to authorize such advertising. As noted above, 47 of the 48 States have so authorized alcoholic beverage advertising, and have enacted laws and promulgated regulations in implementation of that policy. Clearly, any legislation now enacted by the Federal Congress, based on power derived from the commerce clause, prohibiting the advertising of alcoholic beverages, would be in direct and irreconcilable conflict with the policy, validly expressed by formal enactment, of 47 of the States.

Would this conflict not fall squarely within the holdings of the Washington Brewers Institute and Maryland Beverage Association cases wherein it was said that "where such conflict exists *** the commerce clause itself gives way,' and that "valid legislation by a State under the 21st amendment is paramount to conflicting Federal legislation under the commerce clause"?

We think the question answers itself, emphatically and in the affirmative. We do not contend here that the 21st amendment rendered the alcoholic beverage industry completely immune from Federal legislation. Recent decisions confirm that the Federal statutes of general application, not in conflict with State-exercised powers derived from the 21st amendment, may be upheld. In determining whether a Federal statute of general application can be valid as applied to the alcoholic beverage industry within a particular State, the sole question is whether the policy exemplified by the Federal statute conflicts with the policy of the State. If there is conflict, the State policy prevails.

It should be noted that most of the cases relied upon by the courts in the development of the above rules, involved Federal legislation of general application. H. R. 4627 would not be such legislation. It is aimed solely and exclusively at alcoholic beverages. It would attempt to completely usurp a power already fully preempted by the States pursuant to powers derived from the 21st amendment. Thus, the rules developed above would apply with even greater force with respect to a bill of limited application, affecting only the field of alcoholic beverage advertising. It could hardly be said, as was said in the Frankfort, Washington Brewers Institute, and Maryland Beverage Association cases, that such a Federal statute could be enforced in such manner as to avoid conflict with State policies and objectives. As pointed out above, any enforcement of such legislation would be in direct conflict, literally, verbally, and objectively.

Keeping in mind that every State in the Union, save two, permits and regulates the sale of distilled spirits and wines, that every State permits and regulates the sale of beer, that every State has adopted certain policies and objectives with reference to the regulation of alcoholic beverage advertising, and that nearly 84 percent of the total population of the country lives in areas permitting the sale of alcoholic beverages, the enactment of H. R. 4627 would be without precedent in the history of the United States. We know of no instance in which the Congress has used its power to absolutely prohibit interstate transmission of any commodity under such circumstances. It is inconceivable that the first such instance should be attempted with reference to alcoholic beverage advertising with full knowledge of the factual situation above and in light of the 21st amendment.

Proponents of H. R. 4627, and similar bills in the past, have placed great emphasis on the existence of the Federal Alcohol Administration Act, which in part requires that alcoholic beverage advertising be factual and not misleading. The proponents argue that if the FAA Act is valid, then a statute imposing a complete prohibition upon alcoholic beverage advertising would also be valid. This argument overlooks the fact that the validity of the advertising sections of the FAA Act have never been passed upon by the Supreme Court and that in any event the commerce clause, irrespective of the extent to which it may be modified in its application to alcoholic beverages by the 21st amendment, gives Congress the power only to regulate and not to prohibit.

V. CONCLUSION

We believe the conclusion inescapable that the enactment of H. R. 4627 would be unconstitutional. This bill does not manifest a regulatory scheme-it imposes total prohibition.

The proposition that the States possess powers under the 21st amendment which are paramount to the commerce clause is no longer open to question. It is equally well settled that when a governing body enacts legislation or establishes a policy in a field in which it possesses paramount power, it leaves no room for the operation of an inferior power, particularly a conflicting one.

Such is the case in the field of alcoholic beverage advertising. Advertising is an incident of the sale of alcoholic beverages, a field in which the States, by virtue of the 21st amendment, possess paramount power, and a field which has been preempted by the establishment of regulatory schemes evincing policies and objectives with which H. R. 4627 would be in direct conflict.

The CHAIRMAN. Mr. Williams.

Mr. WILLIAMS. Mr. Joyce, you mentioned a moment ago that you have available the statistical data on the subject of the per capita consumption of liquor in this country. Do you have that broken down by States?

Mr. JOYCE. I do not have it with me but we have it broken down by States.

Mr. WILLIAMS. If it would not be too much trouble, I would like to ask that you submit that for the record.

Mr. JOYCE. I would be very glad to.

(The information referred to is as follows:)

Per capita consumption of distilled spirits (calendar year 1954)

Mr. WILLIAMS. Would that include my State of Mississippi, which is dry, or allegedly dry?

Mr. JOYCE. I am afraid, sir, it would not include your State. The CHAIRMAN. Any further questions? If not, may I inquire if there is another phase of this question so far as the Distilled Spirits Institute is concerned that will be developed by Mr. Bondurant? Mr. JOYCE. Yes, sir. That is another phase of it. He also speaks for the Kentucky Distillers Association who are not making an appearance.

The CHAIRMAN. We thank you, and we will hear Mr. Bondurant next.

Is he present?

STATEMENT OF ARTHUR P. BONDURANT, VICE PRESIDENT IN CHARGE OF ADVERTISING, GLENMORE DISTILLERIES CO., LOUISVILLE, KY., ON BEHALF OF DISTILLED SPIRITS INSTITUTE AND KENTUCKY DISTILLERS ASSOCIATION

Mr. BONDURANT. Thank you, Mr. Chairman.

The CHAIRMAN. I will say to you as I have said to others, wherever you can condense your prepared statement and present it orally, it will be very helpful.

Mr. BONDURANT. I would be very happy to, sir.

My name is Arthur P. Bondurant. I am vice president in charge of advertising for Glenmore Distilleries Co., of Louisville, Ky., and I speak for the members of the Distilled Spirits Institute and the Kentucky Distillers Association.

H. R. 4627 on which this hearing is being held is a bill to prohibit the transportation in interstate commerce of advertisements for alcoholic beverages, and for other purposes.

During the past 9 years, including today's hearing, there have been 7 hearings on this identical bill. This is our second appearance before you, and yesterday we appeared for the fifth time before the Interstate and Foreign Commerce Committee of the United States Senate. We believe that in the past the various committees have acted wisely in voting against reporting these bills to their respective Houses. We ask that you not report H. R. 4627 at this time.

What do the advocates of this bill ask of you? They ask you to take action to deny to a single industry, incidentally the only industry in our country legally created by an amendment to the Constitution after a referendum of the American people, the use of accepted channels of communication for advertising purposes.

Such an action would be unprecedented in the history of our Nation and we believe that you will agree with us that consideration of such an action should not be undertaken unless there is urgent demand from citizens of all walks of life and all shades of opinion who feel that there has been such serious and vile abuse of the right to advertise, that it constitutes a mater of national importance.

Obviously, such a condition does not exist. The proponents of this bill come entirely from that small minority of the American public who have dedicated themselves to a crusade for the complete elimination of the manufacture and sale of alcoholic beverages. We believe it is obvious that those people who find alcoholic beverages obnoxious, must logically find any and all advertising of alcoholic beverages obnoxious.

The American people, however, have voted to this industry the right to manufacture and sell its product. We feel it reasonable to state that the right to sell to the American public embraces the right to advertise, for advertising is an integral part of the selling process. Now let us be frank and face the facts. The real desire of the proponents of this bill is the return of national prohibition. In the long run, they will be satisfied with nothing less. However, realizing that this step is impossible at this time, they seek to abolish the advertising of alcoholic beverages in the naive belief that this would reduce consumption. By their own statements, they feel they can make some

headway in drying up the country by attacking the liquor industry at what they consider its most vulnerable point, namely, advertising.

In this belief they are mistaken. The elimination of advertising would not affect the total consumption of alcoholic beverages. If advertising were legislated out of the picture, there would not be one drop of liquor less sold in the United States. Every available bit of evidence indicates that the consumption of alcoholic beverages was greater during prohibition when there was no advertising, than it is today when the product is sold and advertised on a legitimate basis.

NOTE.-1922-30 are estimates of Dr. Clark Warburton of consumption of alcohol beverages during prohibition.

There could be only two results of the elimination of advertising of alcololic beverages:

The first would be that many people in the publishing, printing, and advertising business would be deprived of present day income and employment.

The second and far more important would be that it would destroy brand names and brand preferences which have been laboriously created over a period of many years at great cost and would help to break down the distinction in the minds of American consumers between the legitimate tax paid product and the product of the bootlegger.

Thus, the ultimate effect of the bill, if enacted, would be to create an enormous opportunity for the bootlegger. It would help create a shift in consumption from the legitimate to the illegitimate product, resulting in an increase of lawlessness and a decrease in Federal and States revenues. It would not accomplish the real hope of its advocates, namely, the reduction of total consumption.

Bootlegging is already a serious problem today. Argosy magazine in its February 1956 issue has begun a series of articles on the Nation's bootlegging problem and points out that the Federal Government seized and destroyed 11,943 stills during the last fiscal year and that an approximate like number was seized and destroyed by State enforcement officials. Shall this illegal industry be further encouraged? One of the most pertinent statements on the relationship of advertising of liquor to bootlegging and the legitimate industry was made as far back as 1933 by Time magazine, when it announced that it would accept liquor advertising when repeal became effective. We again would like to quote to you its statement on that occasion:

Time has come to the conclusion that the consumption of liquor is not likely to be materially increased or decreased in the months following repeal. Thus, the primary effect of liquor advertising in the near future will be to divert consumption from nonadvertised brands to advertised brands.

Time believes that the strongest motive in the overwhelming vote for repeal was the national desire to abolish the bootlegger. If it is made impossible for reputable liquor firms to advertise, then such a firm loses one of its strongest competitive advantages, not only over the bootlegger, but also over the disreputable characters who infested the preprohibition liquor business and who may return.

Reputable concerns must be given a fair chance to establish themselves as decent members of the commercial community.

This statement sums up what 22 years of subsequent experience have demonstrated to be the basic uses of advertising in the distilled spirits industry.

The chief virtue of advertising in this industry is that it causes manufacturers to maintain established standards of quality for their products and gives the consumer a reliable guide to purchasing. Obviously, manufacturers with investments of millions of dollars in advertising of brand names are not going to trifle with the franchise which they have established with the consumer.

Perfectly obviously, disreputable or shady characters with no investment in brand names can do so with impunity.

It has been contended by the proponents of this bill that the basic intent and purpose of liquor advertising is to broaden the market, to cause nondrinkers to drink, to induce the youth of the Nation to become consumers of alcoholic beverages. This is very far from the truth as we shall subsequently demonstrate.

The distilled spirits industry is today not unlike many other industries in which there is much more attention paid to the means of improving one company's sales position over another than to increasing overall consumption in that industry.

To be quite frank, the advertising of the distilled spirits industry is a reflection of the very bitter competitive battle within it. With the intense intercompany competition there is in this industry, each company has all it can do with its advertising to attempt to maintain its brand positions. Thus, the primary use of advertising in this industry is for brand advantage.

Hemmed in by legal as well as self-imposed restrictions on its advertising, high taxes, and competition from the bootlegger, if this advertising has had any effect in increasing total consumption, it is not discernible in the statistics. The table herewith shows the statistics on consumption over the years and speaks for itself.

(The chart referred to follows:)

Source: 1850 statistical abstract of the United States; 1941-54 DSI, Apparent Consumption of Distilled Spirits, from Treasury Department sources.

Mr. BONDURANT. The real purpose of those who seek the passage of this legislation is openly stated for all to see and read. Should there be any doubt as to this, we need only refer to statements in the past of those now urging upon you approval of this bill.

Strategy statement by Rev. R. LaRue Cober, chairman, committee on social evils, Council on Christian Social Progress, Northern Baptist Convention:

The liquor traffic in America is such a vast enterprise and has become so large a part of social life that to attack it at every point at once seems futile. As the