Senate amendment; amendment adopted in concurrence, May 8; to Gov. May 11; signed, May 17. Chap. 99. Resolves.

H. 1250. Resolve in favor of Louise McIntire of San Rafael, California. (Ways and Means, Joint.) In House, Feb. 9; ord. 3d and eng. Feb. 10; rec'd in Senate, Feb. 13; ord. 3d, Feb. 14; referred to Senate Ways and Means, Feb. 15; no further action taken.

H. 1251. Resolve in favor of the widow of the late Ernest A. Johnson. (Ways and Means, House.) In House, Feb. 1; ord. 3d and eng. Feb. 2; rec'd in Senate, to Senate Ways and Means, Feb. 6; report, ought to pass, Feb. 7; ord. 3d, Feb. 8; eng. Feb. 9; to Gov. Feb. 14; signed, Feb. 17. Chap. 6. Resolves.

H. 1252. Resolve in favor of the widow of the late Michael John Carroll. (Ways and Means, House.) In House, Feb. 1; ord. 3d and eng. Feb. 2; rec'd in Senate, to Senate Ways and Means, Feb. 6; report, ought to pass, Feb. 7; ord. 3d, Feb. 8; eng. Feb. 9; to Gov. Feb. 14; signed, Feb. 17. Chap. 5. Resolves. H. 1253. (Banks and Banking.) Basis of House 2933.

H. 1254. Bill relative to the making of residential development loans by savings banks. (Banks and Banking.) In House, Mar. 20; ord. 3d and eng. Mar. 21; rec'd in Senate, Mar. 22; ord. 3d, Mar. 23; eng. Mar. 27; to Gov. Mar. 30; signed,

Apr. 4. Chap. 327.

H. 1255. (Banks and Banking.) Basis in part of House 2997. H. 1256. (Cities.) Next annual session, House, Jan. 19; accepted, Jan. 23. H. 1257. (Cities.) Next annual session, House, Mar. 1; accepted, Mar. 2. H. 1258. (Cities.) Leave to withdraw, House, Mar. 13; accepted, Mar. 14. H. 1259. (Cities.) Leave to withdraw, House, Mar. 13; accepted, Mar. 14. H. 1260. Bill establishing a board of public works and a department of public works in the city of Northampton. (Cities.) In House, as changed, Mar. 27; ord. 3d and eng. Mar. 28; rec'd in Senate, to Senate Municipal Finance, Mar. 29; report, ought to pass, Apr. 5; ord. 3d, Apr. 6; eng. Apr. 10; to Gov. Apr. 18; signed, Apr. 20. Chap. 389.

H. 1261. Bill providing tenure of office for certain employees in the city of Chicopee infirmary. (Cities.) In House, ord. 3d and eng. Feb. 20; rec'd in Senate, Feb. 21; ord. 3d, Feb. 23; rejected, Feb. 27.

H. 1262. (Cities.) Next annual session, House, Feb. 20; accepted, Feb. 20. H. 1263. Bill relative to the tenure of office of George Mitchell, deputy election commissioner of the city of Somerville. (Cities.) In House, Feb. 14; ord. 3d and eng. Feb. 15; rec'd in Senate, Feb. 16; ord. 3d and eng. Feb. 20; to Gov. Feb. 28; signed, Mar. 2. Chap. 163.

H. 1264. (Cities.) Leave to withdraw, House, Feb. 20; accepted, Feb. 20. H. 1265. (Civil Service.) Next annual session, House, Feb. 15; accepted, Feb. 16.

H. 1266.

(Civil Service.) Next annual session, House, Feb. 15; recommitted, Feb. 16. Basis of House 2801.

H. 1268. (Civil Service.) Feb. 16.

H. 1269.

Feb. 16.

Next annual session, House, Feb. 10; accepted,

Leave to withdraw, House, Feb. 15; accepted,

(Civil Service.) Next annual session, House, Feb. 15; accepted,

H. 1270. (Constitutional Law.) Report, ought not to pass, Senate, Mar. 6; House, Mar. 7 (placed on file).

H. 1271. Resolutions memorializing the Congress of the United States against granting concessions on textile and fish imports from foreign countries. (Constitutional Law.) In House, Jan. 23; adopted, Jan. 24; rec'd in Senate, Jan. 25; adopted, Jan. 26.

H. 2991. Bill providing for trial by a jury of six in the Central District Court of Worcester in cases involving misdemeanors and certain other violations. (Judiciary.) Based on P.D. 144, page 43. In House, Mar. 27; ord. 3d and eng. Mar. 28; rec'd in Senate, Mar. 29; ord. 3d, Apr. 3; Senate 627 substituted, May 10.

H. 2992. Bill relative to the creation and termination of agency and other fiduciary powers in time of atomic emergency. (Judiciary.) Based on P.D. 144, pages 87-98. In House, Mar. 27; ord. 3d, Mar. 28; eng. Apr. 3; rec'd in Senate, Apr. 4; ord. 3d, Apr. 5; rejected, May 4.

H. 2993. Bill regulating the acquisition of a settlement by veterans and/or their dependents, while in receipt of certain programs of assistance under the Department of Public Welfare. (Public Welfare.) Based on House 2566. In House, Mar. 27; ord. 3d and eng. Mar. 28; rec'd in Senate, Mar. 29; ord. 3d, Apr. 3; eng. Apr. 10; to Gov. Apr. 13; signed, Apr. 20. Chap. 388.

H. 2994. (Public Safety.) Next annual session, House, Apr. 12; accepted, Apr. 13; rec'd in Senate, Apr. 18; accepted, Apr. 20.

H. 2995. Bill increasing the salaries of the clerks of the First District Court of Bristol, the Second District Court of Bristol, the Fourth District Court of Bristol and the First District Court of Barnstable. (Counties, Joint.) Based on House 1976 and 2469. In House, Mar. 27; ord. 3d and eng. Mar. 28; rec'd in Senate, Mar. 29; referred to Senate Counties, Apr. 4; reported in Senate 631, May 11.

H. 2996. Bill authorizing the Commonwealth to grant easements over, across and upon certain land, for the transmission of electric power, to New England Power Company. New draft of House 302 reported in House; ord. 3d and eng. Mar. 27; rec'd in Senate, to Senate Ways and Means, Mar. 28; report, ought to pass, Apr. 17; ord. 3d, Apr. 18; eng. Apr. 24; to Gov. Apr. 27; signed, May 2. Chap. 417.

H. 2997. Order relative to authorizing the committee on Banks and Banking to sit during the recess of the General Court to study the subject-matter of certain current House documents relative to requiring banks to place real estate mortgage investments in certain areas, the consolidation, merger and conversion of trust companies and national banking associations, the disclosure of certain finance charges and interest rates on real estate construction loans. (Banks and Banking.) Based on House 587, 874, 1255 and 1496. In House, to Joint Rules, Mar. 28; report, ought to be adopted; to House Ways and Means, Apr. 6; report, ought to be adopted, Apr. 25; adopted in concurrence, Apr. 26; rec'd in Senate, to Senate Ways and Means, Apr. 27; report, ought not to be adopted, May 4; rejected, May 5.

H. 2998. Order relative to directing the Legislative Research Council to study the subject-matter of current House document numbered 2454 relative to adul teration of drugs. (Public Health.) report, ought to be adopted; to House Ways and Means, Apr. 6; reported in House 3078, Apr. 20.

H. 2999. Bill authorizing the Department of Public Safety to promulgate rules and regulations for the safety of persons and the prevention of fire in nursing, convalescent and rest homes. (Public Safety.) Based on House 797. In House, to House Ways and Means, Mar. 28; report, ought not to pass, Apr. 13; rejected, Apr. 17.

H. 3000. Bill granting prior payment protection to subcontractors and suppliers on any construction work. (State Administration.) Based on House 1468. In House, Mar. 23; ord. 3d, Mar. 29; eng. Apr. 3; rec'd in Senate, Apr. 4; ord. 3d, Apr. 5; amended, Apr. 12; eng. Apr. 13; rec'd in House, Senate amendment adopted in concurrence, Apr. 17; to Gov. Apr. 25; recalled in Senate, May 1; ret. to Gov. May 22; signed, May 25. Chap. 530.

H. 3001. Bill relative to exemptions of certain land from the application of certain provisions of zoning ordinances or bylaws. (Mercantile Affairs.) Based on Senate 269 and House 1623. In House, Mar. 23; ord. 3d, Mar. 29; eng. Apr. 3; rec'd in Senate, Apr. 4; amended, ord. 3d, Apr. 6; Senate 584 substituted, Apr. 17.

H. 3002. Bill providing for forfeiture of obscene literature. Substituted in House for House 1342 and eng. Mar. 28; rec'd in Senate, Mar. 29; ord. 3d, Apr. 3; Senate 570 substituted, Apr. 10.

H. 3003. Bill relative to the reserves of life insurance companies, and nonforfeiture benefits for life insurance policies. Substituted in House for House 210 and eng. Mar. 28; rec'd in Senate, Mar. 29; ord. 3d, Apr. 3; eng. Apr. 5; to Gov. Apr. 11; signed, Apr. 13. Chap. 368.

H. 3004. Bill providing life tenure for Anthony J. Bellio, incumbent of the office of secretary of the Board of Registration of Barbers. Substituted in House for Senate 99 and eng. Mar. 28; rec'd in Senate, to Senate Ways and Means, Mar. 29; report, ought to pass, Apr. 13; ord. 3d, Apr. 17; eng. Apr. 25; to Gov. May 2; signed, May 5. Chap. 427.

H. 3005. Bill providing for the improvement of Gloucester Harbor in the city of Gloucester. Substituted in House for House 935 and eng. Mar. 28; rec'd in Senate, to Senate Ways and Means, Mar. 29; reported in House 3178, May 24. Seantor MUSKIE. Our next witness, already referred to by Senator Bennett, is Mr. Louis Rothschild of the National Association of Retail Clothiers and Furnishers.

Mr. Rothschild has a prepared statement. You may feel free to read that or put it in the record and comment on it or handle it in any way you see fit.

STATEMENT OF LOUIS ROTHSCHILD, NATIONAL ASSOCIATION OF RETAIL CLOTHIERS & FURNISHERS

Mr. ROTHSCHILD. Thank you, Senator.

With the committee's approval, I would appreciate having the statement incorporated in the record and feel free to speak extemporaneously, and briefly, on this entire subject.

Senator MUSKIE. Without objection, your statement will appear at the end of your oral presentation.

Mr. ROTHSCHILD. My name is Louis Rothschild, as the statement indicates, and I am executive director of the National Association of Retail Clothiers and Furnishers, which is a fancy name for men's wear stores. We have over 3,000 members around the country. Our members are largely independent stores. They are extremely varied and some sell for cash only, many sell on credit, many have revolving credit terms, many sell for up to 90 days without any credit charge, many have long-term payments with service charges. There is no uniformity.

Speaking fundamentally, Senators, it appears to me that there are two premises to this bill. One is that business is dishonest and cannot be trusted, and I believe that is a fallacy.

And the second premise is that consumers are ignorant, stupid, and cannot be trusted to take care of themselves. That, I also say is a fallacy, is a wrong premise, and is an insult to the consumers of this country, because, after all, all of us are consumers. We men's wear merchants are consumers of automobiles and of houses and of food. Even Senators are consumers of all the commodities that we sell and others sell.

And these isolated instances of a few business firms and a few individuals who are dishonest and crooks and a few morons who happen to be consumers is not sufficient of a premise for the Congress of the United States to attempt to police-to invite policing of every credit transaction of every nature and every kind in this country.

During the questioning of Father McEwen, I was interested in the Senator's comment that-unrelated-we were mixing apples and pears. This bill mixes apples, pears, pineapples, bananas, squash, and bacon.

Senator MUSKIE. And men's clothing.

Mr. ROTHSCHILD. And men's clothing.

For example, it occurred to me, sitting back there, I am a member of the National Press Club. Maybe the Senator is also. The dues are $15 a quarter if you pay on time; otherwise, they are $20 a quarter. Now, if this bill passes, they have got to state that in terms of— I do not know what. On the other hand, my gas bill is $23-the figures are in my statement. But if I pay within 30 days, it is a lesser amount. Every public utility in the country now is going to have to change its IBM system to figure out how they are going to comply with this bill if it should pass.

This bill would force the consumer and the retailer to anticipate. breach of contract. Many, many stores, particularly men's wear stores, sell on a 30-day, charge-account basis. And if at the end of 60 days, the customer has not paid, many of these stores, not all of them, charge 1 percent on the unpaid balance as a late charge-which is the same thing as the gas company does and the National Press Club does.

How are you going to figure that as a percentage of the unpaid balance? Or if the customer buys a $65 suit from one of our stores on a 30-day charge account, and at the end of 30 days pays $30, at the end of 60 days, he is charged 1 percent of $35, whatever that is. But how can that be anticipated in advance?

As I stated and as my figures show, there is no uniformity. We received last week from New York University the annual business study of men's wear stores which they make for us. It is a sample study, but is regarded among experts in the field as quite accurate. Incidentally, it shows that last year was a bad year for men's wear stores and that the net profit before taxes decreased to 2.6 percent from about 3.3 percent on the prior year.

But extremely interesting to this committee's study is a study of stores' services, men's wear stores' services, of 199 stores answering a certain question. Of that number 120 give extended credit, which is 65 percent of those answering. And of that number, 56, or 43 percent, charge a percentage on the unpaid balance. The percentage varies among stores.

Senator BENNETT. That is 43 percent of the 65 percent, not 43 percent of the 199?

Mr. ROTHSCHILD. That is correct, sir, 43 percent of the 120.

I have extra copies of this report here which I would be delighted to give to the members of the committee. It also, of course, indicates that stores spend much more money on alterations.

You go into a store. Only 11 percent of the stores of the country, according to this survey charge for alterations. Alteration costs vary from about 5 to 7 percent and even higher sometimes of the price of the suit. The cost of the alteration necessarily is reflected in the price of the suit. If a store charges for alterations, as some few stores do, comparatively few, about 10 or 11 percent, then, on the same premise that Congress is passing a law or considering a bill to require a disclosure, a percentage of cost of credit, why should they not require a disclosure of the cost of alterations? It is almost facetious, but it is the same premise and the same theory.

In my distant youth, and it is getting more distant all the time, 1 ran a better business bureau in Washington for 12 years, and at that time, our big problem was the credit clothing and jewelry stores. These stores uniformily advertised no charge for credit, and they sold $1 down and $1 a week, and some few of those stores are still in existence.

The price of their credit and their price of collecting $1 a week from the lowest strata of society was reflected in the price of the merchandise. Their markups were terrific. I recall one case of a suit, the wholesale cost of which in those days was $25, that they were selling for $87.50. Such an operation as that would not be covered by this bill.

And any retailer who wanted to do a credit business and wanted to get out of the rigamarole and the threat of lawsuit and threat of litigation and the threat of harassment that this bill involves would go to a cash basis, an increased markup to cover his cost. We would be inviting a return of the abuses that existed and which have been cut down by the proper method of a charge for credit which shows in dollars which even a moron understands. He knows when he has

got to pay $5 a week for so many weeks. But if you give that to him as a percentage, annual interest, it is meaningless. All it does is create a bugaboo.

The consumer is interested in what he is paying in dollars; he is not interested in what he is paying in percentage. And as long as the consumer knows what he is paying in dollars and as long as competition-and competition is certainly keen in the men's wear field— will control prices and services and as long as the individual gets what he is paying for and pays what he understands he is to pay, then, we are in a free economy and a proper economy controlled by competition.

We have plenty of laws in every jurisdiction to control fraud. On many of these horror cases that have been cited here, any legal aid bureau in any part of the country would protect the consumer by going into the courts.

I think, gentlemen, that brief statement and my statement which I trust you have read or will read covers our position. I will be delighted to endeavor to answer any questions that either of you gentlemen might care to ask me.

Senator MUSKIE. Let me ask, on sales of real estate, is it not unusual today to have a lender charge both a discount and an interest rate. Do you think the rate serves any useful purpose in real estate transactions? Do you think as it is stated here, just as rate, it is useful all by itself?

Mr. ROTHSCHILD. I am sure it is.

Senator MUSKIE. Would it not be simpler and less confusingMr. ROTHSCHILD. You are dealing in big money in the sale of real estate; you are not dealing in a $3.50 necktie or a $45 suit.

Senator MUSKIE. Let me finish my question.

Mr. ROTHSCHILD. I am sorry, sir.

Senator MUSKIE. I am sure consumer credit involves something more than $3.50 neckties, too, but since in so many instances and on so many transactions, the charge for use of the money takes two forms-discount and interest-would it not be less confusing to the buyer if you just stated the total dollar cost of his credit and ignored the question of rate?

Mr. ROTHSCHILD. Well, frankly, I am no authority on real estate finance, and I would not attempt to answer it.

Senator MUSKIE. You have made the point that stating in terms of annual rates is not

Mr. ROTHSCHILD. It seems to me the consumer of real estate, buyer of real estate, is concerned with an interest charge on the discount rate. There are three things a buyer wants to know now, and I sold my house a week ago. I sold it direct and gave the buyer the benefit of the commission.

The buyer was interested in knowing if I would take back the mortgage. The answer was "Yes."

What rate of interest would I charge? I said, "512 percent."

He was interested to know what his monthly payments would be. I called the bank and said, "What would the monthly payments be on a $25,000 loan running for 20 years at 512 percent?" They gave me the figure, and I gave it to him. He checked it with his bank, and it was correct.