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Then in order to enable the Food and Drug Administration to move rapidly in protecting the public, where an injurious drug appeared on the market, it was given power to seize the injurious drug and immediately remove it from sale and likewise move directly in the Federal court by direct action, both in connection with the seizure and also in a criminal prosecution where the law had been violated, and likewise go immediately into the Federal court and get an injunction to enjoin any violation of the law.

Now, Dr. Dunbar in his letter with reference to this bill called attention to the fact that the Federal Trade Commission's chief course of action to protect the public lay in obtaining a cease and desist order, which usually follows a long investigation and development, as has been referred to by the witnesses with respect to the Federal Trade Commission.

Then that is subject to legal procedure of different types. Dr. Dunbar points out instances where the limitation over a cease-anddesist order has continued for as high as 2 years, during which time the injurious drug could be sold and would continue to be sold.

Now, what would your idea about any additional power which the Food and Drug Administration might need, giving all that power to the Food and Drug Administration so as to enable it to move directly on every phase of the distribution of a product so as to enable it to rapidly protect the interests of the public without waiting for long legal proceedings such as obtains in the case of a cease-and-desist order?

Mrs. KEYSERLING. We feel that the powers of the Food and Drug Administration are exceedingly important and have been very effective in protecting the consumer from the sort of products that you mention.

However, we feel that there is a different function, different in emphasis, having to do with the advertising of a commodity, which the Federal Trade Commission has exercised under the present law.

We feel that the consumer is informed of many of these potentially harmful products through advertising, and therefore would regret it if the present law which makes it necessary for an advertisement to indicate potential dangers were limited.

We feel that it is important that that power not be limited. It is quit different power from that which the Food and Drug Administration exercises.

Then, to comment on another aspect of what you have just said. Now, as to delays in proceeding: As we have reviewed the record we have been very much impressed by the fact that although the Federal Trade Commission receives thousands of complaints, a very large proportion of the practices which violate the law have been altered on a voluntary basis without the institution of legal proceedings.

As we have looked at the record we have found that a very small proportion of the cases actually have had to go into the courts, and we feel that that is something which should very definitely be borne in mind.

It is to us an impressive record.

Mr. REECE. Have the Commission or members of the staff advised with you with regard to your statement?

Mrs. KEYSERLING. No, in no way.

Mr. ROGERS. Just one question: I would like to know your interpretation and also the grounds of your opposition to this sentence contained in the bill :

The findings of the Commission as to the facts, if supported by the preponderance of the evidence, shall be conclusive.

Now, just what is your interpretation of that sentence, and what is your counter-proposition to it?

Mrs. KEYSERLING. May I ask where that appears?
Mr. ROGERS. That is at the bottom of page 2, beginning at 22.

Mrs. KEYSERLING. Yes. I think, sir, I have spoken to that in my statement. We feel that this introduces a very significant change in the law at the present time.

At the present time the law reads that the findings of the Commission as to the facts if supported by the evidence shall be conclusive.

To change this, to bring in “if supported by the preponderance of the evidence, shall be conclusive" seems to us to alter the entire function of the Commission and the entire function of the courts in relation to this matter. This change would mean that the courts would have to review the evidence on both sides, all of the evidence, to review and weigh all the facts themselves, and substitute, in our judgment, their judgment as to the facts for the judgment of the Commission experts.

If a change of this type is justified here, it would be equally warranted for all the other quasi-judicial agencies of the Government, and you would be throwing into the courts an immense amount of work’to determine, weigh, and judge all the wacts in the widest range of cases.

You would be compelling the justices to become experts in this enormously complicated range of business. We feel that it would tremendously increase the burden of work in the court; it would induce a great many people to bring cases into court who are now not so doing.

We feel that expense of litigation would be vastly increased; that justice would be much slower than it is at the present time. The very important services which the Commission is now rendering would, we believe, be lost to the Government.

Mr. Rogers. In other words, you think that the courts' duties would be expanded enormously if this were introduced ?

Mrs. KEYSERLING. Yes, I am sure.

Mr. O'HARA. On the question of expertness, what qualification is required of a Commissioner on the Federal Trade Commission that is not required of a Federal judge?

Mrs. KEYSERLING. He is, I presume, and I am very confident is, an expert in this specific Government field. Whereas the justice's territory would have to cover a tremendously wide field if he were called upon to review and weigh all the facts, not only in a field such as this but in all of the other fields that would come before him if similar changes were made in the law with regard to other quasijudicial functions.

Mr. O'HARA. Then your view would be that a Federal circuit court of appeals would not be qualified to pass on any question of appeal and therefore there should not be any appeal? Is that right?

Mrs. KEYSERLING. Not at all.

Mr. O'HARA. Do you not have that same situation today, that Federal circuit judges are required to pass upon this so-called "expertness” qualification on an appeal under the present law?

Mrs. KEYSERLING. Is it not true that the justices now determine whether the decisions have been arbitrary and unreasonable and whether there is substantial evidence confirming the position which the agency has taken?

Now, that seems to me a very different matter and one which would require a different type of qualification from weighing the entire record.

Mr. O'Hara. Well, they pass upon the same facts and the same law, do they not? Under either rule they pass upon the same facts and the same law ?

Mrs. KEYSERLING. I think you are correct that it is a matter of degree, but it seems to me that the issue of degree is a very fundamental and important one.

Mr. O'Hara. But are we not going around in circles if we say that we change this rule from a substantial rule to the preponderance rule, that it is going to overburden the courts and the courts are not capable of handling it?

Mrs. KEYSERLING. As I have indicated before, I am not a lawyer. My field is economics. I have discussed this matter with many able lawyers of my acquaintance.

I was formerly general secretary of the National Consumers League, and we were concerned with similar problems in other fields at the time.

The position which I have indicated has been based on my thinking which has been developed since that time.

Mr. O'HARA. Do you not think that the people who are involved in these proceedings have substantial rights under the Constitution which they should have determined in a sound, constitutional way?

Mrs. KEYSERLING. I do indeed, and I feel that the present procedure more than adequately meets that standard.

Mr. O'HARA. Thank you.

Mr. SADOWSKI. Is Mr. Griffith here? If not, then the next witness is Mr. Benjamin Marsh.

Will you state your name and organization you represent?

Mr. MARSH. Benjamin C. Marsh. I am executive secretary of the Peoples Lobby, with headquarters here in Washington.

The address is 810 F Street NW.



Mr. MARSI. Mr. Chairman and members of the committee, I sent a letter to the chairman asking that it be incorporated in the hearing in opposition to this bill, and I want to repeat that and ask that it be placed in the record.

I hesitate to take more than a few minutes this morning since Judge Davis and others of the Commission who know the details are here, but I would like to point this out: I have been here about 28 years, or a little over, in Washington, watching legislative procedure, and I realize that some of the questions by the members of the committee this morning to the preceding witness emphasized that we have to limit the extent to which courts are able to upset decisions reached by administrative bodies such as the Federal Trade Commission, which, let me note, was constitutionally created by act of Congress.

Now, you simply cannot burden the courts with details. Frankly, I think that this is an indirect method, this bill, or an attempt rather, to paralyze the Federal Trade Commission.

That may not be the intent of the introducer. But if you are going to have to appeal and appeal and appeal, you are simply going to stymie action, and the consumers do not want it.

Let me give a little illustration. I think it was around 1924 or 1925 that there was a marked reduction in the appropriation for the Federal Trade Commission.

Well, I had followed that Commission's work ever since I came here in 1910, and I wrote Members of Congress. I was then with the Farmers National Council and similar organizations, that that was an attempt to put out the eyes of Uncle Sam.

I gave that story to the press. Well, that appropriation was restored. I think it is a very unwise move and a very foolish political move to try to paralyze the Federal Trade Commission, which has a long record of very effective work.

Of course, they need more appropriations, and I assume that they could render their decisions and issue their orders to cease and desist much more rapidly if they had adequate appropriation, but I hope that this committee will not be a party, and I am pretty sure the Congress will not be a party to any effort to—well, I am to repeat, to paralyze and render inoperative in large measure the very effective work which the Federal Trade Commission has done.

I think it would be a very poor campaign slogan.
Mr. SADOWSKI. Is that all?

Mr. MARSH. It is enough. Shall I file a carbon copy of my letter with the clerk?


Mr. REECE. I have a letter here from Mr. Griffith, together with a copy of resolution by the New York Board of Trade.

Mr. SADOWSKI. We will be glad to insert that in the record at this point, and if he has any further statement to make it can follow at this point in the record. (The statement is as follows:)


New York , N. Y., January 31, 1946. Re H. R. 2390. Hon. CARROLL REECE,

House of Representatives, Washington, D. C. DEAR CONGRESSMAN REECE: The New York Board of Trade, by unanimous vote of its board of directors, in whom authority is vested, adopted the enclosed resolution in support of H. R. 2390.

It would be deeply appreciated if this could be inserted in the record of the hearing on this bill.

I wish to reiterate the telegram sent to you that we regret deeply that we were unable to be present at the hearing on January 29. It is my understanding, however, that the hearings may be continued next week. If so, may we respectfully petition for the opportunity of being heard. Very truly yours,

M. D. GRIFFITH, Executive Vice President.


Support the Reece bill, H. R. 2390

Be it resolved, That the New York Board of Trade by this action of its directors endorse H. R 2390, designed to amend the Federal Trade Commission Act. This board does not believe that there should be combined in any administrative agency of government the combined responsibilities and authority of investigator, prosecustor, judge, and jury. This board believes in the right of proper appeal to the duly constituted courts, which is a separate and distinct agency of our Government; and be it further

Resolved, That this opinion be sent to the President of the United States and to the appropriate committees of Congress.

Mr. REECE. And in that same connection, authority was previously given, and I have here a statement by Charles Wesley Dunn.

Mr. SADOWSKI. This ought to follow then, after the witnesses who apppeared at the first part of the hearing.

Our next witness is Mr. Nathan B. Williams.

Mr. WILLIAMS. If the chairman please, I am in favor of the bill, and prefer to be heard after the other side is concluded.

Mr. SADOWSKI. All right.

Well, Judge, it looks as though we have completed our list of witnesses, and we will hear you next.



Mr. Davis. Mr. Chairman and gentlemen, I wish first to refer to some questions which have been asked this morning, before I enter upon my regular statement.

Mr. REECE. Before the judge begins, if I may, I would like to make inquiry as to whether you in the views which you contemplate expressing, speak for the other members of the Commission.

Mr. Davis. How was that?

Mr. REECE. Do you speak for the other members of the Commission in the views that you contemplate expressing?

Mr. Davis. I was authorized by the full Commission to appear and speak for the Commission and to supervise the presentation on behalf of the Commission.

Now, Mr. Chairman, first with respect to the relative functions of the Commission and the courts, that goes back to the administrative process.

Practically every civilized country in the world—all the leading ones at least—like England, France, Germany, the United States, and various others, and some of them even before the United States, gradually drifted into the adoption of the administrative process; and regardless of what some of us may believe, I think it is generally agreed by students of government that these administrative commissions are here to stay.

Because they grew out of necessity. In this complex age, when we have such a tremendous amount of problems, which vitally involve and affect the public interest, the Congress conceived that it was necessary to set up some tribunals to protect the public interest.

Now, most of what has been said here, especially by the proponents, related to protecting certain business interests. But the Federal Trade Commission and these other commissions were created by Congress for the specific purpose of protecting the public interest.

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