department of the Distillers Co. gave their stocks as eighty-eight and one-quarter million gallons.

Mr. BUCK. And what percent of the total do you think that would be?

Mr. MARKS. I don't know what the total stocks are that were at that time in England. I should say they were somewhere around 130,000,000 gallons total, but I can let you have that figure accurately if you wish it.

Mr. BUCK. Will you put it in the record ?
Mr. MARKS. Yes, sir.

Mr. BUCK. And of the approximate 130,000,000, D. C. L. controls 80,000,000 ?

Mr. MARKS. They own eighty-eight and a quarter million; yes.

Mr. Davis. Is that Scotch alone you are talking about, or all of the Great Britain liquors?

Mr. MARKS. It was all, as far as I understand the evidence that was given in Scotland, their stocks of Scotch, pot still, and grain whisky. On the total stocks, the stocks of the United Kingdom of all whiskies; is that what you mean? Does the Judge mean that?

Mr. Davis. I just wanted to definitely identify what you were designating.

Mr. MARKS. The figures given by the United Kingdom authorities are given for the whole of the United Kingdom; they don't separate them, as a rule. That includes Northern Ireland, Scotland, and England, and most of the stocks are held in Scotland; there is a very small proportion held in Northern Ireland today.

Mr. BUCK. Let's step it up now to getting the whisky into this country. How does D. C. L. ordinarily market its whisky in the United States?

Mr. MARKS. I am not very familiar with the methods of D. C. L. in the United States. I understand that they ship their whisky, as do other Scotch producers, to agents or purchasers here and it is distributed through those purchasers.

Mr. BUCK. Let me ask you this question: Do you know what brands are controlled by D. C. L., Scotch whisky brands marketed in the United States ?

Mr. MARKS. I know a number of them; I don't know whether I could remember all of them, but I could remember the most prominent.

Mr. Buck. Will you give the committee the benefit of your approximation of that?

Mr. MARKS. Well, Johnny Walker, Dewars, Buchanans, Haig, White Horse, Vat 69—I suppose they are the six leaders. And then there are the subsidiary brands such as King George and Huntley. I am not sure about King William; I think there are numerous others.

Mr. Buck. Old Angus?
Mr. Marks. Old Angus is not owned by the D. C. L.

Mr. Buck. Would you say that by far the vast majority of the popular brands of the Scotch whisky sold in the United States is owned or controlled by D. C. L.?

Mr. MARKS. Of the popular brands; yes.
Mr. BUCK. Definitely?
Mr. MARKS. Yes.
Mr. BUCK. That is all.
(The witness, Mr. Marks, was excused.)

Acting Chairman REECE. Will you call your next witness?

(Mr. Buck called Mr. T. W. Balfe, Mr. Archibald Kelly, who did not appear.)

Mr. BUCK. Mr. Wile, of Schenley Distilleries.

Acting Chairman REECE. Do you solemnly swear, in these proceedings, to tell the truth, the whole truth, and nothing but the truth, so help you God?

Mr. WILE. I do.

TESTIMONY OF OSCAR J. WILE, VICE PRESIDENT, SCHENLEY

IMPORT CORPORATION, NEW YORK, N. Y. Mr. BUCK. Will you state your name and business association, please, sir?

Mr. WILE. Oscar J. Wile, vice president of Schenley Import Corporation.

ALLOCATION OF BRANDS TO IMPORTERS IN UNITED STATES THROUGH

EXCLUSIVE AGENCY CONTRACTS

Mr. BUCK. Are you acquainted with the arrangements made between Schenley Import Corporation and D. C. L. for the distribution of brands of Scotch whisky?

Mr. WILE. We have arrangements with Dewars, but not with D. C. L.

Mr. BUCK. With Dewars. What is the customary practice that you have? What is the customary practice in respect to allocations of brands? How are they allocated in this country to importers ?

Mr. WILE. Well, they are not allocated at all. Importers make their application to foreign shippers of all kinds for the sole concession, the sole right to sell their goods in this country. There is no allocation by anybody abroad.

Mr. Buck. Do you import your Scotch brands under exclusive and sole-agency contracts?

Mr. WILE. We do.

Mr. BUCK. And when those contracts are consummated between the foreign shipper and the American importer, does the American importer become the sole and only person in the United States who can buy their brand of whisky?

Mr. WILE. That is the case in the contract between Schenley and Dewars. I don't know what the conditions are with other people's contracts.

Mr. BUCK. That is the case in respect to your own contracts on Dewars?

Mr. WILE. Yes.
Mr. BUCK. Do you handle any other Scotch brands?
Mr. WILE. We do.
Mr. BUCK. What are they ?
Mr. WILE. We handle the Scotch known as Bobby Burns.
Mr. BUCK. Is it the case there, too, as in all of your contracts?

Mr. WILE. In all of our contracts we are the sole distributors in the United States.

Mr. Buck. In other words, Schenley under your contract with foreign shippers is the only company that can buy those particular brands for distribution in the United States?

Mr. WILE. That is correct. Mr. Buck. Now, what is the policy in respect to the distribution of those brands once they arrive here? What is your policy in marketing them in the United States in respect to allocation to dealers and so on?

Mr. WILE. We make a practice of selling to every wholesaler. We don't allocate to any particular dealer.

Mr. Buck. You mean you don't give exclusive wholesale rights in specified territory?

Mr. WILE. With two exceptions in the United States we give no exclusive rights. Those are in

Those are in the case of small States where we consider it wise to confine ourselves to one person, one firm.

Mr. BUCK. What States are they?
Mr. WILE. Florida and Rhode Island.

Mr. BUCK. In Florida and Rhode Island you do allocate those
States to particular wholesalers?

Mr. WILE. That is correct.

Mr. BUCK. And they are the only wholesalers who can get this brand of whisky for distribution in those States?

Mr. WILE. No; any other wholesaler can buy them through the distributor that we appoint as our distributor.

Mr. Buck. Yes; but he has to buy it through this man that you set up there.

Mr. WILE. That is correct.

Mr. BUCK. Now, what is your policy in respect to resale price maintenance on these brands?

Mr. WILE. Well, in certain States where there are fair-trade laws, where we consider it wise to put a resale price on Scotch whisky, we enter into fair-trade contracts.

Mr. BUCK. What percent of your business is covered by such contracts ?

Mr. WILE. I would say less than 50.
Mr. BUCK. Less than 50 percent?
Mr. WILE. Yes.

Mr. BUCK. Do you maintain that contract relation in New York
State?

Mr. WILE. Yes, sir.
Mr. BUCK. New Jersey?
Mr. WILE. Yes.
Mr. Buck. Pennsylvania ?
Mr. WILE. No.
Mr. Buck. Why?

Mr. WILE. Because the State of Pennsylvania controls the price itself.

Mr. BUCK. Therefore you couldn't do it there.
Mr. WILE. You could not.

Mr. BUCK. And the reason you don't do it in several States is because of the State distribution system set-up where it can't be done, is that so?

Mr. WILE. Well, in some States there are no fair-trade laws; in other States the State buys and fixes its own prices.

Mr. BUCK. But with those two exceptions, either where you can't do it-let's put it all in that category-where you can't do it because of State laws, you do?

Mr. WILE. No; there are a good many. States that have fair-trade laws that we don't put our goods under fair trade.

Mr. BUCK. What States?
Mr. WILE. Well, Arkansas, for instance.
Mr. BUCK. What others ?

Mr. Wile. I can't tell, off-hand. I am not sales manager of my company.

Mr. Buck. Why don't you do it in Arkansas?

Mr. WILE. Because we consider it the better part of business not to put the whisky under fair-trade control.

Mr. Buck. Why would it be good business not to do it in Arkansas and to do it in Maryland or New Jersey ?

Mr. WILE. Well, because there don't seem to be the desire to cut prices down there that there is in other territories.

Mr. BUCK. You mean the dealers take care of that matter themselves?

Mr. WILE. That is right. The dealers take care of it themselves.
Mr. BUCK. Then they have some organization for that purpose ?
Mr. WILE. I presume the dealers have.
Mr. BUCK. For maintaining the price?
Mr. WILE. I presume so.

Mr. Buck. Under your contracts with foreign shippers on these brands, does the shipper contribute to the advertisement of the brand in the United States?

Mr. WILE. He does.

Mr. Buck. And that is for the purpose of creating consumer demand for the particular brand here?

Mr. WILE. That is correct.

Mr. BUCK. And he also contributes to other forms of sales promotion in this country?

Mr. Wile. No; not our Scotch whisky shippers.
Mr. BUCK. Just the advertising?
Mr. WILE. Just the advertising.
Mr. BUCK. What do you list under advertising at that point ?

Mr. WILE. We list under advertising only published advertisements in newspapers, magazines, or trade magazines.

Mr. BUCK. Mr. Wile, Í had intended to ask another witness this question, but you have been with Schenley for some time. You know the business pretty well, generally.

Mr. WILE. I have been in it 40 years.

Mr. Buck. What is the situation in respect to the New York market now-Schenley marketing whiskies generally, not imports alone?

Mr. WILE. I am executive in charge of the import company and I know nothing about the domestic division at all.

Mr. Buck. Don't you sit in on general policy questions?
Mr. WILE. Our two companies are run entirely separate.

Mr. BUCK. I didn't ask you that. Don't you sit in on general policy questions of the corporation and hear them discussed, and so forth?

Mr. BUCK. You do not?
Mr. WILE. I do not.

Mr. Buck. Do you mean to say, now, that you know nothing about the situation in respect to Schenley's in the New York market?

Mr. WILE. That is correct; I know nothing about their domestic situation.

Mr. Buck. What about their imports? What is the condition of the New York market in respect to your imports, Schenley's imports?

Mr. WILE. Schenley's import company sells to every wholesaler that wants to buy from him in New York.

Mr. Buck. How many want to buy? Do you have any difficulty in marketing in New York City ?

Mr. WILE. None at all.

Mr. BUCK. None at all. Have you had to resort to the establishment of exclusive wholesale agencies?

Mr. WILE. Never have. Mr. BUCK. Do you mean to say that Schenley doesn't have exclusive wholesale agencies in New York ?

Mr. WILE. I believe Schenley domestic does. Schenley import does not.

Mr. BUCK. Don't you distribute through the same distribution channels?

Mr. WILE. We do not.

Mr. Buck. You do not? When you take one of these brands under an exclusive contract for distribution in the United States, what assurances do you have that the brand will be retained by your company?

Mr. WILE. Well, the contract usually has a termination date beyond which we have no assurance.

Mr. BUCK. What is the usual term of the contract? Mr. WILE. Some contracts run for 1 year, some for 10 years. Mr. BUCK. You would say they run from 1 to 10 years? Mr. WILE. That is correct. Mr. BUCK. And they are sold on exclusive agency contracts? Mr. WILE. That is correct. Mr. BUCK. For popular brands. Let's have the chart on imports. That is all of Mr. Wile, Mr. Chairman, if the committee has no questions.

Acting Chairman REECE. Are there any questions by members of the committee ? [None.]

(The witness, Mr. Wile, was excused.) Acting Chairman REECE. You may proceed.

COMPARISON OF CONSUMER COSTS OF SCOTCH WHISKY IN LONDON AND

NEW YORK

Mr. Buck. This chart, Standard Consumer Cost of Scotch Whisky, at this point is introduced for the purpose of comparing the consumer cost on Scotch whisky as between London and New York. The figures are based on market situation as it existed last week, I believe. It is a standard

Scotch whisky 8 years old, four-fifths of a quart, you will observe. That is not a full quart of whisky, even. That is four