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On the other hand, these organizations are impressed with the fact that the needs and problems of industries producing raw foods or semiprocessed foods are entirely different from those affecting refining, fabricating, manufacturing, and processing of foods in a form “ready for human consumption.”

The statements contained herein are intended to constructively suggest changes that may be made in existing proposed statutes, particularly Senate bill 2800, which would permit of equitable recognition of the problems of such industries as the dried-fruit industry and other perishable and semiperishable producing industries. In setting forth these statements, they are inspired with a desire to cooperate with the Government in serving the best interests of the public, while at the same time defending by fair means the just rights of growers and others engaged in producing and handling high-quality foods enjoying, under the auspices of the present law, wide consumer acceptance not only in the United States but on an international scale.

I might point out that agriculture is a basic industry on the Pacific coast ; that the Pacific coast is 3,000 miles from Washington and probably 4,000 miles away from its average market, which means that its problems differ substantially from those of many other producing sections of our country.

Section 2, subsection (e), defines interstate commerce by providing for the Secretary's scope of authority to control by regulation and otherwise of commerce with the entire world. This authority, unless handled elsewhere by special provision, could lead only to injury of American growers and handlers of foodstuffs without compensating advantages to consumers. The regulation by the United States Government of commerce now regulated by the many countries of importation would deprive American agriculture of the competitive opportunity of many of the countries of the world already regulated by their own laws and confer added competitive opportunity to foreign countries producing like foodstuffs.

Apparently much of the philosophy of Senate bill 2800 develops largely from consideration of manufactured foods. It should be recognized that foods fall into two sharply different classifications-raw foods and those manufactured and prepared ready to serve. In the former are fruits, vegetables, and staples that are customarily purchased by the housewife and prepared in the home. In ready-to-serve foodstuffs the service of preparation is usually performed by the packer or manufacturer of the product. The refining, full processing, combining, and services of like nature are performed for the housewife, and in addition to buying a food she is buying a service. In the case of raw foods, unprocessed or at most only semiprocessed, the housewife is attracted by economy and other potent influences to buy the food and herself prepare it.

To make the distinction even more clear, raw foods or semiprocessed foods, both perishable and semiperishable, are natural products. Whereas, ready-to-serve foods may be considered manufactured, fabricated, refined, or fully processed and their natural perishability substantially limited.

In the category of raw foods, which are natural products the forces of nature are constantly at work. The whole system of distribution relates to the effect of these forces upon the product. Consequently, during the phases of production and distribution, death is approaching the product in terms of measurable time. In other words, deterioration commences at the moment of birth and ceases at the moment of death. During this period, certain changes, chemical and physical, take place in the product with resulting phenomena that may be declared below United States standards under regulatory action.

I might point out there, for a moment, Mr. Chairman, if I may, that I think it has been the experience of many of these industries, many of which have their own or State inspection services, that sound goods certified to conform to the United States regulations have after arrival at destination and subsequent examination, been found to have deteriorated to a point where they are, at the latter point, found to be in violation of the Federal regulations.

I would like to interpolate here at this time that the Pacific coast industries are proud of their record. We are selling our product, as I said before, throughout the world. The quality standards maintained by them have made them a major source of supply for food specialties and there are some 200 of them selling in many of the markets of the world, and certainly in the American market. Therefore, it subscribes heartily to any regulatory action of law, which contributes to maintaining a high standard. Naturally, the higher the standard, the greater is going to be consumer acceptance.

The industries we represent are prepared not only to submit to but cooperate in the maintenance of fair and reasonable regulations of this character and to support and maintain American standards of living. This is a domestic measure, intended to protect American consumers.

I want to point out that the food standards of foreign nations of the world are strikingly in contrast. Certain races and nationalities demand products that under American standards would be considered adulterated. I might refer you to the Sikhs of India, the Igorotes of the Philippines, and many races and peasantry in Europe in general. Their standards-æsthetics, that is what we are dealing here with, are entirely on a different basis than our own.

These racial and national demands have always been recognized and satisfied, either by their domestic production or by importation. The effect of paragraph 1 of section 20 would be to apply American regulation to commerce in foodstuffs with foreign countries in a manner extremely detrimental to that commerce, as has been pointed out, without compensating advantage to American consumers. For example, the dried-fruit industry is competitive in production and sale in world markets, with Russia, Persia, the Levantine and Mediterranean countries, Australia, and South Africa, and the application of regulations already in existence to that business would merely deprive American producers of significant economic advantages, while conferring inequitable competitive opportunities upon competitive countries. The effect of this would automatically be to enforce the destruction of substantial quantities of salable products at sources of production, and it is inevitable that this loss must of necessity be passed on to American consumers by forcing price levels upwards of products permitted under regulation, or force loss upon

many thousands of growers. If upward trend occurred, a rising level of prices would further reduce purchasing power and volume of foreign buyers.

I want to indicate here that there is a very delicate balance in all these influences, an economic balance, and one that can very easily be deranged by thoughtless or intentional action which serves to curtail and throw out of balance those economic forces.

The economic effect, with its various ramifications, could well bring about serious impairment of the solvency of American foodproducing industries now enjoying a substantial volume of export commerce.

It is respectfully submitted that either the definition of interstate commerce should be changed or that suitable provision be made which would confer upon American citizens the rights of full competitive opportunity in meeting the legal demands of foreign countries which already enjoy protection under their own food laws and regulations.

I might say, in this connection, that we prefer as a recommendation, the section in the McCarran-Jenckes bill heretofore referred to. Section 16, paragraph (b) on page 18, which provides that this act shall not apply to

(b) To any food, drug, or cosmetic shipped or delivered for shipment for export to a foreign country in a form complying with the laws of said country and acceptable to the foreign consignee: Provided, That if such article is diverted for domestic use and remains in commerce it shall become subject to this act.

However, if the committee disapproves of that suggestion, we earnestly urge that section 2 of the Food and Drugs Act of 1906 be retained. It has the benefit of court decisions, making it understood and accepted in export trade, under which a very large export business has been built up in agricultural commodities.

I might point out here, in the dried-fruit industry alone, of the Pacific coast, as much as 50 percent of the total volume is sold in Europe, and the Europeans are glad to get it.

It is submitted this wording should be incorporated in place of the wording for that section. The wording is:

Provided, no article shall be deemed misbranded or adulterated within the provisions of this act when intended for export to any foreign country and prepared or packed according to the specifications or directions of foreign producers, when no substance is used in the preparation or packing thereof in conflict with the laws of the foreign country to which said article is intended to be shipped, but if said article shall in fact be sold or offered for sale for domestic use or consumption then this proviso shall not exempt said article from the operation of any of the other provisions of this act.

I have emphasized, Mr. Chairman, the difference that we feel is of paramount importance between raw foods and semiperishable foods.

There are one or two other sections here that I think deserve special attention. I would like to refer for a moment to section 17, subsection 7 (b). It was mentioned this morning. It provides a minimum fine, and although the fine in question does not represent a substantial sum it nevertheless relates to certain offenses which are clearly excusable and which could not be subjected to fines of even such small amounts.

This statement that the minimum provision should be removed so that such minimum fines would be discretionary with the courts of proper jurisdiction, it seems that that is in line with justice. Naturally, this product is subject to change. No one can guarantee the period of its life, and in the handling of large volumes, it is not possible to handle each piece of food.

Some of the regulatory tolerances that are established are set up with a view to American aesthetic reactions, and certainly those should be protected, but if at the same time by the inherent nature of the article, deterioration takes place—and I might say that the tolerances are rigid and strict and are supported by our industries, nevertheless great hardship could be brought about by small offenses in packing houses by a minimum fine of that character totally out of proportion to the offense committed.

I should like to refer to section 19, subsection (a)-1, which declares certain acts to be nuisances. The same arguments that follow with respect to the export provisions of this act, I believe, are pertinent here.

Subsection 1 of this section declares:

56 The repetitious introduction into interstate commerce of any adulterated or misbranded food, drug, or cosmetic," be so classified, that it is a public nuisance.

In spite of the tremendous effort being made by the entire Pacific coast fruit industry, there are times when, due to analytical or sampling margins of error, different analytical determinations may be made by entirely unbiased inspectors. Point of shipment inspections, in some instances, have been reversed by inspections made at point of destination. These inspections may be supported by chemical analysis or visual or microscopic examination. In the past it has followed that the examinations made at destination determined the condition of the goods and reversed equally careful examinations made at point of shipment.

Senator HEBERT. May I call to your attention the provisions of section 17, which has been criticized and which you feel should not apply, at least, not in the degree that the penalties would seem to indicate? It does not seem to me that they affect your case in the least. You have in mind the deterioration of food. Now then, that isn't covered in section 17.

Mr. GRADY. Pardon me, Senator. The definition "adulteration” includes in it something that Mr. Frazer tried to deal with. That is the phrase "filthy, putrid, and decomposed.” Now, I might say that those are undefined terms. They are adjectives. They go to a condition. That condition must be defined by the administrative officers themselves and are so defined that natural products are accorded what the administration feels are reasonable tolerances. They recognize the inherent nature of natural products. The industries in the past have worked with and supported those tolerances for reasons already stated.

Senator HEBERT. You feel that this provision against foods being adulterated would include those which you manufacture and which are presumed to be in good condition when they leave your hands and which in transit, or after delivery, become unfit for consumption as food ?

Mr. GRADY. That is conceivable, yes, sir; but that isn't all.

You must take it from the standpoint of aesthetics. To me certain conditions of cheese, for example, advanced and mellowed, and containing certain live organisms are extremely offensive, and to someone else they are extremely attractive. One gentleman of the committee asked the lady testifier here the other day what she meant by aesthetics. Her aesthetic reactions are to the solidity, to the pack, to the heaviness of the sirup, and other things. In other words, aesthetic reactions relate to the sensibility of the person who receives the food. It may be pleasing, it may be satisfactory, or it may be displeasing, it may be revolting. There is a wide degree of difference there. So in order to define when food becomes filthy the administration has set up certain tolerances, most of them determinnable by visual observation by any person with good eyesight, some of them requiring the help of magnifying glasses.

Now, that condition is one that is in the field of opinion entirely and since it is in the field of opinion, and since, in some instances, it has been found practically impossible to avoid in the preparation of foods—after all, we are not manufacturers, the Almighty is the manufacturer, of the type of product I am talking about, the natural raw or semiprocessed product. We are not in the position to do the things that the housewife herself is accustomed to doing. She gets in potatoes, apples, or other commodities and prepares them, removes the worm spots on them, and so forth. Those are the things I am referring to.

Please understand, I am not trying to defend filth or putrefaction or decomposition in the slightest degree, we are merely trying to point out a very real, practical problem.

As long as we are on the subject, if I may have the permission of the chair for just a moment. Mr. Fraser mentioned the filthy condition, where goods may have become contaminated in warehouses. I don't think he stated the case as we would state it at all. There is not a warehouse, or a home, a retail or wholesale store, a vehicle of transportation of any sort, sir, that does not have around or in it, insects. "Insects under the term “filthy, putrid, and decomposed would be barred, but the insects are universal not only here but everywhere. The same insects that bother us in California, bother you in Washington, D.C., and if you were in India, they would bother

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Senator HEBERT. More.

Mr. GRADY. Probably more. Those conditions exist. We are carrying on the warfare that Mr. Fraser indicated against those things, but I might cite an example. Assuming, for example, that the tolerance for apples of this type is 5 percent, and it dealt with a filthy, putrid, and decomposed condition. It might well be held that one worm egg, one flyspeck on that apple rendered it filthy because of the æsthetic measure of the person consuming it. It might well be argued on the other hand, that we would have to have 50 such flyspecks before it became putrid. It might be totally rotten or it might be half rotten, that might be considered 5 percent on the count basis, because that is the way the tolerances operate. I find no fault with the method so long as it does not do an unjust injury. If 5 percent were the case, why, all these applies might be totally rotten, sir, or be

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