Mr. KEITH. I am not an attorney either, Mr. Alger, so this will have to be a draw.

Mr. DINGELL. I know the gentleman is anxious to return to another committee.

Mr. Van Deerlin.

Mr. VAN DEERLIN. No questions.

I just want to say perhaps after having served for a brief period on the Ways and Means Committee our colleague is wise in being happy to return to this committee.

Mr. ALGER. I miss you.

Mr. DINGELL. The Chair notes the presence of a good friend of ours, a famous member of this body, our colleague, Mr. Hemphill.

I understand you have a constituent or friend.

Mr. HEMPHILL. Yes, Mr. Chairman. I have from the great State of South Carolina and the independent city of Charleston, Mr. John White, who is here to represent the National Oil Jobbers Council, quite a successful businessman and distinguished citizen of my State. I would like to recognize him at this time.

Mr. DINGELL. Mr. White, the Chair is very happy to welcome you to the committee on the recommendations and high statements of our friend and colleague. I assume you have a statement you would like to give. Because of the very brief time that is available to the committee to operate today, you might like to file your full statement and summarize its contents for the benefit of the committee.

STATEMENT OF JOHN H. WHITE, NATIONAL OIL JOBBERS COUNCIL

Mr. WHITE. Mr. Chairman and members of the committee, I appreciate the opportunity of appearing before your committee today to present our views. I am appearing on behalf of the National Oil Jobbers Council which represents some 34 State and regional associations of independent jobbers and distributors of petroleum products. These associations cover 41 States representing the great majority of the thousands of bona fide independent petroleum jobbers in the United States. I won't list all of them, they are in my prepared testimony.

I would like to say that I do have a prepared statement and in view of your prior remarks about the time element, I will file it with the committee.

I would like to say this, that in this testimony I have leaned heavily on the statement presented to this subcommittee last year by General Counsel, Mr. Otis T. Ellis on a bill similar to that now before the subcommittee for consideration.

Now there is one provision of the bill which, we feel is a good point and that is bulk commodity products are exempt which includes kerosene, we assume, gasoline, fuel oils, and so forth. Also exempt is the provision for sale of products to Government exchange houses. We are concerned about that because in many instances we have trouble competing with that sort of competition.

We feel in summary, Mr. Chairman, that the bill to us is more or less a fair trade bill and our council has opposed this for years as a matter of principle and we just do not feel that a fair trade bill would work properly within the petroleum industry.

Mr. Chairman, in view of your request for time, I believe thatMr. DINGELL. We are anxious to hear a full summary of your statement, Mr. White, and I don't want you to feel pressed because of the problems that the Chair happens to face with time.

Mr. WHITE. We are concerned about the bill because it does provide for the owner of a brand name to impose either a fixed resale price or arrange the prices at our level of distribution on substantially all commodities other than bulk if that is true. We are concerned as I said before about the prices on the sale to Government of subdivisions there.

Another concern about the bill that we have in mind is the giving away of trading stamps. We are not sure of our interpretation of what the bill means about premiums and stamps. The service station operators continue to give trading stamps on items subject to the law in which the brand is imposed to fixed retail price. Many brand supplies of petroleum products as well as other related products that jobbers sell come substantially under the unbranded resellers and discount houses. This kind of competition is hurting the branch merchant very badly.

We are concerned about what the bill will do to curb this practice. We feel that it is not fair for a branded supplier to impose fixed prices on his brand to resellers while at the same time placing many at a competitive disadvantage who simply do not care for the brand although the quality may be the same.

Mr. Chairman, I have taken my statement at loose ends instead of reading it in full. It may be a little loose and disconnected.

Mr. DINGELL. You have done a fine job.

Mr. WHITE. Our main opposition to this is we feel it is fair for the manufacturer to be in a position to fix prices at the retail level.

Mr. DINGELL. Thank you, Mr. White.

Mr. Long?

Mr. Long. No questions, Mr. Chairman.
Mr. DINGELL. Mr. Curtin.

Mr. CURTIN. Thank you, Mr. Chairman.

I presume, Mr. White, that in your industry you deplore the fre

quent price wars which occur at service stations.

Mr. WHITE. We do, sir,

Mr. CURTIN. How do you feel that this could be avoided?

Mr. WHITE. Offhand, I don't have an answer for that. I don't think anyone in the industry has had an answer for it. We have been plagued with these price wars for years and years and no one has seemed to have been able to come up with an answer to how to stop price wars.

Now most price wars it might be said are started by independent marketers of unbranded products. I don't believe that a branded jobber, the large majority of them, could be charged with starting price wars.

Mr. CURTIN. Do you not think that in the event that large producers of gasoline, for example, Gulf or Atlantic or Mobil, whoever it may be, should each tell all of their dealers in a certain geographical area, that the price for the brand name of its gasoline was a certain figure, that this would help to eliminate this abuse of price wars?

Mr. WHITE. No, sir; I don't, because there are many suppliers, independent refiners, that sell to unbranded accounts and in some cases how could a branded dealer compete with an unbranded service station operator that could sell 2 or 3 or 4 cents below his price? That is what is causing price wars, Congressman Curtin.

Mr. CURTIN. That is what happens all the time, the unbranded gasoline is several cents below the branded gasoline, is it not? Mr. WHITE. Usually the differential is 2 cents. Mr. CURTIN. But there is that differential.

Mr. WHITE. Yes; there is. In some cases it is 1 cent.

Mr. CURTIN. Do you agree that the fact that an unbranded gasoline is always sold at a price below the branded gasoline is no answer to the possible advantages of this pending legislation?

Mr. WHITE. I understand that fair trade provisions are contrived in several States: New Jersey, if I recall correctly, and it didn't seem to be successful there. I think in Pennsylvania it was tried and most of the suppliers withdrew from that practice of fair trade.

We just don't feel that a fair trade bill would entirely solve the problem of price wars and so you would have too many competitive levels within the industry.

Mr. CURTIN. How about tires? Don't you think that if the brand name tires were at a certain level that this would be of some help in the price wars on tires in the service stations?

Mr. WHITE. There again you have the same reason. Some manufacturers will use a concern; Goodyear will sell to a dealer, his branded distributor, and then he will sell the same tire only under a different brand to a discount house. We are concerned about what price will be established for the branded tires to those branded retail stores and what price will be established on the unbranded tires that are sold under a different name. We are competing against something like that every day now.

Mr. CURTIN. In your business do you find that the small independent service stations are gradually being eliminated?

Mr. WHITE. Yes, sir; we do.

Mr. CURTIN. In favor of the large chains of service stations run by the companies?

Mr. WHITE. We do, sir.

Mr. CURTIN. Do you think that is a good tendency?

Mr. WHITE. We don't think so, sir. A lot of independent chains have had to merge, sell out because of the competition that they just could not compete with in the price wars that have been existing for the past 2 years.

Mr. CURTIN. And the dealer who is hurt by the price wars in your industry is the little independent jobber, isn't he?

Mr. WHITE. He is a little independent jobber and not the branded so much. The branded service station operator is hurt too because he usually has to take a portion of any reduction in price on a percentage basis and his margin is curtailed during price wars.

Mr. CURTIN. He is hurt, but he is not hurt to the same extent as am independent.

Mr. WHITE. NO.

Mr. CURTIN. Because he has a cushion to which he can look whichk the independent does not have?

Mr. WHITE. Yes, sir; that is correct, sir

Mr. CURTIN. You don't think this bill would help that independent dealer?

Mr. WHITE. No, sir; I don't.

Mr. CURTIN. That is all, Mr. Chairman.

Mr. DINGELL. Mr. Long.

Mr. LONG. No questions.

Mr. DINGELL. Mr. Van Deerlin.

Mr. VAN DEERLIN. When we talk about difference between branded and unbranded, we are talking about a difference in price. Are we also talking about a difference in quality?

Mr. WHITE. In some cases yes and in some cases no. Some suppliers sell the same product to an independent account that they sell to their own branded service stations.

Mr. VAN DEERLIN. So that is the same quality, just turning up under a different name.

Mr. WHITE. Yes. Due to the distribution of bulk products in terminals it is a little difficult to maintain separate products due to storage capacity. In many cases the product is the same as to quality. Mr. VAN DEERLIN. Does this also apply to tires?

Mr. WHITE. I am not in a position to answer that. I do know that we are associated with a company, B. F. Goodrich, which we have a tire store in Charleston and they manufacture tires for other sellers, but as to the quality, I cannot answer for tires, only on gasoline.

Mr. VAN DEERLIN. Thank you.

Mr. DINGELL. Mr. White, I am particularly interested in a couple of points in the bill which I think you might be well qualified to discuss with us. I want to refer you to two sections of the bill.

The first is the language appearing on page 8, line 14, section (15), which says as follows:

All rights and remedies provided in paragraphs (7) to (17), inclusive, of this subsection, to owners of a brand, name, or trademark, shall be also available to any owner of a brand, name, or trademark who, in the sale of goods identified by such brand, name, or trademark, shall compete, at any level of distribution, with any reseller offering such goods.

This, briefly stated, authorizes an individual who manufactures and markets in competition with wholesale and retail outlets to fix the price of those wholesale and retail outlets?

Mr. WHITE. Yes.

Mr. DINGELL. I wondered what your comment would be on that? Mr. WHITE. We think that would be bad.. We think it would be bad for any manufacturer to be in the position of fixed prices for resale to the consumer.

Mr. DINGELL. Particularly when he competes.

Mr. WHITE. When he competes. There is a lot of competition now within the industry to where a lot of suppliers are competing with their own jobbers by selling products at prices below what they sell to their jobbers, particularly in commercial consumer accounts which makes it impossible to compete with that kind of business.

Mr. DINGELL. Now, on page 8 of the bill, I would also like to refer you to the following language on line 3 of page 8.

Each such currently established resale price and resale price range shall be uniform at each level of distribution within each marketing area determined by the owner of the brand, name, or trademark.

I wonder if you have any feelings or comments on the language on page 8, lines 3 to 6?

Mr. WHITE. Yes, I do. We are a little concerned about in what geographical area could this be established. If the supply is sold to the branded, that is one level; if he sold to a commercial account, that is another level of distribution. The unbranded marketers is another level, and certainly geographical areas could be under that division and that concerns us a little bit.

Mr. DINGELL. Let's construe this business of geographical price discrimination. Is it your opinion that this section authorizes geographical price discrimination between dealers situated in different parts of the country?

Mr. WHITE. Well, I cannot honestly answer that, sir, because I am not a lawyer and I am just not in a position to interpret this bill. Mr. DINGELL. Assuming it is, would you regard that as being a wholesome thing and in the interest of your industry?

Mr. WHITE. No, sir; I do not, if that was the interpretation.
Mr. CURTIN. Would you yield?

Mr. DINGELL. Yes.

Mr. CURTIN. Do you think, then, that you could sell gasoline, for example, at the same price in some area of Alaska as you could sell it close to a production point in other States of the United States?

Mr. WHITE. I am sorry.

Mr. CURTIN. Do you feel that the price has to be the same in all geographical sections of the country?

Mr. WHITE. No, sir. Obviously, you could not have the same price in all States and areas.

Mr. CURTIN. Then that particular section of the bill is not objectionable to you?

Mr. WHITE. NO. The only thing we object to is the level of distribution in distinguishing between whether it is a commercial account, a consumer account, or an unbranded account.

Mr. CURTIN. But you recognize that in different geographical areas there is going to have to be a price differential?

Mr. WHITE. We recognize that, but one thing that concerns us about the geographical area, if you have a disturbance or if you have a fixed price, let's say, in a city in North Carolina and the price level is higher in North Carolina than it is just over the line in South Carolina, where do you stop? It could go on from one area to another and if you had to extend it from North Carolina to the edge of the South Carolina line, then you would have to extend it right on down to the next level of distribution.

That has concerned us quite a bit. I know one company set up a zoning price policy of which they establish certain geographicel areas and they established differentials of, you might say, 3 cents in one area and 2 cents in the other one, but then it began snowballing and it had to be extended on out.

Mr. CURTIN. Thank you.

Mr. DINGELL. Thank you very much. The committee is very much appreciative of your being here this morning and for your very fine

statement.

The committee will recognize Mr. Rothwell.