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or the other, which is actually false in fact, or you may have a label or an advertisement which is literally and technically true, but is so gotten up and displayed and worded, that it actually' is misleading to the consuming public.

Let me illustrate that, for example. Suppose, for example, I might take a perfectly innocuous, a simple preparation, which may be good for treating colds, and I would draft an advertisement for publication to the consuming public in which the principal word across my advertisement, which is in large letters, is " Pneumonia.” Then I would go on and discuss pneumonia, and at the end I would suggest this preparation. Well, now, the chances are that that advertisement would be construed, or maybe written, so as to lead the consumer to believe that that preparation is a good remedy for pneumonia. It is literally true, but actually misleading.

Now, the point that I am making is this, that where you have an advertisement that is literally true, but said to be actually misleading, then the Government should carry the burden of proof to establish that that advertisement is actually misleading, and is injuriously misleading to the consuming public.

Now, when we get into the discussion of “trade puffing” and “ boasting”, with which I will later deal, we come into a field where we are dealing with what we know as “prideful boasting” or “harmless exaggeration ” in trade, which are not literally correct, but have been recognized as valid under the common law, and have been sustained under the Federal Trade Commission Act. Now, those trade-puffing statements, for example, that “My product is the best in the world", would be literally condemned under the operation of this bill, if it is literally construed and applied to that advertisement. There, to meet that situation, you must have three things, as we saw: First, you must make your definition of false advertising and false branding provide that the act is only violated when you have a literally true representation, if it is established that that representation is actually injurious to the purchaser.

Senator MURPHY. Now, that is a word that I want to learn about“injurious." Under what circumstances is it injurious?

Mr. DUNN. Could I state my three positions? Then I will come back.

Senator MURPHY. Certainly.

Mr. Dunn. Now, the third provision you must insert in this act, to have it fair-I have stated the first, the proper definition; the second is the power of review by this Board of Review, so as to catch anything that may be a misadministration; then, thirdly, is a provision expressly written into the act, which shall make reasonable allowance for trade puffing, recognized at the common law, to the extent it can be consistently done with the purposes of this act.

Now, with those three conditions satisfied, vou have protected the honest advertiser, in my judgment, as much as you can protect him fairly, and on the other hand you have left the act quite effective and full effective, to protect the purchasing public, in the circumstances.

Now, getting back to your question as to injury, that is a matter of evidence.

Senator Murphy. Well, is it of physical consequence to the individual, that takes it? Is that what you mean by “ injury”?

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consumers.

Mr. Dunn. I think the evidence would consist first of opinion tesmony, the testimony of experts, and second, of opinion testimony by

Senator MURPHY. Well, a representation is made about a certain article on a label. The test is applied to that, that it is injuriously misrepresented, here?

Mr. Dunn. Yes, sir.

Senator Murphy. Must that injury be in physical damage to me, as a consumer of that product?

Mr. Dunn. No.
Senator MURPHY. To my health?

Mr. Dunn. No, sir. The injury that is contemplated by this act is of two sorts, and always has been--first, injury to health, and secondly, injury to your pocketbook; that is to say, an economic injury, an injury that is deceptive to a purchaser, as such, so that if you had an injury upon either point, and you can establish it by the evidence, then you have made out a case of violation of the act.

In other words, it only suffices to show that that misrepresentation which is literally true, but actually deceptive, defrauds, if I may use that term, a purchaser in the payment of his money for the article, to establish a violation of the act.

Is that clear?
Senator MURPHY. Yes. I know what you mean. I don't go along

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with you.

Mr. Dunn. Well, the only point that I can make, Senator, the only thing that I can say in answer to your objection, is this, that the most we can do in an act of this kind is to lay down what seems to be a sound rule or definition, which will be fair to the public and fair to the manufacturer and advertiser, and then let the application of that rule be determined upon the basis of the facts adduced in each case, and we have found that situation has been amply protective of all concerned, heretofore.

Senator IIEBERT. Under the McCarran bill, if a label be misleading, though not injurious, that will be permissable, and an advertiser can go on and mislead the public all he wants, as long as he does not injure the public's pocketbook or health ?

Mr. Dunn. Yes. In other words, it will permit such a thing as we call “ trade pufling” with which you are familiar, and if you care to have me do so, later on, I will read some of the examples of trade

, pufling which are used in commerce today--what we call “ prideful boasting” or “ harmless exaggeration,” with respect to “I make the finest car in the country” or “ My product is superior to any other." Now, that is just a matter of prideful boasting. I think we all feel that way, if we have pride in our business, and certainly that sort of thing should not be made a criminal offense under this act.

The act should extend only into the field where you have a misrepresentation of fact, which actually works an injury upon the public in the respect of an injury to health or an actual injury to his pocket.

Senator MURPHY. Well, do you think that we should require the Secretary of Agriculture, in the case you cited in the advertisement regarding pneumonia-that is, the flash line in your advertisements that we should require the Secretary of Agriculture to prove a case there! Isn't that prima facie?

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Mr. Dunn. He must prove it. I would say in a case like that that the evidence to support the definition of the McCarran-Jenckes bill would be precisely the evidence that is used to support a violation of the present act, as to the label, and would be equally effective in either case, because there you have rather a clear-cut case, as I see it, but where you got into the border-line cases—that is, very close cases, “Good to the last drop” and things of that kind-now, just what are you going to say about those things, and how far are you going to go? Are you going to read this act literally and thresh out everything that a manufacturer may say in defense of sincere pride in his product? Or are you going to permit him a certain degree of reasonable latitude in his expressions up to the point that he does not actually work an injury upon the consuming public and that point can be established by the evidence in any case ?

Senator Murphy. Give him as much latitude as you would give a mother talking about her baby.

Mr. Dunn. That is exactly the same. There is not a mother who does not believe that her baby is the finest in the world, and I believe that is true of any honest food or drug manufacturer.

Senator COPELAND. May I ask you, Mr. Dunn, is the language as found in S. 2800 the same as the present law?

Mr. Dunn. Yes, sir; it is substantially the same.

Senator COPELAND. You have had court decisions which have determined that there must be a reasonable interpretation of that law?

Mr. Dunn. Yes, sir. The reason that we have changed it, Senator Copeland, is this: Because of the extension of the act to advertising, we have written the definition of “false advertising ” in this broader and more particularized way, and thereby we have made the same definition with respect to false labeling.

Senator COPELAND. But the fact remains that this language is not new; it is in the law and has been interpreted by the courts?

Mr. Dunn. That is entirely correct, and my answer to your implied objection to the amendment is this: That under the revised provision which we propose, the Government will be able to as effectively protect the public as heretofore. The only difference will be that there will be those reasonable limitations upon the exercise of the powers which we hope are exercised today.

Senator COPELAND. Your contention is that it would not weaken the present law?

Mr. Dunn. Yes, sir; fundamentally.
Senator COPELAND. Of course, I differ with you there, Mr. Dunn.

Mr. Dunn. And I say that very seriously, because if I were charged with the responsibility of enforcing this provision, I would feel that I was in substantially the same position of ability to enforce this revised provision as I would be in the case of the present provision.

Senator COPELAND. But the courts have held that trade puffing was legitimate under the present law.

Mr. Dunn. The courts have held that trade puffing is legitimate under the common law, but not

Senator COPELAND. That was not set aside by the existing Food and Drug Act.

Mr. Dunn. The existing food and drug law does not extend to advertisements, and it is in advertisements that you get the practice

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of trade puffing. The label on the particular food, cosmetics, or drugs, is a very limited thing, and relates only to the composition or to the identity of the article, whereas, in the field of advertising, you have a trade appeal to purchase, and a selling argument-and there you indulge in these fanciful statements which we call trade puffing, and it is because of the extension of the act to include them, that we now feel that there must be a little more exact definition in the act, in order to see that there is no injustice done in the administration of the act.

Now, I am coming to a subject, rather important provision in the misbranding section 7 of S. 2800, to which we have serious objection. We respectfully object to the failure of section 7 (a) (1) of Senate 2800 to provide that in construing and applying the prohibition therein of misleading containers as to fill, reasonable variations and tolerances shall be permitted which allow for subsequent shrinkage or expansion of the food and for discrepancies due to a natural or other cause beyond reasonable control in good commercial practice.

This permissin is necessary if such prohibition is to be equitable. It is contained in section 5 (b) of the McCarran-Jenckes bill. Senate 2800 provides for reasonable variations from the label statement of the net quantity of the contents; and such a provision is equally justified with respect of container fill. It was in the Haugen bill, to amend the existing act against deceptively shaped and filled containers, which the Department of Agriculture previously drew and long advocated.

In other words, the situation presented by the definition is this. The act now prohibits, as drawn in Senate 2800, and properly prohibits, any such container as to fill.

In the case of certain food products, we will say corn flakes, as an illustration, you fill that package up as full as you can, in the beginning, but in the course of handling, it shakes down, and when you get it into the hands of the consumer, there is less than a full package, so that the weight is less than the weight stenciled on the label.

In the case of other products, such as baking powder, you have the case of expansion, due to the condition of moisture entering the product after manufacture, so the can must be less than filled, in order to allow for the subsequent expansion of the product.

In this bill, as it is written, no allowance whatever is made for any reasonable variation to provide for such conditions beyond control of the manufacturer.

Senator HEBERT. Section 11 appears to take care of that objection. It provides that the Secretary may promulgate regulations to determine the minimum standards.

Mr. Dunn. No; that does not go as far as what we have here to consider. That section 11 authorizes a minimum standard of fill. In other words, that you must have at least so much in your package.

Now, what we are considering is that assuming you have supplied that minimum standard of fill, and subsequently, for no reason within the control of the manufacturer, that product shakes down in transit, and you have less than the standard fill, that reasonable allowance ought to be made for that variation.

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Senator COPELAND. Isn't it true that minor violations may be dealt with by the Secretary?

Mr. Dunn. That is true, but we are contending that we should not be required to reach the point of an actual violation of the law in a situation of this kind. We are entitled to this reasonable variation exemption, exactly as we are entitled to that exemption with respect to the net-weight measure and numerical count.

Senator HEBERT. Is this what you have in mind, particularly, the shrinkage in the contents of the package that takes place in transit, as well as after it gets on the shelves of the retailer?

Mr. Dunn. Yes. Then you have a case of shaking down, that is a very common thing. You can take a package of corn flakes, and it is very full, flush, you fill your package full at the factory, but the moment you get that package to the wholesaler or the retailer, it does not contain a full package. You cannot protect yourself against that thing

Senator HEBERT. In that case you would not have the manufacturer doing his own shaking down.

Mr. Dunn. Of course, if the manufacturer attempted to do that, the law would reach him. We are dealing with a case where the manufacturer is not doing it. We are dealing with a case—the manufacturer in this situation is helpless.

Senator COPELAND. You are protected by section 22 in this matter.
Mr. Dunn. Not that I understand.
Senator COPELAND. Page 8. [Reading]:

If its contents fall below the minimum standard of fill prescribed by regulations as provided by sections 11 and 22.

If there are conditions inherent in a thing, in the shape of a thing or article, not provided for by sections 11 and 22, those conditions may be recognized and prescribed.

Mr. DUNN. It may be, Senator Copeland, true, that the Secretary may prescribe those regulations. We are asking for an express exemption written into the act, as in the case of net weights, measures, and numerical count.

Senator COPELAND. What difference is there between that situation and the one where his product shows a variation in fill, due to circumstances beyond his control also!

Have you ever been on the administrative side of a law like this? Mr. DUNN. No.

Senator COPELAND. I might agree with you if I had not administered a law of this sort.

Mr. Dunn. I absolutely contend that it is absolutely unjust to lay down a requirement for the manufacturer that he cannot practically observe.

Senator COPELAND. He has an appeal to the board.
Mr. Dunn. What good is the appeal to the board?

Senator COPELAND. If he is an honest manufacturer and presents a case to the board, they will meet the manufacturer on that.

Mr. Dunn. I admit the cogency of that argument, that there is that protection, of course, but I contend that this provision should be written into the act when you already have written into the act the same set of rules with regard to net weight, measure, and numerical count.

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