence F. McKay, Executive Vice President, the Ohio

Corrugating Co., Warren, Ohio, in Behalf of H.R. Bills 6182, 6647, 6775

The Ohio Corrugating Co. is a 50-year-old Ohio corporation which for years now has exclusively manufactured steel shipping containers at its one location in Warren, Ohio. It employs jus t over 200 people and is a totally independent small producer serving the Grea t Lakes, Ohio River and middle seaboard industrial areas. As such, we are vitally concerned with the successful passage of this proposed Steel Shipping Container Identification Act and urge your favorable consideration. The continuing and expanded use of unidentified foreign steel in the manu­ facture of steel shipping containers within the United States could force either our use of such or the ultim ate closing down of our operations. The difference in the price of foreign steel as known to us and tha t of our domestic steel sup­ pliers would be such as to wipe out any semblance of profit for us and more than likely would force heavy losses if carried to any extreme. We operate as modern and as efficient a plant as there is in our industry and pay our employees relatively the same wages and benefits as basic steel under our own United Steelworkers contract. We are constantly fighting costs to remain competitive and there are just no means by which costs could be fu rther reduced sufficient to meet this foreign steel competition except to use it in lieu 

of domestic materials. Warren, Ohio, is a steel town and we live close to the havoc that an expanded use of foreign steel could create in our own local economy which is currently having its own problems with its attendan t unemployment, relief, etc. Even more selfishly is the fact that the American steel industry is one of the biggest consumers of products that are shipped in steel containers, so it follows that the less the basic industry produces, the more we, as a container manufacturer, 

would suffer. We again emphasize the importance of this legislation to our company and our industry and further urge its adoption.

Statement of Bruce R. Aton, Vice President, Marketing Container Division,

Rheem Manufacturing Co., in Support of the Steel Shipping Container

Identification Act, H.R. Bills 6182, 6647, 6775

I am Bruce R. Aton. vice-president—marketing, for the Container Division of Rheem Manufacturing Co. I appear here today on behalf of my company to again emphasize our support of the Steel Shipping Container Identification Act. Rheem Manufacturing Co. is an independent producer of steel shipping con­ tainers with nine plants strategic ally located from coast to coast. We employ approximately 1.300 persons in this particular division manufacturing steel 

containers. We are cognizant of the continued usage of foreign steel for containers which increases appreciably each year. As I stated on my previous appearance before this committee, we have received offers and are still receiving offers of savings which range from $12 to $18 per ton. The variance depends upon the port of 

entry used. Translating this to a per drum basis, the saving is $0.30 to $0.50. Since steel represents 95 percent of the raw material cost which is over 50 per­ cent of the selling price of the container, this cost differential is of extreme 

importance to us. Moreover, steel shipping containers as manufactured by us or any other manu­ facture r in the industry must conform to the Interstate Commerce Commission Regulations, Uniform Freight Classification Rules or the National Motor Freight Classification Rules. Thus, because of the standards set for steel shipping con­ tainers. there isn’t much we can do to alter the drum to meet competitive s ituations.
44 STEEL CONTAINER MARKING

In addition, we feel we are as efficient a producer as anyone in our ind ustry ; 

thus there are no further economies we can make in this area to offset the competitive advantage of those who use foreign steel.

The severe competitive situation which continues to exist in our industry leaves 

us with two alternatives: (1) operate our business at wh at we consider unsatisfactory profit levels or (2) to use foreign steel to compete. Because we believe 

tha t when foreign steel is utilized for any great portion of our business, it has 

an adverse effect on the American economy and upon our own market operations, 

we urge that consideration should be given to granting a measure of protection 

to those companies who desire to continue using American steel.

Therefore, we strongly endorse the Steel Shipping Container Identification 

Act.

Mr. Kent (reading). I am Livingston Keplinger, president of the 

Steel Shipping Container Institute , Inc. I am appea ring today on behalf of the institute to again strongly endorse the Steel Shipping Container Identification Act. As I am sure tha t this committee is aware, 

a similar piece of legislation was unanimously reported out of this 

committee and passed by the House of Representatives in the last session of Congress. Unfortunately, the Senate did not have sufficient 

time to act upon it before it adjourned.

The institute has 30 members which manufacture steel shipping containers—these members fabricate in excess of 90 percent of all steel 

shipping containers made in the U nited States.

It should be emphasized at the outset that the institute has a wide 

diversity in the size of its members. Of particu lar significance with 

respect to the presenl bill is the fact that only four of our members 

are owned by major basic steel compnies: thus, the great majority of 

our members are independent. purchasers of steel used to manufacture 

steel shipping containers. Indeed, the largest national multiplant operation is an independent, company whose stock is listed on the Xew 

York Stock Exchange.

The products of the steel shipping container industry are “drums” 

and “pails” used primarily in transporta tion. A “drum" is defined 

by the Department of Commerce as any single walled container or 

bilged container of 13 to 100 gallons capacity constructed of steel sheer 

inclusive of all gages.

A “pail’’ is likewise defined as any steel shipping package with or 

without bail and handle, having a capacity of 1 to 12 gallons inclusive 

constructed of steel sheet, 29 gage or heavier.

The estimated annual capacity of the industry is 65 million heavy 

drums, 25 million light drums, and 130 million pails. It is estimated 

tha t peak operation of the steel shipping container industry would 

require 3,100,000 tons of steel annually. For reasons which will be 

developed in due course, the production of steel shipping containers 

has been substantially less than full capacity.

The Steel Shipping Container Institute strongly supports the Steel 

Shipping Container Identification Act’s aims of affording to the 

buyers of steel shipping containers information as to the origin of the 

steel used in the manufacture of the containers and perm itting the 

continued use of domestic steel by the members of our industry without 

fear of constantly increasing price disintegration due to cheap foreign 

steel.

At present, the customs laws require the marking of finished steel 

shipping containers upon entry in to this country to indicate the country of origin of the containers.
STEEL CONTAINER MARKING 45

Likewise, steel sheets must be marked upon entry into this country if they have been produced abroad. However, when the steel sheet has been further processed into a steel shipping container, it loses its foreign character under present law and need not be labeled or identi­ fied in any way. This conclusion has been confirmed by both the Bureau of Customs and the Federal Trade Conunission. This situation allows the use of cheap foreign steel in containers without any indication tha t such steel is, in fact, being used. When a company uses foreign steel it acquires a significant economic advan­ tage in the form of the differential between the cost of foreign and domestic steel—this price differential may affect the selling price of a 55-gallon drum by 25 to 40 cents or 5 to 7 percent of the total selling 

price thereof. The user of American steel is then forced to attem pt to meet these lower prices—lower prices due solely to the importation of foreign steel—under the penalty of possibly operating losses, or. as a m atter of self-preservation, may be compelled to buy foreign steel to remain 

economically alive. __

Indeed, as time passes, it becomes more apparent that the importation of foreign steel may well afford the only means by which the members of our industry, particularly the smaller members, may remain in business. This conclusion, while it may appe ar to be extreme, is sus­ tained by the conditions existing in the steel shipping container 

industry. First, the steel shipping container industry has been depressed for some time. During the past 5 years, approximately 33i/3

 percent of 

the total capacity of o ur industry has been utilized. Quite naturally, price competition has been severe and profits cut to a minimum. Thus, it is virtually impossible, particularly for many smaller firms, to cut prices still further to meet this increasing advantage of their com­ petitors who have turned their backs on domestically produced steel while at the same time selling their own products to domestic pu rchasers. Second, all steel shipping containers within the scope of the pro­ posed act are subject to the jurisdiction of the Interstate Commerce Commission and must be approved for use by the official, Southern, Western Classification Committees and by the Bureau of Explosives as agents for the railroads and by the National Classification Board 

for shipments by truck. After securing the approval of these groups, steel shipping con­ tainers must meet a detailed set of specifications adopted by the American Standards Association. These specifications cover every­ thing from gage and physical specifications of the steel sheet and quality and thickness of tine paint, to the closing devices to be used.

1

 As a consequence, a manu facturer of steel shipping containers can­ not design, redesign, alter or substitute materials to regain competitive equality with the users of cheap foreign steel. Third, even if a manufacturer is successful in developing a new design which would benefit him, a substantial period of time must pass before the idea may be developed, tested, and finally approved by the various regulatory and quasi-regulatory bodies. For instance, the institute has been actively engaged for six years in a research prog ram to develop a new light-gage 55-gallon drum. If. as it is hoped, shipping tests prove to be satisfactory in the near

48 -1 61 — 65 -------4
46 STEEL CONTAINER MARKING

future it is expected that approval of one agency may be obtained at 

the end of this summer, and, after an additional 6-month period, full 

approval may be secured. Thus, development of this product up to 

ICC approval will have taken &y2

 years; an additional year will then 

be required to get the new container into production.

Fourth, because of the weight and size of steel shipping containers, 

manufacturers must be located close to their customers. Consequently, container manufacturers have not been able to expand their 

markets abroad to secure new foreign business or to retain old domestic 

business which has been relocated abroad.

Thus, the m anufacturer of steel shipping containers who desires to 

use domestically produced steel is faced with an extremely demoralizing price dilemma—he must meet or come close to meeting the price 

of his competitors who use cheap foreign steel because his products 

are by regulation and circumstances, marketed as commodities, yet 

he can find no way in wThich to overcome the cost differential enjoyed 

by his competitors who use foreign steel—a competitive advantage 

not due to superior technology but due solely to the fact th at they imported foreign steel.

The effect to the American economy of a continued increasing use 

of foreign steel in this industry which has consumed 1,250,000 tons 

of steel a year or 1*4 percent of all finished steel produced in the 

United States is obvious. Indeed, the last 5 years have shown an 

accelerating trend toward grea ter and greater amounts of hot and 

cold rolled sheets being imported.

Department of Commerce figures show tha t the average total tons 

of such products imported into the United States for each year during 

the period 1959-62 was about 180,240 tons. In 1963, the total amount 

of hot and cold rolled sheets imported into the United States had snowballed to 527,000 tons and, in 1964, to 1,122,590 tons.

Thus, the trend toward use of imported hot and cold rolled steel 

sheets continues at an ever-accelerating pace and the problems resulting therefrom for the manufacturer of steel shipping containers 

become more critical.

The Steel Shipping Container Identification Act requires tha t shipping containers made from foreign steel be marked so as to indicate 

the origin of the steel used in the container—it in no way affects existing tariff rates nor does it penalize the manufacturer or the purchaser 

of such containers.

This act is intended to allow the purchasers of steel shipping 

containers to learn the source of the steel used in the container. Of 

course, it is not anticipated tha t many domestic purchasers will be 

inclined to buy containers made from American steel, but the decision 

will be up to the customer based upon all of the business considerations involved in such a situation.

The administration and enforcement of the act is delegated to the 

Federal Trade Commission because of the fact t hat the marked steel 

shipping containers manufactured in the U nited States from foreign 

steel cannot be checked at ports of entry by the Bureau of Customs 

and because the act is generally similar to other labeling acts under 

the authority of the Federal Trade Commission.

The recordkeeping, enforcement, and criminal penalty provisions 

in the act are similar to the previously enacted labeling acts covering
STEEL CONTAINER MARKING 47

wool products, fur products, and textile fiber products administered 

by the Federal Trade Commission. In conclusion, I stron gly endorse the Steel Ship ping Container Identification Act. The act will atlord relevant and important in­ formation to our customers. This act will undoubtedly strengthen the position of the American manu facturer of steel shipping con­ tainers who desires to use domestically produced steel wherever pos­ sible. The act will assist the members of our industry in minimizing a demoralized price structure resulting from the increasing use of 

foreign steel. While we are not the direct beneficiaries of the act as it applies to the basic steel industry and its employees who produce the 1 million or more tons of steel used in our industry each year, we unhesitatingly acknowledge our deep interest in the welfare and continuing prosper­ ity of the basic steel industry and the prevention of the loss of jobs 

bv its working people in the United States. Moreover, the accelerating trend in the importation of steel con­ tinues to contribute to the balance-of-payments deficit and the con­ sequent outflow of gold from the United States. We submit that the enactment of this act would contribute in some degree to rectifying this imbalance and the outflow of gold resulting therefrom. Indeed, all Americans have an important interest in the promotion of industry, the expansion of employment, and the prevention of unemployment in this country, and we submit tha t this bill is not only consistent with these purposes, but significantly contributes to 

their fulfillment.

Thank you, very much.

Mr. Macdonald. Mr. Huot ?

Mr. IIuot. You made some mention about specifications. You said 

something about the gage and I assume these same specifications have 

to be met regardless of where the steel comes from.

Mr. K ent. That is correct. These are recommended specifications 

by the American S tand ards Association which I am informed are adhered to by the industry.

Mr. I Iuot. Regardless of whether the steel is foreign or domestic?

Mr. Kent. That is correct.

Mr. Huot. Tha t is all, Mr. Chairman.

Mr. Macdonald. Mr. Curtin ?

Mr. Curtin. No questions.

Mr. Macdonald. I ju st have one. You say tha t a manufacturer developing a new design has to go through a number of new designs and has to be approved by a number of regulatory agencies. I was wonder­ ing which bodies you had reference to tha t you describe as quasiregulatory bodies on page 5 at the top of your statement.

Mr. Kent. Well, of course, the reference here is to these official Southern, Western Classification Committees, and so forth. I believe tha t was the reference to quasi-regulatory committees that I had in 

mind.

Mr. Macdonald. I do not follow you.

Mr. Kent. I believe the reference that you are pointing to there is refe rring to the Official Southern and Western Classification Commit­ tee, the Bureau of Explosives and the National Classification Board.
48 STEEL CON TAINER MA RKING

Mr. Macdonald. The Bureau of Explosives obviously is a regulatory 

agency, not quasi.

Mr. Kent. I stand corrected then. I might also add we, of course, 

have specifications adopted by the American Standards Association 

which is not a governmental body as such. These are specifications 

which they recommend tha t are the uniform practice in the industry 

or virtually uniform in the industry.

Mr. Macdonald. And the last thing, and I do not mean to keep you, 

but the last thing was I could not help but contrast your statements 

about the outflow of gold which results from the importation of 

foreign steel with tha t advanced by other witnesses which have preceded you as to the fact th at a t the present time we are still selling more 

than we are importing and tha t we have a favorable balance of trade. 

I was wondering if you would like to elaborate any more on that?

Mr. Kent. There was an excellent article in the Wall Street Journal 

on April 20, 1965, and in this article it is pointed out tha t the United 

States for many years exported the greater value of steel than it imported. However, beginning with about 1962, there has been a constant increase in the deficit, that is the greater amounts of steel 

products are being imported at the present time than are being exported by our domestic producers. This has become greater with each 

year.

Let me quote the article:

Alth ou gh mill an d analy st s figu re ste el im po rts wi ll ju m p t o a re co rd 7.5 mi llio n 

to ns th is ye ar , a ris e of more th a n 15 pe rc en t from 1964 on to p of an 18-pe rce nt 

in cr ea se th a t yea r an d th e 13 -p er ce nt in cr ea se in 1963, an inf low of th a t size 

wou ld lo wer U.S. pr od uc tion a b o u t 9 pe rc en t from w hat it wou ld be if th er e 

w er e no im po rts . It also wou ld h u rt Jo hn so n ad m in is tr ati on ef fo rts to end the 

ba lanc e- of -p ay m en ts d efi cit : ex ce ss of mo ney go ing out of th e U ni te d Sta te s over 

mo ney coming in. L ast yea r, fo re ig n tr ade in stee l co ntr ib ute d $150 mi llio n to 

th e de fic it w ith im po rts va lu ed a t $750 mill ion out pa ci ng A m er ic an stee l ex po rts 

va lu ed a t $600 million .

T think this points up the situation in the steel industry. Again, we 

represent the steel shipping container industry but T know the basic 

steel industry likewise indicated their support on the bills submitted 

in the last session and there is every indication tha t they will again 

supp ort them this time.

This does point up the situation as it presently exists in the basic 

steel industry and needless to say, points up the consequent loss of 

jobs to our working people.

I r. Macdonald. Thank you, very much.

Mr. Curtin. I do have one question, Mr. Chairman. Is the membership of the Steel Ship ping Container Institute confined to the 

manufacturers of new steel containers or does it also take into membership those persons who recondition steel containers?

Mr. K ent. No, the association is made up of manufacturers of new 

steel shipping containers.

Mr. Curtin. Thank you.

Mr. Macdonald. Thank you, very much.

Our next witness will be Mr. Roger G. Evans, president of the 

Evans Cooperage Co., of Harvey, La.
STEEL CONTAINER MARKING 49

STATEMENT OF ROBERT G. EVANS, PRESIDENT, EVANS COOPERAGE 

CO,. INC., HARVEY, LA.

Mr. Evans. Gentlemen, I wish you would ask me some of the questions you asked some of the other people who were not able to answer 

them to your satisfaction.

Mr. Macdonald. 1 do not think we can do that with the time 

limitation we are under.

Mr. Evans. First, as to the embossing of the drums.

Mr. Macdonald. I take it you are not unionized.

Mr. Evans. We were unionized by the Steel Workers at one time, Teamsters another, and the Woodworkers at another, and there may 

have been another one in there.

Mr. Macdonald. But I take it at the present time you are not.

Mr. Evans. We are not. The last one was the Steel Workers.

Mr. Macdonald. And I take it you had an unfortunate experience 

with them.

Mr. Evans. No ; the union membership did. The Steel Workers 

wanted to buy me off, asking me if I would drop a suit against them in consideration for the ir dropping their membership and I refused.

Mr. Macdonald. Perhaps it is just because I do not know your 

business very well and I confess I do not, but I do not really see your concern inasmuch as you are presently relying on foreign steel to 

make your product, are you not?

Mr. Evans. To a large extent, but not entirely.

Mr. Macdonald. In the main, you do rely on it.

Mr. Evans. We use more foreign than domestic.

Mr. Macdonald. H ow would this hill change that? Would you 

still rely on foreign produced steel?

Mr. Evans. Certainly would, but it would change it.

Mr. Macdonald. How would it change it?

Mr. Evans. Well, it would change it in many respects. Fir st, it 

would change it in many ways. It would increase our cost consider­ ably, not just a littl e bit either. It would increase our cost because first, we would have to put extra embossing in the drums and in em­ bossing drums you sometimes ruin some of the material. This is an added cost, the cost of the dies is an added cost, but that is rather incidental, to the other costs. This bill, if I understand it correctly, would require that I keep track of every piece of steel th at I use and every drum tha t T m anu­ facture for over 3 veal’s later when some regiilatory agency send a member in and says you had a shipment of 123 drums 3 years ago. Where did this steel come from ? So every drum I produce must be recorded and kept individually. We do not have to do this now.

Mr. Macdonald. You do not keep any records?

Mr. E vans. We do keep records. We do not keep a record of what 

steel goes into the drum. We do not keep that.

Mi-. Macdonald. Bu t you keep records of when you place orders? 

I am not a businessman but when you place orders do you not p ut in 

the file how much you ordered ?

Mr. Evans. Oh, yes.

I will proceed with a letter th at I wrote to Mr. Oren Harris if I may, 

Mr. Chairman.
50 STEEL CONTAINER MARKING

The writer is appearing on behalf of the Evans Cooperage Co., Inc., 

in opposition to bills 6182,6647, and 6775.

Our understanding of these bills is tha t they will require, if passed 

tha t manufacturers of steel shipping containers be required to permanently emboss shipping containers made all, or in pa rt of foreign 

steel w’ith a notation tha t the containers were manufactured from 

foreign steel, naming the country of origin of the steel.

As manufacturers of 55-gallon steel drums used as shipping containers, we are unalterably opposed to this, or any legislation that 

would harass or restrict the users of foreign steel in the manufacture 

of steel containers sold to the general public.

The Steel Container In stitute which purports to represent the steel 

drum manufacturing industry favors these bills; however, the Steel 

Container Institute is dominated by the major steel drum producers in 

this country, most of which are owned by producers of steel. Because 

of this, they can hardly give prop er representation to the small independent manufacturers of steel drums which are most affected by this 

proposed legislation. Such manufacturers of steel drums are United 

Steel Products Co., owned by U.S. Steel, Inland Steel Container Co., 

owned by Inland Steel, Jones & Laughlin Steel Corp. Container Division, owned by Jones & Laughlin Steel Co., and Republic Steel Corp. 

Container Division, owned by Republic Steel Corp.

In addition, there is the Rheem Manufacturing Co. at one time 

partially owned by Bethlehem Steel and which, at this time, is one 

of the largest manufacturers of steel drums in the world, having, in 

addition to numerous plants in the United States, drum manu facturing plan ts throughout the world.

These giants, that do in effect control the Steel Container Institute, 

produce by far most of the steel drums manufactured in the United 

States.

Despite their advantages of a long position in the industry, almost 

unlimited capital, reciprocity, and first call on raw materials during 

times of shortages, they apparently feel th at these enormous advantages are not sufficient to perpetuate themselves in their past position. 

They, therefore, seek legislation which would harass the independents 

purchasing foreign steel as a means of protecting the ir own interest.

When our firm started producing steel drums approximately 10 

years ago, suppliers of foreign steel were not available to us. It was 

with considerable difficulty tha t we were even able to purchase steel 

from domestic suppliers; and, when we managed to secure a supply 

from one mill that had no steel drum manufacturing affiliates, it was 

under conditions th at were indeed, adverse.

This mill was not able to produce all of the types of steel tha t we 

needed; however, fortunately for us, in the succeeding years, a surplus of capacity developed in this country and we managed to make 

contacts with three other steel suppliers, two of which owned steel 

drum manufacturing subsidiaries.

During the steel strike of 1959, we learned by bitter experience 

what can happen to a small independent drum manufacturer who 

purchases steel from a mill having a subsidiary company that manufactures steel drums. We saw steel which was ordered by ourselves 

on a firm basis and promised to us diverted to a local competitor of 

ours which was owned by a steel mill.
STEEL CONTAINER MARKING 51

In dealing with domestic mills of this type, we have experienced numerous instances of indifference to our needs and incompetence in handling our account which convinces us that a truly competitive atmosphere in the steel industry can properly exist only if reason­ able competition in the form of imported steel continues. The plight of the independent drum manufacturer becomes more and more difficult as these giants, in the ir attem pts to dominate the market, progressively reduce the price of steel drums to independent users who are not influenced by reciprocity while, at the same time, they succeed in getting substantially higher prices for the same type drum from those firms that they are able to influence by virtue of their position reciprocitywise. These giants purchase enormous amounts of petroleum products and chemicals, thereby enabling them to use this leverage in denying the small independents normal access 

to a most substantial amount of container business. Drum manufacturers are handicapped by the fact that their prod ­ ucts sell as a completely manufactured article, including delivery, at as little as 11 cents per pound based on the amount of steel used in the drum. A 55-gallon steel drum probably sells for less money per pound of weight tha n any other manufactured article in the 

world. Access to foreign steel assures the independent manufacturers of drums a more economical and more dependable supply of steel so 

essential to their survival in business. Unlike an automobile or an appliance or many manufactured ar­ ticles fabricated from steel selling at 5 to 10 times the price per pound cost of the drum, the steel drum manufacturer is unable to absorb the cost of extensive warehousing or the payment of premium prices 

during times of shortage. Perhaps some of you are wondering why these giant steel producers have singled out the steel container industry in such a discriminatory fashion when they could have used other industries, including the automotive industry as their target. Why do they not propose that automobiles th at use foreign steel in their manufacture be embossed on the fender or the hood with notations similar to what they expect 

a drum manufacturer to emboss? There are perhaps a number of reasons for this, but we must con­ sider the fact that the steel industry does not manufacture automobiles and, therefore, needs the respect and friendship of the automotive industry as a consumer of th eir sheet steel. The collapse of a large segment of the automobile industry would be 

a catastrophe for the steel industry. The collapse of a large segment of the indepdent drum manufactur­ ing industry would, however, pose no problems but ra ther would assist them in their monopolistic aim in controlling the drum industry. Some time ago, a representative of the United States Steel Corp, did, in the writer’s office, most piously declare tha t this bill would as­ sist American industry and American labor by eliminating foreign 

competition. The writer asked this Un ited States Steel representative why United States Steel felt so strongly about foreign imports if they, United States Steel, continued to purchase foreign iron ore in the manufac­ turing of the steel. The writer also asked would it not be a good idea
52 STEEL CONTAINER MARKING

for United States Steel to emboss its steel sheets made from such foreign ore with a statement to the effect that the steel was produced from 

foreign material, naming the country of origin of the ore.

Needless to say, no satisfactory answer was forthcoming. We make 

no apology for purchasing foreign steel used in the manufacture of 

our drums. We purchase foreign steel because in it we receive a quality product at fair prices with a continuance of un interrupted supply. 

Our foreign supplies treat us with courtesy and with consideration 

and, when they accept an order, they deliver at the time and price 

specified in the purchase order.

We wish that we could say this about the American steel industry.

We think that these reasons are sufficient justification and even 

if such purchases to some degree were detrimental to United States 

Steel or the United Steelworkers Union of America, we feel tha t we 

would still be justified.

It is our belief, however, that the purchase of foreign steel affords 

I lie steel producers and the Steelworkers Union a taste of competition 

which, although they may not like it, will probably in the long run 

react to their benefit.

Air. Macdonald. 1 take it the only steel manufacturing business 

you are in is the manufacture of steel barrels.

Mr. E vans. We recondition them and fill them for export largely. 

We operate three businesses as a unit.

Air. AIacdonald. Three businesses?

Air. E vans. We recondition steel drums and we manufacture steel 

drums and we fill some of these drums for export with the customer's 

product. The customer would ship to us lubricating oils and we package them and deliver them shipside.

Air. AIacdonald. In your m anufacturing process, t he only thing you 

manufacture is the drums?

Air. E vans. That is correct.

Air. AIacdonald. When you order steel from W, X, or Y company 

abroad, do you not keep records of how much you order?

Air. Evans. Certainly.

Air. AIacdonald. And do you not keep track of how much vou paid 

for it ?

Air. Evans. Certainly.

Air. AIacdonald. And how many barrels were turned out of it?

Air. E vans. We do not keep a record.

Air. AIacdonald. You do not know how many barrels you put out 

of it. say for last month or whatever fiscal policy you foilow?

Air. Evans. No. I do not know how many barrels we produced but 

I can get the information. AYe do have that information.

Air. AIacdonald. Aly point is tha t you already do keep those records.

Air. E vans. Not the records required in the bill, no.

Air. AIacdonald. You keep records as to how much steel you order 

abroad, how many barrels you turn out ?

Air. E vans. Yes, we do.

Mi-. AIacdonald. What other records would be called for under this 

bill that you do not already have ?

Air. E vans. We would have to trace this steel from the time we 

purchased it until it went into the drum. You see, as it is now we 

could mix foreign and domestic steel in the drum. We do not keep 

t hese records and these records would be costly to keep.
STEEL CONTAINER MARKING 53

Mr. Macdonald. I th ou gh t you said th e b ig gi an ts shut you off.

Mr. E vans. I did no t s ay that.

Mr. Macdonald. An d because of th ei r irre spon sib ility.

Mr. E vans. I said th ei r indifference.

Mr. Macdonald. The ir indifference an d th ei r irr espo nsibility be­ cause as I understood you you said th at you ordered some steel and 

they gave you a firm pro mi se and did n ot delive r it.

Mr. E vans. You are correc t, and I apologize.

Mr. Macdonald. A nd you say th at forei gn ers tre at you with cou rtesy and conside rat ion and the y deliv er at the time and price 

specified in the pu rcha se ord er.

Mr. E vans. Yes.

Mr. Macdonald. So actua lly , yo ur supp lie rs are foreig n su pp lie rs; 

are the y not?

Mr. E vans. Xo; t he y are both dom estic and foreign.

Mr. Macdonald. Ca n you bre ak it dow n, percen tagewise ?

Mr. E vans. I wo uld say we use perhap s------

Mr. Macdonald. F ir st , why do you go to com pan ies that are irre ­

sponsib le f or your su pp ly ?

Mr. E vans. Well, th at is wha t I am tryin g to po int out to you.

Mr. Macdonald. T hat is w hat I would like to hear.

Mr. E vans. We are tr yin g to get away fro m the peop le th at are irresp onsib le and y ou are tryi ng to make it impossible fo r us. Tha t is no t you, yoursel f, bu t the pro ponents of this bil l are. I th in k you 

are supposed to be im pa rti al .

Mr. Macdonald. I have an open mind and you are filling it and th at is why witn esse s such as yoursel f are here. But it would seem to me a forei gn bus iness and the foreign peo ple were selling you good steel at a che ap pr ice and were fa ir an d con sidera te, and so 

fo rth, th at you would tr ad e w ith them.

Mr. E vans. I do.

Mr. Macdonald. Th ere is no thing in this bill th at would in the 

sli gh test pre vent you fro m conti nu ing th at tra de .

Mr. E vans. When you say thi s you do not kno w the drum man ufa ct ur in g business.

Mr. Macdonald. Maybe you are saying it because you do not 

un de rstand the bill. Th ere are two ways to loo k at this.

Mr. E vans. I am no t talk in g about myself.

Mr. Macdonald. H ow would it sto p you fro m pu rch asing steel ?

Mr. Ev ans. It would no t stop me com pletely . It would reduce the 

am ount I could purch ase.

Air. Macdonald. It w ould r educe it ?

Mr. E vans. Y es ; an d sub sta ntial ly.

Air. Macdonald. On wha t gro unds ?

Air. E vans. Several. One is I m ent ion ed the ad ditio na l cost. Cost 

is a fact or.

Air. AIacdonald. You sa id it was in significant. You said the embo ssing was insignificant.

Air. E vans. I said insign ific ant as comp are d to the other costs. Th e other costs are acc ounting. I did not get to the bala nce of the cost. AVe have th is to be considered. Fir st , the drum th at was em­ bossed an d more p ar ticu la rly so on the hea d would hav e less v alue when sold as a good used co nta ine r. So if it has less value when you sold
54 STEEL CONTAINER MARKING

it as a used container, it very often has less value when sold as a 

new container. An automobile tha t does not have a trade-in value 

does not have much value initially.

Mr. Macdonald. Then you dispute the testimony tha t was given 

earlier that all barrels are presently embossed ?

Mr. Evans. No; I am not disputing that. You said additional embossing particularly on the head of the drum. I agree with Mr. 

Hershson s testimony. I am a reconditioner too and know something 

about this and I agree with him. I merely add to it.

Mr. Macdonald. I was impressed with his testimony.

Mr. E vans. If we were required to emboss a drum on the head, if 

this drum was manufactured from foreign steel say from Jap an, our 

competition, these giants tha t I refer to who are really steel warehouses who sometimes operate a t a loss to sell their steef; namely, In ­

land Steel is one of them, they wmuld go to many of the people th at we 

sell and pressure them saying you are buying drums made with foreign steel. They are precisely pressuring and reciprocity goes a longway. These steel mills buy tremendous amounts of fuel and lubricants and chemicals and we try to sell one of the large consumers of 

goods, such as the petroleum industry, we have a hard time because 

these people are inhibited bv reciprocity. We are denied a substantial part of the normal business with the large petroleum industry. 

We get some of it. We get it under the most difficult conditions and 

gentlemen, I assure you that reciprocity plays a big part in the sale 

of steel drums by these organizations tha t produce steel. It makes it 

easier to influence them when the drum is stamped.

Mr. Macdonald. I do not mean to interrupt you, but that really does 

not have anything to do with the bill we are considering here, the 

economics of how the American business is run. If we get into that, 

these hearings will run for a couple of months.

Mr. Evans. If you force me to emboss this drum stating this is made 

from foreign steel you weaken my efforts to sell a drum in areas where 

reciprocity is a factor. This is a big thing. This is important to us.

Now, the Steel Container Institute—their statement, and I will read 

from th eir statement, and this is the Steel Container Institute that is 

really for this bill—they say indeed, as time passes, it may be th at the 

importation of foreign steel may well afford the only means by which 

members of our industry, particularly the smaller members, may remain in business. The Steel Container Institute says there is a good 

chance that the only way the small independents can remain in business 

is by buying foreign steel. I am saying this and they are saying it.

Do you thin k it is possible maybe they are right as well as myself ? 

That is their statement.

Mr. Macdonald. I have no furthe r questions.

Mr. Curtin. I have just one or two. Even if they are right and you 

are right, it would make no difference to this particular piece of legislation, because in no way does it restrict you from getting tha t foreign 

steel.

Mr. Evans. It does restrict us.

Mr. Curtin. Restricts you ?

Mr. Evans. Yes.

Mr. Curtin. How?

Mr. Evans. It reduces the amount we can buy.
STEEL CONTAINER MARKING 55

Mr. Curtin. Restricts you ?

Mr. Evans. Certainly does.

Mr. Curtin. You say this legislation restricts the amount of foreign 

steel tha t you can buy ?

Mr. Evans. Yes.

Mr. Curtin. How ?

Mr. Evans. Because it restricts the amount of drums tha t we can sell with foreign steel by puttin g restrictions on the use of foreign steel. When you restric t the use of steel you restrict the possibility of our using it in the way we would like to use it. Why do you think they 

want this bill ?

Mr. Curtin. Will you be more specific.

Mt.Macdonald. We know why you do not want it.

Mr. E vans. I want to stay in business. This is im portant and if I appear to be somewhat cross about this, I am, and fo r a good reason-— it is the very existence of my business which is jeopardized by this bill.

Mr. Curtin. I presume tha t you are not a member of the Steel 

Institute.

Mr. Evans. I am not.

Mr. Curtin. I assumed that. Now, do you ever have any occasion where your customer gets in touch with you and says th at he wants to buy your steel containers, but he wants them made from American 

steel?

Mr. Evans. We had one occasion, yes.

Mr. Curtin. Wha t do you do under those circumstances ?

Mr. E vans. We say we will make it from American steel and charge 

a higher price for the drum.

Air. Curtin. Do you keep your steel sheets in separate piles ?

Mr. Evans. In instances, we do.

Mr. Curtin. What do you mean ?

Mr. E vans. In this one instance I mentioned there was one of our customers who said he wanted to use American steel. So we said to him this will cost us more money and impose upon us a burden. But we said we would do it if he would pay us for it, so they are paying extra. So I am getting paid for doing the extra work.

Mr. Curtin. When you get steel into your warehouse, do you pu t it in separate bins, or piles, so th at you know, when you look at it, 

where it is from ?

Mr. Evans. By point of origin, no.

Mr. Curtin. So if somebody should ask you for a steel container 

made from American steel, what would you do ?

Mr. Evans. We would have to segregate it at extra cost and we 

would charge fo r that.

Mr. Curtin. You would have to buy additional steel? You would 

not use that in your warehouse ?

Mr. Evans. At times, we might or might not. Our inventory pic­ ture changes. At times we may have the domestic steel in stock over 

in tha t pile, or maybe not.

Mr. Curtin. But I understood from you th at when you look at the steel in your warehouse you have no way to know. You cannot tell 

where it came from.

Mr. Evans. By appearance, you cannot normally, no.
56 STEEL CONTAINER MARKING

Mr. Curtin. Let us tak e a sit ua tio n where you hav e steel sheets in 

yo ur ware house.

Mr. E vans. Yes.

Mr. Curtin. A pu rcha ser gets in touch wi th you an d says he wan ts 

steel ma de from A merican steel. Do you have to th en go to the marke t 

and buy ad dit ion al steel or do you tak e some of it out of th e wareh ouse ?

Mr. E vans. It depend s on the circ umstan ces. A t one time we may 

not purch ase steel. A t othe r times, we will have to buy more.

Mr. Curtin. I am sorry th at I do not seem to be making myself 

clear. We are assum ing a sit ua tio n where you have a warehouse full 

of steel sheets.

Mr. E vans. Yes.

Mr. Curtin. You say you do not seg regate it. Yo u do not know 

whi ch is foreig n steel and wh ich is A merica n. Some custom er gets in 

tou ch wi th you and he wa nts some ba rre ls ma de of Am eri can steel. 

W ha t do you do ?

Mr. E vans. We ll, seg reg ate the steel and cha rge him addition al 

money fo r so doing.

Mr. Curtin . H ow do you seg reg ate it if you do no t know where 

it came fro m?

Mr. E vans. In t hat in sta nce we do.

Mr. Curt in. H ow?

Mr. E vans. Merely when th e steel comes in, you pu t it in this 

corne r instea d o f t hat corner.

Mr. Cur tin . Then you would g et an addit ion al or de r o f steel sheets 

to fill the orde r when such custom er asks fo r steel of Ame rican origin .

Mr. E vans. Tf th ere w as no steel in the corn er.

Mr. Curttn. T certa inly am not ge tti ng my que stio n across.

Mr. E vans. W ha t I am sa ying is we ha ve a c ustomer who savs to us 

he wa nts to buy America n steel. Ac tua lly, the way he says it, he gives 

us an or de r for 50,000 drum s. ou buy steel for 50,000 drums.

Mr. Curttn. You have t o tak e a hypoth etical sit ua tio n, a warehouse 

full of steel.

Mr. E vans. Right.

Mr. Cur tin . A ou have said th at you get the steel sheets and put 

it in th at warehouse.

Mr. E vans. Right.

Mr. Curtin . You do not segregate it. You do not know which is 

yo ur foreig n and w hich is dom estic steel.

Mr. E vans. Th at is rig ht.

Mr. ( urtin . Y e have now a sit ua tio n where you h ave a w arehouse 

full o f steel from which yo u can m ake these steel conta ine rs.

Mr. E vans. Yes.

Mr. Curtin. A ou get an or de r which des ignates it mu st be made 

fro m Am erican steel.

Mr. E vans. Right.

Mr. Curtin. W ha t do you do ?

Mr. E vans. Fi rst, we wou ld hav e to det erm ine if we ha d domestic 

steel. I f we did not, we would h ave to o rder the dom estic .

Mr. ( ur tin. H ow would you know if you ha d domestic steel or 

not?

Mr. E vans. We would have to go into the pl an t, inve ntory it, possibl y m ove some o f it un til we foun d sufficient dom estic steel to furnish
STEEL CONTAINER MARKING 57

this customer, or we would have to buy the steel. In some instances, 

we would have it and in others we would not.

Mr. Curtin. If you look at two sheets of steel can you tell which is 

foreign and which is domestic

Mr. Evans. No way to tell.

Mr. Curtin. Tha t is all.

Mr. Macdonald. Tha nk you, very much.

I have received word that the subcommittee has received permission from the House to sit while they are in general debate.

We will now recess until 2:30 this afternoon.

(Thereupon, at 1:40 p.m., the subcommittee recessed to reconvene 

at 2 :30 p.m. of the same day.)

AFTERNOON SESSION

Mr. Macdonald. The committee will be in order.

The first witness th is afternoon will be Mr. William J . Neville, vice 

president of the Florida Drum Co.

STATEMENT OF W ILL IAM J. NEVILLE, VICE PRESIDENT, FLORIDA 

DRUM CO., PENSACOLA, FLA.

Mr. Neville. I must apologize for not having a w ritten statement, 

but due to mail or something it did not show up, so if you will excuse 

me, gentlemen, I will proceed.

The objection we have to the proposed bill is that it is strictly a cost 

factor for us. One, the additional cost of dies to stamp the drums 

or emboss, additional inventory costs by separating domestic and 

foreign materials, and the other is a freight problem with us.

Our chief competition is located in a town tha t has a steel mill, and 

we are u nfortunate in being located in the Panhandle of Florida with 

no mills close to us and, therefore, it is a freight facto r for us to get steel 

in by 20 cents a drum advantage, which gives our competition in the 

Birmingham area that advantage, so the purchase of foreign steel 

makes it a competitive situation for us.

We, in the purchase of foreign steel, can equalize our price with 

theirs in any area because they have got outgoing freight, and so do 

we. ‘

The other thing that concerns us is th at maybe our direct customer 

would not have any objection to having the drum stamped “made of 

foreign steel” from so-and-so country, but maybe his customer would.

The only problem we would have is where one of our customer’s 

customers would object to receiving their material in a drum marked 

“this drum manufactured of steel” from so-and-so country.

Now, this would constitute additional sales effort on our part to go 

out and sell the ir customer, and I am sure you people can realize tha t 

where we would be willing to do it, maybe our customer would not 

consider us able or whether he would want us contacting his customer, 

and this would cause friction, as you can well see. where he would not 

want to irritate his customer by saying, “Well, we stand behind the 

drum, and it is made of equal quality steel,” and explain our situation to his customer. It is just strictly there a case of another added 

cost with the possible loss of a customer.
58 STEEL CONTAINER MARKING

The other situation is one that could have developed in the last 

few days where there was a possibility of a pending nationwide steel 

strike. If the situation would have developed, and we had not had 

foreign steel in our plant we would have been out of business within 

a period of 30 to GO days because your domestic mills were that far 

behind schedule on shipments. Orders that were placed with the 

domestic mills in Jan uary of this year still have not been received 

in small plants. This is not hearsay, this fact. I am not saying 

tha t they fill their own captive plants first, I am not implying this. 

I am just saying tha t people are stockpiling in case of a strike, we 

as everybody else. This is the only sound way tha t you can operate 

your business, because without steel you cannot produce drums, and 

without drums you cannot hold the customer. They have to have 

something to put it in, and it has to be drums, so we have got to stockpile so that they can have it.

Now, one other point I would like to bring up is it has been mentioned here, the possibility of embossing the head of a drum. This 

runs into two very serious problems. One is the majority of the 

fillers of containers use the head of the drum either for freight or 

customer destination or product identification. Also a good portion 

of the drums today are decorated on the head, actually have a silk 

screened or lithographed identification customer-named trademark 

on the head.

Well, you can see the objection of trying to silk screen or lithograph over this drum made of steel from so-and-so company, it is 

an impossibility.

Another impossibility is embossing the drum on the body. This— 

well, it just is mechanically impossible because to emboss it you would 

have to emboss the sheet in the fiat, this way. To get a drum you 

must put it through a mechanical pressurized roll to make your cylinder, so this would roll out any embossing tha t you put on it and, 

as far as embossing or puttin g more embossing on the bottom of the 

drum, if this was a suggestion, and if it were done, gentlemen, this 

would weaken the steel container quite extensively, because right now 

on the bottom of the drum you have the manufacturer’s identification 

marks, you have got the type of container, which would be 55 gallon, 

18 gage, plus the date of manufacture, which is the month and the 

year, plus your ICC specification identification, which would be ICC 

17 ESTC, which would be a single trip container.

Now, to put any more embossing on this you are stretching that 

steel just to the minimum point of resistance.

I just bring these points out as the primary reasons why we object 

to it. We can understand the other steel drum manufacturers, the 

larger ones, I can understand their problems.

But we have another one. We are situated in, as I said before, 

northwest Florida. We also have a pla nt located in Charlotte. N.C.

We, in the Charlotte, N.C., plant used domestic steel for the drum 

body or the cylinder portion of the drum. For the heads and bottoms we use the foreign material which we blank in our Pensacola 

plan t and ship to Charlotte for complete assembly.

Now, the reason for this is again just p ure economics. A large head 

press costs a tremendous amount of money, and we. being a small
STEEL CONTAINER MARKING 59

manuf acturer, cannot afford to put or purchase at this time two large 

presses. We have the one in Pensacola.

So bv blanking out in Pensacola out of foreign steel and shipping 

to Charlotte, N.C., we can be competitive with the rest of the people 

and the rest of the majors or small users or whoever is our competition 

in that area. Again it is economics to us. It means making a profit 

or going out of business.

This is it, gentlemen.

Mr. Macdonald. Than k you, sir.

Do you have any questions, Mr. Huot ?

Mr. Huot. Do you just manufacture drums or do you recondition 

drums?

Mr. Neville. Manufacture only, sir.

Mr. Huot. At the beginning of your comments you made some comments about freight. I did not understand what you meant.

Mr. Neville. Well, we are located, as I said a few times previously, 

in northwest Florida, and there are not any steel manufacturers within 

our area. They are located in Birmingham, Ala., and in Birmingham 

there are located two of our competitors. Therefore, they have about 

a 20-cent-a-container freight advantage on us because they can pick 

up right from the mill and deliver right to their plant at about 20 

cents a drum, less freight. The foreign steel helps us be competitive 

in the same market.

Mr. Huot. Are all y our drums manufactured, as you indicated before, a portion of it, made from foreign steel and a portion of it made 

with domestic steel ?

Mr. Neville. Not necessarily; no, sir.

Mr. H lot. That is all, Mr. Chairman.

Mr. Macdonald. The question I ask, and I have asked it before, 

and I am just asking to see your reaction to it, is how would this really 

hurt you, inasmuch as you purchase or had been in the custom of p urchasing it from foreign producers of steel, how would this actually 

affect you?

Mr. Neville. The actual effect would be that it would limit part of 

your design of your drum, I am speaking of the finished container, 

on your decorating, such as, I hope I explained well enough, a portion 

or a good portion, of your customers call for a decoration on the head 

of the drum.

Well, you could see if you had an embossing across here, that it 

would be impossible to decorate on top of this, and people pay extra 

to have this decoration on there. It is a design, a trademark.

Mr. Macdonald. As I understand it, as somebody testified earlier 

as to the weight of it—isn’t it usually a 55-pound barrel somebody 

testified?

Mr. Neville. Gallons.

Mr. Macdonald. Gallons.

Mr. Neville. It weights 47,50 pounds.

Mr. Macdonald. Bigh t. What is the circumference of the top ?

Mr. Neville. Twenty-two, twenty-two and one quarter inches.

Mr. Macdonald. Wou ldn't that still leave room to have the embossing plus other printed matte r ?

Mr. Neville. No, sir.
60 STEEL CONTAINER MARKING

Mr. M acdonald. W ha t did yo u c ontemplate th at this b ill would call 

fo r in size of the embossing, which is a po int th at no one has raised 

before ?

Mr. Neville. Tha t wo uld be imm ate rial. I would say it would have 

to be a h al f inch to be of any good.

Mr. Macdonald. A h al f inch which way ?

Mr. N eville. An y way you would pu t it on. The let ter s, if the bill 

goes th roug h, they have to be so you could see them .

Mr. Macdonald. I t would s till leave you 19 inch es or so.

Mr. Neville. Yes, sir. Bu t, you see, when you dec ora te you only 

have a certa in area. You have got screens to go in here, and the y 

would have to fit on, and the y have to fit down onto the metal. An y 

raise in th is would sto p you from decor ating.

Mr. Macdonald. We ll. I do n ot know w ha t de co ratin g is.

Mr. Neville. Well, wh at it is, it is a silk screen process where you 

have a screen th at is m ade to the diam ete r of the head. Th en within 

this screen are cut the let ters or the descr iption or the trad em ark of 

a com pan y in here. Th en t hi s is pa inted and then y ou r screen is pu t 

on, and yo ur ink is a dded, an d it might be a white head wi th a gree n 

pr in t, gre en decoration , bu t it would have to fit down on the re or else 

you could not get a screen.

Mr. Macdonald. Well, on page 3 of the bill, it says th at the contain er would have embossed on the to p head in letters not less th an onefo ur th of an inch in heigh t. Tha t would seem to me, if it is 22 inches 

and thi s is just one-fo urth o f an inch, th at leaves you------

Mr. Neville. Yes, but whe n von s tart taki ng th is dr um o r t his conta in er made of foreign steel or mad e fro m steel man ufactured in 

so-and-so cou ntr y------

Mr. M acdonald. That is n ot how i t is go ing to rea d I am sure. Are 

you fa m ilia r with the bill ? Yo u are fam ili ar w ith y ou r business, like 

most of th e witnesses, bu t m an y of the witnesses are fa m ilia r with the 

business bu t not with the bill. Tha t is n ot how it is go ing to read .

Mr. H uot. Steel in th is co ntaine r m ade in, the name of th e c oun try.

Mr. N eville. St ill, wi th a qu ar te r inch you wo uld n’t have a qu arter 

inch betw een each other, betw een each let ter, an d you wou ld use the 

hea d to d ecorate. You co uld not possibly dec ora te o ver th at thin g.

Mr. Macdonald. I will no t pu rsu e it. I will let Mr. Cu rtin, the 

au th or of th e bill, go into it.

Mr. Neville. I am n ot say ing that ------

Mr. Macdonald. I am no t convinced th at yo u make much of a case 

when you say th at the ba rrel is 22 inches, an d th is specifically says 

th at it should be on e-fourth of an inch embossed, why you can not do 

ev erything else you wa nt to do in the rem ain ing twent y-o ne and one 

qu ar te r inches.

Mr. Neville. Because aft er you emboss y ou r screens would fit onto 

the embossing, the em bossing w ould hold yo ur screen up off of the re st 

of the d rum, an d y ou could n ot emboss because, o r you c ould n ot screen 

because, to screen and to put yo ur ink s thro ug h yo ur screen it has to 

fit dow n snu gly on the bottom, the same as printing a new spa per , the 

exa ct same thin g.

If you ha d indentati on s in th is pa pe r before you pr in te d it, befo re 

you pr in te d the paper, yo ur print wou ld no t—you could not di stin ­

gu ish the pr in t.
STEEL CONTAINER MARKING 61

Mr. Macdonald. Mr. Cu rtin, do you have any questions ?

Mr. Curtin. Just one or two.

Mr. Neville. I take it from your testimony th at you use substantial 

quantities of foreign steel as against domestic steel ?

Mr. Neville. No, sir.

Mr. Curtin. About what is the percentage ?

Mr. Neville. 1 would say we probably use 60 percent domestic to

40 percent foreign.

Mr. Curtin. Now, I assumed from your testimony tha t you felt 

that this bill would, in some way, restrict your ability to procure foreign steel. Was that the intent of your testimony ?

Mr. Neville. No, I do not see where the bill has a nything to do with 

the procurement of foreign steel. You are not stopping us from purchasing the foreign steel. All this is going to do is hinder our 

selling a container made of foreign steel.

Mr. Curtin. This feature of the matter is the next question I had. How is this legislation going to hinder your sales? You say the person who buys from you would have no hesitancy in buying con­ tainers that had on them “This Container Made From Steel”-----

Mr. Neville. Questionable.

Mr. Curtin. But you say, that when this container passed on to the 

next purchaser that then is where the problem would arise.

Mr. Neville. That is another possibility. They could or they could 

not. But being a small manufacturer, we cannot afford to take this 

chance.

Mr. Curtin. But don’t you think that the people who are purchas­ ing those drums, be it the first purchaser or the ultimate purchaser, is entitled to know where the steel in tha t container is coming from ?

Mr. Neville. Not the second purchaser of the drum, I do not care 

what he does. I am speaking of the person who buys the drum to put his material in. I am speaking of his customer. Like if we sold to a chemical concern, what would his customer say if lie received his chemicals in a drum or a container marked “Made With Steel F rom 

Ja pa n” or Sweden or Eng land ?

Mr. Curtin. You thin k tha t would restrict the use of that drum, 

if the person who was loading tha t drum, with whatever might be its contents, had to disclose on the drum the steel from which it was 

made ?

Mr. Neville. I do not know, Mr. Curtin. But we cannot, as a 

small manufacturer we cannot, take t ha t chance of losing a customer 

for one of our customers, and this could happen.

Mr. Curtin. Then you are not really sure that bill is going to do 

you any harm, you are just afraid it might, and because of that fear 

you are against the legislation ?

Mr. Neville. Could you take a chance that if you put your wallet 

on there somebody was going to steal it or wouldn t and that is the 

position we are in right now.

Mr. Curtin. I would have no hesitancy with the persons who are 

here.

Mr. Neville. That is neith er here nor there. on are trying to 

evade our issue.

Mr. Curtin. No, I do not think we are trying to evade anything.

Let us assume th at this bill should be amended to require tha t the marking would go both ways. Supposing, as to the container made 

4 8- 16 1— 65 ------ 5
62 STE EL CONTAINER MARKING

of foreig n steel, it would have to say th at the steel in th at conta ine r 

was mad e in the co un try of ori gin , and then the conta ine rs made of 

U.S. steel would hav e such a no tat ion on the m also, th at is, th at the 

stee l in th at conta ine r was mad e in the Un ite d State s. Would yo ur 

objection to the bill still exist ?

Mr. Neville. Oh, yes.

Mr. Curt in. Why ?

Mr. Neville. Th ere are peo ple th at will not buy forei gn pro ducts.

Mr. Curtin. And you, therefore, to avo id th at problem would 

ju st as soon they did not know the y were bu ying a foreign pro duct, 

is th at r igh t?

Mr. Neville. Tha t is righ t. Th ere are people who have requested 

th at we do not fu rnish the m forei gn steel, an d we do not fu rnish 

them foreign steel.

Air. Curtin . How do you dif ferenti ate when you come to make up 

th at order?

Air. Neville. AATien we ne go tia te our contr acts at the begin nin g 

of the year thi s is discussed.

Air. Cur tin. You have yo ur steel seg reg ated in dif fer ent piles?

Air. Neville. For th at par ticu la r cus tom er; yes, sir. A t the b eginning of th e y ear when we no go tia te ou r y early co ntr acts or se mia nnual 

contr act s, if ou r custome r says “W e do not want any forei gn steel,” 

then we will tak e his yearly req uir em ents and make th at of domestic 

steel.

Air. Cur tin. You have record s th at ind icate how much of the steel 

in yo ur warehouse is foreig n steel and how much is dom estic steel?

Air. Neville. Not as sep ara te, on ly in isolated cases where it is requ ire d by ou r customer. AVe do inter mi x steel other th an specific 

cases.

Air. Cur tin. Then sup posing—a nd I will ask you the same question 

I did of Air. Ev an s—su pposing we hav e a s itu ati on where you have a 

wareho use filled with steel, and which you say you make no effort to 

seg reg ate as to its source. How do you know wh at steel to use if you 

get an orde r th at is to be made up of Am erican steel ?

Air. Neville. A new ord er?

Air. C urt in. Yes.

Air. Neville. W ha t we would do if we did n ot have any in t he coils, 

which I am ge ttin g back tec hnically a ga in, I am sorry , b ut th is is steel 

th at has been unshe are d, and if we did no t hav e it we would order 

steel fro m the mill.

Air. C urtin . H ow w ould you know7

 w he ther th at steel in y our w arehouse was foreign or domestic steel, if you make no effort to keep it 

sep ara te ?

Air. Neville. AVe wou ld no t; we wo uld no t ship it un til we were 

definitely sure.

Air. Curtni. Ho w w ould you be su re ?

Air. Neville. By or de rin g more steel.

Air. Curti n. So every time you g et an or de r t hat req uires A me rican 

steel you do not go to y our w arehouse a t a ll, you or der se parat e A merican steel sheets to fill th at o rde r?

Air. Neville. Well, in a case whe re you have foreign steel or domestic steel, we w ould know a t the b eginn ing of th e y ear wh at we ha d 

coming from the mi lls an d also the custo me rs th at would orde r or
STEEL CONTAINER MARKING 63

would necessarily say, “We want domestic steel,” we would know 

this.

This is not a case where you are going out and receiving a new customer every day. I mean, we probably do not pick up two to three 

new customers a year.

This is a case where you are supplying the same people year in and 

year out, and we have, as 1 am sure you can understand, a certain area 

that you can ship a steel container. Freight is prohibitive to reach 

out thousands of miles to ship a steel container. You try to ship within a 350-mile radius of your operation, and you know all of the new 

drum users in that area, so it is not a case of where you are going to 

pick up a new customer every day, sir.

Mr. Curtin. So then I would like to ask you again, steel tha t you 

have in your warehouse, there is no way that you can tel] by looking 

at tha t steel whether it is domestic steel or whether it is steel from a 

foreign country?

Mr. Neville. Only if it has been segregated due to a specific order.

Mr. Curtin. Well now, tha t raises a very interesting question because I understood that under the law all sheet steel that comes into 

this country has to have stamped thereon the fact that it is foreign 

steel. Doesn’t your steel sheets have tha t ?

Mr. Neville. It is, it is stamped on that. But steel is stacked this 

way, flat, like this in the flat and this thin g is 8 feet high, and you 

cannot walk in there and pull every sheet out.

Mr. Macdonald. I guess the record had better reflect what you mean 

by “this way” and also-----

Mr. Neville. Well, it is stacked in the flat, it is sheared and stacked 

in the flat on skids, let us say on skids.

Well, this thing is moved with a lif t truck or a crane, and to actually 

know which you have you would have to pull down a whole stack and 

go through your sheets because we receive steel in coils. Then it is 

put through an automatic shear line, and cut to length, and then 

restacked. So it can be put onto the line and made into a drum.

Mr. Curtin. Do I understand this steel comes in a roll ?

Mr. Neville. Yes, sir.

Mr. Curtin. How long is the roll ?

Mr. N eville. Y ell. it. averages out about 5 tons, I think about maybe 

360,350 sheets to a roll.

Mr. Curtin. I see.

How manv marks are on tha t roll indicating it is of foreign origin, 

just one?

Mr. Neville. No, I imagine it is stamped when they roll it; I imagine 

it is stamped ever so many feet. Being honest 1 could not tell you 

exactly how it is. I know it is marked because I have seen them going 

throu gh the washer coming off. I couldn’t tell you exactly how.

Mr. Curtin. When you cut this roll into whatever sizes you cut 

it into, I assume, from what you say, that you pile domestic steel and 

foreign steel in the same pile ?

Mr. Neville. Yes, th at is rig ht .

Mr. Curtin. You make no effort to distinguish one from the other.

Mr. Neville. Because the quality is equal.

Mr. Curtin. Supposing that the bill required the containers be 

stenciled rather than embossed. Would you object to it?
64 STEEL CONTAINER MARKING

Mr. Neville. The ste nc iling would still interfe re w ith yo ur decora ­

tio n prob lem.

Mr. C urt in. H ow ?

Mr. Neville. I t w ould sho w righ t thro ug h or o ver the top of it.

Mr. Curtin. We ll, the ste nciling, if it is in lette rs no t more th an a 

qu ar te r inch hig h, and ju st wi th those six words, would no t seem 

to ne ed a trem end ous am ou nt of space.

Mr. Neville. Well, if I sold you a conta ine r or an automobile, an d 

you specifically r equested th at you w anted a lav ender head o r a lave nde r bottom or body on this, an d I came alo ng an d sten cile d, “This 

Co ntain er Made’’ on top of th is special colo r th at yo ur packaging 

peo ple s aid t hat they wa nted on th eir conta ine rs, I do no t th in k the y 

would ap preciat e it, and I know I wou ld not.

Mr. Curtin . An d ye t you say th at the absence of th at lav end er 

colo r off a very small su rfa ce—which would be req uired fo r eit he r 

the emb ossing or t he ste nc iling —would be a rea l ha nd icap to you in 

the sale o f yo ur pro du ct ?

Mr. Neville. I believe it w ou ld; yes, sir.

Mr. C ur tin. T hat is all t he questions I have.

Mr. Neville. I am sp eaking s tri ctly fro m a m ar ke tin g end.

Mr. C ur tin . That is all.

Mr. Macdonald. Ju st to pi n down in my own mi nd y ou r feeling on 

this, an d th is will be the hist que stio n I have, if ins tea d of embossing 

the message “Steel in th is co ntaine r made in,” coun try of ori gin , was 

don e in a different w ay th an embossing, would t hat take c are of you r 

obj ections to the bill?

Mr. Neville. No, because you wou ld—gentlem en, I r eal ize th at ge tting back into th e tec hnical end o f it, today w hen people b uy a con tainer 

it is no t a black and white drum . It is n ot an olive dr ab oil drum as 

they all seem to think.

These people go int o ela bo rate colors and ela bo rat e designs and 

special tra dema rks, and we h ave in stock may be 30 diffe ren t colors of 

blue an d red, eve rybody has specific colo r com bin ations and designs, 

and if you mark this or go aw ay from th is pa tter n of their s in any 

way, t hey are g oing to be v ery , ve ry d issatisfied and you cannot blam e 

them because if you bought an auto mobile a nd somebody sten ciled on 

the side, “T his fen der made from steel fro m Yo shida,” you would not 

like i t eith er, and th at is ju st w ha t i t boils down to.

Mr. Macdonald. Tha nk y ou, sir.

Mr. Dav id Steinberg.

STATEMENT OF DAVID J. STEINBERG, SECRETARY AND CHIE F

ECONOMIST OF COMMITTEE FOR A NATIONAL TRADE POLICY

Mr. Steinberg. Mr. Ch airm an , Mr. Huo t, my nam e is David J. 

Stein berg, and I am secre tar y an d chief economist of the Committee 

fo r a Na tio na l Trade Pol icy.

Our com mittee rep res ents no specific intere st in any way connected 

wi th the ma nufac tur e, im po rta tio n, expo rta tio n, or use of steel containers . Our in ter est is so lely i n the dev elopment an d preserv ation of 

a trad e policy th at adequately advances the na tio na l inter est of the 

United States.
STEEL CONTAINER MARKING 65

In our view the national interest is served best by the removal of tariffs and nontariff barriers as rapid ly as this country’s economic capability, and tha t of the countries from whom we seek reciprocity, will allow. The Nation’s economic strength and resiliency, as well as its international monetary position and its leverage in international negotiations, require this kind of foreign trade policy. We believe th at not only should the many restrictions still impeding world commerce be minimized, but also that the many proposals which have been made, and will be made, to restrict trade either directly or indirectly should be rejected, unless convincing proof can be offered that a temp orary restriction is indispensable to a constructive adjustment effort and that such measures are in the national interest. This is the overall fram e­ work of the policy position taken by our organization. This explains our opposition to H.R. 6775 and its companion bills on the marking of steel containers. We believe th at the purpose of these bills is to restrict trade by adding discriminatory costs to the use of imported steel and creating uncertainty in this trade. They would do this under the guise of protecting the consumer of steel con­ tainers by informing him of the origin of the steel from w’hich the container is made so that he m ight assert a nationalistic preference 

if he is so inclined. Each consumer, of course, has a right to base his choice of product on any considerations that satisfy his fancy. If he wants to give a 

great deal of weight to the country of origin of the steel from which the steel container in which the product he is buying has been shipped, that, of course, he may do. But to require that containers made in the United States of imported steel should bear an embossed mark­ ing of the country of origin of tha t steel (as a condition for allow­ ing that container to be used in the Nation’s interstate and foreign commerce) is not in our view a proper responsibility of Government. It is not a reasonable and logical extension of the marking requirements in existing law. Such markings are not required of other products in which im­ ported materials have been used. And the reason is clear. Such a 

requirement would encumber the free enteiprise system with a costly and administratively burdensome array of manufacturing and book­ keeping details, and amount to discrimination against users of im­ ported steel. It cannot properly be likened to the identification of ingredients on food and drug containers, the purpose of which is clearly to advise the purchaser of what he is buying. Nor does it meet the test offered by another supporter of such legislation, tha t ‘‘some incentive should be provided to utilize domestic steel in the manufacture of these containers, but clearly an incentive which is in no way punitive in character.” I believe it was a member of your committee who made such an assertion during the floor colloquy on 

this matter over a year ago. These burdens, and the ever-present possibility of harassing com­ plaints from those who might think it worth the ir while to question the accuracy of a user of imported steel in his marking duties, may discourage some businesses, particularly small business, from bothering 

with imported steel.
66 STEEL CONTAINER MARKING

The actual costs and inconveniences, in addition to the possible 

legal tangle which an occasional administrative mistake may set off, 

may not be worth the saving he may realize in using imported steel.

Such burdens on business operations are deterrents to sound trade 

expansion, both a t home and abroad. Manufacturers and consumers 

everywhere should be as free as possible to avail themselves of the cost 

and other advantages of buying materials, components, and finished 

products from whatever sources offer such advantages. This is a basic 

element of the free enterprise system and of expanded trade both 

interstate and international. It is an important characteristic of economic life in today’s world. Somewhere along the line, the burdens 

and deterrents injected by bills such as those we are now discussing 

add to costs and prices and affect someone’s competitiveness. If they 

also affect imports of sheet steel, they tend to reduce foreign 

purchasing power for American exports and could conceivably generate similar practices abroad to the detriment of our export trade. 

In fact, what foreign governments might devise, based on our example, 

could far exceed the example we set. Moreover, such steps on our part 

do no good and much harm to the effort our Government is making to 

get foreign governments to reduce the many barriers that now obstruct 

U.S. exports.

What precedents do such requirements set for other interests in our 

own economy ? Why would it not be logical for iron ore interests, concerned as they are over growing imports of ore, to seek legislation requiring U.S. producers of steel sheet for the manufacture of containers 

to mark on their product the country of origin of the ore tha t was used? 

What purpose does it serve? What does it really tell the ultimate 

consumer—whose real interest presumably lies in quality and price— 

except to provide the more narrowminded consumers with a checklist 

against which they may apply the ir p articula r prejudices?

Such catering to political prejudice is not a governmental responsibility. Besides, when the consumer sees no marking rega rding the 

origin of the steel, how will he know it is American steel ? Consumers 

cannot be expected to be familiar with the details of this bill if it 

should become law. If the U.S. producers want the American consumer—in this case the individual or firm that buys the contents of the 

steel container—to prefer or insist upon steel containers made of 

American steel, then those producers should take steps to have their 

own containers indicate that American steel was used in making them. 

If th at is the way they want to do their merchandising, they should 

then urge consumers to buy American goods shipped in containers 

marked as having been made of American steel. This would leave 

nothing to the imagination or surmise of the consumer, t ha t is, the 

consumer who bothers to look for such markings in the. first place. 

But such voluntary practices are a to tally different m atter from burdening the import distribution system with new country-of-origin 

markings required by law.

Alternatively, if the supporters of the proposed legislation feel, as 

they do, that the absence of country-of-origin markings where imported steel is used is “an unfair method of competition and an unfair 

and deceptive act or practice under the. Federal Trade Commission 

Act,” then they should make such a complaint before the Federal Trade 

Commission in accordance with existing procedures. If they feel
STEEL CONTAINER MARKING 6 7

tha t imports are seriously hurting them, they should bring their case-— as an industry or as individual producers—before the Tariff Commis­ sion and seek relief under the provisions of the Trade Expansion Act. In conclusion, we urge the supporters of bills like this to exert their energies not in the direction of new burdens on the movement of goods in international commerce, but in the direction of constructive answers to whatever problems they face. Thank you, sir.

Mr. Macdonald. Thank you, Mr. Steinberg, for a clear and brief 

statement. I see that the committee which you represent carries on its letter­ head a number of very promin ent people who are engagd in extensive production and merchandising and manufacturing.

Mr. Steinberg. Yes, sir.

Mr. Macdonald. I see tha t the board of directors includes gentle­ men with whom I am familiar, the Gillette Co., whose home office is located very close to my district in Boston, and I know that he faces competition from certain blades tha t have made inroads against his company, in which the stamp of the country of origin is very 

prominent. A concrete example is the Wilkinson blade which has made a good deal out of the fact that they have been man ufacturin g swords and blades in England for a number of centuries, and I have found tha t the Gillette Co.’s advertising, in order to counteract this inroad, be­ cause apparen tly the Gillette Co. feels that the fact that it was manu­ factured in England is an advantage to the so-called sword Wilkinson blade, tha t they, too, are going into European type of advertising. So when you say th at the country of origin just appeals to the pre j­ udice tha t may exist in people, T think this could work two ways, 

could it not?

Air. Steinberg. Yes.

Mr. Macdonald. It does n ot always work against the country of 

origin. Don't you agree with that ?

Mr. Steinberg. I agree w ith that, Mr. Chairman. In actual prac ­ tice the country of origin could be a mark of distinction which could benefit the merchandising of the product.

Mr. Macdonald. Well, it has in the case tha t I concretely brought 

to your attention.

Mr. Steinberg. Tha t is correct.

Mr. Macdonald. They do it because the gentlemen that, you repre­ sent here, a member of the board of directors, obviously must agree with what we both agree with, because their advertising is taking a 

slant in th at direction.

Mr. Steinberg. Yes.

Mr. Macdonald. Wh at I am questioning is your statement th at this marking would just appeal to the prejudice of certain narrow prej­ udices among purchasers here in the United States to the detriment of international commerce, and T say to you tha t tha t is not a fact.

Mr. Steinberg. No, I agree with you tha t markings, as I indicated a moment ago, markings do not necessarily have one effect or the other, and in some cases markings serve to move a product more effectively into the channels of commerce, both domestic and foreign.

Mr. Macdonald. Sir, could I just read your statement and perhaps 

you would like to amplify the statement?
68 STEEL CONTAINER MARKING

Mr. Steinberg. I am just about to.

Mr. Macdonald. You say here that does not really tell the ultimate 

consumer—you are talking about marketing now-----

Mr. Steinberg. Yes.

Mr. Macdonald. Except to provide the more narrow-minded consumers with a checklist against which they may apply their particular prejudices. Such, and you underline this in your statement, such 

catering to political prejudice is not a governmental responsibility.

Mr. Steinberg. The difference-----

Mr. Macdonald. And I am just questioning tha t because I do not 

believe it expresses the true facts.

Mr. Steinberg. Well, let me amplify that. Having agreed with 

you on the point you were making t hat markings may in certain instances move a product into commerce, both foreign and domestic, 

more effectively than might otherwise be the case, there is a difference 

between voluntary marking, which is the marking by any company 

tha t wants to mark its product as made in a certain place, because it 

believes th at in so marking the product it may move the product more 

effectively into retail channels and into consumers’ hands. There is a 

difference between (hat kind of marking, the voluntary kind, and 

marking that is required by Goverment.

The point that I was making in my statement is th at the kind of 

marking required in this bill, and the purpose of the marking in this 

bill, and this is the background for my statement, is, it seems to me, 

to appeal or to stimulate appeals to political prejudices so tha t people 

who do not want to buy anything tha t was made in Britain for some 

reason that only they know, or th at-----

Mr. Macdonald, If they were Irish, for example.

Air. Steinberg. I did not want to say that, sir.

Mr. Macdonald. I am happy to say it. (Laughter.)

Mr. Steinberg. Then—I lost my trend of thought—yes, people who 

want to, who do not want to buy a product tha t has any part of it 

originating in a particular foreign country, then they will use this 

specific country identification as a kind of political checklist.

Mr. Macdonald. In other words, what you really are saying is it is 

all right if the manufacturer wants to put the country of origin, the 

foreign manu facturer wants to pu t it on-----

Air. Steinberg. Yes, sir.

Air. AIacdonald. That is all right. But for our Government or by 

act of Congress to enforce it is wrong.

Air. Steinberg. Yes, sir.

Air. AIacdonald. That is a very thin line of demarcation to me.

Mr. Steinberg. Well, this is a complex issue and one of the complexities of the issue is th at such a requirement has to be judged in 

the context of the function of the free-enterprise system at home, and 

of American trade policy around the world, and I believe th at such 

requirements by Government requiring markings of the kind in this 

bill with respect to imported steel, represent discriminations against 

the users of imported steel, and that this could have certain repercussions in terms of our trade policy objectives around the world, besides 

being interference, Air. Chairman, with the functions of the freeenterprise system, as I understand that system.
STEEL CONTAINER MARKING 69

Mr. Macdonald. Well, I take it tha t your committee which you 

represent here so well today is a fairly liberal organization with a 

liberal outlook on trade and other matters.

Mr. Steinberg. Yes, sir.

Mr. Macdonald. Don’t you think tha t it is the very antithesis of 

a liberal approach not to have made available to consumers the knowl­ edge, the information, freedom of information, where the product 

tha t they are about to buy comes from ?

Mr. Steinberg. If it is necessary for proper consumer judgments 

regarding the product, and if it is consistent with the functions of the free-enterprise system and if it is consistent with United States foreign-trade policy objectives, to mention only a few of the considerations that have to be taken into account.

Mr. Macdonald. Well, not to get philosphical, but isn’t one of the 

tenents of our Government tha t freedom of information, dis­ semination of knowledge, should be one of the tenets on which our 

Government is founded ?

Mr. Steinberg. Yes, s ir; and I believe in freedom of information 

and I believe in the right of the consumer-----

Mr. Macdonald. Well, isn’t this inform ation tha t the consumer is 

entitled to as to where the product he is purchasing originated?

Mr. Steinberg. Within certain limitations, yes, sir.

You see, if you want to take this principle to its logical conclusion, then wouldn’t the consumer also be entitled to know where the ore came from th at made the American-made steel fo r the steel container, and you could use many more examples than I can think of at the 

moment ?

Mr. Macdonald. Yes, sir; I thin k there is some merit to that. 

Mr. Neville went into tha t, the witness who preceded you went into the fact, there just is not enough room to put this one-quarter of an inch information on a fairly substantially sized container. So if you s tart breaking down ore and then the chemicals th at came from West Germany, not East Germany, and all tha t, I think we would get rather cluttered up. But I think the basic—and I ask you w hether you agree or not, but isn’t it a basic—right for a person to know where 

the product tha t he is purchasing originates?

Mr. Steinberg. Well, the product he is buying may be a product 

made in the United States, it may be a product made abroad. But the product made in the United States is frequently made to a certain extent out of materials, and in some cases actual components, which 

have been purchased from abroad. Now’, the trend, and it is a healthy trend, in international trade and competition today is for greater interdependence, where manufacturers obtain materials and components where they think they can get the best purchase in order to be able to p ut onto the market a product which will be merchandised at a price tha t they think will att rac t a 

mass demand.

Now, this is the operation of the free-enterprise system today, and I do not think th at a manufacturer who finds that, in order to remain competitive in the finished product tha t he sells in the market place, he has to buy materials or components from abroad in order to remain competitive, that any discrimination or discriminatory burden ought
70 STEEL CONTAINER MARKING

to be placed on the manufacturer, and tha t is what we are talking 

about.

Mr. Macdonald. Well, sir, we have said this many times, and I do 

not want to argue with you, but I do not see what is discriminatory 

about putting the origin of a product on the product itself. I do not 

see an ything discriminatory about that.

Mr. Steinberg. The domestic manufacturer is not required, would 

not be required, by law to place on his products the words “The steel 

was made”—“The steel is American steel that was used in the making 

of this steel container.”

Mr. Macdonald. Let me ask you this question: If this bill were 

amended in such a fashion th at the American producers would put on 

barrels or whatever their technical name is, “Made in the U.S.A.” 

would you then say t hat the bill was nondiscriminatory and, therefore, you would approve of it?

Mr. Steinberg. No, I wTould not, sir, and the reason tha t I would 

not is that this bill says more th an just—this bill would require more 

than just a marking that the steel made in the container was imported 

steel. It would require a mark ing tha t the steel used in the container 

was imported from a specific country, and I think tha t this kind of 

requirement imposes certain burdensome details and costs on the 

American users of imported steel.

Mr. Macdonald. But the domestic producer would put the country 

of origin, too.

Mr. Steinberg. Yes.

Mr. Macdonald. “Made in the U.S.A .”

Mr. S teinberg. Yes-----

Mr. Macdonald. It seems reasonable to me th at the purchaser be 

permitted to know where the product was manufactured. I do not 

understand why you do not think it is reasonable.

Mr. S teinberg. Well, I think tha t the distinction—to take your example—tha t the proper distinction to make would be one between a 

requirement tha t the steel used in the making of the container is 

American made steel, on the one ha nd ; on the other hand, a requirement tha t the steel used in making the container is imported steel, 

and then I thin k you have a question as to whether, or I could then 

have to do some soul searching to figure out what my answer to that 

would be.

I said th at I thought that it would s till be discriminatory if you required the user of imported steel to say tha t the steel used in making 

the container is steel imported from a specific country when that importer may be-----

Mr. Macdonald. It does not say “imported.” It says that the steel 

in this container “made in,” and then names the country.

Mr. Steinberg. Yes, “made in.” If tha t user of imported steel 

buys his steel from a variety of countries, w’herever he can get the 

best buy, then it requires of him special bookkeeping and records as 

to in which containers he used Japanese steel or Belgian steel, sold 

to which consumers.

Therefore, I thin k tha t tha t identification of country of origin is 

a discriminatory requirement.

Mr. Macdonald. I won’t pursue the matter furth er. I appreciate 

your testimony.
STEEL CONTAINER MARKING 71

I would just like to point out tha t on the board of directors I see some names whom I know personally, and many businesswise I am familiar with, who have gone along with legislation much more fa r reaching than this type. For example, Pete Grace, J. Peter Grace, president of the W. R. Grace & Co. The merchant marine operates under certain laws and, as you know, under Public Law 480, at least half of all the things that we send abroad by law have to be carried in American bottoms. That seems to me to go a good deal furthe r than this bill, and Mr. Grace, I know, has ships tha t benefit, and his line benefits from tha t law. It seems peculiar tha t he would take a position, and I take it you are representing him here today-----

Mr. Steinberg. I am not representing Mr. Grace.

Mr. Macdonald (continuing). That is completely different from 

his position, which his position would be, if you asked him about the 

50-50 bottom provisions of the maritime law. Then I see there is Mr. Merrell, whom I do not know, I happen to know Mr. Grace—of the Ford Motor Co. I do not know how much the tariffs are against imports around the world and against Ford being imported in the various countries of the world, but I am sure 

tha t they are very high indeed.

Air. Steinberg. They are indeed.

Mr. Macdonald. And I am not sure he could testify the way you have since the laws t ha t govern his exports are much more stringen t 

than certainly just m arking the point of origin.

Mr. Steinberg. But one of the points-----

Mr. Macdonald. Also Mr. Watson, Tom Watson, of International Business Machines, I happen to know, has any number of problems in getting his machines distributed throughout the world, with high tariffs against them, and many people just plain don’t want IBM 

into their country. So while the letterhead talks about the Committee for a National Trade Policy, I am not sure that they would testify exactly the same 

way you would. Maybe they would.

Mr. Steinberg. Well, I think-----

Mr. Macdonald. But they have, to my knowledge, good reason 

not to.

Mr. Steinberg. On the contrary, Mr. Chairman, I think they would 

have good reason to, and I say that with respect because one of the points made in my statement was that the United States needs leverage, negotiating leverage, to induce other countries of the world to mini­ mize those burdensome trade barriers, and we, as the strongest economy in the world and the largest trading nation in the world, resorting to trade restrictions of various kinds, some direct, some indirect, lose leverage in doing so because other countries say, “Well, look, here is the great, powerful United States doing this sort of thing. Then how can you expect Belgians or what have you to reduce our trade barriers ? 

We cannot afford to.”

Air. Macdonald. But this is not a trade barrier, this is a marking 

showing the country of origin.

Mr. Steinberg. It is more than information, Air. Chairman. It is, I believe, a trade barrier in an indirect sense, in a nontariff sense. It is not a trade barrier at the border or a t the port. It is a trade barrie r in the domestic opeations of the American economy and we, in our own export trade, are faced with those kinds of barriers in other countries,
72 STEEL CONTAINER MARKING

not barriers at the port, but ba rriers in the economy somewhere, special 

kinds of domestic taxes or requirements regard ing electronics specifications or what have you.

Now, it is awfully important to get rid of these barriers, these internal, if you will, trade barriers th at discriminate against American 

exports. But we stand little chance of doing tha t if we resort to a 

proliferation of barriers in our own economy.

Mr. Macdonald. I think we stand little chance of doing that, period. 

But I won’t question any further .

Mr. Steinberg. But you have to try, Mr. Chairman.

Mr. Huot. I have no questions.

Mr. Macdonald. Mr. Curtin?

Mr. Curtin. Sir, I think we have been trying for a long time-----

Mr. Steinberg. With some success, Mr. Curtin.

Mr. Curtin. Not as much as most of us were led to believe. I 

know tha t you and previous witnesses speak of leverage and liberality 

and use other phrases all meaning the same thing. But it looks to me 

as if you are merely working on the theory that we will set a good 

example with the hope that, in the future, other countries will come 

around to thinking we are doing the right thing, and they will reciprocate.

Unfortunately, the reciprocation has been very mild, so far as I 

can see. However, to get away from the philosophical aspects of the 

matter, I note in your statement, sir, on page 4 where you say—and 

you are speaking now, of course, of this legislation presently before 

u s—“Moreover, such steps'’—and that I presume means this marking 

type of legislation—“Moreover, such steps on our part do no good 

and much harm to the effort our Government is making to get foreign 

governments to reduce the many barriers that now obstruct U.S. 

exports.”

I take it that this statement, which you make in reference to this 

particular marking bill, could be applied to all marking bills; is tha t 

true?

Mr. Steinberg. To all marking bills of the same character and we, 

as a committee, have testified in opposition to such bills.

We have, of course, a law now which provides tha t if some importer 

should bring these steel pails or steel drums into this country from 

a foreign country, they would have to be marked with the country of 

origin ; is that your understanding ?

Mr. Steinberg. Yes.

Mr. Curtin. All right.

Mr. Steinberg. Who brings in a steel container ?

Mr. Curtin. Yes.

Mr. Steinberg. Yes.

Mr. Curtin. Imports a steel container or a steel pail.

Mr. Steinberg. Yes.

Mr. Curtin. They would have to be marked as to the country 

they were made in.

Mr. Steinberg. And the sheet steel would be, too, if it came in as 

sheet steel.

Mr. Curtin. Right. Now as to the domestic container contemplated 

by this legislation. This would be made of steel made in a foreign 

country, so instead of saying on this container, “Made in Belgium,”
STEEL CONTAINER MARKING 73

or France, or wherever it is made, this marking would be "The steel in this container is made in Belgium,” or France, et cetera. Wh at is the distinction in your mind as to discrimination? Why is one type 

more objectionable tha n the other ?

Mr. Steinberg. I am not sure I follow the question, Mr. C urtin.

Mr. Curtin. Let me try again. You believe that it is quite p roper 

for a pail th at is manufactured abroad to have marked thereon “Made in the country of origin,” and then brought into the country with 

tha t marking on it ?

Mr. Steinberg. Yes, sir; that is the law.

Mr. Curtin. You see nothing wrong with that ?

Mr. Steinberg. No ; I see nothing wrong with that.

Mr. Curtin. What is the distinction, then, when you have another pail, made in this country from foreign steel instead of having been processed in tha t foreign country, being marked “Steel in this con­ taine r made in such foreign country” ? Where do you draw tho 

distinction ?

Mr. Steinberg. I draw the distinction, sir, in that the container 

tha t is made in the United States from imported steel is a container made in the United States. There was a great deal of what the econ­ omists call value added, American value added, in the manufacture 

of that product, on the one hand. On the other hand, the sheet steel tha t came into the United States that, went into that container is steel that has moved through customs, paid duty, and entered the distribution system of the country. Now, I believe that there is, there should be, no requirement that the manufacturer, that the American manufacturer, of a steel con­ tainer containing imported steel be required to identify tha t product as containing imported steel or as containing imported anything else whatever. If there are any bolts or anything of tha t kind that go into the process, he should not be required to identify those either. Now, as I understand it, the purpose of this bill is to promote the 

sale of American made steel.

Mr. Curtin. Wh at is the purpose of the marking set forth in the 

Tariff Act?

Mr. Steinberg. The purpose there is to identify the product for 

whatever purpose there is in section 304 of the Tariff Act and that, I suppose, is for proper treatm ent of the product under the tariff laws.

Mr. Curtin. You thin k that is the purpose of Section 304 ?

Mr. Steinberg. We have a certain duty that we impose on products 

from the free world as against other countries, and so forth.

Mr. Curtin. Wouldn’t, they collect the same duty on that imported article whether or not it. had stamped thereon that it. was made in a 

foreign country ?

Mr. Steinberg. I am not a customs expert, I do not know all the 

details behind the requirements of section 304.

Mr. Curtin. Yes, sir. But I think you are tryin g to evade the 

question a bit, sir.

Mr. Steinberg. I am not trying to, sir.

Mr. Curtin. I thin k it ought to be fairly obvious that if you should 

get a drum coming from England, that was made in England, tha t has no marking on it, assuming it was inadvertently omitted—and another drum coming from England tha t has a marking on it "Made in En gland ” the tariff on those two drums is going to be identical.
74 STEEL CONTAINER MARKING

Mr. Steinberg. Sir, the steel th at w ent into th e d rum th at was m ade 

in En glan d is no t nece ssa rily B rit ish steel. Yon have the same exam ­

ple with respect to the A me rican conta iner th at uses imported steel.

Air. Curtin. Ye s; th at is true. Bu t nev erthel ess th at drum ma de 

in E ng land tells the ul tim ate consumer th at it is made of steel forei gn , 

th at it is not m ade of domestic steel.

Now, if you make a dr um in the Uni ted States of steel from E ngland and say on th at drum th at it is mad e of stee l fro m Eng la nd , 

you are telling the u ser o f th at dru m exact ly the same thing in eith er 

inst anc e. It is in form ation only.

Mr. Steinberg. I t is inform ati on , it is in teresting inform ati on , but 

th at is n ot th e whole s tory, you see.

You are imp osing, sir , th is b ill is imp osing, upon the users of impo rte d steel certa in costs whi ch do no t have to be borne by users of 

dom estic steel.

Air. Curtin . All rig ht .

Mr. Steinberg. An d, the refore, it is disc rim ina tory.

Aly pos ition is i f you are try in g to promote the use of A merica n made 

stee l and the man uf ac ture of steel conta ine rs, an d if you wa nt to 

pro mo te it by ur ging users o f steel conta ine rs in t he second instance or 

th e th ird instance down th e line of distr ibution, urge them to ins ist 

up on con tainer s mad e of Am eri can steel, the n I suggest t ha t the steel 

co ntaine r ind ustry a nd the steel i nd ustry c ond uct t hei r me rch andis ing 

camp aig ns acc ordingly. A good example of this, sir , on the matter 

of an othe r marking bill, a bill about 2 years ago rega rd ing lum ber 

wh ich was, I believe, vetoed by Pr es iden t John son, was th at a ma nu ­

fa ct ure r of lu mber in Id ah o, a s I told this com mittee at t he l ast h ea ring, was not wa iting fo r any req uir em ent by law th at users of Ca nadia n lumb er ma rk th ei r lumbe r as ha ving been made in Canada. He 

went ahead and marke d his own lum ber “m ade in Id ah o” or “made 

in the U .S.A .” and he w as merch andisin g it with th at as a ma jor p ar t 

of his cam pai gn. Tha t is his busine ss.

Air. C urtin. Th at is lead in g up to the ne xt question I expected to 

ask you , which rea lly has been asked you before by th e cha irm an, 

but I am going to impose on every body’s tim e by asking you aga in. 

You say it is dis cri mi natio n because this per son who makes a contain er in the Un ited State s of forei gn steel is discrim ina ted ag ain st 

because o f add ed costs.

Air. Steinberg. Yes.

Air. Cur tin. I s th at yo ur po sition ?

Air. S teinberg. Th at is w hat I said, righ t.

Air. Cur tin. Ass um ing t hat the bill should be amend ed to say th at 

those conta iners made of foreign steel would have it so desig nated as 

the bill pro vides, and those perso ns who make conta ine rs from domestic steel would so designat e. Is the re any dis cri mina tio n there?

Air. Steinberg. Before I answ er th at , let me un de rst an d th at the 

m arki ng of t he conta ine r made of imported steel would be the m ar king as required in thi s bill ?

Air. Cur tin. Th at is ri gh t.

Air. Steinberg. And my answer there is th e same answ er I ga ve the 

ch airm an , an d th at is th at th at wou ld be discri mi natio n so long as 

the use r o f imported steel was requ ire d by law to iden tif y the country 

of origin fro m wh ich the steel was im ported.
STEEL CONTAINER MARKING 75

Mr. Cur tin . You are us ing now a dif fer ent crite rio n fo r dis cri mi ­

na tio n. You said before th e discrim ina tio n was t he added costs th at 

were invo lved.

Mr. Steinberg. T hat is righ t.

Mr. Curtin . Th e bookkee pin g fo r th e marking . Th ere would 

be ide ntical costs if you ha d both typ es of pr od uc t so ma rke d.

Mr. Steinberg. I do no t think so, Mr. Cu rtin, fo r the reason th at 

■when you req uir e the m ar ki ng of coun try of origin, when you requ ire the marking of im po rte d steel by co untry of origi n com pared 

wi th the marking of dom estic steel as ha ving been steel made in the 

Uni ted Sta tes , you are imposin g on the user of im porte d steel an 

added cost factor and, as I tol d the ch air ma n, how ever, if the questio n were, if the bill requ ire d—and I am not prop osing this, bu t if 

the bill req uir ed th at users of im ported steel must mark (heir contain ers as being m an uf ac tu red in whole or in part of imported steel, 

no t by cou ntry of origin, bu t imported steel, and also req uir e th at 

Am erican m anufactures of steel c ontainers using Am eric an-made steel 

mark th ei r prod ucts as in co rp or ating Am erican -m ade steel, then 1 

th in k th at —I do not propose this sort of th ing, bu t as I said before , 

I th in k th at I wou ld ha ve a much more difficult tim e fig uring out 

wh eth er the re really wa s any discrim ina tio n involved here, and I 

th in k this wou ld req uir e a much closer, more intim ate, knowledge of 

the economics of steel co ntaine r man ufac ture th an I now possess.

But I do think , how eve r, th at th at is the que stio n really, and as 

of th is mom ent, I do no t th in k th at I would be ta ki ng prec isely the 

same po sition th at I am tak in g now.

Mr. Curtin. One ot he r question, sir , an d then I will be throug h. 

Are you speak ing as of yo ur own opinion here or are you spe aking 

fo r the Com mittee fo r a N ati on al Tr ad e P olicy ?

Mr. Steinberg. I am spe aki ng, sir , fo r the Comm ittee for a Natio na l Tr ad e Policy. Thi s also happ ens to be my own convictio n, bu t 

I am speak ing fo r th e committee.

Mr. Curt in. As a resu lt of a me eting they ha d where the m at te r 

was discusse d and a reso lut ion passed ?

Mr. Steinberg. No, sir . I am speakin g fo r th e com mittee with in 

th e fra me wo rk of p olicy guide lines which have been set by the bo ard 

of directors . Th e bo ard of dir ector s is no t in a position to act upon 

or vote upo n e very specific presentat ion , writte n or oral, th at is made 

by the W ashin gto n staff of o ur com mittee, as I am sure you gen tleme n 

will unders tan d.

But th e b oard ha s c learly and d efinitiely se t f orth, as it ha s f or o ver 

10 years of the comm itte e’s existence, the policy framework. These 

are the guidelines, th is is wh at we believe, an d the staff of the com ­

mi tte e is very meticu lou s in op erating wi thin tho se guid elines.

W here the re is a ny question , the sligh tes t que stio n in our min ds, as 

to whethe r the b oard wo uld go along w ith a specific m atter, we poll the 

board . But th e board , aft er the fact, is t hen adv ised of w hat we h ave 

don e, and we inv ite com ments fro m them as to wh eth er this is sti ll 

wi thin the fr am ew ork of the boa rd’s policy.

Now, as you know, sir, we testified on this, on a s im ila r bill, in 1963— 

was it Novemb er 1963—an d the bo ard was advis ed the n of wha t we 

ha d done, the p ositio n we ha d tak en, w ith in the bo ar d’s policy fra me -
76 STEEL CONTAINER MARKING

work. They were advised after the fact of what was done. The board 

has had a chance to comment on this. There is no objection to this 

presentation that I have today pu t before this committee.

Mr. Curtin. That is all, Mr. Chairman.

Mr. Macdonald. Thank you, very much.

Mr. Steinberg. Thank you, gentlemen.

Mr. Macdonald. Mr. Michael Daniels, representing United StatesJap an Trade Council. Welcome back, Mr. Daniels.

Will you proceed, sir.

Mr. Daniels. Thank you, Mr. Chairman.

STATEMENT OF MICHAEL F. DANIELS, ON BEHALF OF THE UNITED 

STATES-JAPAN TRADE COUNCIL

Mr. Daniels. It is 3 o'clock instead of 5 o’clock, which represents a 

remarkable improvement for both of us, I am sure.

Mr. Macdonald. Practice makes perfect, they say.

Mr. Daniels. I am legislative counsel of the United States-Ja pan 

Trade Council, an organization composed of over 700 firms engaged 

in trade between the United States and Ja pan in both directions. Our 

interest lies in the expansion of a healthy trade between these two 

nations.

I appear before this committee in opposition to the steel container 

marking bills, IT.R. 6182, 6647, and 6775. These bills require U.S. 

manufacturers of steel containers using imported steel to mark the 

containers with the country of origin of the steel and to maintain 

and preserve records for at least 3 years showing the origin of all steel 

used in the containers.

We are opposed to these measures because they represent a radical 

departure from U.S. law and internationally accepted standards regarding markings. If enacted, this measure would prove burdensome 

and costly to U.S. independent fabricators and would treat them in a 

discriminatory fashion. The measure—I anticipate I will have some 

questions on these statements—would contravene U.S. trade policy by 

erecting a formidable nontariff barrier.

The General Agreement on Tariffs an d Trade has set forth prin ciples governing marks of origin, to which the United States and other 

member nations of the GATT have adhered. Article I X, paragraph 

2, reads as follows:

Contracting parties recognized that, in adopting laws and in enforcing regulations relating to marks of origin, the difficulties and inconveniences which 

such measures may cause to the commerce and industry of exporting countries 

should be reduced to a minimum, due regard being had to the necessity of protecting consumers against fraudulent or misleading indications.

By and large, U.S. law regarding marks of origin conforms to the 

principles laid down in the GATT. The enactment of this legislation, however, would constitute a radical departure from these principles and could serve only as a protectionist measure. Here, an 

item manufactured in the United States is required to lie labeled with 

the country of origin of the raw materials used in such manufacture.

Now. as we read the language of the GATT we recognize th at the 

article refers to inconveniences and difficulties which such measures
STEEL CONTAINER MARKING 77

may cause to the commerce of the exporting country and, technically, 

I suppose, one could argue that since this bill makes difficulties not 

for the exporting country but for the United States, that it is not with ­

in the purview of the GATT article, at least in its literal terms. I 

think, however, tha t this illustrates the unheard-of—it is the most 

unheard-of thing I ever head of, as somebody once said, without attributin g tha t quote. It was not within the imagination of those 

dra ftin g the article that the kind of measure which we have before 

us today would be enacted or considered by any major government.

So in making our statement tha t it contravenes the GATT article 

we are aware that technically it may not, but I think the fact tha t it 

affects the United States and not the exporting country is all the 

more reason for this committee not to report the bill favorably.

Actually, we could think, or perhaps public relations people could 

think, of no better advertisement for imports in the American economy than having this bill amended to include every product manufactured from foreign materials or including foreign components. 

The benefit of this advertisement would, we realize, be grossly outweighed by the uneconomic cost involved in such extensive labeling. 

Fo r instance we though t about the American automobile and the 

foreign materials going into its manufacture. We checked with a 

major manufacturer of American automobiles, and he mentioned 

aluminum, antimony, asbestos, cadmium, chromium, copper, cork, cotton, fluorspar, hides, iron ores, lead, manganese, molybdenum, nickel, 

rubber, tin, wood, and zinc.

As has ben said before, there is a bit of Chile in the radiator, a dash 

of Cyprus in the brakes, and a little of Egypt in the upholstery of 

an automobile. If such labeling had to be embossed in any conspicuous place in a legend one-fourth inch high, the sleek look of an American automobile would disappear beneath a patin a of labels conforming to law.

In the case of containers, for instance, if one were to be accurate 

and really inform the consumer, one would have to label such a contain er: “This container manufactured of imported steel made in 

Jap an, which is manufactured from iron ore mined in India and manganese mined in the Philippines, with coal mined in the United States 

and scrap from the United States which, in turn, was manufactured 

from Venezuelan ore” and so on, ad infinitum.

We are sure tha t the committee would not endorse the extension of 

the principle of this bill to all imported products. In the instant case, 

the requirements of the bill would introduce burdensome recordkeeping requirements on American manufacturers of containers. This bill 

does not even stop at the customary requirement of marking in a conspicuous place, but goes on to require an embossed legend on the top 

of the container.

It would pull the rug out from under our GAT T negotiators in 

Geneva to enact a measure as patently protectionist as the steel container bill at the same time they are attemp ting to get other countries 

to lower their barriers to U.S. exports. A measure of this nature not 

only makes our tradin g partners less willing to open the ir markets to 

our goods, it may also spur them into raising the ir barriers in retaliation.

48 -1 61 — 65 ------ 6
78 STEEL CONTAINER MARKING

I am not suggesting tha t the whole negotiation in Geneva will collapse if this hill is passed by the Congress and enacted into law. But 

it could ba an important, although minor, irri tan t, and it is a pretty 

snippy game in Geneva.

I was there three times last year. I talked to our negotiators, and 

measures which barelv received attention in the United States—I refer particularly to the Saylor amendment which added a “Buy American” amendment to the mass transp ortation bill—a hullaballoo was 

raised by some of the Europeans and others by pointing the finger at 

us. These become rhetorical debating points, which have a significance far beyond their economic importance or importance in dollar 

terms, and is a very real problem to them.

I think tha t I won’t agree with Mr. Curtin th at the situation is hopeless, but I will say it is extremely serious and grave, and I think that 

our representatives in Geneva are tryin g their very best. I do not 

think it behooves the Congress to make th eir job any more difficult 

than it is already.

With our balance-of-payments difficulties, the United States cannot afford to hamper the continued expansion of its exports. In 1964, 

U.S. exports amounted to $25.3 billion, whereas imports were $18.6 

billion. This $6.7 billion surplus was one of the few brigh t snots in 

our balance-of-payments situation and a healthy plus factor for domestic employment. T am aware tha t these figures include some noncommercial exports, Public Law 480 exports, and others. I believe 

the State Department yesterday stated tha t commercial exports, excluding Public Law 480 and other noncommercial exports, still left 

us with a $3.4 billion surplus in our trade, a not inconsiderable 

amount in comparison to our fight to keep our balance-of-payments 

deficit below the $3 billion mark, the $2.5 billion mark.

Mr. Curtin. If I could interrupt at tha t point, Mr. Daniels, doesn’t 

the amount of our exports include our foreign aid, and awful lot of 

our foreign aid?

Mr. Daniels. No. I say t hat the actual arithmetic surplus is $6.7 

billion. I believe the State Department excluded foreign aid shipments.

Mr. Curtin. You mean they are not-----

Mr. Daniels. Wait a minute, shipments in kind certainly, and I 

am not clear on exactly how they account for it. I know they have 

taken out the agricultural shipments under Public Law 480, and I 

believe they have also sanitized the figure to account for foreign aid 

shipments, and they come out with a $3.4 billion surplus on commercial account.

Mr. Curtin. I was going to say I think if you had taken into 

consideration our foreign aid, which is something for which we 

get very little money since the American dollar goes into it, for, if 

not, the picture is not quite as bri ght as it would seem to be from 

those figures you listed.

Mr. Macdonald. We have just had a call from the House, and I 

do not know how much longer your testimony will go.

Mr. Daniels. To the end of the page, Mr. Chairman.

Mr. Macdonald. I do not know how many questions will be asked 

of you.

Mr. Daniels. I am at your disposal.
STEEL CONTAINER MARKING 79

Mr. Macdonald. We will take a recess and come back very shortly.

(At this point a short recess was taken.)

Mr. Macdonald. The committee will be in order. I believe as we 

adjourned, sir, you were on the last page of your statement.

Mr. Daniels. Yes, sir. Exports to Jap an, our best oversea customer, reached a record high of $1.9 billion in 196-1, whereas imports from that country was $1.8 billion, and here there were none or extremely negligible amounts of anything tha t moved not for cash. This $130 million export sur­ plus pushed our 10-year cumulative export surplus in trade with 

Jap an to over $2.5 billion. We have prepared, Mr. Chairman, a publication entitled “Japan Buys American in All 50 States,” which is an analysis, an attribution 

of exports to Japa n by each State. I would think it would be of interest to members of the subcom­ mittee if I read into the record some of the figures from the States represented on the subcommittee to give you an idea of what the stake 

in trade is. New Hampshire—and these are based on 1963 exports to Japa n— New Hampshire exported $800,000 to J ap an ; Massachusetts $16,700,- 000; Pennsylvania, $60 million, $60,300,000; Michigan, $46,700,000. Now in the Massachusetts exports, metal scrap accounted for $11 

million, machinery accounted for $3 million.

Mr. Macdonald. Is that $11 million?

Mr. Daniels. $11 million in scrap; machinery $3 million; manufactured goods $1 million; and chemicals $1 million. So certainly the machinery manufactured goods and chemicals created employment in the State. In New Hampshire this was machinery and metal scrap; Pennsyl­ vania, machinery and transport equipment, $29 million; textile ma­ chinery, a subcategory for the machinery and transportation equip­ ment, textile machinery $7 million; and metalworking machinery $6 million; other nonelectrical machinery, $12 million; electrical machinery, $4 million. Pennsylvania exported $10 million in chemicals, including $3 mil­ lion of plastics, and $1 million of pharmaceuticals; $8 million in manufactured goods, including $2 million in iron and steel, and $1 million scientific instruments; $7 million in metal scrap, and $3 million in petroleum products.

The jobs that are created by these sales we have estimated as totaling 180.580 for the United States as a whole. In New Hampshire we estimate 80 jobs were created, in Massa­ chusetts 1,480 jobs; in Pennsylvania 6,270 jobs; in Michigan, 5,010 

jobs.

I think often we pay attention to the effect tha t imports have upon our economy and employment, and I invite your attention to these figures which indicate tha t profits and jobs are being created by our exports to Jap an, and that we have consistently exported more to 

Jap an than we have imported from Japan.

In conclusion, Mr. Chairman, no constructive purpose would be 

served by enactment of this legislation. The interests of the United States do not lie in furthe r nonproductive hindrances to a free exchange of goods in international trade. Thank you.
80 STEEL CONTAINER MARKING

Mr. Macdonald. Thank you, Mr. Daniels.

You mentioned that Massachusetts sent $11 million worth of scrap 

to Japan.

Mr. Daniels. Yes, sir.

Mr. Macdonald. It is my recollection that we sold a good deal of 

scrap to them about 20 years ago, too, didn’t we ?

Mr. Daniels. That is true.

Mr. Macdonald. And I would think that, from my own knowledge, 

that I saw about $2 million of it being sent back to people from 

Massachusetts.

Mr. Daniels. Mr. Chairman, one of the hopeful things in the world 

is tha t we now enjoy the best of relations with Japan. The United 

States has a real stake in economic growth and stability in Japan. 

Certainly, the sale of $11 million worth of scrap in the year 1965 does 

not have the same implications tha t it might have had in 1935, thank 

God.

Mr. Macdonald. I am well aware of the fact tha t Japa n is our 

stanchest ally in the Fa r East, and I personally have a very high regard for the Japanese people. I mentioned the scrap in a fairly light 

vein inasmuch as it is well known to what purpose some of the scrap 

that was sent from the United State s ended up in being, an d I served 

in the South Pacific.

Mr. Daniels. Mr. Chairman, we recognize th at you are an intelligent man, and certainly these are your views and the views of th inking Americans. However, one of the prejudices tha t does exist, and 

it must be frankly admitted in the “Made in Japa n” label is th at it 

does evoke certain prejudices which, I think are highly inappropriate 

in this year among some segments of our consumers. I do not think 

tha t t his is widespread.

Mr. Macdonald. I do not either. I could not agree with you more, 

Mr. Daniels. As a matter of fact, I think that some of the products 

tha t are labeled “Made in Japan,*’ have an appeal to people because 

they know of the specialized skills that the Japanese people have, 

especially for a concrete example in television.

I think the Sony, if that is how you pronounce it, is among the most 

sought-after small televisions in the world, and the fact that it is made 

in Ja pan does just the opposite of bring ing up any prejudice against 

the Japanese or the Japanese manufacturers. I think it adds something—

Mr. Daniels. I agree with you.

Mr. Macdonald (continuing). That the Japanese people would be 

happy to put on the Sony television th at i t is made in J apan.

The one thin g—and I was not here since I had to answer the phone 

on some business while you were testifying—I thought that your illustration of the automobile in which you point out, in fairly dramatic 

fashion, tha t there is a little bit of Chile in the radia tor, a dash of 

Cyprus in the brakes, a little of Eg ypt in th e upholstery, et cetera, and 

you say if such a label had to be embossed in any conspicuous place 

on the automobile, it would just be completely labels and not a sleek, 

to use your phrase, I believe, American automobile.

But th at is—I would like to have your comment about my statement, 

I do not think those two things are similar at all. Once again, I am no 

expert in the field, as I have said, but I do no t think people buy a steel 

container because of its style; do they ?
STE EL CONTAINER MARKING 81

Mr. Daniels. Mr. Chairman, the gentleman who testified—Mr. Neville—who testified before me, suggested tha t this was a considera­ tion. I am not in a position to say whether it is or not, with respect ro steel containers. At least, his testimony •would lead one to believe this was, perhaps, a factor. But really, the point 1 was trying to 

make by this example is that there are many products made of im­ ported materials, and that if the principle of the bill were extended to other articles, you mig ht run into these fantastic labels which cer­ tainly would be burdensome to everybody involved. We import—imported—in 1964,18.6 billion dollars’ worth of goods. Some of these were raw materials, some were manufactured, some 

were components. Imports play an im portant pa rt in our economic life as a submanu­ factu re or as a raw material, and I thin k to require this kind of labeling when a material has been substantially transfored, and this is the language of the Customs Act, is an unwararnted extension of the country-of-origin labeling provisions in the customs law.

Mr. Macdonald. One last question. You gave a number of figures that are very valuable and compress our trade relationship with the Japanese economy. I was wondering, do you happen to know, during tha t period of time to which you relate our exports to Ja pan , how much was given in foreign trade to the Japanese economy?

Mr. Daniels. Mr. Chairman, since 1951,1 believe, prior to the sign­ ing of the treaty of peace with Jap an in 1952, we have not given any foreign trade as such to Jap an. The G ARIOA program was ter­ minated, with the exception of some small technical projects such as the Jap an Productivity Center and other places where there werA 

grants, but nothing-----

Mr. Macdonald. Are these sort of pilot programs ?

Mr. Daniels. Pilot programs or tra inin g programs or technical ex­ change or what have you. But at least on what we think of as foreign 

aid, this was not given to Japan since 1952.

Mr. Macdonald. When you say foreign aid you are talking about 

mutual assistance as well ?

Mr. Daniels. That is right. Now, military expenditures by our military in Jap an at one time were much more considerable than they are now. They have gradually declined as we have moved our base of operations to Okinawa. We do not have the large numbers of troops in Ja pan at the present time 

tha t we once had. Although certainly these represented payments to the Japanese economy, I think tha t certain ly they were for our own good purposes as well, and are not aid programs in the sense of the word t hat such 

programs are often referred to.

Mr. Macdonald. Thank vou.

Mr. Huot?

Mr. Huot. In the description of the automobile that you made, it was a rath er dramatic one. However, Mr. Neville pointed out in his testimony, going back to the container, tha t the walls of the container were made with domestic steel, and the tops were made with steel from other countries, which would make labeling, of course, a grea t 

problem.
82 STEEL CONTAINER MARKING

Do you see other products that would have the same components, 

part U.S. steel in this case used in conjunction with imported steel?

Mr. Daniels. Well, take the example of cameras. There are often 

foreign lenses used, foreign parts, in addition to American parts.

I think most or many of our radios and television sets today utilize 

foreign components. Almost any large manufacturer involves materials from many parts of the world. I am sorry I cannot give any 

more dramatic examples. I am sure there are many, many products 

where this would be a problem.

Mr. Huot. Thank you.

Mr. Macdonald. Mr. Curtin.

Air. Curtin. Thank you, Mr. Chairman.

Air. Daniels, is one of your main objections to this bill your fear 

tha t it would be just the foot in the door for even furthe r marking 

legislation?

Air. Daniels. Well, afte r yesterday and today, I suppose I am a 

little fearful where this labeling problem will stop. There is no assurance that you or anybody else could give to me or anybody else that 

if this law were enacted it would not invite other industry groups 

competing against foreign materials from insisting that their products be similarly labeled.

I think the line, Air. Curtin, has been drawn rath er well by the 

customs law. It requires any manufactured article to be labeled with 

country of origin. It then states that if in the process of manufacture 

the article has been so substantially transformed that it loses its original characteristics and nature, then i t will not be required to be labeled. 

I think this is a good line. Legislation always consists in drawing 

lines.

Air. Curtin. Your feeling then is th at you would go so far and no 

further, tha t you would be in favor, and are in favor, of the law as 

it presently exists as to marking, but you think tha t is as far as it should 

go, and any step beyond that you would object to on the ground tha t 

it is protectionist or protectionism.

Air. Daniels. Well, I think tha t the bill, as drafted, would have the 

effect of discouraging and making more difficult the importation of 

foreign steel. I th ink that this constitutes, therefore, a barrier to trade 

and, therefore, I think it is protectionist in intent, and I do not have to 

go very far to draw th at inference.

I read the committee report of last week, I read your opening statement at these hearings, and I think it is quite clear you wish to discourage the use of foreign steel, so I thin k it is protectionist both in 

intent and in purpose.

Air. Curtin. And you see no distinction between a pail which was 

made in a foreign country bearing a nota tion on it tha t it is so made, 

and another pail made in this country from foreign steel bearing a 

notation that it is made of foreign steel. Isn’t it the same intent and 

purpose in both cases?

Air. Daniels. No. This is logic. As O liver Wendell Holmes once 

said, the life of the law has not been logic but experience, and certainly you can make a logical argument that this principle ought to 

be extended, and what is the difference? I thin k there is a practical 

difference, and one which has been accepted by the world community 

of trading nations, tha t we will stop here. Why don’t we have laws
STEEL CONTAINER MARKING 83

saying this watch made in New York State, and that watch made in California? Somebody last year wanted to identify I rish potatoes as 

being grown in Idaho, which I thought was sort of amusing.

Mr. Macdonald. If you will yield at that point, obviously we do 

just that.

Mr. Daniels. I do not thin k we do.

Mr. Macdonald. Many potatoes, for a concrete example, you buy 

by the bag, and they will say, “Raised in Maine,” which I know of my 

own knowledge.

Mr. Daniels. Or lobsters.

Mr. Macdonald. Or they will say “Maine lobsters” or they will 

say “California wines.”

Mr. Daniels. But we have no laws, Mr. Chairman, which require 

anybody to put any such label on, and I think if you did, especially with integrated companies with many plants and branches around the United States, you would find tha t this would be very seriously objected to by our business community. Sure, you can have any kind of label on anything, and I suppose the more information people get the better off they are. You have 

got to draw the line some place, and I suggest tha t the present law, hallowed by time, custom, and the difficulties of legislation, is a good 

place to stop. I am not going to get into a philosophic argument. I do not know 

whether I really think tha t these are unstated prejudices that are being 

appealed to, or people jus t want to know, or whether I really want to know, in terms of a manufactured article as to where it was made. It is helpful. If I buy perfume for my wife and it says “Made in Paris,” I feel happier about it. I do no t think tha t is the question before this 

committee. I thin k the question before this committee is whether to extend this principle to cover raw materials incorporated in articles which are 

manufactured and where most of the value has been added within the United States of America and, as a matter of judgment, my own 

judgment, the judgment of my organization, we do not think it is 

warranted.

Mr. Curtin. This is the same view I believe you expressed last year 

in the hearing on similar legislation.

Mr. Daniels. Yes, sir.

Mr. Curtin. Tha t is all, Mr. Chairman.

Mr. Macdonald. Anything else ? Thank you very much.

Air. Daniels. Thank you, Mr. Chairman.

Air. Macdonald. Air. Stitt, Air. Nelson A. Stitt representing Jap an 

Iron & Steel Exporters Association.

STATEMENT OF NELSON A. STITT, REPRE SEN TING THE JAPAN

IRON & STEEL EXPO RTERS ASSOCIATION AND JAP AN GALVANIZED IRON SHEET EXPO RTER S ASSOCIATION OF TOKYO, JAPAN

Air. Stitt. Air. Chairman and committee members, I am Nelson A. 

Sti tt o f the law firm of Stitt & Hemmendinger of this city. I appear 

before you here today on behalf of two of our clients, the Japan Iron 

& Steel Expo rters Association, and the J apa n Galvanized Iron Sheet Exporters Association of Tokyo, Japan. These are trade associations
84 STEEL CONTAINER MARKING

representing trading houses and mills engaged and interested in the 

exportation of iron and steel mill products from Japan.

I am also directly speaking for the great m ajority of the U.S. importers who are importing steel sheets from Japan.

I hope that I am indirectly representing the interests of the American consumer whose views are not very often heard, and seldom heeded 

in the Halls of Congress. I am testifying in opposition to the bills 

here under consideration.

The United States has maintained a surplus in its tra de with Japa n 

in every postwar year, with the exception of 1959.

Mr. Curtin. If I could jus t inte rrup t you at tha t point, I would 

like to say th at the views of the American people are heeded quite a 

bit by the individual Members of the Congress or else the people 

change their Congressman.

Mr. Stitt. They are heard in various capacities but seldom as consumers. They are heard generally as-----

Mr. Macdonald. Sir, I will ask a technical question. Are you registered as a lobbyist for any consumers group ?

Mr. Stitt. No.

Mr. Macdonald. Then I do not think-----

Mr. Stitt. That is why I say I indirectly, I hope I indirectly represent them.

Mr. Macdonald. I think all of us here in Congress do represent 

consumers because there are obviously many more consumers of any 

product tha t you could name tha n there are manufacturers of them, 

and we would not be here long if we did not represent the m ajority of 

the people in our districts.

So if you are here representing The Japan Iron & Steel Exporters 

Association and The Japa n Galvanized Iron Sheet Exporters Association we would be very happy to listen to your testimony. Otherwise—

Mr. Stitt. All right, sir. I was, perhaps, too facetious.

The United States has maintained a surplus in its trade with Japan 

in every postwar year, with the exception of 1959. Overall for the 

most recent 10-year period, the United States favorable trade balance 

exceeded $2.5 billion, with $10.1 billion in U.S. imports from Japan 

as against $12.6 billion in U.S. exports to Japan. In 1964, the Japa ­

nese steel industry alone purchased over $230 million in U.S. coking 

coal, iron ore, steel scrap, and othe r steelmaking materials. Additionally, it purchases an average of $25 million worth of U.S. steelmaking 

equipment annually.

To assist it in raising dollars to finance these heavy purchases of 

American goods, Japa n has sold goods in the United States, and one 

of the most important categories of Japanese goods sold here is, of 

course, steel mill products. I do not know how many American fabricators make shipping containers with Japanese steel sheets, nor do 

I know how many Japanese sheets are consumed in the steel shipping 

container industry. Since Japan was the principal foreign supplier 

of hot- and cold-rolled and galvanized sheets in 1964,1 assume some of 

the Japanese sheets were used in making steel shipping containers in 

the United States.
STEEL CONTAINER MARKING 85

During the hearings which this subcommittee held on similar steel 

shipping container labeling bills in 19G3, supporters of the earlier 

measures made two apparently contradictory po ints:

(1) tha t the legislation did not prohibit steel im portations; and

(2) that passage of the legislation would greatly help independent 

shipping container fabricators who prefer to use domestic rather than 

foreign steel sheets, presumably by reducing the sales of fabricators 

who think otherwise. In other words, passage of the legislation would 

not ban imports of foreign steel; it would simply inhibit or reduce 

or perhaps eliminate sales of foreign steel sheets to the shipping container industry. This seems to be very much a six-of-one, half-adozen-of-an other proposition. I think I must agree that the present 

labeling bills would reduce the attractiveness of foreign steel to the 

independent fabricator.

Since all steel shipping containers must meet rigorous standards 

established by the Interstate Commerce Commission and the American 

Standard s Association, it is obvious tha t shipping containers of foreign steel are at least the equal in quality of such containers made of 

domestically produced steel. I notice in reading your hearings last 

year tha t frequently these bills were referred to as similar in purpose 

and inten t as the Textile Fibers Product Identification Act, and Wool 

Products Labeling Act. I just thin k this is not so, gentlemen. These 

are acts to protect consumers against inferior products. Here the bill 

would not serve that purpose.

The objection is made that foreign steel costs less. The proposed 

legislation handles this objection in two ways. First, the bills would 

raise the costs of the fabricator using imported steel by imposing special recordkeeping and retention requirements, enlarging the risk of 

legal action by a Government agency, and complicating inventory 

maintenance. This could well erase many or most or perhaps all the 

cost advantages of using foreign steel. Second, the bills are expected 

to activate the passive preferences of shipping container buyers for 

American-made steel and so to divert sales to the bills’ supporters, 

Note th at the consumer preferences to which the bill appeals are passive; purchasers actively interested in buying shipping containers of 

domestically made steel can always specify their interest in the purchase orders. That, of course, is their business; but we suggest th at 

appeals to commercial chauvinism, whether active or passive, are 

neither good business for an industry nor sound trade policy for a 

country.

I am going to skip throu gh this in the interest of time, Mr. Chairman.

I would like to point out several things though tha t I think might be 

of interest and, perhaps, you may be well aware of. First, the U.S. 

steel industry has been ru nning at record levels. Last year, it recorded 

record profits, so fa r this year also, and they did quite well the year 

before last year, and sheet is one of the products in shortest supply 

right now, and has been for some time. Deliveries in sheet are 2 or 3 

months ahead.

I also would like to suggest tha t foreign steel has introduced some 

measure of price competition in the U.S. steel markets. I think you 

would notice if you would check the products which have appeared in 

volume in the import statistics, you will discover tha t those are the
86 STEEL CONTAINER MARKING

products where the U.S. steel industry has either maintained its price 

while raising others or has actually dropped its price in several importa nt categories of steel. I would also like lo suggest th at while much of the testimony has 

spoken of the interest of certain of the container fabricators who had 

to compete with other fabricators who were using foreign steel and, 

therefore, their profits had suffered, tha t we should give some consideration, perhaps, to the interest of the users of these drums and 

pails. It seems to me that they ought to be considered to be entitled to the 

best priced container that they can get of quality. In short, we submit 

the onlv purpose these labeling bills are intended to serve is to inhibit 

sales of foreign steel to fabricators of steel shipping containers in the 

United States. This is quite apparent from the statements in support 

of the legislation, both today and last year’s hearings. No department or agency of the executive branch favors these bills. 

Although disapproval in the Federal triangle obviously does not foreclose a different judgment here, the disapproval of the agency which 

would be e ntrusted with enforcement of the bill, the Federal Trade 

Commission, seems to indicate its limited value in preventing consumer deception. We further submit that legislation which seeks to deprive certain 

smaller segments of an industry of an alternate source of supply, 

which imposes on these segments extra costs and burden unassumed 

bv competitors, which denigrates imported steel, and which is intended to interfere with and undoubtedly will interfere with our foreign trade with Jap an and other allies, we submit this is not wise 

legislation, and tha t this subcommittee should not recommend its 

passage.

Mr. Macdonald. Mr. Huot?

Mr. Huot. There has been a great deal of talk about the price. 

Do you know the price differential there is in steel between foreign 

steel and domestic steel ?

Mr. Stitt. It varies from time to time, Mr. Huot. As of right 

now, because of the great demand, in other words, the foreign steel 

prices fluctuate f ar more than ours, which are maintained a t a steady 

level, right now there would not be a great differential, I do not believe in sheet. In times where the demand is not so great, perhaps 

it would be lower by $10 to $15 a ton.

Mr. Huot. II ow would you feel, Mr. Stitt —Mr. Steinberg, I believe, when he spoke mentioned tha t he would have to search his 

soul to determine the amount of discrimination if the label was to 

merely say “imported steel.”

Mr. Stitt. I do not think—I cannot agree with Mr. Steinberg on 

that, sir. I believe if it said “imported steel’’ it would still, to those 

people who—and we have, as was pointed out before, a certain amount 

of prejudice which exists here, and considering the way these drums 

move from hand to hand, the manufacturer must consider it, perhaps not, the original buyer but buyers down the line four or five 

uses later, I think the imported steel would also tend to inhibit sales. 

I mean the use of th at label would inhibit sales of imported steel.

Mr. II uot. Probably not to the degree t ha t the origin by country 

would.
STEEL CONTAINER MARKING 87

Mr. Stitt. Well, “made in J apan”, of course, is still in some areas 

and to some people not a good label, so to tha t extent it might improve it some, yes.

Mr. ITuot. That is all, Mr. Chairman.

Mr. Macdonald. Mr. Curtin?

Mr. Curtin. No questions.

Mr. Macdonald. I have just one, following up the point raised by 

Mr. Tuot. What would you think of the reverse situation tha t the 

containers made in the United States bear a label “made in the U.S.A.” 

Do you think t hat would be discriminatory ?

Mr. Stitt. You mean if all drums had to have a label, in effect?

Mr. Macdonald. All domestically produced, all drums which were 

made from domestically produced steel.

Mr. Stitt. And the drums made from imported steel would not be 

labeled then or they would also be labeled ?

Mr. Macdonald. Well, let us take the first case, where there is no 

label on it.

Mr. Stitt. Well, obviously my first case would be better. If they 

all have to be labeled, I think it would still be objectionable because—

Mr. Macdonald. I am not clear which pa rt of the question you 

are answering.

Mr. Stitt. If all U.S. drums had a label “Made in U.S.A.,” “Steel 

made in U.S.A.,” and all the imported drums were left with no label, 

that would be the better of those two alternatives, I would say.

Mr. Macdonald. From your point of view ?

Mr. Stitt. Yes, sir.

Mr. Macdonald. Then would you approve of such legislation ?

Mr. Stitt. Sir, I do not—as a matter of principle, I think an article 

manufactured in the United States should not need to carry a label of 

the source of the component raw material or semimanufactured 

material.

Mr. Macdonald. Well, then go to the second case where all those 

made from steel produced here in the United States would have the 

label “Made in U.S.A.,” and all those made from steel produced in a 

foreign country bear the country of origin.

Mr. Stitt. Well, here again, of course, I must admit I think this 

would still tend to inhibit sheet sales from Ja pan.

Mr. Macdonald. Well, that has been the theme of other witnesses 

and, perfectly frankly, I do not understand why.

Mr. Stitt. Because we, our firm, do quite a bit of work in the 

Japanese trade, and we have for years run across problems of this 

kind where there are people, and I am not saying this is a majority 

of the people, but there are, perhaps, a considerable body of people 

who will not knowingly buy something manufactured in Japan .

Mr. Macdonald. Well, obviously this does not apply just to Japan. 

It applies to the country of origin. It applies to Great Britain, E ngland, France, Czechoslovakia, you name it.

Mr. Stitt. That is right.

Mr. Macdonald. So a person would have to be very prejudiced indeed to dislike or have a prejudice businesswise against the Japanese, 

the English, the French, th e Czechs. It would be har d to find such a
88 STEE L CONTAINER MARKING

person, I think, who would be, whose business judgment would be. 

tempered by the fact that they dislike all these other countries.

Mr. Stitt. Well, it would operate to different degrees with different countries, I think. But I am sure it would still operate no matter 

where the steel came from, it would operate to tend to have some of 

these drum buyers not buy the drum, and I must say I go along with 

Mr. Daniels, I think the present labeling requirements are well thought 

out, they are clear, understandable, and they are enforcible, and 1 

would recommend that w’e stick with them.

Mr. Macdonald. Do you have anything else, Mr. Curtin ?

Mr. Curtin. No other questions.

Mr. Macdonald. Thank you very much. That completing the roster of witnesses to be heard, I will close the hearings on bills H.R. 6182. 

H.R. 6647, and H.R. 6775. The committee is adjourned.

(The following material was submitted fo r the record:)

The Ohio Corrugating Co.,

Warren, Ohio, May 20, 1965.

Re Steel Shipping Container Identification Act.

Hon. Torbert Macdonald,

House of Representatives,

House Office Building, Washington, D.C.

Dear Sir : In view of later testimony submitted concerning the subject proposed act, I beg your indulgence in permitting me to supplement my earlier 

statements.

Claims have been made tha t the ma tter of maintaining an inventory of steel 

as distinguished between foreign and domestic, or for tha t matter between 

any supplier, in the production of steel containers and their identifying embossment, would work an undue hardship on the processor.

I challenge these for the following reasons :

1. It is customary for steel container manufacturers to maintain distinguishable inventory for several reasons.

(а) For check as to size, weight, and number of pieces received

(б) Variation in gage.

(c) For purpose of claims as to faulty material which normally would 

not develop until the material is worked.

2. It is customary and required by law and regulation and by customers 

to emboss all steel containers with certain information and the addition of 

the identifying requirement should impose no added particula r cost.

3. Good inventory accounting (bookkeeping) is necessary to effective cost 

control.

I hope this proves helpful in your furth er favorable consideration.

Respectfully yours, Lawrence F. McKay, 

Executive Vice President.

National Council of American I mporters, I nc.,

New York, N.Y., April 23,1965.

Hon. Torbert H. Macdonald,

Chairman, Subcommittee on Commerce and Finance, Committee on Interstate

and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Mr. Macdonald : Our organization wishes to be recorded in opposition

to three bills on which your subcommittee is scheduled to hold a public hearing 

on April 28, 1965; and we respectfully request that this letter be incorporated 

into the record of the hearings on these bills.

The bills to which wre wish to object ar e H.R. 6182 by Hon. Harley O. Staggers, of West Virg inia; H.R. 6647 by Hon. Walter Rogers, of Tex as; and H.R. 

6775 by Hon. Willard S. Curtin, of Pennsylvania. All these bills propose to 

prohibit the introduction into interstate commerce of any shipping containers 

manufactured in the United States from imported steel unless the container 

is marked so as to indicate the country of origin of the steel.
STEEL CONTAINER MARKING 89

In a letter to your comm ittee dated November 4, 1963, we recorded our opposi­ tion to the same proposal in H.R. 5662, also sponsored by Mr. Curtin, and which 

was then being considered by you r committee. As we stated in th at letter, the National Council of American Importers ob­ jec ts to special marking provisio ns to indicate the country of origin of imported ma terials used in producing artic les in the United States. If the proposal in these th ree bills is adopted, the re is no doubt th at o ther domestic ma nufac turers 

will demand similar markin g requirements. At the present time, about ha lf of our total annua l imports are either raw ma terials or semimanufactu res essential for the production of domestic artic les. These imported ma terials ar e necessary because sim ilar domestic ma terials either are not available in the United State s, or are produced in insufficient qua ntities . In many cases, the imported ma terials or component pa rts are different in grade or quality from the domestic prod uct and may be better suited for certain uses. In add ition, it should be borne in mind that because of many factors domestic manufac turers may alternate between domestic and imported materials in the prod uction of their articles. A burden would be placed on such ma nufac tur ers who would then be compelled to keep sep ara te inventories in which articles made with imported products must be marked, while those made with domestic materi als need not be marked. All these considerations definitely point out th at an undesirable legislative precedent would be esta blished if we adopt the proposals in the thre e bills mentioned above. For thi s reas on, we respectfully urge th at your Committee 

refrain from approving any one of these bills.

Resp ectfu lly submitted.

Gerald H. O’Brien, 

Ex ec ut iv e Vic e Presiden t.

Youngstown, Ohio, May 24, 1965.

W. E. Williams on,

Clerk, Subcommittee on Interstate and Foreign Commerce,

Wa shing ton , D.C .:

Befo re hearings are closed on proposed Steel Shipping Containe r Identifi­ cation Act, H.R. 6182, 6647, and 6775, Republic Steel Corp, would like to be on record as supporting thi s proposed legislation. We have read with inte rest statem ent of Mr. Livingston Keplinger, president of Steel Shipping Container In sti tute of which we are a member and in order not to burden the record this will constitute our full and complete endorsement, of th at statement. As mem­ bers of the committee know, foreign competition in steel is increasing ala rm­ ingly, in many cases due to pra ctice of dumping as to which many individual steel companies (including Republic Steel Corp.) have filed complaints with 

the T rea sur y Department. We respectfully requ est this wire be included in reco rd of hearings before 

your subcommittee.

Repu blic Steel Corp. Manufactu ring Division,

J. D. Kirkwood, Gener al M ana ger of Sales.

The Youngstown Sheet & Tube Co.,

Youngstown, Ohio , Ma y 22,1965.

lio n. W. E. William son,

Clerk, House Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Williams on : It is our understand ing th at your committee, which 

has held hearings on an act entitled the “Steel Shipping Con tain er Identifica tion Act,” has granted permission to file additional written statem ents for the 

record. The Youngstown Sheet & Tube Co. hereby records its support of this pro­ posed act. Our company is an inte gra ted steel company which employs on the 

ave rage some 24,000 employees. < The re is an increasing trend In the importa tion of steel and steel products, which has adversely affected the steel industry and the jobs of its thou sands of employees. Producers in foreign countries have dumped stee l and steel prod ucts at prices substan tially below those charged for the same commodities in their
90 STEEL CONTAINER MARKING

domestic markets. The prices of the imported steel and steel products, in any 

event, reflect the lower wages and lower sta ndard s of living of the foreign 

workers as compared with the employees in our country.

Therefore, we believe it is important for the benefit of the people of the United 

States to enact the Steel Shipping Container Identifica tion Act (H.R. 6647, H.R. 

6775, and S. 1634) which will prov ide for the identification of foreign steel 

where used in the manufactu re of shipping conta iners. The Youngstown Sheet 

& Tube Co. supports the proposals containe d in the sa id act.

Very truly yours,

Robert E. Williams, Exe cutive Vice President.

Chicago, III., April 28,1965. Oren Harris,

House Committee, Inter sta te and Foreign Commerce, Ray burn House Office

Building, Washington, I).C.

We are opposed to bills 6182, 6647, and 6775 requiring special embossirg of 

drums manufactured from foreig n steel. These bills are not only unfair and 

discrimitory but tend to create a monopoly in container man ufac turing.

Trilla Steel Drum Corp., 

Lester Trilla.

Statement of Graubard, Moskovitz & McCauley on Behalf of the American

I nstitute for I mported Steel, Inc., New York, N.Y., on H.R. 6182, 6647, and 6775, the Steel Shipping Container Bills

Mr. Chairma n, members of the committee, this statement is subm itted by the 

law firm of Graubard, Moskovitz & McCauley, on beha lf of the American Insti tute f or Imp orted Steel, Inc., a tra de association consisting of approximate ly 

50 American import and export firms. The membership of the institute has offices 

and ware houses from coast to coast. The ins titute opposes any legislation on 

the subject pending bills to requ ire marking of steel containers with the country 

of origin of the steel from which they ar e fabricated by American manufacturers.

The members of the institu te pri ma rily engage in importing steel and steel 

prod ucts from abroad and in exporting stee l and steel prod ucts of U.S. origin 

and manufac ture throughout the world. Their day-to-day participation in this 

vital segment of U.S. internation al tra de make s possible inform ed judgments on 

legislative and other proposals which may affect this imp ortant U.S. foreign 

commerce. The institute’s opposition to the enactme nt of H.R. 6182, 6647, and 

6775 is based upon the unanimous view of its members th at enactment of such 

proposals would dis rup t U.S. trade in steel and steel products and indeed might 

well adversely affect trade in and tra de expansion efforts for U.S. produced 

articles generally.

The proposed bills seek to prohibit shipment in interst ate commerce of steel 

shipping con tain ers—drums and pails of steel as defined in th e bill—m anufacture d 

in the United Sta tes wholly or in chief value of imported steel, unless such containers contain a notice to show the coun try of origin of the steel from which the 

containers are domestically fabricated. Thu s, small U.S. companies which fabricate steel containers, under this proposed legislation, would incur additional 

costs and would be faced with an additional handicap in complying with this 

marking requirement. Th at some of these small firms’ customers will decline 

to purchase con tain ers so marked is clear. As the sponsors of this legislation 

have pointed out, foreign marks of origin are a negative factor in ma rke t acceptability for most products. Moreover, while the mark requ ired by the pending bills, of course, rela tes only to the source of the steel used in the domesticfabricatio n of the container, the name of a foreign country on an article, no 

ma tte r how qualified, constitutes a ha ndicap to the seller. Indeed, th ere would be 

a sub stantial dan ger of confusion on the pa rt of purchasers who might well 

believe, co ntrary to the fact, tha t the co ntainer was not of American manu facture , 

produced by American workers.

Possibly of even more importance, the small American fabricators, who have 

been compelled in many insta nces to purc hase imported steel in order to survive 

aga inst the competition of the inte grated steel giants, would be faced, under 

this proposed legislation, with still ano ther competitive disadvan tage. These 

small xVmerican firms, it must be recognized, ar e in dire ct competition for customers with firms such as United States Steel Corp., Wheeling Steel Corp., and
STEEL CONTAINER MARKING 91

other integr ated steel produc ers who make not only the raw material, steel sheet, but also many of the finished fabrica ted contain ers which would be covered by the pending legislation. These integrated steel mills, for whose apparen t benefit this legislation is introduced, will have no comparable additional cost or inconvenience und er the proposed legislation. On th e contrary, if any of these legis lative proposals were enacted, they would make the object of the integr ated steel producers to intensify the squeeze on their noninteg rated com­ petitors th at much easier. Thu s, when considering this legislation, this com­ mittee should he mindful th at one of the chief victims will be American small 

businessmen and the ir workers. At the outset, this proposed legislation must be recognized for what it is, a serious and unique departu re from the philosophy embodied in American legis­ lation concerning markin g requirem ents. Historically, the United States has required th at articles produced in foreig n countries be marked with the ir country of origin upon importation into the United States. The purpose of this legisla­ tion is to insure th at the “ultim ate” purcha ser will be aw are of the country in which the article he purchases was produced. Once such “ultim ate ” purchaser is on notice of the origin of the imported article the purpose of the marking law is satisfied. Only the artic le as imported is required to be marked, and the mark need only be retained un til the article reaches the “u ltima te” purchaser. If the “ultim ate” purchas er is one who will process or fab ric ate the imported article into ano ther differen t prod uce from th at imported, he is the only person who is requ ired to know the origin of the imported produc t since he is the consumer of that product. The article he fab ricates from the imported mate­ rial is not a foreign arti cle—it is an American article produced by an American firm by the labor of American workers. Thus, an imp orte r of iron ore. as are most inte gra ted U.S. steel producers who fav or thi s legislation, must under presen t law be informed th at the ore it purchase s was mined in Canada or Venezuela or in another country. When th at ore has been converted by a domes­ tic manufacturing process into steel, no one can doubt th at the steel so produced is an article of U.S. ma nufac tur e and that no identification of the country of origin of the iron ore used in its manufacture is or should be required on 1he resulting new article—steel. It is app are nt th at by precisely the same reaso n­ ing, a steel drum made in the United States from steel sheet whether such steel sheet is produced in the United States from Canadia n or Venezuelan or Ala­ bama or Minnesota ore or is produced in Germany from Germ an or French ore and Wes t Virginia or Pen nsy lvania coal is nevertheless a product of the United 

States. 1 bus, requ iring the origin of the steel used in fab ricating shipping containe rs to be shown as a mark on the finished product as the pending proposed legisla­ tion would mandate, would indeed represen t a dangerous departure from the historic U.S. policy regarding m ark ing requirements. One product of the United States would be singled out for discriminatory trea tment by the law. An un­ fortu nate precedent would be crea ted. We are convinced that enactmen t into law of the arb itrary and discriminatory departure from tra dit ion al U.S. m arking requ irem ents embodied in II.R. 6182, 6647, and 6775 is not only unwise and inequitable in the present case, but also that the unfor tun ate precedent would create problems for the executive and legislative branches of Government. Enactment may also trig ger the imposition of sim ilar burd ens by our trading 

partn ers on U.S. exports. For more than a year now the United States has been engaged in negotiatio ns at Geneva under the autho rity granted by the Tra de Expansion Act of 1962 and within the fram ework of the General Agreement on Tariffs and Trade looking tow ard a breakthrough in the form of a mu ltilate ral trade agreement with the major ind ustrial nations of the free world to make possible greatly expanded tra de oppo rtunities. While the “Kennedy Round” is an attem pt to furth er re­ duce tarif f walls by agre eme nt on mutual tariff rate reductions, considerable emphasis is also being placed by U.S. representativ es on the elimination or amelioration of many onerous non tariff trad e barrie rs. Reports e manating from these negotiations indicate th at the U.S. point of view, th at rela xation of these non tariff trade barriers is an essential to a mean ingful agreeme nt in aid of expanded trade, is being accepted by our tra din g partner s. Marking and labeling requ irements, whose sole or prin cipal purpose is to ha rass importers and their customers and thereby to dis rupt the free flow of trade, are on the agenda. The curre nt practices of the United States and of its tra din g partners, we und erstand, are under discussion with a view toward lim it­ ing such practices to their legitim ate sphere of informing the “ultimate” pu r­ chaser with the minimum of interference to trade. At this jun ctu re in these
92 STEEL CONTAINER MARKING

critical negotiations, which may set the patte rn of free world tra de for years 

to come, it is apparent th at ena ctm ent by the U.S. Congress of an additional 

uontariff trade barrier, such as is embodied in the bills under consideration, 

could only be inte rpre ted by o ur tra ding partners as a renunc iation of our stated 

objective to free trade from ar bi trar y and unnecessary burdens. Our position 

at Geneva as the leading tradin g nation of the free world, which, therefore, 

will be a principal beneficiary of a relaxa tion of ju st such barriers , might be 

irre parab ly compromised.

Moreover, the passage of any of these container markin g bills presently under 

consideration by this committee would be an unm istakable signal to the multitude of protectionist groups in this country th at Congress was prepared to enact sim ilar m arking requirem ents into law f or the whole range of p roducts which 

make up U.S. imports. Prior legislative proposals, which Congress has wisely 

and uniformly rejected in the past, would be resuscitated and their sponsors 

would have a precedent to point to in demanding sim ilar “protection” for the ir 

indu strie s. Some of the members of thi s committee may recall these prior 

pro posals; among them th at each vege table and spice used in a can of soup 

be identified by country of origin on the label, th at each toy marble imported 

in a barrel of thousands of marbles be separately marked, th at restau rants be 

required to post signs identifying the cou ntry of origin of the salmon and other 

fish offered on their menus, and th at U.S.-produced automobiles contain ma rkings of origin of all of their component parts. These were actual legis lative proposals and not merely horrible examples of the type of proposal which Congress 

would be required to pass upon with the pending steel container identification 

bill as a precedent.

In the recent past, demands have been made for legislation requiring the 

identification of origin of lumber, textiles, and a number of other products. If 

any of the pending bills are enacted, Congress can look forward to pressures 

from a mu ltitude of sources to enact sim ilar marking proposals based upon the 

unfortun ate departu re from the U.S. pre sen t philosophy concerning markin g requirements. The executive branch of the Government, preoccupied with serious 

concerns abroad as well as at home, would be hard-pressed to put a bra ke upon 

such a legislative trend. Yet it must be emphasized th at none of these past demands by various pressure groups for onerous marking amendments can be distinguished in principle or in fact from the bills now under considera tion by your 

committee.

The members of this committee know only too well the impact of the word 

“precedent” on the legislative process. It is not, we submit, unrealistic to suppose tha t passage of any of the pending bills will call forth hundred s of sim ilar 

proposals affecting a sub stantial proportion of America’s imp ort trade. How 

would this comm ittee or other committees of Congress be able to ignore this 

precedent withou t a charge being fairly made that ignoring the prec edent was 

the rankes t form of discrimination? Now is the time to halt such a protection ­

ist legislative trend before it inju res A merica's prestige as a leader of free trad e 

abroad, and more importantly, endangers o ur sub stantial tra de balance, which is 

presently runn ing a t more than $6 billion a yea r.

What we do here in the United States in esta blishing new barriers and impediments to legitim ate trade can also be done by our tradin g partners. If we 

impose onerous and arbitra ry mark ing requirem ents, our tra din g partn ers can 

also. At a time when the United States is seeking a solution to our balance-ofpayments problem and has wisely embarked upon a fu rth er expansion of o ur al ­

ready favorable tra de balance as one aspe ct of such a solution, it is apparen t 

that we should not ena ct legislation which might well serve as a preceden t in 

the other legislatures of the free world for reversing the trend toward trade 

liberalization. This is exactly what the effect would be of passage of the pe nding legislative proposal.

It should be kept in mind that one of the lar ge st categories of U.S. exports 

is steel and steel products. Only recently the American I ns titute issued a report 

called the tra de s ituation of the United States in steel which demonstrated th at 

our export tra de in steel and products con tain ing steel accounted for sub stantially the entire favorable trade balance which the United States has had for 

the 5-year period 1959-63. A copy of this rep ort is annexed to this statem ent 

and we respectfully request that it be made pa rt of the record of this hearing. 

Retalia tion by our t rading partner s aga inst this vital sector of America’s ex port 

trade, therefore, could have disastrous results on ou r balance of payments. Indeed. the very interests who so assiduously press for the pending legislation 

are the very firms and industries which may have the most to lose from passage 

of this legislation.
STEEL CONTAINER MARKING 93

We re sp ec tful ly su bm it th a t pa ss ag e of H .It . 6182, 6647 or 6775 wo uld no t be 

in th e be st in te re st of th e A m er ic an stee l in dust ry , th e A m er ic an st ee l im porter s 

and ex po rts, or mos t im port antl y, th e eco nomy of th is N at io n. The se le gi sl at iv e 

pr op os al s re pr es en t a se ri ous bac kw ar d st ep aw ay fr om our an no un ce d ob jective 

of ex pa nd ed free -w or ld tr ade. The United S ta te s as th e w or ld le ad er in tr a d e 

ou gh t not to es ta bl ish su ch a ba d pr ec ed en t and th er eb y a c t in co ns iste nt ly w ith 

ou r nati onal ob jec tiv es.

F o r th e forego ing re as on s, th e American In sti tu te fo r Im ported Steel, Inc., 

reco mmen ds th at th is co m m itte e re por t unfa vora bly on H.R . 6182, 6647, an d 

6775 a nd w ork fo r th eir d ef ea t in th e Hou se of R ep re se nta tive s.

Appe ndix

T h e T rade S it uati on ok t h e U ni te d Sta te s in Ste el— Ste el P ro du cts,

Ma c h in er y an d Ot h e r Manu factures of Steel, I ron an d Ste el Scr ap

Th e American In sti tu te fo r Im po rted Stee l, Dec em be r 21, 1964 

INTRODUCTION

T he A merican In sti tu te fo r Im po rted Stee l has undert aken a st ud y of th e stee l 

tr ad e si tu at io n of th e U ni te d S ta te s in or der to cl ari fy an d br oa de n th e scop e of 

in fo rm at io n on th is i m port ant su bj ec t.

U su ally , th e only in fo rm ati on mad e avai la ble co nc er ns im port s an d ex por ts of 

stee l pr od uc ts. In m os t ca ses, too, th e st ati st ic s give n show on ly to nn ag es and 

ra re ly c on side r d oll ar valu e.

More im po rt an tly, im port s and ex po rts of st ee l pro duct s re pre se nt on ly one 

se gm en t of ste el im po rts and e xport s in th eir e nti re ty .

W he n tr ad e in m ac hi ne ry an d ot he r m anufa ctu re s of st ee l as we ll as iro n and 

st ee l sc ra p are co ns id er ed as p a rt of th e ov er al l st ee l tr a d e si tu ati on of th e 

U ni te d Sta te s, it bec omes st art li n g ly ev id en t th a t th is countr y is a ne t export er 

ra th e r t han a ne t im port er of stee l. It becom es eq ua lly ev id en t th a t th e do mestic 

stee l in dust ry p rofit s dir ec tly f ro m i nte rn ati onal tr ad e in ste el .

The American In sti tu te for Im por te d Stee l ho pes th a t th is s tu dy w ill co ntr ib ute 

to w ard a fu ll er unders ta ndin g of th e benefits to th e U nite d S ta te s of a hea lthy 

tr a d e flow.

st ee l prod uc ts

D uri ng th e 5-ye ar pe riod 1959- 63, tonn ag e inq Ki rts of st ee l pro du ct s exceeded 

ex po rts. How ev er, th e d oll ar va lu e fig ure sh ow s a diffe re nt s to ry .

D uri ng th e 195 9-63 pe riod , $154 mi llion more stee l pro ducts wer e ex po rted 

th an im po rted . Tab le 1 sh ow s im po rt an d export figu res in bo th to nn ag es an d 

m illion s of d ol la rs fo r th e 5 y ears in qu es tio n an d fo r th e fi rs t 6 mon th s of 1964. 

We see, fo r ex am ple, th a t in 15)60 e xp or t an d im port to nnag es of stee l pro duct s 

a re al m os t eq ua l, bu t val ue of ex po rt s to ta le d $638 mill io n w hi le th e va lu e of 

im port s w as $429 mill ion— a n et tr ade su rp lu s to th e U nite d S ta te s of $209 

mill ion. In 1963, im po rt to nnag e w as mor e th an do ub le export to nn ag e, but th e 

va lu e ga p w as mu ch sm all er— $601 mill ion fo r im port s and $513 mill ion fo r 

ex po rts.

T ab le 2, which de sc ribe s ta bel 1 in gra ph fo rm , sh ow s th a t des pi te a to nn ag e 

de fic it in stee l pr od uc ts be tw ee n 1959 am i Ju n e 1964, on ly in 1963 an d th e first 

h a lf of 1964, w as th er e a de ficit in v alu e.

S ta ti sti cs issu ed by th e D epart m ent of Co mm erc e co ve ring th e first 6 m on th s 

of 1964 in dic at e th a t th ere w ill be a m ar ke d in cr ea se in to nnag e an d va lue of 

export s an d a sl ig ht in cr ea se in va lu e an d to nna ge of im port s fo r th e enti re ye ar .

In th e f irst 6 mon ths of 15)64. export to nn ag e of stee l pro duct s to ta le d 1,610,000 

to ns w hi le im po rt to nn ag e am ou nte d to 2.838.000 t on s.

E xport s of stee l pro duct s sh ou ld in cr ea se from 2,500,00 0 to ns in 1963 to 

3.200.00 0 to ns in 1964— a ri se of 700,000 tons . Im port s sh ou ld in cr ea se fro m 

5.600 .000 tons to 6 million to ns— up 400,000 tons . Thu s, it seem s like ly th a t ex ­

port s of st ee l pr od uc ts will sh ow a gre ate r in cr ea se th an im port s in bo th ab so lu te 

to nnag e fig ures and in per ce nt ag e.

In doll ar va lue, ex po rt s of st ee l pr od uc ts in th e fi rs t 6 m on th s of th is yea r 

am ou nt ed to $305 mill ion an d im port s w er e va lu ed a t $335 million. Th e defic it 

am ou nt ed to only $30 mi llion .

In su m m ar y, th e tra d e s it u ati o n of t he U ni te d S ta te s in stee l pro du ct s in dic at es 

a muc h mor e fa vo ra bl e po si tion fo r th e U ni ted S ta te s in te rm s bo th of to nn ag e 

an d doll ar v al ue th en o rd in ari ly sup po sed.
94 STEEL CONTAINER MARKING

MA CH INE RY AND OTHE R MA NUFAC TUR ES OF STEEL

This category includes farm machinery, earth-moving machinery, tools, automobiles, electrical machinery, railroad equipment, etc. Defense equipment is included, except for the portion coming under grants-in-aid.

Table 3 shows that the percentage of exports of machinery and other steel 

manufactures relative to total exports remained roughly the same from 1959 to 

June 1964 at about 37 percent. Valued in 1959 at about $6,011 billion, these exports rose to $8,159 billion in 1963—an increase of $2,148 billion or 35 percent.

Table 3 reveals tha t imports in the identical categories increased from $1,630 

billion in 1959 to about $1,788 billion in 1963, or about 9 percent. The rise in 

imports of $158 million compares to an increase in exports of $2,148 billion. Thus, 

the surplus of exports over imports increased by $1,990 billion in the last 5 years.

Taking 1963, it can be seen th at there was a dollar value deficit of $88 million 

in steel products, but a surplus of $6,371 billion in machinery and other steel 

manufactures—a combined surplus of $6,283 billion.

The favorable trend for exports of machinery and other steel manufactures 

held firm in the first 6 months of 1964. Exports reached $4,651 billion and 

imports totaled $975 million.

In 1963, imports of machinery and other steel manufactures accounted for 

10.5 percent of total imports while exports in these identical categories amounted 

to 36.6 percent of total exports. In the first 6 months of 1964, the percentage of 

total exports of machinery and other steel manufactures rose to 37.9 percent 

(1.3 percent over 1963) while the percentage of imports in these categories relative to total imports rose to 10.9 percent (an increase of 0.4 percent).

In terms of tonnages (table 4), steel content in indirect exports of machinery 

and other steel manufactures in 1963 amounted to 3,500,000 tons while imports 

totaled 900,000 tons—a surplus of 2,600,000 tons.

Analysis of the dollar value of steel content in exports and imports of machinery and other steel manufactures shows an export surplus for 1963 of at least 

$281,400,000. The following procedure was employed to arrive at this figure: 

Since imports of steel products in 1963 accounted for 7.3 percent of domestic 

production, this percentage was subtracted from the 3,500,000 tons of steel that 

went into exports of machinery and other steel manufactures, leaving a tonnage 

total of 3.245,000 tons. Nothing was subtracted from the 900,000 tons of steel 

content in imports of machinery and other steel manufactures. Thus, the net 

tonnage surplus amounted to 2,345.000 tons. Then, 2.345,000 tons was multiplied 

by $120 (an averaged price per ton of stee l), leaving a total of $281,400,000.

The trade deficit, in steel products in 1963 amounted to $88 million. When this 

figure is subtracted from the export surplus of $281,400,000 in the steel content of 

machinery and other steel manufactures, a net surplus to the domestic steel industry of $193,400,000 remains. It can be seen, then, tha t the domestic steel industry benefits substantially from international trade in steel. It should also be 

noted that 1963 is not an unusual ye ar ; analysis of the same statistics for earlier 

years reveals a similar result.

Among the leading commodities in U.S. foreign trade in 1963, machinery is 

first on the list of exports, automobiles are fourth and automobile parts are fifth. 

On the import list, machinery is in fifth place, iron and steel products in ninth 

(table 5).

IRON AND STEEL SCRA P

In order to present a still more complete picture of the U.S. trade situation in 

steel, iron and steel scrap should also be considered.

Table 4 shows tha t during the period 1959 to June 1964. U.S. exports of scrap 

exceeded exports of steel products and indirect steel combined—37.227.114 tons 

against 30,030,676 tons. In 1959, export tonnages were the lowest in the period, 

4,800,000 tons, while the peak year was 1951, 9,700.000 tons.

Imports of scrap during the period rose above 300,000 tons only once, in 1959, 

when imports of scrap amounted to 309,000 tons.

Value of scrap exports in 1959 was at a low for the period at $167 million. 

In 1961 peak dollar value of $341 million was reached.

SUM MARY OF IM PO RT S AND EXPORTS IN ALL STEEL CATEGORIES, 1 9 5 9 -6 3

During the 1959-63 period, 33,200,000 tons of scrap were exported and only 

1,200,000 tons were imported.

In steel products 13,200,000 tons were exported and 21.500,000 tons were imported.
ST EE L CON TAINER MA RK ING 95

In m ac hi ne ry and o th er m an ufa ctu re s of stee l, 16,200,000 to ns w er e ex port ed 

an d 4,600.000 t on s w er e im po rted .

Th us , fo r th e en ti re pe riod , ex clud in g sc ra p, export s ex ceeded im port s by 

2,300,000 ton s. In clu din g sc ra p, 61,600,000 to ns w er e ex po rted and 27,300,000 

to ns were im po rted —a su rp lu s in ex cess of 43 mill io n tons .

In do llar va lue, iron an d stee l sc ra p export s fo r th e 195 0-63 pe riod earn ed th e 

United Sta te s $1.63 bi lli on . Th e va lu e of im port s fo r th e same pe riod is quit e 

sm all an d do es not ex ce ed $100 mill ion. Ther ef ore , th e dollar va lu e su rp lu s 

from inte rn ati onal tr a d e in iro n an d stee l sc ra p is a t le ast $900 mi llion .

In stee l pr od uc ts fo r th e sa m e pe rio d, th e U ni te d S ta te s show s a net su rp lu s 

of $154 mill ion— 2.470 bi llio n in ex po rt s again st $2,316 billi on in im po rts.

In m ac hi ne ry a nd oth er st ee l m an ufa ct ure s, ag ai n fo r th e same 195 9-63 pe riod , 

th e Un ite d Sta te s had a net su rp lu s of $28,554 billi on —$36,463 billion in ex port s 

co mpa red w ith $7,909 b illion in im po rts .

Th e to ta l do llar val ue su rp lu s fo r 195 9-63 in stee l pr od uc ts , m ac hi ne ry , an d 

oth er stee l m an u fa ctu re rs an d iro n an d stee l sc ra p to ta ls $29,608 bi llio n— an 

av er ag e an nua l su rp lu s of $5,921 bil lion.

Tak in g th e first 6 m on th s of 1964, th e su rp lu s in th e th re e ca te go ries am ounts 

to $3,676 billion . Sinc e th e am ou nt of ex port s an d im port s in th es e ca te gories 

seem s to b e ho lding firm in th e s eco nd h alf of th e yea r, th e do llar va lu e ea rn in gs 

of t he U nited S ta te s in th ese p ro du ct s will be well ab ov e th e 1959-63 av era ge a nd 

also w ill e xceed su b sta n ti all y the 1963 s urp lu s of alm os t $6.5 billion .

T ra de in th es e th re e cat egories alon e pr ov id es th e U nited S ta te s w ith it s en ­

ti re su rp lu s in ba la nc e of tr ade. In additio n, th e do m es tic stee l in dust ry has 

co ns is te nt ly ea rn ed about $206 million an nuall y bec au se of stee l tr ad e. W he n 

th e fa ct is co ns id er ed th a t a cu rt ail m ent of im port s w ill de pr iv e nati ons ex ­

port in g to th e U ni te d S ta te s of th e doll ar s th ey re quir e in ord er to buy do mes tic 

pr od uc ts, it is ap p are n t th a t bo th th e U ni te d S ta te s an d th e do mestic stee l 

in dust ry wo uld su ff er fr om an y mov em ent to w ar d pro te ct io ni sm in stee l tr ade.

T able 1.—U.S. ex po rts and imports of ste el prod nets (1959 to Ju ne 196 J/)

[Tonnage a nd value]

• t

T a ble 3.—Share of steel trade in total U.S . merchandise trade (imports and exports')

[D ol la r am o u n ts i n m ill ions ]

1959 1960 1961 1962 1963 J a n u a ry -Ju n e 1964

E xport s Im p o rt s E xport s Im p o rt s E xport s Im p o rt s E xport s Im p o rt s E x p o rt s Im p o rt s E xport s Im p o rt s

T o ta l m erc han dis e 1

_____________________________ $16,406 $15,627 $19,609 $15,017 $20,152 $14,713 $20,901 $16,397 $22,287 $17,005 $12,246 $8,921 Ste el p ro d u cts ____ ___________________ . . .............. $395 $482 $638 $429 $467 $347 $457 $457 $513 $eoi $305 $335 Sha re of to ta l (p erc e n t) .— ________ 2.3 3.0 3.1 2. 8 2.1 2. 3 2.1 2.7 2. 3 3. 5 2. 5 3. 6 M achin ery an d o th er st eel__________________ _____ $6,011 $1,630 $6,988 $1,464 $7,218 $1,3 59 $8,024 $1,668 $8,1 59 $1,788 $4,651 $975 Sha re of to ta l (p erc en t) ................... . ................... ............... 36.6 10.4 36.0 9.7 36.1 9.2 38.3 10.1 36.6 10.5 37 .9 10.9 Ir on an d st ee l scra p . . ____ __________ ____________ $167 $238 Sm al l $341 Sm al l $147 Sm al l $170 Sm al l $117 Sm al l T o ta l al l stee l ca te go ries ____________________________ $6,573 $2,112 $7,864 $1,8 93 $8,089 $1,706 $8,628 $2,1 25 $8,842 $2,389 $5,073 $1,310 S har e of to ta l (p erc en t) ......................................................... 40.0 13.5 40.1 12.6 40.1 11.5 41 .2 12.9 39.6 14.0 41.4 12.7

1 E xclu din g m il it ary g ra n t ai d s hip m ents .

So ur ce : D e p art m en t of C om m er ce , fro m ba si c d a ta o f B ure au of C en su s.

STEEL CONTAINER MARKING - I
98 ST EEL CONTA IN ER M ARKIN G

T able 4.—TJ.S. direct and indirect exports and imports of steel (all categories

1959 to Jun e 196',)

[N et to ns ]

Y ea r

19 59 ......... .............................

1960.........................................

1961.........................................

1962.

1963.........................................

E x p o rts .____ ______

Im p o rts .____ ______

N et b a la n c e .. .

E xport s____________

Im p o rt s____________

N et b a la n c e .. .

E x p o rt s____________

Im p o rt s........................

N e t b a la n c e .. .

E x p o rt s____________

Im p o rt s____________

N et b a la n c e .. .

E x p o rt s........................

Im p o rts ........................

N et b a la n c e .. .

Jan u ary to J u n e 196 4___ E x p o rt s_______ ____

Im p o rt s............ ...........

N et b a la n c e .. .

1959 to J u n e 1964________ E xport s........................

I m p o rts ............. .........

N e t b a la n c e .. .

S te el pro du cts

Ir on an d stee l 

sc ra p

In d ir ect

st ee l

T o ta l dir ect 

an d i ndir ect 

ex cl ud in g 

gra nts -i n-a id

1,98 2,78 1 

4,6 28 .32 0

4,849, 076 

309.365

3, 000, 000 

1,2 00,00 0

9,8 31, 857 

6,137, 685

-2 ,6 45.5 39 +4, 53 9. 711 1,8 00,00 0 3,6 94,17 2

3,2 24,11 9 

3,5 78. 019

7,189,61 4

181,884

3,200, 000 

900,000

13,6 13,7 33

4,6 59, 903

-3 53,9 00 +7, 00 7, 73 0 2,3 00 .00 0 8,9 53, 830

2,2 28 ,13 2 

3,3 22 ,432

9,7 15, 876 

270,795

3,2 00 ,000 

700,000

15,144 ,008 

4,2 93, 227

-1 ,0 9 4 ,3 0 0 +9 ,445 ,081 2,5 00 ,00 0 10,850,781

2,2 73 ,872 

4,3 05 ,535

5,11 3,4 09 

264,593

3,3 00,00 0 

900,000

10,687,281 

5,470,128

- 2 , 0 31,663 +4, 84 8, 81 6 2,400, 000 5.217, 153

2,5 11 ,772 

5,6 64, 739

6,3 68,13 9 

216,678

3, 500, 000 

900,000

12,379,911

6,7 81, 417

-3 ,1 52,9 67 +6, 15 1,46 1 2,6 00,00 0 5,598,494

1.61 0.00 0 

2,8 38. 000

3,9 91,00 0

( ' 2)

(*)

(')

5,6 01, 000 

2,838,00 0

-1 ,2 2 8 ,0 0 0 +3 ,9 91 ,0 00 (*) 2,763, 000

13,83 0.6 76 

24.337 , 045

37,2 27,114

1,243, 315

16,200, 000 

4,6 00,00 0

67,257 ,79 0 

30,18 0,3 60

-1 0.5 06,3 69 +3 5,9 83 ,799 11,600 ,00 0 37, 077,430

1 N o t av ai la bl e.

2

 Smal l.

So urce : D ep art m en t of C om m er ce , ba sic d a ta of B u re au of Cen su s.
ST EEL CON TAINER MA RKING 99

TABLE # 5

L eadin g Co mm odities in U.S. 

F o re ig n Tr ad e in 1963 

(b y are a and v a lu e )

E x p o rt s

M ac hi ne ry

C ra in s and p r e p a r a ti o n s

C hem ic al s

Au tom obi is

A ir c ra i t s 

F ats

C ott on 

Tex t i l e 

Tob ac co

Im port s

P etr o le u m

N o n -f err o u s o re s 4 m e ta ls

Pulp and pap er

T e x tile s

M ac hi ne ry

C o ff ee

Che m ic aI s 

S ugar

Ir o n an d s te e l p ro d u cts

B illio n s o f d o lla r s

1 2 3

£ 0 1

C |a! E

C 1 AlElOlsI

r a

c s

c a

Ca nada

19 Am erican R ep ubli cs

Eur op e

O th er a re a s

W S 1

cTe~To1

J El Ol

cNeiol E J S p e c ia l c a te g o ry not

E loi d i s t r i b u t e d by are a s

CL

C 1 AlEl O 1

c IeI

Cl & 101

A~l0l

CTeIoT

a ToI

cJeTo!

U.S . D ep ar tm en t o f Comnerce 

Burea u o f I n te r n a tio n a l Commerce 

O ve rs ea s b u s in e s s r e p o r ts 

J u ly 1964 (OBR 64-6 9)
100 STE EL CONTAINER MARKING

January to June 1963 and 1694— Comparison of exports and imports

[Millions of dollars and thousa nds of short tons]

Exports Imp orts

1963 1964 1963 1964

Iron and steel scrap:

Millions of dollars____________________________ 69 117 (') (>)

Thousands of short tons----------------------------------- 2,658 3,991 (') (*)

Iron and steel products:

Millions of dol lars----- ------------------------------------ 244 305 263 335

Thousands of short tons .......................... .................. 1,173 1,610 2,201 2,838

Mac hine ry:

Millions of dollars_______________________ ____ 4,095 4,651 888 975

Thousands of short tons_______________________ (>) (*) (*) (>)

k

*

* Not available.

May 20, 1965.

Re Steel Shipping Container Identification Act.

Hon. Torbert Macdonald,

House of Representatives,

Washington, D.C.

Dear Mr. Macdonald : Our company is a small independent steel drum manufacturer located in central New Jersey. We employ approximately 125 people, 

98 of whom belong to the United Steelworkers of America.

We strongly endorse the Steel Shipping Container Act and would like this 

position included in the record. It is our feeling tha t the use of foreign steel 

in the domestic manufacture of steel containers, when not identified, puts the 

user of domestic steel in a very difficult position competitively. We believe 

strongly in the use of American products in order not to undermine the strength 

of the American economy. Because of this stand, a competitor using foreign 

steel at a lower cost could significantly reduce prices to customers of ours who 

would have no way of knowing the source of the steel in their drums. If our 

mutual customer doesn’t care about the source of steel then our competitor will 

he able to get the business. On the other hand, if the customer feels as we do, 

he should be made aware of the source. This can only be done succesfully by 

marking the steel permanently.

We do not feel there would be any real problem to those who wish to use 

foreign steel exclusively or in combination with American steel. Steel can be 

kept in separate locations in the warehouse much as we presently do with steel 

from different mills. Embossment of the steel can be done in the process of 

making the drum with little or no additional cost per piece after the initial 

small outlay for dies. Finally subsequent identification of steel is no problem. 

Each manufacturer undoubtedly knows and can prove from which mills steel 

a particular lot of drums is made when a defect turns up with steel during 

fabrication. Otherwise the man ufacturer would not be able to support a claim.

Finally we wish to repeat our strong endorsement of this bill and ask that 

you make this endorsement known.

Sincerely,

Eastern Steel Barrel Corp., 

Andrew Campbell,

a Vice President.

0

A

Armco Steel Corp., 

Middletown, Ohio, May 12, 1965.

Subject: House bills known as Steel Shipping Container Identification (H.R. 

6182, H.R. 6647, and H.R. 6775).

ITon. Torbert H. Macdonald,

Chairman, Subcommittee on Commerce and, Finance,

U.S. House of Representatives, Washington, D.C.

Dear Sir : We have just learned that your committee has been conducting 

hearings on the bills noted above. We would like to go on record as strongly 

supporting this legislation.
STEEL CONTAINER MARKING 101

W e ha ve seen evidence in the past of the de sir e of C ong ress to requ ire ide nti ficatio n of pro ducts to show th e country of origin, and i t would seem to us th at th is 

leg islati on you ar e conside rin g serves to reinforce this we ll-e stablishe d pri ncipl e.

It is also ap pa rent th at th e fabr ication of th e ste el co nt aine r is an op eration 

perfo rmed on a basic ste el pr od uc t and the ste el sho uld not lose its ide ntity .

The contain er indu stry is a highly im po rtan t consu me r of steel. We un de rstan d th at the Steel Shipp ing Co ntain er In st itute ha s gon e on rec ord with you 

reco mmending this legisla tio n and we would like to ad d ou r sup por t.

Obviously our in te re st in th is is th at th e Am erican public will know w he th er 

or no t the y ar e buyin g dome stically produc ed steel. Pa ssag e of this leg islati on 

would con tinue to offe r a com plete freedo m of choice on th e part of the use r, bu t 

we do fe el he sho uld be informed of the sou rce of his m aterial.

You rs very truly,

G. H. McClure,

Vice President, Distribution.

I ndependent Wire Drawers Association,

Washington, May 6, 1965.

ITon. Oren H arris,

Chairman, Mouse Committee on Interstate and Foreign Commerce, Rayburn

Douse Office Building, Washington, D.C.

Dear C hair man Harris : Th e Independent Wire Drawers Asso ciation, a tr ad e

ass ociation represen tin g over 20 ind epe nde nt, no ninteg rated wire dr aw ers and 

fabr icat or s of wi re prod ucts, is opposed to the en ac tm en t of II.R . 1671, th e Steel 

Shipping Co ntain er Id en tif ication Act.

Alm ost all of th e me mb ers of the Inde pe nd en t Wire Drawers Assoc iation 

pu rcha se su bs ta nt ia l am ou nt s of imported wire rod s fo r th ei r wi re dr aw ing 

opera tion. These firm s are forced to use importe d wire rod s because th e high 

price of dom estic wire rod does not pe rm it the m to com pete with the dome stic 

integr ated ste elm ills on th e sal e of wire an d wire product s. Du rin g the pas t 

10 ye ars the dome stic in te gr at ed steelm ills ha ve applied a ser ies of single and 

dou ble pri ce squeezes on both the raw mat er ia l—w ire rod, and th e finished 

prod uc t—w ire an d wire prod ucts, to the de trim en t of th e small inde pend en t 

op erato r. The plight of th e ind ependent wi re dr aw ers is fully des crib ed in an 

ar ticle which was in se rted in the Congr essional Record by Con gressm an .James 

Roosevelt. A copy of th e Congr essional Record ar ticl e is enclosed fo r yo ur 

inform ati on. Th e Steel Shipp ing Con tainer Ide nti fication Act would not dir ectly aff ect the 

independent wire dr aw ers. It would, how ever, establish an ill-conceived precede nt which ru ns co un ter to th e cou ntry-o f-origin marking req uir em ents of th e 

Tariff Act of 1930 and all of the cou ntry-o f-origin marking req uir em ents ad m in ­

ist ered by the Fe de ra l Tra de Commission. It is well estab lished th at impo rte d 

ar tic le s which ar e su bs ta nt ia lly tra ns fo rm ed by man uf ac turin g in the United 

St ates ar e prod ucts of th e Un ite d Sta tes . The Steel Shipping Co nta ine r Id en tifica tion Act would re qu ire steel containe rs and drum s ma nu factu red in the 

Un ited St ates fro m im po rte d steel to be labeled with th e coun try of ori gin of th e 

stee l. Th is requ ire men t is a bu rden on th e small ind ep ende nt steel fa br icat or s depend ent upon importe d ste el fo r th ei r raw material. Fu rth ermore, it is un ­

questionably a bu rden on th e foreig n an d in te rs ta te commerce of th e United 

St ates , and serves no us eful fun cti on in inf orming th e consumer.

To ca rry the concept of th e Steel Shipping Co ntain er Identification Act a ste p 

fu rt h er: Can you imagine th e confusion to th e av er ag e consum er if an au tomobile ma nu factu red in D et ro it wa s requ ire d to have a tag attach ed to it sho wing 

th e co un try of o rig in of th e raw materials com posing th e component par ts of th e 

autom obile? For the rea sons st at ed above , the In de pe nd en t W ire Drawers Assoc iation is 

def initely opposed to th e enac tm en t of th e Steel Shipp ing Con tai ne r Iden tif ication 

Act, H R. 1671.

Sincerely yours, F. C. Muntwyler, Preside nt.
102 STEEL CONTAINER MARKING

[F ro m th e Con gres sio na l Re co rd, Ap r. 28, 1965 ]

Ste el I mp or ts an d D ual D is tr ib u ti o n : T h e P lig h t of t h e I ndep enden t W ire

D ra we r an d F ab rica to r

Ex ten sion of remarks of Hon. James Roo sevelt, of Ca lifornia , in th e Ho use of 

Repre senta tiv es, April 28, 1965

Mr. R oosev elt. Mr. Speaker, du al di stribu tio n is rap idl y becoming one of the 

chief factors thre at en in g the exi stence of man y sma ll bus ine sse s in a gro wing 1

numb er of ind ustri es. As a res ult , it is increasin gly im pe rativ e th at eac h of us

un de rstand the force s a t work here.

One of the mo st clea r cut and pa infully in stru ct iv e exa mples of the plight of 'A

sma ll bus inessm en con fro nte d with du al di strib ut io n is th at of th e ind ep ende nt 

wired raw ers .

Recently, I ha ve received a position pa pe r describ ing th e situation in th e wire ­

draw ing i nd us try fro m Mr. F. C. M untwyle r, pr esiden t of the Indepe nd ent Wire 

Dr aw ers Assoc iati on. It conta ins a mo st inc isive an aly sis of the resu lts of dual 

distr ibution upo n sm all indepe nde nt busin ess es. Under unani mo us con sen t, I 

include it in the Record a t this poin t:

I ndep en den t W ir e D ra we rs Asso cia ti on,

Washington, D.C.

Hon. J a m es R oo se ve lt,

House of Representatives,

Washington, D.C.

My D ea r Congres sm an R oosevelt : A prim e exam ple of the ine quitie s of dual 

distrib ution is fu lly des crib ed in the position pa pe r of the Ind epen dent Wire 

Drawers Assoc iation entitled : “Steel Im po rts an d Du al Distrib uti on : The Pl ight 

of the In de pe nd en t W ire Dr aw er and Fab rica to r.” The presen t sit ua tio n in the 

steel wire and wire prod uc ts indu stry ap tly illu st ra te s the need for remed ial 

legisla tion, such as you hav e sponsored, to as su re th at the marke t pow er of in tegrate d p roducers in du al d ist rib ution indu strie s is exe rcis ed in th e public interest.

Very s inc ere ly you rs,

F. C. Muntw y ler, P r e s id e n t.

Ste el I mp or ts an d D ual D is t r ib u t io n : T h e P lig h t of t h e I nd ep en den t

W ir e D ra we r an d F ab rica to r

Th e plight of the ind epend ent, no ninteg rated ste el wire draw ing and fa br ic at ­

ing indu stry is a pr im e exa mp le of the an tic om pe tit ive marke t pow er which can 

be exercis ed by in te gr ated pro ducer s in a du al distrib ution indu str y, and ap tly 

ill us trates the need fo r rem edial leg isla tion to as su re th at this marke t pow er is 

exercised in t he public in terest. •

The bas ic raw m at er ia l for the steel wire an d wire pro ducts in du stry is hotrolled carbon stee l wire rod. In the Un ited Sta te s wire rod is prod uced by 15 

vertically integr ated ste el m ills ; and 93 pe rcen t of U.S. wire rod capacit y is 

controlled by 12 of the se producers, inc lud ing suc h in du stry gian ts as Un ited *

State s Steel, Rep ublic, an d Bethlehem . Steel w ire an d wire pro ducts, how ever, 

are produc ed by both the majo r integr ated prod ucers of wire rod and by ma ny 

small, indepe nde nt, no nin teg ate d wire dr aw er s and fabricators, who ar e depen dent upon the in te gr ated pro ducer s fo r th ei r wire rod—th e cla ssical du al 

distrib ution situatio n.

Th ere is nothi ng inhe rently evil abou t th is situ atio n so long as a normal re la ­

tionship ex ist s betwee n wire rod, wire an d wire pr od uc t pric es which pe rm it an 

adeq uate ma rgin for conv ertin g wire rod into wire, and wire into pro ducts. Beginnin g in 1955, how ever, the beh avior of these price s has no t been normal, 

ins tea d the se prices illu st ra te how the inte gr ated prod ucers in a dual di st ribu ­

tion indu stry can apply anticom petitive price squ eez es to th eir no ninteg rated 

com peti tors .

The ca se of a typ ica l fabr icated w ire p rod uct , welde d wi re concre te rei nforcin g 

mesh, gr ap hic all y illu st ra te s the doub le pr ice squ eez e exp erienc ed by the in ­

dep end ent wire dr aw er fabr icator s. Pr ior to 1955 most no ninteg rated pro ducers 

purch ase d th ei r wi re rod s from domestic in te gr at ed ste el mil ls at an average 

price of approx im ate ly $144 per ton. At th at tim e welded wire mesh sold fo r 

arou nd $202 per ton wh ich pe rm itted th e fa br ic at or s a small ma rkup on th e 

wire draw ing and fa br icat in g process. Bu t th e m aj or steel prod ucers raise d 

wire rod pri ces in 1955, 1956, 1957 and again in 1958. Acc ording to th e Bu reau
STEEL CONTAINER MARKING 103

of Labor Statistics, wire rod prices rose more than any other steel product 

during the postwar period. The price of the finished product did not increase 

proportionately, instead it actually decreased. A point was reached, in many 

areas, where the raw material was selling at a higher price than the fabricated 

wire product. For example, during 1963 hot-rolled carbon steel wire rod (seven 

thirty-seconds inch to twenty-one sixty-fourths inch) was sold, f.o.b. Sparrows 

Point, Md., for $144.50 per net ton. Yet, the same integrated steel mill was 

selling welded wire mesh for $141.50 per net ton, f.o.b. Sparrows Point.

Obviously, the independent producer could not purchase wire rod from the 

integrated producers at $144.50, clean and draw the rod into wire, fabricate 

the wire into welded wire mesh and then compete against a price of $141.50. 

As a matter of survival the independent producer had to turn to imported wire 

rod. As a result of the double price squeeze applied by the integrated mills, wire 

rod imports increased from 47,800 tons in 1955 to 910,000 tons in 1963. These 

imports are consumed almost entirely by the independent wire drawers, and 

it is estimated that imports account for about 50 percent of the noncaptive w ire 

rod market. The integrate d mills did not even attem pt to meet this import competition in the marketplace, rather they sought the protection of the U.S. 

Antidumping Act. Fortunately for the independent producers, the Treasury Department found Japa nese wire rod prices were “not less than fair value,” and 

the Tariff Commission dismissed the complaints against wire rods from West 

Germany, Belgium, France, and Luxembourg on the grounds of “no injury to a 

domestic industry.” Now the integrated producers are seeking to drastically 

amend the Antidumping Act to insure success in any future complaint against 

imported steel. The cold statistics for this period elegantly portray the plight of the independent wire drawer and fab ric ato r:

[Price p er sh or t t on ]

Im po rted 

wire rod 1

Domestic 

wire rod 2

Welded 

wi re mesh

1959...................................... ...................... ........................ .................. $122.60 

127.60

$148.17 

148.17

$199. 54 

1960_____________________________________________________ 180.93

1961__________________________ _________________________ 115.40 148.17 173. 71

19 62 ..____ _____________ ______ __________________________ 104.40 148.17 168. 13

1963___________________________________________ ____ ____ 97.20 148.17 155.62

t O pen-h earth qua lit y. Im po rted T ho m as qu al ity us ua lly qu oted $4 to $10 less th an o pe n-he arth qu al ity.

2

 O pen-h earth q ua lit y.

Source: Average im po rt wire ro d an d welded wire me sh pric es based on r ep orts from in de pe nd en t w ire 

draw ers. Ave rage dome stic wire ro d pric es from Steel ma gazin e, an d from reports by inde pe nd en t w ire 

draw ers.

Early in 1964 the major integrated producers, with much publicity, announced 

a price decrease on common quality wire rod to $122.50 per short ton. This was 

an empty gesture as far as the independent wire drawers were concerned—the 

price of domestic rod gives them a margin of less than $20 to clean the wire rod, 

draw the wire and fabricate the mesh, plus carry overhead and profit. Fab rica ting costs on welded wire mesh average about $40 to $50 per ton.

Here are some fur the r current examples of abnormal pricing in the dual 

distribution steel wire and wire products industry which illustrate the anticompetitive market power exercised by the vertically integrated steel producers:

1. The vertically integrated steel producers did not decrease the price on the 

heavier sizes of wire rod (nine thirty-seconds inch, eleven thirty-seconds inch and 

thirteen thirty-seconds inch) which sells for $143.50 per short ton. f.o.b. mill 

(Midwest). The vertically integrated steel producers did, however, decrease the 

price $20 per short ton on the wire drawn from this heavier wire rod. In the 

Midwest the following price decreases were made:

Steel wire, *4" to %" , reduced from $175.80 to $155.80 per short ton f.o.b. mill.

Steel wire, .192" to reduced from $173.80 to $153.80 per short ton f.o.b. 

mill.

Steel wire, .177" to .192", reduced from $169.80 to $149.60 per short ton f.o.b.
104 STEEL CONTAINER MARKING

2. The same si tu at io n exis ts w ith w ire pr od uct s fa bri cate d from th e he av ie r 

w ire rod. In Flo rida , th e vert ic al ly in te gra te d stee l pr od uc er s sell nine th ir ty - 

seco nd s inc h wire rod fo r $150.20 pe r sh ort ton , d eli v ere d ; yet 6-by-G 4/4 we lde d 

w ire mesh (a prod uc t fa bri cate d fro m 4-p age wire , which is dra w n from nine 

th irty -s ec on ds inc h wire ro d) is sold by th e ver tica lly in te gra te d stee l pr od uc er s 

fo r $150 pe r sh or t ton de liv ered .

3. The ve rtic al ly in te gra te d st ee l pr od uc er s sell com mo n quali ty ca rb on stee l 

w ire fo r a high er price th an some w ire pr od uc ts fa bri cate d fr om com mo n qu al ity 

ca rb on stee l wire . For ex am ple :

(A ) WE ST COAST

W eld ed w ire mesh 6-by-8 10/10 , $139.83 pe r sh ort ton. f.o.b. mill.

Co mm on qu al ity 10-page st ee l w ire, $149 i>er s hor t ton, f.o.b. mill.

(B ) MIDW EST

W elde d w ire mesh, G-by-6 6/ 6. $137.98 i>er s hort t on , f .o.b. mill.

Comm on q ua lity G ga ge steel wire , $146 per s ho rt ton. f.o .b. m ill.

(C ) FLORIDA

W eld ed w ire mesli. 6 by 6-10/10, $135 pe r sh ort to n. f.o.b. mi ll.

Comm on qual ity 10-gage steel wire , $160 pe r s ho rt ton, f.o.b. mill.

Th e em in en t stee l econom ist. Pro f. W al te r Ad am s, of M ic hi ga n S ta te Uni ve rsity, re ce nt ly sa id th at w ith out th e in de pe nd en t w ire dra w er “W e wo uld ha ve an 

oligop olistic man ag ed eco nom y (in th e stee l w ire in d u str y ). T he pe rs iste nc e of 

th e in de pe nd en ts is ne ce ssary, in th e pu blic in te re st , as th e only m ea ns —s hort of 

re gul at io n or publi c ow ne rship— of in je ct in g a su itab le m ea su re of fluidi ty into 

th e ste el pr ic e st ru ctu re .”

It is ap pare nt fro m th is bri ef analy si s of th e stee l w ire and w ire pr od uc ts 

in dust ry th a t th e ve rtic al oligopoly po w er of th e in te gra te d st ee l pr od uc er s ha s 

tend ed to ke ep pr ic es ar tifici al ly hi gh , wh ich , in tu rn , has contr ib ute d to th is 

N at io n' s ad ver se ba lanc e- of -p ay m en ts po sition by fo rc in g in de pen den ts to buy 

im po rted stee l.

Th e in de pe nd en t wire dra w ers hav e di sp laye d dir ec t, vigo ro us , an d dy na mic 

co m pe tit ive ef fo rt—thi s co m pe tit ive ef fo rt is in th e pu blic in te re st of m ai nta in in g 

a fr ee co m pe titive m ar ke tp la ce . If th e in te gra te d stee l pro duce rs had follow ed 

th e ex am pl e of th e m aj or au to pro duce rs by mee tin g im port co m pe tition di re ctly 

in the m ar ket pl ac e ra th er th an ru nnin g to W as hi ng ton, th ere wou ld ha ve bee 

no need fo r th e inde pe nd en ts to use im port ed ste el, an d th e in dust ry , th e public 

an d the N at io n wo uld ha ve benefited.

Th e Ro osev elt bil l wo uld re quir e fa ir prici ng be ha vi or in dual dis tr ib uti on indu st ries . The Ro osev elt hil l is not an in dir ect su bs idy fo r ineffic ien t in de pe nd en t 

pr od uc er s in th e fa bri ca ting se gm en t of th e stee l in dust ry sc ie ntific evide nc e 

prov es th a t indei>end ent f abri cato rs one o ne -h un dr ed th th e siz e of t h eir inte gra te d 

ri val s ha ve been ca pa ble of co m pe ting eff ec tiv ely w ith th e g ia n ts —w he ne ve r 

all ow ed t o do so in fr ee an d open c om pe tition .

The in de pe nd en t wire dra w er s an d fa b ri cato rs do not w ant sp ec ia l fa vors or 

su bs idies fr om t he Fed er al G ov er nm en t— all we as k is pre se rv at io n o f th e m ar ket ­

plac e— fr ee fr om squ eez e ta ct ic s an d mon op ol istic sh ar ps ho ot in g.

(W hereu pon, the com mittee w as ad jou rned .)

o