as to be not misleading. On the other hand, it is not desired to permit an advertiser to make a representation as to therapeutic effect, for example, in such manner as to be misleading, merely because he can find some expert opinion to support his claim.

As to the legal problem, it is a well-known principle of law that a statute providing punishment for the commission of an offense must describe the offense with a reasonable degree of certainty. There are clear implications in cases arising under the Food and Drugs Act of June 30, 1906, that Congress may not penalize the making of a statement or representation regarding the truth of which, qualified opinion differs (Seven Cases v. United States, 239 U. S. 510; United States v. Johnson, 221 U. S. 488). See also American School of Magnetic Healing v. McAnnulty (187 U. S. 94).

The reason for this limitation on the power of Congress is apparent. Whether an advertisement would be misleading in a material respect and thus be a falseadvertisement, would depend, in a prosecution, on whether the jury found it to be misleading.

If Congress were to provide that a representation, as to the correctness of which qualified opinion differed, would be misleading if the jury agreed with the experts holding one view, but not misleading if the jury agreed with the experts holding the other view, it will be seen that the advertiser would not be able to tell in advance whether his advertisement violated the statute. There would therefore exist the kind of uncertainty which would invalidate the statute. On the other hand, it is undesirable to permit misleading claims to be made simply because experts can be found to substantiate them.

It is in the light of these considerations that the committee on the advice of the House Legislative Counsel, included in the definition of "false advertisement" the following provision: "but if, at the time of the dissemination of the advertisement, there exists a substantial difference of opinion, among experts qualified by scientific training and experience, as to the truth of a representation, the advertisement shall not be considered misleading on account of such representation, if it states clearly and prominently the fact of such difference of opinion. Nothing in this paragraph shall be construed as requiring the making of such statement as to difference of opinion; and failure to so state the fact of such difference of opinion shall not relieve the Government of the burden of establishing the misleading character of the representation."

This provision does not increase the burden of the accused in making his defense, but affords him an opportunity for his own protection where uncertain as to his rights.

What this provision does is to afford the advertiser a means of knowing how he can, with certainty, establish his innocence under the statute, thus removing the danger of invalidity growing out of alleged uncertainty. It applies only in the narrow class of cases where such a difference of opinion exists, and it does not, it should be noted, require the inclusion in the advertisement of a statement as to the difference of opinion. Whether or not such a statement is included, the basic question as to whether the advertisement is misleading always remains to be determined.

It is to be noted that the difference of opinion involved is one existing at the time the advertisement is disseminated. Therefore, if it is necessary to establish in court the existence of such a difference of opinion, it will be done by testimony as to the state of expert opinion on the question at the time of the dissemination and not by testimony as to the sate of expert opinion at the time of the trial or by testimony of individual experts at to their opinion regarding the truth of the representation. There is no obligation on the advertiser to publish a statement that there is a difference of opinion as to the product he advertises. He may avail himself of such a defense if he desires to do so. Whether or not he does so does not relieve the Government of carrying its burden of establishing the misleading character of the false advertisement. Thus the misleading character of the representation will be a burden for the prosecution to prove in every case and the truthfulness of the representation may be a defense in every case.

"TO THE INTEREST OF THE PUBLIC"

Under section 5 action by the Federal Trade Commission is taken in those cases where it appears to the Commission that a proceeding is "to the interest of the public."

The elucidation of this language by the Supreme Court in Federal Trade v. Klesner (280 U. S. 19), is enlightening. In that case the Court, speaking through Justice Brandeis, said:

"In determining whether a proposed proceeding will be in the public interest the Commission exercises a broad discretion. But the mere fact that it is to the interest of the community that private rights shall be respected is not enough to support a finding of public interest. To justify filing a complaint the public interest must be specific and substantial. Often it is so, because the unfair method employed threatens the existence of present or potential competition. Sometimes, because the unfair method is being employed under circumstances which involve flagrant oppression of the weak by the strong. Sometimes, because, although the aggregate of the loss entailed may be so serious and widespread as to make the matter one of public consequence, no private suit would be brought to stop the unfair conduct, since the loss to each of the individuals affected is too small to warrant it.

*

"Its preliminary determination that institution of a proceeding will be in the public interest, while not strictly within the scope of that provision, will ordinarily be accepted by the courts. But the Commission's action in authorizing the filing of a complaint, like its action in making an order thereon, is subject to judicial review. The specific facts established may show, as a matter of law, that the proceedings which it authorized is not in the public interest, within the meaning of the act. If this appears at any time during the course of the proceeding before it, the Commission should dismiss the complaint."

SENATE AMENDMENTS

This bill, as it passed the Senate, contained amendments to several sections of the Federal Trade Commission Act other than section 5 and which are omitted from the bill as now reported. It developed at the hearing some of these amendments were highly controversial, and of doubtful, if of any value. Some of them excited controversies that might impede legislation on this subject and did not seem of sufficient consequence to justify their inclusion. The bill as proposed to be amended by the House committee carries out, and we believe, improves, the substantial amendments proposed by the Senate to section 5.

To summarize, this legislation is needed to give the Federal Trade Commission jurisdiction over unfair acts and practices for consumer protection; to relieve the Government of unnecessary time and expense in proving an injury to a competitor as a prerequisite to consumer protection and to the suppression of an unfair method in commerce, and to give more effective and necessary control over false advertisements of food, drugs, devices, and cosmetics.

The legislation seeks to establish no new bureaus or to take on new fields of activities, but rather to provide more effective methods of accomplishing that, which broadly speaking, are the purposes of the existing law.

CHANGES IN EXISTING LAW

In compliance with paragraph 2a of Rule XIII of the Rules of the House of Representatives, changes in the Federal Trade Commission Act of September 26, 1914, made by the bill as passed the Senate are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman):

"AN ACT To create a Federal Trade Commission, to define its powers and duties, and for other purposes

"Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That a commission is hereby created and established, to be known as the Federal Trade Commission (hereinafter referred to as the commission), which will be composed of five commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate. Not more than three of the commissioners shall be members of the same political party. The first commissioners appointed shall continue in office for terms of three, four, five, six, and seven years, respectively, from the date of the taking effect of this Act, the term of each to be designated by the President, but their successors shall be appointed for terms of seven years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed: Provided, however, That upon the expiration of his term of office a Commissioner shall continue to serve until his successor shall have been appointed and shall have qualified. The commission shall choose a

chairman from its membership. No commissioner shall engage in any other business, vocation, or employment. Any commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office. A vacancy in the commission shall not impair the right of the remaining commissioners to exercise all the powers of the commission.

"The commission shall have an official seal, which shall be judicially noticed.

"SEC. 4. [That the] The words defined in this section shall have the following meaning when found in this Act, to wit:

"Commerce' means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.

“‘Corporation' [means any company or association] shall be deemed to include any company, trust, so-called Massachusetts trust, or association, incorporated or unincorporated, which is organized to carry on business for its own profit or that of its members, and has shares of capital or capital [stock, and any company] stock or certificates of interest and any company, trust so-called Massachusetts trust, or association, incorporated or unincorporated, without shares of capital or capital [stock,] stock or certificates of interest, except partnerships, which is organized to carry on business for its own profit or that of its members. "Documentary evidence' [means] includes all documents, papers, [and correspondence in existence at and after the passage of this Act] correspondence, books of account, and financial and corporate records.

"Acts to regulate commerce' means the Act entitled 'An Act to regulate commerce', approved February 14, 1887, and all Acts amendatory thereof and supplementary thereto and the Communications Act of 1934 and all Acts amendatory thereof and supplementary thereto.

"Antitrust Acts' means the Act entitled 'An Act to protect trade and commerce against unlawful restraints and monopolies', approved July 2, 1890; also [the] sections 73 to 77, inclusive, of an Act entitled 'An Act to reduce taxation, to provide revenue for the Government, and for other purposes', approved August 27, 1894; [and] also the Act entitled 'An Act to amend sections 73 and 76 of the Act of August 27, 1894, entitled "An Act to reduce taxation, to provide revenue for the Government, and for other purposes", approved February 12, 1913; and also the Act entitled 'An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes', approved October 15, 1914. "SEC. 5. That unfair methods of competition in commerce, and unfair or deceptive acts and practices in commerce, are hereby declared unlawful.

"The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, and common carriers subject to the Acts to regulate commerce, from using unfair methods of competition in commerce and unfair or deceptive acts and practices in commerce.

"Whenever the Commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair [methods] method of competition or unfair or deceptive act or practice in commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof would be to the interest of the public, it shall issue and serve upon such person, partnership, or corporation a complaint stating its charges in that respect, and containing a notice of a hearing upon a day and at a place therein fixed at least thirty days after the service of said complaint. The person, partnership, or corporation so complained of shall have the right to appear at the place and time so fixed and show cause why an order should not be entered by the Commission requiring such person, partnership, or corporation to cease and desist from the violation of the law so charged in said complaint. Any person, partnership, or corporation may make application, and upon good cause shown may be allowed by the Commission to intervene and appear in said proceeding by counsel or in person. The testimony in any such proceeding shall be reduced to writing and filed in the office of the Commission. If upon such hearing the Commission shall be of the opinion that the method of competition or the act or practice in question is prohibited by this Act, it shall make a report in writing in which it shall state its findings as to the [facts,] facts and shall issue and cause to be served on such person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and desist from using such method of competition or such act or practice. Until a transcript of the record in such [hearing] hearings shall have been filed in a circuit court of appeals of the United States, as hereinafter provided, the

Commission may at any time, upon such notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any report or any order made or issued by it under this section.

"If such person, partnership, or corporation fails or neglects to obey] Whenever the Commission shall have reason to believe that such person, partnership, or corporation has failed or neglects to obey, or intends or is about to disobey, such order of the Commission while the same is in effect, the Commission may apply to the circuit court of appeals of the United States, within any circuit where the method of competition [or the act or practice] in question was used or where such person, partnership, or corporation resides or carries on business, for the enforcement of its order, and shall certify and file with its application a transcript of the entire record in the proceeding, including all the [testimony] evidence taken and the report and order of the Commission. Upon such filing of the application and transcript the court shall cause notice thereof to be served upon such person, partnership, or corporation and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall have power to make and enter upon the pleadings, [testimony,] evidence, and proceedings set forth in such transcript a decree affirming, modifying, or setting aside the order of the Commission, and enforcing the same to the extent that such order is affirmed, and to issue such writs as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public or to competitors pendente lite. The findings of the Commission as to the facts, if supported by [testimony,] evidence, shall be conclusive. To the extent that the order of the Commission is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of such order of the Commission. If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the Commission, the court may order such additional evidence to be taken before the Commission and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The Commission may modify its findings as to the facts, or make new findings, by reason of the additional evidence so taken, and it shall file such modified or new findings, which, if supported by [testimony,] evidence, shall be conclusive, and its recommendation, if any, for the modification or setting aside of its original order, with the return of such additional evidence. The judgment and decree of the court shall be final, except that the same shall be subject to review by the Supreme Court upon [certiorari] certiorari, as provided in section 240 or the Judicial Code.

"Any party required by such order of the Commission to cease and desist from using such method of competition or such act or practice may obtain a review of such order in said circuit court of appeals by filing in the [court] court, within sixty days from the date of the service of such order, a written petition praying that the order of the Commission be set aside. A copy of such petition shall be forthwith served upon the Commission, and thereupon the Commission forthwith shall certify and file in the court a transcript of the record as hereinbefore provided. Upon the filing of the transcript the court shall have the same jurisdiction to affirm, set aside, or modify the order of the Commission and to enforce same and to issue such writs as in the case of an application by the Commission for the enforcement of its order, and the findings of the Commission as to the facts, if supported by [testimony,] evidence, shall in like manner be conclusive. In no case shall it be necessary to establish a violation of the order of the Commission as a condition precedent to the affirmance, modification, or setting aside of the same or entering an order enforcing it.

"At the end of sixty days from the date of service of any order to cease and desist of the Commission, such order shall become final and conclusive against any person, partnership, or corporation subject thereto failing or neglecting during such sixty-day period to seek court review of such order as provided in this Act as amended; and in case any such person, partnership, or corporation shall fail or neglect to obey such order after the same shall have become final and conclusive and while the same is in effect, such person, partnership, or corporation shall be liable to a penalty of $500 for each such offense and of $25 for each day it continues, which shall accrue to the United States and may be recovered in a civil action brought by the United States.

"The jurisdiction of the circuit court of appeals of the United States to affirm, enforce, [set aside, or modify] modify, or set aside orders of the Commission shall be exclusive.

"Such proceedings in the circuit court of appeals shall be given precedence over other cases pending therein, and shall be in every way expedited. No order of the Commission or judgment of [the] court to enforce the same shall in any wise relieve or absolve any person, partnership, or corporation from any liability under the antitrust Acts.

"Complaints, orders, and other processes of the Commission under this section may be served by anyone duly authorized by the Commission, either (a) by delivering a copy thereof to the person to be served, or to a member of the partnership to be served, or to the president, secretary, or other executive officer or a director of the corporation to be served; or (b) by leaving a copy thereof at the residence or the principal office or place of business of such person, partnership, or corporation; or (c) by registering and mailing a copy thereof addressed to such person, partnership, or corporation at his or its residence or principal office or place of business. The verified return by the person so serving said complaint, order, or other process setting forth the manner of said service shall be proof of the same, and the return post-office receipt for said complaint, order, or other process registered and mailed as aforesaid shall be proof of the service of the same. "SEC. 6. That the Commission shall [also] have power

"(a) [To] Upon the direction of the President or either House of Congress, or upon its own initiative, to gather and compile information_concerning, and to investigate from time to time the organization, [business,] business conduct, business practices, and business management of any person, partnership, or corporation engaged in commerce, excepting [banks] banks, and common carriers subject to the Act to regulate commerce, and [its] the relation of such person, partnership, or corporation, to other individuals, partnerships, and corporations Land to individuals, associations, and partnerships].

"(b) To require, by general or special orders, persons, partnerships, or corporations engaged in commerce, excepting banks, and common carriers subject to the Act to regulate commerce, or any class of them, or any of them, respectively, to file with the Commission in such form as the Commission may prescribe annual or special, or both annual and special, reports or answers in writing to specific questions, furnishing to the Commission such information as it may require as to the organization, business, conduct, practices, management, and relation to other corporations, partnerships, and individuals of the respective persons, partnerships, and corporations filing such reports or answers in writing. Such reports and answers shall be made under oath, or otherwise, as the Commission may prescribe, and shall be filed with the Commission within such reasonable period as the Commission may prescribe, unless additional time be granted in any case by the Commission."

NOTE. Subsection (c) of the existing law becomes subsection (f) by the amendment made to existing law by this bill.

"[h] (c) To investigate, from time to time, trade conditions in and with foreign countries where associations, combinations, or practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United States, and to report to Congress thereon, with such recommendations as it deems advisable.

"(d) Upon the direction of the President or either House of [Congress] Congress, to investigate and report the facts relating to any alleged violations of the Antitrust Acts by any person, partnership, or corporation.

"(e) Upon the application of the Attorney General, to investigate and make recommendations for the readjustment of the business of any person, partnership, or corporation alleged to be violating the Antitrust Acts, in order that the corporation may thereafter maintain his or its organization, management, and conduct of business in accordance with law.

"[(c)] (f) Whenever a final decree has been entered against any defendant person, partnership, or corporation in any suit brought by the United States to prevent and restrain any violation of the Antitrust Acts, to make investigations, upon its own initiative, of the manner in which the decree has been or is being carried out, and upon the application of the Attorney General it shall be its duty to make such investigation. It shall transmit to the Attorney General a report embodying its findings and recommendations as a result of any such investigation, and the report shall be made [public] public, in the discretion of the Commission. "[(f)] (g) To make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to the Congress and to submit therewith recommendations for additional legis