leading, the burden of proof is upon the Government to prove that the advertisement is actually injurious to the purchasing public. Now, we feel that the limitation is a reasonable one, that is required in the circumstances, which is to see that the law is not enforced against anything in the way of an advertisement which is not actually injurious to the purchasing public, and that on the other hand with this limitation and the definition, you still have a fully effective law that will protect the public interest, because in the case of enforcing the present provision in S. 2800, or the substitute provision that we suggest in the McCarran-Jenckes bill, the proof is precisely the same. You put on the stand experts, we will say, advertising men, or representatives of the consuming public, who will state that in their opinion this advertisement is in fact injurious and misleading to the purchasing public, and that is the evidence that you have to offer, that sort of evidence, in any event.

Now, let me make this very important point, which has not yet been brought out in the hearing. The Federal Food and Drugs Act serves as a standard for similar State legislation. The moment this act was enacted, in 1906, there was a process of enactment in the various States of the Union of a similar law, so that we have today, I think, with the exception of only 1 State--New Mexico--a practically identical law with some variations in every 1 of the remaining 47 States. Now, the moment you get this law upon the Federal statute books, you are going to have a duplicaion of that law, without any question, in the 48 States of the Union. Now, just see what that means; when you come to false advertising and you have 48 jurisdictions aside from the Federal jurisdiction all passing upon the truth or falsity of the same advertisement, because your magazines and your newspapers which carry these advertisements are sold in intrastate commerce as well as interstate commerce, when they are sold from the newsstands or delivered locally; and therefore it is of the utmost importance from the standpoint of public policy, from the standpoint of the advertiser, of the honest advertiser, that your definition of “ advertisement” be just as exact and just as precise and just as definite as possible; because, if you leave it open in an unduly loose form, that very moment you create the situation of an immense conflict of administrative construction and application of precisely the same law, in the case of the Federal law and the 48 different State laws, so that it is highly important that we have this definition as exactly as possible, and we have recommended what we think is about as exact a form of this definition as you can draw.

Now, as to the question of "trade puffing”, we recommend only this, Mr. Chairman, not a complete exemption of trade puffing. That would not be in the public interest. That is not what the legitimate advertiser could properly request. We only request a provision in the act to this effect, as is written in the McCarran-Jenckes bill, that in construing and in applying this act, reasonable allowance, consistent with the purposes of this act, shall be made for trade puffing, which is recognized as the common law.

Now, that provision in no way hampers the administration of this act against trade puffing that ought to be prohibited under the act. That in no way prevents the court from sustaining to the fullest extent the new application of this act by the Department of Agriculture, but it does have this valuable and constructive effect, that it writes into the statute the fact that recognition should be given to trade puffing consistent with the purposes of this act, to a reasonable extent, so that in the event that the Department of Agriculture does unjutly and improperly condemn trade puffing under this act, which does not operate to deceive and injure the purchasing public, that there would be a standard in this act upon which the court could rest a decision that would correct that administrative application.

Now, coming to the question of the administration board of review, I have answered that very extensively in my prior testimony before this committee, and I desire to revert just a moment to it. because we consider that this is the heart of the whole bill, from the administrative standpoint, this board of review. Now, there have been two objections, or two arguments made to me since I came to this hearing, against this administrative board of review. The first argument is that there should be no right, properly, of a review of a purely technical question of adulteration, which involves a chemical analysis or something of that sort, where no exercise of administrative opinion comes in, in the administration and construction of this act. That is quite acceptable to us. We are perfectly willing to have this provision as to a board of review exactly limited, only to cases where you have an exercise of administrative opinion in the construction of a label or the construction of an advertisement, and that limitation would meet that objection.

Now, the second argument that is made against the board of review-it is the argument, I believe, that the officers in the Department of Agricuiture advanced—is this, that the Secretary of Agriculture is given the power to enforce this Food and Drugs Act, and by inserting or setting up this board of review you are in effect taking away the power of administration from the Secretary of Agriculture, and you are compromising the right of administration. Well, now, that argument does not stand up, upon analysis. The Secretary of Agriculture is left in possession of complete power to administer this act. All that this board of review does is to review and to correct any misadministration of the act, to the extent that there is an administrative decision of a violation of the act, by an advertiser or an importer or a manufacturer, that is not warranted, and before the manufacturer or the advertiser is dragged into court, charged with a criminal prosecution and branded as a false advertiser to the public.

Now, in the McCarran-Jenckes bill we expressly provide that the administrative board of review shall have the power to determine whether it will accept or grant an application for review. In other words, if the application shows upon its face that the evidence supports the decision of violation of the act, then the boaord will presumptively deny that application.

The board will only grant the application for administrative review where the facts of the record show that there is a reasonable question whether that administration is right; and if there is a reasonable question that the administrative decision is right, I say that as a matter of equity and as a matter of sound public policy, there ought to be the right of review there, that is impartial, and

to correct any misadministration of the act, so that this board of review will not actually operate in fact to prevent or to qualify the due administration of the act, but it will actually and effectively operate to prohibit and prevent a misadministration of the act, especially in the field of advertising because we are now entering a vast field without any limitations, when we get into the field of advertising, where it is all a question of opinion, in most instances, as to whether the advertisement is in violation of this act, and in this field of opinion, where you may have an honest difference of opinion and contrary conclusions, of equally honest people, there ought to be some provision there that will allow an impartial review of a decision that is deemed to be unjust.

Let me go a step further and say that under the Federal Trade Commission Act, you almost have, in effect, this board of review, now, because the five members of the Federal Trade Commission have nothing to do with the original administration of the act that that is all done by their associates. They prepare the complaints. They hold the hearings. They take the evidence, they make the recommendations to the Commission, so that when the matter finally comes to the Federal Trade Commission—and every case has got to be argued before the Federal Trade Commissionthat the Commission is in effect an impartial board of review.

Now, you do not have that same situation in the Department of Agriculture today. There, the proceeding is this, that when a violation of the act is charged, you go before the local laboratory chief. He has no power whatever to make a judgment in the matter. He simply performs administerial duties, of receiving the evidence and passing it on to Washington, and there the evidence comes to Mr. Campbell and his associates, and they make the final decision; so that in effect Mr. Campbell and his associates are the prosecuting attorney, they are the judge and the jury, and there is no appeal from them to anyone except in the very rare instance, and I think I have only known of one or two instances in the entire 25 years of the act, where an appeal has been taken directly to the Secretary of Agriculture; so that you do not have anyone, as a matter of practice, to whom you may go, to review a decision of Mr. Campbell, and his associates, which you may think is wrong.

Now, in referring to Mr. Campbell as I do, I do not wish to infer or to state in any way that I question the administrative judgment of Mr. Campbell. I have the highest admiration and regard for him. As a matter of fact, I would rather trust Mr. Campbell's administration of this act than I would the administration of these committees that are proposed to be set up by the act, because I know from 25 years of dealing with Mr. Campbell that he is absolutely square and honest, and that he gives, as a rule, a sound and just decision on these matters. I am advocating a principle. I am advocating a procedure which is now required, because we are extending this act into the great and limitless field, almost, of false advertising.

Senator COPELAND. Mr. Dunn, my attention was diverted for a moment. Did you suggest the personnel of that committee? Would you have it appointed by the President in the same manner as the others?

Mr. Dunn. I would have the appointment by the President, without any limitation as to the qualifications of the membership of the committee. In other words, you have here a quasi-judicial body, in effect, just like the Federal Trade Commission, or perhaps like the court itself, and we are satisfied to leave the power of selection entirely in the hands of the President of the United States; and we feel that he will select a body that will be the proper body, in this situation.

Senator COPELAND. That would not need to be a large body, would it?

Mr. Dunn. A board of five would be quite sufficient, in our judgment.

Senator COPELAND. Would three be too small !

Mr. Dunn. I think three would be too small, for the reason that in dealing with the questions of advertising, you have a very large field.

Now, so much for the problem of the advertising, which is of major importance in the consideration of this act. Now, I desire to say a word about another very important provision in this act, to which very scant reference has been made during this hearing, and that is the provision contained in section 12 of the act, providing for factory inspection. Now, I wish to direct the attention of the committee to the breadth of this provision, and to show why it is unsound from the standpoint or public policy in its present unlimited form. This section provides that whenever the Secretary of Agriculture finds that the distribution in interstate commerce of any class of foods or drugs or cosmetics may, by reason of conditions surrounding the manufacture, processing, or packing thereof, be injurious to health, and that such injurious nature cannot be adequately determined after such articles have entered into interstate commerce, and in such cases only, he is authorized to place those factories under Government permit, and as a result of that situation, to completely control, by regulation, every condition of production in that business.

Now, bear in mind that we are now writing into the act, through this revised bill, a provision which extends the definition of the adulteration of food into the field of unsanitary production. Under this provision as it is now drawn, the Department of Agriculture can place any branch of the food or drug industry in this country, at any time, in its discretion, under the complete Government control, which will be effective to regulate every single detail of production in that business.

Suppose, for example, the Department of Agriculture says that the conditions in the meat-production industry, the sanitary conditions, are such that the Government requires this permit system of control. It would be authorized to place all the meat-packing business of this country under Government inspection. That is hardly a fortunate illustration, because the meat business is now under the Government inspection, through the Meat Inspection Act of 1906; but let us take the canned-food industry.

The Government might well say to this industry that because canned food is to some extent produced under unsanitary conditions, that, therefore, the industry, the glass and canned foods, as a whole, should be put under Government inspection, and so with fish products.

Take the question of drugs. There isn't any doubt whatever that under this provision the Government could place biologic drugs under this Government control, and Mr. McCoy appeared here before the committee the other day, for the United States Public Health Service, and he pointed out that we now have a law, controlling biologic products, and the there was not, there should not be, any duplication of this Government control.

Take the pharmaceutical products, the industry I represent. The Government may well say that because certain parts of this industry, and because of certain individuals engaged in this industry, there is an inadequate control of the production process; that, therefore, we shall place all of the pharmaceutical products under Government control, under this permit system, and that it could be very easily done.

The patent-medicine business could be the first thing placed under control as to the complete regulation of its manufacture.

Senator COPELAND. Mr. Dunn, you know, of course, even better than I do, that the purpose of this is largely to take care of crab meat, and lobster, and so forth. Now, how would you do that?

Mr. Dunn. Senator Copeland, my answer is this, that if as a result of 25 years of the administration of this act, it has been found that a few food products--and you have named two of them-should be, in the public interest, placed under this permit-control system, then the act ought to be drawn to be confined to those few products, and not to be left wide open, to give to the Department of Agriculture, the power, because of that limited public necessity, to place the whole food and drug industry of this country under complete Government permit control.

Senator COPELAND. Of course, you realize, I assume, that that could be done, so far as these perishable products are concerned.

Mr. Dunn. Well, whatever the products are, Senator Copeland, that ought to be placed under this permit-control system, then the act ought to be expressly written to confine it to those products; and you agreed the other day, in discussing Dr. Beal's testimony, when it has been developed over the period of the last 4 years of pharmacy, that there are only a few or a handful of drugs that are found to be dangerous narcotic drugs, that the law ought to be limited to stating on the label the names of those drugs only, because that statement is justified by the experience of the act.

Now, we have precisely the same situation here. We have found a public need with respect to certain particular products. It is very proper, then, to place the permit control over those particular products, but there is no reason in sound public policy; there is no reason in equity why you should, as a result of that limited public need, give the Department of Agriculture the broad and comprehensive power to place the who food and drug industry in this country, in its discretion, under its control. That is the point we have made.

Senator COPELAND. You would perhaps be willing to modify this section 13, that the manufacture of any article, where it is possible the public health is involved, there should be that right, then?

Mr. Dunn. No; I would not, because I think you are left in precisely the same situation against which I am arguing. What I argue


« ForrigeFortsett »