law the showing of anything in such advertisements except a picture of the bottle and the price, has a per capita consumption of 1.61 gallons, 30 percent higher than the national average and 80 percent higher than the neighboring State of Pennsylvania.

Perhaps an important reason for the failure of liquor advertising as a whole to increase consumption is that, either because of Federal or State regulations, or by self-imposed industry codes, it does not use time-proved forcing tactics and advertising devices which win new customers and increase consumption for other types of advertisers. We have no criticism of these techniques per se, but none of them is used in liquor advertising.

1. Buy a case or the large economy size.

2. One cent sales-2-for-1 sales, and money-saving offers. 3. Gigantic prize contests requiring proof of purchase.

4. Premiums to induce purchase.

5. Appeals to fear of disease or social ostracism.

6. Therapeutic claims.

We show you herewith examples of these types of advertising in other industries which you will not find in hard-liquor advertising. Question No. 6: Does hard-liquor advertising dominate the attention of the American public?

Answer: No.

Let us test the validity of this charge in three ways.

Let us compare the number of pages of liquor advertising in 15 magazines used by this industry during the years of 1953, 1954, and 1955 with the total number of pages these magazines contain:

Using the 3-year average figures, total pages of liquor advertising in these magazines constitute 3 percent of all magazine pages. Can this be termed a domination of attention?

Another way to test this question is to take the largest general magazine in the country, and the leading hard-liquor advertising medium, Life, and look at the facts.

In 1955, Life published 8,148 pages of editorial matter and advertising combined. Of the latter, 305 pages were for distilled spirits.

This was 3.7 percent of total contents and 6.9 percent of total advertising. Life further tells us they average 157 pages total per issue, and hard liquor averages 6 pages per issue.

Does this seem like domination to you?

At this point I would like to insert something else which I clipped from the February 10 Printers' Ink, which is a report of the preliminary estimates for 1955, advertising overall was up 10 percent, a total of $10 million. That is all kinds of advertising. But our industry advertised only $65 million 1954, or seven-tenths of 1 percent. Again, does this seem like domination to you?

The CHAIRMAN. Without objection that may be inserted in the record.

(The material referred to is as follows:)

[From Printers' Ink, of February 10, 1956]

1954 RETAIL SALES UP 32 PERCENT OVER 1948

Census Bureau Releases First Summary of Retail Sales Since 1948

Food Stores Get One-quarter of Total Dollar Volume

Retail sales in 1954 amounted to about $170 billion, for an increase of some 40.7 billions, or 32 percent over 1948, according to a preliminary report by the Census Bureau.

The Bureau has been issuing State-by-State reports on the results of its 1954 censuses of business and manufactures, the first since 1948, and has now brought out its first summary for national retail sales.

In percentage of total sales the 11 major kinds-of-business groups remain in the same order as in 1948, with food stores getting almost one-fourth of the dollar volume. This group and the second-place automotive group gained in their percentage of share of the total retail dollar over 1948.

Going down the list from these leaders, the next several groups, though increasing sales substantially, had in 1954 a lesser share of the dollar. Gasoline stations as a group gained a bigger share of the dollar and increased sales by much higher percentage than did the automotive group.

Next two on the list-furniture, home furnishings, and appliances, and drugstores and proprietary stores-held to precisely the same percentages of dollar share as in 1948, with 5.1 percent and 3 percent, respectively, of the total.

NONSTORE RETAILERS

Nonstore retailers (at the bottom of the list) showed the greatest percentage gain in sales over 1948, a 94 percent increase. This group, however, had only a 2.2 percent share of the total, an advance from its 1.8 percent in 1948. Included in this group are door-to-door distributors, operators of merchandise vending machines, and mail-order houses.

The top-of-the-list food stores took 23.3 percent of dollar volume in 1954 as against 22.8 percent in 1948, and showed a sales gain of over 35 percent. Total for 1954 was almost $40 billion.

Comparing this percentage with that for eating and drinking places figures indicates that people are eating more meals at home. Interestingly, food stores and eat-drink places together total almost exactly the same for 1948 as for 1954, with 31.1 percent and 31.0 percent for the respective years. But in contrast to the food-store gain in share of the dollar, eat-drink places dropped from 8.3 percenti n 1948 to 7.7 percenti n 1954. The latter nevertheless took in 23 percent more dollars in 1954 than 1948.

Of the top groups the biggest gain in sales over 1948 was made by automotive dealers. They grossed 48 percent more dollars in 1954, taking 17 percent of retail dollars spent, as against 15.6 percent in 1948. Sales in 1954 totaled about $30 billion.

As a concomitant of the auto increase, gas stations increased sales by 66 percent over 1948, taking 6.4 percent of all retail sales dollars, compared with 5 percent in 1948. Sales were almost 11 billions in 1954.

In addition to the eat-drink places, these groups, though showing good sales gains over 1948, took a lesser percentage of the total retail dollar:

General merchandise: dollar volume up by 14 percent, but down from a 12.2 percent share of the total in 1948 to 10.6 percent in 1954.

Other retail: sales up by 23 percent. Dropped from a 10 percent share to 9.4 percent.

Lumber, building material, hardware, farm equipment: sales up 17 percent. Dropped from an 8.6 percent share to 7.7 percent.

Apparel, accessories: sales up 14 percent. Dropped from a 7.5 percent share to 6.5 percent.

PAYROLLS UP 37 PERCENT

In spite of dollar volume increases ranging from 14 to 94 percent, the number of employees in retail establishments increased by only 4 percent from 1948 to

1954. But payrolls increased by 37 percent. The total annual payroll for 1954 in retail business amounted to $18.2 billion.

As against the national average of 32 percent increase in retail sales from 1948 to 1954, several States showed much higher gains. The leaders are Florida, 71 percent; Nevada, 65 percent; New Mexico, 54 percent; Arizona, 50 percent; California, Maryland, and North Corolina all showed a gain of 43 percent.

The Census Bureau's preliminary retail report from its 1954 business census comes remarkably close to indications taken from its monthly retail trade report. A probability sample in the 1954 December monthly report is now revealed to have shown an estimate for the year accurate to within a fraction of 1 percent. The closeness of the estimate is even more notable when considering that some types of establishments are not included in the monthly report.

THIS AND THAT

First legislative cognizance of Federal Trade Commission complaints against misleading advertising promises by accident and health insurance companies is noted in a bill introduced by Representative George H. Christopher (Democrat, Mo.). The measure would prohibit insurance companies doing interstate accident and health business from issuing insurance which may be canceled after 3 years for any reason other than nonpayment of premium.

-WALLY FINGAL.

Mr. BONDURANT. The point is that despite what they tell you how much we advertise, we say that seven-tenths of 1 percent, based on this article, is not domination.

There is one further way to test this matter of domination and that is to explore such figures wihch answer this question: To what extent does liquor advertising attract the attention of magazine readers and does it attract attention out of all proportion to its limited volume?

Again, as will be seen from the table which follows, the answer is a clear-cut "No." The table which documents this statement is derived from Starch Consumer Magazine Reports, produced by the organization headed by Dr. Daniel Starch, formerly of the Harvard Business School, who has been a recognized authority on advertising research. since 1932. This organization produces readership reports on each issue of leading magazines, telling advertisers the percentage of readers of those publications which sees any particular advertisement. (The table referred to follows:)

Average noting of 4-color alcoholic beverage advertising in Life

28

6. Fabrics

7. Food

8. Radio, television and electronics

9. Building and decorating_ 10. Clothing-children's

11. Jewelry and miscellaneous__

12. Major household appliances_ 13. Machinery, metal and industrial

Source: Starch Adnorms Report, July 1954-June 1955.

Mr. BONDURANT. We have the lowest rating with only 20 percent of the people having noted the liquor advertising at all, as opposed to 46 percent having noted the motion pictures.

18. Insurance and finance_.

19. Tobacco-cigarettes

20. Toilet goods_-.

30 21. Books and magazines__

22

29 22. Cosmetics

21

29 23. Household supplies..
29 24. Automotive-miscellaneous

21

20

29 25. Alcoholic beverages_

20

The seventh question is: Is it true that the distilled spirits industry has no sense of moral responsibility?

Answer: No!

Of course, our opponents who would legislate this business out of existence, must necessarily feel that no one in this industry could possibly have a sense of moral responsibility. But, any impartial person will recognize that the following facts must make the answer to this question "No."

1. The people who run the distilled spirits industry today are of a caliber and measure in public standing with those of any other great American industry. Their record of public service, charitable and educational work is unexcelled.

2. Individual firms in this industry have over the years conducted substantial campaigns urging moderation in drinking.

3. The distilled spirits industry itself, through one of its trade organizations, Licensed Beverage Industries, has similarly conducted extensive campaigns on the subject of moderation.

4. The industry has made large-scale efforts in collaborating with local law enforcement authorities to correct abuses of local regulations, and to make the conditions under which its products are sold acceptable to all reasonable elements of the public.

To summarize briefly:

1. In our opinion, the ultimate effect of this bill would be to "hinder and hamper" a legally constituted American industry, and to take a step towards national prohibition.

2. It is put forth in the naive belief that the elimination of hard liquor advertising will reduce the consumption of hard liquor.

3. This contention is entirely erroneous as all available facts show, and enactment of the bill would ultimately create a boon for the bootlegger.

4. Liquor advertising is conducted on as high an ethical plane as that of any major American industry.

5. The liquor industry has proved its good citizenship and moral responsibility.

6. To deprive this industry of the right to advertise distilled spirits in interstate commerce would be a rank discrimination against a major American industry which the public has voted into being, and would be thoroughly unwarranted in the face of the facts.

74186-56-18

(The table referred to is as follows:)

Consumption of distilled spirits compared with national income and advertising expenditures of distillers

Mr. BONDURANT. I thank you for the opportunity to testify and I hope you will not report this bill favorably.

The CHAIRMAN. Thank you for your appearance, Mr. Bondurant, I think you are to be complimented on the manner in which you prepared your presentation. I thought for a time it would take you 2 hours to go through it, but it was not quite as long as I thought. Are there any questions?

Mr. HESELTON. I was interested in the thesis that you advance that the consumption of distilled liquors had decreased over a period of time. Am I to understand that you feel that if advertising was reduced or eliminated the consumption of hard liquors would increase?

Mr. BONDURANT. If we eliminated advertising I do not think anybody would drink any less. I think the figures during prohibition indicate that they drank even more.

The question would be whether they would drink something that they know something about and has protection through the Treasury Department regulations.

Mr. HESELTON. At page 18 of your statement you set forth a table of per capita consumption from 1850 to 1954.

Mr. BONDURANT. Yes, sir.

Mr. HESELTON. In 1850, when presumably the advertising was not as extensive as it is today, the per capita consumption was 2.24 gallons. In 1954, it was 1.18.

I asked the rhetorical question whether the advertising was responsible for the decrease. You answered emphatically not. Therefore I