States. The Commerce Department is supporting this effort financially and otherwise.

The Council has undertaken a survey of the teaching of ethics at collegiate schools of business. A questionnaire has been sent to deans of these schools to determine what the situation is, and what can be done to improve and intensify the teaching of business ethics.

A nationwide program of social action has been broached to religious leaders that will embrace retreats, study groups, and seminars with the clergy and business members of the congregation dealing with ehtics.

Finally, preliminary work has been undertaken looking to foundations and universities to set up studies in depth of current problems in business ethics. We hope to explore such problems as the extent to which business groups can establish ethical standards and deal with unethical members without running afoul of the antitrust laws.

I would like to make it abundantly clear that the Government is not sitting in judgment on the business community, or casting any reflections on its general character or the way in which businessmen as a whole conduct themselves. I felt when we were setting up the Ethics Council as I feel now that only a small percentage of businessmen were violating ethical standards, and that the public might lose faith in our free-enterprise system. Quite the contrary, it should be quite obvious that moral standards at the business level are on as high a plane as those of individuals of the community. But we must demonstrate that we are just as responsible in the highest possible sense to the needs of the community as we are astute in business and brilliant in management.

I am pleased that the Packaging Institute was one of the first of the industry groups to come forward and ask to work with the Council in working out a code of conduct for their industry. I am sorry that you have not yet been able to come up with a code-I had hoped, as had the members of the institute, that we could use this occasion to announce such an accomplishment. I don't think we should allow the delays that have been encountered to discourage us. This is, of course, up to you as members of the Packaging Institute.

As I have tried to point out, we are dealing with complex problems for which we should not expect to find quick and easy answers. I would like to ask you this afternoon, though-all of you here to give your support and help to our efforts.

This movement toward policing ourselves must come from the grassroots of business, nurtured in the native soil of American decency and fair play. It can't be forced from outside or legislated. It must come from within.

The Ethics Council is trying to create an atmosphere-to provide a modelfor the business community to develop its own set of codes, codes which will grow out of the needs and background of each particular industry and company. This is real action on the part of Government, business, and intellectual leaders to improve the business practices of those few who don't observe the standards that I am sure your industry wants to uphold. May I challenge all of you to do whatever is necessary to restore complete confidence in our system of competition and free enterprise which has made this Nation great. Thank you.

[From Modern Packaging, editorial memo, February 1963]

ANOTHER MOUSE

Once again the Packaging Institute has labored and brought forth a mouse. Its one-paragraph credo issued on December 28 does little more than restate the same lofty generalities contained in the four-paragraph statement of October 1961, which was the net result of Packaging Institute's first attempt to wrestle with the greatest packaging problem of the day-deceptive packaging and the impending Hart bill which proposes to regulate it with a straitjacket.

Does anyone really believe that the credo will have the slightest effect on the Hart bill?

Does anyone really believe that it answers Secretary Hodges' challenge to the Packaging Institute forum to come up with a voluntary code of packaging ethics to thwart the bill?

Does anyone really believe that it answers the mandate from the Packaging Institute membership, voted overwhelmingly after the forum, to "accept Secretary Hodges' challenge" and "formulate a broad code of packaging ethics"?

Does the Good Packaging Committee itself believe that it has fulfilled its directive from the institute's board of directors, which was to formulate a code and to implement it, by December 31, with specific proposals?

We understand that the committee deliberated for hours. But it was unable to agree on any specifics of implementation.

This is a sad state of affairs. We suggest five simple rules which, as a basic code of conduct, could answer all the legitimate consumer criticisms against packaging and take from the Hart bill its air of necessity:

1. Agreed: That the statement of weight or quantity of contents must appear with unquestionable legibility on the main label panel, without qualifying adjectives.

2. Agreed: That size and shape of package must be kept in reasonable ratio to the contents consistent with economical filling, convenient handling, and product protection.

3. Agreed: That product illustration should show nothing that is not contained in the package unless accompanied by an explanatory line.

4. Agreed: That "cents off" the "regular price" should not be used on labels unless the regular price is also stated on the label.

5. Agreed: That "economy size" should be banned from manufacturers' labels, since the retailer's pricing may make the statement untruthful. What responsible packager would not welcome these simple rules-if he knew that his competitors also would have to observe them? The abuses that have laid all packaging open to criticism have grown from the excesses of competition. If the Packaging Institute will not act, then thoughtful packagers must speak up, individually or in groups, to express a positive rather than a negative attitude as the Hart bill goes through the legislative mill.

(Message from the President of the United States relative to consumers' protection and interest program)

To the Congress of the United States:

Consumers, by definition, include us all. They are the largest economic group in the economy, affecting and affected by almost every public and private economic decision. Two-thirds of all spending in the economy is by consumers. But they are the only important group in the economy who are not effectively organized, whose views are often not heard.

The Federal Government-by nature the highest spokesman for all the people has a special obligation to be alert to the consumers' needs and to advance the consumers' interests. Ever since legislation was enacted in 1872 to protect the consumer from frauds involving use of the U.S. mail, the Congress and executive branch have been increasingly aware of their responsibility to make certain that our Nation's economy fairly and adequately serves consumers' interests.

In the main, it has served them extremely well. Each succeeding generation has enjoyed both higher income and a greater variety of goods and services. As a result our standard of living is the highest in the world—and, in less than 20 years, it should rise an additional 50 percent.

Fortunate as we are, we nevertheless cannot afford waste in consumption any more than we can afford inefficiency in business or Government. If consumers are offered inferior products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer is unable to choose on an informed basis, then his dollar is wasted, his health and safety may be threatened, and the national interest suffers. On the other hand, increased efforts to make the best possible use of their incomes can contribute more to the well-being of most families than equivalent efforts to raise their incomes.

The march of technology—affecting, for example, the foods we eat, the medicines we take, and the many appliances we use in our homes-has increased the difficulties of the consumer along with his opportunities; and it has outmoded

The

many of the old laws and regulations and made new legislation necessary. typical supermarket before World War II stocked about 1,500 separate food items-an impressive figure by any standard. But today it carries over 6,000. Ninety percent of the prescriptions written today are for drugs that were unknown 20 years ago. Many of the new products used every day in the home are highly complex. The housewife is called upon to be an amateur electrician, mechanic, chemist, toxicologist, dietitian, and mathematician-but she is rarely furnished the information she needs to perform these tasks proficiently.

Marketing is increasingly impersonal. Consumer choice is influenced by mass advertising utilizing highly developed arts of persuasion. The consumer typically cannot know whether drug preparations meet minimum standards of safety, quality, and efficacy. He usually does not know how much he pays for consumer credit; whether one prepared food has more nutritional value than another; whether the performance of a product will in fact meet his needs; or whether the "large economy size" is really a bargain.

Nearly all of the programs offered by this administration-e.g., the expansion of world trade, the improvement of medical care, the reduction of passenger taxes, the strengthening of mass transit, the development of conservation and recreation areas and low-cost power-are of direct or inherent importance to consumers. Additional legislative and administrative action is required, however, if the Federal Government is to meet its responsibility to consumers in the exercise of their rights. These rights include

(1) The right to safety-to be protected against the marketing of goods which are hazardous to health or life.

(2) The right to be informed-to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labeling, or other practices, and to be given the facts he needs to make an informed choice.

(3) The right to choose to be assured, wherever possible, access to a variety of products and services at competitive prices; and in those industries in which competition is not workable and Government regulation is substituted, an assurance of satisfactory quality and service at fair prices.

(4) The right to be heard-to be assured that consumer interests will receive full and sympathetic consideration in the formulation of Government policy, and fair and expeditious treatment in its administrative tribunals.

To promote the fuller realization of these consumer rights, it is necessary that existing Government programs be strengthened, that Government organization be improved, and, in certain areas, that new legislation be enacted.

I. STRENGTHENING OF EXISTING PROGRAMS

This administration has sponsored a wide range of specific actions to strengthen existing programs. Major progress has already been achieved or is in prospect in several important areas. And the 1963 budget includes recommendations to improve the effectiveness of almost every major program of consumer protection.

(1) Food and drug protection.-Thousands of common household items now available to consumers contain potentially harmful substances. Hundreds of new uses for such products as food additives, food colorings, and pesticides are found every year, adding new potential hazards. To provide better protection and law enforcement in this vital area, I have recommended a 25-percent increase in staff for the Food and Drug Administration in the budget now pending before the Congress, the largest single increase in the agency's history. In addition, to assure more effective registration of pesticides, a new division has been established in the Department of Agriculture; and increased appropriations have been requested for pesticide regulation and for meat and poultry inspection activities.

(2) Safer transportation.-As Americans make more use of highway and air transportation than any other nation, increased speed and congestion have required us to take special safety measures.

The Federal Aviation Agency has reexamined the Nation's air traffic control requirements and is designing an improved system to enhance the safety and efficiency of future air traffic.

The Secretary of Commerce has established an Office of Highway Safety in the Bureau of Public Roads to promote public support of highway safety standards, coordinate use of highway safety research findings, and en

courage cooperation of State and local governments, industry, and allied groups-the Department of Health Education, and Welfare is likewise strengthening its accident prevention work-and the Interstate Commerce Commission is strengthening its enforcement of safety requirements for motor carriers.

In addition, I am requesting the Departments of Commerce and of Health, Education, and Welfare, to review, with representatives of the automobile industry, those changes in automobile design and equipment which will help reduce the unconsionable toll of human life on the highways and the pollution of the air we breathe. Additional legislation does not appear required at this time in view of the automobile industry's action to incorporate in the new model design changes which will reduce air pollution. (3) Financial protection.-Important steps are being taken to help assure more adequate protection for the savings that prudent consumers lay aside for the future purchase of costly items, for the rainy day, for their children's education, or to meet their retirement needs.

Legislation enacted last year has strengthened the insurance program of the Federal Savings and Loan Insurance Corporation.

The Securities and Exchange Commission has undertaken at the request of the Congress a major investigation of the securities market which should provide the basis for later legislation and administrative measures.

The Postmaster General and the Department of Justice have stepped up enforcement of the mail fraud statutes. Arrests for mail fraud last year set an alltime record; and convictions increased by 35 percent over the previous year.

(4) More effective regulation.-The independent regulatory agencies also report increased emphasis on programs directly helpful to consumers.

The Interstate Commerce Commission has instituted proceedings designed to prevent excessive charges for moving household goods in interstate

commerce.

The Civil Aeronautics Board has recently taken action to protect air travelers from abuses of overbooking.

The Federal Trade Commission has intensified its actions against deceptive trade practices and false advertising affecting a variety of goods; including refrigerators, house paint, sewing machines, vacuum cleaners, kitchen utensils, food wrapping, and carpets.

The Federal Power Commission is initiating a vigorous program to assure consumers of reasonable natural gas prices while assuring them of adequate supplies-revitalizing all of its regulatory programs in the electric power field and undertaking a national power survey designed to identify ways of bringing down power costs in the decades ahead by making the best possible use of our capital and energy resources; and I recommend that the Congress enact legislation and make available funds to enable the Commission to provide for 34 million natural gas consumers the information similar to that now provided electrical consumers on typical bills in various areas, thus spotlighting abnormally high rates and stimulating better industry performance.

The Federal Communications Commission is actively reviewing the television network programs selection process and encouraging the expanded development of educational television stations; and it will also step up in fiscal year 1963 its enforcement program to prevent interference of air navigation signals, distress calls, and other uses of radio important to public safety.

For all of the major regulatory agencies, I am recommending increased appropriations for 1963 to provide the increased staff necessary for more effective protection of the consumer and public interest.

Of the important changes in agency organizational procedure recommended last year to eliminate delays and strengthen decisionmaking, the great majority have been authorized by reorganization plans or legislation and are being put into practice by agency heads; and, to permit similar improvements in the operations of the Securities and Exchange Commission and the Federal Power Commission through greater delegation of assignments, I recommend enactment this year of legislation along the lines of S. 2135 for the SEC and S. 1605 and H.R. 6956 for the FPC. (5) Housing costs and quality. The largest purchase most consumers make in their lifetime is a home. In the past year, significant steps have been taken

to reduce the cost of financing housing and to improve housing quality. The level of interest rates and other charges on mortgage loans has been reduced by a variety of Federal actions. Under authority provided by the Housing Act of 1961, new programs have been started (a) to encourage experimental construction methods likely to develop better housing at lower cost, (b) to provide lower interest rates and longer maturities on loans for rehabilitation of existing housing, (c) to provide especially low cost rental housing for moderate income families, and (d) to provide housing for domestic farm labor. The same legislation also authorized demonstration grants to develop better methods of providing housing for low income families.

(6) Consumer information and research--and consumer representation in Government.-Government can help consumers to help themselves by developing and making available reliable information.

The Housing and Home Finance Agency will undertake, under the budget proposed for fiscal 1963, new studies to discover ways of reducing monthly housing expenses, lowering the cost of land for homebuilding, and minimizing financing charges.

The Department of Agriculture is undertaking similar research designed to help raise rural housing standings and reduce costs.

The Food and Drug Administration will expand its consumer consultant program which, together with the home demonstration program of the Agriculture Extension Service, now provides valuable information directly to consumers on product trends, food standards, and protection guides.

The Bureau of Labor Statistics is now conducting a nationwide survey of consumer expenditures, income, and savings, which will be used to update the widely used Consumer Price Index and to prepare model family budgets.

Too little has been done to make available to consumers the results of pertinent Government research. In addition to the types of studies mentioned above, many agencies are engaged-as aids to those principally concerned with their actiivties, in cooperation with industry or for Federal procurement purposes-in testing the performance of certain products, developing standards and specifications, and assembling a wide range of related information which would be of immense use to consumers and consumer organizations. The beneficial results of these efforts in the Departments of Agriculture, Commerce, Defense, and Health, Education, and Welfare, and in the General Services Administration and other agenciesshould be more widely published. This is but one part of a wider problem : the failure of governmental machinery to assure specific consideration of the consumer's needs and point of view. With this in mind, I am directing: First, that the Council of Economic Advisers create a Consumers' Advisory Council, to examine and provide advice to the Government on issues of broad economic policy, on governmental programs protecting consumer needs, and on needed improvements in the flow of consumer research material to the public; this Consumers' Council will also give interested individuals and organizations a voice in these matters;

Second, that the head of each Federal agency whose activities bear significantly on consumer welfare designate a special assistant in his office to advise and assist him in assuring adequate and effective attention to consumer interests in the work of the agency, to act as liaison with consumer and related organizations, and to place increased emphasis on preparing and making available pertinent research findings for consumers in clear and usable form; and

Third, that the Postmaster General undertake a pilot program by displaying in at least 100 selected post offices, samples of publications useful to consumers and by providing facilities for the easier purchase of such publications.

II. NEW LEGISLATIVE AUTHORITY FOR ADDED CONSUMER PROTECTION

In addition to the foregoing measures, new legislative authority is also essential to advance and protect the consumer interest.

(A) Strengthen regulatory authority over foods and drugs

The successful development of more than 9,000 new drugs in the last 25 years has saved countless lives and relieved millions of victims of acute and chronic