Since our labeling bill went through-maybe I have just gotten more aware of it--but is seems to me that the "cents off" business was increased instead of decreased. Mr. DIXON. It hasn't gone away. Mr. MACDONALD. Well, I will agree it hasn't gone away, but I will go further and say that in my opinion it has increased, and I was wondering what, if anything, your people have been able to do to enforce this. Everyone who appeared before us, including the manufacturers. has said that this was a bad practice and should be stopped. But, on the contrary, it seems to me that it has increased. Mr. DIXON. We have, in a sense, tried to do something about it in coffee. Here it appeared to us it put in peril the whole coffee market. We asked originally that everyone stop this voluntarily for a period of time while we had a hearing, looking toward perhaps a guide or qualification. It was right in this time that the hearings were held and the bill came out. This bill doesn't supersede or take away any responsibility from the Federal Trade Commission or the Food and Drug Administration. In a sense, it supplements it. But the bill does set anything that is a food over there, and everything else is over with us. Now, just how we are going to work this out I don't know. Mr. MACDONALD. Do you need any more help from the Congress? As I recall, I asked you a year ago did you need more people to enforce these things and you said no, you didn't. Mr. DIXON. Well, we needed more people. Obviously, we needed more people. Mr. MACDONALD. You said if you grabbed two or three of the big manufacturers the rest of the people would get the word and the thing would be stopped. I quote you. Mr. DIXON. Even the big manufacturer can't stop a practice very easily if all the others are doing it because it will take sales away from him, which is one way to say it. We have had the largest in coffee, General Foods, Maxwell House, that have twice tried to stop it and returned to it. In our hearings the little people said that it ruined them and they had to give it up because they didn't have any way to promote this, but the fact is that the consumer keeps going there and sees "cents off" on something. It is like saying who is on first base. Mr. MACDONALD. I don't want to plow the field again, to sit here and use a country expression, but it just seems to me that the thing has not worked and I am asking directly: Is there something else we can do to be of assistance to you because everybody agreed that this was a bad thing. Mr. DIXON. The law hasn't gone into effect yet. It goes into effect on July 1. Whether we would attempt to do something on just this one facet again now is questionable. After July 1 we are both provided an across-the-board method to proceed to issues what you might call a regular rule that would have the effect of law ultimately. This is a true legislative grant. 77-336-67-45 If the record should support the necessity for it, such a rule can be issued. Originally, you remember, this bill came up here making this a per se law violation. We took the tack, and I certainly was in the forefront of it, by saying we think it ought to be discretionary. The more I look at it I begin to think maybe we ought to have let it go the other way because it gets awfully hard. You are going to define how long you can have a promotion. Remember the guy putting it on that label has no control over the fellow that is selling it. There is no guarantee. If there is, he can get in trouble for price fixing. Mr. MACDONALD. This is one of the problems that we discussed. Mr. BROWN. Mr. Chairman, I would like to ask one more question. Does the FTC have any jurisdiction or authority over the good taste and moral quality of advertising? Mr. DIXON. No, sir; only false, misleading, and deceptive advertising. Mr. BROWN. I observe that some of the raciest things in reading magazines and on television are in the advertising area these days. I think this is a bad trend. Mr. DIXON. I don't know why the FCC can't do something about it. Mr. MACDONALD. If there are no more questions, and I take it there are not, I want to thank you very much. Mr. DIXON. I want to thank the committee. (Whereupon, at 12:10 p.m., the hearing adjourned, to reconvene at 10 a.m. Tuesday, March 21, 1967.) AGENCY HEARINGS TUESDAY, MARCH 21, 1967 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The committee met at 10 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. Torbert H. Macdonald presiding (Hon. Harley O. Staggers, chairman). Mr. MACDONALD. The committee will come to order. We are pleased to have with us today Chairman Lee White and the members and staff representatives of the Federal Power Commission. The matters entrusted to the regulatory jurisdiction of this Commission impinge upon the welfare of all the people. Without uninterrupted power the wheels of industry could not turn, and our citizens would be without heat, light, and power. The Northeast power failure of November 9, 1965, dramatized the disastrous effects inherent in a breakdown in power supply. In New York City alone, 600,000 people were stranded in the subway system during the blackout. One of the Federal Power Commission's most important responsibilities is to implement existing measures and to recommend the supplemental measures which are needed to assist in the prevention of future blackouts. Another area of concern to the Commission and the Congress is the question of the safety of gas pipelines. Is existing Federal legislation adequate to cope with the public dangers involved in the pipeline transmission of gas? The President of the United States in his February 16, 1967, message called upon Congress to carry forward unflinchingly to achieve, among other things, "the safety of natural gas pipelines." In this field, we shall in turn call upon the expertise of the Commission to furnish us with the necessary standards and guidelines required for the formulation of legislation needed for protection of the public. Of immediate concern to the Congress is the matter of the Government's statutory option to recapture or to relicense federally licensed hydroelectric power projects upon the expiration of their licenses. Licenses for 58 projects subject to recapture will expire in the calendar years 1967 through 1972. Eventually hydroelectric projects having an aggregate estimated ultimate cost of $7 billion will be subject to the Government's option. For the Congress to exercise an informed judgment in determining its recapture or relicense policy, it will have to rely in large measure upon the recommendations of the Federal Power Commission. In 1964, the Commission issued procedures to be followed by it in connection with hydroelectric licenses. Included in such procedures is a provision to notify Congress 5 years in advance of a license expiration date and at least 2 years in advance of such date to forward to Congress its recommendations concerning recapture. To date, we have received one recommendation on February 23, 1967-which was due August 31, 1966. We also note that another such recommendation was due December 31, 1966, and has not yet been received. We trust that this type of delay will be eliminated. It would be unfortunate if this committee found it necessary to make a detailed inquiry into the Commission's administration of the hydroelectric provisions in the Federal Power Act. The respective authority of the Federal Power Commission and State utility commissions over such matters as rates and rate refunds is a matter of constant concern to our committee. The meeting this morning provides an opportunity for our committee to ascertain the Commission's views upon the foregoing and other matters within the purview of the Commission's jurisdiction. Chairman White, you may now proceed with your presentation in such a manner as you deem best. STATEMENT OF HON. LEE C. WHITE, CHAIRMAN, FEDERAL POWER COMMISSION; ACCOMPANIED BY JOHN A. CARVER, JR., VICE CHAIRMAN; LAWRENCE J. O'CONNOR, JR., COMMISSIONER; CHARLES R. ROSS, COMMISSIONER; AND CARL E. BAGGE, COMMISSIONER Mr. WHITE. Thank you, Mr. Chairman. We do have a prepared formal statement. It is comparatively brief. I don't know that the members of the committee have had an opportunity to read it. If it suits your convenience, Mr. Chairman, I plan just to go through it, and at any time that any member of the committee thinks it would be appropriate to stop and discuss each item in detail, we are prepared to do so. Or, if there are questions that follow, whatever meets the convenience of the committee, of course, is the plan that we will use. If there is no objection, I will begin. Mr. MACDONALD. Fine. That will be satisfactory. Mr. WHITE. Mr. Chairman, we are delighted to appear before the full Committee on Interstate and Foreign Commerce which has oversight jurisdiction over our work. We value this opportunity to visit with the committee members. I might add this is the first opportunity I have had personally to come before this committee. I have been on the Commission just slightly over 1 year. I am very grateful for this opportunity. The Federal Power Commission is an agency of the Congress, performing delegated functions in the regulation of the electric power and natural gas industries and the licensing of hydroelectric resources. The Commission consists of five members appointed by the President with the advice and consent of the Senate. The Chairman is designated by the President. The Vice Chairman is elected annually by the members of the Commission. The law requires that no more than three Commissioners be of the same political party. The statutory term of office is for 5 years, and one term ends on June 22 of each year. The law provides for an incumbent Commissioner to hold over in office if an appointment has not been made by the end of his term. With me today are my four fellow Commissioners whom I should like to introduce to the committee: Our Vice Chairman, John A. Carver, Jr., comes from Idaho and is a Democrat. Commissioner Lawrence J. O'Connor, Jr., is a Democrat and comes from Texas. Commissioner Charles R. Ross is a Republican and comes from Vermont. Commissioner Carl E. Bagge is a Republican and comes from Illinois. We also have with us, at your invitation, key members of the Commission's staff who serve the Commission and carry out its policies. They are seated behind me and are here not only to lend moral support to us but to answer any of the more detailed questions that our conversation may lead us into. We have provided for each member of the committee a kit which includes relevant information about the Commission, including biographies of the Commissioners, an organization chart, and related information. (The material referred to appears at the end of Mr. White's statement.) The kit includes a short pamphlet entitled "An Informal Explanation of the Organization and Work of the Federal Power Commission." I found it a helpful introduction to the Federal Power Commission when I first ran across it, and I commend it to you. It is brief; it is written in a direct style and I think it is quite informative. (This pamphlet, together with a copy of the Commission's 46th Annual Report, 1966, has been placed in the committee files.) HISTORY OF THE FEDERAL POWER COMMISSION The Federal Power Commission was created by Congress in 1920 to administer the Federal Water Power Act. Its early activities were confined almost entirely to the issuance of licenses for non-Federal hydroelectric projects. The Federal Power Commission originally was composed of the Secretaries of War, Interior, and Agriculture, but in 1930 it was reorganized as an independent agency with five full-time Commissioners appointed by the President with the advice and consent of the Senate. In 1935, the Commission's jurisdiction was extended by passage of the Public Utility Act which added parts II and III of the Federal Power Act. The Commission now has authority (other than licensing or certificate authority) over the interstate transmission of electric energy and the rates for its sale at wholesale in interstate commerce. It also regulates some securities and mergers, consolidations, acquisitions, and accounts of companies subject to its jurisdiction. To assure an abundant supply of electric energy throughout the United States, with the greatest possible economy and with regard to the proper utilization and conservation of natural resources, the Federal |