The CHAIRMAN. Mr. Dunn, we are going to have to adjourn in 4 minutes. I hope you will conclude in that time. You have spoken about an hour and 20 minutes, and I have no criticism to make of that, but that means

Mr. DUNN. May I have the privilege of speaking after?

The CHAIRMAN. I think not, because the understanding was that you and Dr. Black would take 2 hours here between you. I will be glad to hear you, so you may conclude and file your statements.

Mr. DUNN. That means, of course, that a great many of my objections to this act I cannot touch upon.

The CHAIRMAN. You have done that quite frequently. That is why I allowed you to go beyond the limit.

Mr. DUNN. I will be unable to deal at all with this question of advertising under that limitation, and I can only complete this presentation regarding food misbranding. May I be permitted just to finish what I have here on food misbranding, because they are really very important provisions. I am just going to go right through that.

We respectfully object to the provision in section 11 authorizing the Secretary of Agriculture to promulgate regulations, as provided by section 22, fixing a definition and standard of identity for any food. And to the supplemental provision in section 7 (d) to the effect that any food subject to such a definition and standard is misbranded if it fails to conform thereto. These provisions are objectionable for the following reasons: The first reason we have already considered. It is the fact that such regulations are ordinarily beyond successful legal challenge because the findings of fact upon which they rest are made conclusive. The unfairness of the resulting situation to the manufacturer has been described. The second reason is that the Secretary is authorized to establish a definition. and standard of identity for any food. Therefore, he may do so for a proprietary food. In fairness to the manufacturer this authority ought not to be extended to proprietary food. If it is, then it may be used to injuriously impair and perhaps to destroy the business in such food. For if the composition identity of a proprietary food is standardized for the knowledge of all, then it cannot have a proprietary character or value in a composition sense. And if proprietary food is exempted from this authority, there is no public injury, because it still remains subject to the other requirements of the act that it must not be injurious to health or falsely or deceptively labeled in any material particular. In short, this requirement should be confined to generic food, such as milk, butter, etc. So confined, it accomplishes its essential public purpose without injustice to the manufacturer. We may note here an apparent conflict between section 11 and section 7 (d). The former section does not limit the authority of the Secretary to establish minimum definitions and standards of identity for food, whereas the latter section prohibits failure to conform to a definition and minimum standard of identity. The McCarran-Jenckes bill, in section 5 (f), authorizes the Secretary to prescribe a minum standard of identity for generic food, exclusive of proprietary food, and prohibits a food from falling below such standard therefor unless its principal label plainly indicates that fact. This is the authority we approve.

We respectfully object to the provision of section 7 (f) of Senate 2800 that a food not subject to a definition and standard of identity, established by the Secretary, is misbranded unless its label declares the common or usual name of each ingredient in the order of predominance by weight, constituent spices, flavors, and colors to be collectively designated as such. To these requirements there are only two exceptions. They are (1) to the extent it is impracticable because of normal variations in ingredients or their quantities, usual in good manufacturing or packing practice, reasonable variations from the stipulated order of declaration shall be permitted by regulation; and (2) exemptions as to packages of assorted food shall be established by regulation. It will be noted that these exceptions are not absolute. They are dependent upon the Secretary's discretionary exercise of the power of regulation so conferred upon him. The drastic character of this requirement is clear. It will apply to an infinite number of mixed foods. And while it does not require a percentage statement of ingredients it is practically effective to require a formula disclosure in a trade or competitive sense. It will not suffice to argue that this requirement should cause no concern because it will be voided by the establishment of saving definitions and standards of identity for mixed foods.

It has taken the Department of Agriculture years to define definitions and standards for a relatively few foods. And such definitions and standards only touch upon the vast field of mixed foods, which present a large, difficult and progressive standardization problem under the best of circumstances here. Therefore this requirement is of very real and anxious concern to manufacturers of mixed foods who will be subject to it. The objections to it are numerous and serious. The first objection is that it amounts to a confiscatory destruction of the extremely valuable asset of a private composition. The disclosure of that composition can have but one competitive result, and that is its injurious competition use. Under this bill as now drawn, proprietary food is impaled on the horns of this dilemma. It faces destruction either by government product standardization or by compulsory composition disclosure. And this alternative is unfair.

That

One of my clients is the Lea & Perrins sauce, a product of secret composition, which enjoys a very wide sale in this country. product comes under this section, and if they are required to declare its ingredients upon the label, it would be subject to competition from a lot of competing products, which would be claimed to be just as good.

Senator COPELAND. You know, I have a good deal of sympathy with your position on this line, but suppose we were to permit proprietary foods to be sold without labeling, how could it be otherwise than the case that there would be thousands of foods thrown upon the market at once?

Mr. DUNN. May I present my argument, and if I have not answered your question, I will do so specifically. I do answer it, I think, in what I am about to state.

The second objection is that the requirement is impracticable. It is impracticable, for example, in the case of small mixed food bearing a small label. Such a food may contain up to 20 or so ingredients. And the label is not large enough to name them. The

requirement is also impracticable in the case of mixed food subject to change of ingredient, as to kind or quantity, because of varying market conditions of ingredient purchase. The change does not impair the wholesomeness or character of the food or derogate from its correct representation. In illustration: The change of an oil or fat in a bakery product. In such a situation the manufacturer must either maintain the composition of the food at an increased expense resulting in an increased cost to the consumer or he must use new labels likewise involving additional expense and increased cost. Therefore this requirement is not only unfair to the manufacturer but it is also bound to be more or less unfair to the consumer by reason of the resulting increased cost of food. Moreover, this requirement is not necessary to effectuate the two public purposes of the act. It is not necesary to safeguard health, because the act elsewhere prescribes any food injurious to health. It is not necessary to prevent deception, because the act elsewhere prescribes any false or deceptive representation. Because of this fact and because this requirement is grossly, needlessly and injuriously unfair to the food manufacturing industry, it stands condemned upon its face. Furthermore it is unjustly discriminatory against that industry. The similar requirement as to drugs, originally in S. 1944, has been deleted. There is much more public reason to require a label disclosure of the active therapeutic ingredients of drugs. And the act contains no such requirement as to cosmetics. The existing statute contains the sound and just public policy upon the subject. It expressly provides in section 8 that nothing in this act shall be construed as requiring or compelling manufacturers of proprietary food which contain no unwholesome added ingredient to disclose their trade formulas, except in so far as the provisions of this act may require to secure freedom from adulteration or misbranding. That has been the Federal law for more than 28 years. And there is no sound reason in public policy to change it, in view of the circumstances stated.

So, to answer Senator Copeland's question specifically, there has been for 25 years no rush upon the market of proprietary foods.

The only purpose of this provision, as I read it, is to protect the public interest, and that purpose is wholly provided for in other provisions of the act, so there is no necessity for this provision in the act, and it can only result in injury.

With your permission, I will file the balance of my brief.

The CHAIRMAN. Of course we recognize that the subject of advertising is a very important one, and we wish to have it covered. If anyone else appears on that subject, I shall be glad to have you recalled.

Mr. DUNN. May I say this, Senator Stephens, that the publishers' committee has claimed exemption under this law; they are entirely exempt from the penalties which the law imposes for publishing false advertisements. We are in accord with the principle that the law ought to be written on the theory that the responsibility rests upon the advertiser. We are in accord with the exemption granted to the publishers and I want to call your attention to two things: That it is the food manufacturers whom I represent that are objecting to the provisions of this act, because they are subject to this act, and secondly, as the law now stands, there is a discriminatory provision

with regard to exemptions. It only exempts these for the dissemination of advertisements: First, the reputable broadcasting concerns; second, the publishers; third, the public advertising agencies. It does not exempt all of the other legitimate disseminators of commercial advertising, such as the disseminators of bill boards, street-car and poster advertisements.

As to that, as to an exemption, this is more or less unfair, and it could be, in my judgment, very easily declared unfair in the courts, because you are drawing a line of discrimination in your exemption between those who are engaged in different forms of disseminating advertising. You have either got to exempt all of the commercial disseminators of advertising, or except none.

Senator COPELAND. You would like to have false branded and misbranded products put upon the market, and make nobody responsible?

Mr. DUNN. No, sir. I think that is a rather unfair question, Senator. My position is this: That every advertiser who issues an advertisement ought to be exempt from being held responsible for doing so under this act.

Senator COPELAND. Isn't he?

Mr. DUNN. He is not. Clearly, if you undertake to exempt any of the legitimate disseminators of these advertisements upon the theory that the advertiser is the only one that ought to be held liable under his act, it would be good law or good public policy to exempt all of them.

The CHAIRMAN. As I stated, we recognize the importance of that particular subject, but there have been so many requests for appearances before the committee, and, as I said, if that phase is not covered by someone else who has made a request here, you will be recalled.

Mr. DUNN. Thank you very much, sir.

The CHAIRMAN. We are going to take a recess until 2 o'clock. The committee will meet in the Commerce Committee room at 2 o'clock. (Whereupon the committee, at 12 m., recessed until 2 p.m. the same day.)

AFTER RECESS

The committee reconvened at 2 p.m., pursuant to the taking of the

recess.

The CHAIRMAN. The hearing will come to order. Mr. Dinshah, I understand you desire to be heard.

Mr. DINSHAH. Yes.

STATEMENT OF DINSHAH P. GĦADIALI, PRESIDENT-TREASURER SPECTRO-CHROME INSTITUTE, MALAGA, N.J.

Mr. GHADIALI. Honorable Chairman and Senators, I shall be very brief in my statement in regard to this bill, S. 2800.

There is one point on which my institute, the Spectro-Chrome Institute, Malaga, N.J., desire, if Your Honors please, to protest against the inclusion of the word "devices" in the definition of food and drugs, that is devices, electrical contrivances, where, in the preamble of the bill, it is mentioned as foods, drink, drugs, and cosmetics. That is the position taken by the Honorable Senator Copeland and Mr. Tugwell also. In the definition given on page 2, section b, the

term "drug" shall include "all substances, preparations, and devices intended for use in the cure, mitigation, treatments, or prevention of disease."

I am the inventor and patentee of a number of electrical equipments for the treatment of diseases. In fact, in 1896, when I came first to the United States from Bombay, India, I was the first lecturer on X-rays in New York. I am a manufacturer. We have a tremendously big plant for manufacturing our own instruments. My inventions and patents were made after over 30 years of laborious scientific research, and they are used all over the United States. If, therefore, the word "devices " be included in this act, Your Honors, my institute contends that it will put us completely out of business because it would put us under the power of the medical trust. It is well known that the medical trust have always opposed every other system or method of healing. To put a healing device of an electrical or mechanical or scientific character under the control of a gentleman like the Secretary of Agriculture, who is supposed to mind the business of food and drugs and the purity of those thingsto put mechanical and electrical devices under his control is a problematical absurdity in itself.

A second point to which which I wish to draw your attention is that it takes a stand here as to misbranded foods and drugs, and so on, on page 7, section 6, where it says:

A food, drug, or cosmetic shall be deemed to be misbranded (a) if its labeling is false or misleading in any particular. Any representation concerning any effect of a drug shall be deemed to be false under this paragraph if that representation is not supported by substantial medical opinion or by demonstrable scientific fact.

Now, please, sir, the Honorable Senator Copeland means well, of course. I do not endeavor to impeach the honorable Senator's motives, but I do contend that the inclusion of devices within the meaning of drugs would deprive my invention and machines, patented under Government patents, of being used. A Government patent gives me the right to make, use, and vend my machines. I have introduced my hearing system all over the United States, and have hundreds using exclusively this system, and it will entirely put us out of business. My plant, which is a million dollar plant for manu-` facturing, will close, because my work will then have to be substantially under medical opinion, and if the medical gentlemen in their wisdom think fit to fight me as they have fought other systems, they are going to fight me in a way which would be really unfair competition, because that would give, through the power of the United States Senate, through the august zeal of this Congress, it would give them an absolute control of the entire healing art of the United States.

I therefore emphatically voice my protest against such an unfair method of including within a food and drug act the word “devices " and including all of us within that act. It is unfair.

Another thing that is very apparently unfair here is on page 15, "false advertisement." If Your Honors will please look at this, section 9, line 15, paragraph b:

An advertisement of a drug shall also be deemed to be false if it contains the name of any disease for which the drug is not a specific cure,

and so forth.

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