Mr. COLEMAN. We believe it should be placed in the Treasury Department. There is sufficient law now to take care of it.

Mr. McCORMACK. How many bureaus or departments did you say had stuck their hands into this business?

Mr. COLEMAN. We have the Treasury Department; the Pure Food and Drug Bureau, under the Agriculture Department; the Federal Trade Commission; we have had the Federal Alcohol Control Administration

Mr. McCORMACK. The Federal Trade Commission?
Mr. COLEMAN. On fair-trade practices.
Mr. McCORMACK. We know what their jurisdiction is.
Mr. VINSON. And the courts?

Mr. COLEMAN. And the courts; our State laws, our city and town governments.

Mr. McCORMACK. Your idea is that if they are going to do any. thing, or if anything is going to be done, all those activities ought to be coordinated, or all be under one head?

Mr. COLEMAN. I think, Mr. Congressman, if they took all the existing laws and set up an administration to coordinate all the laws there are now, we have got plenty without writing any more for us to take care of.

Mr. McCORMACK. You made a suggestion about the law of Massachusetts which permits a wholesaler to have a retailer's license.

Mr. COLEMAN. A retailer's license for the sale of bottled goods. Mr. McCORMACK. For the sale of bottled goods. A wholesaler in Massachusetts pays how much for a license?

Mr. COLEMAN. $3,000 a year.

Mr. McCORMACK. Does he also have to pay a fee for the retailer's license?

Mr. COLEMAN. He does.
Mr. McCORMACK. How much?
Mr. COLEMAN. $1,200 in the city of Boston.
Mr. McCORMACK. That, you think, should be taken care of?
Mr. COLEMAN. Yes, sir.

Mr. McCORMACK. Why not go further and say that there will be no man who violates any of the laws of our State with respect to the transaction of the business?

Mr. COLEMAN. I think that should be included. There is no question in my mind about that.

Mr. McCORMACK. There is the twenty-first amendment, which placed the responsibility upon both State and Federal Governments, and its very wording shows that the Federal Government wanted to get out of prohibition.

Mr. COLEMAN. That is correct.

Mr. McCORMACK. And put this back on the State governments as much as possible, and it would be for the Federal Government to protect not only dry States but wet States. Is that what your argument is?

Mr. COLEMAN. That is correct.
Mr. McCORMACK. I think there is a lot of logic in it.

The CHAIRMAN. How could the Federal Government protect dry States and at the same time have nothing to do with it? I do not understand that.

Mr. COLEMAN. Protect the dry States and allow the wet States to take care of their own business within their own borders. You can still control interstate commerce, across State lines, which would give the wet States, as well as the dry States, protection.

The CHAIRMAN. You referred to the Federal Trade Commission.

Mr. COLEMAN, Yes, sir. - The CHAIRMAN. To what extent, according to your knowledge, has the Federal Trade Commission interfered or obstructed the industry in any way!

Mr. COLEMAN. I do not say they have obstructed it. I say, we have to abide by them.

The CHAIRMAN. What have they done in any way to which you object? :

Mr. COLEMAN. I do not object to the Federal Trade Commission at all.

The CHAIRMAN. They have not been a hindrance to the industry?

Mr. COLEMAN. I say there is sufficient law in the Federal Trade Commission and the pure food and drug law, without setting up any legislation which the industry would have to find out about. ALI during the last year it has been impossible for any

industry member to keep track of all the rules and regulations. In my own little plant I have had to have one man doing nothing else but filing and reading reports to the Federal Alcohol Control Administration.

The CHAIRMAN. What was it to which you objected ?
Mr. COLEMAN. That man was not in any productive capacity.

The CHAIRMAN. You think that it is a useless organization and has served no good purpose ?

Mr. COLEMAN. I think in the past year, in keeping out of the industry certain undesirables, they have accomplished a great deal.

The CHAIRMAN. If they have accomplished a great deal in the past year, why could they not accomplish the same thing in future years?

Mr. COLEMAN. Mr. Chairman, they have taken and are going to make into law many things which are undesirable trade practices, such as consignment sales.

The CHAIRMAN. Is not that a matter of opinion? Mr. COLEMAN. I think it is wrong in this way, Mr. Chairman: That the legitimate man in living up to that provision is losing business, and the man who will cut corners is getting it, and it is not fair to the legitimate man.

Mr. VINSON. Do you think that that $3,000 license for wholesalers in Massachusetts is too high?

Mr. COLEMAN. No; I do not.

Mr. VINSON. Do you think the $1,200 license in the city of Boston is too high?

Mr. COLEMAN. Under certain conditions, no; but at the present time I think it is.

Mr. VINSON. As I caught your statement, you do not want any Federal control whatsoever?

Mr. COLEMAN. No, sir; that is not correct.
Mr. VINSON. What kind of Federal control do you advocate?
Mr. COLEMAN. The same Federal control we have had for the last

50 years.

Mr. VINSON. Did you have any Federal control at all?
Mr. COLEMAN. I think we did.

Mr. VINSON. What sort of Federal control did you have for preprohibition days! You paid a license, did you not?

Mr. COLEMAN. We paid a license.
Mr. VINSON. What else did you do?

Mr. COLEMAN. We had to live up to the Treasury rules and regulations.

Mr. VINSON. You have to live up to the laws, the same as other citizens?

Mr. COLEMAN. We had to live up to the pure food and drug laws with regard to labeling, advertising, and whatnot.

Mr. Vinson. You say you have been on the code authority?
Mr. COLEMAN. Yes, sir.

Mr. VINSON. And you are acquainted with the provisions of the codes under F. A. C. A.?

Mr. COLEMAN. That is correct.

Mr. Vinson. What is there in section 5, the section dealing with unfair competition and unlawful practices in this bill, H. R. 8539, that was not in the codes under F. A. C. A.?

Mr. COLEMAN. They were not.

Mr. Vinson. Is there anything in here which was not in those codes?

Mr. COLEMAN. I do not know those. I tried to read this thing through today. I got word in Boston last night that there was a hearing going on, and I came on and tried to digest it today. So far as I can find, it is taken from the codes.

Mr. Vinson. You would not advocate an abolition of that section dealing with tied houses, going back to all the abuses in the preprohibition days?

Mr. COLEMAN. I would object to it in the way it is written here. If I remember rightly, it merely mentions the retailer.

Mr. VINSON. The retailer is the fellow whose house is tied in with the brewery or distillery!

Mr. COLEMAN. There is a distinction between the retailer for consumption on the premises and a retailer for bottling-house goods.

Mr. Vinson. You know what the purpose of the tied house is?
Mr. COLEMAN. Yes, sir.

Mr. VINSON. It is to control the abuses that had a lot to do with bringing on prohibition. Is not that true?

Mr. COLEMAN. That is correct.

Mr. Vinson. On page 15, consignment sales, you do not object to that provision?

Mr. COLEMAN. I do in enacting it into law, because if I live up to it and somebody else does not, I am losing the business to him, and there is nothing under this law or under the prohibition law which would guarantee me that that law would be enforced.

Mr. VINSON. Of course, you could say that about any law.
Mr. COLEMAN. I understand.

Mr. VINson. If you live up to it and somebody else does not, it might bring that on.

Mr. COLEMAN. I have tried, Mr. Chairman, as I say, to enforce this law in New England, and I found certain things which could be enforced and certain things which could not be enforced.

Mr. Vinson. But, if I understood you correctly, you said that in the last year under the Alcohol Code much good was accomplished.

Mr. COLEMAN. Insofar as limiting those coming into the business who had bad records and had no business in the business, and which probably would have worked to the detriment of the entire industry, they did.

I say here in public that Mr. Choate has endeavored to the best of his ability to do the right thing.

Mr. FULLER. How do you stand on bulk sales ?

Mr. COLEMAN. Our association last September went on record in favor of bulk sales.

Mr. FULLER. Would that have a tendency to lower the price of liquor ?

Mr. COLEMAN. It certainly would. If we could ship liquor across the country in barrels instead of glass we could save money. I have advocated that for years.

Mr. McCORMACK. You are in favor of the legislation generally, except you feel it ought to be under one head instead of being under several heads; and if we are going to do something we ought to place the responsibility either in an industry board or an administrator, whichever the committee determines, for administering all laws of a regulatory nature?

Mr. COLEMAN. That is correct.

Mr. McCORMACK. And take away from the pure food and drugs and other places, the Agriculture Department, their powers on labeling and put them here under one head?

Mr. COLEMAN. That is correct.

Mr. McCORMACK. And you would know where to go instead of going different places?

Mr. COLEMAN. The industry knows what the interpretation of the pure food and drug laws are as regards liquors. They have been tested out in the courts, and the courts have handed down decisions prior to prohibition. The industry knows what it is. Instead of picking up a letter one morning that section 6 is the case, they would know. For instance, I had a label matter up called' " Dry Gin, Distilled.” When I sent that on to the administration I made that up in good faith, without any intention of deceiving anyone. It was rejected because the label should have read “Distilled Dry Gin." I say to you gentlemen, when I have to throw away possibly $100 worth of labels in one instance because the wording was changed around, it is not right to burden the industry with such regulations, which they do not know about it, and change from day to day.

Mr. MCCORMACK. I understand that that is one of the serious problems of those in the industry during the past 2 years in connection with labeling.

Mr. COLEMAN. That is correct. Millions and millions of dollars have been wasted, and labels have had to be changed, when they were made up in good faith, under the pure food and drug laws as we knew them.

Mr. McCORMACK. Who told you to make the changes!

Mr. COLEMAN. The F. A. C. A. make their own regulations, irrespective of the pure food and drug laws.

Mr. McCORMACK. Suppose you had a lot of labels which you had had printed or obtained, and they changed their regulations: you would have to destroy the labels?

Mr. COLEMAN. That is correct; they have continually changed them during the past year.

Mr. McCORMACK. Does another department issue instructions on labels?

Mr. COLEMAN. The pure food and drug law.
Mr. McCORMACK. Do you have to conform to them, too?
Mr. COLEMAN. And to our State law as well.

Mr. McCORMACK. Suppose you got an order from the F. A. C. A. and the pure food and drug department, and they conflicted: what would you do?

Mr. COLEMAN. We followed the F. A. C. A. this last year and our State law.

Mr. McCormack. In other words, it creates an uncertainty?
Mr. COLEMAN. It certainly does.

The CHAIRMAN. We thank you for your appearance and the testimony which you have given the committee.

The next witness is Hugh J. McMackin, National Wholesale Wine and Liquor Dealers' Association.

(No response.)
Next is A. Sidney Johnston.



Mr. JOHNSTON. Mr. Chairman and gentlemen of the committee, I reside in St. Louis, Mo. I am here tonight as president of the Associated Cooperage Industries of America, which is the national trade association of the cooperage industry.

Our industry appears here in unanimous support of paragraph (f), section 4, page 9, of H. R. 8539, denying the right of the Commission of the Treasury Department to prohibit the use of wooden barrels, casks, and kegs as containers for the bulk distribution and sale of spirits, wine, or malt beverages.

If this right be not denied, both F. A. C. A. and the Treasury Department have stated their purpose to continue the monopoly they have heretofore granted the glass-bottle industry under the N. R. A. codes and their regulations.

To do this would deny the cooperage industry the right to compete for a large volume of business which it enjoyed prior to prohibition and that naturally belongs to it.

Both the Treasury and F. A. C. A. frankly admit the fact of this complete monopoly, notwithstanding the statement in the codes that they are [reading]:

Not designed to promote monopoly or to eliminate or oppress small enterprises and will not discriminate against them, and will not permit monopolies or monopolistic practices.

However, they attempt to justify the continuance of the monopoly on the grounds of " law enforcement" and "revenue collection."

Such a monopoly cannot be justified on either ground, but to the contrary, bulk distribution and sale of legal spirits will so improve

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