Mr. HALVERSTADT. If I may say so, I think that particular point was brought out in our earlier testimony about a year ago, as to the reasons for different sizes from the standpoint of serving the particular desires of individual consumers. Mr. CLIFFORD. Mr. Chairman-Mr. Halverstadt, within the discussion on cents off, the newspaper advertisements which you offered in your testimony were, I think, of two classes. In one class the retailer advertisers gave exactly the amount of the cents off as indicated in your promotion. Mr. HALVERSTADT. Yes, sir. Mr. CLIFFORD. In the second category the retailers gave even more than your promotion called for. Is that a correct summary? Mr. HALVERSTADT. That is correct. Mr. CLIFFORD. Mr. Halverstadt, in your staff study of these advertisements and in the policing that you must constantly do, have you heard of no examples at all of the cents-off promotion not being exactly followed? Mr. HALVERSTADT. I do not know of examples. I have to say that we check this kind of thing very carefully simply as a matter of business procedure. We know from our own experience that the retailers of America are honest and that with integrity, when they have these opportunities, they pass on these savings to housewives. Mr. CLIFFORD. Sír, I agree with you as to the honesty of retailers as I do to the brilliance of housewives who seem from your testimony to act more brilliantly when they lack information than when they would have meaningful information. But your testimony does seem to be contrary to that of Mr. Dunning's advertisement and to other industry witnesses who indicate that cents off is rather a shameful practice and that the manufacturer has no control over it. You like it. Mr. HALVERSTADT. Regarding the consumer, is Mr. Dunning with the Scott Paper Co.? Is that the gentleman? Mr. CLIFFORD. Yes. Mr. HALVERSTADT. In reading his ad I see in very, very large type here under the heading "The Original Computer," the following: Somewhere in that head among the bobby pins, the hairdo, the perfume, and the problems, there is a thing that makes calculations and decisions. This tricky little thinking center is the oldest instrument of progress in the human race. It is never satisfied with today's cuts of meat or cut of skirt. Day in, day out, month by month over the years this feminine computer is concerned with one thing above all others, value. And the implication I get from that is that there is a very deep regard for the quality of thinking that the American housewife exercises as she shops for her family. Mr. CLIFFORD. You and I are together as to that. But under the bobby pins, the computer, let us say, is making a calculation which has a dividend and a divisor if a quotient is to be arrived at. Now, you seem to indicate that the consumer is so smart she need not have one of those things. Mr. HALVERSTADT. What I am trying to say is, since you brought this up, I believe in relation to cents off Mr. CLIFFORD. Yes. Mr. HALVERSTADT. When the housewife goes into the grocery store and sees a special on Tide at 3 cents off this package or 5 cents off this package, without computation she can buy that package and feel assured that she is getting a special bargain. Mr. CLIFFORD. What is the measure of it? Mr. HALVERSTADT. The measure of it is the price. Mr. CLIFFORD. The cents off what? Mr. HALVERSTADT. The regularly established retail price in that store. Mr. CLIFFORD. Sir, is that not a pious aspiration of Procter & Gamble since you cannot control that? Mr. HALVERSTADT. There is nothing pious about this, Mr. Clifford. Mr. CLIFFORD. Is it an aspiration? Mr. HALVERSTADT. It is a fact that retailers do with honesty and integrity pass on the savings to consumers which we make available to them in such price packs. Mr. CLIFFORD. With regularity? Mr. HALVERSTADT. Yes, sir. Mr. CLIFFORD. That is contrary to the other evidence. It is good for the record. Mr. HALVERSTADT. I don't know what evidence this is contrary to, but I will say without equivocation that what I have described we deeply believe is universally true. Mr. CHUMBRIS. Mr. Chairman, on that point that was just raised by Mr. Clifford, of course Mr. Dunning's advertisement will speak for itself, but I didn't get the same interpretation of it that Mr. Clifford placed upon it. I think the main crux of Mr. Dunning's advertisement is that they tried the cents off. He doesn't like the idea, and so several other witnesses-Mr. Zahn the other day said, "I don't like cents off but I still don't like to see it prohibited under this law." Mr. Scott wants to get away from the cents-off type of thing and gear his whole basis of operating on this point of quality product. So in January of 1962 Scott decided to reaffirm his faith in the basic precept: We offer our products to the homemaker at a fair price and of uncompromis. ing quality. She will recognize their honest value and buy them and retailers everywhere, from the giants to the little ones, applaud it. That is his God-given right under our American way of doing business, of deciding that he wants to follow that way of doing business, and if John Doe wants to use a cents off, then following the theory of Mr. Zahn he should have that privilege, although he, Mr. Zahn, personally didn't like the idea of cents off either. Mr. HALVERSTADT. That is certainly true. Mr. Dunning is certainly giving expression to a merchandising philosophy which he has decided to follow and it is nothing more or less than that as I see it. Senator HART. I think Mr. Dunning is scheduled to testify next week. Mr. Bailey? Mr. BAILEY. I have no questions of these gentlemen. Senator HART. Mrs. Goodwin? Mrs. GOODWIN. Just one point, Mr. Chairman. Mr. Halverstadt, you are aware-I think we have discussed this before that toilet soap under present law does not come within the requirements of the Food and Drug Administration. Mr. HALVERSTADT. That is what I am advised, yes. Mrs. GOODWIN. Thank you. Senator HART. We again thank you very much for two good statements. Mr. HALVERSTADT. We appreciate the opportunity of being here and thank you, and I would like to say this-since there were some questions regarding one of our products, that as the size of a package of Tide increases, as was pointed out earlier this morning, it is in conformity with a pricing policy which gives the consumer an increasingly better value. Senator HART. I am reminded by counsel that I think it is right that on the record we commend Procter & Gamble for its willingness as a company to come in here and discuss its products. There have been a number who took a different position. Mr. HALVERSTADT. You are very nice to say that. Thank you. Senator HART. Our concluding witness today is a woman who for many years has been associated with consumer agencies and consumer interests, Caroline F. Ware. She has served as a professor at Howard University, at American University, Vassar, and the University of Puerto Rico. And in the recent past she has had assignments for the United Nations, OAS, and UNESCO. We note that she is at present a member of the Consumer Advisory Council to the Council of Economic Advisers. We welcome you and anticipate pleasantly your statement. STATEMENT OF CAROLINE F. WARE, CONSULTANT ON CONSUMER PROBLEMS, WASHINGTON, D.C. Mrs. WARE. Thank you, Mr. Chairman. Mr. Chairman, my name as you have indicated is Mr. CHUMBRIS. Mr. Chairman, I thought at this point in the record it should be noted that Mrs. Ware will speak as an individual and not a representative of the Council which I understand has been invited to appear next week? Mr. COHEN. No. Senator HART. This should be made very clear on the record. As Mrs. Ware's statement indicates, and I quote the sentence: I have not been authorized to speak for any organization or group with which I am now associated or have been associated in the past. On that point, has the Council taken a position on this bill? Mrs. WARE. The Council, Senator, has not met since the present bill was introduced. It did consider the previous bill and in general considered it favorably. The Council is meeting this coming week and I presume will consider the present bill and I presume will have something to say about it. Senator HART. The committee, of course, would hope very much to have in addition to all the other guidance that has been given to it the attitude of the Consumer Advisory Council on this and I hope you will insure that it is on the agenda next week. Mrs. WARE. I will do my best, Senator. Speaking then, as an individual, I heartily endorse the principle and purpose of this bill. It seeks to make what I consider à greatly needed contribution to the effective functioning of the American enterprise system and as such merits the support of all elements, whether business, consumers, labor, or farmers, who want the system to function well. Certainly it merits the support of the Congress, acting in the public interest. The American enterprise system presumes and depends on rationality, open and honest competition, and the opportunity for the consumer to exercise intelligent choice. It is not built on chaos, confusion, or deception. If it were, it would not be the highly productive system that it is, nor would it have yielded to American consumers the high and potentially higher levels of living which we enjoy. But chaos and confusion creep into the system from time to time, partly as a result of its very vitality and exuberance as it proliferates new products and new procedures. This has happened in the past and in certain areas it is happening today. In addition, of course, there is always a small minority who think that deception is the way to do business. It is the function of government in such a system as ours to provide a framework for the rational operation which permits honest competition and intelligent consumer choice. It has done so in many ways over the years establishing standards for weight and measures, as provided for in the Constitution, attacking deception, from the first mail fraud act in 1872 on, promoting fair competition through the Clayton Act, requiring honest information through the labeling provisions of the Food, Drug, and Cosmetics Act, facilitating orderly marketing of fruits and vegetables by the Standard Container Acts of 1916 and 1928, and of alcoholic beverages by the Federal Alcoholic Administration Act of 1936. The present bill is part of this continuing process, and the process must be a continuous one in order to keep up with changing conditions. Forty years ago, the vitality of American industry had introduced a chaotic situation in many lines because of the great multitude of products that were nearly alike but just different enough to cause inconvenience differences in sizes of brick, which served no useful purpose, or slight differences in mattress sizes so that they did not quite fit the various sizes of springs. Herbert Hoover as Secretary of Commerce, recognized that these meaningless variations were hampering the American economy, introducing waste, distorting competition, impeding intelligent choicein short standing in the way of rational functioning. From his position as Secretary of Commerce, he led a movement for simplification which was taken up vigorously by a number of industries and the consumers of their products, and resulted in a great reduction in the wasteful and confusing multiplicity of sizes and shapes of many products, primarily industrial goods. Within 6 months of his establishment of the Division of Simplified Practice, in 1922, simplification projects were underway in no less than 65 industries. Types of paving brick were reduced from 66 to 4, of metal lath from 125 to 24, woven wire fence packages from 2,072 to 138, milk bottles from 78 to 10, beds, springs, and mattresses from 78 to 4, and so forth. Industries have found that such simplification and standardization permits more efficient management and saves them many millions of dollars. Various things have been said today about the possible added costs in the attempt to simplify packaging under the present bill. I noticed in an article back in 1928 by the Assistant Director of the Division of Commercial Standards of the U.S. Department of Commerce some estimates at that time by industries of the kind of savings which simplification had brought them. Just a few examples: The simplification in lumber yard sizes the industry estimated, produced a saving of $250 million, paving prick, $1 million, builders' hardware, $10 million, and so forth. In other words, the process of industrial simplification has been recognized as a source of saving rather than a source of cost. Senator HART. Doctor, I think it would be helpful for the record if that article or memorandum was inserted in the record. Mrs. WARE. Yes. Senator HART. Following your testimony. Mrs. WARE. Yes. This is an article which appeared in the Annals of the American Academy of Political and Social Sciences in May 1928. It is an article by Ray M. Hudson, Assistant Director, Commerical Standards, U.S. Bureau of Standards, Department of Commerce. The title is "Organized Efforts in Simplification." Senator HART. It will be printed following your statement in the record. Mrs. WARE. Not only have industries found such simplification to be a source of saving but consumers have also, where simplification has reached the products which come to consumers. For example, we consumers can buy a mattress for a twin bed and know that it will not be an inch too wide or 2 inches too short, and without wondering whether a "super-twin" is the same old bed or something new and different. Thanks to the vision and efforts of Herbert Hoover, the American economy from the 1920's on has been largely free of the hampering confusions among producers' goods and some consumer goods which his program of simplified practice and commercial standards helped greatly to remove. I recognize that the simplified practice and commercial standards programs which Hoover promoted as Secretary of Commerce used quite different procedures from those proposed in the present bill. They operated essentially through voluntary agreements, sanctioned by the Government. It is not the method to which I have reference, but the purpose-the recognition of the need, in the interest of a wellfunctioning economy, to eliminate the chaos which has crept inand vigorous measures under Government leadership to accomplish this objective. It is worth noting that similar measures were undertaken during those same years in other countries, often under the term "rationalization," using a variety of means, but pursuing the same objective. But Hoover's simplified practice program was instituted before the days of general packaging. Those were the days when, for most products and in stores where consumers did most of their buying, a salesman measured out the quantity ordered, and if the consumer inspected the product and was careful to watch the butcher's thumb on the scales, he knew pretty well what he was getting. Now, the package is the salesman. A vast proportion of what the consumer buys is preweighed or measured, as well as premixed. An enormous variety of complex products sit on the shelves for the |