medicines and making these preparations, under attack, was to get out from under the Food and Drug Administration, which had these criminal prosecutions and these forfeitures and condemnations, and get over into the Federal Trade Commission, because the Federal Trade Commission had not any criminal process. All that the Commission did was, first of all, to serve a notice of a complaint, give the defendant the opportunity to come in, prove whether he should or should not have an order against him, and then after a trial and a duration of hearings, which might last for several years, the most that the Commission could do would be to issue an order to cease and desist which carried no penalties unless there was thereafter a violation of the order.

Altogether, the pasture looked a great deal greener over in the Federal Trade Commission than it did with the Food and Drug Administration.

So, Mr. Hoge's idea, which was a very brilliant conception, was accepted by the proprietary people. Some people in the food industry seemed to think that they would get along better with the Federal Trade Commission than they could with the Food and Drug. But a considerable number of the people in the medical preparations field, the pharmaceutical industry, thought they would prefer to stay with the Food and Drug Administration.

There was thereby this contest. The Federal Trade Commission, as I recall, took no part in it, excepting that they were quite unwilling to have jurisdiction which they had heretofore had in respect to advertising taken away from them and put in the Food and Drug Administration. The latter were quite keen to have anything more they could have, because they had spoken very strongly in favor of an improvement, by the amendment of the law, of the Food and Drug Administration. And so, over a period of between 1935 and 1938 this fight raged.

Finally there was an attempt on the part of Congress to reconcile this fight. Senator Copeland took a strong view in that case for the Food and Drug Administration. Congressman Reece participated with others in trying to do something which would in some way harmonize this great fight as to whether the Food and Drug Administration should be denuded, or should be given the new powers or whether they should be turned over to the Federal Trade Commission, so that finally, as the result of all of this, there was an amendment first to the Federal Trade Commission; and that is why we got section 15 of the Federal Trade Commission Act, and also a few months later, some amendments to the Food and Drug Administration Act.

As to the Federal Trade Commission Act, I want to read the way in which the section was written up for the Federal Trade Commission Act.

The additions which were made to the Federal Trade Commission Act begin with the present sections 12, 13, 14, and 15. I will run over them very briefly until I get to section 15, which is now the subject of the proposed amendment in the Reece bill.

Section 12 (a) added this provision:

That it shall be unlawful for any corporation or person to disseminate any false advertisement which may induce the purchase of food, drugs, devices,

or cosmetics, and that that shall be an unfair or deceptive act or practice in commerce within the meaning of section 5.

I mention this just for the continuity of what provisions were added, and there is no attempt in the Reece bill to change that.

Next was added section 13, which stated, I am picking out the high points in the section, that whenever the Commission has reason to believe that any person engaged in or about to engage in dissemination of an advertisement which is in violation of section 12, which I have just read, the Commission may make an application to enjoin in any court of the United States. There is no attempt to vary that. I merely mention that to indicate the scope of the additions which were made in 1938.

Then comes new section 14: Any person, corporation, and so forth, shall, if the use of the commodity advertised may be injurious to health, be punished by a fine or imprisonment, and so forth. There is no change in that.

Then there were various provisions as to exempting publishers and advertising agencies, and so forth, under certain conditions, and then comes section 15, which is to be changed if the Reece bill becomes law. That provides, briefly, this:

The term "false advertisement" means an advertisement other than labeling, which is misleading in a material respect, and in determining whether any advertisement is misleading, there shall be taken into account, among other things, not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual. No advertisement of a drug shall be deemed false if disseminated only to members of the medical profession.

Now, the Reece bill proposes to lop off from section 15, as I have read it, this provision:

or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement or under such conditions as are customary or usual.

That particular provision was one of the things which was agitated from 1935 to 1938 by consumers organizations and by people generally; a large number of Congressmen were extremely eager to have that. That was really one of the things which started the necessity of having a strengthening of the Food and Drug Administration and that section, that is, that part of that section, is struck out by the Reece bill. There has been very little said heretofore as to that, and the only statement which has been made, if I can quote Congressman Reece's own statement, which was sent to me, was that this is done to harmonize with the Food and Drug and Cosmetics Act as it now stands.

There cannot be any harmonizing resulting, because there is a corresponding provision in the Food and Drug Act as it now stands and as amended in 1938, and the only possible result of the passage of the Reece bill, as it now stands, will be to destroy, take out from the Federal Trade Commission Act, one of the essential things which was desired in all of the agitation from 1935 to 1938, in which Senator Copeland and other Senators and Congressmen, eager to meet this demand because of these consequences, which occurred, wanted to have that stopped.

Mr. REECE. Mr. Chairman, you are now discussing the provision of the bill for the control of labels and warnings. Adequate provisions were written in the food and drug bill for such control.

Mr. MONTAGUE. I am discussing the Federal Trade Commission Act. I am not discussing the Food and Drug Act.

Mr. REECE. And the Food and Drug Administration is the agency that is primarily charged with conserving the health of the public, and it was the agency which we gave the facilities, the laboratory facilities and the technical facilities to enable it to determine the therapeutic effect of the various medicines, and charged that agency with the responsibility of doing so.

Now, then, I presume you may have seen the letter of the Administrator of the Food and Drug Administration under date of July, 13, 1945, submitted to me with reference to the provisions of the bill, in respect to those provisions to which you are now referring, and it closes with this admonition:

I shall be delighted to be of all possible assistance to you in your purpose to eliminate difficulties that have characterized the administration of legislation for the control of food, drug, and cosmetics. When the Congress decided in 1938 to delete the advertising provision from the food and drug and cosmetics bill, we accepted the decision philosophically. I am not urging that regulatory control of these commodities be combined under any particular agency. The important thing is the character of the control legislation. In my judgment it should provide for similar procedures against defenses of adulteration, misbranding, and false advertising, so that allegations on all three can be combined in a single action when the facts warrant. It should provide that the issues be tried initially in the Federal courts. It should vest clear responsibility for enforcement in a single agency. It should not interfere with the operation of the existing legislation to control unfair practices that do not come within the statutory definition of adulteration, misbranding, and false advertising.

And as you have just referred, Mr. Montague, the original food and drug bill, S. 2000, and its comparable bill, which was prepared in the Department of Agriculture, at that time referred to as the Tugwell bill, vested all advertising, the authority and control over all advertisers relating to food and drug in the Food and Drug Administration, thereby taking it out of the Federal Trade Commission.

And, as you have stated, I interested myself in trying to harmonize the supervision and permit the Federal Trade Commission to retain general jurisdiction over advertising of food, drugs, and cosmetics, along with authority over other advertising, but we were particular in the efforts to permit the authority over misbranding and labeling to remain in the Food and Drug Administration of the Department of Agriculture. And, no doubt, you are familiar with the various statements which were made in the report of the committee on the Lea bill, and on the Pure Food Drug Administration bill and with the speeches on the floor of the House in which that was clearly enunciated and that the witnesses for the Federal Trade Commission, when before our committee, stated that they had no intention at that time of exercising authority over misbranding and labeling, and were not of the opinion that the bill did give them that authority which was later given to them through the interpretation of the courts. The Food and Drug Administration is the agency that is charged with the responsibility of protecting the health of the public.

The reason I am making this statement at this time was the inference that might be drawn from what you said that I was intending

to weaken the Food and Drug legislation in some way so as to loosen the control, so far as protecting the health of the public is concerned. And that certainly is not the purpose, nor the effect of my bill. All the consuming agencies at the time this question was before the committee originally advocated giving full control over all advertising relating to foods and drugs to the Food and Drug Administration and take it away from the Federal Trade Commission entirely. They said they were then fearful dual control would result in conflict.

I do not want us to get off on to a discussion to indicate that anybody is intending to weaken the Food and Drug Administration legislation which, of course, we are not.

Mr. MONTAGUE. You are interrupting with your own statement my own, and I would like very much to make sure that you have now said everything that you wish before I take up.

Is there anything you want to add to what you have just said, be

cause

Mr. REECE. Mr. Chairman, there is a very good way by which you can attain my seat here, and that is to run for it. And then if I want to attain your position before the committee

Mr. MONTAGUE. I have the greatest difficulty presenting my statement, if I am constantly interrupted by long statements from you, and I thought if you would complete your remarks on that subject, and then be patient while I reply, I will take up your statement seriatim, because it has covered much ground, but I cannot do it being constantly interrupted.

I think the stenographer has more statement from you than he has from me as it stands now.

Mr. REECE. Mr. Chairman, the purpose of my interjecting a statement at that time was the statement by the witness which indicated that I was in favor of weakening the Pure Food and Drug Administration so as to impair the health of the public.

Mr. MONTAGUE. I made no such statement about you. I did say that the purpose of the Proprietary Association was very distinctly to give to the Food and Drug Administration no increase of power, but to put it over in the Federal Trade Commission, where they knew the process was so much easier and softer that it would amount to a softening of the situation for anyone which might come in.

I do not say that you shared that purpose, but you helped to further it, and I know it was their purpose because they so stated. Mr. REECE. That is not correct.

Mr. MONTAGUE. The accusation runs to the Proprietary Association and to the people backing it, and insofar as you furthered it, I do not accuse you of knowing what their purpose was, I do not say that you knew you were going to do that, but that is what they wanted to have happen, and that is what did happen.

Mr. REECE. Dr. Dunbar, who is the Administrator of the Food and Drug Administration, charged with the responsibility of protecting the health of the public, says my bill will strengthen his position in accomplishing that end.

Mr. MONTAGUE. Have you finished your statement?

May I answer it now? Every time I start to answer, you break in. I would very much like, as I have paid my own expenses and hotel and

travel expenses to come down here, to be allowed to get in my statement.

Mr. REECE. I am going to interrupt the witness just as little as possible, but I do not want him to commit me.

Mr. MONTAGUE. I think I have exonerated you from this, but not the people who have been pushing it, and insofar as you followed along in their purpose, you helped further a purpose which I do not accuse you of knowing what you are doing, but they knew what they were doing.

Now, you have quoted

Mr. REECE. Mr. Chairman, I do not like that inference for two reasons: In the first place, I do not like the inference that I may have done it knowingly; and, in the second place, I do not like the inference that I did it not knowing what I was doing, and, therefore, was being duped by somebody else.

Mr. MONTAGUE. I do not say that you were duped. I say that you did not have foresight to see what could happen. Now, it has happened, and again, I ask, may I be allowed to make my statement; if I may proceed, Mr. Chairman.

Mr. SADOWSKI. After all, Mr. Montague is the witness before the committee this morning. We want to hear Mr. Montague. You may proceed.

Mr. MONTAGUE. Dr. Dunbar has been quoted many times. The first thing I learned in poker was that an ace would beat a five spot, and I will now quote from Paul McNutt, who at that time was the Administrator, and therefore stands over, in the Administration of the Food and Drug, considerably above Dr. Dunbar. Here is what Mr. McNutt said in his letter to the chairman of this committee, in a letter which I will read you dated May 3, 1945, and it bears specifically on exactly the thing that I am now speaking of in the amendment, which the Reece bill proposes to section 15. I am quoting now Administrator McNutt:

Section 3 of the bill would amend the definition of false advertisement in section 15-A of the Federal Trade Commission Act. The amendment would change a provision of the act which is identical in its import with the provision of section 201 (n) of the Food, Drug and Cosmetics Act. It would repeal the mandate of the present law to the administrative agency and to the courtsI am speaking of the mandate now to the Federal Trade Commissionto take into account in determining whether representations for an article are misleading, failure to reveal facts, material with respect to the consequences which may result from the use of the article under the conditions prescribed in those representations, or under such conditions as are customary or usual. In deleting this mandate, we think the conclusion is inescapable that the standard of truthfulness set up by the statute is lowered. While the amended langauge would perhaps be construed as broadly as the original provision it is by no means apparent how the courts could do so in the light of the legislative history created by Mr. Reece's declared purposes in making the change.

Now, that is an absolutely correct statement. It is made by Administrator McNutt. It has never been withdrawn. If I had time, I could show you that Dr. Dunbar does not attempt to get away from it. He merely says, if you are going to give a lot of power, he would prefer to have it in the Food and Drug Administration, but as an interpretation of the purpose of this new change; namely, to delete the words which I read, it shows that there will be a weakening not