Fifth, since this bill will cut off legitimate merchandising at the point of sale, along with merchandising through other media, the loss of liquor sales certain to result from the provisions of the bill would cause additional and serious losses in tax revenues to Federal, State, and local governments.

Sixth, severance of the volume of business now done with alcoholic beverage advertisers will result in untold loss to our investors and owners on their capital investments in plant facilities.

It is for these reasons that the Point-of-Purchase Advertising Institute opposes the Siler bill and urges that it be disapproved by this committee. The CHAIRMAN. Is Mr. Clinton Hester present?

STATEMENT OF CLINTON M. HESTER, WASHINGTON COUNSEL, UNITED STATES BREWERS FOUNDATION

Mr. HESTER. Mr. Chairman and members of the House Interstate Commerce Committee, this is the 10th apearance I have made in the last 7 or 8 years before a congressional committee in opposition to legislation of this kind. I testified this morning at length before the Senate Interstate and Foreign Commerce Committee, and my testimony there is a matter of record.

Mr. Chairman, I will endeavor to shorten this, if I possibly can. The CHAIRMAN. Very well, Mr. Hester, the committee will appreciate whatever condensation of a long-prepared statement you might be able to make, assuring you, as we have all others, that the statement will appear in full in the record.

Mr. HESTER. Thank you. I have a very extended legal opinion here which I will ask to put in the record, but I would like to read certain portions of my testimony and try to omit some.

The CHAIRMAN. Very well, you may proceed.

Mr. HESTER. My name is Clinton M. Hester. I am an attorney with offices in the Shoreham Building, this city.

I appear here today on behalf of the United States Brewers Foundation, New York City, in opposition to the Siler bill, H. R. 4627.

Now in its 94th year, the foundation, for which I have been Washington counsel for many years, is the oldest trade association in the United States in continuous operation since its establishment. Its members produce in excess of 85 percent of the beer manufactured in this country.

The bill, if enacted, would impose prohibition upon wet States like, for example, Maryland and New York. Although the States of Maryland and New York permit beer advertising on radio and television and in newspapers and magazines, the plain terms of the bill would interfere with these States by requiring them to desist in permitting beer advertising.

To illustrate, Baltimore radio and television stations would no longer be permitted to broadcast and telecast the baseball games of the Baltimore Orioles and the football games of the Baltimore Colts because the broadcasts would cross State lines.

The bill is aimed primarily at the brewing industry and, if enacted, would reduce beer sales 50 percent. The prohibitionists want prohibition. They are not interested in moderation. They do not wish to prohibit beer advertising simply because they object to the advertising per se.

The logical and only real reason that they are sponsoring and supporting this bill is because they correctly believe that without interstate

advertising, beer sales volume will diminish to the point where the brewing industry will eventually be destroyed.

Manifestly, this bill would, in time, destroy the brewing industry because no brewer could suffer a 50 percent loss in his sales and remain in business.

Today, the brewing industry is pouring revenue at the rate of well over $2 billion a year into the national economy, distributed along these lines: $980 million in combined Federal, State and local taxes and license fees; $350 million in wages and salaries-exclusive of pay rolls of distributors, retailers and allied industries; more than $275 million for agricultural products; $200 million for cans and bottles, and several hundred million dollars additionally for other supplies and services that include construction, machinery, and equipment, crowns, cartons and cases, motortrucks and lift trucks, transportation, et cetera. The brewing industry currently consumes every year more than 4 billion pounds of farm products, such as corn, barley, rice, and hops. In addition, brewers sponsor both national and local radio and television programs, such as baseball and football games, boxing matches, newscasts, musicals, dramas, variety shows, and symphony orchestras, among others.

It is estimated that in a recent year 65 million people viewed the telecast of a national boxing contest sponsored by a brewer. Millions more listened to the radio broadcast of the same event sponsored by the same brewer. This is not surprising when one considers that beer is consumed in the homes of two-thirds of the families in the United States.

The alcoholic beverage industry, consisting of the distillers, vintners, and brewers, is one of the few industries required to pay excise taxes to the support of the Federal Government and State government. This industry pays annually to these governments in excise taxes alone a total of approximately $2,700 million, and to the several States about $750 million.

It is conservatively estimated that the enactment of this bill would cost the Federal Government in alcoholic beverage excise taxes approximately $1 billion annually and the States $250 million annually, and cost these governments hundreds of millions more in corporate and individual income taxes.

All this, too, at a time when our Federal and State indebtedness is at an all time high; when we have so much need for moneys for our national defense and security, and at a time, too, when our taxes are almost at a confiscatory level.

And, likewise, at a time when the President has just recommended to the Congress, and the Democratic and Republican leaders of the House have agreed to accept his recommendation that the emergency excise taxes on alcoholic beverages due to expire April 1, 1956, be continued for another year, to avoid a loss in excise tax revenue to the United States Treasury of upwards of $300 million in the next year.

In 1954, a measure similar to this bill was voted on by the people of the State of Washington. This measure, sponsored by the drys, would have prohibited the alcoholic beverage industry from using radio and television from 8 o'clock in the morning until 10 o'clock in the evening.

At the election in November of that year, the drys suffered one of the worst defeats in the history of the prohibition movement in the United States.

The brewing industry used some of its commercial time on radio and television to inform the people of the State of Washington of the sponsorship, the purpose and the effect of the bill. The result was, the measure was defeated by the people in every single one of the 39 counties in the State of Washington. Statewide the count was 3 to 1 and in many counties the vote was 4 to 1 against the measure. The prohibitionists lost even in the most agricultural and rural counties where prohibition sentiment is the strongest.

And this morning Senator Magnuson reminded us that there were temperance organizations that opposed this measure.

In 1955 the drys suffered a similar overwhelming defeat in North Dakota, the home State of Senator Langer, author of the companion to the Siler bill. A bill aimed at eliminating beer advertising on radio and television, which had previously never been given any consideration, suddenly, overnight, passed the North Dakota House.

The farmers of North Dakota protested so vigorously that the Senate soon killed the bill. The farmers not only realized that they would be deprived of the radio and television programs sponsored by brewers, but also, inasmuch as brewers are among their best customers, the farmers would be adversely affected by decreasing beer sales which were certain to follow if the bill were enacted.

In the past, this committee, and some Members of Congress, have criticized some of the advertising of the brewing industry, and have suggested that brewers should eliminate drinking scenes from their television commercials. It was also suggested that our commercials, along with those of numerous other products, were too frequent, irritating, improperly spaced, and, on occasion, interfered with the program. During the past several years, we have traveled extensively throughout the United States, meeting and addressing brewers in national conventions, regional and State meetings, and many meetings of the board of directors of the United States Brewers Foundation. The members of the foundation's board, incidentally, represent the brewers of the United States on a geographical basis.

In all these meetings, a special effort has been made to call to the attention of brewers suggestions of this committee and other Members of Congress for improving their advertising. They have been urged to review their commercials and all other advertising constantly, and to maintain them in good taste. Brewers throughout the Ünited States have cooperated wholeheartedly.

In addition, the foundation has a highly experienced and efficient field staff throughout the United States. The members of the staff have not only been alerted, but have been directed to listen to radio and to view all television commercials, as well as newspaper and magazine advertising, and to report any advertisements which do not appear to be in good taste.

The work of the field staff of the foundation has been instrumental in improving the standard of advertising in the industry.

Brewers have always recognized that they have a social responsibility in the advertising of their products and have diligently sought to maintain the highest standards of ethics and good taste in their advertising.

Quite naturally, therefore, they have given serious consideration to the suggestions of this committee and individual Members of Congress, and have taken corrective steps.

The United States Brewers Foundation, many years ago, recognized that honest differences of opinion may arise among brewers and advertising agencies as to exactly what constitutes good taste in beer advertising. With this in mind, the foundation prepared for members of the industry a guidebook called the ABC of Beer Advertising. Recently, the foundation published a revised edition including a new chapter on television advertising.

The foundation has always had the benefit of the advice and counsel of one of the largest and most experienced advertising agencies in the United States in both advertising and public relations. The brewers of the United States individually have likewise always maintained very reputable and experienced advertising and public-relations counsel.

In a further effort to cooperate with the committee and Members of the Congress, the foundation within the past year established an advertising review panel. This panel is composed of five distinguished citizens, all of whom are experts on public opinion and are entirely independent of the brewing industry.

These include Dean Carl W. Ackerman, of the Graduate School of Journalism at Columbia University; Neil H. Borden, professor of advertising at the Harvard School of Business Administration; Ralph Starr Butler, consultant on advertising and public relations and formerly vice-president of General Foods. In addition to these three men, Glenn Saxon, professor of economics at Yale University, and Daniel Starch, consultant on advertising research, make up this panel. The purpose of the panel is to help the industry by criticizing advertising which is not in good taste. In this highly competitive industry, any brewer is privileged to complain to the panel about the advertising of his competitor or any other member of the industry.

Thereafter, the panel studies the complaint and advises the complainant, as well as the brewer complained against, of the findings of the panel. The very establishment of this panel has had a salutary effect upon advertising in the brewing industry.

Today, as a result of constructive congressional suggestions, and the wholehearted cooperation of the industry, beer advertising is in good taste; is no longer irritating, consumes less time; is better spaced, and, generally speaking, does not interfer with the program. Drinking scenes have been eliminated entirely from beer commercials.

The United States Brewers Foundation "Home Life in America" series of advertisements appears in five of the leading magazines in the United States: Life, Look, Colliers, McCalls, and the Woman's Home Companion. These magazines have a combined circulation of more than 20 million and a total readership of upward of 80 million. About 25 percent of the subscribers to these magazines live in rural areas where prohibition sentiment is strongest. Yet today these magazines receive an infinitesimal number of complaints against beer advertising.

In all of our advertising only adults are depicted and the appeal is directed solely to adults. The artist is always instructed to portray everyone illustrated as an adult.

Could I go back and repeat here? I am coming to the issued raised about jingles and nursery rhymes.

The CHAIRMAN. You may do that.

Mr. HESTER. What I am doing here is talking about the point you raised and the point that the prohibitionists raised when they appeared here. I am telling you our side of the case, and I am doing that with great deference and respect.

In all of our advertising only adults are depicted, and the appeal is directed solely to adults. The artist is always instructed to portray everyone illustrated as an adult.

There is not, and never has been, a beer commercial or any beer advertising in the United States designed to appeal to children. If you could find any brewer in the United States who desired to advertise in such a manner as to appeal to children, he still would not do so as it would be a waste of money.

Now, this is the nub of the entire case outside of this question that the bill is unconstitutional under the 21st amendment.

Every advertiser naturally advertises for the purpose of selling his product, and to do so employs commercials that are easily remembered so that the name of his product will remain in the mind of the listener. He frequently uses tuneful, catchy jingles and songs. These are not nursery rhymes.

Not so long ago I found that my favorite song, The Yellow Rose of Texas, had been turned into an automobile commercial. Such commercials are used by all advertisers and are not peculiar to the brewing industry.

Therefore, a good catchy tune designed to impress upon adults the merits of a particular beer or other product, may very well appeal to the musical instincts of children.

In fact, my grandchildren enjoy singing them. While they have never cried for beer or any of the other adult products they see and hear advertised on television, it is the responsibility of their parents to see that they do not touch razor blades, cigarettes, matches, coffee, tea, and other adult products which they see advertised.

Just as children are not allowed to drive automobiles, they are not by law permitted to buy beer or cigarettes. While they are prohibited from driving automobiles until they have attained a certain age, nevertheless there are many commercials sponsored by automobile manufacturers which appeal to children just as there are the cigarette and razor-blade commercials which also appear to them.

Yet, while they may enjoy the commercials, and may sing them, they have no interest whatsoever in the products.

There is no clearly defined advertising which appeals exclusively to adults. Children and adults are both human beings and, therefore, generally speaking, a commercial, especially a musical commercial, which is appealing to adults, may also have an appeal to children.

It probably happens that some teen-agers stay up at night in order to see baseball and football games and other programs on television, but that is a matter for the parents. If the parents do not want them to see a program, they can send the teen-agers to bed, or turn off the television just like the Supreme Court has said, and just like Methodist Bishop Gerald Kennedy of Los Angeles observed in the December issue of the Christian Century.

Firm decisions about programs for children must begin at home. When you get down to the basic issues, this is a problem for parents,