Our view is that when we make the rule it does not have exactly the same effect as law, but it is an interpretation of the statute and that establishes an offense if you violate it.

There is no question

Mr. ECKHARDT. Well, that is exactly what I want you to do. I want us to make the guides and I want you to make the rules that are enforceable.

Mr. MARTIN. Well, the private bar, Mr. Congressman, has vigorously opposed the power of the Commission to make that type of rule. Mr. ECKHARDT. Well, let me suggest to you this; that perhaps the private bar is concerned about your making rules without any congressional guidelines.

Mr. MARTIN. This is one of the alleged concerns.

Mr. ECKHARDT. Well, do you think that is a legitimate concern? Mr. MARTIN. I do.

Mr. ECKHARDT. Now, let me suggest something that came to my mind, and I think it is sort of predicated in my question to Congressman Hays.

I was suggesting, No. 1, that there be the requirement that the goods be labeled with respect to the material from which it is made, and I think you agree with me that that would certainly be an absolute minimum requirement.

Mr. MARTIN. Yes, sir.

Mr. ECKHARDT. And, 2, there be required that somewhere within the records of the Government, there be kept information with respect to the nature of that product with respect to what happens if it is cleaned. Now, that would seem to be clearly a minimum requirement.

Now, suppose I added to that one other, and that is that such product may not move in commerce if it does not comply with such rules concerning labeling as may be promulgated by the FTC to give reasonable warning of exceptional cleaning requirements?

Now, what I am suggesting here in the third category is the possibility of the full extent of your powers you are now studying, but it does seem to me that it is our duty to say that you ought to make the rules for a certain purpose and not for other purposes that might not be legitimate.

What would be wrong with our writing a statute that would, first, give you clear authority to make rules for that purpose and would, second, set up guidelines with respect to restricting you within legitimate purposes?

Mr. MARTIN. Well, if that is the desire of the Congress, Mr. Congressman, there is absolutely nothing wrong with it.

You have done that in many cases, in the Flammable Fabrics Act, in the Textile and Fur Act that you have before you and in the Fair Labeling and Packaging Act. That certainly is an option that is open to the Congress.

Mr. ECKHARDT. Now, with respect to another point you raise

Mr. Moss. Mr. Eckhardt, would you hold for just a moment and yield briefly to Mr. Broyhill?

Mr. ECKHARDT. Yes.

Mr. BROYHILL. Off the record.

(Discussion off the record.)

Mr. Moss. Mr. Eckhardt.

Mr. ECKHARDT. Now, with respect to another point you were making, that is, that certain things like tennis balls and shoestrings and so forth would not really be amenable to such a labeling procedure, probably not even with respect to the contents-I mean, you could not very well write "cotton" on a shoestring-it would seem to me that you could simply define what textile products are as they are used in this act, and I would assume that the main thing we are trying to reach is garments, that we might have such things as piecegoods and awning material and things of that nature.

But, if we simply define textile products as including garments and then attempted to set down other things like, say, piecegoods and awnings, and et cetera, it seems to me that this would be a rather practical way to approach that question that you have in your testimony.

Mr. MARTIN. I would like to ask Mr. Dixon to answer that because he heard all of the testimony in the hearings, sir.

Mr. DIXON. That would narrow it down, sir, and take care of a large percentage of the problems that have been brought to our attention and are part of our record. It would not cover everything. It would not cover the whole wide range of household furnishings but

Mr. ECKHARDT. Well, frankly, that is not where the problem is, is it?

If you are buying certain household furnishings that you ordinarily do not clean or clean very seldom, it seems to me that it is not unreasonable to expect you to be rather cautious as to the means used.

That is, for instance, suppose you have, say, a vacuum cleaner bag, and you would not just throw that in the laundry or send it out to have it cleaned. I think you would be under some obligation to go to the manufacturer and find out what is needed, or go to someone who purports to be knowledgeable.

But, it seems to me that if we simply covered all garments and then attempted to list the other specific materials we would have a very practical way of dealing with this problem, itself.

Mr. DIXON. Senator McIntyre's bill on the Senate side would do that. It would limit the requirements to wearing apparel, and he has introduced that very recently.

Again, though, I think, and it is certainly possible, it is being urged to the Commission that the Commission limit itself to this more manageable concept of wearing apparel with the possible addition of other defined products, but I would submit, sir, that you do have a wide range of textiles in the home all the way from draperies to table linens and what have you, that have also caused some problems that have been brought to our attention.

And I think a real need exists as to whether protection is not needed in that area as well.

Mr. ECKHARDT. Well, I certainly do not disagree with that, but I am simply suggesting that at least the basic portion of the definition for textile products could very well be wearing apparel, and then it would not seem a great chore to define specifically what else is covered.

In other words, I would suggest a broad definition with respect to wearing apparel, but I would use the specific definitions with respect to additional products.

Mr. DIXON. That I think is a workable approach, and I think it is one that the Commission will be considering. I would add one more caution, though, that limiting it to wearing apparel is going to narrow the products covered. It is not going to eliminate all of these problems that Mr. Martin discussed in his statement, for some of them will still be present even in a law limited to wearing apparel. For instance

Mr. ECKHARDT. Just a minute, please.

Please understand that I do not propose to limit it to only wearing apparel.

Mr. DIXON. I understand, yes. But, I think no matter how you limit it you are going to still have some of the same problems we encountered.

First, I agree; I think it is very easy to, by definition, eliminate products that are not cleaned, and that could include wearing apparel, disposable wearing apparel made primarily out of paper products.

But, it would also leave with us these other questions as to whether or not a particular permanent label, for instance, would impair the utility or appearance of that product.

We have had it argued quite strenuously that there are situations in which permanent labeling would unduly impair the appearances of it; the see-through garments, that type of thing.

And just as you can have the same problem in table linens, transparent table cloth, in that it does not look too attractive with a permanent label, and they have injected this into the problem.

The Commission has to consider as to whether there are not certain products that should be permitted to carry an attached label and not a permanent label affixed to it.

Mr. ECKHARDT. Well, I can see these problems with respect to a label that gives details as to cleaning, but then with respect to even the sheerest negligee it seems to me there would be the opportunity to put somewhere on it, "silk" or "cotton," without reducing its exotic appearance.

Mr. Dixon. But again we are talking about something now that may be a little longer than that, than simply a small label giving fiber contents.

We have certainly enlarged the label to some extent if we put care and washing instructions on it.

Mr. Moss. Would you yield at that point?

Mr. ECKHARDT. Sure.

Mr. Moss. Rather than defining it in the item, why not define it out of the item? Why not have a requirement that when you market a product, textile product, you require that the manufacturer represent whether it is washable or cleanable. If it is not, he labels it not washable or cleanable, and that eliminates an awful lot of your problems immediately, by doing it directly on his package or directly on the garment.

But, the question of requiring some kind of indication to the consumer what the material is, seems to me to be so patently desirable that it ought to be covered in the law.

That is all I have, Mr. Chairman.

Mr. Moss. Mr. McCollister?

Mr. McCOLLISTER. No questions, Mr. Chairman.

Mr. Moss. Mr. Broyhill, do you have any further questions?

Mr. BROYHILL. No. I would appreciate it if you could provide this information for the record.

Mr. MARTIN. The brief on our power to make these rules, yes, sir. (The following letter and attachments were received for the record :)

Hon. JOHN E. Moss,

FEDERAL TRADE COMMISSION,
OFFICE OF THE GENERAL COUNSEL,
Washington, D.C., May 26, 1971.

Subcommittee on Commerce and Finance, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C. (Attention Mr. Robert F. Guthrie)

GENTLEMEN: At the hearing on the bill relating to care labeling of textiles (H.R. 6143), Congressman Broyhill asked me to submit a discussion of the Commission's power to make trade regulation rules.

I am transmitting herewith a copy of a portion of our brief which will be filed in National Petroleum Refiners Association et al. v. Federal Trade Commission et al., setting forth the Commission's view as to the law substantiating its power. In order that the Subcommittee may have the benefit of the opposition view, I am transmitting a copy of a brief filed by Procter & Gamble in the case relating to our trade regulation rules for listing phosphate content in detergents.

Very truly yours,

JOSEPH MARTIN, Jr.,
General Counsel.

The following is a portion of the Commission's draft of a brief to be sub. mitted in National Petroleum Refiners Association et al. v. Federal Trade Commission et al.

This portion sets forth the legal basis for the Commission's rulemaking powers.

The Statute Specifically Grants Rulemaking Authority

The literal language of Section 6 of the Federal Trade Commission Act, 15 U.S.C. 46, grants the Commission express authority to promulgate rules and regulations:

"The Commission shall also have power

(g) to make rules and regula

tions for the purpose of carrying out the provisions of this Act." a

The Administrative Procedure Act, 5 U.S.C. 551 (4), defines the term "rule," in part, as:

"*** the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy

The Commission's Rule clearly falls within this definition.

Plaintiffs (Complaint, pp. 6-8, 24) contend that the Commission's authority to proceed against unfair methods of competition and unfair or deceptive acts and practices is limited to the adjudicative means specified in Section 5(b) of the Act (15 U.S.C. 45(b)). This contention is wholly without merit.

2 Indeed, even if the power were not expressly conferred by statute It would be mplied from the Commission's prosecuting power under Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45. See, Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); Davis, Administrative Law Treatise (1970 Supp.) § 504 at 260-216.