arise differences of viewpoint between the two administrative agencies which will work hardship on manufacturers who are trying to comply with the law. Furthermore, proceedings by one agency will be seriously embarrassed when the defense shows that the language in issue is not objected to by the other agency. In every event the ultimate sufferer will be the public. Another point has given rise to misunderstanding. It has been said that the bill as it passed the Senate is objectionable because it takes jurisdiction away from the Federal Trade Commission. It has been said that things should be left as they are. As a matter of fact that is what the bill as passed by the Senate did. Under the bill in that form the Federal Trade Commission would have been entirely undisturbed in its authority to proceed against any person for disseminating false advertisements where such action constituted an unfair method of competition. Placing with the Federal Trade Commission the authority to enforce the false-advertising provisions of the bill is an action entirely out of harmony with the philosophy of the Federal Trade Commission Act and the functions which have always been exercised by the Commission. The function of the Commission has been that of an umpire between parties in industry in disputes involving unfair methods of competition. This change in the Senate bill will require the Commission to reorient its viewpoint from that of the commercial umpire to that of the guardian of consumer welfare. VIRGIL CHAPMAN. ADDITIONAL VIEWS The undersigned, members of the committee, in order that the membership of the House may be fully apprised of certain facts, submit the following additional views with respect to one of the most controversial features of the bill, namely, the question of whether the Federal Trade Commission should have jurisdiction over the false advertising features of the measure. The committee changed the bill so as to give the Federal Trade Commission jurisdiction to prevent false advertising by means of the machinery provided by the Federal Trade Commission Act, namely, the issuance of orders addressed to the person complained of, ordering him to cease and desist from further committing the violation of the law. Under the bill as it passed the Senate disseminators of false advertisements of food, drugs, devices, and cosmetics would have been subject to a criminal or civil penalty, depending on the seriousness of the offense, and there was also the authority to obtain injunctions from the courts to prevent repetitious violations. The bill would not have been weakened so materially if these provisions had been retained and the Federal Trade Commission had been given authority to enforce them, but this was not the case. The criminal and civil penalty provisions have been struck out so far as false advertising is concerned, and the only enforcement machinery left is the cease-and-desist order as provided for in the Federal Trade Commission Act. The simple fact is that the cease-and-desist-order machinery will not be effective to protect the public against false and misleading advertisements of food and drugs. This was demonstrated by exhibits before the subcommittee consisting of cease-and-desist orders against certain false advertising, and advertisements subsequently appearing over a period of years conveying essentially the same false representations prohibited by the orders. The Federal Trade Commission, acting under its authority to prevent unfair methods of competition, has been active against false advertising of food, drugs, devices, and cosmetics for a number of years. The frequency with which false advertisements have been disseminated for the same products previously covered by cease-and-desist orders, particularly in many of the lower-grade magazines and in the programs of certain radio stations, would seem to demonstrate the ineffectiveness of the cease-anddesist-order machinery in the case of false advertising. This is in no way a criticism of the Federal Trade Commission or its personnel, or of its diligence in enforcing the law under which it operates. No governmental agency has executed its functions more efficiently or more courageously. But it is a recognition of the fact that the method of procedure under which the Commission operates is subject to limitations which make it ill adapted to coping with the question of false advertising as it is conducted today. 15 An impartial appraisal of the effectiveness of the cease-and-desist order as contrasted with the machinery which would have been provided for in the bill as it passed the Senate, is contained in an authoritative work entitled "The Federal Trade Commission", by Gerard C. Henderson (1924). This book was published under the sponsorship of the Commonwealth fund, under the supervision of a legal research committee composed of some of the foremost legal authorities of the country, including Mr. Justice Cardozo and Mr. Justice Stone, now members of the Supreme Court. In Mr. Henderson's book the following statement appears: Looking at the matter from a more critical viewpoint, however, it becomes apparent that there are certain limitations in the powers of the Commission and certain obstacles in its procedure which impair its usefulness in some of the cases involved. * The second limitation which suggests itself, is that the Commission should not, except in special cases, institute proceedings where the practice in question falls within the scope of the Pure Food and Drugs Act, or of similar Federal legislation. The reason is that in such cases the law confers on the Department of Agriculture powers in many ways more effective than those of the Federal Trade Commission, and that the Department has a scientific personnel_more competent to deal with the technical questions involved. The Food and Drugs Act of June 30, 1906, makes it unlawful to manufacture in any territory or in the District of Columbia, or to ship in interstate or foreign commerce, any article of food or any drug which is "adulterated or misbranded." The words "adulterated" and "misbranded" are comprehensively defined, and it is obvious that the definitions are framed with an eye to practical administration as well as scientific accuracy. They cover every conceivable case of misrepresentation as to the ingredients, strength, quality, or purity of a drug or food product, or (by an amendment added in 1912) as to its curative or therapeutic effect; and all cases of misbranding, including imitation of the distinctive name of another .article, misstatement as to weight, measure, or numerical count, and misrepresentation as to the State, Territory, or county in which the article is produced. In its enforcement the act has great advantages over the cumbersome procedure of the Federal Trade Commission. One who violates the act may be criminally prosecuted, whereas the Federal Trade Commission can only order him to cease and desist, without even forfeiting the unlawful gains derived from the violation. An adulterated or misbranded article, if transported in violation of the law, may be libeled and forfeited in proper proceedings, whereas there is nothing in the Federal Trade Commission Act to prevent a dealer who has been ordered to cease from shipping certain misbranded articles in interstate commerce, from selling them to another dealer in the same State. The latter can ship them with immunity, so far as the Federal Trade Commission Act is concerned, until the Commission's procedure has again set in motion and a new order issued and confirmed by the Court. As a police measure the Food and Drugs Act is therefore vastly superior to the Trade Commission law. It is not difficult to see how impossible it would be to effectively control false advertising of food, drugs, devices, and cosmetics through the cease and desist order machinery. A manufacturer, let us assume, puts an advertisement in a number of magazines and newspapers and broadcasts the advertisement over the radio. By this means the advertisement is quickly brought to the attention of millions of persons all over the country. The first move of the Federal Trade Commission would be to decide that it has reason to believe that the advertisement is false or misleading, and normally it only would be able to come to this conclusion after getting evidence and expert advice with regard to the matter from the technicians of the Food and Drugs Administration, unless a duplicate technical staff is to be established. Referred to the Committee on Interstate and Foreign Commerce Reported with an amendment, committed to the Committee of the Whole House on the state of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] AN ACT To prevent the adulteration, misbranding, and false advertising of food, drugs, devices, and cosmetics in interstate, foreign, and other commerce subject to the jurisdiction of the United States, for the purposes of safeguarding the public health, preventing deceit upon the purchasing public, and for other 1 2 3 4 purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CHAPTER I SECTION 1. That this Act may be cited as the "Federal 5 Food, Drugs, and Cosmetie Aet." 1 2 3 2 CHAPTER H DEFINITION OF TERMS SECTION 201. As used in this Act, unless the context 4 otherwise indicates 5 6 (a) The term "food" includes all substances and prep arations used for, or entering into the composition of, food, 7 drink, confectionery, chewing gum, or condiment for man or other animals. 8 9 10 14 (b) The term "drugs", for the purposes of this Aet and not for the regulation of the legalized practice of the 11 healing art, includes (1) all substances and preparations ree12 ognized in the United States Pharmacopeia, Homeopathie 13 Pharmacopoeia of the United States, or National Formulary, Or any supplement to any of them; and (2) all substances and preparations intended for use in the diagnosis, eure, 16 mitigation, treatment, or prevention of disease in man or 17 other animals; and (3) all substances, and preparations, 18 other than food and cosmeties, intended to affect the structure or any function of the body. 15 19 20 21 (e) The term "device", for the purposes of this Aet and not for the regulation of the legalized practice of the 22 healing art, includes all devices intended (1) for the use 23 in diagnosis, eure, mitigation, treatment, or prevention of 24 disease in man or other animals; and (2) to affect the 25 structure or any function of the body. |