symbols, marks, and coverings which by no possibility can cause confusion between his goods and those of competitors, that the courts look with suspicion upon one who, in dressing his goods for the market, approaches so near to his successful rival that the public may fail to distinguish between them. The law is not made for the protection of experts, but for the public-that vast multitude which includes the ignorant, the unthinking, and the credulous, who, in making purchases, do not stop to analyze, but are governed by appearances and general impressions (Florence Manufacturing Company v. J. C. Dowd & Co., 178 F. 73, 75). This statement of the law has been cited with approval in many of the Commission's cases beginning with the case of Federal Trade Commission v. Balme (23 F. (2) 615 (decided in 1928)).

Much the same principle was laid down by the Supreme Court of the United States in Federal Trade Commission v. Standard Education Society, et al. (302 U. S. 112), in which that court said:

The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the supicious. The best element of business has long since decided that honesty should govern competitive enterprises, and that the rule of caveat emptor should not be relied upon to reward fraud and deception.

It is the duty of the Federal Trade Commission to act in the public interest and to see that the general public and competitors are protected against that small segment of manufacturers and vendors who engage in unfair methods of competition or unfair acts or practices. It is the duty of the Commisison to proceed against monopolies, restraints of trade, price discriminations, and similar violatons of law in the interest of the honest competitors of such violators. It is the duty of the Commission to proceed against those who falsely represent their goods and wares, those who falsely advertise food, drugs, and therapeutic devices, in the interest of health as well as the pocketbook of the consuming public.

The provisions of this bill would, in my opinion, seriously weaken the provisions of the Federal Trade Commission Act, particularly the provisions of the Wheeler-Lea Act, upon which a subcommittee of the House Committee on Interstate and Foreign Commerce, under the guidance of the chairman of your full committee, and with the assistance and full cooperation of the author of this bill, who was also a member of the subcommittee, labored for many weeks so arduously and successfully. The Wheeler-Lea Act was designed to enable the Federal Trade Commission more fully to protect the health of that large section of the public which has to depend largely upon proprietary remedies. The Commission appreciates the value of and the necessity of such remedies, but it has a serious responsibility to see that the advertising of such remedies is not false, deceptive, or misleading, and to see that a small percentage of the manufacturers and vendors of such remedies be not permitted to take advantage of the consuming public, however gullible or ignorant or credulous the persons deceived may be.

I feel that the pending amendments are not only inadvisable but would be a definite handicap to the Commission in accomplishing the purposes that this committee and the Congress desire accomplished. Mr. SADOWSKI. Thank you, Mr. Whiteley.

Are there any questions?

Mr. REECE. There are two, Mr. Chairman.

It would seem to me as if there are two considerations presented in your statement; one has to do with the propriety and power of the court to modify an order of the Federal Trade Commission, and the other one goes to placing a ceiling upon the amount of the fines that may be imposed against the company for a violation.

Is it your view and the view of the Commission that the courts do have power to modify an order of the Commission?

Mr. WHITELEY. It certainly is, Congressman.

Mr. REECE. Then, how do you account for the statement in the brief which was filed in the Alpacuna case which reads as follows:

Unless the findings and order are either outside the line of evidence or represent abuses of discretion, there is no power in the court to change the findings of an order

and then again

it is still contended, we repeat, that the court has no power to modify the order in this case

and again—

in view of the facts as above presented it is strongly contended that the Court has no power to modify the order in this case.

Mr. WHITELEY. Of course, Congressman, those statements were made with respect to the facts in that particular case, and the facts having been as admitted by counsel before the Supreme Court yesterday, counsel for the Siegel Co., that the record amply sustained the findings of fact made by the Commission, the statements there made under such circumstances, were that there was no power in the court to set aside or to change those findings or to modify an order based upon such findings.

It is implicit, it seems to me, in what was said there that in order for the court to have the power to set aside or modify, you must show that the facts found by the Commission were not based upon substantial evidence, or there must be some question of law in issue.

Mr. REECE. But now let us see the opinion of Judge Hand on the record.

Mr. WHITELEY. May I interrupt you there? This case was decided in the third circuit, not by Judge Hand.

Mr. REECE. That is right, I misquoted.

On the record we doubt whether we should have concluded that the disparaging statements were misleading, but since our effort ends as soon as we find substantial support for the findings, this part of the order must also be affirmed. Are there not other cases in which the courts have indicated that they do not have the power to modify an order?

Mr. WHITELEY. I think not, Congressman, except where the order is not supported by competent and substantial evidence. I think that the courts have read into the words used in the statute originally that is the word "evidence," the words "substantial evidence" and the words "competent evidence."

Mr. REECE. If there is no evidence, or sufficient evidence, then the court would no doubt rule adversely to the findings of the Commission. That goes without saying?

Mr. WHITELEY. That is correct.

Mr. REECE. But even if there is evidence to support the findings of the Commission, the court might yet feel that the order was too harsh to do justice under all of the circumstances. Would it, in those cases, have power to modify the order?

Mr. WHITELEY. Not if the order were based upon substantial evidence. And if you depart from that rule, you depart from the substantial evidence rule, and you, in effect, grant two trials upon the facts. That is what this bill provides for, which we contend is not only unnecessary but unwise.

Mr. SADOWSKI. Did you wish to answer that question, Mr. Kelley? Mr. KELLEY. It is a very nice question that is raised.

There can be no answer with any degree of finality, to that particular question, until the Supreme Court decides the Alpacuna case. The Royal Milling case went to the Supreme Court of the United States; it involves the use of the word "mills," where the concerns did not mill in the sense of making flour. In that case, the Commission-there was not any question of the preponderance of evidence, but in applying the remedy, the Commission thought the public could be protected only by taking the word "mills" out of the name.

The Supreme Court, in that case, said, "No; we will modify the order," because in that case there was a question of law involved, and that is always the case for the judiciary.

So they said, "Leave the word 'mills' in your name, but put on it, 'not grinders of wheat.""

Several years later we had a case go to the Supreme Court that involved a question as to whether certain lumber was white pine. The Commission found that it was not white pine. The Court found that it was not white pine. In that case, the Court said that that was a question for the Commission, it was a factual question. It was like calling a fabric wool when it was cotton. You could not say "white pine" and right under it say "yellow pine." It would be a contradiction. So, in that case, the Court held that it was a matter within the discretion of the Commission.

Now, in this Alpacuna case, I dislike to forecast what the Court is going to hold, but I think they are going to hold that that question as to whether or not the name should go out entirely, or whether or not the Commission thought it could be left qualified and still protect the public interest, was a matter of discretion for the Federal Trade Commission.

If they feel, however, that it was a matter of discretion, that case will stand just as it is. If, however, the Court should feel that it was an abuse of discretion by the Commission, the Court will order mandate down for the circuit court to qualify that name.

It seems to me that what the Court is likely to do in that case is to hold that it was a matter of discretion for the Commission, and they will not disturb it unless they feel that the Commission abused it.

On the other hand, it might be, and when you are forecasting what a court is going to do by listening to the argument, it is pretty hard— on the other hand, they may hold that it is a question of law, that the court has power to modify it. The Court listened intently for 2 hours. If in the Alpacuna case, the white pine case governs, there will be, probably, one rule.

If the Royal Milling case governs, there will probably be another rule.

And then there are in-between cases where the Supreme Court held on some like questions of Labor Board questions that have come up, that have got to be considered; it is a nice question.

Mr. REECE. Now, then, along the same line, in the Hirschfeld case, and I will address the question to either of you, where the action of the Commission was upheld, the statement of the court, by Judge Hand, reads this way:

It does not follow that the relief granted should extend to an entire suppression of the word "mill," and if we felt ourselves free to control the remedy we might be satisfied to modify the order by merely adding some such suffix as the Supreme Court thought adequate in the Royal Milling case

and then he goes on

The petitioners are near enough to being manufacturers to justify their use of the title as it stands provided all chances of deceptions were removed.

And then he goes on to refer to the decision in the Royal Milling

case.

The Supreme Court has much circumscribed our powers to review the decisions of administrative tribunals in the point of remedy as they have always been circumscribed in the review of the facts.

Mr. KELLEY. That is right in that particular case, in the cases just like it.

Mr. REECE. If I may just add the rest of the sentence, if you please, such tribunals possess competence in their special fields which forbids us to disturb the measure of relief which they think necessary.

Mr. KELLEY. Yes. There are not many of these cases, but there are three or four, or perhaps two or three, at least, where the court said:

We thought the remedy that the Commission applied was too harsh. We would do it by qualifying the name, but because of decisions of the Supreme Court, we feel that we do not have that power.

That precise question is going to be answered by the Supreme Court when it hands down this Alpacuna case.

Mr. REECE. But my question was, Is it the opinion of the Commission that the courts do have authority to modify an order of the Commission, if it thinks the facts would justify it in so doing?

Mr. KELLEY. Of course, those are nice questions.

The court does not have any power, there is no doubt about that, to reweigh the evidence and arrive at a different ultimate conclusion where the Commission has found, on evidence, otherwise.

Mr. REECE. But, Judge, my question does not go to the right of the court to weigh the evidence, but upon the face of the record submitted to the court, for whatever reason it determines sufficient, thinks an order of the Commission is too harsh to do justice to all parties concerned, then does it have power to modify the order?

Mr. KELLEY. In my opinion, in that particular kind of a case, the Supreme Court is going to hold, when that decision comes down, that the court does not have that power unless the court feels that the Commission abused its discretion.

Whether or not in this Alpacuna case that will be what the court will say, or whether or not they will say that it was one within the discretion and they did not abuse it, or whether they will hold that

the Commission did abuse its discretion, I cannot forecast, but I will say this, these things are pretty difficult; the Commission is trying to balance things and protect the public interest and still not go too far. I recall a case that came over my desk about a month About ago. 15 years ago, there was a case that came before the Commission with respect to the use of a name, of a company doing business in interstate commerce through salesmen and agents. The Commission found that that name was misleading and deceptive, but they did not prohibit it entirely. They qualified it.

Well, time went on, and just before Mayor LaGuardia left office he had an investigation made. It appeared that there were a number of soldiers, ex-servicemen, who had come back who were induced to sign contracts and make obligations that they otherwise would not have because of this misleading advertising and misrepresentations. Mayor LaGuardia's office made an investigation, and a very fine investigation, very thorough, and a final report on it. It came down. I do not know what action the Commission will take, but it all goes back that it never would have happened had the Commission at that time required them to eliminate that name entirely.

In this Alpacuna case, and these others cases-they may be wrong in one case; maybe they are wrong in more than one case-but here are some men, five men, who say, "Can we allow that name qualified and still protect the public, or is it necessary because of inherent deception wrapped up in it-must we tell them to eliminate the name in order to protect the public?"

The court, I think, will hold-again I am forecasting-that the Commission would not be disturbed if the court feels that they did not abuse that discretion. I think that if the court at any time finds or thinks that the Commission in so acting did abuse the discretion they will set it aside.

Mr. REECE. Mr. Chairman and Mr. Kelley, in my question it was not my purpose to state whether the court does or does not have that; and certainly not to criticize the Commission in its contention, if it so contends, that the court does not have that. That is a matter which is determined legislatively, whether you do or do not have, then followed by the interpretation of the courts.

And my question did not go to these cases, but to the general proposition of whether the courts, generally speaking, have the right to modify the order.

I want to read again-if you will just wait a moment, please, in view of what you said about the obligation of the Commission to protect the public-the courts have the same obligation, Judge, and in that line, and that would follow my question here-whether the courts have a right, upon review, to modify the order. In this case from which I was quoting, from Judge Hand, in striking a balance between the conflicting interests involved, they-that is, the Commission-for all practical purposes, are supreme.

Then he goes on-I did not see the expression on his face when this was announced, but I think I can see that he may have been a little facetious somewhere in this following sentence:

We do not forget from time immemorial this duty has been entrusted to courts, but that it is irrelevant, Congress having now created an organ imbued with skill which comes of long experience and administrative study, its conclusions inevitably supersede those of the courts which are not similarly so endowed.