In Rast v. Van Deman ((1915) 240 U. S. 342), the Supreme Court described advertising as follows (p. 365):

"Advertising is merely identification and description, apprising of quality and place. It has no other object than to draw attention to the article to be sold, and the acquisition of the article to be sold constitutes the only inducement to its purchase. The matter is simple, single in purpose and motive; its consequences are well defined, there being nothing ulterior; it is the practice of old and familiar transactions and has sufficed for their success."

In Delamater v. South Dakota ((1906) 205 U. S. 93), the Court considered a South Dakota law imposing a license fee upon the business of selling or offering for sale intoxicating liquors, and upheld the conviction of an out-of-State traveling salesman who solicited orders for liquor for a firm in St. Paul, Minn., without having first obtained the required license. It was held that, inasmuch as the State could regulate or forbid the sale of intoxicating liquor from outside its borders, it followed that the State could regulate or forbid the offering of such liquors for sale in South Dakota even though such liquors were situated outside its borders, for the reason that the business of soliciting in South Dakota for an out-of-State firm was an incident of the business of shipping and selling such liquors in the State.

Ex parte Anixter (22 Cal. App. 117, 134 P. 193), considered a prohibition against certain advertising of, and soliciting orders for intoxicating liquors. In the course of upholding the ordinance, the court said, after citing Mugler v. Kansas ((1887) 123 U. S. 623):

"It follows, therefore, that it is clearly within the police powers of the State *** to do anything in the legislative treatment of that business, or all questions appertaining thereto, which its discretion may direct. * * * In a word, the governing power is not, as before declared, restricted in the slightest degree in its right to do any act respecting the traffic which, in its opinion, is necessary to the welfare of the community over which such power is territorially exercisable."

A Federal court, in Premier-Pabst Sales Co. v. State Board of Equalization (13 F. Supp. 90), upheld a California regulation restricting the size of outdoor advertising signs attached to buildings in which were located establishments licensed to sell alcoholic beverages. The court said, at page 95:

"Advertising is one of the incidents of the sale of liquors. If the State, under its police power, can prohibit the whole business from being carried on, it can prohibit and control any of its incidents. The prohibition against certain forms of advertising is really a prohibition against soliciting of business. Advertising is soliciting in the last analysis."

"Regulations of this character aiming to restrict the soliciting of sales of liquor by advertising or other methods have been held repeatedly to be within the police power of the State.

The advertising of liquors obviously was considered to be an incident of sale, when in upholding a regulation limiting advertising privileges to State licensees, a Virginia court said, in Commonwealth v. Anheuser-Busch, Inc. (181 Va. 678, 26 SE 2d 94):

"To license the sale of liquor and to deny to licensees the right to advertise at all is illogical."

IV. THE STATES HAVE PREEMPTED THE FIELD IN REGARD TO THE REGULATION OF ALCOHOLIC BEVERAGE ADVERTISING

It is equally certain that the States have exercised their powers relating to the advertising of alcoholic beverages and have thus preempted the field. Every State, save one, including the legally dry States of Mississippi and Oklahoma, regulate and control the advertising of alcoholic beverages in varying degrees. Most States, for example, regulate the value and size of advertising signs, both interior and exterior, which may be furnished to a retail liquor dealer. Regulations are found with reference to the lighting of signs, the furnishing of advertising novelties, special holiday advertising and prices. A number of States require prior approval of advertising material. Only 1 State has no law or regulation relating to advertising, and the 2 dry States prohibit the advertising of distilled spirits, but the advertising of beer is permitted.

If under the 21st amendment the States have the power to prohibit the advertising of distilled spirits, as certainly they do have, then they have equal power

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.

In Rast v. Van Deman ((1915) 240 U. S. 342), the Supreme Court described advertising as follows (p. 365):

"Advertising is merely identification and description, apprising of quality and place. It has no other object than to draw attention to the article to be sold, and the acquisition of the article to be sold constitutes the only inducement to its purchase. The matter is simple, single in purpose and motive; its consequences are well defined, there being nothing ulterior; it is the practice of old and familiar transactions and has sufficed for their success."

In Delamater v. South Dakota ((1906) 205 U. S. 93), the Court considered a South Dakota law imposing a license fee upon the business of selling or offering for sale intoxicating liquors, and upheld the conviction of an out-of-State traveling salesman who solicited orders for liquor for a firm in St. Paul, Minn., without having first obtained the required license. It was held that, inasmuch as the State could regulate or forbid the sale of intoxicating liquor from outside its borders, it followed that the State could regulate or forbid the offering of such liquors for sale in South Dakota even though such liquors were situated outside its borders, for the reason that the business of soliciting in South Dakota for an out-of-State firm was an incident of the business of shipping and selling such liquors in the State.

Ex parte Anixter (22 Cal. App. 117, 134 P. 193), considered a prohibition against certain advertising of, and soliciting orders for intoxicating liquors. In the course of upholding the ordinance, the court said, after citing Mugler v. Kansas ((1887) 123 U. S. 623):

"It follows, therefore, that it is clearly within the police powers of the State *** to do anything in the legislative treatment of that business, or all questions appertaining thereto, which its discretion may direct. *** In a word, the governing power is not, as before declared, restricted in the slightest degree in its right to do any act respecting the traffic which, in its opinion, is necessary to the welfare of the community over which such power is territorially exercisable."

A Federal court, in Premier-Pabst Sales Co. v. State Board of Equalization (13 F. Supp. 90), upheld a California regulation restricting the size of outdoor advertising signs attached to buildings in which were located establishments licensed to sell alcoholic beverages. The court said, at page 95:

"Advertising is one of the incidents of the sale of liquors. If the State, under its police power, can prohibit the whole business from being carried on, it can prohibit and control any of its incidents. The prohibition against certain forms of advertising is really a prohibition against soliciting of business. Advertising is soliciting in the last analysis."

"Regulations of this character aiming to restrict the soliciting of sales of liquor by advertising or other methods have been held repeatedly to be within the police power of the State.

The advertising of liquors obviously was considered to be an incident of sale, when in upholding a regulation limiting advertising privileges to State licensees, a Virginia court said, in Commonwealth v. Anheuser-Busch, Inc. (181 Va. 678, 26 SE 2d 94):

"To license the sale of liquor and to deny to licensees the right to advertise at all is illogical."

IV. THE STATES HAVE PREEMPTED THE FIELD IN REGARD TO THE REGULATION OF ALCOHOLIC BEVERAGE ADVERTISING

It is equally certain that the States have exercised their powers relating to the advertising of alcoholic beverages and have thus preempted the field. Every State, save one, including the legally dry States of Mississippi and Oklahoma, regulate and control the advertising of alcoholic beverages in varying degrees. Most States, for example, regulate the value and size of advertising signs, both interior and exterior, which may be furnished to a retail liquor dealer. Regulations are found with reference to the lighting of signs, the furnishing of advertising novelties, special holiday advertising and prices. A number of States require prior approval of advertising material. Only 1 State has no law or regulation relating to advertising, and the 2 dry States prohibit the advertising of distilled spirits, but the advertising of beer is permitted.

If under the 21st amendment the States have the power to prohibit the advertising of distilled spirits, as certainly they do have, then they have equal power

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?