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HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE HOUSE OF REPRESENTATIVES

EIGHTY-EIGHTH CONGRESS

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A BILL TO AMEND THE FEDERAL TRADE COMMISSION ACT,
TO PROMOTE QUALITY AND PRICE STABILIZATION, TO
DEFINE AND RESTRAIN CERTAIN UNFAIR METHODS OF
DISTRIBUTION AND TO CONFIRM, DEFINE, AND EQUALIZE
THE RIGHTS OF PRODUCERS AND RESELLERS IN THE DIS-
TRIBUTION OF GOODS IDENTIFIED BY DISTINGUISHING
BRANDS, NAMES, OR TRADEMARKS, AND FOR OTHER

PURPOSES
AND IDENTICAL BILLS

APRIL 23, 24, 25, 26; MAY 14 AND 15, 1963

Printed for the use of the
Committee on Interstate and Foreign Commerce

U.S. GOVERNMENT PRINTING OFFICE

99685

WASHINGTON : 1963

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COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE

OREN HARRIS, Arkansas, Chairman
JOHN BELL WILLIAMS, Mississippi JOHN B. BENNETT, Michigan
KENNETH A. ROBERTS, Alabama

WILLIAM L. SPRINGER, Illinois
HARLEY O. STAGGERS, West Virginia PAUL F. SCHENCK, Ohio
WALTER ROGERS, Texas

J. ARTHUR YOUNGER, California SAMUEL N. FRIEDEL, Maryland

MILTON W. GLENN, New Jersey TORBERT H. MACDONALD, Massachusetts SAMUEL L. DEVINE, Ohio GEORGE M. RHODES, Pennsylvania ANCHER NELSEN, Minnesota JOHN JARMAN, Oklahoma

HASTINGS KEITH, Massachusetts LEO W. O'BRIEN, New York

WILLARD S. CURTIN, Pennsylvania JOHN E. MOSS, California

ABNER W. SIBAL, Connecticut JOHN D. DINGELL, Michigan

GLENN CUNNINGHAM, Nebraska
PAUL G. ROGERS, Florida

JAMES T. BROYHILL, North Carolina
ROBERT W. HEMPHILL, South Carolina DONALD G. BROTZMAN, Colorado
DAN ROSTENKOWSKI, Illinois
JAMES C. HEALEY, New York
HORACE R. KORNEGAY, North Carolina
W. R. HULL, JR., Missouri
GILLIS W. LONG, Louisiana
LIONEL VAN DEERLIN, California

W. E. WILLIAMSON, Clerk
KENNETH J. PAINTER, A88istant Clerk

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ANDREW STEVENSON
KURT BORCHARDT

Professional Staff

GEORGE W. PERRY
JAMES M. MENGER, Jr.

SUBCOMMITTEE ON COMMERCE AND FINANCE

HARLEY O. STAGGERS, West Virginia, Chairman JOHN D. DINGELL, Michigan

MILTON W. GLENN, New Jersey JAMES C. HEALEY, New York

HASTINGS KEITH, Massachusetts GILLIS W. LONG, Louisiana

WILLARD S. CURTIN, Pennsylvania LIONEL VAN DEERLIN, Callfornia

II

DEPARTMENT OF AGRICULTURE,

Washington, D.C., April 29, 1963. Hon. OBEN HARRIS, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This is in reply to your letter of February 22, 1963, for a report on H. R. 3669, to amend the Federal Trade Commission Act, to promote quality and price stabilization, to define and restrain certain unfair methods of distribution, and to confirm, define, and equalize the rights of producers and resellers in the distribution of goods identified by distinguishing brands, names, or trademarks, and for other purposes.

The Department recommends against this bill.

The objective of H.R. 3669 is the same as that of H.R. 457, for which we have submitted a report recommending against the bill. The exemption of certain transactions provided for in paragraph 5(a) (16) of the act, as added by H.R. 3669, would reduce, somewhat, the scope of the bill. However, neither this change nor others made, alters our judgment that enactment of either bill would not be in the public interest. We do not think that these bills are an effective way to promote quality of the products of agriculture.

Authorizing owners of brands, names, or trademarks to exercise greater control than they now have over resale prices to the consumer would be against the public interest, particularly for food products. The bill would give added advantage to large-scale, well-financed manufacturers and merchandising organizations capable of engaging in extensive brand advertising and promotion. All merchants would be compelled to abide by minimum resale prices. Those merchants who, by the adoption of more efficient methods, achieved real economies in distribution would not be able to pass on the resulting savings to consumers if they were required to observe the retail prices established by wholesalers or manufacturers. Prices paid by consumers for food and fiber would be higher than otherwise; the sales of some products might be reduced; and higher prices at the retail level would not result in higher prices for farmers.

The proposed legislation does not define "bait merchandising practices" re-, ferred to in paragraph (8) (A) on page 2 of the bill. Without further clarification, this could either result in injustice to the vendee or present enforcement problems for the owner of the brand, name, or trademark. Moreover, the statutory remedies which paragraph (10) on page 5 of the bill proposes to make available to an owner of a brand, name, or trademark, whether or not he has an agreement or contract with a vendee prescribing minimum prices, and the consequences imposed upon the vendee by the provisions of the bill, appear to be unwarrantedly harsh.

The Bureau of the Budget advises that there is no objection to this report from the standpoint of the administration's program. Sincerely yours,

ORVILLE L. FREEMAN, Secretary.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D.O., April 26, 1963. Hon. OREN HARRIS, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your request for views of the Bureau of the Budget on H.R. 457 and H.R. 3669, similar bills to amend the Federal Trade Commission ict, to promote quality and price stabilization, to define and restrain certain unfair methods of distribution and to confirm, define, and equalize the rights of producers and resellers in the distribution of goods identified by distinguishing brands, names, or trademarks, and for other purposes.

These measures would provide, among other things, that the owner of a brand, name, or trademark would retain his property rights in such brand, name, or trademark in the event of sale or resale of goods bearing his brand, name, or trademark. They would also grant the owner the right to sue in a civil action for both damages and injunctive relief. H.R. 3669 would allow certain exemptions

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