consumers the protection intended by the marking requirement has not been fully attained.

In so far as the relief sought by the milling industry is concerned, the situation is not at all improved by the marking provision. In Texas the marking requirement rather tends to promote the multiplicity of packages, which is one of the principal grievances of the millers. Under the Texas weights and measures law of June 18, 1919, the standard of weight for a barrel of wheat flour was fixed at 200 pounds, the half-barrel sack 100 pounds, the quarter-barrel sack 50 pounds, and the eighth-barrel sack 25 pounds. No further provision was made for any other size of container or package for wheat flour. It appears, however, that under a decision by the attorney general of the State the sale of flour in any size of package is permitted provided the net weight contents are marked on each package. As a result of this decision, instead of having the decimal-weight packages, there are in use in Texas at the present time nine other sizes of flour packages that are not specified in the law of 1919.

The weight shown upon the package is a notice that it contains a certain quantity of flour, and with most purchasers this is all the protection necessary, for apparently there remains no opportunity for deception. Unfortunately, however, all purchasers do not understand the significance of the weight figures on flour packages. The number of this class of purchasers is, of course, unknown, but considering merely the illiterate, according to the census of 1920, there were 72,000,000 people 15 years of age and over in the United States, and of this number 4,686,000, or 6.5 per cent, were classed as illiterate. This part of the public is not protected by the requirements that the weight of the contents be plainly marked upon the package. Much buying is done through children to whom a weight mark means nothing.

Throughout the hearings on the several bills that have been before Congress, also in communications to this commission, reference was made to the deception and fraud practiced by unscrupulous retail dealers in selling flour to uninformed and nonobservant purchasers. The close resemblance between the 5 and 6 pound sack of flour, the 12 and 12 pound sizes, the 24 and 24, or the 48 and 49 pound sacks affords ample opportunity for deceiving the uninformed or unsuspecting purchaser who does not look to see whether the weight stamped on the package offered is the weight expected in the package of similar size which he has previously bought.

A study of the data in Table 37, page 87, shows that 11 States have prescribed irregular packages below the half-barrel size, and in 7 other States a similar irregularity of packages has been established by custom. In none of these States, however, are there packages or sizes likely to result in confusion. On the other hand, there are 19 States having from 1 to 4 nearly similar packages in use at the present time. While 15 States of this latter group require that the weight must be indicated on each package, yet this provision alone affords no relief from the evil of multiplicity, nor does it give protection against mistakes or fraud.

Under the proposed decimal weight system the absurd and uneconomical complexity in the sizes of flour packages which exists at the present time would be avoided and the opportunities for deception would be reduced.

Section 6. Package weights for commercial feeding stuffs.

Reports received concerning the package requirements for commercial feeding stuffs were not as complete as in the case of flour packages. It was found that while in all States excepting Idaho and Montana the State laws and regulations require that the weight contents shall in some manner, either by labels or tags, be indicated on each package or container, yet only 18 States report having laws or regulations prescribing the weights of the different sizes of packages. The object of the feed laws is to protect the purchaser from fraud and false representations by unscrupulous manufacturers and dealers. Therefore, in addition to the requirement that the weight contents must be marked on or affixed to each package, there are about 42 States in which the laws and regulations also require that each package shall give the name, brand, or trade-mark under which the feed is sold, the name and address of the manufacturer, the minimum percentage of crude protein and crude fat, and the maximum percentage of crude fiber. In 31 States the name of the ingredients in the feed must also be shown.

Table 40 gives a list of the feed-package weights reported for the different States.

TABLE 40.-Package weights for commercial feeding stuffs prescribed by law or regulation or in use by trade custom in different States, 1922 1

[L Prescribed by law; R=by regulation; C=in use by custom.]

1 The States of Arizona, Colorado, Connecticut, Michigan, Montana, Nevada, New Hampshire, North Dakota, Oregon, Vermont, West Virginia, and Wyoming do not regulate the weight of commercial feed packages, and the size of packages in use by custom was not reported.

Utah.

Virginia

Washington..

Wisconsin.

It will be seen that, with a few exceptions, the weights ranging from the 5-pound package for poultry feed to the 200-pound sack are based upon the decimal system. States in the southeastern district particularly have a most complete arrangement of decimal weight packages.

The 80 and 90 pound sacks meet a special need in the Pacific Coast States and in Utah, while in all other States reporting the 100-pound sack is in general use either by law or by trade custom.

The 18 States having laws regulating the sizes of commercial feed packages include Alabama, Arkansas, California, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, and Virginia.

Óf the other 31 States and the District of Columbia, for which no laws regulating the sizes of commercial feed packages have been found, 19 reported the sizes most commonly in use by trade custom. The States in this group include, Delaware, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Rhode Island, Utah, Washington, Wisconsin, and the District of Columbia. Montana has no regulations upon the subject. In Colorado the law requires that the weight, if stated, must be correct.

Section 7. The proposed uniform package law.

Primarily the agitation for uniform package laws was confined to wheat flour. More or less trouble was encountered in handling commercial feeding stuffs, but by far the greatest difficulty was found in meeting the requirements of custom weights and the different State laws regulating the smaller sizes of wheat-flour packages. Consequently, when the original bill was drafted for Congress there was no intention of having it apply to any commodity except wheat flour,* but discussion of the subject developed the need for a more comprehensive measure. As a result when the first bill aiming at standardization was finally introduced in the Sixty-fifth Congress, it provided for a standard of weights for flour, meal, and feeding stuffs. bill was originally drafted at a conference between Mr. A. P. Husband secretary Millers' National Federation, and representatives of the United States Bureau of Standards and the Federal Trade Commission.5

This

This bill ignored the prevailing package weights entirely and substituted the decimal system. It specified that the standard should be 100 pounds avoirdupois, or multiples of 100 pounds, or fractions thereof, including 1, 2, 4, 5, 10, 25, and 50 pounds. In effect, this plan would establish 200 pounds as the standard for a barrel of flour and at the same time eliminate all the irregular and inharmonious weights in use for packages below 100 pounds. Special provision was also made for packages used in the export trade.

Owing to the congested condition of the legislative calendar, this bill failed to pass. In the first session of the Sixty-sixth Congress a similar bill passed the House in December, 1919, but failed of

7

Hearings before House Committee on Coinage, Weights, and Measures, Sept. 19, 1919, part 2, p. 26. Hearings before Committee on Coinage, Weights, and Measures, Oct. 3, 1919, part 3, p. 76.

6 H. R. 10957, Sixty-fifth Congress, first session.

7 H. R. 7482, Sixty-sixth Congress, first session.

8

action by the Senate. Again, in the first and fourth sessions of the Sixty-seventh Congress the bill was introduced, and while in each instance it received the unanimous approval of the House and was reported favorably without amendment in the Senate, the crowded condition of the legislative calendar again prevented final action by that body.9

The bill in its present form, with amendment, as reported to the House, March 14, 1924, by the Committee on Coinage, Weights, and Measures, is given in the Appendix, Exhibit 3, page 129.

A study of this bill shows that its chief purpose is to establish a simple and uniform standard of package weights which would answer every reasonable requirement of the flour trade and the public. The various sizes of packages are so clearly defined as to leave no room for the confusion that constantly arises under the present incongruous system of package weights. Section 2 of H. R. 3241, introduced December 13, 1923, reads as follows:

That the standard packages for the following wheat-mill, rye-mill, and cornmill products, namely, flours, hominy, grits, and meals, and all commercial feeding stuffs, when the same are packed, shipped, sold, or offered for sale in packages of five pounds or over, shall be those containing net avoirdupois, weight one hundred pounds, or multiples of one hundred pounds, or the following fractions thereof, five, ten, twenty-five, and fifty pounds; and in addition, for wheat flour, rye flour, and corn flour only, one hundred and forty pounds; and for commercial feeding stuffs only, sixty, seventy, and eighty pounds.

Although this bill was reported favorably, it failed to pass, apparently on account of the congested condition of the calendar.

The information received by this commission from milling companies, bag manufacturers, and others informed upon the subject all goes to show that the bill has practically the unqualified approval of all the factors engaged in the different branches of business that have to do with the production and sale of cereal mill products. Manufacturers of cereal specialties and wholesale grocers have expressed themselves with regard to the trade requirements in their particular lines of business, and individually and through their associations they have voiced their approval of the measure.10

Section 8. Unnecessary investment and package expense.

An argument urged in support of the proposed standardization of flour and feed packages is the waste of capital involved in carrying inventories of the large number of sizes of packages in use. It is said that the necessity of carrying stocks of numerous different sizes of packages requires a larger amount of capital than is warranted by the volume of business handled, and, furthermore, that this involves an additional expense in packing and shipping which adds to the cost of production.

The amount of capital necessary to carry stocks of packages adequate to meet trade demands depends upon the volume of business and the particular class of trade that is served. Obviously mills whose trade is confined to States in which the packages are regular and uniform in size are in much better position in this respect than those whose trade extends into various States where by law or

8 Hearings, H. R. 4901, May 6, 1921, p. 6.

H. R. 4901, Sixty-seventh Congress, first session, and H. R. 7103, Sixty-seventh Congress, fourth session. 10 Hearings before Committee on Coinage, Weights, and Measures, H. R 7482, first session, Sixty-sixth Congress, and H R. 4901, first session, Sixty-seventh Congress.

custom the package requirements include a full complement of regular and irregular sizes.

Comparison of reports for 25 flour milling companies that are equally distributed among the five geographical milling districts of the country shows that in the five years 1918-1922 the amounts invested in package inventories at the end of different business years for individual companies ranged from $10,000 to more than $2,000,000. Limiting the comparison to those having package inventories averaging less than $100,000 per year, 18 of the 25 companies show an average of $50,580, while for the other 7 companies that carried package stocks in excess of $100,000 per year the average amounted to $473,884.

Further comparison shows that among the smaller companies a greater proportion of the total inventory account was invested in packages. Thus, 14 of the 25 companies had a milling capacity in excess of 2,000 barrels per day. Their package account for the five years averaged 10.4 per cent of their total inventory investment. On the other hand, in the case of the other 11 companies whose milling capacity was less than 2,000 barrels per day their package investment during the five years averaged 18.2 per cent of the total inventory investment.

From this it would appear that in reducing the amount of capital necessary to carry stocks of packages the smaller companies would receive the greatest benefit.

The importance of package expense is indicated by the fact that for the 10-year period 1913-1922, excepting the cost of the wheat itself, packages constituted the largest single item in the cost of a barrel of flour (see Table 29, p. 67).

With respect to the expense incurred under the present package system and the advantage offered by standardization of flour packages, an official of a Kansas flour-milling company stated:

We can not urge too strongly the adoption of a law to standardize the size of flour and feed packages. The present individual State laws and also general requirements of the trade pertaining to flour packages in particular make it necessary that we tie up an exorbitant sum of money in empty bags.

If a law was adopted standardizing the sizes of these packages it would mean that we would only have to carry about 40 per cent of the bag stock that we are forced to have at the present time. All these additional expenses must, of course, be added to the selling price of flour, and as we are interested in getting out flour to the ultimate consumer at the lowest possible basis, we are naturally interested in any legislation that will eliminate certain unsatisfactory practices tending to elevate the cost of necessities.

Expressing approval of the decimal-weight bill, and also referring to the investment required to carry stocks of bags adequate to meet current demands, the president of another milling company in Kansas said: 11

We are unanimous in favoring the immediate passage of the above bill. The general public probably does not realize the very important part that bag costs represent in marketing wheat flour and corn-meal products. It is a conservative estimate the mills of even modest capacity are compelled to carry under present conditions probably 40 different-sized bags. This represents an investment of many thousand dollars.

Should the bill become a law, a considerable saving to the consumer would undoubtedly result.

11 Hearings before the House Committee on Coinage, Weights, and Measures, Part I, p. 19.