Full text of "Investigation of concentration of economic power; monograph no. 1[-43]"

^^3d Sessfon^^l SENATE COMMITTEE PRINT

INVESTIGATION OF CONCENTRATION
OF ECONOMIC POWER

TEMPOEAKY NATIONAL ECONOMIC
COMMITTEE

A STUDY MADE UNDER THE AUSPICES OF THE DE-
PARTMENT OF AGRICULTURE FOR THE TEMPORARY
NATIONAL ECONOMIC COMMITTEE, SEVENTY- SIXTH
CONGRESS, THIRD SESSION, PURSUANT TO PUBLIC
RESOLUTION NO. 113 (SEVENTY -FIFTH CONGRESS),
AUTHORIZING AND DIRECTING A SELECT COMMITTEE
TO MAKE A FULL AND COMPLETE STUDY AND INVES-
TIGATION WITH RESPECT TO THE CONCENTRATION OF
ECONOMIC POWER IN, AND FINANCIAL CONTROL OVER,
PRODUCTION AND DISTRIBUTION OF
GOODS AND SERVICES

MONOGRAPH No. 24
CONSUMER STANDARDS

Printed for the use of the
Temporary National Economic Committee

UNITED STATES

GOVERNMENT PRINTING OFFICE

WASHINGTON : 1941

TEMPORARY NATIONAL ECONOMIC COMMITTEE

(Created pursuant to Public Res. 113, 75th Cong.)

JOSEPH C. O'MAHONEY, Senator from Wyoming, Chairman

HATTON W. SUMNERS, Representative from Texas, Vice Chairman

WILLIAM H. KING, Senator from Utah

WALLACE 'H. WHITE, Jr., Senator from Maine

CLYDE WILLIAMS. Representative from Missouri

B. CARROLL REECE, Representative from Tennessee

THURMAN W. ARNOLD, Assistant Attorney General

♦WENDELL BERGE, Special Assistant to the Attorney General

R&Tpresenting the Department of Justice

JEROME N. FRANK, Chairman

♦SUMNER T. PIKE, Commissioner

Representing the Securities and Exchange Commission

GARLAND S. FERGUSON, Commissioner

♦EWIN L. DAVIS, Chairman

Representing the Federal Trade Commission

ISADOR LUBIN, Commissioner of Labor Statistics

♦A. FORD HINRICHS, Chief Economist, Bureau of Labor Statistics

Representing the Department of Labor

JOSEPH J. O'CONNELL, Je., Special Assistant to the General Counsel

CHARLES L. KADES, Special Assistant to the General Counsel

Representing the Department of the Treasury

Representing the Department of Commerce

* • *

LEON HENDERSON, Economic Coordinator
DEWEY ANDERSON, Executive Secretary
♦Alternates

MoNOGR.\PH No. 24
CONSUMER STANDARDS
SAMUEL P. KAIDANOVSKY

AND

ALICE L. EDWARDS

ACKNOWLEDGMENT

This monograph was written by

SAMUEL P. KAIDANOVSKY

Technical Director, Conswmer Standards Project,

Consumers'' Counsel Division,

Department of Agriculture

assisted by

ALICE L. EDWARDS

Consumers'' Counsel Division, Department of Agricultu/re
under the general supervision of

DONALD E. MONTGOMERY

Director, Consumers' Counsel Division, Depwrtment of Agticidture

The Temporary National Economic Committee is greatly indebted
to these authors for this contribution to the literature of the subject
under review.

The status of the materials in this volume is precisely the sairie as
that of other carefully prepared testimony when given hy individual
witnesses; it is information submitted for Committee deliberation.
No matter what the official capax>ity of the xoitness or authoi' may he,
the publication of his testimony, report, or monograph by the Gom-
mittee in no way signifies nor implies assent to, or appro vol of, any of
the facts, opinions, or recommendations, nor acceptance thereof in
whole or in part by the members of the Temporary National EconomAc
Committee, individually or collectively. Sole and undivided respon-
sibility for every statement in such testimony, reports, or monographs
rests entirely upon the respective authors.

(Signed) Joseph C. O'Mahoney,
Chairman^ Temporary National Economic Committee.

TABLE OF CONTENTS

Page

Letter of transmittal ix

Introduction Xi

CHAPTER I

Definition of basic terms 1

CHAPTER II

Standardization, inspection, and labeling activities of the Federal agencies. 5

United States Department of Agriculture:

Agricultural Adj ustment Administration 7

Consumers' Counsel Division : 7

Consumer Standards Project 11

Agricultural Marketing Service 12

Bureau of Agricultural Chemistry and Engineering 25

Bureau of Agricultural Economics 32

Bureau of Animal Industry 33

Bureau of Dairy Industry 35

Bureau of Entomology and Plant Quarantine 38

Bureau of Home Economics 39

Bureau of Plant Industry 43

Commodity Exchange Administration. . 44

Extension Service 44

Farm Security Administration 45

Federal Crop Insurance Corporation 48

Forest Service 49

Forest Products Laboratory, Madison, Wis 51

Office of Experiment Stations 63

Rural Electrification Administration -.. 65

Soil Conservation Service 70

Surplus Marketing Administration 70

Technical Advisory Board 71

Central Housing Committee 73

United States Department of Commerce:

National Bureau of Standards 77

Federal Alcohol Administration 94

Federal Loan Agency:

Federal Housing Administration 97

Home Owners' Loan Corporation:

Appraisal and Reconditioning Division 101

Federal Security Agency:

Food and Drug Administration 103

Home Economics Education Service of the United States Office

of Education 110

United States Public Health Service 111

Federal Trade Commission 116

Federal Works Agency:

United States Housing Authority 128

United States Government Printing OflRce:

Division of Tests and Technical Control 132

United States Department of the Interior:

Bituminous Coal Division, and the Comsumers' Counsel Division,

Office of the Solicitor 139

Bureau of Mines 145

Fish and Wildlife Service 150

Geological Survey 156

Indian Arts and Crafts Board 158

Office of Indian Affairs (Indian Service) 160

United States Department of Labor:
Bureau of Labor Statistics:

Retail Price Division 162

Wholesale Price Division 164

Children's Bureau 165

VI TABLE OF CONTENTS

Standardization, inspection, and labeling activities — Continued. Pag«

United States Navy Department 167

United States Tariff Commission 173

United States Treasury Department:

Procurement Division 176

Veterans' Administration 181

United States War Department 183

CHAPTER III

Standardization and labeling activities of private agencies 189

Standardization activities of individual companies 190

Standardization activities of trade associations 196

Standardization activities of technical and professional societies 210

Certification of products by trade associations and technical and

professional societies 225

CHAPTER IV

Standardization and smiplification of products as affected by State

legislation 235

Standardization and simplification of fertilizers 237

Sanitation and labeling requirements for new bedding and upholstery. . 243

CHAPTER V

Methods and procedures in government purchasing 255

Procurement methods and procedures of the Procurement Division,

United States Treasury Department . 257

Procurement methods and procedures of the United States Navy

Department , 266

Procurement methods and procedures of the United States War

Department 271

State purchasing methods and procedures 274

County purchasing methods and procedures . 283

Municipal purchasing methods and procedures 289

CHAPTER VI

Independent purchasing agencies and testing laboratories, commodity test-
ing and rating agencies 301

Independent purchasing agencies 302

Testing laboratories 306

Commodity testing and rating agencies 312

CHAPTER VII

Consumer buying and the extent and character of commodity information
available 315

CHAPTER VIII

Value of standards, grades, and informative labels to consumers and their

effect on merchandising 335

CHAPTER IX

Recommendations and policies of various organizations relating to con-
sumer standards, grading, and labeling 355

CHAPTER X

Conclusion 363

APPENDIX

Nomenclature of standards 366

Grade terminology of food products _ _ 375

Index 377

SCHEDULE OF TABLES AND CHARTS

TABLES

Page

1 . Coal classification — Bituminous Coal Division 143

2. Extent of centralized purchasing in States 274

3. Status of State purchasing agencies 275

4. Departments of which State purchasing agencies are a part 275

5. Bureaus, departments, commissions, and institutions for which pur-

chases are made by the State purchasing agency 276

6. Extent to which States use written specifications . 276

7. How specifications are formulated by State purchasing agencies 277

8. Extent to wliich States use specifications of the Federal Government

and of national trade or technical associations 277

9. Use of tests to determine compliance with specifications by State pur-

chasing agencies 280

10. Testing laboratories of State purchasing agencies 280

11. Types of tests made and commodities tested in the laboratories of 13

States where purchasing agencies maintain testing laboratories 281

12. Types of testing laboratories used by the States 281

13. Growth of centralized purchasing in 118 cities of over 30,000 popula-

tion.- 289

14. Extent of centralized purchasing in cities over 30,000 as of

December 1, 1939 - - 290

15. Coverage and returns of questionnaire relating to use of standards by

municipalities . 291

16. Extent to which municipalities use written specifications in purchasing

supplies and equipment 292

17. How specifications are formulated by municipalities 293

18. Extent to which municipalities use specifications of Federal Govern-

ment and of national trade or technical associations 294

19. Use of tests by municipalities to determine compliance with specifica-

tions - 295

20. Ownership of testing laboratories used by municipalities... 296

21. Distribution of families and single individuals by income levels,

1935-36 336

22. Average expenditures for main categories of consumption for the year

1935-36 '. --- 336

23. Contract deliveries of meats graded by Federal graders 344

24. Dairy products graded by Federal and Federal-State graders 345

CHARTS

I. The Federal Government and standardization facing 6

II. Steps in setting up quality standards for farm products — Agri-
cultural Marketing Service facing 14

III. Organization of the Research and Testing Group — National Bureau

of Standards facing 78

IV. Organization of the Commercial Standardization Group — National

Bureau of Standards facing 86

V. Typical development of a Simplified Practice Recommendation —

National Bureau of Standards ' facing 88

VI. Typical development of a Commercial Standard — National

Bureau'of Standards facing 90

VII. Building construction standards activities — Federal Housing

Administration . facing 98

VIII. Procedure for developing identity standards for food under the Food,

Drug, and Cosmetic Act — Food and Drug Administration facing 106

IX.. Procedure for establishing standards in connection with low-rent

housing under the United States Housing Authority program, facing 128

VIII SCHEDULE OF TABLES AND CHARTS

Page
X. Development of a Navy Department Specification originating in

the Bureau of Ships — Navy Department facing 170

XI. Procedure chart of the preparation of Federal Specifications — ■

Procurement Division, Treasury Department •. facing 180

XII. Steps in development and standardization — War Department., facing 184

XIII. Standardization procedure — American Gas Association facing 204

XIV. Organization Chart, American Standards Association facing 212

XV. How American Standards are developed, American Standards

Association facing 2 12

XVI. Outline of standardization procedure of the American Society for

Testing Materials facing 214

XVII. Procedure chart for the adoption of a method of analysis by the

Association of Official Agricultural Chemists facing 216

XVIII. Summary of State fertilizer control laws, regulations, and

rulings facing 238

XIX. Sanitation and labeling requirements for new bedding and uphol-
stery 244

XX. The development of centralized purchasing in the Federal Govern-
ment facing 256

APPENDIX CHARTS

Grade designations as promulgated by Federal agencies — Food Prod-
ucts - - facing 376

LETTER OF TRANSMITTAL

Hon. Joseph C. O'Mahoney,

Chairman, Temporary National Economic Committee,
United States Senate, Washington, D. C.

Dear Senator O'Mahoney : I have the honor to submit herewith a
report on consumer standards which brings together for the first time
the facts concerning Federal activities in the fields of standardization,
inspection, testing, and research which refer to, or provide a basis for,
consumer standards. To this are added chapters on similar activities
by private agencies and on procurement methods and procedures of
both Government and private agencies. It is an analytical inventory
of our present resources for the development and utilization of con-
sumer standards, supplemented by a discussion of how these resources
have been utilized and by the statements and opinions of professional,
trade, and consumer groups on that subject.

The monograph is the work of Samuel P. Kaidanovsky, a member
of our staff and Technical Director of the Consumer Standards Project
sponsored by this Division. It is based upon original research carried
out under his direction. Miss Alice L. Edwards, also of our staff and
formerly executive secretary of the American Home Economics Associ-
ation, assisted in the preparation of the report and is the author of the
chapters on consumer buying and on value of standards to consumers.

Respectfully submitted.

D. E. Montgomery,

Consy/mera' Counsel,
Department of Agriculture.

October 23, 1940.

INTRODUCTION

Interest in consumer standards both on the part of the Government
and of consumers is of long standing. Perhaps the first effective dem-
onstration of this interest on a large scale was the passage of the Fed-
eral Food and Drugs Act of 1906, followed by similar State laws in the
ensuing years. Numerous other Federal and State laws since, and a
few before, have dealt directly or indirectly with standards for con-
sumer goods and many State and Federal Government departments
have exercised functions related to standardization.

In June 1933, the office of Consumers' Counsel was created within
the Agricultural Adjustment Administration as an integral part of
this Administration. The activities of the Consumers' Counsel con-
sisted mainly of examination of marketing agreements and codes, re-
search in connection with consumer problems arising under the
Agricultural Adjustment Act, and inve.stigation and publicity with
respect to food and cotton textile prices to consumers. In analyzing
proposed marketing agreements and codes, several principles were
used by the Consumers' Counsel as a guide. Among them were in-
cluded effective provisions for grading and standardizing products
to insure honesty of labeling.

However, Governmental agencies dealing specifically with the gen-
eral problem of consumer standards did not emerge until the establish-
ment of the Consumers' Advisory Board of the National Recovery
Administration. This Board maintained a continuous interest in con-
sumer standards throughout its existence. The very first policy state-
ments of this Board related to the subject of consumer standards, and
Board committees early concerned themselves with the quality, grad-
ing, and labeling requirements of N. R. A. codes.

As a result, approximately 245 of the 556 approved N. R. A. codes
and some 200 supplements contained provisions for, or at least refer-
ences to, the establishment of standards, grades, and labels. The draft-
ing, application, and enforcement of consumer standards were brought
into discussion before the N. R. A. code hearings where manufacturers,
distributors, and consumers were given an opportunity to freely ex-
press their opinions on the subject of consumer standards. Under
this procedure the necessity for consumer standards was dramatized
more than at any other time.

A Standards Unit was first established by the Consumers' Advisory
Board in January 1934. In October 1934 by administrative orders the
standards work handled by several advisory groups was centralized
in the Research and Planning Division of the N. R. A. Effective
cooperation was achieved between the Standards Unit of the Consum-
ers' Advisory Board and the Research and Planning Division of the
N. R. A.

On July 30, 1935, by Presidential Executive order, a new Consumers'
Division was established in the National Recovery Administration.

XII INTRODUCTION

In it were consolidated the activities of three previously existing
agencies : The Consumers' Advisory Board, the Consumers' Division of
the National Emergency Council, and the Cabinet Committee on
Price Policy.

With the termination of the National Recovery Administration on
December 21, 1935, the Consumers' Division was transferred to the
Department of Labor, and later designated as the Consumers' Project.

A Standards Section, established in the Consumers' Project, con-
tinued some of the research work on consumer standards and related
problems, previously carried on by the Consumers' Advisory Board.
The Consumers' Project came to an end on June 30, 1938. On July 1
there was created the Consumer Standards Project, a Federal WPA
Project, which continued and enlarged the research done by the Con-
sumers' Project in the field of standards for consumer goods.

With the exception of the last agency mentioned, which still func-
tions under the sponsorship of the Consimiers' Counsel Division,
United States Department of Agriculture, the consumer agencies
previously referred to are not treated in this monograph, which con-
siders only existing agencies. However, they have been specifically
discussed at this point because their activities contributed substantially
to the work being done by existing agencies.

This monograph deals with standardization, inspection, and testing
activities of the Federal Government and with the research work being
conducted by various Federal agencies which refer to, or provide a
basis for, consumer standards. The standards work of some of the
most active private companies, technical and professional societies,
and trade associations are discussed.

Standardization and simplification of products is also affected by
State legislation ; the range of State laws is given by two examples, one
illustrating a field where ahnost complete uniformity has been effected,
and the other where heterogeneity of requirements exist. These
examples are fertilizer and new bedding and upholstery.

Procurement methods and procedures of the Federal agencies,
States, counties, and municipalities are discussed, and results of sur-
veys made on this subject, some especially conducted for the purpose
of this monograph, are extensively considered.

Standardization procedure, dennitions, and terminology used by
different agencies are discussed. The procedures in setting up stand-
ards employed by various governmental and nongovernmental
agencies are illustrated by charts. Further, the activities of some in-
dependent purchasing agencies, commercial tes(,yig laboratories, and
commodity testing and rating agencies are described. "-

The extent and character of commodity information available to
consumers, and the value of standards, grades, and informative labels
to consumers and their effect on merchandising are also covered.

Finally, a few recommendations and policies made by various
groups, such as consumers, retailers, trade associations, and profes-
sional societies, relating to consumer standards, grades, and labels, are
also presented to indicate the viewpoint of various nongovernmental
groups on the subject of consumer standards.

CHAPTER I
DEFINITION OF BASIC TERMS

The basic concept underlying the use of term "standard" is quite
definitely established. The definition of a standard as given in Funk
and Wagnalls "New Standard Dictionary"' is: (1) "Any measure of
extent, quality, or value established by law or by general usage and
consent; a weight, vessel, instrument, or device sanctioned or used as
a definite unit, as of value, dimension, time, or quality, by reference
to which other measuring-instruments may be constructed and tested
or regulated. (2) Hence, any type, model, example, or authority with
which comparison may be made; any fact, thing, or circumstance
forming a basis for adjustment and regulation; a criterion of excel-
lence ; test ; as a standard of portion by weight of fine metal and alloy
established by authority."

Dr. Lyman J. Briggs, Director of the National Bureau of Standards,
points out the analogy of the intentional standardization as practiced
by man (conscious deliberate selection) and standardization as a
survival process (natural selection).

We need only glance at the rich background of standards in nature to gain
perspective and obtain a better appreciation of present trends in standardization
and their significance. In the same species of plants, fishes, birds, or animals,
individuals resemble each other in the minutest detail of structure and function.
So thorough has nature been that each species may be recognized by the stand-
ardized organs, functions, cliaracteristics, or habits peculiar to each. At the
same time, individuals exhibit definite distinguishing characteristics and develop
in diverse directions to stimulate the natural processes of selection, survival,
and evolution.

The more the mysteries of nature are dispelled by knowledge, the more is
standardization revealed, as in the geometrical arrangement of crystal formation,
predicted discoveries of new chemicfil elements, or the coming of a comet. We
depend upon the meticulous regularity of the sun's appearance, the recurring
phases of the moon, and the perfectly timed rotation of the planets. We accept
as indisputable facts the definitely established boiling and freezing points, the
peculiar behavior of certain materials and the changeless normal properties of
elasticity, strength, hardness, ductility, viscosity, refractivity, electric conduc-
tivity, permeability, and other properties of the elemental things of nature which
man is cohstantly appropriating for his use.

The variations of color available to the painter are composed of parts of a
narrow band of spectral wave lengths and all of the artistry in music is conveyed
through another small group of frequencies. And yet we hear no complaints that
nature has carried standardization to extremes, that life is dull, drab, or dreary
as a result of standardized chemical elements, standardized crystalline growth,
or wave lengths, as in sound, radio, light, and X-rays.

In every direction we find standardization, whether we look to the orbits of the
electrons about the atom, the constellations of the stars, the microcosm or the
macrocosm, industry or sport, commerce or the arts.

The architect may be limited to one size of common brick but he has a choice
of color, texture, and arrangement suflBcient to produce an unlimited variety of
structures and effect.s, while the accomplished limitation of dimensions gives hira
a basis upon which to start and relieves his mind altogether of the problem of
the size of brick to be employed.^

» "Commercial Standards and Their Value to Biralness." p. Ill, CSO-40, U. S. Oovemment
Printing Office, Washington, D. C, 1940.

2 OONCENTRATIO^ OF ECONOMIC POWER

Webster's New International Dictionary defines a "Specification"
as "A written statement containing a minute description or enumera-
tion of particulars. A written or printed description of work to be
done, forming part of the contract and describing qualities of mate.-
rial and mode of construction, and also giving dimension and other
information not shown in the drawings." A specification is a short-
hand vehicle to converse quickly and accurately about materials and
products.

Many standardizing organizations, such as the American Standards
Association, the American Society for Testing Materials, and others,
have gone into the matter of standardizing specifications, and, hence,
there are now a large number of standard specifications.

Some of the specifications are becoming so definite as to be univer-
sally accepted. For example, cement is almost always bought under
the standard specifications of the American Society for Testing
Materials.

Specifications are sometimes standardized by the Federal Govern-
ment for use in its purchases. Federal Specifications, set up by the
Procurement Division of the United States Treasury Department, are
standard specifications. Specifications of the Society of Automotive
Engineers, chiefly used by the automotive industry, may also be con-
sidered standard specification?.

The follow^ing definitions of standardization, simplification, grades
and grading, and standards for consumer goods have been selected as
representative definitions of basic terms in the field of standards.

Mr. Norman F. Harriman defines standardization and simplifica-
tion as follows:

"Standardization" may be defined as the unification of the methods, practices,
and technique involved in the manufacture, construction, and use of materials,
machines, and products, and in all lines of endeavor which present the necessity
for performing repetition work. From the viewpoint of the buyer and vendor,
it is the establishment of a criterion for the dimensions, quality, or performance
of those materials, machines, and products. In its former aspects, it tends to
assist scientific and engineering development and to prevent waste in manufac-
turing. In its latter aspect its purpose is principally to assist in promoting a
common understanding between producer and user.

Standardization primarily means the setting up of standards by which extent,
quantity, quality, value, performance, or service, may be judged or determined.
It is the crystallization of the best thought and practice of industry, business,
or art into definite forms for general usage.^

Standardization is generally applied to some individual article or some par-
ticular process, while simplification is commonly considered in connection with
lines of products or methods of business procedure. "Simplification," or the
elimination of excess types, grades, sizes, finishes, etc., of products, or superfluous
or unnecessary methods, certainly results in standard products or practices. In
other words, simplification is standardization by elimination rather than by selec-
tion. In either case, the result is the establishment of a standard.

The term "simplification," frequently is more appealing than standardization
of variety, as it sounds less formal.*

Dr. Jessie V. Coles thus defines grades and grading : .

Grading is the comparison of goods with standards and the resulting sepa-
ration into groups possessing uniform qualities. The group is called the
"grades," and the process of comparing with the standard and dividing is
called "grading." The term "standardized grades" is used to designate grades
which are exact and which are based on commonly known and recognized

2 "Standards and Standardization," by Norman F. Harriman, McGraw-IIill Book Co.,
Inc.. New York City, p. 78, 1928.
' Ibid., p. 117.

OONCENTRATION OF ECONOMIC POWER 3

standards. Although the use of some kind of standard is necessary to divide
goods into grades, those grades which are not based on recognized standards
are not usually termed "standardized grades." Sometimes a maximum stand-
ard is established with which goods are compared and rated. Strictly speak-
ing, the resulting groups should be called ratings although they are usually
designated as grades.

Standards set up for the purpose of grading and rating goods may be based
upon a single quality or upon several qualities. They may. also be based on
performances of goods. Combinations of qualities and performances, as those
for size and durability, are also possible.*

At the hearings on the Boren bill, H. R. 6652, before the House
Committee on Interstate and Foreign Commerce, January 22, 1940,
Mrs. Harriet R. Howe presented on behalf of the American Home
Economics Association the following statement relating to standards
for consumer goods :

By "standards for consumer goods" we mean a description of those of its
qualities and characteristics important in consumer use, stated in terms of
quantitative measurements, and understood alike by producers, distributors, and
ultimate consumers. Consumers believe such standards are necessary because
intelligent buying depends upon the ability to identify the relation between
price and value of goods and services so that the individual is able to select
those best adapted to his needs at a price he can afford to pay.

Weights and measures are examples of existing standards that have the
same meaning for both sellers and buyers and that have long been accepted
as a practical necessity in commerce. Everyone recognizes that price has no
meaning without knowledge of how much is offered at a given price. Con-
sumers believe that price is equally meaningless without knowledge of what
is being offered at a given price. Buyers are helpless in trying to compare
the real value to them of two pairs of silk hosiery, two suits of clothes, or
two mechanical refrigerators at different prices when there is no way for
them to make accurate comparisons between their quality and performance
in use.

A more detailed study of the nomenclature used in the field of
standards appears in the appendix.

* "The Consumer-Buyer and the Market,'" by Jessie V. Coles, p. 447, John Wiley & Sons.
New York City, 1938.

Chart I. — The Federal Government and Siandardiz

Agency

rh^ctL^yti'SJS^t.forhfrs^^

I£s3e?'^"^^°^'""'

loans, Insuring private loans.
provom'Si'ts"^ """"''
3

'i^s^HsSl

Agencies whose duties are to

AEencies using standards estab-
lished by other agencies In
carrying out their activities

^rsjs^^?i?l!S5

Agencies mspceting or testing
supplies or equipment to as-
sure the r conformity to ap-
plicable standards ised £
purchases, oans, insurance, or

Agencies developing or estab-
lishing test methods which
may be used by others

Agencies furthering the use of
standards estabUshed by them

*^SiSHAdjSment Administration

Sinistration. '

■■

Consumers' Counsel Division.
SS=af£=;el!„^g'iS=^-ce.

M.iS=°i:S?fnfse^X'.:;::::;;::;:

Boiciii of Agricullural Chemistry and En-

"A^TcuUurVrMwkeViigS'erViM;;

■i-grieuTtuVVlMarkVtingSer"vlee-.:

^gm^cering.^ ^ ^.

-ApiedVuraYM^kVliigServlee-.;

' AgrTculturafMarket Service". ". ^ ! !

Agircultii^TMMketingSerVice''

"fiJKi^IiJsiKi"

■XBiniallndis-trs

BuSu of Entomology and" Plant 'Qiiafsn-'

En^imiiiiy-andPianrQuafai-.-

Entomoiogyand PianrQuaron-

Entomology and PimrQuaran"

Entomology ami Pianrciuaran-"

EntomoioS''and Ptot Quwan-'

Entorao°og'?MdPi;n'tQusrin'.'

fesSfT-:::;;::::::;

HoSe Economics.

Mt^^VehX^^/dminisStion--::;:

Plant Industry

Extension Service

■''^s',„r"''"'"'°"°™""^"-"

- —

—

"RirirElcclVificiVionAdminrs-"

i§|ils-A^mhi^-

Forest Service-

Ru^rElViff^YlinAdminis:-

iSSS5™ Admlnis-

:...,, ...ouAdm^.:-

-H^^i^ct^„™,„„-...mln^V

S Electfiacallon Admlnistra-iibn.";:;::::
Soil Conserration Servioc.......

CentralHousingCommlttee'-.";;

?etrSf'AS7ZS?I?&-
Federal Housing Administra-
Home Owners' Loan Corpora-
Food and Drug Administration.

-,.r,.lu,.u„L,nMgAdmm,stra-

"Cent«rHo-,ising-Oommiti^;:::
National Bureau of Standards...

Central Housing Committee.
National Bureau of Standards.

3S!Ssa°tffi^

S;r^iS"Sl!rtS-::

National Bureau Of Standards-

National Bureau of Standards--

National Bureau of Standards-

Federal Housing Administra-
Home' Owners' Loan Corpora-

Federal Housing Administra-
Home' Owners' Loan Corpora-
Food and Drug Administration-

Food and Drug Administration.

Federal Housing Admlnistro-
Home' Owners' Loan Corpora-
Food and Drug Admlnlstration-

Federal Housing Administra-
Home Owners' Loan Corpora-

Food and Drug Administration.
Public Health Service

F^eral Housing Admlnistm

Food and Drug Administration.
Offleo of Education, Home Eoo-

Sofer?=l^in"t'i^f&«=.

''^Fir/'S^TSinistration....

Food and Drug Administration-

Food and Drug Administration -
Public Health Service

Home Economics Education Service

Public Health Service

Federal Trade Commission

Government Printing Office

U. S. Housing Authority

Public Health Service

aovBmment'println°g"om"eeV.".'.;

Fedirai Trade CommisVion';;:::

Ho^rSSir^^SSEne^;::-

ijureau of Mines -

Federsl Trade Commissior.-;;;:

'TS^^SoHty

aivM?SlriStto°e'offlVe.V.::

U. S. Housing Authority...

"QoVeViiVntPriiitagOfflVe-".-.:;

Bituminous Coal Division and Consumers'

?=l\?liSser;ii^::::::::::::::::::.

GeoloEM Survey.

Bureau of Mines

^'crSsPcouSs'SiJisSi''

Office Indian ASa^':

GeolOEical Survey

■oSeeindiinASaifs--:::::::;:::

OcoiogiVaTsuVvey-!.';;-'."-'-'.'.'-'--"
NavyDepartment-l-'.-IIi;"

Fish and WUdiife Service.

----- -. -

Bureau of Labor Statistics:

Eetail and Wholesale Price Divisions

Retail and Wholesale Price
Divisions.

Children's Bureau

Navy Department; .v:::. :/:::.

Veterans' Admluistratlon.".;.".',';;"'.".'."."/.".'."."." .

Veterans' A'dmini'stration.';;""
War Department

SgSiSi-.:;:::;:::::;:

Proeui^mentDlvM^^^^^

Procurement Division

" "'

War Department

e 30, mo, under tbe t

r Reorganization Plan No. ni. Its lunetiooa v

1 Tax Unit of tbe Bureau of Internal Revenue, U. S. Treasury Department, Washington, D. C,

272496—41 (Face p. 6)

CHAPTER II

STANDARDIZATION, INSPECTION, AND LABELING
ACTIVITIES OF THE FEDERAL AGENCIES

The Federal Government, the largest single purchaser in the coun-
try, deals with standards and specifications for materials and equip-
ment in performing its activities. The research and service bureaus
of the Government also are interested in many problems of stand-
ardization. The work of 46 Federal agencies concerned with stand-
ards, specifications, tests, and basic research leading to or aflfecting
standards was studied for the purpose of this monograph. A detailed
description of the standardization, inspection, and labeling activities
of the Federal agencies presented in this study is supplemented by
charts indicating the procedure used in establishing standards.

In analyzing the results of the study, the activities of the Federal
Government in the field of standardization were subdivided into the
following 10 groups:

1. Agencies estaolishing standards which may be used by others.

2. Agencies establishing standards for their own use in carrying
out their activities.

3. Agencies establishing standards for their own specific use in
approving loans, insuring private loans, or advancing money for
improvements.

4. Agencies whose research or operations aid or provide a basis
for establishment of standards.

5. Agencies whose duties are to assure that commodities sold or
shipped in interstate commerce meet certain established standards.

6. Agencies using standards established by other agencies in car-
rying out their activities.

7. Agencies maintaining a grading or inspection service in per-
forming their activities.

8. Agencies inspecting or testing supplies or equipment to assure
their conformity to applicable standards used in purchases, loans,
insurance, or other activities.

9. Agencies developing or establishing test methods which may
be used by others.

10. Agencies furthering the use of standards established by them
or by other agencies.

The activities of many of the Federal agencies analyzed fall into
several different' groups. In order to illustrate graphically the dis-
tribution of these activities in the field of standardization chart I
was prepared.

272496— 41— No. 24-

UNITED STATES DEPARTMENT OF AGRICULTURE

AGRICULTURAL ADJUSTMENT ADMINISTRATION

The Agricultural Adjustment Administration, United States De-
partment of Agriculture, does not formulate or promulgate stand-
ards. However, it does specifically use many of the standards
which have been promulgated by other bureaus in the Department and
in many instances uses modifications of these' standards. Parity pay-
ments to producers of cotton, wheat, corn, rice, and tobacco are made
on the basis of an equivalent value according to adopted and
established grades.

consumers' counsel division

The office of Consumers' Counsel was set up by the Secretary of
Agriculture as a division of the Agricultural Adjustment Adminis-
tration in June 1933. Although the functions of Consumers' Counsel
at the beginning were described in general terms, its activities soon
crystallized in operation along the lines of (1) analyzing the probable
effect on consumers of proposed and operating farm programs, and
presenting its recommendations with respect thereto to the planning
and action divisions of the Agricultural Adjustment Administration
and (2) disseminating information to consumers on the operation of
the farm program, and on ways of increasing purchasing power
through informed and economical buying.

Early in the evolution of Consumers' Counsel administration the
importance of the value of grading and standardizing to consumers
and producers was recognized. Among the principles developed for
the examination of, and reports on, codes and agreements was the
statement^-

That they should include effective provisions for grading and standardizing prod-
ucts to insure the honesty of weights and measures and of the product itself.*

Necessity promoted this evolution, and its relationship to standards.
This is illustrated by the early history of Consumers' Counsel. When
the processing taxes were imposed upon wheat and cotton, among other
agricultural items, during the early period of the Agricultural Ad-
justment Administration, wholesale and retail price rises ensued, with
some distributors advertising that the increases were the result of the
tax. In many instances it was found that the retail price rise was
considerably more than the amount of the tax, while the buying public
was led to believe that the tax was the entire cause. Recognizing the
need for disseminating correct information, the Consumers' Counsel
Division was set up to accomplish the task. Studies were made show-
ing the effect of the per-bushel tax on wheat on the finished loaf of
bread, and the effect of the per-pound tax on cotton on certain finished

1 "Agricultural Adjustment : A Report of Administration of the Agricultural Adjustment
Act, May 1933 to February 1934," p. 209, Agricultural Adjustment Administration, United
States Department of Agriculture. 1934.

g CONCENTRATION OF ECONOMIC PO^VITR

cotton goods. This information was disseminated to the public and
distributors were called into conference and presented with it. The
sudden price rises of these taxed commodities were halted more or less
effectively and tended to remain at general levels near those immedi-
ately succeeding the adjustment to the taxes imposed.

However, Consumers' Counsel investigations and complaints from
buyers indicated that, although price levels for given commodities
remained stable, the composition and quality of the finished items
often varied. For instance, the weight of the loaf could be, and some-
times was. reduced, or the amount of flour was decreased while mois-
ture was increased; 2 or the weight of cotton shirts or overalls, or
other textiles, was reduced for the same price line items.

In the spring of 1940 the manufacturers of ribbons for hat bands
reduced the width of the band while maintaining the price. Also,
stocking manufacturers, in the face of threatened rises in silk prices,
increased the amount of rayon used, sometimes in the top and at
others in the body of the stocking. Many similar examples could
be furnished from the 1939-40 experience.

The need for more uniform and continuing standards was pointed
to as an assurance that consumers in their daily purchases might have
a proper basis for arriving at accurate value judgments.^

Recognizing the importance not. only of price variation but also
quality variation, the Consumers' Counsel Division emphasized in
its policies and its publications the need for extension of standards
to promote more wise and economical buying. This policy has become
an important phase of the Division's work.

The activities of Consumers' Counsel Division in the planning,
formulation, and administration of farm programs has involved
consideration and use of various grades and standards, particularly
in marketing agreements. While the basic crop programs may have
attempted supply control, this was approached quantitavely, in that
certain acreage reductions were made, thus reducing the supply by
cutting off a segment of the producing facilities. It did not involve
any deviation from grade or standardization other than that following
the normal processes, although there may have been some slight ten-
dency for the quality grown on better acreage to be higher.

In the marketing agreement programs for milk, fruit„ vegetable
and nut products, in addition to the quantitative control, qualitative
control has been employed. Control has been effected by limiting or
prohibiting shipments of certain grades or sizes during all or part of
the marketing season. In practice this meant, for example, that only
milk which measured up to the specified standard, established in a
local milk ordinance, could be marketed. In the case of fruits, vege-
tables, nuts, and other general crops, the shipment of certain grades
such as "culls," or low-value grades, had been limited, or conversely
only the grades which historically returned a price differential above
a certain estimated minimum were allowed to be shipped. In most
instances these grades or standards had been tested by industry
practice and market acceptance and then were approved and promul-
gated by an authorized bureau of the Department, or by the States
in which the program operated. Sometimes, but not often, modifi-

* "Bread Facts For Consumers," Consumers' Guide, vol. IV (3), p. 11, April 5, 1937.
» "Checking Your Wcigiits and Measures," Consumers' Guide, vol. Ill (21), pp. 3-6, 8,
November 16, 1936.

OON'OE'xXTR'ATION OF ECONOMIC POWER Q

nations of the proiiiulgated grades and standards were provided in
the terms of the regulation.

The importance of proper grading and standardizing to insure
better understanding of vahies in the market phice has been em-
phasized by the Division personnel in their cooperation with other
divisions of the Agricultural Adjustment Administration, and with
other bureaus, in considering the applications and effect of programs.
This has been accomplished through informal conference, memoranda,
and formal hearings. As grades and standards for food products
need to be revised from time to time to meet improvements in pro-
duction, shifts in consumer preference, and changes in the art or
science of grading and standardization. Consumers' Counsel Division
personnel have assisted in presenting the consumers' viewpoint on
important factors to be considered in such revisions for the following
commodities : Eggs, beef, butter, lard, poultry, cheese, and citrus
fruits. Here, as in marketing agreements and other programs in-
volving standards, it is the function of Consumers' Counsel Division
economists and marketing specialists to focus attention on the con-
sumer aspects of pending issues and to argue the consumer point of
view with respect to them. Producers and distributors are always
represented during the program. Consumers usually are not organ-
ized and consequently are not in position to present their case
adequately.

Presentation of facts and substantial evidence to governmental agen-
cies promulgating a)id developing standards is a direct responsibility
of consumers if the standards are to be comprehensive and adequate.
However, the task confronting the average group of consumers of
acquainting themselves with all the technicalities and detail involved
in each standard is formidable and difficult to obtain, unless they have
a clearing house of information to assist them. To help fulfill this
function Consumers' Counsel has conferred with consumer groups
acquainting them with the need for specific standards and with
pertinent facts and information. Consumers' Counsel has appeared
to present the consumers' case in the considerations leading to the ice
cream and ice cream freezer regulations for the District of Columbia.
At hearings on standards for butter the personnel of the Division
worked with consumer groups to assist them in the presentation of
pertinent and substantial evidence relating to the desires of consumers
and the effects of proposed standards on consumers. Much time and
attention has been devoted to assisting consumers in presenting their
cases before the Secretary of Agriculture at hearings on food stand-
ards, pursuant to the Food, Drug, and Cosmetic Act. This involves
acquainting consumers with current practices, and in some cases mal-
practices, and with the technicalities of composition, quality, manu-
facturing techniques, and distribution, so that they may' be able
better to arrive at judgments as to what is in their best interests in
the establishing of standards. It also means that the personnel of the
Division must acquaint themselves with the economic and social effects
of present and proposed practice and present evidence thereon for
consideration in the standardizing process.

The same applies to standards procedure under the Agricultural
Marketing Service, the Bureau of Animal Industry, the Federal Trade
Commission, and others.

OONCDENTRATION OF EICONOMIC POWETl

In addition, Consumers' Counsel Division also disseminates infor-
mation through the media * at its disposal. The Consumers' Guide,
in addition to descriptive and explanatory articles on the farni pro-
gram, presents pertinent information to purchasers as to the value of
grades and standards and how they may be used advantageously. The
basic data upon which such Consumers' Guide articles are developed
are obtained from the United States Department of Agriculture and
other governmental and private sources. The objective is to present
in nontechnical, laymanls language infomiation which can be used by
the average purchaser. These articles appear in the Consumers' Guide
from time to time.^ The Consumers' Guide is distributed free to
approximately 140,000 subscribers (May 1940) , throughout each of the
48 States, the District of Columbia, Canada, and other countries.

Consumers' Guide mailing list
(Total State count on all keys used in mailing Consumers' Guide)

State:

Alabama 923

Arizona 399

Arkansas 679

California 11,822

Colorado 1,607

Connecticut 2,304

Delaware 285

District of Columbia 2,996

Florida 1,087

Georgia 978

Idaho 448

Illinois 10,647

Indiana 3, 603

Iowa 2,927

Kansas 3,064

Kentucky 913

Louisiana 778

Maine 750

State — Continued.

Maryland 1,825

Massachusetts 4,830

Michigan 5,766

Minnesota 3, 656

Mississippi 599

Missouri 3,199

Montana. 1,025

Nebraska 2,291

Nevada, 126

New Hampshire 520

New Jersey --- 5,033

New Mexico 314

New York 20,365

North Carolina 1,331

North Dakota 1.591

Ohio 9,031

Oklahoma 1,129

Oregon 1,516

* "Consumers' Guide," a publication of the U. S. Department of Agriculture, Wash-
ington. D. C, issued monthly from June through September ; semimonthly from October
through May. Prepared by the Consumers' Counsel Division, Agricultural Adjustment
Administration.

The Consumers' Guide is printed with the approval of the Bureau of the Budget as
required by rule 42 of the Joint Committee on Printing. Official free distribution,
150,000 copies per issue. Additional copies may be obtained from the Suporintendent
of Documents, Government Printing Office, Washington, D. C, 5 cents a copy, or by
subscription 50 cents a year, domestic ; 80 cents a year, foreign. Postage stamps will
not be accepted in payment.
"Cooperative Boolcshelf," 13 pp.. Publication No. 3, Consumers' Counsel Division, U. S.
Government Printing Office, Washington, D. C, May 1937. 5 cents.

"Consumers' Bookshelf," 100 pp.. Publication No. 4, Consumers' Counsel Division, U. S.
Government Printing Office, Washington, D. C, December 1937. 15 cents.

"Consumers Look at Eggs," 13 pp., Consuiner Studv Outlines No. 1, Consumers' Counsel
Division, U. S. Government Printing Office, Washington, D. C. May 1937. 10 cents.

"Materials for Consumer Education, A Selected Bibliography,'' CS-61 (revised). Con-
sumers' Counsel Division, Agricultural Adjustment .Administration, U. S. Department of
Agriculture, Washington, D. C, September 193!), mimeographed. Address : Consumers'
Counsel Division, Agricultural Adjustment Administration U. S. Department of Agricul-
ture, Washington, D. C.

^ "Are Price Tags Enough," by Donald E. Montgomery, Consumers' Counsel of the .Agri-
cultural Adjustment Administration, Consumers' Guide, vol. Ill (22), pp. 3-6, 21-23,
November 30, 1930. "Buving Meat by Orade," Consumers' Guide, vol. VI (17), p. 3, June
1940. "Public Enemy No. 1 in the Kitchen," Consumers' Guide, vol. Ill (H), pp. 6-9,
June 15, 1930. "What Kind of Safeguards," Consumers' Guide, vol. IV (4), pp. 13-17,
April 19, 1937, vol. IV (5), pp. 9-11, May 3, 1937.

OONOE'NTRIATION OP BCONOMIC POWER H

Consumers' Guide mailing list — Continued

State— Continued. State— Continued.

Pennsylvania 7,871 Colombia 1

Rhode Island 347 Cuba 10

South Carolina 808 Ecuador 1

South Dakota 1,044 Guatemala 1

Tennessee 1,197 Haiti 2

Texas 2,787 Hawaii 222

Utah 1,024 Mexico 9

Vermont 646 Newfoundland 1

Virginia 1,708 Nova Scotia 1

Washington 3,895 Panama 1

West Virginia 744 Peru 4

Wisconsin 4,839 Philippine Islands 33

Wyoming 409 Puerto Rico 59

Alaska 96 Virgin Islands 3

American Samoa 1 Argentina 1

Canada 274

Canal Zone- 24 Total 138,421

Chile 1

This count does not include foreign countries which require postage;
there are 67 such names in foreign countries. Also, the count does
include requests received from the public only through May 4, 1940,
although the count was taken at the United States Government
Printing Office, May 29, 1940.

The 1939 distribution shows an interesting cross section of its interest
to national occupation groups.

Percentage distribution of Consumers' Guide suisa-iiers in 1939, hy occupations

Percent

Housewives 22

White-collar workers 18

Teachers 16

Students , 7

Professional workers 7

Industrial workers 4

Extension workers 3

Welfare, club, and Government workers - 2

Occupation unknown 21

Total . 100

CONSUMER STANDARDS PROJECT

The Consumer Standards Project is a Federal W. P. A. project,
sponsored by the Consumers' Counsel Division of the United States
Department of Agriculture, engaged in research on consumer problems.
It carries on the work of the Consumers' Project of the United States
Department of Labor which came to an end June 30, 1938, together
with certain pertinent phases of research that had been initiated in
the Consumers' Counsel Division.

At present the project is chiefly concerned with problems of stand-
ardization of consumer goods. This work is divided into four major
activities :

(1) The project collects and analyzes Federal,' State,^ and local

• "Chart Analysis of Federal Food, Drug, and Cosmetic Act," by Consumer Standards
Project, Consumers' Counsel Divisi6n, U. S. Department of Agriculture and Work Proj-
ects Administration. Washington, D. C, 1040.

"Analysis of United States and State Standards for Fresh Fruits and Vegetables," U. S.
Government Printing Office, Washineton, D. C. 1937. 25 cents.

' "Survey of State Laws and Judicial Decisions on Bedding and Upholstery," by S. Mermin
and J. M. Maver. S. P. Kaidanovsky, Technical Director, Consumer Standards Project,
vii+160 pp. Consumers'. Counsel Division, U. S. Department of Agriculture and Work
Projects Administration, Washington, D. C.

12 CONCENTRATION OF ECONOMIC POWER

laws and regulations regarding quality and performance standards of
consumer goods, and standards for container sizes, grades, and labels.

(2) It summarizes specifications and test methods used by Govern-
ment and private agencies in establishment of standards for a number
of selected consumer commodities. This work includes a comparative
tabulation of quality grade terms used by Government agencies and
private technical groups.®

(3) The project is engaged in a survey of consumer standards in
foreign countries.

(4) The project is doing routine work necessary for preparing
results of surveys conducted by the Consumers' Counsel Division. For
example, the detailed work of a survey of the inspection and control
of weights and measures conducted in cooperation with the National
Conference on Weights and Measures; and a survey of courses in
consumer education made in cooperation with the United St^es Office
of Education, was done at the project.

The project also takes an active part in the work of several com-
mittees concerned with consumer goods, such as the Advisory Com-
mittee on Ultimate Consumer Goods of the American Standards
Association, sectional committees of the association, and committees
of the National Consumer-Retailer Council.^

The Consumer Standards Project is custodian of the records of the
Consumers' Project of the United States Department of Labor, the
Consumers' Advisory Board of the National Recovery Administration,
and the Consumers' Division of the National Emergency Council.

AGRICULTURAL MARKETING SERVICE

The Agricultural Marketing Service is a "service and regulatory
agency, concerned with various phases of marketing farm prod-
ucts. "/°

This Service was contemplated in the Departmental reorganization
program of October 6, 1938, and was formally established July 1,
1939, following the passage of the Agricultural Appropriation Act
for 1940. In the Agricultural Marketing Service were placed: (1)
From the Bureau of Agricultural Economics — certain marketing re-
search, service and regulatory work in connection with cotton; dairy
and poultry products; fruits and vegetables; grain and seed; live-
stock, meats, and wool; hay and feed; tobacco; and warehousing;
market news service ; and all of the work on crop and livestock esti-
mates; (2) from the Bureau of Animal Industry-^— administration of
the Packers and Stockyards Act; (3) from the Bureau of Plant In-
dustry — administration of the Federal Seed Act; and (4) from the
Bureau of Dairy Industry — administration of the Dairy Exports
Act.

For administrative purposes, the Service comprises the following
Divisions: Agricultural Statistics; Cotton Marketing; Dairy and

« "Summaries and Tabulations of Specifications and Test Methods for Selected Consumer
Commodities," Consumer Standards Project. Consumers' Counsel Division, U. S. Depart-
ment of Agriculture, Washington, D. C. In preparation.

" "A Study of Informative Labeling," by S. P. Kaidanovsky and G. W. Hervey ; 170 pp.,
Consumer Standards Project, Consumers' Counsel Division, IT. S. Department of Agricul-
ture and Work Projects Administration. Washincton, D. C. 193Q, mimeographed.

""Agricultural Marketing Service, Organization and Functions," 97 pp., Agricultural
Marketing Service, U. S. Department of Agriculture, Washington, D. C, March 1940, mimeo-
graphed.

OONOBNTRIATION OF ECONOMIC POWER 13

Poultry Products; Fruits and Vegetables; Grain and Seed; Live-
stock, Meats, and Wool; Packers and Stockyards; Tobacco; Ware-
housing; Marketing Information; and Business Administration.
Much of the work of the Service is done in cooperation with State
departments of agriculture, State agricultural colleges, experiment
stations and extension services, and with other agencies; about 280
cooperative agreements are in effect.

Five Brodd Fxm<;tion8.

The activities of the Agricultural Marketing Service may be clas-
sified in five broad fields: "(1) The collection and dissemination of
crop and livestock production statistics; (2) the gathering and re-
porting of current market information from terminal markets, ship-
ping points, and producing sections; (3) standardization and inspec-
tion to provide a common language in merchandising and a uniform
yardstick for measuring gradations in quality of farm and food
products; (4) research and demonstration in standardization, grad-
ing, preparation for market, handling, and other related phases of
marketing; and (5) the administration of 'rules of fair play' in the
merchandising of farm commodities." ^^

Three of these functions are of particular interest in connection
with consumer standards. They are the standardization, grading
and inspection services, the associated programs of research and dem-
onstration, and the regulatory activities.

Research.

The research conducted by the Service forms the basis of its activ-
ities. Grade standardization research is of primary importance. It
centers about the development of standards for each farm commodity
and the inspection methods by which the standards are applied. The
standardization research involves the determination of all factors
and attributes inherent in a product which may in any way affect
its value and desirability. After these factors have been ascertained
and isolated they are appraised individually and in relation to each
other so as to arrive at their relative importance in determining the
quality of the product. It is then necessary to adopt correct methods
of grade identification by clearly outlined specifications expressed in
simple terminology.

Because of long-time changes that take place in the production
and use of a commodity, continued research is necessary in order to
provide sound and practical bases for meeting the demands for stand-
ards that are made by the many interested parties. Such research
also shows whether changes requested would be of only temporary
value and whether they would benefit only a few persons. Continued
research likewise is necessary for the purpose of developing and
improving mechanical devices for measuring factors of quality. A
great deal has already been done in this connection, but the interpre-
tation of United States Standards is still based largely upon observa-
tion and judgment. This is true, for example, in the measurement
of such quality factors as flavor and odor.

Many basic laboratory research projects are being conducted by
the Service. These projects include cotton-fiber and spinning-fiber

" "Agricultural Marketing Service, Organization and Functions," 97 pp.. Agricultural
Marketing Service, U. S. Department of Agriculture, Washington, D. C, March 1940.
mimeographed.

14 C'ONCIENTRiATIOlS' OF EIOONOMIC POWER

tests, milling and baking tests with wheat and other grains, wool
shrinkage studies, and slaughter tests of different grades and weights
of livestock. Experiments also include projects designed to perfect
inspection equipment and techniques, market-reporting surveys,
marketing studies in specific producing areas, and related projects on
such phases as packing, packaging, and handling farm commodities.
A number of research projects are conducted in cooperation with
other bureaus, and with State agricultural colleges. Studies of
qualities of meats, for example, are made in cooperation with the
Bureau of Animal Industry, the Bureau of Home Economics, the
Virginia Agricultural Experiment Station, and the Virginia Divi-
sion of Markets, Cotton-fiber research is conducted cooperatively
with the Bureau of Plant Industry, Clemson Agricultural College,
and the Agricultural and Mechanical College of Texas. Cotton-
ginning studies are carried on jointly with the Bureau of Agricul-
tural Chemistry and Engineering.^^

Standardization and Inspection.

The authority for the standardization, grading, and inspection
activities of the United States Department of Agriculture, as now
conducted by the Agricultural Marketing Service, is provided by a
number of Federal statutes, and by the authority carried aimually
in the Agricultural Appropriation Act to formulate standards for
farm products and to inspect and certify their quality and condition.
The statutes are the Cotton Futures Act of 1914 (re-enacted in 1916),
the Grain Standards Act of 1916, the United States Warehouse Act
of 1916, the Cotton Standards Act of 1923, the Tobacco Stocks and
Standards Act of 1929, and the Tobacco Inspection Act of 1935.
(Early impetus to fann products standardization work was given
by the Food Products Inspection Act of 1917, an emergency war
measure for conserving food supplies.)

A United States Standard is one formally approved by the United
States Department of Agriculture and is official. It may be manda-
tory or permissive. When the use of a standard is made mandatory
by law, the standard is always promulgated by the Secretary of
Agriculture and no other standards may be used lawfully if the
product is sold by grade and shipped in interstate and foreign com-
merce. For example, this is true for grain and for cotton. A per-
missive or optional United States Standard, on the other hand, may
or may not be promulgated by the Secretary of Agriculture.

A United States Tentative Standard is one prepared by the ITnited
States Department of Agriculture for use under commercial condi-
tions in order to test its practicability, or simply as a basis for discus-
sion. It is subject to further investigation before being recom-
mended as an official standard.

United States Standards of quality have been developed for nearly
all the important agricultural commodities produced in this country.
The procedure for the development of standards is shown in Chart II.
These standards cover grains, cotton, tobacco, 57 of the fruits and
vegetables, peanuts, honey, livestock, meats, wool, and a number of

" "Report of the Chief of the Agricultural Marketing Service — 1939," pp. 21-27, U. S
Govornment Printing Office, Washington, D. C, lO.IQ, 10 cents.

CON'CIENTRiATIOiN OF EICOXOMIC POWER 15

other products." For some of the commodities the standards are
mandatory, but for others they are permissive and are used voluntarily
as quality guides in buying and selling.^*

In formulating United States Standards the various factors that
determine quality gradations are placed into definite groups called
grades. The specifications or descriptions of these separate grades
are carefully Avorked out, with the assistance of commodity specialists
of other bureaus. The advice of farmers, dealers, packers, and other
interested persons and agencies also is sought. In recent years much
consideration has been given, at least for the perishable and canned
product^, to the prejudices and preferences of consumers. The specifi-
cations for these grades are then subjected to extensive tests and study
to determine their practicability when used under actual commercial
conditions.

In some cases the immediate demand for grades has been such
that the Department has issued descriptions of grades in tentative
form. These tentative grades are given actual use in commercial
practice, and their shortcomings noted and corrected, before they are
adopted or promulgated as official.

Certain broad principles are recognized as fundamental in the
establishment of standards for farm products. When establishing
a standard, significant gradations in quality of the entire supply of
the commodity • must be recognized. In this respect, the quality
standards as developed by the Agricultural Marketing Service, differ
from the standards of minimum quality and identity fixed under the
Federal Food, Drug, and Cosmetic Act, Standards of quality for
farm products must apply to all segments of the supply in order to
afford a basis for trade in all qualities of the products. The grades
must be defined in such a way as to recognize commercial differences.
The limits for a practical grade must be broad enough to avoid unneces-
sary technicalities and must conform, to some extent, to trade
acceptance.

Standards for farm products are descriptive standards. Unlike
standards of weights and measures, which are definite in their terms,
descriptive standards require interpretation and exercise of judgment.
At the same time, however, the standards for farm products must be
uniform, within reasonable limits, throughout the country. They can-
not vary from region to region, nor from market to market, and they
cannot be changed from season to season to conform to the quality of
a particular season's crop. To be uniform the standards must be
interpreted accurately and applied consistently. The inspection and
grading work, therefore, calls for competent inspectors to apply the
specifications, an^ for centralized training and supervision of these
inspectors. A carefully supervised system of inspection is maintained
by the Agricultural Marketing Service.

" Prior to July 1939 a number of the activities now in the Agricultural Marketing Service
were a part of the Bureau of Agricultural Economies. Standards formerly set up by the
Bureau of Agricultural Economics, and its predecessor, the Bureau of Markets, are now.
administered by the Agricultural Marketing Service.

" Certain Federal statutes make permissive standards mandatory in some instances.
Under the United States Warehouse Act, United States grades must be used if warehouse
receipt designates the grade. Under the Commodity Exchange Act, United States Standards
for cotton, grain, butter, potatoes, and wool top are mandatory in futures trading. The
Export Apple and Pear Act requires inspection of these commodities before shipment to
foreign markets. The Tobacco Inspection Act provides for mandatory inspection at desijj-
nated auction markets.

IQ CONOENTRATION OF EOONOMIC POWEK

Conswner Standch^ds.

Most standards for farm products have been worked out from the
producer's side of the marketing process. This has been only natural.
Producers and dealers long ago learned that it was impossible to buy
and sell intelligently without quality measurements. The use of
grades by producers and dealers dates back a century and more for
some commodities. Numerous sets of standards for grading grain,
cotton, and other products were in use throughout the nineteenth
century by trade organizations, chambers of commerce, boards of
trade, and other groups. Later, grading and inspection were under-
taken by several State governments. The fact that each market had
its own grades and methods of interpreting grades led to endless con-
fusion and to numerous abuses such as short weighing and under-
grading, and thereby imposed merchandising hazards of all sorts
upon the various groups concerned with the marketing and distribu-
tion processes.

That is how Federal standards and grades were first introduced.
In the past 25 years Federal standardization and inspection, "func-
tions that root deeply into the need of American agriculture," have
become generally recognized as "fundamental to efficient marketing
and distribution." "

Producers and dealers have found that the standards provide a
common language for trading and a basis for market quotations;
eliminate the necessity of personal inspection before purchase; pro-
vide a basis for price adjustment; afford a quality basis for payment;
afford a check on the quality of production ; promote a fair and honest
basis for competition on contract bids ; and provide a basis for loans
on products in storage, and for regulating or controlling shipments
under marketing agreements.

With this brief history of the development and use of standards
for farm products, it is evident why most of the official grades have
been established chiefly for use in wholesale channels of trade. Con-
sumers, of course, have been kept in mind in the formulation
processes; the resulting standards have been important to consumers
because they have made marketing more efficient and thus reduced
costs and prices. Only in very recent years, however, has it seemed
practicable to bring the standardization work to ultimate consumers
in more tangible and concrete form. Marked interest in grades has
been shown the past few years by retail and consumer organizations.
Though the commodity standards for which grades may be carried
through to consumers are few, the increased stress l)eing placed on
this phase of standardization is indeed promising. The emphasis
being placed on standardization of consumer commodities is in line
with the present attitude of the United States Department of Agri-
culture, that in any farm program if it is to be complete, consumer
interests must be considered.

For meats, poultry, butter, eggs, and canned fruits and vegetables,
methods have been developed for carrying the grade designation to
the consumer. The grade designation is marked on the product or
its package in such a way that the grade designation is carried
throuffh the channels of trade to the ultimate consumer.

^s "Agricultural MarkotinR Service, Organization and Functions.'" !>7 pp., Agricultural
Marketing Service, U. S. Department of Agriculture, Wasliington, D. C, March 1940,
mimeographed.

OOKCENTRiATION OF ECONOMIC POWER 17

Meats. — United States Standards have been developed for beef, veal,
lamb, pork, and prepared meats. They were developed largely in
response to the needs and demands of distributors for some practical
means of describing quality as a substitute for examination. The
early terms, however, were too general for wide use and, furthermore,
the slaughtering industry was inclined to change grade designations
according to the season and the predominant quality of the meat
available. Efforts to define and interpret the numerous grade terms
began shortly after the turn of the present century when the Agri-
cultural Experiment Station at the University of Illinois started its
studies on beef, the meat showing the greatest variations in quality.

The results of these studies were used in setting up tentative
standards, prepared by the United States Department of Agriculture
about 1916, for classes and grades of beef. Numerous revisions were
made before the "Official United States Standards for Grades of Car-
cass Beef" were set up in 1926. These standards were first used in
commercial practice in 1927, at the insistence of the Better Beef
Association, in the main a producers' and feeders' organization. The
objective was to have the grade name stamped on the carcass beef
in order that the quality might be readily identified by consumers.
It was logically contended that this assurance of quality would
broaden the demand for the better grades, then in abundant supply
and selling at relatively low prices, and that improved prices would
be reflected in the local livestock markets. Experimental grading
and stamping were conducted in a limited way for a year before
extending and placing it on a fee basis in June 1928.

The beef stamping procedure then was essentially the same as it
is today for all meats ; it involves the use of a roller stamp, applied
by a Government grader. The stamp is rolled down the length of
the carcass in such a way that the grade name appears on all principal
retail cuts. The stamping fluid is harmless and usually disappears as
the meat is cooked.

The system of grading, however, is- different today. The change,
toward simplification, was made in 1939 for the purpose of making
it easier for the ultimate consumer to buy beef on the basis of quality.
Under the previous system, grades were established by classes : steers,
heifers, cows, bulls, and stags. A U. S. Choice or U. S. Good cut of
beef might have been U. S. Choice or U. S. Good steer, or U. S.
Choice or U. S. Good heifer, or U. S. Choice or U. S. Good cow, the
latter being of a decidedly poorer quality than the other two. Under
the present "single standard" system, the gi^ade name also includes
the class in indicating quality. Now all consumers need to do is
familiarize themselves with one series of grade names, — U. S. Prime,
U. S. Choice, U. S. Good, U. S. Commercial, and U. S. Utility, and
their relative positions in the scale of grades. For wholesale trans-
actions, U. S. Cutter and U. S. Canner gi-ades also are used and
provision is made for breaking down the U. S. Choice, U. S. Good,
and U. S. Commercial grades into half-grade designations.

The beef grades were revised only after months of consultation.
Department specialists worked with a committee of the industry in
making the revisions. The proposed standards were then sent to
hundreds of interested persons for comments and suggestions. Pro-
ducers, distributors, retailers, and consumers participated, individ-
ually and through their organizations, in the revision of these grades.

18 C'ONOENTRiATION OF EIOONOMIC POWER

Changes were suggested and made. The revised grades were put
into use officially in July 1939.

Meat graders are now located at all principal packing centers in
all parts of the country. Consequently, graded and stamped beei
may be readily obtained by dealers in any city or town in the United
States. Beef of all grades, however, is not available throughout the
year in all regions. The highest grade regularly available in the Mid-
dle West and East, for example, is U. S. Choice (less than 1 percent
of all carcass beef produced is eligible for the U. S. Prime grade,
which is in demand by exclusive hotels, restaurants, and clubs) . U. S.
Good is the highest grade of beef regularly available from coast to
coast.

A similar grading and stamping service is provided for lamb
and veal. Five grades of lamb are stamped: U. S. Prime, U. S.
Choice, U. S. Good, U. S. Medium, and U. S. Common. The same
grades are used for stamping veal and calf carcasses.

Poultry and eggs. — An increasing interest is being shown on the
part of consumers, and consequently by dealers and the Department,
in grading programs for poultry and eggs. Especially marked has
been the increase in turkeys graded for the holiday season markets.
This work was started about 10 years ago, and, in tlie fiscal year
ending June 30, 1939, was carried on at shipping points in 16 States.
Most turkeys are packed in boxes and each box is stamped with the
grade, but more and more turkeys are being marked individually
with a grade tag.

Other classes of poultry are graded at a number of poultry-packing
plants in the Middle West. The grade of the poultry is stamped
on the container. If individual birds are marked, they must conform
to U. S. Prime or U. S. Choice grades. An effort is being made to
find a satisfactory method of marking individual birds.

The United States grades for eggs are made known to the con-
sumer by means of certificates of quality, and seals which are used
on 1-dozen cartons in which the eggs are packed. Some 75 firms
throughout the country are authorized to use the certificates of qual-
ity and the seals. The grading work is constantly supervised. The
certificate and seal give the grade, date of grading, and the size of
eggs in the carton. Efforts are being made to promote the Federal-
State egg grading progi^ams now carried on at various points in
12 States.'

Butter.— On November 3, 1938, the United States Standards of
quality for creamery butter were promulgated by the Secretary of
Agriculture to become effective on April 1, 1939. The new standards
provide a more exact and simplified system for determining the score
of butter than the superseded United States Tentative Standards
which had been in use for approximately 20 yeai-s. The range of
score was narrowed from the previous basis of 75 to 95 points to
the percent basis of 85 to 93 points. The present grades identify and
evaluate some 30 flavors, each of which is distinguishable in the
grading process.

The grading and labeling service for butter is somewhat similar to
that for eggs. Cartons of certain distributors of high-quality butter
are provided with certificates of quality showing the grade of the
butter as determined by an authorized representative of the United
States Department of Agriculture. The work of the graders for

CONCENTRATION OF ECONOMIC POWER 19

the 142 firms authorized to use tlie quality certificates is checked
throughout the year by butter grading supervisors. The certificates
are used only on butter rating 93 score or 92 score.

Questions are sometimes raised as to the value of this service
to the consumer, because of the probability that the grade will be
lowered substantially before the butter is purchased by the house-
wife. This does happen. A recent study of the quality of butter
offered in retail stores in New York City and Chicago, however,
sliowed that consumers who wish to obtain 92 score or 93 score
butter will find it more often if they buy butter packaged with cer-
tificates of quality rather than if they buy on the basis of advertise-
ments printed on the packages.^''

Fruits and vegetables. — Simple grade terminology appears in the
grades for canned fruits and vegetables.

Three grades — A, B, and C — have been developed for each of 26 canned fruits
and vegetables. Though this work was started only about 8 years ago, the
use of the official grade designations on individual labels is making rapid
strides. At the same time that some canuers and distributors are resisting
the acceptance of this system of indicating quality on consumer merchandise,
it is apparent that more and more consumers are refusing to pay a first-grade
price for a third-grade product — as is often the case when the grade informa-
tion is not available to them."

In general, grade A represents th.e finest and most succulent fruits
and vegetables; grade B — the general utility product not so tender
and succulent perhaps, but prepared from the above average fruits
and vegetables and satisfactory for use in the average household;
grade C fruits and vegetables may lack eye appeal but they furnish
wholesome and nutritious food, and serve a definite use in the
average household.

The virtue of these grades is not only that they can serve both dealers
and consumers, but also that; they are so simple that the use of them by
consumers requires no technical knowledge at all."

A total of 82 standards has been developed for 57 different fresh
fruits and vegetables. Two or more standards ore necessary for
some products because of differences in types and uses. These grades
and their designations are not generally carried through to the
retail markets. Tlie problem here, as with many of the perishables,
is that a package of fruits and vegetables that would be of grade
U. S. No. 1 in the morning might be of a lower grade within a very
short time because of decay or some kind of deterioration that
developed after packing.

The grades of fresh fruits and vegetables, however, are used
extensively in wholesale channels. An increasing quantity of graded
products, such as potatoes, is becoming more readily available in
retail centers. The use of grades facilitates wholesale transactions
and aids in improving the quality of products shipped to the
markets; thus, the consumer is benefited materially, even though
indirectly.

" "A Surve.v of Quality of Selected Brands of Butter Sold in One-Pound Cartons at
Retail in New York and Chicago," by Gordon W. Sprague, Gertrude G. Foelich, and
Edward Small, U. S. Department of Agriculture, Washington, D. C, February 1939,
D\imAt>graphed.

" "Report of the Chief of the Agricultural Marketing Service — 1039," p. 15, U. S. Gov-
ernment Printing Office, Washington. D. C, 1939. 10 cents.

" "Simple as A B C — How Quality Grading of Canned Fruits and Vegetables Grew as
a Government Service and What Yardsticks It Provides for Consumers." Consumers'
Guide, vol. VI (11). pp. 10-13, Consumers' Counsel Division, Agricultural Adjustment
Administration, Washington, D. C, March 1, 1940.

20 CONOENTRiATION OF ECONOMIC POWER

In recent months tentative grade standards have been developed
for frozen peas and frozen lima beans and the work is being ex-
tended to other frozen foods. Growers of fruits and vegetables
and leading processing firms have stressed the need for quality
standards for the raw product and the processed product, to serve
as a basis for transactions and the improvement of quality.

Containei's.

Outlawing of short measure containers and the elimination of
numerous odd sizes and shapes of containers for fruits and vege-
tables was made possible by the Standard Container Acts of 1916
and 1928, both of which are administered by the Agricultural Mar-
keting Service. These acts have led to the reduction of the number
of odd sizes and shapes of climax baskets and containers for small
fruits and vegetables, and for hampers, round stave, and splint bas-
kets. Enforcement of these acts has resulted in reducing the number
of containers of these types from 166 to 36. No longer, for example,
need housekeepers complain of false bottoms in berry boxes.

Numerous quantities of fruits and vegetables are packecl in crates,
cartons, drums, sacks, and paper containers for which United States
standards are not in force. "These containers are used in such a wide
variety of deceptive sizes and shapes that they impose an unnecessary
burden on the distributing trade — and hence on the consumers and
growers." ^^ A bill (H. R. 5530, T6th Cong.) containing new require-
ments for the standardization of other packages commonly used is now
pending. Proponents of additional legislation point out that if regu-
lation is helpful for part of the industry it ought to be beneficial for
all. More than 280 crates, boxes, and cartons are now recognized
in freight tariffs. It is difficult to believe that such a number of con-
tainers is needed for economical and efficient marketing of fruits and
vegetables.
General Use of Standards.

The best test of the practicability of standards is the use being made
of them. The United States Standards have not been as yet completely
established in all branches of farm products marketing, but their use
is rapidly being extended. When it is realized that the standardiza-
tion program of the Department has been in progress for only about
25 years, and that most of the standards are of permissive character
and their use wholly voluntary, the increasingly wide acceptance of
the standardization program must be regarded as a real achievement.

The quantities graded each year represent a very small proportion
of the total volume of some agricultural commodities ; for others, how-
ever, a significant proportion is handled by grade. It is estimated
that around 80 percent of the commercial potato crop, for example,
is sold by grade.

During the year ending June 30, 1939, more than 670.000,000 pounds
of meats were graded, most of which were beef; 321,000,000 pounds of
butter wore officially graded, 90,000,000 pounds of which were sold
in consumer packages carrying the certificate of quality; approxi-
mately 30.000,000 pounds of dressed poultry (includin^r 18,000,000
pounds of turkeys) were graded. More than a half million carloads

^ 'Coutainers for Fruits and Vegetables." p 2, Farmers' Bulletin No. 1821, U. S. Gov-
ernment Printing Office, Waslilngton, D. C. April 1 '•;,», 10 rcnU.

OONCiENTRiATION OF EIC'0^-OMIC POWER 21

of fruits and vegetables were inspected for grade at shipping points
and at receiving markets.

Federal and State agencies and institutions are increasing the use
of the United States Standards in purchasing supplies. Prorations
of shipments, restrictions as to grade and size, and surplus commodity
purchases have been based, for the most part, on the official standards.

Education and Demonstration.

Through educational and demonstrational programs the general pub-
lic is becoming more familiar with the standardization programs, with
the commodity grades, and with the position of the grades in the scale
of grades. Thousands of persons annually attend demonstrations held
by the Agricultural Marketing Service, usually in cooperation with
State extension services and other State and county agencies. Most
of this work, however, is intended for producers and retailers, though
increasing attention is now being given to educational work among
consumer groups. Specialists located in the field and in Washington
are being encouraged to promote and to accept opportunities to speak
before meetings of consumer organizations.

Specifications, or descriptions of the grades, of any product for
which United States Standards have been established are available to
consumers upon request, and a number of such requests are received
daily. Numerous requests also are received for special articles on
commodity grades. These requests come from widely divergent
sources. With the aid of commodity specialists, these requests are
handled by the Marketing Information Division of tlie Service. A
small staff is maintained ''to give timely, adequate, and effective dis-
semination to material that originates within the Service, and to dis-
tribute the information through the media best adapted for reaching
groups that have different requirements." -°

Additional information is provided through tlie press and radio,
and by the use of posters and exhibits. Assistance is given by tlie
Consumers' Counsel Division of the Agricultural Adjustment Admin-
istration, particularly through the "Consumers' Guide." Informa-
tion on grades is also disseminated in some of the radio and ])ress
materials prepared and issued by the United States Bureau of Home
Economics.

Prohlcms Involved.

By reason of their very nahire. United States Standards for farm
products cannot be expected to meet all requirements of producers,
distributors, and consumers. In some cases the lack of precise spec-
ification, or terminology, arises out of difficulties inherent in the
product itself, or in the limitations of present knowledge in meas-
uring quality variations.

A big problem in the general adoption of permissive standards has
been the slowness of dealers and the trades generally to accept them,
A part of the opposition is dur to fear that consumer standards would
supersede well-established and ex]iensively-advertised brand names.
Resistance also comes from manufacturers and others who desire to
mar.ket their products under brand names or other descriptions that

'-» "Asi-iciiltnral Marketing Service Organization and Functions." p. 85. Agricultural
Marketing Seivlce, V. S. Department of Agriculture, Washington, D. C, March 1940,
mimeographed.

272496— 41— No. 24 3

22 OONCENTRATION OF ECONOMIC POWER

do not convey specific quality information. This type of resistance
is being overcome in part by consumer insistence for grade terms
which are understandable and carry the assurance that the pur-
chaser receives the quality for which he pays.

Lack of uniformity in standards and grades established and re-
quired by State laws is an important problem, since when State
grade definitions differ from those of other States, confusion arises.
Iowa and New Mexico are the only States that have not enacted one
or more laws pertaining to the standardization of fruits and vege-
tables. This is encouraging, at least insofar as an increasing number
of States are adopting Ignited States Standards. Many of the State
laws and regulations conflict not only with the United States Stand-
ards but also with standards established by adjoining States. Non-
uniformity also presents a serious problem in the ease of State laws
relating to sizes and other classifications.

Another problem involves the need for uniform and simple grade
designations. Among the long list of grade names which now con-
fuse the consumer are Choice, Extra, 93 score, A, AA, No. 1, and so
forth. Resistance and active opposition on the part of trade groups
must be contended with before changes are made. Cooperation with
trade interests is essential. Progress in this direction was made re-
cently in the simplification of the beef grade terminology. Simpli-
fication, however, is best exemplified in the A, B, C grades for canned
and other processed fruits and vegetables, which are receiving in-
creasingly wide consumer acceptance.

A difficult problem is faced in developing a consumer standard-
ization program for some of the perishable commodities, such as
fresh fruits and vegetables. The most economical practice is to
grade and pack these products at producing or shipping points,
often far removed from consuming markets. Even under the best
of handling, some deterioration occurs in transit. Thus if practi-
cable and acceptable consumer grades were formulated for some of
these highly perishable products, regradip^: and repacking may have
to be done in the wholesale markets or in the retail stores.

Each of these problems is being studied currently by the Agri-
cultural Marketing Service and consumers' needs are being consid'
ered ; and the Service will continue to work toward the improvement
of grades and the extension of their use.

Other Activities of the Service.

The standardization and other service work of the Agricultural
Marketing Service involves the administration of a number of spe-
cific regulatory and service statutes: Cotton Standards Act, Cotton
Futures Act, Grain Standards Act, Packers and Stockyards Act,
Perishable Agricultural Commodities Act, Standard Container Acts,
Produce Agency Act, Export Apple and Pear Act, Dairy Exports
Act, the Warehouse Act, the Tobacco Inspection Act, the Federal
Seed Act, the Cotton Grade and Staple Statistics Act, Tobacco
Stocks and Standards Act, the Peanut Statistics Act, the Wool
Standards Act, the Insecticide Act,-^ and the Naval Stores Act.-^

-= Under the Reoijjanization Plan No IV and by .loint rrsolntion of Congress approved
June 4, Ifiin, the Food and Drus Administration was transforrod to the Federal Security
Ajrency, and functions of the Secretary of Agriculture with respect to the laws enforced
by the Administration, except the Insecticide and Naval Stores Acts, were transferred
to the Administrator of the Federal Security Agency. The personnel and activities au-
thorized under the In.secticide and Naval Stores Acts were retained in the Department
of Agriculture and transferred to the Agricultural Marketing Service.

OONCIENTRiATION OF EICONOMIC POWER 23

INSECTICIDE ACT

Establishnient of Standards.

Definite standards are set up by the Insecticide Act for paris green
and lead arsenate (paste). Sections 6 and 7 read, in part, as follows :

Sec. 6 * * * The term "paris green" as used in this Act shall include
the product sold in commerce as paris green and chemically known as the
aceto-arsenite of copper. The term "lead arsenate" as used in this Act shall
include the product or products sold in commerce as lead arsenate and con-
sisting. chemically of products derived from arsenic acid (H3ASO4) by replacing
one or more hydrogen atoms by lead. * ♦ *

Sec. 7. That for the purpose of this Act an article shall be deemed to be
adulterated —

In the case of paris green : First, if it does no.t contain at least fifty per
centum of arsenious oxide ; second, if it contains arsenic in water-soluble forms
equivalent to more than three and one-half per centum of arsenious oxide;
third, if any substance has been mixed and packed with it so as to reduce or
lower or injuriously affect its quality or strength.

In the case of lead arsenate : First, if it contains more than fifty per centum
of water ; .second, if it contains total arsenic equivalent to less than twelve
and one-half per centum of arsenic oxide (A&O5) ; third, if it contains arsenic
in water-soluble forms equivalent to more than seventy-five one-hundredths
per centum of arsenic oxide (AsiiOs) ; fourth, if any substances have been
mixed and packed with it so as to reduce, lower, or injuriously affect its
quality or strength : Provided, however. That extra water may be added to
lead arsenate (as described in this paragraph) if the resulting mixture is
labeled lead arsenate and water, the percentage of extra water being plainly
and correctly stated on the label.

Labeli?ig Requiremen ts.

If an insecticute or fungicide contains an inert substance, or sub-
stances, section 8 of the act requires that the manufacturer disclose
this fact by placing on the label of each container a statement of
inert ingredients in the manner provided by the third paragraph of
section 8, which reads, in part, as follows :

• * • if it consists partially or completely of an inert substance or sub-
stances which do not prevent, destroy, repel, or mitigate insects or fungi and
does not have the names and ijercentage amounts of each and every one of
such inert ingredients plainly and correctly stated on the label : Provided,
however. That in lieu of naming and stating the percentage amount of each
and every inerr ingredient the producer may at his discretion state plainly
upon the label the correct names and percentage amounts of each and every
ingredient of the insecticide or fungicide having insecticidal or fungicidal
properties, and make no mention of the inert ingredients, except insofar as to
state tlie total percentage of inert ingredients present.

This, in effect, causes the manufacturer to set up his own standard
of composition which shall be specified on the label. Any false or
misleading statement on the label constitutes misbranding, or adul-
teration if the strength or purity of the product is below the declared
standard or quality under which it is sold.

NAVAL STORES ACT

The Naval Stores Act provides for standards for the two principal
commercial agricultural products coming under the classification of
naval stores, namely, turpentine and rosin.

Standards for Turpentine.

In the case of turpentine the standards are of kind or identity.
The Naval Stores Act recognized three distinct kinds of turpentine,

24 OONCENTRiATION 01 EOONOMIC POWEH

and a fourth was later covered by a standard promulgated by the
Secretary of Agiiculture, under authority granted by the act.

The four standard designations and a brief statement describing
the kinds of turpentine follow:

Gum spirits of turpentine : The kind of spirits of turpentine
that is obtained by distillation of the oleo-resin or gum from
living trees (pines).

Steam distilled wood turpentine : The kind of turpentine that is
obtained by steam distillation of resinous wood, such -as old
stumps.

Destructively distilled wood turpentine : The kind of turpentine
that is made by destructive distillation (carbonization) of
resinous wood.

Sulphate wood turpentine: The kind of turpentine that is re-
covered in the "sulphate" process of converting wood into
paper pulp.

The above standard designations are for use in selling and ship-
ping any turpentine in interstate commerce. Since no standard is
provided for any mixture of two or more kinds of turpentine, or of
turpentine with any foreign substance, such mixtures cannot be sold
as turpentine of any kind whatsoever, nor may the word "turpentine"
be used to describe such mixture in selling or shipping. The use of
the standards implies that the article described thereby is of a quality
consistent with that recognized by the naval stores trade as satisfac-
tory for the purposes for which turpentine is customarily used.

Standardis for Rosin.

The standards for rosin are standards of grade or color. Fourteen
color grades are used for evaluating rosin, and 13 standards are in
use for comparison and grading. These standards are made of com-
binations of specially selected colored glass, chosen for light- fastness,
permanence of transparency, and suitable color transmission quali-
ties. The individual glasses, including a colorless glass of varying
thickness, depending on the thickness of the colored components, are
cemented together. The combination is then securely cemented in a
sleeve of nickel-silver, cut exactly 7/g-inch long, from %-inch square
stock, thereby giving a standard in the form of a %-inch cube. This
size is the standard size or thickness of the sample of rosin through
which it is viewed. The several standards, and the grades they des-
ignate, are specified by letters, as follows: X, WW, WG, N, M, K, I,
H, G, F, E, D, and FF. Rosin which is of a darker color than the
standards for D and FF is graded B. No standard is needed for
this grade. The FF is a special grade for wood rosin only, the color
of which is a different and darker red tiian is found in normal gum
rosin.

A standard of condition or quality has been promulgated for rosin
which has developed an opaque condition, preventing its accurate
evaluation in comparison with the regular color standards. This
condition may be due either to crystallization of the rosin, or to oc-
clusion of water. Whenever such rosin is to be graded, and the
inspector cannot determine what the grade should be on the usual
color scale, it is designated "Opaque," and the grade-mark OP is
placed on the package. Both gum and wood rosin are subject to

CONCENTRATION OF ECONOMIC POWER 25

"Opaqueing.^' Such rosin is usually sold on sample, as there is no
market quotation for same.

In grading, the rosin must also be marked to show the kind; that
is, the designation "gum rosin" or "wood rosin," as the case may be,
must be shown on tlie package and also on the selling and shipping
documents, together with the grade designation. Thus the words,
"gum rosin" and "wood rosin," become standards of identity which
must accurately describe the article, together with the grade-mark,
which must describe its color or grade. "Gum rosin" is rosin made
from the gum or oleo-rosin from living trees, remaining after the
gum spirits of turpentine has been distilled, while "wood rosin" is
rosin that is recovered from resinous wood, by extraction processes,
after the steam distilled wood turpentine has been recovered.

The benefits accruing to consumers through the acts administered
by the Agricultural Marketing Service are indirect in most cases; as
they tend to eliminate merchandising losses to producers and reduce
the hazards and risks in trade channels, they reduce costs and prices
to consumers and assure a larger supply of high-quality products in
consuming markets.

BUREAU OF AGRICULTURAL CHEMISTRY AND ENGINEERING

The Bureau of Agricultural Chemistry and Engineering, United
States Department of Agriculture, was formed by the consolidation in
the fiscal year 1939 of a part of the Bureau of Chemistry and Soils
and a part of the Bureau of Agricultural Engineering. It is a
research organization engaged in investigations and experiments in
the fields of chemistry, physics, engineering, and other sciences with
the objective of improving agriculture and developing new and wider
uses for agricultural products.

Under the broad subject of the application of the science of chemistry to the
improvement of agriculture, the Bureau is engaged in investigations concerning
the technology, manufacture, utilization, and preservation, including freezing,
of agricultural products and byproducts ; in the biological, chemical, physical,
miscroscopical, and technological investigation of foods, feeds, drugs, and sub-
stances used in the manufacture thereof, including studies of their physiological
effects on the human organism; experiments on the utilization of agricultural
and other raw materials for industrial purposes ; and development of improved
processes in the production of rosin and turpentine. The four regional research
laboratories, buildings for which are now under construction, will soon begin
investigations to develop new and wider uses for agricultural commodities.

The Bureau conducts investigations of farm machinery, farm buildings, rural
electrification, and other engineering phases of agriculture. The investigations
include land-clearing methods ; planning farm operations, equipment, and lay-out
for more efl5cient production ; mechanical equipment for producing and processing
farm products, including seedbed preparation, planting, cultivating and harvest-
ing, fertilizer placement, hay drying, cotton ginning, fiber flax processing ma-
chinery, and control of insect pests ; development of means to prevenr, dust
explosions and agricultural fires; and the planning and construction of farm
buildings, including heating, lighting, insulation, sanitation, and water supply
for farmhouses, crop storages, and animal shelters, and facilities for the trans-
portation and storage of perishable fruits and vegetables. Service is rendered
other bureaus of the Department in the design and construction of structures
outside the District of Columbia and the purchase of engineering equipment.**

The work of the Bureau follows the general plan of organization
which, in addition to the offices of Chief, Associate Chief. Assistant

1 ,^?r.",P'''^*^'^°'"-^ ^^ Orisanization and Field Activities of the Department of Agriculture,
1939. p. 16, MiseeUaneous Publication No. 376, U. S. Government Printing Office, Wash-
ington, D. C. 1940, 25 cents.

26 CONOENTRATION OF ECONOMIC POWER

Chief in Charge of Agricultural Engineering, Assistant Chief in
Charge of Regional Research Laboratories, Adviser in Chemical Re-
search, Business Administration, Information, and Editorial Service,
and Library, has the f ollovring research divisions :

Carbohydrate Research

Food Research

Industrial Farm Products Research

Protein and Nutrition Research

Naval Stores Research

Chemical Investigations of Allergens in Agricultural Products

Chemical Engineering Research

Farm Mechanical Equipment Research

Farm Structures Research

Farm Operating Efficiency Investigations

Rural Electrification Research

Mechanical Processing of Farm Products

Engineering Plan and Ser^dce

and the regional research laboratories :

Northern Regional Research Laboratory (Peoria, 111.)
Southern Regional Research Laboratory (Nevr Orleans, La.)
Eastern Regional Research Laboratory (Wyndmoor, Pa.)
Western Regional Research Laboratory (Albany, Calif.)

Standardization is not a function of the Bureau of Agricultural
Chemistry and Engineering, but the knowledge gained in connection
with its research work contributes toward a more exact understanding
of how to define or specify the composition and properties of agricul-
tural materials and their derived products ; how to improve analytical,
testing, and research devices and procedures; how to improve tech-
nological methods and equipment for processing agricultural mate-
rials ; how to improve certain products ; and how to improve structures,
mechanical equipment, and engineering operations needed in farming.
That sucli knowledge is usoful in connection with standardization is
recognized by other agencies which call upon this Bureau to collaborate
in the development of specifications and standards. Any standards
developed independently are only incidental to the research work of
the Bureau and primarily for the promotion of such work. Their
adoption by outside agencies would be entirely voluntary. The various
research divisions and the regional research laboratories are presented
with many problems which either are indirectly related to the process
of formulating standards or eventually lead to factors which may be
used as basis for standards. The Bureau of Agricultural Chemistry
and Engineering cooperates not only with the other bureaus in the
Department of Agriculture and other governmental agencies in de-
veloping and promoting standardization but also cooperates exten-
sively with various trade and scientific organizations in the same field.
The Bureau has cooperated with the Federal Specifications Executive
Committee, the National Bureau of Standai-ds, and otlier governmental
agencies, also with the Association of Official Agricultural Chemists,
the American Society for Testing Materials, the International Society
of Leather Trades' Chemists, the American Leather Chemists' Asso-
ciation, and the American Standards Association. Frequently the
Bureau's assistance is requested by and given to various trade associa-

CONCENTRATION OF ECONOMIC POWER 27

tions in connection with problems concerning products originating in
agriculture.

The Bureau, in addition to occasional direct work on standardizing
various products, also supplies important technical information and
develops test methods by which standards may be determined.

Carhohydrate Research.

Members of the Bureau and the Food and Drug Administration
developed the Brice-Keane method and device for grading sugar and
starch by means of the photoelectric reflectometer.-^* This is a rela-
tively simplified process by which the whiteness of a sugar or starch
sample is determined. This method is now a standardized procedure
used by a number of sugar and starch companies in testing the quality
of sugar and starch.^*

The Carbohydrate Research Division also did research work upon
and compiled data on maple sirup on which grading standards were
supplied to the States that used them in connection with the prepara-
tion of larger quantities for State distribution. New turbidity grading
standards were also supplied. The use of permanent glass standards
was further investigated.^'^

Food Research.

The Food Research Division of the Bureau has been engaged for
many years in finding the best methods for handling and processing
vegetables and fruits. This work was performed in the branch
laboratories and in Washington, D. C, in cooperation with the agri-
cultural experiment stations and other State agencies and with growers
and packers.

Recent investigations have been directed to the best methods for
freezing fruits and vegetables. These investigations related not only
to the varieties which are best suited to freezing but also to the devel-
(jpment of the best procedures to follow in carrying through the
freezing process. Better methods of blanching the products have
been developed by the Bureau, which are now accepted as prac-
tically standard procedure, recognizing that further impi-ovements
may be made.

The Seattle Frozen Pack Laboratory and the Los Angeles Fruit
and Vegetable Products Laboratory collaborated with the Northwest
Frozen Food Association and the United States Bureau of Agri-
cultural Economics in preparing tentative standards for grades of
frozen peas. The Bureau of Agricultural Chemistry and Engineer-
ing contributed to the technical work whicli provided the basis for
the standards on freezing and quality of the finished products. These
standards became effective on May 25, 1939. Steps are now be-
ing taken toward the working out of grades for other frozen
products such as asparagus, through further cooperation with the
interested parties.

The Food Research Division also developed deaerators of an im-
proved type which remove the oxygen in orange juice and allow
the production of canned juice of better and longer keeping quality.

23 "Photoelectric Grading of White Sugars and Their Solutions by Reflectance and Trans-
mittancy Measurements," by J. C. Keane and B. A. Brice, Industrial and Engineering
Chemistry, Analytical Edition, vol. 9, pp. 258-263, June 15, 1937.

»* Ibid., pp. 258-263.

=' "Report of the Chief of the Bureau of Agricultural Chemistry and Engineering, 1939,''
p. 20, U. S. Government Printing Office, Washington, D. C, 1939, 10 cents.

28 CONOENTRATION OF EIOONOMIC POWEH

This device is now widely used in the procedure of packing orange
and other juices. The Bureau also developed a method for accu-
rately estimating the peel-oil content of citrus juices which has been
adopted by canners and juice graders.-^

In following through baking investigations the Bureau has found
that tiie best temperature for long-time storage of compressed yeast
is 30° F. It also found from the studies on the staling of bakery
products that staling of bread is directly correlated with the exchange
of moisture between crumb and crust.

In addition, the Food Research Division has been working on
a method for checking the accuracy of the usual eg^r grading process
by measuring the surface of broken-out egg white with special
apparatus; as a result of extensive use it has found a correlation
between the surface area of the broken-out egg white and its fresh-
ness. This provides a scientific standard for checking the accuracy
of the present methods of commercial egg graders on a simple basis
and allows for revamping of methods and basic grade factors. In
commercial practice the candling of eggs can be adjusted accordingly
to give more accurate results.'^

The Bureau also has conducted investigations relating to the
methods for better maintaining eggs in a fresh state while in storage
through the use of a carbon dioxide oiling process. By removing
the air from the egg shell by means of a vacuum and then applying
an oil saturated with carbon dioxide, the freshness of the egg will
be maintained for a longer period of time. This is used
commercially.^^

Industrial Fami Prodvcts Research.

The Industrial Farm Products Research Division continued its
investigation into the physiological processes whereby certain bac-
teria can live and proliferate in saturated solutions of salt, looking
toward a better understanding of the damage which may occur
during curing processes employing salt. Such processes are used not
only in curing hides and skins, but also in the preservation of vege-
tables, meats, and fish for food purposes.

For many years the Bureau has cooperated with other govern-
mental departments such as the National Bureau of Standards, the
War Department, the Post Office Department, Government Printing
Office, and others in developing leather ■ specifications for various
purposes.

A representative of the Bureau of Agricultural Chemistry and
Engineering is a member of the Leather Products Technical Com-
mittee of the Federal Specifications Executive Committee; and on
the Subcommittee on Shoes of the Advisory Committee on Ultimate
Consumer Goods, American Standards Association. Within the past
year the Bureau has cooperated with the Government Printing Office
m developing special commercially tanned leathers for binding pur-
poses. Methods have been developed by the Bureau for testing and
research work on the accelerated aging of leathers. This allows the

»> "By-Products from Citrus Fruits," by E. M. Chace, 15 pp., Circular 232. V. S. De-
partment of Agriculture, Washington, D. C, revised, February 1925. (Out of print.)

" "Report of the Chief of the Bureau of Agricultural Chemistry and Engineering, 1939,"
p. 11, U. S. Government Printing OfRce, Washington, D. C, 1939, 10 cent.s.

28 "A Summary of Studies on the Oiling of Eggs," by T. M. Swenson, 27 pp., Circular 68,
Bureau of Chemistry and Soils, U. S. Department of Agriculture, Washington, D. C, 1939,
mimeographed.

OONGENTRATIOX OF ECONOMIC POWER 29

Bureau to determine by relatively rapid processes what the eflfect of
different curing and tanning processes may be, insofar as the service-
ability and life of various leathers are concerned. The Bureau also
has developed methods for determining the resistance of leathers to
water penetration; to molding; and to deterioration from acid rot;
folding endurance; wear resistance; and other qualities, each valuable
to the consumer of the products.^

In collaboration with the Association of Paint, Varnish, and
Lacquer Manufacturers; National Bureau of Standards; and the
Federal Specifications Executive Committee, investigations as to the
durability of coatings containing soybean oil were conducted indicat-
ing that soybean oils may be used suitably in many kinds of paint.
This may result in the changing of existing standards, such as Federal
Specifications, applying to the composition of certain paints for
specified purposes and allowing the substitution of soybean oil of
specified grades and qualities for other oils previously required.

The Bureau of Agricultural Chemistry and Engineering has worked
with the Commission on the Standardization of Biological Stains,
an independent organization, in developing standard stains for
histological work on vegetable and animal tissues, and also has con-
tributed to improvements on the methods for testing and analysis
of stains. Some of the improved methods developed by the Bureau
have been adopted as standard procedure for analysis of these dyes.
The analysis of the dyes usually involves chemical and spectrophoto-
metric examinations. The Bureau has contributed to the revision
of dye descriptions to be used in the dye monographs for the
forthcoming edition of the National Formulary.

Protein and Nutrition Research.

In addition to investigations relating to the usability and keeping
quality of various proteins under different conditions, the Protein
and Nutrition Research Division has investigated the composition
and qualities of various types of mixed feeds. The underlying prin-
ciples for advantageous mixing of feeds have been investigated and
the results made available through, publications of the United States
Department of Agriculture.

The Naval Stores Research Division.

The Naval Stores Research Division has conducted extensive inves-
tigations relating to the chemical and physical properties of naval
stores (turpentine and rosin). A considerable portion of its work
related to the improvement of production methods both directly and
also as it is related to farm and forestry practice. It has contributed
directly to the development of more standardized practices of stilling
rosin and gum so as to obtain better qualities of turpentine and rosin
which in ti^rn are sold on standards.

The standards for turpentine refer both to the method of pro-
duction and to the color. As stated on page 24, turpentine is clas-
sified as gum turpentine or wood turpentine, with further subdivi-
sions for wood turpentine into steam distilled, destructively distilled,
and sulfate process. According to the Naval Stores Act, enforced by
the Agricultural Marketing Service, turpentine and rosin must be

^ "Report of the Chief of the Bureau of AericuUural Chemistry and Engineering. 1939."
pp. 31-35. U. S Government Printing Office, Washington, D. C, 1939. 10 cents.

30 OONCEXTRATION OF ECONOMIC POWER

labeled with the classification of the product according to the type of
process by which it was produced, that is, turpentine must be labeled
'•gum spirits of turpentine," '"steam distilled wood turpentine," "de-
structively distilled wood turpentine," or "sulphate wood turpentine,"
and rosin must be labeled "gum rosin" or "wood rosin." Commer-
cial wood rosin is produced only by extracting chips which have
been subjected to the steam-distillation process. This classification
has a foundation in fact arising from the difference in the methods
of production.

Although used more or less interchangeably for such purposes as
paint thinners and solvents, these turpentines differ from gum spirits
and from one another in composition to a greater or lesser extent
depending on the process of production.

In addition to the classifications cited above the Naval Stores Act
allows color standards applicable to rosin. They were developed
by the Bureau of Chemistry and modified by the Food and Drug
Administration. The color standards for rosin are the result of re-
search relating to the various classifications desired by the trade.
The existing variable grading types were studied by the Bureau of
Agricultural Chemistry and Engineering and master color standards
were established with permanent glass types available for the use
of graders.

The Naval Stores Act does not require color standards for tur-
pentine. However, the Bureau of Agricultural Chemistry and En-
gineering contemplates the development of color standards for the
various classes of turpentine in cooperation with the American So-
ciety for Testing Materials. These standards would have no official
authority under the Naval Stores Act until accepted by the Secre-
tary of Agriculture after public hearings, but their use would be
sufficiently widespread to be of major marketing importance in the
sale of turpentine.

Standard specifications for various kinds of turpentine have been
developed by the Bureau in cooperation with the American Society
for Testing Materials and have been accepted as official specifications
by this society and the Federal Specifications Executive Committee.
The factors considered by the Bureau and the American Society for
Testing Materials include appearance, color, odor, specific gravity,
refractive index at 20° C, and distillation range.

Several committees have been organized by the American Society
for Testing Materials to determine (1) the softening ponit of rosin,
(2) the acid number of rosin, and (3) the saponification number of
rosin. The naval stores research technicians work closely with these
committees and assume a leading part in their work.

In addition to its contribution toward the standards for turpentine
and rosin, the Naval Stores Kesearch Division has conducted investi-
gations relating to the ({uality of crude oleoresin gum, the raw prod-
uct from which turpentine and rosin are made. I)ue to an increasing
trend in the sale of crude gum by farmers the need for crude gum
standards has been recognized and this is being given attention. The
Bureau of Agricultural Chemistry and Erigineering has developed a
laboratory test for determining the output of turpentine and the
quality of rosin which will result when a small sample of crude gum
is tested. These laboratory investigations have been, checked with
commercial practice and a high degree of correlation has been found.
The laboratory test therefore has been adopted commercially and is

CONCtENTilATION OF EIOQNOMIC POWER 31

used by the industry in determining the grade of crude gum. Tlie
Bureau is attempting to establish standards for crude gum on the
basis of color as related to certain established colors painted on
wooden strips available to graders. However, the results have not
yet been proven practical and it may be necessary to attempt different
methods. The laboratory test or pilot test apparently is the most
accurate standard test for crude ginn grades available for the present.
However, it requires apparatus and technique which may not be
readily available to the commercial grader. The grading of crude
gum involves both a quantitative and a qualitative deterniination.
The standard for crude gimi is determined according to the labora-
tory method, not only by the quantity of turpentine which will be
produced from it but also by the quality of the rosin resulting.

Farm Structures and Storage Research.

The Bureau of Agricultural Chemistry and Engineering does con-
siderable work in determining the proper types of farm structures
to be used for various purposes.

The Bureau has done considerable investigation on the effects of
storage of different products such as corn, wheat, and potatoes under
various conditions and has found that the box storage of potatoes
resulted in less shrinkage and in a higher grade of potatoes than bulk
storage, but the cost of boxes tended to offset the advantages. The
common practice of grading potatoes at the time they are put into
storage is found less desirable than storing the potatoes without grad-
ing them.

The Bureau has collaborated with the National Fire Prevention
Association in developing safe practice codes for the construction and
maintenance of buildings used for such purposes as storage and
processing of agricultural products.

Rural Electrification Research.

A research project was prepared including the following objectives:

(1) Survey and collate information on rural electrification research in State

agricultural experiment stations ;

(2) make case studies of farms in various parts of the country, and by careful

engineering analysis discover how the use of electrical equipment may be
fitted economically into the farm program ;

(3) discover new uses, design new equipment, or redesign existing equipment

to meet the needs of farm operations requiring both stationary and
trac^tive powers * * * ^^

The survey dealt primarily with the application of electricity in
the dairy and poultry industries. Of the studies made, most were
concerned with energy requirements, immediate costs, and immediate
results, and but few with the basic principles involved.

Mechanical Processing of Fai^m Products.

Investigations have been conducted by the Bureau of Agricultural
Chemistry and Engineering relating to the ginning operations and
their effect upon cotton. Their principal objectives were to determine
the effects of different methods of conditioning, cleaning, extracting,
and ginning, and their relationship and correlation with the elements
of quality of lint and ginned cottonseed. A survey of the mechanical
equipment in ginning establishments has revealed that a considerable
saving of power can be made by modernizing present gins. The

™ "Rpport of the Chief of the Bureau of Agricultural Chemistrv and Engineering, 1939,"
p. 88. IJ. S. Government Printing Office, Washington, D. C 1939. 10 cents.

32 CONCENTRATION OF ECONOMIC POWEH

primary problem is to maintain original qualities by proper process-
ing which will meet standards required by textile processors.

Regional Research Laboratories.

The regional research laboratories, when ready for operation, will
work on particular investigations coordinated through the Wash-
ington headquarters. Their status may be considered as an extended
arm of the Bureau's Washington operations which perform specified
investigations usually adapted particularly to the region in which
they are located.

BUREAU OF AGRICULTURAL ECONOMICS

The Bureau of Agricultural Economics, United States Department
of Agriculture, was reorganized in the fiscal year 1939 with the re-
sultant transfer of all regulatory duties to the Agricultural Market-
ing Service and the retention only of agricultural planning for the
Nation, and economic research. As it is now organized, all the work
of the Bureau is under the Chief, who is responsible to the Secretary
of Agriculture for the performance of the duties outlined. To
further the performance of these duties, six major groups of activi-
ties have been designated: (1) General planning; (2) rural welfare;
(3) conservation and land use adjustment; (4) market planning;
(5) the agricultural outlook; and (6) program relations.

The Bureau of Agricultural Economics does not now promulgate
standards, but it does make studies of the economic bases of grades
and standards, and it analyzes the effect of particular standards in
the marketing process. For instance, in cotton prices, information
collected during seasons 1928-32 showed conclusively that prices to
growers in many local cotton markets reflected only a small portion
of central market premiums and discounts for grade and staple
length. Apparently one of the reasons was the lack of adequate in-
formation on the classification of cotton at the time it was sold.
Classification services have been made available to growers in. a few
markets, and information has been collected to ascertain the influence
of these services on the prices to growers and on the quality of
cotton produced. Studies indicate that grade and staple premiums
and discounts to growers varied directly with the reliability and
general acceptability of the classification on the basis of which the
cotton was sold. Aside from premiums and discounts on un individ-
ual-bale basis, farmers who sold in local markets where the average
quality was relatively high usually received correspondingly higher
prices than those wlio sold in local markets where the average quality
was relatively low; but the average level of prices was little, if any,
higher in markets with a public classification service than in those
without such a service.

These findings suggest that, unless the public classification service
is associated with material changes in marketing meth(>ds and prac-
tices other than varying prices on the basis of quality, the possi-
bilities of raising the price level in specific local markets by means
of such a classification service are limited chiefly to the influence of
improvements in quality brought about by the classification service.

CONCENTRATION OF E,O0N0MIC POWER 33

Studies a^e being made of economic possibilities of new markets
for agricultural products. At present this work is limited to new
markets for cotton. Three studies completed on the utilization of
cotton and competing materials dealt with the use of cotton for ferti-
lizer bags, cordage and twine, and hosiery.

Technical research of the Bureau of Agricultural Economics deals
with the developing of new products. During the fiscal year 1938
the Post Office Department agreed to make trials of cotton twine
in tying bundles of letters. In the past, jute twine has been used
almost exclusively for this purpose. The Bureau cooperated with
the Navy Department in the development of parachute cords of cot-
ton in place of the silk cords now used. This potential use of cotton
is not large, but it is obviously important for defense purposes.
Cooperation was maintained with a number of other agencies in the
development of specifications for fabrics, including specifications
used by the Agricultural Adjustment Administration in its cotton-
diversion program; by the Agricultural Marketing Service for cer-
tain coverings for cotton bales; and by the Bureau of Public Roads
for soil-fixation in cuts and fills.

BUREAU OF ANIMAL INDUSTRY

The work of the Bureau of Animal Industry, United States De-
partment of Agriculture, covers a wide field of research in animal
husbandry and diseases of animals, the control and eradication of
Bang's disease, eradication of cattle ticks, control of hog-cholera,
inspection and quarantine, inspection of meat, virus-serum-toxin
regulations and a marketing agreement with respect to hog-cholera
virus and serum. The consumer is particularlj^ interested in the
scientific research providing for better quality of meat and poultry
products and inspection services that safeguard the wholesomeness
of meat, milk, and related food supplies.

In the field of research the Bureau of Animal Industry has dealt
primarily with animal diseases and parasites, improvement of quality
of meats through breeding and feeding, and the nutritive value
of various meats, fats, and oils. Several other bureaus have coop-
erated in the investigations outlined. In studies of the quality
of beef as affected by feeding, many data have been obtained. For
instance,' the fat of grass- fed steers has been found to be slightly
yellower and to contain much more carotene, the chief source of
vitamin A/than the fat of grain-fed cattle. There were no material
differences in the percentages of edible meat in the two groups of
cattle.

Research has been conducted pertaining to Karakul sheep, with
special reference to the quality of fur of the iambs. Results indicate
that desirable fur qualities in Karakul are based largely on complex
genetic factors. Characteristics of mohair, the long lustrous coat
of the Angora goat, have been studied by the Bureau. This work
includes technical observations on mohair fibers involving compari-
sons with other fibers. Such studies have a bearing on suitability
of the fibers for various industrial uses.

At the present time the Bureau is developing a small-type turkey,
in response to market demands for turkeys f^uitable for small families
and small ovens. Besides being several pounds lighter than ordi-

34 CONOENTRiATION OF ElOONOMIC POWER

nary turkeys, young toms weighing, dressed and undrawn, 11 to
1514 pounds and young liens 61/2 to 9 pounds, the new small-type
bird has a compact bocTy with short legs, long keel bone, and abun-
dance of meat. Other characteristics are early maturity, high hatch-
ability, and high viability.

The National Poultry Improvement Plan is supervised by the
Bureau of Animal Industry," for the purpose of assisting the poultry
industry in placing itself on a more sound and efficient basis. The
consuming public should benefit indirectly from this plan through
superior quality of eggs and poultry meat produced. One of the
purposes of the National Poultry Improvement Plan is to identify
authoritatively poultry breeding stock, hatching eggs, and chicks
with respect to quality by expressing them in terms uniformly ac-
cepted in all parts of the country. Cooperation of agencies, within
the States, and their acceptance of standards set up in the plan are
purely voluntary.

The health of consumers is protected in large measure by the Govern-
ment inspection of meat, and meat establishments, which is a function
of the Bureau of Animal Industry, under the Federal Meat Inspection
Act. It is estimated that Federal inspection covers about two-thirds
of all food animals slaughtered in the United States. Establishments
that distribute meat and meat food products in interstate or foreign
commerce must have them inspected by the Federal Government,
Meet that is condemned because of disease, spoilage, or failure to meet
sanitary requirements is never allowed to be put on the market but
is converted into fertilizer, grease, or other inedible products. Ani-
mals are inspected both before and at the time of slaughter. If the
animal is visibly diseased or abnormal it is tagged with a metal label
fastened to the ear. Depending on the condition of the animal, the
tag may be either "U. S. Condemned" or "U. S. Suspect." In the case
of suspects, final decision is withheld until the animal is slaughtered
and a postmortem examination is made.

In establishments inspected by the Federal Government, all car-
casses and internal organs receive a searching examination for possible
presence of diseases, parasites, injuries, or other abnormal conditions.
The men making inspections are divided into two groups. One group
is composed of veterinarians, the other of trained lay inspectors. The
veterinarians make the important decisions ; the lay inspectors perform
various duties under the supervision of veterinarians. If a carcass
is deemed wholesome by the inspectors, the principal wholesale cuts
are stamped "U. S. Insp'd and P's'd." General compliance with the
provisions of the Federal Meat Inspection Act is evident from the
relatively few violations reported by the Bureau of Animal Industry
from month to month. Prosecutions for violations of the Act seldom
exceed four or five a month. In September 1939, for instance, no
prosecutions were reported; in October there were eight, and in
November, two.^^

'1 (It was put into oporation July 1. 1935.) Under authority of an .nppropriatlon by
Cons^ress, Public. No. 62, 74th Cong., H. R. 6718, for the Huroau of Animal Industry to be
user! in cooperation with tlie State authorities in the administration of regulations for
the improvement of poultry, poultry products, and hatcheries.

" "Service and Regulatory Announcements," Bureau of Animal Industry, United States
Department of Agriculture, U. S. Government Printing OflSce. Washington, D. C, September,
October, November 1939, 5 cents each.

C'ONCIE'NTRATION OF EICONOMIC POWER 35

Another protective measure rendered by the Bureau of Animal
Industry is the administration of the Virus- Serum-Toxin Law, by
authority of which the Bureau supervises the production of viruses,
serums, toxins, vaccines, and analogous products, sold in interstate
or foreign commerce, for use in the treatment of domestic animals.^^
If such biological products fail to meet acceptable standards of purity
and potency, The Secretary of Agriculture may prevent sale of such
products, may revoke licenses, or may seize the products on the market.
The administration of this law by the Bureau provides a protection
to the livestock industry and indirectly benefits the general public,
both through the more economical production of livestock products
and through the control of animal diseases, some of which are
transmissible to human beings.

Although its functions are chiefly in the fields of research and inspec-
tion work, the Bureau has issued a number of publications dealing,
in popular form, with foods and other animal products in which con-
sumers are interested. One of these is Miscellaneous Circular 63, "The
Inspection Stamp as a Guide to Wholesome Meat." United States
Department of Agriculture, May 1926; another is Miscellaneous Pub-
lication 317, '"Improving Poultry Through the National Poultry
Improvement Plan," United States Department of Agriculture,
July 1938.

BUREAU OF DAIRY INDUSTRY

The Bureau of Dairy Industry, United States Department of
Agriculture, conducts research in the breeding, feeding, and manage-
ment of dairy cattle to promote efficiency in the production of milk
and to improve its nutritive and sanitary quality. This Bureau also
conducts scientific studies of handling milk on the farm, in transit,
and at dairy plants; studies the promotion of efficiency in dairy plant
equipment, arrangement, and operation; studies the bacteriology and
chemistry of milk and its products, and the problems and manufac-
ture of dairy products and byproducts; assists in establishing new
products and methods in dairy plants; and inspects renovated-butter
factories.

Wliile the Bureau of Dairy Industry is a research agency pri-
marily concerned with the activities enumerated above, its research
involves some problems of interest to the consumer and to those
developing marketing standards.

The Division of Dairy Research L ah oratories.

Bacteria are important in the manufacture of nearly all dairy
products. Therefore, research leading to an increase in the avail-
able information relating to the conditions controlling the growth and
activity of bacteria and especially the effect they have on each other
when growing in mixed cultures has been promoted by the Division
of Dairy Research Laboratories. This basic information has been
related to various dairy products and the quality resulting from
differences in bacteria cultures.^* An incidental result of this work
was the development of a simple and comparatively inexpensive

» 37 Stat., 832, March 4, 1913.

»♦ "Report of the Chief of the Bureau of Dairy Industry, 1939," p. 31. U. S. Government
Printing Office, Washington, D. C, 1939, 10 cents.

35 CONCENTRATION OF EXTONOMIC POWER

medium for growing the eye-forming cultures used in Swiss cheese
making.

Research relating to the various fat, moisture and acid contents
of various cheeses have led to the accumulation of basic knowledge
pointing to the results which may be expected according to various
relationships of such constituents in finished cheese. The results
of this experimental work have been correlated with, and frequently
have altered, commerical practice so as to obtain better quality and
more standard results.^^

A method was developed by which the milk solids in fat in an
ice-cream mix may be increased without danger of the objectionable
sandy texture in ice cream, which is caused by the crystallization of
lactose.^ In this method, sucrose is added to skim milk in the
proper proportion, and the mixture is concentrated under a vacuum
to a point at which crystallization of lactose takes place on cooling.
Since the sucrose prevents excessive thickening, the lactose crystals
may be removed by centrifuging in the usual way to make a self-
preserving skim-milk product that is low in lactose. Since this
product permits the manufacture of an ice cream with better texture
and higher nutritive value, and at the same time provides an outlet
for a large quantity of surplus milk constituents, its general adop-
tion is desirable.

Research has led to the development of a casein fiber having many
of the characteristics of wool." Casein fiber is not as strong as wool,
but it has the same resiliency and takes the same dyes. However,
it is not likely that it will, in the near future at least, become a com-
petitor of wool; rather it should be looked upon as a means of ex-
tending the use of fabrics containing wool. By mixing a casein fiber
with wool it is possible to make fabrics having the desirable proper-
ties of wool but at a lower price.^®

As mentioned, casein fiber dcos not have all of the character-
istics of wool, particularly with regard to strength, but as a result
of research conducted by the Bureau of Dairy Industry, casein fiber
has been developed to a point where it may be an important compan-
ion product for wool, or, in other words, it approaches the present
standards for wool.

In 1928 the Division of Dairy Research Laboratories published
the results of the first of a series of investigations showing that the
lactose of whey could be converted into lactic acid in a short time.^^
On the basis of this information the commercial manufacture of
lactic acid and whey was successfully established. A considerable
quantity of lactic acid is now used in making plastics, but since little
acid of sufficient purity for this purpose is made in this country most
of it is imported. In attempting to extend the outlet for lactic acid
the need for a better method of purifying the crude acid produced

M Ibid., pp. 3.J-36. "The Relation of the Quality of Milk to the Grade of Swigs Cheese."
by L. A. Ropers, R. E. Hardell, and F. Fentz, Journal Dairy Science, vol. 22, pp. 43—48,
January 19.S9.

3« "Report of the Chief of the Bureau of Dairy Industry, 1939," p. 32, U. S. Government
Printing Office. Washington, D. C. 1939, 10 cents.

" "Report of the Chief of the Bureau of Dairy Industry, 1989," pp. 32-33. U. S. Govern-
ment Printin? Offlco. Washington. D. C, 1939, 10 cents.

» "Casein Fiber," by E. O. Whittier and S. P. Gould, Industrial and Engineering Chem-
istry, New Edition, vol. 17, pp 348-349, July 1939,

» "Report of the Chief of the Bureau of Dairy Indostxy, 1939," p. 33, U. S. Government
Printing Office, Washington, D. C, ig.'JO, 10 cents.

CONCENTRATION OF ECONOMIC POWER 37

in this country under commercial conditions was recognized. Such
a method was developed and tested bj the Division of Dairy Re-
search Laboratories on a pilot plant scale in a commercial plant with
such success that the plant is now taking steps to put this method
into operation.

A method was developed for producing lactose with one crystalliza-
tion sufficiently pure to meet the requirements of the pharmaceutical
grade. Investigations were also conducted to show that whey solids
may be used in confectionery, soups, and bakery goods. The use
of these dairy byproducts in foods does not necessarily limit it to
their substitution for ingredients of established foods. There is also
the possibility of combining milk or some combinations of its con-
stituents with other products to make new forms of foods, confections,
or beverages. A start in this direction was made by combmin*^ skim
milk with potatoes to make a new product having some of the char-
acteristics of potato chips and the added advantage that, since it
contains no fat, it has excellent keeping qualities. It can be made
in regions, remote from markets, where sMm milk and cull potatoes
are cheap.*°

It isi rather generally conceded that the grade of the great bulk
of Cheddar cheese made in this country, even in the older cheese
'.ections, is usually low. Investigations by the Division of Dairy
Research Laboratories indicate that three factors are of major im-
portance in establishing the texture and flavor of the ripened cheese.
The first factor is the bacteriological condition of the milk from which
the cheese is made ; second, is the control of the manufacturing proc-
ess with particular reference to the acidity developed in each step;
the third is the adaptation of the curing room temperature to the
particular characteristics of the cheese to be ripened. Regarding
the first factor, the Division of Dairy Research Laboratories found
that pasteurization is a partial remedy and is of value in helping to
produce a uniform product; but even when the milk is pasteurized,
it is necessary to eliminate the bacteriologically poor milk. Tests are
now available Vv'hich indicate tlie bacteriological condition of the
milk with reasonable accuracy so simple that any cheese maker can
use them. Regarding the second factor, the experimental results in
this Division, whicli are fully corroborated by field observations,
show that the acidity limits essential to a good flavor are very narrow
and do not agree )\ith those commonly adopted in the factories.
Investigations relating to the third factor indicate that the present
practice of storing cheese at 34° F. is sound when applied to the
-high acid, high moisture cheese now generally made, but data devel-
oped by the Division show tliat the cheese made from good milk with
proper control of the acid development should be cured at a much
higher temperature to develop the characteristic flavor of Cheddar
cheese."- The results of these investigations are being made avail-
able not only in published form but also by demonstration in coopera-
tion with the University of Wisconsin tlirough which one field man
using the trailer laboratory is making them known directly to those
interested.

Prrnf^^^'nffl"^ *w SJ'/^^"' ^^^ ^^''%1iiS^ R^^^^ Industry, 1939, " pp. 34-38, U. S. Government
iTinting Offlcp, Washington, D. C. 19S9, 10 cents.
" Ibid., p. 3».

272496 — 41— No. 24 4

38 CONCENTRATION' OF ECONOMIC POWER

An investigation of the relation of the fat and moisture content
of Swiss cheese to the quality of the cheese has been completed. The
laboratory results obtained under experimental conditions were con-
firmed by data collected by field men working in the commercial
factories in Wisconsin and Ohio. These data show that there are
definite limits for both water and fat beyond which the cheese maker
cannot go without injuring the quality of the cheese.^-

Investigations were conducted to indicate and demonstrate the prac-
ticability of packing sliced Swiss cheese in cans for distribution to
lunchrooms and restaurants."*^ Selected cheese is cut into blocks,
wrapped in cellophane, and packed in cans. If the cheese is of a
good quality and the storage temperature is not too high, this package
may be held indefinitely. The lunch counter proprietor buying cheese
in this form has less waste, the cheese is ready to serve, and he knows
exactly how many sandwiches may be made from each package. Simi-
lar investigations and demonstrations have been carried on for Ched-
dar cheese with the same potentialities.

Division of Market Milk Investigations.

Experiments have been started to compare five different tests used
in determining the quality of milk and to evaluate the tests in terms
of the keeping quality of milk. Tests were made under various time-
storage conditions. The tests are still in process and not yet conclusive.
The experiments will be continued until a statistically significant
number of samples covering a wide range of quality has been studied.

Investigations were conducted relating to the curd tension of milk.
Curd tension of milk is important particularly in pediatric work. The
Hill method, developed some years ago, has been the most generally
accepted method for determining milk as hard curd or soft curd.
The Division of Market Milk Investigations perfected a method for
determining curd tension using hydrochloric acid and pepsin as *a
coagulant.** The recent method developed by the Bureau of the
Dairy Industry apparently simulates human digestive conditions
much more closely than does the Hill method.

Under the Hill method 33 grams is considered the proper dividing
line between hard curd and soft curd milk. Under the newer method
approximately 21 grams appears to be a reasonable dividing line, but
more data on the relation between curd tension and digestion are
necessary, before a definite standard can be set, although this work
should provide the basis for setting such a standard. This becomes
important particularly with the increase in the homogenization of
milk and its increased sale of soft curd milk. When the results of
these experiments are available in satisfactory form, it should then
be possible for interested parties to establish a dividing line between
hard curd and soft curd milk so that proper labeling may follow,

BUREAU OF ENTOMOLOGY AND PLANT QUARANTINE

The Bureau of Entomology and Plant Quarantine, United States
Department of Agriculture, isnot responsible for administering any
of the various acts dealing with standards. Its basic research work,

« "Report of the Chief of the Bureau of Dairy Industry, 1939," p. 36, U. S. Government
Printing Office. Washington, D. C, 1939, 10 cents.
« Ibid., p. 37.
*« ThM n 40

CONCENTRATION OF ECONOMIC POWER 39

however, on insect control and honey production is largely, or in part,
the scientific foundation for many standards for food products, tex-
tiles, leather, fibers, and forest products.

The results of the Bureau's work on termite control to prevent
buildings from becoming infested with termites have been incorpo-
rated in specifications of many municipal building codes.

The research work on mothproofing materials has led to standard
mothproofing procedure.

The Bureau's investigations on the control of granary and mill
insects has done much to decrease the loss resulting from the reduction
of wheat to low grade, or pecky, caused by these insects.

There are specific requirements as to insect injury in grading apples
and peaches. The Bureau's investigations make possible the pro-
ducing of fruit that will meet Grade A standards.

Grade A potatoes have definite specifications as to the amount of
insect damage to the tubers that will be tolarated. The Bureau's
work on the control of insects makes possible the production of Grade
A potatoes.

The research work of the Bureau of Entomology and Plant Quaran-
tine has resulted in the establishment of specifications by the Bureau
that are used in grading honey.

Control of bot flies in cattle prevents grading down of hides as
grubby.

Lumber is graded down if borer holes appear in the clear lumber.
The forest insect investigations of the Bureau have led to standard
procedures in lumbering and lumber handling processes to reduce this
injury to a minimum.

The insecticide investigations of the Bureau provide the ground-
work for standards for insecticides.

BUREAU OF HOME ECONOMICS

The Bureau of Home Economics of the United States Department
of Agriculture devotes its entire resources to improving the levels of
living of the Nation's families. Much of its w^ork, therefore, is in
the field of consumer problems.

Pursuant to the authority contained in the Agricultural Appro-
priation Act, the Bureau has been conducting investigations for a
number of years on "the relative utility and economy of agricultural
products for food, clothing, and other uses in the home, with special
suggestions and plans and methods for the more effective utilization
of such products for these purposes." Some of this research is carried
on independently ; some in cooperation with other agencies within the
Department.

Steps in the Developtnent of Consumer Standards.

In developing standards for consumer goods and securing wide-
spread acceptance of such standards by household buyers and by busi-
ness groups, four steps must be taken :" {a) Determination of the prod-
ucts for which standards are practicable and important; (6) research
to provide a basis for standards; {c) formulation of standards that
will be helpful to consumers and feasible from the standpoint of
producers and distributors; {d) promotion of the use by business
agencies of established standards on labels, in advertising, and through
other merchandising practices and devices ; education of consumers in

40 CONOENTRiATION OF EiCONOMIC POWETl

the use of standards. In all four of these steps the work of the Bureau
of Home Economics is of fundamental importance.

Determination of Products for Which Stmidards Will Be Developed.

Consumers need standards for some goods far more than for others.
In deciding where to begin a program of establishment of standards,
an agency or group of agencies would consider the consumption pat-
terns of the Nation's families, scientific and technological develop-
ments that might facilitate progress, as well as work already com-
pleted or in progress.

The Bureau's research on the consumption of American families
at different income levels provides information as to the relative
importance of various goods in the family budget, i. e., their share
of total family expenditures for living. Its research of human
needs tells which products are important from the standpoint of
family well-being. A standard might be much needed for a food
product because of its close relation to health, even though expendi-
tures for such food take a relatively small part of total family out-
lays. Use by a large proportion of families also is a criterion for
deciding whether a product shall be included in the program. The
Bureau's studies provide information on the proportion of families
at different income levels using specific goods and services. Fur-
thermore, because of close contacts with families and their problems,
the Bureau's staff members are constantly aware of consumers' prob-
lems and interests.

Research Providing a Basis for Stcmdards; the Form/idation of
Standards.

Much of the Bureau's research on utility and economy of agri-
cultural products may be of direct use in the formulation of stand-
ards; some already have been so used. The Bureau is represented
on the Advisory Committee on Ultimate Consumer Goods of the
American Standards Association. Members of the Bureau's staff
have served on several of the technical testing committees of the
American Society for Testing Materials, and have taken an active
part in the work of the National Consumer-Retailer Council which
is working to promote informative labeling of household goods.

In the field of textiles and clothing, consumer specifications for
fabrics are based on information obtained by the Bureau from a
detailed study of the chemical and physical properties of various
clothing and household textile materials, supplemented by service-
ability tests whenever possible. The Bureau is studying the fabrics
on the market and is suggesting minimum specifications for various
classes of textiles and for various grades within each class. To date,
such minimum consumer specifications have been proposed by the
Bureau for broadcloth, toweling, sheeting, upholstery fabrics, and
blankets.'

These specifications for broadcloth, toweling, and sheeting have
been used by the American Society for Testing Materials in the
preparation of its recommended tentative specifications for these
fabrics. The Bureau has taken the lead in the work of this society
in the development of standard specifications for household and
garment fabrics.

In cooperation with the Farm Security Administration, the Bu-
reau 1.5 dcvelopla^ sp'^cifications for the textiles and clothing sold

CONCENTRATION OF ECONOMIC POWER 41

by the cooperative associations of clients of the Administration.
These specifications are being prepared on the basis of tests con-
ducted by the Bureau,

With the increasing use of mixtures of rayon with silk, cotton, and
wool in the manufacture of fabrics for garments and household
textiles, it has become more important tlian ever to provide the buyer
with labels describing these mixtures. As a basis for a program of
informative labeling, the Bureau has studied the effect of substi-
tuting reworked wool and rayon for new wool in suitings. Fabrics
have been specially woven from wool produced on experimental
animals at the Agricultural Research Center and from spun rayon.
The experimental suitings have been made into boys' knickers and
placed in service in a local institution. Samples are withdrawn
periodically for testing in order to determine the changes produced
by wear.

The determination of sizes of children's garments and patterns
according to age, the procedure now generally followed, has been
a source of difficulty to the buyer. There has been great variation
in actual size of garments sold for children of a given age, as, for
example, for 6-year-olds. In order to provide a basis for develop-
ment of a new standard system of body measurements, the Bureau
sponsored and directed a Nation-wide cooperative project, subsidized
by the Work Projects Administration, in which children 4 to 17
years of age were measured. Nineteen universities and other edu-
cational institutions participated in this work.

The study necessitated 36 measurements on each of 147,000 chil-
dren in 15 States and the District of Columbia. The results have
been incorporated in a suggested standard syst.em of sizes. This
system has been described in a publication of the Bureau and has
been presented to representatives of national organizations of manu-
facturers and distributors of children's wear, under the sponsorship
of the American Standards Association. The adoption of these
standards will do much to improve the fit of children's ready-made
clothing and the sizes of patterns for children's garments.

In order to provide the facts upon which better determination of
sizes of women's clothing may be based, the Bureau has initiated
and is sponsoring a similar cooperative study of the body measure-
ments of women. For this purpose 58 measurements used in the
manufacture of clothing are being taken on each individual.

In the field of food, the Bureau of Home Economics has coopei-
ated with various agencies in the United States Department of
Agriculture in research designed to provide information concerning
qualities of food products, as a basis for the commodity grades pro-
mulgated by the Department. An example of such research is the
extensive, long-time study of factors that affect the palatability of
meat, conducted in cooperation with the Bureau of Animal Industry,
the Agricultural Marketing Service, and a number of State agri-
cultural experiment stations. In addition to measuring quality and
studying palatability factors in a large number of cuts of meat repre-
senting different methods of production and processing, the relation-
ship between shrinkage and methods, time, and temperature of
cooking has been studied. A report of the effect of grade, style of
cutting, and method of roasting, oh shrinkage and cooking time of
rib roasts of beef has been published.

42 CONCIENTRATIO'N OF EOONQMIC POWER

The Agricultural Marketing Service consults with the Bureau of
Home Economics when working upon ^ades for products pur-
chased for family consumption. From its research, the Bureau
provides data concerning qualities of the foods, and consumer buying
habits and preferences.

The Bureau, with the Consumers' Counsel Division of the Agri-
cultural Adjustment Administration, has represented consumers in
the consideration of standards of identity by the Food and Drug
Administration. In the gi-ading of milk, it has cooperated with
the United States Public Health Service. It has supplied informa-
tion on consumer goods for use by the Federal Trade Commissior.
in enforcement of the Federal Trade Commission Act.

Research on housing of farm families has provided a great deal
of information as to tlie dwellings now in use. The Farm Housing
Survey (a Civil Works Administration project) conducted in 1934
provides information on the current situation as to size, materials
used in construction such as wood and brick, facilities and state of
repair of farm dwellings, based on facts collected from more than a
half million houses in 308 counties in 46 States. The Consumer
Purchases Study (a Work Projects Administration project) fur-
nishes facts about the housing of farm families at different income
levels, including average number of rooms and number of persons
per room; the prevalence of such facilities as running water, hot
and cold water in kitchen and bath, indoor flush toilet, central heat,
and electric lights; and the yearly expenditures of families for
keeping their houses in repair. These data are basic for formula-
tion of housing standards. They disclose types of materials that
may be purchased for modernizing and for building new farm homes
and therefore indicate probable consumer needs for standards, as
buying guides.

Another important study of housing made by this Bureau sum-
marizes what farm families say they want and need in house de-
sign to make their homes comfortable and convenient for different
climatic conditions; it also includes their suggestions for adapting
the houses to the requirements of different types of farming. Lack
of such information has been one reason for the failure of architects
and builders to plan dwellings suited to farm life, to the needs of
both the family and the farm business.

Refrigeration is important in the preservation of the farm food
supply for family use. The extension of electric power lines, pro-
moted by the Rural Electrification Administration, and the growing
use of gas in rural areas have made refrigeration available to more
rural homemakers than ever before and thus have increased the de-
mand for help in choosing the types best suited to family needs.
The Bureau has studied the types of refrigeration available and is
preparing a bulletin to guide the farm housewife in selection and
use of such equipment. A representative of the Bureau has served
on the committee on household refrigerators of the American Stand-
ards Association.

The Bureau has cooperated with the State experiment stations in
the study of those items of household equipment most needed in farm
homes in different sections of the country. The findings will be used
in the preparation of standards and buying guides.

CONOENTRATION OF EKTONOMIC POWEiR 43

The Bureau has cooperated with the Rural Electrification Admin-
istration, the Extension Service, and the Bureau of Agricultural
Chemistry and Engineering in the preparation of a bulletin on light-
ing the farmstead. In this publication the farm homemaker is
advised as to the location of outlets and lights, and the points to be
considered in choice of fixtures.

Promoting the Use of Consumer Standards.

Through its work with the National Consumer-Retailer Council, the
Bureau, together with other organizations interested in consumer
education, has worked toward an intelligent and sympathetic under-
standing of the problems of business by consumers and, conversely,
the problems of consumers \>y business. The program of this council
includes work on the development of definitions for products, stand-
ards for consumer goods ; suggestions for labels for some of the more
common widely used consumer commodities; promotion of other
means of providing sound factual material to consumer-buyers.

The Bureau has prepared a series of buying guides to assist pur-
chasers in judging the qualities of household textiles and of clothing.
These guides suggest important points to be considered when pur-
chasing and include publications on ready-made dresses, women's
cloth coats, children's clothing, women's hosiery, men's and boys'
sliirts, sheets, blankets, and bath towels. Whenever possible these
buying guides give specifications for the fabrics used in the finished
article.

The Bureau also cooperates with the Extension Service in formu-
lating study programs for rural groups interested in consumer buy-
ing. It provides material for the Consumers' Guide, published by
the Consumers' Counsel Division, Agricultural Adjustment Admin-
istration. It conducts its educational program through radio broad-
casts, bulletins, press releases, and other means of communication.

The homemaker requires a type of buying information different
from that required by business and Government agencies. Consum-
ers need simple labels and nontechnical statements as to qualities and
performance. If standards for consumer goods are to be of maxi-
mum value to homemakers, they must be used in connection with a
program of consumer education, such as that carried on by this
Bureau, the Extension Service, and other educational agencies.

BUREAU OF PLANT INDUSTRY

The Bureau of Plant Industry, United States Department of Agri-
culture, has published descriptions of principal varieties of various
fruits and vegetables. Because of a lack of a generally accepted,
authentic, and adequate description of even the most important of
vegetable varieties, there has been great disagreement and some con-
fusion as to exactly what characteristics a certain variety should
possess. Members of the seed trade who deal in vegetable seeds, as
well as farmers, canning-factory operators, and most gardeners who
buy vegetable seeds, have long desired and urgently requested that
the United States Department of Agriculture undertake exhaustive
studies and issue adequate descriptions of the most widely used vari-
eties of vegetable seeds. This development of varietal descriptions
relates only indirectly to standardization, for it is almost entirely in
the field of horticultural development and investigation. However,

44 CONCENTRATION OF ECONOMIC POWER

when varietal descriptions and designations have been specifically
established, it is then possible to establish grades and standards of
quality within each varietal group.

The Bureau of Plant Industry has cooperated in providing basic
information of horticultural nature to other bureaus of the United
States Department of Agriculture, directly interested in the promul-
gation of standards.

COMMODITY EXCHANGE ADMINISTRATION

The Commodity Exchange Administration, United States Depart-
ment of Agriculture, does not establish standards of quality. It is
only concerned with grades in connection with its supervision of com-
modity markets. Under section 5a (6) of the Commodity Exchange
Act, the use of official United States grades in futures trading for
commodities under the supervision of the Commodity Exchange Ad-
ministration is mandatory when such grades have been promulgated.
If no United States grades have been promulgated, then trading is
regulated under the various grades adopted by the commodity ex-
changes, provided their inspection systems have been approved by
the Secretary of Agriculture under the provisions of section 5 (a)
of the act.

While the Administration does not establish standards of quality,
it has cooperated with other bureaus in the Department in the formu-
lation of grade 1 for futures.

EXTENSION SERVICE

The Extension Service of the United States Department of Agri-
culture conducts an educational program for farmers, concerning
grades and standards for fruits and vegetables, dairy products, poul-
try products, livestock, grain, tobacco, cotton, and other farm prod-
ucts. This work is closely related to the general educational program
dealing with improvement of quality and the cultural practices which
result in the production of the varieties, grades, and kinds of prod-
ucts that best satisfy consumer demand. Demonstrations are given
by county agents and extension specialists on the proper methods
of grading various products to meet United States or State standards.
In addition, approved methods of harvesting, packaging, and loading
are taught to farmers and farm groups. The majority of this work
is conducted in the field or at shipping points, and frequently cooper-
ative demonstrations are arranged at which representatives of the
State and Federal departments of agriculture, whose work deals with
grading and standardization, participate.

Considerable attention has been given in recent years to the devel-
opment of grades and the use of marks or brands which can identify
these grades to consumers. Extension Service representatives have
assisted farmers in developing so-called quality-improvement pro-
grams. The objective of these programs is to develop a product of
uniform quality and to identify it with a trade-mark or insignia
which can thereby assure consumers of the designated quality of
produce. Work of this nature has been done for various fresh fruits
and vegetables, certain canned products, dressed poultry, dairy prod-
ucts, and other commodities.

OON-dENTRiATION OF EO3N0MIC POWER 45

In addition to the educational program for farmers on grades
and standards, the Extension Service, through home demonstration
work, conducts a program on consumer education for rural women.
The consumer goods covered include food, clothing, furniture, house
furnishings, electrical and other household equipment, and cosmetics.
Homemakers learn, through their home demonstration work, to buy
through examination of product, reading of labels, and questioning
of retailers. Consumers are encouraged to ask for quality labels.

Each State has an extension specialist in some of the fields in
home economics. These specialists develop materials for the use
of home demonstration agents in the counties. Information for
these materials on consumer education is taken from various sources,
including the Bui-eau of Home Economics, American Home Eco-
nomics Association, American Standards Association, and State ex-
periment stations, and from such publications as "Consumers' Guide"
of the Consumers' Counsel Division, Agricultural Adjustment
Administration.

The home demonstration agents also educate farm women in the
use of marketing standards for some of the products which they
sell. These standards are used in the markets which farm women
have established, particularly in the Southern States. ISIost of the
educational work performed by the Extension Service in the use
of marketing standards is conducted by county agents and State
extension specialists. Demonstration meetings to show farmers how
to grade their produce are arranged by the county agents who either
speak themselves or bring in field members of the Agricultural
Marketing Service, and specialists from the agricultural colleges.

Information is given not only on the grading itself but also on
Avays to improve quality so that higher grades may be met. These
demonstrations may range from choice of seed, through the various
cultural operations, to harvesting and packing. In some cases county
agents demonstrate methods of harvesting, grading, and packing in
the fields; and in others demonstrations are arranged at packing
sheds, shipping points, and farmers' wholesale markets.

FARM SECURITY ADMINISTRATION

Standards for Commodities Used in Farm Production.

The Farm Security Administration, United States Department
of Agriculture, has recommended certain quality standards for the
use of its clients in making purchases with proceeds of loans received
through the Administration. These standards, Avliich are more in the
nature of buying guides, apply only to goods used in farm produc-
tion : Seed, fertilizer, equipment, and livestock. These standards
have been prepared with the cooperation of other bureaus of the
United States Department of Agriculture.

The seed standards set up minimum requirements for seeds used
in farm production and for vegetable seeds used in home gardens.
The factors considered in these standards are germination, seed
purity, disease resistance, proportion of weed seeds permitted in a
mixture, weight per bushel, and the need for purchasing untreated
or treated seed. In each case the minimum requirement is specified.
The reports outlining the standards also include a discussion of the
variety of seeds which may be purchased and the proper method

4() CONOENTRATION OF EIOONOMIC POWEH

to be used in the planting of seed. The work on seed standards
which is being done by the Farm Security Administration supple-
ments that regularly being done by the United States Department
of Agriculture on seed labelinsr. The Farm Security Administration
found that descriptive labels which are attached on seed sacks are not
being made available to consumers who purchase in small quantities.
The Administration also found that there was no protection to con-
sumers who buy seed produced locally. Because of the large waste
of money resulting from the improper purchase of seed by its clients,
the Farm Security Administration set up its own minimum stand-
ards for seeds and suggested that its clients purchase them
cooperatively.

The suggested minimum standards for fertilizer likewise are buy-
ing guides. It is recommended that fertilizer mixtures should con-
tain not less than 20 percent plant food. It is also suggested that
farmers purchase grades recommended by the State experiment sta-
tions or the extension service, and use high analysis fertilizers. Re-
gional directors are authorized to prepare a list of a limited number
of acceptable grades of fertilizers for farmers.

The specifications for machinery and equipment are also mainly
buying guides which include factors important in the purchase of
farm machinery. They contain descriptions of the proper types of
equipment to be purchased for certain uses, and information on the
care and repair of farm machinery. These specifications indicate
first that, in purchasing equipment, farmers should ascertain that
(1) the equipment is of a current model regularly furnished to the
trade, (2) the design is in accordance with good practice and the
workmanship and quality is satisfactory, (3) the machinery is new
and unused unless otherwise specified, (4) a satisfactory guaranty
is given by the seller that any defects due to poor workmanship
developing within 3 months of ithe date of purchase will be adjusted,
(5) service and parts are readily available, (6) purchase is subject to
suitable instruction and demonstration, and (7) machines are to be
set up if they are shipped in knocked-down form. The specifications
then classify the various types of agricultural implements and ma-
chinery on the basis of the purpose for which they are to be used,
namely: (1) Seed bed preparation, (2) plantina:, (3) cultivat-
ing, (4) spraying and dusting, (5) harvesting, and (6) processing.
Thev describe the various types of implements available for each
of these purposes and indicate the major factors that should be con-
sidered in the purchase of each type of equipment. Thus, in the
case of planting equipment, it is recommended that the machines
selected should be ones that can be used on diversified crops, should
be equipped with an ample assortment of seed plates for various
sizes of seeds, and that the range in the rate of seeding should cover
future as well as existing farm needs.

Specifications and recommendations for livestock have been pre-
pared which indicate the factors that farmers should consider in
making proper selection of certain types of livestock, and how ani-
mals should be cared for after purchase. These specifications are
more detailed in the case of horses, mules, and dairy stock, than they
are in the case of sheep, swine, and poultry. They are, in effect,
buying guides although they are called standards by the Farm Se-

CONOENTRATION OP EIC'ONOMIC POWE'R 47

curity Administration. The two principal factors that farmers are
advised to consider in buying dairy stock are (1) freedom from
disease (tuberculosis, bangs, mastitis, sound in udder), and (2) pro-
duction. A schedule of prices is included which indicates the differ-
entials that should be paid for dairy stock of different ages and with
different butterfat production records.

Standards for Commodiiies for Farm C onsuinption.

The Bureau of Home Economics of the United States Department
of Agriculture has been cooperating with the Farm Security Ad-
ministration in providing information relating to selection of con-
sumer commodities. The Bureau of Plant Industry and the
Agricultural Adjustment Administration of the United States De-
partment of Agriculture, and the Vocational Education Division of
the Office of Education, United States Department of the Interior,
have also cooperated with the Farm Security Admmistration in
supplying information for guidance in consumer buying.

Account books, required by the Farm Security Administration,
include a list of commodities bought by farm families each month.
From these account books a list of commodities to be tested in order
to determine their quality and performance has been compiled. The
Bureau of Home Economics is conducting tests of many of these
commodities, including boys' trousers, overalls, socks, foods, and
cooking devices. As a result of these tests, specifications may be
formulated to meet the particular needs of the clients of the Farm
Security Administration, with major emphasis on performance.

Efforts are also being made to correlate commodity standards
with nutritive values. Adequat-e minimum needs provided by a
liberal supply of vegetables, milk, eggs, poultry, and meats, are in-
cluded in these "'dietetic standards."

The number of consumers contacted by the Farm Security Ad-
ministration is necessarily small since the Administration helps
only those families who cannot be served through any other channels.
The educational program is developed by field workers and through
cooperative endeavors. It is hoped that emphasis on home and family
needs and costs, together with the detailed keeping of records by
each family, will encourage buying of over-the-counter goods on the
basis of quality and performance. The educational program ifor the
development of buying on this basis will be more easily conducted in
the rehabilitation projects of the Farm Security Administraticm
where community cooperation is being created, than in cases where
the Administration is merely assisting individuals. In the latter
case, however, an attempt will be made to educate these individuals
regarding quality purchasing,

/Standards for Loao-Cost Housing.

While the Farm Security Administration is not primarily a hous-
ing agency it has constructed low-cost homes for the fami families
on, or near, relief which it has helped to become self-supporting.

The houses constructed under this program were designed to meet
a wide variety of climatic conditions, living habits, and economic
needs. Some of the first houses were suburban, such as Greenbelt
communities, rather than rural: Today, however, the Farm Security

48 CONCENTRATION OP ECONOMIC POWER

Administration is building throiigh private contract only low-cost
farm houses.

Construction has been based on a few simple principles, intended
to produce adequate, attractive, but modest homes at the lowest
possible cost:

Design. — Cubic footage of the house was held to the minimum
necessary for health and comfort. Rooms were arranged for both
compactness and convenience. Every unnecessary gable, beam, and
purely decorative feature was eliminated.

Materials. — First grade materials were used throughout, so that
maintenance and repair costs would be as low as possible. Standard
materials, in standard sizes, usually proved most economical. The
use of local products often resulted in considerable savings, through
lower transportation costs.

C onstriiction. — Precutting and prefabrication were highly devel-
oped. A small portable sawmill, for example, often was set up on
the project, to cut lumber to exact specifications for a large number
of houses. Complicated parts, such as window and door frames,
and sometimes the entire frame of the house, were prefabricated at
the mill, so they could be installed with a minimum of labor.

FEDERAL CROP INSURANCE CORPORATION

The Federal Crop Insurance Corporation, United States Depart-
ment of Agriculture, utilizes the facilities of th-.* Agricultural Market-
ing Service in the administration of the Grain Standards Act in con-
nection with the establishment of standards of quality. These stand-
ards of quality are specified in the Official Grain Standards of the
United States.

In accordance with these standards, premiums are computed in the
class of wheat specified by the insured in his application, but the basic
grade for computing premiums and indemnities with respect to each
class is determined by the Federal Crop Insurance Corporation before
applications for insurance are solicited. The Corporation has speci-
fied No. 1 as the grade for Northern Spring Wheat, and No. 2 as the
grade for all of the other classes of wheat to be used as the basis
for collecting premiums and paying indemnities.

Premiums may be paid in wheat, by cash, or by means of an advance
from the Secretary of Agriculture against conservation and parity
payments accruing to growers under the program administered by the
Agricultural Adjustment Administration.

Indemnities are paid either in wheat, in cash by immediate settle-
ment, or in cash by deferred settlement up to 90 days after approval
by the Corporation of the insured's claim for indemnity. The insured
may indicate the method by which he desires an indemnity to be paid,
but the Corporation reserves the right to make payment in form other
than that indicated by the insured.

Only an extremely small portion of the premiums have been paid in
wheat. The cash received by the Corporation is used by the Corporia-
tion to promptly purchase wheat to hold in an insurance reserve to
cover future indemnities. When indemnities are paid in cash, wheat
is sold from this reserve to provide the necessary funds.

The classes and grades of wheat used in ail of these transactions are

CJON'OENTRATION OF EI(X)NOMIC POWER 49

determined in accordance with the Official Grain Standards of the
United States.

FOREST SERVICE

Congress has designated the Forest Service, United States Depart-
ment of Agriculture, as the agency of the Federal Government specifi-
cally responsible for protecting, developing, and administering certain
public lands and their living resources. The Forest Service is also
authorized to help States and farm, industrial, and other owners to
protect and develop such of their lands as are more valuable in forest
growth than as plow land.

Broadly, responsibilities of the Forest Service are : ( 1 ) To initiate
and apply, locally and nationally, action programs looking to the
best use of forest lands in the interest of public welfare and help with
action programs initiated by county, State, and Federal agencies;

(2) to protect, develop, and administer in the public interest the
national forest system and its resources, products, values, and services;

(3) to conduct research in problems involving protection, develop-
ment, management, renewal, and continuous use of all resources,
products, values, and services of forest lands; (4) to make research
and administrative findings and results available to individuals, indus-
tries, and public and private agencies generally.

In research, in national forest administration, and in initiating and
applying action programs the Forest Service works in close coopera-
tion with other branches and bureaus of the United States Department
of Agriculture; and is guided by the Department's basic purpose of
establishing and maintaining such sound land and resource manage-
ment and use as will help build and maintain communities and local
and national social and economic structures.

The Forest Service conducts certain research and investigationa
of interest to the consumer. Although it does not officially promul-
gate standards, it does a large amount of research worL to determine
the proper factors, with their evaluations, which become the bases
for either official standards or standards adopted by semipublic
organizations and extensively used in commercial practice.

Within the scope of marketing standards the research work of the
Forest Service tends to fall into two general categories : ( 1 ) Forestry
practice and the first marketing of raw forestry products, and (2)
investigations as to the inherent identity and quality and most suit-
able uses for forestry products which have been at least initially
processed, that is, lumber, in the conventional sense.

In administering public lands which have growing timber, it fre-
quently is necessary and prudent to dispose, either to Government or
private outlets, of that portion which is ready for cutting. "Wliile
these sales are made in accordance with usual Government require-
ments applicable to the disposition of govermnentally owned prop-
erty, peculiarities unique to forestry are followed. Sales usually are
made upon the basis of price per thousand board feet, log scale. This
involves a process of estimating the probable output at the time the
sale is advertised, and when the bids are offered the logs are scaled
as the basis for monetary settlement. Many rules for measuring logs
in board feet developed or were adopted in different parts of the
country in the effort to obtain a rule which would give the am.ount

50 CONCENTRATION OF HCONOMIC POWEH

of lumber that could be sawed from a log of a given size under local
marketing and sawing customs. Some of these rules, among others,
are known as the Scribner rule, the Doyle rule, the Maine rule, the
Spaukhiig rule, and the International rule. To establish a uniform
or standard basis upon which to proceed in the sale of national
forest timber, a regulation of the Secretary of Agriculture relating
thereto was first issued in 1905. Its present form, regulation S-16,
was published in the "Federal Register," August 15, 1936, page 1094,
and stated that "The cubic volume rules and the Scribner Decimal C
log rule, both as used by the Forest Service, are the official rules for
scaling national forest timber." Improvement of milling machinery
aiid changing customs in parts of the country made it desirable to
have the option of using the International log rule under some circum-
stances, and the Secretary of Agriculture modified Regulation S-16 **
in 1938 to give this option, which as yet has not been widely exercised
except in the Northeast.

The uniform use of the Scribner Decimal C rule, under a standard
set of instructions *" for deductions for defect and for its application
in other ways has had an intensive and extensive influence on the
practice of private owners near the national forests. Company after
company joined voluntarily in the use of the standard so established.
Logging contractors demanded "Government scale" for the logs they
delivered. The Office of Indian Affairs of the United States De-
partment of the Interior later adopted the same rule and issued
similar instructions for its use. The influence of this standard has
been f^r reaching.

The Forest Service also has attempted to promote more extended
use of the standard cord measure. The conventional cord is 8 feet
long by 4 feet wide and 4 feet high, or a cubic content measure of
]1.'8 cubic feet. In the sale of firewood and pulpwood, the common
practice in many localities is to cut it at particular lengths, some-
times for fireplace width and other longer widths such as 52 inches
for pulpwood purposes. Where the wood is cut at lengthy other
than 48 inches, it is necessary to make adjustments either in the height
of the pile or the length to compensate for the variation in width.
It has been stated that it is somewhat of a current practice in the
pulpwood area of the South to sell on what is known as a "long
cord" b^sis. The cubic foot content of this so-called long cord fre-
quently is considerably in excess of the 128 cubic-foot content for the
conventional cord. Similar practices prevail in some other areas. To
protect the farmer and timber owner from unfair advantage because
of such practices, the Forest Service has attempted to make known
thix)ughout all forestry areas what the standard cord measurement
is, and how to measure for a standard cord, and has attempted to
have this measurement adopted in commercial practice. This is
mainly an educational program.

The Forest Service leads in the development of specifications for
nursery stock for application in grading or culling gmall trees grown

« "Modification of Regulation S-16." Federal Register, p. 3137, U. S. Government Print-
ing Offico. Washington, D. C, December 23, 1938, 10 cents.

*• "Instructions for the Scaling and Measurement of National Forest Timber," 103 pp.,
U. S. Forest Service, Washington, D. C, 1928.

OONCENTRATION OF ECONOMIC POWER 51

in the nursery of the planting agency or in a cooperating nursery,
or purchased from commercial nurserymen/^

Cooperating with the Soil Conservation Service, the Forest Service
developed standards and specifications, by species, for nursery ^tock,
which may be u^ed in buying stock from commercial nurserymen.
The standards and specifications, based on data and experience avail-
able to the Forest Service and the Soil Conservation Service refer
to size of stock, size of root, size of stem, and freedom from disease.
Grades 1, 2, and 3 were establi.shed. Experience has indicated to
tlie Forest Service and the Soil Conservation Service that certain
types of nursery stock prodticed best re-^ults imder given climatic
and land conditions while other types of stock developed best under
other conditions/^ The specifications so developed were used not
only in purchases of commercial nursery stock, but also by Govern-
ment bureatts in the interchange of stock between Government
mn-series. So far, the standards have dealt chiefly with conifers.

The Forest Service also developed a departmental forest seed
policy approved by the Secretary of Agriculture on June 21, 1939.

This ha3 resulted in a standard procedure for obtaining seed so
us to give best results in the area awaiting planting. In substance,
it states that the policy of the United States Department of Agri-
culture shall be (1) to use only tree seed of known locality or origin
for nursery stock grown from such seed; (2) to require adequate
evidence verifying the place near the origin of all lots of tree seed
for nursery stock; (3) to require an accurate record of the origin of
all lots of tree seed and nursery stock used in Department activities,
and (4) to use local seed from natural stands whenever available.

FOREST PRODUCTS LABORATORY. MADISON, WIS.

The Forest Products Laboratory is a unit of the research organi-
zation of the Forest Service, United States Department of Agricul-
ture. It is the only institution in the United States concerned wholly
with the investigation of wood and Avood products and their adapta-
tion to diversified fields of u,se. In the course of its work on the
more efficient and diversified utilization of forest materials the Labo-
ratory is daily consulted by consumers, fabricators, producers, and by
varit)us Governmental agencies in regard to uniform test methods
and standards for forest products and allied materials. So great is
the magnitude of the Laboratory's work bearing upon standardiza-
tion that no attempt can here be made even to catalog such activities.
The following, however, may serve as illustrations of the general types
of the Laboratory's activities related to forest products standard-
ization.

Methods of Test.

Strength properties of clear wood. — One of the most important
problems of forest products standardization relates to methods of
testing the strength of clear wood; When the Forest Products Labo-
ratory was contemplating an extensive research program to determine

" ''Artificial Reforestation in the Southern Pine Resrion,'^ 113 pp.. Technical Bulletin
492, V. S. Government Printing Office, Washington, D. C, November 1035, 13 cents.
" Ibid., p. 82.

52 CONCENTRATION OF ECONOMIC POWER

the mechanical properties of various species of woods native to the
United States it realized the necessity for adopting a uniform proce-
dure so that comparable results would be obtained. Standard meth-
ods of testing small, clear pieces of wood were therefore dev'eloped
to cover tests in bending (beams), compression parallel to the grain
(columns), compression perpendicular to the grain (rail on tie),
toughness, stiffness, hardness, and the like, as well as the selection
of the te3t material, cutting the logs into specimens, rate of loading,
and similar factors. The methods *^ have already been employed at
the Laboratory in more than a half million tests made in determining
some of the important properties of over 164 native species of wood.
They have been adopted as standards by the American Society
for Testing Materials, American Standards Association, and other
authoritative bodies. The methods are now used not only in the
United States but in many foreign countries. Their wide adoption
enables the results of tests made in widely scattered laboratories
to be compared.

Methods for condiActing static tests of timbers in structural sizes. —
Methods of testing timbers in structural sizes have been developed at
the Laboratory and adopted as standard ^° by the American Society
for Testing Materials, American Standards Association, and other
authoritative bodies. The methods cover selection of materials, bend-
ing, compression perpendicular to grain, and compression parallel to
grain tests of large-sized members. In addition, methods of testing
minor specimens, cut from the larger specimens after test, are included.
Previous lack of uniformity of testing procedure prevented direct com-
parison of data from different sources. The general adherence to
these methods of tests enable direct comparison of the results of various
laboratories.

Toughness test. — In the selection of lumber for exacting purposes,
as, for example, airplane parts, assurance must be had that no pieces
low in strength are admitted. Experience showed that visual inspec-
tion or specific gravity determinations were not sufficient, and that
some mechanical test was desirable. Such a test must be rapid and
one which will reject those pieces which are unsuitable. To meet this
need the Laboratory developed a toughness machine and set up mini-
num acceptance requirements ^^ for those woods most commonly used
in airplane construction. The toughness machine has also been found
useful by manufacturers in the selection of wood, such as used in the
manufacture of handles, where toughness is an essential property.

Hexagonal drum box -testing machine. — Actual shippnig container
work at the Laboratory began with the invention of the box testing
drum. This machine combines in a single test practically all the
stresses and distortions that containers encounter in service. Upon
the six internal faces of the drum are hazards and guides arranged in
such a manner that, as the drum revolves, the loaded box or crate slides
and falls, striking on its ends, sides, top, bottom, and edges so as to
simulate the rough handling of actual transportation. The first drum

*^ "Strpnsrth and Related Properties of Woods (Jrown m the United States," p. 78,
Technical Bulletin 479, U. S. Government Printing Office, Washington, D. C, September
1935. 2.") cents.

"'* Idem.

" "Manual for the Inspection of Aircraft Wood and Glue for the U. S. Navy," U. S.
Navy Department, Washington. D. C. Revised Edition, 1940. (In press.)

CON'CIENTRATION OF ECONOMIC POWER 53

built was 7 feet in inside diameter. Later a 14- foot drum was built.
This test has been adopted as standard ^- throughout the world.

Machining properties. — Machining properties refer to the common
woodworking operations, such as planing, turning, shaping, and sand-
ing. Different woods vary in these respects just as they do in other
properties, and the machining properties of any given wood affect its
utility for better or for worse. Workable methods of measuring and
comparing machining properties have been developed, the work to date
having been confined largely to southern hardwoods. These methods
would lend themselves to use by other organizations so that comparable
results could be obtained elsewhere with other woods. The actual
work was done by the Forest Products Laboratory although in some
parts close cooperation was maintained with th* American Society of
Mechanical Engineers.^^

Small saiomUls. — With the depletion of the larger bodies of virgin
timber there has been a marked increase in displacement of large
mills by small mills. The latter mills are notoriously inefficient.
Equipment operating methods vary widely. There have been no
organized efforts to improve manufacturing practices, and as a
result the small mill is little different from what it was a generation
ago.

The Laboratory has been making an intensive study of the small
mill, its equipment, and its operating and accounting methods all
the way through from the standing tree to lumber in the pile with
the objective of setting up standard operating methods diat will
result in more economical use of timber and at the same time will add
stability to what is now a fly-by-night industry. A series of mono-
graphs ^* has been prepared and sent out to agencies that are in
position to encourage the adoption of standard practices.

The Laboratory's work on this project is a continuing one, and in
view of the thousands of mill units involved should eventually bring
marked improvement in the handling of forest lands and in the
general satisfaction resulting from the use of forest products.

Logging and. milling studies. — Logging and milling studies con-
ducted at the Forest JProducts Laboratory, and designed to supply
information on costs of lumber production from trees and logs of
different sizes were not directed toward standardization of t<i'ee
cutting sizes definitely, but toward the standardization of methods ^*
by which profitable tree cutting sizes could be determined. Sufficient
studies have been made so that the procedure has come to be recog-
nized as sound. It has gone far in promoting the acceptance of the
principle of selective logging as a standard piactice which should
be followed in putting forest lands on a sustained yield basis.

Wood identification. — Methods for identifying wood as to species,
groups of species, or genera primarily by means of its cellular struc-
ture ^s seen with or without a microscope have been developed for
practically all native species of trees and several hundred commer-

^2 "Anreriean Societv for Testing Materials, Proceedings, Part 2. Teelinical Papers."
pp. 320-342, American Society for Testing Materials, Pliiladelphia, Pa., 1916.

^ "Further Experiments in the Planing of Hardwood," American Society of MechanicaJ
Engineers Transactions, American Society of Mechanical Engineers, New York City,
February 1939.

^ "Small Saw.mill Improvement," U. S. Forest Products Laboratory, Madison, Wis.,
not dated.

» "Selective Logging in the Northern Hardwoods of the Lake States," 47 pp. Technical
Bulletin 164, U. S. Government Printing Office, Washington, D. C, January 1930, 5 cents.

272496 — 41 — No.

54 C'ONaENTRATION OF ECONOMIC POWER

cially important foreign species. Several keys for identification of
the more important native species have been pubhshed.°^

Methods^' have been developed and incorporated in purchasing
specifications for recognizing compression wood, which is an ab-
nonnal type of wood with undesirable properties formed on the lower
side of leaning coniferous trees.

Standard means ^^ have been worked out for detecting brash wood
of numerous species, that is, wood which is brittle and particularly
low in shock-resisting ability and therefore undesirable for many
uses.

A uniform method for detecting and comparing tool marks and
other i^-regularities in the surface of wood not due to inherent struc-
ture of the wood itself has been worked out and applied in crime
detection and historical research. The method consists primarily
in use of oblique lighting in a darkened room for direct observation
of taking photographs.

Seasoning of icood. — The Laboratory pioneered in methods of kiln
drying wood which have been followed both in the United States and
abroad. The object was to provide a rapid means of drying lumber
so that it would be suitable for a wide variety of purposes. Drying
is effective in minimizing such defects as stain, decay, checking,
shrinkage, and warping. As a result of this work improved types
of dry kilns were develoj^ed and standard kiln schedules ^^ were
formulated for lumber for general use and special schedules tor
aircraft lumber.^° The latter are incorporated in the United States
Army and the United States Navy Specifications.

In order to determine the degree of dryness of wood it was for
many years necessary to cut • a small piece from the end of the
board and to weigh it both before and after oven drying at 212° F.
Because of the time and material required in this procedure, the
Laboratory designed and made an electrical-resistance type of mois-
ture meter for the rapid determination of moisture content of wood.^^
This instrument is widely used in industry to determine whether
lumber meets moisture-content specifications.

Reducing nnoisture accumulation in walls and attics. — 'In modern
dwelling construction a number of factors have resulted in an in-
creased tendency for moisture to condense in walls and attics. Prin-
cipal among these factors are tighter construction, heat-insulating
materials, and artificial humidification during the heating season.
Such condensation of moisture is particularly objectionable in frame
dwellings because it may set up a decay hazard and may cause
exterior paint failure or discoloration. Experimental work at the
Laboratory revealed that certain types of building papers commonly
leferred to as vapor barriers are very effective in reducmg the passage

56 "Tbe Identification of Furniture Woods," Miscellantous Circular 66, U. S. Government
Printing Office, Washington, D. C, November 1926, 25 cents.

s' "Structure, Occurrence, and Troperties of Compression Wood," 32 pn.. Technical
Bulletin 546, U. S. Government Printing Office, Washington. D. C, January 11)37, 10 cents.

^ "Causes of Brashness in Wood," Technical Bulletin 342, U. S. Department of
Agriculture. Washington. D. C. January 1933. (Out of print.)

^» "Kiln Drying Handbook," p. 43, Bulletin 1136, U. S. Government Printing Office,
Washington. D. C. May 1929. 30 rents.

"""Manual for the Inspection of Aircraft Wood and Glue for the United States Navy,"
U. S. Navy Department, Washington, D. ('., Revised Edition, 1940. (In press.)

•1 "Determination of the Moisture Content of Wood by Electrical Means," General
Electric Review, pp. 706-713, December 1931.

CONCENTRATION OF ECONOMIC POWER 55

of vapor from the interior into and through a wall or ceiling Such
vapor barriers ^- are now being widely used in the building industry.

Fire resistance of wood. — The Laboratory has participated in com-
mittee work of the American Society for Testing Materials, through
which certain standards for testing the fire resistance of wood have
been evolved. The Laboratory developed the firetube test ^^ which
is in use by many research workers, in this and foreign countries,
for comparing the fire resistance of different treatments and coat-
ings on Moods but this test method has not yet been adopted in the
United States as an official standard of any organization.

Wood pyeservafivefi. — The Forest Products Laboratory developed
the details of the agar method ^* of studying the toxicities of wood
preservatives against wood-destroying and wood-staining fungi.
Tliis method has been informally adopted in this country and is
sometimes referred to as the American method, as opposed to wood
block methods Avhich are favored in Europe.

Paint. — The Laboratory has developed a classification and grading
system '^^ for house paint which it is believed will be very helpful in
the selection of paints for different uses and in educating the users
in how to obtain best results from various paints. The system has
not yet been adopted as standard by any organization.

Glue. — The Forest Products Laboratoiv developed the plywood
shear test '^'^ which has been used for many years in comparing the
strength and water resistance of glue joints in plywood and which
is used in U. S. Army Specifications, LT. S. Navy Specifications, Fed-
eral Specifications, and other specifications covering tlie properties of
casein glue. The laboratory also developed the block shear test"
which is used for comparing the strength of glues or the quality of
gluing in joints made with lumber. This test is included in U. S.
Army Specifications and U. S. Na-s'y Specifications for casein glue
and is widely used as a research method of studying the technique
of gluing.

Paper. — Many methods of testing papers for their physical prop-
erties) have been developed at the Forest Products Laboratory
(F. P. L.). A manual of standard test methods has been compiled
over a period of years and methods are designated by F. P. L.
numbers. In many instances these methods have been taken over by
the Technical Association of the Pulp and Paper Industry
(T. A. P. P. I.) and given their designation number, as indicated in
parentheses following the F. P. L. designation. Some of these meth-
ods are: Tearing Resistance of Paper, F. P. L. No. 129 (TAPPI
No. T414m-40) ; Fiber Composition of Paper (F. P. L. No. 3) ;
Apparent Densitv of Paper (F. P. L. No. 123); Color of Paper
[F. P. L. No. 137) ; Pore Volume of Paper (F. P. L. No. 131) ; Speck
Count in Paper (F. P. L. No. 102) ; Void Volume of Paper (F. P. L.

^ "Condensation Problems in Modern Buildings," Conference on Air Conditioning,
University of Ii^nois, Drbana, III., March 1939.

** "The Firep • oflng of Wood," procedure of the National Fire Protection Association,
May 1931.

^ "A Suggested Toximetric Method for Wood Preservatives," Industrial and Engineering
Chemistry, Analytical Edition, Vol. 2, p. 361, 1930.

•5 "A Proposed System of Classification for House Paints," Industrial and Engineering
Chemistry, September 1937.

««"The Gluing of Wood." p. 69, Bulletin 1500, U. S. Government Printing Office,
Washington, D. C, 1929, 25 cents.

•nbid.. p. 71.

56 CONCENTRATION OF ECONOMIC POWER

Nos. 90 and 91) ; and Volumetric Composition of Paper (F, P. L.
No. 163).

Pulp. — A large number of methods -for the evaluation of the chemi-
cal properties of pulps have been developed at the Forest Products
Laboratory and has been adopted by the Technical Association of
the Pulp and Paper Industry. Some of these are: Isolation of
Cellulose, F. P. L. No. 33 (TAPPI No. T201m-37) ; Chlorine Con-
sumption of Pulp, F. P. L. No. 35 (TAPPI No. T202m-40) ; Alpha
Cellulose in Pulp, F. P. L. Nos. 37 and 38 (TAPPI No. T203m^0) ;
Forming and Testing of Pulp Sheets, F. P. L. No. 95 (TAPPI No.
T205m-10) ; Water Solubility of Pulp, F. P. L. No. 17 (TAPPI
No. 207m) ; Moisture in Pulp by Toluene Method, F. P. L. No. 13
(TAPPI No. T208m) ; Methoxyl Groups in Pulp, F. P. L. No. 43
(TAPPI No. T209m) ; One Percent Alkali Solubility of Pulp,
F. P. L. No. 19 (TAPPI No. T212m-40) ; and Quantitative Deter-
mination of Lignin, F. P. L. No. 31.

Methods for the physical evaluation of pulps developed at the
Laboratory consist of the following : Pebble Mill Method for Strength
Determination of Pulps, F. P. L. Nos. 98 and 101; Consistence of
Pulp, F. P. L. No. 103; and Density of Fiber Substance, F. P. L.
No. 100.

Pulfwood. — ^A method for the physical evaluation of pulpwood
was developed in 1928 and subsequently adopted and revised by the
Technical Association of the Pulp and Paper Industry as their
method T7p-36 in 1936.

Other Forest Products Laboratory test methods associated with
the above for chemical evaluation of pulpwood are: Water Solubility
of Wood, F. P. L. Nos. 15 and 17 (TAPPI No. Tim) ; Methoxvl
Groups in Wood, F. P. L. No. 43 (TAPPI No. T2m) ; Moisture in
Wood Chips and Sawdust bv Toluene Method, F. P. L. No. 13
(TAPPI No. T3m) ; One Percent Caustic Soda Solubility of AVood,
F. P. L. No. 19 (TAPPI No. T4m-40) : Other Solubility of Wood,
F. P. L. No. 25 (TAPPI No. T5m-10) ;' Alcohol-Benzene Solubility
of Wood, F. P. L. No. 27 (TAPPI No. T6m-40) ; Quantitative De-
termination and Lignin, F. P. L. No. 31.

Score tester. — A score tester ^* that applies a combined tension, tear-
ing, and bending test was developed at the Laboratory for studying
the strength of the scored edges of fiber boxes. The scored edges of
a fiber box are the weakest part of the container in resisting rough
handling, and the machine has been used by fiber box manufacturers
to determine the most efficient'design of scores or creases to use.
There has also been some interest recently in using this machine for
determining the relative strength of different methods used in join-
ing the ends of the body piece of boxes.

Tensile test for paperhoard and paper. — A standard technique"®
has been developed for determining the stress-strain relationship
under tension of paper and paperboard used in making solid fiber
and corrugated fiberboards. The method makes use of an optical
strain gage to measure stretch (strain) and the test is conducted
under carefully controlled humidity conditions. With the results
obtained it is possible to apply engineering principles in correlating

«» Paper Trade Journal, pp. 59-60, January 1928.

«* "A Study of Corrugated Piberboard and Its Component Parts as Engineering Mate-
rials," by T. A. Carlson, Fiber Containers, p. 22, July 1939.

OONOBNTRATION OF ECONOMIC POWER 57

the strength- of the paper and paperboard with the strength of
built-up corrugated board.

Static bending test for corrugoMd and solid fiberhoard. — A bend-
ing test technique "° has been developed for determining the strength
and stiffness of corrugated and solid fiberboard. Interest in this test
is growing. It is being used by several laboratories and box manu-
facturers and will probably be adopted as a standard method of test-
ing by the American Society for Testing Materials

Standards.

Softwood yard lumher. — Softwood yard lumber, which comprises
about two-thirds of the yearly cut, was produced by several widely
separated groups of lumbermen under specifications that differed
considerably with regard to grades, sizes, and nomenclature. The
Forest Products Laboratory in cooperation with these groups and
other governmental agencies succeeded in bringing about a consider-
able degree of simplification and uniformity under provisions now
embodied in American Lumber Standards for Softwood Lumber."
Yard lumber specifications are now almost wholly in accord with
these standards which have been accepted by the Government and bv
dealers and purchasers in general.

Softwood factory lumber. — Specifications for softwood factory
lumber varied to a degree that caused frequent misunderstanding and
confusion. Following a series of conferences, at which the lumber
trade, the Forest Products Laboratory, and other governmental
agencies were represented, agreement was reached on provisions that
brought about much more uniform specifications. These provisions
are now part of American Lumber Standards for Softwood Lumber
and current specifications are in accord with these standards.

Standard hardwood Iwmber grades. — In cooperation with various
lumber producing and consuming organizations the Laboratory
worked on standards ^^ for quality classification of hardwood lum-
ber that resulted in the adoption by the trade of one set of specifi-
cations that over a period of 12 years has effected not only more
harmonious relations between buyers and sellers than existed pre-
viously but also more economical use of material.

Design stresses for structural timber. — In addition to limiting
defects in timber to give assurance that a definite proportion of the
strength of clear material remains, it is also necessary to know what
working stresses may be assigned. The Forest Products Labora-
tory has derived safe working stresses for the different species of
native woods. The safe working stresses are based on the proper-
ties of the wood in relation to the variability, duration of stress,
the condition of service, and grade of material. Working stresses ^^
have been assigned for extreme fiber in bending, compression per-
pendicular to grain, compression parallel to grain, horizontal shear,
and modulus of elasticity.

™ "Bending Tests of Corrugated Boards and Their Significance," by T. A. Carlson, Fibre
Containers, March 1940 ; Paper Trade Journal, p. 123, February 1940.

■^ "Lumber : Simplified Practice Recommendation R16-39," National Bureau of Stand-
ards, U. S. Government Printing Office, Washington, D. C, 1940, 20 cents.

■^2 "Rules for the Measurement and Inspection of Hardwood Lumber," National Hardwood
Lumber Association, Chicago, 111.

■^3 "Wood Handbook," U. S. Government Printing Office, Washington, D. C, September
1935, 35 cents.

5g OONCENTRATION OF ECONOMIC POWER

Grading of stntctural timbers. — To permit the more efficient use
of timber and also to enable the designing of timber structures with
assurance of safety, structural grading rules in which defects are
limited in accordance with their effect on strength were developed
at the Laboratory. These have formed the basis for the grading
rules of structural timber of various lumber associations and other
organizations to which definite working stresses could be assigned.'^* ■

A similar method of grading has recently been developed for low-
grade dimension stock which is largely used in house construction.
These rules will permit the establishment of rules for low-grade stock
so that definite working stresses can be assigned.

Speci-fications and stresses for wood poles. — The Laboratory is
represented on and has worked with an American Standards Asso-
ciation sectional committee concerned with specifications and stresses
for wood poles. Northern white cedar, western red cedar, American
chestnut, Douglas-fir (creosoted) have been considered. The stand-
ards ^^ have been widely accepted by pole producers and users and
by regulatory bodies.

Strength values of various woods for use in airplane design. — As
a basis for the design of wooden aircraft" parts and members, a table
of strength values of the different aircraft woods was prepared by
the Laboratory, The special airplane design values take into account
the quality of the material and its variation, provide a minimum density
requirement, and include a consideration of the special effect of dura-
tion of stress. The design of data serve as standard '^^ for the design
of wooden aircraft members and parts in the United States.

Army and Navy Specifi-cations for aircraft woods. — Specifications
for various woods and plywood used in airplane construction have
been issued by the different airplane divisions of the Army and Navy.
Because of the critical requirements for woods used in airplane
construction, the Laboratory has taken a major part in the prepara-
tion of these specifications for aircraft woods.

Aircraft airwortMness. — The Civil Aeronautics Authority has
recently prepared regulations pertaining to the selection of airplane
woods and manufacture of the finished wood parts. These regulations " '
are based largely on information obtained from the Laboratory.

Navy tjinnual for inspection of aircraft wood and glue. — To aid
the United States Navy Department in the proper selection, use, and
standardization ^^ of aircraft wood and glue the Laboratory in 1928
prepared a rather complete manual for use by inspectors of naval
aircraft and naval material, assembly and repair officers of operating
and maintenance organizations, and for instructional purposes. Tlie
Laboratory has recently completed revision of this manual to include
all the latest information.

Building codes. — A large proportion of the lumber manufactured
is used in the building industry. The satisfactory and economical

''* "Guide to the Grading of Structural Timbers and the Determination of Working
Stresses," 27 pp., Miscellaneous Publication 185, U. S. Government Printing Office,
Washington, D. C. February 1934, 5 cents.

■"i "American Standards for Ultimate Fiber Stresses of Wood Poles," A. S. A. 05a-1933,
American Standards Association, New York City. 1933.

■"• "Wood in Aircraft Construction," Aircraft Design Data Note 12, Bureau of Construc-
tion and Uepair, U. S. Navy Department, Washington, D. C.

''T "Aircraft Airworthiness," Report No. 15, Civil Aeronautics Authority, Washington,
D. C, January 1940.

'» "Manual for the Inspection of Aircraft Wood and Glue for the U. S. Navy," U. S.
Navy Department, Washington, D. C, Revised Edition, 1940. (In press.)

CONCENTRATION OF ECONOMIC POWER 59

use of this lumber is dependent largely upon reasonable and adequate
building codes and regulations. The United States Department of
Com.merce issued some years ago recommended minimum require-
ments for small dwelling construction which have been widely used
in preparing or revising building codes/^ The Laboratory had the
major part in the preparation of the section of the publication per-
taining to wood. The Laboratory is represented on the Building
Code Correlating Committee of the American Standards Association
which is now actively engaged in preparing a new code. The Labo-
ratory and the National Lumber Manufacturers Association have
accepted joint sponsorship of the Sectional Committee on Building
Code Requirements for Wood of the American Standards Associa-
tion. A preliminary draft for these requirements for submission to
the sectional committee is now being prepared by the Laboratoiy.

The Laboratory has participated also in the development of the
specifications covering methocls of applying preservatives prepared
by the American Wood Preservers' Association, the Federal Govern-
ment, the National Door Manufacturers' Association, and others.

Naval stores. — As the result of extensive tests, approximately
1/4-inch chipping has been set up by the Laboratory as the standard ^'^
height per week to chip trees in naval stores operations. Increased
yields and profits per tree, combined with better health and growth
of the trees turpentined result from the use of the 14-ii^ch chipping.
Low chipping is now applied to both Government and privately
owned timber.

Moisture content of wood. — In order that wood may give satis-
faction in use, it is essential that attention be given to the factor
of moisture content. As a result of work done by the Laboratory,
the Southern Pine Association ^^ and the West Coast Lumbermen's
Association ®^ have included moisture-content limitations in gi^ading
rules for southern pine and Douglas-fir, respectively.

Longitudinal shrinkage. — Longitudinal shrinkage from the green
to the oven-dry condition of 0.3 of 1 percent has been set up as the
upper limit for normal wood and any shrinkage above that is con-
sidered as being due to some abnoiinality of the wood. This limit is
based on a large number of measurements of wood of normal and
abnormal structure.

A minimum of not fewer than four annual rings of growth per
inch of radius has been set up for the southern pines if excessive
crooking due to uneven longitudinal shrinkage is to be avoided in
otherwise normal wood. This was based on the results of numerous
tests on the longitudinal shrinkage of southern pine wood of different
rates of growth.

Hardwood log grades. — In spite of the long need for accurate
and uniform methods of grading hardwood logs the log trade has
made little progress in the development of standard procedure. Dur-
ing the past year the Laboratory has taken the initiative and has

" "Recommended Minimum Requirements for Small Dwelling Construction," Buildiug
and Housing Publication No. 18, National Bureau of Standards, U. S. Government Printing
Office, Washington, D. C, 1932, 10 cents.

** "More Turpentine, Less Scar, Better Pine," 4 pp.. Leaflet 83, U. S. Government Print-
ing Office, Washington, D. C, 5 cents.

^ "Standard Specifications for Southern Pine Lumber Conforming to American Lumber
Standards," Southern Pine Association, New Orleans, La., July 1939.

^^ "Standard Grading and Dressing Rules for Douglas-fir, Sitka Spruce, West Coast
Hemlock, Western Red Cedar; American Lumber Standards Sizes and Grades," West Coast
Lumbermen's Association, Seattle, Wash., July 1934.

gQ CONCENTRATION OF ECONOMIC POWER

gone forward with basic studies in support of a new approach to
quality classification of logs. When the log-buying program of the
Northeastern Timber Salvage Administration was initiated in the
fall of 1938 the Laboratory submitted its tentative draft of log grades,
and with modifications it was adopted as the basis for log' purchases.
Two other log-buying agencies have adopted the principle suggested
by the Laborato^^y. The results of studies to date give promise of a
set of log grades that will be an acceptable standard for hardwood
logs regardless of species or source.

Ladder code. — The Forest Products Laboratory, through its rep-
resentation on the American Standards Association Sectional Com-
mittee on Ladders, took an active part in the preparation of a safety
code for the construction, care, and use of ladders. This code governs
safe practice for ladders, and has been adopted as standard ^^ by the
American Standards Association.

Terms for describing wood. — In discussing the properties and
characteristics of different species of wood it is often desirable to
describe them broadly by means of descriptive terms, rather than
by quoting precise numerical values. There has been a long-felt
need for precise terms to describe the various physical and mechani-
cal properties of wood and to meet this need the Laboratory has
developed a series of standard terms ^* for describing wood. Ten
terms have been set up for each property, thus giving a relatively
wide range of expression. The general use of standard terms will
result in more precise evaluation of the various important physical
properties of wood as well as eliminate the confusion resulting from
the use of indiscriminate or uncorrelated terms.

Tool handles. — The Laboratory has from time to time prepared
mate 'al for use in the formulation of specifications ^^ for ax handles,
pike |joles, peavy handles, and so forth, of such species as ash and
hickory. This material has been used by the National Bureau of
Standards in the preparation of Simplified Practice Kecommenda-
tions, by the Federal Government for purchase specifications, and by
various manufacturers.

Federal Speciiications for boxes. — The Laboratory has taken an
active part in the preparation of Federal Specifications for seven
types of wood and fiber boxes: Nailed and Lock-Corner
(NN-B-621a); Wire-bound (NN-B-631a) ; Cleated-Plvwood Con-
struction (NN-B-601) ; Cleated-Fiberboard (NN-B-591) ; Fiber,
Solid_(LLI^B-636a); Fiber, Corrugated (LLL-B-631a).

Nailing schediile. — One of the developments resulting from the
study of wooden boxes and crates is a nailing schedule ^^ which gives
the sizes and sfpacings of nails to use with different thicknesses of
lumber. The schedule involves a classific;-cion of container woods
into four groups according to nail-holding ability and other prop-
erties. All of the species within each group can be used interchange-
ably as far as the thickness of lumber and the size and spacing of
nails are concerned. The sizes and spacings Cx nails recommended

« ''Safety Code for the Construction. Oire, and Use of Ladders." A14-19.^o, American
Stnndards Association. New York Citv. 19S5.

'^ "Standard Terms for Descrihing Wood." Journal of Forestry. No 1. .TanuarT 10.^8.

»■• 'Ash TTandlos : Simplified Practice Recommend.ntion R70-40," "niclvory Handles :
Simnlifled Practice Recommendation R77-27" National Bureau of Standards,' TT. S. Gov-
ernment Printing Office, Washinjrton. D. C, 1940. 1928. 5 cents each.

8« "Principles of Box and Crate Construction," pp. 71, 107. Technical Bulletin 171, U. S.
Government Printing OflBce, Washington, D. C, 1930, 55 cents.

CONCENTRATION OF ECONOMIC POWER 61

for each group are based on the thickness of the lumber and the
relation between thickness of the piece through which the nail passes
and ".he thickness of the piece holding the point of the nail. The
classification of species was first made in 191S, and this classification
together with the nailing recommendations have been widely accepted
by practically all organizations interested in wooden containers.

Plywood. — The increasing and wider use of plywood for construc-
tion purposes prompted the formulation of a Commercial Standard
for Douglas-fir plywood. The Laboratory assisted in the prepara-
tion of this Commercial Standard ^^ which covers moisture-resistance
requirements, sizes, tolerances, inspection, manufacturing details,
limitation of defects, and so forth.

Glue. — The Forest Products Laboratory participated in developing
a Federal Specification ^ for animal glue.

Wood 'preservatives. — The Laboratory has actively participated in
the formulation of the standard ^^ specifications of the American
Wood Preservers' Association for wood preservatives, particularly
zinc chloride and various creosote oils and in the preservative specifi-
cations of the National Door Manufacturers' Association. It has also
assisted in tlie development of Federal Specifications covering these
preservatives and several proprietary preservatives.

Softwood log grades. — Quality classification of logs has been an
important feature in all the Laboratory's logging and milling studies.
An attempt has been made to grade logs under standard procedure,
but no intensive studies of softwood log grades have been made com-
parable to the effort being devoted to hardwood grades. However,
the entire softwood log-buying program of the Northeastern Timber
Salvage Administration has been on the basis of grades set up as
standard for purchases of hurricane-thrown timber. These grades
were built up around grades that had previously been developed by
the Laboratory for use in logging and milling studies of New Eng-
land white pine. In use they have proved satisfactory in New Eng-
land, and it is probable that with further development they will be
made applicable to white pine throughout its region of growth.

Paper and pulp. — No specific paper and pulp standards have been
promulgated by the Forest Products Laboratory, but indirectly
technical data and recommendations obtained at the Laboratory have
greatly influenced the purchase and use of the various pulpwoods
to yield satisfactory and required pulps for various papers.

Pulpwood measuring standards.— The pulpwood industry in the
South follows no standard method of measuring pine pulpwood,
most of which is delivered in a green condition with the bark on
shortly after felling. Pulpwood bolts vary from 48 to 66 inches in
length, and the unit of overall measurement varies from 128 to 160
cubic feet. The Forest Products Laboratory, sensing the merit of
using weight as a measure for green pulpwood, is engaged in an in-
tensive study of the relation of weight to overall space occupied,
and to. solid volume of wood. Tlie objective of the study is to obtain
facts which it is hoped will reveal the practicability of weighing,

^ "Douglas-flr Plywood : Commercial Standard CS45-36," National Bureau of Standards,
U. S. Department of Commerce, Washington, D. C, 1939.

«s "Federal Specification CG — 451," U. S. Government Printing Office, Washington, D. C,
May 1931. 5 cents.

* "Manual of the American Wood Preservers' Association," American Wood Preservers'
Association, Washington, D. C, not dated.

g2 CONCIENTRATION OF ECONOMIC POWER

and will make possible one standard of measurement, a standard not
based on scaling judgment but upon weighing scales which are me-
chanical in operation. A standard of this type has particular merit
in that the cost of producing pulpwood varies with weight rather
than with space occupied.

House coverage. — The Laboratory prepared for the Federal Hous-
ing Administration a description of the minimum quality board
suitable for coverage (subfloors and sheathing) in house construe^
tion. The Federal Housing Administration plans to use the de-
scription as a basis for judging the suitability of lumber associations^
grades as described in standard grading rules. The method used in
part as specifying acceptable quality by grade name or number has
proved unsatisfactory because of the determination of comparable
grades being highly controversial and grades of the same name or
number differing widely in quality.

Cooperage. — Specifications for staves and heading are drawn and
administered by the Associated Cooperage Industries of America.
The Laboratory acts as consultant for the industry furnishing in-
formation on the effect of kiln drying, defects, size, and number of
staves on the strength and serviceability.

Springhoards. — The only specifications for springboards are those
contained in the National Collegiate Athletic Association's "Swim-
ming Guide." Those specifications were drawn for one-piece boards
although the rules proper do not prohibit the use of laminated boards.
Considerable trouble has developed in obtaining one-piece boards of
satisfactory quality because of size and exacting requirements of use.
The Laboratory as a result of experiments with laminated boards
has furnished manufacturers with specifications for the construction,
protection, and mounting of laminated boards. These specifications
are used by the industry in the construction of boards, but liave not
been adopted as standard. There are no recognized standard speci-
fications for either one-piece or laminated boards.

Some organizations promulgating standards with M^hich the Forest
Products Laboratory cooperates :

American Paper and Pulp Association.
American Society of Mechanical Engineers.
American Society for Testing Materials.
American Standards Association.
American Wood Preservers' Association.
Associated Cooperage Industries of America.
National Collegiate Athletic Association.
National Door Manufacturers Association.
National Fire Protection Association.
National Hardwood Lumber Association.
National Lumber Manufacturers' Association.
Northeastern Timber Salvage Administration.
Southern Pine Association.

Technical Association of the Pulp and Paper Industry.
West Coast Lumbermen's Association.

United States Department of the Treasury (Procurement Divi-
sion).
United States War Department.

CON'CIENTRATIOiN OF EIC'ONOMIC POWER 63

United States Department of Justice (Federal Bureau of
Investigation).

United States Navy Department (Bureau of Aeronautics).

United States Department of Commerce (National Bureau of
Standards).

United States Department of Labor (Bureau of Labor Standards).

Civil Aeronautics Authority (ilow under United States Depart-
ment of Commerce).

Tennessee Valley Authority.

Federal Housing Administration.

Some Government organizations using standards for forest prod-
ucts developed with the Laboratory's assistance :

Bureau of Agricultural Chemistry and Engineering.

Bureau of Engraving and Printing.

National Bureau of Standards.

Civil Aeronautics Authority.

Federal Bureau of Investigation.

Federal Housing Administration.

Forest Service.

Government Printing Office.

National Advisory Committee for Aeronautics.

United States Navy Department.

Tennessee Valley Authority.

United States War Department.

OFFICE OF EXPERIMENT STATIONS

The Office of Experiment Stations, United States Department of
Agriculture, administers Federal funds provided by the Hatch, Adams,
Purnell, and supplementary acts, and title I of the Bankhead-Jones
Act of 1935 for the support of research in agriculture and home eco-
nomics by experiment stations in the several States and Alaska, Hawaii,
and Puerto Rico: it also has immediate supervision of the expei-i-
ment station of the United States Department of Agriculture in
Puerto Rico. This Office examines in detail the work and expenditures
of the State experiment stations to ascertain whether the Federal funds
for their support are used and accounted for in accordance with the
Federal acts and rulings, and reports annually to Congress on the
work and expenditures of the experiment stations, as required by law.

The Office of Experiment Stations aids in coordinating the research
of the United States Department of Agriculture and in coordinating
the research of the Department with that of the State, Alaskan,
Hawaiian, and Puerto Rican agricultural colleges and experiment
stations. The Office collects and disseminates information and gives
such advice and assistance as will best promote the efficiency of the ex-
periment stations and the effective coordination of their work wdth that
of the Department, including the issuance of the Experiment Station
Record which gives a current review of progress and results of scien-
tific research conducted by experiment stations and other agencies
for the improvement of agriculture and rural life.

To administer properly the functions and responsibilities which
devolve upon it, the Office of Experiment Stations maintains a record
of the projects selected and developed by the agricultural experiment

g4 OONdENTRATION OF EICONOMIC POWEH

stations in accordance with the appropriation acts supporting the re-
spective projects. It also maintains records of all experiments being
conducted at the experiment stations. There are slightly more than
3,000 Federal grant projects in process at the agricultural experi-
ment stations and, including the Federal grant projects, approximately
8,500 projects, of which the Office has a record, as in process. The
projects in process at the experiment stations other than the Federal
grant projects are supported from other than Federal funds. How-
ever, the Office maintains a summary record concerning them.

Research at the agricultural experiment stations covers a wide
field of investigation. For current administrative purposes the Office
has divided the work under 17 general categories which may be used
to indicate the general scope and field of their investigations and
the research relating to standards and their development. These gen-
eral categories are as follows :

Subject classification for Adams, Purnell, and Bankhead-Jones
projects :

Agrotechny, agricultural engineering, agricultural economics,
animal production, dairying, entomology, and zoology, field
crops, forestry, genetics, home economics, horticulture, pastures
and ranges, plant pathology, plant physiology, rural sociology,
soils and fertilizers, veterinary.

An important part of the research being conducted by the experi-
ment stations refers to or provides a basis for standards. Some
samples of this research are shown, to indicate their contribution to
standards and standards development.

A study on performance during wear of women's and children's
silk, rayon, and cotton wearing apparel fabrics. A coopera-
tive study participated in by States in the northeast region.

Selection, care, and wearing qualities of women's hosiery. Mon-
tana Agricultural Ex^ eriment Station.

Effect of sunlight on the strength and color of cotton fabrics.
Texas Agricultural Experiment Station.

A study of values sought and practices followed by consumers
in the purchase of "silk" street dresses and silk yard goods.
Minnesota Agricultural Experiment Station.

Some body measurements of Texas school children. Texas
Agricultural Experiment Station.

Standardization of home-canned tomatoes and tomato juice.
Florida Agricultural Experiment Station.

Degree of fatness and tenderness and flavor in lamb. Texas
Agricultural Experiment Station.

A study of the factors affecting grades, standards, and quality
of mint oil and their relation to price of mint oil. Indiana
Agricultural Experiment Station.

Grading, standardizing, and marketing Indiana peonies.
Indiana Agricultural Experiment Station.

The efficient pouring utensil. Rhode Island Agricultural
Experiment Station.

The accuracy of pressure gages used on household steam pres-
sure cookers. Nebraska Agricultural Experiment Station.

Performance analysis of selected types of kerosene stoves.
Maine Agricultural Experiment Station.

OON'CE'NTRATION OF ECONOMIC POWER 65

RURAL ELECTRIFICATION ADMINISTRATION

The Rural Electrification Administration, United States Depart-
ment of Agriculture, in performing the functions authorized by
Congress in the making of self -liquidating loans to finance the con-
struction of rural electric distribution systems, the construction
of electric generating plants, the installation of wiring and plumbing,
and the acquisition of electric appliances, has been concerned with
the development of physical standards as a basis for providing eco-
nomical and dependable service for a sufficient period to assure the
self-liquidation of loans.

There has been a general recognition of the need for standards
covering all physical facilities financed with funds loaned by the
Rural Electrification Administration. The need for specific stand-
ards was recognized when procedures were established for financing
the following facilities for generation, distribution, or utilization
of electricity :

1. Rural electric distribution systems, poles, and electric meters.

2. Electric generating plants.

3. Wiring installations.

4. Plumbing installations.

5. Electric brooders.

6. Electric irrigation pumping equipment.

7. Electric feed grinders.

8. Portable electric lamps.

9. Electric cold storage and processing plants.

In the initial stages of the development of procedures for financing
these facilities it was decided to undertake the development of
standards for these facilities.

Procedure in Formulating Standards.

To secure data for use in the formulation of these standards and
for background information, specialists trained and experienced in
the requirements for each of the facilities have studied all pertinent
available literature, standards, data, and research papers.

Agreements upon the scope of standards are determined by confer-
ences with technical specialists, legal counsel, and administrative
directors. The scope is largely determined by restrictions in
Congressional authorizations.

The development of standards is usually performed by specialists
directly concerned with each set of facilities. If further research
is necessary to secure additional data essential to the formulation of
any standard, arrangements are made for such research with coop-
erating manufacturers or research agencies. In preparing the stand-
ard a number of drafts may be required to be submitted for criticism,
discussion, and revision ; individuals and organizations concerned with
the standard are i., Ited to participate. The adoption of the standard
is determined by the specialists and administrative director on the
basis of acceptability to these individuals and organizations. Formal
approval of any standard is given by the administrative director whose
functions and responsibilities are most closely related to the
application of the standard.

The respective standards are usually included in documents such
as contract forms and instructions for procedure in carrying through

QQ CONnEN'TRu\TION OF ECONOMIC POWER

a project, in wxiicli the standards are essential in furnishing,
constructing, or installing facilities.

The use of standards is promoted by the requirement that the
advance of funds under loan contracts is conditional upon compliance
with such standards.

Inspection and Testing Procedure.

Inspection and testing to determine compliance with the standards
is performed in various ways. In the usual procedure, compliance
with basic design and performance standards is checked by staff spe-
cialists who determine that certain designated units comply with
the standards. Inspection of separate items of equipment is made
by engineer inspectors of the Rural Electrification Administration
to determine compliance with standards of quality. Compliance
with construction and installation standards of completed facilities
is determined by field engineers of the Administration. Inspection
of wiring installations is made by qualified inspectors acceptable to
the Administration. Inspection of plumbing installations is made by
State or county health authorities or by other inspectors acceptable to
the Administration.

Rural Electric Distribution /Systems, Poles, cmid Electric Meters.

Early in the work of the Rural Electrification Administration it
was found that rural electrification in the United States was being
impeded by the high cost of line construction and by high rates. In
the case of rural lines existing in 1935, these two obstacles went to-
gether, since most of those lines belonged to private utilities which
served urban and rural areas together and whicli used the same heavy
construction in the open country that they used in thickly settled
communities.

By utilizing the new high-strength conductors to increase span
length, by eliminating the cross-arm on two-wire lines and other-
wise simplifying construction, and by standardizing equipment, the
Rural Electrification Administration has greatly reduced the cost
of building rural lines.'''* By adapting the principle of mass pro-
duction in the building of rural electric lines, the Administration
has aided in the reduction of costs, so that the average cost of
"REA-financed" lines is now below $825 per mile including overhead
expenses of the project, contrasted with the $1,200 to $2,000 gen-
erally prevailing prior to 1935. Inasmuch as interest and amorti-
zation payments form principal factors in deciding the rates that
will enable an REA-financed power system to exist, the developments
just outlined immediately increased the area into which self-liqui-
dating electric power lines could be run. Adoption of the principle
of "areal coverage," that is, designing and building a rural electric
system as a unit so that it will reach as many as possible of the
farms in a given area instead of stringing lines haphazardly along
the main roads, has also increased the number of farm families that
can be served economically.

The dominant type of borrower from the Rural Electrification
Administration is the farmer's cooperative.

»• "Construction Contract for Rural Electrification Distribution Project,"' ENG-B-1R3,
U. S. Government Printing Office, Washington, D. C, September 1939, |l.

CONCENTRATION OF ECONOMIC POWEIR 67

The adoption of self -reading of meters by many cooperatives often
cuts the cost of meter-reading from 25 cents per meter to 3 cents.
On systems using the new cyclometer type meter, members are pre-
paring their own electric bills to an increasing extent.

All distribution and transmission lines financed by the Admin-
istration must comply with the National Electrical Safety Code.

Electric Generating Plants.

In those instances where studies showed that a generating plant
would form the most economical solution of the power problem,
the Rural Electrification Administration has lent money for con-
struction of such plants. The result has been a reduction in the
cost of wholesale power to borrowers, outside the Tennessee Valley
Authority area, to a Nation-wide average of 1.2 cents per kilowatt-
hour. Rates below 1 cent have been obtained in many parts of the
country.

'Wiring Installations.

The Rural Electrification Administration has established standards
for rural wiring. All wiring on properties to be served from an
EEA-financed line must be installed in accordance with the National
Electrical Code of the National Board of Fire Underwriters and
any state or local laws in effect at the time of installation. The
specifications of the Rural Electrification Administration cover every
detail of wiring, whether in houses, barns, or other buildings. They
include standards of identity for wiring materials. Diagrams indi-
cate how all installations and meter socket connections should be
placed.*^

When it enters into a "loan contract with a borrower, the Admin-
istration stipulates that no consumer may be connected to an REA-
financed line until a qualified inspector, independent of the bor-
rower and approved by the Administration, has inspected the wiring
and certified that it complies with the National Electrical Code and
with any existing State or local laws or regulations.

Plumbing Installations.

The Rural Electrification Administration has established stand-
ards for plumbing installations. These standards are compulsory
only insofar as they affect equipment to be financed through a loan
frorn the Administration. They provide criteria, however, which
aid the consumer in deciding whether the equipment that he con-
siders buying is likely to give satisfactory and economical service.

Plumbing materials, for which specifications have been prepared,
include water pumping and storage equipment ; water supply faucets ;
and plumbing fixtures including water closets, lavatories, baths, sinks,
and laundry tubs. The minimum requirements for motor and pump
capacity in gallons per hour, and maximum water lifting feet and
miniinum horsepower capacity of electric motors are given. Speci-
fications were also prepared for electrical water heating and storage
equipment, water service suction piping, water service pressure pip-
ing, water distribution piping, surface drains, house drainage and
vent piping, yard sewer pipmg, septic tanks, seepage drains, and
standard piping materials including copper, clay, iron, and brass.

»i "Standard-R.E.A. Specifications for Wiring." 12 pp., REA-UT-8R4, Rural Electri-
fication Administration, Washihgton, D. C, April 21, 1939, mimeographed.

gg CONaENTRATION OF ECONOMIC POWEH

Specifications were also set up for plumbing installations of each of
these materials. For plumbing, as well as for wiring, a bidding
procedure is used whereby dealers or manufacturers are permitted to
bid on specifications; before bidding each manufacturer has to give
evidence that his product meets these specifications.^-

Electric Brooders.

Electric brooder standards ®^ established by the Kural Electrifica-
tion Administration include: (1) Capacity rating, (2) wattage, (3)
materials, and (4) performance. These standards enable the buyer
to select satisfactory brooders that will be inexpensive to operate.
The capacity rating indicates the number of chicks that can be raised
to the end of the brooding season without crowding, rather than the
number of day-old-chicks that can be accommodated. Wattage suffi-
cient to keep the chicks under the hover warm under all climatic
conditions is specified. Durability of materials and efficiency of
insulation are also specified. Data on performance, economy, and
reliability of operation are included in these standards. Besides
establishing standards to guide buyers in selecting electric brood-
ers suitable to their needs, the Administration has prepared detailed
plans and specifications by which farmers can build satisfactory
electric brooders in home workshops.
Electric Irrigation Pumpvng Equipment.

Specifications have been prepared for deep well turbine pumps and
electrical equipment and wiring incidental to the operation of such
pumps.^* The specifications include both structural and performance
requirements. The structural specifications cover materials, engi-
neering design, construction, and workmanship used in connection
with pumps, motors, and controls. The wiring of these pumping
plants is subject to standard? similar to thosp set forth in the wiring
specifications.

Performance specifications are based on an evaluation of over-all
plant efficiency (wire-to- water). Customarily the only guaranty a
buyer is given is that the pump delivers a discharge pipe full of
water. The power required to deliver this pipe full of water is sel-
dom ^ven consideration. These specifications stress economy of
pumpmg water.

Feed Grinders.

Structural and performance standards for electric feed grinders *'
eligible for financing by the Rural Electrification Administration
were established. Their establishment was made necessary because

« "Plumbing : Contract Forms and Specifications," 36 pp., REA-Ut-9R, Raral Electrifi-
cation Administration, Washington, D. C, July 1939. mimeographed.

•o "A Campaign Plan for More Electric Brooders in Your Own Community : Appendix I.
Specifications Approved by the Rural Electrification Administration of United States of
America for Hover Type Electric Poultry Brooders," pp. 2(V-29, Rural Electrification
Administration. Washington, D. C, not dated, mimeographed.

»* "Pumping Irrigation Water with Electric Power. A Manual of Instructions, Forms,
and Specifications Pertaining to Financing, Purchase, and Installation of Electrically
Operated Irrigation Pumping Equipment," Form UT-77, Rural Electrification Administra-
tion, U. S. Department of Agriculture, Washington, D. C., April 1940, mimeographed.

•» "A Coordinated Program to Develop the IJse of Electric Feed Grinders on Electrified
Farms : Appendix 'A,' Specifications Adopted by the Rural Electrification Administration
of United States of America for Feed Grinder Equipment and Installation Prerequisite
to R. E. A. Financing," 9 pp., sec. I, Rural Electrification Administration, Washington,
D. C. December 15, 1939, mimeographed.

"Manufacturers' Offers for Demonstration Hammer Mills (January 1940) : Specifications,
Feed Grinders," 9 pp.. Rural Electrification Administration, Washington, D. C, January
1940, mimeographed.

OONOENTEATIOIS' OF ECONOMIC POWER 69

most feed grinders suitable for electrical operation are made by-
small concerns. No adequate standards had been set up by the
industry itself. The structural specifications cover materials, en-
gineering design, construction, and workmanship. Specifications for
metals, gray iron castings, high-t€st gray iron castings, malleable
iron castings, black and zinc-coated iron and steel, and cable and
conduit fittings conform to Federal Specifications insofar as these
are applicable.^ Performance specifications, set up as a result of
widely varying performance claims, call for ratings of capacity
and power consumption based on specified grains of specified moisture
content ground to a specified fineness. These specifications benefit
the farmer and guide the industry in producing units that meet
the farmer's needs; they also guide the farmer in selecting an electric
feed grinder designed to meet his special requirements. They pro-
vide a desirable load for the electric power system.

The Rural Electrification Administration is encouraging farmers
served by E,EA -financed electric lines to pool their orders for electric
feed grinders, as well as electric brooders and electric irrigation
pumping equipment, in order to obtain the discounts customarily
allowed in quantity purchases.

Portable Electric Lamps.

A special program was devised by the Rural Electrification Ad-
ministration for providing farmei-s with lamps built in accordance
with the Illuminating Engineering Society (I. E. S.) specifications.
The manufacturers agreed to sell two I. E. S. lamps, one table model
and one floor model, through regular distribution channels at a
special price considerably lower than that which the farmer would
have to pay for the same items if he bought them separately. These
lamps have been approved for financing by the Rural Electrification
Administration.

Electric Cold Storage and Processing Plants.

Specifications have been prepared for refrigerated food storage and
processing plants.®^ These specifications include requirements for
(1) design, (2) construction, and (3) operation supervision. The
specifications for design cover all materials and equipment which will
be included in the completed plant. The specifications for construc-
tion deal with such items as time and manner of construction, super-
vision and inspection, and defective workmanship and materials.
The specifications for operation supervision cover selection, training,
and compensation of operator, and supervision of operations.

Educational Program.

The Rural Electrification Administration has issued numerous
pamphlets and folders encouraging productive use of electricity on
the farm and in the farm home. It has a small staff of specialists
in farm and farm home application of electricity who conduct dem-
onstrations and advise consumers in areas in which R. E. A. borrow-
ers operate electric power systems. Members of its staff have col-
laborated with the Office of Education, Federal Security Agency,

*»"Feaeral Specifications QQ-M-151a, QQ-I-656, QQ-I-666, QQ-I-696, W-F-406,"
U. S. Government Printing Office, Washington, D. C, 5 cents each.

•^"Refrigerated Food Storage and Processing Plant," pp. 6-19, Boral Electrification
Administration, Washington, D. C, not dated, mimeographea.

272496— 41~No.

70 OONOENTRATION OF EX^ONOMIC POWER

in providing the content of a booklet on home-made electrical equip-
ment now being prepared for use by vocational agriculture teachers.®'
Because of the preponderance of cooperatives among R. E. A. bor-
rowers, tlie Federal rural electrification program is large a coop-
erative, and hence a consumers' program. The activities of the Rural
Electrification Administration are motivated by a feeling that in
order to be of the greatest benefit to the farmer, electricity must be
able to pay its way on the farm. Hence R. E. A. is laying increas-
ing emphasis on helping farmers to obtain suitable equipment at
reasonable prices and on teaching them to use that equipment most
effectively.

SOIL CONSERVATION SERVICE

The Soil Conservation Service, United States Department of Agri-
culture, uses trucks and other heavy equipment in the operation of
its projects. The Service found that the applicable specifications
used by other governmental agencies were too general. Consequently,
special specifications were prepared by its engineering staflf. These
s)jecifications must be approved by the Technical Advisory Board of
the Department, In cases where the Technical Advisory Board has
already established specifications for these types of equipment these
specifications are used by the Soil Conservation Service,

SURPLUS MARKETING ADMINISTRATION

The Fruit and Vegetable Division of the Surplus Marketing
Administration, United States Department of Agriculture, uses ex-
tensively marketing grades and standards which have been promul-
gated by the Agricultural Marketing Service, or by the States where
no United States Standards apply or where modifications of the
United States Standards in line with the State standards is deemed
desirable.

Many of the programsi under marketing agreements and orders
provide for regulating shipments of specified agricultural commodi-
ties on the basis of grade and/or size.

Marketing agreements which use grade or size standards are —

Walnuts.

Watermelons.

Colorado peas, lettuce, and cauliflower.

Utah onions.

Oregon fresh prunes.

Florida citrus fruits.

California Bartlett pears, plums, and Elberta peaches.

Mississippi tomatoes.

Beurre-Hardy pears.

Tokay grapes.

Colorado peaches.

Fall and winter pears.

Colorado onions.

Utah peaches.

"» "Building Electrical E<iuipment for the b'arm," Vocational Division, Office of Educa-
tion, Federal becurity Agency, Washington, D. C. (In press.)

oon'Cie:ntration of eiconomic power 71

Under th» legislative authority of the Agricultural Marketing
Agreement Act of 1937, marketing agreements and orders issued by
the Secretary of Agi"iculture may provide for limiting grade or size
which in operation may mean the prohibition of shipment of certain
grades or sizes of the commodity.

Many of the marketing agreement programs applicable to fruits
and vegetables regulate the quality of the product marketed, through
a grade and size limitation. At times this regulation hasi assumed
the form of a modification of the permissive grade and size stand-
ards promulgated by the Agricultural Marketing Service.

The Fruit and Vegetable Division works closely with the Federal
Surplus Commodities Corporation in its surplus purchase and di-
version programs which usually make use of grade- and size stand-
ards. In the absence of established standards, specifications may be
developed by both the Division and the Corporation in carrying
out surplus removal programs.

The Federal Surplus Commodities Corporation, a part of the
Surplus Marketing Administration, establishes and uses standards
of quality in connection with its purchasing operations. The Cor-
poration, in general, prefei-s the use of grades already promulgated
when these are available. But when unfavorable weather such as a
freeze damages a crop, and the Corporation is requested to make
purchases fi^om a salvage standpoint, sometimes it is necessary to
establish a slight variation of the grades available. This is the only
condition under which the Corporation may be said to establish a
standard of quality.

In general, the Corporation uses four different types of standards
of quality, namely:

(1) United States grades promulgated by the Agricultural Mar-

keting Service or official State grades ;

(2) Industry or exchange grades;

(3) Commercial Standards of the National Bureau of Stand-

ards (particularly on cloth items) ;

(4) Special adaptations of the United States grades to meet

unusual circumstances.

The Corporation prefers the use of grades established by the Fed-
eral Government in making purchases. However, if it finds that no
such grades are available, or that the use of these grades makes it
difficult to complete the purchase program, it may use industry or
exchange grades.

TECHNICAL ADVISORY BOARD

The Technical Advisory Board, United States Department of Ag-
riculture, performs a two-fold function in connection with standards :
(1) It approves all specifications for equipment involving engineer-
ing principles which are sst up by various bureaus in the Department,
and (2) it establishes its own specifications for the purchase of equip-
ment when the number of purchases of such equipment by the De-
partment is large enough to necessitate Department specifications.

The establishment of the Technical Advisory Board was author-
ized on June 8, 1938, by the Secretary of Agriculture. The Board
consists of a chairman, three members and technical assistants. It

72 concentratio:n' of economic power

is a unit in the Office of Plant and Operations in the Office of the
Secretary. Its functions are as follows: (1) It approves all technical
engineering requirements in specifications employed by the Depart-
ment in the procurement of articles, materials, supplies and equip-
ment; (2) It decides all engineering questions of controversial or
other character which may develop in connection with awards of
contracts based on such specifications; (3) it supplements existing
Federal Specifications by developing Department of Agriculture
standard specifications to be used throughout the Department for
the purchase of articles, materials, supplies, and equipment which
involve the application of engineering principles; ''4) it establishes
uniform standards and criteria in connection with aerial photog-
raphy, such as scales, reflying, and other pertinent material; (5) it
has certain other miscellaneous duties in connection with the opera-
tion, maintenance, and repair of equipment, such as studies on plans
for available future needs for equipment.

The standards activities of the Technical Advisory Board are lim-
ited by the Secretary to "articles, materials, supplies and equipment
which involve the application of engineering principles." This
means the Board may establish specifications on items, such as farm-
ing equipment, motor vehicles, and laboratory equipment. The Board
has established its own specifications only for items which are pur-
chased quite frequently. In all other cases, however, it has required
that the specifications used must be approved by the Technical Ad-,
visory Board before a purchase can be made. Thus, the Technical.
Advisory Board establishes specifications for all equipment involv-
ing engineering principles used by the Department.

From time to time the Board has assisted other departments in the
reparation of technical specifications. However, there is no inter-
epartmental exchange of specifications at the present time. This is
partly due to the fact that other departments do not have boards,
such as the Technical Advisory Board, for the establishment of
standards in connection with the purchase of heavy equipment.

CENTRAL HOUSING COMMITTEE

Organization.

The Central Housing Committee had its origin in the recognition,
by staff members of agencies concerned with housing, construction,
and finance, of the need for some coordinating agency to prevent
duplication of effort, to make available for use a large amount of
accumulated data, and to establish closer working contacts between
technical men engaged in similar lines of activities.

The need for such an organization was emphasized in the 1934
report of the National Resources Board. This resulted in action,
and recommendations were made by housing agencies and other
interested organizations for a committee on coordination of housing
activities. Appointment by the President of the Central Housing
Committee in 1935 followed. This Committee is an informal body
concerned with exchange of ideas and with research in the field of
housing. It is composed of executives of various Federal agencies
dealing with housing, construction, and finance. Their technical
assistants function through subcommittees and auxiliary groups of
specialized interests, thus permitting exchange of experience and
pertinent data and making available results of joint studies or
compilations.

The following Federal agencies are represented on the Central
Housing Committee:

United States Department of Commerce.

Farm Credit Administration.

Farm Security Administration.

Federal Home Loan Bank Board.

Federal Housing Administration.

Office of Government Reports.

Public Building Administration.

The RFC Mortgage Co.

United States Housing Authority.

The following list of committees of the Central Housing Com-
mittee and their subcommittees will give an idea of the scope and
range of interests :

Committees Subcommittees

Ways and Means

Appraisal and Mortgage Analysis

Research, Design, and Construction Fire Resistance, Landscape (Grounds),

Heating and Ventilating, Plumbing
Code, Planning and Design (Unit
Building), Structure.

Economics and Statistics Bibliography, Construction Costs, Finan-
cial Surveys, Utilization of Census
Data, Continuing Series, Special Sur-
veys.

Land Use and Site Planning Planning Standards, Rehabilitation.

Law and Legislation Legal Digest, Land Title Registration,

Mechanics' Lien, Tax Collection, Mort-
gage Foreclosure.

Operation and Management Accounting, Maintenance and Operation.

Public Relations Exhibitions, Publications, Definitions,

Discussions.

74 CONOENTRATION OF ECONOMIC POWER

These committees and subcommittees have certain basic programs
within the limits of which they are free to initiate discussions and
make recommendations. In general, there is very little evidence of
objections in expressions by agency representatives and many recom-
mendations of considerable importance have been presented to and
approved by the Central Housing Committee. Specifically, data
have been shared, duplication of effort avoided, and joint or separate
undertakings arranged where additional information is needed to
deal with specific problems.

The Central Housing Committee and its subcommittees are served
by assistants contributed by the member agencies to meet needs as
they develop. Publications include the Housing Index-Digest, the
Housing Legal Digest, and Technical Bulletins, the latter being of
limited, confidential circulation.

Standardization Activities.

The Central Housing Committee is contributing much toward in-
creased standardization in the housing construction of the Federal
Government, and its efforts have been directed toward reduction iu
cost of such housing. This standardization work includes many
phases such as structural practices, plumbing, heating, and venti-
lating, test methods, fire-resistance classification of building types
and constructions, terminology, building maintenance, and specifica-
tion. Wliile such standardization activities are intended primarily
for use in Government housing programs, the public also benefite
thereby: first, through the provision of adequate housing at lower
cost to the Government and consequenetly to the occupant and tax-
payer; and second, through the availability to private industry of
the standardized methods and practices thus developed. The various
phases of these standardization activities are discussed briefly below.

Structural practices. — A description of the structural practices of
Federal agencies concerned with housing has been compiled for con-
venient comparison as a step in exploring possibilities of greater
uniformity. This was reviewed by the National Bureau of Stand-
ards, United States Department of Commerce, and the Forest Prod-
ucts Laboratory, United States Department of Agriculture, and
returned to the Central Housing Committee with the comment that
recommendations for greater uniformity could not be given until a
study had been made of the problems peculiar to individual agencies
which may have necessitated, to some extent, present dissimilar prac-
tices. When it is possible to complete these studies it is hoped that
they will result in greater uniformity in structural practices of the
Federal Government.

Experience of many Federal agencies has also been utilized by
the Central Housing Committee in the preparation of a check list,
covering all stages of building construction. This check list, in-
tended chiefly for use of those charged with inspection of Govern-
ment building projects, is nearing completion and will aid in the
prevention of costly mistakes in building construction.

Plumbing. — In order to facilitate further Government housing
undertakings, a subcommittee was charged with development of a
Plumbing Manual. Three recommended plumbing codes were used
as a basis for discussion. The Manual, now available, is primarily
intended for the use of Federal Government agencies.

CTONCENTEATIOIN OF ECONOMIC POWEIR 75

Fire-resistance classifications. — In 1938 Federal housing agencies
requested the cooperation of the National Bureau of Standards and
a newly organized subcommittee of the Central Housing Committee
in the development of reasonable requirements as to fire resistance
of buildings and constructions. The classification and definition of
building types and constructions from the standpoint of fire resist-
ance and the making of surveys of combustible contents related to
representative building occupancies was undertaken. Surveys of
school buildings, office buildings, dwellings, and apartments have been
completed, and surveys of warehouses and other commercial build-
ings are in progress. Summaries of the surveys of schools and offices
are available upon request to the Central Housing Committee.

Compilation of fire-resistance ratings of building constructions,
based on results of fire tests, acceptance tests, or recent research, has
also been started.

Heati/ng amd ventilating. — ^A heating and ventilating committee,
recently organized, composed of representatives of Federal agencies
dealing with problems in this field, is concerned chiefly with the
development of performance standards, including correlation of
existing data and the relation between thermal environment and
health, and methods of testing and rating of equipment to determine
conformity with these performance standards. This work was un-
dertaken recently in cooperation with the National Bureau of
Standards.

Test methods. — The National Bureau of Standards' program of
technical housing research, conducted with the cooperation of the
Central Housing Committee, resulted in the development of standard
test procedure for evaluating the structural properties of house con-
structions. Tests of new types of constructions such as prefabricated
units, performed under this procedure, compared with similar tests
on conventional constructions, afford a more reasonable basis for
judging the value of new types of constructions than any other
method available. Ultimately, such tests may find their way into
building codes to replace present requirements, which specify sizes
of structural members rather than 'performance.

TermJmology. — ^Lack of agreement as to definition of housing terms
has resulted in much confusion. The Central Housing Committee
found, however, that while the problem of terminology demanded
immediate steps toward the development of greater uniformity, the
work necessitated much study. A committee from five principal
Federal agencies concerned with housing compiled a preliminary
glossary of housing terms as a basis for discussion and constructive
criticism prior to the drafting of a glossary which might serve as
an official source of reference. This preliminary glossary was well
received and constructive comments were made which are being in-
corporated in the final edition.

In addition, definitions from all publications issued by Federal
Government agencies concerned with housing are now being com-
piled to serve as a further basis for the establishment of uniform
terminology.

Building maintenance. — To protect large investments in housing
made by the Federal Government, the Central Housing Committee
IS cooperating with the National Bureau of Standards and the Public
Buildings Administration in the preparation of a building mainte-

7g OONOENTRATION OF BCOXOMIC POWER

nance or custodial handbook. This work will be based on wide ex-
perience in building maintenance and on the National Bureau of
Standards' research in this field, and it is hoped that an important
step toward standardization of building maintenance practice will
result therefrom.

^pecvflcations. — At the request of the Home Owners' Loan Corpora-
tion, a review of the section on appliances, equipment, and mechani-
cal devices of its Master Specifications was made by the committee.

A new subcommittee is being organized to bring together persons
engaged in writing specifications in order to simplify specification
writing procedure. This undertaking in no way conflicts with work
of the Federal Specifications Executive Committee, which is con-
cerned with description of the type and quality of materials pur-
chased by the Federal Government, rather than with the form of
specifications. It is expected that considerable attention will be
devoted to possibilities of adopting for general use the "streamlined
specification system" developed by the secretary of the Central
Housing Committee, a system already adopted by the Veterans'
Administration. A streamlined specification is one in which a sharp
distinction is drawn between contractual and constructural elements,
the former being covered by a single governing mandatory clause
and the latter by a concise outline of materials and methods.^^

Landscape {Grounds develovTuent) . — ^A subcommittee is cooperat-
ing with the National Park Service in the preparation of a land-
scape architects' handbook, with special emphasis on cost estimating.
Such a handbook, if generally adopted, should promote the stand-
ardizing of many practices in this field. There has also been
prepared a check list for the use of landscape inspectors.

°' For a description of the procedure used in formulation of -these specifications, see:
"Streamlined ^Specifications," by Horace W. Peaslee, Pencil Points, vol. 20. pp. 533-538,
August 1939.

UNITED STATES DEPARTMENT OF COMMERCE

NATIONAL BUREAU OF STANDARDS

The National Bureau of Standards, United States Department
of Commerce, created by the act of Congress approved March 3,
]901, is charged with —

the custody of the standards; the comparison of the standards used in sci-
entific investigations, engineering, manufacturing, commerce, and educational
institutions with the standards adopted or recognized by the Government, the
construction, when necessary, of standards, their multiples and subdivisions,
the testing and calibration of standard measuring apparatus; the solution of
problems which arise in connection with standards; the determination of
physical constants and the properties of materials, when such data are of
great importance to scientific or manufacturing interests and are not to be
obtained of suflScient accuracy elsewhere.

The Bureau shall exercise its functions for the Government of the United
States; for any State or municipal government within the United States; or
for any scientific society, educational institution, firm, corporation, or indi-
vidual within the United States engaged in manufacturing or other pursuits
requiring the use of standards or standard measuring instruihents.*

The Bureau performs its functions through two major groups:
Research and Testing Group, and Commercial Standardization
Group.

Research and Testing Group.

The Research and Testing Group is subdivided into nine divisions :
Electricity, weights and measures, heat and plower, optics, chemistry,
mechanics and sound, organic and fibrous materials, metallurgy, and
clay and silicate products. This group handles all matters pertain-
ing to investigations and research, testing and measuring. The or-
ganization of the Research and Testing Group is shown in chart III.

The work of the National Bureau of Standards in establishing
and maintaining standards of measurement, quality, performance,
and practice serves not only Federal and tax-supported agencies, but
the consuming public as well.

The research and testing facilities of the Bureau are used to
discover and evaluate material standards and to solve basic technical
problems.

The Bureau's work on standards of measurement is designed to
assist in the standardization of containers and products, in promoting
systematic inspection of trade weights and measures, and facilitate
research in science and technology. The establishment of more pre-
cise values for the standard constants furnishes an exact basis for
scientific experiment and design and makes possible the efficient
technical control of industrial processes.

The Bureau's work on standards of quality sets up attainable
standards and test methods to assure high utility of the products

^ Public Act No. 177, an act to establish the National Bureau of Standards, March 3, 1901.
Amendments, June 30, 1932.

78 CONOENTRATION OF BCOXOMIC POWER

of industry and furnishes a scientific basis for truthful branding and
advertising.

The Bureau likewise develops standards of performance: That is,
specifications for the operative efficiency or accuracy of machines
or devices. These are numerical statements of speed, uniformity,
durability, output,^ economy, and other factors which together define
the net efficiency of an appliance or machine. The ultimate pur-
pose is to make exact knowledge the basis of the buyer's choice and
to clarify the understanding between the manufacturer, distributor,
retailer, and consumer.

Another function of the National Bureau of Standards of very
general interest is the development of standards of practice; that is,
collection of data and formulation of codes of practice for public
utilities and other services. These codes are prepared in cooperation
with the technical and commercial agencies concerned, and relate to
the technical regulation of construction, installation, and operation.
These codes are based upon standards of measurement, standards of
(quality, and standards of performance. The purpose of such work
is to afford a single impersonal standard of practice mutually agreed
upon by all concerned and clearly defined in measurable terms.

Testing and inspection for governmental agencies. — The law re-
quires that the National Bureau of Standards shall carry out investi-
gations and tests for the Federal and State Governments, and for
many years the Bureau has served as a testing and research laboratory
for practically every branch of the Government service.

The testing of scientific apparatus, materials, and supplies by the
Bureau for other Government departments and for the various State
governments is widely utilized, and requests for the Bureau's assist-
ance in such matters are steadily increasing.

Another important service is the calibration of instruments and
apparatus for Federal and State Governments in terms of the na-
tional standards.

Commodities purchased by the various departments and establish-
ments of the Federal Government, excepting foods, drugs, and
cosmetics, are tested by the National Bureau of Standards to de-
termine whether they comply with the requirements of the specifica-
tions on which they are purchased. This gives the Bureau an unusual
opportunity to observe how buying on specifications works out in
practice. The experience of the National Bureau of Standards in
this field is available for the preparation of performance standards.

The National Bureau of Standards is concerned not only with basic
scientific research, but also with the development of standardized
methods for testing materials, as well as with the actual testing of
materials and commodities.

Tests and test methods developed by the Bureau during 1938 and
1939 include many items of particular interest to consumers.

Carpets. — A machine for testing the resistance to wear of carpets
and rugs, developed by the Bureau, has been generally accepted by
manufacturers for product control and research.

Ceramic wMteware. — Although the whiteware branch of the
ceramic industry supplies consumers with numerous products, the
consumer's attention is directed most frequently to tableware, sani-
tary ware, and floor and wall tile. For many years semi vitreous

Chart III

U. S. Department of Commerce • National Bureau of Standards
Organization of tfie Research and Testing Group

Assistant Director

1 El.cfncty

1 Reiiifonce
' Meaiurement.

_ 2 Inducfonce and

2 Electrical

_ 4 Magnetic

Measurements

- 5 PhotometrY

- 6 Rad.a

_ 7 Underjround
Corrosion

— t Electro-
Cherriistry

_ Telephone
^ Stondards

A Capacity and

Density

2 Mass

-J 2 Pyro

3 Tin

-4

Weights and
7 Measures

Q Large-Capacity
Scale Testing

9 Lirriit Gages

III Heat and Power

f ■ Thermometry

5 Cryogen

6 Fire Resistance

rcroft

Eng

nesond

Ace

essor,es

I spectroscopy

2 Polarimetry

Spectrophotometry

A Optical

5 Rodiometry

Atomic Physics,
6 Radium, and
X-Roys

Photographic
Technology

8 Intertcfometry

*— 9 Radiooctivity

V Chemistry

Points,
I Vornishes, and

Detergents,
2 Cements,

^ Organic

Chemistry

Metal and Ore
4 Analysis, and

Standard Somplej

e Reagents and
Platinum Metols

Electrochemistry
(Plotingl

Engineering
I instruments and
Mcchonical
Appliances

2 Sound

c Engineering

Mechanics

L- 6 Hydr,

7 Gas Chemistry

Organic and
VII Fibrous

Materials

2 Textile

3 Poper

5 Testing and

Specifications

VIII Metallurgy

Metallurgy

g Physicol
Chemistry

Thermochemistry
" ond Constitution

Cloy and
Silicote
Products

- 1

Whiteware

-2

Glass

-3

Refroctories

- 4

Enameled
Metals

- 5

H.ovyClay
Products

-6

Cement and
Concreting
Materiols

-7

Masonry
Construction

— 8 Lime and Gypsum

- 9

Stone

ICE 1941-0. 272J'

OONOBNTRATION OF ECJONOMIC POWEiR 79

tableware and porous-bodied wall tile would craze after only a few
months' service, regardless of how much care was taken in obtaining
the correct "fit" betw^een the body and the glaze at the time of manu-
facture. The cause of the failure was unknown and therefore a cure
could not be applied. In the course of the Bureau's investigations of
this subject, the cause of the failure was discovered, a test was devel-
oped by which the susceptibility of ware to this failure could be de-
termined in a few hours, and a remedy for the defect was established.
As a result the consumer can now purchase wall tile and very reason-
ably priced semivitreous tableware with the guaranty that it will not
craze in service.

Electric lamps. — The National Bureau of Standards maintains
the national standard of light. It gives technical advice on the per-
formance characteristics to be included in Federal Specifications for
lamps, and it tests lamps for the Federal .Government. During the
fiscal year ending June 30, 1940, over 5,000,000 incandescent electric
lamps were inspected for the Government before shipment, and more
than 7,800 samples selected from these lamps were life-tested at the
National Bureau of Standards.

These lamps were purchased from contractors, each one of whom
supplied lamps which by inspection and test were found to comply
with the requirements of the Federal Specification for incandescent
lamps-

These inspections and tests for the Government have a great influ-
ence upon the quality of all incandescent lamps, whether the manufac-
turers are contractors to supply lamps to the Government or not.
All manufacturers of incandescent lamps, because of the sharp com-
petition, are anxious to supply lamps to their customers that can be
guaranteed to comply with the Federal Specifications, even though
the makers are not actually supplying lamps to Federal departments.

The result is that American-made lamps are of uniform and high
quality, which is not generally the case with imported lamps.

Paint and varnish. — While the major household purpose of paint
is to decorate the home, its durability is equally important since it
involves the question of frequency and expense of repainting. Re-
search conducted at the National Bureau of Standards furnishes data
on the probable life of paint, and has resulted in the development
of test equipment which simulates the action of weather and acceler-
ates its effects. Studies are made of the characteristics of paint films.
Additional information concerning the composition of paints and
varnishes for various purposes is made available through specifica-
tions used by the Federal Government agencies, in the preparation
of which the Bureau takes an active part.

Paper and paper products. — The National Bureau of Standards
has worked continuously on the development and improvement of
testing procedures for measuring the quality of paper products.

The user of record materials is often concerned as to their probable
longevity, and for several years the Bureau has been making exhaus-
tive studies of writing and printing papers to find the qualities re-
quired for a given service and to find the best means of prolonging
their service life as much as possible. From this work has been
evolved a recommended classification of papers to be used for record
purposes, which is based primarily on purity of the cellulose
comprising the fibers, and on the strength of the papers.

go CONCENTRATION OF EiCONOMIC POWEH

Information on storage conditions for records was obtained by a
survey of library conditions, by testing the paper of identical issues
of books stored in libraries under different conditions, and by labora-
tory investigations of influences indicated as harmful by the results
of the survey and testing. These studies led to recommended storage
practice relative to illumination, purification of the air, humidity,
and temperature. Other studies yielded information on protection
against insects and on increasing the resistance of papers to wear
by covering them with transparent sheetings. Information on the
use of both paper and motion-picture film for reproduction of records,
for the purpose of preserving records contained on impermanent
material or for minimizing the handling of valuable documents, has
also been obtained.

Rubher amd rubher products. — Tires and brake linings have a great
deal to do with the safety and comfort of the motorist. These two
products are of importance to the Federal Government because of
the large scale use of automotive equipment hy the Post Office De-
partment, United States Department of the Interior, War Department,
and other departments, and have been singled out for detailed study
so that purchase specifications can be brought up to date and kept in
line with developments in the industry.

An important part of investigations of this kind consists in design-
ing, constructing, and developing testing equipment. Endurance
machines for tires have been built so that a tire may be run at any
desired speed and load against a heavy drum which takes the place
of the road. By the selection of appropriate conditions any one of
the common types of tire failure, such as the breaking of the carcass
or cracking of the tread, can be brought out or accentuated.

No satisfactory method for measuring tread wear is known other
than the slow and expensive method of conducting driving tests
under carefully controlled conditions. Since road tests are not prac-
tical for use in connection with purchase specifications, a long-time
study is being made of the abrasion of rubber with the hope that
eventually a simple reliable test will be developed for evaluating the
resistance of a tire to abrasion without actually wearing it out on the
road.

Equipment for the testing of brake lining is designed to measure
not only the durability but also the performance of linings under a
variety of conditions, hot or cold, wet or dry, and with frequent or in-
frequent stops. Since thousands of stops must be made with any
particular sample in order to obtain a reliable indication of the way
it will perform, the testing machine is designed to operate auto-
matically according to any predetermined schedule, the results being
recorded autographically.

Less extensive studies have recently been made by the Bureau in
connection with purchase specifications for products such a? rubber
sheeting, surgeons' gloves, adhesive plaster, and rubber-insulated wires
and cables. Reocnt teclinical advances have made it possible to
greatly increas e the life of rubber. Hence the principal feature of
these studif'^ hii- been the development of better accelerated aging
tests so as to i i-hre that the Government or the consumer using Gov-
ernment specifications will get the benefit of the improved quality,
which is now possible.

CJON'OBNTEATIOiN OF EICON OMIC POWER gl

Shoes. — At the request of the General Federation of Women's
Clubs, work is being carried out for the purpose of securing informa-
tion which will be of assistance in preparing standards for women's
leather shoes. The method of preparing such standards on the basis
of construction and material specifications has been discarded in favor
of developing performance tests. The wear of the sole and the comfort
of the shoe as indicated by the porosity of the leather are important
properties for the determination of which the Bureau now has ade-
quate tests. Consequently, attention has been turned to developing
a machine for testing the shoe as a whole with respect to its ability,
to hold its shape and resist break-down. At the present time a machine
of this kind is in constant operation testing shoes to determine the
influence of the welt (McKay) turn, stitch-down, and cement types of
construction on the ability of the shoe as a whole to stand up under
simulated service conditions of flexure and pressure. No results are
available from this work at present, but it represents a start in the
direction of creating performance tests for an article in daily use
by consumers.

Soaps and other cleaning materials. — Detergents (soaps and other
cleaning materials) are essential in maintaining the appearance and
sanitary condition of the home, and it is equally important that they
should not injure the articles or surfaces to be cleaned. The National
Bureau of Standards, in cooperation with manufacturers, the Federal
Specifications Executive Committee, and the public, has developed
many of the Government's specifications for such products. Deter-
gents are purchased on the basis of these specifications, and labora-
tory tests are regularly conducted by the Bureau to determine com-
pliance with these standards of quality and performance. This work
tends to bring about better quality of material.

Much of the Bureau's information on this subject is being utilized
by numerous State and municipal agencies, institutions, and other
users in the preparation of their own specifications for cleaning ma-
terials.

Textiles.— Textile studies at the National Bureau of Standards are
concerned with a variety of problems of interest to the consumer as
well as the manufacturer. They range from studies of the ultimate
nature of the fibers themselves, through investigations of the relation
of the yarn and fabric construction and finish, to the properties
of the finished product, and include studies of utilization, storage, and
maintenance. Many of these studies have led to the development of
standards, specifications, and test methods which are utilized by pro-
ducers in bringing about an improvement in the quality of their prod-
ucts, by large department stores maintaining testing laboratorip.s of
their own in testing the quality of goods they buy ns a measuic of
protection to themselves and to the ultimate consumers. Some of the
subjects to which the Bureau has given consideration in the textile
field include carpets, cotton textiles, dress fabrics, dry cleaning sol-
vents, gloves, hosiery, silk textiles, underwear, and waterproofed
fabrics.

To illustrate the variety and scope of the Bureau's activities with
reference to textiles, there are set forth below some examples of its
studies that afFectl the consumer most directly.

Hosiery. — ^At the request of the General Federation of Women's
Clubs, a hosiery testing machine was developed to simulate the

g2 CONOENTRiATION OF ECONOMIC POWETl

forces acting on a stocking at the knee and garter clasps in use. The
applicability of this machine to the evaluation of variations in
knitting, degumming, dyeing, finishing, laundering, and aging has
Feen demonstrated.

A survey was made of women's full-fashioned silk hosiery from
retail stores throughout the United States to provide a basis for a
performance specification. The brand, retail price, appearance, and
construction were found to be inadequate guides to the performance
of stockings as indicated by the hosiery testing machine.

Standard methods of measuring and standard measurements for
men's, women's, and children's hosiery are provided in Commercial
Standard CS46 for Hosiery Length and Sizes, which has been
accepted by the industry for guidance of producers, distributors, and
users. This standard is also intended to eliminate confusion result-
ing from a diversity of measurements and methods, and to provide
a uniform basis for guaranteeing lengths and sizes of hosiery.

Silk textiles. — There has been developed an accelerated aging test
for silks which make it possible to predict how silk, and particularly
weighted silk, will withstand the deteriorative effects of light, heat,
and moist air,, which are the factors largely responsible for its dete-
rioration in service. It furnishes a laboratory method for indicating
the relative stability of different silk fabrics.

The effect of light on silk, untreated and treated with dilute acids
and alkalies, was studied. The results show that the stability of
silk in light is dependent upon the acidity or alkalinity of the finish-
ing solutions.

The trade practice rules of the Federal Trade Commission regard-
ing the labeling of weighted silk textiles, together with the wide-
spread interest of consumer groups in the amount of weighting in
silk fabrics, led to the development of a method for analyzing
weighted silk fabrics.

Underwear. — Standard sizes for knit and woven underwear were
developed at the Bureau through a research associateship established
by the Underwear Institute. These sizes are in general use in the
industry.

The Bureau has also cooperated in a study of the properties of
underwear fabrics made in a variety of weights, thicknesses, and
constructions from cotton, wool, silk, rayon, and combinations r*
these fibers. The results of this study furnish data on representative
underwear fabrics relative to the properties that appear important
from the standpoint of comfort and health. The relative warmth,
air permeability, thickness, weight, "softness," and "smoothness" for
97 fabrics were determined.

Weights and measures. — ^The National Bureau of Standards ren-
ders a N"ation-wide service to the consumer through the direct or
indirect standardization of devices used in weighing and mea^ii^ing
commodities purchased by over-the-counter buyers. The Bureau is
the custodian of the national standards of weight and measure; it
tests, on the one hand, the control standards which govern the manu-
facture of commercial weighing and measuring devices, and on the
other hand, the reference standards of the States upon which their
official tests of commercial devices are based. The Bureau exercises
no regulatory powers on weights and measures, such supervision

CO&CB^rEATIOiN OF EICQNOMIC POWET? 83

having been left by the Congress almost exclusively^ to the jurisdic-
tion of the States; however, by cooperative action the Bureau pro-
motes uniformity of weights and measures laws and administration
throughout the country, and serves as a clearing house for infonna-
tion on this subject.

The Bureau's! work on weights and measures led to the formation
of the National Conference on Weights and Measures which is com-
posed of State and local officials engaged in the inspection of weights
and measures and in the enforcement of laws and, regulations on
the subject. Although it is an unofficial organization with no direct
authority to enforce its recommendations, the conference exerts a
powerful influence in the field of weights and measures, largely
through the adoption of codes and specifications, tolerances, and
regulations for commercial weighing and measuring devices which
are recommended to the States for official promulgation. These
codes are published by the Bureau from time to time.

The National Conference on Weights and Measures seeks to place
weights and measures administration on a uniform basis throughout
the country. It looks toward adopting the most efficient methods
for carrying on all phases of the work.

Since 1914 the Bureau has been conducting field tests of railway
track scales such as are used for the weighing of railway fi^ight
cars; these testsi have played an important part in the improvement
effected during the past two decades in the accuracy of these large
scales, the weights from which are used not only for assessing freight
charges for rail transportation but also as the basis of sale for goods
sold in carload lots. Three railway track scale testing equipments
are maintained in service by the Bureau, with which more than 1,000
tests are made annually.

There was inaugurated by the Bureau in 1936, and is still in prog-
ress, a siomewhat similar progi'am directed to another class of large-
capacity weighing machines. This program is being carried on m
cooperation with State and local weights and measures officials, and
provides for the testing and inspection, with Bureau equipment and
personnel, of a representative number of wagon and motor-truck
scales in each State which does not have adequate equipment for
thisi type of testing. For the purpose of this progi-am, suitable
testing equipment and methods are demonstrated, and data are de-
veloped which clearly show the need for improved equipment, better
methods, and much gi-eater attention to this important class of com-
mercial weighing scale. This work of the Bureau has been well re-
ceived by scale owners and officials, and also by the consuming public
whose coal, building material, and, other commodities are weighed
on vehicle scales. The general percentage of scales foTMid inaccurate
is high, approximating 78 percent, but it is encouraging to note that
already, as a direct result of this program, a considerable number
of States have procured improved testing apparatus, and it is an-
ticipated that other States will da likewise. As the quality of
testing equipment and the standard of testing technique are raise J,
fair competition among the users of vehicle scales viiA] be promoted,
and.the rights of the producer who sells and of t^e consumer who buys
upon the basis of vehicle-scale weights will be better safeguarded.

Bvilding materials research. — ^Much interest is evidenced at the
present time in the development of better housing facilities through-

g4 CONOENTRATION OF ECONOMIC POWER

out the country, particularly in low-cost housing. At the instance
of the Central Housing Committee, composed of representatives of
Federal agencies interested in housing, the National Bureau of
Standards was selected as the agency to conduct investigations and
tests on the physical properties of materials, except wood, entering
into housing construction.

It is believed that the results of the present program have fully
demonstrated the value of this type of research on housing not only
to the Government housing agencies but also to the architects, the
building industry, and the public.

Widespread interest has been shown in the reports which are now
appearing in printed form and available to all groups interested in
housing.

Many of the agencies have found it practicable to make decisions
on the basis of objective tests by the National Bureau of Standards
and other pertinent data rather than on individual experience, per-
haps satisfactory in some cases,. but not necessarily of general appli-
cation.

Some specific examples -of results of the building materials research
program which lead to a reduction of cost are set forth.

Methods have been developed for the successful application of
plaster on fiber insulating lath. Thus, a single material serves as
plaster base and as thermal insulation and it is possible to obtain
a specified degree of insulation at lower cost. The research also
indicated that the plaster must be a strong plaster and at least one-
half inch thick if cracking of the plaster is to be avoided.

Structural tests have shown the possibilities of using fiber insulat-
ing boards as sheathing. Here again one material serves two func-
tions and the cost of obtaining a specified thermal insulation is
reduced.

In cooperation with various manufacturers of masonry materials,
methods of constructing masonry walls of less material and of less
costly materials, such as cinder block, concrete block, tile, and so
forth, either singly or in combination, have oeen investigated. It has
been determined that 8-inch walls may often be substituted for 1.-2-
inch walls and that the cavity type of construction offers op oortunity
for obtaining a given performance as to structural strtrgth and
resistance to rain penetration at lower cost.

The results of studies of mortars in relation to building walls
which prevent the penetration of rain have been incorpor.-.t' i in the
specifications for new housing projects. The maintenance .aid repair
costs of these structures may be expected to be considerab y reduced.

The results of research have prevented the unnecessary expendi-
ture of money on plasticizers and other admixtures in mortars.

Accelerated aging tests on wallboards give the basis for a specifi-
cation for obtaining a material of longer life at the same cost. A
method recently developed is the use of incombustible fillings. In
a recent housing project, the required resistance was obtained by
filling the partition around a stair enclosed with scrap brick, mortar,
and plaster. In other cases, partition walls filled with mineral wool
and plastered with gypsum plaster could be used instead of tile par-
titions. By the use of incombustible fillings, the field of application
of the less-expensive wooden construction can be extended.

OONC5ENTRATION OF EICONOMIC POWER §5

In cooperation with manufacturers, several types of fire resistant
floor construction, which are less expensive than reinforced con-
crete slabs, have been studied.

Studies of paints by practical performance tests make possible the
avoidance of unnecessarily expensive materials. The relative merits
of various types of paints and pretreatments for sheet steel, both
galvanized and ungalvanized, have been determined. The work on
cement-water paints is expected to lead to formulas by which any
contractor may mix satisfactory paint on the job from relatively
inexpensive materials. Research has already shown that these paints
properly applied are a reasonably satisfactory means of waterproof-
ing leaky masonry walls.

Formulas for satisfactory nonproprietary calking compounds have
been developed.

Tests of heating equipment enabled a satisfactory evaluation of
costs of the equipment. In recent tests, one class of devices was
found to be considerably overrated so that the bids including that
type did not correspond to the same actual heating capacity as bids
on other types. An oil-burning combination domestic hot-water sup-
ply and hot-water heating system was found satisfactory for small
houses in a recent project.

The use of 3-inch soil stacks in the plumbing systems of small
houses rather than 4-inch stacks has been found entirely satisfactory.
Simplified piping systems have been developed for small houses and
apartment houses. The adequacy of various methods of protection
against the back flow of polluted water into the water supply system
has been studied. AH these improvements contribute to cost reduc-
tion, but major cost reductions in this field are to be expected only
with prefabricated equipment.

The National Bureau of Standards cooperates with industry to
eliminate superfluous sizes and varieties of building materials, avoid-
ing waste and reducing costs. Recent recommendations cover con-
crete building units, lumber, and roofing ternes.

The Bureau assists industry in the development and establishment
of Commercial Standards - of quality for building materials. Recent
work has covered stock doors, windows, and frames, plywood, and
hardwood paneling, trim, and molding.

The Bureau takes an active part in building code revision and
modernization. It lends its influence toward the use of performance
requirements and toward setting the requirements only as high as the
safety and health of the public require. Placing the requirements
on a performance basis makes possible the use of lower cost methods
of obtaining the performance as soon as these methods are developed.

CoTninerciaX Standardization Group. — ^The Gommerical Standardi-
zation Group is subdivided into three divisions : Simplified Practice,
Trade Standards, and Codes and Specifications. The organization
of the Commercial Standardization Group is shown in Chart IV.

The term "simplification," when used in the sense of eliminating
unnecessary variety, is sometimes confused with standardization,
but the two activities are essentially different. Standardization is
pririiarily technical and creative; its function is to determine and

* For procedure in developing a Commercial Standard, see p. 88.
272496— 41— No. 24 7

gg CONCENTRATION OF EIGONOMIC POWETl

establish in use the best design, quality, method, or process for per-
forming a desired function. Simplification, on the other hand, is
commercial and selective ; its function is to determine which sizes or
items of a product are most important, and to concentrate production
on them wherever possible. Simplification may be applied to articles
already standardized as to design or size, or it may be applied as a
steps preliminary to standardization, thereby reducing the number
of items to be standardized.

Division of SirrbfUfied Practice,. — The Division of Simplified Prac-
tice serves as a clearing house through which manufacturers, dis-
tributors, and consumer groups cooperate on a voluntary basis in
furthering a Nation-wide program for the elimination of the exces-
sive and needless variety of sizes, types, and dimensions of manu-
factured products, which tends to reduce costs of production and
distribution. In addition to the industry itself, direct cooperators in,
and beneficiaries of this* activity are Federal, State, and municipal
agencies, and consumers in general.

A Simplified Practice Recommendation may be initiated by any
interested group. While most projects are initiated by manufac-
turers, several of the most successful ones have been initiated by
distributors or users of the products. Of the list of 173 Simplified
Practice Recommendations promulgated by the Bureau since 1922, 42
relate to so-called consumer goods. Of these, 10 were initiated by
manufacturers, 24 by "users," and 8 by distributors.

According to the case-histories of some of these Simplified Practice Recom-
mendations, it would appear that the need for simplification originated with
manufacturers, whereas, actually, the manufacturers were prompted by sug-
gestions made by the users of the products. Indeed, in some instances the
initial proposals not only originated with the user-groups but were carried
forward to completion by those user-groups. This is exemplified in R37-38,
R50, and R58-36, to mention just three instances.^

Most of the "users" initiating the recommendations were agencies
such as hotel and hospital associations.

The success of a simplified practice project depends largely upon
the completeness and accuracy of the data collected through a survey
of the specific industry. Studies of sales figures for different com-
modity lines frequently show that about 80 percent of a year's busi-
ness is done in approximately 20 percent of the varieties in which the
product is offered. The remaining 80 percent of the varieties
which bring in only 20 percent of the volume is often an economic
burden on industry, causing excessive inventories, higher carrying
costs, slow turnover, and heavy obsolescence, with consequent loss to
all concerned.

Procedure in developing a Simplified Practice Recommendation. —
The procedure employed in the development of a Simplified Practice
Recommendation' includes the following steps:

1. A survey by a representative committee of the industry covering sizes,
varieties, and types of the article made during each year of a given period,
the volume of each item produced annually, the relative importance of the items,
the probable future trends, and the items which can be eliminated with varying
degrees of advantage.

2. Preparation of a statement consolidating this information.

3. Presentation of the statement to a general conference of all interested
groups representing producers, distributors, and consumers.

* Letter from Edwin W. Ely, Chief, Division of Simplified Practice, National Bureau of
Standards, Washington, D. C, dated August 19, 1940.

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GONCIE'NTRATION OF ECONOMIC POWEOB g7

4. Adoption -by the conference, on the basis of the survey findings, of a
Simplified Practice Recommendation, usually in the form of a list of sizes or
types of the product which appear adequate to meet all normal demands.

5. Appointment by the general conference, of a standing committee of the
industry to maintain the recommendation, through revisions when necessaty.

6. Circulation by the division to all concerned of a full report of the con-
ference action for final acceptance of the recommendation.

7. Promulgation of the program by the Department of Commerce, through
the National Bureau of Standards, and publication of the recommendation,
upon receipt of adequate written support by manufacturers, distributors, and
consumers.

The Division thereafter cooperates with the standing committee in conducting,
from time to time, surveys to determine the degree of adherence, to maintain
and extend support of the recommendation, and to secure data for reaffirma-
tion or revision to meet changing industrial conditions.*

Typical development of a Simplified Practice Kecommendation is
shown in Chart V,

Of the 173 Simplified Practice Recommendations developed to date
many have undergone one or more revisions.

The first Simplified Practice Recommendation was for vitrified
paving brick; others cover a wide range of commodities including
construction materials, metal products, tools, ceramic products, tex-
tiles, paper and cardboard products, mechanical products, containers,
invoices and warehouse receipts.

Some of the first "user" organizations to participate in Simplified
Practice conferences were the American Electric Railway Association,
American Gas Association, American Home Economics Association,
American Institute of Architects, American Railway Association
(division VI, Purchases and Stores), Associated General Contractors
of America, National Association of Purchasing Agents, Electric
Power Club (now the National Electrical Manufacturers Association),
National Electric Light Association (now Edison Electric Institute),
National Retail Dry Goods Association, and the National Wliolesale
Druggist Association.

Division of Trade Standards. — The National Bureau of Standards,
with the assistance of interested groups, sets up and promulgates so-
called Commercial Standards; which —

* * * are voluntary recorded standards agreed upon by producers, dis-
tributors, and consumers," covering terminology, types, classifications, grades,
sizes, and use characteristics of manufactured products as a basis for better
understanding between buyer and seller. They include standard methods of
test, rating, certification, and labeling, and provide a uniform basis for fair
competition. They are made effective by means of voluntary guarantees on
invoices, on labels, or by grade marks on the goods themselves."

Representatives of industrial and commercial purchasers partici-
pate in these activities more extensively than do representatives from
consumer organizations. It must be noted, however, that representa-
tives of consumer organizations are invited to express their views of
pending specifications and standards.

The ultimate purpose for having representatives of producers, dis-
tributors, and consumers attend conferences dealing with Commercial

< Letter from Edwin W. Ely, Chief, Division of Simplified Practice, National Bureau of
Standards, Washington, D. C, dated August 14. 1940.

^ The term "consumer" as used in National Bureau of Standards publications connotes
the broader meaning of the term — the "user" of the commodity^whether he be the so-called
"ultimate consumer" or one who buys the material for remanufacture or resale. The "con-
sumer" may be a packer (who buys his containers from the manufacturer), a purchasing
agent for an institution such as a hospital or hotel, or he may be a household buyer.

' 'Commercial Standards and Their Value to Business," by the National Bureau of
Standards, p. 2, U. S. Government Printing Office. Washington, D. C. 1940.

gg CONCENTRATION OF ECONOMIC POWETl

Standards is to consider all points of view before establishing these
Standards. Some consumer organizations represented at conferences
on proposed standards include General Federation of Women's Clubs,
American Home Economics Association, American Association of
University Women, National Council of Women, National Congress
of Parents and Teachers, National Federation of Business and Pro-
fessional Women's Clubs, Young Women's Christian Association,
and the Young Men's Christian Association.

The use of the Commercial Standards promulgated by the National
Bureau of Standards is entirely voluntary on the part of producers,
distributors, and consumers.

Any group, whether producers, distributors, or consumers, may
request the cooperation of the National Bureau of Standards in
the establishment of a Commercial Standard, In initiating the work,
the proponent group is expected to assume certain responsibilities,
such as the selection of the specification; the preparation of the
tentative draft; attending preliminary conferences; and supplying
data, information, or advice as the situation may require.

Upon receipt of a written request from an interested group, for
cooperation in developing a Commercial Standard, the request is as-
signed, by the Division of Trade Standards, to a "project manager"
who represents the National Bureau of Standards throughout the
development of the project and is responsible for the proper conduct
of the work.

Procedure in developing a Commercial Standard. — The procedure
in developing a Commercial Standard requested by an interested
group or by an industry usually includes the following steps :

1. A survey of existing specifications and selection or formulation by the
proponent group of a tentatively satisfactory specification.

2. Preliminary conferences ' of members of the proponent group to consider
the specification.

3. Review of the specification for technical accuracy by the appropriate divi-
sion of the Bureau.

4. Circulation of proposed standard to other interested organizations, especially
consumer groups, for advance comment.

5. Circulation of the specification to all organizations directly interested —
producers, distributors, and consumers with invitation to attend a general
conference or submit comments and criticisms.

6. Consideration, by the general conference, of the specification, and adoption
as recommended Commercial Standard.

7. Appointment, by the general conference, of a standing committee to
maintain the standard, through revision when necessary.

8. Circulation of the recommended standard to each unit of the whole
industry including manufacturers, distributors, and organized consumers, with
request for written acceptance.

9. Promulgation of the recommended standard by the Department of Com-
merce, through the National Bureau of Standards, and publication of the
Commercial Standard, upon receipt of acceptances representing 65 percent of
production or consumption by volume, and in the absence of valid active
opposition.'

■'The reason for limiting these preliminary conferences to the proponent group, that is,
the one initiating the procedure, is "for the purpose of facilitating action and helping to
correlate and epitomize the desires of the group most eager to establish a Commercial
Standard. This method tends to promote free and frank discussion of all ramifications of
the standard and thus produces a firmer foundation for subsequent discussion, adjustment,
acceptance, certification, and labeling." It is best to "have at least the proponent group
substantially in harmony before calling a general conference of all interests." "Com-
mercial Standards and Their Value to Business." by the National Bureau of Standards,
p. 5. United States Government Printing OflSce, Washington, D. C, 1940.

> Letter from I. J. Falrchild, Chief, Division of Trade Standards, National Bureau of
Standards, Washington, D. C, dated August 15, 1940.

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GONOEWTEATION OF EICONOMIC POWEiR 89

Typical development of a Commercial Standard is shown in
chart VI.

Each proposal for a Commercial Standard requires a special ap-
proach adapted to the character of the particular commodity to be
standardized and conditions in that industry.

The National Bureau of Standards does not expect that household
buyers will become familiar with the requirements of Commercial
Standards. The Bureau expects, however, that with the cooperation
of associations of purchasing agents and consumer organizations,
that both the industrial and commercial buyer, as well as the house-
hold purchaser, will benefit gradually through greater competition
stimulated by acceptance, production, and sale of goods of higher
quality and performance.

Women's silk dress fabrics and silk stockings are two commodities
which may serve to illustrate the difficulties encountered in setting
up, promulgating, and promoting the use of Coramercial Standards.

The General Federation of Women's Clubs sponsored the devel-
opment of performance specifications for silk dress fabrics. A draft
of a specification was prepared, but no general agreement has been
reached on performance, although the method by which the fabric
may be tested is covered by Commercial Standard CS59-39. Speci-
fications are being drafted at the present time for fabrics for eve-
ning dresses and for silk fabrics for sport dresses. Most manufac-
turers have opposed informative labeling of dress fabrics, claiming
such labels would confuse consumers.

There is no accepted Commercial Standard including quality or
performance specifications for silk stockings for women, although
consumers have expressed their desire for such a standard. In 1937
the General Federation of Women's Clubs asked that standards of
performance and quality with grades for silk stockings be developed.

The National Bureau of Standards began a series of tests to
measure performance and quality of silk stockings, and, as a result,
two machines to test the wear value of stockings were developed and
built by the Bureau. Stockings, at prices ranging from 59 cents
to $9 a pair, purchased in 8 different cities, were tested on these
machines. It was found that no relationship exists between price
and "value" based on performance, the 69-cent stocking withstood
the test. Undyed hosiery gave consistent performance when tested
on one of these machines, but tests of finished hosiery gave variable
results. Snag resistance and abrasion resistance were measured on
other machines. Fastness of color and finish of silk stockings are
important factors of performance which were tested. Manufacturers,
after testing stockings in their own factories, claimed that the per-
formance of the stockings after finishing could not be controlled,
so instead of performance standards for silk stockings the National
Association of Hosiery Manufacturers developed standards based
on construction ^ and urged their promulgation by the National
Bureau of Standards. Certificates, showing compliance of the ho-
siery with the grades and quality of construction proposed, were
drafted by the National Association of Hosiery Manufacturers. The
industry as a whole, however, failed to adopt this type of certifi-
cation. A few hosiery manufacturers have installed in their factories

•"Standards of Construction and Inspection of Ladles' Full-Fashioned Hosiery," 15 pp..
National Association of Hosiery Manufacturers, New York City, 1936.

9Q CONOENTRATION OF ECONOMIC POWER

testing machines developed by .the National Bureau of Standards ;
to date 25 machines are being used.

It has been suggested that minimum standards for stockings be
established ; these standards to be based on wearability, extensibility,
and recovery of shape, and to include grades if possible. If a
Commercial Standard for stockings is finally adopted and is effective,
grades for stockings might be unnecessary except to indicate imper-
fections or defects; stockings would be classified largely on the
basis of sheerness, weight, or color, and would be graded standard
or substandard in performance.

Division of Codes amd SpecificatioTis. — The work of this Division is
carried on by five sections dealing with safety codes, building codes,
building practice and specifications, producer contacts and certifica-
tion, and consumer contracts and labeling.

This Division cooperates with Federal, State, and municipal
agencies in the development of safety codes. It investigates mate-
rials and apparatus incidental to the establishment of safety stand-
ards; also accidents and field conditions and current practices in
industry. It cooperates with State and municipal officials in the
application of safety standards, and with engineering, insurance, and
other associations in preparing their own standards. It prepares
publications bearing on the application of safety standards.

In cooperation with Federal, State, and municipal agencies and
technical and trade organizations, the Division of Codes and Specifi-
cations prepares minimum requirements suitable for adoption in
building and plumbing ordinances. It compiles and disseminates
information concerning the status of building and plumbing codes.
It also assists local code committees in the revision of their local
codes.

The Division collects and disseminates scientific, practical, and
statistical information showing approved methods of building,
planning, construction, standardization, and adaptability of struc-
tural units, including the selection and economic utilization of
building materials. It investigates current developments in con-
struction of dwelling houses, including new types of materials and
their uses and new uses for existing materials. It assembles in-
formation concerning the care and maintenance of the various parts
of houses and prepares pamphlets, articles, and reports on subjects
of interest to home builders and home owners.

The Division establishes contacts with agencies making purchases
out of tax moneys and with representatives of "over-the-counter''
buyers to show benefits derived by using nationally recognized
standards and specifications under the Certification Plan as outlined
below. It encourages manufacturers of staple goods to identify
their commodities by labels to guarantee compliance with Federal
Specifications or Commercial Standards. It aids public purchasers
in formulating, selecting, and unifying specifications and commodity
acceptance testing methods. The Division compiles and keeps up to
date directories of commercial testing and college research labora-
tories, and Governmental testing laboratories. It prepares the
National Directory of Commodity Specifications in which are classi-
fied and indexed references to all nationally recognized standards
and specifications of technical societies and trade associations and
several agencies of the Federal Government.

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C'ON'CIE'NTEATICXN OF EOONOMIC POWER 9 J

Tlie Certification Plan and its application to Federal Specifications
and Commercial Standards is another program of interest to con-
sumers which is carried on by the Division of Codes and Specifica-
tions. This plan is thus described by the National Bureau of Stand-
ards in part :

The Certification Plan consists in the compilation and distribution by the
National Bureau of Standards, of lists of sources of supply of commodities
covered by certain selected Federal Specifications and Commercial Standards.
These lists contain the names of firms who have indicated their willingness to
certify to purchasers, upon request, that the material supplied by them on
contracts based on the selected specifications and standards does actually
comply with the requirements and tests thereof and is so guaranteed by them.^°

The Certification Plan has already been applied to 666 Federal
Specifications and 54 Commercial Standards. These lists, to which
additions are made from time to time, are distributed to tax-supported
agencies (Federal, State, county, and municipal) and to all others
upon request.

It must be pointed out that the application of the Certification Plan
to Federal Specifications or Commercial Standards is limited to large
contract buying, such as purchases made by the Federal Government,
which in many instances is not a typical ultimate consumer. The
nature of the Government's needs, as represented by Federal Specifica-
tions and those of the over-the-counter buyer are not the same. Com-
mercial Standards, however, cover goods more frequently used by
consumers and intermediate manufacturers.

Some of the benefits derived by the large-quantity purchasers from
using nationally recognized specifications under the Certification Plan
can be passed along to the "over-the-counter" buyer by the widespread
application of the Labeling Plan " outlined below, which is based on
certified compliance with nationall}" recognized specifications.
^ Another service of interest to consumers inaugurated by the Na-
tional Bureau of Standards is the self-identifying, quality -guarantee-
ing Labeling Plan just referred to. In accordance with this plan, a
firm desiring to bring effectively to the attention of the "over-the-
counter" buyer, at the time of making a purchase, commodities which
it is willing to guarantee as complying with the requirements of cer-
tain nationally recognized specifications or standards, places on the
individual commodities or their contailiers labels which definitely
identify both the specification and the manufacturer or the trade
association which holds itself responsible for the guaranty.

An example of a Federal Specification suitable for quality labeling
is that for bleached cotton sheets. Federal Specification DI)D-S-281.

This specification covers the kind of material, the size, weight,
thread count, breaking strength, hems, and stitching.

The Labeling Plan is capable of a considerable expansion into the
realm of "over-the-counter" goods.

Research Associates.

At the present time over 60 research associates are maintained at
the National Bureau of Standards under its research associate plan.
Under this plan, a manufacturer, distributor, or user of a particular

10 ."jiie Certiflcation Plan : Its Significance, Scope, and Application to Selected Federal
^eciflcations and Commercial Standards," 34 pp., LC-559, National Bureau of Standards,
Washington, D. C, 1939, mimeographed.

""Labeling Plan — Aid for Over-the-Counter Buyers," 10 pp., National Bureau of Stand-
ards, Washington, D. C, 1938, mimeographed.

92 CONCENTRATION OF ECONOMIC POWER

commodity, generally through the recognized national association of
that industry, maintains one or more technicians in the laboratories
and shops of the Bureau under the supervision and regular procedure
of the Bureau for the purpose of research in a field of mutual concern.
An examination of the list of projects upon which these associates are
now working discloses that about 44 percent of the research associates
receive all or a part of their pay from organizations that are inter-
ested in research problems from the viewpoint of the user of the
product rather than that of the manufacturer. It should be pointed
out that the results obtained by the research associates working under
this jplan are given to the public through publications of the Bureau.
One example is research in motor fuels; another, research in dental
products.

C ooperatioii. With Other Agencies.

Much of the Bureau's work in research and testing is utilized in
preparing commodity specifications for the Federal Government and
other tax-supported agencies, and in determining whether commodities
purchased do actually comply with the specification requirements.
A large part of the purchases made by the Federal Government are
tested at the National Bureau of Standards.

In cooperation with the Federal Specifications Executive Com-
mittee, Procurement Division, Treasury Department, of which the
Director of the National Bureau of Standards is chairman, members
of the Bureau staff take a leading part in the preparation of Federal
Specifications, The Bureau is represented . on 62 of the 70 technical
committees functioning to date. It furnishes chairmen for 34, vice-
chairmen for 8, and secretaries for 4 of these technical committees.

The staff of the Bureau takes part in the activities of 127 techni-
cal and trade organizations representing variousi fields of endeavor,
including 'science, technical research, and trade, both national and
international. It has representation on 910 technical committees of
these organizations, many of which depend upon the Bureau's co-
operation in carrying forward their scientific and technical activi-
ties. The Bureau is represented on 300 technical committees and
subcommittees of the American Society for Testing Materials
(A. S. T. M.), a national technical society devoted to the promotion
of the knowledge of engineering and the standardization of speci-
fications and methods of testing. Through this representation the
Bureau holds chairmanship of 30 of the A. S. T. M. committees, vice-
chairmanship of 4, and secretaryship of 6.

The National Bureau of Standards is sponsor (or cosponsor) of
26 projects carried out under the procedure of the American Stand-
ards Association (A. S. A.). It is represented on 160 A. S. A. tech-
nical committees, having chairmanship of 15, vice chairmanship of
2, and secretaryship of 7. It is represented also on the following
coordinating agencies of this association : Board of directors, Stand-
ards Council, Electrical Standards Committee, Mechanical Stand-
ards Committee, Advisory Committee on Ultimate Consumer Goods,
Safety Code Correlating Committee, and Building Code Correlating
Committee. All of the safety code, building code, and plumbing
code requirements thus far formulated under the auspices of the
Bureau have been accepted as a basis for the development of safety,
building, and plumbing codes under the American Standards As-

OON-OEyNTBATIOiN OF ElOQNOMIC POWEiR 93

sociation procedure. Two members of the staff of this association
are located at the Bureau to facilitate the cooperative work of the
two organizations.

The National Bureau of Standards cooperates with tax-supported
purchasing agencies, industries, and national organizations in devel-
oping specifications and facilitating their use; it encourages the ap-
plication of the latest development in the utilization and standardi-
zation of building materials, the development of engineering and
safety codes, Simplified Prcatice Recommendations, and Commercial
Standards of quality and performance.

As stated by representatives of the National Bureau of
Standards! —

Lack of adequate funds has kept the Bureau from going as far as it would
like in the field of developing commodity standards for the ultimate small
purchaser. However, it must not be overlooked that in devoting so much time
and study to the problems of contract buyers, and in determining for them
whether commodities meet certain specifications, the noncontract buyer has
also been served indirectly through the economies introduced in manufacturing
processes. Beyond a doubt the small consumer is thereby reaping the benefit
by obtaining better goods, hence more value, for his money.

Attempts have been made to give the small consumer direct assistance in his
buying through a labeling plan. It must be recognized that future progress in
consumer standards will, for a great part, depend upon scientific testing of com-
modities and the properties of the materials from which they are made, carried
out by experts using necessary scientific equipment, with all tests scientifically
controlled.

FEDERAL ALCOHOL ADMINISTRATION ^^

The Federal Alcohol Administration was created by the Federal
Alcohol Act of 1935. Its purpose, as stated in the title is to —

further protect the revenue derived from distilled spirits, wine, and malt bev-
erages, to regulate interstate and foreign commerce and enforce the postal laws
with respect thereto, to enforce the twenty-first amendment, and for other
purposes.

The Federal Alcohol Administration succeeded the Federal Alco-
hol Control Administration, an agency established under the provi-
sions of the National Industrial Recovery Act. It was made a
division of the Treasury Department and was headed by an Adminis-
trator appointed by the President by and with the advice and con-
sent of the Senate.

Section 5 of the Federal Alcohol Administration Act makes it —

unlawful for any person engaged in business as a distiller, brewer, rectifier,
blender, or other producer, or as an importer or wholesaler, of distilled spirits,
wine, or malt beverages, or as a bottler, or warehouseman and bottler, of dis-
tilled spirits, directly or indirectly or through an affiliate * * * ^^ g^n qj.
ship or deliver for sale or shipment, or otherwise introduce in interstate or
foreign commerce, or to receive therein, or to remove from customs custody for
consumption, any distilled spirits, wines, or malt beverages in bottles, unless
such products are bottled, packed, and labeled in conformity with such regula-
tions to be prescribed by the Administrator.

The act requires that the labeling regulations with respect to pack-
aging, marking, branding, and labeling, and size and fill of container
of alcoholic products be such as to prohibit deception of the consumer
through the use of false, misleading, obscene, or indecent matter, and
to provide the consumer with adequate information as to quantity,
quality, and identity. Similar provisions included in the act are
designed to protect the consuming public from deceptive and mis-
leading advertising.^^

In the case of malt beverages, the labeling and advertising require-
ments apply to interstate transactions only if the law of the individ-
ual State imposes similar requirements on local malt beverage manu-
facturers and distributors.

The Federal Alcohol Administration has issued detailed regula-
tions with respect to labeling and advertising of wine, distilled spir-
its, and malt beverages. These regulations and amendments were
promulgated only after public hearings had been held. Each regu-
lation is divided into two parts. The first part deals with standards
of identity for each of the various types of alcoholic beverages, and
the second part deals with information which is required to appear or

"This Administration was abolished, effective June 30. 1940, under the terms of Reorgan-
ization Plan No. III. Its functions were transferred to the Alcohol Tax Unit of the
Bureau of Internal Revenue, U. S. Treasury Department, Washington, D. C.

13 The Federal Trade Commission also has jurisdiction over false advertising under the
recent Wheeler-Lea amendment to the Federal Trade Commission Act, and there is likewise
a close parallel to the Administration's powers with respect to labeling in the functions of
the Food and Drug Administration under the Food, Drug, and Cosmetic Act.

C'ONOE'NTKATIOiN OF ECONOMIC POWEIR 95

which is prohibited from appearing on labels. The mandatory in-
formation is intended to apprise the consumer of the identity and
quality of the products. Other information appearing on labels
must not be false, misleading, obscene, or indecent, and the use of
unenforceable guaranties, therapeutic claims, scientific analyses, and
other information tending to mislead the consumer is banned.

The labeling regulations make mandatory the inclusion on the
labels for wine of the brand name; class and type; designation of
the product, in conformity with the standards of identity ; name and
address .of the responsible firm such as the manufacturer, bottler,
or importer ; the alcoholic content ; and net contents of container.

Standards of identity for the several classes and types of wine
have been established for still grape wine; sparkling grape wine;
carbonated grape wine ; citrus wine ; fruit wine ; vermouth ; and imita-
tion, concentrate, and substandard wine.

The advertising regulations are patterned on the labeling regula-
tions paralleling in many respects the requirements or prohibitions
of the latter.

Regulations dealing with distilled spirits and malt beverages are
similar to the regulations for wine, except that in the case of dis-
tilled spirits standards of fill of container are prescribed, which have
the effect of requiring the use of bottles of prescribed sizes, which
are not of such shape or design as to mislead the consumer as to
contents.
Enforcement.

In order to prevent the shipment in interstate commerce of mis-
branded products, all bottlers and importers of distilled spirits and
wines, and to a limited extent bottlers of malt beverages, are required
to obtain from the Administration certificates of label approval cov-
ering alcoholic beverages intended to be withdrawn from customs
custody or bottled for interstate shipment. The act, however, also
provides that, where it is demonstrated to the satisfaction of the
Administrator that a product will be distributed within a single
State, it shall be exempted from the necessity of label approval.
Twenty-two States have adopted, in whole or in part, the Administra-
tion's labeling regulations as State requirements applicable to intra-
state transactions.

From Pecember 16, 1938, to December 15, 1939, 93,656 applications
for label approval certificates and certificates of exemption from label
approval were acted upon. Of this number, 79,253 certificates of
label approval were issued, 5,117 certificates of exemption were
granted, and 2,286 applications for label approval were disapproved.
Some 5,028 applications were returned because of incomplete filing.

Government officials have supervision over all customhouses, and
are on duty at all distilled spirits distilleries and bottling plants to
prevent the removal of the merchandise from the plants unless the
importer or the bottler, as the case may be, is in possession of the
required certificates of label approval.

Most of the complaints with respect to misbranding are received
by the Administration from industry members and State alcoholic
beverage control board officials. After appropriate investigation,
cases involving violations of the law or regulations are disposed of

95 OONOENTRiATION OF EICONOMIC POWER

through the institution of proceedings for the suspension of permits,
the acceptance of offers in compromise, the reference of the case to
the Attorney General for prosecution, or the transmission of the
file to State alcoholic control board officials for appropriate action
under State laws. During the past year, permits were suspended in
8 cases involving labeling violations, 1 case was referred to the
Attorney General for prosecution, and 15 cases were settled by offers
in compromise. In addition, many minor and technical violations
of the labeling regulations were corrected by correspondence with
offenders, informing them of the requirements of the regulations
and suggesting the immediate discontinuance of irregular practices.
As part of the enforcement program, the Administration employs
specialists who examine advertisements of liquor firms in all of the
major periodicals and newspapers carrying liquor advertising. Spot
checks of advertising in smaller newspapers are made with the as-
sistance of the Press Intelligence Division of the Office of Govern-
ment Reports. In addition, reports of improper advertising in
media of a more local nature are submitted by competitors, trade
associations, and by members of the Administration's field staff.
An official is assigned to check billboard and point-of-sale advertis-
ing. Examinations of approximately 75,000 advertisements are made
annually.

FEDERAL LOAN AGENCY

FEDERAL HOUSING ADMINISTRATION

The objective of the program of the Federal Housing Adminis-
tration, as defined in the National Housing Act, is "to encourage im-
provement in housing standards and conditions, to create a sound
mortgage market, and to provide a system of mutual mortgage
insurance."

From the standpoint of housing values, the development by the
Federal Housing Administration of a national system of minimum
property standards and construction requirements has been respon-
sible for a marked improvement in the quality of the construction
and planning of new homes, particularly in the lower-price brackets.
Consequently, new home buyers under the Federal Housing Ad-
ministration plan have secured sounder investments and more livable
dwellings than were generally available for the same amounts of
money under previous conditions.

Standards amd Minim/wm Requirements for Individual Houses and
Properties.

The interests of the home buyer and of the Federal Housing
Administration are jointly served by the physical standards and
requirements, developed by the Technical Division, for the prop-
erties securing insured mortgages. The procedure used in develop-
ing these standards is shown in chart VII. These standards are
based on the mlinimum requirements considered necessary for a
well-built dwelling which will be resistant to the elements and to
normal use, and which will provide convenient, livable housing.
These standards are especially intended to foster those elements
which retard deterioration and decay, promote safety, safeguard
health, and secure an efficient utilization of space.

Many Federal Housing Administration requirements are designed
as safeguards against common faults and errors in building which
result in accelerated deterioration of the structure, unsanitary con-
ditions, and the premature development of value-destroying influ-
ences. These requirements, however, afford wide limits within which
houses may be built to suit individual tastes if the location is planned
to provide adequate light and air for these houses and their neigh-
boring dwellings, as well as space for access to a garage, and an
acceptable location with respect to street lines and adjacent houses.
Requirements of this nature are of benefit to individual properties
as well as to the neighborhood and community as a whole.

House plans of fixed design are not mandatory. Most plans may
be used which meet minimum requirements as to room areas, closet

9g CONCIENTR'ATION OF HCQNOMIC POWETl

and storage space, and standards of privacy, and which avoid un-
economical use of space. The construction of houses planned and
designed on a highly individualistic basis is discouraged, however,
since such dwellings are generally limited in their appeal and may
prove difficult to market if resale becomes necessary. On the other
hand, departures from conventional plans and exterior designs are
not discouraged if these departures are considered to have a broad
appeal. In particular, the development of regional types of design
which recognize climatic conditions as well as local tradition is en-
couraged.

The minimum construction requirements likewise do not restrict
home owners and builders in their choice of suitable building materials
or methods of construction. Any material or method normally used
for building may be employed. Once the selection has been made,
however, the Federal Housing Administration ascertains compliance
with its minimum standards to assure the proper use of materials
or methods so as to retard deterioration and functional obsolescence.
When the proposed construction methods depart from the generally
accepted practice proven by many years of experience, the Technical
Division reviews them as individual systems and rules on their
acceptability. The public thus receives the benefits of any improve-
ments in construction or cost reductions which may be provided by
new methods but is safeguarded against methods which may be
structurally or otherwise unsound.

Each insuring office of the Federal Housing Administration uses
minimum requirements, which have been adapted from a set of master
requirements, to meet local conditions and customs. The master re-
quirements consist of general minimum requirements applicable to
any average locality. The requirements for individual districts are
adjusted upward or downward to conform with local conditions, and
may also include minor variations based on local custom or practice.
These adjustments from the master requirements involve practical
considerations such as the depth necessary to place foundations below
the frost line ; bracing to resist unusual stresses in localities subject to
earthquakes; greater structural strength of roof members in regions
subject to heavy snowfall; allowance for types of construction in
southern areas which would not be feasible in the north ; more stringent
requirem^ts for the waterproofing of basements in areas where
water conditions are severe; and protection against termites in areas
where termite infestation is prevalent. In some instances, variations
in requirements show recognition that a desired objective in construc-
tion often may be attained in one of several ways and that local custom
and practice, when satisfactory, should not be disturbed by requiring a
different procedure without improvement in the ultimate result.

In preparing and revising the minimum construction requirements,
the Technical Division uses standards established by such orgai]iiza-
tions or agencies as the American Standards Association; the Ameri-
can Society for Testing Materials ; the National Bureau of Standards ;
the American Institute of Steel Construction ; the United States For-
est Products Laboratory ; the Federal Specifications Executive Com-
mittee ; and others. Many of these standards are based on long years
of research, and experience in the laboratory and in practical con-
struction. Where recognized standards and recommendations are not

6 M
'111

5 |l 11

GENERAL OBJECTIVES OF STANDARDS
Structural Soundness Economy
Physical Security Safety
Health and Sanitation Comfort
Livobility Privacy

METHODS OF PROMULGATION

Minimum Requirements

General ond Special Rulings

Technicol Publications

(Educol.onol Nature)

IPuW.candF.H. A. Personnel)

ENFORCEMENT

1 Field OfHces ,

UNDERWRITING RENTAL HOUSING

Singie-Fomily Multiple-family

Dwellrngs Dwelling.

Review of Individual Applications and Inspection

^ "-^^

OONOENTBATION OF EICONOMIC POWER 99

available, the Technical Division relies on engineering analysis and
good building practice. Commercial Standards of the National Bu-
reau of Standards are often used as a basis for, or incorporation in, the
requirements. Where* a trade or branch of the building industry has
not adopted a Commercial Standard for its product, the Technical
Division in many instances recommends and cooperates in the develop-
ment of such a standard.

The minimum requirements of the Federal Housing Administration
for plumbing, heating, and electric wiring systems are also based upon
the standards and recommendations of the National Bureau of Stand-
ards, the American Society of Heating and Ventilating Engineers, the
American Gas Association, the National Board of Fire Underwriters,
and the National Electrical Code. In establishing safe, satisfactory
standards for sewage disposal and water supply in communities
where public utility systems are not available, the Technical Division
of the Federal Housing Administration depends largely upon the rec-
ommendations of the United States Public Health Service and the
various State health departments. The requirements of the Federal
Housing Administration deal primarily with the safety, suitability,
and durability of household mechanical equipment and its installation,
as well as with the general objective that the equipment contribute
to the essential comfort and functioning of the dwelling.

The general purpose of the minumum requirements is to indicate
the acceptable minimum standards of construction rather than to
provide a definite specification. When available funds permit, home
buyers sometimes find it desirable to exceed the minimum standards.
The minimum requirements do not supersede local building codes
except where those codes permit lower standards of construction than
are acceptable to the Federal Housing Administration. In the nu-
merous communities which do not have a building code, these miniminh
requirements provide the only means of regulating construction meth-
ods and often tend to raise the local construction standards.

In formulating its minimum requirements for adequate construc-
tion, the Federal Housing Administration does not demand that
houses include so-called luxury items. For example, the use of in-
sulation in walls, ceilings, or roofs is not required even though it
recognizes that insulation is a valuable aid to comfort and possibly to
heating economy. Insulation is considered not as a primary struc-
tural necessity but rather a desirable addition to a well-built dwelling
if the owner can afford its cost. For the same reason, the require-
ments do not call for specific types of bathtubs, heating plants,
thermostatic controls, and lighting fixtures, or for other refinements
that add to comfort and convenience but do not affect the basic struc-
ture. Similarly, the interior and exterior finish of a house may be
of a grade and quality within the home owner's paying ability, pro-
vided the finishing materials are sufficiently resistant to use and to
the elements.

Wliile adherence to the requirements of the Federal Housing Ad-
ministration does not necessarily guarantee structural perfection,
it assures adequate construction, functional efficiency, durability, and
marketability. Any attempt to rectify faulty construction of founda-
tions or of the structural shell of houses after construction is com-
pleted is costly; therefore, hiarh quality of these basic items is con-

100 CONCfENTRATION OF EIOQXOMIC POWER

sidered of first importance in the formulation of Federal Housing
Administration requirements.

These requirements thus constitute a protection to home buyers as
well as an essential safeguard against excessive losses by the Admin-
istration itself.

Inspection.

Since the Federal Housing Administration insures lending insti-
tutions against loss of principal on mortgages written under the
F. H. A. plan, the physical quality of the properties securing those
mortgages is of prime importance to the Administration. An ana-
lysis of each mortgage includes not only a study of the home site
but also of the design, construction, and equipment of the house.
Furthermore, the neighborhood, general economic background of the
community, and the financial characteristics of the mortgage are
examined.

The outcome of this entire analysis determines whether or not the
Federal Housing Administration will issue a commitment to insure
the proposed mortgage. If a commitment is issued, inspections are
made to determine wliether the construction, alterations, or repairs
comply with the conditions of the commitment. In the case of new
dwellings three inspections are made in the course of construction
to insure compliance with the approved plans and specifications and
with the property standards and minimum construction requirements
of the Federal Housing Administration. Three inspections, while
constituting important safeguards for both the home buyer and the
Administration, are not to be regarded as a substitute for the con-
stant inspection and supervision afforded by an architect or con-
struction superintendent.

The first inspection is made either when the excavation is completed
and ready for footings and foundations, or when foundations are
completed and ready for backfill, depending upon which stage, in
the particular case, is considered to be the more important. The
inspector notes the location of the building on the lot, subsoil con-
ditions, adequacy of drainage, and other important items which can
be best observed at this time. The second compliance inspection is
m!'de when the dwelling is enclosed, with all structural members
exposed, and while the roughing-in for plumbing, heating, and elec-
trical work is in place and visible. The third inspection is made when
the building is completed and ready for occupancy.

If it is found at any stage that the construction or finished work
does not comply with the terms of the commitment, additional in-
spections are made to determine whether acceptable corrections have
been made. In the event that compliance is not secured, the Federal
Housing Administration cannot stop construction or directly demand
corrections. It can, however, refuse to insure the proposed mortgage
unless proper corrections are made.

Land Subdivision Requirements.

Another contribution to increased property values for home buyers
and to adequate safeguards for the Administration is provided by
the work of the Land Planning Division in setting up standards for
land subdivision. The minimum requirements for subdivisions are
designed to accomplish the best use of land and to protect the basic
plan of the neighborhood. The principles underlying these require-

CONCENTRATION OF ECONOMIC POWER IQl

ments include the development of urban land to create neighborhoods
of definite character, the proper relationship of such neighborhoods
to that of the community as a whole, and the design of neighborhoods
to the requirements of the community for a definite type of housing
accomodations. The land subdivision requirements also deal with
the proper construction and width of roads and sidewalks, adequately
sized utilities, and adequate drainage of the area for the protection
of health and property.

Educational Activities.

Another important phase of the activities of the Federal Housing
Administration has been its widespread educational program for
better housing. Numerous technical bulletins, designed both for the
building industry and for home buyers, have beeen prepared by the
Administration as an aid to the construction of better homes and
the creation of better neighborhoods. Educational articles describing
good and bad building practices and emphasizing the most satisfac-
tory procedures to follow in building or buying a home also have
been widely printed by magazines and newspapers.

HOME OWNERS' LOAN CORPORATION

APPRAISAL AND RECONDITIONING DIVISION

The Need for Sfeciilcations.

The Appraisal and Reconditioning Division of Home Owners'
Loan Corporation was established in 1934, and the need for appro-
priate specifications in the performance of its duties was recognized.
The specifications of different governmental agencies were not suita-
ble for use in the Home Owners' Loan Corporation's reconditioning
work and, therefore, it was decided to set up specifications for
the particular functions of this Division.

Master Specifications.

In the preparation of these specifications the following groups
were consulted : Regional and State reconditioning offices of the
Corporation, architects, engineers, manufacturers, and Government
technicians. The experience of these groups was utilized in the
establishment of these specifications, which were called Master
Specifications.

The Master Specifications represent the minimum standards of
workmanship and material acceptable in the reconditioning oper-
ations.

Modified Specifications: Variable conditions make it necessary to
allow certain modifications of the Master Specifications. These modi-
fications may be divided into two classes:

The usual modifications require an indication of different materials
or type of work to be used.

The exceptional modifications are used in the preparation of indi-
vidual job specifications in order to meet unusual or peculiar
conditions.

The selection of suitable materials and equipment is left to the
person preparing the specifications for a particular job.

In order to reduce the length of each individual job specification,
refei'ence is made only to the numbers of applicable paragraphs of

272496 — tl — No. 24 S

102 CONCENTRATION OF ECONOMIC POWER

the Master Specifications when possible, and supplementary informa-
tion is added. This arrangement prevents the repetition of the
detailed information incorporated in the Master Specifications and
provides uniformity in the preparation of specifications.

During the progress of reconditioning and upon completion of
the work, inspection, examination, and tests are made of all materials
and workmanship to ascertain that they are in conformity with the
Master Specifications.

Three editions of the Master Specifications have been published.
The first Master Specifications were released in December 1934, and
a reprint with minor changes in March 1935. In the spring of 1937
the need for more comprehensive specifications was recognized as
a result of improvements in building materials and appliances, and
also because the Corporation as a realtor had entered into new phases
of activity in handling its acquired properties. In June 1939 the
Master Specifications were revised to include further refinements in
content and scope, and to permit improved reconditioning work with
a maximum of economy and a minimum of effort.

Since the Master Specifications have been prepared and adopted
as a standard for reconditioning work by the Home Owners' Loan
Corporation more than 80,000 copies have been distributed and the
Corporation has satisfactorily completed over 700,000 reconditioning
jobs.

An indication of the adaptability of the Master Specifications for
various types of repair work is evidenced by the purchase of these
specifications by private architects, engineers, manufacturers of build-
ing materials and appliances, and trade associations.

It seems that the experience accumulated by this Division, in
repairing and reconditioning homes, and incorporated in the Master
Specifications, may be of use to home owners in general.

FEDERAL SECURITY AGENCY

FOOD AND DRUG ADMINISTRATION

The Food and Drug Administration administers a group of acts
designed to safeguard the purity and truthfulness of labeling of
foods, drugs, and other commodities, the adulteration or misbranding
of which may seriously impair the health and welfare of consumers
and users of these products. These acts are —

Effective date

1. Food, Drug, and Cosmetic Act Jan. 1, 1940.

2. Caustic Poison Act Mar. 4, 1927.

3. Tea Act Mar. 2, 1897.

Amended May 16, 1908,
and May 81, 1920.

4. Import Milk Act May 15, 1927.

5. Filled Milk Act Mar. 4, 1923.

The jurisdiction of all tht. acts is limited to products in inter-
state commerce, or interstate and foreign commerce, and commerce
within the District of Columbia or within any territory of the United
States.

Headquarters of the organizations designed for the effective en-
forcement of these acts are located in Washington, D. C. Field
stations with laboratories for testing various products coming within
the jurisdiction of these acts are located in 16 principal cities
throughout the country; inspection stations without laboratories
are maintained in 20 cities; and, in addition, sea-food inspectors
are located at numerous plants along the coasts of Georgia, Florida,
Alabama, Mississippi, and Texas. Authority for the inspection of
sea food when requested by the packers is contained in section lOA of
the Food and Drugs Act of 1906 ; this section was not repealed with
the enactment of the Food, Drug, and Cosmetic Act of 1938.

In general, enforcement of all acts is carried out by the collection
and examination of samples of products after their entry into inter-
state commerce. Most of this work is done in the field stations.
The staff laboratories in Washington are devoted mainly to investi-
gational and reserach work. Types of such investigational or re-
search work concurrently carried on are —

1. Bacteriological studies of foods, drugs, and cosmetics.

2. Vitamin tests and improvement of methods of testing.

3. Pharmacological tests, mainly of drugs and cosmetics.

4. Microanalytical studies of foods, drugs, and cosmetics and

development of microanalytical methods.

5. Chemical studies of methods for detecting poisonous ingre-

dient^ in foods, products of decomposition, and other forms
of adulteration.

6. Chemical studies of cosmetics and of methods of determining

their purity.

103

2Q4 CONCENTRATION OF ECONOMIC POWER

7. Chemical studies of drugs and of methods of evaluating their

strength and purity.

8. Certification of coal-tar colors.

9. Chemical studies of caustic poisons.

In the enforcement of the various acts the Food and Drug Admin-
istration cooperates with various State agencies enforcing State laws.
A Division of State Cooperation for the express purpose of promoting
cooperative relations with State officials is maintained.

FOOD, DRUG, AND COSMETIC ACT

The Food, Drug, and Cosmetic Act of 1938 prohibits interstate
and foreign commerce in adulterated and misbranded foods, drugs,
and therapeutic devices. Comprehensive definitions of adulteration
and misbranding are set up for the effective control of actual arid
potential abuses of consumer welfare. The various types of con-
sumer protection afforded by the act are shown in a pamphlet prepared
by the Food and Drug Administration, entitled, "Consumer Protec-
tion," and divided into sections on foods, drugs, cosmetics, and devices.

Foods.

The act authorizes the establishment of definitions and standards
of identity and standards of quality and fill of container for all except
a few foods. After establishment of such standards, foods entering
interstate commerce are required by the act to comply with such
definitions and standards.

Procedure in establishing standards. — A certain basic procedure,
to be followed in establishing these standards, is required by sections
401 and 701 of the act. Superimposed on this is the procedure de-
signed to facilitate the administrative handling of various problems
arising in formulation of standards. The entire procedure may be
briefly outlined as follows:

1. ^Recognition of need for standards, based on previous experience
in enforcement work or requests or complaints from interested parties.
Standardization of foods may begin upon the initiative of the Admin-
istrator or upon application of any interested industry or substantial
portion thereof.

2. Decision by the Food and Drug Administration to undertake neces-
sary work and placing products on program of standardization.

3. Investigation of factors which enter into formulation of stand-
ards. These include a study of previous standards which may have
been promulgated by State and Federal Governments, Wlien neces-
sary investigations are made of methods of manufacture, including
study of ingredients used; packing; labeling; and distribution of the
product in interstate commerce ; composition as revealed by chemical
analysis; interviews with State officials, trade organizations, consumer
organizations, and other agencies.

4. Study and summarization of reports of investigation.

5. Decision by Food and Drug Administration as to scope of
standards to be proposed.

6. Study of problem by the Food Standards Committee of the Food
and Drug Administration. This committee consists of six members
of which four are State officials charged with the enforcement of
State food laws and two members of the Food and Drug Administra-

CONCENTRATION OF ECONOMIC POWER 105

tion. This eommittee considers the data accumulated by the Food
and Drug Administration together with any data acquired by its
members through their experience as State officials. Informal hear-
ings are usually held to obtain expressions of opinion from inter-
ested manufacturers and consumers. The attendance of consumer
representatives is encouraged. The committee formulates a recom-
mendation to the Food and Drug Administration.

7. With the assistance of legal advisers of the Federal Security
Agency proposed standards are formulated and a public hearing is
announced at least 30 days in advance of the set date. The announce-
ment of the hearing is published in the Federal Register and copies
of notice are sent to the public press and trade publications.

8. A public hearing is held at which all interested parties are given
an opportunity of presenting evidence regarding proposals. Affi-
davits are accepted from those who are unable to attend.

At the present time the procedure followed is outlined in a regula-
tion issued on January 13, 1939, by the Secretary of Agriculture.
This provides that after the close of the hearing reasonable time is
given for filing of briefs, arguments, and suggestions by interested
parties. After this the presiding officer prepares suggested findings
of fact and formulates proposed standards. These are published in
the Federal Register and a short additional time is allowed for filing
of objections. The entire record then goes to the Administrator for
a final determination of what the standard should be. He promul-
gates findings of fact and the final standard which are published in
the Federal Register. The effective date of the standard is usually
90 days after its promulgation. When the standard becomes effective
it has the force and effect of law and its enforcement follows through
the general enforcement organization of the Food and Drug Admin-
istration.

Foods for which standards of identity have been promulgated to
date:

Eggs: Liquid eggs, frozen eggs, dried eggs; egg yolks, frozen egg yolks, dried
egg yolks.

Tomato juice, tomato puree, tomato paste, tomato catsup.

Vegetables, canned: Artichokes, asparagus, bean sprouts, green beans, green
stringless beans or stringless green beans, wax beans or stringless wax beans,
shelled beans, lima or butter beans, beets, Ijeet greens, broccoli, brussels sprouts,
cabbage, carrots, cauliflower, celery, coUards, white sweet corn, white sugar corn,
yellow corn, golden sweet corn, golden sugar com, golden corn, field corn, dan-
delion greens, mushrooms, mustard greens, okra, onions, parsnips, black-eye
peas or black-eyed peas, field peas, green sweet peppers, red sweet peppers,
potatoes, sweet potatoes, rutabagas, salsify, spinach, Swiss chard, truffles,
turnip greens, turnips.

Foods on which hearings have been held and on which standards
of identity will be issued shortly:

Cream, whipping . cream ; evaporated milk, sweetened condensed milk, dried
skim milk; preserves, jams, jellies; fruit butter; Cheddar cheese, washed curd
cheese, Colby cheese, cream cheese.

Procedure for developing identity standards for food under the
Food, Drug, and Cosmetic Act is shown in Chart VIII.

Foods for which standards of identity, quality, and fill of container
have been promulgated to date:

Fruits and \egetables, canned: Apricots, cherries, peaches, pears, peas, toma-
toes.

JQg CONCENTRATION OF ECONOMIC POWER

So far no procedure bas definitely crystallized with respect to the formula-
tion of standards of quality and fill of container. The only standards of the
kind so far issued under the new law are substantially a reaffirmation of the
standards of quality and fill of container which were in effect under the
McNary-Mapes amendment of the old law. In formulating these there was, of
course, not the need for the extended investigations which have usually char-
acterized the formulation of definitions and standards of identity. Further-
more these quality and fill of container standards were not considered by the
Standards Committee.'*

Drugs.

Drugs sold as official drugs must comply with official requirements
or standards, or may differ from these requirements if the difference
is stated on the label. The official requirements or standards are
contained in three compendiums recognized by the act, namely,
the United States Pharmacopoeia, the Homeopathic Pharmacopoeia
of the United States, and the National Formulary, or any supple-
ment to any of them. The procedure for formulation of standards
in each of these compendiums varies somewhat, and is described on
pages 208-209.
Cosmetics.

Special standard-making procedure is not provided for cosmetics
except with respect to coal-tar colors other than hair dyes. The act
provides that dangerous coal-tar hair dyes must be labeled with the
caution statement stipulated in the act. Cosmetics, except hair dyes,
may contain only those coal-tar colors which come from a batch
certified as being harmless.

Coal-Tar Dyes.

The Food, Drug, and Cosmetic Act defines foods, drugs, and cos-
metics as adulterated if they bear or contain a coal-tar color other
than one from a batch that has been certified in accordance with
regulations. The act directs the Administrator to promulgate regu-
lations providing for the listing of coal-tar colors which are hannless
and suitable for use and for the certification of batches of such
colors with or without harmless diluents. In order to provide for
compliance with these requirements the Food and Drug Adminis-
tration has set up a special laboratory for testing coal-tar colors.
Regulations have been issued listing certain colors which may be
certified. Standards for these colors have been established and
manufacturers making such colors for use in foods, drugs, and cos-
metics are required to submit samples for testing to the Food and
Drug Administration. When tests show that colors are suitable
for any of the various uses the manufacturer is issued a certificate on
the batch. Such colors may then be used for the purposes stated
in, the certificate.

Devices.

Consumer protection is afforded by the act with respect to devices ;
no special standard-making procedure, however, is provided.

CAUSTIC POISON ACT

The Caustic Poison Act specifies that certain information must be
placed on retail parcels, packages, or containers of the caustic or
corrosive substances to which the act applies :

" Letter by c • W- Crawford, Acting Comniissiorier, Food and Drugs, Food and Drug
Administration. ^Vaahiogton, D. C, August 2, 1940.

CONCENTRATION OF ECONOMIC POWER 107

( 1 ) The common name of the substance ;

(2) The name and place of the manufacturer, packer, seller, or distributor;

(3) The word "poison" placed parallel with the main body of reading matter
on the label or sticker, on a clear, plain background of a distinctly contrasting
color, in uncondensed gothic capital letters, the letters to be not less than
24 point size unless there is on the label or sticker no other type so large, in
which event the type shall be not smaller than the largest type on the label
or sticker ; and

(4) Directions for treatment in case of accidental personal injury by any
dangerous caustic or corrosive substance, except that such directions need not
appear on labels or stickers, on parcels, packages, or containers at the time
of shipment or of delivery for shipment by manufacturers and wholesalers
for other than household use.

The Caustic Poison Act applies to the caustic or corrosive sub-
stances listed below and to preparations containing them, if the
percentage is not less than that indicated :

Percent

1. Hydrochloric acid (HCl) 10

2. Sulphuric acid (H2SO4) 10

3. Nitric acid (HNO3) 5

4. Carbolic acid (CeH^OH) 5

5. Oxalic acid (H2C2O4) 10

6. Anv salt of oxalic acid 10

7. Acetic acid (HC2H3O2) 20

8. Hypochlorous acid or its salts (except chlorinated lime) to yield avail-

able chlorine , 10

9. Potassium hydroxide (KOH) 10

10. Sodium hydroxide (NaOH) 10

11. Silver nitrate (AgNa) 5

12. Ammonia water (NHs) 5

TEA ACT

Development of Standards.

The Tea Act authorizes the annual promulgation of standards of
quality, purity, and fitness for consumption of all teas imported
into this country.

Section 2 of the Tea Act provides that for each year, on or before
the 15th of February, the Administrator of the Federal Security
Agency shall appoint a Board consisting of seven members, each of
whom shall be an expert in teas, who shall prepare and submit to
him standard samples of tea. This Board is selected each year
about the 1st rof January; six of these members are selected by
the Administrator from the trade, and one is the chief tea examiner
or supervising tea examiner of the Food and Drug Administration.
The Board usually meets the first week in February. The purpose
of the Board is to select actual physical standards of a uniform
quality and purity : any teas which are below this minimum standard
for quality, purity, and fitness for consumption to be refused entry.
Occasional changes are made in the personnel of the Board. As
experience in selecting these standards is an important factor, changes
in the personnel of the Board from year to year are made slowly.

These standards, w^hen selected by the Board, are submitted to the
Administrator of the Federal Security Agency for approval. They
are authorized as standards under the Tea Act by the Administrator
and published as a service and regulatory announcement. The teas
selected for the coming year, effective May 1, 1940, are the following:

(1) Formosa Oolong.

(2) Formosa Black.

(3) Congou.

IQg CONCENTRATION OF ECONOMIC POWER

(4) Java (to be used for all fully fermented teas excepting China, Japan,
and Formosa).

(5) Japan Black.

(6) Japan Green.

(7) Japan Dust.

(8) Gunpowder (to be used for all China green teas).

(9) Scented Canton (to be used for all scented teas).
(10) Canton Oolong.

The teas selected represent three types: Black tea, green tea, and
oolong tea, which are sometimes designated by the trade as "fully
fermented tea," "unfermented tea," and "semifermented tea," re-
spectively. The standards for Formosa Black, Congou, Java, and
Japan Black all represent black teas. Japan Green, Japan Dust, and
Gunpowder standards represent Japanese and Chinese green teas,
respectively. Formosa Oolong and Canton Oolong represent oolong
teas from Japan and China, respectively, and the Scented Canton
represents a standard for scented teas which may be prepared as
black, green, or oolong tea. The number selected is merely foj. con-
venience in comparison. They- are intended all to be uniform in
quality, purity, and fitness for use.

The Board, in selecting these actual physical standards, chooses
teas of which there is a stock suitable and compares the teas selected
very carefully each with the other and with the standards for the
previous year to insure a uniform standard. This selection of stand-
ards by the Board usually takes 5 days. The teas are examined
according to the usages and customs of the trade for purity, quality,
and fitness, as provided in section 7 of the Tea Act. This examina-
tion consists essentially in brewing a cup of tea, using a definite
weight of tea, and is largely an organoleptic or taste examination.
The infused leaf also is carefully examined to determine that it
does not contain exhausted leaf, decayed leaf, or foreign material.
Examination is made by a special test, which may be confirmed by
chemical test, to insure that the tea does not contain facing or
coloring material.

When these samples have been selected and approved by the
Administrator of the Federal Security Agency and the standards
promulgated, the teas selected are made into physical standards of a
half-pound each, and are distributed to the tea examiners, who make
the actual examinations of tea based on these standards, at ports of
entry. They are also sold at cost to the trade, so that they may be
distributed to those who are shipping or receiving tea, in order that
shippers or others interested may make preliminary examinations
to determine that they are shipping tea which appears to meet the
standards.

Inspection.

Each lot or "chop" of tea imported is examined by the tea exam-
iners of the Food and Drug Administration to determine that they
meet these standards. If not, they are rejected.

There are five tea examiners who examine by this method of com-
parison every lot of tea which is offered for entry at any port in this
country.

The Tea Act, therefore, insures that no tea which is below the
standard is allowed entry into the United States. It does not include
a labeling guaranty or approval, nor certification of the product.

CONCENTRATION OF ECONOMIC POWER 109

As a result of this method of setting standards and examination,
the amount of tea rejected is very small, seldom exceeding 0.5 percent.

C ooperation.

The Tea Act provides that these teas, when offered for entry, shall
be held in customs custody in bonded warehouses except and until
they are released. Teas which are refused entry are exported under
customs supervision.

IMPORT MILK ACT

The Import Milk Act prohibits importation into the United States
of milk and cream unless the shipper holds a valid permit from the
Administrator of the Federal Security Agency. Such permit must be
renewed each year and may be suspended or revoked for cause at
any "time. The Import Milk Act applies only to the Continental
United States. The purpose of the measure is to promote the dairy
industry of the United States and to protect the public health.

StaTidards.

As a preliminary to issuance of permit, certain conditions must
be met and confirmed through investigations carried on by official
veterinarians and inspectors. These include the following require-
ments specifically enumerated in the Import Milk Act :

(1) The producing animals must be healthy, as determined by a physical
examination made not less than within 1 year before permit issues.

(2) If milk or cream is imported in a raw state, the producing animals must,
in addition, be free from tuberculosis, as established by tuberculin test applied
within 1 year previous to the issuance of permit.

(3) The dairy farms or plants in which the milk or cream is produced or
handled must be in sanitary condition and score at least 50 points out of 100
points, according to the methods for scoring provided by score cards used by
the United States Bureau of Dairy Industry.

At the time of entry, milk or cream offered for importation is
lestricted to bacteria content and temperatui^e as follows :

(1) In the case of raw milk, bacteria content should not exceed 300,000 per
cubic centimeter.

(2) In the case of raw. cream, bacteria content should not exceed 750,000
per cubic centimeter.

(3) In the case of i>asteurized milk, bacteria content should not exceed
100,000 per cubic centimeter.

(4) In the case of pasteurized cream, bacteria content should not exceed
500,000 per cubic centimeter.

(5) The temperature of either milk or cream should not exceed 50° F.

Importations of milk exceeding these limits for bacteria content
and temperature are refused entry. The statute grants discretion to
the Administrator of the Federal Security Agency to waive the above
limitations for bacteria content in the case of milk or cream produced
within a radius of 15 miles of a condensing plant in the United States
where it is to be sterilized in processing. In such instances, the bac-
teria content should not exceed 1,200,000 per cubic centimeter. The
statute also directs the Administrator to waive the requirement for
tuberculin test on animals and the limitation of temperature in the
case of milk which is produced within 20 miles of creameries or
condensing plants in the United States where such milk is to be
pasteurized or condensed.

Regulations drawn under the Import Milk Act define milk and
cream, and also define condensed milk, evaporated milk, and sweet-
ened condensed milk.

no CONCENTRATION OF ECONOMIC POWER

Laheling.

By regulation promulgated under the act, each container of milk
or cream at time of importation is required to be branded or tagged
with the name of the product, permit, number, and name and address
of the shipper.

Inspection.

To carry into effect the provisions of the act, the Administrator
of the Federal Security Agency is directed to cause inspections to be
made by his own representatives ; or, at his discretion, he may accept
reports of inspections which are made by duly accredited officials
of an authorized department of any foreign government, or any
State of the United States, or any municipality thereof.

Cooperation With Foreign Countries.

During the life of the Import Milk Act, permits have been issued
to allow importation of fluid milk or cream from three foreign coun-
tries only, Canada, Mexico, and Switzerland. An outstanding num-
ber and volume of entries originated in Canada. Since inception of
the measure, there has existed the closest cooperation between the
United States Government and the Canadian Department of Agri-
culture in carrying its provisions into effect. Likewise, close coop-
eration is extended by the United States customs' officials at ports of
entry.

FILLED MILK ACT

Definition of Filled Milk.

The Filled Milk Act defines filled milk as—

any milk, cream, or skimmed milk, whether or not condensed, evaporated, con-
centrated, powdered, dried or desiccated, to which has been added, or which has
been blended or compounded with, any fat or oil other than milk fat, so that
the resulting product is in imitation or semblance of milk, cream, or skimmed
milk, whether or not condensed, evaporated, concentrated, powdered, dried,
or desiccated.

This definition is not designed to serve purposes of labeling identi-
fication but to prohibit interstate commerce in filled milk if it is adul-
terated, injurious to the public health, or if its sale constitutes a
fraud upon the public.

HOME ECONOMICS EDUCATION SERVICE OF THE UNITED STATES
OFFICE OF EDUCATION

The Home Economics Education Service of the United States
Office of Education has for its objective "the improvement of home
and family life in the Nation, through instruction in home economics
in the public schools." This home economics program deals with the
responsibility of members of the family in the selection, purchase,
and intelligent use of the commodities and services required by the
family.

Educational material including methods of teaching home eco-
nomics to boys, girls, and adults, and descriptions of programs which
have been successfully developed, are made available to the State
and local supervisors of home economics, to those engaged in train-
ing teachers and to teachers generally. Educational programs in
the schools are encouraged and strengthened through this service

CONCENTRATION OF ECONOMIC POWER HI

and contribute to a more intelligent appreciation of quality and
performance standards, grades, and related significant information
about commodities and services used by individuals, families, and
communities.

"Consumer-Buying in the Educational Program for Homemak-
ing," prepared hj the Home Economics Education Service and pub-
lished by the United States Office of Education in 1935, is designed
for the use of those concerned with the teaching of consumer buy-
ing and has been used extensively by teachers of young people and
adults.

Representatives of the Home Economics Education Service ar-
range regional conferences attended by State and local supervisors
of home economics and representatives of teacher- training institu-
tions, at which, in recent years, problems of education in consumer-
buying have been frequently considered.

The Home Economics Education Service cooperated in planning
a survey of consumer education in secondary schools which has been
made by the Consumers' Counsel Division of the Agricultural Ad-
justment Administration. The report on the survey is now in the
process of preparation. The data were tabulated by the staff of the
Consumer Standards Project (Work Projects Administration).

UNITED STATES PUBLIC HEALTH SERVICE

The United States Public Health Service is not required by law to
establish standards for products usually offered for direct purchase
by the ultimate consumer, although many of its functions deal with
the formulation of and encouragement for adoption of certain stand-
ards for the protection of health. Some of these standards affect the
ultimate consumer more directly than do others.

The United States Public Health Service is specifically charged
with the control and standardization of biological products; it also
establishes standards for drinking and culinary water used on common
water carriers in interstate commerce and cooperates with the States
in the enforcement of these standards. Other cooperative activities
of the Service with State agencies concerned with health matters
relate to the formulation of standards for milk sanitation, sanitary
control of the shellfish industry, control of industrial health hazards,
and control of similar health problems.

Biological Products.

By an act of Congress approved July 1, 1902, the United States
Public Health Service was given supervisory control, through li-
censing, of the manufacture, sale, and distribution in the District of
Columbia and in interstate commerce, of biological and analogous
products used in the prevention and treatment of diseases of man, to
insure safe and standard products. With a few exceptions, however,
these products are not ordinarily purchased by the ultimate consumer,
but are dispensed by State and local health departments, hospitals,
clinics, and private physicians. Standards of purity, potency, and
manufacture of these products are established by the United States
Public Health Service, and it is the function of the Service to ascer-
tain that the standards are maintained in order that such products
may be sold in interstate commerce. The products so controlled in-

112 CONCENTRATION OF ECONOMIC POWER

elude the various vaccines, serums, antitoxins, arsenicals, and analo-
gous preparations. Vaccine virus, diphtheria toxoid, typhoid fever
vaccine, antipneumococcus serums, rabies vaccine, scarlet fever serum,
and the arsenicals used in the treatment of syphilis are among the
most familiar products standardized by the Service. Standards are
also established for insulin, used in the treatment of diabetes, and
this product is one which is most likely to be purchased directly by
the consumer.

Those collaborating in the development of standards for biological
products include physicians, manufacturers of biological products, thfe
Permanent Commission of Biological Standardization of the League
of Nations, and institutes of health of other nations.

In establishing a standard unit for a biological product, research
is conducted to determine the amount of the product required for a
curative dose. Effort is then made to adjust the volume of the unit
to a convenient size for a dose for a patient. In many cases com-
parisons are made with international standards and the American and
international units are correlated.

Wlien a standard was developed, it became official when it had been
promulgated by the Secretary of the Treasury ; ^^ this authority is now
vested in the Administrator of the Federal Security Agency.

The United States Public Health Service is the guardian of the
standard units for the various biological products for which such
standards have been developed. A plan is followed whereby stand-
ard units of different biological products are sent at stated intervals
to the manufacturers of the respective products so that these manu-
facturers may compare their products with the standard units to in-
sure continued adherence.

There are various biological products for which standards have not
yet been established but for which standard tests have been developed.
Manufacturers of these products send samples to the United States
Public Health Service to be analyzed for strength in accordance with
these tests.

In the exercise of control measures, licenses are granted by the
Service only after inspection of the manufacturing establishment and
laboratory examination of samples of its products with respect to
potency and safety have been made. Control of certain serums is
based on official tests. Samples of products on the market are con-
tinually being tested, and the products of all biological establisliments
are tested once a year.

'Water Supplies.

In the prevention of interstate spread of disease, a function of the
United States Public Health Service required by law, interstate quar-
antine regulations have been promulgated.

The first standards for drinking water used on interstate carriers
were developed by the United States Public Health Service with the
cooperation of advisors appointed by the Surgeon General. These
standards, dealing only with the bacteriological quality of the water,
were promulgated by the Secretary of the Treasury in 1914.

Present standards for drinking water, promulgated by the Secre-
tary of the Treasury in 1925, were developed by the United States

"On July 1, 1939, the U. S. Public Health Service was transferred from the U. S.
Department of the Treasury to the Federal Security Agency.

CONCENTRATION OF ECONOMIC POWEK 113

Public Health Service with the assistance of an Advisory Committee
on Official Water Standards appointed in 1922 by the Surgeon Gen-
eral. The members of this committee included sanitary engineers,
bacteriologists, an^ chemists representing the following groups : Offi-
cials of city waterworks. State officials concerned with the enforce-
ment of drinking water standards, and owners of water systems. It
is of interest to note that these drinking water standards, dealing
chiefly with source, treatment, and distribution, have been generally
adopted as standards for public water supplies.

These standards are enforced by requiring annual certification by
the United States Public Health Service of water supply sources used
by common carriers in interstate commerce. The State health au-
thorities cooperate in this work, and usually the certification by
State sanitary engineers is accepted by the Service. The United States
Public Health Service makes sanitary inspections relative to the han-
dling of water and milk supplies, and the methods of taking on, cool-
ing, and dispensing water supplies on common carriers in interstate
commerce; and general sanitary conditions of vessels, coaches, inter-
state air carriers, and motor busses, coach yards, and the terminal sta-
tions of the various carriers.

Milk Supplies.

The United States Public Health Service Milk Ordinance and
Code has been prepared by the Service for voluntary adoption by
municipalities. It is based on the results of investigations in milk
sanitation, tests of pasteurization practices and equipment, and
epidermiological studies of milk-borne diseases.

The Milk Ordinance requires the grading of pasteurized and raw
milk sold in the community, with the provision that the municipality
may require the pasteurization of all mUk sold therein. Each year
the Service studies the operation of the milk ordinance in communities
in which it has been adopted and determines the degree of compliance
in terms of a numerical rating based on the information furnished
by State milk sanitation authorities. The purpose of this activity is
to encourage the communities of the United States to attain and main-
tain a high level of excellence in public health control of milk supplies.

Frozen Desserts.

Consideration of an ordinance for frozen desserts was initiated in
1936 as the result of a request from health officials in Memphis, Tenn. ;
a tentative ordinance, prepared by the United States Public Health
Service and these officials, was adopted as a Memphis city ordinance.
A later ordinance, developed by the United States Public Health
Service, has been revised from time to time ; and, as a result of the
May 1940 conference of the Public Health Service Sanitation Ad-
visory Board, a board of technical experts appointed by the Surgeon
General to advise on various phases of environmental sanitation, a
revised ordinance and code to be recommended for local adoption is
now in preparation.

Restaurant Code.

A Tentative Ordinance and Code Regulating Eating and Drinking
Establishments was issued in 1938. It presents a system of grading
for such establishments and was prepared at the request of local
and State health officers. Some of the items in the code deal with

]^]_4 CONCENTRATION OF ECONOMIC POWER

examination and condemnation of adulterated food ; cleaning and
bacteriocidal treatment of utensils ; notification of disease of
workers; requirements for floors, walls, ceilings, ventilation, and
toilet facilities, and other features of the building The provisions
of the code were reviewed at the May 1940 conference of the Public
Health Service Sanitation Advisory Board and suggestions from
various sources were considered. As a result, a revised edition of
the Ordinance and Code Regulating Eating and Drinking Establish-
ments has been released.
Other Activities.

The United States Public Health Service has contributed to the
establishment of standard methods and procedures in various other
fields of public health, but they are not standards promulgated and
enforced by the Service; they are merely recommended standards.
The Service is also represented on committees engaged in the formu-
lation of standards; and in these cases the Service acts only as a
member of the committee or in an advisory or consultant capacity.

In various other fields that relate to public health and sanitation
the United States Public Health Service contributes to the stand-
ardization of eiquipment and practices. It has formulated minimum
standards for lighting of low-cost homes; and established, or con-
tributed to the establishment of specifications for the screening of
rural houses to aid in the prevention of malaria; the construction
of sanitary outdoor toilets and septic tanks ; the ratproofing of dwell-
ings and vessels; the construction of rural water supplies; sewage
disposal; and housing.

The United States Public Health Service also investigates health
hazards in industry and makes recommendations for necessary cor-
rections in the revision of standards. Studies, such as determining
the effect of certain amounts of toxic insecticide sprays on fruits
and vegetables, lead poisoning in the storage battery industry, sili-
cosis and lead poisoning among pottery workers, toxicity of lead
and its compounds, inhalation of vapor from new commercial or-
ganic compounds used in industry, and health hazards associated
with coal mining, metal mining, and smelting, are conducted by
the Service.

These standards are in no sense compulsory so far as enforcement
by the United States Public Health Service is concerned, and when
minimum requirements for health protection are determined and
established by the Service they are for information and recommenda-
tion only, in most instances the control over such matters comes
under the jurisdiction of State and local authorities, and activities
conducted thereunder must conform to State and local requirements.
Through a cooperative agreement dealing with the establishment of
standards for domestic water supply and sewage disposal, between
the Federal Housing Administration, the United States Public
Health Service and the State health authorities, the standards of the
several States are enforced in all subdivisions or housing develop-
ments conducted in the States under the procedure of the Federal
Housing Administration.

In the administration of title VI of the Social Security Act,
which provides for allotments to States for the extension and im-
provement of State and local health services, certain minimum

CONCENTRATION OF ECONOMIC POWER 115

qualifications for health officers and other health personnel have
been established. These qualifications were formulated and recom-
mended by the conferences of State and Territorial health officers
with the Surgeon General of the United States Public Health
Service. Similar minimum qualifications have been established for
venereal disease control officers.

In the control of venereal diseases an attempt is being made to
improve and standardize laboratory procedures in making sero-
diagnostic tests for syphilis. This is being done by an evaluation
of the various serologic procedures in State-controlled and other
laboratories which conduct such tests.

Cooperation With Other Agencies.

The United States Public Health Service is a member of the
United States Pharmacopoeial Convention, and is represented on
the Committee of Revision of the United States Pharmacopoeia.

In addition to the activities mentioned, relating to or dealing with
the formulation of standards, the United States Public Health Serv-
ice, on request from the State health authorities and Federal de-
partments and independent agencies, acts in a consulting capacity
on matters of health and sanitation. These activities affect the
public primarily with reference to water supplies, sewage disposal,
sanitation in public buildings and parks, and other sanitary matters.

THE FEDERAL TRADE COMMISSION

The Federal Trade Commission derives its jurisdiction from three
statutes: the original Federal Trade Commission Act,'^ as amended
by the Wheeler-Lea Act/^ the Clayton Act/^ and the Export Trade
Act.^^ By the original Federal Trade Commission Act, the Com-
mission is empowered to prevent unfair methods of competition in
interstate commerce and in foreign commerce. False labeling, false
advertising, and other forms of deception fall within the methods
of competition which the Commission was empowered to prevent
under the original Federal Trade Commission Act. The Wheeler-
Lea Act gave the Commission the additional power of preventing
also unfair or deceptive acts or practices in interstate commerce and
foreign commerce. In other words, acts or practices unfair or de-
ceptive to the public, as well as competition unfair to competitors,
are now within the power of the Commission to prevent.

There are three methods used by the Federal Tradei Commission
for the prevention of unfair competition and of unfair or deceptive
acts or practices. These methods are (1) the issuance of cease and
desist orders, (2) stipulations by which the parties who otherwise
would be proceeded against agree with the Commission to stop using
the method, act, or practice, and (3) the use of trade practice
conferences.

These methods are discussed rather in detail since they illustrate
a procedure the purpose of which is, to a great extent, the protection
of the consumer.

Cease and Desist Orders.

Cease and desist orders are used in cases of misrepresentation where
the party proceeded against has not availed himself .of the oppor-
tunity given him by the Federal Trade Commission to cease and
desist from the practice by stipulation. Such opportunity is not
afforded by the Commission in all cases.

Certain types of false advertising cases are initially proceeded
against by the Federal Trade Commission in a petition to the United
States District Court having jurisdiction over the alleged offender,
for a temporary injunction or restraining order to' prevent the dis-
semination of or the causing of the dissemination of false advertising
of food, drugs, devices, and cosmetics, pending the issuance of a
complaint and the disposition thereof after hearings.

The issuance of a cease and desist order is preceded by the issuance
of com.plaint which contains a notice of a hearing at which the re-
spondent has the right to appear and be heard, the taking of testi-
mony, the filing of briefs and the hearing of oral argument. If,
after such procedure, the Federal Trade Commission is of the opinion

"38 Stat. 717.
"52 Stat. HI.
«S8 Stat. 730.
W40 Stat. .Jlt!.

116

CONCENTRATION OF ECONOMIC POWER H'J

that the method, act, or practice is prohibited in any of the acts
administered by the Commission, it makes a report in writing in
which it states its findings as to the facts. Upon such findings of
fact and upon the opinion of the Commission that the method, act,
or practice is prohibited by these acts, it bases its order to cease and
desist. The respondent has a right to a review of the order in the
proper United States Circuit Court of Appeals. The respondent, in
the event the order is affirmed by the circuit court of appeals, has a
right to petition the Supreme Court of the United States for a writ
of certiorari to review the judgment and decree of the circuit court
of appeals. If the respondent does not petition a circuit court of
appeals for review of the Cormnission's order within 60 days, the
order becomes final at the end of such period. In case of violation
of the order after it becomes final, the respondent makes himself
liable for the recovery of a penalty for each violation. Wliat has
been stated as to the order becoming final at the expiration of 60
days and what has been stated with regard to penalties for viola-
tions applies to the original Federal Trade Commission Act as
amended by the Wheeler-Lea Act, approved March 21, 1938. Prior
to that date there had been no provision by which orders to cease and
desist became final after any given period, nor had there been any
penalty provided for violations of orders to cease and desist issued
under the original Federal Trade Commission Act. However, under
the original Federal Trade Commission Act if a respondent violated
the order after it had been affirmed by a circuit court of appeals or
after in a circuit court of appeals a decree of enforcement had been
entered he made himself liable to punishment for contempt of the
court which had affirmed the order or had entered the order of
enforcement.

The scoi:)e and variety of cases involving false advertising and mis-
representations which deceive consumers may be illustrated by a few
examples of cease and desist orders issued during 1939, as follows:
(1) To cease and desist from misrepresenting the fiber content of
hosiery, only partly composed of silk, by failing to disclose the other
fibers therein. One concern was directed to discontinue misrepresent-
ing the wool content of its products and from using the word "wool"
to describe cloth containing other fibei-s unless such other fibers were
conspicuously listed. (2) To discontinue use of the term "pure dye"
to describe fabrics not made wholly of unweighted silk, as well as
the unqualified term "satin" or "taffeta" to describe rayon. (3) To
discontmue misrepresentations in connection with solicitation of
orders from the public for photographic enlargements described by
salesmen as "portraits" and "paintings," and from failing to disclose
to purchasers the true nature of the proffered transaction. (4)
Cease and desist from failure to disclose harmful potentialities of drug
prodticts. (5) A number of orders involved the misrepresentation of
the composition or value of drugs, soap, textiles, welding machines,
and so forth. (6) To discontinue representing Japanese-made
bicycle frames as made in America; and from describing cosmetics
as of foreign origin; and from obliterating or otherwise concealing
marks of foreign origin on gloves.

The Wheeler-Lea Act specifically makes unlawful the false or mis-
leading advertising of food, drugs, devices, and cosmetics, and gives

272496— 41— No. 24 9

XX8 CONCENTRATION OF ECONOMIC POWER

the Federal Trade Commission power to prevent such advertising.
It also provides for penalties for certain types of violations of the
provisions against false and misleading advertising of food, drugs,
devices, and cosmetics. A false advertisement of a food, dru^, device,
or cosmetic is defined by the Wheeler-Lea Act to be one misleading
in a material respect and it is provided in this act, in determining
whether an advertisement is misleading, that there should be taken into
account (among other things) not only representations made or sug-
gested by statement, word, design, device, sound, or any combination
thereof, but also the extent to which the advertisement fails to rev^eal
facts material in the light of such representations or material with
respect to the consequences which may result from the use of the
commodity to which the advertisement relates under the conditions
prescribed in said advertisement, or under such conditions as are
customary or usual.

The advertising cases for 1938-39 covered false and misleading ad-
vertising of a wide range of food, drug, and cosmetic products, e. g.,^"
■ Food. — Coloring compounds, dairy products, flour, sea food, soft
drinks, sirups, teas, and vitamin capsules.

Drugs. — Cough drops, deodorants, contraceptives, eye lotions, eye-
brow treatments, germicides, habit forming and heart depressing
drugs, hair dyes, tonics, treatment for dandruff, and nose salves. Also
alleged remedies of many descriptions inclusive of treatments or cures
for acne, asthma, alcoholism, boils, impure blood, constipation, grippe,
headaches, indigestion, malaria, nervous disorders, obesity, stuttering,
whooping-cough, and worms.

Devices. — Electrolysis machines for removal of superfluous hair,
electromagnetic belts and blankets, hair curlers, reducing girdles, and
sun lamps.

Cosmetics. — Beauty packs, ey« treatments, facial lotion, face pow-
ders and creams, and shampoos.

Stipulations.

Under certain circumstances the Federal Trade Commission, in-
stead of disposing of cases by formal complaint and trial, affords
a respondent the privilege of disposing of. a case by signing a state-
ment of fact and agreement to discontinue the alleged unfair method
of competition.

The Federal Trade Commission determines the form and subject
matter of all stipulations which are prepared in accordance with the
facts as disclosed by the investigation. If a respondent alleges the
facts to be other than the investigation discloses, then the matter is
not subject to stipulation and the proper and only procedure is to
try the issue in order to develop the true facts.

In those classes of cases in which the Federal Trade Commission
affords the respondent an opportunity to dispose of a matter by
stipulation, that procedure accomplishes economically and expedi-
tiously the same result as a complaint and order to cease and desist.
It also simplifies the Commission's legal procedure and saves both
the Government and the respondent the expense incident to trial of
the complaint.

20 See Releases "Monthly Summaries of Work," Federal Trade Commission, Washington,
D. C, 193S-39.

CONCENTRATION OF ECONOMIC POWER 119

Often it appears that a violation occurs through ignorance or mis-
understanding, and that the attention of the offender has only to be
called to such violation to induce discontinuance of the practice. In
such an instance the Federal Trade Commission, instead of issuing
a formal complaint, grants the respondent an opportunity to sign a
statement of facts disclosed by the investigation and agi-eement to
cease and desist from the practices charged. If such stipulation is
signed, further action is suspended ; if it is not signed, the case goes
to trial.

Where signed stipulations are approved and accepted by the Fed-
eral Trade Commission, the public interest is deemed satisfied without
issuance of formal complaint. They are not permitted in cases
where a fraudulent business is concerned, where a legitimate business
is conducted in a fraudulent manner, where the circumstances are
such that there is reason to believe that an agreement entered into
with the concern involved will not be kept, or where a violation of
section 14 of the Federal Trade Commission Act, of the Clayton Act,
or the criminal sections of the Sherman Act or any other statute, is
believed to have occurred. The Commission reserves the right in
all cases, for any reasons which it regards as sufficient, to refuse to
extend the privilege of stipulation.

All stipulations are for the public record.

Unfair trade practices discontinued as a result of stipulations
comprise a wide variety of misleading misrepresentations affecting a
large number of businesses. These practices are usually of a type
that can be readily corrected through this procedure.

T!ie range of commodities involved in the disposition of cases by
stipulation embraces practically all types of products sold in inter-
state commerce.

Stipulations in which various individuals, firms, and corporations
agreed to cease and desist from the unlawful practices as set forth
therein and which were approved by the Commission during the
fiscal year ended June 30, 1939, included 27.1 cases in addition to 329
cases of a special class which were limited largely to false and mis-
leading advertisements and were disposed of through a special pro-
cedure for this purpose. A total of 600 stipulations was thus
approved and accepted during the year.

Trade Practice Conferences.

The Federal Trade Commission holds trade practice conferences
for specific industries to discuss unfair trade practices and to effect
correction through cooperative effort under rules. This procedure
of the Commission has been in operation for many years, and through
it a large body of fair trade practice rules has been established. Be-
sides covering a variety of unfair methods of competition and other
trade abuses, the rules contain certain consumer standards in respect
of proper marking of products, disclosure of contentj specification of
minimum standard of composition or grade, advertising and labeling
to prevent deceptive merchandise, misrepresentation and confusion of
the buying public, standards and other provisions of interest to
consumers.

The work is handled by the Commission's Division of Trade Prac-
tice Conferences, which was established in 1926. The Assistant
Director of this division has stated:

120 CONCENTRATION OF ECONOMIC POWEIR

Businessmen are glad, as a rule, to lend their support to voluntary and simul-
taneous abandonment of bad practices. They welcome the chance to wipe the
slate clean. The overwhelming majority are unwilling to stoop to unfair
tactics. At times some may feel that they must do so in order to meet in kind
the unfair or unethical competition of less scrupulous competitors. Many con-
cerns, as is often the case, would like to abandon their use of unfair or uneth-
ical methods if they can but be assured that their competitors will likewise
stop and not take advantage of the situation. The trade practice conference
procedure affords a means whereby this can be accomplished in a substantial
and gratifying degree by having the rules placed in effect on a day certain,
\vhen by simultaneous action each may turn over a new leaf and make a fresh
start on the same fair basis of competition."

In some instances it may be found that the industry's principal difficulties are
in final analysis, due to the lack of guiding standards for their product. The
Commission has found it possible to assist industries in setting up in their rules
such wholesome standards, thus clearing away the main stumbling block in
their competitive problems. Not only is it found possible in certain situations,
through industry and Commission collaboration, to formulate and establish such
standards, but also to provide the necessary measure of enforcement to make
them effective.**

Through the trade practice conference and hearings, opportunity
is afforded for voluntary participation by interested groups in the
formulation of rules to provide for the elimination and prevention
of unfair trade practices, and to foster and promote fair competitive
conditions ; to encourage high ethical standards in business relation-
ships. At the conference a set of rules is disctissed and proposed
by the industry for the Federal Trade Conmiission. The Commis-
sion, after study and incorporation of perfecting corrections deemed
desirable, makes such draft of the proposed rules available, and
upon public notice affords all interested and affected parties oppor-
tunity to present their views or suggestions and to be heard at the
public hearing ordered for the purpose. In passing upon the rules,
the Commission gives consideration to all memorandums, briefs, oral
arguments, and other information submitted pursuant to public no-
tice. Thereupon, the rules, if deemed proper and acceptable, are
approved and received by the Commission and promulgated as trade
practice rules for the industry. Each member is supplied with a
copy and an acceptance card on which he may record his voluntary
undertaking to observe the rules in the conduct of his business.

The rules as approved are generally of two kinds or classes known
respectively as group I and group II. Rules relating to practices
falling within the broad phrase, unfair methods of competition, or
other competitive practices inhibited by law, are designated as group
I rules. Observance of these rules is required as a matter of law
because of the illegal character of the practice, and its hannful
effect upon the public. Other industry rules received by the Com-
mission, but not applying to practices forbidden by law, are placed
in group II, provided such rules are acceptable to the Commission
as being in the public interest and constructively in furtherance of
their competitive practices in the industry. Observance of group II
rules is voluntary and depends upon cooperation developed by the
industry and the degree of support accorded them by the public.

The following description of approved rules for the industries
named is indicative of the consumer interest and protection in-

21 "Federal Trade Commission Regulation of Business Practices," p. 6, address by Henry
Miller, Assistant Director of Trade Practice Conferences, Federal Trade Commission, before
the Eleventh Boston Conference on Distribution, Boston Conference on Distribution, Boston,
Mass., October 3, 1939.

wibid., p. 8.

CONCENTRATION OF ECONOMIC POWER 121

volved in the trade practice conference work of the Federal Trade
Commission. Virtually all of the rules mentioned are of group I.

Rayon, industry. — Trade practice rules have been set up for this
industry by the Federal Trade Commission making provision for the
proper disclosure of fiber content of the innumerable articles of
clothing and other textile products which contain rayon in whole
or in part. The rules officially define the scope of the word "rayon"
as a generic term and make detailed provision for labeling articles
containing rayon so as to correctly inform the public of the com-
position of the fabric and to avoid misrepresentation, misinforma-
tion, and deceptive concealment. Provision is also made against
advertising designation and selling methods which tend to confuse
the fiber with silk, wool, cotton, or other material and which mislead
the public or deprive purchasers of the benefits of honest and above-
board merchandising. Experience has demonstrated that such rules
and tlieir observance generally have been of tremendous benefit to
consumers as well as to the business concerns engaged in the market-
ing of merchandise containing this widely used textile fiber, of which
the annual production in this country exceeded 340,000,000 pounds
(1937 figures).

Silk industry.— ^\rm\?ir fiber identification rules have been pro-
mulgated by the Federal Trade Commission covering the large vari-
ety of articles of clothing and other merchandise which contain silk
in whole or in part. The wearing apparel, household, and other
textile commodities embraced in these rules cover more than 60
industry classifications of finished products which are produced in
this country and aggregate approximately $600,000,000 in annual
retail sales value. The rules make provision for the proper labeling
and disclosure of fiber content of the merchandise. The rules also
contain specific provision for the proper application of the term
"pure" or "pure dye" silk, and for the proper identification and dis-
closure of weighted silk and silk noil. False advertising, misbrand-
ing, loading, and adulteration of the product, deceptive concealment
of deterioration or damage to merchandise, and many other unfair
practices harmful to the buying public and to business are proscribed.
(Proceedings for the adoption of rules covering textile products
composed of fibers other than silk or rayon are pending.)

Fur industry. — Trade practice rules for this industry cover the
marketing of furs and fur garments and were promulgated June 17,
1938. There are tens of thousands of establishments engaged in the
fur industry as manufacturers and distributors of the finished prod-
uct and as fur farmers, trappers, dyers, dressers, and other handlers.
Sales to the consuming public total several hundred millions of dol-
lars annually. The rules promote the use of ethical selling practices
and provide therein essential consumer protection in their purchases
of the valuable and useful merchandise of the industry. The use of
misleading or deceptive designations of furs in tags, labels, advertise-
ments, and selling representations are prohibited. The designations
used are to disclose the true name of the animal from which the pelt
was taken. The use of fictitious animal designations, the passing-off
of fur of one animal as that of another, misrepresentation of
geographical origin, use of deceptive guaranties or warranties, de-
ceptive concealment of dyeing, blending, or piecing, or that fur has
been dyed to imitate the fur of another animal or of a higher gi-ade

122 CONCENTRATION OF ECONOMIC POWER

pelt, deceptive concealment of the fact that products are made in
whole or in part of second-hand furs, deceptive concealment of dam-
age or injury to pelts caused in dyeing or processing, and many other
forms of unfair methods of competition and practices which are
injurious to the purchasing public as well as to honest competitors,
are prohibited by the rules.

Dress industries. — Trade practice mles were established in Decem-
ber 1937, covering house dresses, wash frocks, and so-called popular-
price dresses in which at that time the annual sales totaled nearly
$4:00,000,OOOj manufacturers' prices. Provision was made against
false advertising and deceptive labeling with respect to quality, size,
serviceability, character of fabric^ color fastness, workmanship,
washability, fiber content, shrinkage properties; also against the use
of any other selling method which may be misleading or deceptive to
the purchasing public. Various additional rules provide for main-
taining, in the interest of the public, fair competitive conditions
among the hundreds of manufacturers and thousands of merchants
engaged in marketing dresses. Informative labeling of fiber con-
tent of the fabric is largely provided for in the above-mentioned
rayon and silk rules.

Cotton converting industry. — Trade practice rules promulgated
for this industry on August 18, 1939, in revised form, cover cotton
and mixed cotton and rayon goods, embracing the following indus-
trial classifications: Fabrics for clothiers' linings; corset, brassiere,
and allied trade fabrics ; converted curtain and drapery fabrics ;
shirting fabrics; wash goods fabrics; interlining fabrics; bleached
goods; and all other cotton and cotton-mixture fabrics. Of direct
interest to consumers are rules against misbranding and misrepre-
sentation of the grade, quality, thread count, shrinkage properties,
color fastness, washability of the goods, as well as any other form of
misrepresentation or deceptive selling claims. The rules also pro-
hibit the deceptive concealment from purchasers of the foreign origin
of imported cotton goods which have been dyed or redyed in tliis
country with the consequent obliteration of the original mark of
foreign origin, and various other unfair competitive methods. All
have been formulated in the interest of the public and for the pro-
tection of consumer and fair business enterprise.

Shrinkage of woven cotton products. — On this subject, specific and
detailed provision is made in trade practice rules for proper labeling
in respect to.preshrunk character or shrinkage properties of woven
cotton goods, the legal principles of the rules being also applicable to
wearing apparel or other merchandise made of woven cotton goods.
Unless and until processes are found and applied which will remove
all shrinkage, the rules require that the product shall not be labeled
or represented as shrinkproof or nonshrinkable, or by advertising or
labeling claims of similar import. They also provide that in case the
merchandise is labeled or represented as having been preshrunk or
shrunk, full disclosure shall be made in connection therewith of the
percentage of additional shrinkage the merchandise will undergo
when launderec^-or used by the consumer. Thus the purchaser is to
be appraised of the fact that, although having been preshrunk to a
degree, the goods will shrink still more and what will be the extent of
such additional shrinkage. Observance of these rules means the elimi-
nation of the chaotic, confusing, and misleading conditions in advertis-

CONCENTRATION OF ECONC -VIIC POWER 123

ing and labeling which had sprung up in the matter of control of
shrinkage of woven cotton merchandise of all kinds marketed annually
to the extent of many hundreds of millions of dollars.

Infmits'' and children's knitted out&pwear industry. — The proper
labeling of infants' and children's knitted outerwear is provided for in
trade practice rules for this industry. Under them, fiber content is
to be disclosed in labeling and advertising in accordance with the rayon
and silk rules. Misbranding and misrepresentation respecting the
grade, quality, size, serviceability, color fastness, workmanship,
shrinkage properties, or in any other respect, are to be eliminated. As
in the case of other industries many other forms of trade abuses are
also covered.

Ribbon industry. — Comprehensive trade practice rules were issued
June 28, 1939, for this industry, covering ribbons and ribbon products,
of which the manufacturing branch has a total annual sales volume
of approximately $12,000,000. Provision is made, among other things,
for the elimination of misbranding and misrepresentation; for the
disclosure of yardage on label, or spools of ribbon, also for disclosure
of the fact when the ribbon is of the cut-edge or of the pasted-back
type of construction instead of woven edge or back. A rule is included
against the practice of dyeing or redyeing ribbon to obliterate mark of
foreign origin and deceptively conceal the fact that the product was not
made in the United States. Fiber identification and other provisions
are incorporated for the protection of honest business and the consum-
ing public.

Radio receiving sets, parts, aiid accessories industry. — This industry
has aggregate sales amounting to more than $460,000,000 per annum.
Rules relating to the advertising and selling practices of the industry
were promulgated by the Commission on July 22, 1939. The industry
is comparatively new, also subject to rapid technological advances,
and various competitive problems involving confusion and deception
to the buying public had sprung up. To correct these d^Sculties,
trade practice conference proceedings for the industry were neld and
the rules were established. These provide against all forms of mis-
branding, misrepresentation, and deceptive selling methods. They pro-
vide for proper advertising descriptions in respect to "all- wave,"
"world-wave," and "standard broadcast" sets ; for the proper designa-
tions of the radio frequencies covered by the respective sets; also
proscribed are deceptive or unfounded claims as to reception of foreign
or distant broadcasts ; freedom from fading, noise, electrical interfer-
ence, static, and other phenomena; as to the performance of the re-
ceiving set in the locality of the purchaser, its ability to receive trans-
missions from or to ships at sea, amateur stations or other types of
transmissions. Concealment of defects or deficiencies, misrepresenta-
tions as to ability to bring in certain foreign or domestic stations, are
also covered; provision is made against the use of fake or "dummy"
tubes ; the misrepresentation of tube capacity of set ; misrepresentation
of the model, switching of cabinets to deceive ; misrepresentations as
to manufacturing sponsor of set; and various other unfair competitive
methods. The rules constitute a Qs>ncerted effort in cooperation with
the industry to protect the buying public in their purchases of radio
sets, parts, and accessories, for which millions are spent annually.

Putty industry. — Rules promulgated for this industry proscribe
such practices as false advertising and deceptive representation of

X24 CONCENTRATION OP ECONOMIC POWER

grade, quality, manufacture, character, content of the product, false
labeling, misrepresentation as to the oil content, whether the same is
linseed oil or substitute oil ; the use of adulterants or substitute oils to
mislead and deceive ; the misrepresentation of the white lead and other
pigment content ; the use of slack filled or short weight containers ; the
making of false guaranties; and many other forms of unfair trade
practices, the prevention of which affords comprehensive consumer
protection in the purchase of putty, an essential and widely used
commodity.

Paint and varnish hru^h industry. — As in the case of putty, trade
practice rules for the paint and varnish brush industry were pro-
mulgated to protect the buying public as well as honest business from
advertising and selling practices which mislead, deceive or defraud
purchasers. The rules not only prohibit all forms of deceptive ad-
vertising and labeling, but also contain comprehensive provisions in
respect to labeling paint and varnish brushes so as to reveal. the type
of bristle or hair used in the brush, whether hog bristle, horse-
hair, fiber, or mixture thereof. Inasmuch as the quality and A-alue
of the brush is largely dependent upon the type or proportion of
bristle content, the truthful disclosure of the facts to the purchaser
in this respect closes the door on conditions which in the marketing
of this product would mislead, deceive, or defraud the consumer.
The rules likewise provide for the prevention in the industry of many
other forms of unfair trade practices.

Toilet h7nish indiostry. — The trade practice rules covering toilet
brushes provide against concealment of foreign origin of the handles
or blocks, misrepresentation of bristles and of the kind of wood in
the handle or block. The rules also provide a system of approved
designations to be used in connection with brushes sold as "Made in
U. S. A." but containing handles made in Japan, England, France, or
other foreign country. The purpose is to protect consumers from
deception, confusion or misunderstanding in their purchases of do-
mestic or foreign-made brushes or of brushes containing essential
parts made in a foreign country. Various other forms of misbrand-
ing, false advertising, and unfair methods of competition are also
inhibited.

Baby chick industry. — Trade practice rules promulgated for this
industry are of special value to our farm population. They cover
the sale and distribution by hatcherymen of baby chicks and make
definite and detailed provision for the protection of farmers and other
poultry raisers who purchase nearly a billion chicks annually. All
forms of deceptive advertising and selling methods are inhibited,
including deceptive concealment of material facts. Specific inhibi-
tions are provided to control unethical selling methods which are
grounded in false claims and deceptive representations relative to egg
yield or egg-producing qualities, blood testing, vaccination, inocula-
tion, pullorum testing, freedom from disease, purported bargain
prices, trap nesting of flocks, liveability and stamina of chicks, and
many other trade abuses and unethical soiling j^ractices which are
injurious to the public as well as to scrupulous competitors.

Preserve, macaroni., and tomato fo^te mdusfries. — Hules covering
these industries relate to the advertising, sale, and distribution of
fruit preserves, jams, jellies, macaroni, spaghetti, noodles, and related

CONCENTRATION OF ECONOMIC POWER 125

products, and to tomato paste products. These various commodities
are widely used by the public and involve a segment of our national
trade and commerce of considerable proportions. The rules were
issued in the interest of maintaining fair competition and protecting
the public interest. They provide minimum standards of content of
products and proscribe deceptive advertising or selling representa-
tions which conceal the fact when the product is substandard or is
an imitation, or is deficient in required ingredients, as, for example,
deficient in fruit content in the case of preserves, jams, jellies; or
deficient in egg or semolina or farina flour content in the case of
macaroni and related products ; or is lacking in sufficient concentra-
tion of tomato content in the case of tomato paste products. Adul-
teration, use of artificial color to mask inferiority, and many forms
of selling practices are covered which are injurious in their effect upon
the buying public, or which interfere with the consumer's interest
in the maintenance of fair methods of competition.

Oleomargarine industry, — Of somewhat similar nature are the rules
covering the advertising and distribution of oleomargarine. Besides
prohibiting false advertising and misrepresentation as to nutritive
value, fat content, grade or character of ingredients of product,
special provision is made against the practice of misrepresenting
the product as containing milk when only skimmed milk has been
used or when either the cream or other food content has been ex-
tracted from the milk. The rules condemn the failure to comply
with Federal or State laws or regulations for oleomargarine, and
various other unfair competitive methods.

Mirror industry. — These trade practice rules treat a most important
problem from the standpoint of protecting the public and scrupulous
business by, among other things, providing for labeling of mirrors
to show whether the glass is plate glass or window glass. The pass-
ing off of one for the other is prohibited. Deception as to copper
backing is also proscribed. Rules against improper use of such
terms as "crystal glass," "sheet glass," are inhibited. Misleading
or deceptive guaranties as to silver spoilage and as to durability of
the product are prohibited. Sale, of defective mirrors or seconds
as first-class merchandise, or the deceptive concealment of the fact
that the product is defective is likewise proscribed. The provisions
of the rules to the effect that mirrors should be labeled to show
whether the glass is plate or window glass constitute a forward
step in informative labeling. A knowledge of the kind of glass
in the mirror is of prime importance to consumers, enabling them to
buy intelligently and to be protected from deception and imposition
in the matter of price and quality. Manufacturers' sales of mirrors
approximate annually $20,000,000, for which, of course, the con-
sumer pays much more.

Jewelri/ iivdustry. — The rules established in this industry are aimed
at protecting the public from such practices as selling watches which
are secondhand or which have been rebuilt or contain secondhand
movements without disclosure to purchaser that the merchandise is
second-hand or rebuilt, thus protecting deceptive concealment; repre-
senting precious stones as- being perfect, when in fact they show
flaws or imperfections under a magnifier of not less than 10 power;
passing-off imitation, synthetic, manufactured or cultured gems as
the real, genuine, or natural ; the practice of tinting gems to mislead

126 CONCENTRATION OF ECONOMIC POWER

or to conceal defects or inferior nature of article, and many other
practices which deceive or defraud purchasers and unfairly divert
trade from the scrupulous competitor.

Rubber tire industry. — Trade practice rules relate to the sale and
distribution of the products of this industry which consist princi-
pally of automobile tires and tubes. There are about 50 manu-
facturing companies and over 100,000 distributing outlets, with total
capital investment of approximately $2,000,000,000. The aggi-egate
annual sales volume is estimated to be in excess of $750,000,000. Of
direct interest to the consumer are provisions against false adver-
tising and misbranding, including misrepresentations as to the grade,
size, life, durability, and otner properties of any of the respective
brands or makes of tires or tubes being offered to the public. The
rules also provide against confusion and deception in regard to
so-called "first-line" tires, "standard makes," 'change over tires,"
"rebuilt," "recapped" and "retreaded" tires, with provision for the
proper marking of such "rebuilt," "recapped," or "retreaded" tires
that the public ma}^ not be deceived into believing they are new
as they appear to be.

General Investigations.

One of the principal duties of the Federal Trade Commission,
and the one which it inherited in 1915 from the Bureau of Corpora-
tions, is that of making general "investigations" into business con-
ditions and practices, particularly as respects corporations engaged
in interstate commerce (exclusive of banks, common carriers, and
certain other types of utilities) and their relations with other com-
panies or persons. In the conduct of such investigations, the Com-
mission possesses broad powers for obtaining information.

Many general investigations and studies have been made by the
Federal Trade Commission in which the consumers' interests are
very large. These are, for example, the inquiry into the electric
and ^as utilities industries, an investigation into the conditions
affecting the sale and distribution of milk, the investigation of
"agricultural income" and related questions, and othei^s. The most
recent of the major investigations made by the Federal Trade Com-
mission was that of the motor vehicle industry and trade.

The facts developed during the conduct of investigations have
demonstrated the need, both of the Government and of the general
public, for a more comprehensive knowledge of industiy and its
operations as a guide for an economic policy.

Export Trade.

The Federal Trade Commission administers the Export Trade
Act (Webb-Pomerene Act), which permits a combine or coopera-
tive, termed in the act an "association" for the sole purpose of
engaging in export trade. The purpose of this act is to promote
export trade by placing American exporters on an equal footing
with competitors abroad, especially in those countries where cooper-
atives and cartels have been permitted and encouraged.

Agreements by the associations may provide, among others^
standardization of products and improvement of the quaiity of
goods exported; establishing rules and regulations for export pack-
ing and shipping.

OONCENTRATION OF ECONOMIC POWER 127

Checking Advertising.

Another activity of the Federal Trade Commission consists in
maintaining a constant check on newspaper and magazine adver-
tisements and radio continuities. This program is conducted by
the Radio and Periodical Division of the Commission. The sur-
veying of advertising in newspapers and magazines was inaugurated
by the Commission in 1929; the surveying of commercial advertising
by radio was started in 1934. In 1939 this service was extended to
include mail order catalogs, almanacs, and domestic newspapers
published in foreign languages.^^

During the fiscal year ending June 30, 1939, the Division exam-
ined advertisements and noted those for further study as follows:

Newspaper aud magazine advertisements 220, 760

Allegations in advertisements marked for further study 26, 176

Mail order catalog pages examined 10, 927

Marked as possibly false, misleading, and deceptive 773

Commercial radio broadcast continuities 626, 293

Continuities marked for further study 29, 143

An analysis of questioned J advertising reveals that 42.4 percent
was for drugs; 10.4 percent for cosmetics and toiletries; 7.8 percent
for foods, including beverages; 2.1 percent for health devices; 6.8
percent for commodity sales promotion plans; 5.3 percent for auto-
mobiles, radios, refrigerators and other equipment; 3.3 percent for
correspondence coui-ses; 21.9 percent for other miscellaneous
products.

During the fiscal year ending June 30, 1939, the Federal Trade
Commission, through the Radio and Periodical Division :

* * * sent questionnaires to advertisers in 679 cases and to advertising
agencies in 44 cases, negotiated 230 stipulations accepted and approved by the
Commission for discontinuance of misleading representations, and settled or
closed by its various methods of procedure 394 such cases. In 26 cases the
issuance of complaint was recommended, 18 for failure to stipulate and 8 with-
out giving the advertiser an opportunity to stipulate because of gross deception
or danger to the public involved in the practice. In 15 cases previously settled
by stipulation complaints were recommended for violation of the terms of those
stipulations.^

Cooperating Scientific Services.

The Federal Trade Commission receives the cooperation of the
staffs and facilities of such Federal agencies as the National Bureau
of Standards; Public Health Service and Food and Drug Adminis-
tration, Federal Security Agency; Bureau of Home Economics, and
Bureau of Animal Husbandry, United States Department of Agri-
culture ; the Commission has a small medical unit under the supervi-
sion of a physician assigned by the Public Health Service.

» "Annual Report of the Federal Trade Commission for the Fiscal Year Ending June
30, 1939," p. 135, Federal Trade Commission, Washington, D. C, 1939.
« Ibid., p. 139.

FEDERAL WORKS AGENCY

UNITED STATES HOUSING AUTHORITY

The broad objective of the program of the United States Housing
Authority, Federal Works Agency, is to provide decent, safe, and
sanitary low-rent homes for low-income families now living in slums.
Realization of this objective, which directly benefits low-rent housing
tenants and indirectly benefits other tenants and home purchasers,
is the joint responsibility of local public housing authorities and the
Federal Government.

The program is entirely decentralized. The United States Housing
Authority is a financial assistance agency, since it makes loans and
subsidies to local municipal and county housing authorities who
plan, build, own, and operate projects in their own communities.
Loans are being made for a period of 60 years. The United States
Housing Authority, in addition to providing technical aid, advises
the local authorities on all phases of the development and administra-
tion of local housing programs and projects, and reviews all proposals
to determine their compliance with the terms and spirit of the United
States Housing Act.

This work has made necessary the development of standards and
minimum requirements aimed at providing housing which can be
built at a low first cost and which will have low maintenance and
repair costs for a long period of time.

Standardization in the Low-Rent Housing Field.

Although the relationship of the United States Housing Authority
to the local housing authorities does not permit it to dictate to them
or to compel acceptance of its suggestions, most of its proposals con-
cerning standardization of parts used in housing structures are being
put into effect by these local authorities throughout the country.
Some of the standards for dimensions, materials, and equipment de-
veloped for use in the housing program of the Authority are being
accepted generally in the various trades and consequently are becom-
ing important factors in aiding mass production. Standardization in
large construction operations, such as low-rent housing projects, even
when the standards are not generally adopted by the trades, results
in the economy inherent in simplicity of design and uniformity of
methods and materials.

Standardizing Activities.

Through the collation of housing experience data, the United
States Housing Authority is in a position to interpret housing needs
and to recommend and encourage the standardization of various
elements and their component parts. This is being accomplished
through the procedure outlined in chart IX. In addition many re-
quirements and suggested standards for small detail parts are being
recommended in everyday contacts and correspondence with manu-
facturers, trade associations, professional societies, and other Federal
and non-Federal agencies. Several specific examples of achievements
in this direction are discussed in the following paragraphs:
128

CONCENTRATION OF ECONOMIC POWER 129

Windows. — A great variety of window sizes and types offered by
manufacturers throughout the country has complicated the selection
of the most suitable windows. A survey of 45 projects under the
United States Housing Authority's program showed that in 21 projects
53 different types of steel casements were used, and in 18 projects 75
different types and sizes of wood double-hung windows were used.
Recognizing that economies would be possible through the standard-
ization of windows and that certain relationships betw^een room sizes
and window areas are desirable from a health standpoint, the United
States Housing Authority invited manufacturers to assist in estab-
lishing a limited number of sizes and types suitable for low-rent hous-
ing. Through cooperative effort, 5 sizes of steel casement windows
and T sizes of wood double-hung windows, with standard design
details for economical construction, have been agreed upon and are
now being recommended to local housing authorities for use on their
projects.

Structural parts. — Suggested details for Avood framing, shown in
Policy and Procedure Bulletin No. 21, "The Structure," have been
widely adopted by local engineers in preparing plans for low-rent
housing projects. These suggestions help to effect standardization
by simplifying the usual details of framing and by encouraging the
use of uniform sizes for framing members. The general adoption
of suggested design details for concrete members, which require only
commercial lumber widths for forming, is helping to promote
standardization in lumber sizes.

Rangex and refrigerators. — Through the cooperation of the refriger-
ator and range manufacturers. U. S. H. A. Suggested Specifications
have been developed for such equipment. These are based on quality
and omit refinements which are usually included chiefly for the pur-
pose of increasing "sales appeal." For example, the electric refriger-
ators specified have no interior light, no door on the ice-tray compart-
ment, and are finished without exterior decoration. Gas ranges are
specified without pilot light burner ignition and with only one burner
for broiler and oven instead of the usual two.

Lighting -fixtures. — The United States Housing Authority, in coop-
eration with the American Lighting Equipment Association, is de-
veloping several types of lighting fixtures, simple in design and
particularly adapted to low-rent housing needs.

Electrize meters. — The meters which have been available on the mar-
ket were designed by utility companies for the purpose of obtaining
iiccurate records of consumption under varying types of loads. In
cooperation with a leading manufacturer, an. electric meter has been
developed which is less complicated in design, less expensive, and par-
ticularly suited to low-rent housing needs. This type of meter is now
being recommeneded as standard for housing projects with individual
tenant metering plans.

Participation m Standardization Activities of Federal. Agencies.

The United States Housing Authority assists in establishing stand-
ards, directly benefiting consumers, through cooperation with and
participation in the work of the following Federal agencies:

National Bureau of Standards.

Federal Specifications Executive Committee.

Federal Fire Council.

130 CONCENTRATION OF ECONOMIC POWER

Central Housing Committee.
Federal Housing Administration.
Farm Security Administration.
Forest Products Laboratory.

Participation in Standardization Activities of National Organiza-
tions.

The United States Housing Authority is helping in the establish-
ment of standards through participation in the work of national
organizations such as —

Anwrican Standards Association. — ^Members of the staff serve on
the Standards Council, which directs the technical work of the Amer-
ican Standards Association ; the Building Code Correlating Commit-
tee ; the Committee on Coordination of Building Material Dimensions ;
and several sectional committees.

American Society for Testing Materials. — The United States Hous-
ing Authority is represented on the Standing Committee on Manu-
factured Masonry Units and on the Lime Committee.

American Public Health Association. — The United States Housing
Authority has been active in the work of the Committee on Hygiene
of Housing, the function of which is the development of minimum
health standards for housing. This work affects the design and per-
formance requirements of such equipment and materials as heating
units, plumbing equipment, lighting equipment, insulation, and
others.

National Association of Hoitsing Officials. — Members of the Staff
are active in all phases of this organization's work and are contribut-
ing particularly to the development of standards of design and con-
struction for low-rent housing through the Committee on Physical
Standards and Construction.

Trade associations. — Many trade associations are interested in
standardization for the purpose of reducing production costs and,
consequently, selling prices. The United States Housing Authority
interprets current housing needs to such groups and cooperates with
them in the development of materials and equipment which will best
meet these needs.
Other Activities Which Help to Promote Standardization.

In addition to the standardizing activities outlined, the Authority
is helping to encourage the development of standardization in the
housing field by conveying to the public, through press releases,
speeches, and magazine articles, the story of low-rent housing and the
new low construction costs made possible, to a great extent, through
simplified design and large scale construction with standardization
of component parts.
Publications of the United States Housing Authority.

The above items are illustrative of the United States Housing
Authority's activities in connection with the standardization of com-
ponent parts and equipment and housing structures. In a much
broader sense the entire program is directed toward standardization
since the establishment of mmimum acceptable standards has been a
chief factor in reducing costs to the point where rents can be brought
within the means of the lowest income third. Some of the most im-
portant publications which set forth standards for the planning.

CONCENTRATION OF ECONOMIC POWER 131

design, and construction of housing projects are briefly discussed
below :

Policy a')id Procedure Bulletins. — A series of standard guides for
use in the planning, design, and operation of low-rent housing proj-
ects have been established and published in a series of Policy and
Procedure Bulletins, These are used by all local authorities partici-
pating in the housing program.

Suggested Specifications. — There has been developed, in cooperation
with manufacturers and their trade associations, a set of U. S. H. A.
Suggested Specifications for use in preparing individual housing
project specifications. They simplify and clarify minimum require-
ments for substantial construction and safeguard against inferior or
inappropriate materials and equipment. The use of these specifica-
tions saves time and minimizes the danger of omissions and errors
which might later necessitate construction "change orders" with con-
sequent additional costs. The extensive use of these specifications
by architects and engineers in developing local projects, and their
general acceptance by manufacturers, is helping to effect standardiza-
tion in manufacturing.

Suggested unit pluns. — Maximum efficiency, livability, and econ-
omy is being achieved through the use of a seiies of related plans for
dwelling units and public space. These plans call for the use of
standard sizes of construction materials and equipment used in hous-
ing structures. They are based on minimum room and window areas
required for comfort and healthful living.

Development cost control. — An index has been developed which
fixes cost standards for minimum acceptable construction in various
regions of the country. It serves as a yardstick for keeping costs
down to reasonable low-rent standards.

UNITED STATES GOVERNMENT PRINTING OFFICE
DIVISION OF TESTS AND TECHNICAL CONTROL

The Division of Tests and Technical Control of the United States
Government Printing Oflfice tests all materials entering into printing
and binding processes, and is engaged in such standardization work
and technical research as might be desirable to improve the quality
of the products and the materials used by the United States Govern-
ment Printing Office. This Division is under the direct supervision
of the Public Printer. It assists all other divisions of the United
States Government Printing Office in obtaining materials which are
best suited to the requirements of their processes and aids in the
solution of technical problems incident to plant operations. This
Division works in close cooperation with the Director of Purchases
of the United States Government Printing Office.

The Division of Tests and Technical Control consists of four sec-,
tions, three of which are production units; (a) Chemical Laboratory
Section, where all technical tests are made and technical research is
conducted; (b) Ink Section, where all printing, writing, and miscel-
laneous inks used by the United States Government Printing Office
and by other Governmental departments are manufactured; (c)
Roller and Glue Section, where press rollers and bindery adhesives
are manufactured; (d) Metal Section, where all type-casting metals
are remelted and adjusted through chemical analyses to conform with
standard formulas.

The Chemical Laboratory Section consists of six units: Paper
testing, textile and binding materials, type metals and miscellaneous
materials, oils and solvents, inks and color, and general research.

Pafer.

In accordance with section 3 of the Government Printing Act of
1895 2^ the Joint Committee on Printing of the United States Con-
gress fixes standards of paper for the public printing and binding.

The Joint Committee on Printing is composed of three Senators,
three Representatives and a clerk of the committee.

The Committee on Paper Specifications, of the Joint Committee
on Printing, is composed of the Clerk of the Joint Committee on
Printing, who serves in the capacity of Chairman; the Chief of
Printing and Processing, Work Projects Administration; the Print-
ing Clerk of the Post Office Department; the Inspector of Paper and
Material for the Joint Committee on Printing; the Chief of the
Paper Section of the National Bureau of Standards, United States
Department of Commerce; and three officials of the United States
Government Printing Office, namely, the Technical Director, the Di-
rector of Purchases, and the Superintendent of Stores and Traffic
Manager. This Committee prepares specifications on paper and

» Jan. 12, 1895, ch. 23, S. U. S. Stat. L., p. 601.

132

CONCENTRATION OF ECONOMIC POWER I35

recommends their adoption to the Joint Committee on Printing of
the United States Congress. New developments in paper manu-
facture and in the printing and binding industries and new require-
ments of all Governmental departments are considered in the
formulation of specifications which are approved by the Joint Com-
mittee on Printing before each contract period. As a result, a speci-
fication of the United States Government Printing Office for any
grade of paper i-epresents the latest development in that particular
grade. Tlie Schedule of Paper for the year 1940 specified 82 grades
of paper classified under 169 items, furnished by 39 different mills.
Included in these purchases are all classes of paper ranging from
newsprint to the highest quality of ledger and index paper. AU
deliveries of paper and envelopes for public printing and binding
are tested by the United States Government Printing Office labora-
tory for compliance with specifications.

The use of specifications is not only beneficial to the United States
Government Printing Office, but also to the paper industry as a
whole. In 1928 the United States Government Printing Office con-
ducted a research program to secure complete information concern-
ing the quality of commercial bond and ledger papers for the purpose
of establishing quality standards. Paper manufacturers were re-
quested to furnish samples of their regular mill runs of papers. As
a result of this work, specifications for six grades each of bond and
ledger papers were recommended. The United States Government
Printing Office subsequently discarded the most inferior one of these
six grades and adopted specifications for use in the purchase of five
grades each of bond and ledger papers. These specifications have
been revised in the past few years to include chemical requirements
regarding acidity and rosin sizing. Such specifications have proven
satisfactory to paper manufacturers and the Federal Government,
and are in accord with good commercial practice.

Bond and ledger papere are watermarked to show their rag con-
tent. This watermark is the eagle from the seal of the United
States surmounted by 4 stai-g to indicate 100 percent rag content,
3 stars 75 percent, 2 stars 50 percent, and 1 star 25 percent rag
content. Other bond or ledger papers, composed of wood pulp
instead of rag fibers, are not watermarked. These five classes are
sufficient to meet the needs of the United States Government Printing
Office in bond and ledger papers. One of the primary advantages
of the standardization of these papers is the reduction to a minimum
of the number of grades which mills need to produce.

In cooperation with the mechanical department of the American
Newspaper Publishers Association considerable research on newsprint
and news ink was conducted from 1928 to 1933. The results of this
work were published in Technical Bulletin No. 18, "Newsprint and
News Ink.""

The quality of paper and envelopes purchased on Government
specifications up to 1925 was determined primarily by the bursting
strength test. General dissatisfaction with this test was noted. It
was. found necessary, therefore, to conduct research to find more
specific and definitive tests for the evaluation of paper, which might

f "Newsprint and News Ink," 86 pp., Technical Bulletin No. 18, U. S. Government
Printing Office, Washington, D. C, 1933.

272496 — 41 — ^No. 24 10

134 CONCENTRATION OF ECONOMIC POWER

be used iii revising the specifications for the purchase of this com-
modity by the United States Government Printing Office. As a
result of this work on bond and ledger papers the folding endurance
test was introduced into the specifications in 1925 and later applied to
No. 1 *and No. 2 quality kraft papers in 1926 and to kraft envelopes
in 1929. The kraft paper manufacturers who cooperated in this
work, and jobbers and consumers as well as the National Kraft
Manufacturers' Association, showed considerable interest in the
standardization of the quality of kraft papers and envelopes.

The question of permanence and durability of paper is receiving
increased interest among certain printers concerned with preserving
records of special future value. Considerable research in this field
has been conducted by the paper industry. Since the year 1885
approximately 300 articles on this subject have been published in
various trade magazines in this and other countries. These articles
have been abstracted for 'ready reference in the Government Printing
Office Technical Bulletin No. 22.'^

A new trend in paper testing is the development of laboratory
methods for paper analysis tending toward correlation with certain
printing qualities, in order that printability under given conditions
may be reasonably predicted before the paper reaches the presses.
Test methods have been developed by the Division of Tests and!
Technical Control which provide a basis for forecasting the printing
quality of a paper. These test methods have been included in the
specifications for most book papers purchased by the United States
Government Printing Office. This subject was presented at the
annual meeting of the American Pulp and Paper Mill Superin-
tendents Association in June 1937,"^ and at the annual meetings of
the Technical Association of the Pulp and Paper Industry in 1932 ^
and 1939 ^° reports of these test methods were presented.

Printing Inks.

No Government standard specifications for printing inks have as
yet been developed. The research work on inks has resulted, however,
in the development of formulas for all printing, addressograph, mim-
eograph, stamp pad, numbering machine, ruling, and writing inks
manufactured by the United States Government Printing Office for
its own use and for that of other governmental departments in
Washington, D. C.

Press Rollers and Bindery Adhesives.

Research in the manufacture of composition press rollers, usually
composed of glue and glycerin, has resulted in the use of recently
developed substitutes for glycerin which, might at some time be unob-
tainable due to its diversion to wartime use. The standardization of
formulas containing in part such glycerin substitutes has elicited much

■^ 'Permanence and Durability of Paper," by Morris S. Kantrowitz, Ernest W. Spencer,
and Robert H. Simmons, Technical Bulletin No. 22, 114 pp., U. S. Government Printing
Office, Washington. D. C, 1940.

«« "Evaluating the Printing Qualifications of Paper," by M. S. Kantrowitz and R. H.
Simmons, Paper Trade Journal, vol. CV (1), 6 pp., July 1, 1937.

» "The Bekk Smoothness Tester as an Aid in Studying the Printing Quality of Paper,"
by B. L. Wehmhoff, R. H. Simmons, and D. H. Boyce, presented at the Annual Meeting
of the Technical Association of Pulp and Paper Industry (T. A. P. P. I.), New York City,
February 19H3, and published in the Paper Trade Journal, Technical Association Section,
Vol. XCVl (4), p. 36 ff., January 26, 19.33.

M "Paper Quality in Relation to Printing," address presented by R. H. Simmons at
annual meeting of T. A. P. P. I. in New York City, February 1939, and published In the
Paper Trade Journal, vol. 109 (19), 4 pp.. November 9, 1939.

CONCENTRATION OF ECONOMIC POWER 135

interest on the part of commercial roller makers throughout the
United States.

Some roller making firms have adopted procedures, based upon this
experience, for the preparation of rollers exhibiting superior quality
and longer service than formerly obtainable.

A study was made of adhesives to determine the effectiveness of a
high jell-strength glue for bindery use. This resulted in the elimi-
nation of two of tlie three grades of glue formerly purchased, effecting
increased efficiency of machine production, and economy in total cost.

To reduce the warping of book covers, a special adhesive, nonwarp-
ing paste was developed. This paste is now being manufactured by
several commercial paste makers in accordance with a formula
developed by the Division of Tests and Technical Control.

Type Metal.

Standardization of type metal alloys in the United States Govern-
ment Printing Office has proven to be a very important problem.
After a thorough technical study, standard formulas were adopted for
linotype, monotype, stereotype, and electrotype metals. Since type
metal alloys deteriorate with each, remelting it is necessary to main-
tain their standard composition by daily analyses and correction of
the metals as each of them is returned for remelting. Approximately
12,000,000 pounds of metal are standardized per year. Technical con-
trol of type metal has resulted in improvement in the quality of print-
ing, and increased production with the minimum amount of resetting.
Longer runs and sharper printing have resulted from this research
and standardization of the metal employed for both type forms and
stereotype plates.

Electrotyping .

Research by the United States Government Printing Office in elec-
trotyping resulted in the development and installation of improved
equipment by the use of which a copper deposit of satisfactory thick-
ness and more uniform quality is obtained; This method and tech-
nique of electrotyping has been advantageously used by commercial
firms.

Bookbinding.

Research in bookbinding is conducted by the United States Gov-
ernment Printing Office in cooperation with the Book Manufacturers'
Institute under the research associate plan established by the United
States Congress, by which any group or association among the graphic
arts industries may place its technical men in the United States Gov-
ernment Printing Office laboratory to conduct research under the
supervision of the Public Printer and the Technical Director of the
United States Government Printing Office on definite problems agreed
upon by the association and the Public Printer.

The value of this cooperative research work was expressed by Mr.
E. W. Palmer, president of the Kingsport Press, Kingsport, Tenn., and
formerly chairman of the Research Division, Book Manufacturers'
Institute, in a report to the Public Printer dated March, 1938, in which
he states :

Even the briefest r^sum^ of the work of the Research Associate and the Re-
search Division of The Boob: Manufacturers' Institute (formerly the Employing
Bookbinders of America) must be quite general in scope. Back in 1929, when
the position of Research Associate was established in the Government Printing

J36 CONCENTRATION OF ECONOMIC POWER

Office, the graphic arts industry, and particularly the bookmaking branch, was
notable for its total lack of specifications for guiding purchases ; the lack of
any adequate and systematic methods for testing materials; the absence of any
established trade standards covering manufacturing technique; in short, it was
hopelessly behind the times.

In this connection there is presented a brief resume of the past re-
search work, and a description of the present research together with
an outline of proposed future investigations of the. Division of Tests
and Technical Control.

Studies of various bookbinding materials were made under this
cooperative research and standardization program as a result of which
three standards were developed and adopted by the bookbinding in-
dustry. These standards were promulgated and published as Com-
mercial Standards by the National Bureau of Standards and were
later approved as American Standards by the American Standards
Association. These Commercial Standards are CS49-34 Chip Board,.
Laminated Chip Board, and Miscellaneous Boards for Bookbinding^
Purposes; CS50-34 Binders Board for Bookbinding and Other Pur-
poses: and CS57-40 Book Cloths, Buckrams, and Impregnated Fabrics
for Bookbinding Purposes except Library Bindings.

The present trend in bookbinding is toward replacing starch-filled
book cloths with pyroxylin-treated fabrics, which are more moisture
proof and vermin-resistant. Properties of various trade brands of
these materials have been tested by the Division of Tests and Tech-
nical Control to determine their qualifications for bookbinding r
starch-filled book cloths have been replaced by pyroxylin-treated fab-
rics in the bindery operations. Standard specifications have been
developed for purchase of these fabrics.

Another example of development is the use of roll gold leaf backed
by a thin sheet of cellophane which replaces (he former paper backing.
A thorough investigation of imitation gold leaf has been made and
a procedure standardized for determining the comparative tarnish
resistance of the various brands of that leaf, both flat and m the form
of rolls. The impression made with this new product is sharper and
clearer.

Various materials, such as end papers, super or crash, and sewings
thread, used in the binding of books, ha^'e been studied with reference
to their efficient use in operations.

During the course of this research several technical bulletins dealing
with bookbinding materials were published.^^

Within recent years State governments liave adopted various speci-
fications for the printing and binding of textbooks supplied, under
contract, to the pupils in schools. A movement, supported by textbook
publishers, textbook manufacturers, and State boards of education,,
has been started to make these specifications uniform and suitable for
use in all States. The United States Government Printing Office
rendered all possible assistance to a joint connnittee representing these
groups in connection with the technical phases of these specifications..

» "Bindery Adhesives." by B. L. Wchmhoflf, Tpchniral Bulletin No. 14. 22 pp., U. S.
Government Printing OCace, Washington, D. C, 1931. "Tlio Evaluation of Bronze Stamp-
ing Leaf," by B. L. Wehmhoff and F. R. Blaylock, Tecnniral Bulletin No. 17, 10 pp., U. S..
Government Printing Office, Washington, D. C, 1933. 'Starch Filled Book Cloth." by
M. S. Kantrowitz, F. H. Blaylock. and G. G. Groome. Technical Bulletin No. 21, 27 pp.,
U. S. Government Printing Office. Washington, D. C. 1934.

Also eleven confidential special bulletins were published by F. R. Blaylock. Research
Associate Employing Bookbinders of America (E. B. A.) and Book Manufacturers' Institute'
(B. M I.), between the years 1929 to 1934, and issued only to members of the Employing
Bookbinders of America.

CONCENTRATION OF ECONOMIC POWER 137

The United States Government Printing Office has made bindery
tests of chrome-tanned leathers, experimentally produced by American
tanneries, and has overcome the first difficulties encountered in their
use for bookbinding. As a result, specifications were prepared for
the purchase of chrome-tanned sheepskin, goatskin, and cowhide
leathers. Vegetable-tanned leathers have been completely eliminated
from use in the United States Government Printing Office. This is
an important development in the industry, because leather required
for the most permanent and high quality bindings could formerly be
obtained only from foreign countries.

In planning the future trend of this research work the following
program has been outlined :

Special research :

Adhesives for bindery use.

Sizings.

Inks.

Book cover plastics

Machine wrapping and sealing.

Pyroxylin treated fabrics.

Insect and vermin damage.
Research to effect standardization of —

Sewing threads.

Muslin and tape cloths.

Sewing tapes.

Headbands.

Back-lining papers.

End papers.

Super or crash.

Other materials as the need develops.
State textbook specifications and standards.

Photoengraving and Lithographw Research.

Studies have been made- in photoengraving and lithography with
a view to standardizing and improving the character of reproduction
of pictorial subjects with relation to the printing processes. The
materials and formulas in these processes, being of an almost entirely
chemical nature, were studied in their relation to functional proper-
ties and the purchase of the most suitable chemicals, for which stand-
ard specifications have been formulated.

Standardization of wet-plate collodion was found necessaiy. Lab-
oratory analysis and performance tests made in photoengraving
cameras, led to the development of a standard specification for .wet-
plate collodion.

In a similar way all of the various chemicals in photoengravingj
processes were investigated, and the best grades for use were
determined.

An extensive study was made of photoengraving zinc to determine
the chemical and physical structure of the metal most suitable to the
etching and routing processes. As a result of this research, a
standard specification was established upon which a uniform product
could be bought. This study was reviewed in a scientific paper on
the Technical Qualifications of Photoengraving Zinc, presented at
the annual meeting of the graphic arts division of the American
Society of Mechanical Engineers in Washington, May 1936.^^

32 "The Technical Qualifications of Photoengraving Zinc," by Ernest W. Spencer, pub-
lished bv the American Society of Mechanical Engineers. New York City, in Proceedings
of the Graphic Arts Technical Conference, Washington, D. C, May 11-13, 1936, p. 23 flf. ;
and in the Production Year Book 1937. the Colton Press, New York City.

138 CONCENTRATION OF ECONOMIC POWER

The graining of offset plates has a fundamental bearing on the-
process of offset printing. A microscopic study was made, therefore,,
of the plate grain and of the quartz sands used in automatic grain-
ing machines for producing the plate grain. Investigation of the
commercial grades of sands on the market revealed a great lack of
uniformity in their particle sizes and a great variety in crystalline
structure. In order to obtain uniformity of plate grain and a uni-
form length of time required for the graining process, it was neces-
sary to obtain sands consistent in structural form and granulation.
A greater degree of fineness in the plate grain was also found to be
a factor in producing more sharply printed images and more satis-
factory press runs. In order to improve the process of offset print-
ing in the United States Government Printing Office, as well as to
stimulate standardization of sands for the trade in general, a study of
this problem was made by the Division of Tests and Technical Con-
trol. The result of this study, which was published in a current issue
of the Printing Equipment Engineer,^^ was to form definite specifica-
tions upon which sands are now purchased.

Cooperation With Technical and Trade Orgamizations.

The Division of Tests and Technical Control has cooperated with
the American Standards Association, the United Typothetae of
America, the Lithographic Technical Foundation, the American
Newspaper Publishers Association, the Technical Association of the
Pulp and Paper Industry, the American Society for Testing Mate-
rials, the Printing and Allied Trades Research Association of Great
Britain, and other domestic and foreign associations dealing with
standardization in the printing and binding industries. Several
chemists, members of the staff of the United States Government
Printing Office technical laboratory, serve on advisory boards and
technical committees of scientific organizations and trade organiza-
tions, such as the Federal Specifications Executive Committee, the
Interdepartmental Advisory Committee on Photography, the Tech-
nical Association of the Pulp and Paper Industry, and the American
Society for Testing Materials.

As a result of the research constantly being conducted by the
Division of Tests and Technical Control the paper industry and
other trades are able to maintain better control of their products
during manufacture. The printer ultimately derives benefit because
he obtains a standardized product, the uniform behavior of which on
his presses is assured.

«s "Sands for Graining Zinc Oflfset Plates," Subject of Microscopic Study, by B. W.
Spencer, Printing Equipment Engineer, vol. 50 (5), p. 6 ff., August 1935.

UNITED STATES DEPARTMENT OF THE INTERIOR

THE BITUMINOUS COAL DIVISION AND THE CONSUMERS' COUNSEL
DIVISION, OFFICE OF THE SOLICITOR

Standardization and the dissemination of commodity information
relating to coal constitute part of the activities of both the Bitu-
minous Coal Division, United States Department of the Interior, and
the Consumers' Counsel Division, in the Office of the Solicitor, in the
. same Department. Although dealing with the same basic subject
matter, that is, the administration of the Bituminous Coal Act of
1937, these Divisions were made independent of each other by the
act, and this independence was maintained by Reorganization Plan
No. II, the effective date of which was fixed by Congress as July
1, 1939. Under Reorganization Plan No. II, the National Bitumi-
nous Coal Commission was abolished and its functions were trans-
ferred to the Secretary of the Interior; and the former Office of
Consumers' Counsel of the National Bituminous Coal Commission
became the Consumers' Counsel Division in the Office of the Solicitor,
United States Department of the Interior.

Legislative Authorization.

The Bituminous Coal Act of 1937 embodies more than one pro-
vision under which the collection or dissemination of information
relating to the qualities and uses of coal is authorized. Section 2 (a)
of the act authorizes the Bituminous Coal Division ^* to-
initiate, promote, and conduct research designed to improve standards and
methods used in the mining, preparation, conservation, distribution, and
utilization of coal and the discovery of additional uses for coal, and for such
purposes shall have authority to assist educational, governmental, and other
research institutions in conducting research in coal, and to do such other acts
and things as it deems necessary and proper to promote the use of coal and
its derivatives

Section 14 (a) among other things directs the Bituminous Coal
Division to "study and investigate the matter of increasing the uses
of coal * * *."

In addition to these sections relating to research, there are other
pertinent provisions connected with the price-establishing functions
of the Bituminous Coal Division. The initially proposed prices are to
be determined by the Bituminous Coal Division after first reviewing
the price proposals made by the various district boards, representing
those coal producers within the district who have accepted member-
ship in the Bituminous Coal Code set up by section 4 of the act.
The proposals of the district boards are, as required by section 4,
II (a) of the act, to include prices for the "kinds, qualities, and sizes

" Here and in the ensuing pages when reference is made to the functions of the Bitu-
minous Coal Division authorized by the act it should be understood that the act actually
refers to the "Commission," but the Commission's functions are now exercised by the
Bituminous Coal Division, as stated previously.

139

14:0 CONCENTRATION OF ECONOMIC POWER

of coaj" produced in the district, and a "classification of coal and
price variations as to mines, consuming market areas, values as to
uses, and seasonal demand." The prices are to reflect, as nearly as
possible, the relative market value "of the various kinds, qualities,
and sizes of coal," are to be just and equitable as between producers
within the district, and are to have "due regard to the interests of
the consuming public."

After the promulgation by the Bituminous Coal Division of pro-
posed minimum prices the district boards, subject to the Division's
subsequent approval or revision, "coordinate," for common consuming
market areas, upon a fair competitive basis, the minimum prices and
the rules and regulations determined by the Coal Division, Such co-
ordination must take into account among other things, the relative
market values at points of delivery in each common consuming market
area, of "the various kinds, qualities, and sizes of coal," "their values
as to uses," and the "competitive relationships between coal and other
forms of fuel and energy," and "shall preserve as nearly as may be
existing fair competitive opportunities."

Among the methods of "unfair competition" listed in section 4, II
(i) of the act is the —

intentional misrepresentation of any analysis or of analyses, or of sizes, or the
intentional making, causing, or permitting to be made, or publishing, of any
false, untrue, misleading, or deceptive statement by way of advertising, invoic-
ing, or otherwise concerning the size, quality, character, nature, preparation, or
origin of any coal bought, sold, or consigned.

The Consumers' Counsel is authorized by the act among other
things, "to appear in the interest of the consuming public" in any
proceeding before the Bituminous Coal Division, and to conduct such
"independent investigation of matters relative to the coal industry
and the administration of this act as he may deem necessary to enable
him properlv to represent the consuming public in any proceeding"
before the Bituminous Coal Division. The Consumers' Counsel is also
authorized to obtain from the Bituminous Coal Division "any infor-
mation at its command" and require the Division to "conduct any
investigation as to any matter within its authority."

Use of Coal Standards in Estahlishing Prices.

The foregoing statement of powers conferred upon the Bituminous
Coal Division and the Consumers' Counsel opens up several possibil-
ities for standardization. The first of the powers listed, namely the
power conferred on the Bituminous Coal Division to conduct research
into certain general aspects of coal, need not concern us here. As
stated on pages 23 and 24 of the "Third Annual Report Under the
Bituminous Coal Act of 1937," dated January 3, 1940, the "immediate
and major responsibility of establishing minimum prices and market-
ing rules and regulations" has absorbed the time of the research per-
sonnel of the Bituminous Coal Division to the exclusion of any sub-
stantial research not directly connected with that major responsibility.

The price-establishing powers of the Bituminous Coal Division con-
stitute the chief source for its exercise of standardization activities.
As previously indicated in the statement of legislative authorization,
the determination of prices, when first proposed and when later co-
ordinated, must take into account such matters as "kinds, qualities,
and sizes" of coal and their "values as to uses." This seems to necessi-
tate some kind of standards on which classifications may be made.

CONCENTRATION OF ECONOMIC POWER 141

In response to this necessity, Order 234, dated March 16, 1938, and
Order 235, dated March 17, 1938, were promulgated by the Bituminous
Coal Division. Order 234 required code members to file with the
Bituminous Coal Division and the district boards a "Questionnaire as
to Analysis, Methods of Mining, Preparation of Coals and Other In-
formation." Order 235 authorized the district boards to provide
facilities for the sampling and analyzing of coals or to enter into con-
tracts for performance of such work either by governmental agencies
or by "competent and disinterested" private parties "generally en-
gaged in the business of sampling and analyzing coals" ; and to request
from code members by questionnaire or otherwise, such information as
would tend to establish the physical characteristics and performance
characteristics of tlieir coals. This order stated that whenever an-
alyses filed as required by Order 234 were adjudged unrepresentative,
the district board could make its own analysis.

Also, unless otherwise directed, the analysis to be made in every case shall
be proximate analysis, and shall show the moisture, ash, volatile matter, fixed
carbon, and sulfur content of the coal, and ash softening temperature, together
with the heating value in British thermal units on an "as received" basis
* * * all samples of coal taken for analysis purposes shall be tipple samples
taken after final preparation of coal for shipment to market, in accordance
with the standard methods developed by the United States Bureau of Mines
in Technical Paper No. 133 or approved by the American Society for Testing
Materials. •

In accordance with these requirements, size and quality classifi-
cations have been made in each of the coal-producing districts sub-
ject to the act. The quality classifications have been based to a
certain extent on a consideration of the following factors: moisture,
ash, volatile matter, fixed carbon, British thermal units (B. t. u.)^
sulfur, ash softening temperature and (for lump and double-screened
sizes) on size stability. However, other imponderable factors com-
prehended in the term "consumer acceptance" often have been given
considerable weight in determining the quality classifications. Ap-
parently no uniform and precise formula has been deemed feasible
for the determination of quality classification, as may be seen from
the manner in which the Bituminous Coal Division decides disputes
as to such classifications.^^

Projected Changes in Coal Standards.

The Consumers' Counsel- Division has, from time to time, recom-
mended to the Bituminous Coal Division certain changes in the iden-
tity and use of coal standards. These recommendations have
pertained both to size standards and quality standards.

Size standards. — In its briefs analyzing the coordinated minimum
prices proposed by the Bituminous Coal Division, the Consumers*
Counsel Division argued that size groups should be reduced in num-
ber and standardized for all producing districts. It pointed out
that the 8-inch by 3-inch size was classified as "egg" in district 16,
as "grate" in district 17, as "stove" in district 20, and as "furnace"
in district 22. It was also observed that in some cases sizes were
classified differently even within the same district, depending upon
the consuming market, or the classifications used, or the transporta-

» See,* for example, the decision with respect to a claim that the screenings from certain
mines In District 7 should have been placed in classification "A" rather than "B," "Federal
Register," p. 300, January 19, 1939.

142 CONCENTRATION OF ECONOMIC POWER

tion method, or the preparation given at the mine (whether raw,
washed, cleaned, and so forth). A further standardization and con-
solidation of size groups, it was argued, would be an aid to
consumer interests, since price schedules would be more readily under-
stood and price comparisons could more readily be made. In the
publication "How Much Heat" ^^ the Consumers' Counsel suggested
as standard methods of determining and describing sizes the follow-
ing methods adopted by the American Society for Testing Materials :
"Method of Test for Screen Analysis of Coal" (A. S. T. M. Desig-
nation: D410-38), and "Method for Designating the Size of Coal
from its Screen Analysis" (A. S. T. M. Designation: D431-38).

Quality staTidards. — Of broader significance than the Consumers'
Counsel's proposals as to size standards are its recommendations
regarding quality standards. The Consumers' Counsel has suggested
that not only should the sampling be done in accordance with
A. S. T. M. standard methods (as is recommended, in the alterna-
tive, by Order 235 of the Bituminous Coal Division) but also the
analyses, and classifications of coal should be performed in accord-
ance with the "Methods of Laboratory Sampling and Analysis of
Coal and Coke" (A. S. T. M. Designation: D271-37), "Specifications
for Classification of Coals by Grade" (A. S. T. M. Designation:
D389-37), and "Specifications for Classification of Coals by Rank"
(A. S. T. M. Designation : D388-38).

The classification by "rank" is a traditional method used by geol-
ogists, chemists, and engineers in describing different kinds of coal.
Por anthracite coal and for "high-rank bituminous," the classification
has been on the basis of the percentage of fixed carbon and volatile
matter (i. e., the highest rank coals, such as anthracite, having the
highest fixed carbon content and lowest volatile matter content.) But
certain other bituminous coals, while having more moisture and less
heating value (i. e., less B. t. u.) than the "high-rank," do not vary
considerably among themselves as to fixed carbon and volatile matter.
These are therefore classified on the basis of moist B. t. u. per pound.
The complete table of rank for bituminous coal, as approved by the
American Society for Testing Materials, begins with the high-rank
coals, divided into "Low Volatile" and "Medium Volatile" (classified
on the basis of specified limits for fixed carbon and volatile matter) ;
then follows "High Volatile A," "High Volatile B," and "High Volatile
C" (classified on the basis of moist B. t. ii. per pound). This table
further continues with sub-bituminous, lignite, and brown coal, with
their correspondingly lower amount of moist B. t. u. per pound.

The "grade" classification adopted by the American Society for
Testing Materials and recommended in 1937 by the Consumers' Coun-
sel is determined by size designation, the B. t. u., the ash content, the
sulfur content, and the ash-softening temperature. The size of coal
is designated in accordance with the Standard Method for Designating
the Size of Coal from its Screen Analysis of the A. S. T. M. (D431-38) .

The heating value is expressed in hundreds of B. t. u. per pound, to
the nearest hundred, for example, 13,150 to 13,249 B. t. u., inclusive,
would be expressed as 132.

»• "How Much Heat" (Consumer Ideas No. 1), by Consumers' Counsel of tbe National
Bituminous Coal Commission, 28 pp., U. S. Government Printing Office, Washington, D. C;
1937, 10 cents.

CONCENTRATION OF ECONOMIC POWER 143

The ash content, sulfur content, and ash-softening temperature are
expressed in symbols. Thus, in the case of ash content, the first symbol
is A4, for coal with an ash content from zero to 4 percent ; the next
is A6, for coal with ash content from 4,1 to 6 percent, and so on,
the last being A20 plus, representing coal with ash content of 20.1
percent or higher.

In the case of ash-softening temperature (a, s. t,) ; the first symbol
is F28, for coal with an a. s. t. of 2,800° F. and higher ; the next is F26,
for coal with an a, s. t. of 2,600° to 2,790° F., and so on, the last symbol
being F20 minus, representing coal with an a, s, t. of less than 2,000° F.

In the case of sulfur, the first symbol is S0.7, for coal with sulfur
content zero to 0.7 percent; the next is Sl.O, for coal with sulfur from
0,8 to 1 percent; the next is S1.3, for coal with sulfur from 1.1 to 1.3
percent and so on, the last symbol being S5.0 plus, representing coal
Avith sulfur content of 5.1 percent or higher.

Thus, a designation of a certain coal as 2-4 in., 132-A8-F24-S1.6
would indicate a coal of 2-inch to 4-inch size, having a heating value
of approximately 13,200 B. t. u., an ash content of 6.1 to 8 percent,
inclusive, an ash-softening temperature of 2,400° to 2,590° F., inclusive,
and a sulfur content of 1.4 to 1.6 percent, inclusive.

While the above methods of description have the essentials of stand-
ardization, the symbols used are not likely to be easily understood by
consumers without a considerable amount of explanation of their
meaning. The Consumers' Counsel therefore decided in 1938 that
another and simpler system of nomenclature should also be made
available to consumers. It proposed, in "Know Your Coal"," that
coal be rated by the primary factors of friability, ash, and British
thermal units, and also by any other factors that may be important
in the coals of the particular district ; and that a simple, understand-
able classification for the three primary factors be as follows :

Table 1. — Coal classification

1. FRIABILITY OR SIZE STABILITY
Percent of coal as it comes from the mine which will pass over a 2-inch round-hole screen

A 40 percent and over B 39.9 percent and under

2. B. T. U.'S PER POUND

A 15,000 or more

B 14,500 to 15,000

O 14,001 to 14,500

D 13,501 to 14,000

E 13,001 to 13,500

F 12,501 to 13,000

<J ^_ 12,001 to 12,500

H 11,501 to 12,000

A 4. percent or less

B 4. 1 to* 6. percent

C 6. 1 to 8. percent

D 8. 1 to 10. percent

E 10. 1 to 12. percent

I 11, 001 to 11, 500

J 10,501 to 11,000

K : 10,001 too 10,500

L 9, 501 to 10, 000

M 9,001 to 9,500

N-. ^_ 8,501 to 9,000

O 8, 001 to 8, 500

P 8, 000 or less

F 12. 1 to 14. percent

G 14. 1 to 16. percent

H 16. 1 to 18. percent

I 18. 1 to 20. percent

J 20.1 percent or more

•^"Know Your Coal" (Consumer Ideas No. 3), by Consumers' Counsel of the National
Bituminous Coal Commission, 11 pp., U. S. Government Printing Office, Washington, D. C,
1938, 10 cents.

144 CONCENTRATION OF ECONOMIC POWER

Comparison of the Bitv/minous Coal Division quality desigvMions
with those recommended hy the Conswmers'' Cov/mel Division. — The
coal classifications now used by the Bituminous Coal Division are in-
fluenced by consideration of numerous economic factors in addition
to analytical qualities. For each classification the letter designations
used, unlike the designations in the system recommended by the Con-
sumers' Counsel Division in the preceding table, are not precisely
defined; and the designations treat as a unit all the factors revealed
by the physical and chemical analysis rather than grade each factor
separately. The methods used to determine the classifications in each
district are not always made explicit. In addition the classification
systems differ from district to district; for example, in district 10 the
classifications range from A to N, inclusive ; in district 1, from A to
H-2, inclusive ; in district 4 from D to U, as follows : D, H, K, M, N,
O, Q, R, T, U. The meaning of a letter used in one district bears no
necessary relation to the meaning of the same letter used in another
district. The letter classifications are significant only within the dis-
trict, and denote a price classification rather than a quality classifica-
tion.

The system recommended by the Consumers' Counsel, on the other
hand, is intended to afford a precise, uniform, and simple method for
the designation of quality. As the Consumers' Counsel explained in
"Know Your Coal,"

if the proposals of the Consumers' Counsel for the standard classification of
coal are adopted, and the consumer picks up his telephone to order a ton from
the retailer, he will be able to ask the retailer what properties the various
coals offered for sale have * * *. The consumer will be told that one coal
has a rating of "A" for friability, "B" for ash, "C" for B. t. u.'s ; and another
has a rating of "A" for friability, "B" for ash, and "B" for B. t. u.'s. He can
compare their prices and buy with his eyes open * * *.

What weight the consumer should give to the various characteristics of the
coal he buys depends upon his geographical location, the type of burning equip-
ment he uses, the amount of nuisance he is willing to put up with, and the prices
he is willing to pay. Some dealers will be helpful to him in determining the
proper weight to give to the various characteristics of the coal. Briefly, if the
consumer lives near a coal-producing area that produces coal of high ash con-
tent and low B. t. u.'s he may find that the lowered cost due to the lower
freight rate will more than make up for the additional work involved in
shoveling more coal into this furnace and more ashes out of his firebox. If
the consumer has an automatic stoker or other equipment, under certain condi-
tions, he may find that high-volatile coals are a better buy than low-volatile,
high B. t. u. coals that he possibly should burn in hand-fired equipment. Coals
containing less B. t. u.'s may be a better buy If the equipment is properly
designed to burn them.

Availability of Specific Coal Analyses to the Public.

Although the symbols used by the Bituminous Coal Division in
coal classifications are not of direct value to consumers, the physical
and chemical analyses upon which these classifications are largely
based, do constitute an important source of information for con-
sumers. The physical and chemical analyses are required to be filed
with the Bituminous Coal Division together with the price proposals,,
and hence, as part of a public record, become available to the public.
The Bituminous Coal Division has also promulgated a marketing regu-
lation that any analyses of individual coals quoted to a consumer or
distributor by any producer, must be filed with the statistical bureau
an^ district board for the district in which the coal is produced, and

CONCENTRATION OF ECONOMIC POWER 145

be open to inspection by interested persons at the offices of the
statistical bureau of that district and the Coal Division.

Many requests from consumers, for anaylses of the coals of specific
mines have been addressed to the Consumers' Counsel Division, and
this Division has furnished the pertinent data from the record.

To make the data on coal analyses available in more significant form,
data books are being compiled jointly by the Consumers' Counsel Divi-
sion and the Bureau of Mines, for the purpose of assembling the
facts available at the Bituminous Coal Division and the Bureau of
Mines regarding the chemical and physical properties of coals in
each seam in each county within the producing districts. Data books
containing available information for the Appalachian region em-
braced in price area 1 are nearing completion, and will show not
only specimen analyses and their usual ranges but also the rank
(low-, medium-, or high-volatile coals) and the character of the
samples selected for analysis.

Publications of the Consumers' Counsel Division other than "How
Much Heat" and "Know Your Coal," which contain information on
the classification and kinds of coal of interest to consumers, include
"The Consumer Speaks," "Study Material on Bituminous Coal, Unit
II-A — Marketing, Conservation and Purchasing Information for Con-
sumers," "Heat Values from Coal Dollars," "Coal Consumers Digest,"
and "Co-op Coal News."

BUREAU OF MINES

The Bureau of Mines was established May 16, 1910, for the —

purpose of conducting inquiries and scientific and technologic investigations
concerning mining, and ttie preparation, treatment, and utilization of mineral
substances with view to improvirg health conditions, and increasing safety,
eflSciency, economic development, and conserving resources through prevention
of waste in the mining, quarrying, metallurgical, and other mining industries ;
to inquire into economic conditions affecting these industries ; to investigate
explosives and peat ; and on behalf of the Government to investigate the mineral
fuels and unfinished mineral products belonging to, or for the use of, the United
States, with view to their most efficient mining, preparation, treatment and
use; and to disseminate information concerning these subjects in such manner
as will best carry out the purix)se of this act.

Most of the activities of the Bureau of Mines concern the ultimate
consumer, while some of the investigations and scientific research
regarding commodities are directed toward coromercial and Govern-
ment purchasing specifications. It is believed, however, that con-
sumer standards are influenced by basic research carried on by the
Bureau of Mines. Undoubtedly, even today, the consumer is able to
buy better fuel as a direct result of Bureau of Mines' work.

To select from the huge program of basic research carried on by
the Bureau of Mines and to designate those studies that have some
bearing on consumer problems of buying would be a tremendous
task far beyond the scope of this monograph. However, a few items
will serve to illustrate the contributions being made by the Bureau,
and to indicate that research has far outdistanced the steps that have
been taken toward development of standards for the ultimate product.

The utilization of solid, liquid, and gaseous fuels has been of con-
tinuing interest to the Bureau of Mines for many years. Coal affords
an abundant and cheap fuel, and the Nation's coal resources being

146 CONCENTRATION OF ECONOMIC POWER

larger than the known resources of petroleum and natural gas, coal
will doubtless be a standard fuel indefinitely, in spite of the increase
in consumption of fuel oils. Consequently, the Bureau has turned
its attention in part to the development of clean, efficient coal for
the householder. At its field stations in the northwest and south
the Bureau has tested the effectiveness of pretreatment on hundreds
of samples of coal, and it is now possible to obtain washed and de-
dusted bituminous coals that represent a decided advance in cleanness
and efficiency over the dirty, crumbling fuel supplied a few years
ago. Investigations of interest to consumers are being conducted
on the utilization of coal refuse in making an activated char for
water-purification purposes, for a base exchanger for water-softening,
and for a soil conditioner in agriculture. Pulverization of coal is
now of tremendous interest to industry and may in time be of value
to householders should furnaces be equipped for the utilization of
pulverized coal. Emphasis in this has been given both to the process
and the substance itself. In 1939, reports were made on the physical
and chemical properties of Alabama coal, washability studies of coal
from three beds in that State, and the physical and chemical properties
of coke made or used in the State of Washington.

Realizing that the present economic structure depends to a large
degree upon petroleum and that the Nation's reserves of crude oil
are not inexhaustible, the Bureau of Mines has conducted research
on the liquefaction of coal by hydrogenation — a process already suc-
cessfully applied in England, Germany, and France — for obtaining
oil from American coal. As the Nation's oil is graduallj^ depleted,
It is hoped that motor fuel from coal can be made so efficiently and
cheaply that it can supplement the diminishing supply of the oil
fuel without drastic adjustment.

During 1939, the Bureau of Mines conducted carbonization tests
on four low-volatile and three high-volatile A-rank coals. These
tests were standardized in cooperation with the American Gas Asso-
ciation. The constitution of the coal subjected to carbonizing tests
was determined by petrographic and chemical analysis. High- and
low-temperature distillation assays were made on coals from various
fields to estimate their coke and byproduct-making qualities. An
investigation of the effect of adding chemicals to coal was concluded
and a small overfeed stoker, which was tested in combination with
a modern hot water boiler, was found to give over-all efficiencies as
high as 76 percent with intermittent operation, as in house heating.

Other coal research includes that on the utilization of sub-bitumi-
nous coal and lignile; important as fuel in the West and Southwest,
on the causes and means of preventing coal-dust explosions, and on
the methods of burning fuel in furnaces.

Should the retail buying of coal be so developed as to include
grade specifications, source of coal will be an important factor. The
Bureau has made analyses of coals in the United States from more
than 1,500 mines and prospects. Heating values of all coals have
been determined in addition to proximate and ultimate analyses.

In 1938, 8,681 samples of coal, coke, and related products were
analyzed in the coal analysis laboratory. Of these, 6,646 were
analyzed in connection with purchases of coal for the use of Govern^
ment and certain State institutions and for classifications of coals

■CONCENTRATION OF ECONOMIC POWER 147

by the National Bituminous Coal Commission (now Bituminous Coal
Division, United States Department of the Interior), 1,823 related
to the research program of the Bureau of Mines, and 212 were mis-
cellaneous samples.

The Bureau of Mines, in cooperation with the American Society
for Testing Materials, has developed new methods of testing and
analyzing coal and coke, and has assisted in formulating specifi-
cations for classification of coal based on heat value, ash, and chem-
ical and physical qualities. Moreover, studies have been made to
determine the burning characteristics of fuels in domestic heaters.
Classification of coals is made by rank, that is, according to degree
of metamorphista in the natural series from lignite to anthracite;
by grade, that is, according to nature and amount of impurities
present, screen size, and so forth; and by type, that is, by varieties
such as common banded, splint, cannel, and boghead or algal coals.

Studies of coke as a domestic heating fuel have included analysis
grading and evaluation, and comparison with other fuels used for
the same purpose. Coke is graded by size, heating value, percentage
of fixed carbon, volatile matter, and ash. Because certain charac-
teristics of coke are more desirable than others for domestic use,
and some types of coke are more efficient, the Bureau of Mines has
published several bulletins on this subject to provide data for ulti-
mate consumers as a guide in buying for household use.

The Bureau of Mines cooperated with the American Society for
Testing Materials in the preparation of standards for coke analysis
and tests.

The Bureau of Mines technologic work on petroleum and natural
gas is concerned with drilling, production, transportation, and re-
fining, and to a lesser extent with petroleum products.

The Bureau of Mines performs an important function in helping
to establish standards which the ultimate consumer may use in buying
petroleum products.

The Bureau has long recognized that there is a merging from fundamental
research in the laboratory to so-called "practical" research. Therefore, in
developing the philosophy of any research project it is not enough to establish
certain fundamental relationships by laboratory experiment: To be effective
the work must have practical application in the field or at the plant.**

* * * Many companies have their own research organizations, both in the
laboratory and in the field, and some types of laboratory research are conducted
at universities and other technical institutions.

Recognizing this growth and change, the Bureau of Mines for several years
has concentrated its efforts on studies of a fundamental nature that apply
throughout the whole industry and that cannot reasonably be made by indi-
vidual companies or others.*"

Thus it may be that as consumer demand becomes more articulate
the emphasis on that type of research having direct effect on the
quality and performance of ultimate consumer products may become
greater and more evident.

Studies of the characteristics of motor fuels and lubricants are
made in order that more suitable grades of these- products may be
made available to meet consumer requirements.

»8 "Petroleum and Natural Gas Studies of the United States Bureau of Mines," by H. C.
Fowler, p. 2, Information Circular 6737, Bureau of Mines, Washington, D. C, 19S3.
(Out of print.)

w Ibid., p. 7.

148 CONCENTRATION OF ECONOMIC POWER

The Bureau of Mines is represented on the Lubricants and Liquid
Fuel Technical Committee of the Federal Specifications Executive
Committee.

Surveys of motor gasolines date back to 1915, and are now made
semiannually, with the assistance of the Cooperative Fuel Research
Committee. This committee is composed of representatives from the
Society of Automotive Engineers, American Petroleum Institute,
Automobile Manufacturers' Association, and the National Bureau of
Standards. The brand names of the samples that are collected at
service station pumps in widely scattered cities throughout the United
States, are not published, but each sample is designated by a number.
The Bureau of Mines has frequently been besieged with letters re-
questing the brand names of the samples collected. Many of such
letters also request a statement as to the best gasoline available in a
given city. Although this is perhaps a normal inquiry from the
viewpoint of the individual motorist, the Bureau of Mines does not
profess to know which gasoline will best meet individual consumer
needs in any given area. It is doubtful if any research group could
make an! unqualified statement on this point. The question of de-
sirability and undesirability of particular brands involves so many
factors in addition to the results obtained by laboratory tests, that,,
according to the Bureau, no serious student of the subject would care
to make a dogmatic statement regarding the actual quality of any
particular brand.

The average motorist does not have the required technical knowl-
edge to judge the various factors determined by the analyses. Also,
the factors of cost of fuel and condition of engine are matters for
individual consideration by the buyer of motor fuels. However, the
semiannual gasoline surveys are believed to be of value to students
of motor-fuel problems, because they supply representative data on
the qualities of gasolines that are actually being bought and used by
the public, in so far as these qualities can be determined by laboratory
analyses. By making the data available without identification, the
Bureau believes that it is aiding the public, because technologists
charged with the development of the refining industry make, use of
these data and thus are able to develop better technique in the manu-
facture of motor fuels.

A comment made by a member of the Bureau's staff indicates very
clearly that effective grading of gasoline would have to be too com-
plex for practical use.

The incongruity of such procedure will be clearer if a person considers the
types of automotive equipment serviced at motor-fuel pumps. The driver of
an expensive make of car desiring as nearly perfect performance as he is able
to obtain, should have latitude in his decision regarding the <luafit>- of products
that he uses. His initial investment probably justified premium prices for the
best obtainable products. In contrast, a motor vehicle of the "jallopy" type
may give satisfaction with any motor fuel that will explode in the cylinders
and any type of lubricant that will keep the moving parts from "freezing" or
"burning out"

The Bureau of Mines' studies on applied methods for reducing
evaporation losses of gasoline are of interest to consumers. Evapora-
tion of gasoline from bulk storage stations is one of the major and
most deceptive sources of loss in marketing gasoline. The determi-
nation of loss is frequently complicated by the relatively large co-

CONCENTRATION OF ECONOMIC POWER 149

efficient of expansion of gasoline, which is not understood by many
retail distributors.

Other projects having a direct bearing on consumer standards of
petroleum products include studies on fuel oil specifications, manu-
facture of paraffin wax from petroleum, and dry cleaning solvents.
Many of the studies on properties of typical crude oils produced in
various fields relate to that class of consumer standards indirectly
influenced by fundamental research. Producers and refiners are
guided by such studies in making consumer products available at
more reasonable costs. The study reported in Technical Paper 477 *°
was a forerunner of solvent refining, a process no^ used extensively
in industry by which refiners are able to prepare petroleum products
from crude stocks which formerly were considered unsuitable for
such use.

The Bureau of Mines work on asphalt has been confined chiefly
to the study of petroleum asphalts for use as road-building materials.

Helium is of direct concern to the consumer as it is used in treating
certain respiratory diseases such as asthma, laryngitis, croup, and
diphtheria. Before helium could be secured from the Government
its price was approximately $150 per thousand cubic feet, now the
same volume can be bought for about $15. Helium is mixed with
oxygen when used for medical purposes. Research is being conducted
on various uses of helium for medical and industrial purposes„
During the fiscal year 1939 the Bureau of Mines sold more than a
million cubic feet to private concerns for these purposes.

Research is also being conducted on chemical products obtainable
from natural gas. Some of the products are: Rubber substitutes,
ethyl, prestone and hi-octane fuel, insulation materials, and motor
fuels from natural gas.

Among important research on minerals, having direct bearing oti
consumer standards, are studies on gypsum for fertilizer and plaster
and on mineral wool for insulation.

Health and safety standards are established by the Bureau ox
Mines for flame safety lamps, electric mine-lamps, electric flashlights
and for supplied-air respirators and filter-type dust respirators.
Tests and investigations and the issuing of "approval plates" for
these items are authorized under the act of Congress approved Febru-
ary 25, 1913.*^ The pupose of investigations made under this pro-
gram is to promote the development of electric flashlights, electric
lamps, flame safety lamps and supplied air respirators that may be
safely used in mines. Those articles passing required tests set up
by the Bureau are called "permissible," and may be so labeled with
standard approval plates. The Bureau reserves the right to rescind
for cause at any time any approval granted under this schedule.

Among the health and safety publications is one entitled "Incom-
plete <^ombustion of Natural-Gas Space Heaters," which is of partic-
ular interest to consumers.*^ The Bureau's study of carbon monoxide
produced by certain types of natural gas heaters has caused a decided

«>"A Study of the Lubricant Fractions of Cabin Creek (W. Va.) Petroleum," by H. M.
Smith, with chapters on the Action of Solvents on the Heavy Constituents of Petroleum,
by F. W. Lane. I. H. Nelson, J. M. Devine, and H. M. Smith, 48 pp., Technical Paper
477, Bureau of Mines, Washington, D. C, 1931. (Out of print.)

*i37 Stat. 681.

« "Incomplete Combustion in Natural-Gas Space Headers," by G. W. Jones, W. P. Yant.
ana L. B. Berger, 22 pp., Bureau of Mines Technical Paper 362, U. S. Government Printing
OfBce, Washington, D. C, 1925, 5 cents.
?*72496 — 41— No. 24 11

150 CONCENTRATION OF ECONOMIC POWEH

change in. the construction of this type of equipment during the last
several years.

The Bureau of Mines, being primarily a research agency, is issuing
material of a highly technical nature, however, some of its publica-
tions are of interest to the general public in revealing the content
or characteristics of such commodities a^ coal, petroleum, etc., and the
care of them.^^

FISH AND WILDLIFE SERVICE

Fisheries Work.

Although the fisheries work of the Fish and Wildlife Service,
United States Department of the Interior, is concerned primarily
with the practices of the fishermen and the operations of the distribu-
tive or processing trades, the consumer is thereby benefited indirectly.

Among specific items having some bearing on consumer standards
are the following :

The Division of Alaska Fisheries has had seal furs, produced under
its supervision, tested by the National Bureau of Standards for dye
fastness and for durability of pelts tanned in various ways. Through
its supervision of fishery operations in Alaska, this Division has
a considerable influence on the canned salmon industries as well
as on other important fishery industries of the Alaska Territory.

A provision of the laws relating to Alaska fisheries is designed
to assure that salmon are in wholesome condition when canned. This
law requires that all salmon to be preserved for sale as food for
human consumption must be preserved or iced within 48 hours of
the time they are killed.

The work of the Division of Scientific Inquiry affects consumers
largely through the conservation measures resulting from its investi-
gations. Through the adoption by the States of the recommended
conservation principles based on sound biological information, the
continuance of a supply of commercial fish, shellfish, and crusta-
ceans is assured." The angling resources are being maintained and
improved through the formulation of stocking policies based on
ecological facts; through the improvement of hatchery techniques;
by the detection and control of diseases, epidejnics, and parasites ;
by stream and lake improvement; and by detection and elimination
of pollution in natural waters. The Division also collects and tabu-
lates whaling statistics and conducts biological investigations of
whales. Various biological studies are making it possible to improve
the quality of certain aquatic products, for example, the improvement
of oyster bottoms to produce larger and fatter oysters.

The Division of Fish Culture is closely concerned with recreation.
Through its production of fish in hatcheries and its help to various
States, carrying on similar activities, a large number of game fish,
and an enormous volume of commercial types as well, are released
annually.

The Division of Fishery Industries, dealing, as it does primarily,
with the commercial aspects of the fishery industry, has the greatest
volume of its activities related to consumer standards.

•" "List of Publications," Bureau of Mines, 1910-37. and "Supplements to List of Pub-
!ication8," Bureau of Mines, July 1. 1937, to June 30, 1938, and July 1, 1938, to June
30, 1939. U. S. Government Printing Office, Washington, D. C.

CONCENTRATION OP ECONOMIC POWER 151

Economic ^-esearch conducted by the Division of Fishery Industries
has been largely in the field of marketing. This research is of benefit
to the consumer to the extent that it aids more orderly and efficient
marketing and results in improvement of quality and stabilization
of prices. Various interests of the fish trade, as a result of this work,
become better acquainted with the fish marketing structure outside
their own particular fields and with the character and extent of
operating economic forces, and are more able to adapt their activities
to the general structure of the fishery industry. This enables them
to operate at a higher efficiency with a resultant benefit to the general
public. Even though relatively few of the members of the trade
may have first-hand knowledge of this research work, the practices
inaugurated spread to others through the operation of competitive
forces.

Over a -period of years, the Division of Fishery Industries has
conducted studies of the wholesale marketing of fish in a number
of the larger cities of the country. The most recent of these studies
covered the San Francisco Bay area. Other studies have analyzed
the marketing of shad on the Atlantic coast, the frozen fish situation,
the leading varieties of fish in the retail trade of 60 cities, the Pacific
halibut fishery, the oyster industry, the horse-mackerel fishery of
Maine, and the fisheries of Puerto Kico and the Virgin Islands.

A study still in progress deals with a survey of the retail marketing
of fish in some 50 cities east of the Mississippi Kiver. This study
will present a broad picture of the methods and practices of retailers
handling fish in general grocery stores and fish markets which are the
principal outlets. This study will also yield considerable informa-
tion as to consumer preference regarding species of fish and forms
of preparation.

It is already apparent from this study that there are a great many
stores engaged in retailing of fresh and frozen fish, and a great varia-
tion among them in volume sold. A large proportion of the stores
handling the commodity, however, sell such, a small quantity that they
are scarcely justified in giving that phase of the business intensive
care. Nearly 40 percent of the 4,000 stores surveyed averaged less
than $10 in fish sales per week in 1938.

Data on the extent to which certain species predominated in the
cities studied are included in the schedules for the survey. A sig-
nificant phase of the schedule data was the variety of names under
which some species were sold and the number of species that were
sold under the same name. The attendant confusion of the con-*
sumer, and the opportunities for misrepresentation offered, are
apparent.

In many cities distant from the source of supply, haddock fillet
is a sort of generic name and m.ay be used to cover all of the main
supply of groundfish, which, for example, in one large western
city is 60 percent cod and undoubtedly contains some element of cusk.
In one large city fillet of sole is almost entirely halibut cut in such
a way to make convenient slices for frying or broiling. In another
large city a salt water species, croakers or hardheads, is quite fre-
quently sold under the name of silver bass, but during some periods
of the year when sheepshead from the Great Lakes are available they
are sold as silver bass. The "tenderloin of trout" sold in one city in

]^52 CONCENTRATION OF ECONOMIC POWER

the central United States is almost always grouper which has been
cut after a fashion peculiar to the city. It is intimated by the mem-
bers of the trade that in certain regions fillet of trout and red snapper
are very frequently some other and cheaper fish. In one midwestern
city, whiting, a salt-water fish, is commonly known as jack salmon,
while this name is given to blue pike, a fresh-water fish, in several
other cities.

The Fishery Market News Service, Division of Fishery Industries,
maintains offices, with a reporting staff, in several of the larger fish
marketing centers. Daily reports made public by these offices are
valuable to the consumer in indicating prices prevailing on the
wholesale market. These reports are primarily useful to the fishery
trade and to the fishermen in marketing their catches; it has aided
also in stabilizing market conditions in the industry.

The statistical section of the Division of Fishery Industries compiles
and analyzes the data on the catch of fish and other aquatic products.
These data are obtained by a staff of statistical agents who cover all
the important fishery regions. A current and continuing indication
of supply conditions is thus available and constitutes another factor
in stabilizing markets.

The Division of Fishery Industries has made some study of the
data on fish consumption obtained in the Consumer Purchases Study
of the United States Departments of Labor and Agriculture. Simi-
lar data for some 50 cities, obtained in the Study of Money Dis-
bursements of Wage Earners and Lower-Salaried Clerical Workers
made by the United States Department of Labor, are better adapted
for city-by-city analysis. The Fish and Wildlife Service plans to
examine this material more carefully to indicate the significant fea-
tures regarding fish consumption which do not appear in the original
reports.

The studies by the technological section. Division of Fishery In-
dustries, among other purposes, are directed toward (a) improved
methods of judging the quality of fishery products, (6) better prac-
tices for handling and transporting fish, (c) developing more efficient
preparation of medicinal and other fish oils, {dj establishing the
nutritive value of all sea foods, and (e) establishing standards and
grades of sanitary production. While the results of these studies
directly affect the industry, any improvements in methods of produc-
tion are reflected in higher quality and cheaper prices.

iTnproved methods, of judging the quality of fishery products. —
The adoption of freezing as a method of preserving fish, in recent
years, has emphasized the necessity for utilizing only the highest
quality of fish for this purpose. As a result of this need, a method
was developed whereby a quality selection could be made by scientific
methods. Considerable interest has been shown by the industry in
this method since it enables it to prepare a higher quality product at
a lower price.

Better fractices for handling and transporting fish. — Research by
the technologists have led to the improvement of the containers and
methods of packing fresh fish. One of these developments is a re-
frigerated container for less than carloads of fish or fishery products.
Another is the improvement in refrigerator car and truck design
which tends to increase the efficiency of operation. Still another
investigation which at present is under consideration deals with the

CONCENTRATION OF ECONOMIC POWER 153

utilization of individual lockers for the storage of fish for family
consumption. All of these improvements are reflected in the quality
and the price of the products offered to the public.

Developing more e-ffvcient preparation of medicinal and other fish
oils. — One of the earliest known methods for the production of cod-
liver oil was permitting the livers to rot ; this caused the oil to be
released. Oil prepared in this manner was badly decomposed and
of low vitamin value. Studies have been made which have set up
maximum temperatures at which the livers can be heated for the pro-
duction of a high vitamin oil. Other studies have led to the utiliza-
tion of the livers of other species of fish in the preparation of
medicinal oils of high vitamin content. Much of the body oil pro-
duced from fish has been diverted from the paint and soap industries
to the medicinal and animal food fields. The modern poultry indus-
try would find itself seriously handicapped had it not been for the
investigations of the technologists of the Fish and Wildlife Service
in finding new sources from which they could obtain an adequate
supply of vitamin oil at a reasonable price. The income derived
from the commercial use of the byproducts of the filleting industry
has made it possible for this industry to operate more economically
and thus pass the savings on to the consumer of its products.

Establishing the nutritive value of all sea foods. — The investiga-
tions dealing with the nutritive value of fish have indicated that fish
contain an ample supply of all of the minerals necessary for growth
and the maintenance of good health. It has been found that fish
contain large amounts of iodine and thus its consumption has been
recommended in those sections of the country where diseases caused
by a lack of iodine are prevalent. It has also been established that
sea food is one of the most valuable sources of a protein which is
easily digested and assimilated for use by the body. All of these
investigations directly affect the health and welfare of the consuming
public.

Setting up standards and grades of sanitary production of fish. —
Various investigations into the existing sanitary regulations and
recommendations for their improvement have been made. The
acceptance of these recommendations has resulted in the conserva-
tion of many thousands of pounds of excellent and healthful food
previously lost to the consumer through careless handling. Codes
of sanitary practice have been set up for the crab, oyster, and fresh-
fish industries. Grades for salt herring and canned herring roe,
used by the Division of Markets of the Virginia State Department
of Agriculture and Immigration, have been established with the co-
operation of the Division of Fishery Industries. The Fish and
Wildlife Service has aided the Technical Committee on Provisions
of the Federal Specifications Executive Committee in preparing
Federal Specifications for fresh fish, fresh oysters, canned salmon,
canned sardines, and canned tuna fish. The Service has also aided
the Federal Trade Commission with technical advice in setting up
quality definitions in Trade Practice Rules for the Tuna Fish In-
dustry and Trade Practice Rules for the Sardine Industry.
. .Educatiorml work. — The results of the fisheries' work of the Fish
and Wildlife Service reaches the public through various channels
used to publicize the findings of general interest, as well as through
its effect on the fishery industry. The radio programs and popular

154 CONCENTRATION OF ECONOMIC POWER

press releases which are now planned as a continuing feature of the
Service's activity will disseminate information of interest to the
consumer. This information may be particularly valuable in efforts
to standardize the names of certain species of fish in which there is
now a marked confusion and in increasing public knowledge of
grades and standards for fishery products as they are developed.

Fur Resources 'Work.

Broadly speaking, the work of the Section of Fur Eesources, Fish
and Wildlife Service, United States Department of the Interior,
falls under four headings, which are: (1) To make more generally
known the commercial importance of fur m industry ; (2) to empha-
size the need of maintaining the supply of raw materials; (3) to
explain methods by which this supply may not only be maintained
in quantity but improved in quality; and (4) to conduct experiments
on farms in the production of fur animals under controlled condi-
tions. Most of the research work that may benefit the consumer is
carried on cooperatively with other agencies.

Fur-iiber investigations. — At the Agricultural Research Center a
study was begun in cooperation with the Bureau of Animal Industry,
United States Deparment of Agriculture, to determine by micro-
scopic examination the physical properties of fur and the factors that
contribute to the production of superior quality fur. Special atten-
tion was given to fur-fibers of the silver fox, mink, marten, and Karakul
sheep. A review was made of all the American and foreign literature
covering similar investigations.

Through persistent research, media have been found that are suitable
for making both temporary and permanent mounts to reveal the inner
structure of the fibers, especially pigmentation, and to emphasize their
outlines. In heavily pigmented and meduUated fibers fine relation-,
ships between scales cannot be distinguished by direct observation,
and in such cases the details were revealed by casts and photomicro-
graphs. The precision of this method will undoubtedly prove of
importance in the identification of unknown fibers.

Quality of tanned skins. — The work with the Bureau of Agricultural
Chemistry and Engineering, United States Department of Agricul-
ture, is set up to determine the influence of environmental factors on
the quality of raw and tanned fur-animal skins. Pelts taken from
young and adult silver foxes, fed experimental rations, were supplied
by the Fish and Wildlife Service for this study. In addition, a num-
ber of prairie dog skins collected by field representatives of the Service,
and guinea pig skins furnished by commercial breeders and the Bureau
of Animal Industry, United States Department of Agriculture, were
given to the Bureau of Agricultural Chemistry and Engineering for
use in e?Jperimental tanning tests to determine their commercial value.
Australian rabbit skins also were supplied. Observations were made
on the effect of alternate freezing and thawing of silver fox skins
immediately following pelting. No appreciable difference in either
the tensile or bursting strength of the frozen and unfrozen skins was
detected.

Felting studies. — The cooperative study to determine the value of
various North American furs for felting has been carried on with the
research department of one of the leading hat manufacturers. The
fur of the mountain beaver and the hair of the guinea pig were found

CONCENTRATION OF ECONOMIC POWETl I55

to have no felting properties. One hundred pelts from 60-day-old
domestic rabbits were classified and graded for furriers' purposes.
Doeskins produced 5 percent more usable blown fur suitable for hat
making than an equal number of the same grade of buckskins and
yielded 11 to 16 percent more usable fur than an equal weight of
buckskins. Skins graded as No. 1 and No. 2 produced 16 to 27 percent
more usable fur than those graded No. 3 and No. 4.

Trade Practice Rules of the Federal Trade Commission. — Repre-
sentatives of the Fish and Wildlife Service have been cooperating
with the Federal Trade Commission in the preparation of Trade
Practice Rules for the Fur Industry. The rules promulgated were
released June 17, 1938. Information concerning the real and trade
names of furs, as well as information regarding fur trade practices
in general, was supplied for use in enforcing fair Trade Practice
Rules for the Fur Industry. During the first year of operation of
the rules the Federal Trade Commission handled over 500 cases of
alleged misdescriptive advertising and made much progress in cor-
recting bad practices against which the rules were directed.

Fur imports. — In cooperation with the Foreij^ Office of the Bureau
of Agricultural Economics (now Office of Foreign Relations), United
States Department of Agriculture, and the Committee for Reciprocity
Information, United States State Department, representatives of the
Fish and Wildlife Service have been furnishing statistical data and
other information pertaining to fur farming developments in the
United States and foreign countries. This was in connection with
the import duty on silver fox pelts. A number of meetings were held
in the offices of the United States Tariff Commission to give fur farmers
an opportunity to present their views.

The United States Treasury Department was assisted in proceed-
ings before the Court of Customs and Patent Appeals between the
Federal Government and fur importers. Representatives of the Fish
and Wildlife Service furnished scientific and other data for rse in
preparing the cases, in which duties amounting to many millions of
dollars were involved.

Persian lamb production. — The- popularity of Persian lambskins
for use in coats and trimming has stimulated activity in Karakul
sheep raising in this country in both purebred and grade flocks.
Karakul sheep investigations in cooperation with the Bureau of
Animal Industry, United' States Department of Agriculture, are
progressing satisfactorily. Assistance was given by representatives
of the Fish and Wildlife Service in selecting a more complete and
comprehensive set of standard sample skins for classifying the exper-
imental Karakul skins as well as live lambs retained for breeding.
All skins taken during previous years have been reclassified in ac-
cordance with the new standards.

Rahhit raising. — Raising domestic rabbits for food and fur has
received a stimulus from advancing prices, and raising rabbits for
laboratory purposes is still found profitable by many breeders. An
unsatisfied demand for domestic rabbits suitable for making pneu-
monia serum has had an encouraging effect on rabbit raising. The
Angora rabbit wool produced in the United States also seems to have
found- a more extensive and dependable market.

Representative pelts of fryer rabbits produced by the self -feeding
Dlan were graded by dealers in raw rabbit skins and by other experts

156 CONCENTRATION OF ECONOMIC POWER

after dressing the natural long hair. The possibilities of increasing
the percentage of fryer-rabbit skins usable in the fur trade is being
considered and has much practical value because of the higher prices
now being paid for skins.

GEOLOGICAL SURVEY

The Geological Survey, United States Department of the Interior,
was created by act of Congress, approved March 3, 1879, for the pur-
pose of classifying "the public lands and examination of the geologi-
cal structure, mineral resources, and products of the national
domain * * *" **

The Geological Survey, which is a fact-finding agency, proceeds
from the investigation of the sources of basic materials to their anal-
ysis. Although its function does not consist in formulating standards,
it heeds the established standards an-d requirements and makes
efforts to describe) ores, minerals, and structural materials in terms
of and in their relations to standards. It examines annually more
than a thousand mineral specimens submitted for examination by the
public and its reports to the senders include identification of the
specimens and further information based on standards expressing
probable adaptability of the mineral to different uses. Information
is gathered on all metallid and nonmetallic minerals. This informa-
tion is made available in publications,*^ mostly on specific areas or dis-
tricts, by correspondence, and by personal interviews.

The Geological Survey undertakes studies of coal, oilj and gas fields,
metallic and nonmetallic mineral deposits, and geologic problems re-
lated to engineering projects. It endeavors to place at the disposal of
the architect and builder the results of its experience with and knowl-
edge of natural structural materials.

Coed. — The coal fields of the United States have been investigated by
the Geological Survey and are described in reports which give infor-
mation on the distribution, thickness, and quality of the coal deposits.
The Survey collects samples of coals for analysis by the Bureau of
Mines and those analyses are published in reports on the geology of
the areas in which the deposits are found. The Survey has cooperated
with the American Society for Testing Materials and the American
Standards Association in the establishing of coal classification by rank
and grade.*®

OU amd gas. — The developed oil and gas deposits, also the oil and
gas possibilities "^f untested areas, are investigated by the Geological
Survey for the purpose of acquiring information on the location, char-
acter, and reserves of these resources. Samples of oil and gas are
obtained by the Survey's experts in the areas studied by them and
these are analyzed by chemists of the Bureau of Mines. The British
thermal unit heating value of gas is determined at the time the analyses
of the gas samples are made. Information on the available reserves
of oil and gas is essential in determining whether the supply is suffi-
cient to justify the installation of equipment for their utilization.

** "D. S. Geological Survey, Its Origin, Development, Organization and Operations," 205
pp.. Bulletin 227, U. S. Government Printing Office, Washington, D. C, 1934 (Out of
Print).

« "Publications of the Geological Survey," U. S. Government Printing Office, Washington,
D. C, May 1938.

«* "Recently Adopted Standard of Classification of Coals by Rank and Grade," by Thomas A.
Hendricks, Economic Geology, vol. 33 (2), pp. 13&-142, March to April 1938.

CONCENTRATION OF ECONOMIC POWER 157

Deposits of helium-bearing natural gas have been investigated by
the Geological Survey and basic information for the determination
of the amount of available helium has been acquired.

Ores. — Investigations by the Geological Survey of ores of the differ-
ent metals involve exploration of the original sources of the ores, clas-
sification, location, and description of the deposits and their occur-
rence, estimation of ore reserves, and studies of the genesis of the
deposits.

The Survey, in the dissemination of accurate information, seeks to
encourage the development of promising deposits and to prevent
expenditure of funds and labor on those which hold no promise of
successful exploitation. An important phase of this latter function
is to assist in blocking fraudulent promotion enterprises based on mis-
interpretation and misinformation concerning mineral deposits.

Bcmxite. — Bauxite is mainly valuable for the aluminum that may
be extracted from it. However, bauxite is used in other ways, for
example, as an abrasive, as a pigment, as a refractory, and as a partial
source of alum, aluminum sulfate, and several other chemicals used
particularly in water purification.

The Geological Survey is in a position to give valuable information
as to the location, characteristics, and industrial possibilities of
bauxite. ,

Mica. — ^The Geological Survey is a source of information regarding
the physical and mineralogic characteristics of known deposits of mica,
includmg the relative qualities in each.

Pr.eciotis stones. — The Geological Survey serves the public in
identifying precious stones and in giving information concerning
their quality and probable utility.

Fertilizer materials {phosphate, potash.^ nitrates). — The Geologi-
cal Survey has made studies of phosphates in this country. As ?
result of this study it has prepared maps, made analyses, and esti-
mates regarding phosphates whereby a prospector or mining com-
pany can determine on what particular tracts of land phosphate is
present, and some information regarding its quality and amount.
The investigations relative ta potash have led to the discovery of
minable potash comparable to the best imported grades. Investiga-
tions of nitrate show that com.merciai deposits of natural 'titrates
probably do not exist in the United States; however, through elec-
trochemical processes of extraction of nitrogen from the air, this
country it now not dependent on foreign supplies of nitrates.

Structwral materials. — ^Much information has been made available
hy the Geological Survey to users of such products as building stone,
decorative and monumental stones, lime, sand and gravel, clay and
clay products, concrete aggregates, gypsum and other plasters.*^

In the field of constructional stone materials, study has been made
of the relationship of the quarry to quality of stones,^ of vermicu-
lite and other insulation material, and clay for brick. The physical
properties of granite and marble such as color, texture, and crush-
ing strength are criteria for the commercial grading of granite. The

""Contributions of the U. S. Geological Survey to Architects," by Earnest F. Burchard,
Journal of the American Institute of Architects, Structural Service Book, vol. 1 (2), pp.
18-20, February 1917. y i ^ vv

" "Commercial Marbles of Western Vermont," by T. Nelson Dale, 170 pp., Bulletin 521,
Geological Survey, U. S. Department of the Interior, Washington, D. C, 1912. (Out of print.)

"Granites of New England," by T. Nelson Dale, 488 pp., Bulletin 738, Geological Survey,
U. S. Department of the Interior, Washington, D. C, 1923. (Out of print.)

158 CONCENTRATION OF ECONOMIC POWER

Survey has shown that petrographic analysis rather than chemical
analysis is the logical basis for determining the durability ot gran-
ite and other building stone. This would base the commercial classi-
fication of properties of granites on "use" instead of chemical or
mineral composition.'* A study was made on the relation of natural
features of limestone to commercial grading.^ The Geological Sur-
vey is represented on several committees of engineering and standard-
izing societies,, such as the American Society for Testing Materials
(A. S. T. M.) and the American Standards Association. It has
cooperated with A. S. T. M. committees in establishing grades foi
commercial building stone, the purpose being to broaden the classi-
fication so as to eliminate misrepresentation of building materials.

Ceramic raw materials. — Ceramic raw materials include a con-
siderable group of nonmetallic minerals, chief among which is clay.
The work on clays has included publication of reports showing the
location, character, and general utility of high-grade clays in differ-
ent parts of the country. Important research on clay materials is
being carried on in the laboratories of the Geological Survey.
Bleaching clay investigations have led to the discovery of apparently
large bodies of high-grade activable clay and to the development
of a technique by which comparative studies may be made of the
bleaching properties of clays from many different localities. In-
formation on feldspar, another wideh^ used ceramic raw material,
has been gathered and published by the Survey.

Refractory materials. — Refractory materials are used not only by
the ceramic industries but also by other industries where high tem-
i:)eratures are involved, as in metallurgical or manufacturing proc-
esses, or in the finished product. For example, automobile spark
plugs, wliich must withstand brief but rapidly repeated subjection
to high temperatures, are made from rock material, or minerals
such as andalusite and dumortierite, whose availability is known to
the Geological Survey. Magnesite is another refractory to which
the Geological Survey has given much attention. This material finds
its way into industrial plants but is also widely used in compounds
for insulating such commodities as domestic furnaces, and furnace
and hot water pipes. The Survey has made inquiries about supplies
of materials suitable for making rock wool, one of the common types
of insulating materials, and vermiculite and diatomite, and other
commonly used insulating materials.

Many other examples could be cited, but the foregoing serve to
illustrate the service, rendered by the Geological Survey to industry,
and through industry to the ultimate consumer.

INDIAN ARTS AND CRAFTS BOARD

Standards for Indian Arts and Crafts.

Among the functions of the Indian Arts and Crafts Board, as
defined in the act of August 27, 1935, are those —

to create Government trade-marks of genuineness and quality for Indian
products and the products of particular Indian tribes or groups; to establish
standards and regulations for the use of such trade-marks; to license corpora-

•» "Commercial Granites and the Geology of Granite Deposits," by L. W. Currier, report
In preparation, Geolopical Survey, U. S. Department of the Interior, Washington, D. C.

»> "Indiana Oolitic Limestone, Relation of its Natural Features to its Commercial Grad-
ing," by G. F. Loughlin, pp. 113-202, Bulletin 811 (c), Geological Survey, U. S. Government
Printing Office, Washington, D. C, 1930. 30 cents.

CONCENTRATION OF ECONOMIC POWEK 159

tions, associations, or individuals to use them ; and to charge a fee for their
use; to register them in the United States Patent Office without charge.

Extensive surveys of the field and interviews with experts, crafts-
men, and traders have revealed that, in. the field of Indian arts
and crafts, no uniform procedure in developing standards for trade-
marks and certificates can be adopted.

Since these trade-marks were to be created above all to protect
the producer from the competition of nongenuine articles and to
inform the consumer of the genuineness of his purchase, it was the
first duty of the Indian Arts and Crafts Board to investigate what
constitutes genuineness in the various lines of Indian crafts pro-
duction. These inquiries revealed that the factors that are generally
considered to determine genuineness of Indian crafts products are
varied in the different fields of production and in their respective
markets. The only generally accepted criterion of genuineness, as
voiced by all consumers and producers alike, is the identity of the
maker as a member of the Indian race, or more specifically of that
tribe that is traditionally known for the production of his type of
crafts. Other factors, such as quality of raw material, type of
production method, quality of workmanship, and excellence of style
and design, are given varied importance by the different groups of
consumers and producers.

From this, it became apparent that no certificate of genumeness
could serve its aim without available indication of the factors that
constitute genuineness in the given case.

The Indian Arts and Crafts Board's mark for Navajo, Pueblo, and
Hopi silver was devised to protect specifically a type of production
that is generally considered to be outstanding, because of its traditional
workmanship and its design. Since no written regulation can define
this type of merit, every piece that receives this mark has to be
examined and judged by an expert in the field. To explain the mean-
ing of this mark, explanatory circulars have been prepared for the
use of consumers, which are offered free to everyone who submits
articles to be stamped. The circulars are intended to be given free
to every purchaser of such a piece of jewelry. Since this type of
mark applies to only a small percentage of the output, the Indian
Arts and Crafts Board is now undertaking to find means of identifi-
cation for other types of silver products.

The Indian Arts and Crafts Board's certificate of genuineness for
Navajo all-wool woven fabrics is not concerned with either design or
quality of workmanship, because workmanship in Navajo weaving
speaks for itself, and the designs in better fabrics follow an es-
tablished tradition. The need here was mainly for protection against
inferior products made partly with machine-made thread and against
fabrics made outside the tribe. This certificate, which is attached to
the fabric, therefore states that the piece is entirely produced by
Navajo Indians, made entirely of local wool, locally hand-spun, and
woven on a native Navajo loom. Since these standards may be
checked by anyone familiar with Navajo weaving, any trader who
applies for a special license may be authorized to attach certificates.

The Indian Arts and Crafts Board's stamp for Alaskan Eskimo and
Indian products, are aimed only to identify the tribal origin of the
product and to protect the Alaskan Eskimo or Indian craftsman from
the competition of articles made in factor3.es or under workshop con-

IQQ CONCENTRATION OF ECONOMIC POWER

ditions. The stamp therefore bears only the inscription "Hand-
made — Alaskan Eskimo," or "Hand-made — Alaskan Indian."

The Indian Arts and Crafts Board hopes eventually to be able,
through its own standards or through its endorsements of standards
established by producer's groups, to develop a system of certificates
that cover not only all fields of Indian arts and crafts, but also all
those classifications within a field that need identification.

OFFICE OF INDIAN AFFAIRS (INDIAN SERVICE)

Purpose of Preparing Standards and /Specifications.

The Indian Service, United States Department of the Interior, has
established specifications for supplies, articles, and equipment used in
schools, hospitals, and sanatoria, for approximately 9,000 items.^^
To those familiar with conditions existing in the Indian Service some
years ago the purpose of preparing standard specifications is at once
apparent. They know how indefinitely and inadequately specifica-
tions for procurement were prepared in those days. The article to
be purchased was merely named and usually samples were called for,
leaving it more or less to the discretion of the prospective bidder to
determine the character and quality he should offer. The awarding
official made his selection from what was placed before him. At that
time he proceeded in the consideration of proposals from the stand-
point of the cheapest sample offered where a selection could be made
of the commodity required which in his opinion was adequate to the
Indian Service both in quality and price. This procedure developed
into a matter of more or less personal preference. The inadequacy
and unfairness of purchasing under such a system, without an ac-
companying detailed description of the article to enlighten the bidder
as to the quality required and at the same time fix a standard for the
guidance of the awarding officer, is apparent.

Procedure in Establishing Standa/rd Specifications.

Kealizing the inadequacy of such a system, the development and use
of detailed specifications in purchasing articles of supply, equipment,
and so forth, became an active feature in the operating program of
the Indian Service. In the selection of personnel particular attention
was given to prospective employees who had some practical or tech-
nical experience in purchasing, selling, or using the supplies or equip-
ment which they would handle under the commodity assignments.
Progress was slow, but little by little the specifications were improved
to the point where inferior goods, when offered in proposals, could
be rejected because they did not meet the requirements for which they
were to be used. In developing the specifications careful attention
was given to the results obtained in practical institutional use. Not
only was quality considered, but where necessary, proper sizes of
garments and wearing apparel for children of various ages and adults
were studied. The results have more than repaid the effort expended.

Inspection and Tests.

The benefit resulting from the use of standard specifications would
be largely offset without the inspection and testing of goods and
supplies to assure conformance with the specifications. The results

"These specifications are prepared by the Purchasing Office of the U. S. Department of
the Interior.

CONCENTRATION OF ECONOMIC POWER X61

of inspection are considered essential in the development of specifica-
tions, since through tests and laboratory analyses the necessary cor-
rections in specifications are made. In addition to laboratory tests
and analyses, goods and supplies which lend themselves to practical
tests are studied during their use. Such practical tests often out-
weigh any conclusion which may be reached as a result of laboratoiy
tests or analyses.
Cooperation With Other Government Agencies.

In the preparation of standard specifications use was made of other
governmental facilities and of the knowledge and experience gained
by employees of other departments and activities of the Government.
The National Bureau of Standards has been of help, and the facilities
of bureaus were used where available; these included the Bureau of
Home Economics, United States Department of Agriculture, the
Food and Drug Administration, the Bureau of Supplies and
Accounts in the United States Navy Department, and certain
imits in the office of the Quartermaster General of the United States
Army. In addition to the research work on standardization conducted
by the Indian Service, use has been made of Federal Specifications.
Cooperation between the administrative branch of the Indian Service
and the purchasing office of the United States Department of the
Interior resulted in very definite requirements for the Indian Service
as to the type and quality of merchandise to be purchased.

UNITED STATES DEPAKTMENT OF LABOR
BUREAU OF LABOR STATISTICS

RETAIL PRICE DIVISION

The Retail Price Division of the Bureau of Labor Statistics collects
retail prices for more than ?00 commodities and services which are
important in retail trade and in the expenditures of the average wage
earners' and lower-salaried clerical workers' families. These com-
modities and services are classified into the following groups : Food ;
rents; fuel and light; clothing and shoes; yard goods and textile
furnishings; furniture and floor covering; household equipment and
electrical appliances; drugs, toiletries, and sundries; miscellaneous
commodities, including automobiles, tires and tubes, petroleum
products, and so forth; miscellaneous services, including transporta-
tion, newspapers, medical care, personal care, and similar services.

The major objective of the Bureau is to secure from time to time
comparisons of retail prices for identical or comparable qualities
of ultimate consumer goods. At present the principal use of the
retail price data collected by the Bureau is in computing changes
in cost of living. They are also used for many other purposes,
however, such as computing retail price indices, publication of aver-
age retail prices, limited place-to-place comparisons in living costs,
and similar studies.

Prices of food items are collected monthly, and fuel and light items
quarterly, for 51 large cities in the United States. Prices of all
other items are collected quarterly in 33 of the same cities through-
out the country. Quotations for fuel and light are secured by mail ;
all others by personal visits of field representatives of the Bureau,
from department stores, specialty shops, real estate firms, physicians,
dentists, hospitals, newspaper offices, transportation companies, and
other sources.

The need for specifications to be used as guides for securing retail
prices of comparable items from time to time was recognized early
in 1933. The specifications were not then, nor are they now, intended
to be set up as standards of quality for consumer goods. They are
intended only to describe the essential price determining features
of the items covered so that bona fide changes in retail prices can
be distinguished from changes in the quality of goods.

The foundation for the use of specifications by the Bureau was
laid in the summer of 1933 when the Federal Inter-Departmental
Retail Price Committee, organized by the Central Statistical Board
and consisting of representatives of several Federal Goverun^ient
agencies, developed a set of preliminary specifications for use as a
basis of price collection. These specifications were first used officially
to serve as a basis for prices collected in November 1933 in computing
changes in the cost of living of Federal employees in the District
of Columbia. They were uged further during the early part of 1934
to make test collections ot retail prices in a number of cities
throughout the United States.
162

CONCENTRATION OF ECONOMIC POWER 163

During January and February 1935 all available data were corre-
lated and additional specifications were developed covering all items
for which retail prices are secured by the Bureau, The specifications
prepared at this time were used in the March 1935 collection of prices
and thereafter with only minor revisions until 1937.

A considerable amount of research work on specifications, especially
for clothing, was done in 1937. The research included conferences
with manufacturers, trade associations, wholesalers, jobbers, retailers,
and others who are familiar with manufacturing processes and
marketing and merchandising problems. Over 300 sources were con-
sulted for information, either directly or through special surveys
conducted through trade associations. The data were studied and
necessary changes were made in the previous specifications. This
research work and the information secured from experts on retail
merchandising revealed the strata of the retail markets into which
various qualities of goods could be classified. The price determining
characteristics of each class of goods were examined and specifications
were prepared which consisted largely of detailed descriptions of
the price determining factors for each item, such as construction, kinds
and amount of materials, style, quality of workmanship, whether
hand- or machine-made, sizes, brands, and general terms regarding
qualities (medium, inexpensive, very inexpensive, and so forth).
Separate specifications were developed for two or three different
qualities of many items. They were designed to describe the articles
sold through the various price brackets which encompass the volume
of expenditures for consumer goods.

All specifications are considered only tentative Avhen first prepared.
They are then forwarded to trained field representatives of the Bureau
who test them in collecting retail prices, not only by using all labeling
information given for each item but also by questioning informanfs
regarding details of materials and construction which are seldom given
on labels. Through this process, the Bureau has built up an exten-
sive amount of information which is used in periodic revisions of
the specifications. This information is supplemented by that secured
by members of the research staff of the Retail Price Division, and
checked with manufacturers, trade associations, and authorities on
retail merchandising before being incorporated into revised specifica-
tions. The adequacy of the specifications is checked constantly as
new or additional information is received, as the nature of commodi-
ties changes, as new articles assume importance in retail trade and
family expenditures, and as old articles decline in importance.

In the formulation of specifications, the need for detailed and com-
prehensive descriptions has been demonstrated. The current tendency
is toward the development of two distinct sets of specifications, one
set to be used primarily by highly trained representatives of the
Bureau in their contacts with well-informed retailers; the other, a
considerably less technical set of specifications, to be used in contacts
with those informants to whom technical details of construction and
materials seem unnecessary.

Pricing by specification has been useful ,and gratifying. Many of
the Bureau's cooperators, in reporting retail prices, who were skep-
tical at the introduction of these specifications are now interested and
eager to assist in the development of more useful ■ specifications.
Some have, through study and market contacts, increased their

154 CONCENTRATION OF ECONOMIC POWER

knowledge of the technical details of the commodities they sell as
a direct result of having had their curiosity and interest stimulated
by the specifications. Manufacturers and trade associations have
voluntarily furnished information far beyond the requests made of
them.

WHOLESALE PRICE DIVISION

The regular collection of wholesale price data by the Wholesale
Price Division of the Bureau of Labor Statistics began in 1900 by
the then "Bureau of Labor" of the Department of Commerce and
Labor. The work at that time consisted of bringing up to date the
information compiled under instructions of the Senate Finance Com-
mittee, issued in four volumes known as the "Aldrich Report," and
inaugurated the regular collection of data.

The primary purpose of the collection of wholesale prices has been
to show changes occurring between two current periods of time and
the trend in price movements over a period of years. With the
improvement of the wholesale price series a number of specialized
uses has developed.

Over the period of 40 years several revisions have been made in
the wholesale price materials issued by the Bureau. The first at-
tempt at a general revision was in 1913-14 incident to the World
War. The more important changes at that time were an exten-sion
in the coverage and a change in method of calculation. Subsequent
revisions have been made in 1920-21, 1927, and 1931. The present
weighted index number series of wholesale prices includes more than
1,000 individual price quotations representing over 800 price series.
The items are divided into 10 major groups of commodities, 47 sub-
groups of closely related items, and 5 economic classifications.

The present groupings of the Burear's wholesale price data arp
as follows :

Commodity Groups and Subgroups

(1) Farm products: Grains, livestock and poultry, other farm products.

(2) Foods: Dairy products, cereal products, fruits and vegetables, meats, other

foods.

(3) Hides and leather products : Shoes, hides and skins, leather, other leather

products.

(4) Textile products: Clothing, cotton goods, hosiery and underwear, rayon,

silk, woolen and worsted goods, other textile products.

(5) Fuel and lighting materials: Anthracite, bituminous coal, coke, electricity,

gas, petroleum products.

(6) Metals and metal products: Agricultural implements, farm machinery,

iron and steel, motor vehicles, nonferrous metals, plumbing and heating.

(7) Building materials : Brick and tile, cement, lumber, paint and paint ma-

terials, plumbing and heating, structural steel, other building materials.

(8) Chemicals and drugs: Chemiieals, drugs, and pharmaceuticals, fertilizer

materials, mixed fertilizers.

(9) Housefumishing goods: Furnishings, furniture.

(10) Miscellaneous: Automobile tires and tubes, cattle feed, paper and pulp,
rubber (crude), other miscellaneous.

Economic Classifications
(1) Raw materials.
("S) Semimanufactured articles.

(3) Finished products.

(4) All commodities other than farm products.

(5) All commodities other than farm products and foods.

■CONCENTRATION OF ECONOMIC POWER 165

In pricing commodities at wholesale, the Bureau has made use of
specifications since the beginning of its work. In the earlier days
only broad and general specifications were used for identifying the
items priced. Changing economic conditions, shifting consumer de-
mands, introduction of technological improvements, and the expand-
ing use of price materials has necessitated broadening and sharpening
of specification data. At no time have the specifications used for
pricing been intended to be set up as standards of quality, or to be
used as standards established by the Federal Government.

The Wholesale Price Division uses specification data in a gen-
eral way to evaluate price changes, to denote quality changes, and
to insure comparability of prices.

The specification data are not predetermined by the Wholesale
Price Division but are a result of research conducted in cooperation
with trade asociations and individual members of the industry. When
a particular commodity is to be included in the price reporting serv-
ice, or when a revision is to be made, field agents of the Bureau dis-
cuss with representatives of the industry the proper items to be
priced.

Recognizing the need for more detailed specification data, the
Wholesale Price Division organized, in the fall of 1934, a Research
Unit, one of the fimctions of which is the improvement of price
data. This Unit is now engaged in developing more detailed speci-
fications and the scope of its work is constantly expanding.

It is recognized that adequate specifications should cover all im-
portant price determining factors such as construction, kinds, and
amounts of materials used in manufacture, type and quality of
workmanship, size of sale, marketing channels for distribution, con-
ditions of sale and purchase, terms of trading (including discounts
and payment), kinds of buyers and sellers, source of raw materials,
amount of fabrication or processing necessary, ultimate use of the
articles, type of packaging, number of producers or manufacturers,
concentration of production or manufacture, frequency and magni-
tude of price and quality changes, and type of price (seller's list,
transaction, exchange, and so forth).

Recently the Bureau of Labor Statistics prepared detailed de-
scriptions for its price series in connection with price studies of
the Temporary National Economic Committee.

CHILDREN'S BUREAU

The Children's Bureau, United States Department of Labor, accord-
ing to its organic act, "shall investigate and report * * * upon
all matters pertaining to the welfare of children and child life among
all classes of our people, and shall especially investigate the questions
of infant mortality, the birth rate, orphanage, juvenile courts, deser-
tion, dangerous occupations, accidents and diseases of children, em-
ployment, legislation affecting children in the several States and
Territories." In addition, the Children's Bureau is responsible for
administration of the matet-nal- and child-welfare provisions of the
Social Security Act, title V, parts 1, 2, and 3, relative to maternal and
child health, crippled-children's and child-welfare services.

272496 — 41— No. 24 12

IQQ CONCENTRATION OF ECONOMIC POWER

The Children's Bureau conducts research studies on various matters
pertaining to the health of mothers and children. Some of the studies
are made Avith a view to establishing standards for commodities or
equipment of direct value to the consumer in protecting the health and
welfare of these mothers and children.

The research studies of the Children's Bureau are initiated in the
Bureau itself, or are undertaken at the request of State health depart-
ments, State and local health agencies, medical schools, hospitals, or
other private and public agencies. The studies are conducted in coop-
eration with the above agencies or with other Federal agencies.

The Children's Bureau has made studies of the effectiveness of
preparations of vitamin D from various sources and in varying
amounts in the prevention of rickets in infants and children.

Studies of premature infants are being made which include a study
of incubator beds required to maintain within normal limits the
body temperature of the premature infant. Numerous types of
these incubator beds are in use, although no standards have been
established nor have tests been made to detemiine the performance
of these beds in relation to clinical requirements as recommended by
the medical profession. The Children's Bureau is at present coop-
erating with the National Burejiu of Standards in a study which in-,
volves tests of a number of thes.> beds to evaluate the mechanisms
for control of temperature, humidify, and oxygen supply; tests of
thermometers, thermostats, and other apparatus supplied by the
manufacturers of the beds; and tests for ventilation of beds. These
data will be used in developing standards of performance, safety,
and economy for incubator beds.

In a popular bulletin, "Home Play and Play Equipment for the
Preschool Child," the Children's Bureau has recommended dimen-
sional and quality standards for materials to be used, and detailed
instruction regarding construction of play equipment.

There are no generally recognized specifications or performance
standards for braces and artificial limbs for crippled cliildren, and as
a result many of these appliances are unnecessarily heavy and me-
chanically inefficient. However, activities in relation to the appli-
ances, on the part of the Children's Bureau, have been restricted to
assembling data on prices paid for these appliances by State agen-
cies administering programs for crippled cluldren.

UNITED STATES NAVY DEPAKTMEXT

The United States Navy Department is one of the country's largest
purchasers of materials, using the term "materials" to cover the range
from raw materials and agricultural commodities to manufactured
products. All of its purchases are made in accordance with ^he com-
petitive method of buying. This method cannot be applied success-
fully unless the material to be purchased is described adequately in
specifications, and an efficient inspection service is provided to insure
that the delivered article conforms to these specifications. The Navy
Department has developed both of these concomitant conditions to
competitive buying to a high degree with the result that this Depart-
ment probably buys as economically as any large purchaser of mate-
rials in the United States.

So far as the Navy Department is concerned, the use of specifications
for buying at least some of its materials dates from the beginning of
the Navy. The following is an interesting specification used by the
Navy for the purchase of canvas for sailcloth in the year 1800 :

The warp and filling are to be wholly of good hatchelled flax and no part
thereof of tow, and that there is no sizing to be used in the manufacture of the
cloth. But if it should be found indispensable that some kind of sizing should
be used, then to guard the public from the evil of paying for what would be of
no use, the Navy may have the sizing washed out of one bolt, weighing the bolt
before and after this operation, and the weight lost by this process shall be de-
ducted from each bolt delivered to ascertain the true weight to be paid for by
the public. It is also agreed * * * that the warp and filling are to be
as near the same size as practicable.

An old Navy record, dated December 31, 1794, speaks of the appoint-
ment of an inspector "who shall be sworn to reject all wh^ch is not of
perfect quality," the material referred to also being canvas.

So long as shipbuilding remained an art no great advance was made
in the use of specifications for purchasing the materials entering into
the construction and equipment of ships. With the advent of steam
and iron, shipbuilding became an engineering science and the use of
specifications became more important. It was not, however, until the
first steel naval shipbuilding program was started in the late eighties
followed by the programs in the nineties and culminating in the hur-
ried large-scale buying for the Spanish-American War in 1898 that
the absolute need of specifications as a vital part of the competitive
method of buying was realized. The extension of the use of standard
specifications was necessarily slow because it is not an easy matter to
write satisfactory specifications for even simple articles.

The broad considerations which have always governed the Navy
Department in drawing up standard specifications may be stated
briefly as follows: (a) The stipulations covering the characteristics
of the material must be broad enough, on the one hand, to make the
material commercially obtainable thus insuring competition, but must
be rigid enough, on the other hand, to exclude grades that will not meet
the Navy's needs; (b) such detail as tests, chemical composition, per-

167

Igg CONCEKTRATION OF ECONOMIC POWER

formance, and so forth, must be included in the specification, and must
be so clearly worded that there will be no doubt in the minds of either
the bidders or of the inspector who finally approves the delivery.

While these fundamental requirements for an adequate specifica-
tion appear self-evident, their description for any particular mate-
rial or article is not always easy. The decision, in the first place,
of what will meet the Navy's requirements is often not simple. For
example, a broom that is good enough for use on shore may not
be good enough for use on ships because the highly corrosive sea
atmosphere may necessitate a more expensive type of binding than
is sufficient for even a first-class article for domestic use. In general,
United States Navy Specifications call for high grade materials
because it has been the experience of the Navy that high quality
results in ultimate economy. High quality also is held to be neces-
sary because all possible risks of failure of apparatus at the critical
moment of bat.tle must be avoicled.

In specifying grade or quality, due consideration is given to the
availability of the material in the current market. The Navy De-
partment has at times set a standard which the industry could not
meet at the moment but which, due to the Navy's requirements, has
led to technological advances in the field involved. For example,
the Navy specified steel plates and shapes of domestic manufacture
for the ships of the White Squadron, which were built in the late
eighties of the last century, before there was a steel industry in the
United States capable of producing such material. These specifica-
tions led to the development of the steel industry so that such mate-
rial could be produced with the characteristics stipulated. The
beginning of the steel casting industry in the last decade of the
nineteenth century was also largely due to the fact that the Navy
specified steel castings instead of forgings for the large stem and
stern posts of the naval ships built in the early nineties.

The following are some of the articles of interest to the ultimate
consumer to which the Navy has devoted considerable study and re-
search, with a view to standardizing their production on a basis of
satisfactory quality:

Mattresses. — Because of the wide range in quality of commercially
obtainable mattresses for beds and bunks for use on board ship, the
Navy undertook some time ago an extensive survey of the field to
determine the minimum requirements as to quality and construction
which would meet the Navy's needs. A practical test of 12 different
commercially obtainable mattresses is being conducted. These are
furnished to ships with directions that each mattress is to be assigned
to an individual for a period of 1 month, at the expiration of which
the mattress is assigned to another individual. A careful record is
kept of the favorable and unfavorable reports of the users, and the
mattresses are examined from time to time for indications of wear,
deterioration, and so forth. Eventually, a specification will be pre-
pared for mattresses which from the point of view of cost, durability,
comfort, and other factors, will best meet the Navy's requirements.

Cordage. — Much work had been done on standardizing manila rope
and flax signal halyards. Studies concerned with, this product have
resulted in definite improvement in the service and life of cordage by
specifying special treatment of this material.

CONCENTRATION OF ECONOMIC POWER XgQ

Surgical guuze and ligatures. — In an effort to apply competitive
buying to such materials, it was found that many of the grades on
the market were not suitable for use by the Navy. Research and
standardization have reduced the number of 'accepted grades to about
seven or eight each. A recent revision of the United States Pharma-
copoeia recognizes this decreased number of grades by practically
paralleling the standardization set up by the United States Navy
Specifications.

Surgical' and dental instTuments. — Materials and finishes used by
manufacturers of surgical and dental instruments are in the process
of standardization, as the result of a study made by the Navy Depart-
ment, with a view to the adoption of standard specifications for such
articles.

Cotton sheeting. — Standardization of the maximum of residual
shrinkage has changed the practice of manufacturing such articles as
mattress covers, bed sheeting, pillow cases, and so forth, used by the
Navy. Formerly, such articles were manufactured from unshrunk
sheeting, but the investigations of the Navy Department led to the
conclusion that there was an economical advantage in using preshrunk
sheeting which now forms one of the requirements of standard
Specifications.

Ruhher-like materials. — The standardization of materials used as
substitutes for rubber have received much attention by the Navy De-
partment. This work which was initiated about 10 years ago will be
of great benefit to the industry and to the ultimate consumer.

Small hand tools. — An excessive variety of types and qualities have
always existed in this field. The Navy Department has for many
years taken a very active interest in standardizing such articles as
hammers, hand cutting tools, wrenches, screw drivers, and similar
tools. Such standardization has resulted in improved quality and
serviceability without appreciable increase in cost.

In describing the standardization work of the Navy Department,
the activities of the Department dealing with contract plans and speci-
fications for building ships, and with their inspection, are not in-
cluded, as these functions do not apply to consumer standards.

Procedure in Formulating S'peci-fications.

The Navy uses such a large variety of materials, commodities, and
manufactured products that no individual or small group of individ-
uals has sufficient knowledge to prepare specifications for all of them.
The primary responsibility for drafting or revising each specification
is, therefore, assigned to that bureau of the Navy Department which
is the principal user of the material. This bureau is referred to as
the "sponsoring bureau" for the specification. For example, the
Bureau of Ships sponsors the specifications for steel plates and shapes
used in shipbuilding, the specifications for electric conductors; the
Bureau of Supplies and Accounts, the specifications for food; the
Bureau of Medicine and Surgery, the specifications for surgical instru-
rnents; and so forth. Wlien a proposed United States Navy Specifica-
tion is prepared it may be issued in mimeographed form for immediate
use by the originating bureau. It is then forwarded to the Bureau of
Supplies and Accounts, through other interested bureaus for such com-
ment and recommendations as they may desire to submit. If the pro-

170 CONCENTRATION OF ECONOMIC POWEK

posed specification meets with the approval of these reviewing bureaus,
it is forwarded to the Government Printing Oflfice for printing. If,
however, any of the bureaus finds the proposed specification unsatis-
factory from any technical aspect, the draft is returned to the origi-
nating bureau for further consideration. If parts to which objections
have been made are satisfactorily revised, the proposed specification is
forwarded to the Bureau of Supplies and Accounts again by the origi-
nating bureau M'ith the request that a United States Navy Specification
be printed.

The Navy Department Specifications Board, on which each bureau
is represented, functions principally as a policy board, and regulates
the orderly progress of proposed new specifications and revisions of
existing specifications through the proper channels. This Board
meets once a month to adjust any final difficulties.

In the Bureau of Ships, the need for a purchase specification
originates usually in the Design Branch, in the Procurement Branch,
or in the Research Branch. A requested specification may require
consideration by all three of these branches. Sometimes, however,
this is not necessary ; in the case of a request for a specification origi-
nating in the Procurement Branch, the technical requirements may
not necessitate consideration by either the Design Branch or the
Research Branch. In all cases the Standards Section prepares the
draft of the proposed specifications.

Chart X illustrates the route followed by a specification for con-
sumer materials during its development in the Navy Department.

The personnel engaged in work on specifications maintains close
contact with the National Bureau of Standards and makes frequent
use of the facilities and research work of the National Bureau of
Standards in preparing specifications.

United States Navy Specifications are printed in leaflet form, a
separate leaflet being issued for each article, material, or product.
This arrangement has been found more economical and satisfactory
than publishing the specifications in book form. (A leaflet specifica-
tion may consist of many pages or of only a single sheet, depending
on the amount of description that is necessary to a complete under-
standing of what is required. The description of acceptance tests
or of the method of making chemical analysis called for often forms
an important part of the specification.)

By the time the United States entered the World War all important
materials used by the Navy, about 800, were covered by standard
specifications. Use of these specifications by the Navy Department
assisted in the successful conduct of the greatly increased purchasing
program, which had to be undertaken at the beginning of the war.
Largely because the Navy's purchasing methods, based on competitive
bids and standard specifications, had proved so successful throughout
the war, a Federal Specifications Board was appointed thereafter to
study the feasibility of requiring the use of similar specifications by
all Federal Government departments. This Board was later called
the Federal Specifications Executive Committee. The Navy Depart-
ment is represented on this Committee. Federal Specifications were
patterned on the United States Navy Specifications. In fact, the
United States Navy Specifications were used practically verbatim in
preparing many of the early Federal Specifications.

U. S. Navy Department

Development of a Navy Department Specification

Originating in the Bureau of Ships

Navy Department
Specification Board

Med.cine and Surg

Supplies and Accouni

CONCENTRATION OF ECONOMIC POWER 171

Whenever possible, the Navy Department uses Federal Specifications
and cancels the corresponding United States Navy Specification. For
certain materials, however, the Navy Department finds it necessary
to continue the use of its own specifications because the Navy's re-
quirements are frequently more exacting than those of other Govern-
ment departments. This applies especially to materials which are
important in the construction or equipment of warships where the
paramount consideration in specifying quality and in prescribing tests
is the one of providing maximum guaranty against failure in battle.

Cooperation with Other Agencies.

The Navy Department cooperates with various organizations and
engineering societies concerned with specifications, standardization,
and inspection of materials, such as the American Society for Testing
Materials and the American Standards Association, and participates
in the work of their committees. The Navy Department is also rep-
resented on the Standards Council of the American Standards Asso-
ciation. As a consumer, the Navy Department is represented on the
committees preparing specifications for materials in which the Navy
is particularly interested. In this way the Navy Department has a
voice in influencing technological progress in the industries and in
working for standards that will be of ultimate benefit to the Navy and
thereby indirectly to the consumer.

Inspection and Test.

Unless competitive buying, based on specifications, is followed by
rigid inspection of the delivered material to insure compliance with
the specifications, the whole procedure is valueless. The Navy Depart-
ment has, therefore, always laid great stress on adequate inspection
of the materials which it purchases, and in order to carry out this
policy successfully it has built what is perhaps the most complete
inspection organization operated by any of the Federal departments.

For this purpose, the continental area of the United States is
divided into 12 inspection districts. The administrative head of each
district is a naval officer who is called the inspector of naval material
of that district. The districts are of very unequal size geographically,
but when originally planned some effort was made to keep the inspec-
tion activities of the respective districts of about the same volume,
but even this was not found entirely practicable. In general, the
physical area is smallest where industrial activities are the greatest.
For example, the New England and Middle Atlantic States represent
6 of the 12 districts, whereas, the entire South is represented by only
1 district. There are 68 officers, 453 civilian inspectors, and 281 clerks
attached to these 12 districts. During the fiscal year 1940, this staff
will have inspected material valued at approximately $250,000,000.
Practically all of the material used by the Navy afloat and ashore,
whether at navy yards or at private shipyards in building ships, is
inspected by this organization at the place of manufacture before ship-
ment. Occasionally material is shipped subject to inspection after
delivery, but this procedure is for only a very small part of the total
material purchased. Normally, the inspectors of naval material inspect
large quantities of material for other Government departments. The
very large increase in Navy purchases, due to the present shipbuilding

172 CONCENTRATION OF ECONOMIC POWER

program, has made necessary the curtailment of this service
temporarily.

Research.

The Navy Department has its own laboratories and testing stations
for making the chemical analyses and physical tests required by the
specifications. In addition, researcli work is constantly conducted
at the Naval Engineering Experiment Station, Annapolis ; the Research
Laboratory, Bellevue ; the Boiler Laboratory, Philadelphia ; the Model
Basin, Washington; the Naval Aircraft Factory, Philadelphia; and
at the various navy yards. This research has a direct influence on
the standardization of the materials used by the Navy and on the
suitability of newly-developed products for naval use. Indirectly, the
ultimate consumer derives benefits from all of these activities of the
Navy Department.

UNITED STATES' TAEIFF COMMISSION

Studies of specific commodities are an important phase of the activi-
ties of the United States Tariff Commission. Probably the best
description of the kind of commodity studies for which the Commission
is responsible is found in the Tariff Act of 1930.

Section 332. Investigations.

(d) Information for President mid Congress. — In order that the President
and the Congress may secure information and assistance, it shall be the duty of
the Commission to —

(1) Ascertain conversion costs and costs of production in the principal growing,
producing, or manufacturing centers of the United States of articles of the
United States, vphenever in the opinion of the Commission it is practicable ;

(2) Ascertain conversion costs and costs of production in the principal grow-
ing, producing, or manufacturing centers of foreign countries of articles imported
into the United States, whenever in the opinion of the Commission such con-
version costs oi" costs of production are necessary for comparison with conversion
costs or costs of production in the United States and can be reasonably
ascertained ;

(3) Select and describe articles which are representative of the classes or
kinds of articles imported into the United States and which are similar to or
comparable with articles of the United States ; select and describe articles of
the United States similar to or comparable with such imported articles ; and
obtain and file samples of articles so selected, whenever the Commission deems
It advisable ;

(4) Ascertain import costs of such representative articles so selected;

(5) Ascertain the grower's, producer's, or manufacturer's selling prices in
the principal growing, producing, or manufacturing centers of the United States
of the articles of the United States so stiected ; and

(6) Ascertain all other facts which will show the differences in or which
affect competition between articles of the United States and imported articles
in the principal markets of the United States.

(e) Definitions. — When used in this subdivision and in subdivision (d) —
(1) the term "article" includes any commodity, whether grown, produced, fab-
ricated, manipulated, or manufactured ;

Kinds of Information.

It will be noted that the emphasis of these sections of the law is on
measures of competition between domestic and foreign producers and
that such competition is to be evaluated in terms of "articles of the
United States similar to or comparable with such imported articles."
The study of the comparability of domestic and imported goods re-
quires both a detailed knowledge of the intrinsic quality of the goods
and a full fund of information on the methods used in their produc-
tion. Commodity information obtained by the United States Tariff
Commission deals with the description and use of the article; the
grades and varieties produced in the United States and imported from
abroad ; an analysis of the various qualities with particular emphasis
on distinctions in use which result from such qualitative differences ;
detailed information on methods of production in the United States
and foreign countries including data on processes of manufacture,
machine equipment, and other factors which bear upon either the
quality of the goods or the competition in markets in this country.

173

174 CONCENTRATION OF ECONOMIC POWER

Information of this kind on each of the thousands of commodities
in the dutiable schedules and on the free list of the Tariff Act is avail-
able in the publications of the Commission. Current information
on these articles is available in the files of the Commission.

Methods of Ohtaining InfoTmation.

To carry on these studies the staff organization of the United States
Tariff Commission includes seven commodity divisions: Agriculture,
Ceramics, Chemicals, Metals, Sundries, Textiles, Lumber, and Paper.
Each of some 50 "commodity specialists" in these divisions is assigned
the responsibility for a designated group of articles. These specialists
have had both practical industrial experience and formal education
bearing upon the commodities and industries which they handle.
There are, for example, chemists, engineers, metallurgists, and other
technicians on the staff of the Commission. The commodity divisions,
in preparing reports, work in close cooperation with the Economics
Division whose function is to insure full coverage of economic aspects
of the commodity problems.

Information on these commodities is obtained from many sources.
Primary sources are used to a great extent. These include manufac-
turers, importers, distributors, and others engaged in the trade in
the particular commodity for which information is desired. Infor-
mation is obtained, insofar as practicable, through the fieldwork
method by means of personal interviews and direct examination of
records; through questionnaires and other direct mail inquiries; and
by oral and written testimony submitted to the United States Tariff
Commission in connection with complaints and investigations. Sec-
ondary sources such as official trade statistics and trade periodicals
are also used extensively. In addition other Governmental agencies
cooperate with the Commission and make available to it the large
amount of information which these branches of the Government
collect.
Dissemination of Information.

Commodity information is made available through various chan-
nels. Formal reports to Congress under the general powers of the
United States Tariff Commission have consisted of tariff information
summaries, each of which deals with a specific commodity or related
group of commodities and which presents information with respect
to uses, United States production, imports, exports, tariff history, and
competitive conditions. These summaries were submitted to Congress
during two general tariff revisions, that is, in 1921-22 and 1929-30.
On January 28, 1933, the Senate directed the Commission ^^ to bring
the 1929-30 summaries up to date. Much of this work has been done,
but no formal report thereon has been made to Congress. However,
a large part of the material gathered by the United States Tariff Com-
mission under this resolution has been made available to those con-
cerned with the negotiation of trade agreements and, more recently,
to those concerned with the defense ju-ogram; some of it has been
published in the form of surveys, and digests of information con-
cerning trade agreements. In most cases, commodity digests have
been prepared and published by the Commission aft«r the conclusion
of a trade agreement.

" S. Res. 334, 72d Cong., 2d sess.

CONCENTRATION OF ECONOMIC POWER 175

The digests have as their subject matter the commodities with re-
spect to which the United States granted concessions in trade agree-
ments. The information thus made available is similar to that
contained in the summaries but usually in an abbreviated form and
with, emphasis on the factors pertinent to the concession.

In 1936 the United States Tariff Commission initiated a series of
commodity or industry surveys of commodities or related groups of
commodities important from a tariff point of view.

The basic idea underlying the survey program is that rarely can
the tariff problems of any one commodity be isolated ; other connnodi-
ties must inevitably be drawn into the analysis. Where a producing
industry makes several related products, it is necessary to consider
these products together. Thus, in a survey of the flat glass industry
it is necessary to analyze the production and trade of both plate and
window glass. Then, too, consideration must be given to the raw
materials for the production of the commodity or related commodi-
ties. Thus, imports of some raw materials used in making synthetic
resins are important, whereas imports of the finished products are
not. It is conceivable that a change in the tariff status of a raw mate-
rial in relation to that of the finished product would greatly affect
trade. Finally, the possibility of substitution of one commodity for
another is of importance in any analysis of the effects of the tariff
upon trade. For example, one chemical would be substituted for an-
other in some applications should there occur any change in tariff
status affecting price.

Each survey presents statistical and other factual material required
for the analyses outlined above. The commodities and their uses are
described; statistics on United States and foreign production and
trade are given ; the industries and markets in this country and abroad
are discussed, together with the factors affecting trade, such as cartels
and export subsidies. Each survey, therefore, constitutes a significant
contribution to the knowledge of the subject, particularly where the
material was obtained largely by direct investigation.

In addition to the above reports of the United States Tariff Com-
mission, investigations and reports on specific commodities are made
from time to time in response to congressional resolutions. Further-
more, many reports have been issued under more specific powers of
the Commission. For example, in carrying out its functions under
the "flexible provision" (sec. 336 of the Tariff Act of 1930) the Com-
mission ascertains the costs of production of similar domestic and
imported commodities and reports the differences to the President.
These differences constitute the basis for changes in tariff rates. The
reports thus issued contain much commodity information, particularly
on costs of production and factors affecting costs.

The reports of the United States Tariff Commission, particularly
under its general powers, are widely distributed and are used not onlj?
by members of Congress and by the President, for whom they are
primarily intended, but also by th.e general public. In addition the
Commission, through correspondence and interviews, is constantly
supplying information on commodities to individuals and organiza-
tions interested in import problems.

UNITED STATES TKEASURY DEPARTMENT
PROCUREMENT DIVISION

The Procurement Division of the United States Treasury Depart-
ment is responsible for the determination of policies and methods of
procurement, warehousing, and distribution of property, facilities,
improvem.ents, machinery, equipment, stores, and supplies.

Those branches of this office which deal with the standardization,
specification, and inspection activities are (1) the Contract and Pur-
chase Branch, and (2) the Stores and Operation Branch. The vari-
ous subordinate sections more definitely involved in developing the
three functions cited fall under these two branches.

Standardization.

Standardization is an element considered in the operation of each
specification. It is fundamental that the statement of quality shall
be limited to that which is appropriate and necessary to the require-
ments to be served. That is to say, if a study of a need discloses that
the quality originally indicated is deficient or unnecessarily high for
the purpose to be servedj revision of the specification upward or down-
ward to the level of the requirements, is in order.

The chief responsibility for promoting standardization in procure-
ment work centers in the Federal Specifications Division of the
Contract and Purchase Branch. It should be pointed out, however,
that the members of the administrative staff and the various operating
units of the Procurement Division contribute, from their respective
viewpoints as occasion arises, suggestions as to the need for an addi-
tional specification, or toward the improvement of an existing one,
or to other possibilities of improving standardization. Thus, an
interpretation of the provisions of a specification by the Inspection
Division, also of the Contract and Purchase Branch, to a vendor in
connection with the adjustment of a rejected delivery, may indicate
that a difficulty arose as a result of ambiguous language in the specifica-
tion, or it may disclose that provisions for packing, appropriate when
the specification was prepared, are no longer practicable because of
new practices generally adopted in the industry. Such information
may also be collected by the various administrative or purchasing
officers in the course of their duties, or through the activities of the
supervisory personnel in the Warehouse Division of the Stores and
Operation Branch.

Reports reflecting the need or opportunity for improvements are
submitted and are made the subject of study for the purpose of
correcting obsolete provisions, ambiguous language, modifying or
extending the scope of existing specifications or introducing new ones.

Specifications.

Three types of specifications are developed in the Procurement
Division :
176

CONCENTRATION OF ECONOMIC POWER J 77

1. A Federal Specification which is a formally approved stand-
ard of quality and essential characteristics (design, dimensions,
composition, physical and chemical requirements, workmanship,
finish, performance, etc. ) of a material, article, or piece of equip-
ment desired for a particular use by two or more departments or
establishments of the Federal Government.

2. A Federal Procurement Division Specification, which is a
formally approved standard of quality and essential character-
istics of a commodity to be incorporated in an invitation to bid
issued by the Procurement Division.

3. A "specification" used in the Procurement Division, which
covers an item not covered by a Federal Specification and repre-
sents a commodity not in sufficient current demand to justify the
development of a Federal Procurement Division Specification.
It is referred to merely as "specification."

Preparation of Federal Specifications.

With the installation of the Bureau of the Budget in 1921, it was
considered to be desirable to prepare standardized purchase specifica-
tions for many of the commonly used articles purchased by the Federal
Government; and the Federal Specifications Board was established
for that purpose by Circular No. 42 of the Bureau of the Budget,
dated October 10, 1921, which was issued by the Director of the Bureau
of the Budget, hy authority of the President. The Board functioned
under the Clrief Coordinator, whose office was also set up by Executive
order; each department and establishment purchasing materials and
supplies in accordance with specifications, designating a representative
to serve as a member of the Board. The chairman ex officio was the
Director of the National Bureau of Standards. Technical committees
were formed, composed of qualified representatives from the various
branches of the Government, to formulate the specifications. These
specifications, after consultation with the interested industries, were
submitted to the departments for comment and criticism, and after
consideration of these comments by the technical committees, were
approved and promulgated by the Federal Specifications Board. On
June 10, 1933, the Federal Specifications Board and several other
interdepartmental boards were transferred to the jurisdiction of the
newly established Procurement Division, United States Treasury
Department. The Federal Specifications Board and several other
activities of the Government were abolished by the order of the execu-
tive director of the National Emergency Council dated January 24,
1935.

To take the place of the former Federal Specifications Board mem-
bers, the Director of Procurement, United States Treasury Depart-
ment, requested the head of each department and establishment to
designate a technical liaison with whom the Procurement Division
was to collaborate, for that department or establishment, on technical
matters. There was also 'established a Federal Specifications Execu-
tive Committee, consisting of the Director of the National Bureau of
Standards, chairman ; the technical assistant to the assistant director
of Procurement Division, vice-chairman; the assistant chief. Speci-
fications Division of the Procurement Division, technical secretary;
and the technical liaisons from the Navy Department, War Depart-
ment, the Department of Agriculture, the Post Office Department, and

178

CONCE^'TRATION OP ECONOMIC POWER

Veterans' Administration. Technical committees were formed, com-
posed of specialists from the various branches of the Government.

There are 70 interdepartmental technical committees on Federal
Specifications covering the following groups of materials :

Abrasives and polishing materials.

Acoustical correction materials.

Appliances, mechanical and electrical.

Ball and roller bearings.

Beds and bunks.

Brake linings.

Brick and building tile.

Brushes and brooms.

Builders' and miscellaneous hardware.

Cement, lime, and plaster.

Chemical products.

Color.

Cordage.

Detergents.

Drafting equipment and supplies.

Electrical supplies.

Feeds and forage.

Fire alarm systems and electric clocks.

Hand fire extinguishers.

Fire extinguishing liquid.

Floor coverings (nontextile).

Floor treatments.

Foundry apparatus and supplies.

Furniture.

Pressure and vacuum gages.

Dimensional gages.

Glassware, chinaware, stoneware.

Hair for mattresses.

Hand tools.

Heat insulating materials.

Inks, typewriter ribbons, and carbon

paper.
Insecticides.
Laundry equipment.
Leather and leather products.
Lubricants and liquid fuels.

Lumber.

Machine screws, bolts and nuts.

Medical and surgical instruments and

supplies.
Metals.

Motor vehicles.
Office supplies.

Packing and gasket materials.
Paints and varnishes.
Paper and paper products.
Photographic supplies.
Pipe and pipe fittings.
Plumbing fixtures.
Provisions.

Refractory materials.
Refrigerators.

Road and paving materials.
Roofing bituminous.
Rubber products.
Safes, burglar resisting.
Safes, fire and petty larceny.
Safety equipment.
Safety walkways.
Screens and screen cloth.
Shipping containers.
Stitches, seams and stitching.
Storage batteries and dry cells.
Surveying instruments.
Tableware and kitchen utensils.
Tents and tent appliances.
Textiles.
Thermometers.
Wearing apparel.
Weighing and measuring devices.
Wire rope.
Wood preservatives.

The procedure for the preparation of Federal Specifications is as
follows: The interdepartmental need of a specification for a given
article or material, for either technical or business reasons, having
been decided upon, the subject is then referred to a technical com-
mittee composed of officially designated representatives from the
various branches of the Government, who are most interested in the
particular subject, for consideration of all existing governmental and
industrial specifications. A specification is selected, or formulated,
which will be suitable for the intended use by all departments and
establishments of the Government. The cooperation and advice of
interested commercial and industrial concerns is requested and their
recommendations are fully considered by the technical committee.
The specification, as tentatively agreed upon by the technical com-
mittee, is then submitted to all departments and establishments of
the Government, through the respective technical liaisons with the
Procurement Division, for comment and criticism. All criticisms
received are referred to the respective technical committee for
consideration.

Specifications submitted in final form by the various technical com-
mittees, after consideration of all comments, are recommended by the

CONCENTRATION OF ECONOMIC POWER ]^79

chairman of the Federal Specifications Executive Committee to the
Director of Procurement for approval, after which they are printed
and officially promulgated by the Director of Procurement for use
by the various agencies of the Government.

In the preparation of Federal Specifications for material, supplies,
and equipment, an effort is made to bring the specifications into
harmony with commercial practice wherever conditions permit, to
establish uniform nomenclature, and to standardize the types, grades,
and sizes of articles purchased by the Government.

Federal Specifications are continually being revised to keep them
abreast of the best current manufacturing practice, and the needs
of the Government. Up to May 15, 1940, 1,292 Federal Specifications
had been promulgated. The procedure of the preparation of
Federal Specifications is shown in chart XI.

An index of Federal Specifications,^^ and also the specifications
listed therein, may be purchased from the Superintendent of Docu-
ments, Government Printing Office, Washington, D. C.

Preparation of Federal Procurement Division Specifications.

Federal Procurement Division Specifications are prepared in the
office of the technical assistant to the assistant director. Procurement
Division, United States Treasury Department. These specifications
are approved by the Director of Procurement, and are primarily for
use by that Department but may be used by any other agency. Pro-
curement Division Specifications frequently are preliminary to a
Federal Specification. Up to May 15, 1940, 190 Federal Procurement
Division Specifications have been issued. These specifications ma}' be
obtained on application to the Director of Procurement, United
States Treasury Department, Washington, D. C.

Inspection.

The inspection activities of the Procurement Division are centered
in the Inspection Division of the Stores and Operation Branch which
inspects, in Washington and as occasion requires in the field, supplies
and materials delivered on Procurement Division order. On request,
it also makes inspections for other governmental agencies. In addi-
tion, it makes or has made tests of samples of materials, supplies, and
equipment submitted with bids to determine whether the samples
comply with the specifications.

When necessary, the Inspection Division investigates requests from
various Federal agencies for clearance to buy in the open market
items listed in the General Schedule of Supplies ^* or carried in tlie
warehouse stock of the Procurement Division. In the event that the
contract or stock items meet all practical requirements of the need,
such clearance to buy in the open market is denied.

The Inspection Division also contributes to the development of neAv
or improved Federal Specifications or Federal Procurement Division
Specifications by recommending the formulation of specifications for

« "Federal Standard Stock Catalog, Section IV, Part I," U. S. Government Printing
Office, Washington. D. C, 1940. 15 cents.

"Tfrm contracts are negotiated by the Procurement Division for many thousands of
items in regular use by several agencies of the Federal Govercrment. These engagements
are usually made for a one year term. Detail as to commodities so placed under contract is
circularized to all Federal agencies for their independent use by a catalog entitled "General
Schedule of Supplies."

180 CONCENTRATION OF ECONOMIC POWER

new items or by suggesting modifications or improvements in existing
specifications. These recommendations and suggestions are, in many
cases, the result of conferences between the Inspection Division and
contractors relative to rejected deliveries. These conferences fre-
quently involve the interpretation by the Inspection Division of the
provisions of the applicable specification. The Inspection Division
also arranges for all technical help necessary for adequate inspection,
either through its own limited facilities or through the laboratories
of the National Bureau of Standards, the United States Department
of Agriculture, or other recognized agencies.

All deliveries made through the Procurement Division Building
are inspected by the Inspection Division. Responsibility for in-
specting deliveries made in the field is generally fixed on the con-
signee but occasionally this Division makes inspections at the ship-
ping point or at the factory.

The Inspection Division maintains a sample room where speci-
mens of items included under General Schedule of Supplies contracts
are stored and kept available for examination of prospective pur-
chasing officers or for purposes of comparison with delivery samples.

The principal function of the Inspection Division is to assure that
all commodities delivered are in conformity with the applicable
specifications. In performing this work it —

1. Receives, records, has custody of, displays, and eventually

disposes of bidders' contractors' samples;

2. Conducts or arranges for tests and prepares reports thereof;

3. Makes qualitative inspections at the Procurement Division

warehouse, at various Treasury a/;d other governmental
agencies, and contractors' storage warehouses in the Wash-
ington area, and occasionally u'^ y- .ints of manufacture or
delivery in the field ;

4. Investigates quality of, and reported deficiencies in, deliveries

to governmental departments and agencies in the Washing-
ton area (principally under General Schedule of Supplies
contracts) ; and

5. Conducts interviews with contractors regarding interpreta-

tion of specifications and kindred matters resulting from
rejected cleliveries or other phases of inspection activity.

Inspection may be either an examination by a qualified individual
or it may require the use of mechanical or chemical facilities in the
laboratory. Many of the items purchased for stock, for instance,
are approved largely on the basis of judgment of qualified inspectors.
This applies particularly to commodities which are bought regularly
and where simple measurement, comparison for color, and examina-
tion as to other qualities by experienced inspectoi-s are adequate
to establish compliance with specifications. However, a field de-
livery of heavy equipment may be tested by a selected engineer as to
general fulfillment of specifications, including a performance test;
or experts may be sent to inspect a large order of furniture or
textiles in process at the factory or mill.

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VETERANS' ADMINISTRATION

The Veterans' Administration uses Federal Specifications in all its
purchases of supplies and equipment, where its needs are satisfac-
torily met by purchasing items covered by such specifications. It
is estimated that 35 percent of the purchases by the Veterans' Ad-
ministration are made on Federal Specifications and 65 percent on
specifications prepared by the Veterans' Administration. In the
subsistence group, 98 percent of the purchases are made on Federal
Specifications and 2 percent on specifications prepared by the Ad-
ministration.

In the prejjaration of specifications by the Veterans' Administra-
tion, standardization is an element considered in all instances. The
method followed in such cases is the development of requirements
of interested services of the Veterans' Administration with the ex-
perts in the particular field. The specifications are pi-epared jointly
by the interested service and the supply service. The supply service is
under a director wlio is responsible for purchase, storage, and dis-
tribution of all supplies and equipment for all Veterans' Adminis-
tration activities; accountability for all GoV^rnment property and
auditing of property accounts; operation and management of supply
depots; and contracts, leases, nnd agreements for all Veterans' Ad-
ministration activities, except construction contracts.

The Veterans' Administration prepares its own specifications on
the following kinds and tj'pes of equipment and supplies :

OcrnpatiouMl therapy cqnipnieut and supplies: physiotherapy equipment; X-ray
equipment and supplies; dental ecjuipnient and supplies; hospital furniture and
equipment; hand tools; machine shop equipment (metal working), machinery
(woodworking): agricultural implements, machinery and supplies; rug wash-
ing machines; wall washing machines: tire engines and tire fighting equipment
and supplies: electrical and engineering equipment and supplies: plumbing
equipment and iimcliinery ; heating and ventilating equipment and sup-
plies; electrical appliances and supplies; motortrucks (developed from basic
Federal Specifications); tractors: motor passenger vehicles: hand trucks (all
types); pumps: boiler room equipment: builders' machinery and etpiipment;
paint spraying equipment and supplies: radio receiving and voii'e transmis-
sion e(iuipment : gasoline engines; gasoline pumps and storage tanks; oil
storage tanks; hydraulic lifts (auto); hydraulic lifts (dimnage) ; air com-
pressors (garage); sewing machines: shoe repair machinery and equipment;
garage equipment; laundry machinery and equipment: casters, bed and truck;
warehouse platform scales (built in) ; red rope folders; forms, continuous roll
and folded type; tabulating cards; smoking tobacco; suits and overcoats; food
supplies.

Inspection and Test.

In connection with the inspection of the above listed supplies or
equipment purchased by the Veterans' Administration, the facilities
of the National Bureau of Standards; Navy Inspection Service;
Naval Supply Depot at Brooklyn ; United States Government Print-
ing 'Office; Agricultural Marketing Service, United States Depart-
ment of Agriculture; Food and Drug Administration, Federal Se-

181

272,496 — 41 — No. 24 13

132 CONCENTRATION OF ECONOMIC POWER

curity Agency ; Director of Mint ; and the War Department are used
for this purpose.

The Veterans' Administration is represented on the Federal Spec-
ifications Executive Committee.

In addition to the above, acting independently of the supply service
is the Construction Service of the Veterans' Administration.

The Construction Service is under a director who is responsible for
preliminary inspection and engineering work in connection with the
selection of sites for new hospitals, homes, and other facilities;
preparation of plans, specifications, and estimates covering construc-
tion, alterations, and repair of plants and equipment, and supervision
of performance of such work; maintenance of contact with other
services, Government departments and agencies to provide facilities as
and when required for service ; construction contracts ; supervision of
the maintenance of buildings, grounds, and mechanical equipment
under the control of the 'Veterans' Administration, including motor
transportation; and general supervision of maintenance and opera-
tion of utilities, heating, lighting, electric power, plumbing, sewage
and refuse disposal, water supply, fire protection, refrigerating plants,
carpentry, laundry, and telephones. In order to insure the incorpora-
tion and utilization of materials of known value in structures erected
by the Administration, the Construction Service prepares specifica-
tions for materials to be used in those cases where existing Federal
Specifications are not applicable. The materials required by these
specifications are those which through prior usage by the Veterans'
Administration are known to be satisfactory or those on which satis-
factory reports have been obtained. The contractor is required to
submit samples of all materials used in the structures to the Construc-
tion Service for testing. A major part of the tests of the materials
submitted are made in the laboratory of the Construction Service and
tests of materials for which the Veterans' Administration laboratory
is not equipped, such as acoustical materials, insulating materials and
compression tests on masonry materials, are made by the National
Bureau of Standards. In addition, occasional tests and inspections
are made by the Upited States Navy Department; Bureau of Mines;
Public Roads Administration, Federal Works Agency; and private
laboratories, on materials used in construction.

UNITED STATES WAR DEPARTMENT

Character of Equipment and Supplies.

The great majority of military equipment is noncommercial and
has no counterpart in the market. Even such apparently common
articles as tlotliing and blankets differ from those ordinarily found
in the market, particularly for use in the field. It is therefore
necessary that suitable articles of equipment and supply be developed
by the technical services of the Army. Satisfactory performance at
an economical initial and maintenance cost is an important factor.

Quantities of supplies identical with or very similar to those on
the market are also used. These include such articles as food, some
articles of clotliing, rope, forage, brushes, construction materials,
refrigerating equipment, hand tools, drugs and medical supplies,
photographic supplies, toilet articles and the like.

The Army is a user of goods rather than a producer. Its few
manufacturing arsenals and depots can produce only about 10 per-
cent of war aupply requirements of military noncommercial articles.
These establishments are most important as centers of technical in-
formation concerning the development and manufacture of military
equipment. Their production capacity is relatively small, but serves
to develop manufacturing processes for items of military equipment,
not commonly produced by industry, which may be used in the event
that quantity production is required.

Sfandardizadon of Equipment amd Supplies.

As applied to the military service, the term "Standardization" in-
cludes not only the decision as to what is the most advanced and satis-
factory type of article of equipment and supply, but applies also to
the procedure for selection of the article and specific type to be used.
Insofar as possible the basic quality and dimensional standards
adopted by industry are followed in the design of all articles of mili-
tary equipment.

A standard article is simply the best that can be devised at the time.
Improvement and development are desired but the standard article is
changed only for good reasons and after detailed study and test.

The selection of a standard article of military equipment and supply
involves the type needed, the design, the development, and the specifi-
cation for quantity production. These steps are shown in chart XII.

The preparation of military characteristics, development of articles
and decision as to suitability of an article for military use, are func-
tions of the General Staflf, and the using supply arms and services.
The final decision as to the adoption of a type is a function of the
General Staff.

The Assistant Secretary of War is charged with the supervision of
procurement. The supply arms and services develop and procure the
necessary supplies. They are the Air Corps, Chemical Warfare Serv-

183

184 CONCENTRATION OF ECONOMIC POWER

ice, Coast Artillery, Corps of Engineers, Medical Department, Ord-
nance Department, Signal Corps, and Quartermaster Corps.

The need for a new article or change in an existing article of equip-
ment or supply usually arises in a using arm or service.

When the necessity for an article is determined, the using arm states
the need to the supply service charged with its development and pro-
curement. The supply service then prepares the military character-
istics in cooperation with the using arm, and forwards them to the
Secretary of War for consideration by the General Staff. Upon ap-
proval, the supply service institutes a development project and pre-
pares the design or other technical data required, which is concurred
in by the using arms and services. Models or samples are then pro-
cured, either from a manufacturing arsenal or depot, or from industry.
Tests are made by the supply service and using arm, to determine the
technical suitability of the article and to eliminate obvious defects and
flaws. If these experimental tests are satisfactory, a request will be
forwarded to the Secretary of War for consideration of the General
Staff, for authority to procure a small quantity sufficient for extended
service test. This small number is then issued to units of the using
arm for tests under field conditions. If the results are favorable,
the procuring supply arm or service, with the concurrence of the using
arm, recommends that the article be adopted as standard for the Army.
Regulations emphasize that throughout all stages of development work
the adaptability of the article to quantity production in an emergency
will be an important element of the design. The recommendation for
adoption is forwarded to The Assistant Secretary of War for clearance
for procurement, since he is charged with the supervision of activities
concerning the assurance that items of equipment, insofar as is prac-
ticable, are made from commercial materials by commercial processes
and adapted to mass production. After approval by The Assistant
Secretary of War ancl by the General Staff, it is then reported as a
standard article of equipment and supply for the Army, and the sup-
ply arm or service completes the drawings and specifications for
quantity production.

In the case of the army blanket, a definite size, color, weave, and
wool content most suitable for warmth, light in weight and service-
able, but not expensive, is desired. The selection of the standard
army blanket by the steps outlined above, assured the adoption of
the most suitable type available.

Specifieations.

The Assistant Secretary of War is charged by regulation "with
the supervision of activities concerning the preparation of specifica-
tions and the progress of the work." Specifications are prepared by
the supply arms and services for the articles which they procure. A
specification is defined in Army Regulations as "a clear and accurate
description of a material, an article, or service, which it is necessary
to procure and the procedure which the purchaser will follow to
satisfy himself that the requirements of the specification have been
complied with." A specification should be complete. It must cover
all requirements either directly or by reference to other specificfffions.
It should omit matter covered by notes on drawings which form part
of the specification. It should not contain matter contradictory to
specifications referred to as applicable. The preparation of a satis-

U. S. War Department
Steps in Development and Standardization

General
Staff

Assistant
Secretary
of War

Using
Arm

Supply Arm
or Service

1. Requests new item of equipment (a "required Type").

2. Coordinates statement of required militory characteristics.

3. Approves requirement — Authorizes development.

4. Develops and designs, Using Arm concurring.

5. Purchases or manufactures experimental models.

6. Conducts technical tests of experimental models.

7. Tests experimental models.

8. Recommends procurement of small quantity for extended service test.

9. Approves procurement for service test.
10. Procures small quantity for service test.
I I . Conducts extended service test.

12. Recommends adoption as "Standard."
I 3. Approves for procurement.

14. Approves as "Standard."

15. Enters in Boole of Standards, completes drawings and specifications.

1 6. Approves U. S. Army Specification.

CONCENTRATION OF ECONOMIC POWER 185

factory speci-fication is a difficult job. It must meet the requirements
for the article, and it must be satisfactory for procurement.

The kinds of specifications used by the Army for procurement
are —

Federal Specification.

United States Army Specification.

United States Army Tentative Specification.

Army-Navy Aeronautical Specification.

United States Navy Specification.

Federal Specifications.

Generally they are intended to cover items of material or supply
nonmilitary in character, that are commonly procured by two or more
Government departments.

The Office of the Assistant Secretary of War acts as a clearing-
house for all War Department administrative activities concerned
with the preparation, acceptance, rejection, or revision of Federal
Specifications. A member of his office represents the War Depart-
ment on the Federal Specifications Executive Committee. His office
arranges for War Department representation on technical commit-
tees, charged with or engaged in preparation of specifications of
interest to the War Department. The War Department members
of these technical committees are appointed from the supply arms
and services having paramount interest in the item, as recommended
by the chief of the supply arm or service concerned. Proposed Fed-
eral Specifications, amendments, and revisions to existing Federal
Specifications are referred by the Office of the Assistant Secretary
of War to the chief of the supply arm or service, who would ordi-
narily prepare a United States Anny Specification for the same item.
He coordinates the specification with all other interested supply arms
and services and recommends to the Assistant Secretary of War
the War Departments action. The Office of the Assistant Secretary
of War then completes the action for the War Department on the
specification and refTirns it to the Federal Specifications Executive
Committee.

The War Department is represented on a large majority of the 70
technical committees preparing Federal Specifications.

United States Army Sfecif-cations.

These are prepared by the supply arms and services for all standard
articles of equipment and supply, and materials used in the con-
struction of such standard articles, if such materials cannot be ade-
quately described in the specification for the articles themselves.
Their use is mandatory for all purchasing agencies of the War
Department. The existence of an applicable Federal Specification
renders the preparation of the corresponding United States Army
Specification unnecessary.

The supervision of activities in the preparation of United States
Army Specifications is carried out by the Assistant Secretary of War
through the Standards Division of his office. His office acts in an
administrative and policy forming capacity. It prescribes how a spec-
ification should be prepared, how and from whom concurrences are
to be secured, and how assurance will be obtained that the specification
is adapted to commercial manufacturing methods and mass produc-
tion. A specification submitted for clearance is accompanied by data

186 CONCENTRATION OF ECONOMIC POWER

which will indicate its acceptability under policies of the War Depart-
ment.

The specification nnist adhere to the military characteristics ap-
proved for the item by the General Staff. Throughout the develop-
ment of the item, its adaptability to quantity production must be a
matter of continuous consideration. It is a policy of the War Depart-
ment to require the adoption of standard commercial items, or their
adaptation with the fewest practicable modifications. The design of
the item, and its subsequent tests are matters which determine the
suitability of the item. They constitute the framework around which
the specification is written. Every specification after it is written must
be coordinated with other interested arms and services of the War De-
partment before submission to the Assistant Secretary of War. This
serves as a check of correctness, and also to unify as far as practicable
the specifications used in common by two or more supply arms and
services.

A specification submitted for clearance is accompanied by data to
show that the item is an adopted standard. Information is furnished
as to whether the specification is restrictive in any way that might
curtail production, or which might give one or more manufacturers an
advantage in the field of competition, and whether industry has been
consulted in its preparation.

Information is also required as to any features which have been
commented upon unfavorably by industry, but which are deemed essen-
tial for retention in the specification in order to meet the prescribed
military characteristics.

If a specification is satisfactory to the using or interested arm or
service, if it contains no restrictive features, and if it is acceptable to
industry, it can be and is cleared promptly for procurement purposes.
This clearance makes it a United States Army Specification and it is
listed in the Index, an annual publication listing United States Army
Specifications and Federal Specifications used by the Army, which
may be purchased from the Superintendent of Documents, Washing-
ton, D. C. The Index lists over 4,000 United States Army
Specifications.

The revision or cancelation of United States Army Specifications is
accomplished generally by the same coordinating process that governs
the clearance of an original specification. Cancelation normally be-
comes necessary when the item is made obsolete or when the specifica-
tion is superseded by an applicable Federal Specification. This work
of revising specifications requires almost as much time and effort on
the part of supply arms and services as does the preparation of new
specifications. Standards do not remain the same over a given period
of time. Improvements in design of military equipment and changing
methods of commercial manufacture are constantly taking place which
require modifications in specifications. Where these modifications are
important ones, the revision of existing specifications becomes neces-
sary and is accomplished by the preparation of an entirely new speci-
fication to supersede the old one. However, if only a minor change is
involved, this does not require complete revision of a specification, but
is published in the form of an amendment which becomes a part of the
specification until it is revised. Supply arms and services are author-
ized to prepare and use amendments without the approval of the
Assistant Secretary of War's office.

CONCENTRATION OF ECONOMIC POWER 187

Several specifications may be necessary for one item in order to
cover all the elements required for its manufacture. In some cases
one specification may cover several items. That is particularly so
in the case of drugs where the standard is established by the United
States Pharmacopoeia.
United States Army Tentative Speciflcatijons.

United States Army Tentative Specifications are prepared and used
by the supply arms and services. They are authorized for two
purposes —

{a) To cover the purchase of articles required only occasionally
or for temporary peacetime use.

(6) To test the procurability of a specification when it appears
desirable to do so before preparing it in the form of a United
States Army Specification.

They are not required to be submitted to the office of the Assistant
Secretary of War for clearance or for any other action. No record of
them is kept except with the supplj^ arm or service that prepared them.
Tentative specifications show in their title the name of the service .
which prepared them instead of the title "U. S. Anny Tentative
Specification.''

There. is one instance, however, where a tentative specification is
used in a different way than just mentioned. This relates to the pur-
chase of motor vehicles. Because of annual purchase and varieties of
motor vehicles developed by industry, standardization of motor vehi-
cles is limited to the approved military characteristics for certain
definite capacities and performance. Consequently, motor vehicles
during any one fiscal year are purchased under tentative specifications
which are written around these military characteristics. Because of
the volume and importance of this type of purchase, the Assistant Sec-
retary of War made an exception to the usual practice, and requires
in the case of tentative specifications for motor vehicles that they be
cleared through his office in the same way as United States Army
Specifications.

Army -Navy Aeronautical Specifications.

The Aeronautical Board, made up of representatives of the Army
and the Navy, has for several years been engaged in standardization
of Army and Navy aeronautical material. The Board is now preparing
joint specifications for material. They are mandatory in the War
Department for use in the procurement of aeronautical material and
supplies.

United States Navy Specifications.

Their use is encouraged wherever applicable, and in the absence of
a United States Army Specification or Federal Specification, in order
to avoid duplication of effort.

LiaisonWUh Other Technical Agencies on Standards.

Contact between the Army and certain national agencies concerned
with the promotion of standards for commercial materials and prac-
tices is maintained by The Assistant Secretary of War.

The most important of these are the American Standards Associa-
tion, and two divisions of the National Bureau of Standards, Depart-
ment of Commerce, namely, the Division of Simplified Practice and

|§g CONCENTRATION OF ECONOMIC POWER

the Division of Trade Standards. The Assistant Secretary of War
arran<jes the necessary War Department representation on the work-
ing committees of these national organizations and indicates the
agreement or recommendation of the War Department on a proposed
standard or practice. The administrative procedure by which this is
done is similar to that previously mentioned in connection with the
clearance of Federal Specifications. In addition, the supply arms and
services maintain contact with many technical societies engaged in
standardization work, in order to keep abreast of current practices
and adopted standards. By utilizing applicable standards and sim-
plified practices of these general standardizing agencies and of numer-
ous technical and trade organizations, chiefs of supply arms and
services may improve the specifications as well as reduce the difficulties
of procurement.

Inspection and Test.

The inspection and test of supplies for conformance with specifica-
tions is decentralized in the War Department. The chiefs of supply
arms and services are responsible for the proper inspection of all
supplies manufactured or procured by them or by those under their
control. Contracting officers of the supply services are in turn held
responsible for inspection in accordance with instructions issued by
the chiefs of their respective services or higher authority.

Contracting officers at field establishments (arsenals, depots, and
military posts) are required to provide for the necessary inspection
on contracts made by them or, as in some supply arms or services,
inspection may be made by field inspection officers established in other
locations. Depending upon the type of article being procured, and
circumstances surrounding the purchase and delivery, final inspection
may be either at point of manufacture or at point of delivery. Nor-
mally, laboratory tests, when required, and some functioning tests,
are made at these field establishments. However, if suitable facilities
to conduct the tests required are not available at these establishments,
the services of the National Bureau of Standards may be requested.

The Field Inspection Service of the Navy Department, as well as
the services of certain other Federal departments, are also available
and made some inspection of supplies for the War Department. The
"Directory of Inspection Services and Testing Laboratories of the
Federal Government," compiled in 1935 by the Procurement Division,
Treasury Department, and the National Bureau of Standards, lists
these Federal facilities for the use of Government purchasing and
contracting officers.
Research.

The activities of the War Department in basic research are decen-
tralized to the supply arms and services. Each service conducts
research applicable to' the articles of military equipment whicli the
service supplies to the Army. Basic research is confined, principally
to that carried out in fields not overlapping those in which scientific
research is being conducted. Each service maintains laboratories,
where activities are directed toward technical research with the pri-
mary purpose of applying scientific principles to the solution of their
particular problems, and adapting results attained by scientists,
throughout the country to design of military equipment.

CHAPTER III

STANDARDIZATION AND LABELING ACTIVITIES OF
PRIVATE AGENCIES

In addition to the activities of the Federal Government in the field
of standardization, a considerable amount of work in this field is being
done by individual companies, trade associations, and technical and
professional societies.

An individual company may use purchase or test specifications for
the products the company buys, or company standards or specifications
for the products the company manufactures or sells. Some trade asso-
ciations have set up standards, recommended practices and the like for
the voluntary use of their membership. Technical and professional
societies have established standards for raw materials, finished prod-
ucts, processes, construction, and performance. Some of these stand-
ards are Jiationally recognized.

A number of trade associations and technical and professional socie-
ties make use of certification systems, labels and approval media to
identify the products conforming to the standards adopted by such
organizations.

The description of standardization activities of some private com-
panies, trade associations, and technical and professional societies will
serve to illustrate the methods and procedures used by them.

189

STANDARDIZATION ACTIVITIES OF INDIVIDUAL
COMPANIES

The manufacturing industry is confronted with a double problem :
The manufacture of standard articles for mass production, and the
manufacture of special articles to satisfy the particular requirements
of a customer.

The question of short-time deliveries is playing such an important
role that the manufacturer ought to be prepared, in accepting an order,
to make the engineering design and the drawings, and furnish the
shop with the necessary manufacturing information — all in a very
short time.

The shop must order the material ; the rate department must estab-
lish the rate for each operation involved during the manufacture of
the article; the time and pay roll departments must determine the
amount of money to be paid to the workman ; and the cost department
must calculate the cost of the finished product.

In order to accomplish this in a short time, all the operations in each
department must be performed in a methodic and efficient way, so that
overlapping and lost motion may be avoided. Close interrelation
between the engineering, production, rate, and cost departments of a
company must be established.

When manufacturing special articles, provision must be made for
using the maximum number of standard parts available and for mak-
ing special parts only when necessary. Standard parts eliminate dupli-
cation, lower production costs, and speed output in manufacturing.

When parts are standardized, they can be manufactured in great
quantities, can be tool made when it is economical to do so, and most
of the material can be kept in stock. This is not only profitable to the
manufacturer, but ultimately also to the consumer. Standardization
helps the worker on the bench to increase his efficiency, by working with
the same material, by following the same assembly instructions, and by
reading the same drawings. It permits the design engineer to deter-
mine readily what standard parts can be used when handling a special
order.

The introduction of company standards facilitates the work of the
engineering, rate, cost, and other departments. Some of the results
obtained at the Sharon plant of the Westinghouse Electric & Manu-
facturing Co., where a system of company standards was developed by
the author, are summarized as follows:

Engineering department: Number of design specifications, for each line of
apparatus, reduced from several liundred to only three design si«?ciflcations.

Rate department : Set-up of standard time values made up once and for all,
except for adjustments. The number of rate cards at the time of revision in
September 1931, reduced from 11,000 to 600.

Cost department : Standard cost calculated once and for all, except for revision.
The number of design specifications and rate cards required for this purpose is
exceedingly small.^

^ "Industrial Standardization Proves Profitable to Manufacturer and Ultimately to Con-
sumer," by S. P. Kaidanovsky, Industrial Standardization and Commercial Standards
Monthly, vol. 6 (10), p. 281, October 1935.

190

CONCENTRATION OF ECONOMIC POWER 191

Company standards are sometimes referred to as "internal stand-
ards" as distinguished from "external standards," such as those estab-
lished by an entire industry, a technical or professional society, or
the Government. However, every well organized company standards
program makes use of external standards. In fact, company stand-
ards and external standards are very often interrelated. An attempt
to develop a company standard frequently indicates the desirability
of an external standard of Nation-wide scope, and conversely, a knowl-
edge of existing company standards assists a particular committee in
drafting acceptable external standards.

The following description of the standardization activities of the
General Electric Co., the Detroit Edison Co., the Bausch & Lomb
Optical Co., and that of 12 company members of the Associated
Grocery Manufacturers of America, Inc.,. may serve to illustrate
methods and procedures used in company stlandardization.

The General Electric Co.

The standards department of the General Electric Co., Schenectady,
N. Y., was organized in 1938 to coordinate the company's standardiza-
tion activities. This department cooperates with various organiza-
tions establishing standards, such as the American Institute of Elec-
trical Engineers, the American Standards Association, the American
Society of Mechanical Engineers, the American Society for Testing
Materials, the Edison Electric Institute, the National Electrical Manu-
facturers' Association, and the National Fire Protection Association.

The principal functious of the Standards Department in the development of
internal or company standards are to follow outside standardization activities,
assemble best information available on any specific subject, initiate new stand-
ards where necessary, advise standardizing committees, coordinate work where
more than one group or committee is involved, and edit and publish company
standards that are adopted.^

The General Electric Co. has established a number of specific
standards committees, but when there is no appropriate committee to
which a problem may be assigned, it is referred to an appropriate
general committee.

The consideration of a company standard may be suggested by a
design or manufacturing department, a particular committee, the
standards department, or by a standardizing agency. Before adop-
tion, the approval of the interested committee or committees is re-
quired. This system provides for adequate representation and close
cooperation between different departments.

General Electric (G. E.) standards are published as recommended
practices in a series ,of G. E. ./ andards books, classified according to
subject and use.

When test methods of the American Society for Testing Materials
(A. S. T. M.) are available they are used, otherwise a required test
method is developed by the General Electric Co. These methods are
assembled in a G. E. test methods book.

Little or no attempt is made by the General Electric Co. to enforce
company standards. All G. E. standards are of a temporary nature
and. are constantly subject to revision in the interest of economy and
progress.

* "How standardization Works at General Electric," by H. W. Samson, Indus
•ardlzation and Commercial Standards Monthly, vol. 13 (3), p. 65, March 1939.

192 CONCENTRATION OF ECONOMIC POWER

The Detroit Edison Co.

The materials standardization program of the Detroit Edison Co.,
a public utility, Detroit, Mich., began in 1932. This company
adopted a committee standardization system wherein all departments
participated in a formulation and use of standards.

A main standardization committee, composed of the chief engineer,
acting as the chairman, the general storekeeper, and purchasing agent,
was appointed to outline the general policies of standardization and to
appoint subcormnittees to work on sj)ecific problems. This main com-
mittee adopted the following objectives :

1. Establishment of o classification of all materials and equipment.

2. Use of a standard terminology in the description of all materials.

3. Establishment of adequate specifications.

4. Reduction of the number of different items purchased and used by the
elimination of superfluous types and sizes.

5. Coordination of decisions and A. S. A. (American Standards Association)
and other national standards. ^

A classification subcommittee grouped all items of materials and
equipment into 65 main classes, and further divided them into 353
subclasses of related items. A scope subcommittee then determined
those classes which would justify further research. Subcommittees,
including representatives from the stores, purchasing, engineering,
and, the using departments, were set up by the main committee to
investigate the classes to receive special study. The objectives of
these subcommittees were mainly: Eliminating duplication, obsolete
materials, and unnecessary types and sizes; replacing items made to
special design with national or industry standards; recommending
substitutes which make for better construction or lower cost; writing
new specifications when necessary; and setting up standard
terminology.

In pursuing these objectives, existing applicable standards were
studied. These studies resulted in the publication of a Standards
Catalog listing both stock and nonstock standard items and containing
other pertinent information.

The enforcement of a standard adopted by the company is not dif-
ficult, since every department or interested group participates in its
formulation. The actual enforcement, however, is a function of the
purchasing department. The buyers of the purchasing department
are governed by these policies :

1. Complete elimination of the purchase and use of nonstandard items is not
desirable but their indiscriminate use should be eliminated.

2. A requisitioner should not have to wait for committee action before procuring
a nonstandard Item.

3. New materials and methods should be continually tried so as to keep the
company up to date.'

In order that the standards may not become too fixed and thus pre-
vent progress, each subcommittee occasionally reviews the purchases
under its jurisdiction.

The Bausch <£' Lomh Optical Co.

The Bausch & Lomb Optical Co., Rochester, 'N. Y., established a
permanent committee, during 1935, to study material specifications.
This committee was organized to —

" "The Detroit Edison Co. Standardize.'! Its Materials." by Arthur J. Beck, Industrial
Standardization and Commercial Standards Monthly, vol. 10 (7), p. 184, July 1939.
« Ibid., p. 185.

CONCENTRATION OF ECONOMIC POWEK ^93

* * * prepare material specifications, to devise a simple code for labeling and
identifying the specifications, and to select additional matei'ials for which the
specifications were to be written * * * to review and analyze specifications
as written, indicate those materials requiring testing, act on the acceptance of
final specifications, and submit them to the management."

The committee is composed of four permanent members: The as-
sistant to the works manager, acting as chairman ; the purchasing
agent ; the head research chemist ; and a representative of the engineer-
ing department. Other members, specialists in their field, assist this
group. This committee designates subcommittees to work on specific
problems. Two n.embers of the materials standards department are
permanently assigned to edit specifications.

The materials investigated for standardization by the Bausch &
Lomb Optical Co. are covered by material purchase specifications and
approved material forms.

All material purchase specifications follow the same general outline : (o) Scope,
(&) a general paragraph describing the material and how it is to be used, (c)

chemical properties, (d) physical properties, (e) material and manufacture,
if) finish, (g) size, (h) tolerances, (i) packing, (;) marking and labeling, (fc)

testing and inspecting, (l) rejection. * * *

The approved material forms follow a standard outline covering: (a) Name of

the material, (6) what departments use it and for what purpose, (c) lists of the

suppliers and the particular trade names by which they supply the material,
(d) the characteristics of the material, and (e) the frequency and quantities of

purchase.'

Standard test methods are used in testing purchased materials to
assure their conformity to company material purchase specifications.
American Society for Testing Materials (A. S. T. M.) specifications,
modified A. S. T. M. specifications, various accepted trade practices
and their modifications, and test methods developed by the company
are used in making these tests.

Articles that are reproduced by the Bausch & Lomb Optical Co.
hundreds of times are required to be uniform and to come within
a certain standard of perfection. Group tolerances for lenses have
been arrived at, which are required to be within the limits of varia-
tion suitable to the needs of a particular customer. Spectacle frames
were standardized although many styles, shapes, and sizes are re-
quired to fit the individual.

Compani/ Members of the Associated Grocery Manufacturers of
America^ Ine.
The Associated Grocery Manufacturers of America sent the follow-
ing questionnaire to a few of its nationally known company mem-
bers :

1. In purchasing your raw materials — materials which make up the ingre-
dients of your finished product — what methods or controls are employed by you
to insure uniformity of the quality desired?

2. You manufacture your product to meet certain specifications — what safe-
guards or controls are used by you to guarantee uniformity of production?

3. What safeguards do you employ to assure you that the finished product
meets all specifications and that no defective packages are shipped out?

4. Are you supplying specific information about your product to the public?
What is the nature of this information and how do you pass it on?'

^ "How the Bausch & Lomb Optical Co. Works Out Its Standarrlization Program," by
A. W. Anderson, Industrial Standardization and Commercial Standards Monthly, vol. 9 (9),
p. 201, September 1938.

"Ibid., p. 203.

' Letter by Mr. Paul S. Willis, president. Associated Grocery Manufacturers of America,
Inc., New York City, November 29, 1939.

194 CONCENTRATION OF ECONOMIC POWER

Twelve companies replied to the questionnaire. The replies con-
tained rather detailed descriptions of their respective standardization
activities. The subjects discussed in these replies are here analyzed
according to the following classification : {a) Control of the sources
of raw materials, (h) purchases based on samples, (c) use of pur-
chase specifications, (d) tests before acceptance, (e) manufacturing
specifications, (/) testing of the finished product, (g) packaging
specifications, (h) testing of products after sale, (i) research, {j)
commodity information.

Control of the sources of raio materials. — Control of the sources of
raw materials is exercised by 4 of the 12 companies through close
cooperation with farmers; 2 of these companies furnish seeds to the
farmers and direct the planting and harvesting of the crops.

Purchases based on samples. — Three companies based their pur-
chases on samples subjected to laboratory tests, one of these com-
panies manufactures a small quantity of the product to determine
whether the material under consideration meets the required stand-
ards.

Use of yurchase specifications. — Nine companies purchase their raw
material according to specifications, two of these make use of grades
and standards established by the United States Government.

Tests before acceptance to assure conformity with purchase speci-
fications. — The nine companies purchasing by specifications examine
products before acceptance to determine whether the specifications
have been complied with. In the majority of cases the material is
subjected to laboratory tests. The raw materials of one company
are tested upon receipt : Meats and poultry are inspected, and toma-
toes are graded and inspected by agents of the United States Depart-
ment of Agriculture; raw and canned vegetables are inspected, piece
by piece and grain by grain, by company inspectors. Fruits and
vegetables of another company are examined by graders of the
United States Department of Agriculture. One company has estab-
lished standard test methods for its own use. One company requires
that raw materials not meeting purchase specifications must have the
approval of the company's laboratory before they are used. One
company tests raw material at each manufacturing plant and also
at the central laboratory.

Manufacturing specifications. — The products of all 12 of these
companies are produced accordinj^ to manufacturing and processing
specifications. Intermediate testmg during manufacturing process
is conducted by each company. In one company, inspectors are sta-
tioned at key points and require samples from batches to be taken
hourly for laboratory testing.

Testing of finished product. — Each company examines and tests its
finished product to verify its conformity to manufacturing specifica-
tions. VarioMs tests used include chemical and physical analysis,
study of the product under conditions corresponding to those of con-
sumer use, aging tests, and cooking tests. Four companies, in addi-
tion provide for tests independent of the manufacturing plant; one
of tnese companies maintains a central research laboratory for this
purpose; and in another company, the test results are reported
directly to the home office.

Packaging specifications. — Eight companies package their products
according to company specifications. Containers are filled and pack-

■CONCENTRATION OF ECONOMIC POWER 195

aged automatically in two companies. In the other six, the packages
are tested to ascertain whether they comply with company specifica-
tions.

Inspection of iiroducU after sale. — Three companies purchase mer-
chandise from the grocer's shelves for examination and analysis, one
of these companies supervises, to some extent, the storage of the
products on the shelves of the wholesaler and retailer.

Research. — Four of the 12 companies conduct experimental re-
search for the improvement of the quality of their respective prod-
ucts. An experimental farm is maintained by one company, and a
staff assists farmers in producing raw materials that meet company
standards. Another company maintains a small factory for research
on process standards, and also employs special agents to cooperate
with those upon whom the company is dependent for its raw mate-
rials in an effort to increase their quality.

C ommodity information. — None of the above companies furnish
information regarding their products in. terms of generally recognized
standards or grades. They use various media by Avhich to inform
the public about the desirable characteristics of their different prod-
ucts. Of course, they supply on labels all information required by
legal regulations.

STANDARDIZATION ACTIVITIES OF TRADE
ASSOCIATIONS « '

The Trade Association Survey made by the United States Depart-
ment of Commerce for the Temporary National Economic Committee
secured schedules in 1938 on all types of association activities from
more than 1,300 trade associations of national and interstate scope.
These schedules included questions of "standardization and simpli-
fication" (in this chapter "standardization" includes "simplification"
unless otherwise stated) and "establishment- of quality standards,"
and more than 700 associations replied that they furnished services
to members on one or both of these items. Ahnost 350 associations
also provided a "standard business forms and contracts" service.
Stanclardization is often related to other association activities, such
as trade practices and uniform cost accountinc;, in connection with
the promotion of uniformity in business relationships.

Many trade associations active in the field of standardization also
provide sei*\nces such as inspection, o;rading, certification, labeling,
and guaranteeing; and also conduct technical research and inspection
services dealing not only with the products of the industry itself, but
also with those of other industries, such as raw materials and com-
peting products.

Standardization is especially predominant among activities of man-
ufacturing associations. Industrial standardization consists largely
of singling out specific products and methods which have been found
to be most desirable, and concentrating upon them for the purpose
of obtaining the greatest possible production efficiency. Standard-
ization, however, can include not only products and methods, but
also terms and contract forms.

A trade association can render services to members and the indus-
try in endeavoring to secure uniformity or standardization of —

Nomenclature Packaging Types and patterns

Dimensions Shipping Equipment

Quantity Sales practices Plant lay-out

Quality Trade rules Building codes

Performance Contract forms Safety codes
Test methods

Trade association work in simplification, or the elimination of
unnecessary varieties, can pertain to :

Shapes Conii:)Osition Grades

Sizes Models Quality

Standardization work can bo carried on by any firm and by one or
several trade associations in a particular field. However, most of the
outstanding progress has been brought about through the close coop-
eration of hundreds of trade and professional associations with such

* Material on pp. 196-202 is based on data obtained from the U. S. Department of Com-
merce's report for the Temporary National Economic Committee, known as the "Trade
Association Survey."

196

CONCENTRATION OF ECONOMIC POWER 197

standardizing bodies as the National Bureau of Standards, American
Standards Association, and American Society for Testing Materials.

More than 20 years ago when American industry was mobilized
for World War purposes, various surveys by the War Industries
Board disclosed an over-diversity of products, as well as a vital need
for improved products of highest possible efficiency in the ''Win the
War" emergency program. The War Industries Board insisted upon
immediate standardization in many fields, thus calling for a great
amount of standardization activity by trade associations. It was the
practice of the Board, in most cases, to deal, as far as possible, with
each industry through its national trade association. Drastic reduc-
tions were made in grades, sizes, and styles of products.

After the war, American industry was faced with a status of indus-
trial over-capacity, and manufacturers attempted to increase sales by
featuring new sizes and styles having "individual appeal," claimed to
be improvements over the standardized product. Thus tlie stanclards
movement was retarded in its early growth. It was not long, however,
before the resulting waste became such a burden on many industries
that a united movement was fostered by trade associations, technical
societies, and governmental agencies to stop this undue diversification
trend. Variety is likely to increase most rapidly during a period of
depression, accompanied by a buyers' market. Sales departments like
to feature something "new and different," and this also applies to the
engineering department of a manufacturing firm in the conduct of
its development work. If one company yields to a trend away from
the standardization program advocated by the trade association of
the industry, rival companies are apt to follow as a temporary business
experiment.

The harmful effects of over-diversification were given wide publicity
in the "Waste in Industry" survey by the Committee on Elimination
of Waste in Industry of the Federated American Engineering Socie-
ties, Washington, D. C.,^ made in cooperation with a number of trade
and professional associations and the United States Department of
Commerce. About this time aid to industrial standardization and
simplification by the present National Bureau of Standards was
started, and the Federal Specifications Board was established.

In 1921 the Secretary of Commerce set up the present Division of
Simplified Practice and, in 1923, the Division of Codes and Specifica-
tions within the National Bureau of Standards.

Surveys of Sta\ndardization. Activities of Trade Associatiom.

In 1927 a survey by the American Trade Association Executives ^°
indicated that 40 percent of a representative group of associations
were by then providing standardization and simplification services to
their members.

A Federal Trade Commission study ^^ of the activities of over 700
associations of manufacturers and contractors for the period 1926-28

9 "Waste in Industry." by Committee on Elimination of Waste in Industry of the Fed-
erated American Ensinerinsr Societies, 400 pp.. ^McGraw-Hill Rook Co.. Inc., New York Citv.
cl921 (by American Engineerins: Council). (Tlie American Ensineerins; Council is tbe
executive body of the Federated Ameiloan Engineerins Societies.)

1" "American Trade Association Executives: Proceedings and Addresses, Eighth Annual
Convention." pp. 224-225, West Baden Sprinss. Ind.. October 6, 7. 8. 1927.

""Open Price Trade Associations," 70tb Cong., 2d sess., S. Doc. 226, pp. 29-35, Govern-
ment Printing Office, Washington, D. C, 1920.

272406— 41— No. 24 14

198 CONCEXTRATIOX OF ECONOMIC POWER

showed that about 30 percent of their activities were in the standard-
ization field and, for wholesalers' associations, 15 percent.

In 1931 a survey was made by the Chamber of Commerce of the
United States relating to activities of trade associations of national
and local scope; replies were received from approximately 500 asso-
ciations. Thirty-three percent of the associations were active in stand-
ardization work and 26 percent in simplification. As is generally the
case, such activities were much more important in national rather
than local programs:

National

Local

standardization

Percent
43
35
20

Percent

Certification .- -

During the period of 1937-38 trade association services in the general
field of standardization had sharply increased, with 58 percent for all
associations ; this was found in a survey made by the United States
Department of Commerce for the Temporary National Economic Com-
mittee. Not all products, however, of even those industries most active
in this field were sold on a standardized, inspected, certified, labeled
basis. Custom work made in accordance with individual specifica-
tions will always be a factor. Also, a certain percent of the products
of the most modern factories do not quite meet certain standards, yet
are reasonably serviceable. These are sold to markets satisfied wdth
slightly substandard items at lowered prices. In most industries, a
large number of the firms are unable financially to purchase equipment
and materials of the quality needed to permit competition in the high-
quality market. In the lumber industry, for example, thousands of
the Nation's saAvmills are too small and poorly equipped to turn out
most of their products on such a quality basis as is called for by
Federal Specifications.

About 58 percent of the trade associations, or over 700, reported,
as above mentioned, that they were furnishing some form of standardi-
zation service to their members. This was much more prevalent among
associations of producers than of distributors. It was an activity of
93 percent of associations of manufacturers in the electrical machinerj^
industry; 90 percent of associations in the paper industry; 89 percent
of associations in the furniture industry ; 87 percent of associations in
the lumber industry and 83 ])ercent of those manufacturing iron and
steel products. However, only 26 percent of the associations in the
apparel and other finished textile products fields reported standardi-
zation activities.

In functional groups other than production, standardization activi-
ties are not as common. Some percentages of activities in these groups
were :

Percent

Finance and real estate , 9

Mining and quarrying, except coal 2n

Transportation and other public utilities 29

Personal business and recreational 38

Retail trade 49

Wholesale trade 51

Construction 65

CONCENTRATION OF ECONOMIC POWER j^QQ

Of the total of more than 700 associations reporting standardization
and simplijfication activities, about 450 stated that it was so important
in their programs, that it was regarded as a major activity. This ratio
was very high for associations in many industries manufacturing prod-
ucts of lumber, and iron and steel, and low for wholesaling and retailing
trade associations :

Percent

Lumber products 72

Iron and steel 69

Electrical machinery 64

Construction 47

Transportation and other public utilities 22

Wholesale trade 20

Retail trade 15

Although hundreds of trade associations are active in standardiza-
tion work, it may be of interest to mention briefly the activities of some
of them.

The anthracite industries recently stated that "more than 100,000
persons are normally employed in the mining and preparation of
anthracite coal, and there are about 9,000 retail coal dealers supplying
the needs of 6,000,000 homes." As part of a broad trade expansion
program, a research and testing laboratory was established and equip-
ment used by the coal industry has been tested. Improvements have
been made in efficiency, economy, and convenience, both in old types
of equipment and in new types that have been and are still being
developed.

The Mixer Mauf acturers Bureau, affiliated with the Associated Gen-
eral Contractors of America, reported that there was formerly an
uncontrolled competition in sizes, models, and capacities of concrete
mixers. The association sponsored a program which has brought
about a saving to the buyers of the product as a result of a reduction
in waste and premature obsolescence.

The National Electrical Manufacturers Association (N. E. M. A.)
has a Codes and Standards Committee w;hich cooperates with the
American Standards Association in the development, approval, and
promotion of the use of "American Standards." It also cooperates
with such organizations as the National Safety Council, International
Association of Electrical Inspectors, Associated Factory Mutual In-
surance Companies, American Society for Testing Materials, Amer-
ican Welding Society, Underwriters' Laboratories, American Gas As-
sociation, National Bureau of Standards, and the International Stand-
ards Association. A recent report stated that "standardization is a
never-ending process. N. E. M. A. is constantly receiving requests
for cooperation in solving standardization problems affecting elec-
trical apparatus and equipment from outride sources." This associa-
tion is composed of about 70 sections and there are 36 joint committees
working with the Codes and Standards Committee whose duty is to
assist in —

promulgating standards for rating construction, performance, durability, com-
position, and other characteristics of their products ; also, for manufacturing
practices and to provide for identifying compliance therewith.

_ The American Lumber Congress in 1919 adopted a program for
simplification of lumber-grading standards, greater uniformity of
similar grades of competing species, and the standardization of sizes
of yard and factory lumber. Iv May 1922 the First General Lumber

200 CONCENTRATION OF ECONOMIC POWER

Conference was held under the auspices of the Division of Simplified
Practice, Bureau of Standards; unanimous resolutions to further
standardization work were adopted. At the Second General Lumber
Conference, in July 1922, the Central Committee on Lumber Stand-
ards was formed to act as an executive organization in drafting con-
crete recommendations, A larger group, the Consulting Committee
on Lumber Standards, was organized by this Central Committee. At
the Third General Lumber Conference, held at the United States De-
partment of Commerce in December 1933, recommendations were sub-
mitted and adopted, which resulted in the elimination of unnecessary
sizes, thereby reducing the number of actual finished yard lumber
items nearly 60 percent, and the fixing of definitions of basic grades.
Approximately 110 organizations were represented at the 1922 Con-
ference while 168 representatives of lumber manufacturers, distrib-
utors, and consumers, including Federal Government agencies, archi-
tects, engineers, and other technical experts attended the 1923 Con-
ference. Recommendations were offerecl by the Central Committee on
Lumber Standards at the 1924 and 1925 Conferences which continued
work on the American Lumber Standards, and completed stand-
ardization of the products of the softwood industry. By 1928 size
standardization had been completed and problems relating to quality,
especially basic standards for structural material, were undertaken.

The Central Committee on Lumber Standards is playing an im-
portant role in the standardization of lumber products.

In 1925 the Secretary of Commerce established the National Com-
mittee on Wood Utilizaition, which existed until 1933. This com-
mittee was composed of representatives of a number of Federal
agencies and such trade associations as the Aeronautical Chamber
of Commerce, American Paper and Pulp Association, American
Petroleum Institute, Association of American Railroads, Associated
General Contractors of America, and about 40 other national groups.
The National Committee on Wood Utilization led in the cooperative
development of methods for eliminating waste not only in the fabri-
cation of lumber products, but in logging, milling, drying, seasoning,
storage, and transportation. Some of the projects formerly carried
on by the committee are now continued by the National Lumber
INIanufacturers Association and its 15 regional affiliated associations
in cooperation with the Forest Division of the United States Depart-
ment of Commerce.

Since trade associations in the timber products industry are pos-
sibly devoting more effort to promoting the use of standard products
conforming to Federal Specifications than associations in any other
industry, detailed information will be given on some lumber stand-
ards. An example of cooperation of trade associations with the Gov-
ernment is the formulation of the Federal Specification for Softwood
Lumber and Timber (MM-L-751a).

This sipecification states in part:

Softwood lumber shall conform to the grading rules of the various lumber
associations * * * where such grading rules are approved by the Central
Committee on Lumber Standards as in conformance with "American Lumber
Standards"; see Simplified I'ractice Recommendation R-16-29 '^ "Lumber" of
the Department of Commerce.

" This Simplified Practice Recommendation was recently revised ; its designation is
K1R-S9.

CONCENTRATION OF ECONOMIC POWER 201

In recent years softwood lumber has often accounted for as much
as four-fifths of the total production of lumber in the United States.

The lumber specification mentioned above covers species, classes,
grades, material, workmanship, methods of inspection, and packing.
This specification lists a number of national and regional trade
associations which are actively cooperating with the Government in
grading and inspection work to increase business efficiency and secure
and hold the confidence of Government purchasing agencies and the
consuming public in the integrity of the association's efforts to sell
lumber which conforms to the high standards agreed upon. This
Federal Specification states in part:

The grading rules of the following manufacturers' associations are published
upon the basis of the American Lumber Standards.

Among the associations cooperating with the Government on this
particular Federal Specification are the —

California Eedwood Association.
Northern Pine Manufacturers Association.
Southern Pine Association.
West Coast Lumbermen's Association.

The National Hardwood Lumber Association is composed of firms
which prepare lumber from various species of hardwood trees. It
reported that its standardization program has "enabled all hardwoods
to meet in common markets on a price competitive basis."

The Northeastern Lumber Manufacturers Association reported that
its activity in standardization work was brought about by the public
demand for standardized products in the construction field and
by competition of other standardized lumber. The result of the
work of this association is increased demand for the inspected and
graded products of its members and increased public confidence in
its products, since consumers now know what to expect when they
specify a particular standardized product.

The Rubber Manufacturers Association has coordinated, to a high
degree of efficiency, the standardization and simplification work of
the rubber industry. This industry is characterized by a small num-
ber of large firms. The Rubber Manufacturers Association reports
that large sums have been saved through reduced inventory and pro-
duction costs, and also by public acceptance of standardized rubber
products, such as rubber automobile tires.

The Soft Fiber Institute is one of the large number of associations
utilizing the facilities of the American Society for Testing Materials,
and representatives from this institute are members of textile and
other industrial committees of the American Society for Testing Ma-
terials. Laboratory tests are constantly carried on to determine the
relative efficiency of various types of yarns.

The Sporting Arms and Ammunition Manufacturers Institute has
cooperated with the Ordnance Department of the Federal Govern-
ment in the standardization of its products, and has for years carried
on various tests at the National Bureau of Standards. It reports
that there has been marked success in eliminating odd weights and
sizes of ammunition, which has simplified manufacturing, wholesal-
ing, and retailing practices in this industry.

The American Institute of Steel Construction, Associated General
Contractors of America, Construction League of the United States,

202 CONCENTRATION OF ECONOMIC POWER

National Association of Builders Exchanges, National Association of
Master Plumbers, National Lumber Manufacturers Association, Port-
land Cement Association, Structural Clay Products Institute, as well
as the American Institute of Architects and other professional or-
ganizations and public officials such as building inspectors, and the
National Association of Housing Officials are cooperating with the
National Bureau of Standards in the preparation of building and
plumbing codes, carefully developed so as to be suitable for general
adoption by State and municipal agencies.

The National Paving Brick Association, a pioneer association in
simplified practice work, was organized in 1905 and in 1939 had about
75 percent of the industry's firms in its membership, representing
about 85 percent of the Nation's total production of that industry.
This association is active in standardization work and has a research
laboratory. It is allied in various programs with the Structural Clay
Products Institute, whose membership includes manufacturers of
common brick, face brick, tile, and similar products. The benefits
of simplification were enumerated in a recent report on vitrified
paving brick which emphasized the accomplishment of this associ-
ation in confining most of its production to comparatively few sizes
and types.

The Porcelain Enamel Institute has developed several effective
standards for both products and processes which are extensively used
in the porcelain enameling industry. The managing director states —

The Porcelain Enamel Institute has issued a standard fineness test for
milling enamels under the title, "Tentative Screen Test for Wet-Milled Porce-
lain Enamel." It has also issued a pamphlet on architectural standards, en-
titled, "Recommended Materials and Practice for Architectural Porcelain
Enamel."

Standards have been issued for the following:

(1) "Test for Resistance of Porcelain Enamels to Surface Abrasion" 'A

tentative standard.)

(2) "Test for Acid Resistance of Porcelain Enamels."

(3) "Reflectance Test for Opaque White Porcelain Enamels."

*******
Standards are not used by this industry as a basis for selling and con-
tractual relations because sufficient research work has not yet been done to
make all factors subject to standard grading.^'

The American Institute of Steel Construction is primarily con-
cerned with rolling mill steel, semifinished for use. The membership
of this institute is composed of companies engaged in the fabrication
and construction of steel for bridges, buildings, and other structures.
The purposes of the institute are —

To further better methods and elimination of waste in the design, fabrica-
tion and erection of structural steel, through a cooperative effort based upon
simplification and standardization, as suggested by the United States Depart-
ment of Commerce, to the end —

That the institute's activities may promote greater efficiency in production
and selling, and that the mills, architects, engineers, contractors, the public,
and members of the structural steel industry, may derive equal b'nefits there-
from.

That the institute's standard specification, prepared to further uniform prac-
tice, may contribute to the public the material reduction in building costs that
result from its application ;

" Letter by C. S. Pearce, managing director, Porcelain Enamel Institute, Inc., Chicago,
111., December 5, 1939.

CONCENTRATION OF ECONOMIC POWER 203

That both buyer and seller may profit from the Code of Standard Practice,
recognition of established ideals, and better ethics as applied to all trade
relations ; "

*******

The institute is engaged in research and assembles and distributes
data and information for the use of architects and engineers in pre-
paring engineering plans for structures in which structural steel is
used.

The activities of the institute are mainly of three general types:
The simplification of sizes (these have been reduced over 33 percent
in recent years) ; the standardization of uses of steel in construction;
and the development of standards of practice, and of codes of safety
in steel construction, including fire safety. The major factors con-
sidered in standardization as related to public interest are safety,
economy, and efficiency. Standards developed by the institute have
general interest and wide use.

Many of the members of the institute are serving on standardiza-
tion committees of the American Society for Testing Materials, the
American Welding Society, the National Bureau of Standards, and
the American Standards Association. The institute is sponsor of the
Committee on Structural Steel and Iron for the American Stand-
ards Association.

The institute publishes "Steel Construction,"" a manual which is
an indispensable tool for those concerned with drawing up specifica-
tions for any type of structure in which steel construction is employed.
This manual gives dimensions, weights, strength, and related facts for
all standardized structural steel. The standards of the American
Society for Testing Materials are used in designating physical and
chemical characteristics of structural steel.

Matters related to use of sheet steel and steel sheets in small build-
ings, including residences, have been transferred by the American Insti-
tute of Steel Construction to the American Iron and Steel Institute.

The American Gas Association (A. G. A.) includes in its membership
companies engaged in the production, distribution, and sale of manu-
factured and natural gases, and some companies manufacturing and
selling gas appliances, equipment,' and accessories. This association
is conducting extensive research in the field of production, distribution,
sale, and use of gas, in its own and commercial laboratories, and in
various educational institutions. Research associates are maintained
at the National Bureau of Standards. Since 1924, the association has
sponsored a program for standardization of gas-burning appliances
used in the household. The work of the association in this field is
outstanding.

The standardization program has included the creation of a main
cooperative committee, designated as the "Approval Requirements
Committee"; affiliated technical committees; "and a system of legisla-
tion whereby minimum requirements for the safe and satisfactory con-
struction and performances of gas appliances and accessories and in-
stallation thereof could be developed." ^^ The A. G. A. Testing Labora-

1* "Steel Construction," p. 15. American Institute of Steel Construction. Inc.. New
York. N. Y., June 1939.

" "Steel Construction : A Manual for Architects. Engineers, and Fabricators of Buildings
and Other Steel Structures," 398 pp., American Institute of Steel Construction, Inc.. New
York. N. Y., 3d ed., 1939.

" "Product Standardization," lecture by R. B. Harper, 16 pp.. mimeographed, National
Institute of Commercial and Trade Organization Executives, Northwestern University,
Evanston, 111., August 19. 1939.

204 CONCENTRATION OF ECONOMIC POWER

tories in Cleveland, Ohio, with a branch in Los Angeles, Calif., have
contributed an essential part to the program of the association by
"examining various gas appliances and accessories, as submitted by
the manufacturers thereof under contractual arrangements, and deter-
mining whether or not these meet the stipulated requirements, and may
therefore bear the A. G. A. seal of approval. Certificates of approval
are issued to the manufacturers for the type and size of products which
have been found to comply with the requirements." ^'

The present Approval Requirements Committee, which is also con-
stituted as the Committee on Approval and Installation Require-
ments for Gas-Burning Appliances of the American Standards
Association, has 25 members representing gas utilities, manufactur-
ers, trade associations in related fields, Governmental agencies (U. S.
Bureau of Home Economics, National Bureau of Standards, Bureau
of Mines, and U. S. Public Health Service) and the American Home
Economics Association.

Standards have been established for nearly all types of gas-burning
household appliances and for some types of gas-burning commercial
equipment. At present 26 standards for gas appliances have been
approved by the American Standards Association as "American Stand-
ards." These standards are for such appliances as domestic ranges;
water, space, and private garage heaters ; hot plates and laundry stoves ;
clothes dryers; gas refrigerators; draft hoods; conversion burners;
and various accessories.

The Approval Requirements now in effect represent minimum
standards of performance, safe operation, and substantial and durable
construction. While the question of safety has always been regarded
as of paramount importance in the gas industry, much attention has
been paid to the establishment of suitable standards governing de-
tails of performance, depending on the class of equipment under con-
sideration.

It has been estimated that approximately 95 percent of all domestic
gas-burning appliances offered for sale in the United States meet
the Approval Requirements of the American Gas Association.

In order to illustrate the development of standards by trade as-
sociations, chart XIII, outlining the standardization procedure of
the American Gas Association, is given.

The numbers in parenthesis in the following description of pro-
cedure for the preparation, revision approval, and publication of
requirements, correspond to the numbers in the chart.

The Approval Requirements Committee of the American Gas As-
sociation considers requests for standardization from various sources
(1) and decides the necessity for standards. This committee author-
izes the appointment of subcommittees; the chairman appoints the
subcommittee members who have been previously nominated by gas
utility executives, by the Association of Gas Appliance and Equip-
ment Manufacturers, and by Governmental bodies and national or-
ganizations concerned with standardization. Each subcommittee pre-
pares or revises requirements of standards (2), requests special in-
vestigations or research to be made by the American Gas Associa-
tion Laboratories if necessary (3) and (4), and sends its tentative
requirements to the members of the gas industry and others for

" "Product Standardization," lecture by R. B. Harper, 16 pp., mimeographed. National
Institute of Commercial and Trade Organization Executives, Northwestern University,
Evanston, III., August 19, 1939.

< I

1= «-

o "2
O _2

5 i Ji 11

CONCENTRATION OF ECONOMIC POWER 205

comment (5) and (6). Following consideration of their suggestions
and criticisms, the subcommittee drafts the final recommendations
for action by the Approval Requirements Committee (7). If the
requirements are approved by this committee they are submitted to
the American Gas Association's Executive Board (8), which in turn
submits them to the American Standards Association for possible
approval as an "American Standard" (9). If the Approval Require-
ments Committee does not concur in the standard recommended by
the subcommittee, the requirements are referred back to the originat-
ing subcommittee with instructions for reconsideration (7a), After
approval by the American Standards Association the requirements
are published as an "American Standard" by the American Gas As-
sociation Testing Laboratories (10) and (11).

The National Canners Association was organized in 1907, just 97
year after Appert described the methods he had discovered for pre-
serving perishable foods. The object of the association is "to im-
prove the methods and products of the industry and to increase
the consumption of canned foods by establishing confidence in
them." ^^ The membership of the association is constituted of both
individuals and firms, including canners of all kinds of foods packed
in hermetically sealed containers and sterilized by heat.

The association maintains laboratories in Washington, D. C, San
Francisct), and Seattle in which research is conducted to determine
desirable canning practices. Special emphasis is placed on preserva-
tion, palatability, and appearance of the canned product.

The association issues a bulletin, which is revised from time to
time, of recommendations on processing for nonacid foods. These
recommendations are based upon data available from its own re-
search laboratories, the laboratories of allied industries, and those
of individual companies. This bulletin is made available to mem-
bers of the canning industry, so that the information it contains may
aid in insuring the wholesomeness of products and in improving their
quality.

Although the National Canners Association opposes the grade
labeling of canned foods it has cooperated with the Agricultural
Marketing Service, United States Department of Agriculture, in
developing grades for canned fruits and vegetables, for use within the
trade. The association has participated, also, in conferences ar-
ranged by the United States Department of Agriculture to develop
standards for canned foods under the Federal Food, Drug, and Cos-
metic Act.

The position of the National Canners Association relative to can
sizes is stated as follows :

The program of simplification and standardization of containers, upon wliich
the association has cooperated with the Division of Simplified Practice of the
National Bureau of Standards, has been steadily advanced. The object of the
association's work "has been to secure a practical simplification and standardization
which takes fully into account the technical problems in can making and canning,
and which meets the need of preventing consumer confusion and deception.'"

However, the number of sizes of cans appears not to have been de-
creased, although the National Canners Association states that an

" "Yotir National Association at Work," p. 3, National Canners Association, Washington,
D. C. November 1939.
» Ibid., p., 17.

2Qg CONCENTRATION OF ECONOMIC POWER

increasing proportion of the major canned fruits and vegetables is
packed in cans of sizes desigiiated in the Simplified Practice Recom-
mendation ^° for each of the various kinds of products. The associa-
tion has opposed legislation to establish legal can sizes for food
products.

An increasing proportion of food products for canning are purchased
by canners on a grade basis. Sales by canners to distributors is said
by the association to be chiefly on basis of grades, but information as to
the grade of the product is seldom passed on to the retailer or to the
ultimate consumer.

The National Preservers Association is one of the associations which
has secured the assistance of the Federal Trade Conmiission, and pro-
visions as to the quality of products and labeling were included in the
trade practice rules for this industry.

At the request of members of the sardine and tuna fish industries,
trade practice conferences were held by the Federal Trade Commission.
Trade practice rules relating to sale and distribution, and including
definitions of types of pack of sardines and quality grades of tuna fish
were promulgated by the Federal Trade Commission.

The National Association of Hosiery Manufacturers initiated its
standardization activities in 1922, when it placed a research associate
at the National Bureau of Standards. The association now maintains
two such associates and a secretary at the Bureau. The research pro-
moted by the association deals principally with the character and
performance of the materials used by the hosiery industry.

Important standards developed in recent years by the association
include the standard oil content for rayon; standard lubricant ^^ for
knitting machines (which will not stain hosiery) ; minimum twist (of
the yarn) requirements for crepe hosiery ; and hosiery fabrics defect
(which are used abroad). Standards relating to methods of testing
hosiery have been approved by the American Association of Textile
Technologists and published by the National Bureau of Standards,-^
also Commercial Standards for Hosiery Lengths and Sizes -^ and for
Regain of Mercerized Cotton Yarn ^* have been accepted and are in
general use.

The raw silk color standards developed by the association furnish
the only available method of classifying raw silk by color, although
most of the industry still depends for this operation upon the human
eye. Fine and accurate classification of raw silk by color is of impor-
tance, since it is intimately related to the uniformity of color in the
finished product.

Standards and definitions applying to the construction and inspec-
tion of women's full-fashioned silk hosiery -^ were prepared by the
National Association of Hosiery Manufacturers in 1936. The stand-
ards of construction are now outdated but the use of the standards
of inspection is constantly increasing. This latter standard furnishes

^Simplified Practice Recommendation 155-37 (in process of revision).

^ "Specifications for Stainless Lubricating Oil for Knitting Machines, Loopers and Seam-
ers," prepared by Research Associate, National AsbOciation of Hosiery and Underwear
Manufacturers, 4 pp., no date.

-'^ "Methods of Testing Hosiery," 34 pp., by E. Max Schenke and Howard E. Shearer,
C422. National Bureau of Standards, Washington, D. C, 1938.

^ "Hosiery Lengths and Sizes," Commercial Standard CS46-36, Government Printing
Office. Washington. D. C, 1936.

24 "Regain of Mercerized Cotton Yarn," Commercial Standard CSll-29. Government
Printing Office, Washington, D. C, 1929.

"* "Standards of Construction and Inspection for Ladies Full-Fashionod Hosiery," 15
pp., National Association of Hosiery Manufacturers, New York City, 1936.

CONCENTRATION OF ECONOMIC POWER 207

a mechanical means of classifying women's full-fashioned silk hosiery
on the basis of differences in quality and character of irregularities,

A trade practice committee of the association is working with
the Trade Practice Division of the Federal Trade Commission in
developing trade practice rules for the hosiery industry. It is antici-
pated that rules will be promulgated for the identification of the
fiber, and for labeling of hosiery which is not of first quality. In
addition to agencies already mentioned, the National Association of
Hosiery Manufacturers cooperates with the American Standards
Association ; the Joint Committee on Raw Silk Classification ; the
Japanese Raw Silk Intelligence Bureau ; the United States Institute
for Textile Research, Inc. ; and the National Consumer-Retailer Coun-
cil in furthering the development of standards and labeling practices.

The American Institute of Laundering, the successor to the Laun-
dryowners National Association, has for 20 years been primarily in-
terested in research and dissemination of information among its mem-
bers. The institute has found that the standards used in laundering
services may affect health. Therefore, the institute prepared for the
members of the medical profession a popular bulletin -^ dealing with
this subject. The bulletin includes data on the bacterial content in
successive tubs of wash and rinse water through which clothes pass
during different washing processes.

The American Institute of Laundering has prepared and issued
recommended standard procedures for washroom and finishing prac-
tices concerning which the general manager states —

Its engineers and chemists and other technicians are constantly making
studies of subjects pertinent to commercial laundering. Following the comple-
tion of these studies, they publisli reports for the guidance of the membership.
Naturally, in work of this type, we have developed information which is on the
border line of standards and which is constantly being recommended for
adoption by the industry. We have no compulsory standards and serve purely
as an educational and research organization.

It has been almost impossible to have standardized names of laundry services,
due to the wide variation in names as they are used locally all over the country.
We are representing an institution with a membership of nearly 2,200 laun-
dryowners scattered all over the United States and Canada. * "* *

It is our best judgment that the laundry industry is adopting more and more
of our recommendations with regard to washing and finishing methods in the
operation of their plants."

Incidentally, the institute has accumulated much performance data
on various textiles which have proved of value to the textile industry
in improving and developing standards for comparable materials.

The National Association of Dyers and Cleaners was organized in
1906. The active membership of this association includes proprietors
of dry cleaning establishments or dye works. Nonactive members may
include individuals, firms, or corporations concerned with dry cleaning
supplies, equipment, or textiles.

In 1930 the association adopted a code of business practices, which
defines dry cleaning services. Later unsuccessful efforts were made to
include definitions and standards of dry cleaning services in the N. R.
A. Code for the Dry Cleaning Industry.-®

=" "Health and the Laundry," p. 31, Public HeaUh Section, American Institute of Laun-
dering, .Toilet, ni.. 1937.

=' Letter liy George H. Johnson, general manager, American Institute of Laundering,
Johet. 111., December 2. 1939.

=* "Report of the Consumers' Advisory Board of the N. R. A.. Recommending Standards
f(>r the Dry Cleaning Industry," 22 pp.. National Recovery Administration, Washington,
D. C, April 1934.

208 CONCENTRATION OP ECONOMIC POWER

More recently the National Association of Dyers and Cleaners has
developed standards for "cleaning room practices" which affects quality
of dry cleaning. Such standards are voluntary. As yet no nationally-
recognized standards have been established for different grades of dry
cleaning services.

The association has investigated methods of dry cleaning and han-
dling of various types of fabrics. These methods are published and
made available to the membership in the form of technical bulletins
and textbooks and may be regarded as standards of practice. In many
instances they include standards of quality for textiles, since fabrics
which cannot be handled during the dry cleaning processes, in ac-
cordance with these practices, are considered unserviceable. The man-
aging executive of the association states:

We bPlieve members to be more favorable toward standards than in previous
years. However, standards of practice are difficult to attain since it involves so
many elements over which we have no control. Type of fiber, dyestuffs, atmos-
pheric conditions, the acid condition of perspiration and variations therein ate
examples of the factors which contribute to the difficulties of standardization.

The development of new equipment by machinery manufacturers, new products,
technical research carried on in our laboratory, the maintenance at our head-
quarters of a school to educate cleaners in proper drycleaning methods, and the
greater interest shown by drycleaners in keeping accurate cost records are con-
sidered important factors which have contributed to the improvement of the
drycleaning industry.^

The experience acquired by this association pertaining to various
kinds of fabrics, garments, and household textiles, as in the case of the
American Institute of Laundering, has contributed to the improvement
of these commodities by manufacturers.

The American Pharmaceutical Association was organized in 1852.
Its membership includes pharmacists, druggists, teachers of pharmacy
and related subjects, editors of pharmaceutical journals, and others
interested in pharmacy. The purposes of the association are :

To advance the science and art of pharmacy ; * * * to limit the practice of
pharmacy to trained pharmacists ; to increase the observance of proper standards
of identity, purity, and strength of drugs and medicines and to prevent their
adulteration ; to regulate the use of habit-forming and dangerous drugs. * * * »•

The association maintains a well-equipped laboratory to carry on
research and testing which contributes to the establishment and im-
provement of standards for drugs. However the regulation of the
labeling of drugs and related products now rests with the United
States Food and Drug Administration.

The Committee on the National Formulary is responsible for the
periodical revision of the National Formulary ,^^ a publication of the
American Pharmaceutical Association which lists standards for
preparation's sold under an established name such as arnica, turpen-
tine, and zinc oxide paste. These standards are recognized in the
Federal Food, Drug, and Cosmetic Act. In commenting on the status
of the National Formulary, the secretary of the American Pharma-
ceutical Association said:

The passage of the Federal Food, Drug, and Cosmetic Act gave the N. F.
(National Formulary) * * * a much more important position in the en-

^ Letter by J. M. Matson, managing executive, National Association of Dyers and
Cleaners, Silver Spring, Md., December 19, 1939.

'o"AmPrican Pharmaceutical Association," p. 1, American Pharmaceutical Association,
Washington. D. C, no date.

« "The National Formulary," by Committee on the National Formulary, 556 pp., sixth
edition, Macli Printing Co., Easton, Pa., June 1, 1936.

CONCENTRATION OF ECONOMIC POWER 209

forcement of the act and also gave * * * the power to promulgate standards
for drugs if upon request the appropriate committee of revision did not take
action within a reasonable time. * * *

Medical progress is now probably greater in 1 year than it was in a decade
when the N. F. was established. * * * Formerly the N. F. was revised
over a period of a few years, and after the revision was issued, the Committee
on National Formulary was practically inactive during the rerbaiuder of the
decade. Medical progress now requires that revision be a continuous process.'"

The Committee on the National Formulary has 10 members, each
of whom is a chairman of a subcommittee dealing with a specific
division: Pharmacognosy, chemicals, solution preparation, extrac-
tive preparations, solid preparations for external use, bacteriological
or biological preparations, external preparations, miscellaneous prep-
arations, pharmacology and posology, and nomenclature. Each chair-
man is privileged to select his own committee members, but these must
be approved by the president of the American Pharmaceutical Asso-
ciation and ratified by the council of the association, which is composed
of 18 members. The present members of the Committee on the
National Formulary include 7 members of faculties of schools of
pharmacy or other divisions of some college or university, 1 hospital
pharmacist, and 2 members of commercial firms.

The United States Food and Drug Administration is not repre-
sented on any of these committees or on the council of the association,
although conferences on questions of mutual interest are held when
desired. The members of the American Pharmaceutical Association
recognize, however, that, should the Committee on the National
Formulary fail to approve satisfactory standards with reasonable
promptness, the privilege of establishing these standards might be
withdrawn by the Federal Government.

The Committee on the Recipe Book is responsible for the publica-
tion of the "Pharmaceutical Recipe Book," ^^ which provides formulas
for preparations ordinarily mixed by individual druggists.

The Committee on Unofficial Standards is expected "to formulate
standards, so far as it may be found desirable, for such drugs and
chemical products for which standards are not otherwise provided." ^*
The Council on Pharmacy and Chemistry of the American Medical
Association is also active in this work.

A committee serves on the Pharmacopoeia Revision Committee of
the United States Pharmacopoeial Convention. This organization is
responsible for the revision of the United States Pharmacopoeia,^^
which gives standards for drugs (or simples, as the profession speaks
of them). These standards are recognized in the Federal Food, Drug,
and Cosmetic Act.

32 "National Fo-.Tiulary Revision," by E. J. Kelly, Journal of the American Pharmaceutical
Association, vol. XXVIII, pp. 629-630, October 1939.

a3 orpjjg Pharmaceutical Recipe Book." by Committee on Recipe Book of the American
Pharmaceutical Association, 529 pp., second edition. Mack Printing Co., Baston. Pa., 1936.

3< "Constitution and By-Laws," ch. VIII, art. VIII, American Pharmaceutical Association,
Washington, D. C, August 1925.

3' "United States Pharmacopoeia," by United States Pharmacopoeial Convention, 676 pp.,
eleventh revision, Mack Printing Co., Easton, Pa., June 1, 1936.

STANDARDIZATION ACTIVITIES OF TECHNICAL AND
PROFESSIONAL SOCIETIES

There are 30 or more technical and professional societies in this
country participating in the development of standards and specifica-
tions. The types of membership of these societies vary widely. Some
societies are composed exclusively of individuals who have met certain
rigid professional requirements, while other societies include a com-
bination of individuals, corporations, trade associations, and educa-
tional or institutional agencies. Whatever the nature of the member-
ship, each society represents some technical interest common to all
members. Many of the engineering and other technical societies have
become outstanding in standardization work, and are conducting
extensive research programs.

Much of the, scientific research is coordinated under the leadership
of such agencies as the National Research Council, the Engineering
Foundation, the American Institute of Electrical Engineers, and the
American Society of Mechanical Engineers. Research workers are
maintained at the National Bureau of Standards, educational insti-
tutions, or private technical laboratories.

The three outstanding agencies dealing with the standardization of
specifications and test methods are the American Standards Associa-
tion, the American Society for Testing Materials, and the Association
of Official Agricultural Chemists.

Americcm Standards Association.

Industrial standardization in the United States had reached by 1918
a stage of development which demanded greater coordination and
agreement between industries, technical groups, and goverimiental
agencies (Federal, State, and municipal) than had been attained thus
far. Confusion and rivalry among the proponents of different stand-
ards, and conflicts in jurisdiction were continually arising as popula-
tion increased, industry advanced, and governmental activities were
extended.

It was fitting that five of the leading technical societies should at-
tempt to solve these problems. The American Institute of Electrical
Engineers invited the American Society of Civil Engineers, the Ameri-
can Society of Mechanical Engineers, the American Institute of Min-
ing and Metallurgical Engineers, and the American Society for Testing
Materials to unite in developing a plan for cooperation in standardiza-
tion work. On October 10, 1918, they formed an agency to serve as
a clearinghouse through which technical, industrial, and governmental
agencies might coordinate and develop their standardization activities
so as to evolve, eventually, voluntary national standards which would
have a relatively wide application. This was first known as the Ameri-
can Engineering Standards Committee. Gradually other groups were
brought into this committee. In time the concept of its objectives was
broadened, and in 1928 the committee was reorganized and its activi-
210

CONCENTRATION OF ECONOMIC POWER 211

ties greatly extended. At that time tlie name was clianged to tlie
American Standards Association. Since then, its procedures have been
further modified to provide for the inclusion of representatives of all
interests concerned with the development of standards and to include
a wider range of projects :

dimensional standards to allow for interchangeability of supplies or to secure the
interworking of parts or of interrelated apparatus ; specifications for materials
and methods of test ; definitions of technical terms used in industry ; industrial
safety codes to make possible uniform requirements in safety devices for machines
and other equipment in the fields of both public and industrial safety ; industrial
health codes for the prevention of occupational diseases ; the development of a
national building code; specifications for consimier goods sold in retail trade.""

The organization of the American Standards Association is shown
in chart XIV.

The primary membership of the American Standards Association
includes 72 national technical societies, trade associations,, and govern-
mental departments and agencies. In addition, there are some 2,000
industrial concerns which hold membership either directly or by
group arrangement through their trade associations.

The association is democratically controlled by its membership. Finances and
general policy matters are in the hands of a board of directors made up of 19
executives, each nominated by a different industry. The technical work is super-
vised by the Standards Council, which is composed of representatives of all the
member bodies.^

The association is supported by dues from all members, except Gov-
ernment departments and agenci(i5, and by subscriptions of sustaining
members. The total sum, however, represents only a small fraction
of the amount industry spends for standardization. Industry supports
this work because it realizes .and can demonstrate that standardization
along suitable lines pays generous dividends.

Major fields in which standards have been and are being developed
by the association are: Automotive, chemical, civil engineering and
construction, electrical, ferrous materials and metallurgy, nonferrous
materials and metallurgy, mechanical engineering, mining, textiles,
transportation, wood, and other miscellaneous lines.

The procedure in developing American Standards by the sectional
committee method is shown in chart XV.

Over 3,000 men and women are working on the various committees.

""lie procedure of tlie American Standards Association provides that

iimittees engaged in developing standards for a commodity must
include representatives of all groups having a substantial interest in
the standard, including producers of materials used, manufacturers of
the product, distributors, users of the product, and technical experts.
All of these interests should be represented from the beginning of the
development of the standard. Before a standard can be approved
there must be evidence of its general acceptance by all groups substan
tially concernea.

The association provides the machinery through which the industries themselves
arrive at decisions. It takes up a new project only upon request of a reslkmsible
organization or group. The project may deal with an exijsting standard already
in general use, or one which it is proposed shall be genei-aBy accepted, or it may

^ "American Standards Year Book," p. 3, American Standards Association. New York
City. 1938.,

^" "The American Standards Association." Industrial Standardization and Commercial
Standards Monthly, vol. 10, p. 140, June 1940.

212 CONCENTRATION OF ECONOMIC POWER

involve the development of an entirely new standard. It may be any one of
a wide variety of types : Dimensional standards ; specifications for materials ;
methods of test ; performance specifications ; methods of analysis ; definitions of
technical terms ; industrial safety codes ; industrial health codes ; or a national
building code.'*

Almost 400 standards have been approved to date by the American
Standards Association and over 280 are in the process of development.
Most of these standards are for products to be sold to and to be used by
industry and for production methods employed by manufacturers. In
fact, it was not until the reorganization in 1928 that the American
Standards Association so defined its program as to include specifically
the development of standards for retail goods. The relatively few
standards so far approved for goods to be sold to ultimate consumers
are —

standards for testing ice refrigerators; standards for methods of testing woven
textile fabrics ; specifications for dry batteries ; specifications for labeling cotton
yard goods; and standards covering installation and performance requirements
for all the commonly used gas-burning appliances.**

Attempts have been initiated to formulate standards for bed blankets,
bed sheets, and shrinkage of cotton textiles, but these efforts have failed
because of lack of support by manufacturers. However, the pro-
posed standards on shrinkage have since been included in the Trade
Practice Rules for the Shrinkage of Woven Cotton Yard Goods of
the Federal Trade Commission.

In October 1936 increasing demand on the part of women's organiza-
tions and gradually rising interest in consumer standards within the
American Standards Association led to the organization of an Advisory
Committee on Ultimate Consumer Goods to coordinate and direct the
standardization work on consumer goods. This committee includes
representatives of leading national women's organizations, retailers'
associations, and interested Federal agencies. Subcommittees of the
Advisory Committee on Ultimate Consumer Goods have reviewed the
situation with reference to various standardization projects for con-
sumer goods, which, from time to time, have been initiated under the
procedure of the American Standards Association, and have selected
certain Commercial Standards approved by the National Bureau of
Standards which it has recommended to the Standards Council of the
American Standards Association for acceptance as American
Standards

Other committees are investigating the need for work in such fields as shoes,
sheets and sheeting, boys' clothing, hosiery, household refrigerators, silver plated
tableware, waterproof and water repellant fabrics, and color permanence.*"

A committee of the American Standards Association is working on
the development of standard body measurements to be used as a basis
for a uniform system of sizes for children's garments. The standards
will be based on a survey of 36 body measurements of 147,000 children
between the ages of 4 and 17. This survey was made under the super-
vision of the United States Bureau of Home Economics and subsidized
by the Work Projects Administration.

" "The Organization and Worlc of A. S. A. Sectional Committees," p. 2, American Stand-
arris Association, New Yorlt City, 1939.

» "Consumer Goods," Industriai Standardization and Commercial Standards Monthly,
vol. 10. p. 146, June 1939.

« Idem.

American Standards Association (ASA)

Corrclafins Commiftcei Dealing With;

Woil on standards is hondled by commiHees or c
Mosto* the committees work under the leoderstiip

more of the organisations chiefly concerned.

Organization Chart

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CONCENTRATION OF ECONOMIC POWER 213

Tlie Ameincan Society for Testing Materials.

This society (A. S. T. M.) was organized in 1898 as a section of the
International Association for Testing Materials. In 1902 it was incor-
porated as an independent society, the purpose of which is "the promo-
tion of knowledge of the materials of engineering and the standardi-
zation of specifications and methods of testing." *^

The membership of the society is made up of individuals, companies,
firms, corporations, associations, laboratories, governmental depart-
ments, universities, technical schools, and libraries. It is a national
technical societ}^ with approximately 4,200 members.

The society has 59 standing committees with a total membership of
3,405. These committees are organized under separate major divisions,
such as ferrous metals ; nonferrous metals ; cementitious, ceramic, con-
crete, and masonry materials; miscellaneous materials, such as paints,
petroleum products, gaseous fuels, coal, timber, paper and its products,
rubber products, soaps and other detergents, textile materials, and plas-
tics; and miscellaneous subjects, such as methods of tests, chemical
analysis of metals, radiographic testing, nomenclature and definitions,
research. The following statement is made concerning the work of
these committees :

The standing committees of the society have the broad functions of promoting
the knowledge of materials of engineering and the formulation of standard methods
of test, specifications, definitions, and recommended practices i-elating to suCh
materials * * *. The obtaining of accurate technical information on the
characteristics of engineering materials is fundamental and serves as a basis for
the standardization work, which comprises the following:

1. The development of suitable analytical procedures, sampling techniques, and
methods of test for determining the constitution, structure, or properties of
materials.

2. The formulation of speclfi ations defining the quality and characteristics of
materijils.

3. The formulation of standard doflnitions and systems of nomenclature.

4. The preparation of recommended practices governing certarn methods and
processes not ordinarily subject to contract.

The scope of activities of each of the individual standing committees is indi-
cated, particulacly as to the materials falling within the jurisdiction of each.
In general, the committees are interested in both standardization and investi-
gative work, except in those instances where some limitation is definitely
indicated.*^

The society, which was one of the founding societies of the American
Standards Association, is sponsor or joint sponsor of .15 sectional com-
mittees functioning under the procedure of that association. These
committees deal with a variety of subjects, .such as portland cement,
drain tile, plastering, copper wire, classification of coal, and methods of
testing materials. The society is represented on 34 other sectional
committees of the American Standards Association and on 10 technical
committees of the International Standards Association. Representa-
tives of the society serve on one or more committees or boards of 17
other organizations. ^

The American Society for Testing Materials is affiliated with the
International Association of Testing Materials.

The A. S. T. M. Standards and Tentative Standards are published
by the society. Procedure for promulgation of Tentative Standards

""Year Book,' pp. 5-14, American Society for Testing Materials, Philadelphia, Pa.,
August 1039.
'* Idem.

2724SIG— 41— No. 24 15

214 CONCENTRATION OF ECONOMIC POWER

and A. S. T. M. Standards is shown in chart XVI. The 1939 edi-
tion of these standards appears in 3 parts totaling 3,700 pages, and
includes 866 standards for materials or test methods :

Part I. Materials. — Ferrous and nonferrous metals, except methods of chemical
analysis, general testing methods.

Part II. Nonmetallic materials — Constructional. — Cementitious materials, cou-
crete, masonry building units, ceramics, pipe timber and preservatives, paints,
road materials, waterproofing materials, soils, general testing methods.

Part III. Nonmetallic materials — General. — Fuels, petroleum products, elec-
trical insulating materials, rubber, textiles, s6aps and detergents, paper, plastics,
water, thermometers, general testing methods.

The A. S. T. M. Standards are of exceptional value to industry and
consumers. These standards are developed by representatives of a wide
variety of interests for their own use in purchasing or production, and
are revised promptly as the need arises.'

One of the committees of great interest to ultimate consumers is the
textile committee of the A. S. T. M., whose designation is D-13. The
functions of this committee are best described in the following excerpt
from a letter by Prof. Herbert J. Ball, chairman of the committee :

The committee is organiz o subcommittees which deal with every textile

fiber and their products, with finitions and nomenclature, methods, machines,
Jiumidity, finishing processes, sampling, presentation, and interpretation of data.
It has been chiefly instrumental in developing most of the test methods for textiles
which are in use today and has formulated 37 separate standards relating to
them.

The committee now proposes to add a new subcommittee on household and
garment fabrics, whose chief interest will He in those materials which enter so
liirgely into the construction of ultimate cotisumer goods. Although it will not
deal with the ultimate consumer article itself, it would be concerned with the
setting up of definitions, methods of test, and quality standards for the fabric
from which such articles are made. Its membership would be composed of pro-
ducer, consumer, and general interests. Its accomplishments should rest on the
firm foundation of scientific tests and data. Through cooperation with the other
subcommittees and using a procedure tested by long experience, results may be
expected which are practically attainable and mutually satisfactory to those
concerned.

The present members of D-13 can supply a vast amount of technical knowledge
regarding the production of textiles. The laboratories of its members provide
a great variety of testing equipment of both standard and special types. Sources
of supply of materials are generously open to the committee for its work. The
committee has the benefit of its long experience with work of this character ;
its reputation is widely known and well established ; and it benefits from the
universal prestige which the A. S. T. M. enjoys."

Association of Offioial Agricultural Chemists.

The Association of Official Agricultural Chemists of North America
(A. O. A. C.) was founded in 1884 by several representative agricul-
tural chemists interested in adopting a uniform system for the analysis
of commercial fertilizers.

At the first meeting methods for the determination of ammonia, phos-
phoric acid, and potash in commercial fertilizers were adopted. Later
the passage of food and drug, and insecticide and fungicide control
legislation by the States and by the Federal Government made it neces-
sary to extend the scope of the association's activities for the reason
that the methods adopted by the association were designated as the

« "Committee D-l-S and Consumer Good.s," Journal of Home Economics, vol. 2S, pp.
390-391, June 1936.

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CONCENTRATION OF ECONOMIC POWER 215

official methods for the enforcement of such legislation as well as for
the control of feeds and fertilizers by the various States.

The membership is institutional, that is, composed of chemists con-
nected with the United States Department of Agriculture; State, or
provincial experiment stations; colleges; or bodies charged with offi-
cial control of agricultural products or farm commodities.

Chemists connected with commercial firms or institutions and
others interested in the objectives of the association, who are not
eligible for either active or associate membership, may attend its meet-
ings, take part in the discussions and collaborative testing, and, if
permission is secured from the executive committee, may present
papers.

The objectives of the association are —

To secure, devise, test, and adopt uniform and accurate methods for the
analysis of fertilizers, soils, foods, feeding stuffs, dairy products, insecticides and
fungicides, and other materials relating to agricultural pursuits ; also medical
products; caustic poisons; paints, paint materials, and varnishes;

To secure uniformity in the statement of analytical results ;

To conduct, promote, and encourage research in chemistry in its relation to
agriculture ;

To afford opportunity for the discussion of matters of Interest to agricultural
chemists.**

The publications of the association include the "Journal of the
AssQciation of Official Agricultural Chemists," *^ in which the proceed-
ings of the association are published, and the "Official and Tentative
Methods of Analysis," *® which presents methods of analysis for the
following: Soils', fertilizers; sewage; agricultural liming materials;
agricultural dust; insecticides and fungicides; caustic poisons; naval
stores; paints, varnishes, and constituent materials; leathers; tanning
materials; "plants; beverages (nonalcoholic) and concentrates; malt
beverages, sirups and extracts, and brewing materials; wines; dis-
tilled liquors; baking powders and baking chemicals; coffee and tea;
cacao bean and its products; cereal foods; coloring matters in foods;
dairy products ; eggs and egg products ; fish and other marine products ;
flavoring extracts; fruits and fruit products; grain and stock feeds;
meat and meat products; metals in foods; nuts and nut products; oils,
fats, and waxes; preservatives and artificial sweeteners; spices and
other condiments; sugars and sugar products; vegetables and vegetable
products ; vitamins ; waters, brine and salt ; radioactivity ; drugs ; bac-
teriological methods; microchemical methods; and also, a list of defi-
nitions of terms and interpretations of results on fertilizers and liming
materials.*^

In the development and formulation of a method of analysis, the
procedure of which is shown in Chart XVII, a "referee" is ap])ointed
to study any subject for which the association has not yet developed
an official method, or a method that seems to require further, investi-
gation. T he duties of this referee are to direct and conduct research

«a^2.°?*'*"'^°°'r„'^**"'""^^ o^ t^« Association of Official Agricultural Chemists, vol. XVIII,
p. 96, February 1935.

« Journal of Uie Association of Official Agricultural Chemists, Association of Official
Agricultural Chemists, Menasha, Wis.

*» "Official and Tentative Methods of Analysis of the Association of Official At ricultorgl

••MbW ' ff^R '^^^°"^**"" ^^ Official Agricultural Chemists, Washington, D. C, 1936.

216 CONCENTRATION OF ECONOMIC POWER

on methods and subjects assigned to him, to prepare and distribute
samples and reagents to coUaborators, to present at the annual meet-
ing of the association the results of work done and recommendations
of methods based thereon, and to direct and encourage general dis-
cussion at the meeting.

Methods to be adopted as oflScial, or changes to be made in official methods,
must be recommended by the referee for such action at two annual, but not
necessarily consecutive, meetings of the association. Final action on adoption
does not follow first action automatically ; the referee must recommend the second
(final) action.

Methods to be adopted as tentative require only one recommendation on the
part of the referee and publication of the methods in the proceedings of the
association.

Departures from this regular method of procedure for the adoption of methods
can only be made by vote of the active members of the association to suspend
the bylaws involved.'"

A similar procedure is followed in adopting tentative and official
definitions or interpretations of a fertilizer. The adoption of a fer-
tilizer definition or interpretation as "tentative," or an amendment of
a "tentative" fertilizer definition or interpretation must be recom-
mended by a Committee on Definitions of Terms and Interpretation
of Results on Fertilizers and must be published in the proceedings of
the association. To be adopted as "official'" or foi- an official ferti-
lizer definition or interpretation to be amended, appropriate recom-
mendation by the committee is required at two annual meetings.

Other Technical, and Professional Societies.

In order to suggest the diversity of the standards with which
technical and professional societies are concerned, to indicate the
cooperation existing among these societies and other agencies, and
to give an idea of the extent of the use of the standards established
by the societies, a brief account of a few typical societies follows.

The American Home Economics Association, a professional as-
sociation of trained home economists, has chapters in each State,
the District of Columbia, Puerto Rico, and Nova Scotia.

The association's interest in standards, grades, and informative
labeling of commodities sold at retail is of long standing. In 1919,
following the World War. when textile fabrics were high in price
and unreliable in quality, the textile section of the American Home
Economics Association started a program to promote the use of
informative labels in the marketing of fabrics. The association
endeavored to gain the cooperation of the textile industry, to further
the research required for the establishment of minimum standards
for textile fabrics, and to encourage the education of consumei-s in
the intelligent use of these standards. Special studies were made of
women's habits in buying fabrics and garments, of the wearing
qualities of bed sheets, and of the wearing qualities of silk of known
composition.

The American Home Economics Association, realizing the need
of research on the performance characteristics of fabrics, conferred
with textile specialists and members of the industry. As a result,
the first abrasion machine for testing the durability of fabrics was
built at the National Bureau of Standards. Under the auspices of the

" "Report of Committee oir Recommendations of Referees." Journal of the Association of
Official Agricultural Chemists, vol. XVII. n. 43, February 1934.

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National Research Council, conferences were arranged with textile
experts and representatives of the textile industry. The industry
failed to support this effort. In order to stimulate research in this
field, the association, in 1926, established fellowships in textile re-
search for graduate home economics students. Data from these
studies later proved of significant value in conferences on stand-
ardization.

As early as 1922 the association cooperated with the Division of
Simplified Practice of the National Bureau of Standards in a survey
relating to standardization of sizes of bed blankets. In 1926 a stand-
ing committee was appointed by the association to cooperate with
this Division and the functions of this committee gradually extended
to include work on quality and performance standards, grades, and
informative labeling of consumer commodities. Efforts were made
by the association to strengthen the consumer aspects of home-eco-
nomics education. The association sought the cooperation of manu-
facturers and retailers in providing information to consumers.

Representatives of the association have participated in numerous
conferences of the Division of Simplified Practice and the Division
of Trade Standards of the National Bureau of Standards, in Trade
Practice Conferences of the Federal Trade Commission, and in con-
ferences of other governmental and private agencies. Association
representatives appeared at code hearings of the National Recovery
Administration, and at hearings on marketing agreements of the
Agricultural Adjustment Administration, in support of informative
labeling, truthful advertising, acceptable standards, and fair prices
for consumer commodities.

The association has been a member of the American Standards
Association since 1929 and is represented on the A. S. A. Standards
Council. At the request of the American Home Economics Association,
conferences were called by the American Standards Association to
consider the establishment of standards for household refrigerators,
bed blankets, bed sheets, and weighted silk.

The American Home Economics Association, a charter member of
the National Consumer-Retailer Council, has contributed toward the
cooperation of consumers and retailers in promoting standards and
informative labeling of consumer commodities.

The Journal of Home Economics of the American Home Eco-
nomics Association has published articles and editorials on stand-
ards and labeling of consumer commodities, related buying problems,
and consumer education. The association has published leaflets on
special commodities, which illustrate the type of information con-
sidered necessary in purchasing household supplies and equipment
A study outline on consumer purchasing, a forerunner of various
similar outlines by other agencies, was also published. Its consumer-
education service has proved exceptionally valuable in keeping inter-
ested persons informed as to the latest developments in the field of
standards, grades, labeling, and consumer education.

The American Association of Textile Chemists and Colorists was
organized in 1921. It has individual, corporate, and sustaining mem-
bers totaling approximately 2,400.*"

*• "1939 Year Book of the American Association of Textile Chemists au<i Colorists," p.
699. Howes Publishing Co., New York City. 1939.

218 CON'CENTRATION OF ECONOMIC POWER

The purposes of the American Association of Textile Chemists and
Colorists are —

To promote increase of knowledge of the application of dyes and chemicals in
the textile industry.

To encourage In any practical way research work on chemical processes and
materials of importance to the textile industry.

To establish for the members channels by which the interchange of professional
knowledge among them may be increased.'"

The association's research committee has 25 subcommittees, with
3 research associates and 2 research assistants working under its direc-
tion on various projects, such as wash fastness tests for dyed or printed
cotton, silk, and dyed wool; fastness to light; fastness of dyed mate-
rials to perspiration, to acids and alkalies; waterproof ness of fabrics;
analysis of fiber mixtures; shrinkaae of textiles; and deterioration of
textile fibers exposed to- light.

In speaking of the work of the association, the chairman of the
Committee on Eesearch Program has stated :

While the activities of this association are closely allied with the textile manu-
facturing and distributing branches of the industry, the research committee of
the association has endeavored at all times to give the ultimate consumer full
consideration when establishing standards of fastness."

The Society of Automobile Engineers was organized in 1905. In 1910
it took over the work previously carried on by the Mechanical Board
of the Association of Licensed Automobile Manufacturers, which
had been gathering data on various materials used by its members.
The society then appointed the first standards committee in the auto-
motive industry. This committee had 16 divisions dealing Avith prob-
lems relating to such products as aluminum and copper alloys, ball and
roller bearings, carburetors, frame sections, and springs and fastenings
for solid wheels. In 1917, in order to consolidate and coordinate stand-
ardization work in the automotive industry, this society combined with
the Society of Tractor Engineers, the American Society of Aeronautic
Engineers, and engineers interested in boat and gas engines to form
the Society of Automotive Engineers."'-

The Society of Automotive Engineers (S. A. E.) has approximately
3.000 individual members. Its purpose is —

To promote the arts, standards, and engineering practices connected with the
design, construction, and utilization of automotive apparatus, all forms of self-
propelled or mechanically propelled mediums for the transportation of passengers
uv freight, and internal-combustion prime-movers.

In its standardization work the Society of Automotive Engineers is
primarily concerned with engineering designs. It listed in the 1939
S. A. E. Handbook ^^ 18 divisions of its Standards Committee and
2 special committees. The divisions are: Aircraft; aircraft engine;
axle and wheels; ball and roller bearings; Diesel engine; electrical
equipment ; gasoline engine ; iron and steel ; lighting; lubricants ; motor-
coach and motortruck; nonferrous metals; parts and fittings; pas-
senger car; production; .screw threads; tractor and equipment; and
transportation. The special conunittees are: Methods of Expressing
Limits and Tolerances; and Patents..

"> "1939 Year Book of the American Association of Te.\tile Cliemists and Colorists," p. 45,
Howes Publishing Co., New Yorlt City, 1939.

'-^ Letter by L. A. Olney, Lowell, Mass., September 13, 1039.

«2 "History of Automobile Standardization," S. A. E. Journal, p. 698, June 1930.

""S. A. E. Handbook," pp. XXI-XXVII. Society of Automotive Englneera, New Y6rk
City, 19.39.

CONCENTRATION OF ECONOMIC POWER 219

In addition to its own committee work, the society is a sponsor of 11
sectional committees of the American Standards Association and is
also represented on 29 other sectional committees. These committees
deal with standardization of parts, methods of tests, and safety. The
Scciety of Automotive Engineers is also represented oji 18 committees
of the American Society for Testing Materials and cooperates in the
standardization work of 20 other organizations.

The S. A. E. Standards and Recommended Practices are used by a
wide range of industries. The extension of their use, however, is said
to depend on economic and other factors in the individual plant. The
standards most commonly accepted are the ones for parts, such as spark
plugs, wliich are manufactured in one factory and used in the assembly
of products in different plants.

The S. A. E. Standards which may be used outside of the automo-
tive industry are usually submitted to the American Standards
Association for approval as American Standards, but those restricted
to use in. the automotive industry remain only S. A. E. Standards.

The progressive development of the society's activities is indicated
in the following statement :

As mass production rapidly became the fundamental basis of automobile
manufacturing, the society in 1926 initiated standardization in automotive pro-
duction engineering. This new tield of standardization has since become a na-
tional project for all industries and the society is cooperating in this work also
under the procedure of the American Standards Association.

Progress in automotive design soon made possible fleet operation of motortrucks
and motor coaches, and the society undertook standardization in the motor trans-
port field, the first standards relating specifically to these operations being adopted
in .June 1931.

Soon thereafter the regular manufacture of passenger car or "house" trailers
became an established industry that included several of the automotive manufac-
turers. The first trailer committee was organized in December 1936 by the
society, with the cooperation of the traiFer manufacturers, and the first trailer
standards were adopted in January 1938."

The American Institute of Electrical Engineers (A. I. E. E.) was
founded in 1884. The purpjose of the institute is the advancement of
the theory and practice of electrical engineering. The institute is the
national society of the electrical engineering profession.

The standards developed by committees of the institute are recog-
nized throughout the United States as the authoritative sources of
information on the "terms and conditions which characterize the rating
and behavior of electrical machinery and apparatus, with special refer-
ence to the conditions of acceptance tests." ^^

The first A. I. E. E. Standards, developed by a committee of seven,
were adopted in 1899. Since that date standardization activities have
been continued and extended as experience has demonstrated the im-
portance of standardization in the development of the electrical indus-
try. The American Institute of Electrical Engineers is one of the
founders of the American Standards Association. A large proportion
of the A. I. E. E. Standards have been submitted to the American
Standards Association and approved as American Standards.

The Illuminating Engineering Society (I. E. S.) was founded in
1906. It has both individual and sustaining members. The latter
may be a company, firm, association, or individual interested in the

" "S. A. E. Handtook," p. V, Society of Automotive Engineers, New York City, 1939.
»"A. I. E. E. Standnrds," p. 2 (A. I. E. E. No. 1), American Institute of Electrical
Engineers, New York City, April 1925.

220 CONCENTRATION OF ECONOMIC POWER

purposes of the society. The society seeks "the advancement of the
theory and practice of ilhiminating engineering and the dissemination
of knowledge related thereto."

Twelve technical committees of the Illuminating Engineering So-
ciety composed of 225 members are concerned with the following
projects :

The development of testing specifications for lighting equipment ; the fonnu-
lation of specifications for I. E. S. certified portable lamps, including the I. E. S.
better-sight lamp ; improvement of lighting conditions in the home ; the codifica-
tion of street and highway lighting principles and practice; school lighting and
industrial lighting practice, including recommendations covering lighting require-
ments for the seeing tacks in approximately 10 major industries ; and the publica-
tion and distribution of lighting data covering practically every phase of applied
lighting technique.

Other projects include the vpork on light in architecture and decoration ; the
relation of adequate light to human safety and its effect on production in industry ;
the motor vehicle lighting code ; aviation lighting requirements and practices ; the
nomenclature of illuminating engineering with definitions of the terms used ; the
correlation and dissemination of information on natural lighting; the nomencla-
ture, classification, and properties of illuminating glassware and the Society's
work in the field of lighting education."

The Illuminating Engineering Society is represented on 7 sectional
committees of the American Standards Association and committees
dealing with lighting or related problems of 14 other organizations.

The society has developed standard specifications for I. E. S. better-
sight lamps. Lamps which meet these specifications are identified on
the market by certification tags issued by the Electrical Testing Lab-
oratories, which follows a testing plan to insure continuing compliance
with I. E. S. specifications. These specifications cover construction
and performance with special reference to definite standards of
illumination.^^

The American Society of Mechanical Engineers (A. S. M. E.)
initiated its standardization work in 1885 by appointing a Stand-
ardization Committee on Pipe and Pipe Threads. Its standardization
activities have been almost continuous from that date and are con-
ducted as follows:

The technical committee activity of the society is supervised by four standing
committees and one special committee, viz, the committees on research, standard-
ization, power test codes, safety, and boiler code. These committees cooperate
fully with industry, with similar committees of other societies, and with such
organizations as the Engineering Foundation, the American Standards Associa-
tion, and the International Electro-technical Commission."^

This society is a founder of the American Standards Association.
It is an outstanding organization in the promotion of dimensional
standardization and is the sponsor or joint sponsor of many American
Standards Association committees dealing with the standardization
of screw threads ; gears ; surface qualities ; bolt, nut, and rivet propor-
tions; fire-hose couplings; safety codes; pressure piping; and small
^ool and machine tool elements, and so forth. A large proportion of
A. S. M. E. Standards has been submitted and approved as American
Standards.

» "niuminatinK EJnglneering Society : Its Objectives and Activities," p. 5, Illuminating
lOngineering Society, New York City, no date.

" "Specifications for I. E. S. Portable Lamps," JO pp.. Mimeographed, IIluminatlDg
fineinpcring Society. New Yorlt City. 6tli ed.. November 10. 1938.

"" "Aims and Activities," p. 3, American Society of Mechanical Engineers. New York €lty,
I) date.

CONCENTRATION OF ECONOMIC POWER 221

The A. S. M. E. Standards, as those of similar professional societies,
are widely accepted and used by many industries as well as by govern-
mental agencies.

The American Chemical Society (A. C. S.) was organized in 1876,
reorganized in 1891-92 to further national cooperation, and was
granted a Federal charter in 1938. This charter states :

Section 2. That the objects of the incorporation shall be to encourage in the
broadest and most liberal manner the advancement of chemistry in all its
branches ; the promotion ol research in chemical science and industry ; the im-
provement of the qualifications and usefulness of chemists through high standards
of professional ethics, education, and attainments ; the increase and diffusion of
chemical knov?ledge ; and by its meetings, professional contacts, reports, papers,
discussions, and publications, to promote scientific interests and inquiry, thereby
fostering public welfare and education, aiding the development of our country's
industries, and adding to the material prosperity and happiness of our people.

Secttion 4 T'hat the American Chemical Society shall, whenever called upon
by the War or Navy Department, investigate, examine, experiment, and report
upon any subject in pure or applied chemistry connected with the national
defense, the actual expense of such investigations, examinations, experiments,
and reports to be paid from appropriations which may have been made for that
purpose by Congress, but the society shall receive no compensation whatever for
any services to the Government of the United States: Provided, That the title
to any and all inventions and discoveries made in the course of such investiga-
tions, examinations, and experiments that, in the opinion of the Secretary of
the Navy or the Secretary of War, involve the National defense, shall vest in
the Government of the United States, and the Government of the United States
shall have unlimited license under all other inventions and discoveries.™

The American Chemical Society has over 24,000 members, who have
completed required college training in chemistry or chemical engi-
neermg or the equivalent and who have been actively engaged in some
form of chemical work. The American Chemical Society —

leads in establishing standard specifications and analytical procedures for chem-
icals and chemical products. Use of its specifications for analytical reagents
is increasing. At present American Chemical Society committees are engaged
in developing standards for (a) reagent chemicals, (6) apparatus, (c) analysis
of commercial fats and oils, (d) soap and soap products, (e) examination of
water and sewage, (f) biological stains, (g) vitamin research, and (/») methods
of analysis*"

The society has established standards for chemical equipment and
apparatus, as well a.s standards for chemical reagents, which are
widely used. These standards have been approved and used by the
United States Government.

The discussion of standardization activities of technical and pro-
fessional societies could be considerably extended. However, the few
examples presented illustrate accomplishments in the development of
standards through cooperation of organized groups.

The mere listing of a few additional technical societies will serve to
indicate the areas of other activities and potential contributions.

The American Society of Heating and Ventilating Engineers is in
a key position to guide the establishment of standards in an industry
in which rapid developments are taking place.

The American Society of Sanitary Engineers, in cooperation with
other groups, is promoting desirable standards in plumbing equip-
ment.

»• An Act to Incorporate the American Clwinical Society," 2 pp., Public No. 35S, 75th
Cong., ch. 762. 1st sess., H. R. 7709. January 1, 4938. . _

«> "What Tt Is Doing for Chemists," p. 6, American Chemrical Society, Washingtott. D . C
no date.

222 CONCENTRATION OF ECONOMIC POWER

The American Institute of Architects is represented on many com-
mittees concerned with the development of standards for materials,
dimensions, and codes for building of all kinds.

The American Institute of Mining and Metallurgical Engineers,
the American Railway Engineering Association, the American So-
ciety of Civil Engineers, and others are organizations which have been
and are participating actively in standardization programs.

Medical and DerUal Organizations.

There are several medical, surgical, and dental associations which
have established standards of materials and practices for use of their
respective professions. These standards are of immediate value to
those requiring medical or dental treatment and also to the public
at large, because many of these standards contribute to the further-
ance of public health.

The American Medical Association, the American College of Sur-
geons, the American Dental Association, and related associations have
been active in promoting the improvement of the education and
practical training of physicians, surgeons, and dentists. They have
also established standards for physical and other equipment of edu-
cational institutions and clinics in which this training is provided.

The American Medical Association (A. M. A.) is active in the
improvement of quality and standardization of medical products pri-
marily for use by the medical profession. The committees of the asso-
ciation whose activities relate to standards are the Council on Phar-
macy and Chemistry ; the Council on Physical Therapy ; the Council
on Food, originally a subcommittee of the council on pharmacy and
chemistry; the Advisory Committee on Advertising of Cosmetics and
Soaps; and the Bureau of Investigation.

The Council on Pharmacy and Chemistry was created in 1905 to
protect the public and the medicaJ profession against fraud, undesirable
secrecy, and objectionable advertising of proprietary medical articles.
The council judges (on the basis of scientific and clinical study) prod-
ucts claimed to have therapeutic values. The products accepted ®^ by
the council are described in the Journal of the American Medical Asso-
ciation and are included in New and Nonofficial Remedies,^^ which is
revised and published annually; approximately 900 accepted articles
are listed in the 1939 edition. Statements are issued for both accepted
and rejected articles, and each edition of New and Unofficial Remedies
includes a list of articles appearing in the previous issue but excluded
in the current edition.

The Council on Physical Therapy, created in 1925, investigates and
reports on the merits of nonmedical apparatus and devices, offered for
sale to physicians, hospitals, and the public; 232 items are listed in the
"Apparatus Accepted" list.^^ This council has established standards
of practice and standard definitions and terms used in physical
therapy.

The Council on Foods checks the health claims made for manufac-
tured foods by their producers. The council's findings are made known

•*^"Offleial Rules of the Council on Pharmacy and Chemistry of the American Medical
Association," 38 pp., American Medical Association. Chicago, 111., January 3. 1940.

«* "New and Nonofficial Remedies," 617 pp., CouncH on Pharmacy and Chemistry. American
Medical Association, Chicago, 111., 1030.

'^ "Apparatus Accepted by the Council on Physical Therapy," 78 pp., Council on Physical
Therapy, American Medical Association, Chicago, 111., September 1938.

CONX'ENTRATIOX OF ECONOMIC POWER 223

to the medical profession through the Journal of the American Medi-
cal Association. Producers of foods which meet the requirements of
the council are granted the use of a "seal of acceptance," This service
is not available to producers of individual brands of natural foods,
such as eggs, fresh fruits, or vegetables. Approximately 3,800 foods
are listed in the 1939 issue of Accepted Foods."

The Advisory Committee on Advertising of Cosmetics and Soaps
was recently formed to advise the manager of the Journal of the
American Medical Association concerning advertisements of cosmetics
and soaps which are submitted to him.

. The Bureau of Investigation has for its primary objective the col-
lection and dissemination of information on "patent medicines,"
quacks, medical fads, and various other phases of pseudo-medicine.
It collects its information through original investigations and re-
search; data received from Federal, State, and municipal agencies;
information in technical and other journals; and from reports of
special commissions.

The American College of Surgeons is a society of surgeons of North
America and South America. This society is actively engaged in
standardization work. In 1930 it published the first authoritative
Avork on the standardization of surgical dressings, relating to the most
desirable quality, size, and shape.

In 1931 the Division of Simplified Practice, Bureau of Standards of tlie United
States Department of Commerce, approved the report, thereby making the stand-
ards authoritative. At the same time a committee was appointed to make further
studies, to keep in touch with changing conditions, and to make such recommenda-
tions as might become advisable from time to time. The American College of
Surgeons in its first Manual of Surgical Dressings included these recommenda-
tions, as well as information relative to manufacture, sterilization, storage, and
other matters pertinent to the use of surgical dressings. In 1933 a preliminary
report of the committee was presented to and approved by the American Hospital-
Association. It is thus that the movement for standardisation of surgical dre.ss-
ings was initiated. The work has since been carried on through the cooperative
activities of the American College of Surgeons, the American Hospital Association,
and the Division of Simplified Practice, Bureau of Standards of the United
States Department of rommerce."'

The 1940-41 Yearbook of the college gives a classification of surgi-
cal dressings on the basis of function and essential characteristics.
The items covered include sponges: abdominal packs; sterile gauze
dressings; pads; cotton balls: gauze drains, such as cigarette drains
and tampons; bandages; and binders. Standard dimensions are fur-
nished for different sizes of the first five of these items.

The College has also developed standards for hospitals.*^'' The.se
deal with personnel and its organization; minimum standards for
different types of hospital services including cancer clinics; clinical
laboratories; obstetrical, X-ray, ]:»hysical therapy, and out-patient de-
partments; anesthesia; traumatic surgery; treatment of fractures;
nursing service; and medical records: as well as standards for the
small hospital.

Tlie American Institute of Hornerpathy published the first Homeo-
pathic Pharmacopoeia in 1897. Tlie fifth revision of this Pharma-

<" 'Aeof'pterl Food.< and Their Xutrition.'il Significance," 492 pp., Council on Foods. Ankii-
C8n Mpdical Association, Cliicago, l\\., 19.30.

«B "American CoUeee of Surgeons 1940-41 Year Book," 1.077 pp., .\nierican College of
Surgeons, Cliicago, 111., 1940.

•"'Manual of Hospital Standardizatioh." 96 pp., American College of Surgeons. Chicago,
111., no date.

224 CON'CENTRATIOX OF ECONOMIC POWER

copoeia^^ was published in 1938 and, as stated in the preface, "is
designed to furnish directions for the selection and preparation of
remedies which are thoroughly adapted to the purpose of homeopathic
prescribing." It is for the use of the pharmacist as well as the
physician.

The standards for drugs in the Homeopathic Pharmacopoeia are rec-
ognized in the Federal Food, Drug, and Cosmetic Act.

The American Dental Association (A. D. A.) has been active in the
standardization of materials used in dental practice. It promotes re-
search on these materials through research fellowships maintained at
the National Bureau of Standards.

The Council on Dental Therapeutics is a standing committee of the American
Dental Association. This committee accepts and rejects articles coming within
its purview on the basis of available, scientific evidence. Acceptance of an article
does not connote a recommendation. * * * On this basis the council desig-
nates its favorable action on a product "acceptance" rather than "approval." It
should also be noted that the major portion of the council's work is directed to
the dental profession."*

Products must meet a set of definite requirements before the seal of
acceptance may b6 used.^'' The American Dental Association pub-
lishes Accepted Dental Remedies, prepared by the Council on Dental
Therapeutics.^^

The appreciation of the work of the council is indicated by the
increasing number of inquiries received, many of which ask for a list
of safe dentifrices.

The Americf n Hospital Association plays an. active part in stand-
ardization. It has invited the cooperation of the National Bureau of
Standards in developing Commercial Standards for various products
such as clinical thermometers, rubber sheeting,' surgeon's latex and
rubber gloves, and mattresses. The association has sponsored the Sim-
plified Practice Recommendations for hospital beds, china, hospital
textiles, plumbing fixtures, and surgical dressings.

The American Hospital Association is an associated member of the
American Standards Association and is represented oh its committees
dealing with products used in hospitals.

"7 "The Homeopathic Pharmacopoeia of the United States, Fifth Revised Edition," 68 pp.,
published under the direction of the Committee on Pharmacoiweia, American Institute of
Homeopathy, by O. Clapp and Sons, Boston, Mass.. 1938.

0* "Letter by Harold L. Hansen, secretary. Council on Dental Therapeutics, American
Dental Association, Chicago, 111.. January 19, 1940.

60 "Official Rules of the Council on Dental Therapeutics of the American Dental Associa-
tion," 35 pp., Chicago, 111., July 1939.

•""'Accepted Dental Remedies," 304 pp., Council on Dental Therapeutics, American
Dental Association, Chicago, 111., 1939.

CERTIFICATION OF PRODUCTS BY TRADE ASSOCIA-
TIONS AND TECHNICAL AND PROFESSIONAL SOCIE-
TIES

Consumers often have very unsatisfactory experiences with the goods
they purchase. The major reason for this seems to be lack of useful
information concerning the character and performance value of retail
merchandise. Therefore, it is easy to understand the consumer's re-
quest for some assurance of the quality of the products" he buys, and
the manufacturer's effort to devise some means by which to gain the
consumer's confidence in his product. This has led to the adoption by
different agencies, both public and private, of various methods of
certification or guaranty of commodities. These methods have ranged
from Federal or municipal inspection of commodities and quality or
grade-marking programs, to guaranties by irresponsible agencies.

An extensive study of certification and labeling was made by the
American Standards Association and reported in 1932. This was
"A factual survey of the methods and results of certification and
labeling in the marketing of commodities as practiced by trade and
technical associations and governmental bodies."'^

The certification and labeling activities of over 60 agencies were
surveyed. The report covers a wide range of commodities and services
including lumber, foods, drugs, dental supplies, electric wiring, heat
installations, mattresses and pillows, mirrors, paper products, steel,
textiles, tile, wallpaper, various appliancp«^ and miscellaneous
materials.

The Certification Plan developed by the National Bureau of Stand-
ards provides means whereby those who make purchases through con-
tracts are enabled to identify firms which are willing to certify that
their goods meet certain Federal Specifications or Commercial Stand-
ards. This plan is described in detail on page 91.

Provisions are included in numerous Commercial Standards and in
some Simplified Practice Recommendations developed by industries in
cooperation with the National Bureau of Standards which require the
labeling of products to indicate their adherence to a specific Commer-
cial Standard or Simplified Practice Recommendation. A few exam-
ples follow.'^^

The Mirror Manufacturers Association adopted a specification cov-
ering five grades of plate-glass mirrors which was promulgated as
Commercial Standard CS27-30. This was later revised (CS27-36)
to include "shock" or common window glass mirrors, and to eliminate
two grades. The association recommended to mirror manufacturers
that polished plate-glass mirrors be labeled as follows : Red for "A"
quality ; blue for "No. 1" quality ; and green for "No. 2" quality with
the words:

"' "Certification ami Labeling Activities in 60 Commodity Fields, " by P. G. Agnew, and
J. W. McNair, A. S. A. Bulletin, vol. 3, pp. 1-23. January 1932.

"■- Material on pige.s 22.^-23:; is based on data furnished by the National Bureau of
Standards, U. S. Department of Conim>'rce, Washington, D. C.

225

226 CONCENTRATION OF ECONOMIC POWER

We guarantee this mirror to be manufactured of polished plate glass and to be

of quality as specified in Commercial Standard CS27-36, issued by the

National Bureau of Standards, U. S. Department of Commerce.

Shock mirrors shall be labeled as follows: Yellow for "A" quality
with the words :

We guarantee this mirror to be made of common window glass.

* * *

The Tile Manufacturers Association has adopted uniform grade
names and a color scheme for grade-marking, and certificates to ac-
company packages of various types of tiles manufactured to comply
with the Simplified Practice Recommendation R61-30. If required in
the architect's specification, typical samples of each kind and grade of
tiles as indicated and proposed to be used, and shop drawings shall be
submitted to the architect for approval. Each sample shall be marked
with the name of the manufacturer and the grade of the tile. Ap-
proved samples shall be retained by both the architect and the tile con-
tractor. Before setting any tiles, the tUe contractor shall furnish to
the architect a certificate of grade, properly filled in on the form of
grade certificate issued by the association. The certificate shall be
signed by the manufacturer of the tiles; sliall state the grade, kind,
and full quantities of tiles; and give identification marks for all pack-
ages of tiles furnished under the contract. Packages shall be branded
with corresponding shipping marks, and shall be subject to inspection
by the architect or his representative before being opened.

The Institute of Book Cloth and Impregnated Fabrics Manufac-
turers in cooperation with the Book Manufacturers Institute and the
Employing Bookbinders of America, has sponsored the establishment
of Commercial Standard CS57-40, for book cloths, buckrams, and
impregnated fabrics for bookbinding. In connection with this Com-
mercial Standard, manufacturers of starch-filled and impregnated
bookbinding fabrics shall place on their fabric a label to the effect
that—

These goods are manufactured to conform with Commercial Standard CS57-40
issued by the United States Department of Commerce.

Through the joint cooperation of the Southern Cypress Manufac-
turers' Association, the Red Cedar Shingle Bureau, and the California
Rf dwood Association, a quality standard has been established for
tidewater red cypress, red cedar, and California redwood sliingles.
Shingles produced by members of the California Redwood Association
may be readily identified by a label which appears on each bundle.
This label reads:

Certified shingles, No. 1 grade. These shingles are guaranteed by the manu-
facturer. Inspected for and certified by the California Redwood Association to
meet all the quality requirements of Commercial Standard CS31-38 for redwood
shingles as issued by the United States I>epartnient of Commerce.- 100 percent
edge gi'ain : heartwood 100 percent.

The Red Cedar Shingle Bureau maintains a corps of trained inspec-
tois who visit the plants at irregidar intervals to check on the quality
of shingles. In addition to labels for the No. 1 grade which meet the
requirements of Commercial Standard CS31-38, labels are also issued
and placed on bimdles of shingles for No, 2 and No. 3 grades. These
latter grades were established by the Red Cedar Shingle Bureau.

CONCENTRATION OF ECONOMIC POWER 227

The American Walnut Manufacturers Association has adopted a
certification mark "American wahiut certified veneers" and maintains
an inspection service and issues a certificate of inspection for each ship-
ment which states that the wahiut veneers have been rigidly graded and
inspected by an independent inspector whose name appears on the cer-
tificate. It further states that veneers are certified to complj' with the
requirements of Commercial Standard CS64-37 for quality, workman-
ship, thickness, full measurement, and the true representation of the
flitch by the samples.

The HardAVood Dimension Manufacturers Association has developed
a guaranty certificate which reads as follows :

This hardwood dimension lumber has been manufactured by a member of the
Hardwood Dimension Manufacturers Association and is guaranteed by the under-
signed to conform to Commercial Standard CS60-36 issued by the National
Bureau of Standards, United States Department of Commerce. The certificate
is signed by the manufacturer using it.

The National Oak Flooring Manufacturers' Association promoted
the establishment of a Commercial Standard for white oak and red
oak flooring. The association has adopted a label by which manufac-
turers and the association jointly certify full compliance with the Com-
mercial Standard CS56-36. The label applied to bundles of oak
flooring states :

This oak flooring is guaranteed and marked for grade by the manufacturer,
is inspected and certified by the National Oak Flooring Manufacturers Association
to meet all requirements of the Commercial Standard CS36-36 as issued by the
National Bureau of Standards of United States Department of Commerce.

The Douglas Fir Plywood Association has adopted a certificate of
inspection which is signed, sealed, and sworn to by an inspector of the
association. The certificate contains a statement that the inspector
certifies that the ply^vood so inspected —

complies with the grade specification of Commercial Standard CS45-38 of the
United States Department of Commerce.

In addition to products for which Commercial Standards are avail-
able, many organizations provide certificates, labels, or guaranties for
products which conform to grading rules, standards, or specifications
formulated by these organizations.

The activities of these organizations in the field of certification
follow :

The National Hardwood Lumber Association is engaged in estab-
lishing and maintaining grading rules covering hardwood lumber. A
stafT of bonded inspectors in the principal prwlucing and consuming
centers of the country are authorized to issue certificates on lumber
shipments.

The Mahogany Association, composed of American firms that im-
port genuine mahogany logs and manufacture them into lumber and
veneer, licenses manufacturers to use labels issued by the association
and to aflfix these labels to furniture made of genuine mahogany. Con-
tracts between the manufacturers and the association contain penalty
clauses in the form of liquidated damages for willful misuse of the
labels. Labels are issued in two colors. The re(t lal)el on a piev^e of
furniture indicates that it is made of solid mahogany Iinnber. v.liereas
the blue label means that the furniture is made of solid mahogany
lumber tor frame parts and of msihogany plywood for larger surfaces.

228 CONCENTRATION OF ECONOMIC POWER

The association states that it has been found that the penalty contract
automatically enforces proper use of the labels and that during the 2
years they have been in use not a single violation has come to the
attention of the association.

The Maple Flooring Manufacturers Association permits members to
use its trade-mark on maple, beech, or birch flooring which is stand-
ardized by the association. The quality of flooring is guaranteed by
the association when approved by an accredited inspector, provided
the grade name and species of the wood is stamped on each bundle of
flooring. The association has inaugurated a "car card plan'' by which
it furnishes certificates to manufacturers who, in using them, guaran-
tee the contents of sealed cars to be in conformity with the grading
rules of the association.

The Southern Cypress Manufacturers' Association maintains an
inspection department for the purpose of grading and inspecting lum-
ber manufactured by member mills to insure purchasers that the lumber
is graded and shipped in accordance with the official grading rules
of the association, which conform to American Lumber Standards.
Under proper supervision member mills are licensed to stamp their
cypress with the official trade-mark and grade marks which have the
approval of the association. Inspectors of the association will offi-
cially grade and mark cypress for nonmember mills. Manufacturers
of specialized products, such as special millwork and woodwork and
wood tanks, may have their products inspected and officially stamped
to indicate that the material is of first quality or grade.

The Northern Hemlock and Hardwood Manufacturers Association
has adopted a system of certified shipments of lumber whereby it
licenses lumber firms to manufacture, grade, and ship lumber in accord-
ance with the standard rules of the association. Only firms having
competent lumber inspectors may be licensed. Under the terms of
the contract a licensed firm agrees to place in cch car of hardwood
lumber shipped the association's licensed shipment form properly filled
out to show the correct grade and tally of the lumber in the car, and to
seal it within the association's enveloi:)e. The buyer is thus furnished
with a certified copy of the original inspector's statement of the amount
and gi'ade of lumber loaded into the car at the original shipping point.
The licensed manufacturer further agrees with the association that in
case of complaint the buyer shall unload the car and submit his tally
report to the firm within 5 days after unloading. The association may
revoke the license of any manufacturer where it is found that improper
or incompetent use is made of the shipment forms, or where the terms
of the contract have been breached, or for any other reasons determined
by the board of directors of the association.

The Southern Pine Association has adopted a grade-marking plan
conforming to the requirements of American Lumber Standards, which
were formulated under the auspices of the United States Department
of Commerce. Each piece of lumber is branded with the standard
grade name, the producing mill's name or identifying number, and
the symbol "SPA," which indicates that the association has supervised
the grading.

The Western Pine Association has established official grade, trade,
and species-marks applied to ponderosa, Idaho, and sugar pine, larch-
Douglas fir. white fir, Engelman spruce, red cedar, and incense cedar

CONCENTRATION OF ECONOMIC POWER 229

lumber. Lumber sold by members of this association may be graded
under the association's rules established by its bureau of grades. Rules
are standard for the region.

The Northern Hemlock and Hardwood Manufacturers Association,
the Southern Pine Association, and the Western Pine Association em-
ploy experienced lumber inspectors who check on the manufacturers'
grading and inspection work. These inspectors may hammer-brand,
or designate by some other distinguishing mark, each piece of lumber
approved.

The Society' of Automotive Engineers (S. A. E.) provides a list of
manufacturers whose products conform to the S. A. E. Standards
published in the S. A. E. Handbook.

The Illuminating Engineering Society (I. E. S.) has formulated
specifications for electric lamps satisfactory for individual desk work
or reading, which will endure over a reasonable period of time with a
minimum of casualty and fire hazard. Lamps manufactured in con-
formity with these specifications may, after examination and approval
by the electrical testing laboratories, have the I. E. S. approval tag
attached to them.

The American Glassware Association has inaugurated a plan
whereby glass reflectors used in lamps manufactured to meet the
I. E. S. specifications are labeled to indicate that these reflectors have
been tested with instruments provided by the Electrical Testing Lab-
oratories. Each reflector is stamped with the name of the manufac-
turer and the words: "Conformance Certified. Electrical Testing
Laboratories. lES Standard."

The Underwriters' Laboratories test devices and materials with
relation to fire and casualty hazards and grant the use of a label to
those approved.

The American Zinc Institute licenses its members to use the seal of
quality on galvanized sheets, to indicate that special care has been
used in making the sheets and that the zinc coating is extra heavy — 2
ounces per foot.

The Cast Iron Pipe Research Association has adopted a symbol, Ji
letter Q with a check, which is stenciled on each length of pipe pro-
duced by the members of the association.

The American Hot Dip Galvanizer Association has adopted an
official insignia, in the form of a tag or sticker, for the use of its
members on products conforming to the specifications of the
association.

Steel Barrel Manufacturers Council maintains its own policing
system to prevent unscrupulous deterioration of members' products or
the substitution of inferior material in the manufacture of steel bar-
rels. Ail members have pledger! to adhere to the standards developed
by the counci), or ihosp established by tlie Interstate Commeict, Com-
mission, oi tliose which are embodied in the rules of the Railroad
Consolidated Classification Committee, and certify to purchasers that
barrels manufactured by theni comply witli the requirements of these
standards.

Safe Manufacturers' National Association (S. M- N.A.) conducts a
label service designed to protect the public against unwarranted claims
relative to the fire resistance and/or burglary resistance of products
of the fire-resistive safe industry. Members of the association submit

272496— 41— Xo. 24 IG

230 CONCENTRATION OF ECONOMIC POWER

their products to the association's Technical Advisory Committee foi
Testing and Classification. The S. M, X. A. labels are applied to these
products with ratings stamped or etched in the lower left-hand corner
as, for example: "SMNA Rating — 1-Hr. Exposure." The test require-
ments for fire-resistive safes are those which have been established by
the National Bureau of Standards and by the Underwriters' Labora-
tories and adopted by the association.

The "Rail Steel Bar Association permits its members to use a uniform
identification mark on rail steel reinforcing bars produced by them.
The use of this mark, which is protected by registration, signifies a
willingness on the part of manufacturers to certify that bars produced
by them comply with the standards of the association. The associa-
tion maintains a cooperative program of research for the purpose of
improving methods and quality of products. Each mill is visited by
the association's metallurgist at intervals for purposes of general
inspection and policing.

The National Warm Air Heating and Air Conditioning Association
has adopted a symbol which installers may display in their places of
business if they are members of the association and pledged to install
furnaces according to the standard code as published by the associa-
tion. Such installations are triply endorsed — by the installer, the
furnace manufacturer, and the association.

The Oil Burner Institute has adopted a seal used by its members on
their oil burners, letterheads, and advertising and sales literature.
The institute's seal on equipment is evidence that it complies with the
standards of the institute and that the manufacturer's efficiency has
been approved by recognized authorities acceptable to the board of
directors of the Oil Burner Institute; that a fixed minimum number
of installations have been made and proper endorsement of the equip-
ment received from users; and that standards established from time
to time are constantly maintained.

The American Gas Association (A. G. A.), through its Approval
Requirements Committee, has established safety and performance re-
quirements for gas-burning appliances and accessories. These require-
ments must be met before the manufacturer is authorized to attach, to
an individual appliance or accessory, the A. G. A. seal of approval.

The American Petroleum Institute (A. P. I.) grants to manufac-
turers the right to place its official monogram on equipment standard-
ized by the institute. This is subject to submission of a statement as
to past experience of the manufacturer, and a notarized guarantee that
the material so marked complies with the American Petroleum Insti-
tute Standards. The institute reserves the right to revoke the use of
its monogram for any reason deemed sufficient by the board of
directors.

The National AssociatiGn of Ice Industries has adopted for ti;*;
industry a seal of approval whicli will identify ice refriirrritors and
other ice-using appliances that have been subiectcd to tests by the
association and which conform to carefully determined standards of
construction and peiforni?^riC(i established by the asst)ciation. This
seal on an ice refiipsrator or ice chest is a guarantee that it has been
carefully tr.itcu by the technical department of the National Associa-
tion oi "ice industries and has been found upon test in a testing labora-
tory to meet the requirements, both as to construction and perform-
ance, set up and unanimously approved by this association and the
National Association of Ice Refrigerator Manufacturers.

CON'CEXTRATIOX OF ECONOMIC POWER 231

The National Association of Ice Refrigerator Manufacturers has
established minimum construction requirements for ice refrigerators
for the purpose of insuring satisfactory and economical operation.
Ice refrigerators which conform to these requirements may have at-
tached the association's insignia, which states that the refrigerator is —

manufactured by certified member according to specifications of the National
Association of Ice Refrigerator Manufacturers.

The United States Shellac Importers Association has inaugurated
a plan for the sampling of all shipments of shellac imported into the
United States. The plan ])rovides for a standardization bureau which
shall examine each importation of shellac. An examination com-
mittee, composed of representatives of member firms, is entrusted with
the duty of examining samples of the various grades of shellac and
determining their quality in accordance with the official rules and regu-
lations of the association. The examination committee issues cer-
tificates on each lot examined, stating grade, mark, lot number, name
of vessel, date of examination, and the committee's award.

The Gummed Industries Association has organized the Certified
Products Bureau, which is the administrative division of the associa-
tion. The objectives of the bureau are to establish minimum specifica-
tions for kraft sealing tape, and to provide a "certified products label"
for the use of members of the association on products which conform
to these specifications. The facilities of a national testing laboratory,
are used to test products selected in the market for compliance with
the bureau's requirements.

The National School Supplies and Equipment Association has in-
augurated a certification and labeling program whereby all janitor
supplies used in schools are properly labeled as conforming to stand-
ards promulgated and adopted by the association. The manufacturers
or distributors of janitor supplies may submit samples of their regular
supply products for certification purposes. These samples are tested
in the laboratory of the association, and if they confoiTn to the estab-
lished standards, the companies are privileged to use the certification
seals. The association also makes use of labels to identify school
furniture complying in color with the standards established by the
industry under the auspices of the National Bureau of Standards,
United States Department of Commerce.

The National Door Manufacturers Association, Inc., has established
minimum standards for wood preservatives. Any manufacturer or
distributor of architectural wood products may enter into a license
agreement to use" the association's seal of approval. The primary
provision of this agreement is that the licenses shall conform strictly
to the association's minimum standards in treating all products to
which the seal is affixed. The seal of approval is to be branded, by hot
brand, on all products which are treated in conformity with these
minimum standards. The seal shows the number of the licensee and
the wording "Toxic-Preservation; Approved, National Door Manu-
facturers Association."

The National Association of Furniture Manufacturers has established
a Design Registration Bureau for its members, and issues a "design
registration label" for use on designs which members claim to have
originated and to own exclusively. The association states that most
furniture manufacturers will not knowingly copy a design which an-
other manufacturer claims to have originated.

232 CONCENTRATION OF ECONOMIC POWER

Tlie Window Shade Institute has adopted a label for use on window
shades made from windoAv cloth and shade rollers purchased by the
members of the institute. The label may be affixed to the window
shade either by the manufacturer or jobber. It bears the statement
"Made by a member of the Window Shade Institute,"

The National Venetian Blind Guild has a registered trade-mark
vhich is used in conjunction with their guild seal tag. This tag is
affixed to each blind shipped by members of this guild. The statement
on the label is — .

Standard Warranty — This Blind is guaranteed to conform to the standard speci-
fications of the National Venetian Blind Guild, Cleveland, Ohio.

The Sanitary Institute of America has adopted specifications deal-
ing with the process of sterilization and grading of wiping cloths. The
Institute has adopted an official label, the presence of which on a bale
of industrial wipers represents a guaranty that the contents of the bale
conform to the specifications. The label reads :

The wiping cloths contained in this bale or package have been produced and packed
according to specification of the Sanitary Institute of America.

Each member of the institute issues an affidavit certifying that he,
as a manufacturer of the particular bale or package of wiping cloths,
has complied with all rules and regulations of the State and city health
departments along with the regulations of the Board of Underwriters
and city sealer. The manufacturer also certifies that the wipers con-
tained in a given shipment are correct in weight, and that he has com-
plied with all of the recommendations f the Sanitary Institute of
America. The institute relies chiefly upon the integrity of its members
for the enforcement of specifications.

The National Association of Finishers of Textile Fabrics has made
arrangements with a commercial testing laboratory to conduct tests of
goods finished by members to determine the degree of fastness to light
and washing. Licensed finishers whose goods receive an "A" or '^"
rating for fastness to light and washing are granted the use of the
association's "Nafal Label," showing that the particular dyeing from
whicluthe sample was taken has passed the requirements and tests of
the association's standard for colors. The license to use the label is
automatically revoked if, by a majority opinion of the executive com-
mittee of the association, it has been found that the label was used in
a manner contrary to the provisions of the license agreement.

The International Silk Guild, Inc., distributes, to manufacturers of
pure dye silk, tags or labels stating that the fabrics to which they are
attached are "All pure silk"; these tags or labels, bearing the name of
the guild, constitute a guaranty that the silk is genuine. The term
"pure dye silk" is used as defined in the Kules and Definitions on the
Marking of Fabrics established at a trade practice conference under
the auspices of the Federal Trade Commission. The guild reports that
all fabrics are tested to see that they come within the ruling of the
Commission.

The National Association of Lace Curtain Manufacturers has
adopted a seal of quality which is used by its members to indicate that
lace curtains manufactured by them are guaranteed by the association
to be of a specified quality.

The Underwear Institute does not issue quality labels or certificates;
however, its members observe the rule established at a conference held
under the auspices of the Federal Trade Commission with respect to

rON'CEXTRATIOX OF ECONOMIC POWER 233

the use of the word ''wool." The percentage of wool is stated on
garment and container and wherever the .word "wool" is used on the
label or in advertising; and further, that unless the material in ques-
tion is all wool (less 3 percent tolerance) the percentage of wool is
stated.

The Tanners' Council of America has sponsored the use of labels for
the luggage industry. These labels are used on top grain cowhide and
seal, and split cowhide and seal. In consideration for receiving per-
mission to use the official labels manufacturers of luggage sign an
agreement with the council concerning the type and kind of luggage
on which the labels are to be placed. In the event a manufacturer
violates this agreement, it is understood that he shall return to the
council all labels which he may have purchased, provided the demand
for their return is made.

The Rice Millers Association has established laboratories for the
inspection and analysis of rice. The use of these facilities enables the
industry to sell its product on the basis of origin of growth, quality,
grade, and condition, and makes possible the issuing of certificates of
such findings by the association.

The National Macaroni Manufacturers Association requires that all
products manufactured by its members must be subjected to chemical
tests and analyses at the association's laboratory to determine whether
or not they comply with the association's standards and specifications,
which are in line with those established by the Food and Drug
Administration.

The New England Council has conducted a farm marketing program
to encourage producers to grade and pack their products according
to official State standards, and to identify them by means of quality
labels placed on the containers in which the goods are packed. Per-
mission to use the New England quality label must be obtained in
each State from the State commissioner of agriculture, and it may
only be used on goods packed in accordance with official State grades.
Each State department of agriculture maintains an inspection service
and employs trained field inspectors to examine graded and labeled
products in order to determine whether or not they comply with the
grade requirements.

The Council on Foods of the American Medical Association grants,
on application, the use of its seal to manufacturers of food products,
which comply with the requirements of the council. The council deals
chiefly with processed foods, the sale of which is largely promoted
through advertising. No food is accepted if the manufacturers' claims
of nutritive and health values are considered false or misleading.
Approximately 3,800 food products have been accepted by the council.

The Council on Pharmacy and Chemistry of the American Medical
Association provides a similar service for medical products and grants
use of a seal to manufacturers of products accepted by the council.

Tlie American Dental Association grants a seal of acceptance to
manufacturers of dental products which meet the requirements of the
association.

Testing and approving institutes are maintained by several period-
icals which grant approvals to various products 4ised by ultimate
consumers.

This description of certification activities might be extended to
include many more organizations. These activities deal with many
different commodities such as lumber, metal, textile, heuting and other

234 CONCENTRATION OF ECONOMIC POWER

kinds of equipment, furniture, foods, and medical and dental products.
Similarly, a wide variation in tj'pes of certification, approval, accep-
tance, and labeling plans is noted. Certified products may be identi-
fied by a card, label, stamp, or other means.

Certification may refer to certain characteristics of a product which
are of no particular value to consumers, or, on the other hand, it may
refer to factors of quality and performance of importance to
consumers.

Some of the methods of certification indicate that the certified
products conform to widely recognized standards, grades, or specifica-
tions; for other methods no information is given on what standard the
certification is based.

Some organizations may approve and certify a product after only
a superficial inspection or inadequate laboratory test; while others
grant approval based on scientifically conducted tests made in con-
formity with nationally-recognized methods.

It has been found that not all agencies issuing such approvals have
been reliable. Sometimes the name of an approving agency has been
misleading and has implied a technical character which the agency
did not possess ; or in some cases the name may have been chosen with
the express purpose of deriving the benefit of confusion with the name
of some thoroughly reputable agency. Evidence of such unfair trade
practices is provided in complaints and cease and desist orders issued
by the Federal Trade Commission against agencies which have falsely
approved or guaranteed goods or services.

The study on certification and labeling made by the American
Standards Association in 1931 and referred to on page 225 was under-
taken at the request of the Committee on Certification and Labeling
of the Board of directors of the American Standards Association. In
a preliminary report presented by this committee to the board the
following recommendations were made :

1. Any program of certification, labeling, or grade marking, in order to be
adequate, should be based upon specifications which are publicly available and
nationally recognized.

2. iLas for the group or groups substantially concerned with the specifications
to decide whether there is to be certification or labeling ; and the A. S. A. itself
eannot directly take any primary responsibility in respect to such activities.

3. Any certification or labeling program should be effectively supervised by a
properly qualified body : e. g., a trade association, or a testing laboratory, oper-
«ting under proper administrative management."

In 1936 the Association of Consulting Chemists and Chemical Engi-
neers submitted to the American Standards Association a proposed
recommended practice on public approval and certification ])rocedures.
Subsequently a Committee on Valid Certification was authorized by
the Council of the American Standards Association. This committee,
compo.sed of representatives of a number of organizations of varied
interests, has drafted a Recommended Practice in Public Approval
and Certification Procedures which is now under discussion.

In conclusion it may be said that any agency which undertakes to
certify or guarantee products should be competent and responsible,
that standards to which the products coniiply should be identified and
made available, and that adequate provisions should be made for test-
ing the products at stated intervals to assure continuing adherence
to standards on which approval is based.

'"'Report of the Committe on Certification and Labeling," by Howard Coonley, A. S. A.
Bulletin, vol, 3, p. 24. January J932.

CHAPTER IV

STANDARDIZATION AND SIMPLIFICATION OF PROD-
UCTS AS AFFECTED BY STATE LEGISLATION

Quality standards and labeling requirements are embodied to some
extent in existing State legislation. The types of laws containing thes€
requirements include the following: (1) a general "food and drug'"
law; (2) separate laws governing special types of foods or drugs, for
example, meat, dairy products, eggs, fruits and vegetables, poisons
and narcotics; (3) laws governing a variety of consumer goods that are
neither foods nor drugs, for example, gasoline and oil, fertilizer, seeds,
insecticides, gold, silver and platinum articles, bedding and upholstery
and a few other items.

Some State laws are concerned with labeling requirements only, some
with quality standards, and others with both. There is a great deal of
variation among these laws. Not only do they differ as to stringency
of regulation, but even those which impose approximately the same
degree of regulation do so in different ways.

Perhaps the best method of indicating the range of these State laws
is to consider in detail two examples, one illustrating a field where
almost complete uniformity among the States (as well as more detailed
regulation) has been effected, and the other where heterogeneity of
requirements exists. These examples are fertilizer and new bedding
and upholstery.

The difference which exists between the respective uniformity ana
nonuniformity in requirements for these two commodities may be
partl}^ the result of a difference in the degree to which there has been
cooperation between industrial and scientific groups and enforcement
officials in obtaining more uniform legislative regulation. In the case
of fertilizer, there was cooperation between industry. State control of-
ficials, the American Chemical Society, and the Association of Official
Agricultural Chemists. In the case of bedding and upholsterv. this
type of cooperation is still in its initial stages.

The desire for uniformity in State bedding and upholstery laws and
for regulation, in areas where none existed, led to the authorization,
by the Standards Council of the Amterican Standards Association, of a
sectional committee to develop such standards. This committee in-
cludes representatives of manufacturers, retailers, consumers, and
State officials and is concerned with —

Development of standards covering the identification and disclosing the percentage
composition of filling material ; grades of such filling material ; identification of
the finished article to show whether it is in whole or in part made from new or
second-hand material ; and methods of labeling to make this information available
to distributors and consumers.^

^ "A. S. A. Authorizes Work on Bedding Standards," Industrial standardization and
Commercial Standards Monthly, vol. 9 (4). p. 93. April 1938.

235

236 CON'CEXTRATION OF ECONOMIC POWER

The standardization and simplification of fertilizers, the reduction of
the number of grades, the development of standardization of nomen-
clature, the standardization of chemical methods for determining
plant-food content in fertilizers by the American Chemical Society, the
standardization of analytical methods for designating various plant-
food elements in fertilizers by the Association of Official Agricultural
Chemists, the increase in plant-food content, and the standardization
of bag sizes is given below in chronological and rather detailed form to
illustrate how the cooperation of industry, science, and legislation has
resulted in the adoption of standards.

A chart analyzing the sanitation and labeling provisions for new
bedding and upholstery, and a summary of these provisions, indicates
the lack of standardization in an industry of great importance to con-
sumers. However, the cooperation of the National Association of
Bedding and Upholstery Enforcement Officials with the American
Standards Association (in which the manufacturers, distributors, and
consumers are represented) in the establishment of standards may be
the beginning of greater standardization in the bedding and uphol-
stery industry.

STANDARDIZATION AND SIMPLIFICATION OF
FERTILIZERS

Almost continuously since the enactment of the first State fertilizer
control law in Massachusetts in 1869 efforts have been made to intro-
duce simplification and standardization in the control laws of each of
the several States as they have been enacted or amended. The fertilizer
industry has always believed that a uniform' law could be drafted to
control the sale and distribution of fertilizers and fertilizer materials
that would be suitable for the conditions in any State. Such a uniform
law should adequately protect the consumer; and at the same time
protect honest manufacturers from unfair practices of unscrupulous
competitors and from unfair purchasers. It should not place useless
and unnecessary requirements on manufacturers or requirements that
cannot be enforced, yet should require for the purchaser disclosure of
such information as may be useful to him in the use of the goods
purchased.

Methods have been developed for making a quantitative determina-
tion of all the plant-food elements in a fertilizer but it is sometimes
difficult or even impossible to determine quantitatively certain of the
components that may be used in the formulation of mixed fertilizers.
It would therefore be difficult to enforce a law requiring the detailed
quantitative disclosure of all the ingredients of a fertilizer mixture.

The fertilizer industry has drafted a model law which is believed
adequate to protect both consumer and producer, to be easily and com-
pletely enforceable, and to furnish all necessary information to enable
the purchaser to select the fertilizer best suited to his needs of crop and
soil. State control officials and legislative bodies have used this pro-
posed draft as a basis for legislation in many States. There are now
47 States with fertilizer control laws; only Nevada is -without one.
Chart XVIII gives a summary of the principal requirements of these
47 laws and indicates their approach to uniformity.

Reduction in the Nvmber of Grades of Fertilizer.

It has been recognized for many years that an uneconomic situation
existed in the large number of grades of fertilizer being offered for
sale. The grade of a fertilizer is represented by the integers repre-
senting the percentage content of the three primary plant- foods in the
fertilizer. For example, a 5-10-5 grade of fertilizer indicates that the
fertilizer is guaranteed to contain not less than 5 percent of nitrogen,
10 percent of available phosphoric acid, and 5 percent of available
potash. As each figure clianges, a different grade is represented. An
almost unlimited number of combinations of the three figures is possi-
ble. A survey of the grades of fertilizer offered for sale in the various
States, made in 1934, indicated that over 1,000 separate and distinct
grades of fertilizer were being used in the United States. Tlie State
of Florida alone has recorded sales of 425 separate grades.

237

238 CONCENTRATION OF ECONOMIC POWER

It is a generally-accepted fact, recognized by practically all agron-
omists, that the fertilizer needs of any one State for all its crops
on any of its soils can be satisfied with from 10 to 25 different grades
of fertilizer. The needs of the country as a whole, in like manjier,
can probably be satisfied with 50 to 75 grades. In 1934, for instance,
71.9 percent of the entire country's tonnage of fertilizer was repre-
sented b}' 25 grades, and 95 percent by 175 grades. The final 5 percent
included 878 more grades.

As early as 1925 the control official o.f the State of Texas arranged
a conference with fertilizer producers to decide on a list of fertilizer
grades which by com,mon consent would be the only grades registered
and sold during the following year. Each year a similar conference
is held, now in conjunction with the neighboring States of Arkansas,
Louisiana, Mississippi, and Oklahoma. In Texas the accepted list for
the current year contains but 22 grades. A number of other States
and groups of States have followed this example and have adopted
lists of grades that will be recommended , by State experiment stations,
jind the sale of these grades will be featured by the manufacturers.
In some instances State laws now provide that such a list may be
established each year by the control official and the sale of other grades
prohibited.

Such standardization is of considerable economic importance. It
obviates the necessity of the manufacturer being prepared to ship a
multitude of unnecessary grades, and not only relieves him of that
expense but permits him to ship the sm'aller number df grades with
much greater efficiency and cheaper cost, all of which results in lower
consumer prices.

Development of Standardization of Nomenclature.

The fertilizer control laws of the various States, as is to be expected,
differ in many details as agricultural conditions or the opinions of
legislators and control officials determine. Since the early days, effort
has been constantly made by the industry to have uniform nomen-
clature used, and wherever possible to have labeling requirements of
adjacent States uniform. Considerable variation occurred in these
requirements. Some States required guaranties to be made in terms of
nitrogen, phosphoric acid, and potash, and in that order; some re-
quired the phosphoric acid to be stated first; and others required the
guaranty in terms of ammonia instead of nitrogen. Some laws I'e-
quired that the percentage of plant-food be guaranteed in whole
numbers only ; others permitted fractions.

In the fall of 1927 a fertilizer conference was called at Louisville,
Ky., by a group of editors of farm papers. To this conference \yere
invited editors of the farm papers, agronomists. State control officials,
and representatives of the fertilizer industry. Over 80 individuals
attended. Tlie question of uniformity of State control law require-
ments was a major topic of the conference. After extensive discus-
sion, it was voted to recommend to all States that guaranties of plant-
food in fertilizers be required in terms of available phosphoric acid,
nitrogen, and potash, and in that order and in whole numbers only.

In September 1928 a second conference was held at West Baden,
Ind., to discuss progress made since the first conference. It developed
that little progress on uniformity of guaranties had been made because
of extensive opposition to the order of statement of guaranties. After

'"Hr"

I '

hsrsi," ■"""""

...K ,, ..„,.!.. ,.„

N-P-K ■•

.,:

v™

N.P-K...

"»5r

I:,:

::::i::

V-s

fon p,omu,te

Js nj.ooii...,,, 1

SL,5S2'""° "'

::::

Y»

jSSS^™

"^SS,...

'"■

°S=|i

-s.So.r-

«p.TOnl,f.Tj».

y«

Ve,

jn«io.j.nci...

"-'"""■■'"•'•-

Ve.....

"'-■■

1 v-m of ,.l». ..

la. .-

n".'"."";...

Fl.,,.a,.tl.lld

KotodoMj

V„

"si-Tr^:z;i,

"£'■""-'«

''"

V»..

Y„

N. .

'^'S.j"''""' ""'' "

luroodU„m,rt,J..i„

^SHE;

?.SH£

SB .^SSKWiarftK!

CONCENTRATION OF ECONOMIC POWER 239

discussion, this second conference passed a resolution recommending
that the guaranties be expressed in the order of nitrogen, phosphoric
acid, and potash (known as the N-P-K order) .

In 1928 the Association of Official Agricultural Chemists adopted as
tentative the N-P-K order and officially adopted this order in 1930.

In 1931 there were 26 States requiring the guaranty in terms of
nitrogen, and 17 States permitted or required the guaranty in terms
of ammonia, 2 of them requiring both. By 1931 at least 15 States
prohibited fractional guaranties. In May 1931 a conference between
the control officials of the 13 Northeastern States and fertilizer manu-
facturers doing business in those States resulted in further uniformity.
By July 1931 there were 35 States that required nitrogen only to be
guaranteed ; 36 required the N-P-K order, and 23 permitted guaranties
in whole numbers only.

Efforts to establish complete uniformity were continued, but neces-
sity for legislative action in certain States and inability to obtain such
action in every case delayed complete uniformity until 1939, when
the South Carolina Legislature passed a fertilizer law, thus making
the fertilizer laws of 47 States (Nevada has no fertilizer law) uni-
form in requiring guaranties in terms of nitrogen, phosphoric acid,
and potash, and in the N-P-K order. By 1939 fractional guaranties
were prohibited in at least 38 States.

State control officials and industry representatives are continuing
their efforts toward the achievement of still greater uniformity in con-
trol requirements. Frequent conferences have been held on the subject,
and it is believed that slow but continuous progress will result. The
goal is to have such a degree of uniformity that one standard method
of designation on bags of fertilizer woiild satisfy the labeling require-
ments of all State control laws.

Standardization of Chemical Methods for Determining Plant-Foq,d
Content in Fertilizers Through the American Chemical Society.
The fertilizer division of the American Chemical Society meets each
year and affords an opportunity for the presentation of technical
papers on fertilizer. In a measure, it acts as a clearing house for new
subjects to be presented for the consideration of the Association of
Official Agricultural Chemists. Chemists connected with fertilizer
industry, with State experiment stations and control laboratories, and
with the various Federal agencies engaged in fertilizer research meet
to discuss common problems of analytical technique in order to- develop
uniform procedure for the chemical evaluation of agricultural com-
modities and supplies. Such developments as need official recognition
arc then referred to the Association of Official Agricultural Chemists
for action.

Standardization of A'nalytical Methods and Terms for Designating
Various Plant-Food FUments in Fertilizer Through the Associa-
tion of Q-fficial Agricultural Chemists.

In 1922 a group of chemists representing the fertilizer industry sug-
gested to the Association of Official Agricultural Chemists of North
America (a body composed of those State and Federal officials who
are engaged in agricultural research or in the enforcement of the feed,
fertilizer, and food control laws) the establishment of a forum for the
discussion of technical fertilizer problems. As a result, this associa-
tion formed a Committee on Definitions of Terms and Interpretation

240 CONCENTRATION OF ECONOMIC POWER

of Results on Fertilizers and Liming Materials. This committee meets
each year during the annual meeting of the association for the discus-
sion of definitions of fertilizer terms and such other matters as may be
presented. An opportunity is thereby afforded the technical men of
the industry, persons engaged in agricultural research, and officials
administering State laws to meet on common ground and voice their
opinions and recommendations.

The committee, after a complete hearing, prepares, in executive
session, official definitions for the various fertilizer terms, establishes
official standards for various fertilizer materials, and makes official
interpretations of terms and phrases used in the industry. These
matters are referred as recommendations to the Association of Official
Agricultural Chemists for adoption as official standards. The laws of
many States provide that the methods of analysis and the recom-
mendations of this association shall govern the practice of the control
officials, in which case these methods and interpretations have the
effect of law.

Since the first meeting of the committee in 1923, up to and including
the 1939 meeting, 60 fertilizer and liming materials have been offi-
cially defined by name and identified by specifications, and 28 terms
have been officially defined or interpreted. Through these channels
not only has uniformity and standardization been achieved but a
measure of official and even legal standing has also been obtained.

The Association of Official Agricultural Chemists also has adopted
official methods of analysis for all determinations that are necessary to
be made in cormection with the sale and use of fertilizer. They have
also adopted official methods to be used in the collection and prepara-
tion of all samples that are to be used in determining whether or not
the guaranties required by any law have been met. The chemists of
the fertilizer industry have cooperated in the development of these
official methods.

Increase in Plcmt-Fpod Content.

The cost of handling a ton of fertilizer is the same, regardless of its
plant-food content. It takes just as many bags to hold a ton of
fertilizer containing 12 units of plant-food as it does to hold one con-
taining 24 units. The freight costs are the same on each ; also, labor
expense, selling expense, accounting, and many other items are calcu-
lated on a ton cost. Within liiiiita, then, the cost of each pound of
plant-food delivered on the farm is reduced as the concentration of
total plant-food in the fertilizer is increased. The United States
Department of Agriculture and certain of the State experiment sta-
tions for years have recommended to customers that they buy fertilizf^rs
of higher plant-food content. The fertilizer industry believes in the
sound economics of such practice, and is on record as favoring the
inclusion of a requirement in all State laws as to the j^ormissible
minimum plant-food content of mixed fertilizers, reconmiending that
such minimum be not less than 16 percent. As of 1939, the laws of 14
States prohibit the sale of fertilizers containing less than 16 percent
total plant-food, and six additional States prohibit less than 14 percent.

That these recommendations regarding higher plant-food content
are being accepted is evidenced by figures furnished by the Ignited
States Department of Agriculture which.show that the average plant-
food content of complete mixed fertilizers in 1880 was 13.4 percent;

COXCi:XTKATION OF ECONOMIC POWER 241

in 1900, 14.1 percent; in 1925, 16.0 percent; in 1930, 17.8 percent; and
in 1935, 18.2 percent and it is estimated that it will reach approxi-
mately 19 percent in 1940.
Standardization- of Bag 'Sizes for Fertilizer.

The standardization of package sizes in the fertilizer industry has
never been an important problem. State laws requiring a tax stamp
or tag to be affixed to each bag or package, to e\'idence payment of
the tonnage inspection fee, naturally required even-weight bags in
each ton. Custom established the 200-pound bag in the greater part
of the country, and the 100-pound in the remainder. Variations were
the 125-pound and the 167-pound bag. Smaller sizes, containing 50
pounds, 25 pounds, 10 pounds, 5 pounds, and 1 pound, were used only
for the city lawn and garden trade. Practically 100 percent of fer-
tilizer for the farm trade is shipped in one of the first four sizes, with
the 100-pound and 200-pound sizes predominating. When paper bags
were first introduced for fertilizer shipments, the use of a somewhat
smaller bag was found necessary to carry better and to be less subject
to damage, and an 80-pound size was chosen. Better quality paper
bags now permit the 100-poimd size, which is almost universally used.

SANITATION AND LABELING REQUIREMENTS FOR NEW
BEDDING AND UPHOLSTERY

A survey of State laws dealing with provisions regulating the
manufacture and sale of bedding and upholstery, and with Federal
and State court cases in this field shows wide variation in the laws of
the States surveyed.^

Chart XIX on sanitation and labeling requirements for new bed-
ding and upholstery, based on this survey, reveals that 37 States,
including the District of Columbia have laws regulating the manu-
facture and sale of new bedding or new bedding and upholstery.
Thirty-six of these laws apply in terms to mattresses; 30 to com-
forters, quilts, or quilted pads; 28 to cushions or pillows; and 11 to
upholstered furniture in general, with some other laws, applying only
to specified types of furniture, such as "upholstered spring:^."
"lounges," and sofas." In addition, the laws of a few States apply
to articles of bedding in general, or to articles ''similar" to tiiose
specincally mentioned in the laws.

Sanitation requirements regarding the use of materials in the
manufacturing of bedding are of more than one kind. There are
prohibitions to be found in 13 States against the use of second-liand
or shoddy material, while the laws of 21 States specifically permit the
use of such material if it has been sterilized. Similarly,'in 17 States
with bedding laws, the use of contaminated material is specifically
prohibited, while in 8 States the use of such material when stevdizecl
is permitted. There are qualifications in 4 States prohibiting --ertain
uses or prohibiting certain kinds of contaminated or second-hand
material and permitting others.

* "Survey of State l^aws and Judicial Decisions on Beddinar and Upbolsteiv,'" prepared
by S. Mermin and J. Mayer, S. P. Kaidanovsky, Technical Director, Consumer Standards
Project, pp. vii-t-160, Division of Consumers' Counsel. Agricultural Adjustment Adminis-
tration, U. S. Department of Agriculture, and Work Proj-ects Administration, Washington,
D. C.

243

244

CONX'EXTRATION OF ECONOMIC POWER

Chart XIX. — Sanitation and labeling re

[This chart was prepared by the staff of the Consumer Standards Project, Consumers' Co

Agriculture, and Work

I. COVERAGE

A. Bcddinj;:

1. Mattresses

2. Comforts or quilts

3. Pads or quilted pads

4. Pillows

5. Cushions

6. Upholstered springs or box

springs. .__

7. Misrellaneous other articles

named

8. Articles (unnamed) which may

be used for sleeping or reclining
purposes

B. Upholstery:

1. Upholstered furniture (in gen-

eral)

2. Miscellaneous articles named

C. Articles filled exclusively with steril-

ized feathers are specifically ex-
cluded

Second-hand material:

1. Prohibited-

2. Permitted if steriHzed.
Contaminated material:

1. Prohibited

2. Permitted if sterilized.

(22)

HI. GENERAL LABELING REQUIREMENTS

1 to descrip-

1. Qualitative (label shall show)—
(a) Whether new or second-
hand (e. g., "All new

material"; "Second-hand

material") ,

(6) Whether "Sweepings" or

"oily sweepings" are used
(c) Whether damaged, waste, or

other inferior material is

used

"Felted cotton" or "felted

linters" when such ma-
terial is used . .

'Cotton linters" when such

material is used

(0 A statement of materials

us?d

(ff) "Kind" of materials .

(ft) "Kind"of materials used in

filling

(r) "Kind and Character" of

materials _ _

<■// "I><-5^-=T\tion" of materials

used

(k) "Descnpti... ■ .' materials

used in liiling ..

(!) "Kame" of materials.- - .
(m) "Name" of materials «;«. '

in filling. ...

(n) "The contents"

(o) "Quality" of materials | x I., .j —

(p) "Grades" of materials used I i

infilling !...!....! (")

See footnotes at end of tabic.

(rf)

(?)

(2.)

(!6)

x,.x

CONCENTRATION OF ECONOMIC POWER

245

quirements for new bedding and upholstery

unsel Division, Agricultural Adjustment Administration, United States Department of
Projects Administration]

X
X
X
X

X
X

(■)

X
X
X

X
X
X
X
X

X
X

X
X
X

2
2

X
X

X
X
X

X
X
X
X
X

(•)

s
o

X
X
X
X

J=
o

X
X

X
X
X
X

(.*)

X
X

X
X
X

X
X

X
X
X
X

1
—

X
X

a
35

X
X

X
X
X

X 1

(J)

....

(«)

('■)

(12)
(15)

(")

(IS)
X

'■ '

('«)

(20)

(18)

fn".

c^)

(1.)

X
X

(")

X
X

1 *

X
X

- ..

X
X

_.-..;::

X
X

(.)

(>3)

(«)

...

(2.)

(J.)

(")

1 1 <

...

....

•■

(«)

( J

-...1

(«>

See footnotes at end of table.
27240fl— 41 -Tijo. 24

246

CONCENTRATION OF ECONOMIC POWER

Chart XIX. — Sanitation and labeling requir-

1
1

S
O

.2
a

3
2

ni. GENERAL LABEUNQ REQUraE-

MENT3— continued
A. Positive requirements— Continued.
1. Qualitative— Continued.

(S) Such description of ma-
terials used as adminis-
trative body shall pre-

(r) Whether material required
to be sterilized has been

(31)
(28)
(28)

(32)

(33)

2. Quantitative (label shall show)-
(a) "Percentage" of materials...
(6) "Percentage" of materials
used in filling

....

X
1

(d) "Percentage" of materials
when ffther than hair is
tfsed in combination with
hair

(e) Quantity or amount of each

(28)
(28)
(43)

(28)

(/) Total weight or gross weight

(40)

B. Olher positive requir ementi (label
shall show)—
1 Name of manufacturer or vendor

2. Name and address of:

....

'd) Manufacturer or vendor and
successive vendors

3. Delivery date:

(a) Date of delivery to customer.

(b) Date of delivery within

4. Registry or serial number of man-
ufacturer assigned by adminis-
trative body

X
X
X

5. Adhesive stamps (e. g., inspec-

X
X

(a) Which contain replica of
State seal

(b) Which contain registry

X
X

6. Compliance with State law:
(a) That article complies with

....

(b) (As repasds label on con-
tainer) that the article
complies with labeling re-

7. Miscellaneous:

(a) "This label is a;ttached as
required by law as a cer-
tification that this article

(b) Label is to be procured from
State and bear replica of
. State seal

(d) Label similar to that re-
quired on article is also

(e) When tag is to be used on
pillow, cushion, bolster,
or comforter it shall bear
a statement that it Ls to be

1
1

....

CONCENTRATION OF ECONOMIC POWER

ments for new bedding and upholstery — Continued.

247

(33)

(30

(3J)

(")

(3.)
(3S)

..._

(3.)

r")

(«)
(")

0')

— -

(«)

...

X
X

X
X
X
X

X
X

....

X
X

(«D

(..)

See footnotes at end of table.

248

CONCENTRATION OF ECONOMIC POWTi^R

Chart XIX. — Sanitation ana labeling require

.2
1

a
U

3
O

1
p

.2
O

X
X

a
a
!^

in. GENEEAL LABELING REQUIRE-

MENTa— continued

C. Negative requirements:
1. General:

(a) Prohibitions apainst mis-

X
X

(6) Prohibitions against tam-

(f) Information other than that
specified in the law is not
to appear on the required

(d) No terms describing filling
materials may be used
other than terms stated in

2. Specific:

(a) Word "felt" not to be used
imless material processed
by felting machine

(6) Word "hair" not to be used
unless material is com-
posed totally of animal

X
X

(")

(d) Word "silk" not to be used
in description of kapok

X
X

(«) Word "floss" not to be used
if filling contains material

(/) No tolerances other than
commercially accepted
tolerances are permitted
in case of terms: "All,"
"100% " "Pure " etc

(g) No variance is allowed for
material described as
"All," "Pure," "100%,"
or terms of similar import -

IV. FORM, SIZE, AND COLOR OF LABEL

A. Size of label (shall be not less than)-
1 4 by 8 inches

2 4 by 5 inches

(")

4 4 by 3 inches

5 3 by 3 inches

7 3 by 21^ inches

(S8)

(60)

10 3 by IH inches

(62)

11. The size sufl5cient to provide
plainly for description of ma-
terials

B. Color of label (to be)-
1. "White"

2. "White" if material is all new

X
X

(31)

3 "Red" if materia] is second-hand

5. "Yellow" if material is second-
hand

C. Material of label: ««
1. Cloth

'('«)"

....

X
X

2 Muslin or linen

4. Cloth lined

6. Cloth backed

6. Paper

See footnotes at end of table.

CONCENTRATION OF ECONOMIC POWER

ments for new bedding and upholstery — Continued.

249

•3

X
X

a
.1

1
i

X
X

i
1

X
X

(M)

1
1

X
X

1
«

X
X

...

....

(«)

(")

(i')

-—

....

...

(61)

X
X

(83)

(.5)

(5.)
X

(■681

(«)

(.7)

"■

(M)

X
(65)

...

(")

...

(«)

See footnotes at end of table.

250

CONCENTRATION OF ECONOMIC POWER

Chart XIX. — Sanitation and labeling require

5
•s
■s
5
.a
p

IV. FORM, SIZE, AND COLOR OF LABEL—

continued
C. Materialof label— Continued,

8 Not paper-faced

9. Stamping or printing, etc., label
on the article it.self is permitted
in lie!] of a separate tag

D. Size of lettering:

1. Statements as headings shall be
in 24 point type

2 Labels shall be in "large" type

3. Statements shall be not less than
^ inch high

—

X
X

4. Statements as to new or second-
hand shall be not less than H
inf'h high

X
X

5. Statements as to filling material
shall be not lfs<; than }4 inch
high

—

G. "Words "shoddy material" when
required to be on label shall

7. Words "second-hand material"
shall be not less than:
(a) 20-point type

(^) 24-poiTit type

8. Material which is waste, second-
hand, shoday, or subject to
contamination shall be enum-
erated on (yellow) label in type
not less than J^ inch high

9. Word "second-hand" shall be not
less than Vi inch high (on addi-
tional label when article con-

E. Sample form of required label is set

F. Form of label shall be prescribed by

G. Label shall be approved by admin-
istrative body

H. Material: used shall be described
in such manner as administrative
body shall prescribe

1 Mattress pad.

2 Couch pads.

' Cushions, quilts, or similar articles.

* Bags, cases or coverings which are filled, etc.

* "Other articles of bedding" in addition to those specifically covered.
« "Substantially similar" articles to those specifically coVered.

' "Similar articles" to those specifically covered.

* "Beddmg."

« Including children's furniture.
'» Anything containing upholstering.
" Couches or lounges.
" Bedsprings, cots, lounges, and sofas.

" Settees, couches, day beds, davenports, and overstunoa chairs.
i« Word "exclusively" is omitted,
" Words "exclusively" and "sterilized" are omitted.

" Certain uses of second-hand and contaminated material are prohibited and others permitted. Also,
administrative body mny pronibit the use of excessively damaged or otherwise unfit filling material.
'? Prohibits u.se oi shoddy

'9 Certain kinds of second-hand materials are prohibited, and others permitted if sterilized.
" Applies to abandoned filling material.

CONCENTRATION OF ECONOMIC POWER

251

ments for new

bedding and upholstery —

atinued

1
1

i
1

1
a

s
a
a

1
z

1
S

.2
1

■1
1

.2
1

a
1

(6.)

(55)

X
X

....

...

'1 Material contaminated by infection, etc., may not be used or sold; other second-hand material may
be used after sterilization.

" Shall be designated as "mill sweepmgs."

S2 Label shall show whether the felt is "felted staple cotton" or "felted cotton linters." tf any other
material is felted, its name shall be indicated.

" Used in filling.

2< Used in filling (applies to mattresses).

" A statement of the kind of materials used in the filling and covering, according to the grades used by
the trade (applies to upholstered furniture).

2' When filling material has been previously used.

" Specific enumeration and description of second-hand materials used, in case of bedsprings, cots, lounges,
and sofas.

*» For certain qualifications, see California provisions.

" The only reference to grades is in one line of the sample form, i. e., "Grade— ounce, Sheeting—, Drill—,
Sateen, etc."

30 "Type or grade of cotton and all other materials used" in filling mattress (if new materials are used).

3' This requires an additional label.

» Also the number of the sterilizing permit.

« Also number of sterilizing or disinfecting permit. Saijl number required, without the other require-
ment, if article not filled with feathers or down.

252 CONCENTRATION OF ECONOMIC POWER

'< When article sterilized by other than owner, label shall show the sterilizing permit number and the date
of sterilization.

" Date of sterilization.

3« What germicidal treatment, if any; date any such treatment was performed; and number of required
permit.

" Applies where second-hand material is used in upholstery.

ss When mixed.

" Appro.ximate percentages when mixed.

" When mattress is of cotton, felt, wool, kapok, silk floss, floss, or hair.

<' When mattress is of cotton, felt, wool, kapok, or hair.

" See sample form, sec. 59-1808 of code.

""Finished" size. Comforter labels shall show "cut" size. Decorative, boudoir, and fancy cushion
need not show size.

" "Measurement."

" Name and address of maker or his registered factory number.

<« Applies to nonresident manufacturers and wholesalers with no usual place of business in the State.

<' This appears to be an additional label.

«* Applies to tags furnished by the administrative body for use on "comforts, bunk quilts, cushions, and
pillows."

" When article contains more than one kind of material, and administrative rules require amount of
materials to be stated on label, a variance of not over 10 percent shall not be deemed misleading.

'" Also prohibits use of other than standard definition, practice, or terms of classification, where a standard
classification exists concerning any commodity.

«i When used exclusively.

" Word "felt" not to be used if filling includes any material not felted and filled in layers; unless all
materials used are plainly set forth.

" The word "totally" is omitted.

" Applies to the separate label on articles containing second-hand material.

" Applies to label on upholstered furniture having loose cushions or pillows, including studio couches.

" Applies to bedding labels and to labels required when article has been sterilized.

»' This appears to be an additional label.

" Applies to decorative, boudoir, and fancy cushions or "similar articles."

" Applies to bed springs, cots, lounges, and sofas.

'o Applies to mattress or pillow tags.

" Applies to mattresses or pillows. Commissioner may require smaller or larger tags on other articles.

M Applies to indelible stamp on slip seat chairs and benches or upholstered stools and similar articles.

•' Also if material is waste or shoddy.

«< When 2 or more items under this topic are indicated for 1 State and are in apparent conflict, a choice
is permitted among these items.

" Applies to upholstered furniture.

«« Sec. 7251 (ce) pr vides for muslin or linen labels, and sec. 7251 (hh) 27 provides for cloth or Cloth
backed labels.

" Use of cloth is o,itional in case of upholstered furniture.

" Or material of like durability.

" When words "second-hand material" are required on the label.

The many variations in labeling requirements constitute the most
striking differences in these laws. Thirty-three States have laws
requiring a statement as to whether the materials used are new or
second-hand. In 13 States it is provided that the label must indicate
whether material required to be sterilized, has been sterilized; but,
depending on the State involved, the date of sterilization or the
number of the sterilizing permit, or both, may also have to be indi-
cated. In California this information would have to appear on a
separate sterilization label.

Thirty-two States have requirements, variously worded, that the
label give a "description," or the "names," or the "kind," or the "con-
tents" of the materials used ; some require only the name of the mate-
rials used in the filling. A few States have more specific require-
ments relating to this type of labeling information. Alabama, Ohio,
Tennessee, and Wisconsin, for instance, have laws requiring that a
statement regarding "quality" of the materials be given. California,
Oregon, Texas, and Wisconsin have laws providing that the "grade"
of filling materials be specified.

Information regarding the quantity of material used, as distin-
guished from the preceding disclosure of quality, is also required to
be indicated in some States. California, Ohio, Oregon, and Tennes-
see laws provide that the quantity or amount of each material appear
on the label, and nine States have laws requiring a statement of the
"proportion" or "percentage" of materials. The size of the article

CONCENTRATION OF ECONOMIC POWER 253

must be specified in California and Oregon; and these States, in
addition to Alabama, Indiana, Michigan, and Washington, have laws
which require that the total weight of the article be given.

Identification of the manufacturer or vendor is required in seven
States, the address as well as the name of the manufacturer or vendor
is to be specified in nine other States, name and address of only the
manufacturer in five States, name and address of only the vendor in
one State, and name of the manufacturer or vendor and successive
vendors in three States.

The registry number of the manufacturer is an additional identify-
ing mark required in 10 States, and shall appear on an adhesive
stamp attached to the label, as in the case of 4 States, or shall appear
otherwise on the label.

The date of delivery from retailer to customer must be given on the
label in Goruiecticut and New York; the Massachusetts' law requires
that the date of delivery within the State by a nonresident be
specified. .

In nine States the label must show that the article complies with
the State law. In California, Connecticut, New York, and North
Carolina the label must be approved by a State administrative body.
In the District of Columbia, Pennsylvania, and Texas, labeling in-
formation is to appear in such manner as is administratively pie-
scribed. On the labels in Delaware, Maryland, and New Jersey no
information may appear other than that specified in the law.

In addition to the differences among the States as to what shall
appear on the label, there is a large number of variations in the
specific matters of form, size, and color of labels. There are 10 dif-
ferent minimum sizes of labels prescribed in the various laws: 4 by 8
inches, 4 by 5 inches, 41^ by 3 inches, 4 by 3 inches, 3 by 3 inches, 3i/^
by 214 inches, 3 by 2i/^ inches, 3 by 2 inches, 3 by 11/2 inches, and 6
square inches. The most common minimum size prescribed is 3 by 2
inches, which occurs in 8 State laws, there being 22 States which have
laws providing for labels of, not less than a specified minimum size.

A specific sample form of the required label is given in the laws of
nine States.

The color of the label is to be white m Texas, it is to be white in
California, New York, North Carolina, and Pennsylvania only if the
material used is all new. If the material is second-hand, the label
must be red in California, but yellow in New York, North Carolina,
Oregon, and Pennsylvania. A yellow (separate) label in California
signifies that the material has been sterilized.

There is generally a requirement in the State laws that the label be
made of some durable material. The laws of 8 States specify "cloth,"
in 13 States a choice is permitted between a "cloth" label and some
other kind, usually a "cloth lined" or "cloth backed" label. "Muslin
or linen" labels are required in the laws of 15 States, in 7 of which
the choice of some other material, usually paper in the case of up-
holstered furniture, is permitted. The use of a paper tag is permitted
in Kentucky, Ohio, Tennessee, and Wisconsin, and is permitted on
upholstered furniture in Massachusetts, Rhode Island, and Vermont.
A few State laws require the labels to be "cloth lined," "cloth backed,"
"permanent," or of "durable material," or not paper-faced. New
Hampshire and New Jersey laws permit stamping or printing on the
article itself in lieu of a separate label.

254 COXCENTPATION OF ECONOMIC POWER

Tlie most common provision regarding the lettering on the label is
the provision in 16 States that the letters be not less than one-eighth
inch high. In 5 of these States, this applies to all statements on the
label, but in the remaining 11 States it applies only to certain state-
ments concerning the filling material, such as statements indicating
that the material is new or second-hand. Headings are to be in 24-
point type in California; and the same is true in Washington in cases
where the phrase "second-hand material" is required on tlie label.
The minimum size of letters in phrases indicating the presence of
second-hand or shoddy material is one-fourth inch in Oregon, one-half
inch in Texas; 20-point type in Kentucky and 24-point type in
Washington.

The laws of most of the States contain prohibitions against decep-
tion in labeling. Twenty-nine States have enacted laws prohibiting
misleading labels. The laws of 32 States prohibit the tampering with
labels. In addition to the foregoing general prohibitions against mis-
leading labels and tampering, a provision that the term "felt" is not
to be used unless the material has been processed by a felting machine
is common to 13 States, and in 5 States other terms such as "hair,"
"curled hair," "silk," and "floss" may be used only if their meaning
is that as specified in the statute. New York laws permit no variance
when such terms as "all," "pure," "100," et cetera, are used, while the
Connecticut law permits commercially accepted tolerances when these
terms are employed on the label.

CHAPTER V

METHODS AND PROCEDURES IN GOVERNMENT
PURCHASING

The duty and responsibility for making piirchases for the Federal
Government, with the exception of purchases for the Army, Navy,
and INIarine Corps, is placed upon the Procurement Division, United
States Treasury Department.

Chart XX, entitled "The Development of Centralized Purchasing
in the Federal Government," lists, in chronological order, the various
acts, orders, or reports, relative to purchasing by the Federal Govern-
ment, sliows the department, office, board, or committee responsible for
the purchasing, and gives the duties of and procedures used by these
agencies. It is interesting to note that the first act dates from May
1792. when Alexander Hamilton, then Secretary of the Treasury under
President Washington, made one of the earliest studies of centralized
purchasing for the Federal Government.

Tliere is an essential difference between the Federal Government and
piivate procurement, and the major restrictions of the Federal Govern-
ment purchasing are as follows :

1. Contracts are awarded only to manufacturers and regular dealers. — These
terms are defined as follows :

A. manufacturer is a person who owns, operates, or maintains a factory or estab-
lishment that produces on the premises the materials, supplies, articles, or equip-
ment required under the contract and of the general character described by the
specifications.

A regular dealer is a person who owns, operates, and maintains a store, ware-
house, or other establisliment in which the materials, supplies, or equipment of the
general character described by the specifications and required under the contract
are bought, kept in stock and sold to the public in the usual course of business.

2. Purchases are made on specifications. — These specifications set the standard
of quality desired, and are binding alike on all bidders. This feature insures an
equitable relation between quality and price which puts all bidders on a common
ground.

3. Requirements arc given wide publicity. — The wants of the Government are
made public long enough in advance of the time set for the formal opening of bids
to allow all interested bidders sufficient time to prepare and submit their bids.
Advertising takes the following forms :

(a) Advertising in newspapers ;
(6) Advertising by notices placed in public places;

4. Competitive oidding. — Bids are invited and received on the common basis or
specifications and general conditions binding on all alike.

5. Bid bond reqxiired except und^ certain conditions. — The bid bond is a guar-
anty by authorized sureties that the bidder will, within the time specified in his
bid, enter into contract and give proper bond for its performance.

6. Sealed bi4s. — Bids are received up to the hour specified for the opening; then
publicly opened, read, and recorded Bids received after the hour set for the
formal opening, unless delayed through no fault of the bidder, are returned
unopened.

7. Bids must be formal. — Bids shall be prepared on the forms provided for the
purpose, and must be formal in all respects. They shall be signed on behalf of
the bidder by a person authorized to do so.

255

256 CONCENTRATION OF ECONOMIC POWER

8. Bids of competitors are availaole after opening date for examination hy
interested parties.

9. Preference is given to articles of domestic manufacture or production.

10. Award is made to the lowest satisfactory bidder. — The lowest satisfactory
bidder is that bidder who is either a manufacturer or a regular dealer and who
offers suitable material, in a formal bid, at the lowest price.

11. As a general rule, contracts are reduced to vrriting and signed by both
parties.

12. Performance bond is required under certain circumstances. — The perform-
ance bond, with authorized security, indemnifies the Government against the failure
of the contractor to perform aU the terms of the contract.

13. Deliveries are rigidly inspected to determine compliance with the specifica-
tions and the terms of the contract or order. ^

Negotiated Contracts.

Though as a general rule bids are invited and awards made to the lowest respon-
sible bidder, negotiated contracts may be used in cases in wTiich competition either
is out of the question or may be detrimental to the national interest. Items of
normal usage ordinarily are purchased on a competitive basis whereas articles
of a special or secret nature may be purchased through negotiated contracts."

The principal steps observed in tiie purchasing by the Procurement
EHvision, United States Treasury Department, the Navy, and the War
Department are presented first in this chapter. This is followed by
the description of the results of three surveys: (1) A survey of State
purchasing methods and procedures, (2) a survey of county purchasing
methods and procedures, and (3) a survey of municipal purchasing
methods and procedures. The surveys of State and municipal pur-
chasing methods were made in May 1940 for the purpose of this
monograph through the courtesy of the Council of State Governments
and the American Municipal Association, respectively. The survey of
county purchasing methods was made in 1939 by the National Bureau
of Standards, United States Department of Commerce, and the results
were made available for the purpose of this monograph.

* "Selling to the Navy," by the. Navy Department (Bureau of Supplies and Accounts),
pp. 1-2, Washington, D. C, 1940.

•Letter by Charles Hines, colonel, U. S. Army, Secretary, Army and Navy Munitions
Board, Washington, D. C, August 1, 1940.

PKOCUEEMENT METHODS AND PROCEDURES OF THE
PROCUREMENT DIVISION, UNITED STATES TREASURY
DEPARMENT «

Major Functions of the Procurement Division.

The Procurement Division, United States Treasury Department, is
charged with the determination of policies and methods of procure-
ment, warehousing, and distribution of Government property, facili-
ties, machinery, equipment, stores, and supplies; the performance of
all activities incident to the purchase in definite quantities of those
supplies for which requirements can be anticipa?i/ed and consolidated ;
the negotiation of contracts for those supplies of the departments and
establishments for which requirements cannot be consolidated in defi-
nite quantity purchase but for which common contracts can be made
with advantage to the Government ; and the warehousing and distribu-
tion to the departments and establishments of supplies maintained as
stock items in the Procurement Division building.

In addition to these definite purchasing and warehousing functions,
the Procurement Division is responsible for —

{a) The preparation and maintenance of the Federal Standard
Stock Catalog, involving the analysis of commodity records so as to
develop uniformity of nomenclature, to provide standard arrangement
for storage and issue of warehoused stock, to assign precise designa-
tions for individual items, and to establish and maintain uniformity
in the cataloging of supplies ;

(&) The preparation and maintenance of Federal Specifications;

\c) The coordination of all matters pertaining to contract forms
and general policies pertaining to contract procedure ;

{d) The coordination of the Government's freight, express, and
other trajffic activities within the continental limits of the United
States ;

{e) The coordination and supervision of the disposition of surplus
property in Washington and in the field, and of property seized and
forfeited under the Federal Alcohol Act and the Liquor Law Repeal
and Enforcement Act of 1935, and firearms seized and forfeited under
the National Firearms Act ; and

(/) The maintenance of an accounting activity to clear vendors'
bills in payment for deliveries made on Procurement Division orders,
to effect, reimbursement to the Procurement Division's capital account
for purchases made for other Federal agencies, and to maintain finan-
cial records of the business of the Procurement Division.

The principal procurement operations are the negotiation of term
contracts and actual purchasing, or procurement otherwise, as by
transfer of surplus property, of supplies used in various Government

•Material obtained from the Procurement Division, U. S. Treasury Department,
Washington, D. C.

257

258 CONCENTRATION OF ECONOMIC POWER

establislunents, exclusive of realty, and also excluding the require-
ments of the Army, Navy, and Marine Corps.

This centralization of procurement responsibility is based on the fact
that large quantity procurement, made possible through consolidation,
of requirements of various Federal activities, offers certain economies
and advantages to the Government consumer, important among which
are —

Minimizing overhead cost by eliminating the duplicatiou which attaches to
the large volume of small purchases represented by one term contract or pur-
chase of a corresponding consolidated procurement;

Standardization of character and quality of requirements through study of
actual needs and establishment of standards accordingly, as reflected by ade-
quate specifications;

Lowest prices consistent with proper standards and a comnetitive market;
and

Better opportunity to apply effective inspection practices.

These general functions of the Procuren^ent Division are accom-
plished in part by delegation of authority to certain other agencies
and in part by actual handling of details through this division and
its field offices.

The fundamental of competition which governs all procurement
negotiations is that proposals must be invited from a wide field of
potential supi^liers and award must be made to the lowest responsible
bidder meeting the specifications and conditions. In the case of rela-
tively small purchases, exemption from strict observance of this rule
is given by statute, such exemptions varving with different appro-
priations from $50 to $300.

"Procurement" as applied to the activity of the Procurement Divi-
sion has a broad meaning. It includes, together with certain related
activities, two particular features: (1) The contractual function
under which sources of supply for standard materials are established
for terms up to 1 year, and (2) actual purchasing either from estab-
lished term contracts or in the open market.

Specialization of functions.

Standard noinenclature. — ^All supplies purchased by the Govern-
ment are precisely identified and cataloged according to a prearranged
system to assure the use throughout the Government service of
standard commodity nomenclature, to facilitate the establishment of
uniform records and promote comparable analyses thereof, and to
provide a uniform plan for storage. As of January 1, 1940, about
500,000 items have been so cataloged.

Classes. — This large commodity field is treated under "classes'' of
related articles. There are about 60 such "classes'"; e. g., "Class 5 —
Flags and bunting," "Class 58 — Railway, dock, and fire-fighting ap-
paratus."

Item identification. — The identification of the individual item con-
sists first of the number of the class, followed by the initial letter of
the article, then the number which is assigned' to the article itself,
supplemented by subordinate numbers or letters as the elaboration
by types or size requires. Thus, 1 ounce glass-stoppered bottles, of a
certain description, in lots of one dozen would be ".57-B-753a-(a)":
in gross lots it Avould be "57-6-7530- (b)," etc.

Commodity groups. — As a matter of practical operation, the han-
dling of the technical activities of contracting and purchasing i^

CONCENTRATION OF ECONOMIC POWER 259

organized so that related commodity classes are alssociated and as-
signed to groups of specialists, hereafter identified as "Commodity
groups," whose interests are concentrated on items within their re-
spective fields. This arrangement promotes expert knowledge and
skillful treatment in perfecting specifications, in effecting adjustment,
in buying against account in the event of failure of timely or ac-
ceptable delivery,, and in handling other details relating to the trans-
actions. There are a number of such commodity groups, one hlan-
dhng, for instance, class 29 (toilet articles and all accessories, out-
fits, and parts), class 51 (acids; chemicals; drugs; gases; soaps;
abrasive materials; cleaning, cutting, and polishing compounds), and
class 57 (hospital, laboratory, and surgical apparatus; and all acces-
sories, outfits, parts, and supplies).

The following is a list of items contracted for by the Procurement
Division :

Acids; chemicals; drugs; gases; soaps; abrasive materials; clean-
ing, cutting, and polishing compounds.

Agricultural implements and all accessories, outfits, and parts.

Airplane accessories.

Ammunition; ammunition details; blasting-apparatus; bombs.

Arms, small ; and all accessories, outfits, and parts.

Athletic equipment, recreational apparatus, sporting goods, spe-
cial wearing apparel.

Bakeshop and kitchen apparatus and utensils : Aluminum utensils ;
galley gear ; tinware ; and all accessories, outfits, and parts.

Bathroom and toilet fixtures; and all accessories, outfits, and
parts.

Bolts, nuts, rivets, screws, washers.

Books, blueprints, charts, drawings, libraries, maps, newspapei-s,
periodicals, professional publications, etc.

Boots ; shoes ; leather and rubber clothing.

Brooms, brushes.

Building materials : Asphalt, brick, cement, glass, granite, gi-avel,
lime, mJllwork, roofing material, sand, stone, tar, tiling, etc.

Caps; iiats; gloves; men's and women's furnishings.

Cordage: Hemp; jute; oakum; twine; including manufactured
articles.

Dry goods : Bedding, buttons, curtains, cushions, draperies, find-
ings, floor coverings, linoleiun, oilcloth, textiles, trimmings,
upnolstery materials, yarns, etc.

Duck ; canvas ; tentage ; including manufactured articles.

Electric apparatus and all accessories, outfits, and parts.

Electric cable and wire (insulated).

Engine room and fire room fittings, supplies, and tools.

Fire-surfacing and heat-insulating materials.

Flags, bunting.

Food: Groceries, ice, provisions, subsistence.

Forage ; bulbs and roots ; plants, shrubs, and trees ; seeds.

Fuel: Charcoal, coal, coke, dust fuels, gas, gasoline, oil (fuel),
wood, etc.

Furniture.

Gaskets; hose; packing; rubber (sheet and strip) ; hose fittings;
tubing (flexible) ; including manufactured articles.

2g0 CONCENTRATION OF ECONOMIC POWER

Hardware (builder's general).

Hospital, laboratory, and surgical apparatus ; and all accessories,

outfits, parts, and supplies.
Instruments of precision of all accessories, outfits, and parts.
Leather: Belting, harness, saddlery, including manufactured

leather articles.
Lighting apparatus (nonelectric) and all accessories, outfits, and

parts.
Lumber; timber; (barrels, boxes, cases, crates) wooden; railroad

ties; including manufactured lumber.
Machinery and equipment.
Metal in bars (flat, hexagon, octagon, round, square) ; billets,

ingots, pigs, slabs.
Metal in plates and sheets.
Metal shapes (angles, channels, half-rounds, I-beams, T's, Z's,

etc.) ; structural metal.
Motor vehicles ; bicycles ; trailers ; and all accessories, outfits, and

parts.
Office equipment : Adding machines, cash registers, file cases, num-
bering machines, typewriters, etc.
Oils (illuminating and lubricating), greases, and all lubricants.
Paints; paint ingredients.
Pipe fittings.

Pipes, tubes, tubing (nonflexible).
Pumps and their parts.
Radio and sound-signal apparatus and all accessories, outfits, and

Railway, dock, and yard equipment; including fire-fighting (and

meteorological) apparatus.
Rope, wire ; and wire, bare ; including manufactured articles.
Stationery: Bags, paper; books, blank; boxes, paper; cartons;

drafting-room, office, and printer's supplies.
Tableware (barracks, crews' mess, hotel, hospital, officer's mess,

ship-saloon): Aluminum ware; chinaware; glassware; silver-
ware.
Textile clothing ; knitted goods.
Tobacco products: Cigars; cigarettes; and all accessories, outfits,

and supplies.
Toilet articles and all accessories, outfits, and parts.
Tools, hand.
Tools, machine (bending rolls; drop hammers; drills; grinders;

lathes; milling machines; planers; presses; punches; riveters;

rolling machines; saws; shears, etc.) ; and all accessories, outfits,

and parts.
Vehicles (animal- and hand-drawn) ; and all accessories, outfits,

and parts.

Inspection. — Stress is laid on the importance of inspection. With-
out competent inspection, all of the effort of careful specification
writing and attention to other details designed to assure compliance
with the requirements would be fruitless. Rigid ext*mination of de-
liveries prior to acceptance and payment is the vital and concluding
step of procurement. Occasionally, in connection with orders placed
by the Procurement Division, it is necessary to send inspectors to

CONCENTRATION OF ECONOMIC POWER 261

examine deliveries in the field or to inspect commodities in the process
of manufacture.

The Procurement Division inspection facilities are available to other
Government agencies upon request.

A pamphlet entitled "Directory of Inspection Services and Testing
Laboratories of the Federal Government," prepared in collaboration
with the National Bureau of Standards, has been made available to
Government purchasing oflfices.

Deliveries to Procurement Division. — All commodities received in
the Procurement Division Building are inspected as to quality and
quantity by trained personnel. With many commodities, qualitative
inspection is accomplished promptly in the Procurement Division,
either on the basis of the expert knowledge of the inspectors or through
chemical or physical tests made in the inspection laboratory. Where
the simpler technical facilities available in this Division are inade-
quate to an exhaustive analysis that may be necessary the inspection
office arranges for appropriate tests through the National Bureau of
Standards, the United States Department of Agriculture or elsewhere.
In either case an authoritative inspection is accomplished.

Field deliveries. — Normally deliveries outside of Washington must
be inspected by the consignee, for which purpose data is supplied as a
basis for checking on the acceptability of the commodity received. In
some instances this information is in the form of a copy of the invita-
tion to bid ; in others it may be the detail given in the General Schedule
of Supplies or on the delivery invoice supplied by the purchasing
officer. Frequently, in the case of General Schedule items, a delivery
sample may be forwarded to the Procurement Division in Washington
for comparison with the official sample so as to determine acceptability.

Character of Procurement Transactions.

Procurement, as organized in the Procurement Division, may be
either (1) the negotiation of a term contract; or (2) the purchase of a
definite quantity in the open market, hereafter referred to as a "spot"
purchase; or (3) a stock (warehouse) transaction, the distinctions
between which are explained as follows :

General ScJiedul-e of Supplies {term contracts). — ^Under this cate-
gory term contracts are negotiated for many thousands of items in
regular use by several agencies ; e. g., furniture, chemicals, hardware,
auto parts, etc. These engagements are usually made for a 1 year
term, though occasionally market conditions make it necessary to
accept proposals for a shorter period. New contracts are made annu-
ally for each item so long as general demand is sustained. Items found
to be inactive are dropped.

Detail as to commodities so placed under contract is circularized to
all Federal agencies for their independent use by a catalog entitled
*'General Schedule of Supplies." This catalog contains all informa-
tion essential for ordering purposes and cites the conditions of the
contract. It is issued in sectional form by classes. The issue of the
various classes is staggered so as to spread the work involved evenly
over the year and thus avoid the congestion which would be apt to occur
if the whole publication were made as one.voliune on any one date.

Itt5ms covered by the General Schedule of Supplies may not be
purchased by Government offices in Washington from sources other
than prescribed in the schedule, and the degree to which the same

272496— 41— No. 24 18 •

2g2 CONCENTRATION OF ECONOMIC POWER

principle is mandatory on offices in the field is stated in each class
schedule.

Samples of many items covered by these contracts are maintained
for examination by agencies contemplating purchase and also as a
standard against which deliveries may be compared.

The approval of items for inclusion within the General Schedule
of Supplies is a responsibility of the Director of Procurement and is
based on probable demand as well as on the character of the item itself.
Items for such consideration are usually developed within the Procure-
ment Division in its normal activities but also frequently through
recommendations of the using agencies.

The General Schedule of Supplies activity is a major feature of
Government procurement and not only saves the using agencies the
labor, cost, and delay incident to individual advertising, but assures
appropriate price and quality standards, and facilitates inspection
of deliveries. Some 50,000 principal items are covered by these con-
tracts, and purchases made from them by Government agencies aggre-
gate about $60,000,000 annually.

The majority of term contracts are those which are included in the
General Schedule of Supplies. However, some term contracts are
made for the use of but one agency ; e. g., for the Procurement Division
in replenishing its warehouse stock so as to establish a source of supply
for an item on which new stock is expected to be required frequently.

Open market {spot) purchases.— These are definite quantity trans-
actions, initiated by orders from requisitioning offices, for items which
are not covered by General Schedule of Supplies or other term con-
tracts. Such a purchase may be a buy of very simple character; it
may be the procurement of a single piece of special apparatus, such
as a complete dental office on an auto trailer unit; it may represent
a consolidation of orders from 2 or 3 agencies for the same item ; or
it may represent a large purchase of a common article, as for instance,
980 trucks for 1 agency.

Many of these transactions are actions to which the specialized
facilities of a large buying organization, such as personnel particularly
qualified in specification and inspection work, c^n be advantageously
applied.

Stock. — Under this activity, commodities of most common use
' (standard foodstuffs, office supplies, janitor's materials, etc.) are ware-
noused in the Procurement Division Building to meet such require-
ments of all agencies in the District of Columbia area and also to supply
many field activities. About 1,800 different items, inventorying at
approximately $600,000, are thus made available for immediate deliv-
ery. Issues aggregate over $3,500,000 annually.

Purchase of stock by the Procurement Division warehouse is initi-
ated by a special requisition originating in the warehouse. The pur-
chasing of such requirements may be affected either by (a) ordering
from an existing term contract, or (6) establishing a term contract
so as to provide a suitable source for reordering, or (c) making a spot
purchase where replenishment is not imminent or potentially frequent.
Items are added as new demands are established, and discontinued as
diminished use indicates.

Issue of stock from the warehouse is a simple withdrawal transaction,
initiated by an acceptable requisition.

CONCENTRATION OF ECONOMIC POWER 263

Procurement Procedure.

Purchase against a term contract. — This type of transaction, whether
against a General Schedule or other term contract, is a simple action
involving only the drawing of an official order and related documents,
under a routine as stated in paragraphs 7 to 13 of the procurement
steps discussed immediately following.

Negotiation of a contract. — This type of transaction follows a fixed
procedure designed to assure, in conformance with statutory and ad-
ministrative requirements, timely deliveries complying with the specifi-
cations and other terms of the purchase contract. This fundamental
applies whether the transaction relates to the negotiation of a General
Schedule, or other term contract, or to a spot purchase.

The full course of a procurement transaction is represented by a
spot purchase, which includes all steps from the preparation of speci-
fications, invitation, award, issue of purchase order, inspection, pay-
ment detail, and various intermediate and subsequent documentation
or action.

In the case of a term contract negotiation (General Schedule of
Supplies or otherwise) the Procurement Division action is completed
when the award is made and potential users are informed, ordinarily
by issue of a covering section of the General Schedule of Supplies as a
basis for issue of purchase order and related documents independently
by the using agency.

The folloAving presents, in order of their occurrence, the principal
steps taken in a complete purchase transaction. Certain minor vari-
ations as to style of documents, number and distribution of copies,
etc., which occur in practice, are not incl-uded in this statement of
fundamentals.

Principal steps. — 1. Mailing list : Timely procurement of satisfac-
tory commodities requires knowledge of dependable sources of supply.
In the Procurement Division such information is available through
the maintenance of a current mailing list sufficiently comprehensive to
assure offers on a competitive basis. Accordingly, a feature of every
transaction maturing into an invitation to bid is the establishment
from the mailing list of that group of potential bidders applicable to
the commodity involved. Access to such a mailing list simplifies
observance of the statutory requirements for advertising.

2. Requisition : Upon receipt, this originating authority is recorded,
reviewed as to its general sufficiency and authenticity and referred to
the commodity group responsible for buying the particular commodity
involved.

3. Invitation to bid : An invitation to bid is a request for quotations
on supplies. Its preparation is of fundamental'importance and first
in order of attention. Each invitation includes several standard fea-
tures, important among which are: (1) General conditions which
stipulate observance of applicable statutory requirements, such as
those fixing hours and wages, those prohibiting child labor, and those
providing restrictions to insure delivery of goods of American origin ;
and also include provision by, which, in the event of contractor's de^
fault, the Government may purchase in the open market and hold the
contractor responsible for any resulting loss; (2) special instructions
or conditions that relate to the particular transaction, i. e., packing,
handling, delivery, etc.; and (3) the specifications which set forth

264 CONCENTRATION OF ECONOMIC POWER

fully the qualities required, which detail of description always in-
cludes citation of a Federal Specification, in whole or in part, where
such specification is applicable. The preparation of an invitation to
bid is accordingly a specialized function.

4. Bid opening and tabulation : Bid opening is public and begins at
the time specified in the invitation. A clear announcement is made of
the identity of the invitation and of the offer of each bidder, as to
price, discount, and other basic information. Following the public
reading, the bids are tabulated in such manner as to present those
common elements which are necessary for consideration in readily
comparable arrangement.

5. Award: All bids received on a given invitation, together with
their tabulation, are next examined by the commodity group under
whose supervision the transaction is being conducted. It evaluates
the various offers and determines which of those meeting all require-
ments is the lowest in price. Award is then made to the bidder so
qualifying.

6. Guaranty : Performance guaranties may be required in the case
of certain term (indefinite quantity) contracts, or in connection with
spot purchases, where the sum involved exceeds $2,000. Such guaran-
ties are in amounts representing a schedule percentage of the probable
aggregate amount involved. Bid guaranties evidencing the good
faith of bidders may also be required. In lieu of sureties executed
on standard forms provided for those purposes, certified checks or
Federal obligations may be accepted.

The steps discussed in sections 1 to 6 preceding cover the major
phases of procurement so far as the negotiation of term contracts is
concerned, the final action in such transactions being the circular-
ization of the results through notice in the class of the General Sched-
ule of Supplies affected, or otherwise where the General Schedule is
not involved.

Procurement procedure involving spot transactions necessarily re-
quires additional steps, such as order placement and other actions, as
follows :

7. Purchase order ticket : In order to facilitate the issuance of prop-
erly worded purchase orders and related documents, the commodity
group details on a "Purchase Order Ticket" all information essential
to adequate description, delivery conditions, etc., for the guidance of
the typing pool which handles the mechanics of document preparation.

8. Routing : Since shipment of Federal property must be on Govern-
ment bills of lading, when a purchase is made f . o. b. shipping point
the traffic section is required to furnish appropriate routing.

9. Purchase orders : With the information supplied on the purchase
order ticket and the routing, the purchase order is drawn and for-
warded to the responsible commodity group for examination and signa-
ture. Purchase orders are prepared in multiple copy, the various
carbons being distributed to an approved list of accounting and admin-
istrative offices.

10. Delivery invoice : An invoice on which delivery is to be acknowl-
edged is prepared coincidental with the issue of the purchase order.
Under one procedure followed the delivery invoice is a separate docu-
ment, while under another it is a part of the multiple-form purchase
order. Under both practices, however, copies are supplied to the con-

CONCENTRATION OF ECONOMIC POWER 265

signee and to administrative or accounting offices in accordance with a
fixed distribution list.

11. Bill of lading: Where the purchase is made f. o. b. shipping
point, covering Government bill of lading is prepared in multiple copy
and distributed under standard instructions.

12. Inspection: Except in unusual transactions, as where in large
purchases inspection is made in process or at shipping point, consignees
are responsible for the examination of deliveries and for reporting the
result of such examination. Official acknowledgment that delivery
meets contract requirements must in all cases be on file before payment
may be recommended.

13. Payment: The vendor's bill may be submitted on the regular
Government voucher form or on the firm stationery. It must include
certifications as to compliance with those conditions (as to American
origin, observance of wa^es and hours laws, etc.) cited on the reverse
of the purchase order which are applicable to the transaction. Upon
receipt in the accounting office, the vendor's bill is associated with a copy
of the purchase order, the contract and evidence of acceptable delivery.
It is then audited and, if in order, available discount is taken and the
account forwarded to a disbursing office for payment.

In concluding this brief explanation of Government procurement
practices, it should be mentioned that when public exigencies require
immediate delivery, as for the protection of life or property, purchases
may be made without observance of the requirement governing com-
petition, but payments covering such transactions must be supported
by evidence justifying the noncompliance.

PROCUREMENT METHODS AND PROCEDURES OF UNITED
STATES NAVY DEPARTMENT *

The Bureau of Supplies and Accounts.

The Navy, one of the largest of the procurement agencies of the
Federal Government, in general, adheres to a centralized purchasing
system. The Bureau of Supplies and Accounts, under the direction
of the Paymaster General of the Navy, is the Navy's central purchas-
ing office for supplies and materials. The common requirements of
the various naval activities are consolidated, prepared into schedules
or invitations to bid and purchased in quantity lots for delivery to the
major activities.

The Bureau of Supplies and Accounts acts administratively on
requisitions for materials which are to be purchased by offices located
elsewhere than in Washington. Purchases in the so-called field
usually comprise itenxs found necessary to meet a specific project (as
distinguished from standard supplies for general issue), articles re-
quired to meet an emergency, products of a perishable nature, and
articles required in such small quantities that consolidated procure-
ment would not be justified.

Thus the Bureau of Supplies and Accounts is the centralized pur-
chasing agency and either procures directly or has supervision over
the purchase of all materials required by the Navy, except^

The Bureau of Yards and Docks prepares schedules, open bids,
and makes contracts for public rooms (i. e. buildings, dry-
docks, etc.) involving both labor and material in construction.

The Bureau of Ordnance purchases ammunition, arms, and gun
forgings.

The Judge Advocate General of the Navy, in conjunction with
the Bureau of Ships, contracts for the construction of ships at
private shipyards.

The Marine Corps performs all its own purchase functions.

Navy requirements. — The general range of the Navy's requirements
can best be presented by the following list of standard classes into
which the Navy supplies are segregated for accounting and store-
keeping purposes.

Acids, chemicals, cleaning compounds, soaps, etc.

Aircraft and aircraft materials.

Automotive and railroad supplies.

Belting, gaskets, hoSe, leather, packing, and rubber,

Boilers, engines, etc.

Boat and ship supplies.

Boats, life rafts, etc.

* Material obtained from the U. S. Navy Department.
266

CONCENTRATION OF ECONOMIC POWER 267

Brooms and brushes.

Building materials.

Cordage, hemp, oakum, twine, etc.

Drygoods — clothing, textiles, etc.

Drygoods— gloves, insignia, shoes, etc.

Electrical accessories, wiring, and illuminating devices.

Electrical accessories and equipment.

Fire surfacing and heat insulating materials ; foundry apparatus.

Forest products.

Fuel.

Furniture.

Hand tools.

Hardware — general.

Instruments of precision, including accessories, outfits, and spare

parts.
Iron and steel.

Lighting apparatus (nonelectric).
Machine tools, accessories, outfits, and parts.
Musical instruments, accessories, and parts.
Machinery and equipment for navy yard use.
Mess gear and galley equipment ; laundry apparatus.
Nonferrous materials.
Oil, grease, and lubricants.
Ordnance equipment.
Paints, varnishes, etc., and ingredients.

Plumbing and steam fittings, bathroom accessories, valves, etc.
Provisions.
Pumps.

Radio equipment, accessories, parts, and supplies.
Recreational apparatus.
SKeet metal products.
Stationery, office equipment and supplies.
Wire and wire rope ; electric cable and wire.

There are about 60,000 items of supplies and equipment in common
use by the Navy. These are practically all listed in the N-Navy De-
partment Supplement to the Federal Standard Stock Catalog. All
items appearing in this catalog have a standard nomenclature and a
standard stock number for use within the service. The standard no-
menclature is based on the plan of arranging the descriptive words in
order of importance. Thus, white cotton canvas is known as "Canvas,
cotton, white," followed by number and grade, and a standard-thread
steel machine screw with flat head is known as "Screws, machine, steel,
flathead, standard," followed by diameter, threads per inch, and
length.

The standard stock number is made up of the standard class number,
first initial of the nomenclature, and serial number. Thus, canvas,
cotton, white. No. 4, medium, is standard stock number 24-C-6. This
standard naming and numbering is an insurance against misunder-
standing and error. These standard designations are not generally
used in schedules and other papers furnished to the public because of
the possibility of confusion with commercial terms.

Much of the N-Navy Department Supplement to the Federal Stand-
ard Stock Catalog can be procured from the Superintendent of Docu-

268 CONCENTRATION OF ECONOMIC POWER

ments under the names of individual parts and classes. For a
complete list see Price List 75, Federal Specifications, Federal Stand-
ard Stock Catalog, issued by the Superintendent of Documents, United
States Government Printing OflSce, Washington, D. C, to whom appli-
cation for the price list and orders for items covered thereby should be
addressed.

Acceptable List of Approved Materials. — The Navy Department
maintains a list of products which require test prior to purchase.
This list of products with the names of the manufacturers and trade
or other identifying data concerning the products which have been
tested and approved comprises the Acceptable List of Approved
Materials.

When materials requiring test and approval prior to purchase are
included in a schedule inviting bids, the specifications and the general
conditions on the schedule specify that the Government reserves the
right to reject bids on brands or products which have not been subjected
to the required tests and found satisfactory. The specifications and
schedule invite the attention of manufacturers and bidders to this re-
quirement, and urge them to forward samples of such products which
they may propose to furnish to the Government in the future, in order
that the tests may be made.

Such tests are made at the expense of the manufacturers; this in-
cludes the furnishing of samples and costs of transportation to and
from point where tests are made. If samples submitted prove unsatis-
factory, consideration is given to the request of manufacturers for
additional tests only after it is clearly shown that changes have been
made in the product with reference to the method of manufacture, etc.,
which the Navy considers sufl&cient to warrant conducting additional

t€StS.

The commodities purchased under the prior-test or acceptable list
method are limited as far as possible to products which come ^ithin
one or more of the following classifications :

1. Products requiring elaborate testing apparatus which is not

available to test the individual deliveries.

2. Products which require a long time for testing.

3. Products of such character that testing upon delivery does not

indicate the lasting qualities or performance value.

4. Products which cannot be tested completely without destruc-

tion.

5. Products which are purchased on performance, or work value,

where it is necessary to set up factors which show the rela-
tionship between performance and price.

6. Products rec^uiring costly tests which cannot be applied to indi-

vidual deliveries.

The listing of a product on the Acceptable List of Approved Mate-
rials does not preclude inspection of actual deliveries.

The Acceptable List of Approved Materials is a restricted publica-
tion ; it is not distributed outside the naval service.

Principal Steps of Procurement Procedwre.

Piorchase requisitions. — ^The form on which one bureau or office of
the Navy makes a request on the Bureau of Supplies and Accounts for
the furnishing by purchase or from stock certam material and supplies
is designated by the term "requisitions." These requisitions require

CONCENTRATION OF ECONOMIC POWER 269

official approval depending upon the circumstances ; those for pur-
chases are finally approved by the Bureau of Supplies and Accounts,
either for bureau purchase or purchase by a local purchasing officer
near the point originating the requirement.

Advertising. — The required supplies covered by an approved pur-
chase requisition are purchased after advertisement, and competition
is required by Federal statute.

Schedules^ vroposals^ or invitations to hid. — When the approved
requisition is d hand the "schedule" is prepared for distribution to
prospective bidders. The "schedule" forms the basis of subsequent
transactions of a formal nature.

Schedules are prepared in mimeograph or printed form and include
the essential data with appropriate blank spaces for entry of bids.

A guaranty is required by Federal statute and is to the effect that
the bidder will execute the required contract and give bond for faithful
performance of same if his offer is accepted. Guaranty is required
when the .total amoimt of all classes on which bid is submitted exceeds
$P00.

Specifications and flans. — Most Navy supplies are purchased on the
basis of standard specifications: Federal Specifications and United
States Navy Specifications which describe in detail the quality, grade,
size, etc., of the article desired. Use of such a specification tend^ to
standardize the Navy's material, puts all bidders on equal footing,
assists inspection, eliminates questions and dispute. When there is
no standard specification the required particulars are set forth in the
schedule.

Openings of bids; awards. — Bids having been submitted, they are
opened publicly and currently by the officials of the Navy purchasing
agency. Bidders or their representatives may be present at these
openings, which are public in character.

Awards are made to the lowest responsible bidder except in a few
cases of statutory exemptions.

Contract., Bureau order ^ -.or order. — After award is made a for-
mal contract is prepared when the amount involved is over $500. This
contract is required to be reduced to writing and signed by the con-
tracting parties with their names at the end thereof. A bond for
faithful performance is required to accompany the contract.

Purchases amounting to less than $500 may be made without formal
contract or bond. The informal order placed by the Bureau of Sup-
plies and Accounts in such cases is called "a bureau order;" if placed
by a field purchasing activity it is called an "order."

Inspections. — Before material may be accepted and paid for by the
Navy it is required that it may be inspected, and passed as to the quality
and quantity, by a responsible official.

Proper and adequate inspection and test are essential to efficient
purchasing. Inspection and test are particularly important when pur-
chases are made under the competitive system of bidding. Few com-
modities are invariably uniform in quality ; it is inevitable that some
vendors will deliver a better quality than others. The best specifi-
cations and procurement procedures are of little value without intelli-
gent and thorough inspection.

It cannot be assumed that the record of reliability of a bidder is a
guaranty that the material he proposes to furnish wiU comply in all

270 CONCENTRATION OF ECONOMIC POWER

respects with the specification requirements. Conceding the good in-
tention in the great majority of cases, there always exists the possibility
of errors in manufacture or of shipment, variations in count of quan-
tity, etc., which are discoverable only by adequate test and inspection.
Proper specifications and the contract indicate what the Navy wants ;
adequate inspection and test insure that it obtains what it has pur-
chased.

The inspection activities of the Navy are in charge of commissioned
officers of the Navy who are well qualified by training and experience
for the service of inspection. These officials are designated as Inspec-
tors of Naval Material. In the Navy inspecting system the United
States is divided into 12 inspection districts. These inspection dis-
tricts are based on (1) the concentration of basic industries, and (2)
transportation facilities. Assigned to these inspection districts are
experienced civil personnel competent to inspect apparatus and mate-
rial not only for naval and marine use, but for general commercial use.

The responsibility for the inspection of the Navy material lies ex-
clusively with the respective bureaus for which the material is pur-
chased. The Bureau of Supplies and Accounts at the purchasing
agency has no cognizance over the inspection of material, except as to
those items of which it also has technical cognizance.

Bureau cognizance is a very broad term to cover the allocation of
inspection duties among the various bureaus. It may be helpful, how-
ever,, to outline in most general terms, cognizance over some items.

Bureau of Aeronautics: Airplanes, engines, aeronautical equip-
ment, etc.

Bureau of Ordnance : Arms, armor, ammunition, etc.

Bureau of Medicine and Surgery : Medicines, hospital supplies, in-
struments, etc.

Bureau of Supplies and Accounts : Provisions, clothing, fuel, etc.

Bureau of Yards and Docks : Public works and other utilities on
shore.

Bureau of Ships: Hull materials, anchors and cable, rigging, can-
vas, winches^;^j^pelling machinery, electrical appliances, radio,
navigational instruments, etc.

Bureau of Navigation : Libraries, recreational items, etc.

All these Bureaus maintain inspection forces both in the field and in
the navy yards.

Shipments.^ — Contractors must give particular attention to instruc-
tions pertaining to shipment in order to avoid misunderstanding and
delay.

Payments. — Delivery having been completed and inspection con-
cluded, the contractor is naturally interested in obtaining prompt
payment. He is advised in the contract where to submit his invoices
or dealers bills, which must contain all necessary data for identifica-
tion.

PROCUREMENT METHODS AND PROCEDURES OF THE
UNITED STATES WAR DEPARTMENT^

So far as practicable, the War Department decentralizes its pro-
curement activities. Each War Department procuring agency is in-
terested in specialized products which are assigned to the depots or
field purchasing offices.
Procurement Planning.

1. The procurement planning agencies are engaged in planning for
the procurement of supplies and equipment which will be needed by
the Army during a war or other major national emergency. Military
requirements are computed in advance. They are apportioned by the
supply arms and services to procurement districts. The procurement
planning officers in these districts search the areas to which they are
assigned for the productive capacity necessary to meet requirements.
Individual plants are surveyed, production studies are made, and in
agreement with the management, plants are allocated for particular
production during an emergency.

2. The management of plants having facilities which are considered
suitable for the production of military ecjuipment are asked to com-
municate with the officer in charge of the procurement district which
is nearest the plant for detailed information regarding this activity.

Procurement planning agencies of the War Department : *

Air Corps: Purchases all flying equipment and the necessary
facilities for operating the air bases.

Chemical Warfare Service: Purchases items having to do with
toxic gases, gas defense appliances, incendiary war materials,
and the development of equipment for use in that type of
service.

Corps of Engineers: The military branch buys the materials and
equipment used for field work in connection with a mobilized
army. (The nonmilitary branch is in charge of the main-
tenance of the rivers and harbors throughout the country.)

Medical Department: Purchases all articles required for the
treatment of patients and for general hospital use ; also for the
veterinary service and the inspection of perishable foodstuffs.

Ordnance Department: Procures all items of ammunition,
weapons, fire control instruments, tools, machinery, and sup-
plies used in arsenals and for maintenance of ordnance.

Quartermaster Corps: Purchases a great variety of items re-
quired by the personnel of the Army, classed^s subsistence,
clothing, motor vehicles, machinery, and supphes, etc.

» Material obtained from the U. S. War Department, Washington, D. C.
_ _.._.. . _ . „ J

omi
271

• "National Defense. Procurement Planning, Purchasing, and Contracting," 14 pp., by the
Bureau of -Foreign and Domestic Commerce, United States Department of Commerce, Wash-
ington, D. C. (Revised), August 1940.

272 CONCENTRATION OF ECONOMIC POWER

Signal Corps : Purchases general equipment for communications,
photographic purposes, meteorological studies, etc.

Coast Artillery Corps : Purchases scientific laboratory equipment
and submarine mine equipment and supplies.

Purchasing Methods.

1. After advertising. — All normal purchases of the War Depart-
ment are made after advertising for bids. Purchasing officers pre-
pare circular proposals and invitations to bid. These papers list the
items to be purchased, list the applicable specifications, state delivery
points and dates, and furnish all the information necessary for a pros-
pective bidder to calculate his costs and submit a bid. Bids are re-
quired to be submitted by a stated time in sealed and properly ad-
dressed envelopes. Bid bonds are frequently required with the bids.
At the stated time, the purchasing officer, in the presence of those
bidders who desire to be present, opens the bids. As a result of this
procedure, the purchase contract is awarded to the best advantage)
of the Government. Circular proposals are given wide distribution
in order to secure the maximum competition. Newspaper advertising
is frequently used. Several commercial concerns publish daily in-
formation regarding invitations issued by the various purchasing
agencies of the Government.

2. Without advertising. — A great portion of the requirements of a
military force are articles which are not in ordinary commercial pro-
duction. These at*e such items as weapons, ammunition, and numer-
ous special articles of transportation and communication equipment.
For some of these, the entire applicable productive capacity of the
country is insufficient to meet the requirements as to quantity and
delivery dates. Several procurement projects are so large that no
one commercial concern is equipped to meet the requirements of any
of them. In order to secure the productive capacity required and in
order to prevent disastrous delays to the present national-defense
program, the Congress has authorized the award of contracts under
special circumstances without advertising. Since this procedure is
resorted to only in order to accelerate and to prevent delays to the
present procurement program, contracts of this sort are awarded to
those facilities known by the purchasing agency to be capable of the
required production. The awards are made with a view of distrib-
uting the production load over available productive capacity. The
negotiation of such contracts will be resorted to in those cases only
where time and other considerations will not permit the award of a
contract as the result of advertising.

3. Open market. — Purchasing officers of the War Department may
purchase to the amount of $500 or less in the open market. Such pur-
chases are made, with minor variations covered in the regulations, in
a manner common among businessmen. Purchases in excess of this
amount may be made without formal advertising when authorized by
the chiefs of the respective arms or services. Informal quotations are
requested from several convenient sources of supply. The purchase
order is issued to secure those terms which are most advantageous to
the Government. Price and discounts, quality, and delivery are con-
sidered. Purchases of this sort are made, in general, at postsi and
stations to meet maintenance requirements when local procurement

CONCENTRATION OF ECONOMIC POWER 273

by purchase offers advantages over procurement by requisition on
military supply depots.

Purchasing Agencies.

Actual purchasing activity of the War Department is specialized
and decentralized. The greater volume of purchases is made by the
depots and arsenals of the Army. These specialize to a great extent
in the articles purchased.

Local Purchases.

The Quartermaster, the Ordnance officer, the Medical Supply officer,
the Signal officer, the Engineer Supply officer, the Chemical Warfare
officer, and the Air Corps Supply officer at Army posts where the
activities of each are located purchases materials, supplies, and equip-
ment. These local purchases are to cover requirements of the post
when supplies required are readily procurable and no advantage would
exist from consolidation and procurement by a depot.

Civilian Conservation Corps.

Purchases for the operation and maintenance of Civilian Conserva-
tion Corps establishments are made under the supervision of the War
Department.

Items Purchased by the War Department Against Procy/rement Divi-
sion^ Treasury Department, Contracts.

1. Such items are : Tires and tubes ; office furniture, filing cases, and
similar equipment ; gasoline } and several less important items. Other
items contracted for by the Procurement Division, Treasury Depart-
ment, may be purchased against such contracts by the Army when it
is advantageous to do so.

2. Stock piles of strategic and critical raw materials authorized
under recent acts of Congress are being purchased under the super-
vision of Procurement Division, Treasury Department.

Items Purchased hy the War Department Against Namy Department
Cov.tvo.cts.
Such items are lubricating oils and certain fuel oils.

STATE PURCHASING METHODS AND PROCEDURES

In order to get some idea of the extent to which the States make
use of written purchase specifications and scientific testing of com-
modities in their buying, a questionnaire was prepared for the pur-
pose of this monograph and sent by the Council of State Governments
to the 48 States.

This questionnaire consisted of the following items:

1. Name of the purchasing agency.

2. Independent agency or part of what State department.

3. Name and title of the chief officer.

4. For what bureaus, commissions, departments, and institutions

are purchases made by the agency ?

5. Are purchases made and contracts based on written specifi-

cations, or by trade-name or brand ?

6. How are standards and specifications formulated (that is,

by a specifications committee, by the purchasing agency
itself, or otherwise) ?

7. What use is made of the specifications of national trade or

technical associations, or of the Federal Government?

8. Classes of commodities for which standards and specifications

have been prepared.

9. What arrangements are made for testing samples submitted

with bids?

10. Are commodities tested after delivery to ascertain that they

conform to the purchase specifications?

11. Is a testing laboratory maintained ? If so, what kind of tests

are conducted?

12. Is use made of (a) college or university or (b) private or

commercial testing laboratories?

Extent of Centralized Purchasing in States.

Among the 42 States replying to the questionnaire, 38 States re-
ported centralized purchasing. Table 2 shows the coverage of the
questionnaire, replies received, number of States not replying, num-
ber and percent of States reporting centralized purchasing, aiid num-
ber and percent of States reporting no centralized purchasmg.

Table 2. — Extent of centralized purchasing in States

states

Number of
States

Percent of
replies

Percent of
total

Total

48
42
>6
>38
M

87.5.

Not replying

12.5

90.5
9.5

79.2

8.3

■ Arkansas, Delaware, Oeorgia, Idaho, Kansas, and Louisiana.

' 2 purchasing agencies were reported for the State of Iowa: Purchasing department of board of ccnftrol, and
executive council.
» Mississippi, Nevada, New Mexico, and South Carolina.

274

CONCENTRATION OF ECONOMIC POWER

275

/Status of /State Purchasing Agencies.

Among the 38 States reporting centralized purchasing, 11 States
have an independent State purchasing agency, while in 26 States
the purchasing agency is part of a State department.* Table 3 gives
the names of the States and the status of the State purchasing agency.

Table 3.

-Status of State purchasing agencies

[Based on 38 States]

Type of agency

States

Number

Percent

Independent State agency

1 n
»26

68. 4

Not specified

2 6

100.0

' Arizona, Florida, Maryland, Missouri, Montana, New Hampshire, North Carolina, Tennessee, Utah,
Vermont, and West Virginia.

' Alabama, California, Colorado, Connecticut, Illinois, Indiana, Iowa (purchasing department, 1 of the 2
purchasing agencies in the State, is a part of the board of control), Kentucky, Maine, Massachusetts,
Michigan, Minnesota, Nebraska, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Dakota, Te.xas, Virginia, Washington, Wisconsin, and Wyoming.

» New Jersey.

Departments of Which State Purchasing Agencies are a Part.

Among the 26 States where the State purchasing agency is part of
a State department, 8 States have the purchasing agency as part of
the department of finance, 3 States as part of the executive depart-
ment, and 3 States as part of the board of control. Table 4 shows
how purchasing agencies are distributed through different depart-
ments and gives the names of the various departments and the names
of the respective States.

Table 4. — Departments of which State purchasing agencies are a part
(Based on 26 States]

State department

States

Number

Percent

>8
«3
J3
<2

>i 1

1) 1
>< 1

30.70

Board of control . . .

11 65

State administrative board

7 70

3.85

Commission on administration and finance

3 85

Coordination and finance

3 85

Department of finance and control

3 85

Executive council

3 85

3.85

Tax commission

3 85

Total

100.0

1 Alabama, California, Illinois, Kentucky, Maine,
Ohio, South Dakota, and Virginia.
> Indiana, New York, and Wisconsin.
« Iowa, Oregon, and Texas.
« Michigan and North Dakota.
» Minnesota.
• Wyoming,
f Massachusetts.

' Rhode Islan
• Washington
i« Connectica
" Colorado.
IS Pennsylvau
» Oklahoma.
" Nebraska.

t.
ia.

276 CONCENTRATION OF ECONOMIC POWER

Bureaus^ Departments^ Commissions, and Institutions for Which
Purchases Are Made hy the State Purchasing Agency.
Among the 38 States with centralized purchasing, purchases in 22
States are made by the State purchasing agency for the State depart-
ments, bureaus, institutions, etc.; purchases in 13 States are made
for these game agencies with few exceptions; and purchases in 2
States are made for State penal and charitable institutions. Table 5
shows the types of bureaus, departments, and institutions for which
purchases are made and gives the names of the different States.

Table 5. — Bureaus, departments, commissions, and institutions for which
purchases are made by the State purchasing agency

[Based on 38 States]

Bureaus, departments, institutions, etc.

States

Number

Percent

State departments, bureaus, institutions, etc

122

2 13
»2
U

57 9

34.2

Rt.fttP ppnal and f>harit,fthlfi institutions

5 3

2.6

Total

100

• Alabama, Colorado, Connecticut, Iowa (executive coimcil makes purchases for State penal and charit-
able institutions; purchasing department of board of control makes purchases for all other State institutions,
departments, and bureaus, etc.), Maryland, Massachusetts, Minnesota, Montana, New Jersey, New York,
North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Ten-
nessee, Texas, Vermont, West Virginia, and Wisconsin.

' California, Indiana, Kentucky, Maine, Michigan, Missouri, Ohio, Nebraska, New Hampshire, Utah,
Virginia, Washington, and Wyoming.

' Arizona (capitol building and grounds in addition to State penal and charitable institutions) and
Florida.

* niinois.

Extent to Which States Use Written Specifications.

Among the 38 States with centralized purchasing only 7 States
use written specifications exclusively, 6 States use written specifica-
tions in most cases, while 24 States use .trade-names and specifications.
Table 6 shows the extent of the use of written specifications, and
gives the names of the States.

Table 6. — Extent to which State use toritten specifications

[Based on 38 States]

Extent of use of written specifications

States

Number

Percent

Use of specifications exclusively

•7
«6
»24
*1

18 4

15.8

Use of trade-name and specifications

63 2

Specifications never used

2 6

Total

• Alabama, Connecticut, Ulinois, Massachusetts, New York, South Dakota, and Virginia.
' Colorado, Indiana, Nebraska, Oklahoma, Rhode Island, and Wisconsin.

' Arizona, California, Florida, Iowa, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri,
Montana, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas,
Utah, Vermont, Washington, West Virginia, and Wyoming.

* North Dakota (trade-name and brand).

CONCENTRATION OF ECONOMIC POWER

277

How Speci-ficati&ns Are Formulated.

Among the 38 States reporting centralized purchasing, there are
9 States where specifications are formulated by the State purchasing
agency ; 16 States where specifications are formulated by the purchas-
ing agency in cooperation with the departments concerned, committee,
or specialists; and 4 States by a specifications committee. Table 7
shows in detail how specifications are formulated in different States.

Table 7.-

-How specifications are formulated

[Based on 38 States]

State purchasing agencies

Formulation of specifications

States

Number

Percent

M6
«7

23 7

By purchasing agency in cooperation with departments concerned, committee, or
specialists

42 1

Other

18 4

Total .

100

' Alabama, Arizona, Iowa, Maine, Montana, Oregon, South Dakota, Texas, and Wyoming.

« Connecticut, New Jersey, Virginia, West Virginia.

' Colorado and Missouri.

« California, Florida, Indiana, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, North
Carolina, Ohio, Pennsylvania, Tennes.see, Utah, Vermont, Washington, and Wisconsin.

• Includes "various ways" (Illinois); "specifications based on experience and tests made by the testing
division of the University of Nebraska" (Nebraska); "Bureau of Standards" (New York); "no specific
specifications, sometimes make use of Government specifications" (North Dakota); "have no set type or
brand to buy" (Kentucky); "United States and Department of Agriculture specifications largely used,
also Bureau of Standards, and 'rom scientific department of the State of Oklahoma" (Oklahoma); "Depart-
ment of Public Works and Purchasing Standardization Committee" (Rhode Island).

Extent to Which States Use Specifications of the Federal Govern-
ment and of National Trade or Technical Associations. ,
Among the 38 States with centralized purchasing, 13 States use
specifications of the Federal Government or of the national trade or
technical associations extensively or frequently, and 13 States use only
when applicable. Table 8 shows the extent of use of nationally
recognized specifications and gives the names of the States.

-Extent to tvhich States use specifications of the Federal Oovernment
and of national trade or technical associations

[Based on 38 States]

Extent of use of specifications

Extensively or frequently —

Whenever applicable

Only for reference and comparison
Very little

TotaL.-

' Colorado, Connecticut, Indiana, Maine, Maryland, Michigan, Nebraska, New Jersey, New York, North
Carolina, Ohio, Oklahoma, and Oregon,

J Arizona, California. Illinois, Kentucky, Minnesota, Missouri, North Dakota, Pennsylvania, South
Dakota, Texas, Utah, Vermont, and Wisconsin.

3 Alabama, Tennessee, Washington, West Virginia, and Wyoming.

« Florida. Iowa (Federal Specifications are used on meat), Massachusetts, Montana, New Ilampshire,
Rhode Island, and Virginia.

271.'4'.

-41— No. 24-

Metals.

Motor oils.

Motor vehicles.

Nursery supplies (shrubs, etc.)

Office supplies and furniture.

Oils.

Packing (steam, water pump, etc.)

Paint.

Paint brushes.

Paint (license plate).

Paper.

Photo engravings.

Piling.

Pine cleaner.

Pipe (concrete).

Pipe (vitrified).

Plumbing equipment and supplies.

Power plant grease and oil.

Printing.

Putty (steel sash).

Road machinery and equipment.

Road materials.

Revenue stamps.

Revolvers and holsters.

School equipment and supplies.

278 CONCENTRATION OF ECONOMIC POWER

Commodities for Which Written SpecificatioTis Have Been Prepared

hy One or More States.

The following is a list of commodities for which written specifica-
tions have been prepared by one or more States :

Asphalts.

Athletic goods.

Baby chicks.

Badges.

Bedspreads.

Belting (leather, rubber, and canvas).

Bituminous material.

Blankets.

Brick.

Building material.

Cans and canning supplies.

Cement.

China and silverware.

Clothing.

Coal.

Cotton.

Creosote.

Culverts.

Dairy equipment and supplies.

Disinfectants.

Drugs.

Dry goods.

Enamel (license plate).

Electrical equipment.

Feeds and grains.

Fertilizer.

Fire extinguishers.

Foods and food products.

Fuels.

Fumigants.

Gasoline.

Glas.s (window and plate).

Gravel.

Hardware.

Hose (garden, steam, and water).

Hospital. equipment and supplies.

Household equipment (furniture, carpet

and rugs, refrigerators, etc.).
Insecticides.
Janitor supplies.

Kitchen equipment and. supplies.
Laboratory equipment and supplies.
Laundry equipment and "supplies.
Light bulbs.
Lumber.

Arrangements Made for Testing Samples Snhmiffed With Bids.

It is interesting to note that the arrangements made for testing
samples submitted with bids are very different throughout the 38
States with centralized purchasing. 'The following illustrates tlie
f acilites used by various States for this purpose :

Alabama : "Some tested in own laboratory, some submitted to outsldQ
laboratories." ,

Arizona : "Left to the executive officer and institution stewards. '

California: "Division of Highways Laboratory, Department of Agricoltnre
Inspection Service on meats. Pure Food and Drug Laboratory."

Colorado: "Highway Laboratory tests equipment, oils, asphalt, etc."

Sewing and tailoring supplies.

Sheets and sheeting.

Shoes.

Signs, sign parts, and sign markings.

Soap.

Spray materials.

Steel (license plate).

Tar.

Textiles.

Tires.

Tobacco.

Tools, smalL

Towels and toweling.

Trees.

Twine (binder).

Varnish.

Waxes.

Wild game.

CONCENTRATION OF ECONOMIC POWER 279

Connecticut : "Samples with bids, tested in State laboratories, such as High-
•way, Agricultural Experiment Station, etc. Some use of Commercial Labora-
tories where special equipment not owned by the State is required."

Florida : "State Chemist is used where possible, also U. S. Bureau of
Standards."

Illinois: ^'Private and State agencies."

Indiana: "Groceries are tested by the bureau and State Board of Health.
Meats are inspected by Bureau of Agricultural Economics.'

Iowa : ' "Most commodities are tested by the Purchasing Agent. Conee and
teas are tested by an expert tester, butter by the State Agricultural Department.
Occasionally the state Chemist tests various items, such as seeds, etc.

Kentuclty : "Samples are tested when needed in the laboratories of the Uni-
versity of Kentucky and the Highway Department."

Maine: "Laboratory facilities at University of Maine, and the use of indus-
trial laboratories for textiles."

Maryland : "Federal Bureau of Standards, Federal Bureau of Mines
Laboratory make some tests."

Massachusetts : "The Purchasing Bureau maintains its own laboratory for
testing samples."

Michigan : "Purchasing Agents' experience and Michigan State College."

Minnesota : "Samples are tested by individual testing agencies, Highway
Department Testing Laboratory, Agricultural Testing Laboratory, U. S. De-
partment of Agriculture for meats."

Mis.souri : "State laboratories."

Montana : "Samples are tested in state and college laboratories. Some items
are tested in commercial laboratories."

Nebraska : "All tests are made by the testing division of the University of
Nebraska if there is any question of quality.'

New Hampshire: "The facilities of the State Highway Department and
State University are available when required."

New Jersey : "If specifications of bid require samples for testing, said sam-
ples are tested by various agencies at command of Statp Purchasing
Department."

New York : "Samples are not submitted with J)id, except in a few cases, at
which time the samples in question are tested by the Bureau of Standards."

North Carolina : "Our own testing laboratories and utilize those of other
State departments and those of our colleges."

North Dakota : "Some samples are sent to the State laboratories for testing."

Ohio : "Require samples to be submitted with bids on most food products,
and on any other products where feasible. Laboratory tests made at discretion
of Supt of Purchases and Printing. All flour tested through private tieup."

Oklahoma : "Bureau of Standards, Board of Health, Board of Agriculture,
and laboratories of state institutions and departments."

Oregon : "State Lab."

Pennsylvania : "Laboratory controlled and in laboratories, Pennsylvania, De-
partment of Property and Supplies, Bureau of Standards."

Rhode Island : "State Materials, Engineer ; other State Laboratories."

South Dakota : "Samples are tested by Testing Laboratory."

Tennessee : "Certain institutions and departments are equipped for testing
samples of articles they request."

Texas: "On articles where quality is unknown we either test them in this
office, or .send them to one of the state owned laboratories."

Utah : "Very adequate system, no central warehouse. We sometimes put our
men at mfg. plant for paint, etc., otherwise just go on the judgment of this
office and using agency."

Vermont: "Various Food stuffs tested at Vermont State Hospital, Waterbury,
Vt. We use the Highway Testing, Agricultural and Extension Ser^-ice
Laboratories."

Virginia : "State Laboratory — Bureau of Standards, Washington, D. C. All
groceries are purchased by samples and samples are tested when purchase is
made."

' Purcha.sing Department of Board of Control, one of the two purchasing agencies in the
State.

280

CONCENTRATION OF ECONOMIC POWER

Washington : "In all instances where purchases made as per sample, com-
parison is made of deliveries with original sample. Laboratory tests made ol
samples of nearly all purchases of consequence based on specification."

West Virginia : "Tests conducted by testing laboratories."

Wisconsin : "Use commercial testing laboratories, Federal Government agencies,
technical laboratories at educational institutions and Highway Testing Labora-
tories."

Wyoming: "State Laboratory."

Use of Tests To Determine Compliance With SpecifiGatioiis.

Among the 38 States with centralized purchasing, tests are regularly
made on all commodities in 22 States, while tests are never made in
1 State. Table 9 shows the extent of the use of tests and gives the
names of the States.

Table 9. — Use of tests to determine compliance with specifications by State

purchasing agencies

[Based on 38 States]

Extent of use of tests

States

Number

Percent

Tests regularly made on all commodities

122

57 9

6.3

Tests regularly made only on certain commodities

18.4

15.8

Tests never made .

2.6

Total - - - -

100.0

1 Alabama, Arizona, California, Connecticut, Florida, Illinois, Maine, Massachusetts, Minnesota,
Missouri, Montana, Nebraska, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode
Island, Texas, Utah, Vermont, and West Virginia.

2 Colorado and Washington.

3 Indiana, Kentucky, New Hampshire, New Jersey, Ohio, Tennessee, and Wisconsin.
* Iowa, Maryland, Michigan, North Dakota, South Dakota, and Virginia.

5 Wyoming.

Testing Laboratories of State Purohasing Agencies.

Among the 38 States with centralized purchasing, 13 States main-
tain testing laboratories and 25 do not maintain such laboratories.
Table 10 shows the extent of maintaining testing laboratories and
gives the names of the States.

Table 10.— Testing laboratories of State purchasing agencies
[Based on 38 States]

Testing laboratories of purchasing agencies

States

Number

Percent

Purchasing agencies maintaining testing laboratories

.13
«25

34.2

Purchasing agencies not maintaining testing laboratories

65.8

Total

100.0

1 Alabama, Iowa (Executive Council, one of the two purchasing agencies, maintains a testing laboratory),
Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island,
South Dakota, West Virginia, and Wyoming.

2 Arizona, California, Colorado, Connecticut, Florida, Illinois, Indiana, Kentucky, Maine, Maryland,
Michigan, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, Tennessee,
Texas, Utah, Vermont, Virginia, Washington, and Wisconsin.

CONCENTRATION OF ECONOMIC POWER

281

Table 11. — Types of Tests Made and Commodities Tested in the Laboratories of
13 States Where Purchasing Agencies Maintain Testing Laboratories

State in which agency
is located

Type of test or commodity tested

Iowa'

Massachusetts.

Minnesota

New Jersey

New York

North Carolina

Oregon

Pennsylvania..
Rhode Island..

South Dakota..

West Virginia..
Wyoming

Highway materials, feeds and food commodities.

Ink, soap, seeds.

All kinds of tests*

Physical and chemical tests.

Paper, carbon paper and ribbons, textiles.

Analytical tests.

AnalysLs and practical tests.

All kinds of tests.

Organic and inorganic, physical tests.

Road oils, fuel oils, coal, cement, stone, etc., dairy and poultry feeds, milk, eggs,

etc.
Tests for moisture and ash content in coal, dirt in sand, size of gravel; chemical

analysis of paint, etc.
A.11 kinds of tests.
Chemical analysis and strength tests.

» Executive Council, one of the two purchasing agencies in the State.

Types of Testing Laboratories Used hy the States.

Among the 38 States with centralized purchasing, 17 States use
college or university and private or commercial laboratories and 8
States use college or university testing laboratory. Table 12 shows
the type of testing laboratory used and gives the names of the States.

Table 12. — Types of testing laboratories used by the States

[Based on 38 States]

Type of laboratory

1 Number

Percent

21.1

»3

7.9

College or university and private or commercial

3 17

44.7

other

23.7

None

I »1

2.6

Total

! 38

100.0

» Colorado, Kentucky, Michigan, Nebraska, New York, Virginia, West Virginia, and Wyoming.

• Alabama, Florida, and Rhode Island.

» California, Illinois, Indiana, Iowa, Maine, Massachusetts, Minnesota, Missouri, Montana, New
Hampshire , New Jersey, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, and Utah.

•Includes "local Highway Department and university laboratories" (Arizona); "State University,
Health Department and State Roads Commission, and private testing laboratories" (Maryland); "State
Chemical Laboratory" (South Dakota); "Highway, Health and Agriculture Department Laboratories"
(Tennessee); "State owned laboratories" (Texas); "Highway Testing, Agricultural and Extension Service
Laboratories" (Vermont); ."State Highway Department, University of Washington, and State College
Laboratories" (Washington); "Commercial testing laboratories. Federal Government agencies, college or
university laboratories, and highway te.sting laboratories" (Wisconsin); "Highway Dept., Agricultural Ex-
periment Station, Health Dept., Dairy and Food, Dept. of Agriculture, and University of Conn., as well
as commercial laboratories (Connecticut).

» North Dakota.

Results of the Survey.

An analysis of the returned questionnaire indicates that the fol-
lowing 38 States report a centralized purchasing agency.

Massachusetts

Michigan

Minnesota

Missouri

Montana

Nebraska

Alabama

Illinois

Arizona

Indiana

California

Iowa

Colorado

Kentucky

Comiecticut

Maine

Florida

Maryland

282 CONCENTRATION OF ECONOMIC POWER

New Hampshire

Oregon

Vermont

New Jersey

Pennsylvania

Virginia

New York

Rhode Island

Washington

North Carolina

South Dakota

West Virginia

North Dakota

Tennessee

Wisconsin

Ohio

Texas

Wyoming

Oklahoma

Utah

It is to be expected that the State purchasing agency should work
closely under the supervision of the Governor, or probably under his
appointed head of the finance department. In the majority of the
States the purchasing agency is connected with the department of
finance or its equivalent.

Purchases are generally made for all State departments, bureaus,
and institutions. In a few States purchases are made only for State
penal and charitable institutions.

Almost all orders for State supplies are placed by means of writ-
ten specifications. However, few States are using standard specifica-
tions, since, in the majority of the cases supplies are ordered by brand
or trade name. In many instances the brand is used only as a de-
scription, or a guide to the buyer, and it is understood that another
brand of equal merit may be substituted. Sometimes purchase orders
which mention a brand must include at least three brands, any of which
may be supplied.

As a general rule, the formulation of specifications for purchases is
left to the purchasing agent or agency, often with the advice of the
department for which the purchase is being made, or with technical
assistance if it is available. Only in a few States are specifications
prepared by a special committee appointed for this purpose.

It is interesting to note that in 26 States Federal Specifications or
nationally recognized specifications are used extensively, frequently,
or wherever possible.

Almost all of the States have set up specifications on at least certain
items, such as foodstuffs, highway materials, gasoline and oil, and
construction materials.

In most of the States some effort is made to test samples of materials
before placing the order, or upon delivery. Thirteen States have
testing laboratories in connection with their purchasing agencies, and
in some of the States the testing facilities of the purchasing agency lab-
oratories are supplemented by commercial or university laboratories.

The results of this survey show that much could be accomplished
if the present purchasing methods of the States were placed on a
scientific basis. The utilization of standards and specifications estab-
lished by the Federal Government or by nationally recognized stand-
ardizing agencies, used tentatively for a trial period in the original
form and modified when necessary to meet local requirements would
undoubtedly improve the quality of the goods purchased and result
in savings to the States. It seems that the testing facilities of tax-
supported colleges or universities should be used most extensively to
ascertain that the commodities delivered conform to the purchase
specifications.

COUNTY PURCHASING METHODS AND PROCEDURES

A survey of purchasing methods used by counties was made in 1939
by the National Bureau of Standards, United States Department of
Commerce. A questionnaire was sent to the oflScial in charge of pur-
chasing in each of the 3,070 counties in the country requesting the fol-
lowing information : The establishment of purchasmg agency ; method
of appointing a purchasing agent; the extent of purchasing for county
agencies; whether purchases are made on contracts based on written
specifications or by trade-name or brand ; how standards and specifica-
tions are formulated; adoption and use of specifications of national
technical -organizations and those of the Federal Government ; arrange-
ments made for testing samples submitted with bids and samples of
deliveries ; maintenance of testing laboratories by counties ; and, use
made of the facilities of college or university testing laboratories.

A total of 1,177 replies was received from counties in every State
except Delaware. Of this number, 430 were not considered because of
failure to give any information of value. The discussion which fol-
lows is based, therefore, on returns from 747 counties, or approximately
25 percent of the total number of counties.

This survey shows that the authority of counties to make purchases
of equipment, materials, and supplies needed for the operation of their
governments is derived from acts passed by State legislatures.

Centralized Purchasing.

Centralized purchasing, defined by Dr. Russell Forbes, commissioner
of purchase. New York City, as "the delegation to one office of the
authority to buy supplies, materials, and equipment needed by all the
operating branches of an organization," occurs in not more than 75
counties. California leads all States in the number of counties which
have adopted the centralized system of purchasing by the establish-
ment of purchasing departments and the appointment of purchasing,
agents in accordance with the political code of that State ; 18 counties
in California have already adopted the centralized form of purchasing.

In North Carolina, county purchasing agents have been appointed
to handle purchases of materials and supplies in nine counties.

Under an act passed by the Legislature of Wisconsin relating to
county officers acting as purchasing agents, the county boards in six
counties have appointed purchasing agents. Two counties have also
appointed purchasing agents, but their purchases are limited to mate-
rials and supplies needed for courthouse purposes only.

In Ohio full-time or part-time purchasing agents are employed in
seven counties. Perhaps the outstanding system of centralized pur-
chasing in Ohio is in effect in Hamilton County. All purchases for
all administrative departments and institutions of the county are han-
dled by the purchasing department. There are no laws in the State
of Ohio requiring centralized or coordinated purchaung by counties.
The plan of Hamilton County is extralegal by resolution of the board

283

284 CONCENTRATION OF ECONOMIC POWER

or county commissioners, by approval of the city council of the city
of Cincinnati, and by the board of education, through a committee
known as the coordinating committee of Hamilton County. This com-
mittee consists of the city manager of Cincinnati, the president of the
board of county commissioners, the president of the board of educa-
tion, and a member of the board of trustees of the University of
Cincinnati.

In Michigan five counties have employed purchasing agents who
devote their full time to purchasing problems. In Iron County, the
chairman of the board of supervisors appoints a purchasing committee
at each annual meeting. In Kalamazoo County, the purchasing de-
partment, which is under the direction of the finance committee, pur-
chases for all departments of the county which are not incorporated
bodies.

Although the General Assembly of Virginia passed an act in 1932
with respect to county purcliasing, replies to the questionnaire re-
ceived from counties in this State show that only four have adopted
the centralized system of purchasing. Arlington County has made
rapid progress in its system of centralized purchasing which was in-
stalled about 9 years ago. The three other counties have also made
some progress in the use of centralized purchasing methods.

Recognition should be given to the fact that a large number of
counties in this country are small both geographically and in size of
population. The establishment of a purchasing department and the
maintenance of a purchasing agent in a majority of these counties
might constitute an undue burden on the taxpayers with the result
that any savings which might be effected by centralized purchasing
may be offset by the maintenance of a purchasing department. Pre-
sumably, the General Assembly of Virginia considered this fact in the
act of 1932 relative to county purchasing by the inclusion of the fol-
lowing section :

The board of supervisors of any two or more adjoining counties shall have
power to appoint, in accordance with the provisions of this section, a joint pur-
chasing agent. Such joint purchasing agent shall carry out the provisions of this
act as they shall apply to each of the counties concerned. He shall be subject
to rules and regulations mutually formulated and agreed upon by the county
boards which designate him as their joint purchasing agent.

No counties in Virginia, according to replies received, have taken
advantage of this plan. It would be interesting to note the effect in
savings which a plan of this nature would bring to a group of counties
adopting it. There is no doubt that under proper administration and
careful procedure in buying it would produce beneficial results.

In Alabama three counties reported that they maintain purchasing
departments. In Tuscaloosa County, a resolution adopted by the
board of revenue in 1930 provides that no department of the county
shall buy anything, but shall send its requisitions to the purchasing
agent, who shall make all necessary purchases. By an act of the
State legislature approved in 1935 there was created in Henry County
a purchasing agency "dealing with and having reference to all pur-
chases" for the county.

In North Dakota, purchasing boards or committees have been estab-
lished in five counties, and all purchasing is centralized in these boards
or committees.

CONCENTRATION OF ECONOMIC POWER 285

In New York State several counties have also centralized theii
methods of purchasing. In Chemung County, a purchasing depart-
ment was established by the county board with the appointment of a
county agent who makes purchases for all county departments. A
similar arrangement has been made in Chenango County, and the
county purchasing agent does the buying for all departments except
highways. The same is true in Erie, Jefferson, Madison, Oneida,
Nassau, and Westchester Counties. In Genesee County, a purchasing
committee, operating under the direction of the board of supervisors,
handles all ordinary purchases for the county departments. The de-
partment of purchase of the city of New York buys all materials,
supplies, and equipment required by all the agencies of the five counties
within greater New York ; namely, New York, Kings, Queens, Bronx,
and Richmond. This includes equipment and foodstuffs for the
sheriffs' jails and office furniture and supplies as well as stationery
for the various county officers.

Purchasing departments have also been established in several coun-
ties of the following States : Arkansas, Connecticut, Florida, Georgia,
Idaho, Kansas, Kentucky, Nebraska, New Jersey, Oregon, Texas, and
Utaii.

Replies received from two-thirds of the counties in Vermont indi-
cate that centralized purchasing is in effect in that State. Counties
present their requirements to the State purchasing agent who, in turn,
does practically all of the buying. Some purchasing is done by the
county courts in each county, but it is limited solely to materials
needed for repairs to jails and courthou3es.

Purchasing Procedure.

Purchasing as it is conducted today is quite different from that of a
quarter of a century ago. It has developed into a science in the sense
tnat persons who are engaged in it must possess at least a fair knowl-
edge and understanding of the technical problems involved in connec-
tion with the purchasing of commodities or services. The elements
entering into purchasing are many and require sound judgment on the
part of those who do the buying. There is no doubt that a good pur-
chasing department with a competent personnel can effect real savings
to an organization whether industrial or governmental.

Purchasing in the county actually begins when the head of a depart-
ment or an institution notifies the officers in charge of purchasing of
his needs. While such notification may and probably often does take
the form of a mere verbal request, it is properly done by submitting
a written requisition. After the requisition has been approved sources
of supply are informed what material or service is required. This is
done in various ways, the most common of which is direct request for
quotations or bids. The ultimate responsibility for approving invoices
for payment in counties is usually the function of the county board.

Use of Standards and Specifioations.

Obviously, in order to make an intelligent bid, the bidder ought to be
fully informed as to what he will be expected to furnish. Such details
are generally predicated upon certain standards and specifications
established by Federal, State, and local governments, and by various
national technical societies and trade associations. Of course, all com-
modities used by a government cannot be standardized, but many can be

286 CONCENTRATION OF ECONOMIC POWER

and are, with a resultant reduction in cost and an improved delivery
service for the purcliaser.

It is a significant fact that approximately 70 percent of the 747 coun-
ties, whose returns were considered, reported the use of standards and
specifications on which contracts for purchases are based.

In more than 30 percent of the counties either the county engineer,
county auditor, or superintendent of highways drafts the specifications,
chiefly for road and bridge construction and the necessary materials.
In many counties purchases for county, roads and highways are pro-
cured in accordance with specifications prepared by the State highway
departments,

Purchasing^agents, purchasing boards, or committees prepare speci-
fications for materials, supplies, and equipment in about 10 percent of
the counties reporting. The county boards, or officials designated by
them, formulate the specifications in 32 percent of the reporting coun-
ties. In a number of counties specifications are prepared by the various
departments, and in others by technical officers in cooperation with the
using agency.

The following is only a partial list of the commodities for which
written specifications have been prepared by one or more of the counties
replying to the questionnaire :

Automobiles Office equipment and supplies

Building materials Office and janitorial supplies

Canned goods Oils

Clothing Paper

Drugs Pipe

Foods Printing

Fuel oil Road machinery and equipment and

Gasoline materials

Gravel Sand

Greases School supplies

Hardware Scrapers

Highway materials Shoes

Hose Stationery

Lamps Steel

Lumber Tires

Approximately 15 percent of the counties state that they have
adopted and use Federal Specifications as a basis for contracts for
purchase, while 10 percent employ standards and specifications pre-
pared by national technical organizations. More than 20 percent of
the counties rely on trade-brands or trade-names as a guide to pur-
chases. It should, of course, be borne in mind that certain counties
indicate the use of some or all of the methods referred to, depending
upon the nature of the commodity procured.

It is believed that, with a few exceptions, it would be advantageous
for county officials who are in charge of purchasing to utilize Federal
Specifications tentatively throughout a trial period. It is suggested
that they be used first in their original form and modified later when
necessary to meet special conditions or requirements.

Use of Testing Laboratories.

Comparatively few counties of the United States report the main-
tenance by their own governments of laboratories for testing and
inspection of commodities, or the employment of commercial, univer-
sity, or other laboratories for such purposes. Of the 162 counties in
28 States reporting the use of laboratories for testing commodities

CONCENTRATION OF ECONOMIC POWER 287

purchased by the county, 14 maintain their own laboratories and
conduct various kinds of tests; 17 employ the service of commercial
testing laboratories; 88 utilize the facilities of college or university
laboratories, mostly for tests and inspection of materials and equip-
ment used in road construction; and 43 employ their State highway
laboratories mostly for tests and inspection of materials and equipment
used in road construction.

It would seem, from the results obtained from the survey, that too
few counties are taking advantage of the testing facilities of tax-
supported colleges or universities for the purpose of determining
whether commodities purchased comply with the requirements rela-
tive to quality and grades as specified in the contracts or with the
specifications on which contracts are based.

It is conceivable that a cooperative arrangement could be effected
whereby county agencies would utilize the facilities of State-owned
institutions to conduct certain kinds of analyses and tests. In all
probability, a number of State-owned colleges and universities do
maintain equipment for testing, but the counties are not making use
of available services. There is no question that the use of commodity
acceptance testing will have a tendency to lessen the disadvantages
of accepting second-grade or off-grade materials and at the same time
will result in savings which may be utilized by the counties in render-
ing other services to the taxpayers.

Results of the Survey hy the National Bureau of Standards.

The results of the survey show that with certain exceptions, county
purchasing methods leave much to be desired. Nothing can be gained
from the rule-of-thumb method which prevails in a number of coun-
ties. On the other hand, much may be accomplished if counties
would revise their present purchasing methods and place them on a
scientific basis. An ideal county purchasing department is one which
has put into effect a centralized system of purchasing whereby all
purchases for county needs are handled by the purchasing department
in charge of a. competent purchasing agent; the maintenance of a
library of current standards and specifications covering v£(rious classes
of comm'odities ; and one which owns or may utilize proper laboratory
facilities for the testing of deliveries to determine their compliance
with the requirements of the standards or specifications on which
contracts are based.

It is evident that there are limits to the feasibility and efficiency of
a completely centralized purchasing system in small or sparsely-
settled counties. For them might well be an expensive luxury,
except in the purchase of the more commonly used materials. The
solution may lie in county consolidation, or in cooperative purchas-
ing, whereby two or more adjacent counties would pool their require-
ments and purchase on joint contracts.

Survey hy the Governmental Committee of the National Association
of Piirchasing Agents.
In addition to the survey made by the National Bureau of Stand-
ards, the National Association of Purcliasing Agents' Governmental
Committee sent out a (luestionnaire to each county clerk in the United
States, to obtain information as to county purchasing laws, practices,
and administrative organizations. The replies received from this

28g CONCENTRATION OF ECONOMIC POWER

survey formed a basis for a study entitled, "County Purchasing," » by
Joseph W. Nicholson, city purchasing agent, Milwaukee, Wis.

A county model law was proposed by the National Association of
Purchasing Agents in 1931, and in the pamphlet "County Purchas-
ing," this model law is reproduced with the recommended changes
and exceptions suggested by Mr. Nicholson.

Section 12 of this model law deals with the establishment of a
standardization committee for each county.

There shall be in each county a standardization committee which shall be

composed of .' The members of this committee shall serve without

additional compensation.

It shall be the duty of the standardization committee to classify the require-
ments of the county -government for supplies, mateilals. and equipment ; to
adopt as standards the smallest number of qualities, sizes, and varieties of
such supplies, material, and equipment consistent with the successful operation
of the county government; and to prepare, adopt, promulgate, and enforce
written specifications describing such standards.

In the preparation and revision Of any such standard specification, the
standardization committee shall seek the advice, assistance, and cooperation
of the county departments and agencies concerned, to ascertain their precise
requirements. Each specification adopted for any commodity shall, insofar
as possible, satisfy the requirements of the majority of the county departments
and agencies which use the same. After its adoption, each standard specifica-
tion shall, until revised or rescinded, apply alike in terms and effect to every
future purchase and contr:'.ct for the commodity described in such specification ;
providedr however, that the county purchasing agent, with the approval of
the county board, may exempt any county department or agency from use of
the commodity described in such standard specification.

'"County Purchasing," by Jos. W. Nicholson, 61 pp.. The National Association of Pur*
chasing Agents, 11 Park Place, New York City, 1940.

» "The personnel of this committee should be adapted to the siructure of the county gov-
ernment of each State. It should include a member of, or representative of the county
board, the county highway engineer or his representative, a representative of the county's
penal and charitable instiiutious, a representative of the county school system if school
suriplies are to be purchased through the county purchasing office, and the county purchas-
ing agent who should be chairman and >hould bo present at all meetings."

MUNICIPAL PURCHASING METHODS AND PROCEDURES

While much has been written with regard to municipal purchas-
ing problems and principles, especially the theoretical advantages
of centralized purchasing, it is only ver}^ recently that there has
been available any considerable amount of factual material concern-
ing actual purchasing practices in American municipalities. In
fact, the first comprehensive study along this line seems to have
been that which was made in 1939 by the Governmental Group of the
National Association of Purchasing Agents and the International
City Managers' Association. For the purposes of that study a com-
prehensive questionnaire was circulated among all cities of over
30,000 population in the United States. The findings were presented
in an article published in the "Municipal Year Book of 1940." ^°

Growth of Centralized Purchasing.

Among other interesting facts brought to light by this survey is
that centralized purchasing has had an extremely rapid and constant
growth in American cities during the past 20 years. Of 118 cities
with a centralized purchasing procedure replying to the question-
naire, 38.2 percent adopted centralized purchasing during the last
decade, 8 cities being added to the list in 1939. Moreover, all but 23.6
percent of these cities adopted centralized purchasing within the
past 20 years. The details concerning the rate of growth of central-
ized purchasing in such cities are given in table 13.

Table 13.— Growth

Of centralized purchasing
population

in 118

cities of over

30,000

Number of cities by population groups

Year adopted

Over
500,000

200,000 to
500,000

100.000 to
200,000

30,000 to
100,000

All cities
over
30,000

Percent
of total

Before 1907

5
3
3

8
3

1
1

4
9

2
7
32
28

1
3
24
45
45

0.8
2.5
20.3
38.2
38.2

1907-9

1910-19

1920-29

1930-39

Total

118

100.0

Extent of O&ntralized Purchasing.

Of the 194 cities replying to the questionnaire, 125," or 64 percent,
reported that procurement of materials and supplies was centralized,

lo'-The Municipal Year Book 1940," pp. 194-201, International City Managers' Associa-
tion, Chicago, 111., 1940. The National Association of Purchasing Agents, and the Interna-
tional City Managers' Association have generously made available for the present pui--
poses the executed questionnaires and the other data collected in that survey

"The article contained in the "Municipal Year Booli for 1940," cited above, shows a
figure of 123. However, several questionnaires were returned following the publication
of the 'Year Book," and the figure here given Is based on these supplemental returns.

289

290

CONCENTRATION OF ECONOMIC POWER

as against only 69 cities reporting that purchasing was not centered
in one office. As would be expected, the extent of the use of cen-
tralized purchasing has a direct relationship to the size of munici-
pality; all of the very largest cities reported its use, with the per-
centage of municipalities reporting centralized purchasing systems
decreasing constantly with each smaller population group. While
the extent to which centralized purchasing is practiced in the 116
cities of over 30,000 population that did not reply to the question-
naire (see table 14), is little more than a matter of conjecture; it may
be presumed that a large proportion do not have this system, but in
any event information from the whole could hardly be expected
to change the picture in this particular. Table 14 shows the extent
of centralized purchasing at the close of 1939 in cities of over 30,000
so far as can be determined from the replies to the questionnaire.

Table 14. — Extent of centralized purchasing in cities over

1939

as of Dec. 1,

Total
number
of cities
in United
States

Cities replying

Cities reporting centralized
purchasing

Population group

Number

Percent
of total

Number

Percent
of re-
plies

Percent
of total

Over 500,000

28
62
217

11
17
34
132

85
61
65
61

11
16
25
73

100
94
74
(55

200 000 to 500,000

100,000 to 200,000 '

80,000 to 100,000

All Cities over 30,000

310

194

125

Questionnaire Relating to Use of Standards.

In order to gain some idea concerning the extent to which American
municipalities make use of written specifications and scientific testing
of commodities in municipal buying, in May 1940 a special question-
naire was prepared, for the purpose of this monograph, and sent by
the American Municipal Association to 100 municipalities of various
population groups and representng all sections of the country. Spe-
cifically, this questionnaire requested information as to (1) whether
purchases are made on written specifications or by trade-name or
!>rand; [a) how standards are formulated; (3) the extent to which
use is made of specifications prepared by national technical organiza-
tions and the Federal Government; (4) the arrangements which have
been made for testing samples of commodities both when submitted
with bids and after delivery; (5) the exent to which testing labora-
tories are maintained; and (6) the use made of the facilities of col-
lege or university testing laboratories as well as those of private or
commercial institutions. Table 15 shows the coverage of this ques-
tionnaire and the percentage of returns received, and up(m which
returns the present study is largely based.

CONCENTRATION OF ECONOMIC POWER

291

Table 15. — Coverage and returns of questionnaire relating to use of standards
by municipalities

Number '
of ques-
tionnaires

sent

Number of returns

Percentage of returns

Poptdation group

Com-
plete

Incom-
plete

Total

Com-
plete

Incom-
plete

Total

Over 500,000._

6
6
6
34
24
24

6
5
4
16
14
9

6
5
4

18
14
:j

100
83
67
47
58
38

100
83

100 000 to 200 000

30,000 to 100,000

5 000 to 10,000

Total

100

£4

It is necessary to note at least two important qualifications in the
accompanying data. In the first placfe, the number of municipalities
from which information has been secured, though well distributed
both by population groups and by sections of the country, is entirely
too small to warrant the assumption that the picture presented is
representative or typical of the whole of each of these respective
population groups. Furthermore, most of the municipalities covered
m the accompanying tabulations practice centralized purchasing at
least to a limited extent, and it may be assumed that these, u.unicipali-
ties, on the whole, make a greater use of writtpn specifications and
laboratory tests in connection with the buying of supplies and equip-
ment than do those municipalities which have not adopted centralized
purchasing. In spite of these limitations, however, the replies re-
ceived to the questionnaire reveal many interesting facts and give at
least some indication of the extent to which American municipalities
are resorting to scientific methods in purchasing the commodities
required for their needs.

Use of Written Specifications in Municipal Purchasing.

Approximately 34 percent of the municipalities replying to the
questionnaire report the use of written specifications either exclusively
or to a very large extent in purchasing municipal supplies. As was
to be expected, tlie cities in the larger population groups make a far
greater use of written specifications than do the smaller communities;
however, it is interesting to note that a large percentage of the munici-
palities in the very small population groups makes extensive use of
written specifications, a few of those with populations ranging from
5,000 to 10,000 reporting that practically all of the commodities pur-
chased are bought on written specifications. Some 44 percent oi the
municipalities in all the population groups covered by this survey, re-
port that purchases are made on written specifications and by trade-
name or brands, but many indicate that whenever trade-names are
given in advertisements for bids or on requisitions it is always under-
stood "that competitive articles are not barred." It seems particularly
significant that 19 percent of all the municipalities covered in this
survey report that major commodities purchased are bought "largely
on written specification," while 15 j^ercent of these municipalities re-
port that such purchases are made on written specifications exclu-

292

CONCENTRATION OF ECONOMIC POWER

sively. Even more interesting, however, is the fact that only 7
percent of all the municipalities surveyed fail to make any use of
written specifications, and these are restricted to the smallest popula-
tion groups. Table 16 shows a breakdown by population groups of
the extent to which specifications are used by these municipalities in
purchasing supplies and equipment.

Table 16.— Extent to which municipalities use written specifications in purchas-
ing supplies and equipment

Municipalities reporting

Specifica-
tions never
used

Population group

Number
of muni-
cipalities
surveyed

Use of spec-
ifications
exclusively

Use of spec-
ifications
in most
cases

Use of trade-
name and
specifica-
tions

Little use
of specifica-
tions

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Over 500,000

6
5
4
16
14
9

2
1

1
1
3

33.33

6.25
21.43

2
2

1
2

33.33
40

18.75

7.14
22.22

2
2
3

7
6
4

33.34

43.75

42.86

44.45

4
3
'1

lf.<3

11.11

1
2

200 000 to 500,000

100,000 to 200,000

30,000 to 100,000

6.25

10 000 to 30 000

7 14

5,000 to 10,000. . -

22.22

Total

1 This dtv reports that "written specifications are compiled and advertisements made only when purchase
exceeds $fio6."

Forrmilation of Sto/ndards omd Specifications.

The great majority of the municipalities reporting indicate that the
central purchasing agency, where one exists, has the responsibility of
formulating the standards and specifications used in the purchasing of
commodities. Sixteen percent report that standards and specifications
are formulated by using departments, four percent report that spec-
ifications are prepared by a special committee set up for that purpose,
and six percent use Federal Specifications exclusively. In those cases
where special committees have been created they are usually composed
of the purchasing agent, if any, a representative of the city engineering
department, and a technician or chemist connected with the city testing
laboratory. The city of St. Louis, Missouri, reports that its standards
and specifications are formulatec^ by a "Board of Standardization." "
This Board is composed of the city comptroller, the supply commission,
and the president of the board of public service (the membership of
which board includes, in addition to the president, the directors of the
departments of public utilities, streets and sewers, public welfare, and
public safety). Several municipalities report, incidentallv, that the
establishment of special committees for the formulation or standards
and written specifications is now under way. Table 17 shows, by
population groups, the general practices with regard to the formula-
tion of standards and specifications.

" The work of the Board of Standardization of Department ot Purchase, city of New
York, waa not reported In this survey.

CONCENTRATION OF ECONOMIC POWER 293

Table 17. — How specifications are formulated by municipalities

Population- group

By purchasing
agency

By a specifica-
tions com-
mittee

By using de-
partments

Federal Specifi-
cations jised .
exclusively

' '"^>er plans

Num-
ber

Percent

Num-
ber

Percent

Num-
ber

Percent

Num-
ber

Percent

Num-
ber

Percent

Over 500,000

200,000 to 500,000. . .
100,000 to 200,000. . .
30,000 to 100,000....

10,000 to 30,000

6,000 to 10,000

5
5
3

50
80
25
33.33

' 1

16.66

6.67

20
25

6.67
38.5

16.67

13.33

«6
«3

16. 6r

50
40
23

Total

' "Board of Standardization" (see explanation in text).

J This city reports that specifications are prepared "by the purchasing agent, also by using departments
and, when necessary, by both."

' In one case specifications are formulated by "the purchasing agent, the engineering department, and the
city chemist;" in the other city, jointly by the using department and the purchasing agent.

< Specifications are formulated in these cities as follows: (a) By purchasing agent subject to approval of
"board of contract and purchase;" (6) by engineering and purchasing departments; (c) by the using
departments and the purchasing agent; (d) same; (e) by the purchasing committee of the city council and
the head of the department involved; (f) by the purchasing agent and the head of the department involved.

» Specifications formulated in these cities as follows; (a) By the engineering department and the pur-
chasing agent; (6) by the department head, the purchasing agent, and the city manager; (c) by the engineer-
ing department in all cases where structural requirements are involved, and by the purchasing agent in all
other cases.

« Only seven municipalities in this populatioT- group gave information on this point. Percentages here
given are figured on basis of these seven replies.

' Specifications formulated in these four municipalities as follows: (o) By the city council; (6) same;
(c) by a committee of the city council and the purchasing agent; (d) same.

Commodities for Which Specifications Have Been Prepared.

Many of the cities reporting indicate that Written specifications have
been prejDared by them to cover nearly every type of commodity com-
monly purchasecl for municipal use. The following is only a partial
list of the commodities for which written specifications have been
prepared by one or more of the municipalities i-eplying to the
questionnaire :

Alloys (Various)

Alum

Asphalts

Asphalt Binder

Brick

Brushes

Bulbs (Flowering)

Cable

Carbon (Activated)

Castings

Catch Basins

Cerneut

Chfetaicals (Filtration)

Chlorine

Goal

Cotton Goods

Drugs

Electric Power Units

Expansion Jwnt Material

Electrical Supplies

Fencing

Fertilizer

Filter Alura

Fire Engines

Fire Hose

272496—41 — No. 24

Foods

Gasoline

Granite Curbing

Grass Seed

Gravel

Hospital Supplies

Hydrants

Iron

Jute

Lead

Light Bulbs

Lime

Lumber

Manhole Covers

Manhole Frames

Motor Equipment

Motor Trucks

Office Supplies

Oils

Paint

Paper and Allied Products

Paving Materials

Pipe (Cast Iron)

Pipe (Concrete)

Pipe (Vitrified)

294

CONCENTRATION OF ECONOMIC POWER

Poles (Light)

Street Signs

Printing

Road Machinery and Equipment

Street Sweepers

Tar

Sand

Tires

Soap

Tree Surgery

Soda Ash

Uniforms

Steel

Valves

Stone

Waterworks Supplies

Use of Specifioatians Prepared hy the Federal Government cmd Ncn-

tionul Trade or Technical Associations.

Of the 52 municipalities replying to the question concerning the
use of specifications of the Federal Government and national trade
or technical associations, about 80 percent used these specifications
for one or more purposes. The replies indicate that extensive use
of specifications prepared by the Federal Government, as well as
those prepared by national trade and technical associations, is made
in at least two important respects — first, as guides for the prepara-
tion by municipalities of their own written specifications, and, sec-
ond, as the specifications actually used for requisitioning municipal
supplies and commodities. Some cities report that they try to in-
corporate in their own specifications those of the Federal Govern-
ment plus those of trade or technical associations so as to make the
local specifications, as one city purchasing agent termed it, "liberal
yet positive." On the other hand, 6 cities report that they make very
little use of either specifications prepared by the Federal Govern-
ment or those of national trade or technical associations because of
the fact that there are "too many local conditions prevailing." Table
18 shows the breakdown by population groups.

Table 18. — Extent to which municipalities use specifications of Federal Govern-
ment and of national trade o^- technical associations

Municipalities reporting use of specifications of Federal Government and
of national trade or technical associations

Munlcl.

Population group

Total
(used
for any
pur-
pose)

Used where
applicable

Used only for
reference
purposes

U.sed both as
local specifica-
tions and
reference

Used very

little for any

purpose

palities

never
using
such

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

tions

Over 500.000

200,000 to 500,000. . .
100.000 to 200,000...

30,(X)0to 100,000

10,000 to 30,000

5,000 to 10,000

6
5
4
13
9
4

1
2

1
3

33.33

20
50

7.68
33.33
25

3
2
1
3
3
3

23.08

33.33

16.67
20
25

46.16
11.11

23.08
22.23

3
3

Total _-

Testing for Compliance With Specifications.

If the replies to the questionnaire may be accepted as indicative of
the trend throughout the country, it would seem tliat xVmerican muni-
cipalities are now resorting to extensive use of tests to determine
whether samples of commodities submitted with bids, and supplies
and equipment actually delivered after piii-chase, comply with the
j-epresentations made by the vendors.

CONCENTRATION OF ECONOMIC POWER

295

Of the 47 municipalities replying to the question concerning the
use of tests, only 7, or 15 percent, report that they ne^^.' test com-
modities after delivery to ascertain if they conform to specifications.
However, 14 municipalities, all of which have less than 100,000 pop-
ulation, report that they do not make tests regularly but only at
infrequent intervals, or, as 1 purchasing agent states, only "when
we are suspicious." Several others regularly test only a few special
items, such as coal, fire hose, gasoline, and oils of all kinds. It is
significant, however, that all but one of the cities of over 100,000
population reporting regularly test all purchases for compliance with
specifications, and that one tests all "coal, gasoline, oils, soaps, chem-
icals, and building materials" and also other commodities "when
deemed necessary." Table 19 shows, by population groups, the extent
to which the municipalities, from which information was obtained,
make use of tests to determine whether purchases comply with spec-
ifications and with the representations made by the vendors.

Table 19.

-Use of tests by municipalities to determine compliance with
sp'.. dcations

Population group

Num-
ber of
mun it i-
paUties

All major items
regularly
tested

Tests regularly

made only on

few special

commodities

Tests not regu-
larly made on
any commodity

Tests never
made

Num- Per-
ber j cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Num-
ber

Per-
cent

Over 500,000

4
1
3
5
2

83
80
100
20

38.46
28.6

1 1
1

2
2

17
.20

13
15.39

7
5
2

47
38.46

3
1
3

200,000 to 500,000

100.000 to 200,000

30 000 to 100 000

10,000 to 30,000

7.69

5,000 to 10,000

42 8

Total

4-:

' This city reports that "coal, gasoline, oils, soaps, chemicals, and building materials are all tested; other
commodities tested only when deemed necessary."

Even in the matter of samples submitted with bids a large percentage
of municipalities report that tests are regularly made, at least on all
major items, to determine compliance with specifications. Nearly all
cities of over 100.000 population from which information was received
report that samples submitted with bids are tested in all cases where
compliance with specifications cannot be accurately determined merely
by personal inspection and measurements. All cities of over 100,000
population report that tests of samples are made. Only 3 cities in
the population group between 30,000 and 100,000 report that tests are
never made. Of the 13 cities surveyed with populations ranging from
10,000 to 30,000 only 1 reports tliat no tests are made, while in the
smallest population group (5,000 to 10,000) only 3 of the 7 munici-
palities reporting state that tests of samples are never made.

In conducting such tests wide use of college, State, and private or
commercial testing laboratories is made, and 1 city in close proximity
to Washington, D. C, reports that tests which cannot be made by the
city laboratory "are made at the National Bureau of Standards."
Several cities report that arrangements have been made with the
State highway department to test certain supplies and equipment.

296 CONCENTRATION OF ECONOMIC POWER

especially road and street construction materials, purchased for the
department of public Avorks. While nearly all of the cities of more
than 100,000 population maintain some kind of testing laboratory,
the smaller municipalities, for the most part, depend upon the facili-
ties of private or commercial laboratories or those of colleges and
universities. Moreover, most of those cities which maintain their
own laboratories make some use of private or college laboratories,
either for the conducting of tests requiring more facilities than are
provided at the city laboratory or for the making of tests so that
the results may be compared with those obtained at the city labora-
tory. Three cities in the 10,000 to 30,000 population group report
that the laboratory facilities maintained by the State highway de-
partment are used for testing certain kinds of supplies, chiefly road
and street construction and maintenance materials. Another city in
this same population group reports an arrangement which many
other municipalities may find possible for local application. This
city advises that much use is made of the laboratory facilities of a
local hospital which is maintained jointly by the city and the State.
Table 20 presents detailed information concerning the ownership of
testing laboratories which municipalities of various population
groups use in testing supplies and equipment.

Table 20.-

-Oicnershlp of testing laboratories used hy municipalities

Municipalities reporting use of laboratories owned by-

Population group

Munici-
pality

Private or

commercial

interests

Colleges or
universities

Other public

agencies or

Government

units

Over 500,000

6
3
4
3
2

5
3
4
10
9
2

4
3

1
5
6
2

1 1

200,000 to 500,000

100,000 to 200,000

30,000 to 100,000

10,000 to 30,000 ...

6 000 to 10 000

Total

33 1 21

1 This city reports that tests which cannot be made in the city's own laboratory are made at the National
Bureau of Standards.

' One of these cities reports that some use is made of the laboratory facilities of the local hosoital which is
owned jointly by the city and the State; the other three report that arrangements have been made with the
State highway department to test certain road and street construction and maintenance materials.

Of the 6 cities with more than 500,000 population which were
included in this survey, 3 report that their city laboratories are
equipped to make "nearly all kinds" of tests of commodities and
materials purchased for municipal use. Another city reports that
tests are made at the city laboratory "on nearly everything except
fire brick and complex electrical goods." The fifth city reports that
"building materials and foods" only are tested at the city laboratory,
while the sixth tests "building materials only" at tlie city's testing
laboratory.

Of the 5 cities survej^ed in the population group ranging from 200,-
000 to 500,000, 1 does not maintain a testing laboratory and 2 others
are equipped to make chemical tests only at their city laboratories.
The other 2 report that their city-maintained laboratories are pre-
pp.red to make "nearly all kinds" of tests.

CONCENTRATION OF ECONOMIC POWER 297

All 4 of the cities in the population group between 100,000 and 200,-
000 included in this survey report that they maintain city testing
laboratories, although one states that its testing facilities are "very
limited." Another reports that 2 separate laboratories are main-
tained by the city, 1 for testing of "coal and water treatment mate-
rials," and the other for the testing of "paving and sewer materials."
A third city in this group reports that its city laboratory makes tests
of lime, alum, oils, gasoline, and all road materials (except road oils),
also clay and concrete pipe." The fourth city reports that tests are
made of "foodstuff, cloth, paper, et cetera" at its laboratory.

None of the cities of less than 100,000 population included in the
survey reports the maintenance of a testing laboratory equipped to
test all city purchases ; most of those which do maintain their own
laboratories report that these are "chemical laboratories only."

Improvements in Purchasing Practices Shewn in Recent Years.

This surve}^ reveals that American municipalities, especially the
larger cities, have made definite progress during recent years in im-
proving their purchasing practices, and, consequently in effecting sub-
stantial savings to their taxpayers. We have already noted ^^ the
rapid growth of centralized purchasing in cities of over 30,000 popu-
lation during recent years, and while the movement perhaps has not
been so rapid in the smaller municipalities there nevertheless has been
a decided trend in this direction. Along with the increase in cen-
tralized purchasing, and closely related to it, have come, among others,
the following improvements in municipal buying practices and meth-
ods: The adoption of standards, thereby reducing the number of
kinds, types, brands, and sizes of commodities ; the use of specifications
stating the precise grade and quality of the commodities to be pur-
chased, thereby facilitating competitive bidding and simplifying the
inspection of goods delivered : purchasing in large volume or on con-
tract to obtain quantity prices; and bona fide competitive bidding.

Many outstanding examples of savings that have been realized
under each of these improvements in purchasing practices are in-
cluded in the data collected in recent surveys. A few illustrations
of each are listed below :

Adoption of standards. — New York City is now conducting a
project which' will reduce the number of printed forms used by city
departments from 15,000 to 5,000 and the number of different sizes of
such forms from 360 to 170. These changes will, it is estimated, save
the city approxi^^ately $200,000 a year in printing costs.

Use of specifications. — The city of Milwaukee has reduced the cost
of its soap purchases approximately 75 percent by formulating speci-
fications instead of buying by brand or trade-name without know-
ledge of the ingredients of the product purchased.

Provision for 'bona fide bidding. — New York City reduced the cost
of printing the city budget by $27,500 when it first asked competitive
bids on this work. Milwaukee once received bids ranging from $172
to $600 for repairing a fountain with 4 pieces of granite of a par-
ticular size, shape, and color. Though outside the municipal field, a
further classic example of possible savings through requiring com-
petitive bidding should be mentioned here. This is the estimated
saving of $2,000,000 which the State of Ohio effected last year through

"P. 289, supra.

298 CONCENTRATION OF ECONOMIC POWER

insistence upon bona fide competitive bidding, nearly $500,000 of
which was saved on purchases of hot-mix road material alone.

Quantity binji7ig. — The city of Milwaukee reportedly saves 7 or 8
cents a gallon on gasoline by providing storage facilities for several
carloads and buying when the price is low.

Development in Cooperative Purchasing.

No review of the developments of recent years in municipal pur-
chasing practices would be complete without some mention of at
least a few major experiments in cooperative buying. The success
witK^hich some of these experiments have been carried out has
pronxgted one authority to state that "one of the most encouraging
trends "Tlrmunicipal purchasing is the growing appreciation of the
possibilities of intermunicipal purchasing arrangements."^*

In several cases school districts in the United States and Canada
have cooperated in purchasing supplies and equipment. An out-
standing example is the Kansas School Purchasing Association, which
was established in 1930 and now includes over 500 schools, some of
them, in Nebraska and Oklahoma. This association secures special
prices from vendors but sells to its members at the market prices.
Then at the end of the year it declares a dividend to its members.
This dividend amounted to 20 percent of sales in 1937.

Another interesting cooperative purchasing arrangement is that
of Hamilton County, Ohio, the city of Cincinnati, the public library,
the University of Cincinnati, and the city school district, all of which
have established the "coordinating committee of the purchasing agents
of Hamilton County." Joint contracts and informal agreements
entered into during 1939 by this committee amounted to a total value
of $575,000. In a single year (1937) the savings on coal purchases
alone made under this cooperative arrangement were estimated at
$50,000.^^

A further important cooperative purchasing arrangement is the
system which has been set up in seven States whereby cities or coun-
ties or both may purchase through the State agency. These States,
in the order of the adoption of such plans, are : Michigan and New
Hampshire (1919), Virginia (1924), Wisconsin (1929), West Vir-
ginia (1935), Pennsylvania (1937), and Alabama (1939). In every
case purchasing through the State agency is optional with the local
authorities. The usual arrangement is that the State central pur-
chasing agency, in making its own contracts, provides that local gov-
ernments may buy at the same price if they so desire ; the State agency
provides information on specifications and prices but assumes no
further responsibility. Substantial savings are reported by most of
the municipalities which have taken advantage of the purchasing
facilities provided by these States.

A particularly significant development in this connection is the
cooperative purchasing arrangements which have been worked out by
several of the State leagues of municipalities. Among the leagues
which have undertaken cooperative purchasing for their member
municipalities are those in Arkansas, Colorado, Kentucky, Maine,
Michigan, Missouri, Nebraska, North Carolina, Oregon, South

" "Municipal Purchasing." by Joseph W. Nicholson, The Municipal Year Book, 1939, pp.
84-38, International City Managers' Association, Chicago, 111., 1939.

""Cooperative Purchasing in the United States and Canada," by Carlton Chute, National
Municipal Review, vol. 27, p. 501, October 1938.

CONCENTRATION OF ECONOMIC POWER 299

Dakota, Wisconsin, and Virginia. Municipalities by "pooling" their
orders in this way are reported in some instances to have purchased
certain supplies at less than 50 percent of the prevailing market price.

Need for FuHher Imprcyvements in Purchasing Practices.

The facts which have been presented in this brief review of
municipal purchasing practices would seem, on the whole, to show
that at least the larger American municipalities- are making rapid
strides in the improvement of purchasing techniques and procedures.
On the other hand, the survey has revealed that the situation in many
quarters leaves much to be desired.

In the first place, a large number of even very large cities have
not adopted centralized purchasing. In many of these it is still
contended that such a system is not justified from the viewpoint
of economy, that the cost of operating a purchasing department
would be greater than the amount saved by centralized purchasing.
While this contention may be sound as applied to municipalities in
the smaller population groups, it would seem to be of extremely
doubtful validity with reference to large cities. At any rate, the
experiences of the cities which have practiced centralized purchasing
for several years do not bear out the contention. It is interesting to
note in this connection that the survey made by the National Asso-
ciation of Purchasing Agents and the International City Managers*
Association in 1939 revealed that the average cost of operating the
central purchasing departments of 75 cities of over 30,000 population
in 1938 amounted to only about 1 percent of the value of purchases.^*

Secondly, it is apparent from the reports received from some of the
cities covered in this survey that their purchasing authorities either
do not have full knowledge of the work that the Federal Govern-
ment and certain national technica-l associations have done, and are
doing, in establishing standard specifications, or that for some other
reason they are not making adequate use of such specifications. For
example, a member of the purchasing committee of a city of approxi-
mately 20,000 population reported that he had never heard of any
such specifications but "would like to have copies * * * jf -^^
may be advised where to apply." Another city with a population
of approximately 76,000 reported that such specifications "are on
file, but no need for same at this time." Certainly the small munici-
pality which seeks to prepare its own specifications should make use
of, at least for reference purposes, the standard specifications already
published by the larger units of Government and other agencies,
especially those adopted and promulgated by the Federal Specifica-
tions Executive Committee, of which there are now more than
1,300 in use. Many of these Federal Specifications may be easily
adapted for municipal purchases, even if they cannot be used in
their original form.

It would seem also, from results obtained from this survey, that
many cities are not taking full advantage of laboratory facilities of
tax-supported colleges or universities in testing commodities pur-
chased to determine whether they comply with the quality and grade
required by the contracts or specifications. Many municipalities situ-

«"The Municipal Year Book, 1940." p. 196, International City Managers' Association,
Chicago, 111., 1940.

300 CONCENTRATION OF ECONOMIC POWER

ated near colleges or universities which now maintain adequate test-
ing equipment are not making use of this available service. More-
over, even where publicly-supported educational institutions do not
have such facilities at present it is entirely possible that a concerted
request by municipal agencies for the service would result in its estab-
lishment, at least on a cost basis. Apparently, however, municipal
officials, with a few notable exceptions, have done little or nothing as
yet toward encouraging tax-supported colleges and universities to
establish such testing laboratories.

As time goes on, American municipalities, regardless of size, in
their search for ways and means of furnishing the public services
which their citizens demand at the least possible cost to the taxpayers,
will find it necessary to effect maximum economy in procuring the
supplies, materials, equipment, and contractual services necessary to
carry on the various municipal activities. Inasmuch as the expendi-
tures for such commodities and services constitute nearly one-third of
the expenditures for current operations of the average municipality,
they demand the careful and constant attention of municipal officials
throughout the country. Thus it is to be expected that more and more
attention will be ^iven to practices and procedures which promote
economy in municipal purchasing. To enable municipal officials to
evaluate properly the efficiency and economy with which the purchas-
ing in their respective municipalities is now being handled, and to
plan improvements in the present systems, it is necessary that they
have comprehensive factual information as to those purchasing prac-
tices and procedures which have proved their value in actual opera-
tion. It is, therefore, hoped that many future detailed studies of
actual purchasing methods and practices will follow.

CHAPTER VI

INDEPENDENT PURCHASING AGENCIES AND TESTING
LABORATORIES, COMMODITY TESTING AND RATING
AGENCIES

The importance of correct application of economic and engineering
principles to purchasing is now being generally recognized.

The modern purchasing agent is an economist — and probably also an engineer —
who studies his materials and products, their sources, methods, and costs of
production, markets, and price trends.^

In addition to the efforts of the Federal Government, States, coun-
ties, and cities toward the adoption of scientific methods of procure-
ment, private agencies are also much concerned with the improve-
ment of their purchasing methods and procedures. Purchasing agents
of private companies, educational, eleemosynary, and other institu-
tions, with the help of their respective professional organizations, en-
deavor to introduce scientific methods in their purchasing. The de-
scription of the activities of some independent purchasing agencies
will serve to illustrate the progress being made in this direction.

Many of the private companies or institutions do not have their own
testing laboratories to ascertain that the materials and supplies they
buy conform to their purchase specifications. Therefore, they are
using for this purpose th*^ facilities of private commercial laboratories.
These laboratories afford an opportunity to the small manufacturer
or retailer to find out the facts about the products he deals with which
otherwise are only available to large concerns able to maintain their
own testing laboratories.

The large department stores and mail-order houses have their own
testing laboratories. These laboratories help the store buyer in his
selection of merchandise by the testing of samples from different
sources and ascertain that the quality of the merchandise delivered to
the store is maintained.

The ultimate consumer can subscribe to the services of commodity
and rating agencies, which provide simple, usable information about
consumer commodities, covering quality, performance, and price.

The description of the activities of some testing laboratories and of
the commodity testing and rating agencies will illustrate the facilities
available to manufacturers, retailers, and consumers in determining
and appraising the quality of consumer goods.

1 "Principles of Scientific Purchasing," by Norman F. Harrlman, p. vli, McGraw-Hill
Book Co., Inc., New York City, 1»28.

301

INDEPENDENT PURCHASING AGENCIES

National Association of Purchasing Agents.

The National Association of Purchasing Agents has approximately
5,000 members, including representatives of manufacturers of indus-
trial and consumer products and some 200 purchasing officials of
States and municipalities.

The National Association of Purchasing Agents does no basic
research on materials or their development. All of its present acti-
vities deal with policies and procedure of value to purchasing agents.

Six or seven years ago the association had committees actively
carrying on work in the standardization and simplification of various
lines of commodities of interest to members of the purchasing pro-
fession such as classification of coal for steam generators, an outline
for the scope of specifications to be used in ordering shipping con-
tainers made of corrugated fiberboard, standard nomenclature for
shipping containers, standard methods of testing cotton goods, and a
standard code for marking steel in bars.

Recently the National Association of Purchasing Agents decided
to eliminate the initiation of standardization projects from its ac-
tivities, feeling that the recognized standardization agencies, such as
the National Bureau of Standards, the American Society for Testing
Materials, the American Petroleum Institute, and many trade associ-
ations were better organized to handle standardization projects and
that the contribution of the National Association of Purchasing
Agents might best be made through cooperation with these agencies.
When the association has a project requiring consideration by one
of these agencies it has no difficulty in securing their cooperation.
This is true, alike, of projects dealing with standardization, inspec-
tion, grading, certification, and labeling of products.

The National Association of Purchasing Agents has developed
standard contract forms in cooperation with other organizations.
Frequently, the association's assistance is requested in the develop-
ment of a satisfactory contract form by a trade ^roup; such assist-
ance is always willingly given because of the belief that buyer and
seller usually can arrive at mutually satisfactory terms through
friendly cooperation and that well-drafted contract forms contribute
to such cooperation.

In the development of a procedure for centralized purchasing in
governmental agencies, the National Association of Purchasing
Agents -was probably the original sponsor. Nearly all States and
most large cities now have centralized governmental purchasing and,
either directly or indirectly, were assisted by the association through
its special Committee on Governmental Purchasing.

Educational Buyers Association.

The Educational Buyers Association, New York City, is composed
of procurement officers of over 350 educational institutions, compris-

CONCENTRATION OF ECONOMIC POWER 3Q3

ing colleges and universities, including municipal and State, as well
as some private secondary schools and boards of education. Edu-
cational institutions operating under State and municipal regula-
tions are often compelled to buy completely on the basis of
•competitive bidding, and have set up specifications which are pat-
terned after the Federal Specifications.

The Product Testing Committee of the Educational Buyers Asso-
ciation prepares periodic reports on commodities of general usage in
which are shown the valuable and detrimental characteristics of these
commodities as determined by laboratory test. Eight of these reports
were sent to the membership during the past year. The subjects of
these reports were chosen for test by a questionnaire and are as follows :
Product testing aids, linoleum and floor brushes, fire extinguishers,
adhesives and paste, flags, calking lead, red writing ink, garden hose,
toilet pajjer, blotting paper, chalk, antifreeze solutions, glue for wood-
working, paper towels, and typewriter ribbons.

The facilities of the educational institution at which a member of the
association is located furnish an opportunity for individual laboratory
tests, the results of which are often forwarded to the executive secre-
tary of the Educational Buyers Association for transmittal to the
•entire membership of the association. This type of activity is purely
voluntary. At sectional meetings, planned and held throughout the
year, and at the annual convention, much of these individual findings
are exchanged.

The "Homemade Products" column in the association's confidential
''Bulletin" is of most practical help to thp mbership. This feature
permits alert educational buyers to cut ...eir costs and improve the
quality of the products used. The range of items extends from insect-
control preparations to diving boards and asphalt pavements.

The application of the prmciple of cooperation is not exclusively
intra-association. The Educational Buyers Association joins with
other reputable consumer groups in projects for establishing standards.
Most recently the Educational Buyers Association has agreed to assist
the American Hospital Association in the development of adequate
consumer standards for sheets, pillowcases, and sheeting.

One of the services of the association to its members is the help pro-
vided in establishing specifications and also indicating test method
procedures to ascertain that the materials delivered conform to the
specifications, or calling the members' attention to standard methods
of analysis developed by such standardizing bodies as the American
Society for Testing Materials.

Because many privately endowed institutions are small, it would be
economically unsound to set up elaborate systems of specifications and
testing for their own use. The Educational and Institutional Coopera-
tive Service, Inc., organized by the Educational Buyers Association,
and known as the E and I Cooperative, was formed for the purpose or
enabling members to make advantageous purchases of nationally dis-
tributed products. This organization sets its standards before it makes
its contracts with distributors and, when advisable, uses an independent
laboratory to test merchandise before the contract is consummated, to
see that the standards specified are maintained.

The E and I Cooperative has entered into some 50 different contracts
for commodities in general use in educational institutions. A contract

304 CONCENTRATION OF ECONOMIC POWER

is entered into with the vendor only after exhaustive trial of the
vendor's product has occurred at several member institutions which,
are set up to determine the value both by actual use and laboratory tests.

Hospital Bureau of Stamdards and Supplies.

The Hospital Bureau of Standards aiid Supplies, New York City,
founded 30 years ago and incorporated January 13, 1934, is a coopera-
tive purchasing association of some 207 voluntary hospitals.

The Bureau renders a fourfold service to its members :

(a) Quotation or inquiry service. — It furnishes its member institutions with
the most economical prices available from a Nation-wide standpoint on medical,
surgical, household, kitchen, laundry, engineering, and other hospital supplies, and
01} some foodstuffs.

(&) Buying service. — It works out buying arrangements whereby these goods
can be purchased on the basis of the requirements of the entire group instead of
on those of the individual hospital.

(c) Technical service. — Its Research Department determines the relative merits
of major hospital items and recommends selections on both a quality and price
basis. It studies hospital practices in the use of materials and points out methods
of obtaining greater economies. It offers a technical consultant service on
special problems.

{d) Special information service. — When requested it secures information on
sources of supply, prices, use-value, etc., of comparatively unknown or highly-
specialized items.'

Members usually purchase less than one-half of their required needs
through the bureau. The total savings to members are estimated at
$350,000 per year, not considering savings made due solely to distribu-
tion of purchasing information by the bureau.

The Hospital Bureau of Standards and Supplies recognizes that any
intelligent comparison of prices must take into consideration the ques-
tion of quality and that all too often comparisons are made without
the standard or grade being known, or on the assumption that an item
is of a given standard where it may be actually either above or below
the standard. In 1939 a standardization program was inaugurated
to undertake three chief lines of activities :

1. To test and report on those brands and types of products used in large quan-
tities in hospitals.

2. To prepare specifications on the basis of such tests and special service
requirements as determined by hospital needs.

3. To check the shipments of hospital supplies for the purpose of determining
their compliance with specifications.'

The program embodies the use of recognized standard test methods
where they exist, and where necessary the development by the bureau
of its own test methods ; testing of products purchased in large quan-
tities to ascertain compliance with specifications; study of actual wear
or use requirements for particular products; and upon completion of
laboratory tests and surveys to determine the use req[uirements, prepa-
ration of purchase specifications. Where specifications are available
from Government or municipal sources, the bureau will use these as a
basis in preparing its own specifications.

The bureau has already completed performance and other tests on
the following items : Gauze, bandage rolls, absorbent cotton, cellulose,

• "HosDltal Bureau of Standards and Supplies, Inc., What It Is and What It Offers," p. 1,
New York aty. 1940.

•"Research Program of the Hospital Bureau," p. 1, Hospital Bureau of Standards and
Supplies, New York City, 1940, mimeographed.

CONCENTRATION OF ECONOMIC POWER 305

sanitary pads, paint, and thermometers. Preliminary work has been
completed on blankets, sheets, syringes, paper towels, and toilet tissue.

The bureau purchases all kinds of special, surgical, household,
kitchen, laundry, engineering, and other supplies commonly used by
an institution and also a large number of staple groceries, including
canned and packaged foodstuffs (about 2,000 items in all). It does
not handle any fresh foodstuffs.

Standards, specifications, and. test methods from Federal, municipal,
and nongovernmental agencies are used by the bureau, as well as re-
ports of products by brand name, prepared by testing laboratories and
commodity testing and rating agencies.

TESTING LABORATORIES

The American Goimcil of Commercial Ldboratoroeis.

The American Council of Commercial Laboratories is an associa-
tion of 20 independent commercial laboratories widely distributed
throughout the country. Some of these members maintain a number
of branch laboratories in different cities.

The objects of the council are the promotion of scientific analysis, testing,
inspection, or research and advancement of the welfare of the independent
scientific laboratories which associate themselves for this purpose.*

The council disseminates among its members information concerning
the economic, promotional, and other values of laboratory services;
seeks to maintain the services of members on a high plane of reli-
ability and encourages cooperation among its members to increase
services to clients.

Members of the council agree to maintain certain policies desig-
nated to further the council's objectives. Listed among these are
policies which directly affect the quality or standard of services per-
formed for their clients and others :

To assert competency only in work for which they are adequately equipped
and for which adequate experience is available or adequate preparation has
been made.

To refrain from rendering services where tbey will aid enterprises which
may be fraudulent or contrary to the public welfare.

To endeavor in reports to makie clear the significance and limitations of find-
ings reported.

To safeguard reports as far as is possible against misinterpretation or mis-
use, and to contend against such misinterpretation or misuse.

To oppose incompetent and fraudulent analysis, testing, inspection, or
research.

To cooperate so far as reasonably practicable in the activities of professional
and scientific societies and related associations and to make to them contribu-
tions of personal services and of suitable technical information insofar as this
may be done without violating the rights and interests of clients.

To render services upon request one for another where equipment or experi-
ence is lacking, or where economy or promptness of results can be gained
thereby."

A laboratory may be dropped from membership for conduct at
variance with the above policies. However, the member laboratory
is first given an opportunity to be heard before an arbitration com-
mittee; if the arbitration committee so recommends to the executive
committee the membership must be canceled.

Services of coinmercial laboratories. — Member laboratories of the
council engage in research, analysis, inspection, testing, surveys, and
statistical analysis. They investigate and report upon raw materials,
finished products, devices, and processes. They render reports, con-

* "By-Laws." p. 1, American Council of Commercial Laboratories, New York City, revised
December 1938.
■> Ibid., p. 4.

306

CONCENTRATION OF ECONOMIC POWER 307

suiting services, and expert testimony. Their services are intended
to result in quality control, economy, good contractual relations, and
compliance with specifications.

Fundamentally services of commercial laboratories consist m the utilization
of specialized equipment and specialized knowledge, skill, and experience la
the determination of properties and characteristics of materials, or of perform-
ance and value of devices and products.®

The function of these testing laboratories consists in testing prod-
ucts for their- clients to determine that the products are made in
accordance with specifications. They also assist clients in the cer-
tification of their products which meet certain quality or perform-
ance specifications. It is understood that most independent
laboratories prefer to ba\e specifications or standards formulated
by competent representatives of all having a proper interest in the
subject. Where suitable specifications are not available, however,
tentative specifications sometimes are prepared by these lab ries

pending the establishment of standards by recogjiized ^standardizing
agencies. For example, such specifications were recently prepared
by the Electrical Testing Laboratories for electric flat irons and
vacuum cleaners.

Each testing laboratory retains its own name, independent man-
agement, and freedom to conduct -its work within the policies of the
council. The services of the compiefcial testing laboratories tend
to obviate most of the disputes as to quality of products and their
compliance with specifications which may arise between buyer and
producer. Contributing to the individuality of the member labora-
tories is the number of different pursuits followed by laboratories.
Some laboratories engage in consultation, furnish experts for court
testimony, and render services in the way of plant and process devel-
opment. Others confine themselves to fact finding and avoid expres-
sion of opinion. Furthermore, one laboratory may specialize in
electrical equipment, while another may select textiles for its field
work. It is not unusual for one laboratory, when approached by a
client for service which it is not prepared to render to acquaint the
client of this fact and to use, in cooperation with its own, the services
of an associate commercial laboratory that has equipment and scien-
tific personnel to provide the service desired.

Clientele of commercial laboratories. — The services of these lab-
oratories afford an opportunity to the small manufacturer or retailer
to ascertain facts about products which would otherwise only be
available to larger organizations able to maintain their own labora-
tories. Purchasers find in independent laboratories a means of insur-
ing compliance with specifications and of selecting products which
best serve their purposes. Fulfillment of contractual obligations may
be assured to the satisfaction of both seller and buyer through such
independent services. Bankers, investment houses, insurance com-
panies, transportation and advertising agencies, are also among the
clients of these testing laboratories.

C ooperation with other agencies. — Most of the member laboratories
participate actively in the research work of technical societies. Mem-
bers of their staffs serve on committees of these organizations and

« "Independent Laboratory Seirices," by the American Council of Commercial Laboratories,
p. 3, New York City, 1938.

3()g CONCENTRATION OF ECONOMIC POWER

derive therefrom much that enhances the technical competence of
the services of their organizations.

Uriderwriters^ Laboratories^ Incorporated.'' — Underwriters' Labora-
tories, Inc., sponsored by the National Board of Fire Underwriters,
is a nonprofit organization maintaining and operating laboratories
for the examination and testing of devices and materials.

The Underwriters' Laboratories "define and publish standards,
classifications, and specifications for materials, devices, construction,
and methods aflfecting life, fire, and casualty hazards."

The Underwriters' Laboratories, Inc., have several engineering
councils: Fire Council, Casualty Council, Electrical Council, and
others. Copies of standards and reports submitted to the above
councils are filed with the National Bureau of Standards.

The majority of underwriters in the United States, and man;^ Fed-
eral, State, and municipal authorities, and architects, building
owners and users either accept or require listing by Underwriters'
Laboratores, Inc., as a condition of their recognition of devices and
materials having a bearing upon life and fire hazards, and upon
accident prevention.

There exist permanent arrangements between Underwriters' Lab-
oratories, Inc., and the National Bureau of Standards, whereby, in
the event of a fixed difference of opinion on an engineering or tech-
nical matter between Underwriters' Laboratories, Inc., and any of its
clients, the question at issue may be submitted to the Bureau for
decision.

The standards of Underwriters' Laboratories, Inc., have been
drawn up to provide specifications and requirements for construction
and performance under test and in actual use of materials and ap-
pliances submitted to the laboratories. Approximately 150 of these
standards and sets of requirements have been issued.

The label service consists of inspections of devices and materials
at the factories by inspectors of Underwriters' Laboratories, Inc.,
and the manifesting of goods found to conform to Laboratories' re-
quirements by labels (which may be in any form or of any material
adapted to the product and its use) , whereby they may be identified
at all times. All such labels (Manifests of Inspection) include the
-words "Underwriters' Laboratories, Inc., Inspected," and are obtain-
able only from Underwriters' Laboratories, Inc. Label service includes
listing in the published records of Underwriters' Laboratories, Inc.

The J. C. Penney Research and Testing Laboratory.

The J. C. Penney Research and Testing Laboratory, New York
City, was established in the early part of 1930. Its purpose was to
aid in sound buying of merchandise and to insure the greatest pos-
sible dollar value.

The work of the laboratory covers all lines of commodities handled
by the J. C. Penney Co., such as ready-to-wear, yard goods, sheets,
blankets, shoes, hosiery, and so forth. A variety of tests are made
on all these items. Judgment as to the worth of any given article
is not based on one test, but the article is evaluated by compilation
of all the factors possible to obtain by test methods. The laboratory

^ "Underwriters' Laboratories, Inc., Organization Purposes and Methods," 19 pp., Cliicago,
til., 1937, ed.

CONCENTRATION OF EC0N0^1IC POWER 309

is equipped to do both physical and chemical testing, and some types
of biological testing.

The laboratory helps the buyer in his selection of merchandise by
the analysis of samples from different sources. After this selection
is made, it then becomes the duty of the laboratory to follow sub-
sequent shipments to ascertain that the quality of the product is
maintained throughout the period of the contract and is in accord-
ance with the sample submitted. The laboratory also examines re-
turned goods to find out if the article has been mishandled by the
customer or if there is an inherent fault in the article which has not
been shown up through previous analyses. If such a fault is present,
efforts are begun immediately to correct it.

The laboratory is continually carrying on research with a view to
improving merchandise, especially textile finishes.

Members of the staff of the laboratory spend considerable time at
the various mills throughout the country working in close coopera-
tion with the actual manufacturers for continued improvement of
merchandise.

Naturally, through this work various standards have been devel-
oped. Where Government standards exist, these are used as a basis
for the laboratory work. The laboratory has worked in close coop-
eration with the National Consumer-Ketailer Council^ -the Advisory
Committee on Ultimate Consumer Goods of the American Standards
Association, the National Bureau of Standards, Bureau of Home
Economics of the United States Department of Agriculture, the Na-
tional Better Business Bureau, the American Society for Testing
Materials, and other organizations, in an endeavor to produce sound
standards and standard methods of tests.

Macy's Bureau- of Standanh.

The Macy's Bureau of Standards is primarily interested in the
adaptability, performance, durability and care of merchandise sold
by its store and makes investigations of these factors from the con-
sumer's point of view. The bureau develops test methods simulating
such factors as the "warmth" of blankets and garments, or wear of
fabrics. Studies are made of composition and construction of fabrics
and their effect upon the factors enumerated above,- such as the effect
of yarn count, fabric construction and napping on the warmth and
durability of blankets. Research of this kind frequently requires the
development of special test equipment; such as thermal transmission
apparatus, abrasion machines, and others.

^lany standards have been developed for merchandise sold under
Macy's brand names.

The establishment of these standards is preceded by a study of
the deficiencies of merchandise available on the market, the means
for improving the quality of tlie article, and an evaluation of tlie
different types of the article available.

]Manufacturer.s are frequently asked to modify the quality of their
merchandise to conform to the results of these preliminary studies.

In many instances it is essential to visit mills aiul other manufac-
turing establishments for the purpose of inspecting manufacturing
in'ocesses in order to assist manufacturers in the improvements and
development of merchandise such si improved umbrella cloth of spun

L'-249C— 41— No. 24 21

310 CONCENTRATION OF ECONOMIC POWER

silk, pyroxylin coated material for house slippers, and washable
Eoman-striped hose.

Testing. — The testing of commodities serves the following purposes :

[a) The analysis and comparison of commodities offered by man-
ufacturers to obtain fact^ as to content and to determine
best value.

(6) The conducting of tests "on merchandise to ascertain durabil-
ity and performance.

{d) The assurance of correct description of merchandise in adver-
tising copy.

(e) The comparison of products sold in other stores with mer-
chandise sold by Macy's.

(/) The examination of returned goods so as to adjudicate com-
plaints and to determine weaknesses and flaws in the
merchandise.

The commodities tested include: Clothing, home furnishings, acces-
sories, foods, drugs, cosmetics, jewelry, insecticides, and antiseptics.

Services of the bureau. — The bureau makes studies and recommenda-
tions for more effective garment cleaning, rug cleaning, fur cleaning,
waterproofing, mothproofing, etc. ; prepai^es informative labels to be
affixed to merchandise ; assists in the training of buying, selling, and
management personnel; gives lectures for student groups at high
schools and colleges, for consumer groups of adults, and various busi-
ness groups; arranges visits to the bureau for these groups; and sup-
■ plies information to various home economic groups in colleges and
universities throughout the United States.

The subject of terminology is being given speeial intensive study,
with the object in view of developing simplified understandable means
for conveying information to the consumer so as to enable him to
evaluate the merchandise he is buying in terms of adaptability, per-
formance, durability, and to understand how to care for it.

The bureau cooperates with technical associations such as the Amer-
ican Society for Testing Materials, American Association of Textile
Chemists and Colorists, American Association of Textile Technol-
ogists, National Consumer-Ketailer Council, Advisory Committee on
Ultimate Consumer Goods of the American Standards Association,
and Federal, State, and municipal agencies.
Technical Laboratories of Sears.,- Roebuck <& Co.

The Sears, Roebuck & Co. has maintained its own laboratories and
a staff of technicians since 1911. The company is not engaged in
basic research ; however, it sets up minimum standards on certain fea-
tivre value items which it carries. These standards are arrixed at
through agreement among the general merchandise office, tlie buyers,
tlic mercliandise comparison office, and the technical laboratories. It
is stated by the company officials !hat these mininunn standards are
not below standards generally accepted by the respective industry.

The Sears, Roebuck & Co. maintains one of the largest, privately
owned, merchandise testing laboratories in the country.

The primary function of the technical laboratories is to aid buyers
in the selection of merchandise. It augments the information received

CONCENTRATION OF ECONOMIC POWER 311

from the manufacturers and also recommends needed improvements
and developments. In addition, a merchandise development depart-
ment not only follows through on the findings of the technical labora-
tories in many cases but also is constantly working with a view toward
incorporating improvements in the merchandise sold by the company.

The technical laboratories are supplemented in some cases by out-
side agencies and provide technical aid on an the merchandise carried
to the buyers of the company; the technical work is performed by the
laboratories only on their request.

The Sears, Roebuck & Co. gives special attention to its own trade-
marked goods. The characteristics of the products receiving atten-
tion is dependent upon the use to which they will be subjected by the
customers. If an item is to withstand abrasion, it is subjected to
various kinds of abrasives* if it is to resist heat, it is subjected to
heat; if it is to resist cold, it is subjected to cold or is frozen.

Because the goods are bought from thoiisands of sources and are
received at over 500 points in the company, it is possible to make only
a perfunctory inspection of merchandise at the point of receipt. In
addition, however, the merchandise comparison office maintains a con-
stant spot-check inspection on all commodities.

The Sears, Roebuck & Co. cooperates with the following organiza-
tions in the development of standards : The National Bureau of Stand-
ards, the American Standards Association, the American Society for
Testing Materials, American Society of Textile Colorists and Chem-
ists, National Consumer-Retailer Council; also with the American
Home Economics Association, Association of American University
Women, General Federation of Women's Clubs, and with the United
States Department of Agriculture on varicJus projects.

COMMODITY TESTING AND RATING AGENCIES

Consimiers^ Research^ Inc.

Consumers' Research, Inc., whose offices and laboratory are located
in Washington, N. J,, was organized as Consumers' Club in 1927 and
originally incorporated in December 1929, under the laws of the State
of New York, as a membership corporation to provide unbiased in-
formation and counsel on merchandise bought by the ultimate con-
sumer.

Types of service. — After experimenting for a number of years with
different methods of presenting information to ultimate consumers,
two types of service were decided upon beginning October 1934, as
the most satisfactory and convenient method of presenting Consumers*
Research material in accordance with subscribers' expressed wishes
and criticisms.

Consumers' Research Bulletins: All of the bulletins list products
by brand name as "recommended," "intermediate," and "not recom-
mended." Whenever possible, price classifications are also given,
prices being rated as 1, 2, and 3; 1 being low, 3 high. The quality
judgments are completely independent of price classifications.

This service is available only to individuals, who are required to
sign the confidential pledge before their subscriptions are entered.
Each subscriber to the bulletin service receives the current Annual
Cumulative Bulletin and all other monthly bulletins issued during the
year for which his subscription is in effect. Bulletins are mailed to
subscriber^ monthly, between the 10th and 15th of the month, except
during July and August. There are no bulletins issued in July and
August because these 2 months are spent in compiling and preparing
data for the 240-page Annual Cumulative Bulletin, which appears in
September each year. This issue and five of the* monthly bulletins
are confidien'tial in nature and are marked, "The analyses of com-
modities, products, or merchandise appearing in this issue of the Con-
sumers' Research Bulletin are for the sole information of subscribers.'*
Four of the monthly bulletins are nonconfidential and may also be
obtained as a separate service called the General Bulletin service
which is described below.

The General Bulletin service : The General Bulletin is issued quar-
terly, in October, January, April, and June, and is not confidential.

Subscriptions are open to libraries, schools, and other organizations,
and to any individual who does not wish to subscribe to the regularly
monthly bulletin service. The volume year runs from October through
June, and subscriptions are accepted for that period only. Single
copies of the bulletins of this service are also available to nonmembers.

Sources of information. — The technical judgments and recommenda-
tions of Consumers' Research are based upon its own technical tests and
investigations, and knowledge of its technical staff or experts; upon
data published by the Federal and State Governments pertaining to
312

CONCENTRATION OF ECONOMIC POWER 313

consumers' goods ; upon data issued by the State and national medical
associations, and other research and investigating bureaus, associations,
corporations, or individual experts ; in certain cases, upon advice from
users who have made observations of their experiences with, or possess
special knowledge of, the product in question, and whose views, in
the opinion of the technical experts of Consumers' Research, ar^ de-
serving of consideration by other consumers; upon tests or investiga-
tions which are made available for the use of Consumers' Research
by various qualified noncommercial experts, technicians, and scientists.
At one time Consumers' Research published the monthly magazine
Consumers' Digest. This presents in a more popular form information
on commodities, general buying advice, and news of especial interest to
consumers. Consumers' Digest is now published by Consumers' In-
stitute of America, Inc., which also has its headquarters in Washington,
N. J. Only products which can be listed as recommended, or rated
with a qualified recommendation, are listed in Consumers' Digest.

Consumers' Union of United States.

Consumers' Union, Inc., located in New York City, was formed in
February 1936 under the laws of New York State as a nonprofit mem-
bership corporation set up to provide consumers with simple, usable
information about consumers goods and services, covering quality,
price, and wherever possible, labor conditions in the factories produc-
ing 6U. :h goods. Quality and price ratings are not affected by the
reports on labor conditions, according to the policy of the organiza-
tion.

Servwes. — Consumers' Union, an organization of 85,000 members,
publishes monthly Consumers' Union Reports in full and abridged
form. The full reports contain ratings and discussions of higher-
priced commodities, while the abridged reports, designed primarily for
low-income families, omit ratings on high-priced products. Con-
sumers' Union also publishes an Annual Buying Guide, which is a
compact booklet rating many hundreds of products and designed for
quick reference in shopping.

The information published in the monthly reports is not confiden-
tial. Only the material included in the Annual Buying Guide and
certain ;ther special reports is made confidential. This is done pri-
marily for legal reasons since there is no explanation in the Annual
Buying Guide of the methods of test employed nor space^ given to
the qualifications accompanying the recommendation of certain prod-
ucts as in the monthly reports. All confidential material is for the
sole use of members and their immediate families.

Merchandise is rated in the reports and Annual Buying! Guide by
brand names in three groups: "Best b^ys," "also acoeptable," and
"not acceptable."

Sources of information. — The ratings of products represent the
judgments of the technicians of the staff of Consumers' Union or of
consultants whose technical competence and freedom from commercial
bias are approved by Consumers' Union. Ratings are based on labora-
tory tests, on controlled tests under conditions of use, on the opinion,
of qualified authorities, on the experience of a larjge number of per-
sons with the products being studied, or on a combination of all these
factors.

314 OONCBNTRATION OF ECONOMIC POWER

Intermovmtami Consumers' Service^ Inc.

Intermountain Consumers' Service, Inc., 435 Marion Street, Denver,
Colo., is a nonprofit research and information agency organized in
December 1932 under the laws of the State of Colorado for the purpose
of supplying ultimate consumers with reliable comparative data as to
the price and quality of consumers' goods.

Services. — Intermountaii isumers' Service supplies to members,
through its Consumers' Buj. g Guide, a handbook of buying issued
in installments during the year, scientific and technical information
and counsel, based on its own tests or the findings of experts. Goods
are listed as recommended, not recommended, and unclassified, giving
brands and names of manufacturers in full and using the rational
grade symbols A (first quality), B (second quality), and C (third
quality). Reasonableness of the price of a commodity is indicated by
the numbers 1 ( fair price) , 2 (high price) , 3 (excessive price) . Where
standards and specifications of significance to ultimate consumers are
available, these are u;sed as gages of quality, and where they are
lacking, new standards and specifications, which give adequate con-
sideration to the factors of importance to consumers, are evolved.

Sources of information. — The recommendations of Intermountain
Consumers' Service are based on tests conducted by it, on current sci-
entific literature, on the counsel of consultants, and on governmental
and other approved unbiased sources of commodity information.

CHAPTER VII

CONSUMER BUYING AND THE EXTENT AND CHAR-
ACTER OF COMMODITY INFORMATION AVAILABLE

The consumer who purchases commodities on the retail market is
in a very different position from that of the purchasing agent who
buys for the Federal Government, a State, a. county, a municipality,
or a large commercial establishment. The consumer has to depend
upon the information concerning commodities that he can obtain
for himself or that the retailer is willing and prepared to give him.
The individual consumer cannot afford to have commodities tested
to determine their compliance with given standards or specifications.
Because the consumer knows so little regarding different commodi-
ties, he often makes uneconomical and otherwise unsatisfactory selec-
tions, buys erratically, and fails to develop sound buying habits.

Standards, grades, and informative labels may be used effectively
in providing consumers with information concerning commodities.
However, standards and labels are employed to a very limited extent
in retail selling, although manufacturers, retailers, and the trade
press, as well as consumers, are giving more consideration to the use
of standards and labels than formerly.

The extent and character of commodity information available to
consumers vary from store to store, in different sections of the coun-
try, and for different groups of cojnmodities.

The Individual Consimier as a Buyer.

The buying practices of consumers have been given much con-
sideration as the number and variety of commodities have increased,
and as the price range has enabled consumers to select from a greater
number of commodities. Those responsible for the sale of the
products of mass production have sought new ways of influencing
the consumers' choices of commodities. Meanwhile, consumers have
gradually become more conscious of their inefficiency as buyers and
have tried to discover means of improving their buying practices.

The individual consumer is influenced by a variety of motives in
making choices between different types of commodities such as a
stove, a rug, a davenport, or a radio. If he decides to buy a stove, a
selection must then be made from a variety of available stoves, and
he must consider such factors as price, quality, style, and his own
particular needs. Eacn of these choices may be either largely emo-
tional or largely rational.

Many of those responsible for the sale of specific commodities
have recognized that consumers are susceptible to emotional appeals
aipid have ^-elied almgst entirely, if not wholly, on such appeals in
their salQS campaigpis. At the same time consumers, confronted by
an array of relai^iVely inexpensive commodities, have long sincp. cast

316

316 OOXCBNTRATION OP ECONOMIC POWER

aside, as no longeiLapplicable under present conditions, the generally
respected buying habits and guides followed by past generations,
and have thereby increased their susceptibility to various kinds of
sales promotion. Consequently, consumers have been confused and,
more or less futilely, have been seeking new guides to aid them in
trying to decide whether or not they should include given com-
modities among their purchases, how much they should pay for them,
and how to identify the ones best suited to their needs.

At present the buying habits, if such they may be called, of most
consumers are influenced in a variety of ways. Often, quite uncon-
sciously, consumers are swayed in their choices by what they pre-
viously purchased ; familiarity with a given commodity inclines many
to select one that is similar, and this familiarity may be established
either through use of a commodity, seeing other people use it, or
through some form of aggressive advertising. If, however, experi-
ence with a commodity has been distinctly unsatisfactory, this may
serve to stimulate search for another in the hope that it may prove
more acceptable.

The salesman's recommendation is usually given considerable
weight by the