kieht to your opienste vous reste now should be changed · Mr. SPRINGER. Mr. Schulberg, I hoped this matter would not come up. I have not changed my opinion one iota from two years ago. As I told you some time ago, I am perfectly willing to listen. But I certainly know of no reason why present D.C. law should be changed. And I am talking about the public interest now-I am not talking about anybody's private interest. You, and your association, naturally, have a right to your opinions also. Mr. SCHULBERG. Thank you. Mr. Springer, I would say this: I respect your views—the fact that you might not agree with me, I will admit I don't like that fact but I can understand it. · I will say this. At least when you express your views, it is expressed in a fashion which is much more honorable and consise than one of the leading newspapers did in an editorial this morning. , Mr. SPRINGER. Mr. Chairman, thank you very much. Mr. Dowdy. Thank you, Mr. Schulberg. We will place in the record a statement from the Federation of Citizens Association of the District of Columbia. (The statement referred to follows:) THE FEDERATION OF CITIZENS ASSOCIATIONS OF THE DISTRICT OF COLUMBIA SUBJECT: H.R. 3317 H.R. 3317 is one of a series of bills reintroduced in this Congress by Mr. Sisk. The particular bill has as a stated purpose the prohibition of certain sales of alcoholic beverages below cost with appropriate definitions thereof. Once again it is intended to eliminate competition and to permit the establishment of price control involving a degree of determination of the cost of doing business which would completely change the nature of the Board. H.R. 3317 is contrary to the Federation's usual principle of opposition to price control in the District of Columbia and the Committee unanimously recommended that it be opposed. Col. WILLIAM A. ROBERTS, Chairman, Law and Legislation Committee. Report approved by the Federation, unanimously, February 25, 1965. MABEL E. MORRIS, Secretary. Mr. Dowdy. The next witness is Mr. Hyman H. Tash, Certified Public Accountant. Mr. MEYROWITZ. Mr. Tash is not here. I am Mr. Tash's partner. I will testify in his place. Mr. Dowdy. State your name, and where you live. STATEMENT OF LESTER MEYROWITZ Mr. MEYROWITZ. My name is Lester Meyrowitz. I am a Certified Public Accountant in the District of Columbia. I have been engaged in the public practice of accounting since 1949 and for the last 10 years as a partner in the firm of Sinrod and Tash, Certified Public Accountants. My firm was requested by the Washington, D.C. Retail Liquor Dealers Association to compile statistics relative to the cost of doing business by retail Class A liquor outlets in the District of Columbia. The information was derived from the operations of 45 retail stores doing a gross annual combined volume of $14,350,000. This represents Mr. SCHULBERG. Well, I recognize that perhaps is possible. But we must remember that a package store, for example, can only be located in the commercial area. We have quite a bit of restrictions on the amount of commercial area available. It is very difficult, even today, if you attempted to move your location, to find a spot for it. So while theoretically it is possibleI recognize that—I don't think it is too probable because the ABC Board would still have the right to determine whether that store that wanted to locate around the corner, if it was not on a direct 500 foot line, would serve the public convenience and advantage. In other words, are there enough stores in the area ? So I think that that could be overcome by the good judgment of the ABC Board when it holds a hearing on granting or denying of a license transfer. Mr. SPRINGER. Mr. Chairman-would you yield for one question ? Mr. Dowdy. Certainly. Mr. SPRINGER. Mr. Schulberg, have you read the report of the Commissioners on these bills? Mr SCHULBERG. No, sir. Mr. Dowdy. He could not have read them. They were just brought in. Mr. SPRINGER. The Commissioner's report is very unfavorable to H.R. 3317. Now, they say the new section 42— in the opinion of the Commissioners would operate to prohibit an independent retailer of alcoholc beverages from exercising his judgment in pricing for sale the products he owns. In the view of the Commissioners, the cost proposal is contrary to the free market concept, and deprives the consumer of free choice in determining relative values. The Commissioners believe that the imposition of a price floor with no price ceiling inevitably will operate to the detriment of the public in that it shields the inefficient retailer from the competition of efficient retailer and prevents the efficient retailer from passing on to the consumers savings which may result from his more efficient operation, and that the result will be increased price for beverages sold at retail. Do you have any rebuttal to that? Mr. SCHULBERG. I think my whole statement answered that. I think my prepared statement gave every answer to that. And my view is diametrically opposed. I think the result is just the opposite. I think, sir, that if you continue to let these people have the monopoly control they have, eventually, when they control the market—and each year their part of the market becomes higher—the public, whether it realizes it or not, is paying them higher prices for inferior products, and so the public is being mulcted. Mr. SPRINGER. The Federation of Citizens Association of D.C. opposed H.R. 3317 on the grounds that it would eliminate competition, permit the establishment of price controls over the sale of alcoholic beverages. Mr. SCHULBERG. And I say that it would promote competition. Mr. SPRINGER. “The Commissioners believe that the bill is so detrimental to the interests of the consumer public and indirectly to the revenues of the District of Columbia, that they must of necessity recommend against its enactment.” Mr. SCHULBERG. I would say to you it would increase the revenues of the District of Columbia, because if they are selling at these depressed prices, your sales tax and income tax returns as so much less. uptold you now of no about the rest · Mr. SPRINGER. Mr. Schulberg, I hoped this matter would not come up. I have not changed my opinion one iota from two years ago. As I told you some time ago, I am perfectly willing to listen. But I certainly know of no reason why present Ü.C. law should be changed. And I am talking about the public interest now-I am not talking about anybody's private interest. You, and your association, naturally, have a right to your opinions also. Mr. 'SCHULBERG. Thank you. Mr. Springer, I would say this: I respect your views—the fact that you might not agree with me, I will admit I don't like that fact but I can understand it. · I will say this. At least when you express your views, it is expressed in a fashion which is much more honorable and consise than one of the leading newspapers did in an editorial this morning. . , Mr. SPRINGER. Mr. Chairman, thank you very much. Mr. Dowdy. Thank you, Mr. Schulberg. We will place in the record a statement from the Federation of Citizens Association of the District of Columbia. (The statement referred to follows:) THE FEDERATION OF CITIZENS ASSOCIATIONS OF THE DISTRICT OF COLUMBIA SUBJECT: H.R. 3317, H.R. 3317 is one of a series of bills reintroduced in this Congress by Mr. Sisk. The particular bill has as a stated purpose the prohibition of certain sales of alcoholic beverages below cost with appropriate definitions thereof. Once again it is intended to eliminate competition and to permit the establishment of price control involving a degree of determination of the cost of doing business which would completely change the nature of the Board. H.R. 3317 is contrary to the Federation's usual principle of opposition to price control in the District of Columbia and the Committee unanimously recommended that it be opposed. Col. WILLIAM A. ROBERTS, Chairman, Law and Legislation Committee. Report approved by the Federation, unanimously, February 25, 1965. MABEL E. MORRIS, Secretary. |Mr. Dowdy. The next witness is Mr. Hyman H. Tash, Certified Public Accountant. Mr. MEYROWITZ. Mr. Tash is not here. I am Mr. Tash's partner. I will testify in his place. Mr. Dowdy. State your name, and where you live. STATEMENT OF LESTER MEYROWITZ Mr. MEYROWITZ. My name is Lester Meyrowitz. I am a Certified Public Accountant in the District of Columbia. I have been engaged in the public practice of accounting since 1949 and for the last 10 years as a partner in the firm of Sinrod and Tash, Certified Public Accountants. My firm was requested by the Washington, D.C. Retail Liquor Dealers Association to compile statistics relative to the cost of doing business by retail Class A liquor outlets in the District of Columbia. The information was derived from the operations of 45 retail stores doing a gross annual combined volume of $14,350,000. This represents of Columbia, and approximately 14 percent of the total volume of retail business transacted by the 388 licensed outlets. Of these 45 outlets, the information for 23 was taken from my firm's clients' files, and the information for the other 22 was supplied by the association as a result of the survey of member stores. The items considered as costs of operations were salaries, exclusive of officers or owners, rent, taxes, exclusive of taxes on income, insurance, delivery, telephone, supplies, heat, light and power, legal and audit, advertising, repairs and maintenance, general expenses, and depreciation. As a result of this survey, the following findings are presented: As a total, the cost of operation for all stores participating is approximately 12 percent, computed as a percentage of cost of merchandise. Segregating the retail outlets by volume of business, the information is as follows: For those stores doing less than $300,000 annually, the cost of operations was 13 percent of the cost of merchandise. For those outlets doing between $300,000 and $500,000 annually, the cost of operations was 13 percent, again, of the cost of merchandise. For those stores doing in excess of $500,000 annually, the cost of operations is 9 percent of the cost of merchandise. In conclusion, and based upon the foregoing, it is evident that the actual cost of doing business is in excess of the 6 percent factor provided for in H.R. 3317. This concludes the information I have to present to the committee. Our next witness is Mr. James F. Ervin, Director of the Montgomery LIQUOR CONTROL, MONTGOMERY COUNTY, MARYLAND Mr. ERVIN. Mr. Chairman, my name is James F. Ervin. I am Director of the Department of Liquor Control for Montgomery County, Maryland. I am grateful for the opportunity to convey my overwhelming support and approval on behalf of Montgomery County, Maryland, to the introduction of H.R. 3317. I feel its enactment will greatly enhance the effort of law enforcement and the promotion of temperance, both in Washington, D.C., and in nearby Maryland counties. It is indeed an honor to have the opportunity to inform you that we hope the bill will receive a favorable report after the careful consideration your Committee is known to give pending legislation. We have always concurred in Congressional action steered toward keeping alcoholic beverage advertising in the District of Columbia within reasonable standards. Many Montgomery countians work in or visit Washington, and we do not condone unfair merchandising practices that prevail in the Nation's Capital, as they do have an adverse effect on the people of our County. The use by Washington, D.C. retailers of advertising "loss leaders” is among the more regrettable practices that have plagued us from time to time in our efforts to furnish our citizens with good, sound control, and we strive to exercise regulations they demand. H.R. 3317 would substantially reduce that problem. Naturally, as a liquor administrator in Montgomery County, Maryland, I in no way oppose advertising. However, since Montgomery County is often referred to as the "bedroom” of Washington, D.C., I am fearful that many Montgomery County residents violate the liquor laws unintentionally because of the advertising of “loss leaders”. This also encourages the purchase and consumption of alcoholic beverages in quantities in excess of their normal needs. I am sure that the Alcoholic Beverages Division of the Comptroller of the Treasury would also concur in any action which would cause the discontinuance of this practice, as the State of Maryland, as well as Montgomery County, stands to lose tax revenue by advertising which lures our residents to purchase alcoholic beverages outside our boundaries. Thank you, Mr. Chairman. The next witness is Mr. Charles Buscher, Executive Director, National Alcoholic Beverage Control Association. STATEMENT OF CHARLES BUSCHER, EXECUTIVE DIRECTOR, NATIONAL ALCOHOLIC BEVERAGE CONTROL ASSOCIATION Mr. BUSCHER. Mr. Chairman—with your permission, I have a copy of a letter addressed to Chairman McMillan from the Chairman of the Virginia ABC Board, also in support of this bill. Mr. Dowdy. The letter will be made a part of the record. (The letter referred to follows :) COMMONWEALTH OF VIRGINIA, Richmond, Va., September 7, 1965. DEAR MR. McMILLAN: We take this opportunity to express our wholehearted support of HR 3317. The enactment of this legislation will, in our judgment, alleviate a condition which has long existed in our Northern Virginia area which has to do with the sale of alcoholic beverages in the District of Columbia at drastically reduced prices. This encourages Virginia citizens to purchase alcoholic beverages in excessive quantities, which we do not believe they would, otherwise, do. It would further contribute, in some cases, to persons unknowingly transporting alcoholic beverages in violation of the Virginia Alcoholic Beverage Control Board transportation regulations. These regulations have the full force and effect of the law and violation of the regulations gives just cause for confiscation of the transporting vehicle. We feel the enactment of this legislation would materially contribute to better law enforcement and the encouragement of temperance in our nearby Northern Virginia Counties. Consequently, we respectfully request the favorable consideration of your Committee in reporting this Bill. Sincerely yours, WARREN WRIGHT, Chairman, Virginia Alcoholic Beverage Control Board. Mr. BUSCHER. My name is Charles B. Buscher. I am Executive Director of the National Alcoholic Beverage Control Association, 1000 |