under section 3 (c) of the bill be exercised only after "a public hearing has been conducted and opportunity for review has been accorded in conformity with the provisions of sections 7 and 8 of the Administrative Procedure Act." (Sections 7 and 8 of the Administrative Procedure Act, which relate to so-called formal rulemaking, apply automatically under present law where a rule may be issued under the applicable statute only on the basis of a hearing on the record. If the bill were to require such a hearing, specific reference to sections 7 and 8 of the Administrative Procedure Act would therefore be surplusage, especially in view of the requirement of the preceding sentence that regulations be issued in conformity with the Administrative Procedure Act.) We believe, moreover, that the bill should not require a hearing, with the long delays incident to that procedure, unless a hearing is requested on the basis of objections to the proposed rule filed by a party who would be adversely affected. The Food, Drug, and Cosmetic Act originally contained, for formal rulemaking, a provision requiring a hearing in all cases. We soon found out that there were a number of instances where everyone was in substantial agreement as to the need, scope, and content of a regulation. The mandatory hearing often caused great delay in the publication of final orders. With the active support of industry the Hale Amendment was enacted in 1956. This amendment was incorporated into section 701 (e) of the Food, Drug, and Cosmetic Act and now compels the Secretary to hold a public hearing only if requested to do so by one adversely affected by the proposed final order. This is the procedure that we believe should be followed for any formal rulemaking proceeding under this bill. We further believe that the bill should provide for judicial review on the basis of the hearing record in a U.S. court of appeals. The provisions of section 701 (e) and (f) of the Food, Drug, and Cosmetic Act furnish a desirable pattern for the recommended procedure. In conclusion, we again strongly endorse legislation along the lines of this bill and we urge that your committee give favorable consideration to the modifications suggested above. We are advised by the Bureau of the Budget that there is no objection to the submission of this report from the standpoint of the administration's program and that enactment of this bill, with modifications suggested in its report, would be in accord with the program of the President. Sincerely, WILBUR J. COHEN, Secretary. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., April 16, 1965. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: The following are the views of the Bureau of the Budget on S. 985, a bill "To regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging of labeling of certain consumer commodities distributed in such commerce, and for other purposes." In his message to the Congress in February 1964, on "The American Consumer," the President recommended "legislation to insure that the consumer has access to the information needed to make a rational choice among competing packaged products." This was reaffirmed in his 1965 Economic Report. S. 985 would accomplish this objective by requiring, in section 3(a), the Secretary of Health, Education, and Welfare (in the case of food, drugs, and cosmetics) and the Federal Trade Commission (in the case of other consumer commodities covered by the bill) to promulgate several specific types of regulations governing packaging and labeling for all such commodities, with appropriate exceptions for particular commodities. It could also authorize, in section 3(c), six other types of regulations for specific consumer commodities whenever "necessary to establish or preserve fair competition *** by enabling consumers to make rational comparison with respect to price and other facilities, or to prevent the deception of consumers." With one exception, the general requirements for regulation in section 3 (a), in our judgment, are fully consistent with the objective of protecting the consumer and the manufacturer, especially since exceptions for particular com modities are provided. It would appear preferable, however, for use of "cents off" labels to be subject to discretionary regulation under section 3(c), rather than outright prohibition as now provided under section 3(a) (5). In order to forestall possible losses, it would also appear desirable to provide businesses an opportunity for advance clearance of specific packages and labels, provided, however, that ample time is allowed for the review of applications for such clearance, that during this period the applicant refrains from using the proposed new package or label, and that as under the Poultry Products Inspection Act, the Government's advice is binding unless and until the applicant obtains a reversal after a formal hearing procedure. Enactment of legislation along the lines of S. 985, modified as suggested above, would be in accord with the President's program. Sincerely yours, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. THE GENERAL COUNSEL OF THE TREASURY, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 985, "To regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities distributed in commerce, and for other purposes." The proposed legislation is designed to prevent unfair and deceptive packaging and labeling of certain consumer commodities. The Secretary of Health, Education, and Welfare would be directed to promulgate regulations with respect to foods, drugs, and cosmetics which would require packages to give accurately and clearly essential product information and fairly represent the contents. The Federal Trade Commission would be required to promulgate similar regulations with respect to commodities which are customarily produced or distributed for sale through retail sales agencies for consumption or use by individuals. The proposed legislation is not of primary interest to this Department and the Department has no comment to make as to its general merits. The Department has been advised by the Bureau of the Budget that there is no objection from the standpoint of the administration's program to the submission of this report to your committee. Sincerely yours, FRED B. SMITH, Acting General Counsel. DEPARTMENT OF AGRICULTURE, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: This is in reply to your request of February 23, 1965, for a report on S. 985, a bill to regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling certain consumer commodities. The Department recommends the enactment of this bill. The provisions of S. 985 are basically comparable to the labeling and packaging regulations issued under the Poultry Products Inspection Act. These regulations establish specific and meaningful rules for interpreting and enforeing the prohibition in this act against the use of any false, misleading, or deceptive label or name on poultry products. Under the Meat Inspection Act extensive regulations regarding deceptive labeling are also in effect. Provision has been made in S. 985 for exemption of meat and poultry products and for other commodities or containers that are now regulated under Federal laws administered by this Department. The requirements of S. 985 are not materially different than the existing egulations under the Food, Drug, and Cosmetics Act governing the labeling of foods, other than meat and poultry products. We recommend that provision be made in the bill, or in the regulations issued hereunder, for the advance clearance of labels and packages. Advance approval of labels for meat and poultry products is required by regulation and this procedure has, we believe, been mutually satisfactory to the industry and to the Department. There are two provisions of the bill which would constitute a significant difference from the Federal meat and poultry inspection acts and the regulations issued thereunder. These provisions, not present in the meat and poultry acts, are the mandatory prohibition of cents-off labeling by the manufacturer and the administrative authority to establish reasonable weights or measures by which a commodity shall be distributed for retail sale. We have handled on a case-by-case basis the cents-off labels submitted for approval by manufacturers of meat and poultry products. Relatively few such labels have been submitted for approval. They have been approved when the manufacturer submitted satisfactory evidence that there was no change in the product formula and quality, and when the labels showed the base price to which the "cents off" would apply. Only temporary approval (6 months limitation) is given to a cents-off label. We are currently reviewing the matter to determine if further safeguards or limitations, within the scope of the meat and poultry inspection acts, should be adopted. Lack of authority under existing Federal laws to require standardization of weights or measures for retail packages of meat and poultry products has not been a troublesome or contentious matter. The Bureau of the Budget advises that there is no objection to the presentation of the report from the administration's point of view. Sincerely yours, Hon. WARREN G. MAGNUSON, ORVILLE L. FREEMAN, Secretary. U.S. DEPARTMENT OF JUSTICE, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C. DEAR SENATOR: This is in response to your request for the views of the Department of Justice concerning the bill, S. 985, to be known as the "Fair Packaging and Labeling Act." The bill would, with certain exceptions, make it unlawful to package or label consumer commodities for distribution in commerce which fail to conform to regulations to be promulgated under the measure. The Secretary of Health, Education, and Welfare would be charged with the promulgation of regulations and enforcement of the legislation with respect to food, drugs, devices, and cosmetics, and the Federal Trade Commission would be similarly charged with respect to other consumer commodities. Subsection (b) of section 2 of the bill provides that the prohibition contained in subsection (a) shall not apply to wholesalers or retailers except to the extent that they package or label covered commodities or prescribe or specify the manner in which such commodities are packaged or labeled. The committee may wish to consider the desirability of amending subsection (b) to make the provisions of the measure applicable to wholesalers or retailers who offer packaged or labeled commodities for distribution knowing they are not labeled in conformity with regulations promulgated pursuant to the act. Section 3(a) (5) would flatly prohibit "cents-off" labels. In our view such a prohibition is inadvisable for price competition is certainly a desirable factor in the market place. It is therefore suggested that this provision of the bill be deleted and in its place section 3 (c) be amended to add a paragraph “(7)” authorizing the promulgation of regulations to deal with the "cents-off" question. In the exercise of such an authority, the Secretary of Health, Education, and Welfare or the Federal Trade Commission, as the case may be, could permit the use of such labels under circumstances which would assure against consumer deception and pursuant to appropriate safeguards. We note that section 3 (c) (1) authorizes the promulgation of regulations to establish reasonable weights or quantities in which commodities shall be distributed for retail sale. Since standardization could, in some instances, be an anticompetitive factor, the provision appropriately confers a discretionary authority which, in its exercise, may take into account the impact of any such regulations on competition. The Department of Justice favors the enactment of this legislation which will implement the recommendations contained in the President's Consumer Message of February 5, 1964 (H. Doc. 220, 88th Cong.). The Bureau of the Budget has advised that enactment of this legislation would be in accord with the program of the President. Sincerely, RAMSEY CLARK, Deputy Attorney General. DEPARTMENT OF STATE, Washington, April 28, 1965. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: This report on S. 985, a bill "to regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities distributed in such commerce, and for the purposes" is submitted in response to your letter of February 23, 1965. S. 985 would provide for the promulgation of packaging and labeling regulations by the Secretary of Health, Education, and Welfare for foods, drugs, and cosmetics, and by the Federal Trade Commission for other consumer commodities, excluding certain products, such as meats, alcoholic beverages, and seeds, for which labeling and packaging requirements are imposed under existing law. Any violation of the regulations issued by the Secretary of Health, Education, and Welfare would be subject to certain of the penalties provided in the Federal Food, Drug, and Cosmetic Act with respect to misbranding, and violations of regulations issued by the Federal Trade Commission would be subject to penalties prescribed by the Federal Trade Commission Act for unfair or deceptive acts or practices in commerce. The provisions of S. 985 as presently drafted do not appear to relate significantly to the responsibilities of the Department of State. The Department wishes to refrain, therefore, from making any recommendation with respect to the bill at the present time. The Bureau of the Budget advises that from the standpoint of the adminis tration's program, there is no objection to the submission of this report. Sincerely yours, DOUGLAS MACARTHUR II, Assistant Secretary for Congressional Relations, (For the Secretary of State). COMPTROLLER GENERAL OF THE UNITED STATES, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: By letter dated February 23, 1965, you requested our comments on S. 985, 89th Congress. The stated purpose of this measure is: "To regulate interstate and foreign commerce by preventing the use of unfair or deceptive methods of packaging or labeling of certain consumer commodities distributed in such commerce, and for other purposes." We have no special information as to the desirability of such legislation, and since such measure would not affect the functions of this Office, we have no comments to make concerning its enactment. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. The CHAIRMAN. Senator Hart has a short statement. Senator HART. Mr. Chairman, members of the committee, thank you, Mr. Chairman, first of all, for scheduling these hearings at a time when I know the press of the Appropriations Committee bears heavily upon you. I do have a statement. It is brief. I shall read it literally, rather than attempt to summarize it, because the summary is usually longer than the prepared statement. The truth-in-packaging bill has become a symbol. To the consumer it is an outlet for pent-up frustrations resulting from the packaging revolution of the past two decades. To many manufacturers it represents undue governmental influence. Actually, and I think the chairman stated it so well, the bill is in the tradition of other labeling bills which have originated in this committee and are now the law of the land. Like those other bills, it seeks to meet a real need with a tested and reasonable approach. The need for this bill grows from the package's role as salesman in today's supermarket. This the chairman has commented on. It is a need multipled by the approximately 8,000 consumable items on today's shelves as compared to 1,500 about 20 years ago. The need is for sufficient information presented in a way that will allow and encourage the shopper to make rational price comparisons among competing products. Our free enterprise economy, like our political system, rests on one pivotal point-that the voter-consumer will reward the most deserving candidate. But to reward the manufacturer who offers the best buy necessitates the first step of easy computation of price per unit. It is to this end that this bill is addressed. It is no answer to say the consumer is too smart to be fooled. Even the most complex computer must be fed the basic information before it can come up with a responsible answer. This bill will help to make that information available to the consumer in a way that can be rapidly digested. At stake are purchasing decisions affecting an $80-billion-a-year industry-our largest. The nickels and dimes involved add up to big money, not only in terms of our total economy but in the pay envelopes of each and every one of our citizens. To say that present law is adequate is to repeat the arguments against all the labeling bills that are now accepted as wise supplements to the law of this land. This argument ignores the evidence piled up in the six volumes of congressional hearings of more than 2,000 pages of testimony during the past 3 years. It ignores the thousands of letters sent to me, and I suspect to my colleague who sits to my right. Mrs. Neuberger. Many of those letters describe personal experiences with insufficient packaging and labeling. It can be refuted by one shopping trip to any supermarket. If the law were adequate, the practices at which the bill is aimed would not persist. The bill's reasonableness is the outgrowth of hundreds of discussions with affected persons and numerous amendments made to the bill the past 3 years. Criminal penalties have been removed. Comprehensive procedural safeguards have been added. Provisions to |