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business, as well as large, is represented in virtually every board and committee of the Institute. Our Constitution and Bylaws assure the continuation of this practice.
Turning to the antitrust aspects, as I mentioned in my testimony, it would be an impossible administrative burden to require Justice Department's approral of all new standards. In addition, the delays that would necessarily oceur would make most standards meaningless and eventually mean the end of the standards movement. Timeliness is of utmost importance in standardization. It does no one any good to reach agreement on a particular item, such as interchangeability of components, if the standard cannot be developed in time for the product to be marketed.
What is essential is that the procedures by which standards are developed be such as to make restraint of trade or monopolization impossible. This is reflected in the Institute's Constitution and Bylaws. These have been dereloped with full understanding that the Department of Justice would have opportunity to comment officially before a Federal charter for the Institute would be legislated
By assuring itself that action which brings about antitrust violations is not possible under the procedure of the USA Standards Institute, the Justice Department can fully protect the public interest without being held responsible for approval of the thousands of standards developed each year.
Again, we appreciate the opportunity to testify before your subcommittee
FRANCIS K. McCUNE,
Vice President, USASI. Mr. Roush. We would also seriously consider the suggestions you have made. We will have our own counsel go over them.
We will also submit them to the appropriate governmental agencies for their comments, and hopefully we can come up with something here that will serve a useful purpose in a very complex situation in the commercial world, the technical world in which we live today.
Thank you again, gentlemen, for appearing here today.
(Whereupon, at 11:37 a.m., the committee adjourned until 9:30 a.m., Thursday, September 22, 1966.)
INTERNATIONAL COMMERCIAL STANDARDS
THURSDAY, SEPTEMBER 22, 1965
HOUSE OF REPRESENTATIVES,
Our first witness this morning is Mr. John D. Ritchie, regional vice president, American Plywood Association.
Mr. Ritchie, we are happy to have you here this morning.
Mr. RITCHIE. Yes, and I think I read it in good time, and that will be the best way to handle it.
Mr. Roush. You may proceed.
Mr. RITCHIE. I have with me our Washington counsel, Mr. Earl Kintner, who is certainly very familiar with the background of our testimony.
STATEMENT OF JOHN D. RITCHIE, REGIONAL VICE PRESIDENT,
AMERICAN PLYWOOD ASSOCIATION; ACCOMPANIED BY EARL KINTNER, COUNSEL
Mr. RITCHIE. Mr. Chairman and members of the subcommittee, my name is John D. Ritchie, and I am the regional vice president for Washington, D.C., of the American Plywood Association. Our association, which has its headquarters in Tacoma, Wash., is composed of some 95 firms engaged in the production of softwood plywood. These member firms operate about 160 plants in the Western and Southern States of the Nation, and they represent in their total production approximately 85 percent of all softwood plywood produced in the United States.
We very much appreciate this opportunity to present our views on H.R. 17424. Our industry has a vital interest in commercial standardization, an interest which we have actively demonstrated by working with the Department of Commerce on the development of plywood standards for more than 30 years. Since 1933, when the first standard for the plywood industry was promulgated, our com
mercial standards have been formed and issued through the voluntary standards program administered by the Department itself. That standardization work continues to prosper today through the functions performed by the Office of Commodity Standards which is a part of the National Bureau of Standards. The fact that the plywood industry is today-according to the Federal Reserve Board rated as the Nation's fastest growing basic industry can be attributed in considerable part to the successful work which has been accomplished by and for the industry in standardization.
We wish today to support in principle the basic objective of H.R. 17424: the promotion and support of U.S. interests in voluntary international commercial standards activities. All of us, citizens, industry, and the Federal Government, have a vital concern in strengthening the Nation's export position. Among the important obstacles to a larger U.S. export trade are the inadequate state of international standards and the ineffective participation by our country in the existing standards framework. We believe that a stronger U.S. participation in the international standards program will certainly promote an expansion of international trade and, in particular, will create new horizons for our Nation's products,
However, while the basic objectives of H.R. 17424 are desirable, we view certain provisions of the proposed legislation with some misgirings because they might easily be construed as giving the Secretary of Commerce wide authority to change or even abolish
existing domestie standardization programs. Specifically, we fear that these proposed provisions would provide broad legislative authority for the abandonment of the Department of Commerce's own commodity standards program on which our industry and over a hundred others have relied for many years. If you will bear with me briefly as I retrace some of the relevant history, I think that you will agree that our fears in this regard are not groundless.
The Government-operated standards service began in 1921 and, as early as 1933, there came the first attempts to have the Government abandon the activity. A tentative arrangement was made between the Secretary of Commerce and the President of the American Standards Association for the ASA to take over the substance of the Government's commodity standards work. But strong objections to the proposed transfer voiced by the industries that utilized the Government service were successful in preventing the change. Subsequently, the Government's activity was not only retained, but was gradually built up.
In 1945, a second attempt was made to transfer the functions of the Government program to interested private organizations. Two Wilson reports prepared on the subject advocated the development of all standards through private organizations, and urged that the Government limit its activity strictly to basic research and development and to developing testing methods for standards. In 1945 and in 1933, the industries primarily concerned urged retention of the function by the Government. The Wilson proposal was rejected by the Secretary of Commerce, Henry Wallace, in a public letter to Mr. Wilson. The Department, Secretary Wallace said, "does not wish to compete with, or to duplicate the services which private organizations can provide equally well, nor does the Department wish to have voluntary industry
standards misrepresented as scientific and compulsory Government standards * * *'I do not believe, however, that the Department of Commerce can properly close the door to industry and other economic groups which request the direct assistance of the Department in developing and in publishing voluntary standards on their behalf.”
Moreover, in this letter he stated:
The Department has a statutory responsibility to provide such services in the interest of business and industry and the general public and we have no authority to refuse such requests.
After a further confrontation had taken place in 1960, still another study group, with Dr. Frank L. LaQue as chairman, was formed to study standardization problems, and that group submitted its report in February of 1965.
Mr. Chairman, may I say here, Dr. LaQue will be testifying and I would like to be sure that everyone understands that our organization, while the testimony from here on may not be in complete agreement with his, we are conscious of the tremendous assignment of Dr. LaQue's panel, of the dedicated effort that went into it and the desire to do a complete and adequate job fully in accordance with their efforts in that direction.
This report, known generally as the “LaQue report,” among other things, took pains to commend private standardization services in derogation of the public program and to attribute misconceptions to those industries which have preferred to use the voluntary standards service afforded by the Department of Commerce. For the promotion of international standardization, the La Que Panel recommended the establishment of a national coordinating institution for voluntary standardization and also suggested :
In implementing this recommendation, preference should be given to reconstituting the existing national standards organization, American Standards Association, rather than the creation of an entirely new body.
The “ASA,” as you may know, only a few weeks ago reconstituted itself into the "United States of America Standards Institute" with the avowed purpose of placing increased emphasis on international standards programs.
Following issuance of the LaQue report, the Department of Commerce requested the submission of comments by interested parties, and our association along with representatives of other industries submitted views accordingly. We expressed the view that the La Que Panel had not given fair consideration to the position and interests of those industries that use the services of the Department of Commerce and that accordingly a number of the body's basic findings were defective.
We also urged that the conduct of international standardization activity for the United States should not be wholly relegated—with a subsidy of Federal funds—to private organizations, but that rather the Department of Commerce itself, acting through the National Bureau of Standards, could be best equipped to promote in an unbiased and efficient way the Nation's vital interest in international standardization. Essentially similar views were also expressed by representatives of many other industries.
It is with this background then, and with this dialogue of many years, inevitably in mind that we have considered the provisions of
H.R. 17424. Section 2 of the bill gives the Secretary of Commerce quite general authority to promote and develop U.S. participation in international commercial standardization, as well as to establish and maintain a clearinghouse service for the collection and dissemination of standards to be made available to producers, distributors, users, consumers, and the general public.
Section 3 of the bill gives the Secretary what would seem to be sweeping powers to "do all things necessary to carry out the funetions described in section 2” including, but not limited to, the authority to make grants and enter into contracts or cooperative arrangements with any public or private organizations, "firms or persons which he deems qualified to carry out any of the functions authorized without regard to any other provision of law."
This language, as we read it, would not only give the Secretary of Commerce very extensive powers in the field of international standards, but would also provide a statutory framework authorizing drastie changes in the areas of domestic standardization where deemed desirable by the Secretary in the interests of international standardization.
Our specific fear, as I have said, is that this bill would provide the impetus and the springboard for the abolition of the Government domestic commodity standards program and its transference to private interests as yet unidentified.
In terms of the needs of our industry, therefore, we urge you to consider including in this proposed legislation provisions to the effect that the legislation shall in no way be construed as impairing or affecting the authority of the Department of Commerce to promulgate voluntary standards, both domestic and international, under the Department's own procedures. Our industry and, we believe, scores of other industries, consider the work of the Office of Commodity Standards indispensable to them and have over the years developed the firm conviction that the Government is particularly well fitted to carry on the many-faceted role of coordinator, impartial arbiter, technician, and protector of both industry and consumer, which is essential to effective standardization.
Another suggestion which we would urge for your consideration is that the proposed clearinghouse service for the collection and dissemination of engineering, product, and government procurement standards be operated and maintained by a public agency. We feel that this important function can best be carried out so as to protect the interests of all concerned if it is entrusted to public, rather than private hands. The granting of control over the national clearinghouse service to a private standards organization could endow the organization in question with effective and perhaps restrictive control over standardization practices within as well as without the United States.
In sum, we are concerned that the implementation of this proposed legislation could place undue emphasis upon the role to be performed by private standards organizations in advancing international standards. We have no quarrel with the principle that private organizations do have a vital role to play in carrying out the important task before us. But we believe that the responsibilities and role of public agencies, programs and facilities should not be overlooked. Indeed. the applicability of commercial standards to international trade would seem to be a matter of foreign trade relations in which the executive