is a question of enough information so that the consumer can protect himself. This association's policy regarding legislation over the years has not only been favorable to the type of consumer protection provided by the FTC, but our members have voluntarily cooperated with FTC in the detailed technical work of building up its trade-practice rules. Like the FTC, this association is heartily in favor of honest business competition and informative advertising. As consumers, and as an association interested in satisfactory living standards, we have long seen the economic and health importance of proper advertising of consumer goods. For these reasons, we support FTC in opposing unfair and deceptive treatment of the consumer-as for instance when potentially dangerous drugs and cosmetics are advertised without warning disclosure to the user as to possible harmful results. As consumers, we have listened wiht the keenest interest, while your subcommittee so carefully weighed and studied the proposal to amend the Federal Trade Commission by H. R. 2390. Insofar as H. R. 2390 would weaken the existing Federal protection of the consumer, the American Home Economics Association herewith respectfully registers its opposition. Thank you very much. Mr. SADOWSKI. Thank you. Mr. REECE. May I ask you one question: There has been some question raised that dual control is impairing the protection to the public. In full and adequate authority to deal with all phases of this question-foods, drugs and cosmetics-should be vested in one agency, either of these agencies, would you feel that that would accomplish the purposes that you have in mind? That is, you have confidence in both agencies, I take it? Mrs. THOMPSON. You mean, sir, that they should be combined in one? Mr. REECE. That is, if either agency should be given full authority to deal with this question, either the Federal Trade Commission or the Food and Drug Administration, would you have any objection to that? Mrs. THOMPSON. We think that the situation as it is now is good Federal consumer protection. We would not make a statement as to giving the entire work to either of those agencies. Mr. REECE. Thank you. Mr. SADOWSKI. The next witness will be Mrs. Sylvia Wubnig. STATEMENT OF SYLVIA WUBNIG, REPRESENTING NATIONAL LEAGUE OF WOMEN SHOPPERS Mrs. WUBNIG. My name is Sylvia Wubnig of the National League of Women Shoppers. We are an organization whose members are drawn largely from housewives in some eight or nine cities, nine cities actually, in various parts of the United States. We are profoundly concerned with any attempt to weaken the protection which we as consumers look for from our Government. Mr. O'HARA. Will you please give the address of your organization? Mrs. WUBNIG. Our Washington address is 1706 G Street, and our New York address is 1134 Broadway. Mr. REECE. How is your organization supported? Mrs. WUBNIG. By membership dues only. Mrs. WUBNIG. I would not know. I am not on that kind of committee. I am on the consumer committee, and I have been interested in consumer interests for the National League of Women Shoppers. Mr. O'HARA. Well, you have at least one member, because you are here. Mrs. WUBNIG. Yes. And if I may make a passing comment, I am not an impartial witness either. I am a very partial witness. I do not want my husband or my family or anybody else related to me to suffer. Mr. O'HARA. We are all partial in that way. Mrs. WUBNIG. It seems to us that this bill is an attempt of that sort, to weaken consumer protection. It can benefit no one but the few unscrupulous manufacturers and advertisers who may wish to profit by the inability of the people to evaluate advertising claims or to distinguish harmful drugs and devices. It can benefit no one but manufacturers and advertisers and those who have the funds to engage in protracted litigation or to pay the limited penalties set in this bill. As consumers, as taxpayers, and as common-sense citizens we oppose the provision which thrusts upon the courts the necessity for investigation of finding of facts. I do not pretend to be a lawyer; I am a housewife. But it seems amply evident in any careful reading of the act that that is what our courts would have to do by requiring the FTC to be supported by the "preponderance of the evidence." Judicial review is now available for any who may feel that the Commission's cease-and-desist orders are arbitrary or unreasonable. Why then force upon our already overburdened courts work that is competently done by the experienced technical personnel of the FTC? To do so is an open invitation to evade compliance with the orders of the FTC by litigation, long drawn out and burdensome, and becomes an effective challenge of the purposes for which FTC was created by Congress. As consumers, we want the FTC as strong as possible to prevent misleading advertisement, to protect us from the consequences of unfair practices and to provide us warning whenever necessary. We want enforcement to be as quick and efficient as possible. As taxpayers we object to the costly procedures that will inevtitably take place by clogging the courts with appeals that would be spun out endlessly in order to evade FTC rulings. And as common-sense citizens we feel that technically equipped agencies should undertake the special technical questions that come up for investigation. But although the courts under the Reece bill are given greater duties and responsibilities, they are at the same time deprived of effective sanctions against violators. It seems to me a contradiction that does not make very much sense. Mr. O'HARA. You do not understand that the Reece bill wipes out the penalties which now exist; do you? Mrs. WUBNIG. No; I say that it limits the effect of sanctions against violators, because not only is the maximum penalty, as I read in the bill, for each violation reduced from $5,000 to $1,000 for violation, but $10,000 is set as a limit for the total penalty on the representation of a violation. When we consider the fact that $10,000 is not unusual for a single radio broadcast sponsored by leading drug and cosmetic manufacturers, it is obvious enough that $10,000 might be well worth paying for the privilege of further unhampered violation. Once the violator has paid the limit in penalties, what sanction would the courts have to curb further violations? Controlling markets, fixing prices, misleading advertisement—are those not privileges that are well worth a mere $10,000, when millions of dollars in profits are in question? And how then can we as consumers be protected? I have said I am not a lawyer. I am not a chemist. I am not a druggist. I am not a doctor, either. I buy drugs and cosmetics and foods, and I use them, and I provide them for my family, as most of us who are housewives do, as your wife does. I am a conscientious consumer, probably on the average more conscientious than most consumers, but I do read the label. But even though I can read the labels, I do not always know what is going on. I can read a whole series of drug analyses. I do not know whether I will die from it or get better, whether my headache will leave me or I will get something worse than a headache. I read advertisements. But I must be told which drugs and which cosmetics will be harmful to me. I want that warning. And to deny me that precaution is to deny me the minimum protection I think I can demand from my Government. Section 3 of the Reece bill does just that. Most people buy in response to advertisements only. A great many drugs are sold over counters where there is no opportunity to read labels even if you were willing to and able to read them and understand them. And, however truthful all the announced facts may be to permit withholding information that is equally pertinent, that is, that in certain circumstances these drugs, cosmetics, and devices are actually harmful, is to endanger the public health. And whom would such an amendment to the existing act now benefit? Certainly not the public, whose health and well-being would be endangered; and not the honest, thoughtful manufacturing people and advertisers who would want their customers to be warned of any potential dangers in his product. It can be only those manufacturers and advertisers who hope to amass great profits through the ignorance and innocence of the buying public. I feel sure that Congress is not willing to jeopardize the public interest and good will to the boundless greed of such people. Section 5 of the Reece bill removes food, drugs, devices, and cosmetics from the regulation of the Federal Trade Commission and thereby denies us the protection against false and misleading labeling practices as an unfair method of competition. We want the FTC to continue in its authority to require in advertising any warnings or precautions it deems necessary for products. that may be harmful or dangerous. It is doubly to our advantage as consumers of the potential dangers of the product. Together they can deprive the FTC of its jurisdiction over foods, drugs, devices, and cosmetics would be to deprive the consumer of a second line of defense, and to provide to the unscrupulous manufacturer and advertiser a wider and more dangerous margin of latitude. This bill, then, as we see it, is a serious undermining of the protection that we as consumers feel is vitally important. We are being flooded with advertising claims and products that we cannot possibly analyze or evaluate. We now have two technically equipped agencies of the Government that can now protect us against false claims and harmful products. We are grateful to Congress for providing such agencies. We sincerely urge this committee to reject this bill. Its only result would be to damage the public interest and to destroy the safeguards that have already been soundly and honestly established, and can mean profit to no one but the unscrupulous and the greedy. Mr. REECE. May I ask a question? You think, then, it would be inadvisable for the courts to have the authority to review the decisions of the Federal Trade Commission on food and drug matters? Mrs. WUBNIG. Congressman Reece, as I have admitted before, I am not a lawyer, and I do not feel myself competent to answer completely, but it seems to me, and I have reason to believe, that the courts now have adequate power to review any decisions of the FTC which may seem reasonable, unreasonable, and arbitrary. Mr. SADOWSKI. Thank you. (The following was submitted for the record:) LEAGUE OF WOMEN SHOPPERS, INC., New York 10, N. Y., March 19, 1946. Hon. CLARENCE LEA, Chairman, House Interstate Commerce Committee, House Office Building, Washington, D. C. DEAR CONGRESSMAN: We strongly oppose passage of the Reece bill, H. R. 2390, which weakens Federal Trade Commission cease-and-desist ruling; reduces and limits violators penalties; eliminate requirements to warn against dangerous drugs in advertising, and removes established jurisdiction over drugs and cosmetics. We urge you to use your influence to defeat this legislation. Sincerely yours, ALICE RIVKIN, MRS. BERNARD PARELHOFF, Acting President. STATEMENT OF IRVING RICHTER, NATIONAL LEGISLATIVE REPRESENTATIVE, UNITED AUTOMOBILE WORKERS, CIO The UAW-CIO, made up of 900,000 members, strongly opposes Reece bill, H. R. 2390, which would weaken the present inadequate protection against fraudulent and misleading advertising by further limitations on the Federal Trade Commission. The bill appears designed to put the Federal Trade Commission on trial rather than the alleged violators, by providing cumbersome legal machinery. Instead of increasing penalties for violations, the Reece bill reduces maximum penalties. This would encourage further frauds by the drug manufacturing industry, which has shown its disregard for the public interest on many different occasions. The proposed maximum penalty of $10,000 on violators is an invitation to violations. The bill also absolves manufacturers and advertisers from telling consumers the consequences of indiscriminate use of drugs. We believe passage of this bill would betray the general public for the greater profits of a few manufacturers who don't like the present legal limits on their exploitation of the public. Mr. SADOWSKI. I think we can proceed with Mr. Cassedy, our next witness. FURTHER STATEMENT OF JAMES W. CASSEDY, SPECIAL ATTORNEY, FEDERAL TRADE COMMISSION Mr. CASSEDY. Mr. Chairman, I do not think I will take very long. I appreciate the fact that I have taken possibly too long already. So I will try to get through as quickly as I can. Mr. REECE. Did I understand you to say, Mr. Cassedy, that you came with the Commission in 1939? Mr. CASSEDY. No, sir; I said I came March 9, 1943. Mr. REECE. You have been with the Commission 3 years? That was what I wanted to get cleared up. I was not sure as to my recollection. Mr. CASSEDY. Mr. Chairman, in the letter of Hon. Paul V. McNutt of May 3 Mr. REECE. Before you go into another phase of the question, Mr. Chairman, may I again refer back to the Dearborn case, which I admit is becoming somewhat shopworn, but for the purpose of keeping the record straight in connection with the time that this case was instituted, since it involved either the good judgment or the propriety of one of the witnesses who referred to it in the first instance. Mr. CASSEDY. I would like to correct a statement I made if I may. Mr. REECE. That was what I was getting around to. Mr. CASSEDY. All right. I appreciate your suggestion. Mr. REECE. If I may add first: Now, in checking back further on it, it is my understanding that a stipulation was drawn up in this case in 1937. Then the complaint was served on September 17, 1938, which was after the Wheeler-Lea Act was passed, some 6 months afterward. That is what I understand the facts to be. Mr. CASSEDY. I do not know what you have in mind, Congressman Reece, about this case. As I stated before, this case is based upon section 5, on unfair methods of competition, and is not based on the Wheeler-Lea amendments at all. Now, the investigations in this case were begun long prior to the enactment of the Wheeler-Lea amendments. I believe they were enacted March 21, 1938. I think that is the effective date of those amendments. The complaint in the Dearborn case was issued September 17, 1938, and I have in my hand a copy of the complaint and a copy of the order. Mr. REECE. But the stipulation was signed prior to the enactment of the Wheeler-Lea amendments, and then things went along; and then after the Wheeler-Lea amendment was passed, which, of course, gave the Federal Trade Commission additional authority, a complaint was served in the Dearborn case. Mr. CASSEDY. I beg to differ with you. I do not see that the Wheeler-Lea amendments have anything to do with the Dearborn case. |