In a resale, don't they usually do that? Don't they put a label on the product that the price stamped on the tea, which is 45 cents, and they will add under it "Special, 42" or "40," so you really know if you are getting something off an established price?

Your testimony on page 4, about the results of an excursion into a supermarket, bear out over and over and over again the kind of consumer mail complaints that comes to many of us. I think our mail is almost as good in quoting to substantiate a position as that of the public opinion polls that we had from witnesses last week, and that we had again this morning, because they have in the polls questions slanted towards their own viewpoint.

So they don't convince me in the light of the testimony that only a small number of consumers are not satisfied with things the way they are now. And you seem to bear that out.

Senator Cannon?

Senator CANNON. You indicated that you believe that nothing has changed since your previous testimony. Have you made any survey such as you did before? I recall you made a check, a store check, a shoppers check. Have you done that recently to see if there is an appreciable change in the manufacturing or packaging procedures?

The

Mr. GIDDINGS. On the "cents off" question, we checked that a few days ago, and we couldn't find any indication, as I pointed out, that the industry had policed itself, had made any improvement. same deceptive items are to be found on the shelves today that were there 2 years ago this month.

For instance, we noticed just Saturday, items like the "king-sized soap box," one king size, 5 pounds, 4 ounces; one 5 pounds, 12 ounces; and the next one along the line, again 5 pounds, 4 ounces. The customer has no way of interpreting the meaning because of the label "King Size."

The same difference in quantity was there under the one labeled "Giant Size." In fact, ranging from 2 pounds, 1 ounce to 3 pounds, 1

ounce.

Senator CANNON. Madam Chairman, I might say since we had these hearings, I have become more interested myself when I occasionally have gone out to help with my family shopping, I have noticed this same thing. I have been unable to find what the "cents off" relate to so far.

I notice on this package, it says "5 cents off regular price," and it says "you pay the stamped price." The stamped price, who knows what the regular price may be.

Certainly the manufacturer who printed that on there had no way of knowing what the regular price was going to be for the retailer. This example right here, if I were shopping and these items were the same price, I would pick up the bigger one because it looks like it has more in it. Yet, if you read the fine print, you find this one has one ounce and this other has an ounce-and-a-half in net weight. Senator NEUBERGER. How do they do that?

Senator CANNON. I don't know.

Senator NEUBERGER. What is the density situation? I know in bread and ice cream they fluff it up with air. Soap can have air incorporated in it. We have shaken those around and pounded them around. They have something else in there.

Mr. GIDDINGS. Senator, when the label is printed, is it printed 3 months ago, 6 months ago, or a year ago?

Senator CANNON. On this particular one, you will notice that the bottom size of these, the small one is a little bigger. Maybe that makes up for the difference. I don't know how the tops compare. Apparently the tops are about the same. But you have the indentation on the larger one, and a smaller bottom on that one also.

Maybe it is just in the packaging of the glass container itself that makes it look like you are getting free a third more, whereas actually you don't get it.

Senator NEUBERGER. A third more than what?

Senator CANNON. It looks like you are getting a third more in this one than in this one, yet you are really getting a third less in content. I have no other questions.

Senator NEUBERGER. Senator Bass?

Senator Bass. I would like to comment. If I were to go there, I would use the Chinese axiom:

You fooled me once, shame on you; you fool me twice, shame on me.

[Laughter.]

Senator CANNON. How do you know you have been fooled? You buy the big one and you are sure you are getting a third more, and you get it home and you find it is not so.

Senator Bass. There is a different texture in the content. I don't know which would make the most cups of tea.

Senator NEUBERGER. But you don't weigh them against each other. Senator Bass. But do you know which would make the most cups of tea?

Senator NEUBERGER. No. I never bought the other one. I bought the one which I thought was the best buy.

Senator Bass. I looked at the texture of these. One is a very fine grind, completely the finest type of grind. And this is a coarse grind. So actually, maybe you would get more cups of tea out of this, which is a very fine, concentrated grind, than this one, which is a very coarse one and weighs an ounce and a half.

I think we would have to see what the texture of the grind is, and how many cups of tea it will make before you know whether you are getting gypped or not, wouldn't you?

You have to sort of experiment. If they fool you twice, it is your fault on a deal like this. I drink instant coffee and I can get one type of coffee and I know that a spoonful will make a very strong cup of coffee for me, and with another one the spoonful will make a very weak cup of coffee.

Serve us some tea, Madam Chairman.

Senator NEUBERGER. Coffee is standardized.

Senator Bass. You can tell the difference in the texture here. Really, I don't know.

Senator LAUSCHE. Madam Chairman?

Senator NEUBERGER. Are you through, Senator Bass?

Senator BASS. Yes.

Senator NEUBERGER. Senator Lausche.

Senator LAUSCHE. I concur completely with your statement, Mr. Giddings, that there may be valid objections to the means employed

48-222-65--28

by this legislation, but there can be no valid objection to what this legislation is intended to do. No one with any concept of morality can give subscription to the practice of fraud, misrepresentation, and deception, whether it deals with package goods or any other kind of goods.

I, however, am trying to resolve in my own mind whether or not we have adequate laws on the books now to cope with this problem. Before I proceed to question you, I would like to ask, are you generally familiar with what the laws now provide in guarding the public against deceptive practices in the sale of goods?

Mr. GIDDINGS. No. I wouldn't claim to be.

Senator LAUSCHE. We have two acts under which the public is supposed to be protected. One is the Federal Trade Commission Act, and the other the Federal Food, Drug, and Cosmetic Act. Both of these laws are in effect. They are enforced by different agencies of the Government.

I would like now to go through these two acts to see what we need that is not now in existence.

Under the Federal Food, Drug, and Cosmetic Act there is set forth section 403. This reads:

A food shall be deemed to be misbranded (a) if its labeling is false or misleading in any particular.

My question to you is: This language, which I just quoted under subparagraph (a), is rather broad. Would you agree with that? Mr. GIDDINGS. It is rather broad, I would say, yes.

Senator LAUSCHE. A food shall be deemed to be misbranded if its labeling is false or misleading in any particular. Now then, subparagraph (b):

A food shall be deemed to be misbranded if it is offered for sale under the name of another food.

That obviously would be fraud, wouldn't it, this deception?

Mr. GIDDINGS. I think so.

Senator LAUSCHE. And it is dealt with under this Federal Food, Drug, and Cosmetic Act.

Subparagraph (c) reads:

A food shall be deemed to be misbranded if it is an imitation of another food, unless its label bears in type of uniform size and prominence the word “imitation" and immediately thereafter the name of the food imitated.

That would seem to take care of efforts on the part of vendors to sell one food under the false name of being another food; is that correct? Mr. GIDDINGS. Yes.

Senator LAUSCHE. Now (d):

A food shall be deemed to be misbranded if its container is so made, formed, or filled as to be misleading.

That would seem to have some application to the principle involved when a container is so constructed as to appear large when, in fact, it has in it an air pocket. I don't know whether such indentation, which might seem to deceive and imply that the contents are much larger than they actually are would be covered. But the food shall be deemed to be misbranded if its container is so made, formed, or filled as to be misleading. That language is extrordinarily broad

and would seem to me to give the Food and Drug Administration authority to run these matters down.

Now then (e):

A food shall be deemed to be misbranded if in package form unless it bears a label containing the name and place of business of the manufacturer, packer, or distributor, and (2) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count.

The Congress, it seems to me, tried to fortify the position of the Drug Administrator by giving him this rather broad power in prosecuting or bringing equitable actions for relief.

Now I will read one more:

It shall be deemed to be misbranded under subparagraph (f) if any word, statement, or other information required by or under authority of this act to appear on the label or labeling is not prominently placed thereon with such conspicuousness and in such terms as to render it likely to be read.

What in these provisions is lacking? How much farther could they go in writing out this specific law to meet what you feel ought to be done?

Mr. GIDDINGS. Quite obviously, in the case that we seem to be able to make against the practices, if that case is valid at all, and I believe it is, some remedy is needed, either by action of the Congress or by further action of the Federal Trade Commission or other agency.

It seems to me somewhat possibly the same case as some of the other antitrust legislation. From time to time the Congress has had to act, and it may be that that is necessary at this time.

Senator LAUSCHE. Thus far I have discussed the law pertaining to the Federal Food, Drug, and Cosmetic Act, and its general regulations. That is one method of ferreting out and prosecuting the deceiver. The remedies provided under this act call for criminal prosecution and injunctive relief, whichever the Administrator decides to prosecute. But now I go to the Federal Trade Commission, and this is another act:

Section 5 of the Federal Trade Commission Act declares it to be unlawful to use unfair methods of competition in commerce or unfair or deceptive acts or practices in commerce.

This language is broad, and declares it to be an unfair practice to use deceptive acts or practices in commerce.

Section 12 of the Federal Trade Commission Act also armed the Commission with additional procedural weapons to compete with practices of false advertising on the same basis.

So that the Federal Trade Commission Act (1) puts in the Federal Trade Commission the authority to institute cease-and-desist orders in a court of equity, for false practices in commerce, and also against false advertising.

With this background and this basis, what I am confronted with is do we need more law.

I frankly say to you that I am impressed with the fact that when they say "5 cents off" they do not always state on the package what the original cost is. But except for this, I can't see where there is inadequacy in the present law.

Mr. GIDDINGS. The question, it seems to me, Senator, is has the Congress given the clear authority to the Federal Trade Commission

or the other agency, or is it a situation such that the Federal Trade Commission reports that it does not have the authority or that the courts do not permit it the authority.

Senator LAUSCHE. For the purpose of the record, I would like to say that the previous witnesses have testified that the Food and Drug Administration does not have the authority to adopt regulations, and that the adoption of regulations is vitally needed. That means that the advocates of this law feel that an Administrator should be permitted to write laws. There is one group which said we don't believe in that principle, the Congress should write the law.

As I have said, I want to stop fraud; I want to stop deception. But I don't want to load down the books inordinately with laws if we already have enough laws in existence. And I don't want to be a party to portraying all of American business as scoundrels, thieves, and deceivers. And I don't think any of us want to do that.

That is all I have to say.

Senator NEUBERGER. Senator Morton?

Senator MORTON. I have no questions, Senator.

Senator NEUBERGER. Thank you very much, Mr. Giddings.

It is now necessary for the committee to recess to take care of some other business. The remaininng witnesses who were scheduled for this morning may either submit their testimony for the record, or come back at 9 tomorrow morning.

Mr. Baker, do you wish to express your opinion?

Mr. BAKER. We will reserve judgment on that for a while, until we have a chance to talk about it.

Senator NEUBERGER. All right. You will be the first witness at 9 tomorrow morning if you decide to come back tomorrow. Mr. Griener?

Mr. GRIENER. I will come back, Madam Chairman.

Senator NEUBERGER. You will come back?

Mr. GRIENER. Yes.

Senator NEUBERGER. Mr. Strachan?

Mr. STRACHAN. I would prefer to submit my statement, Madam Chairman.

Senator NEUBERGER. Thank you very much. We would be glad to have that.

STATEMENT OF JOHN R. STRACHAN, VICE PRESIDENT, ALBANY PEPSI-COLA BOTTLING Co., INC., BROADWAY-MENANDS, ALBANY, N.Y,

Mr. Chairman and members of the committee, my name is John R. Strachan. My address is 440 Broadway, Menands, Albany 4, N.Y., and I am vice president and treasurer of Pepsi-Cola Albany Bottling Co., Inc., which bottles and distributes Pepsi-Cola and other soft drinks in Albany, N.Y., and the surrounding

area.

Although I happen to hold the position of chairman of the standardization committee of the Pepsi-Cola Bottlers Association, which is an organization representing the approximately 500 independently owned franchised bottlers of Pepsi-Cola in the United States, I am not appearing as an official spokesman of that or any other organization, but am speaking for myself as a fairly typical soft-drink bottler, and independent businessman, operating in my own community, with a substantial investment in my business, and with the hope of being able to leave a substantial equity in that business to my heirs.