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next, one of the various major objections we have to the administrative part of this bill, which must be considered before we deal with the definitive parts of the bill, is this: We respectfully object to the provision in S. 2800 that in formulating the regulations specifically authorized as to adulteration, misbranding, advertising, and permit factories, the findings of fact by the Secretary of Agriculture shall be conclusive if in accordance with law. This provision is in section 22(h). And such regulations are the most important under the act, in an industrial sense. For they prescribe the composition of food and cosmetics, the labeling of food, drugs, and cosmetics, the packaging of some drugs, and the advertisement of others. More than that, , they comprehensively control manufacture in factories placed under Government permit by section 12, and I will later indicate that section 12 may be used by the Government to practically place the whole food, drugs, and cosmetics industry in this country under complete Government permit control, as it is now drawn. This provision for conclusiveness of the findings of fact of the Secretary, is fundamentally objectionable because its practical effect is to place such regulations beyond successful court challenge, as a rule.

Senator COPELAND. Mr. Dunn, will you excuse me?
Mr. DUNN. Yes,

Senator COPELAND. There was an inadvertance in the printing of this bill, and I agree fully with some of the things you have said. If you will look at page 37, line 7, reference is made to subsections (b) and (c); also (d) to be inserted. Insert that in your bill, (b), (c), and (d), because otherwise the evil that you speak of would certainly be present.

Mr. Dunn. It will still be present with the addition of (e), Senator, because the bill leaves (b) and (c) in.

Senator COPELAND. You recall that (d) provides that before any regulation is decided, it must be submitted to the Secretary? Mr. DUNN. Yes.

Senator COPELAND. But that was omitted in that first arrangement in the writing of the bill, because this came over from the old S. 1944.

Mr. Dunn. That is true, but the fundamental fact remains that if and when regulations are established, that the findings of fact of the Secretary upon the basis of which those regulations are established, are conclusive against the manufacturer, under this provision.

Senator COPELAND. Would you mind if I made just one comment? You will recall that in section (d), before a proposed regulation is put into effect, there must be a hearing, a public hearing ?

Mr. Dunn. Yes.

Senator COPELAND. And then, that the regulation must be approved by a majority of the Board ? Mr. Dunn. Yes, sir.

Senator COPELAND. Otherwise it would be exactly as you have said, that findings of fact would be established by the Secretary, and that would be the end of it.

Mr. DUNN. Yes, but if you will permit me to develop my argument, that even under the provision in section (d), providing for a review of the Secretary's regulations by either of the two committees appointed, the fact remains that once those regulations are established, and the Secretary makes findings of fact as a basis for those regulations, those findings of fact are made conclusively against the manufacturer, under this act. Now, if you will permit me to develop my argument, I will indicate how that is going to work out in practice. This provision, as I have stated it, is fundamentally objectionable, because it is practically effective to place these regulations beyond successful court challenge as a rule.

That is manifestly its intended purpose. We maintain that a provision having such a practical effect is inequitable, because it denies the elementary right of fair play through independent court review and it operates to perpetuate regulations open to honest question as to their sound and equitable character. And it also operates to build and support arbitrary bureaucratic power of regulation under the act, subject only to the committee control prescribed by section 22, and later considered. It cannot be assumed that the Secretary's regulations will be invariably sound and equitable. If experience is the criterion, we know that they will not be such. This being so, the manufacturer is justly entitled to his unfettered court review. Moreover this provision is further objectionable because it is also practically effective to reverse the ordinary rule of evidence prevailing under the present act whereby the defendant in a criminal prosecution is presumed innocent until he is proven guilty, and the burden is upon the Government to prove that he is guilty. Foi with this provision in the act the Government need only prove that the defendant violated such a regulation. The burden is then upon the defendant to prove that the regulation is invalid, if his defense is to succeed. A burden ordinarily beyond his ability to carry in the circumstances.

But this opposition to the provision in issue will be subject to opposing argument. It will be first argued that the provision expressly stipulates that the Secretary's findings of fact are only conclusive “if in accordance with law”, and therefore a right of court review is assured. This argument is technically correct. But it avoids the important point that this right of review is severely restricted and that as a result and a rule it would be practically impossible to establish that such findings are not in accordance with law.

It will be next argued that this provision is not open to serious question, because it is provided in section 23 that the district court may enjoin the enforcement of any such regulation, based upon such findings of fact, if it is shown to be unreasonable, arbitrary or capricious, or not in accordance with law. "This argument likewise will not stand up, because if the findings upon which a regulation is based are conclusive the regulation will undoubtedly be sustained as a general rule. It must be assumed that the Secretary will make findings prima facie sufficient to sustain the regulation. The truth is that whatever chance a manufacturer may have to set aside such a regulation, deemed by him to be unsound and unequitable, without this provision, that chance is practically swept aside with this provision. It will be finally argued that the objection to this provision is sufficiently met by the committee plan of control of such regulations, prescribed in section 22. Under that plan two committees are appointed by the President, one a committee on public health and the other a committee on food standards. The plan is this:

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Whenever the Secretary desires such a regulation he so advises the appropriate committee; the committee must then recommend such regulation, if a majority of the members approve it; the regulation is then subject to public hearing, after which the Secretary may promulgate it subject to approval by a majority of the committee.

Now it is clear that this plan does not answer our objection to the provision as to the conclusiveness of the Secretary's findings. For

The first is that the objection does not arise until after the regulation is promulgated and the time comes when it is sought to avoid or modify the regulation by court action. The second reason is that the Secretary's power to make his findings of fact is subject to no review or control by the committee. It must approve the regulation before the latter is promulgated. But the Secretary's findings are made independently of it. This state of the bill is not an accident. It is clearly designed to cement these regulations beyond destruction. And it practically has that effect. This provision is apparently borrowed from the Federal Trade Commission Act. Section 5 thereof contains a provision that the Commission's findings as to the facts, if supported by testimony, are conclusive with respect of an order forbidding an unfair method of competition. But the two provisions are not comparable, in policy or form. For one reason the Commission's findings of fact are made conclusive only if they are supported by testimony. Whereas the Secretary's findings of fact are unconditionally conclusive. They may be based upon insufficient or incomplete evidence. For another reason the Commission Act goes on to authorize the court to require the Commission to take further evidence, if it is material to the validity of the order in question, under conditions prescribed by the court. Whereas this bill gives the court no authority whatever to require the Secretary to reopen the hearing upon the regulation for its evidential reconsideration.

It is clear that if this provision remains it fairly should be subject to the conditions that the findings shall only be conclusive if supported by the evidence; that if the evidence appears insufficient or incomplete the court shall be authorized to cause the hearing upon the regulation to be reopened for the taking of further evidence; that the court shall be empowered to unqualifiedly review the sufficiency of the evidence upon which the findings are based; and that the full record of the original hearing shall be placed before the court to enable it to make a due review of the evidence adduced. But we contend that this provision should be omitted entirely. In that event the Secretary is left positioned to fully protect the consuming public. He remains possessed with all his comprehensive power of regulation. And his regulation has the support of a long line of Supreme Court decisions sustaining the exercise of such administrative power of regulation under a general regulatory act. The sole difference would be a fair opportunity for the manufacturer to modify or reverse a regulation which is in fact unsound and unequitable. “And that difference fully justifies the ommission of the provision. It is not contained in the McCarran-Jenckes bill. That bill preserves the sound policy of the present act. It lays down broad definitions of adulteration, misbranding, and false advertising; it gives the Secretary complete power to construe, apply, and enforce these definitions, subject only to constitutional limitations; and it

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leaves the burden upon the Government to prove a violation of the act in each instance by the established rules of evidence. This should be the state of the revised act. It is pertinent at this point to note two comments upon the committee plan prescribed by section 22. Our first comment is an expression of approval of the inclusion of two representatives of the food manufacturing industry upon the committee on food standards.

Such a representation we suggest in the McCarran-Jenckes bill. Our second comment is to question the provision that no person shall be a member of the public health committee or a public member of the food standards committee who has a financial interest in the manufacture, advertising, or sale of any food, drug, or cosmetic. If this provision excludes scientific experts who are employed by the manufacturer, in an advisory capacity, then the number of eminent experts available for membership upon these committees will be

Now, that is as much as I have to say on that point, and before passing to the food provisions of the act, I would be glad to answer any questions on the conclusive provision of this.

Senator VANDENBERG. Mr. Dunn, did I understand that under S. 2800 these committees promulgate their regulation, ahead of the public hearing and do not reassert their interest in the matter after the public hearing ?

Mr. Dunn. No, sir. After the public hearings the regulations which may be desired by the Secretary are then subject to approval by the committee before they may be promulgated by the Secretary.

Senator VANDENBERG. Does the committee act again after the public hearing?

Mr. Dunn. Yes, sir. The committee acts, in the sense that the regulations may not be promulgated by the Secretary unless and until they are approved by the committee in each instance.

Senator COPELAND. May I say, in that connection, Mr. Dunn, I think your argument before the subcommittee found this mistake on page 37 is a very valid objection, and I think undoubetdly that the omission might well be made. Then there should be no regulation promulgated until a majority of the committee, after public hearing, had passed upon it.

Mr. Dunn. But that state of a bill would not meet at all the fundamental objection we make to the provision of conclusiveness, for the reason that our point is that unless the regulation is established, assuming it may happen to be unsound or inequitable, that because of this provision of conclusiveness of the findings of fact upon which the regulation is based, the regulation itself is practically unassailable in the court.

Now, that is the point we are making here.

Senator COPELAND. And that is the reason you want the appeal board on such acts as this?

Mr. Dunx. No. This has nothing whatever to do with the appeal board. This is a question, here, solely of the power of the Secretary to make formal regulations under the act. The appeals board deals rather with the question of the right to secure a review of an adverse decision of violation of the act. There are two different manners, although they are supplemental.

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Senator COPELAND. Under the present act the Secretary has the power to promulgate those regulations himself.

Mr. Dunn. He has the power to promulgate the regulations, but he must then, in case of a prosecution against a manufacturer, carry the burden of proof of establishing the guilt of the manufacturer in a criminal prosecution. Under this set-up that rule of burden of proof is reversed, and the manufacturer is placed in the impossible position of being compelled to establish that the regulation is invalid before he can successfully defend.

Senator CLARK. Of course, this is a criminal statute, isn't it?
Mr. Dunn. Yes, sir.

Senator CLARK. This is a reversal of the universal rule of criminal law.

Mr. Dunn. It is, sir. Now, I will take up the food provisions in this act, and then follow that discussion of the food provisions with a discussion of the advertising provisions.

Senator HEBERT. How would you modify paragraph (h), page 37, which provides that findings of fact by the Secretary shall be conclusive if in accordance with the law?

Mr. Dunn. The last sentence of paragraph (h) on page 37 should be stricken out entirely.

Senator HEBERT. Strike it out entirely?
Mr. Dunn. Entirely; yes, sir.

Senator HEBERT. So that in the case of a review, all questions of fact would arise de novo?

Mr. Dunn. Right; and the burden of proof remains as it has been under the common law, and is under the present act.

Now, with respect to the definitions and provisions in this act relating to food, we respectfully object to the definition of food in section 2 of Senate 2800, with respect of its application to ingredients of food. As now drawn, this definition includes all substances and preparations entering into the composition of food. We suggest that it should only include all substances and preparations intended for use in the composition of food. This because such substances and preparations may be and are also used for nonfood purposes and the act should not be extended to such use. Moreover this definition is subject to the criticism that it is not well and logically drawn, as to form.

Section 3 of the McCarran-Jenckes bill states the definition we suggest, which is essentially that designed in Senate 2800. It is this:

The term “food”, as used in this act, includes (1) all articles used for food, drink, or condiment by men or animal; and (2) all articles used for confectionery or chewing gum by man; and (3) any substances or preparation intended for use as an ingredient in the composition of any such article.

Confectionery is separately classified because it is not used by animals. And chewing gum is explicitly named to remove any question that it is within this definition.

There is a real serious question in my mind, whether chewing gum is within the term used of the act as it now stands. Therefore, it should be expressly included in the definition of food, and I may properly make that objection, because I am counsel for the Beechnut Packing Co., which is one of the largest manufacturers of chewing gum in the country.

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