and the administrative problems and costs of H. R. 3734. At the time of the passage of this act there were numerous complaints that such a law would unduly burden manufacturers and retailers. However, I am advised that the operation of this law since its enactment has shown it to be a practicable and effective curb on those deceptive trade practices against which it was directed. This experience with the Wool Products Labeling Act would seem to indicate the practicability of adopting a similar proposal to prevent similar deceptive practices in the fur industry.

There are certain specific provisions of the proposal which would seem to require some clarification and comment:

(1) Section 3 (a) provides as follows:

"The introduction, or manufacture for introduction, into commerce, or the sale, advertising for sale, transportation, or distribution, in commerce, of any fur article, or any imported fur, which is misbranded or falsely or deceptively advertised or invoiced within the meaning of this act or the rules and regulations prescribed under this act, is unlawful and shall be an unfair method of competition, and an unfair or deceptive act or practice, in commerce under the Federal Trade Commission Act; [Italics added.]

* * * ""

The prohibitions of this section apparently are not made applicable to domestic furs as distinct from domestic fur articles. It would seem necessary to include domestic furs in the subject matter of this section to afford the comprehensive protection for manufacturers and consumers which presumably is the purpose of the bill. Unnecessary regulation of sales of domestic furs, in any cases where the purchaser might be expected to need no protection, could be avoided by exercise of the authority to specify exempted transactions which is suggested in subparagraph (3) below.

(2) Section 6, which deals with false or deceptive advertising or invoicing of fur articles or imported fur, also omits a reference to domestic fur as in section 3. For similar reasons it is recommended that domestic furs be included under section 6.

(3) This bill, while very similar to the Wool Products Labeling Act in most respects, lacks one important exception found in the latter act. In section 4 (d) of the Wool Products Labeling Act certain exceptions are permitted where the product contains "an insignificant or inconsequential textile content." Subsection 7 (b) (3) of the proposed legislation, providing a special procedure for regulation of labeling pieces of parts of skins, apparently would not cover the labeling of fur articles with low fur content. To take care of situations where the use of fur constitutes an inconsequential element in the product, and otherwise to provide for a degree of flexibility which in the light of practical experience under the proposed act may minimize regulatory activity on the part of the Government, we recommend that the Commission be granted broad authority (perhaps by an amendment of section 10 (b)) to establish classes of exempted transactions in cases where it finds that the public interest does not require the application of regulatory processes of the nature contemplated by this bill.

Protection afforded manufacturers and consumers by the Wool Products Labeling Act of 1939 offers a cogent argument for the adoption of the proposed bill to afford similar protection for manufacturers and consumers against similar unfair or deceptive acts or practices in the fur industry. Because of the demonstrated value of such legislation in the closely related field of wool textiles, the Department recommends enactment of H. R. 3734 after amendment in accordance with our suggestions.

I am advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee.

Sincerely yours,

WILLIAM C. FOSTER, Acting Secretary of Commerce.

The CHAIRMAN. The first witness will be Hon. Reid F. Murray, a Representative from the State of Wisconsin.

Mr. O'HARA. Mr. Chairman, Mr. Murray advised me yesterday that he had had something come up and it would be impossible for him to be here this morning, but he expects to be here before the hearings are completed.

STATEMENT OF JOSEPH H. FRANCIS, EXECUTIVE SECRETARY, NATIONAL BOARD OF FUR FARMING ORGANIZATIONS, MORGAN, UTAH

The CHAIRMAN. Mr. Joseph H. Francis, executive secretary, National Board of Fur Farming Organizations, Morgan, Utah.

Mr. FRANCIS. Mr. Chairman: My name is Joseph H. Francis, executive secretary of the National Board of Fur Farming Organizations, which organizations constitute and represents 90 percent of all of the fur farmers in the United States and we are appearing in the capacity of presenting the views of this new but important branch of agriculture that has been developed in our country.

Copies of my statement have been supplied to the members of the committee but I think it would facilitate and simplify matters for me to read it.

The purpose and intent of this legislation is to encourage and bring about better business practices in all branches of the fur industry so as to provide the consumer with reasonable protection against unfair trade practices.

Though fur is one of our oldest products, in general, the public knows very little about the various kinds and quality of fur articles offered for sale. This fact has been largely responsible for many unfair trade practices being carried on in the fur industry today. Though it is impossible to establish or set up specific grades or standards under which fur or articles made of fur can be handled or sold, it is essential for the protection of the consumer and legitimate operators in the fur industry that the various species or kind of fur be identified, handled and sold, under their proper names.

Therefore, it is highly desirable that legislation should be passed protecting the consumers, retailers, distributors, manufacturers, dealers, and producers from misnaming, misbranding, and deceptive or misleading advertising of fur articles made in part or in whole from fur. The principle of this legislation is not new but is a part of a growing body of legislation to protect the consuming public in the field of food, drugs, weights, and measures, and clothing.

The proposed legislation corresponds in principle and practice to the Wool Products Labeling Act of 1939, though its provisions are not as far-reaching or inclusive as those covering wool products.

The requirements as set forth will not cause any hardship or increased cost on any branch of the industry and do not present any administrative difficulties, while on the other hand it will encourage better business practices, thereby improving the relationship between the various branches of the industry and promote confidence and reliance among consumers, which is so essential to the welfare of all business.

Fur is a product of nature, produced in most every country of the world. In order to identify the various species of fur producing animals proper names have been given each type of animal.

The physiological characteristics of each specie of fur-producing animal are different, consequently the characteristics of the fur or pelt it produces is also different. The same name as given to identify the animal is used to identify its fur. Beaver fur comes from beaver, mink fur from mink, muskrat fur from muskrat, and so forth. In their natural state each fur can be easily identified. However, methods

74903-48--2

of processing, dyeing, and blending of furs have been developed to where, today it takes an expert furtier to tell what kind of fur is used in a finished fur garment or article.

Like unto any other product there are some natural qualities and characteristics that cannot be substituted by artificial processes which makes one specie of fur more valuable than others. Only through the proper use of names can these natural qualities and characteristics, according to species, be identified.

Both the trade and the consumer are more familiar and have a greater knowledge of the various kinds of domestically raised fur, than of foreign produced fur. The large increase of imported fur from all parts of the world is adding to the confusion and difficulty of identifying fur articles as to type and kind.

By requiring the use and assimilation of the proper names of the fur used in fur articles according to the animals that produced the fur, a general classification according to specie and kind will be maintained and offer considerable protection to the consumer and those dealing in furs.

The proposed legislation merely requires the specie of fur to be identified, bought and sold under its proper name and the manufactured article be properly labeled as to the specie of fur it contains.

To continue the practice now in effect of using whatsoever names or combination of names as one may choose to use merely in order to promote the sale or to sell a piece of fur or fur article without regard to its effect on competing fur articles or on society, can and nothing short of confusion and complete disintegration of the industry itself.

Unfortunately at this date ways and means have not been developed where specific standards and grades can be applied to furs, thus insuring to the consumer the full protection desired. It should, also, be pointed out that there is always a small percent of pelts of expensive fur that, due to unprimeness, defects or damage that are less desirable and less valuable than good quality cheaper fur. These factors cannot be overcome until such time as a system of applying standards or grades for fur can be perfected. However, the consumer is entitled to such protection as the Governmert and the industry can now, within reason, provide.

The consumer is not the only person that is entitled to protection against misnaming, misbranding, and deceptive or misleading advertising. There are many honest and conscientious persons in all branches of the fur trade who are striving to produce and present to the consumer fur articles of high quality and workmanship, at a fair and reasonable price, but they are discouraged in their efforts by unscrupulous operators who are left free to use any means possible to deceive, mislead, and confuse the consumer, so she must be totally dependent and at the mercy of the furrier to see that she gets value for the dollar she spends on fur. This is, therefore not a healthy condition for either society or industry. I know of no industry today where lack of confidence and trust is so evident as it is in the fur industry. The proposed legislation is the first step to restore confidence and integrity, not only between the trade and the consumer, but also within the trade itself.

I regret, Mr. Chairman, that unfair practices are becoming so common in our industry that legislation is needed to require what should be a basic principle of all business and industry, that of simply

telling the "truth." The more difficult it is to appraise or determine value in a product, the greater is the incentive to deceive and mislead. This explains in part why it is so important to society and our industry that fur products should be properly named, labeled, identified,

and advertised

ANALYSIS OF THE LEGISLATION

Section 1: Titles the legislation "The Fur Products Labeling Act of 1947."

Section 2: Deals with definitions. Defining the words, fur, raw fur, processed fur, virgin fur, reused fur, and fur articles.

The definitions given are for clarification of the act, as there is no satisfactory substitute for fur, or method of mixing or attaching hair fibers to skin so as to resemble or imitate fur.

Except in the case of the term "virgin fur" the definitions as applied to fur merely set forth the various stages or conditions in which fur is handled or used.

Though the term "virgin fur" is not used in the act, the popularity of this term as applied to wearing apparel to denote pureness of the product has been defined when and if used in connection with fur so that it cannot be confused with reused fur.

Section 3: Declares unlawful, and an unfair and deceptive act or practice, the introduction, or manufacture for introduction, or the sale or transportation or distribution, in interstate commerce, of any misbranded fur article or imported fur.

The section excludes common and contract carriers, and exportation to foreign countries of a fur article or fur branded in accordance with the laws of such countries.

Section 4: Deals with the label or branding of the fur articles and requires (a) the true English name of the animal that produced the fur be used; (b) or if more than one kind of fur is used in the article, then the names of the animal that produced the furs; (c) if the article contains reused fur in any amount, the fact shall be stated; (d) name of the manufacturer; (e) if imported fur is used in the article, the name of the country from which the fur was imported.

Section 5: (a) Assigns the responsibility for affixing stamp, tag, or label of a fur article to the manufacturer, which shall remain on the garment until sold to the consumer. Provides that if a legitimate mistake is made in labeling an article, correction can be made by person who has possession of said article; (b) unlawful to wilfully remove or mutilate label.

Section 6: Requires in advertising and invoicing that only the proper name or names of the specie or kind of fur contained in the article be used.

Section 7: Requires all imported fur to be stamped, tagged or labeled with proper name of fur and name of country from which fur originated.

Section 8: Requires proper invoicing of fur and fur articles that are imported in order to carry out the purposes of this act.

Section 9: Provides that the Federal Trade Commission in cooperation with the Secretary of Agriculture, shall, within 1 year after due public hearings have been held, issue a regulation setting forth the names of all fur bearing animals to be known as the Fur Product Name Guide. The names to be included therein shall be the true

English names which shall be used in stamping, tagging, labeling, advertising, and invoicing fur and fur products. Also provides that names may be added or removed when necessary.

The remaining sections deal with enforcement proceedings, which are identical with those contained in the Wool Products Labeling Act that have proven reasonable and effective. Mr. Chairman, I wish to insert here the fact that we do not want to duplicate testimony so I understand the Federal Trade Commission will discuss that end or be here to represent the administrative procedure as to the other sections of the bill.

IN PRACTICAL OPERATION HERE IS HOW THE PROPOSED LEGISLATION WOULD BE APPLIED

First. The Federal Trade Commission is required to hold a public hearing at which all interested persons could attend, and assist in setting forth the true and proper English name of each specie of fur. Cooperation is required of the Secretary of Agriculture in assisting the Federal Trade Commission to set forth the proper names of domestically produced fur.

Second. When the proper names have been established for each specie for fur, a regulation shall be issued by the Federal Trade Commission which shall be known as the Fur Products Name Guide. After the effective date of this act such names shall be used by all branches of the trade in stamping, tagging, labeling, advertising, and invoicing fur and fur products.

Third. All imported fur and fur articles will be required to be stamped, tagged, or labeled with the proper name as set forth in the Fur Products Name Guide and also the name of the country from which the_fur originated, and must appear therein when released from the Bureau of the Customs for introduction into commerce. In the case of raw or processed fur skins or products which have not been manufactured, assembled, or made suitable for consumer use, the tag, label, or stamp shall remain on the said fur until in the hands of the manufacturer.

Fourth. The manufacturer is responsible to properly stamp, tag, label each article, whether domestic or imported, with the proper name of the fur used in the article along with the name of the manufacturer, if imported fur is used, the name of the country which appeared on the stamp, tag, or label affixed to such fur at the time it was released from the custody of the Bureau of the Customs.

In the case of a fur article containing reused fur, the fact that it contains reused fur.

For example, a fur garment made out of muskrat skins imported from Canada would be required to bear the label "Canadian Muskrat" and the name of the manufacturer. A garment made out of Kolinski imported from Russia would be required to bear the label "Russian Kolinski" and the name of the manufacturer, and so forth. If the fur that goes into the garment is domestically produced, the fact that it was domestically produced or raised in the United States can either be included or omitted. If two or more kinds or species of fur are used in one garment, proper names of identifying each kind shall appear on the label.