WOOL

THURSDAY, JULY 8, 1937

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF THE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met at 10 a. m., Hon. Clarence F. Lea (chairman) presiding.

The CHAIRMAN. The committee will come to order.

The subcommittee appointed by the Interstate and Foreign Commerce Committee has met this morning for the purpose of holding a hearing on H. R. 5182 and H. R. 6917.

Copies of the bills will be inserted in the record at this point. (The bills, H. R. 5182 and H. R. 6917, are as follows:)

[H. R. 5182, 75th Cong., 1st sess.]

A BILL To require informative labeling of textile fabrics and textile products in interstate commerce for the purpose of preventing deception of the public

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

DEFINITIONS

SECTION 1. When used in this Act

(a) The term "textile fabrics" means any fabric made of fiber, thread. or yarn, and any product made in whole or in part from any fabric containing fiber, thread, or yarn.

(b) The term "person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust, or any unincorporated organization. SEC. 2. The National Bureau of Standards of the United States Department of Commerce shall have power to make such rules and regulations concerning the labeling, stamping, or tagging of textile fabrics as shall be necessary or appropriate to prevent deception of the public. Such rules and regulations may provide for the kind and type of labeling, stamping, or tagging of particular classes of textile fabrics and for the proper affixing of such labels, stamps, or tags. Such rules and regulations may forbid the inclusion in labels, stamps, or tags of the names of certain kinds of fiber, thread, or yarn, or any names commonly regarded as indicating a textile fabric containing such fiber, thread, or yarn, unless the labeled fabric contains prescribed amounts of percentages of such fiber, thread, or yarn. The National Bureau of Standards shall have power to classify textile fabrics and may apply certain rules and regulations to certain classes of textile fabrics without applying them to other classes. The rules and regulations of the National Bureau of Standards shall be effective upon publication in such manner as the National Bureau of Standards shall prescribe.

SEC. 3. The shipment, delivery for shipment, sale, or offer for sale in interstate commerce by any person, of textile fabrics which are not labeled, stamped, or tagged in conformity with the rules and regulations promulgated pursuant to section 2 hereof is unlawful and shall constitute an unfair method of competition within the meaning of section 5 of an Act entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes", as amended and approved September 26, 1914.

1

[H. R. 6917, 75th Cong., 1st sess.]

A BILL To protect producers, manufacturers, and consumers from the unrevealed presence of substitutes and mixtures in woven or knitted fabrics and in garments or articles of apparel made therefrom, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Fabric Labeling Act of 1937."

SEC. 2. As used in this Act

DEFINITIONS

(a) The term "person" means an individual, partnership, corporation, or association.

(b) The term "wool" means wool of the sheep or lamb or hair of the Angora or Cashmere goat.

(c) The term "woolen goods" means any yarn and any woven or knitted fabric, and any garment or article of apparel made from such woven or knitted fabric or knitted from such yarn, which purports to contain wool or is in any way represented as containing wool or as being in whole or in part a "wool," "woolen," or "worsted" fabric.

(d) The term "Commission" means "The Federal Trade Commission." (e) The term "interstate or foreign commerce" means commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through any place outside thereof; or within any Territory or possession, or the District of Columbia.

PROHIBITION OF MISBRANDED GOODS

SEC. 3. No person shall ship or deliver for shipment, or sell or offer for sale at wholesale or retail, in interstate or foreign commerce, any article, wholly or partly produced or processed of or containing fabrics originating in, shipped from, or processed in a State other than the State in which such article is sold or offered for sale, if such article is composed wholly or partly of wool and is misbranded or falsely described.

This section shall not apply

(a) to any common carrier in respect of any article shipped or delivered for shipment in the ordinary course of its business as a common carrier; nor

(b) to any person in respect of any article shipped, delivered for shipment, or sold for exportation from the United States to any foreign country if such article is branded in accordance with the specifications of the purchaser and in accordance with the laws of such country.

MISBRANDED GOODS

SEC. 4. For the purpose of this Act any fabric, garment, or article of wearing apparel purporting to contain wool, or in any way represented as containing wool, shall be held to be misbranded unless stamped, tagged, or labeled in accordance with the following paragraphs of this section and with such additional regulations as the Commission may prescribe.

(b) Each stamp, tag, or label shall show

1. The registration number of the manufacturer last processing the article, whether such manufacturer be a textile or garment manufacturer, or, in the case of imported merchandise not further processed or manufactured in this country, the registration number of the importer.

2. The actual percentage content by weight of each fiber contained, except that the word "wool" shall not appear on any such stamp, tag, or label if the fabric or goods contains less than 25 per centum by weight of wool. A tolerance of 2 per centum by weight shall be allowed for unavoidable variations in manufacture.

3. The percentage figures relating to fiber content must be of size equivalent to the name of the fiber or fibers to which they refer and it must be as conspicuously shown as the name of the fiber or fibers.

4. On any stamp, tag, or label containing the name of more than one fiber, the names of different fibers shown shall be uniform as to size of type or other characters.

5. Fabrics or goods may contain 2 per centum or less, by weight, of a fiber not revealed on the stamp, tag, or label.

(c) No stamp, tag, or label, nor any advertisement offering for sale any labeled merchandise, may contain any trade name, pictorial representation, term, or descriptive name which suggests or implies the presence of wool unless the fabric contains 25 per centum or more of wool by weight and the label complies with the requirements of this section.

(d) This Act shall not be construed as requiring any information in respect to linings, interlinings, paddings, stiffening, trimmings, or facings, except that if any lining or interlining is represented as containing wool then the terms of this section shall be applicable thereto.

REQUIREMENT OF REGISTRATION NUMBER

SEC. 5. It shall be unlawful for any manufacturer, wholesaler, jobber, dealer, or retailer of wool or part-wool fabrics or wool or part-wool goods to ship, deliver for shipment, sell, or offer for sale in interstate or foreign commerce any such goods unless he has in force a valid registration number secured from the Commission.

In the case of merchandise made wholly or in part of wool, the registration number to appear upon the label or tag shall be the number assigned to the last manufacturer or processor of such merchandise. In the case of piece goods wholly or in part of wool sold in the piece or by the yard, the textile manufacturer shall be deemed to have complied with the provisions of this act if he attaches to each piece of goods a tag containing the information specified in section 4 hereof. In the case of blankets, or of wearing apparel and other articles of merchandise made from woven or knitted wool or part-wool piece goods, or knitted from wool or part-wool yarn, each garment, article, or unit of merchandise must carry a tag or label as provided in section 4 hereof, such label to bear the registration number only of the person manufacturing, processing, or finishing the completed article or unit.

ENFORCEMENT OF THE ACT

SEO. 6. Except as otherwise specifically provided in this act, the Federal Trade Commission shall enforce its provisions. The Commission may cause investigations, inspections, analyses, and tests to be made and samples to be collected of any fabrics or goods.

The shipment, delivery for shipment, sale, or offer for sale in interstate commerce by any person of fabrics, goods, or merchandise not stamped, tagged, or labeled in conformity with this act or with rules and regulations authorized by this act to be prescribed is unlawful and shall constitute an unfair method of competition under the Federal Trade Commission Act; that is, the act entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914, and amendments thereto. The Commission is authorized to cooperate with any department or agency of the Government, with any State, Territory, or possession, or with the District of Columbia, or with any department, agency, or political subdivision thereof, or with any person.

EXCLUSION OF MISBRANDED GOODS

SEO. 7. (a) Whenever the Federal Trade Commission has reason to believe that any goods offered for importation are being shipped in interstate or foreign commerce in violation of this act, it shall give due notice and opportunity for hearing thereon to the owner or consignee and certify such fact to the Secretary of the Treasury who shall thereupon (1) refuse admission and delivery thereof to the consignee, or (2) authorize admission and delivery thereof to the consignee pending examination, hearings, and decision in the matter on the execution of a penal bond to the amount of the full invoice value thereof, together with the duty thereon, if any, and to the effect that on refusal to return such goods for any cause to the Secretary of the Treasury when demanded, for the purpose of excluding such goods from the country or for any other purpose, the consignee shall forfeit the full amount of the bond.

(b) If, after proceeding in accordance with subdivision (a), the Federal Trade Commission is satisfied that such goods were shipped in interstate or foreign commerce in violation of this act, it shall certify the fact to the Secretary of the Treasury, who shall thereupon notify the owner or consignee and cause the sale or other disposition of such goods unless such goods are exported by the owner or consignee within 3 months from the date of such notice, under

such regulations as the Secretary of the Treasury may prescribe or unless such goods are properly tagged, marked, ro labeled as hereinbefore provided. All charges for storage, cartage, or labor on any such goods shall be paid by the owner or consignee. In default of such payment such charges shall constitute a lien against any future importations made by such owner or consignee.

GUARANTY

SEC. 8. No person shall be prosecuted for any violation of this act in respect of any goods if he can establish a guaranty signed by, and giving the business address of, the manufacturer thereof, or signed by, and giving the business address of, the party residing in the United States from whom such person purchased such goods or the material of which such goods are manufactured, that such goods or the material of which such goods are manufactured were truthfully stamped, tagged, or labeled in accordance with the provisions of this act and the regulations thereunder. In such case the manufacturer or party signing such guaranty shall be amenable to the prosecution and penalties which would attach in due course to such person, under the provisions of this Act.

The CHAIRMAN. H. R. 5182 was introduced by Mr. Peyser, who, unfortunately, has been ill for several weeks and is unable to be present. We hope before the hearings are concluded that Mr. Peyser will be present and personally present his measure. Before the hearings are completed witnesses for Mr. Peyser's bill will be heard by the committee.

The second bill, H. R. 6917, was introduced on May 10, 1937, by Mr. Martin of Colorado, a member of the subcommittee. It might be stated, for the benefit of those who may read the record, without going into detail, that while there is a similarity in purpose between these two bills there is a wide difference in the method of approaching the problem.

The Peyser bill gives the National Bureau of Standards the power to make rules and regulations concerning the labeling, stamping, or tagging of textile fabrics as shall be necessary or appropriate to prevent deception of the public. The bill provides that such rules and regulations may provide for the kind and type of labeling, stamping, or tagging of particular classes of textile fabrics, and so forth, and that the channels of interstate commerce would be denied to textiles not branded as provided in these rules and regulations coming from the National Bureau of Standards.

The bill introduced by Mr. Martin is broader in its method of control. It would deny the channels of interstate commerce to articles composed wholly or partly of wool which are misbranded or falsely described within the provisions of the bill.

The first witness, I understand, is Mr. Besse.

STATEMENT OF ARTHUR BESSE, REPRESENTING THE NATIONAL ASSOCIATION OF WOOL MANUFACTURERS, NEW YORK CITY

The CHAIRMAN. Mr. Besse, will you state your name and whom you represent for the record?

Mr. BESSE. My name is Arthur Besse. I represent the National Association of Wool Manufacturers.

Mr. Lea, do you want testimony as respects both bills, or do I understand that you wish a postponement of a consideration of the Peyser bill at the moment?

The CHAIRMAN. We should be glad to have either proposal discussed, so far as that is concerned. I take it that the primary con

sideration of the committee, in the first instance, is to understand what the problem is here on which legislation is desired.

The details necessary for carrying that out finally will become important. But if you could deal primarily with that problem, the need of legislation of this type and the kind of legislation you think is necessary, I am sure you would be of service to the committee. Mr. BESSE. We think there is need of some such legislation. Voluntary efforts have not been entirely adequate to correct a certain amount of misbranding. One of the prime reasons for that is the fact that a good deal of apparel passes through so many different hands, and it is very easy to place the blame for any ultimate mislabeling on somebody else, and it is often difficult to determine exactly who is responsible.

The wool-textile mills very rarely are guilty of mislabeling their merchandise, but a great deal of it is sold without designation. Some of the business, perhaps with certain of our customers, is done on the basis of the horse with the spavin, where the follow who sold him to me did not say anything about it, so I thought it was a secret. [Laughter.]

Unfortunately, the errors are more errors of omission than they are of commission. But we feel it is desirable to have some legislation which puts the blame in some particular place, so that if there is mislabeling or misrepresentation, the responsibility for that can be allocated to the party or parties that should properly assume that responsibility.

I think we can dispose of our attitude toward the Peyser bill very simply by saying that we are not in favor of that type of bill, largely because we do not quite know what we are assenting to, if we do express ourselves as in favor of such a measure.

As at present constituted, the Bureau of Standards, I think, would do a very constructive job as respects labeling procedure. They have devoted a considerable amount of time and attention to the matter and they are both well informed and practical. But we have no guaranty that the present personnel will continue indefinitely.

It looks to me, both from the practical standpoint and from a legal standpoint, like an open grant of authority that is much too broad and might be subject to considerable abuse; perhaps not intentional, but abuse none the less, and we would prefer not to consider any legislation of that type.

The other bill, H. R. 6917, in the main, is in accord with our general ideas for labeling legislation. We wish to point out, as I pointed out to the Senate committee, that it does concern itself primarily with wool, and that there is a difficulty in legislation of that kind that singles out a certain product, that if the requirements concerning the marketing of that product impose any undue burdens on those who do market those products, they may prefer to sell other products in preference to wool products. That is something that I think should be given consideration.

I shall be glad, if you would like to have me do so, to take up the bill as written and make certain detailed suggestions, giving the reasons for those suggestions, as we go along.

The CHAIRMAN. I think it would be very well if you did that.

Mr. BESSE. I think that method would indicate our attitude toward the bill more clearly than any other way of doing it.