Sidebilder
PDF
ePub
[blocks in formation]

FOODS, DRUGS, AND COSMETICS

[ocr errors]

THURSDAY, MARCH 1, 1934

UNITED STATES SENATE,
COMMERCE COMMITTEE,

Washington, D.C.

e committee met, pursuant to adjournment at 10 a.m., in the is room, Senate Office Building, Senator Hubert D. Stephens ding.

esent: Senators Stephens, chairman, Murphy, Caraway, Clark, land, Bachman, Gibson, Erickson, Hebert, Brown, Overton, Vandenberg.

ne CHAIRMAN. Come to order, please. Judge Davis.

TEMENT OF HON. EWIN L. DAVIS, COMMISSIONER, FEDERAL
TRADE COMMISSION

he CHAIRMAN. You may proceed, Judge, to discuss the matters t you have in mind.

udge DAVIS. Mr. Chairman, and gentlemen of the committee, it. s indicated that the committee would be glad to hear whatever › Federal Trade Commission might desire to state in relation to the 1 under consideration, S. 2800, and the Commission delegated me appear in that capacity.

I wish to state that we appreciate this privilege, and I shall underke to be brief in what I may say, unless questions of the committee ay lengthen the time required.

We assume that it is not expected of this Commission to give any ›inions in relation to any feature of the bill as it relates to any her agency, and consequently I shall only discuss it from the andpoint of the jurisdiction of the Federal Trade Commission. s perhaps you are aware, the Federal Trade Commission has irisdiction over false and fraudulent advertisements. In its rganic law it has enjoined upon it the duties of preventing unfair ethods of competition in commerce, and the courts have repeatedly and uniformly held that false and fraudulent advertising came within that category.

Senator VANDENBERG. Judge, you are referring, now, not only to food and drug advertising, but all fraudulent advertising?

Judge DAVIS. All advertising, Senator. The Commission has exercised this jurisdiction from its beginning about 19 years ago, and during that time has handled many thousands of advertising cases relating to every article of commerce, almost.

An examination of the reported cases indicates that about 70 percent of the Federal Trade Commission's unfair-method-of-com

231

FOODS, DRUGS, AND COSMETICS

THURSDAY, MARCH 1, 1934

UNITED STATES SENATE,
COMMERCE COMMITTEE,

Washington, D.C.

The committee met, pursuant to adjournment at 10 a.m., in the caucus room, Senate Office Building, Senator Hubert D. Stephens presiding.

Present: Senators Stephens, chairman, Murphy, Caraway, Clark, Copeland, Bachman, Gibson, Erickson, Hebert, Brown, Overton, and Vandenberg.

The CHAIRMAN. Come to order, please. Judge Davis.

STATEMENT OF HON. EWIN L. DAVIS, COMMISSIONER, FEDERAL TRADE COMMISSION

The CHAIRMAN. You may proceed, Judge, to discuss the matters that you have in mind.

Judge DAVIS. Mr. Chairman, and gentlemen of the committee, it. was indicated that the committee would be glad to hear whatever the Federal Trade Commission might desire to state in relation to the bill under consideration, S. 2800, and the Commission delegated me to appear in that capacity.

I wish to state that we appreciate this privilege, and I shall undertake to be brief in what I may say, unless questions of the committee may lengthen the time required.

We assume that it is not expected of this Commission to give any opinions in relation to any feature of the bill as it relates to any other agency, and consequently I shall only discuss it from the standpoint of the jurisdiction of the Federal Trade Commission. As perhaps you are aware, the Federal Trade Commission has jurisdiction over false and fraudulent advertisements. In its organic law it has enjoined upon it the duties of preventing unfair methods of competition in commerce, and the courts have repeatedly and uniformly held that false and fraudulent advertising came within that category.

Senator VANDENBERG. Judge, you are referring, now, not only to food and drug advertising, but all fraudulent advertising?

Judge DAVIS. All advertising, Senator. The Commission has exercised this jurisdiction from its beginning about 19 years ago, and during that time has handled many thousands of advertising cases relating to every article of commerce, almost.

An examination of the reported cases indicates that about 70 percent of the Federal Trade Commission's unfair-method-of-com

231

petition cases have related to some form of advertising, and of this 70 percent of their cases, embracing many thousands, about 20 percent related to food, drugs, and cosmetics; the other 80 percent relating to various other forms and classes of commodities.

The procedure before the Federal Trade Commission in relation to unfair-methods-of-competition cases is that when a complaint is made, or in any manner there comes to the knowledge of the Commission a probable violation of such law, a preliminary investigation is made, sometimes in the form of a questionnaire, and sometimes by personal contacts through one of the Commission's field investigators. If it reaches a point that it is indicated that there is a probable violation of law, a formal complaint is issued. The respondent is served with a formal, specific complaint, is given 30 days within which to answer, if he desires to litigate it, and then it pursues the same course, practically, as a case in court. An attorney of the Commission takes proof, before a trial examiner of the Commission, who is skilled in that work, and who is absolutely impartial. He has had nothing to do with the preparation or prosecution of the case, and then counsel for the respondent is entitled to present whatever proof they desire.

Then the trial examiner prepares a written finding of facts, to which either counsel may note an exception, and be heard before the Commission. Then the case is submitted to the Commission upon brief, and also upon oral argument if desired, and the Commission itself, of course, having nothing to do previously with the prosecution or investigation, sits there in a judicial capacity and undertakes to decide the case in accordance with the law and the facts; and in that connection, under the Federal Trade Commission, has grown up a long line of precedents, not only in the Commission, but in court decisions, because our cases have been reviewed time after time by courts, including the Supreme Court.

The Supreme Court recently rendered two very important decisions affirming this Commission.

Senator COPELAND. Was one of them in the Marmola case?

Judge DAVIS. That is not the one to which I referred. That was a case; yes, sir. That was one of the cases.

Senator COPELAND. In that case, did not the court hold something to the effect that the Federal Trade Commission could hardly act, because it was competition between two knaves, and that the Federal Trade Commission had to do with competition between concerns, and nothing to do with health, itself?

Judge DAVIS. It held the former; yes, but not the latter. It reversed the Commission, on the ground that it was competition between knaves, and ignored the public equation; but I would say that in that respect that was quite an extraordinary decision, and we haven't had a difficulty of that kind except in very few instances; and furthermore, we expect to ask for and to procure an amendment to our act, which will cure the difficulty which was presented in that decision.

Senator COPELAND. Is there any conflict between the Federal Trade Commission and the Bureau of Food and Drugs?

Judge DAVIS. No; I want to state that there has been a fine cooperation between the Commission and the Pure Food and Drug Division of the Department of Agriculture. They have heretofore re

« ForrigeFortsett »