SECTION 17 (a) (5)

Should be stricken from the bill.

(NOTE. We have recommended section 12, herein referred to, should be stricken from the bill.)

SECTION 17 (6) (b)

Approved, allowing for the excision of (5) above.

SECTION 17 (d)

This subdivision should be stricken from the bill as it merely releases one class: of offenders from prosecution and inferentially places the guilt on another. The guilt of the informer or the other party to the contract or both is a matter for a jury to pass upon. No publisher, etc., should be exempted from prosecution merely by alleging that the other party was the offender.

SECTION 17 (e)

This subdivision should be stricken from the bill for the reasons mentioned above.

SECTION 17 (f)

Approved except that the word "Sections" on line 16 be changed to the singular, to wit, "Section", and the excision of the numeral "12" and the word "and" immediately following on line 16.

(NOTE. We have recommended that section 12 be stricken from the bill.)

SECTION 18 (a)

This subdivision should be stricken from the bill. It is purely a question for a jury.

SECTION 18 (b)

This subdivision should be stricken from the bill. It is purely a question for a jury.

SECTION 21

This section is approved but with a condition that the final determination of all ́ judgments, degrees, orders, proceedings instituted, and seizures made, or the abandonment or reversal of such judgments, decrees, orders, proceedings instituted, and seizures made shall likewise be published by the Secretary.

SECTION 24

This section should be stricken from the bill on the ground that it is unnecessary. A common-law right of action exists.

STATEMENT OF J. A. LADDS, FIRST VICE PRESIDENT OF THE ALLIED MANUFACTURERS OF THE BEAUTY AND BARBER INDUSTRY, INC.

Mr. LADDS. This organization, I may explain, is a trade association of manufacturers of cosmetics, mechanical equipment, permanent wave machines and supplies, hair dyes, hair rinses, and kindred items particularly adapted for use in the beauty and barber shop field. The association is, therefore, especially interested in any legislation affecting the manufacture and control of cosmetics by the Federal Government.

The association has given very careful consideration to the legislation now proposed, had representatives at the hearings of your committee in Washington, and is disposed to cooperate in every possible way in the matter of securing the enactment of reasonable and proper legislation to meet the general purposes in view. The

association feels, however, that the proposed measure is, in its present form, impractical and unworkable and places in the hands of a Government official vast powers capable of grave abuse. With this situation in mind, I wish to bring to the committee's attention certain suggestions by way of amendment, which, it is believed, will be of a constructive nature.

The following amendments are accordingly respectfully submitted:

I

Proposed amendment: Section 5 (a): On line 14, page 6, in place of the language "if it is or may be injurious to the user * * *"substitute the following: "if it is dangerous to public health * *

Comment: The definition of adulteration of cosmetics, as contained in the present draft of the act, makes no allowance for the possible idiosyncrasy or supersensitiveness of the user of a cosmetic. Almost any cosmetic may in rare instances result in irritation to a user who is supersensitive to some of its ingredients. Under the present working of the act, if a corporation ships in interstate commerce a cosmetic which to the overwhelming number of users is harmless, but which is a negligible number of cases may cause irritation, real or fancied, on account of some supersensitiveness, idiosyncrasy, or pathological condition, its officers may be prosecuted, fined, or imprisoned. The change in language proposed above, it is relieved, would assure to the Secretary of Agriculture and to the courts a reasonable latitude in the application of the law to products of this class which, on the one hand, could not be said to countenance general and arbitrary prohibitions, and, on the other hand, would permit effective and adequate protection to the public.

II

Proposed amendment: Section 6 (b): On line 3, page 7, after (2) add the words "in the case of foods and drugs." On lines 8 and 9 of page 7, omit the words "and cosmetics."

Comment: So far as cosmetics are concerned, the provisions of 6 (b) (2) are burdensome and unnecessary. Consumers do not buy cosmetics by weight. They buy the brand they desire and willingly pay the price for that brand. In view of the fact that weight is not an important element in the mind of the purchaser, it would appear unnecessary to impose upon the manufacturer the burdens which this provision would entail. It is not easy to standardize the exact weight or the exact volume of the contents of cosmetic containers, and any attempt to do so would result in annoyance and expense totally out of proportion to any benefit conferred upon the purchaser. As to the effect or desirability of this subdivision with respect to food and drugs, no comment is made since the representatives of the food and drug industries are obviously best qualified to speak on this point.

III

Proposed amendment: Section 8 (e) (2): Lines 3-5, page 11, strike out the following language after the word "be": "and (2) the name and quantity or proportion of each medicinal or physiologically active ingredient thereof." Line 8, page 11, add after the word "health" the following: "provided that nothing herein contained shall require the disclosure of any formula." Comment: See comment under proposed amendment V infra.

IV

Proposed amendment: Section 10 (a): On lines 24 and 25, page 14, and line 1, page 15, in place of the language "is or may be injurious to health, taking into account other ways in which the consumer or user may partake of or be exposed to * * *"substitute the following language: "is dangerous to the public health, taking into account other ways in which the consumer or user has under normal conditions partaken of or been exposed to

* * * ""

Comment: This suggestion is prompted by the same considerations set forth in the comment with respect to the amendment proposed above to section 5 (a).

V

Proposed amendment: Section 13 (a) (2): On lines 22-23, page 17, strike out the words "methods, processes". On line 23, page 17, strike out the words

"and unfinished".

Section 18 (a) (2): On line 24, page 17, add the following proviso: "provided that nothing herein contained shall require any manufacturer to disclose any method, process, or formula".

Section 13 (b) (1): On line 10, page 18, also strike out the words "methods, processes" and "and unfinished".

Comment: The above change is suggested in order to insure the protection of valuable formulae and methods and processes of manufacture. The formulae and methods and processes of manufacturing cosmetics are property rights recognized as such by the courts, and frequently are of enormous financial value. The acquisition of such information by competitors would in many instances spell ruin of an established business. Under the section as drawn, Government inspectors would have access to all such secrets. While publicity to such secrets is doubtless not contemplated, it would be a practical impossibility to protect the manufacturer under such circumstances against the risks of such valuable information getting into the hands of actual or potential competitors.

VI

Proposed amendment: Section 15: On page 20 add paragraph (d) to read as follows: "Excepting in cases threatening grave and imminent danger to the public health, the Secretary shall, before instituting any civil action authorized by this Act, afford due notice and opportunity for hearing to interested parties in accordance with such regulations as the Secretary shall prescribe."

Comment: The above provision is recommended in order to afford and assure manufacturers opportunity for administrative relief in all ordinary cases and to avoid insofar as possible the danger and embarrassment, to an innocent manufacturer, of public court action without notice.

VII

* *

Proposed amendment: Section 16 (a) (2): On lines 2 and 3, page 21, in place of the language "imminently dangerous to health *"substitute the following language: "Imminently dangerous to the public health Comment: This suggestion is prompted by the same considerations set forth in the comment with respect to the amendment proposed above to section 5 (a).

VIII

Proposed amendment: Section 21: Lines 22-25, page 28, and lines 1-3, page 29. Strike out the language following 66* * * and orders which have been rendered,".

Comment: The powers contained in the language struck out are capable of grave abuse. The Secretary of Agriculture, it is submitted, should not be enabled to disseminate statements adverse to the interests of a manufacturer until the manufacturer has had his day in court and has been adjudicated guilty.

IX

Proposed amendment: Section 22: Strike out this section in toto. Comment: The service provided in this section, while stated to be a “voluntary inspection service", is, in effect, a compulsory inspection service. If one manufacturer avails himself of the service, every manufacturer will, as a practical matter, be required to in order to avoid being placed in an unfair competitive situation. It is not the business of the Government to make what are in effect recommendations as to particular products. Furthermore, the transfer to the manufacturer of the expense of maintaining the army of inspectors, which would be required under this section, would effect by indirection the imposition of a heavy additional tax.

X

Proposed amendment: Section 23 (c): Substitute for the paragraph in its present form the following: "Regulations relating to adulteration, misbranding, false advertisement, and tolerance, as authorized in sections 3-10, inclusive, of

this act, shall be prescribed upon the joint authority of the Secretary of the Treasury, the Secretary of Agriculture and the Secretary of Commerce. Regulations relating to imports, as authorized in section 20 of this act, shall be prescribed upon the joint authority of the Secretary of the Treasury and the Secretary of Agriculture. The Secretary of Agriculture is authorized to prescribe such further regulations as may be necessary and appropriate to the efficient enforcement of the functions otherwise vested in him by the provisions of this act, including regulations with the force and effect of law as to notice and conduct of hearings by the Secretary of Agriculture."

Comment: In the hearings on this bill neither Secretary Wallace nor Mr. Campbell called attention to the fact that, while the proposed legislation would vest practically all regulatory authority in the Secretary of Agriculture, the existing Food and Drugs Act (section 3) provides that all rules and regulations must be prescribed by "the Secretary of the Treasury, the Secretary of Agriculture, and the Secretary of Commerce." The vital interests of the Treasury Department in the Food and Drugs Administration through its Bureau of Public Health Service and of the Commerce Department through its Bureau of Foreign and Domestic Commerce and its Bureau of Standards are too apparent to justify their participation of the Food and Drugs Administration being terminated without most serious consideration of the reasons involved. Since the proposed legislation contemplates a much greater delegation of legislative control over the food and drug industries and the inclusion of the cosmetic industry as well, the more reason exists in the interest of fair administration for not accompanying this added delegation of control with a complete concentration of authority in the Secretary of Agriculture. Industry, it is believed, could look forward to the new control with much greater confidence and assurance of fair treatment if the Department of Commerce had a voice in formulating the most important regulations.

ΧΙ

Proposed amendment: Section 23 (c): This paragraph, by providing that "the findings of fact by the Secretary shall be conclusive if in accordance with law" in all hearings authorized or required by this act, would effect a delegation of judicial authority, which, when added to the wide administrative and enforcement powers elsewhere conferred, would make the Secretary of Agriculture a practical dictator over the food, drug, and cosmetics industries of the country. In view of the enormous business and public interests involved and the broad powers of regulation in contemplation, it would seem that the matter is of sufficient importance, in order to avoid abuse of authority and to assure fair treatment to all concerned, to warrant the creation of an independent board or commission comparable to the Board of Tax Appeals or the Federal Radio Commission, as the final administrative and fact-finding tribunal. In the absence of such independent board or commission it is submitted that the rulings of the Secretary of Agriculture or his agents should by definite and specific provisions be made subject to court review. In this connection attention is invited to the right of appeal from the findings of the Commissioner reserved to manufacturers under "the National Prohibition Act", section 5 of this act providing as follows:

"The manufacturer may by appropriate proceeding in a court of equity have the action of the commissioner reviewed, and the court may affirm, modify, or reverse the finding of the commissioner as the facts and law of the case may warrant and during the pendency of such proceedings may restrain the manufacture, sale, or other disposition of such article." (41 Stat. 305.)

XII

Proposed amendment. Section 24.-Strike out this section in toto. Comment: This act should not attempt to modify or restate the common law with respect to personal injuries.

A copy of Senate Bill 1944, in which the proposed changes or amendments have either been pasted or typed in, is enclosed herewith for convenience.

We suggest the following amendments:

On page 6, line 14, strike out the words "or may be injurious to the user" and insert "dangerous to the public health".

On page 7, line 3, after the figure (2), insert the words "in the case of food and drugs".

On page 7, strike out the last word in line 8 and the first word in line 9.

On page 11, line 3, put a period after the word "be" and strike out the remaining words in the line.

On page 11, strike out all of line 4.

On page 11, line 5, strike out the words "active ingredient thereof." On page 11, line 8, change the period after the word "health" to a colon, and add the following: "Provided, that nothing herein contained shall require the disclosure of any formula."

On page 14, line 24, strike out the words "or may be injurious to" and insert the words "dangerous to the public".

On page 14, line 25, strike out the last word in the line and insert "has under".

On page 15, line 1, strike out the words "partake of or be" and insert the words "normal conditions partaken of or been".

On page 17, line 22, strike out the following "methods, proc-".
On page 17, line 23, strike out "esses,".

On page 17, line 23, strike out the words "and unfinished".

On page 17, line 24, after the word "stored", change the period to a colon, and add "Provided, that nothing herein contained shall require any manufacturer to disclose any method, process or formula."

On page 18, line 10, strike out the words and figures "methods, processes," and also the last two words in the line "and unfinished". On page 20, between lines 11 and 12, add a new paragraph as follows: "(d) Excepting in cases threatening grave and imminent danger to the public health, the Secretary shall, before instituting any civil action authorized by this Act, afford due notice and opportunity for hearing to interested parties in accordance with such regulations as the Secretary shall prescribe."

On page 21, line 3, between the words "to" and "health", insert the words "the public."

On page 28, line 22, change the comma after the word "rendered" to a period, and strike out everything that appears thereafter on the page.

On page 29, strike out everything appearing thereon.

On page 30, strike out lines 1 and 2.

On page 30, strike out from lines 4 to 17, inclusive, and insert in its stead the following: "Sec. 23 (a). Regulations relating to adulteration, misbranding, false advertisement, and tolerance, as authorized in sections 3-10, inclusive of this act, shall be prescribed upon the joint authority of the Secretary of the Treasury, the Secretary of Agriculture, and the Secretary of Commerce. Regulations relating to imports, as authorized in section 20 of this act, shall be prescribed upon the joint authority of the Secretary of the Treasury and the Secretary of Agriculture. The Secretary of Agriculture is authorized to prescribe such further regulations as may be necessary and appropriate to the efficient enforcement of the functions otherwise vested in him by the provisions of this act, including regulations with force and effect of law as to notice and conduct of hearings by the Secretary of Agriculture."

On page 31, strike out lines 5, 6, 7, and 8.