from any labeling requirement. This exposes the true purpose of the bill. It is ironic that a bill allegedly aimed at misbranding and misdescription should itself exhibit the vices it seeks to prevent.

The provisions of the proposed bill relating to imported furs are unconstitutional since these provisions are futile and protect no one, and have no reasonable relation to any legitimate purpose and cast an arbitrary, unreasonable and impossible burden on dealers in foreign furs and deprive them of their business and property without due process of law.

This is a constitutional point that will be raised, and of course I think it would be fatal to the proposed bill if it applied only to imported furs, and not applied also to domestic furs. That is a legal point.

While the Federal Government has the right to enact laws requiring labeling of products for the protection of the health of the community or to prevent frauds on the public, the provisions of the proposed bill relating to imported furs have no reasonable relationship to any such purpose. The provisions of such a bill must bear some reasonable relationship to the object sought to be accomplished. If a bill, under the guise of a labeling bill, has some other motive which would deprive the public of a large quantity of furs which they are anxious to buy, that would be an arbitrary and unreasonable exercise of police power which would be unconstitutional.

I might comment for a moment on the case which was cited by Mr. Miller, the Ury case, which was an article of machinery, I think, which had been marked "made in Germany." That article would never change its label from the point where it was imported into this country, sold, and resold, and finally down to the final consumer. But mind you, this bill is very different. In this bill the original label disappears and there is no way of identifying the strips of fur with any original labels after that. Then an entirely new label comes into the picture at some point in the chain of the process. That is a very different state of affairs from the machine which is stamped "made in Germany," "made in Japan," or anything else that you will. There is a definite continuous chain, and there is no change at all. Here there is a decided change, and a loss of identity.

I have cited several cases, and I did not try to make this a legal brief because I thought it would be more helpful to the committee if we just talked about facts in the industry.

I have cited some cases to show that the bill as drawn is unconstitutional. I have a feeling that there is no great dispute on that point, either.

In the first place, up the point where fur skins are manufactured into fur garments the raw or processed commodity is dealt in by experienced and expert dealers who could not possibly be deceived and who need no protection. In the second place, existing rules and trade practices identify clearly the type of skins purchased and the country of origin. Similarly, when the processed skins are sold to the manufacturer, they are clearly described by invoice and all of the requirements for labelling each skin before release from customs and thereafter repeatedly during processing are all futile since all labels are removed when the skins are cut up and manufactured into garments, so that all means of identifying particular pieces of skins with particular labels are lost and destroyed.

Nothing is accomplished except that an unreasonable and impractical burden is cast on the imported fur whereas domestic furs are exempt from any such burdens.

The law is well settled that legislation of this type must be reasonable and must be designed to protect the public and not under guise of such purpose drive from the market a major portion of an important industry.

In Nolan, U. S. Attorney v. Morgan (69 F. (2d), 471), affirming 3 Fed. Supp. 143, the court below held that regulations under the Pure Food Act requiring canned peas made from dried soaked peas to be labeled "below United States standard" was unconstitutional under the fifth amendment, since it resulted in the taking of plaintiff's property without due process of law. On appeal, this decision was upheld. The court said at page 474:

The McNary-Mapes amendment is not directed toward adulteration of foods, but solely to their misbranding. Its purpose is commendable, but, if unreasonably applied, may work hardship and injustice wholly beyond its intended and lawful scope. As stated in the amendment itself, the regulations to be made under it should "promote honesty and fair dealing in the interest of the consumer," * * *. It cannot be in the interest of the consumer to drive from the market this useful and cheaper product through branding it so the public will not buy it.

In Burns v. Bryan (264 U. S. 504), the Court held that a statute prescribing exact weights for loaves of bread and prohibiting other weights likewise violated the due process clause of the fourteenth amendment. The Court said at page 664:

*

Undoubtedly the police power of a State may be exerted to protect purchasers from imposition by sale of short-weight loaves-But a State may not, under the guise of protecting the public, arbitrarily interfere with private business, or prohibit lawful occupations, or impose unreasonable and unnecessary restrictions upon them. (Lawton v. Steele, 152 U. S. 133 * *; Meyer v. Nebraska, 262 U.S. 390, 399.) Constitutional protection having been invoked, it is the duty of the court to determine whether the challenged provision has reasonable relation to the protection of purchasers of bread against fraud by short weights and really tends to accomplish the purpose for which it was enacted.

In Nolan v. Morgan, supra, the opinion of the District Court contained the following pertinent language at page 145:

To require plaintiffs to comply with such regulations will not only seriously damage their business, but will deprive the consumer of the product which he desires, and to which he is entitled.

There is a vast field of law on the subject that such regulations must be reasonable and practicable and that if compliance with the law is impracticable and creates an unnecessary hardship for no good purpose, the law will be held unconstitutional.

The proposed bill is also unconstitutional in that it discriminates unfairly between dealers in foreign furs and dealers in domestic furs and deprives the former of their business and property without due process of law. We feel, however, that further citations of legal authorities would be neither appropriate nor necessary in a memorandum of this kind. The principles are well established and when applied to the facts here presented leave no doubt concerning the invalidity of the provisions relating to imported furs from a constitutional standpoint.

The provisions of the proposed bill relating to imported furs are opposed to the announced policy of our State and Commerce Departments and are against our own public policy.

As have been shown, the provisions of the bill would seriously impede and destroy the importation of foreign furs. Such policy is directly opposed to the announced policy of our State and Commerce Departments involved in our reciprocal trade treaties which are designed to encourage the exchange of goods and commodities in foreign commerce. We know that if we wish to export our manufactured products, we must encourage importations of raw materials and place no unreasonable burdens on imports. Foreign countries must have dollar exchange with which to purchase the products of American industry.

Even from a purely domestic point of view, it certainly would be against the public policy of this country to pass a law which would limit the output of fur garments and fur articles which our public is eager and anxious to buy. Such artificial limitation of output would result in raising prices to the consumer and making it impossible for many of our own citizens to obtain fur garments.

The bill is also opposed to our own public policy in that it would tend to promote the destruction and extinction of wildlife in this country.

I am referring to it now as drawn, again. Because, as drawn, if the foreign importations are discouraged, there would be a great pressure on the market to produce more furs. All of our States have game laws designed to protect our wildlife from trappers during the closed seasons. However, if furs, became a scarce and expensive commodity, it is certain that the demands of the market would result in violations of our State laws and in the speedy disappearance of our native furbearing wild animals.

The existing rules and regulations of the Federal Trade Commission and existing State and Federal statutes sufficiently protect the consumer. The proposed bill, far from affording additional protection, might well tend to promote fraudulent practices by dishonest retailers.

As we have shown, the provisions of the bill relating to the labeling of imported furs prior to their manufacture into completed garments cannot possibly protect retailers and consumers, since all such labels would be removed and destroyed prior to manufacture. After fur skins have been manufactured into fur articles, the bill requires the manufacturer to affix an entirely new and different label setting forth the name of the manufacturer and the type of skin and the country of origin, and so forth. This label must remain on the garment until sold to the consumer.

Section 12 of the proposed bill virtually exempts retailers from any responsibility by providing that no person shall be guilty under section 3 of the act if he establishes a guaranty in good faith from the seller or manufacturer of the fur article that the same is not misbranded. In fact, the section permits a continuing guaranty to be filed with the Commission. In other words, all manufacturers of fur articles could sign continuing guaranties and so avoid issuing separate guaranties with each sale. Under such a system a retailer would be tempted to purchase goods which he suspects might be improperly described, since he would have no responsibility in the matter.

Far from preventing frauds on the public, the proposed bill may have the effect of promoting frauds on consumers. In the first place, the retailer would be furnished with a virtual certificate upon which he could base all kinds of puffing arguments to promote sales. He

could, for example, extol the virtues of a coat labeled "Canadian. mink" as if the country of origin, Canada, made the skins greatly superior and more desirable. The average consumer has no idea whether the skins from one country have any superiority over skins from another, but the retailer would have selling and puffing arguments, whereas at the present time when there is no particular label on a coat he is not in position to impress his customer with the contents of a label or certificate required to be affixed by Federal law.

In the second place, the requirement of labeling would not protect the consumer against an occasional dishonest retailer. A fly-by-night merchant who would not hesitate to resort to false advertising and false description in the face of present penal statutes would hardly hesitate to affix false labels to garments. The customer would be lulled into a false sense of security because of the label.

We submit, therefore, that the effect of the bill might be unfortunate and place legitimate retailers at a disadvantage. In general, fur articles and fur garments are sold by responsible and legitimate retailers. The public patronizes such legitimate stores relying on the reputation and responsibility of the store. If, by reason of the statute, the public should be lulled into a belief that it is protected from any misrepresentations or frauds, customers might be tempted to buy from small fly-by-night stores instead of patronizing the legitimate retailer.

Existing regulations and local penal statutes and local bureaus for the prevention of business frauds already furnish ample protection to the consuming public. Cases involving fraudulent sales have diminished greatly so that today there are only very occasional complaints. No system of law could ever be devised which would eliminate such occasional violations of law.

For all of the foregoing reasons, we respectfully submit that the proposed bill should not be approved by the committee.

With the permission of the chairman, I would like to ask permission to have Mr. Adelstein just supplement my remarks briefly for about 5 minutes.

The CHAIRMAN. Very well.

Mr. MANN. Thank you, sir.

STATEMENT of george ADELSTEIN, PRESIDENT OF THE AMERICAN FUR MERCHANTS ASSOCIATION

Mr. ADELSTEIN. Gentlemen, my name is George Adelstein. I am president of the American Fur Merchants Association.

I have been in the fur business for over 25 years, the firm I am with having been in business for over 50 years. The business I am in, and the people who are associated with me in the similar business, deal with furs purchased from country dealers and through trapppers in all the farm areas of our country. There is hardly a farm area which is excluded.

It is interesting to note that, notwithstanding the fact that the bill under consideration reads "to protect consumers, retailers, distributors, manufacturers, dealers, and producers," I thought it was my duty, before I came to address you gentlemen, to communicate with all the recognized groups that it would be possible for me to be in touch with, to find out who wanted this protection, who asked for this protection, and who are the proponents of this bill for protection..

Now, I shall not deal with the business so far as it relates to foreign consumers. We are dealers of a raw commodity from all parts of our country which we in turn sell to manufacturers who process into garments. We export a considerable part of our domestic crops. We also import skins as dealers from all parts of the world, as Mr. Mann indicated in his brief.

It is very interesting that, having called all possible groups that I could contact in and around the city of New York and as far apart as I could in our country, I found no group in favor of this legislation. The CHAIRMAN. What do you mean by group?

Mr. ADELSTEIN. No groups of trappers, country dealers, processors, and others mentioned in this bill, a bill to protect the subjects mentioned in this bill, with the only exception that I find the proponents of this bill are producers, and for the points of distinction, to make our minds clear, as between producers who are trappers of the fur and producers who are ranchers, I shall refer to them as fur ranchers.

By their own statement they said that they do about 15 percent of the domestic business in our country. That is about correct. I am willing to accept the figure. I do not have it actually before me, but I believe it is about correct.

However, when we consider that, of the total of the $500,000,000 worth of retail furs that were sold per annum, no more than and probably less than 50 percent of the fur is domestic fur, then you see they shrink from an insignificant 15 percent to less than about 7 or 7%1⁄2 percent of the total value of fur business handled in our country. Now, we have here all of the segments of the industry, all of whom are capable of expressing how this bill affects them individually. And I do not want to presume to tell you how this bill is not necessary, let us say, as far as protecting consumers. My business is not in relation to consumers, but we have retailers and manufacturers and others who have contacts with consumers. They will tell you where the bill is not necessary, or perhaps is even obnoxious insofar as consumers. Congressman O'Hara mentioned this morning that he had a letter from the Minnesota Raw Fur Association. I should like, with your permission, just very briefly to read a very small part of a letter received from the raw-fur dealers in upstate New York, or the New York State dealers, as distinguished from the dealers within the city itself:

This association-

the secretary, Mr. Brightman, of the association, writes

represents all the raw-fur dealers in New York State outside of New York City. It is through them that most of the raw furs are sold by trappers and farmers. This proposed bill would impose a heavy burden of labor and expense which would necessarily have to be passed on by farmer and trapper of skins in the form of higher prices. Apparently the sponsor of this bill is not very familiar with the method of handling fur skins. To label each skin throughout its route from trapper to finished garment would be about the same as requiring a farmer to label every potato and just about as impossible.

The trapper, the dealer, and the manufacturer of furs knows his product and does not want or need protection. The consumers are already protected by law, by required true-name label on the finished garments.

We fail to see any point in this bill. We trust it will go no further than the committee.

Gentlemen, I bring your attention to the fact that these are letters