and Mississippi, which incidentally are not dry at all but dripping wet. ALCOHOLIC BEVERAGE ADVERTISING IS ADEQUATELY CONTROLLED BY EXISTING LAW The interstate advertising of alcoholic beverages is now regulated under the Federal Alcohol Administration Act administered by the Alcohol and Tobacco Tax Division of the Internal Revenue Service. This act deals specifically with the advertising and labeling of alcoholic beverages, and grants to the executive department broad authority to promulgate regulations requiring truthfulness in advertising, and prohibiting that which is false or misleading. The department is empowered to promulgate regulations which will prohibit deception of the consumer; prohibit advertising which is disparaging, false, misleading, obscene, or indecent; and which will provide the consumer with adequate information as to the identity and quality of the product advertised. The bill before your committee is not an attempt to prevent deception of the consumer or to enlighten him about the product. It has a directly opposite purpose, namely, to prohibit all advertising whether truthful or not. It is therefore arbitrary and capricious. Summarizing our opposition to this bill: 1. We think this legislation would discriminate against manufacturers and distributors of one lawful product of commerce, by singling it out for special treatment apart from all others, in violation of the letter and spirit of the Constitution. 2. Congress does not have the power under the commerce clause to enact this legislation, because the power to regulate interstate commerce does not embrace the power to prohibit the legitimate advertising of a commodity such as beer, which may be lawfully sold in every State in the Union. 3. Congress lacks the power to enact this legislation under the 21st amendment to the Constitution, which vests in the States exclusive jurisdiction to control the alcoholic beverage traffic within State borders. 4. State legislatures are more competent to deal with the problem locally in the light of local needs and from an intimate knowledge of local conditions. 5. Existing Federal laws and regulations under the Federal Alcohol Administration Act are adequate, and any legislation of a prohibitive nature beyond these controls would be outside of Federal jurisdiction. The CHAIRMAN. Thank you very much, Mr. O'Neill. Mr. Hale? Mr. HALE. You have seen the report that this committee issued in August 1954? Mr. O'NEILL. What bulletin is that, sir? Mr. HALE. The report of our committee on the advertising of alcoholic beverages. Mr. O'NEILL. No, I have not, sir. Mr. HALE. I commend it to you. The report says on page 2: The committee takes cognizance of the fact that the distilling industry has adopted a policy of refraining from advertising its products over radio and television. This fact creates the thought that consideration could profitably be given by the beer and wine industry to the possibility of eliminating or curtailing their advertising over radio and television. So far as you know, has the organization which you represent ever given any consideration to this suggestion? Mr. O'NEILL. Yes. There has been consideration given, I think, back in 1949. The association which I would again commend to your attention comprises 160 out of the 240 brewers. However, these are mostly small brewers. Our association has for its interest the furthering of the small brewers' problems in sales and so forth. In answer to your question, now, as to what has been done in regard to attempting to eliminate some types of offensive advertising, it has been the policy of the association to operate within the scope of existing Federal regulation. Mr. Wooton, who testified for the wine producers, said earlier that the code of the wine producers had been adopted in 1949. At that time a bill was introduced by Senator Murray. This bill would make the penalty clause of the Alcoholic Act which deals with beer advertising—I should say would take out the penalty clause of the paragraph with regard to beer advertising so that the Federal Government would have jurisdiction over beer advertising as they do in the case of whisky advertising. Under the scheme of existing legislation, if the State does not have laws which are similar or the same as the Federal regulations with regard to advertising, the Federal Government has no jurisdiction. In summary, I might say that the Brewers' Association of America sponsored a plan of an amendment to the existing Federal Alcoholic Administration Act whereby they would be subject to further restric tion. I might say now that the Brewers' Association of America is in no sense opposed to reasonable regulation. We feel that this is unreasonable. Mr. HALE. Does the idea of abstaining from radio and television advertising on the part of the brewing industry appeal to you as bad or good? Mr. O'NEILL. I am not in a position to say. is legitimate. I have not been offended by it. diced on the other side of matters. That is opinion. The CHAIRMAN. Thank you very much. I think the advertising I am more or less prejumore or less a personal Mr. O'NEILL. I would like to state one thing further. The Board of Directors of the Brewers Association of America after their meeting here have approved this testimony and would be here themselves but in the interest of time they did not come down. I would like, if I would be permitted, to read their names into the record as approving this testimony. The CHAIRMAN. It is all right, but if you can furnish the list to save time in reading, I can assure you they will go into the record. I have no objection to your reading them, but it will save more time. Mr. O'NEILL. Thank you very much. (The information referred to is as follows:) BOARD OF DIRECTORS Karl H. Bissell, Hampden Brewing Co., Williamsett, Mass. H. T. Castello, Oertel Brewing Co., Louisville, Ky. J. Oliver Doern, Eagle Brewing Co., Catasauqua, Pa. Leo W. Erdlitz, Menominee-Marinette Brewing Co., Menominee, Mich. J. F. Fesenmeier, Fesenmeier Brewing Co., Huntington, W. Va. Louis F. Garrard, American Brewing Co., Miami, Fla. Thomas R. Gettelman, A. Gettelman Brewing Co., Milwaukee, Wis. Thomas Kelly, Butte Brewing Co., Butte, Mont. John D. Koch, Fred Koch Brewery, Dunkirk, N. Y. J. F. Lanser, Arizona Brewing Co., Phoenix, Ariz. T. Reed Montgomery, Boston Beer Co., Boston, Mass. John L. Reuss, Centlivre Brewing Corp., Fort Wayne, Ind. Floyd O. Schneider, Lone Star Brewing Co., San Antonio, Tex. Edward Schoenling, Jr., Schoenling Brewing Co., Cincinnati, Ohio. Carlus E. Walter, Peter Bub Brewery, Inc., Winona, Minn. The CHAIRMAN. At this point in the record, without objection, there will be inserted a statement on behalf of Mr. O. R. Strackbein, legislative representative of the International Allied Printing Trades Association. (The statement referred to is as follows:) STATEMENT OF O. R. STRACKBEIN, LEGISLATIVE REPRESENTATIVE, INTERNATIONAL ALLIED PRINTING TRADES ASSOCIATION In my capacity as legislative representative of the International Allied Printing Trades Association, I speak for the members of the five international unions organized in the graphic arts field and affiliated with the AFL-CIO. These unions are: International Typographical Union, International Photoengravers Union, International Brotherhood of Bookbinders, International Printing Pressmen's Union, and International Stereotypers and Electrotypers Union. The membership of these unions is over 350,000 and represents the great majority of employees in the crafts represented. Members are located in every State in the United States. H. R. 4627, if enacted, would prohibit the interstate advertisement in any form of alcoholic beverages. We find it difficult to comprehend how this could be done under the Constitution. It appears to us that such a prohibtion would constitute a wholly unjustifiable interference by the Federal Government with the distribution of a product or a group of related products that are recognized by our national law as legitimate articles of commerce among the States. How then justify any restriction on the advertisement of such products so long as the advertising copy or the advertising expression itself violates no laws that apply to advertising in general? This would be discriminatory on the face of it. We must not overlook the fact that the production and distribution of alcoholic beverages were expressly legalized, after a period of prohibition, by repeal of the 18th amendment which annulled the Volstead Act. This repeal left no special restrictions on alcoholic beverages with respect to advertising. This Government should not now seek to do by indirection what the repeal of prohibition set aside as a means of direct interference. We are opposed to H. R. 4627, however, not only because of its discriminatory and objectionable constitutional features, but because of its economic implications. To the extent that its enactment would cripple the alcoholic beverage industry, it would affect adversely the employment of workers engaged in the distilleries, wineries, and breweries. The crucial value of employment is no longer a matter of debate. If employment is legitimate, we should be slow to take steps that would depress it; and we consider employment in alcoholic beverage advertising and in the production of alcoholic beverages to be legitimate. Therefore, we cannot support the present bill. It appears to us that the sponsors of the bill, aware that they cannot again succeed in having the Constitution amended to bring about prohibition, are bent on gaining some of their ends by harassing those who ask only to enjoy the equal protection of the law. For these various reasons we urge rejection of H. R. 4627 by this committee. The CHAIRMAN. Is Mr. Edward S. Miller, general president of the Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, present? (No response.) The CHAIRMAN. Is Mr. John Dwight Sullivan present? The CHAIRMAN. About how much time will you require? The CHAIRMAN. You just gave the chairman a great lift here at this hour of the day. Thank you, sir. You may proceed. STATEMENT OF JOHN DWIGHT SULLIVAN, GENERAL COUNSEL, ADVERTISING FEDERATION OF AMERICA Mr. SULLIVAN. Mr. Chairman and gentlemen of the committee, I am well aware at this hour of the day and this stage of the hearings it would be quite impossible to be original and I shall not attempt it. Instead I shall attempt to be as succinct and brief as I can in presenting the position of the group whom I represent. I represent the Advertising Federation of America whose office is at 250 West 57th Street, New York, N. Y., and I appear here at the direction of its executive committee. It is composed of 115 advertising clubs, 17 national advertising associations, and 1,100 firms and individuals. It includes national and local advertisers, advertising agencies, newspapers, magazines, business papers, farm papers, outdoor advertising operators, transportation advertising companies, and various suppliers to the advertising business. Its membership also includes radio and television stations. Its total membership, consisting of associations, firms, and individuals, is over 30,000. It is a fair cross section of the groups, firms, and individuals who deal with the printed and spoken word in the advertising business throughout the United States from coast to coast. One of the principal functions of the federation has been and is to promote truth in advertising, to establish and maintain standards of good taste, both as to form and content. That course is dictated by a proper concern for public opinion and by an enlightened self-interest. The membership of the federation is well aware that any course of practice in advertising which offends or is likely to offend any considerable segment of American public opinion will defeat its own ends, will not serve the best interest of the advertising business or the commodity to be advertised. It would be impossible to determine, except after an extensive survey, the amount of advertising of alcoholic beverages, measured either by the lineage of the advertising or the amount of advertising expenditures, in which the members of the Advertising Federation of America have any business interest, but we do know that the amount measured by either standard is trivial compared to the total of advertising lineage and expenditure for advertising in the United States. Insofar as this bill would prohibit the advertising of distilled spirits by radio or television, it would have virtually no effect. The accept ance of liquor advertising is forbidden in the codes of both radio and television broadcasters. I doubt that any member of this committee has ever heard or seen by radio or television an advertisement for distilled spirits. I call attention to the fact to indicate that the force of organized opinion within the advertising business against liquor advertising by radio and television has been strong and effective. It is an indication that the advertising business has the force and will to police itself. We believe that in the long run voluntary and cooperative action of this kind provides an effective safeguard of the public interest and will prevent any abuse of the right to advertise. The preamble of this bill states that it is directed to those "engaged in the sale of alcoholic beverages." It is a recognition of the fact that the manufacture and sale of alcoholic beverages is lawful under Federal law, subject to limitation and regulation by the several States. Nevertheless, it provides, section 2, that it shall be unlawful for any publisher to transport in the mails from one State to another by any of the recognized media of information an advertisement or a solicitation of an order for the sale of alcoholic beverages. Section 3 extends the prohibition to any common carrier or private carrier. Section 4 further extends it to all broadcasts, even though it is a matter of common knowledge that it is impossible to limit a broadcast within State lines. Section 5 would deny entirely the use of the United States mails for transporting advertising or the solicitation of orders for alcoholic beverages into any State where it is at the time unlawful to advertise or to solicit orders for such beverages. This proposed bill presents a serious question under the first amendment of the United States Constitution, prohibiting the Congress from making any law abridging freedom of speech or of the press. Let me say, Mr. Chairman, I raise the question without attempting to give an answer today. Let me emphasize that our concern about this bill, even if it were modified, is not because of the amount involved, measured either by money or lineage. Neither are we concerned because of the particular industry or industries affected. Our concern is on account of the advertising business as a whole and because of the principle involved. The Advertising Federation of America opposes this bill on the ground of principle. In our opinion it would constitute an invasion of a right long sustained by law and by custom; that is, the right to advertise any product which may be lawfully made and publicly sold. The federation believes that if this right to advertise is limited by express statutory prohibition directed to a particular product or products, then this limitation can be extended to other products. This bill would single out for punishment industries which are lawful, from which the Federal Government derives a sizable portion of its revenue arising out of excise taxes, and from which most of the States of the Union derive a considerable portion of their revenue by way of a tax upon the products themselves or by way of a license to sell them. The end result of this bill would be plainly punitive. The enactment of it would be contrary to every standard of American fair play. It would deny to particular industries rights enjoyed by every other lawful business and industry in the United States: the right to advertise one's product. The apparent purpose of this bill is to punish, not to regulate. |