how it is possible to provide for an equitable, fair factory inspection service on a scale sufficiently extensive to cover the food, drug, and cosmetic industries. As stated at the previous hearing before the subcommittee, it is our belief that the Government should be very reluctant to enter upon the broad field of factory inspection except in the specific cases covered by section 12. Section 13 would in effect give agents or employees of the Secretary the right to enter into any factory and inspect all equipment, methods, processes, materials, containers, and labels on pain of restraint of their goods in interstate commerce. Most of the manufacturers of drugs, as well as of foods, have many secret processes which they would be perfectly willing to disclose to the Government if they got no further. However, Government inspectors frequently find their way into commercial establishments, and it is no exaggeration to say that eventually what is in the hands of the Government is in the hands of the competitor. As we have previously stated, in view of the powers contained in section 12, we believe that factory inspection is, furthermore, wholly unnecessary to the true regulation of interstate commerce. With the broad powers already given to the Secretary to check and seize goods in interstate commerce by injunction and libel, we believe that it is quite superfluous to include the inspection provisions contained in section 13. We therefore again urge the deletion of the entire section.

Page 27, section 17, paragraph (e), line 24, reads as follows:

"No dealer shall be prosecuted under paragraph (b) of this section (1) because of commerce in any article he has purchased or received in good faith if he furnishes on request of an officer or employee duly designated by the Secretary the name and address of the person from whom he purchased or received such article, or (2)

* * * ""

This provision is entirely new. We believe it to be quite unnecessary, and ample protection is given to the dealer under the guaranty clause in subdivision 2 of this paragraph. On the other hand, we can readily see how this provision might, under certain conditions, be taken advantage of so as to obstruct and hamper the accomplishment and purpose of the Federal Food and Drug Act.

There are certain other suggestions made by us at the previous hearing before the subcommittee which have not been adopted in S. 2800. However, we have not considered it advisable to further urge the adoption of these suggestions at this time because they are of relatively minor importance. The suggestions which we have mentioned, however, are of such importance, we believe, that their adoption should be given very serious consideration by the committee.

BRIEF OF THE CALIFORNIA COSMETIC ASSOCIATION, INC.

California Cosmetic Association, Inc., on behalf of its directors and members, submits herewith its argument in opposition to certain provisions of Senate bills 1944, 2000, 2800, 2355, and 2508, and other similar legislation, otherwise known and referred to as the proposed Tugwell legislation, and respectfully requests that the facts and matters hereinafter set forth will be read before your committee at its hearing to be held at the hour of 10 o'clock a.m., Tuesday, February 27, 1934.

California Cosmetic Association, Inc., representing a large number of substantial cosmetic manufacturers and distributors on the Pacific coast, is unalterably opposed to Government control and regulation of its industry as set forth in the several bills hereinbefore referred to, in the matter of inclusion of the word "cosmetics" therein. This opposition is based mainly on the ground that such control and regulation is unnecessary. It is impossible for any legislative body to truthfully claim that the manufacture of cosmetic preparations is so fixed in the public interest as to require Government control and regulation.

By no stretch of the imagination may it be argued that a cosmetic preparation is a drug intended for use in cure, mitigation, treatment, or prevention of disease, nor is a cosmetic preparation manufactured or sold for internal consumption. Cosmetics are manufactured and sold primarily for the beautification of women, and among the varied types of cosmetics are included face creams, face powder, lip rouge, mascara, and substitutes for soap and water. Purchasers of cosmetics choose for themselves, and use, the type and brand

of cosmetic preparations most suitable to their complexion or ideas of beautification. Food consumption and drug consumption is entirely another matter, in that one seeking health or one consuming food may be at the mercy of the purveyor thereof, regardless of choice. It is well established in the minds of all citizens that food and drugs must, of necessity, be manufactured and processed so that there shall be no resultant injury. It is evident, therefore, that cosmetic preparations do not come within that category of merchandise, food and drugs, which affect the public health. Present Federal, State, municipal, and county statutes are ample to enforce regulatory measures affecting the public health.

In recent months the Government of the United States, through its distinguished leader, the President, has called upon industry, large and small alike, to regulate itself. At the suggestion of the Government and with its assistance and cooperation the manufacturers and distributors of cosmetics have prepared a code of fair competition, and have submitted this code to the code Administrator for approval. This code contains not only provisions which will tend to increase employment, lessen hours of employment, increase wages, but also will purge the industry of any small or other abuses which may have heretofore existed, and adopts sanitary regulations, and measures to restrain fraudulent, misleading, and unethical advertising. The members of the California cosmetic industry have diligently and earnestly pursued a course of faithful assistance in the preparation of this code of fair competition, in which the industry will be self-regulating, and in nowise place upon the Government the duty of regulation. The Government on the one hand, through emergency legislation sponsored by the President of the United States, says, "Regulate yourselves and we will help you", and now the Congress of the United States, on the other hand, is considering legislation in direct opposition thereto.

At the annual meeting in May of 1919. the Chamber of Commerce of the United States adopted a resolution on the subject of government and business, reading as follows:

"The very essence of civilization is that there be placed upon the individual only that degree of restraint which shall prevent his encroachment upon the rights of others, thus releasing to the utmost individual initiative in every proper direction. Our form of government most effectively expresses and maintains this principle. Within our basic law exists ample provision for such changes as may from time to time be necessary to safeguard our people. It is therefore essential that our Government should scrupulously refrain from entering any of the fields of transportation, communication, industry and commerce, or any phase of business when it can be successfully undertaken and conducted by private enterprise. Any tendency of Government to enter such fields should be carefully weighed in the light of its possible effect upon the very genius of our institutions."

The California Cosmetic Association, Inc., and its membership, is vitally concerned over the proposed legislation affecting its industry. The enactment by Congress of the legislation containing provisions hereinabove referred to. in the opinion of our manufacturer members, means restriction and disruption for their business. The members of our association engaged in the manufacture of cosmetics on the Pacific coast, are upright, conscientious, and active citizens and believe in true American ideals and principles. In this belief we cannot, without injury to ourselves, endanger our whole future by the encouragement or toleration of a deviation from that which is of the very essence of the foundation of our Government.

BRIEF OF CHESTER H. GRAY, WASHINGTON REPRESENTATIVE OF THE AMERICAN FARM BUREAU FEDERATION

A proper approach to the provisions in S. 2800 cannot be made on the part of the representative of the American Farm Bureau Federation, except in relation to the most recent statement, or resolution, of the federation, in regard to the Food and Drug Act. This statement was made by the voting delegates at the fifteenth annual convention in Chicago, Ill., held on December 13, 1933, and reads as follows:

"Fraudulent advertising in print and by radio, the sale of harmful drugs and cosmetics, and similar practices should be prevented by proper amendments to the present Food and Drug Act.

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"No discrimination, however, should be permitted against healthful rawfood products or their processed forms, such as butter, maple sirup, and fruit. "Court decisions for many years have given the Federal Government large powers and wide interpretations of the present act. Whatever amendments are needed should be added to the present law, rather than rewriting the entire Food and Drug Act."

It will be noted that the Farm Bureau Federation is in favor of the following additional legislation, relative to foods and drugs:

(1) Fraudulent advertising by radio and in print is to be prohibited.

(2) The sale of harmful drugs, particularly those to be self-administered, is to be prohibited.

(3) The sale of harmful cosmetics is to be prohibited. In addition to these positions contained in the most recent statement of position of the federation there is a long-established policy of the Farm Bureau in favor of proper labeling of foods and drugs.

It will be noticed that the federation desires to secure the additional legislation by amendments to the present Food and Drug Act, rather than by entirely rewriting food and drug legislation. Certain reasons are given for this position; namely, that court decisions have been built up through almost two decades on the language of the present law, and that the precedence, rules, and regulations of the present law would need to be developed anew, if the language, upon which precedence, rules, and regulations are founded, should be entirely changed.

In brief, the thought of the federation on this matter is that in order to accomplish a few necessary additions to a law which has been operative nearly 20 years, it is not necessary to rewrite the entire structure of the legislation. Some folks become so enthusiastic about a desirable detail of legislation that they lead themselves into the conclusion that the entire law must be changed. It would be a comparatively simple series of amendments to accomplish what the Farm Bureau Federation recommends in regard to food and drug legislation, as well as to include the additional details which are in S. 2800. The amendments should be these:

(1) To modernize the law of 1916 by extending its provisions over certain harmful drugs which were not then known;

(2) To modernize the law of 1916 by extending the provisions over cosmetics which, if then known, were not so generally used as is now the case;

(3) To so slightly restate the sections of the present law which relate to labeling, that any developments, byproducts, and the results of scientific discoveries in foods and medicines, should not be discriminated against by requiring them to be classified for labeling purposes under outgrown and antiquated formula.

Farmers, speaking through the Farm Bureau Federation, in regard to foods and drugs, and in general, relative to farm legislation, are very skeptical about lodging in any Federal authority such broad and autocratic powers as are sought to be fixed in the Secretary of Agriculture under S. 2800. Surely we have not yet proceeded to the point in our American development when a Federal official, even a Member of the Cabinet, can make a decision which is neither subject to scrutiny, nor revocation by the courts. It is not necessary in a brief statement to itemize the sections and paragraphs in the proposed measure which might, with propriety, be called autocratic in nature so far as giving the Secretary almost unlimited powers is concerned. But, such language undoubtedly is still retained in the measure, although this present bill S. 2800 is the third rewriting of a general plan to amend the Food and Drug Act, and is more modest in its language than were the two former editions. The mere fact that such a public opposition, not forgetting statements of position of organized groups like the American Farm Bureau Federation, has risen in recent months against the bill as originally planned and as it was first revised in S. 2000, still serves to show that S. 2800 should be further revised. There is no doubt the Nation needs a modernization, if one may so call it, of the Food and Drug Act of 1916, but let us proceed in this matter as is ordinarily done in regard to other legislation which has been on the Federal statutes for somtime. Let us simply amend the present law in general agreement with the recommendations above set out, and by so doing, hold fast to what we have thus far gained in food and drug legislation, and in addition, add the few necessary features, which developments in recent years require.

REPORT PREPARED BY A COMMITTEE OF THE CHAMBER OF COMMERCE OF THE UNITED STATES ON FOOD AND DRUG LAWS AND THEIR ADMINISTRATION

EXISTING LEGISLATION

From time to time in the past the Congress has passed laws affecting the production, distribution, and sale of specific kinds of merchandise that might affect public health, or work fraud upon purchasers. The Food and Drugs Act, enacted in 1906, was of this nature. The title of the act is "An act for preventing the manufacture, sale, or transportation of adulterated or misbranded or poisonous or deleterious foods, drugs, medicines, and liquors, and for regulating traffic therein, and for other purposes." This act defined "adulteration and "misbranding" as they relate to food and drug products. It has been amended from time to time.

In 1907 Congress passed a meat-inspection law, providing for inspection and labeling of meat products intended for interstate or foreign commerce.

In 1910 Congress passed the Insecticide Act making unlawful the interstate transportation of adulterated or misbranded insecticides. The act defined "adulteration and "misbranding" and fixed penalties for violation of the provisions.

In 1930 the McNary-Mapes amendment to the Food and Drugs Act was enacted. This amendment authorized the Secretary of Agriculture to promulgate standards of "quality, condition, and/or fill of container" for canned foods, and for labeling of the container in the event the product falls below the prescribed standard. The label need not carry any statement of quality if the product is above the prescribed standard.

The Trade Commission Act, by which Congress created the Federal Trade Commission, prohibits unfair methods of competition. Under the act the Commission has dealt with cases involving false and misleading advertising, misbranding and mislabeling, and similar practices. Moreover, the movement to eliminate such practices has been advanced by provisions in codes of fair competition developed by industry and approved by the President under authority of the National Industrial Recovery Act.

In addition to Federal legislation, individual States have enacted laws to protect public health. Almost all of the States have food and drug laws, antinarcotic laws, pharmacy laws, insecticide laws, and other similar statutes. Many individual cities have passed local ordinances regulating the sale of various products in the interest of public health.

In connection with existing laws, national, State, and local, there is a large body of court decisions and administrative interpretations by means of which business knows fairly well what may be done and may not be done. New legislative proposals which would upset this situation by destroying precedents and creating confusion between Federal and State laws should be subjected to very careful consideration.

ADVERTISING

During the years in which the Food and Drugs Act has been in force, loopholes have been found which have prevented the Food and Drug Administration from reaching certain practices which are considered to violate principles of the law. For example, the law does not apply to statements in the advertising of food and drugs except statements actually on the label. Unwarranted and exaggerated claims which formerly appeared on the labels of the containers were transferred in some instances to separate advertising of the products, while the label was made to conform to the law. Advertising of this type undoubtedly assisted in the sale and use of products, in some cases, which were injurious.

During the 27 years in which the present Food and Drugs Act has been in force there has been a great development of legitimate advertising, not alone in the quality and technique of advertising but in the number and kinds of media by which it is disseminated. Advertising has become an increasingly important means of inducing consumers to buy.

It would seem obvious that advertising of products, the labeling of which is covered by the Federal Food and Drugs Act, should contain only truthful statements about these articles.

The national chamber has long held that "representation of goods and services should be truthfully made and scrupulously fulfilled and that "unfair

competition, embracing all acts characterized by bad faith, deception, fraud * * * is wasteful, despicable, and a public wrong." The position of the chamber applies to advertising as well as to any other method of selling, or to other business practices.

It is equally obvious that the requirement of truthful advertising of articles to which the Federal Food and Drugs Act applies, without impairment of modern advertising in its truthful and beneficial forms, cannot be extended to include all of the technical requirements that may be appropriate for labels. With the requirement of truthfulness there should always be recognition of the essential difference between a label and an advertisement as carried in a modern medium of advertising.

Your committee recommends that there should be legislation requiring the same truthfulness in advertising, with respect to foods, drugs, and cosmetics, as in the labeling of articles to which Federal labeling laws apply.

Advertising has attained an indispensable place in modern American life. Through advertising, consumers obtain most of their opportunity to exercise selection. It is largely responsible for the development of our enormous domestic market. It is through advertising that improvements in products, new products, or new uses for old products, which are beneficial to the public, are most quickly and directly made known. The proper coordination of advertising with other sales effort results in the most efficient and most economical means yet devised to bring to the attention of great numbers of persons articles which will contribute to their individual welfare.

Large-scale production in this country, which has meant economy of manufacturing processes, has been possible only because producers have been able to reach a wide market. As a sales medium, advertising has helped to make possible economical methods of production and distribution, and eventual savings to consumers. The general result has been to reduce prices and to improve and standardize quality. It has helped to stabilize business operations by developing year-round demand instead of seasonal use for many products.

Without advertising it would scarcely be possible to have newspapers and periodicals at current low prices. Newspapers and other printed matter, which are supported almost entirely by the revenue from advertising, contribute great social benefits to the public. Their educational value can hardly be estimated, and on this ground alone advertising could be justified.

Some critics have come forward to say that advertising entails an unnecessary expense which consumers pay in the price of goods, and make proposals which are calculated to reduce advertising. The place of advertising in American economic life and its undoubted social benefits demonstrate the invalidity of this position, not merely from the business point of view but also from the public point of view.

Your committee recommends that the value of proper advertising as an economical and efficient means of distribution should be maintained as in the public interest, and that all attempts to restrict it as a means of reaching and developing marekts should be resisted.

Censorship of Advertising.-A special form of attack on advertising has appeared in proposals for Government censorship of advertising. The laws respecting truthfulness in advertising are already adequate or can be made adequate through the customary legislative and judicial proceedings. It is in no sense a proper Government function to exercise any degree of censorship of advertising otherwise lawful. Government censorship would be an attempt to intrude Government inexcusably into private affairs.

Furthermore, the practical impossibility of dealing with the great volume of advertising through any process of censorship would inevitably result in the suppression of the greater part of present-day advertising even though such advertising may be conducted in a manner undeniably legitimate. Any attempt at censorship would mean also the creation of a new bureaucracy of Federal employees.

For the most part advertising has been honest in intention as well as performance; and in the great majority of cases, particularly in recent years. abuses have been recognized and effective steps taken by nongovernmental agencies to correct them. This movement has been aided by advertising agencies and media, as well as by the advertisers themselves.

Business men understand that public confidence in industry and its advertising must be maintained if business restoration is to go forward. False. misleading, and deceptive advertising, even though practiced only by a small minority, tends to impair public confidence in all advertising.