The CHAIRMAN. You must have had a little capital with which to do this.

Mr. MASTERS. Very little, which we got from members. You see, before we actually started publication the membership made up almost entirely of members of the other organization that were sympathetic to the strikers-I think numbered about 2,000. On the basis of their fees, that would come to around $5,000.

The CHAIRMAN. This staff, of course, is a paid staff?

Mr. MASTERS. Yes; it is.

The CHAIRMAN. Just as the staff of the other agency was a paid staff?

Mr. MASTERS. That is right.

Mr. MONTGOMERY. Would you mind telling some of the salaries on that staff? I think it might be interesting. I don't know what they are; I understand they are not very high.

Mr. MASTERS. Well, the salary was level all around for the director of the organization and everyone else. When they started the or ganization it was $10 a week, and it remained there for several weeks, and then was jumped way up to $12.50. After a time it moved up to $14.50, and then at $16 differentials were first introduced. At the present time there is a minimum, under our closedshop contract, of $20, which is the lowest we pay, and $60 is the top salary.

The CHAIRMAN. Are there any other questions?

Mr. MONTGOMERY. No, sir.

Dr. LUBIN. Mr. Masters, has your organization been following with any degree of interest the attempts to modify the Pure Food and Drug Act?

Mr. MASTERS. Yes, indeed.

Dr. LUBIN. Have you received any aid, or have you found much interest in getting anything done to get the public conscious of what the act is attempting to do through the press?

Mr. MASTERS. Quite the contrary. The press distinguished itsel in the 5-year fight for food and drug legislation (1) by saying virtually nothing about it from the consumer point of view, or what we conceive to be the consumer point of view, (2) by doing fairly yeoman work in support of the advertisers' point of view. Again we think it is entirely understandable, but we think it should be known.

Dr. LUBIN. Was there any medium at all other than organizations such as yours to notify the consumer of the importance of the law to their welfare?

Mr. MASTERS. There were organizations which later turned out t have been set up by advertising groups which had "consumer" in the title and were known generally by rather long names to indicate that they were for disseminating sound and constructive information or food and drug legislation. But aside from those, which were simply not consumer organizations, and aside from more or less spontaneous organizations set up in some cases by consumer groups, and by trade unions, I can't think of any in particular now.

Mr. MONTGOMERY. I think that there should be introduced in the record there honorable mention for two large newspapers that dic take a very different stand in that respect and did give very honest and

full reporting of the food and drug fight, namely, the St. Louis PostDispatch and William Allen White's Emporia Gazette. They were very outstanding as an exception to this general treatment of the question in the metropolitan press.

The CHAIRMAN. Are there any other questions? (The witness, Mr. Masters, was excused.)

The CHAIRMAN. The committee has received from Seton Porter, president of the National Distillers Products Corporation, a list of all the subsidiaries of National Distillers Products Corporation as of 1924, 1933, and 1938, together with a statement of the brand names controlled by National Distillers Products Corporation as of those dates. This material was requested by the committee at hearings on March 14, 1939. It may be printed in the record.

(The letter referred to was marked "Exhibit No. 516" and is included in the appendix to Hearings, Part VI, p. 2745.)

The CHAIRMAN. The hearings are finished for this afternoon, until 10 o'clock tomorrow morning. The committee will go into executive session.

(Whereupon, at 4:15 p. m., a recess was taken until Thursday, May 11, 1939, at 10 a. m.)

INVESTIGATION OF CONCENTRATION OF ECONOMIC POWER

THURSDAY, MAY 11, 1939

UNITED STATES SENATE,

TEMPORARY NATIONAL ECONOMIC COMMITTEE,

Washington, D. C.

The committee met at 10:45 a. m., pursuant to adjournment on Wednesday, May 10, 1939, in the Caucus Room, Senate Office Building, Senator Joseph C. O'Mahoney presiding.

Present: Senator O'Mahoney, chairman; Representative Williams: Messrs. Lubin, Hinrichs, O'Connell, Henderson, and Lowell J. Chawner, Chief of Division of Economic Research, Bureau of Foreign and Domestic Commerce, alternate for Mr. Patterson.

Present also: Messrs. D. E. Montgomery, Consumers Counsel, Agricultural Adjustment Administration; Willis J. Ballinger, Federal Trade Commission; Anderson Tackett, Federal Trade Commission; Wilford L. White, Department of Commerce; Milton Katz and James C. Wilson, Department of Justice; and Thomas Blaisdell, Securities and Exchange Commission.

The CHAIRMAN. The committee will please come to order. Mr. Montgomery, are you ready to proceed?

Mr. MONTGOMERY. Mr. Chairman, I would like first this morning to put on the record an apology. Yesterday I stated that there were two newspapers that deserved honorable mention with reference to the food and drug news coverage that had been referred to.1 I think I was wrong; I should have included the Christian Science Monitor.

The CHAIRMAN. I am sure there are a lot of newspapers all through the country which deserve a little accolade in that respect.

Mr. MONTGOMERY. Mr. Chairman, yesterday we were showing through these witnesses the general picture of consumer confusion which results from the conditions under which they make their purchases. Today we want to go into new fields and get away from that. Before we do, our first witness will give you one more picture of that confusing situation which summarizes the whole story pretty well in one concrete case. I would like to call Dr. Ayres.

The CHAIRMAN. Do you solemnly swear that the testimony you are. about to give in these proceedings will be the truth, the whole truth, and nothing but the truth, so help you God?

Dr. AYRES. I do.

TESTIMONY OF DR. RUTH AYRES, ECONOMIST, NEW YORK, N. Y.

Mr. MONTGOMERY. State your name, please.

Dr. AYRES. Ruth W. Ayres.

Mr. MONTGOMERY. And your address?

1 Supra, p. 3342.

Dr. AYRES. 410 Riverside Drive, New York City.

Mr. MONTGOMERY. What are your occupations or experiences in this field, Dr. Ayres?

Dr. AYRES. I am an economist, and happen to have done work in the consumer field for several different companies, and I am in volunteer work with several organizations working on consumer problems.

CONFUSION OF BRANDS, SIZES, AND PRICES

Mr. MONTGOMERY. Your first point that you want to discuss is this exhibit of cans of tomato juice. Will you explain to the committee what these are and then go on and tell your story about them?

Dr. AYRES. We have here tomato juice which was purchased in one store here in Washington in one day, and I just want to show a problem, if each of you will think in terms of how you would buy as you realized the choices which were before you. I go into the store and ask about tomato juice and I want to get the relative prices in relation to the best quality, or if I want to get a second quality tomato juice I want also to be able to know that.

So I go into a store and ask what they have for tomato juice and I find that there are 21 different containers of tomato juice representing 11 different brands. These containers sell at 15 different prices. There are 17 different sizes when measured by size of container; there are 15 different sizes if measured by volume; there are 16 different rates of price if you relate it to 10 ounces of tomato juice.

Mr. MONTGOMERY. You mean there are different costs per unit of contents?

Dr. AYRES. Yes; different costs per unit of content. So my job is to come in in the morning and buy tomato juice for the rest of the week for my family, and in order to do that successfully I have to build a statistical table giving me the range in price per unit of all of these 21 different containers, and then following that I have to know which one represents good quality and which one represents bad quality.

Mr. MONTGOMERY. How many different grades are there? I don't think you mentioned that.

Dr. AYRES. There is no grading on this; in other words, there is no way except to try the 11 brands before I can tell whether by brand there is any difference, and then whether there is any difference in relationship to the brands of a single grade. By experience I have discovered that grades vary within a single brand, so that the opportunity for me to buy this one item of tomato juice intelligently just doesn't exist unless I spend the day on this one problem.

I think it really represents the total of the confusion which the housewife meets in buying really hundreds of different commodities. We simply chose this because it is one which is so commonly used. In other words, there is no way because of the multiplicity of can sizes that I can judge of the relative costs per unit of the article that I am going to buy. Then that is added to the fact that I have no way of telling the relative quality of the material in the cans without trying out all of the brands, and if I went to two or three more stores in the same block the number of brands would jump 35 or 50 percent, probably, because I know a lot of the brands I have tried