LETTER OF MERRILL HUTCHINSON, PRESIDENT HUTCHINSON ADVERtising Co. MINNEAPOLIS, MINN., TO SENATOR HENRIK SHIPSTEAD

The Hon. HENRIK SHIPSTEAD,

MINNEAPOLIS, MINN., December 15, 1933.

Minneapolis, Minn.

MY DEAR SENATOR: On behalf of the group here present, I want first to thank you for your courtesy in granting us this opportunity to meet with you and present certain information respecting the provisions and possible consequences of the proposed Federal enactment S. 1944 and H.R. 6110, commonly designated as the Tugwell bill, which we understand will come before Congress in January. We, of course, have a direct and vital interest in this bill. We do not challenge the sincerity of United States Senator Royal S. Copeland or Congressman William I. Sirovich, who appear as sponsors of the bill, although admittedly not its writers. We raise no question as to the possible need for amendment of the present Pure Food and Drug Act. We were prompted to request your consideration today because of our confident belief that you desired to be in possession of all available information respecting the likely results of the application of any new legislation, and particularly as it might affect not only the entire body of your constituents but also the business interests with which such constituents' livelihood is inseparably woven.

With your full comprehension of the vicissitudes by which business in general has been beset during the past few years, and the delicate balance between profit and loss figures which obtains in most businesses today, we realize that we do not need to tell you that immediate consideration of any measure of the import of the Copeland bill, not having the urgency of some of the so-called emergency legislation hastily enacted at the last term, merely serves to aggravate further and we believe unwarrantedly-an already delicate situation. Many representative business men are in agreement that if there is any single obstacle contributing more than others to retardation of economic rehabilitation, it is the factor of uncertainty: uncertainty respecting the imminence of enactment of inimical legislation, Federal and State; uncertainty respecting interpretations and applications of existing experimental legislation, such as that affecting the monetary situation; uncertainty concerning conditions of peace, war debts, tariffs, armament, and many others in the foreign countries.

In its present form, Senate bill 1944 is loosely drawn, indefinite, impractical, unduly severe in penalties prescribed, and contravenes established court procedure. As drawn, the bill does not represent in substance what its title purports to have it constitute; namely, a bill "to prevent the manufacture, shipment, and sale of adulterated or misbranded foods, drugs, and cosmetics, and to regulate traffic therein; to prevent the false advertisement of foods, drugs, and cosmetics, and for other purposes." The powers which this bill, if enacted, would convey upon the Secretary of Agriculture, and which would of necessity in practice be delegated by him to subordinates of varying degree, would vest in the Secretary powers bordering on those of an autocrat, and charge him with responsibility for decisions wherein his opinion, once expressed, is to be given the finality of a court decree, in matters so extensive and complex as to challenge the capacity and wisdom of a Solomon. No reputable manufacturer, no honest advertiser, can take exception to the avowed purpose of that portion of the bill which seeks to protect the public against nefarious practices in respect to foods, drugs, and cosmetics, but there has been incorporated in the bill, evidently under that portion of the title expressed as and for other purposes" many provisions fraught with danger of great harm, not only to reputable, long-established businesses, but also the great body of salaried employees, whose living is wholly dependent upon the successful continuance in business of the institutions thus affected.

Obviously, this bill was conceived in an atmosphere of distrust and with much greater consideration for the apprehension of the miscreants, whose number, we believe it is admitted, is relatively small, than for due protection of reputable manufacturers and advertisers, whose number, we believe, admittedly is legion. This bill not only contains destructive provisions presently but vests the Secretary of Agriculture with unrestricted power to expand by regulations its provisions at his will to almost unlimited lengths, thus creating a situation wherein manufacturers and advertisers who arrange for compliance with the bill as promulgated may find themselves subject to prosecution for unintentional violation of new regulations contradictory or more inclusive than those theretofore pronounced.

Recognizing that the press of legislative matters which will demand your careful consideration immediately upon your return to Washington may make it difficult for you to retain all of the points which may be covered today in our discussion, we have, as a means of conserving your time and facilitating your consideration of the points involved, taken the liberty of setting forth hereinafter some of the provisions of the bill, together with comments and observations respecting the impracticability, injustice, and, we believe, dangerous effects or results likely to ensue if this bill, without substantial modification, should be enacted. We trust you may not judge us presumptuous in submitting this outline, which we hope may serve your convenience.

Section 3 provides

"A food shall be deemed adulterated (b) (1) if any valuable constituent has been in whole or in part abstracted therefrom.'

To cite one example of the application of this section, we suggest that a product such as Cream of Wheat, which is internationally sold as a breakfast cereal with a particular appeal as an infants' food, but which, of course, does not contain all of the wheat berry, would apparently be liable to classification as an adulterated food. If the provisions of the bill are not to be applied in accordance with their expressed language, and the sole and exclusive interpretations of what constitutes violations are to rest in the discretion of the Secretary and his assistants in the Department of Agriculture, manufacturers will never know definitely when they may be innocently violating some of the provisions of this bill. Section 6 provides that a food or cosmetic shall be misbranded—

“If its labeling is in any particular false, or by ambiguity or inference creates a misleading impression regarding any food, drug, or cosmetic.

You will note that the above section does not specify that the falsity be fraudulent or pertain to material matters. It constitutes an offense if the portion of the label alleged to be false pertains to any particular, or that even if by ambiguity or inference it creates a misleading impression. Sight must not be lost of the fact that if enacted this bill becomes a criminal statute, with severe and multiple penalties provided for violation. In criminal statutes, penalty for false statements is usually limited to a material matter. For example, to procure a conviction of perjury it must be shown that the false statement pertained to a material matter. Of course, no encouragement should be given to false statements relative to any matter, but this bill goes further by including any statements which "by ambiguity or inference creates a misleading impression." It covers typographical errors, unintentional mistakes, deliberate allegations of harmful misinterpretations, and also makes the advertiser wholly responsible for every possible type of mentality of the readers of his advertisement. An examination of the mail received by any radio advertiser who has made an offer of any kind over the radio stations of the country would at once demonstrate the impracticability of phrasing advertising in such manner as to avoid the possibility of misleading impressions being gained by some listeners. An offer simply and clearly stated will bring forth responses from all sections of the country so utterly inconsistent with the offer as to indicate the impossibility of avoiding misleading impressions on some people, regardless of the language chosen. Yet should anyone gain an impression wholly foreign to that intended by the advertiser to be conveyed, the advertiser becomes liable to severe punishment at the discretion of the Secretary of Agriculture under the powers vested in him by this bill. ›

Section 8 provides:

A drug shall be deemed to be misbranded-(a) (1) if its labeling bears the name of any disease for which the drug is not a specific cure but is a palliative, and fails to bear in juxtaposition with such name and in letters of the same size and prominence a statement that the drug is not a cure for such a disease; * * *"" As a matter of fact, specific cures are known to medicine in only a few cases, and even these few cannot be considered specific cures in all cases. Rarely is any nationally advertised packaged medicine offered as a specific cure. It is offered usually for the relief of pains, distress or discomfort, or to assist Nature in avoiding certain diseases. To recognize how inclusive this provision is, let us quote the definition of disease "any departure from, failure in, or perversion of normal physiological action in the living constitution or integrity of the living organism." Section 8 would therefore appear to prohibit the advertising of aspirin for the treatment of headaches, since under the above description headaches become a disease, unless there were printed conspicuously on the label of the aspirin package the words "Not a Cure." Simple salves for skin eruptions

and numerous other instances suggest themselves as indicating the drastic nature of this section.

Section 8 (a) further provides that a drug shall be deemed misbranded:

(2) If its labeling bears any representation, directly or by ambiguity or inference, concerning the effect of such drug which is contrary to the general agreement of medical opinion.

It is doubtful that the most sanguine reputable physician allied with any branch of medical thought, would venture the hope that there could ever be general agreement of medical opinion. Yet the advertiser may be adjudged guilty of crime if by "ambiguity or inference" his cartons, labels, or direction pamphlets, bear any representation "contrary to the general agreement of medical opinion." Medicine is not an exact science. Its progress to date owes much to the conflict of opinions among its practitioners, and there is today wide variation between the opinions of different schools of medicine among which are allopaths, homeopaths, eclectics, and osteopaths.

In Eckman's Alterative v. United States (239 U.S. 510), the Supreme Court of the United States held:

"* * * Congress deliberately excluded the field where there are honest differences of opinion between schools and practitioners. It was plainly to leave no doubt upon this point that the words 'false and fraudulent' were used."

In a case, American School of Magnetic Healing v. McAnnulty (187 U.S. 94), the Supreme Court held:

"As the effectiveness of almost any particular method of treatment of disease is, to a more or less extent, a fruitful source of difference of opinion, even though the great majority may be of one way of thinking, the efficacy of any special method is certainly not a matter for the decision of the Postmaster General within these statutes relative to fraud."

The Supreme Court of Arkansas, in Green v. Blanchard (138 Ark. 137), said: "It is well known that the different schools of medicine, and even of dentistry, have widely divergent views as to the treatment of certain diseases."

The Supreme Court of California said, in Hewitt v. Board of Medical Examiners (148 Calif. 590):

"It is a matter of common knowledge that each school of medicine is governed in the treatment of diseases and injuries by rules and principles and practices in material respects fundamentally and essentially different, the adherents of each implicitly believing that the eradication or alleviation of diseases can be only successfully attained under the peculiar principles and practices of the particular school to which he belongs; that the successful treatment of a particular disease under radically different principles of medicine practiced by another school cannot be attained."

Obviously, therefore, a manufacturer whose formula and labeling may have been developed with the aid of the most reputable physicians practicing in his community, may have shipments of his goods seized by the Secretary of Agriculture because the latter has decided that by inference or ambiguity the labeling or advertising bore representations contrary to what he (the Secretary) and his academic advisers considered to be the "general agreement of medical opinion." Section 8 (3) provides further that a drug shall be deemed to be misbranded: "If * * * its label fails to bear * * *(2) the name and quantity or proportion of each medicinal or physiologically active ingredient thereof

* *

This, of course, means complete formula disclosure and would amount to a confiscation of highly valuable trade assets without according any real or tangible benefit or protection to the public. It would appear that if the sole purpose of the framers of this legislation was protection of the public, that provision should have been made for registration or filing of a copy of the formula with the Secretary of Agriculture with proper provisions for preserving the secrecy thereof. Most formulas are technical and convey no understandable meaning to the public, outside of chemists, physicians, and pharmacists. Disclosure, however, would invite and encourage imitations, counterfeits, and infringements of reputable and proved products. The protection now afforded the public in the selfish desires of established companies to protect huge investments in well-known trade marks through the maintenance of various sorts of production and quality control, constitute the best safeguard which can be offered the public. Disclosure of the formulas so that irresponsible individuals with no investment in trade marks or names to protect, with questionable financial responsibility, and spurred by the opportunity to produce hastily and without control spurious products resembling those produced by established manufacturers, would result in injustice

to the established manufacturers and serve to endanger the public. The bill does not reach drug bootleggers and counterfeiters engaged in intrastate business. Section 8 (e) (2) further provides:

The Secretary is hereby authorized to prescribe by regulations requirements for such further information on the label of such drug as he may deem necessary to protect the public health.”

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This certainly is an "open-end" provision which can be expanded to any extent and at any time that the Secretary, or in practice his subordinates, may deem necessary any provisions not now contained within this bill. Many labels and cartons are so small as to render it difficult to display the requirements as to contents, place of manufacture, formula, "complete and explicit directions for use", various warnings, and the declarations specifically required by other sections of this bill.

Section 12 provides:

"(a) Whenever the Secretary finds that the distribution in interstate commerce of any class of food, drugs, or cosmetics may, by reason of conditions surrounding the manufacture, processing, or packing thereof, be injurious to health, and such injurious nature cannot be adequately determined after such articles have entered interstate commerce, he is authorized, after notice and hearing, to make such regulations governing the conditions of manufacture, processing, or packing as he deems necessary to protect the public health, and requiring manufacturers, processors, and packers of such class of articles to hold a permit conditioned on compliance with such regulations."

Further provisions of the bill authorize the Secretary to suspend any permit if it is found that any of the conditions of the permit have been violated. And, a manufacturer whose permit has been suspended is guilty of a violation of the act if he ships any goods until and unless the Secretary reinstates the permit.

Here bureaucracy attains its apex. The Secretary, not being satisfied with the power and control over the manufacture of foods, drugs, and cosmetics which he would have under the other provisions of this bill, is authorized by this section to regiment the industries into classes, to make such regulations covering the conditions of manufacture as he alone deems necessary to protect the public health, and to require manufacturers in each class to hold a permit which is conditioned on his being satisfied that the conditions which he himself has laid down have not been violated.

In other words, the Secretary-in practice, a bureau chief under him--is given the sole discretion to determine: (1) Whether any class of food, drugs, or cosmetics may be manufactured only under a permit; (2) under what conditions a permit will be granted; (3) when the permit will be suspended; and (4) when, if at all, the permit will be reinstated.

And, in addition, if in the exercise of this extraordinary power he suspends a permit, he can cause the goods of the manufacturer to be seized or the manufacturer to be indicted. This, it is readily seen, is more than extraordinary power. It is just a little short of Government ownership-ownership without any risk of business losses.

Section 21 provides:

11* * * The Secretary shall cause to be disseminated such information regarding any food, drug, or cosmetic as he deems necessary in the interests of public health and for the protection of the consumer against fraud."

This places in the hands of the Secretary or his assistants another dangerous power. Dissemination of any condemnatory information by the Secretary would be interpreted at once by the public as a conviction of the manufacturer. No provision is made in this portion of the bill that the Secretary shall first be required to give notice or hold hearings or disseminate such information after judicial judgment has been rendered. This power is given him in another portion of section 21. The above-quoted portion extending his powers to disseminate information which he "deems necessary" in the interest of public health, before trial, without notice, and regardless of what the manufacturer or advertiser has done to assure his compliance with the law. It is discretionary with the Secretary or, in practice, à subordinate bureau chief to determine (1) what information shall be disseminated, (2) when it shall be disseminated, (3) how it shall be disseminated, and (4) to whom it shall be disseminated-all without prior notice to manufacturers, distributors, or dealers affected, and without later compensation for damages unjustly caused them.

Section 23 (c) provides:

Hearings authorized or required by this act shall be conducted by the Secretary or such officer or employee as he may designate for the purpose. The findings of fact by the Secretary shall be conclusive, if in accordance with law."

In practice, the Secretary or his subordinate actually establishes the law by making his findings conclusive. They are not subject to review by court, or jury, and rules of evidence do not apply in hearings. The result of this provision clearly establishes the Secretary of Agriculture as legislator, inspector, administrator, prosecutor, judge, and jury.

Perhaps one of the most objectionable features of this bill is that it defines in broad general terms certain spheres of authority and then authorizes a Government officer, by regulations of his own creation, to expand and elaborate (1) the legislative provisions of the bill; (2) the executive powers and functions; and (3) the judicial powers and offices. Further, it denies to persons engaged in private business the constitutional guarantees of due process of law and freedom from governmental oppression.

We direct your attention to the following provisions, which appear on pages 10 and 11 of the November 23, 1933, issue of the Printers' Ink Weekly, which epitomize the objections to the bill, and offer suggestions for revisions, which would meet the requirements of the honest merchandiser and seemingly not encounter too great opposition from the sponsors of the bill:

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"1. The advertising industry will object to leaving such vague questions about advertising appeal as would be implied in inference and ambiguity, to a bureaucrat to decide. These should be decided only by the industry itself, when feasible at all. The administration, while nominally under control of the Secretary of Agriculture, would be actually carried out by a civil service employee. Thus would be built up a continuing bureaucracy.

"2. The publishers and advertising agencies will seek a definite exemption from liability in all cases unless they decline to give the Government information in their possession regarding the advertiser and his location.

"3. Damning an advertisement of a specific by indicating in bold type that it is not a cure, is too much of an advertising handicap. The same thing can be conveyed in clear and unmistakable ways without such a repelling signboard.

"4. Prohibiting any advertisement statement that a specific has any effect upon a list of well-known ailments seems as unreasonable as to prohibit a physician from prescribing for them. This should at least be limited to curative effect. "5. Basing judgment as to the effects of a specific upon any ailment, upon general agreement of medical opinion, is too vague even for physicians to abide by. A much more effective criterion would be scientifically correct test.

"6. The same would be true of any self-medication. The Secretary of Agriculture should not have the power to determine what is safe or unsafe as a matter of personal opinion. This should always be based upon tests by those capable of making them. If it is right in the law to assure a proper hearing and notice of hearing before criminal prosecurion, this should also be applied to civil prosecution and to libel or seizure.

"7. Seizure should be limited to cases of emergency where public health is definitely menaced and prompt action is a factor.

"8. Penalties should not be inflicted upon advertisers for an innocent infraetion of the law, and no penalty should apply until after the offender has been warned, as far as advertising copy is concerned.

"9. All material rulings by the Secretary, aside from administrative routing, should be subject to court review.

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"10. There should be no unfavorable publicity given to a product or to an advertiser by the Secretary until after such product, or advertiser, has been condemned either by admission or by due process of law.

"11. United States attorneys should not be compelled by the law to proceed at the mere direction of the Secretary, without evidence being submitted satisfactory to the Department of Justice.

"12. No officer or employee of a corporation violating the law should be personally punished, unless personally responsible as having authorized, ordered, or performed such acts.

13. Government inspectors, even in voluntary service, should not be paid by the advertiser, but by the Government itself, at least in major part; such inspection being instituted essentially for the protection of the public.

"14. It might be better to amend the original Food and Drugs Act without repealing it, instead of having a whole new statute, as such repeal might deprive the food and drug industry of a long series of court decisions under the act protective of them and also clarifying their rights.