The 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 statements concerning the filling material, such as statements indicating that the material is new or second-hand. Headings are to be in 24point type in California; and the same is true in Washington in cases where the phrase "second-hand material" is required on the 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 deception 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 misleading 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 purchases for the Federal Government, with the exception of purchases for the Army, Navy, and Marine 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 Government, shows 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.

There is an essential difference between the Federal Government and private procurement, and the major restrictions of the Federal Government 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 establishment that produces on the premises the materials, supplies, articles, or equipment 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, warehouse, or other establishment 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 are 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;

(b) Advertising by notices placed in public places;

(c) Advertising by means of distribution of proposal forms to known sources of supply.

4. Competitive bidding.-Bids are invited and received on the common basis of specifications and general conditions binding on all alike.

5. Bid bond required except under certain conditions.-The bid bond is a guaranty 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 bids.-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.

8. Bids of competitors are available after opening date for examination b 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 whe offers suitable material, in a formal bid, at the lowest price.

11. As a general rule, contracts are reduced to writing 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 all 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.1

Negotiated Contracts.

Though as a general rule bids are invited and awards made to the lowest responsible bidder, negotiated contracts may be used in cases in which 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 the purchasing by the Procurement Division, 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 purchasing 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.

CHART XX.-The development of centralized purchasing in the Federal Government Purchase directed by

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