[Federal Register Volume 61, Number 193 (Thursday, October 3, 1996)]
[Rules and Regulations]
[Pages 51577-51584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25358]


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FEDERAL TRADE COMMISSION

16 CFR Part 24


Guides for Select Leather and Imitation Leather Products

AGENCY: Federal Trade Commission.

ACTION: Final rule; Final Guides for Select Leather and Imitation 
Leather Products.

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SUMMARY: The Federal Trade Commission (the ``Commission''), as part of 
its periodic review of its rules and guides, announces that it has 
concluded a review of its proposed Guides for Select Leather and 
Imitation Leather Products (``proposed Guides''), which combined and 
amended the provisions of Guides for the Luggage and Related Products 
Industry, the Guides for Shoe Content Labeling and Advertising, the 
Guides for the Ladies' Handbag Industry and the Commission's Trade 
Regulation Rule Concerning Misbranding and Deception as to Leather 
Content of Waist Belts. The Commission has decided to adopt the 
proposed Guides, modified as discussed below.

EFFECTIVE DATE: The effective date of this rule is December 2, 1996.

FOR FURTHER INFORMATION CONTACT: Susan E. Arthur, Attorney, (214) 767-

[[Page 51578]]

5503, Federal Trade Commission, Dallas Regional Office, 100 N. Central 
Expressway, Suite 500, Dallas, Texas 75201.

SUPPLEMENTARY INFORMATION:

I. Background

    On September 18, 1995, the Commission rescinded the Guides for the 
Luggage and Related Products Industry (``Luggage Guides''), the Guides 
for Shoe Content Labeling and Advertising (``Shoe Content Guides''), 
and the Guides for the Ladies' Handbag Industry (``Handbag Guides''). 
60 FR 48027 (September 18, 1995). On the same day, the Commission 
sought public comment on proposed Guides for Select Leather and 
Imitation Leather Products. 60 FR 48056 (September 18, 1995). The 
proposed Guides combined relevant portions of the three Guides, updated 
certain language used in the Guides, and made other modifications to 
clarify and streamline the provisions of the Guides. The Commission 
included within the coverage of the proposed combined Guides certain 
provisions of the Commission's Trade Regulation Rule Concerning 
Misbranding and Deception as to Leather Content of Waist Belts, 16 CFR 
Part 405 (``Waist Belt Rule'').1
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    \1\ The Commission recently repealed the Waist Belt Rule. 61 FR 
25560 (May 22, 1996).
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    The request for public comment contained questions designed to 
assist the Commission in determining whether the proposed Guides should 
be expanded in scope and to allow interested parties to apprise the 
Commission of any special considerations for their industries. The 
questions were as follows:
    1. Should the proposed Guides for Select Leather and Imitation 
Leather Products be expanded in scope to include other products made of 
leather or imitation leather? Such products might include, but are not 
limited to, clothing, furniture, watchbands, and equestrian items.
    2. Are there special considerations for these or other leather or 
imitation leather goods which are not addressed by the proposed Guides? 
How could any such special considerations be addressed by the Guides?

II. Comments Received

    Nine comments were received in response to this request for public 
comment. Additionally, the Commission received two Waist Belt Rule 
comments in response to an advance notice of proposed rulemaking 
published on September 18, 1995. Previously, the Commission had 
received 12 comments in response to its March 27, 1995 Federal Register 
notice on the three individual Guides and 10 comments on the Waist Belt 
Rule (all but three of the Waist Belt Rule comments were also submitted 
in response to the request for comment on the three Guides). Because 
the Waist Belt Rule comments concern the same or similar issues as 
those under consideration in this proceeding, they have been considered 
in this review.
    In its September 18, 1995 Federal Register notice, the Commission 
addressed the first set of comments on the three Guides and the Waist 
Belt Rule, which had been received in response to its March 27, 1995 
Federal Register notice. The Commission now addresses the comments 
received in response to the September 18, 1995 Federal Register notice 
and will refer to the first set of comments where appropriate or 
necessary to the discussion.2
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    \2\ Comments Received in Response to the March 27, 1995 Federal 
Register Notice.
    Concerning the Three Guides:
    1. Rose E. Kettering (``REK''). Same comment sent regarding 
Waist Belt Rule
    2. Matt Anderson (``MA''). Same comment sent regarding Waist 
Belt Rule.
    3. Marilyn Raeth (``MR''). Same comment sent regarding Waist 
Belt Rule.
    4. James A. McGarry (``JAM''). Same comment sent regarding Waist 
Belt Rule.
    5. Lenna Mae Gara (``LMG''). Same comment sent regarding Waist 
Belt Rule.
    6. Linda D. Lipinski (``LDL'').
    7. Footwear Industries of America (``FIA'').
    8. Leather Industries of America, Inc. (``LIA''). Same comment 
sent regarding Waist Belt Rule.
    9. Luggage and Leather Goods Manufacturers of America, Inc. 
(``LLGMA'').
    10. Cromwell Leather Company, Inc. (``CL''). Same comment sent 
regarding Waist Belt Rule.
    11. Enger Kress (``EK'').
    12. Footwear Distributors and Retailers of America (``FDRA'').
    Concerning the Waist Belt Rule:
    13. Stephen Toso (``ST'').
    14. Humphreys, Inc. (``HI'').
    15. Enger Kress (``EK2'').
    Comments Received in Response to the September 18, 1995 Federal 
Register Notice.
    Concerning the Proposed Guides:
    16. Ecological Fibers, Inc. (``EFI'').
    17. Leather Industries of America (``LIA2''). Addendum dated 
January 11, 1996 (``LIA3''). Addendum dated January 18, 1996 
(``LIA4'').
    18. Fried, Frank, Harris, Shriver & Jacobson (``FFHSJ'').
    19. Footwear Industries of America (``FIA2''). Addendum dated 
January 25, 1996, to Susan Arthur (``FIA3''). Addendum dated January 
25, 1996, to Secretary's Office (``FIA4''). Addendum dated January 
30, 1996 (``FIA5'').
    20. Footwear Distributors and Retailers of America (``FDRA2'').
    21. Cromwell Leather Company, Inc. (``CL2'').
    22. People for the Ethical Treatment of Animals (``PETA'').
    23. Hong Kong Government Industry Department (``HK'').
    24. Luggage and Leather Goods Manufacturers of America 
(``LLGMA2'').
    Concerning the Waist Belt Rule:
    24. Humphreys, Inc. (``HI2'').
    25. Larry Gundersen (``LG'').
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    In conducting this review, the Commission also examined the 
European Union Directive 94/11/EC, which applies to footwear. The 
Directive has as its objective informing consumers of the contents of 
their shoes, which is different from the Guides' aim of preventing 
misrepresentation caused by the appearance of leather. However, to 
enhance global harmonization, the Commission has, where appropriate, 
incorporated some of the concepts of the Directive into the Guides.

A. Comments Concerning the Usefulness of the Guides

    The proposed Guides are premised on the Commission's long-standing 
position that a product that looks like leather makes an implied 
representation that the product is made of leather. The Commission 
received a number of comments which indicated a need for the Guides. 
One comment, however, stated that the proposed Guides are at odds with 
current Commission law and policy and urged the Commission to abandon 
the Guides as they apply to shoes and boots.3 This comment also 
said that the proposed Guides convert silence about shoe content into 
an ``appearance of leather'' misrepresentation and then require 
disclosure to cure that misrepresentation.
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    \3\ FDRA2, #20 at 2.
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    Specifically, the Footwear Distributors and Retailers of America 
argues that the proposed Guides deal with conduct that is not 
prohibited under modern FTC deception law. The association cites 
International Harvester Co., 104 F.T.C. 949 (1984), as setting forth 
the circumstances under which the Commission will apply deception 
theory to omissions: (1) where the seller fails to disclose information 
necessary to prevent an affirmative statement from creating a 
misleading impression, and (2) where the seller remains silent under 
circumstances which constitute an implied but false representation. 
International Harvester, however, also states that a deceptive omission 
can arise from the physical appearance of a product, and cites as 
authority a case in which the Commission upheld charges against a 
seller who failed to disclose that a simulated wood product was 
actually paper. Haskelite Mfg. Corp., 33 F.T.C. 1212, 1216 (1941), 
aff'd, 127 F.2d 765 (7th Cir. 1942). The proposed

[[Page 51579]]

Guides are designed to correct the same type of omission as that in 
Haskelite. Both cases provide support for the underlying premise of the 
Guides.
    The Footwear Distributors and Retailers of America also cites 
Thompson Medical, 104 F.T.C. 648, (1984), aff'd, 791 F.2d 189 (D.C. 
Cir. 1986), cert. denied, 479 U.S. 1086 (1987) and Leonard Porter, 88 
F.T.C. 546, (1976), as support for the proposition that a product 
appearing to be leather does not make an implied representation 
concerning the material from which the product is made. In Thompson 
Medical, the Commission said that if an initial review does not permit 
it to conclude with confidence that an implied message exists, it will 
not find the implied claim unless extrinsic evidence (consumer surveys, 
expert testimony) allows it to conclude that such a reading is 
reasonable. In Leonard Porter, the Commission found that consumers 
would not generally assume that certain souvenirs were handmade in 
Alaska by natives. The Commission said that, simply from the appearance 
of the items, it could not conclude that the items possessed the 
capacity to deceive as to their origin and method of manufacture.4 
With regard to the appearance of leather and the potential resulting 
content representation created by that appearance, however, a visual 
examination of the item is sufficient to determine whether a 
representation is made. Extrinsic evidence is unnecessary to determine 
the existence of the claim.
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    \4\ The Commission also said that complaint counsel's extrinsic 
consumer evidence did not appear to be representative either of 
current conditions or of any substantial segment of consumers and 
did not support a need for disclosures.
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    The Footwear Distributors and Retailers of America comment also 
expresses a belief that new high-tech synthetics are far superior to 
the synthetics used in the early 1960's, ``offering the appearance, 
comfort, breathability, durability, and other qualities that are 
comparable or superior to leather.'' The organization believes that the 
performance and value of the shoe, not the materials used, drive 
consumer choice. Further, Footwear Distributors and Retailers of 
America states that consumers do not assume that footwear is made of 
leather nor do they care about the exact materials used in shoes.
    The Commission believes that leather content representations likely 
are material to consumers. Two consumers who responded to the first 
request for comment indicated a belief that imitation leather, when 
used in shoes, may cause feet to sweat excessively.5 Another 
stated that animal lovers, vegetarians and others who do not wish to 
wear leather need to know what they are buying.6 Two other 
comments from the first set of comments indicated that the requirements 
of the Guides assist consumers in making purchasing decisions.7 
Although the Footwear Distributors and Retailers of America comment 
contends that these consumer comments are anecdotal evidence which 
should be rejected, the Commission believes that they demonstrate a 
desire on the part of consumers to be informed of the nature of a 
product and that this desire is common to a substantial number of 
consumers.
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    \5\ REK, #1; MA, #2 at 2.
    \6\ LMG, #5.
    \7\ MR, #3 and JAM, #4.
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    It seems likely that the appearance of leather in a synthetic 
material may be a representation that the product is leather. Further, 
price or other factors are unlikely to signal to consumers that a 
product which appears to be leather is not.8 Products made from 
synthetics that look like leather, especially synthetic athletic shoes, 
are often priced the same as similar products made of leather.
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    \8\ In contrast, consumers are unlikely to confuse a gold-toned 
product with real gold when the ``pretender'' sells for a fraction 
of the amount that gold items typically cost.
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    In addition, the Guides trigger disclosures for non-leather 
materials only when a product appears to be leather and is not. Many 
synthetics are intentionally made to simulate the look of leather, 
apparently because many consumers prefer leather. Other synthetic 
products, however, are clearly and visibly synthetic, and for such 
products disclosure requirements would not be triggered. Thus, the 
application of the Guides is properly limited to situations where 
consumers are likely to be misled about a product's true composition.
    In sum, it seems likely that that the appearance of leather in a 
non-leather product constitutes a representation that a product is 
leather. Consumers have come to rely upon the information provided 
pursuant to the Guides, and if the Commission did not adopt the 
proposed Guides, it is likely that confusion in the marketplace would 
result.
    B. Comments Concerning Products Covered by the Guides
    The request for comment on the proposed Guides contained questions 
related to (1) expansion of the Guides to include other types of 
products made of leather or imitation leather and (2) any special 
considerations for such products not addressed by the proposed Guides. 
For the reasons discussed below, the Commission has decided not to 
expand the Guides to cover additional types of products.
    A number of comments received in response to the first Federal 
Register notice concerning the three individual Guides addressed the 
expansion issue. One comment said that a single set of guides should 
cover all leather-using industries.9 Another stated that the 
Guides could be generalized to many, if not all, industries.10 
Leather Industries of America suggested that a set of leather 
definitions be developed to apply to all finished goods.11 The 
Luggage and Leather Goods Manufacturers of America stated, however, 
that it did not endorse combining the Guides because of the special 
circumstances in other industries.12 None of the second set of 
comments concerning the proposed Guides expressed any views on whether 
the Guides should be expanded to include additional products.
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    \9\ CL, #10 at 1.
    \10\ EK, #11 at 2.
    \11\ LIA, #8 at 4-5.
    \12\ LLGMA, #9 at 2.
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    Other than the request for special consideration of footwear 
contained in the Footwear Distributors and Retailers of America comment 
discussed above, only one comment from the second set of comments 
requested any special consideration for certain products. This comment 
came from a company which supplies paper and cover products to the 
bookbinding and looseleaf industry. The comment requested an exclusion 
for material thinner than 10/1000th of an inch, provided that the 
material is identified by some name which indicates the presence of 
non-leather ingredients (the company suggests the term ``reinforced 
bonded leather'') and that the material is used as covering 
material.13 No such exclusion has been incorporated into the 
Guides as adopted. The leather appearance of the product, rather than 
its thickness, makes a representation to consumers. Further, as 
addressed below, use of the term ``bonded leather'' is sanctioned by 
the proposed Guides, provided that appropriate disclosures are made.
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    \13\ EFI, #16 at 2.
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    While there are some arguments for broadening the Guides, they are 
not compelling. The record developed during this review does not 
provide sufficient support to justify expansion of the Guides. There 
are still many unanswered questions regarding the extent to which 
misrepresentations are made in other industries, how

[[Page 51580]]

consumers would interpret the appearance of leather for products in 
other industries, and whether there are special considerations for 
other industries. Thus, the Commission has decided that the Guides 
should not be expanded to cover additional products.14 
Nevertheless, all industries which utilize leather and imitation 
leather can obtain valuable guidance from the Guides. Because the 
Guides are interpretive of laws enforced by the Commission, these 
industries may obtain useful information from the Guides even though 
they are not specifically covered. Further, although other industries 
may not be within the coverage of the Guides, the Commission is in no 
way prevented from otherwise taking action against a company engaged in 
deceptive omissions.
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    \14\ The provision concerning the scope of the Guides is 
modified in that the term ``footwear'' is substituted for the 
enumeration of footwear items.
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C. Suggested Changes to the Guides

    A number of the comments received in response to the second request 
for comment suggested that certain changes be made to the proposed 
Guides. Generally, these suggestions fall into the following 
categories: (1) Use of the term ``Leather,'' (2) Multi-material Shoes, 
(3) Disclosure Requirements, (4) Concealed Innersoles, (5) Use of the 
term ``Bonded Leather,'' (6) Use of the term ``Waterproof,'' and (7) 
Deletion of Unnecessary Provisions.
1. Use of the Term ``Leather''
    Split leather is the leather which results from the splitting of 
hides or skins into two or more thicknesses, other than the grain or 
hair side. Top grain leather is the grain or hair side. As published 
for comment, the proposed Guides provided for use of the term 
``leather'' only when the material is top grain leather. Originally, 
the distinction was retained because of apparent differences between 
the performance and appearance of top grain leather and that of split 
leather, as well as possible consumer expectations with regard to these 
materials. Upon further consideration, the Commission has decided that 
the term ``leather'' would also be appropriate for split leather 
products.
    The European Union Directive 94/11/EC, which applies to footwear, 
allows split leather to be called ``leather'' without 
qualification.15 For this reason, two comments from the first set 
of comments urged that the Guides be amended to allow split leather to 
be called ``leather.'' 16 The comments suggested that 
technological advances have resulted in a split leather which is 
superior to that produced years ago. In support of preservation of the 
Guides' distinction between top grain and split leather, however, one 
of the first set of comments stated that split grain is less expensive, 
less attractive, and less durable than top grain leather, and that 
split leather is subject to ``crocking.'' 17 Another of that set 
of comments stated that the Guides should continue to permit only top 
grain leather to be called ``leather'' or ``genuine leather'' and that 
other forms of leather should include qualifying words.18
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    \15\ Under the European Union directive, leather which has a 
surface coating thicker than 0.15 mm cannot be called ``leather.'' 
Leather with a surface coating which does not exceed one third of 
the thickness of the material but is greater than 0.15 mm must be 
referred to as ``coated leather.'' The proposed Guides do not 
address coating materials because such materials were not addressed 
in the original Guides, and there is insufficient record evidence 
regarding practices in the United States upon which to base guidance 
about coatings.
    \16\ LIA, #8 at 4; FDRA, #12 at 3. FDRA restated this position 
in its second comment.
    \17\ FIA, #7 at 2. The comment stated that crocking is the 
transfer of color from the surface of a colored material to an 
adjacent area of the same material or to another surface, 
principally by rubbing. In its second comment, Footwear Industries 
of America again supported qualification of split leather because of 
differences in the performance and appearance of split leather and 
top grain leather.
    \18\ CL, #10 at 1.
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    One of the second set of comments reasoned that top grain leather 
is in fact a split--albeit the top grain split--of a cowhide or sheep-
skin.19 Further, the comment stated that top grain leathers are 
noted for their exceptionally low tear strength and structural 
weakness. The comment also said that it could be argued that there is 
no application where splits could not visually and physically replace 
or substitute top grain leathers, but that the reverse would not apply. 
The commenter stated that for use on the products its client 
manufactures, appointment books and diaries, splits are preferable for 
their strength characteristics and their blemish-free surface. Since 
these products are enhanced by use of split leather, the comment states 
that it would not be unfair or deceptive to represent that the products 
are leather, but that it would detract from the marketing of the 
products to refer to them as anything other than leather.20
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    \19\ FFHSJ, #18 at 1.
    \20\ Alternatively, the comment requested a clarification of the 
scope of the Guides to make clear that the Guides do not apply to 
the company's products.
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    Rather than relying upon the performance characteristics of split 
leather and top grain leather, the Commission believes that consumer 
understanding and the messages conveyed to consumers should be the 
focus in deciding whether to permit use of the term ``leather'' to 
describe split leather. Footwear Distributors and Retailers of America 
commented that there is no reason to assume that consumers distinguish 
between top grain and split leather.21 Another comment requested 
modification of the proposed Guides to accurately reflect consumer 
acceptance of split leather.22 The Commission believes that it is 
reasonable to assume that consumers do not perceive a distinction 
between ``leather'' and ``split leather'' and that consumers do not 
assume that ``leather'' means only ``top grain leather.'' Indeed, the 
relevant definition of leather is the ``dressed or tanned hide of any 
animal, usually with the hair removed.'' 23 If the Guides are 
modified to allow split leather to be called ``leather,'' manufacturers 
of top grain leather would be free to label their products as ``top 
grain leather'' if they so choose. It is likely that a number of top 
grain leather product manufacturers already label their products in 
this manner. If consumers are aware of any difference in the quality of 
various types of leather, the term ``top grain'' will likely convey 
more useful information to consumers than will the term ``split.''
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    \21\ FDRA2, #20 at 3.
    \22\ FFHSJ, #18 at 1.
    \23\ The American Heritage Dictionary, Houghton Mifflin Company, 
Third Edition (1992).
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    Based on the European Union position on split leather and the 
representation that the Commission believes is made to consumers by use 
of the term ``leather,'' the Commission deletes from the Guides the 
provision stating that only top grain leather can be called leather 
without qualification. Furthermore, the provision requiring disclosure 
of the presence of split leather and other references to the term 
``split leather'' are deleted.
2. Multi-Material Shoes
    Footwear Distributors and Retailers of America suggested that the 
proposed Guides should be more flexible with regard to multi-material 
footwear.24 The proposed Guides stated that if all or part of a 
shoe is non-leather with the appearance of leather, the general nature 
of the material or the fact that the material is not leather should be 
disclosed.25 The proposed Guides also stated that a product which 
is made principally of leather but which has

[[Page 51581]]

non-leather parts with the appearance of leather may be described as 
leather as long as there is a disclosure of the non-leather parts. 
Given the current design of footwear, it may have been necessary in 
order to comply with the proposed Guides to disclose the composition of 
a number of different parts of a shoe. Such a lengthy disclosure may 
have been cumbersome to manufacturers and confusing to consumers.
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    \24\ FDRA2, #20 at 4.
    \25\ Under the proposed Guides as published for comment, the 
composition of heels, stiffenings, and ornamentation was not 
considered when making the determination of whether a shoe, boot, or 
slipper may be called ``leather.''
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    The EU Directive on Footwear states that labels shall provide 
information on only three parts of a shoe: the upper, the lining and 
sock, and the outersole.26 The Commission believes that such a 
limitation is appropriate to prevent costly and cumbersome disclosures. 
Consequently, a footnote has been added to the Guides indicating that 
footwear is considered to be composed of these three parts.
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    \26\ The European Union Directive defines these three parts of a 
shoe as follows: (1) the upper is the outer face of the structural 
element which is attached to the outersole; (2) the lining and sock 
are the lining of the upper and the insole, constituting the inside 
of the footwear article; and (3) the outersole is the bottom part of 
the footwear article subjected to abrasive wear and attached to the 
upper.
    According to the Directive, labels must disclose the material 
which constitutes at least 80% of the surface area of the upper, 80% 
of the surface area of the lining and sock, and at least 80% of the 
volume of the outersoles. The Guides have not been modified to 
conform with the European Union Directive with respect to the 80% 
figure.
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    Footwear Distributors and Retailers of America suggest allowing use 
of a more flexible disclosure if a footwear part is composed of both 
leather and non-leather materials. For example, if the majority of the 
upper is leather, the following term would be used: ``leather and 
manmade upper.'' If leather is not the majority of the material: 
``upper of manmade and leather materials.'' Because such disclosures 
would inform consumers that the upper of a shoe is not entirely leather 
and would prevent deception, a footnote has been added to the Guides 
which states that, with regard to footwear, it is sufficient to 
disclose the presence of non-leather materials in the upper, the lining 
and sock, or the outersole, provided that the disclosure is made 
according to the predominance of materials. An example similar to the 
one mentioned above has also been added.
3. Disclosure Requirements
    People for the Ethical Treatment of Animals stated that its 
members, because of their ethical concerns, need labels affixed to 
products which accurately identify the material from which the product 
is made. The organization suggests that all leather products be labeled 
``Animals Suffered to Make This Product'' and that all non-leather 
products be labeled ``Cruelty-free Product.'' The aim of the Guides is 
to prevent misrepresentation of leather content. The disclosures 
provided in the proposed Guides accomplish this goal. The disclosures 
suggested by People for the Ethical Treatment of Animals are not 
appropriate in the context of the Guides.
4. Concealed Innersoles
    The proposed Guides currently state that shoes with visible parts 
having the appearance of leather but containing non-leather concealed 
innersoles should bear a disclosure of the composition of the 
innersoles.27 Initially, the Commission believed that insufficient 
evidence of consumer beliefs had been presented to warrant removal of 
this provision. On further consideration, however, the Commission now 
has decided that disclosure of the composition of concealed innersoles 
is not needed.
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    \27\ Concealed innersoles are the portion of a shoe hidden 
between the liner and the outersole of a shoe.
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    Comments from two trade associations addressed this issue. Footwear 
Industries of America objected to the Guides' not being limited to 
uppers and outersoles, the two main components of a shoe upon which the 
association believes consumers base their purchasing decisions.28 
The comment said that innersoles are typically covered with a sock 
lining or insole sock which conceals the innersole and separates it 
from the foot, so consumers are not deceived into thinking it is 
leather. Footwear Distributors and Retailers of America argued that the 
concealed innersole disclosure should be deleted given the absence of 
any empirical evidence that consumers care about concealed 
innersoles.29 The comment also said that consumers should not have 
any expectations at all about a part of the shoe which is not seen.
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    \28\ FIA2, #19 at 1. Footwear Industries of America also made 
this argument in its first comment.
    \29\ FDRA2, # 20 at 3. In its first comment, the organization 
stated that the Guides should not apply to concealed innersoles 
because consumers expect that the concealed portions of footwear 
bottoms, particularly innersoles, are made of synthetic material.
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    Footwear Industries of America stated that leather innersoles do 
not guarantee better performance, and that leather is no longer being 
used in this manner.30 The comment states that leather innersoles 
crack and break during flexing movements due to the effects of 
perspiration acids and humidity. The comment also estimates that less 
than 1% of the 1.6 billion pairs of shoes sold annually in the U.S. 
have a leather innersole, and that most are cellulose board. The 
association also provided information to indicate that cellulose board 
can outperform leather in a number of respects, including dimensional 
stability, porosity, and thermal conductivity.31 The information 
provided also indicates that the material is lighter in weight than 
leather and has a lower Ph factor than leather.
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    \30\ FIA2, #19 at 2.
    \31\ FIA5, #19 at 1.
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    As discussed above, with regard to footwear, the coverage of the 
Guides has been limited to the three main parts of footwear. Therefore, 
the provision regarding concealed innersoles has been deleted. A 
concealed innersole does not make any implied representation to 
consumers and, therefore, no disclosure of the content of concealed 
innersoles is necessary.32
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    \32\ As indicated above, the European Union Directive does not 
apply to concealed innersoles.
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5. Use of the Term ``Bonded Leather''
    In drafting the proposed Guides, the Commission considered a number 
of comments concerning use of the term ``bonded leather,'' which 
generally refers to material made of leather fibers held together with 
a bonding agent. Although the original three Guides did not mention the 
term ``bonded leather,'' they addressed this type of material, which is 
also called ``ground leather,'' ``pulverized leather,'' or ``shredded 
leather.'' The Shoe Content Guides and the Ladies' Handbag Guides 
allowed either a disclosure stating that the material is simulated or 
imitation leather or that the material is ground, pulverized, or 
shredded leather. The Luggage Guides stated that an accurate 
representation as to the ground, pulverized or shredded leather content 
of the material could be made, but that if the material had the 
appearance of being leather a disclosure must be made in accordance 
with the imitation leather provision of the Luggage Guides. The example 
given in the Luggage Guides contains a disclosure that shredded leather 
fibers are contained in the material, but that rubber adhesive and 
vinyl are also contained in the material. The Luggage Guides provide 
that consumers should be made aware of the different components in this 
type of material. The history of this issue was considered in drafting 
the proposed Guides, which state that if the term ``bonded leather'' is 
used (or if similar terms such as ``ground leather,'' ``pulverized 
leather,'' or ``shredded leather'' are used), a disclosure of the 
percentage of leather fiber and of the

[[Page 51582]]

percentage of non-leather substances contained in the product should be 
made.
    One of the comments expressed support for the proposed Guides' 
treatment of this issue.33 Another comment suggested that this 
material should be called ``reinforced bonded leather'' rather than 
simply ``bonded leather'' in order to put the public on notice that 
there are other ingredients in the material.34 A comment regarding 
the Waist Belt Rule suggested that the term ``bonded leather'' should 
be permitted to be used unconditionally.35 The Commission 
concludes, however, that use of the terms ``bonded leather'' or 
``reinforced bonded leather'' without further information is likely to 
confuse consumers as to leather content, and the best way to avoid such 
confusion is to include the disclosures as provided by the Guides.
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    \33\ FIA2, #19 at 1.
    \34\ EFI, #16 at 2.
    \35\ HI2, #24 at 1.
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    Another commenter supported using the term ``bonded leather'' but 
did not think the additional content information as provided by the 
Guides was the best solution.36 Cromwell Leather believed that a 
qualifying word before the term ``leather'' (such as ``bonded'' or 
``split'') will keep the Guides simple, yet effective, and suggests 
that ongoing education will increase consumer understanding of the 
qualifying terms. The comment stated that the proposed Guides' 
disclosure requirement for bonded leather will create additional costs 
and cause confusion because some manufacturers get bonded leather from 
more than one supplier. The company believes there should be a 75% 
leather fiber minimum for use of the term ``bonded leather'' (without 
further qualification). The comment states that there is widespread 
industry agreement on the 75% figure.
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    \36\ CL2, #21 at 1.
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    As discussed in response to the first set of comments, however, 
even if the 75% figure were an industry practice or standard, it would 
not prevent deception. In one of the original comments regarding the 
Waist Belt Rule, consumer survey evidence was provided in support of 
use of the term ``bonded leather.'' 37 The data provided indicates 
that some consumers may be misled by use of the term. Further, the term 
may be interpreted to mean that the material is of greater quality than 
leather,38 or is strengthened or reinforced leather. Without the 
qualifying information contained in the Guides, the term ``bonded 
leather'' may not inform consumers that non-leather fibers are 
contained in the material.
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    \37\ HI, #14, part 6.
    \38\ EK, #11 at 3 and letter dated February 3, 1964, to the 
Commission from counsel for the Tanners' Council of America at 10-
11.
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    The ecological benefits of using the term ``bonded leather'' 
(namely, encouraging the use of leather scrap or recycled leather 
fiber) are also addressed in the second set of comments. One of the 
comments urges the Commission to reconsider the decision not to require 
a minimum leather content for use of the term ``bonded leather'' 
because ecological benefits are subverted.39 Another comment 
urging a minimum threshold for use of the term stated that permitting 
any amount of leather fibers to be called ``bonded leather'' may 
diminish the use of recycled leather fibers and reverse the ecological 
progress the industry has made.40 Whether recycling goals are 
affected by use of the term ``bonded leather'' or not, consumers should 
be made aware of the contents of such material.
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    \39\ LIA2, # 17 at 1.
    \40\ CL2, #21 at 2.
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    One of the second set of comments urged the Commission to require a 
minimum leather content for use of the term ``bonded leather'' since 
consumers may not read fine print.41 The Guides already contain a 
provision regarding the form of disclosures which should prevent any 
``fine print'' from being used to mislead consumers. This provision 
states that the disclosures affixed to products and made in advertising 
should be conspicuous and clear and should be in close conjunction with 
the representation necessitating the disclosure.
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    \41\ LIA2, #17 at 1.
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    In summary, the Commission believes that consumers should be made 
aware of the contents of bonded leather and similar materials. The 
Guides' treatment of this issue accomplishes this objective. One change 
has been made to the ``bonded leather'' provision. The term 
``reconstituted leather'' has been added to the section concerning use 
of the terms ground, pulverized, shredded, and bonded leather. 
Apparently, this term is often used interchangeably with ``bonded 
leather.''
6. Use of the Term ``Waterproof''
    A number of comments expressed concern about the provision in the 
proposed Guides which relates to the term ``waterproof'' because the 
Guides provide for use of the term only if an item is impermeable to 
water.42 The comments argue that a product can be waterproof 
without being totally impermeable to water. New technology waterproofs 
leather by chemically modifying the leather fibers. Use of this 
material in footwear allows air molecules to pass through while 
preventing larger water molecules from reaching the foot. Total 
impermeability is not desirable since the ability of leather to breathe 
is a form of permeability. Leather Industries of America proposed the 
following modification:
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    \42\ LLGMA2, #24 at 1, LIA3, #17 at 1, LIA4, #17 at 1, FIA4, #19 
at 1.
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    It is unfair or deceptive to:
    (a) Use the term ``Waterproof'' to describe all or part of an 
industry product unless the designated product or material prevents 
water from contact with its contents under normal conditions of 
intended use during the anticipated life of the product or 
material.43
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    \43\ LIA3, #17 at 1. Footwear Industries of America and Luggage 
and Leather Goods Manufacturers of America each submitted a somewhat 
similar proposal, without reference to the anticipated life of the 
product.
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    Due to changes in technology and consumer acceptance of the modern 
waterproofing methods, the waterproof provision has been modified as 
contained in Leather Industries of America's suggestion.
7. Deletion of Unnecessary Provisions
    The proposed Guides stated that it is unfair or deceptive to 
misrepresent that a product is colored, finished, or dyed with aniline 
dye. One of the comments expressed concern about this provision.44 
Leather Industries of America stated that ``aniline leather'' is 
universally used in the industry in a non-chemical sense to describe 
leather that is finished without pigment coverage. The association 
believes that the term does not imply that the leather has been dyed 
with an aniline dye, only that the finish is clear and contains no 
pigment. Because the term ``aniline'' now refers to a clear finish 
which allows the surface to be seen, the Commission has removed the 
provision in the proposed Guides relating to aniline dye.
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    \44\ LIA2 at 1.
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    The same provision also deals with misrepresentations that a 
product is dyed, embossed, grained, processed, finished, or stitched in 
a certain manner. Such misrepresentations would fall within the general 
deception provision and do not need to be contained in a specific 
provision.
    Although no comments were received regarding the ``fictitious 
animal'' provision in the proposed Guides, this provision has also been 
deleted. Any representation that a product is made from the skin or 
hide of an animal that

[[Page 51583]]

does not exist would clearly fall within the general deception 
provision of the Guides.

III. Conclusion

    A number of changes to the Guides have been made based upon the 
second set of comments. The final Guides incorporate the following 
modifications:

--The scope of the Guides has been modified to use the term 
``footwear'' instead of a list of footwear items, and the term 
``footwear'' is used as appropriate throughout the Guides.
--The provision stating that only top grain leather can be called 
leather without qualification is modified. The provision requiring 
disclosure of the presence of split leather and other references to the 
term ``split leather'' have been deleted.
--The provision regarding concealed innersoles has been deleted.
--With regard to footwear, the Guides have been modified to state that 
for purposes of the Guides, footwear is composed of three parts: the 
upper, the lining and sock, and the outersole. A footnote has been 
added which says that with regard to footwear, it is sufficient to 
disclose the presence of non-leather materials in the upper, the lining 
and sock, or the outersole, provided that the disclosure is made 
according to predominance of materials.
--The term ``reconstituted leather'' has been added to the provision 
dealing with use of the terms ground, pulverized, shredded, or bonded 
leather.
--The provision concerning use of the term ``waterproof'' has been 
modified to allow the term to be used if a product or material prevents 
water from contact with its contents under normal conditions of 
intended use during the anticipated life of the product or material.
--The provision relating to misrepresentation that a product has been 
dyed with aniline dye and other specific misrepresentations has been 
deleted.
--The ``fictitious animal'' provision has been deleted as unnecessary.

List of Subjects in 16 CFR Part 24

    Advertising, Clothing, Distribution, Footwear, Imitation-leather 
products, Labeling, Ladies' handbags, Leather and leather products 
industry, Luggage and related products, Shoes, Trade practices, Waist 
belts.
    Accordingly, 16 CFR Part 24 is added to read as follows:

PART 24--GUIDES FOR SELECT LEATHER AND IMITATION LEATHER PRODUCTS

Sec.
24.0  Scope and purpose of guides.
24.1  Deception (general).
24.2  Deception as to composition.
24.3  Misuse of the terms ``waterproof,'' ``dustproof,'' 
``warpproof,'' ``scuffproof,'' ``scratchproof,'' ``scuff 
resistant,'' or ``scratch resistant.''

    Authority: 15 U.S.C. 45, 46.


Sec. 24.0  Scope and purpose of guides.

    (a) The Guides in this part apply to the manufacture, sale, 
distribution, marketing, or advertising of all kinds or types of 
leather or simulated-leather trunks, suitcases, traveling bags, sample 
cases, instrument cases, brief cases, ring binders, billfolds, wallets, 
key cases, coin purses, card cases, French purses, dressing cases, stud 
boxes, tie cases, jewel boxes, travel kits, gadget bags, camera bags, 
ladies' handbags, shoulder bags, purses, pocketbooks, footwear, belts 
(when not sold as part of a garment) and similar articles (hereinafter, 
``industry products'').
    (b) These Guides represent administrative interpretations of laws 
administered by the Federal Trade Commission for the guidance of the 
public in conducting its affairs in conformity with legal requirements. 
These Guides specifically address the application of section 5 of the 
FTC Act (15 U.S.C. 45) to the manufacture, sale, distribution, 
marketing, and advertising of industry products listed in paragraph (a) 
of this section. They provide the basis for voluntary compliance with 
such laws by members of industry. Conduct inconsistent with the 
positions articulated in these Guides may result in corrective action 
by the Commission under section 5 if, after investigation, the 
Commission has reason to believe that the behavior falls within the 
scope of conduct declared unlawful by the statute.


Sec. 24.1  Deception (general).

    It is unfair or deceptive to misrepresent, directly or by 
implication, the kind, grade, quality, quantity, material content, 
thickness, finish, serviceability, durability, price, origin, size, 
weight, ease of cleaning, construction, manufacture, processing, 
distribution, or any other material aspect of an industry product.


Sec. 24.2  Deception as to composition.

    It is unfair or deceptive to misrepresent, directly or by 
implication, the composition of any industry product or part thereof. 
It is unfair or deceptive to use the unqualified term ``leather'' or 
other unqualified terms suggestive of leather to describe industry 
products unless the industry product so described is composed in all 
substantial parts of leather.1 This section includes, but is not 
limited to, the following:
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    \1\ For purposes of these Guides, footwear is composed of three 
parts: the upper, the lining and sock, and the outersole. These 
three parts are defined as follows: (1) The upper is the outer face 
of the structural element which is attached to the outersole; (2) 
the lining and sock are the lining of the upper and the insole, 
constituting the inside of the footwear article; and (3) the 
outersole is the bottom part of the footwear article subjected to 
abrasive wear and attached to the upper.
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    (a) Imitation or simulated leather. If all or part of an industry 
product is made of non-leather material that appears to be leather, the 
fact that the material is not leather, or the general nature of the 
material as something other than leather, should be disclosed. For 
example: Not leather; Imitation leather; Simulated leather; Vinyl; 
Vinyl coated fabric; or Plastic.
    (b) Embossed or processed leather. The kind and type of leather 
from which an industry product is made should be disclosed when all or 
part of the product has been embossed, dyed, or otherwise processed so 
as to simulate the appearance of a different kind or type of leather. 
For example:
    (1) An industry product made wholly of top grain cowhide that has 
been processed so as to imitate pigskin may be represented as being 
made of Top Grain Cowhide.
    (2) Any additional representation concerning the simulated 
appearance of an industry product composed of leather should be 
immediately accompanied by a disclosure of the kind and type of leather 
in the product. For example: Top Grain Cowhide With Simulated Pigskin 
Grain.
    (c) Backing material. (1) The backing of any material in an 
industry product with another kind of material should be disclosed when 
the backing is not apparent upon casual inspection of the product, or 
when a representation is made which, absent such disclosure, would be 
misleading as to the product's composition. For example: Top Grain 
Cowhide Backed With Vinyl.
    (2) The composition of the different backing material should be 
disclosed if it is visible and consists of non-leather material with 
the appearance of leather, or leather processed so as to simulate a 
different kind of leather.
    (d) Misuse of trade names, etc. A trade name, coined name, 
trademark, or other word or term, or any depiction or device should not 
be used if it misrepresents, directly or by implication, that an 
industry product is made in whole or in part from animal skin or hide, 
or that

[[Page 51584]]

material in an industry product is leather or other material. This 
includes, among other practices, the use of a stamp, tag, label, card, 
or other device in the shape of a tanned hide or skin or in the shape 
of a silhouette of an animal, in connection with any industry product 
that has the appearance of leather but that is not made wholly or in 
substantial part from animal skin or hide.
    (e) Misrepresentation that product is wholly of a particular 
composition. A misrepresentation should not be made, directly or by 
implication, that an industry product is made wholly of a particular 
composition. A representation as to the composition of a particular 
part of a product should clearly indicate the part to which the 
representation applies.2 Where a product is made principally of 
leather but has certain non-leather parts that appear to be leather, 
the product may be described as made of leather so long as accompanied 
by clear disclosure of the non-leather parts. For example:
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    \2\ With regard to footwear, it is sufficient to disclose the 
presence of non-leather materials in the upper, the lining and sock, 
or the outersole, provided that the disclosure is made according to 
predominance of materials. For example, if the majority of the upper 
is composed of manmade material: Upper of manmade materials and 
leather.
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    (1) An industry product made of top grain cowhide except for frame 
covering, gussets, and partitions that are made of plastic but have the 
appearance of leather may be described as: Top Grain Cowhide With 
Plastic Frame Covering, Gussets and Partitions; or Top Grain Cowhide 
With Gussets, Frame Covering and Partitions Made of Non-Leather 
Material.
    (2) An industry product made throughout, except for hardware, of 
vinyl backed with cowhide may be described as: Vinyl Backed With 
Cowhide (See also disclosure provision concerning use of backing 
material in paragraph (c) of this section).
    (3) An industry product made of top grain cowhide except for 
partitions and stay, which are made of plastic-coated fabric but have 
the appearance of leather, may be described as: Top Grain Cowhide With 
Partitions and Stay Made of Non-leather Material; or Top Grain Cowhide 
With Partitions and Stay Made of Plastic-Coated Fabric.
    (f) Ground, pulverized, shredded, reconstituted, or bonded leather. 
A material in an industry product that contains ground, pulverized, 
shredded, reconstituted, or bonded leather and thus is not wholly the 
hide of an animal should not be represented, directly or by 
implication, as being leather. This provision does not preclude an 
accurate representation as to the ground, pulverized, shredded, 
reconstituted, or bonded leather content of the material. However, if 
the material appears to be leather, it should be accompanied by either:
    (1) An adequate disclosure as described by paragraph (a) of this 
section; or
    (2) If the terms ``ground leather,'' ``pulverized leather,'' 
``shredded leather,'' ``reconstituted leather,'' or ``bonded leather'' 
are used, a disclosure of the percentage of leather fibers and the 
percentage of non-leather substances contained in the material. For 
example: An industry product made of a composition material consisting 
of 60% shredded leather fibers may be described as: Bonded Leather 
Containing 60% Leather Fibers and 40% Non-leather Substances.
    (g) Form of disclosures under this section. All disclosures 
described in this section should appear in the form of a stamping on 
the product, or on a tag, label, or card attached to the product, and 
should be affixed so as to remain on or attached to the product until 
received by the consumer purchaser. All such disclosures should also 
appear in all advertising of such products irrespective of the media 
used whenever statements, representations, or depictions appear in such 
advertising which, absent such disclosures, serve to create a false 
impression that the products, or parts thereof, are of a certain kind 
of composition. The disclosures affixed to products and made in 
advertising should be of such conspicuousness and clarity as to be 
noted by purchasers and prospective purchasers casually inspecting the 
products or casually reading, or listening to, such advertising. A 
disclosure necessitated by a particular representation should be in 
close conjunction with the representation.


Sec. 24.3  Misuse of the terms ``waterproof,'' ``dustproof,'' 
``warpproof,'' ``scuffproof,'' ``scratchproof,'' ``scuff resistant,'' 
and ``scratch resistant.''

    It is unfair or deceptive to:
    (a) Use the term ``Waterproof'' to describe all or part of an 
industry product unless the designated product or material prevents 
water from contact with its contents under normal conditions of 
intended use during the anticipated life of the product or material.
    (b) Use the term ``Dustproof'' to describe an industry product 
unless the product is so constructed that when it is closed dust cannot 
enter it.
    (c) Use the term ``Warpproof'' to describe all or part of an 
industry product unless the designated product or part is such that it 
cannot warp.
    (d) Use the term ``Scuffproof,'' ``Scratchproof,'' or other terms 
indicating that the product is not subject to wear in any other 
respect, to describe an industry product unless the outside surface of 
the product is immune to scratches or scuff marks, or is not subject to 
wear as represented.
    (e) Use the term ``Scuff Resistant,'' ``Scratch Resistant,'' or 
other terms indicating that the product is resistant to wear in any 
other respect, unless there is a basis for the representation and the 
outside surface of the product is meaningfully and significantly 
resistant to scuffing, scratches, or to wear as represented.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 96-25358 Filed 10-2-96; 8:45 am]
BILLING CODE 6750-01-P