Senator HRUSKA. Oh, well, now, that I would like to see, because the language of the Food and Drug Act does give express authority to issue or promulgate regulations, and it has been doing it ever since its inception, and they have the force of law. Senator HART. I think it would be helpful for the record, and for all of us, to ask you to indicate the force and effect of those regulations under existing law. As I understand it, they are advisory. They are not regulations that have the effect of law. Senator Ribicoff has responded to your question as to what this bill proposes that is not already existing law. You are also reminded that the prohibition of this bill would apply against the "cents off" deals. This is another example that is not covered by existing law. And it goes beyond food, drugs, and cosmetics in its application. Senator RIBICOFF. That is right. I mean there is nothing in the Food and Drug Act that gives you any authority over detergents, soaps, the many compounds, the many products that you now have, and some of the greatest abuses are in these fields that take up so much of the consumer dollar. Senator HRUSKA. But is that not a trade practice, whether it is detergents, foods, or anything else? Senator RIBICOFF. NO. Senator HRUSKA. That falls within the jurisdiction of the Federal Trade Commission? You see, you name another subject, and it will fall under the Federal Trade Commission. We already have had testimony from the Chairman of that Commission, and we will have some more in which he will testify, if he testifies as he has heretofore, that they have the power to deal with these things. Senator RIBICOFF. My understanding is that both Mr. Dixon and Mr. Larrick have indicated that they do not have the power. Senator HART. We will have the benefit of the testimony of both of those gentlemen. My impression of their previous testimony is at variance-reading the full testimony in context-with the impression that Senator Dirksen has and apparently Senator Hruska has. We will have specific comment from both Mr. Dixon and Mr. Larrick now that the question has been raised. Senator HRUSKA. Except that this statement of Senator Dirksen's refers to the record, the record of testimony given by Chairman Rand Dixon, quoting now from Senator Dirksen's statement: Chairman Dixon reviewed the various acts giving the Federal Trade Commission jurisdiction over packaging and labeling and reviewed some of the decisions of the Federal Trade Commission and the courts, and he concluded there can be no doubt that the Federal Trade Commission's general power under existing law would authorize it to issue such orders when false or misleading packaging and labeling result in consumer deception. He cited the Supreme Court of the United States v. Morton Salt Co. when the Court held: The fact that powers long have been unexercised well may call for close scrutiny as to whether they exist. But if granted, they are not lost by being allowed to lie dormant any more than nonexistent powers can be prescripted by an unchallenged exercise. We know that unquestioned powers are sometimes unexercised from lack of funds, motives, or expediency or the competition of more immediately important concern. Now, I do not know what Chairman Dixon is going to testify when he appears later, but I have an idea that, inasmuch as in March of 1962 he did testify on this very point on page 821 of the hearings, he is not apt to stray too far from that type of assertion of jurisdiction and that type of court decision, whatever the ideas of any of us might be here. But I just did not want, Mr. Chairman, the idea to go abroad that there is not sufficient statutory power existent now which can be applied to all of these situations. Senator HART. That is to say, you want it understood that, in your judgment, there is now sufficient authority. I am very glad that you have the opportunity to make that plain. In my judgment, there is not adequate authority. That is what we are discussing now. Senator HRUSKA. And in the judgment of Chairman Rand Dixon, who is an authority in this field. He knows far more than I will ever learn about it, and he is a pretty good authority. Senator HART. I say amen to that. Senator RIBICOFF. As I read Commissioner Dixon's testimony, it is his feeling that this bill is absolutely necessary for them to do a proper job. I have the hearings here, and I am leafing through his testimony. Senator HART. You see, it is my feeling that this bill is directed against statements which are not false, which, indeed, may not be misleading, but which, nonetheless, do confuse the shopper, to the point of frustration, whether she has her glasses on or off. I think this bill is aimed at those who exploit the weakness of existing law, not that they are doing anything illegal. Senator RIBICOFF. Reading from Mr. Dixon's testimony: All of my instincts tell me that the problem here could be more clearly resolved if additional legislation, specific legislation, were enacted in this field. Now, continuing on, it would do much both to clarify business responsibility for fair packaging and accurate and complete labeling and to strengthen and facilitate the Commission's efforts to prevent deception. Of particular value in enhancing the Commission's ability to deal with these difficult and complex problems would be specific designation of specific packaging and labeling abuses and detailed authorization accompanied by these additional appropriations to promulgate affirmative, general standards of packaging and labeling to give additional protection to consumers against deception. That is why I believe it would be beneficial for this subcommittee and Congress in considering possible legislation under which the Commission has jurisdiction. I read his testimony differently, Senator Hruska. Senator HART. Senator Hruska and I carried away different impressions, as you can see, and we will have Mr. Dixon's testimony here next week. Senator HRUSKA. Just one other point. It was suggested that the regulations which are now issued and promulgated under the Food, Drug and Cosmetic Act are advisory. read from section 701 (a), which says: The authority to promulgate regulations for the efficient enforcement of this act, except as otherwise provided in this section, is hereby vested in the Secretary. Now, when it says "the efficient enforcement of this act," and it is followed by the fashion in which these regulations shall be made, published, and hearings held on them, and then they are enforced, it seems to me some question can be raised as to a statement or an idea that they are advisory only. Senator HART. It is my impression that section 701 has very limited application and does not relate to labeling. We will have counsel prepare an adequate statement on that. That is my very strong impression here. Senator HRUSKA. However, it does refer to the entire act, and the act does include the chapter on food and also on labeling, misbranding. Senator HART. Senator Ervin, I apologize to you and to the Secretary for not being able to call on you sooner. Senator ERVIN. I am enjoying it. It is very illuminating and somewhat confusing. Senator HART. The bill is aimed at reducing that confusion. Mr. RAITT. No questions. Senator HART. Senator, again, thank you. I think that this record is much the better for your comments. Senator RIBICOFF. Thank you very much. Senator HART. We have a distinguished member of the Judiciary Committee and a distinguished guest. I appreciate Senator Ervin presenting our next witness, the Secretary of Commerce. Senator ERVIN. Senator Hart, I am grateful to you as acting chairman of the subcommittee for extending to me the privilege of introducing the next witness. I realize that in exercising this privilege I am carrying coals to Newcastle. This is true because Secretary Hodges is my most distinguished constituent. I have been privileged to know Luther Hodges since he and I were college mates at the University of North Carolina, and since that time I have watched his career with increasing admiration and affection. Luther was endowed by his parents with a fine mind, a great heart, and a willing spirit. While they were rich in character, they were not too affluent in the goods of this world. Consequently, Luther had to work his way through the University of North Carolina by waiting upon tables and performing similar tasks. Having completed his education there, he entered the national industry at what might be described as the lowest ground. By his initiative, industry, and talents, he rose to the highest positions in that great industry. Having done this, he decided at a comparatively early age that he would like to retire from that industry and broaden the scope of his services to his generation. After performing notable services in a consultant capacity for the Department of Agriculture and having rendered a great service in Europe in connection with the administration of the Marshall plan, he returned to North Carolina. Although he had always been interested in political matters and had been a stanch supporter of his party, he entered politics first as a candidate for the Democratic nomination for Lieutenant Governor. Despite the fact that he had had no practical experience in politics and had no organization, he singlehandedly toured North Carolina and defeated two very experienced politicians for the nomination for Lieutenant Governor. While serving as Lieutenant Governor and ex officio president of the North Carolina State Senate, he was called suddenly to the Governor's office as a result of the death of Gov. William B. Umstead. He served slightly over 2 years as Governor by virtue of having been elected to the office of Lieutenant Governor, and then became a candidate in his own right for reelection to that office. He was elected the Governor of North Carolina by the largest majority ever recorded for that office by any candidate in the history of our State. In the office of Governor he performed a magnificent job, in keeping with the highest traditions of that office in North Carolina. I might add that, incidentally, North Carolina has been very fortunate in the character and caliber of its Governors and Luther Hodges lived up to the highest traditions; in fact, he did a job that could simply be described as superb. It was, therefore, not surprising to me that the President called him to serve the Nation in the capacity of Secretary of Commerce, and in performing the duties of this office he is doing the same fine and magnificent job that he has done in connection with every task to which he has set his hand or his mind or his heart. And so it is a great privilege to introduce to this committee one who needs no introduction to any American, and one who is, I claim, a young friend of many long years standing. I cannot remain to hear him testify. I have got to go over to the Rules Committee and beg some money from them for some subcommittees. Senator HART. I hope you have all success in your efforts. Senator HART. Mr. Secretary, all of us think that we do know you, but I think each of us in this room knows you a little better and feel even more strongly our regard and affection as a result of that introduction. We are very grateful that you took the time from what we know is an enormously demanding area to give to the committee your impression of this proposal. STATEMENT OF HON. LUTHER H. HODGES, SECRETARY OF COMMERCE Secretary HODGES. Thank you. Mr. Chairman, Senator Hruska, I do appreciate that overgenerous introduction and your comments, sir. I appreciate the opportunity of appearing before your committee this morning. I come to express administration support of S. 387, a bill designed to prevent deceptive methods of packaging or labeling consumer commodities. This bill, in my opinion, would not only serve to protect the interests of consumers throughout our country but would also serve to protect and advance the interest of manufacturers, packagers, and all other business elements participating in the distribution of consumer products. Last year, the President took express notice of the problems involved in packaging and labeling practices. In his consumer message to the Congress, the President referred to the hearings which Senator Hart and members of his subcommittee have conducted and he had this to say: Misleading, fraudulent, or unhelpful practices *** are clearly incompatible with the efficient and equitable functioning of our free competitive economy. Under our system, consumers have a right to expect that packages will carry reliable and readily usable information about their contents. And those manufacturers whose products are sold in such packages have a right to expect that their competitors will be required to adhere to the same standards. Mr. Chairman, last October I had the privilege of speaking at the 24th Annual Packaging Forum of the Packaging Institute which was held in Chicago. I might say, Mr. Chairman, that represents the bulk of the industry of those who make packages, as well as the bulk of those who buy packages for themselves. At that time I referred to the hearings being conducted by your committee. I commented on some of the packaging and labeling practices which seemed designed more to mislead than to inform: such as bottles with false bottoms and pinched waists to make them appear to hold much more than they do; such as boxes much bigger than their contents; such as large, giant and super sizes-but not small sizes; such as weights or contents printed so small as to be overlooked or printed in ink about the same color as the package so that regardless of size it might well be overlooked; such as the practice in some instances, which have been brought to light, of pricing "large economy size" of a product to cost more per ounce than the small size of that same product. I said this to the Packaging Institute last October: It seems to me at this point, that because responsibility is so widely distributed and hard to pin down, that some basic legislation might do a great deal of good in your industry. If an entire industry is required to comply with certain basic standards, no one segment, or handful of companies would need fear competitive reprisals. This basic legislation could eliminate the fear that the refusal of contracts would lead to a ruinous loss of sales, and could go far toward restoring public confidence. I believe that legislation along the lines of S. 387, which your committee is now considering, is the sort of basic legislation which can indeed be helpful, not only to the consumers of America but to all the business firms and businessmen engaged in the manufacture, packaging, and distribution of consumer commodities. I think, Mr. Chairman, that it has been very helpful that your committee has had this subject under study since June 1961. This study and consideration of the problems involved in regulating packaging and labeling will certainly insure against hasty or ill-advised legislative solutions. Your present bill, S. 387, represents a modification of S. 3745 which was introduced last session, and shows the result of your continued effort to write the best bill possible. The subject matter of S. 387 is of vital concern to the Department of Commerce. We are charged by law with the direct responsibility to foster, promote and develop the foreign and domestic commerce of the United States. The economy of our country depends greatly— if not entirely-upon the proper functioning of our competitive system. We know by experience in many areas of business activity that some degree of Government regulation is essential-so as to establish some 97158-63-pt. 1-3 |