established by the Bureau of Agricultural Economics, and also provides for voluntary cannery inspection and certification service. It is understood that to some extent canners have availed themselves of these services and facilities with satisfactory results in intertrade transactions. A certain small portion of the canning industry believe that the Bureau of Agricultural Economics grades are as suitable for enforcement purposes under a criminal statute as under civil statutes, and may appear as active proponents of section 11 and section 22 of this bill as drawn; but the governing board of the National Canners Association rightly holds that experience and evidence cannot be ignored. There can be cited convincing public statements of informed and responsible officials to fully substantiate what we have said respecting the limitations in the matter of grade definitions of canned foods. To the extent of such limitations the folly and futility of idealistic and unenforceable laws must now be, as never before, apparent. Section 23 (a), line 5, page 30. Delete the words "he may deem" and substitute "are"; lines 11 and 12, delete words "they may deem and substitute the word "are." This recommendation is in line with the previous recommendation as to section 3 where it was stated that determination should be based upon facts rather than upon conjecture. Section 23 (c), lines 2, 3, and 4, page 31. Delete last sentence of paragraph. The elimination of this sentence is requested because of recommendations hereafter to be made. Section 24. We recommend that section 24 be eliminated from the bill. This section gives the consumer no rights which he does not already have under other legislation and the relatively drastic provisions of this bill will doubtless invite an increase in the fraudulent claims for injury which have been increasing at an alarming rate, and, in certain sections, constitute a racket. Add new section to constitute section 27 as follows: Section 27 (a). In any action suit or proceeding involving any regulation made. promulgated, or prescribed under this act, such regulation and any evidence considered by the Secretary and any findings made by the Secretary may be reexamined by any court as to any question of fact as well as law. (b). In any proceeding involving the issue, renewal, suspension, or reinstatement of any permit under this act, or in any other action, suit, or proceeding involving the rights of any person affected by this act or any action taken thereunder, any action by the Secretary, any evidence considered by the Secretary, and any findings made by the Secretary, may be reexamined by any court as to any question of fact as well as law. The addition of this section is recommended as a precautionary safeguard against possible misuse of delegated powers. The CHAIRMAN. Thank you very much. I will call upon Mr. Bruce Kramer at this point. STATEMENT OF BRUCE KRAMER ON BEHALF OF THE DRUG INSTITUTE OF AMERICA Mr. KRAMER. Mr. Chairman, I do not desire to discuss the measure before the committee but, for the purpose of the record, as the counsel for the Drug Institute of America, an organization comprising a membership of approximately 40,000 units in the industry, I desire to have the record show that the Drug Institute of America endorses the views so ably and forcibly expressed by Dr. Beal during his presentation. to this committee. If the record will so show, I will conserve the rest of your time. The next speaker will be David F. Cavers, professor of law at Duke University. STATEMENT OF DAVID F. CAVERS Mr. CAVERS. Mr. Chairman, my name has been indicated. My connection with this measure arises from the fact that I was requested by Assistant Secretary Tugwell to join in a group which assisted in the drafting of this measure which Senator Copeland introduced as S. 1944. I am sure all of us who participated in that work feel that we have had presented yesterday, this morning, and this afternoon constructive suggestions with respect to the bill. I also have no doubt that the committee will give them its earnest. consideration and that a better measure will result. I do not wish to undertake an extended rebuttal of what I believe are some misconstructions of the language in the bill. For one reason, the chairman of this gathering has by his searching questions, I believe, very frequently dissipated those misconstructions. His evident interest in the protection of the consumer through remedial legislation, and his fairness, I am sure, will be appreciated by all those who have any connection with this measure. I would, however, like to question whether the insertion of adverbs such as "materially", "inherently", "essentially", and the like, can be regarded as constructive suggestions by any other than members of the legal profession. I have no doubi that they will prove a great boon to them, but I wonder whether an advertiser would feel that his interests were advanced by the ability to assert, where that his advertising was admittedly false, the defense that it was not very false, not materially false, not particularly false. I question whether that would do him any good, and I know that it would remove teeth from the law. I should like to present for your consideration the position which some of us who worked on the legislation find ourselves in. In some instances we undertook the drafting of general standards of conduct. Now we find them too broad; at least, so we are told. In some instances we endeavored to use specific statements; now we are told they are too rigid. In some instances we sought to secure both specific rules and flexibility through the use of the administrative machinery of the Government, subject at all times to the control of our courts. Now we are told that it is bureaucracy and tyranny. It seems that when you put those three views together, after making proper allowance for the valuable suggestions which have come to us, the result is that there is left open only the drafting of rules which are like silent policemen at street intersections they do not cover much ground, and they are easy to get around. I do not think that you want that sort of legislation; I am sure that the Committee does not, and yet it seems essential that in some situa tions there be general standards of conduct, in some situations that there be specific rules; and in some situations where specific regulations can be made under general standards of conduct which the courts can use as a guide in limiting the action of the administration, there should be the grant of administrative power. I can assure you that this is no novelty in our law, and that its exercise would be subject to the same watchful scrutiny of the courts that any other grant of power to administrative officers is subject. Furthermore, in almost all instances where that grant of power has been given in the bill, it has been accompanied by provision for notice and hearing. Now, Mr. Campbell stressed the fact that at those hearings effort would be made to bring to the attention of the officer presiding, not only the Department's views, but also ample scientific testimony from whatever source available. I think that I should make also clear that at those hearings after public notice there is and should and would be granted to the industry ample opportunity to be heard and to present its views. There will, therefore, be the opportunity for special consideration of the special problems of industry, and there will be possible a discrimination-in the best sense of the word-in the treatment of these products. I think that there also has been a tendency somewhat to exaggerate the extent of the granting of administrative discretion in this bill, despite the fact that no one can examine the bill without remarking its frequent appearance. A more careful comparison of the grants of power may perhaps dispel some of those apprehensions. In many instances the grant is to accomplish a matter of form, more specifically, to set up ways of stating required information, a matter which cannot very well be put into a statute without making it resemble a tariff schedule of a tariff law. There are also necessary grants of power to establish procedure for the conduct of the hearings, all subject, of course, to the operation of the due process clause of the United States Constitution. I wish also to point out the fact that some of these grants of power are to exempt industries from the operation of statutory regulations where they may be harsh. In the case of standards for food products, we have no other way of setting these standards up except as they are now established under the McNary-Mapes amendment, by administrative action. Whether you want standards or not is another thing, but I do not think that you can regard the standard-making power as an unjustified resort to administrative discretion. The same thing, I think, can be properly be said of the voluntary inspection provision in section 22. Whether that is desirable or not, I think that the fact remains that is would be very difficult for such a system to be set up without some grant of discretionary power to the Secretary. Certainly none of us, I suppose, would wish to see the compulsory establishment of an army of inspectors overnight, which would be necessary if there were not in the Secretary's power the power to withhold the extension of this privilege, not from specific individuals, but from classes. In the cases of tolerances and prohibitions of adulteration of ingredients, a number of speakers have brought out the rather obvious fact that that determination is one which is dependent not only on the state of economic knowledge, but on the state of technical processes. If, in a scientific laboratory, a wash to remove insecticides which was 100 percent effective were invented, taking a case which may seem exaggerated, the effect of such a discovery on the tolerance, of course, would be great. It would be, in such a circumstance, unreasonable to grant the same liberality in permitting poisons to remain on a product after such a discovery as before. In other words, here is a situation which cannot very well be handled by statute. The question is whether, after the Secretary has, following a hearing such as I described, set a standard, the industry can rely on that standard being maintained when once it has been passed upon in an appropriate action reviewing it in the courts, or whether the industry is left subject to the fate of a standard in every particular case in which it comes up, in which the Government must prove not merely the violation of the standard but the danger to health of the ingredients on the products. With regard to the grant of administrative power as to deteriorating drug products, you have a situation in which it seems obvious, not only for the benefit of the consuming public, but also for the advantage of manufacturers to have regulations appropriately indicating when a drug would no longer be useful. Suppose you have a case where a drug is not properly labeled with such precautionary statements, and it deteriorates. A person uses. it, and injury results. Then you would have a damage suit. Is it not better to forestall a thing of that sort by an appropriate precaution in advance? I do not believe that there have been vigorous objections made to the granting of a discretionary power there. We could not very well include all the drugs which might be subject to such regulation without having an extended appendix to this measure, which, some have complained, is already too long to be understood, and have, in some instances, have given testimony to that accusation by their misinterpretations. With respect to supplementing the tests to determine the quality of United States Pharmacopoeia products, another grant of discretionary power, certainly there would be very few instances of its exercise,. especially if the United States Pharmacopoeia Convention, a national organization, keep by supplements their standards abreast of medical science. "Permit factories", as has been explained, present a very special situation, and I think Dr. Copeland made a good suggestion by adding to the standard which was set there the words, "in such case only." The bill's standard is the protection of public health in those situations. where prior inspection is the only means of detecting the wrongfulness: of the product. It is an exceedingly limited section, perhaps too limited. It sets a standard which would make it easy for a producer to upset any usurpation of power by appropriate legal proceeding. In the case of narcotics we have a possibility again of exercise of discretionary power. Dr. Beal, I think, made a very valuable suggestion in the addition of the words "habit forming" as qualifying nar cotics and hypnotics. It was certainly our purpose that that should be understood. But we cannot hope to anticipate, by an enumeration of drugs in a statute, the progress in the development of such products for I do not know how many years to come. One purpose in putting in grants of administrative power in a bill of this sort is to enable the legislation to keep abreast of progress, of change in conditions, so that it will not be necessary to resort to congressional action which may itself be a burden on the industry, which may be upsetting, which certainly will be slow. On that point I should like to bring this thought to your attention: I think there have been five amendments to the Food and Drugs Act of 1906; the last amendment which had any operation with respect to drugs was in 1912. Speaker after speaker in the last two days has brought to our attention by very candid public-spirited admissions that there are substantial shortcomings and defects in the present legislation. Now, if one quarter of the interest, one quarter of the vigor which has been expressed in opposition to this bill had been expended by the industries themselves in the support of measures in the past to remedy these defects, these hearings would not be in session this afternoon. It seems, therefore, that we cannot hope for militant action on the part of the industries to correct minor defects which is the sort of thing that the grants of discretionary power, by and large, are seeking to accomplish. Those grants, as I say, are subject to court action. It has been desired that there be an appeal to the courts from their exercise. The regulatory power of an administrative official exercised in this fashion is not an exercise of quasi-judicial function; it is, if I may use the term, quasi-legislative. The hearings, which he would hold, are not in the nature of an adjudication of the rights and wrongs of individuals. There is no adversary party, technically, so that it seems impossible that a technical appeal could be taken. I think I can say safely that provision for an appeal from such a determination could not constitutionally be granted to the Federal District Courts of the United States. Very possibly some special tribunal might be established by statute to handle precisely such cases. However, is that necessary? That would depend, it seems to me, on the ease with which a review in the United States Federal courts might be obtained. How can that be done? In any case in which action is taken under such a regulation, its constitutionality may be questioned. It may be asserted as a defense in any prosecution based on a regulation that the regulation is unreasonable, unsupported by evidence, or without the bounds of this statute. No special proceeding has to be brought by the interested party in order to do that, or, as an alternative, he might proceed by injunction and enjoin the enforcement in advance of any wrongful administrative action. I think Mr. Campbell pointed out that at the present time there is an injunction against one of the canning standards which were set up under the McNary-Mapes amendment. No one can very well make argument that administrative officers never blunder-that there will never be a miscarriage of justice under any legislation. We all, certainly, should be sufficiently realistic to know that it may happen; but is the reason of an occasional, and I think the record of the Food and Drug Administration indicates quite clearly that it would be only an occasional mistake of that sort, sub |