article manufactured in the United States from imported material. In doing so, the bills would place upon the manufacturers of certain steel containers the burden and expense of marking the containers and keeping books under pain of criminal penalties while the manufacturers of other containers and other products made from imported material would not be so burdened. This amounts to a different treatment without persuasive distinctive features. Although we followed the hearings and read the favorable report of your committee and the debates in the House on identical bills in the 88th Congress, we feel that this is unwise legislation. If it should be enacted, every industry which meets severe price competition from abroad would be entitled to the same foreign product labeling for the purpose of curtailing foreign competition. The burden on the fabricator and the packager would be multiplied. This would also appear inconsistent with present U.S. policy to remove barriers to foreign trade, expressed for example, in the Trade Expansion Act of 1962. Accordingly, we are unable to recommend enactment of this legislation. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely, RAMSEY CLARK, Deputy Attorney General. GENERAL COUNSEL OF THE DEPARTMENT OF COMMERCE, Washington, D.C., April 29, 1965. Hon. OREN HARRIS, DEAR MR. CHAIRMAN: This is in further reply to your request for the views of this Department with respect to H.R. 6775, a bill to prohibit the introduction into interstate commerce of any shipping container manufactured in the United States from imported steel unless the container is marked so as to indicate the country of origin of the steel. If enacted, this bill would require steel shipping containers manufactured in the United States from imported steel, to be stamped with the country of origin of the steel. The term "shipping container" would mean all steel drums and pails used for shipping products “as defined by the Department of Commerce." Every manufacturer of such containers would be required to maintain proper records showing the origin of the steel used in all the steel shipping containers made by him. The Federal Trade Commission would be empowered to enforce the act and to impose the appropriate penalties for its violation. Provision is made for the willful or deceptive alteration of any mark of origin placed on a steel shipping container. Insofar as the marks of origin requirement on imported articles is concerned, and except for the deceptive marking practices covered by the Federal Trade Commission Act, the basic policy of the United States is embodied in section 304 of the Tariff Act of 1930, as amended. Under this law each imported article produced abroad, and not otherwise specifically exempted from marking requirements, must be legibly marked in a conspicuous place in a manner that will indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congress intended, and customs court decisions affirm, that the country-of-origin marking requirement apply only to imported articles which do not lose their identity before reaching the ultimate purchaser. This Department supports the present practice under section 304 which does not require that imported materials which lose their identity in a product manufactured in the United States be identified in the finished domestic product. To do so would create a discrimination against the imported materials inasmuch as the burden of marking would tend to deter U.S. manufacturers from using imported materials and would thereby institute a nontariff barrier. In the same manner the marking requirement would discriminate against some domestic products on the basis of the origin of the materials incorporated therein. The net effect of excessive marking or labeling requirements directed against imported products is to either limit their availability or to increase their cost. This in turn increases the cost of supplies and materials to American manufacturers and thereby renders them less able to compete with imported finished products both in the domestic and foreign markets. Although H.R. 6775 does not specifically amend the Tariff Act of 1930, its enactment would create three undesirable effects in terms of the 1930 act. First, the bill has the indirect effect of redefining "ultimate purchaser" by requiring notification of country of origin, not on the article in the form in which it is imported, but on the product after it has undergone substantial transformation by manufacture or processing by U.S. industries. Secondly, H.R. 6775 shifts the burden of responsibility for marks of origin to all of the manufacturers, processors, or others who handle the import prior to its final use and sale. Thirdly, H.R. 6775 constitutes special legislation since it requires manufacturers of steel shipping containers to comply with the marking and recordkeeping requirements but permits other manufacturers to incorporate imported materials into their products without submitting to such administrative burdens. Under the existing requirements of section 304 of the Tariff Act of 1930, shipping containers manufactured outside the United States, like other finished products, must be marked with the country of origin. The Department believes that it is not desirable to exceed the scope or intent of section 304, as provided for in H.R. 6775, since to do so would place unwarranted administrative and cost burdens on U.S. handlers and consumers of imported materials with no commensurate benefits to the final consumers of the product into which the imported materials have been incorporated. The Department is of the opinion that the Congress in enacting section 304 carefully balanced the need to inform the ultimate purchaser as to the country of origin of the imported article in the form in which it is imported against the burden that attaches to marking, as represented by the exemptions to section 304 which recognize that not all products can be marked in the normal manner. H. Rept. 1609, 89-2- -2 For these reasons, the Department of Commerce opposes the enactment of H.R. 6775. We have been advised by the Bureau of the Budget that there would be no objection to the submission of this report from the standpoint of the administration's program. Sincerely, Hon. OREN HARRIS, ROBERT E. GILES, General Counsel. FEDERAL TRADE COMMISSION, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This is in reply to your letter of April 1, 1965, requesting the Federal Trade Commission to comment on H.R. 6775, 89th Congress, 1st session, a bill to prohibit the introduction into interstate commerce of any shipping container manufactured in the United States from imported steel unless the container is marked so as to indicate the country of origin of the steel. The subject bill is identical with H.R. 1671, 89th Congress, 1st session, on which the Commission submitted a report to your committee on March 26, 1965. The bill would make it an unfair method of competition and a deceptive act or practice in commerce under the Federal Trade Commission Act for a manufacturer of steel shipping containers to introduce them into commerce when the "container is manufactured in the United States in whole or in chief value from steel made outside the United States," unless the container is properly marked to indicate that the steel is of foreign origin. The bill contains specific definitions of a "shipping container." The bill also makes it a violation of the Federal Trade Commission Act to change or re-mark such marking for the purpose of hindering or preventing other persons from obtaining the information given by such mark. Records showing the origin of the steel so used would be required to be kept by manufacturers of such steel shipping containers; the failure to do so would constitute violations identical to those above mentioned. The bill further provides for the imposition of certain sanctions, including criminal penalties, for violations thereof. The Commission is of the view that existing provisions of law, as construed and applied by the Commission and the courts, are adequate to protect consumers against any material deceptions arising from failure to disclose adequately the place of origin of imported merchandise or parts or components thereof and, consequently, adequate to protect American producers as well. In respect to the foreign policy questions raised by this proposed legislation, the Commission defers to the views expressed by the Department of State. By direction of the Commission: PAUL RAND DIXON, Chairman. N.B.-Pursuant to regulations, this report was submitted to the Bureau of the Budget on May 5, 1965, and on May 11, 1965, the Bureau of the Budget advised that there is no objection to the submission of this report from the standpoint of the administration's program. JOSEPH W. SHEA, Secretary. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., March 17, 1966. Hon. HARLEY O. STAGGERS, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This is in response to your request for the views of the Bureau of the Budget on H.R. 1671 and H.R. 6775, similar bills, to prohibit the introduction into interstate commerce of any shipping container manufactured in the United States from imported steel unless the container is marked so as to indicate the country of origin of the steel. These bills would require that any steel shipping containers, as defined in the bills, which are manufactured from imported steel, be marked with the country of origin of the steel. Manufacturers of such containers would be required to maintain records indicating the origin of the steel used. Failure to comply with these provisions would be deemed an unfair method of competition and a deceptive act under the provisions of the Federal Trade Commission Act. The Federal Trade Commission would accordingly be empowered to enforce the proposed act and to assess criminal penalties. The Departments of State, Treasury, Commerce, and Justice and the Federal Trade Commission have all opposed H. R. 1671 and H.R. 6775 in their reports to your committee. The Bureau of the Budget concurs in the comments made by the above agencies, and accordingly recommends against enactment of these bills. Sincerely yours, WILFRED H. ROMMEL, Acting Assistant Director for Legislative Reference. AGENCY VIEWS ON BILL AS AMENDED DEPARTMENT OF STATE, Hon. HARLEY O. STAGGERS, DEAR MR. CHAIRMAN: The Department's attention has been called to H.R. 6775 as amended and ordered to be reported by the Committee on Interstate and Foreign Commerce. In letters sent to the committee on April 5, 1965, the Department of State expressed its opposition to H.R. 6775 and to a similar bill H.R. 1671. The amendments to H.R. 6775 do not materially alter the nature and purpose of the bill which, as indicated by its sponsors, is to discourage the use of imported steel in domestically manufactured steel shipping containers in favor of domestically produced steel. Accordingly, the Department wishes to reaffirm its opposition to H.R. 6775 as amended. Ĥ.R. 6775 as amended would declare it to be an unfair and deceptive act or practice in commerce under the Federal Trade Commission Act to introduce into interstate commerce any steel shipping container as defined in the bill (e.g., steel drums and pails) unless such container bears a marking with letters at least one-fourth inch in height showing the country in which the steel was made. Manufacturers of steel shipping containers would be required to maintain records showing the origin of all steel used for containers and to preserve the records for at least 3 years. Willful violators of these requirements would be subject to a maximum penalty of $5,000 fine or imprisonment up to 1 year. The Department opposes this bill for the following reasons: 1. It would establish a new nontariff trade barrier at a time when we are making a major effort to reduce such barriers maintained by other countries against U.S. exports. 2. It would establish an undesirable precedent by requiring a marking on a product manufactured in the United States indicating the country where a material going into that product was produced. It would give rise to demands to enact similar marking requirements for a whole range of products which are imported into the United States. If the requirement were applied generally the task of labeling for many manufacturers, for instance automobiles, would be almost impossible. 3. It would encourage other countries to enact similar legislation that would be detrimental to U.S. exports, and the effect would be more serious for the United States because of its great interest in expanding exports. 4. Because it is designed to focus prejudice against foreign-made steel, it may tend to deprive certain smaller producers of steel containers of an alternate source of supply for steel because they would |