^ 4 .In 0/4; 51 3/2-

STEEL CONTAINER LABELING AND W O V E f^ l?

covernmen. LABEL IDENTIFICATION

Storage . . . - - . - —

= ?

H E A R I N G

BEFO RE A

SUBCOMMITTEE OF THE

COMMITTEE ON

INTERS TAT E AND FOREIGN COMMERCE 

HOUSE OF REPRESENTATIV ES

EIGH TY -EIG HT H COXGEESS 

F IR S T SE SS IO N 

ON

H.R. 4994

A B IL L TO AM EN D T H E T E X T IL E F IB E R PR OD UC TS ID E N T IF ICA TI ON AC T AN D T H E WO OL PR ODUCTS LA BEL IN G ACT OF 

1939 IN ORDER TO R EQ U IR E THA T IM PO RTED WOV EN LA BE LS 

MUS T HAV E W OV EN IN TO TH EM TH E NA ME OF TH E CO UN TR Y 

W H ER E WO VEN

H.R. 5662, H.R. 5673, H.R. 5675

B IL LS TO P R O H IB IT T H E IN TR ODUCTI ON IN TO IN TER STA TE 

CO MM ER CE OF ANY SH IP P IN G CO NTA IN ER MANU FA CT UR ED 

IN T H E U N IT ED ST ATES FR OM IM PO RTED STEEL UNL ES S TH E 

CO NTA IN ER IS M ARKED SO AS TO IN DIC A TE TH E CO UN TR Y O F 

O RIG IN OF TH E STEEL

NOVEM BE R 6, 1963

27-208

P ri n te d fo r th e us e of th e 

Com mitt ee on In te rs ta te a nd For ei gn Co mm erc e

WAS HI NG TO N : 1964
*

T k •»

CO M M IT T E E ON IN T E R S T A T E ANI) FO R EIG N CO M M ERCE

ORE N H ARR IS ,

JO HN B E L L W IL LIA M S, M ississ ip pi 

K E N N E TH A. R O BER TS, Al ab am a 

H A R L E Y O. STA G G E R S, W es t Vir gi nia 

W A L T E R RO GERS, Tex as 

SA M U E L N. F R IE D E L , M ar ylan d 

T O It B E R T H. M AC DONAL D, M as sa ch us etts 

G EO RG E M. RH ODES, Pen nsy lv an ia 

JO HN JA RM AN , Ok lah om a 

LEO W. O’B R IE N , Ne w Yo rk 

JO HN E. MOS S, Cal if or nia 

JO HN D. D IN G E LL , Mich igan 

P A U L G. ROGERS, Flo ri da 

R O B E R T W. H E M P H IL L, So ut h Ca ro lin a 

DAN R O ST E N K O W SK I, Illin oi s 

JA M E S C. H E A L E Y , Ne w Yor k 

H O R ACE It. K O R N EG AY, Nor tli Ca ro lin a 

W. R. H U LL, JR., Miss ou ri 

G IL L IS W. LO NG, Lo ui sian a 

LIO N E L V A N D E E lt L IN , C alifo rn ia

A rk an sa s, Chairma n

JO HN B. B EN N ET T, M ichiga n 

W IL LIA M L. SP R IN G ER , Illin oi s 

P A U L F. SC H EN CK , Ohio 

J. A R TH U R YO UNGE R, C ali fo rn ia 

M IL TO N W. G LE NN , Ne w Je rs ey 

SAM U EL L. D EV IN E, Ohio 

A N CH ER N ELS EN , M inne so ta 

H A ST IN G S K E IT H , M as sa ch us et ts 

W IL L A R D S. CU RTI N , Pen nsy lv an ia 

A B N E R W, S IB A L, Con ne ct ic ut 

GLENN CU NNI NGH AM , Neb ra sk a 

JA M ES T. B R O Y H IL L. Nor th Ca ro lin a 

DO N ALD G. BR OTZ M AN , Co lora do

W. E. W il l ia m so n , C le rk

K en n eth J. P a in te r, A ss is ta n t C le rk

A nd re w Ste ven so n

K ur t B orc har dt

P r o fe ssio n a l S ta ff

G eor ge W. P er ry

J am es M. Men ge r, Jr .

S u b c o m m it te e on C om m erce an d F in a n c e

H A R L E Y O. STA G G E R S, W es t V ir gin ia ,Chair ma n

JO HN D. D IN G E LL, M ichiga n 

JA M E S C. H E A L E Y , Ne w Yor k 

G IL L IS W. LO NG , Lou is iana 

L IO N E L V A N D E ER LIN , Califo rn ia

M IL TO N W. G LE NN , Ne w Je rs ey 

H A ST IN G S K E IT H , M as sa ch us et ts 

W IL LA R D S. CU RTI N, Pen nsy lv an ia

II
C O N T E N T S

T ext of— Page

H .R . 4 9 9 4 .__________ 1

H .R . 56 62 _________________________________________________________ 2

R ep ort of—

Bur ea u of th e B ud ge t on —

H .R . 49 94 __________ ______ _______________ _____________ ______ 3

H .R . 56 62 _____________________________________________________ 6

Co mmerce D epart m ent on—

H .R . 49 94 _____________________________________________________ 5

H .R . 56 62 _____________________________________________________ 8

Fe de ra l Tra de Co mmiss ion on —

H .R . 49 94 _____________________________________________________ 3

H .R . 56 62 _____________________________________________________ 9

Ju st ic e D epart m ent on H .R . 566 2, H .R . 5673, an d H .R . 56 75______ 10

S ta te D epart m ent on—

H .R . 49 94 ____________ 4

H .R . 56 62 _____________________________________________________ 7

T re as ury D epart m ent on—

H .R . 49 94 ___________________________ 6

H .R . 56 62 _____________________________________________________ 9

S ta te m en t of—

Aton, Br uce IL, vic e pr es id en t, m ar ke ting co nt ai ne r division , Rhe em

M an ufa ct ur in g Co_______________________________________________ 22

C ha nd le r, I.ouis , Wov en Lab el M an uf ac tu re rs of th e U ni te d S ta te s of

America_________________________________________________________ 45

C ur tin, Hon . W illard S., a R ep re se nt at iv e in Co ng ress fro m th e S ta te

of Pen nsy lv ania _________________________________________________ 13

Da niels , Mich ael P., le gi slativ e counsel , U ni te d S ta te s- Ja pan Tra de

C ou nc il_________________________________________________________ 40

Hof fm an n, Fra nk H. , le gi slativ e dire ct or , U ni ted St ee lw or ke rs of

America_________________________________________________________ 26

Jo hn so n, Alex an de r, A rtistic W ea ving Co__________________________ 55

Kep lin ge r, Livin gs ton, pr es id en t, Stee l Shi pp in g C onta in er In sti tu te ,

In c______________________________________________________________ 16

M ac do na ld , H on . T orb ert H. , a R ep re se nta tive in Con gress from th e

Com m on wea lth of M as sa ch use tts________________________________ 54

M cK ay , La wrenc e F. , ex ec ut iv e vice pr es id en t, Oh io C orr ugat in g Co.,

W arren, O hio ____________________________________________________ 23

Ren nie, Ja m es M. , La be l W eave, In c______________________________ 55

R ob er ts , Hon . K ennet h A., a R ep re se nta tive in Co ng ress from th e

S ta te of A la ba m a________________________________________________ 11

Ros tenk ow sk i, H on . D an , a R ep re se nta tive in Co ng ress fro m th e

S ta te of Illin ois__________________________________________________ 15

Steinb erg, D av id J ., ch ief e co no mist, C om m itte e for a N at io nal Tra de

Po lic y___________________________________________________________ 29

A dd iti on al in fo rm at io n su bm it te d for th e re co rd by—

Bethl eh em Stee l Co., In c. , le tt er from E. D. Bi ck ford, vice pre si dent. 62 

N at io na l Cou nc il of American Im por te rs , In c., le tt er fro m H ar ry S.

Ra dcliffe, ex ec ut ive vic e pre si dent_______________________________ 61

Rep ub lic Stee l Cor p. , le tt er from P. L. B ru hn , ge ne ra l man ag er ,

m an uf ac tu ri ng div is io n_________________________________________ 63

S ta ndar d Em br oi de ry , In c., le tt er fro m Willi am Mitc he ll C an to r,

pre si dent________________________________________________________ 63

U ni te d S ta te s- Ja pan T ra de Co un cil , le tt er fro m M icha el P. Da niels ,

legislative coun sel, tr an sm it ti n g in fo rm at io n on stee l im port s______ 43

W ov en La be l M an ufa ctu re rs of th e U ni te d S ta te s of America, s up pl em en ta l st ate m en t of Lo uis C handle r_____________________________ 64

h i

STEEL CONTAINER LABELING AND WOVEN LABEL 

IDENTIFICATIO N

WEDNESDAY, NOVEMBER 6, 1963

H ouse of Representatives,

S ubcommittee ox Commerce axd F inance of tiie

Committee ox I nterstate axd F oreign Commerce,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to call, in room 1340, 

Longworth Building, Hon. Harley O. Staggers presiding.

Mr. Staggers. The committee will come to order.

The hearing today will be on bills relating to the labeling of certain 

products. One bill, H.R. 4994, introduced bv our colleague on the 

committee, Mr. Macdonald, would amend the Textile Fiber Products 

Identification Act and the Wool Products Labeling Act of 1939 in 

order to require tha t imported woven labels must have woven into 

them the name of the country where woven.

Three bills dealing with another aspect of labeling are identical. 

They are H.R. 5662, H.R. 5673, and H.R. 5675, introduced by our 

colleagues on the committee, Mr. Curtin, Mr. Roberts, and Mr. Rostenkowski. These bills would 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.

At this point in the record I will insert the text of each of these bills 

and the agency reports thereon.

(II.R . 4994, IT.R. 5662, and agency reports thereon follow:)

[H.R. 4994, 88th Cong., 1st sess.]

A BILL To amend the Textile Fib er Products Identification Act and the Wool Produc ts

Labeling Act of 1939 in order to require th at imported woven labels must have woven 

into them the name of the country where woven

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

of America in Congress assembled, That section 4 of the Textile Fiber Products 

Identification Act (15 U.S.C. 70b) is amended by adding at the end thereof the 

following new subsection:

“ (i) For the purposes of this Act, any woven label which is an imported textile 

fiber prcxluct shall be misbranded unless the name of the country where such 

label was woven into such label before importation.”

Sec. 2. Section 4 of the Wool Products Labeling Act of 1939 (15 U.S.C. 68b) 

is amended by adding at the end thereof the following new paragra ph:

“ (e) For purposes of this Act, any woven label which is an imported wool 

product shall be misbranded unless the name of the country where such label 

was woven is woven into such label before importation.”

Sec. 3. The amendments made by this Act shall apply with respect to articles 

entered, or withdrawn from warehouse, for consumption after the sixtieth day 

afte r the date of enactment of this Act.

1
2 MISCELLANEOUS LABELING BILLS

[H .R . 566 2. 88th Cong., 1st se ss.]

A B IL L To pro hib it th e in tr oduction in to in te rsta te co mmerce of an y sh ip pi ng co nta in er 

m an ufa ct ure d in th e U ni te d S ta te s from im po rted ste el un le ss th e conta in er is mar ke d 

so as to in dic at e th e co unt ry of or ig in of th e stee l

Be it en ac ted by th e Sen ate an d Hou se of R ep re se nta tive s o f th e United

S ta te s o f Am er ica in Co ng res s as se mbl ed , T h at th is Ac t may be cite d as th e 

“S tee l Shi pp in g C on ta in er Id en tifi ca tion A ct”.

D EFIN IT IO N

Sec. 2. As us ed in th is Ac t—

(a ) The te rm “p er so n” m ea ns an in di vi du al , p art n ers h ip co rp or at io n, 

as so ci at io n, o r any oth er fo rm of bu sine ss en te rp rise .

(b ) T he te rm “com merce ” m ea ns co mm erc e am on g th e se ver al S ta te s or 

w it h fo re ig n na tion s, or in any po ssessio n of th e U ni te d S ta te s or in th e 

D is tr ic t of Colum bia, or be tw ee n an y su ch po ssession an d an ot he r, or 

be tw ee n an y such po ssession and an y S ta te or fo re ign na tion, or be tw ee n 

th e D is tr ic t of Colum bia an d an y S ta te or po ssessio n or fo re ig n na tion .

,(c ) T he te rm “C om miss ion” m ea ns th e F edera l T ra de Co mm ission .

(d ) T he te rm “shi ppi ng conta in er” sh al l mea n all st ee l dru m s an d pa ils 

(a s defin ed in th is su bs ec tio n) us ed fo r sh ip pi ng pro du ct s to who lesale or 

re ta il dis tr ib u to rs or to co mm er cial use rs an d are defin ed as —

(1 ) D ru m : An y sin gle w al l cylindr ic al or bil ged co nta in er ha vi ng 

a ca pac ity of ov er tw elve ga llon s to one hun dre d an d te n ga llo ns , in cl usive , co nst ru ct ed of stee l sh eet an d in clus iv e of all ga ges.

(2 ) P a il: Any stee l sh ip pi ng p ac ka ge w ith or w ithout bai l an d ha nd le 

hav in g a ca pac ity of one ga llon to tw elve ga llo ns, inclus iv e, co ns truc te d 

of stee l sh ee t tw en ty -n in e ga ge or he av ie r.

M ARK ETIN G OF ST EEL S H IP P IN G CONTA IN ER S

Sec. 3. (a ) I t sh al l be unla w fu l an d sh all be an u n fa ir metho d of co mpe tit ion 

and an u n fa ir an d de ce pt ive ac t o r pra cti ce in co mmerce un d er th e Federa l 

T ra de Co mmiss ion Act fo r any m an u fa ctu re r of st ee l sh ip pi ng co nt ai ner s to 

in tr oduce an y su ch conta in er in to co mm erc e di re ct ly or in di re ct ly , whe ne ve r 

su ch conta in er is m an ufa ct ure d in th e U ni ted Sta te s in who le o r in ch ief val ue 

fr om st ee l mad e ou tsid e th e U ni te d Sta te s, un le ss su ch conta in er bears stam pe d 

th er eo n in le tt ers no t less th an on e- fo ur th of an inc h in hei ght th e lege nd “S teel 

us ed in th e m lanu factur e of th is w as m ad e in w ith th e fi rs t b la nk spac e be ing fille d w ith th e appro pri ate d es ig na tion of the c on ta in er , 

and th e sec on d bl an k sp ac e be ing filled w ith th e na m e of th e fo re ig n co unt ry in 

whi ch su ch stee l w as mad e.

(b ) I t sh al l be un la w fu l an d sh al l be an u n fa ir metho d of co m pe tit io n an d an 

u n fa ir and de ce ptive act or pra cti ce in comm erc e under th e F ed er al T ra de 

Com miss ion Ac t fo r an y pe rson to de face , de stro y, rem ov e, alt er, cover, ob scu re, 

or o b li te ra te an y m ar k plac ed on a stee l sh ip pi ng conta in er p u rs u an t to su bse ct io n (a ) of th is section, if th e pu rp os e of de facing , des troy in g, rem ov ing , 

alt eri ng, co ve ring ob scur ing, or obli te ra ti ng su ch m ar k is to hin der or pre ve nt 

o th er pe rs on s from obta in in g th e in fo rm at io n give n by su ch m ar k.

RECORDS

Sec. 4. (a ) Eve ry m an u fa ctu re r of ste el sh ip pi ng conta in ers su bje ct to section s 2- 7 of th is Act sh al l m ain ta in pr oper reco rd s show ing th e or ig in of th e 

stee l us ed in all stee l sh ip pi ng conta in ers mad e by him. and sh all pres er ve 

su ch re co rd s fo r a t le ast th re e ye ar s.

(b ) The neglect, or re fu sa l to m ain ta in or pre se rv e th e re co rd s re qu ired by 

th is se ct io n is un la w fu l, an d any pe rs on ne gl ec tin g or re fu si ng to m ain ta in 

su ch re co rd s sh al l be guilty of an u n fa ir metho d of co mpe tit ion, an d an u n fa ir 

or de ce pt iv e act or pra ct ic e in co mmerce under th e Fed er al T ra d e Co mm ission 

Act.

EN FO RCEM ENT

Sec. 5. (a ) Exc ep t as o th er w is e sp ec ifi ca lly p ro vi de d in th is Act, th is Ac t sh al l 

be en fo rc ed by th e Co mm iss ion under ru le s, re gu la tion s, an d pro ce du re s au th o rized fo r in th e F edera l T ra d e Com miss ion Act.

(b ) The Co mm ission sh al l pre vent an y pe rs on from vi ol at in g th e pr ov isions 

of th is A ct in th e sa m e m an ne r, by th e sa m e mea ns , an d w it h th e sa m e ju ri s-
MISCELLANEOUS LABELING BILLS 3

di ction, po wers, and d uti es as th ou gh all ap pl ic ab le te rm s an d pr ov is io ns of 

th e F ed er al T ra d e Com miss ion Act w er e in co rp ora te d in to an d mad e a i« ir t 

of th is A ct ; and an y su ch pe rs on vi ol at in g th e pr ov is io ns of th is Act sh all be 

su bje ct to th e pen al ties and en ti tl ed to th e pr iv ileg es an d im m un itie s pr ov id ed 

in th e F edera l T ra d e Co mm iss ion Act as th ough th e ap pl ic ab le te rm s an d pro ­

vi sion s of su ch A ct w er e in co rp ora te d in to and m ad e a p a rt of th is Act.

(c ) The Co mm iss ion is au th ori ze d and dir ec te d to mak e su ch ru le s an d 

re gula tions as m ay be ne ce ss ar y and pro pe r fo r th e pu rp os es of adm in is tr ati on 

and en fo rc em en t of th is Act.

(d ) Th e Co mmiss ion is au th ori zed to ca use insp ec tio ns , an al ys es , te st s, an d 

ex am in at io ns to be m ad e of an y st ee l sh ip pin g co nta in er su bj ec t to th is Act.

CRIMINAL PENA LTY

Sec. 6. (a ) W ho ev er w illf ully vio la te s se ct io n 3 or 4 of th is Act sh al l be guil ty 

of a m isde m ea no r and upo n co nv ictio n sh al l be fined no t mor e th an $5,000 or 

im pr ison ed not mor e th an on e yea r, or bo th, in th e di sc re tion of th e co u rt : 

Pro vide d, T h a t no th in g in th is se ct ion sh all li m it an y oth er pr ov ision of th is Ac t.

(b ) I f th e Co mm iss ion has re as on to be lie ve th a t an y pe rson has vio la te d 

se ct io n 3 or 4 of th is A ct th e Co mmiss ion m ay cert if y al l pert in ent fa c ts to 

th e A ttorn ey G en er al an d if th e A ttor ney G en er al co nc urs, he sh al l ca use app ro ­

p ri a te pr oc ee di ng s to be bro ught fo r th e en fo rc em en t of th is Act ag ain st su ch 

pe rson .

APPLICATION OF OTHER LAWS

Sec. 7. The pu rp ose s of th is Act sh al l be he ld to be in ad di tion to, an d no t 

in su bst it uti on fo r or li m it ati on of, th e pr ov isio ns of an y oth er Ac t of Co ng ress.

Sec. 8. T hi s A ct sh all t a k e effect th re e m on th s a fte r th e d ate o f it s en ac tm en t.

Execut ive Off ic e of th e P resid ent,

Bure au of th e Budget,

Washington, D.C., November 7, 196.'i.

Hon . Oren H ar ris,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Cha ir man : T hi s is in repl y to your re quest of M arch 21. 1963. fo r 

co mm en ts on H.It . 4994, a bi ll “T o am en d th e T ex ti le F ib er Pro duct s Id en tifica ­

tion Ac t an d th e W ool P ro ducts Lab elin g Act of 1939 in ord er to re quir e th a t im ­

por te d wo ven labe ls m ust hav e wov en in to th em th e na m e of th e co untr y w he re 

wov en .”

The bi ll wo uld re quir e th a t ev er y wo ven la bel of wo ol or te xti le fib er im por te d 

in to th e U ni ted S ta te s lie in div id ual ly m ar ked w ith th e na m e of th e co untr y in 

w hi ch m an ufa ct ur ed . F ail u re t o ap ply su ch a m ar k of o rigi n wou ld be co nst ru ed 

as misbr an di ng .

The D ep ar tm en ts of Sta te , T re asu ry , and Co mm erc e, and th e F edera l T ra de 

Com miss ion ha ve a ll op po sed H.R. 4994 in th e ir re port s to you r co mm itt ee . The 

B ure au o f th e Bud ge t co nc ur s in th e co mm en ts mad e by th e ab ov e ag en cies, an d 

ac co rd in gl y reco m men ds a g ain st en ac tm en t of th e bil l.

Sinc er ely yo ur s,

P h il l ip S. Hughes,

Assistant Director for Legislative Reference.

F ederal Trade Com m is si on , 

W ash in gt on , D .C., N ov em be r 4 ,1963.

Hon . Oren H ar ris,

Chairman, Committee on Intersta te and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Ch a ir m a n : T his is in resp on se to you r le tt e r of M arch 21, 1963,

re qu es ting a re port on H.R. 4994, 88 th Co ng res s, 1s t session, a bil l “T o am en d th e 

T ex ti le F ib er Pro duct s Id en tifi ca tion Act an d th e Woo l P ord ucts Lab elin g Act 

of 1939 in or der to re quir e th a t im po rted wov en la bel s m us t ha ve wov en in to 

th em th e na m e of t he c ountr y w her e wo ven.”
4 MISCELLANEOUS LABELING BILLS

This bill would amend section 4 of the Textile Fib er Pro duc ts Identification 

Act so as to provide th at any label which is woven of imported textile fiber is 

considered to be misbranded under the provisions of the act "unle ss the name 

of the country where such label was woven is woven into such label before 

imp ortatio n.”

Under section 12 (a )(5) of the Tex tile Fiber Products Identification Act (15 

TJ.S.C. 70j), “trim mings” are exempted there from . The rules promulgated by 

the Commission under the provisions of this act describe a “label” as a form of 

trimm ing. Furthermore, under such rules, rolls of labels, or labels before they 

are attached to ano ther article, are excluded from the provisions of the act on 

the theory th at the disclosure of the textile fiber conten t of a label is not necessary 

for the protection of the u ltim ate consumer. It is our und erstanding th at Congress, in enacting the Textile Fiber Products Iden tification Act, was primarily 

intere sted in the fiber content of the prod uct being offered for sale and not in 

the fiber content of th e label attached to the product.

The Commission is of the opinion th at it wduld be very difficult, adminis tratively, to i>olice this matt er of labels in addition to the labeling of prod ucts to 

which the labels are attached, and, furth er, th at this is not necessary for the 

protectio n of the ultimate consumer.

It is our opinion th at the enactment of the subject bill would cause confusion 

where a prospective purchaser of a textile product, woven in one country, noted 

th at th ere was attached thereto a label which disclosed th at the label was woven 

in a nothe r country.

The Commission opposes the enactment of H.R. 4994.

Paul Rand Dixon, Chairman.

N.R.: Pu rsu ant to regulations, thi s report was subm itted to the Bureau of 

the Budget on May 3, 1963, and on November 1, 1963, the Bureau of the Budget 

advised th at there is no objection to the submission of thi s report from the 

standp oint of the adm inistration’s program.

Joseph W. Shea, Secretary.

Department of State, 

'Washington, November 6,1963.

Hon. Oren Harris,

Chairman. Committee on In ter sta te and Foreign Commerce,

House of Representatives.

Dear Mr. Chairman : This rep ort on H.R. 4994. a bill “To amend the Textile 

Fiber Prod ucts Identification Act and the Wool Prod ucts Labeling Act of 1939 

in ord er to require th at imported woven labels must have woven into them the 

name of the country where woven,” is subm itted in response to your requ est of 

March 21,1963.

The purpose of H.R. 4994 is to require th at every woven label of wool or te xtile 

fiber imported into the United States to be affixed to a garment or other arti cle 

be indiv idually marked w ith the name of the country in which manufactured.

Under existing law, woven labels imported by a manuf acturer, processor, or 

dea ler in this country to be affixed to articles by him are exempt from requirements as to individual marks of origin. The Wool Prod ucts Labeling Act (15 

U.S.C. 6Sb) does not require th at prod ucts be identified as to country of origin. 

Although the Textile Fib er Produc ts Identification Act contains a marks-oforigin requirem ent (15 U.S.C. 70b), articles to be sold to the ultimate consumer 

in packages are exempted provided the package bears the name of the country of 

origin. A similar rule is applied under section 304 of the Tariff Act of 1930 

(19 U.S.C. 1304) as inte rpreted by the courts.

It is the view of the Department of Sta te that the provisions of existing law 

as presently interprete d with respect to the m arking of woven labels are reasonable an d should be allowed to stand . The garme nt m anufa ctu rer or other manufactur er or processor would appea r to be the las t person in the series of commercia l users who would be in a position to exercise an independent personal 

judgment as to the acce ptab ility of the imported label and is, consequently, 

properly to be regarded as the “ultimate purcha ser.”

A princip al objection to a requirement th at foreign-m ade labels be individually 

ma rke d is that if such a label should be affixed to a U.S. product, the prod uct 

its elf would very likely be rega rded by prospective buyers as of foreign origin. 

The effect of the proposed amendment, if enacted into law, would, therefore, 

be to defeat the purpose of normal markin g regulations, which is to prevent 

deception of the purc haser. Moreover, the singling out of a small class of parts,
MISCELLANEOUS LABELING BILLS 5

such as labels, for exception from the general rules imposed under the laws 

would not seem to be a desirable adm inistrative practice.

The application of markin g requirem ents to imported woven labels would 

doubtless be interp reted abroad as the imposition of a new tra de restric tion by 

the United State s. Such an impression will not be helpful to our negotiatio ns 

und er the Trad e Expansion Act, n or will it aid us in securing removal of foreign 

restric tions affecting our exports. In 1961, less than 6,000 pounds of cotton 

labels, valued at less tha n $50,000, were imported. The Netherlands was the 

principa l supplier. The publishe d import sta tis tic s for th at year do not separately list imports of woolen labels.

For the reasons set for th above, the Departme nt of Sta te is opposed to the 

enac tment of H.R. 4994.

The Bureau of the B udget advises th at from the standpoin t of the admi nis tra ­

tion’s program the re is no objection to the submission of this report.

Sincerely yours,

Frederick G. Dutton,

Assistan t Secr etary

(For the Secretary of S ta te ).

General Counsel of the Department of Commerce,

Washington, D.C., November 5, 1963.

Hon. Oren Harris.

Chairman, Comm ittee on Intersta te and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Chairman : This is in furth er resi»onse to your requ est for the views 

of this Department with reg ard to II.R. 4994, a bill “to amend the T extile Filler 

Produc ts Identification Act a nd the Wool I’roducts Labeling Act of 1939 in order 

to requ ire th at imported woven labels must have woven into them the name of 

the country where woven.”

If enacted, H.R. 4994 would require that the name of the country where imported labels a re woven be woven into the label before importation. Any woven 

label which is an impo rted tex tile fiber prod uct would be misbranded unless the 

mark of origin is so applied.

The Departm ent of Commerce supp orts the long-established requiremen t now 

embodied in section 304 of the T ariff Act of 1930 th at, recognizing cer tain exceptions, each imported article produced abroad must be legibly marked with the 

name of the country of origin in English so as to indicate to the ult imate pu rcha ser in the United States w’here the a rtic le was originally produced or manufacture d. The Dep artm ent supports equally the prin ciple embodied in the 

several exem ptions from markin g requirem ents auth oriz ed or required by th at 

section, th at the requiremen t should not be so applied as to impose an undue 

burd en on foreign commerce.

In the past, manufac turers and processors have been regarded as the ultimate 

purcha sers of labels. On t his basis, subsection 3( H) of section 304 requires no 

country of origin identification for labels used by these business groups. The 

Dep artm ent of Commerce favo rs the retention of thi s principle.

To go furth er tha n the pre sen t law appears to be an unnecessary chang e in 

the existing interp ret ati on of an “ultimate purch ase r” as the term applies to 

users of labels. Labels have been, and should continue to be, rega rded as a 

component in the overall ma nufac turing process, the country of origin having 

little or no significance to the retai l consumer. It is, therefore, sufficient th at 

only the outer con tainer of the labels be marked so as to reaso nably indicate the 

country of origin to the ma nufac tur er or processor.

Customs regulations prescribe th at where an inqiorted label on an article with 

which it is combined shows the country of origin of the label and the country 

name is visible, the country of origin of the label shall be prefixed by the word 

“label,” as “label made in Holland.” As a prac tical consideration, however, many 

domestically produced articles do not lend themselves to markin g and the label 

is the only feasible place to show the country of origin of the prod uct being 

marketed. In such instances, retai l consumers would in all probability int erpret 

the origin information as pertainin g to the prod uct as well as to the label. 

Consequently, the projiosed origin requ irem ent on articles that are to be used by 

a ma nufac turer would in many cases be mislead ing to the buying public.

For these reasons, the Depar tment of Commerce is opposed to the enactment 

of H.R. 4994.

27—208— 64------ 2
6 MISCELLANEOUS LABELING BILLS

Th e D epar tm en t under st ands th a t th e do mes tic woven labe l in d u st ry has been 

su bj ec te d to co ns id er ab le pre ss ur es fr om co mpe tin g im po rted pr od uc ts . Ho wev er, it is not. believed th a t a disc us sion of th is prob lem is re le van t to th e issu es 

ra is ed by H.R. 4994.

We ha ve be en ad vised by th e B ure au of th e Bud ge t th a t th ere wo uld be no 

ob jection to th e su bm iss ion of th is r ep o rt from th e st an dpoin t of th e ad m in is tr ati on’s pr og ra m .

Sinc erely,

L aw ren ce .Tones,

Act in (j G ener al Cou ns el .

Gen er al Co unse l of t h e T rea su ry,

W as hing ton, D.C., Nov em be r J/, 1963.

Ho n. Ore n H arris ,

Cha irm an , C om m itte e on In te rs ta te a nd F or eign Comm erc e,

Hou se o f R ep re se nt at iv es . W as hi ng to n, D.C.

D ear Mr. Ch a ir m a n : Ref er en ce is m ad e to yo ur re ques t fo r th e view s of th is 

D epart m ent on H.R . 4994, “t o am en d th e T ex ti le Fib er Pro du ct s Id en tifica tion 

A ct a nd t h e W ool Pro duct s Lab elin g Ac t of 1939 in ord er to re quir e th a t im po rte d 

wo ven la be ls m ust h av e wo ven in to th em th e na me of t he c ount ry w he re w ov en .”

The pr op os ed le gi sl at io n wou ld pr ov id e th a t im po rted woven la be ls sh al l be 

m isla be le d fo r th e pu rim se s of th e T exti le F ib er Pro duct s Id en tifi ca tion Act an d 

th e W ool P ro ducts Lab elin g Act. u nl es s th e n am e of the c ountr y w her e such lab el 

w as w ov en is wov en in to th e lab el be fo re i m por ta tion. W hi le t he F ed er al T ra de 

Com miss ion is re sp on sibl e fo r en fo rc in g th e T ex tile F ib er P ro duct s Id en tifica tion 

Act and th e Wool P ro duct s Lab elin g Ac t, th e b ill wo uld see m to pr ov id e th a t th e 

Cus toms Se rv ic e ha ve th e re sp on si bility to see th a t im po rted wo ven labe ls are 

m ark ed as re qu ired .

The B ure au of Cu sto ms of th is D epart m ent has ru le d th a t th e m anufa ctu re r 

in th e U ni te d S ta te s of a rt ic le s to which wo ven labe ls a re affix ed is th e “u lt im ate 

pu rc h aser” of th e im po rted art ic le w ithin th e mea ni ng of se ction 304(a ) of th e 

T ari ff Act of 1930. as am en de d, in ac co rd an ce w ith th e pr in ci ple of th e decis ion 

in th e ca se of United Sta te s v. Gibso n- Th om se n Co., In c. (19 40) 27 CC PA 267. 

W ov en la be ls a re ex em pt from in div id ual m ar kin g to in dic at e th e co un try of 

or ig in under section 3 0 4 (a )(3 )(D ) of th e T ari ff Act if th ey a re im po rted in 

conta in ers leg ibly an d co ns picu ou sly m ar ked to in dic at e th e co unt ry of or ig in 

of th e co nte nts an d th e co lle ctor of c us to m s a t th e p o rt o f entr y is sa tisf ie d th a t 

th e la be ls will re ac h th e “u lt im ate p u rc h ase r” in su ch un op en ed co nt ai ner .

No ev iden ce h as been su bm itte d to th e T re asu ry D epar tm en t th a t th e ex ce pt ion 

from m ark in g of woven labe ls under section 304(a ) (3 ) (D ) of th e T ari ff Ac t is 

not ap p ro p ri ate or has re su lted in m is le ad in g th e U.S . “u lt im ate purc hase r” as 

defin ed above. If a va lid ca se is to be mad e, it sh ou ld be mad e, in th e firs t 

in st an ce , to th e T re asu ry D ep ar tm en t.

As th e P re si dent sa id a t th e tim e of th e sign in g of th e T ra d e Exp an sion Act 

on Octob er 11, 1962, th e bes t pro te ct io n po ss ible fo r our econom y is a m utu al 

lo w er in g of ta ri ff b arr ie rs am on g fr ie ndly nat io ns so th a t al l m ay be ne fit fro m 

a fr ee flow of goo ds. T his pu rp os e wou ld be co mprom ise d if th e U nited Sta te s 

w er e to re so rt t o in dir ec t metho ds (s uc h as unn ec es sa ry m ark in g re quirem en ts ) 

fo r re str ic ti o n of im po rts. The T re asu ry D ep ar tm en t, th er ef ore , does not fa vor 

th e enactm ent o f H .R. 4994.

The D epart m ent has been ad vi se d by th e B ure au o f th e B udget t h a t th ere is no 

ob ject io n from th e st andpoin t of th e adm in is tr ati on’s p ro gra m to th e su bm iss ion 

of th is r ep o rt to you r c om mittee .

Sin ce re ly yo ur s,

G. d’And elot B e l in ,

Gen eral Counsel.

E xec uti ve Offic e of t ii e P res id en t,

B ure au of t iie B ud ge t, 

W as hi ng to n, D.C., Nov em be r 7, 1963. Hon . Oren H arris ,

Cha irm an , Com m itt ee on In te rs ta te an d For eign Comm erc e,

Hou se o f R ep re se nt at iv es ,

W as hi ngt on, D.C.

D ea r Mr. Ch a ir m a n : Thi s re fe rs to your re ques t of A pr il 22, 1963, fo r com ­

m en ts on H.R . 5662, a bi ll “t o pro hib it th e in tr oduct io n in to in te rs ta te co mm erc e
M IS CEL LANEOUS LABEL IN G BIL LS 7

of an y sh ip pi ng co nta in er m anufa ctu re d in th e U nited S ta te s fr om im port ed 

stee l un less th e co nta in er is m ar ke d so as to in dic ate th e co un try of or ig in of 

th e st ee l.”

H.R. 5662 wou ld re quir e th a t an y stee l sh ip pi ng co nt ai ne rs , as defin ed in th e 

hil l, m anufa ctu re d from im por te d stee l, he st am ped w ith th e co untr y or or ig in 

of th e stee l. The m an u fa ctu re rs of su ch conta in ers wou ld he re qu ired to m ain ­

ta in re co rd s sh ow ing th e or ig in of th e st ee l used . The Fed er al T ra de Co mm issio n wou ld be em po wer ed to en fo rc e th e pr op os ed act an d to as se ss cri m in al 

pe na ltie s.

The D epar tm en ts of Sta te . T re asu ry , Ju st ic e, an d Comm erc e, an d th e F edera l 

T ra de C om miss ion hav e all oppo sed II.R . 5662 in th e ir r eport s to y ou r co mmitt ee . 

The B ure au o f th e B ud ge t co nc ur s in th e co mm en ts mad e by th e abov e ag en cies, 

and ac co rd in gly reco m men ds agai nst enac tm en t of th e hill.

Sincerely yo ur s,

**»., P h il l ip S. Hug hes,

A ss is ta n t D irec to r fo r Leg is la tive Ref er en ce .

D epa rtm en t of Sta te , 

W as hi ng to n, N ov em be r 5, 1963.

Ho n. Oren H ar ris,

Cha irm an , C om m itte e on In te rsta te an d Fo reign Co mm erc e,

Hou se o f R ep re se nta tive s.

Dear Mr. Ch a ir m a n: T hi s re port on H.R. 5662, a bil l to pro hib it th e in tr o ­

du ct io n in to in te rs ta te co mmerce of an y sh ip pi ng co nta in er m anufa ctu re d in 

th e U ni te d S ta te s fr om im po rted stee l unl es s th e co nta in er is m ar ke d so as to 

in dic ate th e co untr y of origi n of th e stee l, is su bm itte d in re sp on se to you r 

le tt e r of A pr il 22, 1963.

T hi s bi ll wou ld dec la re it to be an u n fa ir an d de ce pt ive act o r pra cti ce in 

co mmerce under th e Fed er al T ra de Co mmiss ion Ac t to in tr odu ce in to in te rsta te co mmerce an y st ee l sh ip pi ng conta in er as defin ed in th e hi ll te. g., st ee l 

dru m s an d pai ls ) if m ad e in who le or in ch ief va lu e fr om im po rted st ee l un le ss 

su ch conta in er he ar s a stam p, w ith le tt ers a t le ast on e- fo ur th inch in he ig ht, 

sh ow ing th e co unt ry of origi n of th e im po rted stee l. M anufa ctu re rs of st ee l 

sh ip pi ng co nta in er s wou ld be re qui re d to m ain ta in re co rd s sh ow ing th e or ig in 

of all stee l us ed fo r conta in ers an d to pre se rv e th e re co rd s fo r a t le ast 3 yea rs . 

W illf ul vi ol at or s of th es e re quir em en ts wou ld be su bje ct to a m ax im um pen al ty 

of $5,000 fine or im pr is on m en t up to 1 yea r.

The pu rp os e of H.R. 5662, as in di ca te d by sp on so rs of th e bill, is to pr om ot e 

th e us e of do m es tica lly pr od uc ed stee l in th e m anufa ctu re of sh ip pin g c onta in ers 

an d to di sc ou ra ge th e us e of im po rted stee l in su ch m anufa ct ure s. The pr opo sed le gi sl at io n is th ere fo re in te nd ed to be re str ic ti v e of fo re ig n tr ad e. The 

re du ct io n of b a rr ie rs and hin dra nce s to tr ad e is a m ajo r fo re ig n po lic y ob ject iv e 

of th e U ni te d Sta te s. P ro gre ss to w ar d th is ob ject ive is es pe ci al ly im p o rt an t 

in view of our pre se nt ba lanc e- of -p ay m en ts difficu lties and th e reco gn ized ne ed 

to ex pa nd our ow n co mm ercial ex po rts. Ac tio n on our p a rt th a t has a re str ic ­

tive eff ect up on export s of oth er co untr ie s is in co nsi st en t w ith our de clar ed 

ob ject iv e an d co uld re adil y const itute a basi s fo r si m il arl y re str ic ti v e act io n by 

o th er co un trie s.

The ex pa ns io n of in te rn ati o n al tr ad e as a fu ndam en ta l ob je ct iv e of th e U ni te d 

S ta te s is cl ea rly ex pre ss ed in th e T ra d e E xpan si on Ac t of 1962, as it w as in 

th e pr ec ed in g T ra d e A gr ee m en ts Act. U nd er th e la tt e r ac t. th is G ov er nm en t 

en te re d in to agre em en ts w ith cert ain co untr ie s bin din g ag ain st in cre ase th e 

ex is ting duties on sh ee t stee l. R es tr ic ti ve m ea su re s of th e so rt prop os ed in 

H.R. 5662 wou ld re du ce th e ad van ta ges which th os e co untr ie s obta in ed from 

th os e tr ad e ag re em en ts . I t wou ld re du ce thos e advanta ges be ca us e of th e 

ad de d ex pe ns e an d tr ouble of ap pl yi ng th e re quir ed m ark s of or ig in, be ca us e th e 

he av y pen al ties pre sc ribe d wou ld like ly ca us e m an u fa ctu re rs of sh ip pi ng conta in ers to re fr ain fr om purc has in g fo re ig n stee l, an d be ca us e th e m ark s of 

or ig in wou ld te nd to fo cu s pre ju dic e ag ain st th e m ark ed conta in er s and ca us e 

pr os pe ctiv e purc hase rs to re fr ain from purc hasi ng conta in er s m ad e from 

im po rted stee l. The ad op tion by th e U ni te d S ta te s of su ch re st ri cti ve m ea su re s 

could he ex pe cted to have an ad ve rs e effect up on th e cl im at e fo r th e ne w tr ad e 

ne got ia tion s under th e T ra d e Exp an si on Ac t.

H er et of or e, re quir em ents as to m ar ks of origi n h ave be en im po sed under U.S . 

la w fo r th e m os t p a rt up on art ic le s pr od uc ed ab ro ad . H.R . 5662 go es muc h
8 MISCELLANEOUS LABELING BILLS

furth er, however, and proposes to impose a markin g requirem ent because of the 

use in a product man ufactured in the United States of a material produced 

abroad. This bill, if enacted, would set a very troublesome precedent. If the 

rule were imposed generally that U.S. prod ucts must he labeled to indicate the 

place of origin of a ll of the foreig n ma terials used, the task of labeling for many 

manufac turers (of automobiles, for exam ple) would be an extre mely onerous 

one.

For the reasons outlined above, the Department of Sta te is opposed to the 

enactment of H.R. 5662.

The Bureau of the Budget advises th at from the standpoi nt of the administra tio n’s program there is no objection to the submission of t his report.

Sincerely yours,

Frederick G. Dutton,

Assistan t Secreta ry

(F or the Secretary of State).

General Counsel of th e Department of Commerce,

Washington, D.C., November 5, 1963. Hon. Oren Harris,

Chairman, Committee on In ter sta te and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Chairma n : This is in fu rth er reply to your request for the views of 

this D epartment with respect to H.R. 5662, a bill to prohibit the introdu ctio n into 

intersta te commerce of any shipping con tainer man ufactured in the United 

Sta tes from imported steel unless the con tain er is marked so as to indicate the 

country of origin of the steel.

The Steel Shipping Containe r Iden tific ation Act, as it is called, would requ ire 

all steel drums and pails (as defined in the bill) manufactured in the United 

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

Every manuf acturer of such contain ers mu st maintain proper records showing 

the origin of the steel used in all the steel shipping containers made by him.

The Federal Tra de Commission would be empowered to enforce the act and to 

assess the app ropriate penalties for its violation. Provision is made for the 

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

container. Willful failure to comply would be punishable by a fine of not more tha n $5,OCX) or imprisonment up to 1 year.

The Department of Commerce sup ports the long-established requiremen t now 

embodied in section 304 of the Tariff Act of 1930 that, recognizing certa in exceptions, each imported article produced abroad must be legibly marked with the 

name of the country of origin in English so as to indicate to the ult im ate purcha ser in the United States where the artic le was originally produced or manufactured. Although H.R. 5662 does not specifically amend the T ariff Act of 1930, 

it has the indirect effect of redefining the “ult imate purcha ser” as understood 

by the act. Broadly stated, an ult imate purch ase r may be defined as the last 

person in the United States who will receive the article in the form in which it 

was imported. In the case of imported art icl es used in manufacture, the manufac tur er is rega rded as the ultimate p urchaser.

In accordance with U.S. customs laws, bundles or coils of foreig n sheet steel 

are marked to indicate the country of origin. Similarly, imports of fabricated 

or man ufactured steel products that are to be sold at retail require a marking, 

since the ultimate purchaser is the p urc has er at reta il.

To go fu rthe r than the present law. and to requ ire that any shipping container 

manuf actured in the United Sta tes from imported steel be marked with the 

country of origin, appears to be unnecessary. Such a requ irem ent would be 

inconsistent with the spirit of section 304 of the Tariff Act of 1930. It is also 

inconsistent with the adm inistration’s policy of striving to reduce impediments 

to intern ational trade.

For these reasons, the Dep artm ent of Commerce recommends again st the 

enactment of II.R. 5662.

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

objection to the submission of t his rep ort from the stand point of the adminis tration’s program.

Sincerely,

L awre nc e J ones,

Acting General Counsel.
MISCELLANEOUS LABELING BILLS 9

F ederal Trade Com mission , 

Washington, Novem ber 4, 1963.

Hon . Oren Harris,

Chairman, Comm ittee on Interstate and Foreign Commerce, House of Representative s, Washington, D.C.

Dear Mr. C hairm an : This is in reply to your let ter of April 22, 1963, requesting the Fed eral Tra de Commission to comment on H.R. 5662, 88th Congress, 1st 

session, a bill to prohibit the introduction into interstate commerce of any shipping container manuf actured in the United States from imported steel unless 

the co ntainer is marked so as to indicate the cou ntry of origin of the steel.

The bill would make i t an unfai r method of competition and a deceptive act or 

practic e in commerce und er the Fed eral Trade Commission Act for a man ufac ­

tu re r of steel shipping con tain ers to introduce them into commerce when the 

“con tain er is manufactured in the United States in whole or in chief value from 

steel made outside the United Sta tes,” unless the container is properly marked to 

indicate th at the steel is of foreign origin. The bill contains specific definitions 

of a “shipping c ontainer.”

The bill also makes it a violation of the Feder al Trade Commission Act to 

chang e or re-ma rk such markin g f or the purpose of hindering or preventing o ther 

persons from obta ining the info rmation given by such mark. Records showing 

the origin of the steel so used would be required to be k ept by m anufa ctu rers of 

such steel shipping co ntaine rs; the failur e to do so would con stitute violation s 

identical to those above mentioned.

The bill fu rth er provides for the imposition of cer tain sanctions, inclu ding 

crim inal penalties, for violations there of.

The Commission is of the view th at existing provisions of law, as construed 

and applied by the Commission and the courts, are adequate to protect consumers again st material deceptions concerning the place of origin of impo rted 

merchandise.

In respe ct to the foreig n policy questions rais ed by thi s proposed legislation, 

the Commission defers to the views expressed by the Department of State.

Commissioner Anderson diss ents from the expressions herein, and favors enactment of the subject bill.

By directio n of the Commission.

P aul Rand Dixon, Chairman.

N.B.—Purs uant to regulations, this rep ort was subm itted to the Bureau of 

the Budget on Ju ly 16, 1963. and on November 1, 1963. th e Burea u of the Budget 

advised th at the re is no objection to the submission of this report from the 

sta ndp oin t of the admi nis tratio n’s program.

J osep h W. She a, Secretary .

The General Counsel of th e Treasury,

Washington, D.C., November 1963.

Hon. Oren Harris,

Chairman, Comm ittee on Inter sta te and Foreign Commerce,

House of Repre sentatives, Washington, D.C.

Dear Mr. Chairma n : Reference is made to your requ est for the views of this 

Departme nt on H.R. 5662. to prohibit the introduction into inter sta te commerce of any shipping con tainer manufactured in the United States from imported steel unless the c ontainer is marke d so as to indicate the country of origin 

of th e steel.

The proposed legislation is inten ded to require that the name of the country 

of origin be marked on shipping containe rs manufactured in the United States 

from imported steel.

Since the bill is concerned with articles which are manufactured in the United 

States, the Dep artm ent has no enforcement jurisdic tion. Ra the r the enforcement of the bill would be vested in the Federal Tra de Commission.

Imported articles which are used by manuf acturers in the United States in 

the manufacture of new or differen t articles are excepted from marking, und er 

the customs laws, to indicate the country of origin, if imported under circumstan ces which will assure th at the ma nufac turer is aw are of the country of 

origin of the imported materials, and there is no requirem ent und er the custom s 

laws that the new articles be marked to indicate the foreign origin of the ma
10 MISCELLANEOUS LABELING BILLS

te ri al fr om which th ey are prod uc ed . To re quir e th a t sh ip pi ng co nta in ers 

m an ufa ct ure d in th e United S ta te s from im po rted stee l be m ar ked to in dic at e th e 

co un try of or ig in of th e stee l wo uld th us appear to dis cr im in at e ag ain st m an ufa ctu re rs of s hi pp in g co nta in er s wh o us e i m po rted st ee l.

The D epar tm en t wo uld he op po sed to th e pa ss ag e of H.R. 5662. The bill is 

ap pare ntl y d esig ne d to d isco ur ag e th e purc has e of c onta in er s m ad e fr om i m po rted 

stee l. It is our op inion th a t th is wo uld co nst it ute a tr ad e b arr ie r of th e kin d 

in co nsi st en t w ith t he a dm in is tr ati on’s po lic y of tr ad e e xp an sion an d wou ld hin der 

ef fo rts to se cu re re li ef fo r U.S. ex po rt s fr om fo re ign nonta ri ff tr ad e barr ie rs . 

F urt her, it is be lie ved th a t sp ec ia l le gis la tion is un ne ce ss ar y in th a t re li ef in 

th e form of tr ad e re st ri cti ons and adju st m ent as si st an ce is avai la ble to a dis ­

tres se d do mes tic i ndust ry u nder t he T ra de Exp an si on A ct.

The D ep ar tm en t ha s bee n ad vi se d by th e B ur ea u o f th e Bud ge t th a t th ere is no 

ob jection from th e st an dpoin t of th e ad m in is tr ati o n ’s pr ogra m to th e su bm ission 

of t his re port t o y our co mm ittee.

Since re ly yo urs,

G. d’Andelot Belin ,

General Counsel.

U.S . Depa rtme nt of J us tice,

Off ice of th e D eput y Attorney General,

Washington, D.C., November 1963.

lion. Oren H ar ris,

Chairman, Committe e on Inte rstate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. C ha ir man : Thi s is in re sp on se to your re qu es t fo r th e view s of th e 

D ep ar tm en t of Ju sti ce co nc erni ng th e id en tica l bills (I I.R. 5662, H.R . 5673 an d 

H.R. 5675 ) “t o pro hib it th e in tr oduct io n in to in te rs ta te co mm erc e of an y sh ip ­

ping co nta in er m an ufa ctu re d in th e U ni te d S ta te s from im po rted stee l un less 

th e co nta in er is m ar ked so as to in di ca te th e co un try of or ig in of th e stee l.”

The se b ills wou ld pr ohi bi t th e in tr odu ct io n in to in te rs ta te or fo re ig n comm erc e 

of st ee l dru m s or pa ils , of a ce rt ain size, m an ufa ct ure d in th e U ni te d Sta te s, in 

who le or in ch ie f va lue , from im po rted stee l, un less th ey are m ar ke d to in di ca te 

th e co un tr y of or ig in of th e stee l. The y wo uld lik ew ise pr oh ib it th e ob sc ur ing 

or dest ro yi ng of a ny s uc h m ar k w ith th e pu rp os e of hin de ring o r pre ve nting o th er 

pe rs on s fr om ob ta in in g th e in fo rm at io n give n by th e m ar k. M an ufa ctu re rs of 

su ch conta in er s wou ld be re qui re d to ke ep re co rd s fo r a t le ast 3 year s show ing 

th e or ig in of th e ste el. A w ill fu l vi ol atio n of th e pro po sed law wo uld co nst itut e 

a m isde m ea no r, pu ni sh ab le by a fine of up to $5,000 an d /o r a max im um ja il 

se nt en ce of 1 ye ar . F urt her, no nc om pl ianc e w ith th e pro hi bi tion s of section 3 

an d th e re qu ir em en ts of section 4 are ch ara cte ri zed as u n fa ir co m pe tition an d 

u n fa ir tra de pr ac tice s un de r th e Fed er al T ra de Co mm iss ion Act.

Se cti on 304 of th e Tar if f Act of 1030 (10 U.S.C. 1304) im po ses th e dut y of 

m ar kin g ev er y rea d.v -to-sell art ic le of fo re ig n or ig in im po rte d in to th e United 

S ta te s in su ch m an ner as to in dic at e to an ultim ate purc has er in th e United 

S ta te s th e E ng lish na m e of th e co un try of origin. In ad di tion , th ere a re la w s re ­

qu ir in g t h a t a p a rt of an im po rted ar ti cle o r do mestic a rt ic le be m ar ked to in fo rm 

th e co ns um er of qu al ity. (See , fo r ex am pl e Pu blic La w K7-354, ap pr ov ed 

Octo be r 4, 1961, an ac t “to fa cil it ate th e pr ot ec tion of co ns um ers of ar ti cle s of 

m er ch an di se comp osed in who le or in p a rt of gold or silv er fr om fr au d u le n t m isre pre se nta ti on co nc erni ng th e quali ty th er eo f, an d fo r oth er pu rp ose s.” ) How ­

ev er . we are aw are o f no pr ov isio n of ex is ting law which pr es cr ib es th e mar ki ng , 

as wo uld be re qui re d by th es e bills , of an art ic le m an ufa ctu re d in th e United 

S ta te s from im po rted m at er ia l. In do ing so, th e b ill s wo uld pl ac e up on th e m an ­

u fa ctu re rs of cer ta in stee l conta in er s th e bur de n an d ex pe ns e of m ar kin g th e 

conta in er s and ke ep ing books under pai n of cr im in al pe na lties, w hi le th e m an ufa ctu re rs of oth er co nt ai ne rs an d oth er pro duc ts mad e from im po rted m at er ia ls 

wou ld no t he so bu rden ed . In th e ab se nc e of an y in fo rm at io n dem onst ra ting the 

ne ed fo r su ch di st in ct iv e tr eatm ent, th e D ep art m ent of Ju st ic e is una ble to recom men d en ac tm en t of th is le gi sl at io n.

The B ure au of th e Bud ge t has ad vi se d th a t th ere is no ob jection to th e su bm ission of th is re port fro m th e st andpoin t of th e adm in is tr ati o n ’s pr og ra m . 

Sin ce re ly yo urs,

Nicho las deB. Kat zenb ac h,

Deputy Atto rney General.
MISCELLANEOUS LABELING BILLS 11

Mr. Staggers. Our first witness this morning will lx? our colleague, 

the Honorable Kenneth Roberts of Alabama.

Mr. Roberts.

STATEMENT OF HON. KEN NET H A. ROBERTS, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF ALABAMA

Mr. Roberts. Mr. Chairman, I appreciate the opportunity of appearing before the subcommittee today in support of II.R. 5673 which 

I introduced, and II.R. 5662 and 5675 introduced by my colleagues, 

Air. Curtin, a member of this sulicommittee, and Mr. Rostenkowski, 

also a member of the full committee.

These identical bills would prohibit the introduction into interstate 

commerce 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 broad objectives, namely, (1) 

to permit the buyers 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.

Through 1957, the United States exported substantially more steel 

than it imported. However, in the period 1958-62, imports of steel 

into the United States nearly tripled in volume, rising to 9 percent 

of world imports, compared to 4 percent in the earlier period.

Thus, whereas world trade in steel mill products continued to increase throughout the period, reaching 44 million tons in 1962— 

nearly triple the 1950 volume—U.S. exports have tended to stagnate 

at approximately 2 million tons, and U.S. imports to rise to a level 

of above 4 million tons per year. In fact, for 1963, imports are 

expected to exceed 5 million tons for the first time.

The fact that this country has changed from a net exporter to a 

net importer of steel mill products has had an adverse effect on our 

balance of payments and employment in steel and related industries.

It has been estimated that if the American steel industry had 

maintained its 1953-57 average participation in world export trade, 

and had prevented further erosion of its markets by imports, the industry in 1962 alone would have provided employment for an additional 50,000 workers and paid out over $350 million in wages and 

salaries.

The unfavorable imbalance in our steel exports and imports stems 

from competitive factors which show little promise of diminishing 

in the years immediately ahead.

The current trend, in fact, will probably accelerate. The differences in employment costs, ta r’ff structures, nontariff trade carriers 

and export subsidies, credit costs, and governmental regulatory policies in this and other countries of the world present obstacles to the 

domestic steel industry which are extremely difficult for it to overcome in its battle for consumer markets.

I am advised that the steel shipping container industry is second 

only to the automotive industry in consumpt ion of sheet steel in the
12 MISCELLANEOUS LABELING BILLS

United States. In a typical year, manufacturers of such containers 

consume in exeess of 1 million tons of steel. Price competition within the industry is severe. Manufacturers utilizing imported steel can 

substantially undercut in price those of their competitors who support 

to a large extent the basic domestic steel markets.

It seems clear to me from the information available tha t this poses 

a grave threat to not only these industries, but to our economy as well. 

In my opinion, 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.

The Steel Shipping Container Identification Act would, I believe, 

provide an indirect incentive of this nature, fo r the following reasons.

Section 304(a) of the Tariff Act of 1930, as amended, requires— 

subject to certain exceptions—that every article of foreign origin—or 

its container—imported into the United States be plainly marked so 

as to indicate to the ultimate purchaser in the United States the name 

of the country of origin.

For the purposes of the act, the “ultimate purchaser” is ordinarily 

viewed as the last person in the United States who will receive the 

article in the form in which it was imported.

Since the manufacturer of steel shipping containers is the “ultimate 

purchaser” of the steel in the form in which it is imported, he must 

ordinarily be put on notice of the country of origin of the steel.

However, there is no requirement that the manufacturer in turn 

mark the steel containers so as to convey this information to the purchasers of such containers. The Steel Shipping Container Identification Act would require the manufacturer to provide this information for the benefit of those customers to whom such information is 

pertinent in exercising the ir freedom of choice.

This legislation would in no way affect tariff rates or other customs 

regulations. The act provides that a violation of its provisions constitutes an unfair method of competition and an unfair and deceptive act 

or practice in commerce under the Federal Trade Commission Act.

Enforcement is therefore lodged with the Federal Trade Commission, which is equipped to administer other legislation requiring the 

labeling of certain products.

You gentlemen on the committee of course are familiar with the 

Textile Fiber Products Identification Act, the Fu r Products Label Act, 

and the Wool Products Labeling Act.

While I might, say tha t these acts are not certainly identical, and 

steel, as we recognize, is of course a homogeneous product and differs, 

therefore, from the products covered in those three bills, the incentive 

provision I think in this legislation is quite the same and I believe that 

in this way we could protect our own economy and our own industry,, 

and certainly our own workers.

Thank you, Mr. Chairman.

Mr. Staggers. Thank you, Mr. Roberts.

Any questions, Mr. Van Deerlin ?

Mr. Van Deerlin. No thank you, Mr. Chairman.

Mr. Staggers. Mr. Glenn?

Mr. Glenn. No questions, Mr. Chairman.

Mr. Staggers. Mr. Curtin.

Mr. Curtin. Thank you, Mr. Chairman.
MISCELLANEOUS LABELING BILLS 13

I am most happy to have Mr. Roberts as an ally in this legislation 

and I feel that the need for it is shown by the fact that three of the 

members of this committee have introduced bills for it. 1 think this 

is important and 1 think tha t Mr. Roberts has very forcefully shown 

the reason and need for it.

Thank you, Mr. Roberts, for appearing before us today.

Mr. Roberts. Thank you, Mr. Curtin.

Mr. Staggers. I want to ask you one question, if I may.

Your State produces steel and manufactures steel ?

Mr. Roberts. Yes.

Mr. Staggers. And this does affect the economy of your State?

Mr. Roberts. Yes.

Mr. Staggers. As well as many other States in the Union ?

Mr. Roberts. I would say yes.

Mr. Staggers. This only carries out the provision tha t perhaps is 

identified, as you say, in the Wool Products Labeling Act and other 

acts?

Mr. Roberts. It is a similar provision, Mr. Chairman.

Mr. Staggers. I congratulate the gentleman from Alabama in being 

diligent in his duties in looking out fo r not only his constituents, but 

for other people of our country.

Thank you for your testimony.

Mr. Roberts. Thank you, Mr. Chairman.

Mr. Staggers. We have our colleague, Mr. Curtin, with us, should 

he care now to give us the benefit of his view’s on this bill. It is an 

honor to have you testify, not only as a representative of your people, 

but as a member of our committee. We are glad to hear from you 

today.

Mr. Curtin. Thank you, Mr. Chairman.

STATEMENT OF HON. WILLARD S. CURTIN, A REPRES ENT ATIVE IN 

CONGRESS PROM THE STATE OF PENNSYLV ANIA

Mr. Chairman and gentlemen of the subcommittee, I welcome this 

opportunity to appear before you today in reference to the legislation 

which has been introduced for the identification of steel shipping contain Pl'S.

As you know’, H.R. 5662, introduced by myself, is one of three 

similar bills. Bills have also been introduced by two other members 

of this important committee; the Honorable Kenneth A. Roberts has 

introduced II.R. 5673, and the Honorable Dan Rostenkowski has 

introduced H.R. 5675. As mentioned above, all of these bills are on 

this subject of labeling of steel containers.

H.R. 5662 was introduced for two basic purposes: First, to promote 

the continued use of domestic steel to the end that American industry 

and labor will not suffer the loss of dollars and man-hours caused by 

the use of foreign steel in the fabrication of steel drums and pails.

Second, to assist the manufacturers 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 undersell the user 

of American steel without having to disclose that the price differential 

is not due to superior technology and know-how—but simply cfrte to 

his using foreign steel in drums and pails to be sold to dom^fejc 

purchasers.

27- 208— 64- 3
14 MISCELLANEOUS LABELING BILLS

To accomplish these goals, we do not propose to raise tariffs or 

arbitrarily exclude foreign steels—we merely want to inform the pu rchaser of steel drums and pails and let him make his decision based 

upon all the facts and considerations which provide the basis for a 

business decision as to what drums and pails he'll buy.

The act would require that the manufacturers of steel shipping containers from foreign steel indicate the country of origin of the steel on 

the container. It has been suggested th at, rather than merely stamping this information on the container, it should be embossed thereon— 

this would minimize the risks of destruction or concealment of the 

marking.

The act would authorize the Federal Trade Commission to enforce 

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

be an unfair trade practice. The Federal Trade Commission is pa rticularly suited for the administration and enforcement of this act 

because it is generally similar to other labeling acts under its authority.

In addition, since the marking will take place afte r the containers 

have been fabricated from the imported steel, the Federal Trade Commission, with its nationwide network of offices, is best suited at present 

to enforce such an act.

The public must be able to use American-made steel products if it 

wishes. This bill leaves the choice entirely up to the private sector of 

the economy. This measure cannot lx* called an act discriminating 

against, or restricting, foreign trade, or imported products. It is like 

the description of ingredients on food and drug containers—the purpose of the law is information.

The present level of production among American steel producers 

adds to the urgency of the present position. Unemployed steelworkers 

and hard-pressed manufacturers caught in the cost-price squeeze must 

be adequately protected through the efforts of other citizens to spur a 

demand for their product.

This is not a restraint of free trade. The public still makes the 

decision—hut with this legislation, a concerned public will have the 

information so that it may make a meaningful decision.

I thank you for your attention and respectfully request that the 

legislation represented by these three bills be given early and favorable consideration by this subcommittee.

Mr. Staggers. Thank you, Mr. Curtin.

Mr. Van Deerlin ?

Mr. Van Deerlin. No questions, Mr. Chairman.

Mr. Staggers. Mr. Glenn?

Mr. Glenn. Just one question. Mr. Curtin.

How serious is the impo rtation of foreign steel in your area ?

Mr. Curtin. It is a real problem, Mr. Glenn. I know something of 

the problem because, in my district, I find tha t the cost of bringing 

foreign steel into this country is such tha t it creates unfair competition with the local steel mills. Our local mills—and I have a very 

large steel mill in my district, th e Fairless plant, as well as many constituents who work in the Bethlehem Steel plan t in Bethlehem, Pa., 

which is adjacent to my d istrict—are really caught in this competition 

problem because they just cannot produce steel in this country to meet 

the competition of steel made in foreign countries.

Mr. Glenn. Thank you, Mr. Chairman.
MISCELLANEOUS LABELING BILLS 15

Mr. Staggers. Mr. Curtin, I will ask you, as I did Mr. Roberts, if 

your State is a producer of steel.

Mr. Curtin. Very much so.

Mr. Staggers. 1 imagine, in fact, it is one of the foremost steel 

producing or steel m anufacturing States in the Union?

Mr. Curtin. I think that is true.

Mr. Staggers. And steel is one of the fundamental industries of 

America.

Mr. Curtin. That is correct, sir.

Mr. Staggers. As 1 understand your testimony, you are not advocating raising tariffs or taking any other action which would reduce 

the flow of imported steel or restrict trade with the steel producers. 

You want only to provide that the American consumer knows where 

the steel comes from.

Mr. Curtin. That is right, sir.

Mr. Staggers. That is not in any way to prohibit the steel from 

coming in, but only to provide that the American citizen will know 

what he is buying.

Mr. Curtin. That is correct. It in no way restricts the right of 

a person to buy steel from a foreign country if he so desires, but it 

does say that the ultimate consumer should know where that steel 

is from and let him make the final decision.

Mr. Staggers. This has nothing to do with tariffs, restrictions of 

trade, or anything like that.

Mr. Curtin. That is right , sir.

Mr. Staggers. Fine. I want to compliment you also for your testimony on behalf of your constituents affiliated with one of the basic 

industries of America.

Thank you, Mr. Curtin.

Mr. Curtin. Thank you, sir.

Mr. Staggers. The next witness is another colleague on the entire 

committee, the Honorable Dan Rostenkowski of Illinois. Mr. Rostenkowski, we will be glad to hear you at this time.

STATEMENT OF HON. DAN ROSTENKOWSKI, A REPRES ENT ATIVE 

IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. Rostenkowski. Mr. Chairman, I appreciate this opportunity 

to appear before your committee in support of my bill, II.R. 5675, 

and smilar legislation, which may be cited as the Steel Sh ipping Containe r Identification Act. The purpose of this bill is to prohibit the 

introduction into interstate commerce of any shipping container m anufactured in the United States from imported steel unless the container is marked so as to indicate the country of origin of the steel. 

Section 3 (a) states:

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 manufacturer of steel shipping containers to introduce any 

such container into commerce, directly or indirectly, 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 stamped thereon in letters not less than one-fourth of an inch in height the legend “Steel used in the 

manufacture of this was made in —
16 MISCELLANEOUS LABELING BILLS

with the first blank space being filled with the appropriate designation 

of the container, and the second blank space being filled with the 

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

Presently there are some manufacturers using imported steel in 

the manufacture of steel containers. Because of a differential in the 

cost of producing steel in this country as compared to foreign markets, 

the price for steel used in manufacturing containers creates unfair 

competition in the sale of the finished product. Manufacturers using 

foreign steel can undersell a manufacturer using steel produced in 

the United States. The Steel Container Institute, Inc., has sought 

relief from both the Bureau of Customs and the Federal Trade Commission to have foreign steel labeled as to the source of production. 

However, they discovered that, under present law, containers made 

in the United States from steel imported from foreign countries need 

not indicate the origin of the foreign steel. This bill would require 

labeling containers made with foreign steel. In no way does it control 

prices of steel. Congress has already enacted legislation to specifically 

authorize the Federal Trade Commission to require labeling in specific 

industries; namely, furs, woolen goods and textile fibers. This bill 

acts in the same way; therefore, T request it be favorably considered 

at this time.

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

your appearance and testimony, Mr. Bostenkowski.

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

Mr. Staggers. The next witness will be Mr. Livingston Keplinger.

Mr. Keplinger, I understand you reside in Mr. Curtin's district so 

we will let Mr. Curtin welcome you.

Mr. Curtin. Mr. Keplinger, we are very happy to have you before 

this subcommittee today. T am particularly pleased to welcome you 

since you live in our fine Eighth Congressional District of Pennsylvania. You are a very representative member of the citizenry of that 

district and so it is a real pleasure to have you appear before us today 

and give us the benefit of your views in reference to this legislation.

STATEMENT OF LIVINGSTON KEPLINGER, PRESIDENT OF THE 

STEEL SHIPPING CONTAINER INSTITUTE, INC.

Mr. Keplinger. Thank you, Mr. Curtin and Mr. Chairman, and 

gentlemen.

T am Livingston Keplinger, president of the Steel Shipping Container In stitute, Inc. I am appearing today on behalf of the institute 

to strongly endorse the Steel Shipping Container Identification Act.

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 United States.

It should be emphasized at the outset that the institute has a wide 

diversity in the size of its members. Of particular significance with 

respect to the present bill is the fact that only four of our members 

are owned by major basic steel companies; thus, the great majority of 

our members are independent purchasers of steel sheets used to manufacture steel shipping containers.

Indeed, the largest national multipla nt operation is an independent 

company whose stock is listed on the New York Stock Exchange.
MISCELLANEOUS LABELING BILLS 17

Th e products of the steel sh ipping conta iner indu str y are “dru ms” 

an d “p ails” used prim ar ily in t rans po rta tio n. A “d ru m" is defined by 

the Dep artm en t of Comm erce as any single walled co nta iner or bilged 

co nta iner of 13 to 110 gal lons’ capacity constru cte d o f steel sheet inclu ­

sive of all gages.

A “p ai l” is likewise defined as any steel sh ippi ng pac kag e with or 

wi thou t bail and handle, ha ving a capacit y of 1 to 12 gallons, inc lusive, constructed of steel sheet 29 gage or heav ier.

Th e estim ate d annu al cap aci ty of the indu str y is 60 million heavy 

drum s, 20 m illion lig ht d rum s, and 125 m illion pails. I t is estimated 

th at peak opera tio n of the steel shipping co nta iner indu str y would 

req uir e 3 millio n ton s of steel annually. For reasons whi ch will be 

dev elop ed in due course, the pro duction of steel sh ipping conta ine rs 

ha s been su bs tan tia lly less tha n full c apacity.

Th e Steel Sh ip pi ng C on tainer I ns titu te s tro ng ly su pp orts the Steel 

Sh ip ping Co ntain er Identifi cat ion Ac t's aims o f aff ordin g to the bu yers of steel sh ipping conta ine rs inform ation as to the origin of the 

steel used in the man uf ac ture of the conta ine rs and pe rm itt in g the 

continued use o f domestic steel by th e m embers o f our indu stry wi thou t 

fe ar o f c onsta ntl y inc rea sin g price disin teg ratio n due to cheap foreig n 

steel.

A t pre sen t, the customs law s req uir e the marking of finished steel 

sh ippi ng c ontainers upon e ntry into th is cou ntr y to ind ica te the coun ­

tr y of origi n o f th e co nta ine rs.

Likewise, steel sheets mu st be ma rke d upon en try into this country 

if the y have been pro duced abroa d. However, when the steel sheet 

ha s been fu rthe r processed into a steel sh ipping conta ine r, it loses its 

forei gn c ha racter u nd er p resent la w an d need not be labe led or ide ntified in any way. Th is conclusion has been confirm ed by both the 

Bu rea u of Customs and the Fe de ral Tra de Comm ission.

Th is sit ua tio n allows th e use of cheap forei gn steel in conta ine rs 

wi thou t any indic ati on t h at such steel is in fac t being used. Wh en a 

com pan y uses forei gn steel it acquire s a signif ica nt economic ad va ntag e in the form of the differ ential between the cost of foreig n and 

dom estic steel.

For inst ance, since the cost of steel is in excess of 50 percen t of the 

to ta l cost of m an uf ac tu rin g a 55-g allon drum , th is price dif fer ential 

ma y affect th e selling price of such a drum b y 30 to 60 cents, or 8 to 10 

perce nt of the total s ell ing pric e ther eof .

Th e use r of Am erican steel is then forced to attempt to meet these 

low er pric es—low er prices due solely to the im po rta tio n of foreign 

steel—und er th e pe na lty o f possible op erating losses o r, as a m atter of 

sel f-p res erv ati on, is compelled to buy forei gn steel to rem ain economically alive.

Indeed, as tim e passe s, it becomes more ap pa rent th at the im po rta ­

tio n of foreign steel may well afford the only mea ns by which the 

mem bers of ou r indu str y, pa rti cu la rly the sm aller mem bers, ma y rema in in business. Th is conc lusion, while it ma y ap pe ar to be extre me, 

is sus tained by th e con dition s existing in the steel sh ipping conta ine r 

indu str y.

Fi rs t, the steel sh ipping conta ine r indu str y ha s been dep ressed for 

some tim e; du ring the past 5 yea rs, approx im ately 331X$ percen t .of 

the total capacit y of o ur indu str y has been utilized. Qu ite na turally , 

price com petition has been severe and pro fits cut lo a min imu m.

IS .1
18 MISCELLANEOUS LABELING BILLS

Thus, it is virtually impossible, particularly for smaller firms, to 

cut prices still further to meet this increasing advantage of their 

competitors who have turned their backs on domestically produced 

steel while at the same time selling their products to domestic purchasers.

Second, all steel shipping containers within the scope of the proposed 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 containers must meet a detailed set of specifications 

adopted by the American Standard s Association—these specifications 

cover everything from gage and physical specifications of the steel 

sheet, and quality and thickness of the paint, to the closing devices to 

be used.

As a consequence, a ma nufacturer of steel shipping containers cannot 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 5 years in 

a research program to develop a new light-gage 55-gallon drum. If, 

as it is hoped, shipping tests prove to be satisfactory in the near 

future, it is expected that approval of one agency may be obtained 

and, after an additional 6-month period, full approval may be secured.

Thus, development of this product up to ICC approval will have 

taken 5y2 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 former domestic 

business which has l>een relocated abroad.

Thus, the manufacturer 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 circumstance marketed as commodities, 

yet he can find no way in which to overcome the price differential 

enjoyed by his competitors who use foreign steel, a price advantage 

not due to superior technology but due solely to the fact tha t they 

import foreign steel.

The effect to the American economy in terms of dollai-s and manhours lost of a continued increasing use of foreign steel in this industry which has consumed 1,250,000 tons of steel a year or i y percent of all finished steel produced in the United States, is obvious.

Indeed, the last 5 years have shown a general trend toward greater 

amounts of hot and cold rolled sheets being imported; Department of 

Commerce figures show* that average total tons of such products imported into the United States for each year during the period 1959-62
MISCELLANEOUS LABELING BILLS 19

was about 180,240 tons as compared with 27,040 tons for each year 

during the period of 1956-57 or 1957-58.

In the light of the previous discussion, there is every reason to 

believe that this trend will continue at an accelerated pace. The first 

quarter of 1903 saw a total of 78,000 tons of hot and cold sheet imported into the United States which, at an annual rate, is double that 

of 1902 and is more than the total annual imports for the combined 

years of 1950 through 1958.

Indeed, foreign manufacturers of steel are continuing stepped up 

campaigns to secure a larger and larger share of sheet steel to he used 

by steel shipping container manufacturers.

The Steel Shipping Container Identification Act requires th at shipping containers made from foreign steel he 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 p urchaser 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 anticipated that many domestic purchasers will he inclined to buy 

containers made from American steel, hut the decision will he 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 that the marked steel 

shipping containers manufactured in the United States from foreign 

steel cannot he 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 

wool products, fur products, and textile fiber products administered 

by the Federal T rade Commission.

It should lie noted that the institute has recommended one minor 

change in the act as it was originally proposed. This amendment 

would require tha t the required marking be embossed on the top head 

of the container rath er than merely stamped thereon. This would 

make the marking more readily visible to interested customers and 

would make destruction or removal of the marking virtually 

impossible.

At present, the ICC requires that other types of information he 

embossed on containers for the same reasons as set forth above.

In conclusion, I strongly endorse the Steel Shipp ing Container 

Identification Act. The act will afford relevant and important information to our customers. This act will undoubtedly strengthen 

the position of the American manufacturer of steel shipping containers who desires to use domestically produced steel wherever possible—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 pros-
20 MISCELLANEOUS LABELING BILLS

pe rit y of th e b asic steel indu str y and the pr evention of t he loss o f jobs 

by its wo rki ng people in the United Sta tes.

Indeed, all Am eric ans have an im po rta nt int ere st in the p rom otion 

of indu str y, the expansion of employment and the pre venti on of un ­

employment in this country , an d we submit th at th is bill is not only 

con sistent with these purpo ses but significantly contr ibute s to their 

fulfillme nt.

Tha nk you, M r. C hairm an, a nd gentlem en.

Mr. Staggers. Any qu estions of Mr. K ep lin ge r ?

Mr. Van Deerlin. Mr. Ke pling er, un de r th is bill would we be 

relying on the pa trio tic ferv or of steel consum ers to reduce the use 

of imported steel ?

Mr. Keplinger. T do n't th in k it would be exactly th at . I think it 

is a matter, as the bill says, of knowing wha t the y are buy ing . The 

logical assu mption from th at is t ha t a b uyer who buy s foreig n steel or 

a drum made from foreign steel would want the price him sel f so th at 

in th e end the person who was demo ralizing the price str uc ture by 

pocke ting the price or using it to cut prices wou ld be elim ina ted.

Mr. Van D eer lin. I s there a real question o f in ferio r p roduct from 

im po rts in connection with these con tainer s?

Mr. Keplinger. Unf or tuna tely , we have spent so much of our 

money to make good steel mills in some of th ese c ountr ies t ha t th at is 

no lo nger a prob lem.

Mr. Van Deer lin. So th at the imported prod uct in most cases will 

sta nd up un de r safety te sts an d o ther tests?

Mr. K eplinger. T o the best of my k nowledge.

Mr. Van D eer lin. Th e reason I have tak en this line of question ing 

is th at I recall a few ye ars ago when the tu na i nd us try in my distr ict 

was in trouble. We mad e a big th in g about lab eli ng Japane se tun a 

an d ma king sure th at store own ers ind icated which were San Diego 

ca ug ht tu na and which were Japa ne se, a nd what we le arn ed there was 

th at the housewife di dn ’t give a good gosh d arn. She went ahead and 

if she could get it for a penn y cheeper, the f act that she might even live 

in the same neig hbo rhood wi th these tuna fishermen di dn 't make a bit 

of difference.

I wonder if you are n ot up ag ains t the same pro ble m here , which is 

th at p eop le will sh op f or price ?

Mr. Keplinger. Tha t is very possible and we d on’t res tri ct them in 

any wav i f that is thei r final decision.

Mr. Van D eer lin. Tn which case w hat we m igh t b e d oin g is setting 

up mo re governm ental intru sio n into the bookkee pin g and labeling 

processes of ind us try to ac complish perh ap s not hing at all.

I wondered if maybe von ha d some p sychologists who h ad been consulted on th is sub ject who would sug ges t wh eth er th is might accomplish wha t you are a fte r.

Mr. Keplinger. I am so rry , we haven’t gone th at fa r with seeking 

inf orma tio n on this, bu t it doe sn’t seem to be a logical assu mption . 

I th in k th at the p urchasers o f the c ontainers are p rim ar ily basic steel 

ind ustries.

Th is isn ’t som eth ing th at goe s o ut into the retai l distr ibu tio n. This 

is a service pro duct, deliv ering to man ufacturers prim arily , and I 

don’t th in k th at the question you raise wou ld be app licable to the 

avera ge ma nu factu rer.
MISCELLANEOUS LABELING BILLS 21

I have the list of our major industries which purchase drums if you 

would be interested.

Mr. Van Deerlin. It might be even more so. It might be that the 

average manu facturer is even more closely a ttuned to saving a buck 

than my wife is, fo r example, though I wish that were not so.

Mr. Keplinger. If it were true he would know tha t he is saving 

the buck by reason of the importation of the Japanese steel. It 

woudn’t go into somebody else's pocket who was profiting at the expense of our users in this country.

He is entitled I think to have that knowledge.

Mr. Van Deerlin. This bill provides, I assume, only for prim ary 

labeling; that is, labeling at the primary source of the imported 

product. It would say, for example, steel from Japan. It wouldn’t 

indicate where Japa n got the scrap to make the steel with, or where 

the scrap had its origin.

Mr. Keplinger. The indication would be the same as appears on 

the coil or the bundle when it comes in from the country of origin. 

We would duplicate tha t information that is now required by the 

Customs Department.

Mr. Van Deerlin. Thank you, Mr. Chairman.

Mr. Staggers. Mr. Glenn?

Mr. Glenn. Mr. Keplinger, I am amazed at the reported steel container production of one-tliird of total capacity during the last 5 years. 

How does th is compare with the steel industry generally ?

Mr. Keplinger. It is hardly comparable, sir, because this is a singlepurpose industry and both during the war and the Korean episode, 

which I understand is not a war. the capacity was greatly increased 

by means of Federal loans to a large degree, so that a capacity has 

been built up in a single-purpose industry beyond what is now its 

normal requirement.

Based upon the last 5 years or the period since 1957 there has been 

a decline of approximately 10 percent overall in the production from 

tha t date, so th at it is difficult to know exactly what we would call 

a normal volume in this business except it is down from its own peak, 

excluding military use.

Mr. Glenn. What would be the method of identification on the 

containers ?

Mr. Keplinger. It would be an embossment on the top panel which 

would cost the manufacturer nothing more than the cost of the die 

because it would be embossed with the stamping at the head.

Mr. Glenn. Wh at would it say ?

Mr. Keplinger. Wh at would it say?

Mr. Keplinger. Sir?

Mr. Glenn. What would it say ?

Mr. Keplinger. It would say, “ Steel used in the manufacture of 

this---------------- was made in----------------.”

Mr. Glenn. Would it say anything about where it was m anufactured, like, “Made in the United States of America.”

Mr. Keplinger. Tha t has to be on the bottom of every drum by 

the Interstate Commerce regulation, so tha t is automatically there. 

It says who made it and they are made under a code, under the 

maker's symbol, which is registered with the Interstate Comjperce 

Commission.

27- 20 8— 64------ 4
22 MISCELLANEOUS LABELING BILLS

Mr. Glenn. And your identification proposed in this bill would 

be elsewhere on the container?

Mr. Keplinger. This would be on the top versus the maker’s identification on the bottom where it is customarily put.

Mr. Glenn. Thank you. Thank you, Mr. Chairman.

Mr. Staggers. Mr. Curtin?

Mr. Curtin. Thank you, Mr. Chairman. I have no questions. 

However, I do wish to congratulate Mr. Keplinger on a very inform ative statement.

Mr. Keplinger. Thank you, Mr. Curtin. Thank you, Mr. Chairman, and gentlemen.

Mr. Staggers. Thank you, Mr. Keplinger.

Mr. Keplinger. Thank you.

Mr. Staggers. Our next witness is Mr. Bruce Aton. Would you 

please give your name to the reporter and identify your business?

STATEMENT OF BRUCE R. ATON, VICE PRESIDENT, MARKETING 

CONTAINER DIVISION, RHEEM MANUFACTURING CO.

Mr. Aton. Yes, Mr. Chairman and members of the committee, I 

am Bruce R. Aton, vice president, Marketing Container Division, 

Rheem Manufacturing Co.

I do not have a prepared statement but would like to make several 

comments.

Mr. Staggers. Fine. Go right ahead.

Mr. Aton. Rheem Manufacturing Co. is an independent producer 

with eight plants located from coast to coast. We employ over 1,200 

persons in this particular division, manufacturing steel containers. 

I am appearing in support of the Steel Shipping Container Identification Act. We are well aware of the growing usage of foreign steel 

for containers as we have been approached on many occasions with 

offered savings of from $12 to $18 per ton, depending upon the port 

of entry.

This represents approximately 30 to 50 cents per drum. Incidentally, considering the cost of steel used in a drum, which represents over 50 percent of the selling price, it is a big factor.

Because of regulations governing the manufacture of the drum 

there isn't much we can do to alter the drum to meet competitive situations. We feel that we are as an efficient producer as anyone in the 

industry.

However, with the severe competition existing in the industry we 

have but two alternatives, and that is either to operate at rather unsatisfactory margins, or to use foreign steel. With our sizable annual usage we feel that this would have a marked effect upon the 

American economy.

Thank you.

Mr. Staggers. Thank you very kindly.

Mr. Van Deerlin ?

Mr. Van Deerlin. Mr. Aton, is there any evidence of support 

from the main body of the steel industry of this legislation ? There 

will be witnesses for them. Excuse me. No further questions.

Mr. Staggers. Mr. Glenn ?
MISCELLANEOUS LABELING BILLS 23

Mr. Glenn. I am just curious as to whether or not you still have 

a plant somewhere in the Philadelphia area, the Trenton area, or 

somewhere up in the Middle Atlantic section.

Mr. Aton. No, sir. The only east coast plant we have is in New 

Jersey—Linden, N.J.

Mr. Glenn. Where in New Jersey ?

Mr. Aton. Linden, N.J.

Mr. Glenn. Linden?

Mr. Aton. Linden; yes.

Mr. Glenn. Thank you very much.

Mr. Staggers. He is interested. He is a New Jersey Congressman.

Mr. Curtin?

Mr. Curtin. Mr. Aton, did you say tha t the differential in cost is 

about 30 cents a drum between the users of the foreign steel and the 

users of domestic steel ?

Mr. Aton. Depending on the location. Again, it can run from 30 

to 50 cents, depending on where you use hot rolled, cold rolled, and 

again the location. That is a range when I say 30 to 50 cents is the 

saving.

Mr. Curtin. Doesn’t tha t differential very much affect the source 

of the steel that is used by the producers of these steel drums ?

Mr. Aton. Yes.

Mr. Curtin. That, in turn , affects unemployment rates among the 

steel workers of the United States, does it not ?

Mr. Aton. No question about it.

Mr. Curtin. That is all. Thank you, Mr. Chairman.

Mr. Staggers. I was going to ask you about the profit margin on 

both the steel here and abroad, but you have answered my question 

by saying that it is from 30 to 50 cents between the two.

I think that is sufficient. Thank you very kindly.

Mr. Aton. Thank you.

Mr. Staggers. Our next w itness w ill be Mr. Law rence F. McKay.

STATEMENT OF LAWRENCE F. McKAY, EXECUTIVE VICE PR ES IDENT, THE OHIO CORRUGATING CO., WARREN, OHIO

Mr. McKay. Mr. Chairman and gentlemen, I am really regretful 

that the great steel State of Ohio doesn’t have a representative on this 

subcommittee.

I am sure he wTould concur in many of the other thoughts expressed 

here this morning.

Mr. Staggers. We all represent the State of Ohio on the committee.

Mr. McKay. Thank you. I am using as a background the statements that preceded me. Hence, this is relatively brief but I hope to 

the point.

I am Lawrence F. McKay, executive vice president of the Ohio 

Corrugating Co., of Warren, Ohio. 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 just over 200 people and is a totally independent 

small producer serving the Great Lakes, Ohio Kiver, and middle seaboard industrial areas.
24 MISCELLANEOUS LABELING BILLS

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 manufacture of steel shipping containers within the United States 

could force either our use of such or the ultimate closing down of our 

operations. The difference in the price of foreign steel as known to us 

and that of our domestic steel suppliers 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 further 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 atten dant 

unemployment, relief, et cetera.

Even more selfishly is the fact that the American steel industry is 

one of the biggest consumers of products tha t are shipped in steel 

containers, so it follows that the less the basic indu stry 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.

Mr. Staggers. Than k you.

Mr. Van Deerlin, any questions?

Mr. Van Deerlin. I notice in your thir d paragraph you say that 

you might lie forced into using foreign products. I take it that means 

tha t you don’t use any now.

Mr. McKay. And don’t w ant to.

Mr. Van Deerlin. You have refrained from doing this for what 

reasons?

Mr. McKay. Well, for the general effect we feel it would have 

on the economy of our own area, our basic industry, and I am a typ ically buy-American individual.

Mr. Van Deerlin. And so tha t you would be an example of somebody who would be moved by this label not to buy if you Knew it was 

foreign steel ?

Mr. McKay. No, sir. The labeling is intended to influence, if possible, the buyer of the container. We can only do what competition 

forces us. This labeling is simply an incidental way of indicating to 

the ultmate buyer and consumer tha t this container has been made of 

foreign steel.

Mr. Van Deerlin. But you have thus far resisted the temptation 

to effect savings in your operation by sticking to American steel and 

not using any imported steel ?

Mr. McKay. That is correct. I believe what I am tryi ng to emphasize here in mv particu lar statement is th at the expanded use of 

foreign steel would bring th is about. It is now affecting us. There is 

no question about this. And affecting us adversely. It is not yet at
MISCELLANEOUS LABELING BILLS 25

a clamorous state, b ut this sort of thing snowballs and it can snowball 

very readily and very easily.

If you want to take a minute I can probably give you an example. 

Let me say th is: If you permit me a few round figures here and there 

and some poetic license maybe I can draw a picture for you.

The container industry per se, whether it is steel, paper, glass, tin, 

or what have you, is a low-profit, high-volume industry. We must 

depend on volume. A simple reading of any financial statement of 

anybody in the container industry will support this and a reading of 

the Dun & Brad stree t report covering our own company could substantiate it.

While I don't want to give away any specific secrets at this point, 

as they might affect the operations of our own company, let me say 

that we operate, and have fo r years, on about a 2-percent profit on our 

sales.

Now, I am not talking prices here, but the general area in which a 

55-gallon, 18-gage drum sells is $6. At least th at is the price we are 

able to get and I assume our competition is doing about likewise or 

we would be hearing about it. Two percent of $6 is 12 cents.

Let’s put together some other figures tha t have been mentioned 

here today. From what we know of the cost or the price at which 

foreign steel could be obtained, even in Great Lakes ports, is such that 

it would wipe out this profit entirely.

Say, the savings in the use of foreign steel is 30 cents a drum or even 

25 cents a drum. Our 12-cent profit immediately turns in to a 12-cent 

loss. Supposing, to go on with my point, one of our competitors of 

equal size in the area servicing the same market should decide th at he 

would be better off economically, or profitwise, or however he might 

interpret the facts, to use foreign steel and, say, he saved the maximum, 50 cents a drum.

I doubt that he would accomplish this in the Great Lakes area, but 

presuppose this. I have asked for permission here to use some round 

figures. lie does this and he brings in the foreign steel and he p roduces his container from foreign steel and he goes out to stimulate his 

own sales and his own position in the industry. He halves this 50 

cents with the customer and keeps the other half for himself.

You can immediately see what recourse we have. We have no recourse other than to follow it if we are going to stay in business. We 

certainly can't in a business that has such a low-profit margin, afford 

to do other than to follow this, and this is where I think this thing 

tends to snowball. It builds up. All we need is this kind of a break.

I do believe th at the inten t of the Steel Shipping Container Act in 

identifying containers made of foreign steel so the ultimate customer 

knows what he is doing to his normal suppliers and how he can hurt 

them is quite significant,

Mr. Van Deerlin. In conference with your customers have you had 

any indication that they would be repelled by knowing that they were 

buying drums made with foreign steel ?

Mr. McKay. Yes. I think the major industry of America which 

uses steel shipping containers, and I am speaking of the petroleum 

industry and the chemical industry, which totally represent 60 percent 

of the new steel containers used; tha t is, used and bought for filling 

and shipping of products, resist the idea of a container made from
26 MISCELLANEOUS LABELING BILLS

foreign steel. I th ink I can say this quite hones tly fro m my own 

experience in attempting to sell.

Mr. Van Deer lin. Tha nk you, Mr. C hairm an.

Mr. Staggers. Mr. Glenn ?

Mr. Gle nn . No questions, hu t I would like to make a comm ent on 

your last statem ent abo ut the petroleu m com panies seeing this th ing 

as the y do o r would.

Two years a go I was on a subcommittee of the Merc hant Ma rine and 

Fisheri es Comm ittee which visited sh ipya rds ove r in Eu ro pe to de termine wh eth er we were ge tti ng a fa ir share of all the sh ipb uilding 

contr act s fo r A me rican ships an d T n oticed th at m ost of the ships that 

were be ing built over the re, in th e t an ke r line pa rticul ar ly , were of our 

Am eric an petroleum com panies, so buy in Am erica doesn’t work on 

sh ipbu ild ing as you think it wou ld work on yo ur drum s and con ­

tainers.

Mr. McK ay. I think that is ve ry tru e, Mr. G lenn . I th in k probably 

th at is because you deal on an inter na tio na l level and on an in tern ational level you are de ali ng wi th one fac et of th is problem.

Wh en you are deali ng with rega rd to the domestic mark et, th at in 

the United Sta tes , you are de ali ng with an en tirely different ma rke t 

un de r differen t circumstances.

Mr. Gle nn . Th an k you, M r. C hairm an.

Mr. Staggers. Mr. C ur tin ?

Mr. Cur tin. No questions.

Mr. Staggers. Tha nk you, Mr. McKay , fo r com ing and giv ing us 

the benefit of you r views.

Mr. McK ay. Th an k you.

Mr. S taggers. Mr. F ra nk Ho ffm ann , United Ste elw ork ers o f A merica. Mr. Hof fma nn, we are glad to hav e you before the committee.

STATEMENT OF FRANK H. HOFFMANN, LEGISLATIVE DIRECTOR, 

UNITED STEELWORKERS OF AMERICA

Mr. H offman n. My nam e is Fra nk Hof fma nn. I am a leg isla tive 

director of the Un ite d Ste elw ork ers of Am erica. I am ap pe aring 

toda y in support of H.R. 5673, which wou ld req uire the disclosure 

of the country of origi n of steel sh ipping con tain ers.

Mr. Ch airma n, ou r union has not determined to wh at exten t this 

lab eli ng bill would r esult in di rec t e mployment o f our mem bers. Ho weve r, we are fully in accord with the notion th at the consum er should 

be made aware of all pe rti ne nt inform ation pr io r to his pu rch asing 

of an a rtic le. It is f or th is reason th at we have alr eady gone on reco rd 

su pp or ting the tru th -in -len ding bill and the tru th-in -p ac ka ging bill.

A na tio n like o urs, w hich has dec lare d itself f or a free r tra de w orld 

economy, can sus tain its elf in a fre e en ter prise economy only where 

the consumer has a deq uat e inf orma tio n upon whi ch t o m ake his choice. 

Th e othe r alt erna tiv es of restr ict ive tra de , wi th quo tas, and hig h 

tariff pro tec tion, we have alread v rejected .

A necessa ry corollary of the Tr ad e Ex pa nsion Act of 1962 is the 

Ste el Sh ip ping Co nta ine r Ide nti fic ati on A ct which is now before your 

com mittee. It does not in any way affect tariff rat es, no r the price of 

the p rodu ct for the consumer.

Ac tuall y, Mr. Ch air ma n, it gets at the man uf ac turin g of these 

conta iners from steel sheet which h as been im po rte d int o this cou ntry.
MISCELLANEOUS LABELING BILLS 27

If a steel container is manufactured in a foreign country current 

custom laws require a label designating the country of origin. However. this is not required if the container is manufactured in this country from imported steel.

This bill would simply require that such labeling be placed on the 

container. We have no way of estimating the employment impact of 

such disclosure. But in the interest of fuller information the United 

Steelworkers of America is supporting H.R. 5673.

Mr. Staggers. Thank you, Mr. Hoffmann. I noticed tha t in the 

first part of your testimony you said that a nation like ours, which 

has declared itself for a freer trade world economy, can sustain itself 

and that we have already rejected restrictive trade, with quotas, and 

higher tariff protection.

You are in agreement then, that free nations must trade together and 

work together?

Mr. Hoffmann. Th at is correct.

Mr. Staggers. I notice mention of only one nation from which steel 

comes. Do you have any idea or could you tell me some of the main 

sources of steel coming in from other nations? What are the other 

nations ?

Mr. Hoffmann. What are the nations?

Mr. Staggers. Yes; some of those t hat are the main producers of 

steel coming into our country.

Mr. Hoffmann. Well, we have had, as you know, Mr. Chairman, 

some dealings directly with United States Steel on the dumping problems which have affected both of us and jointly we have gone to see the 

President and Members of Congress.

In this area we were concerned with Japanese steel, with steel from 

Belgium, and steel from England, in this area.

Mr. Staggers. How about steel from Italy ?

Mr. Hoffmann. At th at time we were not concerned with Ita ly. I 

am not prepared to go to the full length of this, but I say these were 

the three that we were considering at that time.

Mr. Staggers. Yes, sir. I understand that since tha t time, Italy 

has come into the world market quite extensively. I believe West 

Germany has also.

Mr. Hoffmann. Yes; West Germany, that’s correct.

Mr. Staggers. I notice that Jap an is only one of those that is producing and sending steel into this country. In most of these countries I believe we helped to build these steel mills and helped to rehabilitate these countries in order to make them self-sufficient and able to 

go about their business.

And, as I see from your testimony, you are not trying to restrict 

the steel coming in. As you say, this Nation has rejected the policy 

of high trade barriers. But the only thing t hat you are advocating, 

as the bill does, is tha t American people know the origin of this steel.

Mr. Hoffmann. Basically all we are interested in is consistency, and 

we require these things on products which are manufactured outside 

o f this country and we say that steel which is brought into this country 

for this purpose ought to be properly identified.

Mr. Staggers. I notice we have some representatives of the Ja pa ­

nese people here in the news media and I thought it only fair to say that 

this steel is coming from other countries. It just happens their name
28 MISCELLANEOUS LABELING BILLS

was mentioned here and they are not being singled out as any one 

group.

Mr. Hoffmann. No, they are not.

Mr. Staggers. It. is the world of free nations tryi ng to work together tha t involves what we are tryin g to do. I have no other comments or questions.

Mr. Van Deerlin?

Mr. V an Deerlin. Mr. Hoffmann, you say it is not intended to 

discourage importations of steel. Is that true, do you think? It 

surely isn’t going to encourage importation, is it?

Mr. Hoffmann. We have had for years in this country a requirement th at any product made outside the United States is required to 

have this stamp of made in whatever country it was on the product, 

and certainly this has not discouraged them from sending products 

into this country and I don’t see why th is would discourage it either.

Mr. Van Deerlin. This is getting into the area of what we might 

call a secondary boycott.

Mr. Hoffmann. I am not talking about secondary boycott. I am 

merely tryin g to be consistent. I am not allowed to talk, by rules of 

Congress, about secondary boycott as a union representative.

Mr. Van Deerlin. What we are dealing with is getting into the 

materials which go into an imported product rather than the manufacture of the product itself. You say that we should all be made 

aware of pertinent information prior to the purchase of an article.

Is it your opinion that there is involved here a quality of product ?

Mr. H offmann. I am not enough of an economist or a specialist to 

tell you about the quality of a product except tha t I am American 

enough to thing that we make the best product in the world and as a 

steelworker I am sure that we make the best product in the world.

I am not questioning whether the other countries who are shipping 

steel in make an inferior product. I am not saying that, except that 

I say as a proud American we make the best steel in the world. Th at’s 

all I am saying.

Mr. Van Deerlin. This would not necessarily be true in the entire 

spectrum of manufactured products, though, would it?

Mr. Hoffmann. I am only talking about the steel. This is the only 

thing I have anything to do with.

Mr. Van Deerlin. What you are asking Congress to do then is to 

ascertain where this principle should be applied and where it should 

be ignored?

Mr. H offmann. All I am doing here is supporting H.R. 5673.

Mr. Van Deerlin. I understand that.

Mr. H offmann. Tha t is just one phase of a number of bills which 

are before vour committee, and we are here in behalf of this because 

this directly affects the steelworkers and their operations with the 

steel companies and the manufacturers of basic steel products in the 

United States.

Mr. Van Deerlin. Well, it also touches on the principle of trade, 

which is something that we have been working a t pretty hard in this 

country for about 30 years now, and what this bill seems to me to do 

is to attempt to discourage one facet of free trade, and I want to make 

sure tha t we are taking a step which is very necessary to protect the 

public, as you say.
MISCELLANEOUS LABELING BILLS 29

You liken it to the truth-in-lending bill and truth-in-packaging bill.

Mr. Hoffmann. Right.

Mr. Van Deerlin. Here consumers would be protected against being defrauded. I want to know whether this is the same principle 

which is at stake in this legislation, whether we are protecting them 

against being cheated, or whether we are just putting in a little 

Government-supported prop here for a segment of industry.

Mr. Hoffmann. I don’t think tha t could be read into this in any 

way. I certainly don’t thin k that is in this statement and I certainly 

don’t think that is what we believe.

Certainly the labor movement as such has tried for years to interest 

the public in having union labels on their products. A labeling process as f ar as the trad e union movement is nothing new. This is something we have had for years, and I thin k that the same thing, by 

identifying the product as of its source regardless of its manufacture, 

if it is manufactured in here, just makes fair overall competition for 

everybody.

I don’t think t ha t there is anything wrong with this at all because 

I just think th at people ought to be able to know where it comes from.

Mr. Van Deerlin. Than k you, Mr. Chairman.

Mr. Staggers. Mr. Glenn?

Mr. Glenn. Mr. Hoffmann, I notice in your statement you refer 

to the Trade Expansion Act of 1962. Of course it is my opinion that 

that title is a misnomer, tha t it would be better called the Tariff Removal and Reduction Act rath er than Trade Expansion.

Mr. Hoffmann. Right.

Mr. Glenn. Do you have any opinion and can you tell us as to 

whether or not the so-called Trad e Expansion Act has been of any 

benefit to our American economy as yet ?

Mr. H offmann. I don’t have the facts or figures and I would not 

be well enough informed to answer tha t question, Congressman.

Mr. Glenn. Tha nk you. That is all, Mr. Chairman.

Mr. Staggers. Mr. Curtin?

Mr. Curtin. No questions.

Mr. Straggers. Thank you, Mr. Hoffmann, fo r giving us the benefit 

of your views.

Mr. Hoffmann. Thank you.

Mr. Staggers. Mr. David J. Steinberg. Would you state your 

name, please?

STATEMENT OF DAVID J. STEIN BERG , CH IE F ECONOMIST, 

COM MITTEE FOR A NATIONAL TRADE POLICY

Mr. Steinberg. Yes, sir.

My name is David J. Steinberg. I am chief economist for the 

mittee for a National Trad e Policy.

Mr. Staggers. You may proceed.

Mr. Steinberg. I appear oef ore your committee today on behalf of 

the Committee for a National Trade Policy, Inc., in opposition to 

H.R. 5662, a bill that would prohibit the use in U.S. commerce of 

shipping containers made from imported steel unless the container 

indicates the country from which the steel was imported.

Our committee was established 10 years ago to promote general 

public education in problems of international trade and to advance the

27 -20 8— 64- 6
30 MISCELLANEOUS LABELING BILLS

tra de policy best calculated to serve the na tio na l int ere st. As, I am 

sure, y our committee knows, we stro ng ly s up po rte d the T ra de E xpan ­

sion Ac t of 1962, the cornerstone of U.S. trad e policy in th e 1960’s. 

Since its ena ctm ent we have continued ou r regu lar pr og ram thro ug h 

which we str ive to ensure th at U.S. trad e policies across the bo ard 

will contr ibute to the Na tio n’s interest in vigorous trad e exp ansion. 

We believe th at the man y restr ict ions which s till imped e wo rld commerce should be m inim ized . We believe t hat the ma ny p ropo sals th at 

hav e been made, an d will be made, to re strict trad e eith er dir ectly 

or i nd ire ctly sho uld be reject ed un less con vincin g p ro of can b e offered 

th at a tem po rary restr ict ion is indisp ensab le to a constru cti ve ad ju stment effo rt and th at such measure s are in t he n ationa l inter est.

Th is expla ins ou r opp osition to two othe r marki ng bills ea rlier 

this year (H .R . 2513 and S. 957), an d it expla ins ou r opposition to 

H.R. 5662 tod ay. We belie ve th at the purpo se of these bills is to 

restr ict t ra de by a dd ing discrim inatory costs to th e use o f im po rts an d 

cre ati ng un ce rta inty in thi s tra de .

Mr. Ch airm an , may I interjec t at th is po int and ad d th at I hav e 

no t seen the othe r bills being con sidere d by yo ur com mittee in to ­

da y’s he aring an d therefore my tes tim ony is confined toda y only to 

H.R . 5662.

Mr. Staggers. Fin e.

Mr. Steinberg. H.R . 5662 may on its surface look like a reasona ble 

and logical extension of the basic m arking req uir em ent in existing 

law. But ca refu l stu dy of the facts of economic lif e will, I believe, 

show th at it is no t reas onable, no t logical, no t th e protec tor of the 

consum er as its supp orter s may con tend. I t is ra th er a de terren t to 

sou nd trad e expansion. Th is is so, no t only in view of its effect on 

business op eration—both the m ar ki ng and the rec ordkeepin g required—b ut also in view of the haras sing ac tion it ma y well fom ent— 

an d the attitu de it may fos ter, ce rta inly among small businesses in 

ou r na tio na l distr ibution system—th at the use of im porte d products 

may in some cases not be wo rth the ad minist rativ e tan gle s which certa in U.S. m an uf ac turers may set in m otio n.

Th is is th e latest in a succession of marking bills . W ha t is the 

logical ou tcom e o f such effo rts once a pre ced ent h as been set ? Sho uld 

dru ms used to ship refin ed petro leu m products show the co un try or 

cou ntries or origi n of the orig inal raw m ate ria l ? Why w ould it no t be 

logical fo r iro n ore intere sts , con cern ed as they are over grow ing impo rts of ore , to seek leg islation r eq ui rin g U.S . producers o f steel sheet 

for the m an uf ac ture o f conta ine rs to m ark on th eir prod uc t the countr y of or igin of the ore t hat was used ?

Moreover, wh at p urp ose does it serv e? W ha t does it really tell the 

ultim ate c onsumer—whose real interest presu ma bly lies in qua lity and 

price—e xcept to pro vid e the m ore c hauvini stic consumers w ith a ch ecklist ag ain st whi ch th ey may ap ply t hei r p ar ticu la r politic al preju dic es? 

Suc h ca terin g to pol itic al prejud ice is no t a gov ern me ntal responsi ­

bility.

Passage of such bills—a t a tim e when the Un ite d St ates seeks not 

only the re ducti on and in some cases th e elimination of foreign tar iffs 

an d the elimi natio n of quo tas, but also the elim ina tion of a wid e ran ge 

of other trad e ba rri ers—wou ld hurt ou r nego tia tin g pos itio n and in 

fact set an example fo r sim ila r or even worse forms of so-called in ­

visible ba rrie rs to trade.
MISCELLANEOUS LABELING BILLS 31

If U.S. producers want the American consumer—in this case the individual or firm that buys the container as such or the contents of a 

steel container—to prefer or insist upon steel containers made of 

American steel, then those producers should take steps to have their 

own products marked “made in U.S.A.”—tha t is?

 made of American 

steel—and, if that is the way they want to do their merchandising, to 

urge consumers to buy American goods shipped in containers made of 

American steel. Earlie r this year when we opposed a bill requiring the marking of country of origin on imported lumber, we found 

tha t a lumber producer in Idaho felt so strongly about the identification and promotion of his product as American made that he had begun 

to mark it to tha t effect, leaving nothing to the imagination or surmise of the consumer. But such voluntary practices are a totally 

different matter from burdening the import distribution system with 

new country-of-origin markings required by law.

These days—and I am glad to say this—our foreign trade has expanded to a point where imported goods are more common in our 

everyday purchases than ever before. I should say equally th at U.S. 

goods are more common in foreign markets today than they have ever 

been. A product tha t carries no identification of country of origin 

should not be assumed by the U.S. consumer to be American made. A 

manu facturer who wants his product to be so identified should take 

steps to have it so marked.

Or 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”—and I quote from the bill there—then they should have 

such a complaint brought before the Federal Trade Commission in 

accordance with existing procedures. If they feel tha t imports are 

hurting them, they should bring their case, as an industry or as individual producers, before the Tariff Commission and seek relief under 

the Trade Expansion Act.

I urge the supporters of hills 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 w hatever competitive problems they face.

Thank you, Mr. Chairman.

Mr. Staggers. Thank you. Mr. Van Deerlin ?

Mr. Van Deerlin. Mr. Steinberg, in following up this policy of 

your organization, have there been any studies made as to the willingness of consumers to spend their money on the basis of national labels?

Mr. Steinberg. No, sir; we have not made such studies, but we have 

examined, or begun to examine, rather closely cases tha t have been 

heard by the Federal Trade Commission on various products.

Watch hands happen to be one of them, where the Commission made 

a judgment on this point and on that, particular product felt that, where 

the consumer did not see a country of origin marked, the consumer, 

and I guess they mean most consumers—I don’t know what proportion 

of the consuming market they had in mind, and on this I question the 

Federal Trade Commission—the consumer believed th at the product 

was domestic in origin. I would gather that the assumption tha t the 

consumer makes regarding country of origin would vary from product 

to product.
32 MISCELLANEOUS LABELING BILLS

The same consumer who looks at a watch band for country of origin 

may not look at or pay much attention to the marking of country of 

origin on a steel container or some other product, so that I believe 

that the propensity of consumers to look for country of origin is something that ought to be examined by technicians in this field who are 

concerned with the whole problem of unfair methods of competition. 

The Federal Trade Commission has such a responsibility.

Mr. Van Deerlin. In your opinion, doesn’t it seem likely that the 

pressure of stockholders in a big company might be very keenly felt 

by company executives who try to impose their restraints onto the 

profit-and-loss sheet of the company by arbitrarily deciding that price 

and quality were not the only consideration in purchase of products?

Mr. Steinberg. I would imagine, sir, tha t certain stockholders 

would certainly want the management of the company in which they 

have invested to market the product primarily, or perhaps exclusively, 

on the basis of quality and price and not on some other basis of 

merchandising, but I would assume also there are other stockholders 

who wouldn’t care very much on what basis the merchandising took 

place as long as it brought in increased income.

Mr. Van Deerlin. Has there been an alarming trend, in your 

opinion, toward the loss of American markets to foreign manufacturers recently overall ? I don’t mean just any one market.

Mr. Steinberg. I haven’t made a detailed study of public sentiment on this, but I would say that it is no more or less today than 

ever before and tha t there is among many sectors of the public a concern about this problem.

Mr. Van Deerlin. Oh, yes, this I know. I asked though if in your 

opinion there was an alarming trend—alarming to you ?

Mr. Steinberg. No; I wouldn’t call it an alarming trend.

Mr. Van Deerlin. Are we losing or gaining in this general exchange of world trade? Is America proportionately still selling as 

much as she did before ?

Mr. Steinberg. We are selling as much. The U.S. export surplus, 

exports over imports, is roughly what it has been in the past few years. 

And may I elaborate on tha t to say tha t I know th at there are certain 

people who question the validity of the export surplus figure in view 

of the fact tha t there arc exports of Public Law 480 agricultural products involved and therefore the export surplus may not be a valid 

indication of the foreign trade position of the American economy.

On tha t point—I hope I am not. getting away from your question, 

sir—may I add tha t if you took the export surplus of U.S. exports 

of finished manufactured goods over U.S. imports of finished manufactured goods and even left, out the goods that move because of the 

foreign aid program, you would still get a substantial export surplus, roughly in the area of $4 to $5 million a year. That, it seems 

to me. is a pretty good indication of the competitive ability of the 

American economy in a world that, we all know is getting increasingly 

competitive.

Mr. Van Deerlin. American tooling and American know-how are 

still standing up pretty well despite our higher wage level, which we 

intend to keep.

Mr. Steinberg. Right, but I think you would agree with me, sir, 

that, we face a growing challenge from the burgeoning industrializa
MISCELLANEOUS LABELING BILLS 33

tion abroad and tha t the way for the American economy to respond 

to tha t is by vigorously adjusting to it, and this takes a lot of effort in terms of better equipment, better management, increased invest­ ment in research and development, and all the rest of it, so th at we as a committee and I as an individual are not taking a simple view of what is happening in the world and saying tha t everything is fine 

and tha t we can rest on our laurels. We are going to have to face up to growing import competition and growing competition in thir d markets to which we export, and we as a committee believe th at the American economy, and the Amer­ ican Government, and American labor ought to be spending a lot of their time, much more than they have been perhaps, on facing 

up to the challenge which will increase as time goes on.

Mr. Van Deerlin. I notice the board of directors on the letterhead on which your statement is written includes the executives of a number of large users or manufacturers of steel and steel products, which would suggest t hat there is not unaminity in the steel industry.

I assume you speak for the full committee.

Mr. Steinberg. Yes, sir; I speak for the full committee. We do 

not have, if I remember correctly, anybody on the board who is in the steel industry. I would assume tha t some of the members of the board are associated with companies which use steel containers, but may I add, sir, tha t I am not speaking for any individual member 

of the board.

Mr. Van Deerlin. Oh, no.

Mr. Steinberg. Nor has any member of the board or any supporter 

of our committee asked the staff of the committee to testify in opposi­ tion to this bill. We are here because we feel that this bill is not consistent with a trad e policy tha t serves the total national interest.

Mr. Van Deerlin. It seems logical tha t the steel industry as a 

whole would be concerned over the views of the Ford Motor Co., the 

Union Tank Car Co., the Gillette Razor Co.

Mr. Steinberg. I should think so, sir.

Mr. Van Deerlin. Than k you, Mr. Chairman.

Mr. Staggers. Mr. Glenn?

Mr. Glenn. Mr. Steinberg, I can appreciate your statement of the 

growing challenge of imports coming into our country, but I was under the opinion that we have had tha t challenge for some time and tha t it has been a problem for some years now. I agree with your statement when you say foreign trade has expanded to a point where imported goods are more common, everyday purchases than ever be­ fore, but 1 don’t believe I can agree with you when you say th at U.S. goods are more common in foreign markets today than they ever 

have been before except through our foreign aid porgram. Do you have any basic figures which you have used for this statement?

Mr. Steinberg. I don’t have any figures with me, sir, but even if 

you took out the amount of U.S. exports attributable to foreign aid, as I indicated before, you would still have a substantial and generally growing U.S. export business in finished manufactured goods. I think that there are many areas in which we as a country feel th at we have lost some of our competitive touch because of the complaints made by the U.S. industries—textiles, lumber, and other industries
34 MISCELLANEOUS LABELING BILLS

which have been complaining about import competition. These complaints need careful evaluation.

Many of these industries are beginning to recognize that, there is 

abroad a growing market f or their own products, but it takes perhaps 

an unprecedented export effort, unprecedented sales effort, and a 

special effort in design to meet the needs of consuming markets abroad.

T think that the potential abroad is there and it is our job as a country 

to <TM< after it.

Mr. Glenn. The thing that, gives me concern is we have given so 

many of these countries not only the know-how, but the machines to 

do it perhaps better than we can because the machines are newer 

than ours.

Take, for instance in the glass industry, and the big factor and the 

item which gives us so much concern is th e labor cost. How can we 

improve on the technical aspects of automation when we know tha t 

they are just as advanced, if not more so, than we are.

Mr. Steinberg. I am pretty sure there are many answers to that, 

Mr. Glenn. I shall offer two.

One is tha t there is a lot more to international competition than 

comparative wage rates and comparative technology. There is also 

this very important and often neglected dimension called management, and it is quite possible for an American firm producing a prod ­

uct with advanced technology and paying high wages to out-compete 

a foreign firm with the same equipment and paying low wages, because 

there is this management factor, and this design factor, and the sales 

promotion factor, and many other elements of quality in a product 

which are not explained by the fact that the technology may be the 

same.

My second point is tha t there are many sectors of American industry 

which have not brought th eir levels of technology, the quality of the ir 

plant equipment, up to where it ought to be. I think in the steel 

industry today we are seeing some very impressive and encouraging 

steps to improve equipment and some spokesmen of the steel industry 

have themselves within the past year, within the past few months, 

acknowledged that there are many areas of their own industry where 

there is a lot of ground to make up in terms of gettin g better equipment, the use of the oxygen furnace, et cetera. So that I think th at if 

we are faced, as we are faced, and we ought to be very much concerned 

about this, with improved technology abroad, then let’s make every 

effort here at home to make sure t hat our technology is up to or even 

better than the technology abroad.

Mr. Glenn. As to your first point, is it your opinion that our management structure in the corporate entities is top heavy and tha t it 

doesn’t compare with those of foreign countries.

Mr. Steinberg. I have no basis at this time, sir, to make a judgment on that subject.

Mr. Glenn. You don’t know whether we have too many vice presidents or not in some of our large corporations?

Mr. Steinberg. Sometimes I wonder, but I have no basis for 

j udgment.

Mr. Glenn. Thank you.

Mr. Steinberg. Thank you, sir.

Mr. Staggers. Mr. Curtin ?
MISCELLANEOUS LABELING BILLS 35

Mr. Curtin. Thank you, Mr. Chairman.

Air. Steinberg, I must confess tha t I am primarily interested in 

the American economy and the employment of the American working 

man and, 1 am, secondly, an internationalist. Do 1 understand you 

to say th at you feel tha t since the Trad e Expansion Act has become 

the law of the land our foreign trade position has improved?

Mr. Steinberg. 1 would say tha t our foreign trade position is pretty 

much what it has been. 1 don’t have the figures in fron t of me, but 1 

believe tha t we have been able to, across the board, hold our own. 

There are obviously certain areas where we have experienced growing 

difficulties from competition at home and abroad, but on the whole 1 

think we are holding our own.

Mr. Curtin. I see. The various reports tha t I have seen in the last 

year indicates that, presently, the balance of trade is against the 

United States so far as international trad e is concerned. Would you 

agree with that statement ?

Mr. Steinberg. I do not.

Mr. Curtin. Would you say that the balance of trade is proportionately more favorable for the United States than against it since the 

Trade Expansion Act became effective ?

Mr. Steinberg. Well, I don’t know what distinction ought to be 

made without the figures in front of me as to what change has taken 

place since October or September of last year when the President 

signed the Trade Expansion Act, but 1 would say tha t we have not 

had an opportunity to see what the Trade Expansion Act can do for 

the American economy because the President has not yet had an opportu nity to use the negotiating powers tha t were given him in the 

Trade Expansion Act.

A better judgment on the effect of the Trade Expansion Act can be 

obtained after the trade negotiations and after we have seen how the 

American economy responds to the changes in tariffs and other trade 

barriers which the T rade Expansion Act bill brings about.

I want to add a t this point that the fact tha t the Trade Expansion 

Act was passed, even though the negotiating authority has not yet been 

used, has certainly been a plus mark for the United States because it 

has shown the rest of the world the direction in which we really want 

to move and may have deterred other countries from perhaps adopting 

more restrictionist policies than they would otherwise have adopted.

Mr. Curtin. I s showing the rest of the world where we are moving 

more important th an sustaining the economy of the United States, in 

your opinion ?

Mr. Steinberg. My first priority, sir, as with you, is to sustain the 

economy of the U nited States. If we as a committee or myself as an 

individual did not feel that the trade policies we were advocating 

did not serve the national economy of the United States, then we 

would not favor this kind of trade policy.

Mr. Curtin. Do you feel tha t the Trad e Expansion Act should 

be used primarily for trade expansion for the United States, or should 

trade expansion of the European nations be our main objective?

Mr. Steinberg. This is in the first instance a trade expansion for 

the United States and it was enacted by the Congress, I am sure, 

with tha t objective in mind, and I assure you, sir, that it was supported by our committee with only tha t objective in mind. And
36 MISCELLANEOUS LABELING BILLS

by trade expansion I mean not just opening up increased opportunities for imports into this country, but opening up opportunities 

for American exports abroad.

Mr. Curtin. Then I take it tha t you and your committee are in 

favor of expansion of American industries too ?

Mr. Steinberg. This is our basic interest.

Mr. Curtin. How are American plants going to have their trade 

expanded—particu larly in the steel industry—if foreign steel is 

brought in and the local manufacturer of containers can sell the 

containers made from foreign steel for 30 to 50 cents per unit cheaper? 

How is that going to expand the trade of the local steel manufacturer?

Mr. Steinberg. You mean expand his e xport trade? Expand his 

business ?

Mr. Curtin. Expand his business.

Mr. Steinberg. I do not have before me all the facts and figures 

regarding what is actually taking place in this industry. I will 

assume that there are certain American producers of steel containers 

who are experiencing difficulties, and I shall assume even growing 

difficulties, from imports of steel sheet tha t go into the fabrication 

of competing steel containers in this country.

Exactly which sectors of the industry are experiencing these dif ­

ficulties I don’t know. But I would certainly think that the answer 

to any such difficulty or any such dislocation ought to be through 

an adjustment effort on the p art of those companies, and it may well 

be, and I don’t know enough about the steel container industry to be 

certain about it, that there are certain producers of steel containers 

from American steel who will just not be able to stay in business 

making steel containers from American steel, in which case, sir, 

there are provisions in the Trad e Expansion Act for a technical 

expert evaluation of their case before the Tariff Commission to find 

out what is really taking place.

Mr. Curtin. Tha t is a very fine general statement, but it doesn’t 

answer my specific question.

Mr. Steinberg. I am sorry.

Mr. Curtin. Let me rephrase my question.

The testimony has indicated that the steel container people—if 

they use foreign steel—can sell their containers from 30 to 50 cents 

a container less than they can sell those containers if they use domestic steel.

Now, then, you say tha t this legislation would be a deterrent to 

trade expansion. What I want to know is, deterrent to whom? To 

the American manufacturer and workman, or to an expansion of the 

domestic steel sale in America, or is it a deterrent to the importation 

of foreign steel ?

Mr. Steinberg. It is a deterrent to the totality of American trade 

expansion interests. In other words, sir, the steel industry itself has 

a tremendous stake in the expansion of American exports, not just 

in terms of its own direct exports of steel, but in terms of exports 

of products made by American companies th at buy American steel

If we are to be successful in opening markets abroad for those industries which use American steel, then we have to be in a position to 

negotiate foreign concessions which are an important factor in opening up those markets.
MISCELLANEOUS LABELING BILLS 37

Therefore, we are talking about the totality of the process of trade 

expansion and not just situations regarding steel containers.

Mr. Curtin. Then you are talkin g in general. You say that so far as this pa rticu lar industry is concerned, the local domestic steel manu­ facturers are going to sutler, but that this is necessary for this general 

picture of making the rest of the world love us (

Mr. Steinberg. I don't say that they are going to sutler, because I shall have to wait for an expert evaluation of what is really taking 

place in this industry.

Mr. Curtin. The test imony says that they can sell the containers for from 30 cents to 50 cents a container less if they use foreign steel than 

if they use local steel.

Mr. Steinberg. Mr. Curtin, I haven’t had an opportunity to evalu­ ate that testimony, but even if I did I would certainly want to see an expert evaluation of the problems of that industry by a group that 

is competent to make such an evaluation. With all due respect to the previous witnesses, the mere presenta­ tion of that kind of testimony regarding facts of economic life in that industry is something that I with all due respect cannot accept just on face value. I shall have to, and I would hope that the Tariff Com­ mission or some other group qualified, would make a detailed analysis of what is really happening, and what the problems really are, and to what extent imports contribute to those problems.

Mr. Curtin. That is what you mean then in your answer to a previ­ ous question by one of my colleagues when you say that we must face up to growing imports? That is substantially it?

Mr. Steinberg. We must, face up to growing imports by making sure 

as to what the problems of competition really are.

Mr. Curtin. Aren’t the problems of competition the fact that importers are selling products cheaper than we can make them?

Mr. Steinberg. I would assume, sir, tha t the problems faced by the steel container industry and every other American industry are rathe r complex problems that cannot be attributed just to foreign competition. I am assuming that foreign competition is an important problem and in many cases a growing problem and in many other cases a serious 

problem, but let’s really find out industry by industry.

Mr. Curtin. With from 5 to 6 percent of our working population unemployed, it is a serious problem, and I am speaking now of the American economy and not the international picture.

Mr. Steinberg. We ought to find out to what extent imports are causing the problem. I know from having followed trade hearings for many years, and having read the public statements made by in­ dustry people who have complained about foreign competition, tha t they may say that their big problem is imports and they won t talk about any other problem because the import problem may be the only problem on which they feel justified in coming to the Congress to ask for some kind of relief. But T do think that these industries owe it to themselves and to the country to take a good hard look at what the problems really are, the problems from competing materials, 

et cetera.

Mr. Curtin. I will ask you just one other question.
3 8 MISCELLANEOUS LABELING BILLS

What is so wrong in having a drum that is made of steel imported 

from a foreign country so marked? How does that interfere with any 

of these principles that you have been expounding?

Mr. Steinberg. Well, this is what is called an invisible barrier to 

trade. I know it isn't an import restriction in the tariff sense or the 

quota sense, but it imposes on people who use imported steel a cost 

factor.

Mr. Curtin. A cost factor?

Mr. Steinberg. A cost factor which is not required of domestic producers.

Mr. ( ’urtin. Wha t is the cost factor ?

Mr. Steinberg. The cost factor of placing that marking on the 

product, and also the-----

Mr. Curtin. Excuse me. Do you mean one of the big reasons that 

you are objecting to it is because of the additional cost of embossing 

on a container ?

Mr. Steinberg. No, that is not the big reason, sir, I didn't finish my 

statement. It is also the m atter of keeping records of exactly where 

the steel came from.

Now, may I complete the thought?

Mr. Curtin. Certainly.

Mr. Steinberg. In this whole process there may be possibilities for 

clerical errors, steel perhaps used from one source which was not p roperly identified as coming from that source and instead stated as coming 

from some other source.

It is possible for errors to take place.

Mr. Curtin. Do you mean that if there are 100 pieces of steel in 

the factory that manufactures containers and of that 100 sheets, 99 

are foreign steel and 1 is a domestic steel sheet, the problem might be 

tha t they might erroniously mark tha t 1 sheet?

Mr. Steinberg. I am not saying that would be bad, but what I am 

saying is that some of the manufacturers we are talking about who 

use imported steel are smaller manufacturers and there are all kinds 

of penalties set up in this bill for the prosecution of people who don't 

keep proper records regarding the source of imported steel, who do not market the product properly, et cetera.

This is the kind of th ing which may make, as I said in my statement, 

certain manufacturers who use imported steel or certain manufacturers 

who may want to use imported steel, feel, “Well, look, there is just too 

much redtape to all this. Who knows but what certain mischievious 

interests in the Ihiited States may complain to the Federal Trade Commission without really having all the facts a t their disposal, and then 

the whole process of having to answer, and so forth. Why bother 

with the imported steel at all. Let’s not get involved in subjecting 

ourselves even to the possibility of being accused of violating the steel 

container marking act. Let’s just buy American steel.*’

Let me complete the thought. The completion of the thought is 

that this sort of requirement in the United States—and we are the 

leading tra ding country in the world—could well lead, and conceivably 

lead, to other countries anxious to restrict their imports devising all 

kinds of marking requirements infinitely more serious than this which 

would hurt American exports. So that I am talking here not just 

about the steel container trad e; I am also talking about the totality of
MISCELLANEOUS LABELING BILLS 39

American policy, and then I wonder what will happen if von do this 

regarding steel containers. Why wouldn't you have to consider a bill offered by the iron ore 

interests to protect their particular stake in having more of their ore 

used bv American steel producers, and on and on.

Where does this end?

Mr. Curtin. Mr. Steinberg, it seems to me you are reading a great 

number of complications into an essentially simple provision.

That is all. Mr. Chairman.

Mr. Steinberg. I said at the outset, Mr. Curtin and Mr. Chairman, 

tha t this bill, and previous marking bills before the Congress—I think 

they are all of a pattern—looks simple, and it looks reasonable, and it 

looks logical, but tha t when you begin to look underneath it and find out what the purpose is and find out what the implications are for future bills along this line, and when you think through what the implications are in terms of invisible barriers which other coun­ tries may create, restricting American exports, other countries which are very anxious to take an example from the United States, not just in technology, sir, but also in trade restrictions, when you look at the total picture T think you come out as we have come out in opposition to this kind of bill. May T conclude the thought and say tha t this kind of legislation doesn’t really come to grips with the problems of the steel container 

industry.

Mr. Curtin. It comes to grips with the problem of putting Americans to work, which is the problem in which I am primarily interested.

That is all, Mr. Chairman.

Mr. Steinberg. And I, too, sir.

Mr. Staggers. Mr. Keith?

Mr. Keith. Thank you, Mr. Chairman. As one of those who voted for this legislation. I have been some­ what concerned as to whether it has worked out as well as we hoped it would. T think the general feeling among the Members of Con­ gress from the New England area who supported this program is 

one of disappointment. Would you comment briefly on whether or not it has lived up to 

the expectations tha t you as an economist saw for it?

Mr. Steinberg. Well, in an important respect there is one disappointment and that is tha t the negotiating authority of the Presi­ dent is not as great as the bill envisioned and as we as supporters of 

the bill had expected. The President’s authority is not as great by reason of the fact that 

(he United Kingdom has been kept, out of the EEC. However, a judgment regarding the effectiveness of the Trade Expansion Act. Mr. Keith, will have to wait until the negotiations have taken place so tha t we get some idea of the extent to which for­ eign countries have removed the formidable barriers tha t they have against American exports, or certainly minimized those barriers, or reduced those barriers, in exchange for concessions which the Trade Expansion Act gives the President authority to make on our side. We haven’t yet had a chance to see how the P resident’s authority will 

be used.

''I //

■
40 MISCELLANEOUS LABELING BILLS

However, I do feel as I ind ica ted in response to a previous question, th at the fact th at the U ni ted State s las t ye ar enacted this kind of 

leg islation p uts th e rest of the worl d—and may I ad d—pu ts the A merican economy, on n otic e tha t this is t he tr ad e policy th e Ame rican Govern me nt reg ards as the one bes t cal culated to serve the n ati on al in te rest of th is c ountry, and this I th ink has ha d an effect whi ch T am not 

able to qu an tify, b ut I am sure is has had an effect on the attit ud e of 

countries aro und the wor ld tow ard th eir own im port policies.

T think th at if the Un ite d St ates had not tak en this action, othe r 

coun tries would have felt free to impose increased ba rriers on th eir 

imports, saying. “Lo ok, Un cle Sam is concerned abo ut protectin g his 

economy ag ain st im po rt com pet itio n. He is no t in favo r of a libera l 

trad e policy. W hy sho uld we?”

And the reac tion aro und the w orld would be one in favo r of import 

res tricti ons. Th ere fore, in th at sense, which is an ab str ac t sense, if 

you will, T think the T rade Ex pa nsion Act has been a good thi ng .

As to what the ultim ate r esults will be when i ts n eg otiatin g a utho rity 

is used, this rem ain s to be seen. We m ay have to wa it 2 y ears or more 

to find out.

Mr. K eith . Th an k you fo r yo ur attempts to answer briefly the 

que stio n T posed.

Mr. Steinberg. It is a com plex question, sir.

Mr. K ei th . May I say fo r th e reco rd that T think there is a tendency 

on the p ar t of economists to look at thi s problem in a na rro w and pe rha ps a naive way. Our inter na tio na l rel ations are dependent upon 

de aling with firmness and fro m a ha rd position, not only in the field 

of economics, but also in the field of the military.

Mr. S teinberg. I agree on the need fo r firmness a nd a ha rd n eg otiating position.

Mr. K eith . And they h ave to be conside red joint ly. In my opinion, 

there h as been too littl e o f t ha t coord ina tion in acc om plishing n ational 

objectives th roug h the use o f economic force and m ili ta ry force. I am 

incline d to agree with one economist of lon g sta nd ing and hig h repu ­

tatio n in nation al economic circles who wro te a book ca lled “E conomics 

in One Lesson,” th at T comm end fo r yo ur con sidera tion.

Mr. Staggers. Tha nk you very kind ly fo r yo ur testim ony, Mr. 

Ste inb erg .

Mr. Steinberg. Tha nk y ou, sir.

Mr. Staggers. Mr. Da nie ls, wou ld you sta te yo ur nam e and whom 

you represent?

STATEMENT OF MICHAEL P. DAN IELS, LE GISL AT IVE COUNSEL, 

UN ITE D STA TES-JAPAN TRADE COUNCIL

Mr. Daniels. My name is Michael Dan iels. T am legisla tive cou nsel o f the U nited States-.Tapan Tr ad e Council and T ap pe ar b efore the 

com mittee, with the ch airm an ’s permission at th is point, in opp osition to tw o o f th e b ills which are be fore you. both the lab eling bill and 

thp steel conta ine r lab eling bill.

Th e Un ite d States-.Tapan Tra de Council is an organizatio n composed of over 600 firms engaged in trad e betw een th e Un ite d States 

an d Ja pan in both direction s. Our inter est lies in the expansion of 

a he althy tr ad e betw een t hes e two nati ons.

Jtfc. a:
MISCELLANEOUS LABELING BILLS 41

We are opposed to thes e bills because they rep res ent a radical de­ pa rtur e fro m U.S . law a nd intern ationa lly accepted sta nd ards reg ar d­ ing ma rki ng. I f enacted, the y wou ld prove burden som e to U.S . man ­ uf ac tu rers and im po rte rs an d a h indran ce to a f ree flow of trade. Th ey would serve no real purpo se in in fo rm in g consum ers o r in p rev en tin g mi sre prese nta tion and dec eption in the m ar ke tin g of art icles in U.S . 

commerce. We are sure th at the sub com mittee is aw are of the piirposes of the Tra de Ex pansion Act of 1962 a nd of the serious ness with which the Uni ted States conte mp lates the negotia tio ns wh ich will be conduc ted pu rsua nt to t hat act wi th th e Eu ro pe an Economic C om mu nity and the othe r na tio ns of the Gener al Ag ree me nt on Ta rif fs and Trade. As the su bcommittee is undoubted ly aw are , the question o f no ntariff ba rrie rs will be the subje ct of serious ne go tia tio ns on the pa rt of the Un ited Sta tes . Beyond the tar iff , othe r me asures; such as intern al discrim inatory taxa tio n, various quota devic es, an d natio nal pre fe r­ ence pra cti ces loom lar ge as imped iment s to th e fre e exchan ge of m erchandise across natio na l b oundaries. M arking req uir em ents, if abused, wou ld co nstitute a no ntari ff bar ­ ri er to trad e and, as such, could figu re in the ne go tia tio ns to ta ke place in Gen eva next yea r. Th e enact me nt of th e leg islati on befor e the 

subcom mittee—and here 1 re fe r both to the steel conta iner lab eling 

bill and the lab eli ng identification bill—wou ld undoubted ly create 

pro blems fo r ou r ne go tia tor s in th ei r efforts to elimi nate foreig n nontariff barriers t o ex po rts from the U nited Sta tes . Th e Gener al Ag ree me nt on Ta rif fs an d Tra de has set fo rth pri n­ ciples go verning m ark s o f orig in, to w hic h the U ni ted State s and oth er mem ber n ati on s of the G A TT hav e adhered . Article IX , pa ra gr ap h 

2, rea ds as fo llo ws:

C on trac ting p art ie s reco gn ize th at, in ad opting la w s and en fo rc in g re gula tion s re la ti ng to m ark s of or ig in , th e difficu lties an d inco nv en ienc es whi ch such m ea su re s m ay ca us e to th e commerce and in d u str y of export in g co untr ie s sh ou ld he re du ce d to a min im um , du e re gard be ing had to th e ne ce ss ity of pr o­ te ct in g co ns um er s again st fr au d u le n t or m is le ad in g in dic at io ns.

Bv and large, U.S . law re ga rd ing marks of origin confo rm s to the princ iples laid down in the GATT . Th e en actm en t of th is leg isla­ tion, h owever, would con stitut e a wide d ep ar tu re from th ese prin ciples 

and would serve no useful purpose fo r th e Uni ted State s. The whole reason fo r marking w ith country of o rig in is m urky and appeals to un sta ted preju dices or sup pos ed preju dices on the part of 

consumers. In this connection, Mr. Ch airm an , I wou ld like to re fe r to an othe r bill before the committee on which we ha ve no po sition . Thi s b ill p ro ­ vides f or the m arking of potatoes w ith S ta te of o rig in. We w ere qu ite amu sed, if I m ight say, to rea d the title of th e b il l: “To req uire th at Ir is h p ota toe s sold o r shipp ed in in tersta te commerce be labeled as to St ate of origin.” We th ou gh t, pe rhap s fac etiously, if the com mittee will ind ulg e me, that, th ere sho uld be a 1 ab el ; “These Irish pota toe s not gro wn in Ir el an d” ; th is is an ind ica tio n of the kind of problem in ­

volved in marki ng with c ou ntry o f o rigin. I t would be frau du lent , cert ain ly, i f an artic le m an ufac tured abroad were m ark ed in su ch a way as to convey the i mpress ion to the pu rcha ser 

th at it was m an uf ac tured in the United Sta tes .
42 MISCELLANEOUS LABELING BILLS

It would be equally fradulent if, say, perfumes manufactured in 

Ohio were labeled “Paris ” or “France,” in an effort to share the prestige 

which such a label conveys. The present bills, however, do not stop 

at accepted principles regarding deception and misrepresentations 

but extend into the area of protectionism.

An accepted principle of marking requirements is that the “ultimate 

purchaser” be informed of the country of manufacture. In the case 

of the “labeling of labels” bill in a technical sense, the ultimate pu rchaser under American law would be the garment manufacturer or 

other manufacturer who buys labels from a foreign source and attaches 

such labels to his product. He is informed of the origin of such labels 

because, in order to be imported, packages containing such labels must 

be appropriately marked with the country of origin. The user, therefore, is in a position to exercise his judgment on whatever basis he 

chooses regarding the purchase of an imported article. Of what value 

would it be to the purchaser of a suit, for instance, to know that the 

label was manufactured in one country or another? He is presumably 

buying a suit and not a label, and the origin of the label would be of 

no importance in the exercise of his preference.

Labeling of a label might indeed be confusing in that there might 

be different countries of origin for the label and the item to which it 

is affixed. This might even result in a hindrance to the sale of goods 

manufactured in the United States. Suppose, for instance, a suit were 

manufactured in the United States and a label manufactured abroad 

were affixed to i t: the prospective suit buyer could very well confuse 

the origin of the label for the origin of the suit.

The policy purposes underlying labeling requirements are well met 

by the present provisions of U.S. law, which require that the manufacture r who buys the label be informed of the country of origin.

The steel container labeling bill represents an even wider departure 

from established practices and principles. Here, an item manufactured in the United tSates is required to be labeled with the country 

of origin of the raw materials used in such manufacture.

Accordingly, if a stigma does indeed attach to an imported product, 

products of American manufacture would suffer whatever disadvantages are inherent in such labeling merely because they utlized raw 

materials of foreign origin.

In thinking about this legislation, Mr. Chairman, we contemplated 

an endorsement, rath er than an objection, if the bill were amended to 

include every product manufactured from foreign materials. We 

could think of no better advertisement for imports in the American 

economy. We decided against such a suggestion because of the extensive labeling which would be required.

For instance, we thought about an American automobile, and I have 

here a list of foreign materials which go into the manufacture of an 

American automobile. I might say this is as o f Jan uar y 1960, and 

I assume the situation hasn’t greatly changed. An automobile includes the following imported materials: Aluminum, antimony, asbestos, cadmium, chromium, copper, cork, cotton, fluorspar, hides, iron 

ores, lead, manganese, molybdenum, nickel, rubber, tin, wood, and 

zinc.

As somebody has put it, there is a bit of Chile in the radiator, a dash 

of Cyprus in the brakes, and a little Egypt in the upholstery. If such
MISCELLANEOUS LABELING BILLS 43

labeling had to be displayed in any conspicuous place in a legend U r 

inch high, the sleek look of an American automobile would disappear 

beneath a patina 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 con­ taine r : “This container manufactured of imported steel made in Japan , which is manufactured from iron ore mined in India, manganese mined in the Philippines, with coal mined in the I nited States and scrap from the United States which, in turn, was manufactured from A enezuelan ore” and so on and so forth. We are sure 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 requirements on 

American manufacturers of containers. Regarding the materials which go into the manufacture of Japanese steel, I would like to mention for the benefit of the chairman that the State of West Virginia shipped to Japa n in 1962,6,465,000 tons of coal, largely used in steelmaking, which totaled in value $64,147,000. The figures that we have on imports of all countries of hot and cold rolled sheet which were mentioned in the statement totaled $38.8 million. I don’t mean to mislead the committee. There are other steel products coming in, but these were the two that were mentioned by the pro­ ponents of this bill. I could supply an overall steel figure if you wish, but I think it is illustrative of the fact that in the international ex­ change involving steel, the United States comes out pretty well. In conclusion, Mr. Chairman, we are confident that the Government agencies responsible for administering our labeling laws will take the position tha t the legislation before the committee should not be enacted. We are of the opinion that no constructive purpose would be served bv such enactment and that the interests of the United States do not lie in further nonproductive hindrances to a free exchange of goods in 

international trade.

Thank you very much.

Mr. Staggers. Thank you, Mr. Daniels.

I would like to ask one question. Do you have any of the figures on steel imported from other 

countries?

Mr. Daniels. I can supply those for the record, Mr. Chairman.

Mr. Staggers. I wish you would.

Mr. Daniels. We do have such figures. I didn’t bring them with 

me today.

(The information requested follows:)

United States-J apan Trade Council.

Washington, D.C., November 7, 1963.

Hon. H arley O. Staggers,

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

Dear Mr. Staggers : During the course of my testimony on November 6. you 

asked me to supply figures on steel mill imports. The enclosed sta tistic s cover the calendar yea r 1962 and the first 6 months of 1963. Table I gives a total dollar figure for each of these two periods for im­ por ts of steel mill and oth er steel products, and for exports of these products. Table II sets for th the total steel mill products imported, in net tons, from 

various countries.
44 MISCELLANEOUS LABELING BILLS

We would appreciate it if you would have the enclosed tables incorporated into 

tlie record following my testimony.

If any furth er information is desired, please let me know’.

Yours sincerely,

Mic h a el P. D a n ie l s,

Legis la tive Counsel.

Table I.—Tota l ste el m il l and ot he r ste el prod uc ts

[Dollar value]

C ale n d ar y ear F ir st 6 m o nth s 

1962 i 1963 i

Im p o rt s___ ____ _______________________________________________________

E x p o rt s_______________ _____ ___ _______ ______________________________

533,8 53,13 9 301 ,972,7 39

565,2 38.65 6 303 ,512,617

> C om piled b y th e A m er ic an Ir on & St ee l In s ti tu te , bas ed up on re p o rt s o l t h e U .S . D e p art m en t of C om ­

merce.

Table II .—Dmport® of to ta l steel m il l prod uc ts 1

[N et to ns ]

C o u n tr y C ale ndar yea r 

1962

F ir st 6 

m o nth s 1963

J a p a n ___ _ _____________ 1,0 71, 456 865, 629 B el giu m -L uxem bourg ___ . . . . ___________________ ________ 1.246,22 7 584,808 C a n a d a ____________ ______ ______________ ______ 367’ 184 206,801 U nit ed K in g d o m ___ . . ________ . . __ . 249,884 148,689 W est G e r m a n y .. .______ ____________ ____ 460, 272 172,627 F ra n c e __________ _____ ___________ 299’ 836 155, 730 O th e r .. ............. . . . __________ 405’ 656 234,091

T o ta l.......... ........................... ......................... .. . 4,100, 515 2,3 68,37 5

1

 So ur ce : A m er ic an Ir on & St ee l In s ti tu te .

Mr. Staggers. Mr. Van Deerlin, any questions ?

Mr. Van Deerlin. No, except to inquire was it just happenstance 

tha t our chairman is from West Virginia, or could you have provided 

equally convincing figures for any of the members of the committee.

Mr. D aniels. I could, Mr. Van Deerlin. I will send each member 

of the committee a study which we did on the origin of exports to 

Japan. I believe California was the largest State a fter Texas.

Mr. Van Deerlin. Obviously you will give us each a conflict of interest and we will have to disqualify ourselves from considering this 

legislation. Thank you.

Mr. Staggers. Mr. Glenn ?

Mr. Glenn. No questions.

Mr. Staggers. Mr. Curtin ?

Mr. Curtin. Thank you, Mr. Chairman.

Mr. Daniels, I am somewhat curious as to why you labeled my 

bill the labeling of labels.

Mr. Daniels. This refers to the Label Identification Act, H.R. 4994. 

Mr. Curtin. Oh, you were not then referring to H.R. 5662?

Mr. Daniels. No, I refer specifically to t hat bill star ting on page 4, 

the last paragraph. The other material referred to the other bill.

Mr. Curtin. I was having difficulty in reconciling a steel containe r with a label on a suit.

Mr. Daniels. This referred to the other bill before the committee. 

Thank you, Mr. Chairman.
MISCELLANEOUS LABELING BILLS 45

Mr. Staggers. Thank you, Mr. Daniels. This will conclude our testimony on steel container labeling and we will continue our hearings on the labeling bill as introduced by Mr. 

Macdonald. The committee will continue righ t now until a quorum call. Mr. Chandler, will you give your name for the record and proceed now ?

STATEMENT OF LOUIS CHANDLER FOR THE WOVEN LABEL MANUFACTURERS OF THE UNITED STATES OF AMERICA

Mr. Chandler. My name is Louis Chandler and I am from Boston, Mass. I appear on behalf of the Woven Label M anufacturers of the United States, which represents most of the 45 companies in the 

industry. We greatly appreciate the opportunity to present to you our views in support of H.R. 4994. A statement in support of the bill has been submitted to the committee and we respectfully request that it be incorporated in the printed record.

Mr. Staggers. It shall then be done. If you can summarize, that 

will be fine, or whichever way you care to give it.

(Statement follows:)

Sta tem ent of t h e W ove n L ab el Manufa cturers of t h e U ni te d Sta te s of

A m er ic a in Supp ort of H.R . 4994

I. INTROD UCTORY ST AT EM EN T

The Woven Lab el M an uf ac turers of the Un ite d St ates of America, repr esen t­ ing a major ity of th e 45 com pan ies in th e indu stry, ap pr ec iates the op po rtu nit y 

to presen t its view s in su pp or t of H .R. 4994. The proposed leg isl ation wou ld requ ire th at woven lab els be ma rked with the country of origin, in the same wa y th at vi rtua lly all ot he r finished text ile fiber prod ucts imported into th e Un ite d St ates m us t be ma rke d. Th e bill is in acc ord ­ anc e with lon gstan din g con gre ssional policy th at th e ul tim at e con sum er of any marke tab le product im porte d from an ot he r coun try sho uld l>e inform ed, by its 

ma rking, of th e coun try fro m wh ich th e prod uc t wa s im ported. Our high -wage­ pay ing ind us try is n ot seekin g an y spe cial co nside ratio n, bu t only th e same t re at­ me nt as to un marke d foreign goods th at othe r Am erican m an uf ac tu re rs have 

been acco rded. A wid e spread pr esen tly ex ists between th e price s of dom estic and imp orted woven labe ls. Th e pro pos ed legis lat ion does no t in an y wa y at tem pt to lessen th at disparity . It is int en de d me rely to requ ire th a t the comp etition betw een domestic and foreign prod ucts, en tir ely apart fro m price, sh all be fair. At the tim e of the en ac tm en t of the Tex til e Fi be r Pr od uc ts Ide nti fication Act (72 Stat. 1717, 15 U.S.C. 70, P ub lic Law 85-897. 85th Cong.. 2d sess.) woven label man uf ac ture rs assumed th at finished woven lab els would be ma rke d ind ivi duall y with the co un try of ori gin ju st as would all othe r finished textile prod ucts im­ po rte d into the Un ited St ates . Unfortuna tely, and lar ge ly through a misu nd er­ stan ding th at will be des cribed mo re fully below, ru le 45 of tho se pro mu lga ted un de r the ac t by th e Fe de ra l Trade Com mission, exc luded woven labels from its req uir em ents. Th e rule gro upe d woven lab els improperly with ce rtain tex tile prod uct com ponents which could no t pr ac tic ab ly be ma rke d in accorda nce with th e act . As will be shown below, it is pr ac tic al and not at all exp ens ive to ma rk each woven label with co un try of orig in. Th is can be done at infinitely small cost. Eac h woven lab el is a finished te xt ile prod uct which nev er loses its individu al ide nti ty. Su pp ort is urged for H.R . 4994 in or de r to br ing about fa ir comp etition be­ tween Am eric an-made an d foreign-woven labels. Markin g leg islation will not in any way in te rfer e with comp etition bas ed on price, no r on qu ality or del ive ry time. It does not run co un ter to na tio na l policy in favo r of expand ing world tra de . It is no t th e kind of prac tic e which th e Un ite d St ates ha s urg ed othe r
46 MISCELLANEOUS LAB ELING BIL LS

nat io ns to give up in fa vor of a les s re st ri cti ve world econom y. I t only re qu ires 

th a t fo re ig n- m ad e labe ls may not th en m as qu er ad e as a do mes tic pr od uc t.

II . HISTORY OF REQUIREMENTS TO MARK WOVEN LABELS

Wo ven labe ls were re qui re d to be in div id ual ly m ar ke d by fo re ig n co un try of 

origin u nder th e T ar if f Ac t ex is ting p ri or to 1930. The Cou rt of C us toms Ap peals 

in A rt is ti c W ea vi ng Co. v. M ag uire (U .S. im plea de d. 13 Ct. Cus t. App. 140. T.D . 

401X54 (1 92 5) ) ha d decid ed th a t in div id ual labe ls an d no t m er ely ro lls of lab els 

were re quir ed to be m ar ke d w ith th e countr y of origin. The in div id ual label 

an d no t th e co ntin uo us roll of labe ls is th e ite m im po rted an d re quir in g marking . 

The court ha d he ld th a t fa bri c la be ls are a fin ish ed fib er pro duct which doe s 

no t los e it s id en tity whe n la te r sewn to a ga rm en t. W ea vi ng th e na m e of th e 

co un try in to t he la be l a t th e tim e of p ro duc tion was held to be per fe ct ly p ra ct ic al .

The Tar if f Ac t of 1930 di d no t effect an y ch an ge in Ih e re quir em en t th at 

in di vi du al labe ls be so m ar ke d. The re quir em en t co nt in ue d in effect th ro ug ho ut 

th e 1930’s a nd 1940’s an d w as cha ng ed b y in te rp re ta ti on of th e B ure au of Cu sto ms 

on ly a ft e r th e decis ion in U.S . v. Gibso n- Th om ps on Co., In c. (C.A.D. 98, 27 Ct. Cu st. P at. A pp. 267, in 1954).

T hat de cision co nc erne d to oth bru sh ha ndle s to be mad e in to to ot hbr ush es in 

th e U ni ted Sta te s. Th e B ur ea u de cid ed , we be lie ve er ro ne ou sly, th a t woven 

lab els a re a co mpo ne nt of gar m en ts in th e same way as han dle s are of to oth ­

br us he s.

No co ns id er at io n w as appare ntl y giv en to th e fa ct th a t ha ndle s los e th ei r 

id en tity in a to ot hb ru sh . Pr ov isio n fo r w or di ng on a to oth br us h han dle wo uld 

pr es um ab ly invo lve addit io nal oper at io ns or a differ en t proc es s of m an ufa ct ure . 

Su ch w or di ng wou ld in ev itab ly co nf us e th e re ta il pu blic as to th e or ig in of th e 

complete d to ot hb ru sh . The pu rp os e of labe ls on th e oth er han d is to car ry 

wording . Lab el s could ea si ly be wov en to show one or tw o addit io nal wor ds on 

th e tu rn -u nder po rtio n. Lab el s im po rted in to th e U nite d S ta te s are fin ish ed 

ar ticl es , no t t o be inv olve d in any m anufa ctu ri ng by A mer ican firm s.

Th e ch an ge in in te rp re ta ti on as to wo ven labe ls follo wing th e Gibso n- Th om pso n ca se w as ap par en tly a ro utine act par al le ling ex ce pt ions m ad e as to a lon g 

li st of oth er pr od uc ts. La bel m anufa ctu re rs ha d ha d, of co urse , no op po rtun ity 

to te st if y in th a t ca se nor were they give n a hea ri ng whe n th e ru le in th a t case 

was to be ex te nd ed to cov er woven labe ls.

Ab ou t th e on ly oth er te xti le pro duc ts th en si m ilar ly ex clud ed from in di vi du al 

m ar ki ng re qu irem en ts were liat bod ie s; sh ir t bo die s, sle eves, an d co ll ars : un fin ­

ishe d b ra ssie re s: an d pie ce goods in scarf de sig ns. No ne of th es e oth er s could 

po ssibl y be ca lle d fin ish ed te xti le pr od uc ts. The re is no in dic at io n th a t th er e 

w as an y fin ding th a t in di vi du al m ar kin g of l ab el s was a t all bur de ns om e or th a t 

th e p art ic u la r fa cto rs be ar in g on th e in di vid ual m ar kin g of l ab el s w er e se riou sly 

co ns id ered .

W or ds ap pea ri ng on a labe l are th e re as on fo r th e lab el, and a ddin g o ne o r two 

mo re w or ds fo r co un try of origin wo uld invo lve on ly an auto m ati c proc es s done 

a t th e tim e of weavin g.

Ho w dif fe re nt from fib erbo ard to go in to sho es, or ey eg lass fr am es , or ho ur 

gl as se s fo r egg tim er s, or bl ad es fo r sc re w dr iv er s, to give ex am pl es of se ve ra l 

ot her pro duc ts which w er e ex clud ed from in di vi du al m ar kin g re qu irem en ts 

un de r th e sa m e in te rp re ta ti on by th e B ur ea u. Fr om th e ch an ge d in te rp re ta ti on 

by th e Cus toms B ur ea u an d th e la te r ex em pt ion of wo ven la be ls by th e Fed er al 

T ra de Co mm iss ion from th e co ve ra ge of th e ac t stem s th e an om al ou s si tu at io n 

wh ich th e prop os ed le gi sl at io n is in te nd ed t o c or re ct.

As h as been st at ed above, wo ven labe l m anufa ctu re rs loo ked to th e e na ct m en t 

of th e T ex tile Pro duct s Id en tifi ca tion Act in 1958 as a re tu rn to tr eatm en t of 

labe ls eq ua l to th a t ac co rded mo st o th er im po rted goo ds. T he la nguag e of the 

ac t sp ec ia lly di re ct ed to th e re quir em en ts fo r m ar kin g te xti le pro duct s seemed 

to pr om ise su ch eq ua l tr eatm ent.

Secti on 12 (b ) of th e ac t, ho we ve r, per m itte d som e ex em pt ions , as de term in ed 

l\v th e Fed er al T ra de Co mm iss ion . U nfo rt unat el y, a t th e tim e th e ru le s we re 

fo rm ula te d th er e w as a m is under st an din g th a t m ar kin g of co untr y of or ig in on 

in di vi du al w oven labe ls w ou ld co nf us e th e b uy ing public.

R eta il ers fe lt th a t “la be l m ad e in' (c ountr y of o ri g in )” wou ld lead man y 

pote ntial bu ye rs to th in k th a t th e en ti re ga rm en t was of fo re ig n ori gin . 

It was th en as su m ed th a t th e co untr y of or ig in, if in di ca te d a t all, wo uld ne ce ssa ri ly be wo ven in to th e lab el. Actua lly, it is per fe ct ly pra cti cal to wea ve the
MISCELLANEOUS LABELING BILLS 47

nam e of th at co un try int o th e tu rn un de r po rtion of the labe l, where it wou ld be 

hidd en. Th is is wha t II.It. 4004 prop oses. A re ta il custo me r could not be con ­

fus ed by any refer ence to th e for eig n origin of the label. Th e coun try of origin 

of the label would ap pe ar only on th e tu rn un de r po rtion o f th e labe l which would 

not be visible.

The rules p romu lga ted un de r the a ct be cam e effective Ma rch 3, 1960. The 4 5th 

and las t of tho se ru les exc lud ed a sh or t lis t of tex tile pro ducts, inc lud ing labe ls. 

On th at lis t were items suc h as shoelaces which would not be at all fea sib le to 

ma rk.

Woven labels would probabl y no t have been exc luded fro m th e cov erage of the 

ac t by rule 45, if it had not the n seemed th at ma rking of the ind ivi du al woven 

labe l would confus e reta il cu sto mers as to th e ori gin of th e who le garm ent. The 

presen t leg islati on would c orrect th e e rr or t hat w as then made.

Section 12 (b ), pe rm itt in g suc h rules, pro vid es th a t:

“Th e Com mission may exclu de fro m the pro visions of this Act othe r textile 

fiber pro ducts (1) which ha ve an ins ign ific ant or inc onseq uential textile filler 

con ten t, or (2) with respect to which the dis clo sur e of textile fiber co nten t is 

not nec essary for the prote cti on of the ultim ate con sum er.”

Eac h woven label is in its elf a com plete text ile fiber pro duct. It is not a 

prod uct as to which the dis clo sure of text ile fiber co ntent is unn ece ssa ry. If the 

m an uf ac tu re r intend s th at th e lab el will remain at tach ed an d at tr ac tive for 

the life of the garm en t, then the fiber content is releva nt in the sam e wa y as 

it is to the bu yers of ot he r finished te xt ile pro ducts . The proposed leg islati on 

is aim ed to requ ire th e we aving in of the coun try of ori gin bu t not of th e textile 

fiber con tent.

The proposed am endm en t is lim ite d in scope bec aus e un fa ir com petitio n in 

the woven lab el field ha s tak en the form of con cea lme nt of the coun try of 

ori gin and not of the fiber used in weaving the labels.

As dis cus sed above the ultim ate con sum er of woven lab els is the man uf ac tu re r 

whose prod uct will be pro moted an d identified by such labels. Notice of countr y 

of origin to such man uf ac tu re r is the notice wh ich is requ ire d to ca rry out the 

general in te nt of the act.

It would ap pe ar th at th e exc lusion of woven labels un de r rule 45 wa s based 

ne ith er on a low text ile fiber content in lab els or on any finding th at the disclosur e of the te xt ile fibers use d is un im po rtan t to th e buyers of labels. The 

regu lat ion was based, ra th er , on the misu nd ersta nd ing th at the n ex ist ed as to 

how the ind ivi du al lab els would be ma rked and on the con fusion th at any 

marking on the fac e of the lab els might cause to re ta il cus tom ers. Now th at 

suc h misu nd ersta nd ing no longer ex ist s it would ap pe ar th at the only logical 

rea son for exc lud ing woven labels from th e cov erage of the Tex til e Fiber 

Products Ide nti fic ati on Act ha s been removed.

III . INDU ST RY EFF ORTS TO REM EDY TH E EX CL US IO N OF WOV EN LABELS FROM TH E

COVERAGE OF TH E ACT

Since the requ ire men t of indiv idu al marking of lab els by country of ori gin 

ceased to lie require d, in the midflfties, by in te rp re tation of the Bur ea u of 

Cus toms, the indu stry ha s sou ght to corre ct the con fus ion which ha s followed 

as to which lab els ar e of dom estic and which of forei gn orig in.

The ma rking of th at coun try on pac kag es of labels ha s proved en tir ely inad eq ua te in disclosing to th e ultim ate bu yer of labels, the ga rm en t ma ker, th at 

coun try of orig in.

Lab els ar e woven in conti nuous fabr ic str ips, pac kag ed in rolls of 500 or 

1,000 per roll. An im po rte r of lab els res ell s and shi ps them to the ga rm en t 

maker, their ultim ate con sum er, in any of th e follow ing w ay s:

1. In th e or iginal package rece ived fro m the co un try of or igin;

2. Repac kag ed an d un de r the im po rte r’s own brand nam e, with the lab els 

then losing th ei r iden tit y as the prod uc t of an ot he r co untr y; an d

3. Afte r cu tti ng the ind ivi du al lab els fro m the roll and placin g the m in 

unma rke d conta ine rs, the lab els ag ain losing ide ntification of th ei r co un try 

of origin.

Most labels ar e del ive red in this cu t an d folded form and not in rolls.

The purpo se of ma rking leg isla tion is no t ach ieved wh ere th e final bu ye rs of 

labels withi n the Un ited State s fre qu en tly receive lab els w hose co un try of ori gin 

is n ot identified.

Pr io r to pa ssag e of the act, woven lab el m an uf ac tu re rs, alo ng w ith othe rs in 

the te xtile indu stry , h ad soug ht its enactm ent.
48 MISCELLANEOUS LABELING BILLS

The woven label industry believed tha t, with the enactme nt of that legislation, its requiremen t of fa ir competition, and proper m arking would cover labels along with finished textile products generally. With the promulgation early in I960 of the rules as determined by the Fed era l Tra de Commission, it became clear that equal treatm ent was to be denied the woven label industry. Virtually all other finished textile products would have to be marked with country of origin, but not woven labels.

Both prior to, and since the issuance of the rules, the woven label industry has presented to each of the Fe deral agencies involved its position that treatment of the ind ustry is anomalous and unf air.

In December of 1958 the ind ust ry atte mpted to secure from the Bureau of Customs an inte rpretation that woven labels would have to be indiv idually marked with the country of origin.

On Februa ry 16, 1959, a formal statem ent by th e industry was submitted to the Division of Classification, Entry, and Value of the Bureau of Customs. This statem ent argued in d etail that th e 1925 decision of the Court of Customs Appeals in the Ar tistic Weaving case, sup ra, should still govern the Bu rea u’s practices. Th at case had dealt dire ctly with woven labels and determined th at individual marking was both practic al and requ ired. No l ater determ ination by Congress or any decision by the courts furnished any basis for a change. The unrelated decision in the Gibson-Thompson case, supra, relied on by the Bureau was there distinguished.

Also in 1959, a brief was subm itted to the Fed eral Tra de Commission in op­ position to the proposed exclusion of woven labels under its rule 45 from the coverage of the Textile Fib er Pro duc ts Iden tification Act. Th at brief pointed out th at the Commission was planning to exclude woven labels from the normal coverage of the act w ithout any affirmative case as to why it should create such an exception. Congress having set a general policy, no item should be trea ted contrary to th at policy w itho ut a compelling case as to why an exception should be made. Apparently, the only argument in favor of the exception tha t was made to the Commission was the point about confusion to the retail public aris­ ing from "made in (country of o rig in)” a ppe arin g on the face of the label. Th at argument was based on the mis understanding discussed above. Apart from th at misu nderstanding, there was no v alid reaso n why woven labels were not to be trea ted in accordance with congressional policy. Mr. Joseph Krause, intern ational vice president of the United Textile Workers of America, AFL-CIO, representing many woven label workers, also appeare d in opposition to the exception.

In Septem ber of 1960, a complaint aga inst deceptive prac tices by a major imp orter of foreign woven labels was presented to Mr. Ea rl Roberts of the staff of the Fede ral Tra de Commission. In that partic ula r instance, the importer had misrepresented certain American-made labels offered by anoth er firm as being of foreign origin. Fa r more common, of course, is the practic e of repackaging foreig n labels so th at they will appear to be of American ma nufactu re.

The association has made numerous oth er atte mpts to preven t deceptive prac­ tices in connection with the importation of foreig n labels. No prac tical way of preven ting such concealment, ap ar t from legislation, has been found during more tha n 3 years of effort. The proposed legislation requiring the individual marking of all foreign made labels would effectively and simply prevent any confusion of foreign made labels w ith American made labels.

IV . T H E PR OPOSED LE GI SL ATI ON

The proposed legislation will simply provide th at woven labels not individually marked will be considered misbranded under the term s of the act. It provides for parallel treatm ent und er the Wood Prod ucts Labeling Act of 1939 for any labels which come within the terms of th at act.

The purpose of the act requiring the m arking of textile prod ucts with country of origin is to put before the ultimate consumer the fac t of foreign origin for whatev er effect this fac t may have on his decision to buy or not to buy. The ultimate consumer is entitled to weigh the fa ct of foreig n origin along with price ami appearance and representatio ns as to the qua lity of the product. The buyer may feel that in his experience the particu lar country of manuf acture may he eith er an encouraging or a discouraging factor in assessing the probable quality of the product.

Buyers of virtually all finished textile products from abro ad are at present given the assistance of the act.
MISCELLANEOUS LABELIN G BILLS 49

It shou ld be st re ss ed th a t H R . 4994 m er ely re quir es th a t co ng re ss io na l po licy 

as to te xtile pro duc ts gen er al ly sh al l ap ply to wov en labe ls. C urr en tly, on ly 

th e boxes co nt ai ni ng fo re ig n m ad e labe ls ne ed bear th e co untr y of or ig in . Su ch 

m in im al m ar kin g re quir em ents see m mer ely an in vit ati on to de ce pt ive pr ac tice s. 

Num erou s in st an ce s in w hich fo re ig n or ig in w as con ce aled h av e bee n in ve stig at ed . 

W hat eve r step s w er e ta ke n, w ithout th e be ne fit of th e pr op os ed le gi slat io n, ho wev er. ha ve pr ov ed ineffective. N um er ou s le tt ers from fir ms cutt in g an d fo ld in g 

labe ls in th e U ni te d S ta te s ha ve po in te d out to our as so ci at io n th a t under th e 

pr es en t re qu ir em en t it is ea sy en ou gh fo r th e c u tt er an d fo ld er as we ll as fo r th e 

garm en t m ak er to b e unaw are of th e fo re ig n origin.

Clear ly , th e pr es en t re quir em en ts as to th e m ar kin g of bo xes alon e are en tire ly 

in ad eq uate to carr y out gen er al co ng re ss io na l polic y an d to giv e no tice of th e 

co un try of origin. The o bjec t of t he p ropo se d le gis la tion i s to giv e th e fin al buy er s of wo ven labe ls 

in th e U nited S ta te s th e sa m e in fo rm ati on on co untr y of origi n as is give n th e 

ult im ate co ns um er s of o th er fin ish ed te xti le pr od uc ts. T h at le gi sl at io n is in ­

tend ed to br in g abou t fa ir an d open co m pe tit io n, entire ly a p a rt from pr ice, betw ee n fo re ig n an d do m es tic wov en lab els. The pre se nt ex em pt ion fr om th e m ark in g re quir em en ts of th e T ex ti le Fib er 

Pro du ct s Id en tifica tion Act is an om al ou s and w ithout an y logica l ba sis. Th e 

tr eatm ent of wo ven la be ls under th e prop os ed le gi sl at io n wou ld on ly be th at 

re qu ired now as to al l o th er fin ish ed te xti le pr od uc ts.

Louis C h an d le r.

Attorney for Woven Label Manufacturers of the United States of America.

Mr. Chandler. Thank you, sir. The industry is composed of a 

group of companies having employees in practically every State of the 

Union. Factories are located in States ranging from Maine to Cali­ fornia and some factories employ workers who live in several States, as 

for example, a factory in Maryland which is on the West Virginia line 

employs a number of workers living in the Second Congressional District of West Virginia. I had hoped tha t Mr. Van Deerlin would have stayed for a moment 

because I also made a reference, as you will note, to a factory in California, so there is no attempt to discriminate in any way in the presentation of the evidence. The proposed legislation would require tha t woven labels be marked 

with the country of origin, in the same way that virtually all other 

finished textile fiber products imported into the United States must be marked, instead of requiring, as is presently the case, that only the 

container be marked. The bill is in accordance with longstanding 

congressional policy that the ultimate consumer of any marketable product imported from another country should lx* informed, by its 

marking, of the country from which the product was imported. The industry is not seeking any special consideration, but only the 

same treatment as to foreign goods that other manufacturers in the 

United States have been accorded. We urge support fo r this bill in order to reestablish fair competition 

between American-made and foreign woven labels. The marking legislation that is here proposed does not in any way interfere with 

competition based on price nor on quality or delivery time. It does 

not run counter to national policy in favor of expanding world trade. 

It is not the kind of practice which this country has urged other nat ions to give up in favor of a less restrictive world economy. It only requires tha t foreign-made labels may not masquerade as a 

domestic product.

The basic history T would like to touch on briefly, 

that you have will speak for itself and I don't intend
50 MISCELLANEOUS LABELING BILLS

it is in the record, hut the basic history involving the marking requirements as to woven labels can be traced hack to a legislative enactment 

in 1922 which was further buttressed and repeated through the 1930’s 

and into 1939 in which there was the requirement tha t every article 

imported into the United States tha t is capable of being marked, without injury to it, during its manufacture sliould be marked to indicate 

the country of origin, and, interestingly, in 1925 the Customs Appeals 

Court stated that this law applied to individual woven labels.

This was done in the Artistic Weaving case, which is cited in our 

statement, where basically an attempt was made to include a roll of 

labels, maybe 500 or 1,000 labels in a bag, whether it be a paper bag, 

or a box. or some other kind of container, and the container was 

marked; and the court stated in that case that each label was an individual article, that this wasn’t the case of a material, whether it be 

a raw material or some semifinished kind of material tha t would become a component of a completely new article, and therefore the court 

held that each article had to be marked separately.

The court in that particular situation also quoted from another 

case which involved cigar bands, which stated tha t basically the imported article is not the bundle or package of cigar bands; it is the 

cigar band itself, manufactured for a particular purpose and use, 

put into packages for convenience: but, nonetheless, the character 

of the individual article had not been changed by putting it up in 

packages containing 100 similar articles, and the court held in that 

case that the cigar band was a manufactured article and is the article 

of importation and applied that rule to individual labels, even though 

labels too became p art of another product, but for a basic identification purpose just as the cigar labels.

Then this continued through until 1954 when the same court in another case called the Gibson-Thompson case, which is also cited, held 

that pieces of wood that were imported and marked with the country 

of origin need not be remarked to continue to show the country of 

origin to a retail customer after it had been manufactured into a new 

article, which was a tooth brush. The bristles were inserted in the 

end of the wood and the marking therefore disappeared. The ultimate purchaser was held to be the manufacturer, which is our contention as well.

We are not talking about the ultimate purchaser being the retail 

customer. We are delighted with the position taken, as a matter of 

fact, by Mr. Daniels of the United States-Japan Trade Council, because we agree with him; we are not trying to involve the ultimate 

retail customer in any way, but when he says the manufacturer should 

know, this we agree witli. The clothing manufacturer should know 

directly from each imported article: that is, each woven label. He 

cannot be expected to be apprised of this information from getting a 

box tha t may come to him from a jobber who buys these labels from 

outside of the country, or from a label manufacturer who himself may 

buy labels from outside of the country and repackage them in another 

box of his own, so that the clothing manufacturer is not aware of the 

fact that he is getting a label from another country.

This is the kind of u nfair competitive practice tha t we seek to avoid 

and to nullify. Unfortunately, after the Gibson-Thompson case, what happened in that situation was that the Bureau of Customs applied
MISCELLANEOUS LABELING BILLS 51

the rule on many materials across the board and they exempted such 

things as blades for screwdrivers, and fiberboard going into the manufacture of shoes, and shirt sleeves which became a component of a 

shirt, but they also in this apparent haste to consider everything as 

coming within the purview of the Gibson-Thompson case, as a routine 

matter exempted from the marking requirements the individual woven 

labels without having regard for the court case which had said woven 

labels are each articles that are susceptible and appropriate for marking.

In fact, the same court had held that not only were they separate 

articles for marking purposes, but tha t they were not manufacturing 

components of a new article. In order to remedy this situation this 

industry backed the Textile Products Identification Act of 1958, which 

required tha t imported textile fiber products must show the country 

of origin, but tha t act in a subsection 12(b) gave the Federal Trade 

Commission the right to make exclusions from the provisions of the 

act and the FTC in 1960 excluded woven labels, apparently again 

because of misinterpretation of the Gibson-Thompson case and because they just followed the earlier administrative ruling of the 

Bureau of Customs. It is, therefore, a fact tha t the sole requirement 

presently in effect is that only the box or bag or wrapper in which 

the labels are shipped from the country of origin need be marked.

The labels arriv e in the rolls, as we have already indicated: the 

domestic jobber may repack them, or the domestic label manufacturer 

who finds for one reason or another he wants to buy from some other 

country may repack them in their own boxes, which are not marked 

with country of origin, and the unmarked labels are then shipped to 

what Mr. Daniels in his statement says is the ultimate purchaser who 

should know, who should be apprised, but who isn’t apprised; so 

tha t we are in accord in fact not only with this comment, but with 

the Departments of Commerce and Treasury when they say that the 

ultimate purchaser is the clothing manufacturer.

We fully agree tha t this should be so, and the label, therefore, 

when we say th at its hould be marked, as will appear from the testimony of an industry representative, the only other witness who will 

appear, with an exhibit, this identification would go on the turnunder 

portion of the label and would disappear after the clothing manufactu rer put it on the back of his shirt collar or on the inside of his 

coat because it would be sewn in, and there is provision on every 

label for this kind of a turnu nder, and in this turnu nder appears 

sometimes trade marks or other kind of insignia.

The basic reason for the legislation as we look at it is the reason 

tha t Congress itself has set forth in the Textile Fiber Products 

Identification Act, and it reads “an act to protect producers and consumers against mismarking” and so forth.

It read s:

The importation into the United States of any textile fiber product which is 

misbranded shall be an unfair method of competition and an unfair and deceptive act or practice in commerce under the act.

And this is all tha t we are addressing ourselves to. We will compete to the best of our ability as an industry with industry wherever it 

may be in this world, b ut it should be on the basis tha t Congress has 

outlined, fair competition.
52 MISCELLANEOUS LABELING BILLS

Certainly nobody can come into this room and argue before you, Mr. 

Chairman, or your committee tha t they want to engage in unfa ir 

competition. The statements that are made by those few opponents 

to this legislation as to the construction to be given the Gibson-Th ompson case are erroneous because actually tha t case only holds tha t the 

retail customer need not be appraised of the country of origin where 

imported articles change their identity and become a new article. 

This is what we talked about a moment ago.

We are not talking about re tail customers. As T have already stated 

the courts have held that woven labels are not articles that, change in 

their material form in any way; but most important, the GibsonThompson case actually stated not only that the loss of the marking 

durin g the reprocessing was no violation, and th is is where the Department of Commerce missed the point and where the other opposing 

statements also miss the point because, and I am quoting from the 

decision itself, “At the time of their importation the involved articles 

were marked in such manner as to indicate to the ultimate purchaser 

in the United States, that is, the manufacturer of the tooth brushes and 

hair brushes, the country of their origin.”

And this is all tha t we say we want, to avoid having the packages 

as the sole means for notifying the clothing manufacturer, because 

he may never see the package, tha t the product itself should be so 

marked that the clothing manufacturer, who under Gibson-Th-ompson

is the ultimate purchaser, would be appraised of the foreign country of 

manufacture. I reiterate the retail customer thus would not be notified. The industry does not want him to be notified any more than the 

Departments of Commerce or the Treasury or the Jap an Trade 

Council wants him notified.

There are several brief comments that I want to make only with 

reference to the statements tha t are on record and presented to you 

in th is hearing by the several parties who filed them in opposition to 

the bill, and one particula rly was to the effect that the industry 

should have gone through various other channels. The industry has 

been doing this for the last 5 to 6 years.

The Treasury says tha t there is a long record of approaches by 

the industry to the T reasury Department and that the Treasury Department, in fact, referred the parties to Customs.

We have, dated February 16, 1959, a brief tha t runs some 14 or 

15 pages addressed to the Division of Classification, Entry, and Value, 

Bureau of Custom, Treasury Department, getting into the background 

and the problems th at are involved in the selling of labels by domestic 

jobbers to customers who are clothing manufacturer and the problems 

tha t the clothing manufacturers have when they have complaints 

against foreign labels for bleeding or shrinkage, or even when there 

are exact copies of the labels made by American manufacturers, 

claims made against an American manufacturer, who then has to 

turn to the manufacturer of the garment who has put the label into 

his garment and comes to the woven label manufacturer with the complaint and the domestic label manufacturer says “You may have exactly the same label, but your jobber didn’t buy it from us. He bought 

it from some foreign company.”

These incidents have actually happened, so I want to repeat the 

statement made by the legislative counsel of the United States-Japan
MISCELLANEOUS LABELING BILLS 53

Trade Council. He is referring to both bills tha t are being heard 

today, while we are talking only about H.R. 4994, because ours is an 

article th at goes to the ultimate purchaser, tha t is, the manufacturer 

of the garment, in its final finished form and not as a material that 

is made into a new product. H.R. 4994 would serve no purpose, he 

says, to inform customers or to prevent misrepresentation and deception in the marketing of articles in U.S. commerce.

Actually, H.R. 4994, the bill tha t we support, does serve tha t pu rpose. As a matter of fact his argument supports H.R. 4994 because 

he goes on to say, quoting from the GATT setting forth principles 

governing marks of ori gin: “Contributing parties recognize that, in adopting laws and enforcing regulations relating to marks of origin” there are difficulties 

and inconveniences, but due regard should be had to the necessity of 

protecting consumers against fraudulent or misleading indications.

This is the kind of thing that we are talking about. Mr. Daniels of 

the United States-J apan Trade Council, in his written statement is 

in agreement with the basic principle tha t the clothing manufacturer 

should be apprised of the country of origin. His objection, as well 

as that of Commerce and Treasury, is that they have misconstrued 

the purpose of the proposed legislation. They were apparently of 

the opinion that there was a requirement tha t the retail customer be 

notified. This is not the intent of the bill and it does not so state. 

There is no legislative change in the interpretation to be given to 

the term “ultimate purchaser.” It would be the clothing manufacturer. This is what we are talking about. Under all of the circumstances, knowing the sympathy that our opponents have with our 

position, despite the written word tha t is being submitted here, and 

knowing t hat the general legislative intent of the act is to protect the 

free trade and commerce on a fair competitive basis, we support this 

bill and urge your support. Mr. Alex Johnson, assisted by Mr. Jim Rennie, would like to present 

a statement.

Mr. Staggers. We will not be able to hear it now, unless they just 

want to present it for the record, because we will be in session and I 

would have to get permission to proceed after this quorum call. If 

they just want to present a statement for the record I would be glad to 

have them do that, but if they want to present it orally, I will have to 

get permission to come back.

Mr. Chandler. I think they would rathe r stay.

Mr. Staggers. All righ t. I will tr y to get permission.

The committee will adjourn until 2 o’clock.

(Whereupon, the committee recessed at 12:27 p.m., to reconvene at 

2 p.m., the same day.)

after recess

(The subcommittee reconvened at 2 p.m., Hon. Harley O. Staggers, 

chairman of the subcommittee, presiding.)

Mr. Staggers. The committee will come to order.

At. this time we will be glad to hear from our colleague, Mr. Macdonald of Massachusetts, author of one of our bills.
54 MISCELLANEOUS LABELING BILLS

STA TEM ENT OF HON. TOR BER T H. MACDONALD, A RE PR ES EN TA ­

TI VE IN CONGRESS FROM TH E COMM ONWEALTH OF MASSA CHUSETTS

Mr. Macdonald. Thank you very much, Mr. Chairman. I appreciate the opportunity of a ppearing here this afternoon in support of my 

lull H.R. 4994 which would amend the Textile Fiber Products Identification Act and the Wool Products Labeling Act of 1939 in order to 

require tha t imported woven labels must have woven into them the 

name of the country where woven.

As a Representative from the Commonwealth of Massachusetts, I 

am deeply concerned about the serious economic plight faced by the 

American textile industry today. High wage-paying manufacturers, 

in Xew England as well as other sections of the United States, are 

being menaced daily by the importation of cheap textile products. 

The woven label industry is an important segment of our textile industry. The legislation which I have introduced seeks to accord no 

special advantage to manufacturers of woven labels but rather seeks 

to accord the woven label industry the same marking regulations as 

that required of other finished textile products imported into the 

United States.

When Congress enacted the Textile Products Identification Act in 

1958, the woven label industry viewed the provision in the act relating 

to the requirements for marking textile products as calling for the 

treatment of woven labels equal to that accorded other finished textile 

products. However, the Federal Trade Commission promulgated a 

regulation excluding woven labels from the requirements of the Textile Products Identification Act. The regulation was based on a 

misunderstanding by both retaile rs and the Federal Trad e Commission that the marking of country of origin on individual woven labels 

would confuse the buying public as to the origin of the whole garment. 

It was assumed that the country of origin would be woven into the 

portion that necessarily would be shown to the retailing public. However, a m anufacturer m ight weave the name of country of origin into 

the turnu nder portion of the label where it would be hidden.

I introduced H.R. 4994 to clear up this misunderstanding caused by 

the belief that marking requirements for woven labels would confuse 

retail customers. This legislation will serve to put on notice the 

ultimate consumer of woven labels: namely, the manufacturer whose 

product will be promoted and identified by such labels.

I nder present law, imported woven labels need only carry the country of origin on the box or container in which they are brought into 

this country. I have been informed by representatives of the woven 

label industry that this requirement has given rise to deceptive practices; such as, the repackaging of foreign woven labels so that they 

appear to be of American origin to manufacturers.

H.R. 4994 seeks to maintain the longstanding congressional policy 

that the ultimate consumer o f an imported product be informed by its 

marking of the country from which it was imported. A regulation of 

the Federal Trade Commission has placed the woven label industry in 

an anomalous and unfair position which sets labels apart from all 

other finished textile products. H.R. 4994 in no way calls for a reduction of the importation of woven labels from other countries. It does
MISCELLANEOUS LABELING BILLS 56

seek to bring about open and fai r competition between fnreig n and domestic woven labels by requiring that the final buyers of woven lal>els be given the same information on country of origin as is given 

the ultimate consumers of other finished products. I want to thank you again, Mr. Chairman, for allowing me the opportunity and the privilege to testify here before this committee. I would be very happy to answer any questions if there are any.

Mr. Staggers. Well, my colleague from Massachusetts, as a member 

of this committee I have no questions to ask you but I would like you to come and sit with me on the committee if you will while we hear 

the rest of the witnesses. I would say th is: 1 congratulate you on your attention to the prob­ lem and to the people that you represent and to your bills in carrying out your intentions to try to be helpful in introducing this legislation. I say to the people you represent that you certainly are trying to do 

your job as you see it in their behalf.

Mr. Macdonald. Thank you very much, Mr. Staggers.

Mr. Staggers. We are ready for our next witness. Would you come 

forward and identify yourself ? I believe the rest of these gentlemen will probably submit a statement for the record. We are trying to accommodate you gentlemen since you are here today in order tha t 

you may not have to stay over another day.

STATEMENT OF ALEXANDER JOHNSON, ARTISTIC WEA VING CO.; 

ACCOMPANIED BY JAMES M. REN NIE , LABEL WEAVE, INC.

Mr. J ohnson. I am Alex Johnson of Artistic W eaving Co., a domestic woven label manufacturer, of Pompton Lakes, N.J. We have 

plants also in North Carolina and in Nebraska. Here are my comments: Country of origin marking requirements, whether stipulated under the Textile Fiber Products Identification Act or under the Fu r Products Labeling Act, or any exclusion from a requirement of marking, in either case revolve around the basic mark­ ing law which is contained in the Tariff Act of 1930, as amended. In substance, the act provides that every imported article be legibly and permanently marked as the nature of the article will permit. The act necessarily also provides an alternative of marking just the con­ tainer of an article under certain circumstances. Fundamentally that would be where the article itself could not physically be marked, such as yarn put up in a bundle. You cannot mark yarn so you mark its wrapping or its container. Some articles would l>e marred by marking, so you mark the container. Some other articles could be too costly and burdensome to mark individually, so there again, you are permitted to mark the container. If no such governing circumstances prevail—if marking the article can be done at practically no cost, no separate operation, and no im­ pairment whatsoever to the use or appearance of the article and where in fact the marking completely disappears from view once the article is put to use, in such a situation there are no valid grounds to dismiss the basic marking requirement of the law. You must then come to the conclusion that any request from an im porter for exemption from indi­ vidual marking requirement for an article such as the one described,
56 MISCELLANEOUS LABELING BILLS

can yield only one resu lt; namely, possible nondisclosure of the country 

of origin of the article in contravention of the law’s intent.

In any such matter as the one presently under review, there is always 

reason to expect that State or Treasury or Fede ral Trade, or Commerce, one or all, will enter the proceedings automatically, being p roperly on the alert as to whether some undue curb on imports and trade 

is being attempted.

We flatly disclaim anything of tha t nature. We strongly endorse 

the principle of fair trade between nations who enjoy friendly relations. We recognize where economic relief is indicated, the appropriate avenues are tariffs, antidumping, or quotas. We are entirely 

outside of those realms in this present matter and completely disassociate the present marking request from any such question or issue.

If, on the other hand, any other party at interest, either commercial 

■or governmental, seeks to intrude with an allegation tha t insistence on 

proper marking of a qualifying article is in some strange way an attempt to curb imports, any such allegation should be given no consideration and should be rejected. Any representation tha t proper marking 

might operate as a curb on trade is an attack on the marking law itself, 

However- as long as the marking law is on the books, it must be administered without discrimination to cover all qualifying articles.

Now, as to the request for individual marking of woven labels, each 

woven label is a unit, and is used singly. They are woven on jacquard 

process looms which are the same the world over. The jacquard machine is mounted above the loom, and by guidance of perforated cards 

laced together to resemble a piano roll, controls the rise and fall of 

what you might compare to puppet strings. These suspended strings, 

in turn , guide the interweaving of the label warp in relation to the 

cross weaving by shuttles of separate yarns which combine to form the 

ground fabric and the wording interwoven in it, the wording being 

referred to as “figure.”

The controlling cards were machine perforated by guidance from 

a hand-painted design done on graph paper which delineated the respective warp and figure yarns which would create the finished label.

At this point, Mr. Chairman, I have some exhibits to show. Could 

I have your permission to have assistance ?

Mr. Staggers. Yes.

Mr. J ohnson. Would it be poaching if he walked into the congressional area here?

Mr. Staggers. No, sir.

Mr. J ohnson. Mr. Rennie ?

Mr. Rennie. Would it be permissible to spread these here ?

Mr. Staggers. Anything in reason.

Mr. Johnson. Exhibit I herewith-----

Mr. Rennie. This is the making of the hand-painted controls, the 

cutting of the cloth which in turn controls the rise and fall of it.

Mr. J ohnson. So exhibit I herewith is a jacquard design as last 

referred to and was the guide for cuttin g the perforated cards to control the weaving of label herewith showing featured wording “Wash 

and Wear" and marked “Exhibit I-A.”

Mr. Rennie. Here is an example of the label.

Mr. J ohnson. This label is without country-of-origin marking.

Mr. Rennie. Mr. Chairman, you might wish to compare this.
MISCELLANEOUS LABELING BILLS 57

Mr. J ohnson. It can be seen, the vast amount of brush strokes 

that went into the job of pain ting this design. Now, in order to provide country-of-origin m arking you do not do a thing with the original design, exhibit I; you simply combine with it the very small 

supplementary design piece which reads “Jap an ” just for the purpose 

of this illustration, the same being marked “Exhibit I I. ”

Mr. Rennie. I will have to show you this again, Mr. Chairman.

Mr. J ohnson. Now, by comparison with exhibit I, you can see the 

very negligible amount of brushwork involved in creating the country 

of origin.

Exhibit II- A shows the label so marked.

Mr. Rennie. This is the label.

Mr. J ohnson. It would be impractical to brin g here the complete 

card pattern used to weave the “Wash and Wear” label. Suffice it 

to say exhibit I-A , without marking, represents 788 cards laced together and these cards have 56,737 perforations. We do show here the 

cards involved in weaving the marking of label exhibit II-A . They 

are 6 in number and contain 185 perforations and are marked “Exhibit 

II -B ” ; and the weaving operation by this very insignificant card 

change automatically includes the m arking wording in the completed 

label.

Mr. Rennie. This is caused, Mr. Chairman—would be cut for the 

main, to be woven in as compared with the vast amount of cards. In ­

cidentally, these cards, Mr. Chairman, can be reused again with other 

labels. You do not have to recut for every one, merely by adding 

these cards.

Mr. J ohnson. Now, as to materials used : 1,758 inches of yarn went 

into the weaving of the label I-A without the marking and 3 inches 

of yarn were added to include the marking. That is why we say that 

the marking of each woven label can be done at practically no cost 

and involves no separate operation, but instead, is accomplished in one 

and the same basic weaving process by which the completed label is 

produced.

Next, on the matter of marking as related to the use of the woven 

label, it is recognized th at the origin o f a woven label is of no significance to the ultimate consumer of an article to be labeled and at that 

point the label should show no marking. Here again this product 

fully qualifies for marking.

Exhibit I II shows-----

Mr. Rennie. These are actual physical labels, Mr. Chairman and 

Congressman, showing the various ways that the strip comes off the 

loom. There is one marking and the label that is turned under. There 

is no country of origin on it. This is the way it is attached to the 

graph.

Mr. J ohnson. Jus t to review that, the n:

A. A label of conventional form fe aturing “Wash and Wear” wording as i t comes off a loom in strip form—no marking.

B. The same unmarked label, end folded or turned under, ready 

to sew in.

C. The same unmarked label as sewed into the product to be labeled.

A A. The same label in strip form—containing country-of-origin

marking “Ja pa n” in the turn under or sew-in area.
58 MISCELLANEOUS LABELING BILLS

BB. The same label, with the sew-in area turned under, in which 

manner only can the label be used. Mark still shows. Label not yet 

used.

CC. The same label sewed into a product. The country-of-origin 

marking has disappeared. The marking complied with the law up 

to the point of the imported label use, then ceased to be seen, in effect 

ceased to exist.

Mr. Rennie. Mr. Johnson, could I interrupt there? I think this 

answers very clearly Mr. Macdonald's previous statement concerning 

confusion of the ultimate consumer and the retail consumer.

Mr. Staggers. You mean th is being turned under?

Mr. Rennie. Yes; because it does not show country of origin in a 

suit or shirt as the whole garment being made from the country of 

origin.

Mr. J ohnson. At this point, after use, there is no final, visible 

difference whatsoever between label C with no marking and label 

CC with count ry-of-origin marking. They both look and are exactly 

the same. The only difference is label CC with marking, though now 

hidden, complied with the law's intent. Label C, if imported without marking, failed to do so without supporting reason.

Exh ibit 111 includes labels subject to other sew-in methods:

D. Shows a label in strip form featuring “Custom Tailored" no 

marking.

E. Shows the same unmarked label, bias folded with the folded 

ends in stickup position for insertion under a seam of a garment, 

usually at the inside of a collar line.

F. Shows the same unmarked label now sewed into the garment.

1)1). The same label in strip form with country-of-origin marking,

this time by way of illustration “Germany" in turnunder in sew-in 

area.

EE. The same label cut and bias folded, ready (o sew into a garment 

seam, still marked.

EE. The same label now sewed in. The marking was in the sew-in 

area of the label and has disappeared.

Mr. Rennie. Par t of this, Mr. Chairman, is the fact that this is 

one method of cutting the fold, this is another method, and this would 

be the third method.

Mr. J ohnson. G. Label reading “Pants Land'’ illustrates another 

method of sewing a label—here now in strip form, no marking.

IT. The same unmarked label pinked-cut to retard fraying and 

providing sewing margin at the top for insertion under a garment 

seam.

I. The same unmarked label, now sewed in.

GG. The same label in strip form, now marked in the sewing 

margin and for illustration showing “Sweden’’ as the country of 

origin only up to time of use.

Till. The same marked label, individually cut and ready for use.

IT. The same label sewed into the garment, the marking gone, 

and the label originally foreign marked now no different from the 

unmarked label I, still complying with the law’s intent up to time 

of use.

Mr. Rennie. Mr. Chairman, Congressman, I think the confusion 

in the past has been there would be some exception by having the
MISCELLANEOUS LABELING BILLS 59

country of origin deface it and confuse the retailer or ultimately the 

consumer. That eliminates that.

Mr. J ohnson. Nearly all imported woven labels are bought by 

domestic importing jobbers who then resell to the label customer. 

The labels enter, packed in multiple-case lots in which tbe different 

customer labels are combined and then removed for delivery to 

each customer. Some of these labels come in, put up in continuous 

strips wound on rolls like exhibit IV reading “U.S. Army”-----

Mr. Rennie. This is exhibit IV.

Mr. J ohnson (continuing). And before delivery to the customer 

are cut apart and folded and packaged as in exhibit V, and it would 

be routine to ship to the customer in domestic boxes.

Mr. Rennie. In other words, if the labels are cut in this country and 

put on the boxes. This is the same one that was cut.

Mr. Macdonald. Are you saying that these U.S. Army labels are 

made in some foreign country ?

Mr. J ohnson. No.

Mr. Rennie. No, just for illustration.

Mr. J ohnson. This was taken at random for illustration.

Mr. Macdonald. I see.

Mr. Rennie. Keep that as a souvenir, if you want it.

Mr. J ohnson. Some imported labels are stocked in bulk for stores 

along with domestic labels, and sold piecemeal to the stores’ garment 

makers with no practical manner of isolating and maintaining foreign 

source identity. In short, even at best, any adequacy of label marking 

via the container is a chaotic thing to control and impossible to assure 

maintenance of marking up to the time of delivery to the user.

Based on all the foregoing, favorable consideration of IT.R. 4994 is 

respectfully requested.

Mr. Rennie. Shall I give these exhibits to the clerk, Mr. Chairman?

Mr. Staggers. Well, I don’t know. Should they or should they not ?

Mr. Painter. We do not need them.

Mr. Staggers. All right. I was wondering before the full committee if they might be needed. It might be wise if the clerk would have 

them, I believe.

Mr. Painter. We could keep them until the full committee.

Mr. Staggers. If you would, let the clerk keep them and if we need 

to have anything brought before the full committee we can explain it.

Mr. Rennie. Thank you.

Mr. Staggers. Thank you, Mr. Johnson.

I have only one question. This must run into considerable money 

from the effort you are making here today and with the advent or the 

introduction of this bill. Do you have any figures to show what 

amount of money is involved in the buying of these abroad? I mean 

what the amount of business runs to ?

Mr. J ohnson. The value of the imported labels?

Mr. Staggers. Yes, what is the quan tity and the amount of money 

involved in it ?

Mr. J ohnson. We don't have any precise statistics on it or a source 

of information, but there is an assumption that the 

may he—let me p ut it this w ay: Yearly the woven 

be $25 million, and 25 percent of this may presently 

foreign sources.

> domesJjjcjndustry 

label industry ipay 

be coming in
60 MISCELLANEOUS LABELING BILLS

Mr. Staggers. The industry would use approximately $25 million 

during the year ?

Mr. J ohnson. Yes.

Mr. Staggers. And you assume that probably one-fourth of that is 

coming in from foreign countries?

Mr. J ohnson. Approximately. Tha t would seem a safe assumption.

Mr. Staggers. That would be around $61

/

4 million ?

Mr. J ohnson. It could be. That would be predicated on domestic 

values, I would say, because the Japanese labels cost a lot less than the 

domestic labels, a lot less.

Mr. Staggers. Than from Germany, and I believe from Belgium, 

too, coming in from all the different countries ?

Mr. J ohnson. Some little from the other countries, bu t there is one 

nation tha t I think accounts for the predominance of the imports.

Mr. Staggers. I noticed in your testimony you say tha t you believe 

in free trade, or you don’t quite say it tha t wa y; you say t h at:

We strongly endorse the principles of fai r trade between nations who enjoy 

friendly relations.

Mr. J ohnson. Correct.

Mr. Staggers. Then your contention is tha t this won’t have anything to do with the trade, but tha t it should just be m arked as to 

where it comes from ?

Mr. J ohnson. That is precisely it.

Mr. Staggers. You are not trying to prohibit it.

Mr. J ohnson. No. That is precisely it. There is an article on 

the legislative books tha t provides for marking of qualifying articles 

and we maintain this is one such qualifying article and it should not 

be discriminated against, just in the interest of fair competition. 

Whatever the fairness of the marking law is, let the result fall as it 

may, and the law should be complied with, we feel.

Mr. Staggers. Well, fine. Thank you very kindly. Do you have 

any questions?

Mr. Macdonald. Just one. Is it correct when the people in Massachusetts told me that early, when this regulation came out, they 

thought they were goin<r to be afforded the same protection as any 

other kind of textile product?

Mr. Johnson. That is correct.

Mr. Staggers. And your main contention is you don’t think all the 

labels should be discriminated against in the textile field; is tha t 

correct ?

Mr. J ohnson. That is precisely it.

Mr. Macdonald. Than k you.

Mr. Staggers. I thin k that is all.

Mr. Johnson. Thank you very much.

Mr. Staggers. Thank you very kindly for your testimony.

Do we have any other witnesses who want to appear in person to 

testify on this bill ?

If not, we would be happy to have any testimony or statement 

anvone might wish to submit for the record.

Mr. Chandler. I would like to submit on behalf of the industry 

a statement in rebuttal to any statements that have been filed in 

opposition.

Mr. Staggers. What is that?
MISCELLANEOUS LABELING BILLS 61

Mr. Chandler. I should like to submit on behalf of the proponents 

of this bill a written statement in rebuttal to some of the written 

statements that have been filed by opponents of the legislation.

Mr. Staggers. I think that is fair enough, if you have a certain 

time. There will have to be a time lim it on i t because we want to get 

into the executive session. We would have to have it before that 

time. What time would you need ?

Mr. Chandler. When do you want to get into executive session? 

We will have it in before then.

Mr. Staggers. Can you have it in this week ?

Mr. Chandler. Yes.

Mr. Staggers. Produce that for the record and that shall be put 

into the record.

If there is nothing further , the committee is now adjourned.

(The following material was submitted for the record:)

Nationa l Cou nc il of A me ric an I mporters, I nc.,

New York, N.Y., N ovember 4,1963.

H on. Oren H ar ris,

Chairman, Intersta te and Foreign Commerce Committee,

House of Representatives,

Washington, D.C.

Dear Mr. H ar ris : We are informed tha t your committee will hold public hearings on November 6 on the follow ing bills:

H.R. 4994, introduce d on March 19, 1963. by Rep resentativ e Torbert H. Macdona ld proposing to amend the Textile Fiber Pro duc ts Identification Act and 

the Wool P roducts Labeling Act of 1939 in order to require that imported woven 

labels must have woven into them the name of the coutnry where woven ; and

H.R. 5662, introduced on April 11, 1963, by Rep resentativ e Willard S. Curtin 

proposing to pro hib it the introduction into interst ate commerce of any shipping 

con tainer manufac tured in the United States from imported steel unless the 

con tain er is marked so as to indicate the country of origin of the steel.

Our organiz ation desires to go on record in opposition to both of these bills 

and resi>ectfully requ ests th at thi s letter be incorporated in the report of the 

public hearin gs.

As a matter of general principle, the National Council of American Importers 

objects to special marking provisions to indicate the foreign country of origin of 

mate rials used in the manufac ture of domestic articles made in the United 

States, such as proposed in H.R. 5662. While this pa rticu lar bill deals with 

a special situ atio n, if a sim ilar requ irem ent was to be given broad application, 

thousands of products manufac tured in the United States with the use of 

imp orted ma terials or component parts would have to have such foreign materia ls or pa rts identified as to the country of origin. It is well known that 

nearly two-thirds of our annual total imports are either raw materi als or semimanufac tures th at are essential for the prod uctio n of domestic articles, eith er 

because such foreign mate rials and sem imanufactu res are not available at all 

in the United States, or are domestically produced in insufficient quantities. 

In many other cases the imported mate rials or component parts are different 

in grade or quality for the product to be domestically produced. To single out 

impo rted steel used in the manufac ture of domestic shipping containers would, 

therefore, set a very undesirable legislative precedent.

In the case of H.R. 4994 we respectfully subm it it would be very misleading 

to the consumer to have impo rted woven labels show the foreign country of 

origin where such labels are woven. These labels are usually attached to 

garments and oth er wearin g app arel and if they bea r the label of the country 

of origin it would give the consuming public the erroneous impression th at the 

garment or article of wearin g apparel was produced in th at foreig n country 

rather than having been produced in the United States or even in ano ther foreign 

country.

We respectfully subm it th at thi s proposed legislation is ill conceived and 

should be disapproved by your committee.

Respectfu lly submitted.

H arry S. R ad cl iff e, 

Exe cutive Vice President.
62 MISCELLANEOUS LABELING BILLS

B e t h l e h e m Ste el C o., I n c., 

Bet hle hem , Pa ., Dec em be r lf

, 1963.

Co m m it tee on I nte rs ta te an d F oreig n Commer ce ,

U.S . H ou se o f Rep re se nta tive s, W as hi ng to n, D.C.

(A tten tion o f M r. W. E. W illiam so n) .

Gen tlem en : It is ou r unders ta ndin g th a t yo ur co m m itt ee has he ld hea ri ngs 

on an a c t ci te d as th e Stee l Shipp in g C onta in er Id en tifica tion A ct w hi ch h as been 

in tr od uc ed by a num be r of M em bers of th e H ou se of R ep re se nta tive s.

The pu rp os e of th is le tt er is to re co rd w ith you r co m m itte e su pport by th e 

Bethl eh em St ee l Co. of th is b ill.

Th e Bet hl eh em Stee l Co. does no t hav e an y bar re l, dr um , or pail pr od uc in g 

su bsi dia ry or di vi sion an d is who lly dep en de nt u po n bu sine ss w e can obt ai n fr om 

pr od uce rs of bar re ls , dr um s, and pai ls fo r ord er s fo r th e pro duct s our co mpa ny 

m ak es to su pp ly to th is in dust ry . T hi s is a m ark et of nearl y 1 m illion tons . I t 

is a m ark et in which Bethl eh em has his to ri ca lly p art ic ip ate d an d which is im ­

port ant, p art ic u la rl y to our st ee l-pr od uc in g pla nt a t Spa rr ow s Poin t, Md.

We, an d our em ploy ees a t th e Spar ro w s Poin t pl an t, ha ve good re as on to be 

co nc erne d about th e im por ta tion of st ee l m ill pr od uc ts. All of th e follo wing 

pro du ct s are prod uc ed a t ou r Spa rr ow s P oin t pl an t, an d th e ra ti o of im po rts to 

th e sh ip m en ts of th e to ta l do mestic st ee l in dust ry fo r 1902 a re sh ow n a ft e r ea ch 

pro duct d e sig n ati o n :

Percen t

W ire ro ds______________________________________________________________ 63

D ra w n w ir e___________________________________________________________ 10

Nails an d st ap le s_______________________________________________________ 84

Bar be d w ir e___________________________________________________________ 78

R ei nf or ci ng b a rs _______________________________________________________ 26

Pip e and tu bin g_______________________________________________________ 9

Im port ati on of fo re ig n stee l has gr ow n st ea dily fr om re la ti vel y mod es t to nna ge s (t o ta l im po rts of al l pro duc ts a t 1,707,000 tons in 1958 ) to an ex pe cted 

lev el in exc es s of 5 mill ion to ns f or 1963.

As th is in cr ea si ng tr end in im port s has co ntin ue d, we hav e ob serv ed th e 

be gi nn in g of a tr en d in tw o oth er m ajo r co mmod ity g ro up s, hot ro lled sh ee ts an d 

cold ro lled sh ee ts. The se are th e ver y th in flat pro du ct s ro lled on hot st ri p 

and co ld str ip mill s which are su pp lied by th e stee l in dust ry to m anufa ctu re rs 

of barr els , dr um s, an d sh ip pi ng pa ils. On ho t ro lled sh ee ts, fo r ex am pl e, im ­

port s av er ag ed ap pro xim at el y 4,400 to ns per mon th in 1961, 10,000 tons pe r 

mon th in 1962, an d re ac he d a lev el of 44,00 0 to ns in A ugu st of 1963. The 1963 

lev el m ig ht ea si ly av er ag e mor e th an 25,000 to ns per mon th. In th e ca se of 

cold ro lled sh ee ts im po rts ha ve cli mbe d fr om 400 to ns per m on th in 1961, to 

4.300 to ns pe r mon th in 1962, to an aver ag e of ap pro xim at el y 14,000 to ns per 

mon th r ec en tly.

W hi le th es e in cr ea se s in th e im port at io n of th e li ght fl at ro lled pro du ct of 

th e ty pe whi ch we su pp ly to th e m anufa ctu re rs of bar re ls , dru m s, and sh ip pi ng 

pa ils wou ld appear so m ew ha t sm all in co mpa riso n to th e trem en dou s to nn ag e 

of th es e pro duc ts sh ippe d by th e do m es tic in dust ry , we a re vit all y co nc erne d 

w ith th e ov er al l ex ce ss of su pp ly ver su s de m an d fo r th is ty pe of pro duct in th e 

w or ld m ark et. T ra dit io nal ly , pro duce rs in fo re ign co un tr ie s hav e follo wed a 

de finite m ultip ri ce syste m in which th ey ha ve m ar ket ed to nn ag e in th e w or ld 

m ark ets a t pr ic es su bst anti all y be low th os e ch ar ge d fo r th e sa m e co mmod ities 

in th e ir ho me m ar ke ts. The se pr ices , re flec tin g th e lo wer st an d ard s of liv in g of 

fo re ig n w ork er s as co m pa re d w ith w ork er s in th is co un try, ca n cre ate ch ao tic 

co nd itio ns in wor ld m ar ket s. Th e U nited Sta te s, w ith it s trem en dou s lev els of 

co ns um ptio n of su ch pr od uc ts, become s a ve ry a tt ra cti v e ta rg e t fo r such op po rtu nis ti c s ellin g.

A good m ea su re of w h at re ac tion to th is si tu ati on ca n do in a m ark et can be 

see n in th e pu bl ishe d re port s of th e prob lems w ithi n th e E uro pea n coal an d 

stee l co mm un ity , w he re “a linem ent” w ith th e lo w er qu ot ed pri ce s of im po rted 

stee l has cre at ed se riou s si tu ati ons in th eir m ar ke ts fo r stee l pro du ct s an d h as 

led to pl ea s fo r pro te ct io n in vari ous fo rm s ra ngin g fr om qu ot as , to hig her 

ta riff s, t o im por t l icen ses, and su ch r est ri cti ons.

In view of th is si tu at io n, it cert ain ly see ms to us im per at iv e th a t pr ov isio n 

be m ad e fo r th e id en tifica tion of fo re ig n stee l w he re us ed in th e m an ufa ctu re 

of stee l sh ip pi ng co nta in er s in w hi ch th e m ate ri al us ed is a m ajo r ite m , fa b ri catio n be in g co m pa ra tive ly min or . T his is in no w ay an ar gum ent fo r re st ri cti on
MISCELLANEOUS LABELING BILLS 63

of tr ad e no r fo r si m il ar id en tifica tion of in nu m er ab le fa bri cate d and m an ufa ctu re d art ic le s co nta in in g re la tivel y in sign ific an t co mpo ne nt s of fo re ig n ra w 

m ate ri als bu t, ra th er, a ple a fo r pro pe r id en tifica tion so th a t purc hase rs of stee l 

sh ip pin g co nta in ers may m ak e th eir de cision s kn ow in g w het her or not fo re ig n 

m ate ri als w er e us ed in t he p ro du ct io n of th e co nt ai ne r.

Ac co rdingly, we wou ld ap pre cia te yo ur m ak in g th is le tt er p a rt of th e re co rd 

of yo ur he ar in gs on th e St ee l Sh ippi ng C on ta in er Id en tifi ca tion Act. T he B et hle ­

he m St ee l Co. de finitely en do rs es th e pr op os als co nta in ed in th e act and fe el s 

th a t tli e econom ic hea lth of th e do mestic pro duc er s of th es e co nta in ers wou ld 

be en clm nc ed b y it s p as sa ge .

Ve ry tr u ly y ou rs,

E. D. Bick ford, Vi ce P re si den t.

Standard E mbroidery, I nc.,

N ew Yor k, N .Y ., Nov em be r 13,19 63.

li on. J oh n V. Lin ds ay .

Hou se of R ep re se nt at iv es ,

W as hi ng to n, D.C.

Dear Sir : W e are th e American re pre se nta ti ves of Va n Eng elen & E ver s of 

He eze, N et her la nd, wh o m anufa ctu re w ov en la be ls.

Acc ording to a pe nd in g bil l, H.R. 4994, sp on so re d by Mr. T orb ert II. MacDon ald, Con gr es sm an fr om M as sa ch us et ts, an d mem be r of th e In te rs ta te an d 

For ei gn Co mm erc e Com mittee , all wo ven la be ls will be re quir ed to ha ve co untr y 

of o rigi n wo ven in to e ac h lab el.

The labe ls w hi ch we a re now im port in g are cu t and pr es se d in div id ua lly 

an d m ea su re about on e-lia lf by 2 inch es an d a re pa ck ed 500 to a bo x about 

th re e-f ourt hs in ch hi gh and 2 in ch es wi de. Eac h bo x is labe le d “W ov en in 

H ollan d.”

Sinc e ea ch in di vi du al la bel is ve ry sm all, it wou ld be bot h co stl y, in art is ti c, 

an d u n att ra cti v e to ha ve ea ch sm al l labe l carr y th e addit io nal mes sa ge st ati ng 

th e co un tr y of origin.

We be lie ve th a t th e pre se nt met ho d sh ow in g “W ov en in H ollan d” on ea ch 

sm al l bo x co ve rs th e pur po se of th e bi ll and im pl ie s no de ce ption.

In vie w of th e ab ov e circ um st an ce s, we re sp ec tfully re ques t th a t we sh ou ld 

be p er m itte d t o co nt in ue our p re se nt m etho d of op er at io n.

Res pe ct fu lly yo urs,

W m. Mit ch el l Cant or, Pre side nt .

R ep ub lic Steel Corp., 

Man uf ac tu ring Div is io n,

You ngs to w n, Ohio., D ec em be r 30 ,19 63 .

Re prop os ed Steel Sh ip pi ng C on ta in er Id en tifi ca tion Act (H .R . 5662, II .R . 5673, 

andIl .R .5 675).

Hon . H arley O. Staggers,

Cha irman , Subc om m itte e of th e C om m itte e on In te rsta te an d For ei gn Comme rce , W as hi ng to n, D.C.

D ear Congre ssm an Staggers : B ef or e th e heari ngs are clo sed on th e abo vem en tion ed b ills R ep ub lic Ste el Co rp, w ou ld l ik e to be on re co rd as su pport in g t his 

pr op os ed legi slatio n. We hav e re ad , w ith in te re st , th e st ate m ent of Mr. Liv in gs ­

to n Kep lin ge r, pre si dent of th e Steel Shi pp in g C onta in er In sti tu te , of w hi ch we 

a re a mem be r, an d. in ord er not to bur den th e reco rd , th is w ill const it ute ou r 

fu ll a nd c om plete end or se m en t o f th a t st at em en t.

As th e mem be rs of the co m m itte e kn ow , fo re ig n co m pe tition in st ee l is in cre asin g al ar m in gl y, in m an y ca se s du e to th e pra cti ce of du mping , as to whi ch m an y 

in div id ual s te el co mpa nies (inc lu di ng R ep ub lic Steel C or p.) hav e file d co m pl ai nt s 

w ith t he T re asu ry D ep ar tm en t.

A st ri kin g ex am pl e of th is in cr ea se in fo re ig n im port s is re vea le d by th e 

m os t re ce nt Co mm erc e D epart m ent st ati sti cs on st ee l sh ee ts, th e ba si c pro duct 

fr om which stee l co nta in er s are fa bri ca te d. In Sep tem be r of t h is yea r, th e la te st 

mon th fo r whi ch fig ures a re av ai la bl e, th e co mbine d im po rts of th es e var io us 

ki nds of sh ee ts to ta le d 78.362 tons , or ov er 2,000 to ns mor e th an in th e fi rs t 9 

m on th s of 1961 w he n th e co mbine d to ta l of im port ed sh ee ts w as 76,146 tons .

The se a re n ot j u st ab nor m al fi g u re s; th ey refle ct a st eady an d in cr ea si ng tr en d 

w hi ch alr eady h as re su lt ed in th e loss of th ousa nds of jo bs fo r st ee lw ork er s in
64 MISCELLANEOUS LABELING BILLS

thi s country and which, unless arrested, will certain ly res ult in the loss of more 

jobs in the future .

Republic is both a producer of the various kinds of steel sheets and the various 

kinds of stee l drums. As a consequence, we have a dua l intere st in seeing that 

every app rop riate effort is made to insure th at foreign competition develops on 

a fa ir and equitable basis withou t the competitive disadva ntages which come 

from such un fair trade practices as dumping, or from the lack of identific ation of 

the fabricated end product.

We respectfully request th at this lette r be included in the record of the hearings before your subcommittee.

Yours very truly,

P. L. Bruh n, General Manager.

Supplemental Statement of Louis Chandler on Behalf of the Woven Label

Manufacturers of the United States of America in Support of H.R. 4994

The Woven Label Manufacturers of the United States of America, appe aring 

on beh alf of H.R. 4994, appreciate the opportunity to answer certain opposing 

statem ents made a t the he arin g of November 6, 1963.

I. The association wishes first to answer the contention of Michael P. Daniels 

of the U.S. Japa n Tra de Council th at marking of indivdua l woven labels with 

the cou ntry of origin would confuse the r eta il public in buying finished garments. 

Our association emphasized at the hearing that such marking would be woven 

into the turn under portio n of the label and would not be visible when sewn 

into a garmen t. This is clea r from our exhibits on file with the clerk of th e committee. Country of origin thu s would be made known only to garm ent manufac tur ers using labels, who are the ultimate purcha sers of the labels, but not 

to buyers of garm ents containing the labels. No wording on the face of the 

label would in any way suggest th at a garmen t of American ma nufac ture was 

made in any other country. No v alid objection to individual markin g or to the 

enactment of H.R. 4994 can thu s be based on the danger of confusing retail 

customers.

II. As pointed out at the hearing, the requirement of individual marking of 

labels as it existed for many years prior to 15)40 was changed by adm inistra tive 

interp retation of the Bureau of Customs following the Gibson-Thomsen case (27 Ct. Cust. Pat. App. 267 (1940)). The holding of th at decision with respect 

to pieces of wood used to m anufa ctu re hairbrushes furnis hed no basis for ending 

the requ irem ent that individual labels be marked. In fact, th at case held that 

brush handles were to continue to be indiv idually marked so th at the manufacturer could be apprised of the coun try of origin but th at they need not be so 

marked that the buyer of the finished brush, made in the United State s, would 

be apprised of the foreig n origin of the handle. The cou rt decided th at “at the 

time of their importation, the involved articles were marked in such a manner 

as to indicate to the ultimate purchaser in the United States—the manuf acturer 

of toothbrushes and hairbrush es—th e country of their origin * * *” (a t p. 273).

There was no question th at each brush handle was then marked with the 

country where the handle was made and th at after th at decision it was to 

continue to be so marked.

“I t app ear s from the record th at at the time of the ir importation the involved articles were legibly, indelibly, and permanently m arked in a conspicuous 

place (so long as they rema ined in the ir imported condition) with the name 

of the cou ntry of their origin * * * die sunk on that part of the article s where, 

after importation, bristle s were to be inse rted in orde r to convert the toothbrush handles into toothbrushes and the wood brush blocks into hairbrushes” 

(at p. 269).

The domestic woven label ind ust ry asks only that impo rted labels be marked 

in the same way as toothbrush handles and hairbrush blocks were to continue 

to be marked after the Gibson-Thomsen decision. The country of origin would 

be woven into the tur nunder portion of each imported label and the legislative 

purpose of the act would no t be thw art ed by adm inistrative fiat.

Evidently the Bureau of Customs must have been of the mistaken impression th at any individual markin g of labels would nece ssarily appea r on the face 

of the labels. Otherw ise it is difficult to find any connection at all between the 

Gibson-Thomsen decision and the Bu rea u’s ending of the longstanding requirement th at imported labels be individually marked with coun try of origin.
MISCELLANEOUS LABELING BILLS 65

The cou rt in th at case made some reference to han dles being material for 

the manufacture of brushes with in the United State s. Labels, however, are not 

the m aterial from which a dress or shirt is made, but a s epara te integral finished 

textile prod uct in and of itself serving its own functio nal purpose and not converted to a new product or a new material in which its identity is lost. As 

Commerce, Treasury, and the Japa n Tra de Council have indicated, the ultimate 

purcha ser of the label is the manufacturer. As they have indicated, he alone 

should be appraised of the country of origin. Weaving this information—not 

on the the face of the label but into the turn -under portion of the individual 

label—accomplishes this purpose which they supp ort and which is legislatively 

required.

It is apparen t th at the reasoning of the Gibson-T homsen decision furnishes no 

basis for opposition to the passage of ILK. 4994 but rather supp orts the individual marking for the benefit of the ultimate purc haser, i.e., the manuf acturer.

III. A letter from an official of the Commerce Departm ent, presented at the 

hearing, suggested that the industry should first seek relie f from the various 

administrative agencies concerned with the marking of imports. Actually, for 

almost 5 years, the ind ustry has sought from those agencies a resumption of the 

requirem ent of many yea rs standing th at individual labels be marked. The indus try was und erstandab ly surprised by the position taken in th at letter. The 

Department, in July of 1961. indicate d its sympathy with the anomalous position 

in which the ind ust ry has found itself but sta ted th at our only relief could be 

through legislation such as we are now supporting. In fact, representativ es of 

th at Department assured the industry th at it would support legislation requiring 

the country of origin to be woven into the turnu nder portion of each label.

The following is a pa rti al list of the repeated efforts by the industry to secure 

a resumption of the individua l m arking requirem ent by administrative action.

February 16. 1959: Petition addressed to W. E. Higman, Chief, Division of 

Classification, Entry, and Value, Bureau of Customs.

September 22, 1960: Discussion with Ea rl Roberts of the Fed eral Trade 

Commission.

March 15, 1961: Petition to Division of Classification, Entry, and Value, 

Bureau of Customs.

March 15, 1961: Petitio n to Henry Hanna h, Fed eral Tra de Commission. 

March 21, 1961: Correspondence and discussions, Walter G. Roy, Bureau

of Customs.

May 3, 1961: Complaints to W. P. How ard, attorney, Burea u of Customs. 

June 16, 1961: Petition to Office of Civil and Defense Mobilization.

IV. The Treasur y Department letter read at the hearing pointed out that 

under present rules, labels are excluded from individual marking requirem ents 

if the collector of custom s at the port of entry is satisfied that the labels will 

reach the ultimate purch ase r in the unopened contain er in which the labels 

entered the United States. That con tain er is itse lf marked with the country of 

origin, at lea st by a sticker. Such marking of containers only is entirely inadequate.

Labels, imported in rolls, are often cut and folded, and then repackaged and 

sold in packages which gave to the cloth ing manufacturer, who is the ultimate 

pur cha ser of th e label, no indica tion of foreign origin. Firm s which manufacture 

some labels in the United States may imp ort fa r larger quantities, and sell 

imported labels in th e sam e containers they use to sell domestic labels. Similarly, 

jobbers that import labels also handle domestic labels.

As Mr. Daniels, for the Jap ane se industry, points out (a t p. 3), it is the garment m anufa ctu rer who is t he final purcha ser of labels. It is th e garment manufac tur er, and not merely the jobber or the folding and cutting firm or the dealer 

or manufac tur er of woven labels, that markin g legislation requ ires be given 

notice of the country of origin. The present prac tice of marking containers, but 

not individual labels, clearly fails to give the required notice and leads to possible deception of the ma nufac tur er who, ra th er tha n the jobber or importing 

label manufacturer, is the ultimate purchaser under the act. The collector of 

custom s has no way of checking this. His burden is completely relieved, however, if the ind ividual label is marked a s proposed.

V. The proposed legislation is entirely compatible with this Nation’s efforts 

to reduce barriers to expa nding world trade. The woven label ind ustry seeks 

only to in sure th at the purposes of the Tex tile Fiber Products Identification Act, 

and of other markin g legislation, shall be carried out with respect to labels 

as it is for other products. It urges that imported goods not be passed off as
66 MISCELLANEOUS LABELING BILLS

pr od uc ts of th e do mes tic in dust ry un fa ir ly utilizi ng th e good w ill an d re p u ta ­

tion which th a t in dust ry h as de ve lope d ov er m an y yea rs of se rv ice to Amer ican 

gar m en t m an ufa ctu re rs .

Und er pre se nt pr ac tic e, an im po rter , or a labe l m an u fa ctu re r who bu ys fo reign labe ls, ca n re ad ily sh ip fo re ig n la be ls to a gar m en t m an u fa ctu re r w ithout 

hi s kn ow in g th a t th e labe ls w er e not pr od uc ed in th e U ni ted Sta te s. A fo re ig n 

la bel m ak er or his jo bb er ca n copy ex ac tly a lab el de sign ed by an American 

labe l m ak er to till th e ne ed s of a do m es tic garm en t m anufa ctu re r. The g arm en t m ak er may la te r be sold labe ls th ro ugh a jo bb er whi ch look s ex ac tly th e 

same, w ithout kn ow ing w her e th e la be ls ca me from . Co pie s of A m er ic an lab el 

m ak er s’ de sign s hav e been kn ow n to b ear th e tr adem ark o r symbo l of th e American m ak er , copie d alon g w ith th e re st of th e de sign , in cl ud in g so m etim es th e 

copy ing e ve n of an e rr o r i n th e weave.

T he in d u st ry as ks on ly th a t co m pe tition be tw ee n fo re ig n an d do mes tic wo ven 

labe ls, view ed entire ly a p a rt fr om differ en ce s in pr ices , sh all be fa ir . As Mr. 

D an ie ls o f th e Jap an T ra de Co un cil h im se lf s ta te s (a t p. 3) : “I t wou ld be fr a u d u ­

le nt , ce rt ai nl y, if an art ic le m anufa ctu re d ab ro ad w er e m ar ked in such a way 

as to conv ey th e im pr es sion to th e p u rc h aser th a t it w as m anufa ctu re d in th e 

U ni ted S ta te s. ”

It is th e in te n t of m ar kin g le gi sl at io n to disclose to th e ult im ate buy er of 

fo re ig n pr oduct s th eir co untry of or ig in fo r w hat ev er effect th is di sc lo su re ma y 

ha ve on th e bu yer s’ ev al uat io n of th ose pr od uc ts . T h at fin al bu ye r, which we 

ag re e is th e garm ent m an ufa ct ure r, is en ti tl ed to ta ke in to ac co un t any ex per ien ce he m ay ha ve had w ith sh ri nkage and bl ee di ng of co lors in la bels from a 

p art ic u la r co un tr y an d his ex jte rien ce in se cu ri ng del iv er y of addit io nal lo ts of 

id en tica l labe ls as needed. Dom es tic wov en la be l m an ufa ctu re rs ev en hav e re ­

ceive d co m pl ai nt s fr om gar m en t m an u fa ctu re rs of la be l sh ri nka ge, fo r ex am ple, 

on sh ir ts an d ha ve fo un d up on in ves tigat io n th a t th e la be ls invo lved w er e of 

fo re ig n ori gi n but w er e exac t co pies of th e ir ow n do mes tic la be ls so th a t the 

ultim ate pu rc ha si ng clothing m an u fa ctu re r w as co nf us ed an d m isle d by jobb er s 

wh o im po rted th e lab els , dis ca rd ed the f or ei gn pa ck ag e, a nd re pa ck ag ed th e lab els 

fo r de live ry in an unm ar ked co nta in er—o r po ss iblv one m ar ked as “M ad e in 

U.S.A .”

Th e prop os ed le gi slatio n does no t se ek to ha ve Amer ican pro ducts mar ke d 

w ith th e co un try of or ig in of var io us m ate ri als go ing in to th a t pr oduct . Woven 

la be ls a re th em se lv es fin ish ed te xti le pro ducts which sh ou ld be re quir ed to be 

iden tif ied to th eir ultim at e purc hase rs — U.S . garm ent m anufa ctu re rs . The pr oposed legi slat io n does no t re quir e m ark in g of la be ls whi ch wi ll be vi sibl e to th e 

re ta il b uy er of th e g ar m en t or oth er art ic le .

II. R. 45)5)4 is in te nd ed on ly to in su re fa ir pr ac tice s in th e sa le of wov en labe ls. 

It is in te nd ed to re st or e th e re quir em en t of in di vid ual m ark in g o f wo ven labe ls 

which w as re qu ired follo wing th e A rti sti c W ea ri ng ca se (13 Ct. Cus t. P at. App. 

140 (1 92 5)) . It is in te nd ed to en d tr eatm en t of wo ven labe ls w hi ch is di ffer en t 

from th a t ac co rd ed oth er fin ish ed te xti le pro duct s an d which is in co nsi st en t w ith 

th e cl ea r in te n t of th e Tex tile F ib er P ro ducts Id en tifi ca tion Ac t. The sole purpo se of th is legi slat io n is to bri ng wov en la be ls ba ck w ithi n th e pu rv ie w of th e 

ac t. which is in te nd ed “to pro te ct pro duce rs and co ns um er s again st m is bra ndin g” an d whi ch st ate s in se ct io n 3 (a ) th a t “t he im port at io n inito th e United 

S ta te s of an y te xtile fiber pro duct which is m is br an de d or fa ls el y o r de ce pt ively 

ad ver tise d w ithin th e mea ni ng of th is a c t * * * is un la w fu l and sh al l be a n un ­

fa ir metho d of co mpe tit ion an d an u n fa ir an d de ce pt ive a c t o r pra cti ce in Com ­

merce unde r th e Fed er al T ra d e Co mmiss ion Act.” Th e Con gr es s of th e U ni te d 

Sta te s has seen fit to re quir e su ch m ar kin g. The la w sh ou ld no t be vit ia te d o r 

adm in is trat iv el y repe aled as to wo ven labe ls. II.R . 495)4 will m er ely el im in at e 

th e di sc rim in at io n th a t h as ex ce pt ed wov en labe ls from th e co ve ra ge re quir em en ts o f th e ac t.

Res pe ctfu lly su bm itt ed .

W oven L ab el Manufa cturers of t h e

U nit ed Sta te s of A m eric a,

B y L o u is C handle r.

(Whereupon, at 2:30 p.m., the subcommittee adjourned.)

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