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Jr. Parlix. I know it is, but I say that ought not to be in there. The Chairmax. That this would be a good law if we changed it?

Mr. Parlin. Certainly--if we were going to amend the Food and Drugs Act we would get the poor dealer yet. Certainly you do not want to send some dealer to jail to make him conscious of the fact that he is subject to a jail penalty? He did not know it before but now it is just so much publicity he will probably find it out.

Now, on page 26 this paragraph (b) says:

Whenever a corporation or association violates any of the provisions of this Act, such violations would also be deemed to be a violation of the individual directors, officers, or agents.

I do not know whether you ever sold advertising or not, but if you did you would know how easy it was for some of the directors to find an excuse to vote against advertising, and believe me they will do it. (Laughter.) If you need any further testimony I will call on all the advertising men here. Now, I believe that no director ought ever to be prosecuted unless his company has previously been officially notified that a continuance of the advertising of that product or that party is going to lead to prosecution.

The CHAIRMAN. This is the same as it is in the Securities Act, I expect?

Mr. Parlin. Well, I guess they had enough trouble with that one, too. (Laughter.) I do not know; I am not in the security business.

The CHAIRMAN. I have heard some criticism of that act.
Mr. PARLIN. Yes; exactly.

You see, the problems that we are dealing with on this one is fear. No matter how well these people meant it is fear that stops us. The greatest thing that deters advertising, orer everything else, is fear, and the greatest thing that can be done for advertising today would be an assurance quickly, that these provisions that are really going to be bad against advertising are not going to appear.

Now, so far as the problem of protecting the public health is concerned, anything within the bounds of reason in the way of legislation against doing that which will injure the public health we are 100 percent for. We are not down to argue that, we are not down to find something about.

I have told our men, and I think everybody in the business agrees with it, that the worst thing that could happen to us would be just to get no bill at all, just get this killed and nothing else. That is the last thing we want. We want the danger of this thing cleaned up; we will go 100 percent with you. Every publisher in our list, I believe, will go 100 percent with you in cleaning up the things that are the real purposes of the bill, and the only things we object to in the bill are, in the first place, the various grades and the extent of that authority-I do not need to talk of those; those have already been covered aptly. You have been very generous to me with your time. I do not know how much time you allowed me, and I probably took more than you gave.

The CHAIRMAX. You had just twice as much as we gave you. Mr. Parlin. That is fine. I certainly appreciate it, Senator. That was grand of you, and may I read just this much more?

We say that we all wish to promote the President's policy of getting men back to work, increasing farm prices, and restoring prosperity.

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We realize the great opportunity that advertising can perform in this program, and we hope that nothing will be done to discourage legitimate advertising.

Thank you.

The CHAIRMAN. We are very much obliged to you.

I notice Mr. Robert Lynn is a member of the N.R.A. Consumers' Advisory Board. Regardless of what his testimony might be, I should like to ask Mr. Lynn if he would be good enough to tell us whether in his opinion this proposed legislation is counter to the efforts and practices of the N.R.A.

Mr. Lynn?

STATEMENT

OF ROBERT LYNN ON BEHALF OF THE N.R.A.

CONSUMERS' ADVISORY BOARD

Mr. Lynx. I have been summoned over here somewhat hurriedly from a mceting of the Consumers' Board of the N.R.A. I do not speak for that Board because I am speaking only as a member of that Board.

In addition to being a member of that Board, I happen to be the cliairman of the Board's committee on consumers' standards.

I have been asked to come over and talk briefly as to whether the Food and Drug bill proposed is contrary to the N.R.A. as the consumers see it in the N.R.A. Administration. I have jotted down some notes that I will read here.

This point of view that the Food and Drug Act proposed is contrary to the spirit of the N.R.A. for the following reasons. N.R.A. codes are codes of fair competition.

Now, fair competition today, in view of our elaborate fabrication of commodities that we buy, in view of the use of synthetic materials, in view of the widespread use of packaging, necessarily must include competition in terms of quality as well as competition in terms of price.

The Agricultural Administration has found that in its milk agreements, for instance, in order to quote prices at all it must first set up standards as to butier-fat content.

In nearly every line of merchandising a similar need exists for quality standards on which and around which to build price competition.

Second, the importance of quality definition in the N.R.A. codes is attested by the fact that soine producers and growers have actually come to the Code Authorities in the drafting of the codes and have asked for the establishment of quality grades and standards as parts of the codes.

Among the agreements that have already gone through, such expressions have corae and have been incorporated for the following groups: The Citrus Fruit Agreement, the California Rice Mills Agreement, the Southern Rice Mills Agreement, and the California Cling Peach Agreement.

Third, N.R.A. is directed squarely at the stabilization of the industry. Among other things this necessarily entails, does it not, the curtailing of chiseling, cheap substandard grades.

Again, N.R.A. is interested in increasing the buying power, which means that current wages and losses in family buying power, due to

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mistaken substandard buying, must insofar as possible be raised and all possible buying power channeled into commodities that represent honest quality value and use value to the consumer purchasing the commodity.

Both the Government and industry is required as standard practices to buy, not by style and price, but by quality specifications, through this procedure they save many millions of dollars annually. There has never been an estimate of just how much the saving is, but it is so substantial that by buying by standard segregations is the accepted practice today.

If the N.R.A. stands for fair competition, we consumers submit that fair competition means giving our 30 million families, spending at the 1929 level 60 percent of our total national income over the retail counters of this country, the same kind of chances that government and industry now have to know what they are buying.

The consumer has historically been the man nobody knows here in Washington. For the first time, in the N.R.A. and in the Agricultural Adjustment Administration, the Government is recognizing, that labor and the consumer and industry are joint partners in the industry of this country. This recognition has taken the form of definite administrative arms in the Recovery Administration.

Fair competition today means, therefore, not merely, as in the past, fair competition against another industry or merchant, but fair competition against this newly recognized partner in industry, the consumer.

The Food and Drugs Act, like the quality standards going into many of the recovery codes, represents a simple and inescapable necessary aid to the isolated consumer in his difficult and otherwise largely helpless effort to compete on equal footing with the vast resources of industry.

One final point: In urging support of the truth in advertising section of the new Food and Drugs Act, the consumer is simply bringing back to you business men and to advertising men the thing that for 20 years you have been talking about so proudly in printers ink and

elsewhere, the simple, plain fact of truth in advertising. The CHAIRMAN. Thank you very much.

Bad as it is, I am glad this bill does not run counter to the N.R.A. as interpreted by Mr. Lynn.

May I ask Mr. Thomas Elliott, associate counsel of the Department of Labor, to say a word?

STATEMENT OF THOMAS ELIOT ON BEHALF OF THE

DEPARTMENT OF LABOR

Mr. Elliott. Senator, I am appearing on behalf of the Department of Labor, not to argue for any specific provision in this bill, but generally to endorse the measure and to state that the Department regards as unsound the argument against the bill that it it were enacted it would adversely affect the workers of the country.

It is our belief that any temporary dislocation of employment resulting from the closing down of concerns unable or unwilling to comply with the law, would be more than compensated for, first, by the eventual increase of employment in industry for the manufactured products in which the public can have confidence; and, second

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because the average wage earner has very little money to spend and this bill, if enacted into law, will help him to keep from being misled into wasting that little upon products which are useless and are actually harmful.

The CHAIRMAN. Thank you very much, Mr. Elliott. (Applause.)

The CHAIRMAN. We have another 5-minute speaker, Jobn A. Benson, of New York, president of the American Association of Advertising Agencies.

Mr. BENSON:

STATEMENT OF JOHN A. BENSON, ON BEHALF OF THE

AMERICAN ASSOCIATION OF ADVERTISING AGENCIES

Mr. BENSON. As president of the American Association of Advertising Agencies, I represent a substantial cross section of advertising agency opinion, in appearing at this hearing to protest against tho so-called "Tugwell bil", in its present form, confining my objections to its advertising provisions.

May I say, at the outset that the advertising agencies are heartily in favor of giving the consumer and the public al needful protection against false advertising, and against the promotion through advertising of any had drugs, adulterated foods, or dangerous cosmetics. We are deeply concerned about the consumer. She is our customer; upon ber confidence depends the permanent success of any advertising effort.

Many of us feel that the present Food and Drugs Act, and other legislation now in effect, inadequately protect the consumer in these respects, and that additional legislation is needed, wbich should take the form of an amendment to the present Food and Drugs Act, without repeal.

False advertising of food, drugs, and cosmetics might be even more harmful than false labeling, since people read advertisments more freely than they read labels and are more influenced thereby.

But a distinction should be made between the requirements of a label and the requirements of advertising, in any legislation which may be enacted. The former is a factual statement of ingredients and uses; the latter is a persuasive appeal to the consumer, a selling argument to induce him to purchase." Hence, in the latter much more leeway is needed in the way of emotional appeal and dramatic presentation. You can construe a label narrowly and literally; but you have to construe an advertisement broadly in the light of its only function, which is to sell. And as a further difference, it is impractical to censor advertising in advance, because of its newsy character. That would practically blockade it.

It thus becomes evident that in adopting the language of & Supreme Court decision regarding labels, in its definition of false advertising, the Tugwell bill is in error.

It is comparatively easy to judge a label. Advertising is something quite different. It cannot be a cold statement of facts only; it must make an appeal to the emotions which motivate common, everyday action of people, such as the love of health, of personal beauty, of children, of effective vigor in the battle for success. There must be room for honestly imaginative appeal in portraying, as the case may

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be, personal beauty, pleasure, or relief, to arouse the consumer's interest in the product and its use.

Advertising is a special plea; it is not a judicial analysis; it is salesmanship in print. This does not preclude an honest presentation of the value and effectiveness of a product. No advertiser, of course, has any right to be deceptive or to make literal truth a rebicle of falsehood by distortion of details in themselves true. His statement must be essentially true in material respects which are capable of harm to the reader or user of a product.

If an advertiser is not enthusiastic about this product, full of confidence in its worth, he might as well save his money. He must reflect that feeling: Everybody is biased in favor of his own baby, and should be expected to praise his own product. That is mere trade puffery and has been recognized by the Supreme Court as in no sense a false hood, even though it may idealize a commonplace or be overoptimistic.

Should such questions be entrusted entirely to any bureaucrat, however honest, who is unfamiliar with the true needs of advertising, as well as with its service to the consumer, or not in sympathy with such needs?

I would like to call the committee's attention to some provisions in the proposed Tugwell bill about advertising, and protest against their present form.

In section 9, (b) (1): An advertisement of a drug shall be deemed to be false if it includes “the name of any disease for which the drug is not a specific cure but is a palliative, and fails to state with equal prominence and in immediate connection with such name that the drug is not a cure for such disease."

There is no better instance of how the bill works against the consumer's interest than provisions of this kind requiring a "No cure" headline or signboard to be inserted on the label and in the advertising.

This would inevitably cause mistrust of the drug itself. People do not casually distinguish between a cure and a palliative. If it is said to be no cure, it will be offband regarded as no good. Faint praise will damn anything. An obtrusive headline of this sort would violate the most elementary principle of advertising in repelling the reader before he gets into the text.

People would thus be discouraged from using a palliative which might be very beneficial to them, in relieving pain, in arresting disease, in removing irritation, or in making the sufferer more comfortable. This would be a distinct injury to him.

When you consider that there are only very few specifics recognized by the Government as having a curative effect, it is apparent that the great bulk of effective and meritorious drugs would have to be labeled "No cure", under the Tugwell bill as now written, and their advertising be emasculated.

In section 9 (b) (2): An advertisement of a drug shall be deemed false if there is "any representation, directly or by ambiguity or inference, concerning the effect of such drug which is contrary to the general agreement of medical opinion."

How often is there any general agreement of medical opinion as to the effect of a drug, and who shall determine when it exists? Doctors differ widely in their treatment of disease and in their estimate of drugs as curative agents. There are even opposing schools of thought.

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