and the decisions of the courts' (Leisy v. Hardin, 135 U. S. 100, 110, 34 L. ed. 128, 132, 10 S. Ct. 681, 3 Inters. Com. Rep. 36; Re Bahrer (Wilkerson v. Rahrer), 140 U. S. 545, 556, 35 L. ed. 572, 574, 11 S. Ct. 865; Louisville & N. R. Co. v. F. W. Cook Brewing Co., 223 U. S. 70, 82, 56 L. ed. 355, 358, 32 S. Ct. 189). It was because intoxicating liquors were legitimate subjects of commercial intercourse that the States were powerless to interfere with their transportation in interstate commerce (Bowan v. Chicago & N. W. R. Co., 125 U. S. 465, 489, 31 L. ed. 700, 708, 8 S. Ct. 689, 1062, 1 Inters. Com. Rep. 823; Leisy v. Hardin, supra (135 U. S. pp. 110, 113 34 L. ed. 132, 133, 10 S. Ct. 681, 3 Inters. Com. Re. 36); Rhodes v. Iowa, 170 U. S. 412, 42 L. ed. 1088, 18 S. Ct. 664; Vance v. W. A. Vandercook Co., 170 U. S. 438, 42 L. ed. 1100, 18 S. Ct. 674; Louisville & N. R. Co. v. F. W. Cook Brewing Co., 223 U. S. 70, 56 L. ed. 355, 32 S. Ct. 189, supra). But because of the effects ascribed to the traffic in intoxicating liquors, the States in the exercise of their police power in relation to their internal commerce could restrict or interdict that traffic without violating the Federal Constitution (Foster v. Kansas, 112 U. S. 201, 206, 28 L. ed. 629, 696, 5 S. Ct. 8, 97; Mugler v. Kansas, 123 U. S. 623, 657-659, 31 L. ed. 205, 209, 210, 8 S. Ct. 273). To aid the States in securing the full protection they desired, Congress brought into play its power to regulate interstate commerce.

"By the Wilson Act of August 8, 1890, intoxicating liquors transported into any State were subjected upon arrival to the operation of state laws to the same extent as though they had been produced within the State although still in the original packages. This act was upheld in Re Rahrer (Wilkerson v. Rahrer) (140 U. S. 545, 35 L. Ed. 572, 11 S. Ct. 865, supra). But the statute did not apply until the transportation was completed by actual delivery to the consignee (Rhodes v. Iowa, supra, 170 U. S. p. 426, 42 L. Ed. 1096, 18 S. Ct. 664; Adams Exp. Co. v. Kentucky, 214 U. S. 218, 222, 53 L. Ed. 972, 973, 29 S. Ct. 633; Louisville & N. R. Co. v. F. W. Cook Brewing Co., 223 U. S. 70, 56 L. Ed. 355, 32 S. Ct. 189, supra). As the right to receive' was not affected by the Wilson Act, 'such receipt and the possession following from it and the resulting right to use' remained protected by the commerce clause (Clark Distilling Co. v. Western Maryland R. Co., 242 U. S. 311, 323, 61 L. Ed. 326, 327, 37 S. Ct. 180, L. R. A. 1917B, 1218). In this situation the Congress passed the Webb-Kenyon Act of March 1, 1913, which prohibited the transportation of intoxicating liquors into any State when It was intended that they should be 'received, possessed, sold or in any manner used,' in violation of its laws. The Court upheld the constitutional validity of this act as a regulation of interstate commerce (Clark Distilling Co. v. Western Maryland R. Co., supra). It was supplemented by Act of March 3, 1917, known as the Reed Amendment (United States v. Hill, 248 U. S. 420, 424, 63 L. Ed. 337, 339, 39 S. Ct. 143).

* * *

"The course of congressional legislation with respect to convict-made goods has followed closely the precedents as to intoxicating liquors. By the HawesCooper Act of January 19, 1929, the Congress provided that convict-made goods (with certain exceptions) transported into any State should be subject upon arrival, whether in the original package or otherwise, to the operation of State laws as if produced within the State. In Whitefield v. Ohio (297 U. S. 431, 80 L. Ed. 778, 56 S. Ct. 532), petitioner was charged in the State court in Ohio with selling convict-made goods in violation of the State law. It appeared that the goods had been sold in the original packages as shipped in interstate commerce and that there was 'nothing harmful, injurious, or deleterious' about them. But this Court said that the view of the State of Ohio, that the sale of convict-made goods in competition with the products of free labor was an evil, found ample support in fact and in the similar legislation of a preponderant number of other States. The Court observed that the Congress had prohibited the importation of the products of convict labor. All such legislation, State and Federal, proceeded upon the view that free labor, properly compensated, cannot compete successfully with the enforced and unpaid or underpaid convict labor of the prison.' The Court upheld the power of the State, so far as the Federal Constitution is concerned, to base non-discriminatory legislation upon that conception, and as it appeared that the Ohio statute would be unassailable if made to take effect after sale in the original package, the statute was held to be equally unassailable in the light of the provisions of the Hawes-Cooper Act. As to the validity of the latter Act, the Court followed the decision in Re Rahrer (Wilkerson v. Rahrer) (140 U. S. 545, 35 L. Ed. 572, 11 S. Ct. 865, supra), in relation to the Wilson Act.

"The Ashurst-Sumners Act as to interstate transportation of convict-made goods has substantially the same provisions as the Webb-Keyon Act as to intoxi

cating liquors and finds support in similar considerations. The subject of the prohibited traffic is different, the effects of the traffic are different, but the underlying principle is the same. The pertinent point is that where the subject of commerce is one as to which the power of the State may constitutionally be exerted by restriction or prohibition in order to prevent harmful consequences, the Congress may, if it sees fit, put forth its power to regulate interstate commerce so as to prevent that commerce from being used to impede the carrying out of the State policy.

"In the congressional action there is nothing arbitrary or capricious bringing the statute into collision with the requirements of due process of law. The Congress in exercising the power confided to it by the Constitution is as free as the States to recognize the fundamental interests of free labor. Nor has the Congress attempted to delegate its authority to the States. The Congress has not sought to exercise a power not granted or to usurp the police powers of the States. It has not acted on any assumption of a power enlarged by virtue of State action. The Congress has exercised its plenary power which is subject to no limitation other than that which is found in the Constitution itself. The Congress has formulated its own policy and established its own rule. The fact that it has adopted its rule in order to aid the enforcement of valid State laws affords no ground for constitutional objection."

In upholding the constitutionality of the Public Utility Holding Company Act of 1935 (1946), (91 L. ed. No. 2, p. 91, 95), the Court said:

"Thus to the extent that corporate business is transacted through such channels, affecting commerce in more States than one. Congress may act directly with respect to that business to protect what it conceives to be the national welfare. It may prescribe appropriate regulations and determine the conditions under which that business may be pursued. It may compel changes in the voting rights and other privileges of stockholders. It may order the divestment or rearrangement of properties. It may order the reorganization or dissolution of corporations. In short, Congress is completely uninhibited by the commerce clause in selecting the means considered necessary for bringing about the desired conditions in the channels of interstate commerce.'

99

See also North American Co. v. Securities and Exchange Commission (90 L. Ed. No. 12, p. 737).

The provisions of the first amendment declaring that "Congress shall make no law ** * abridging the freedom of speech, or of the press," does not exempt the press or other publicity media from reasonable regulation by Congress enacted to promote the public welfare. In 1946, in Oklahoma Press Publishing Co. v. Walling (90 L. Ed. Adv. Op. 8, p. 440, 441), the Court said:

"Coloring almost all of petitioners' positions, as we understand them, is a primary misconception that the first amendment knocks out any possible application of the Fair Labor Standards Act to the business of publishing and distributing newspapers. The argument has two prongs.

"The broadside assertion that petitioners 'could not be covered by the act,' for the reason that 'application of this act to its newspaper publishing business would violate its rights as guaranteed by the first amendment,' is without merit (Associated Press v. National Labor Relations Bd., 301 U. S. 103, 81 L. Ed. 953, 57 S. Ct. 650, and Associated Press v. United States, 326 U. S. 1, 89 L. Ed., 65 S. Ct. 1416; Mabee v. White Plains Pub. Co., No. 57, decided this day, U. S. 455, 66 S. Ct.). If Congress can remove obstructions to commerce by requiring publishers to bargain collectively with employees and refrain from interfering with their rights of self-organization, matters closely related to eliminating low wages and long hours, Congress likewise may strike directly at those evils when they adversely affect commerce (United States v. Darby, 312 U. S. 100, 116, 117, 85 L. Ed. 609, 618, 619, 61 S. Ct. 451, 132 ALR 1430). The amendment does not forbid this or other regulation which ends in no restrain upon expression or in any other evil outlawed by its terms and purposes."

A Federal ban on commercial advertising intended to promote the sale of a comodity which the States in the exercise of their policy power may outlaw entirely, and which some of the States and many local communities have outlawed, constitutes no unlawful restraint upon the right of free expression protected by the first amendment.

A most recent exercise of the power of Congress to prohibit certain types of advertising is that found in the act of December 23, 1944, making it unlawful to print any statement or advertisement concerning any candidate for President, Vice President, Senator, or Representative in Congress unless it contains the name of the person responsible for such statement or advertisement (U. S. C., T. 18, sec. 62).

The Regulation of Lobbying Act of April 2, 1946, (U. S. C., T. 2, sec. 261.) goes much beyond mere commercial advertising in applying regulations to the exercise of the rights of free speech and a free press, since it requires any person who shall engage himself for any consideration for the purpose of attempting to influence legislation by Congress to register, file periodically detailed reports of his receipts and expenditures, "and the names of any papers, periodicals, magazines or other publications in which he has caused to be published any articles or editorials; and the proposed legislation he is employed to support or oppose."

INTERSTATE COMMERCIAL ADVERTISING SUBJECT TO REGULATION AS INTERSTATE

COMMERCE

That interstate commercial advertising comes within the regulatory power of Congress under the commerce clause is also established by Supreme Court decisions. Thus, in Charles A. Ramsey Co. v. Associated Bill Posters (260 U. S. 501, 67 L. Ed. 368), a Nation-wide combination of bill posters who refused to post advertisements sent in interstate commerce except upon terms and for persons arbitrarily fixed and selected by them, greatly limited or destroyed the interstate business of advertising solicitors not recognized by the combination, was held to be within the operation of the Sherman antitrust law to prohibit such an act in restraint of trade.

PRECEDENT FOR THE LEGISLATION FOUND IN PRESENT RADIO LAW WHICH PROHIBITS THE BROADCASTING OF ADVERTISEMENTS OF LOTTERIES

The Federal Communications Act of 1935 (T. 47, sec. 316), prohibits the use of the radio for the advertising of lotteries:

"No person shall broadcast by means of any radio station for which a license is required by any law of the United States and no person operating any such station shall knowingly permit the broadcasting of, any advertisement of or information concerning any lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes. Any person violating any provision of this section shall, upon conviction thereof, be fined not more than $1,000 or imprisoned not more than one year, or both, for each and every day during which such offense occurs."

The constitutional authority of Congress to prohibit the use of the facilities of interstate commerce in the promotion of the sale of lottery tickets was settled by the Supreme Court in Champion v. Ames (1903) (188 U. S. 321, 47 L. Ed. 492, 23 S. Ct. 321). There it was said:

"As a State may, for the purpose of guarding the morals of its own people, forbid all sales of lottery tickets within its limits, so Congress, for the purpose of guarding the people of the United States against the 'widespread pestilence of lotteries' and to protect the commerce which concerns all the States, may prohibit the carrying of lottery tickets from one State to another."

CONGRESS NOW PROHIBITS OR REGULATES OTHER FORMS OF ADVERTISING IN INTERSTATE COMMERCE

Title 18, section 396, United States Code, prohibits the importing and transporting in interstate commerce of obscene books, etc.:

"Whoever shall bring or cause to be brought into the United States or any place subject to the jurisdiction thereof, from any foreign country, or shall therein knowingly deposit or cause to be deposited with any express company or other common carrier, for carriage from one State, Territory, or District of the United States or place noncontiguous to but subject to the jurisdiction thereof, to any other State, Territory, or District of the United States, or place noncontiguous to but subject to the jurisdiction thereof, or from any place in or subject to the jurisdiction of the United States, through a foreign counry, to any place in or subject to the jurisdiction thereof, or from any place in or subject to the jurisdiction of the United States to a foreign country, any obscene, lewd, or lascivious, or any filthy book, pamphlet, picture, motion-picture film, paper, letter, writing, print, or other matter of indecent character, or any drug, medicine, article, or thing designed, adapted, or intended for preventing conception, or producing abortion, or for any indecent or immoral use; or any written or printed card, letter, circular, book, pamphlet, advertisement, or notice of any kind giving information, directly or indirectly, where, how, or of whom or by what means any of the hereinbefore mentioned articles, matters, or things may be obtained or made; or whoever shall

knowingly take or cause to be taken from such express company or other common carrier any matter or thing the depositing of which for carriage is herein made unlawful, shall be fined not more than $5,000 or imprisoned not more than five years, or both."

This act has been upheld in the following cases:

Clark v. United States (N. D., 1914) (211 Fed. 916, 128 C. C. A. 294).

United States v. Popper (D. C., 1899) (98 Fed. 423).

Title 18, section 387, United States Code, prohibits importation or transportation in interstate commerce of lottery tickets or advertisements thereof:

"Whoever shall bring or cause to be brought into the United States or any place subject to the jurisdiction thereof, from any foreign country, for the purpose of disposing of the same, any paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon the event of a lottery, gift enterprise, or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any advertisement of, or list of the prizes drawn or awarded by means of, any such lottery, gift enterprise, or similar scheme; or shall therein knowingly deposit or cause to be deposited with any express company or other common carrier for carriage, or shall carry, from one State, Territory, or District of the United States, or place noncontiguous to but subject to the jurisdiction thereof, to any other State, Territory, or District of the United States, or place noncontinguous to but subject to the jurisdiction thereof, or from any place in or subject to the jurisdiction of the United States through a foreign country to any place in or subject to the jurisdiction thereof, or from any place in or subject to the jurisdiction of the United States to a foreign country, any paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon, the event of any such lottery, gift enterprise, or similar scheme, or shall knowingly take or receive, or cause to be taken or received, any such paper, certificate, instrument, advertisement, or list so brought, deposited, or transported, shall, for the first offense, be fined not more than $1,050, or imprisoned for more than two years, or both; and for any subsequent offense shall be imprisoned not more than two years."

The constitutionality of this act was upheld in Champion v. Ames (1903) (188 U. S. 321, 41 L. Ed. 492).

The Federal Trade Commission Act, as amended (title 15, sec. 45, U.S. C.), prohibits false and misleading advertisements of foods, drugs, cosmetics, or devices, and section 53 authorizes injunctive relief against such practices.

"Title 15, section 52 (a): It shall be unlawful for any person, partnership, or corporation to disseminate, or cause to be disseminated, any false advertisement

“(1) By United States mails, or in commerce by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of foods, drugs, devices, or cosmetics; or

"(2) By any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase in commerce of food, drugs, devices, or cosmetics.

"(b) The dissemination or the causing to be disseminated of any false advcrtisement within the provisions of subsection (2) of this section shall be an unfair or deceptive act or practice in commerce within the meaning of section 45 of this title."

"Title 15, section 55 (a): False advertisement. The term 'false advertisement' means an advertisement, other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in the light of such representations or material with respect to consequences which may result from the use of the commodity to which the adver

tisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual. No advertisement of a drug shall be deemed to be false if it is disseminated only to members of the medical profession, contains no false representation of a material fact, and includes, or is accompanied in each instance by truthful disclosure of, the formula showing quantitatively each ingredient of such drug.”

The constitutionality of this act was sustained in the following case:

Seven Cases v. United States (1916) (239 U. S. 510, 60 L. Ed. 411, 26 S. Ct. 1: 0.)

Title 27, section 205 (f), United States Code provides, in the Alcohol Administration Act:

"SEC. 5. It shall be unlawful for any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine, or malt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits, directly or indirectly or through an affiliate: * * *

"(f) Advertising: To publish or disseminate or cause to be published or disseminated by radio broadcast, or in any newspaper, periodical, or other publication or by any sign or outdoor advertisement or any other printed or graphic matter, any advertisement of distilled spirits, wine, or malt beverages, if such advertisement is in, or is calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, unless such advertisen ent is in conformity with such regulations, to be prescribed by the Secretary of the Treasury: (1) As will prevent deception of the consumer with respect to the products advertised and as will prohibit, irrespective of falsity, such statements relating to age, manufacturing processes, analyses, guaranties, and scientific or irrelevant matters as the Secretary of the Treasury finds to be likely to mislead the consumer; (2) as will provide the consumer with adequate information as to the identity and quality of the products advertised, the alcoholic content thereof (except the statements of, or statements likely to be considered as statements of, alcoholic content of malt beverages and wines are prohibited), and the person responsible for the advertisement; (3) as will require an accurate statement, in the case of distilled spirits (other than cordials, liqueurs, and specialties) produced by blending or rectification, if neutral spirits have been used in the production thereof, informing the consumer of the precentage of neutral spirits so used and of the name of the commodity from which such neutral spirits have been distilled, or in case of neutral spirits or of gin produced by a process of continuous distillation, the name of the commodity from which distilled; (4) as will prohibit statements that are disparaging of a competitor's products or are false, misleading, obscene, or indecent; (5) as will prevent statements inconsistent with any statement on the labeling of the products advertised. This subsection shall not apply to outdoor advertising in place on June 18, 1935, but shall apply upon replacement, restoration, or renovation of any such advertising. The prohibitions of this subsection and regulations thereunder shall not apply to the publisher of any newspaper, periodical, or other publication, or radio broadcaster, unless such publisher or radio broadcaster is engaged in business as a distiller, brewer, rectifier, or other producer, or as an importer or wholesaler, of distilled spirits, wine, or malt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits, directly or indirectly or through an affiliate. * * *

"In the case of malt beverages, the provisions of subsections (a), (b), (c), and (d) shall apply to transactions between a retailer or trade buyer in any State and a brewer, importer, or wholesaler of malt beverages outside such State only to the extent that the law of such State imposes similar requirements with respect to similar transactions between a retailer or trade buyer in such State and a brewer, importer, or wholesaler of malt beverages in such State, as the case may be. In the case of inalt beverages, the provisions of subsections (e) and (f) shall apply to the labeling of malt beverages sold or shipped or delivered for shipment or otherwise introduced into or received in any State from any place outside thereof, or the advertising of malt beverages intended to be sold or shipped or delivered for shipment or otherwise introduced into or received in any State from any place outside thereof, only to the extent that the law of such State imposes similar requirements with respect to the labeling or advertising, as the case may be, of malt beverages not sold or shipped or delivered for shipment or otherwise introduced into or received in such State from any place outside thereof.

62655-47- -9