and they limited it to "in commerce." They knew what they were doing when they did it. That does not mean the Congress cannot in its judgment change it.

I just have suggested that I think-no-I fear the amendment would involve the Commission too deeply in local matters-matters our critics like to refer to as "trivia." The Commission should concentrate on violations by the larger interstate corporations.

You know, I have played ball in my time, and it is not hard to get hit this way and that way, but one day you are criticized for trivia; and the next day they want you to deal in trivia, you see-the same critics. And the critics accuse the Commission of being involved in trivia, and then somewhere over in the background all of them arrived at one sentence.

However, the Congress should realize the Commission is grossly understaffed. Mr. Nader in all of his wisdom at least said nine to 10 times the number of employees were needed for the consumer work. But no one has ever paid much attention to that sentence.

I realize that with this broadened jurisdiction the Commission could use its discretion and not get involved in too many local matters. In the President's message, he suggested this; and then in the next sentence he said "only use it sparingly." But I have a question.

With the knowledge that the Commission has the jurisdiction, pressure to act will undoubtedly increase. I strongly believe that the better approach is to leave the responsibility with local governments and lend them a helping hand where needed in carrying out this responsibility.

We have sat at the Federal Trade Commission literally for weeks on what we call consumer protection hearings. We have not completed our summation but, as I listened to them I heard things that were tragic; things that were happening on Broad Street, America; things that had the overtone of deception and fraud. They do not belong in a cease-and-desist situation; they belong in jail. They need somebody to tell the mayors and the Governors of these cities and States that they are kidding their constituents. They are not doing their best for them. That is what is needed on consumerism. It is needed right here. Now, if you want to try to do it all for them, because it is not very popular to be engaged in consumer protection; you very rarely make anyone happy. Certainly the guy you sue is not happy, and probably because the relief is rather hollow, the consumer has been injured, as you say; so it is pretty much left to a bunch of fellows in Washington to do it. It is not popular locally. Every time a local law enforcement officer does something like that, he loses a few friends.

Now, section 102 of the bill would amend section 13 of the Federal Trade Commission Act to provide the Commission with a procedure whereby it could seek a temporary restraining order or preliminary injunction from a district court to enjoin "any act or practice which is unfair or deceptive to a consumer and is prohibited by section 5" of the Federal Trade Commission Act. The restraining order or preliminary injunction would be dissolved if the Commission did not file a complaint against the party within 60 days of such issuance.

I heard you ask that question, Mr. Chairman. Look, the investigation would precede the filing of the complaint and it would not be any more difficult to do it in 60 days, 20 days, or 30 days.

And I have another message for you. We are faster than they are in the district courts. You did not ask Mr. McLaren how slow he was. Ask him sometime. "How long does it take you to get in a district court? When you get in line, how long after you file?" That is the question.

The effect of this amendment would be to be enable the Commission to protect consumers from policies of unfair or deceptive acts or practices during that considerable period of time from the date the Commission first has reason to believe the law has been violated until such practices have been enjoined by a final Commission order. You do not have any reason to believe it until you have investigated something, unless you just want to shoot from the hip and condemn people without a trial or due process or anything.

The Commission makes every effort to expedite its proceedings. However, our experience has been that frequently a considerable period of time may elapse from the time the Commission first begins an action until it is concluded with a final order.

If you want to measure it from the time Citizen so-and-so in State so-and-so complains, and from the time we went out and got the evidence and the time we filed the complaint and it was tried and the petition was reviewed in the circuit court; and if we lose, if we were able to persuade the Solicitor to take it to the Supreme Court; or if we won, he had to go then if you want to measure it that way, it sometimes takes a considerable time under due process in our country.

During the interim, the Commission, if not powerless, is severely handicapped in its efforts to protect the consumer from deceptive practices such as "bait and switch" tactics, misrepresentation of prices, or misrepresentation of products, and bogus contests.

I believe it manifest that the rights of consumers to be free from unfair and deceptive practices should not be subservient to the rights of those who would continue profitable unfair and deceptive practices. I, therefore, strongly support this amendment as providing an effective weapon to the Commission to enable it to take efficient action to protect consumers in those matters where immediate action is warranted.

Mr. Chairman, in 1961 or 1962, I along with Congressman Patman and Congressman Steed, appeared before Chairman Ölen Harris of the Interstate and Foreign Commerce Committee of the House and recommended strongly that the Congress pass a bill giving the Federal Trade Commission this power across the board because, as Mr. McLaren talked about patterning this law after the Clayton Act, part of that Clayton Act, as amended, deals with price discrimination which he does not enforce; which he leaves to us. And for Lord's sakes alive, we have heard over the years about the small businessman that said

I am being subjected to sales beneath cost now; and if you do not save me now, it will not do any good 6 years from now or 2 years digging me up and reinterring me.

We asked for that and the line was twice around that room with opponents who were against it.

Now the time has changed. Since the consumer movement has come along and it has been painted the way it is. There is support. Now the challenge is the Deceptive Sales Act bill which you rightly passed in the Senate; but it got no farther. This is a different approach, but

at least patterned after powers we already have. You would update this to other deceptive practices under section 5 and let us go to court. It is a good idea. It has long been needed. We have supported it before. I heartily support it again.

The very existence of this authority alone will often obviate the need for its use. It also would deter those fraudulent operators who now deliberately stretch the maximum period of grace afforded by exercising their procedural rights to continue to milk the consumer. Moreover, the issuance of the injunction would have the salutary effect. of expediting the adjudicative process by discouraging unnecessary procedural delays.

This is the beauty of it: That great member of the bar, doing the best for his client, knows all the tricks of his trade and he can string one of these things out until you get gray-haired. You pass this law and there is no percentage in stringing it out.

The Commission has long sought such injunctive authority for the substantial additional protection it affords the consumer.

Section 201 is basically a definitions section-defining an "unfair or deceptive practice" to be any of 11 categories enumerated in the bill. Section 202 would declare these listed practices to be unlawful.

I do not agree with this approach of limiting the unlawful practices to specific categories. This was the question I heard you ask Mr. McLaren. I want to tell you why I differ with him. There are many practices unfair and deceptive to consumers which would not fit into these neat pigeonholes.

And you brought up the use of the word "free." And "payola" is another example. The use of coercion, intimidation, and scare tactics would not be covered. Neither would misrepresentation of employment opportunities or sales opportunities in connection with sales of educational courses, and on and on and on.

Several categories are further limited by requiring proof that the deceptions were knowingly made, or made with knowledge of their falsity. Further, the proviso in section 201 (a) (11) would further debilitate these categories. A substantial amount of time would be spent attempting to fit a deceptive practice into the proper category, taking maybe another 40 years to get out and to have the definition of what each one of those eleven things might mean, prove it was knowingly made, and establish that it was not exempt under the proviso of subparagraph (a) (11).

I can see no logical reason for singling out certain unfair or deceptive practices, or trying to categorize the unfair practices, or offering consumers protection against only a limited range of unfair practices. These limitations, in my opinion, would cause substantial problems for everyone concerned. I would propose, therefore, that an "unfair or deceptive practice” be defined simply as any act or practice which is unfair or deceptive to a consumer and which is prohibited by section 5(a)(1) of the Federal Trade Commission Act.

It is just that simple. Congress did this. Congress did this in 1938and it is now 1969 that is 31 years' worth of experience. There is a little bit of guidance in there somewhere if you look for it.

The unfair or deceptive acts or practices declared to be unlawful by the Federal Trade Commission Act are readily ascertainable. There is an existing body of law compiled over a 55-year period, consisting of

thousands of Commission decisions, which defines these terms. There are also some 800 court opinions rendered during these 55 years interpreting the act. The term "unfair or deceptive acts ar practices" is no more vague than "due process of law," "unsound mind," "undue influence." "schemes to defraud," or "unreasonably low prices," the meaning of all of which the courts have been able to determine. Sears, Roebuck & Co. v. Federal Trade Commission, 258 Fed. 307, 311 (1919); United States v. National Dairy Products Corp., 372 U.S. 29, 32 (1963). Further, no supplier need be in doubt as to conduct likely to be declared in violation of the Federal Trade Commission Act in view of this large body of decisional law.

It seems to me that the consumer should be given the broad protection contemplated by this bill as against all unfair cr deceptive practices, not just the limited categories enumerated in the bill.

Section 203 gives the district courts jurisdiction to restrain the unfair or deceptive practices declared to be unlawful by the bill upon application by the Attorney General. The courts would be authorized to issue whatever injunctive relief may be appropriate.

Under section 204, a consumer would be granted a right to a private action against any supplier to recover actual damages he may have sustained, costs, and reasonable attorneys' fees, and when appropriate, other equitable relief. This right of private action would arise where

1. The Attorney General has enjoined such supplier from committing any act or practice declared to be unlawful within section 201 of the bill, whether after final adjudication or by consent decree that is if justice does it, you see; or

2. The Federal Trade Commission in a proceeding initiated under section 5 of the Federal Trade Commission Act has ordered any supplier to cease and desit from any act or practice declared to be unfair or deceptive within section 201 of this bill, whether by consent decree or after adjudication, and such order shall have become final within the meaning of the Federal Trade Commission Act.

Section 205 provides that a final judgment or decree in any proceeding brought by the Attorney General under section 203, to the effect that a defendant has engaged in any unfair act or practice within the meaning of this bill, shall be prima facie evidence against such defendant in any private action brought by any consumer under section 204. That is going to be prima facie there, you see. Prima facie effect is not extended to consent judgments or decrees entered before any testimony has been taken.

But under this bill the Attorney General is authorized to seek injunctions, the consumer is authorized a right of private action where an action by the Attorney General results in a decree, and, in successfully litigated cases, the court decree may constitute prima facie evidence for purposes of a consumer suit. Federal Trade Commission proceedings give rise to a right of private action for damages, but such proceedings are not given prima facie effect in a subsequent consumer suit.

Now why should that difference be there-unless you want all these things to go over to Justice. Is that the plan?

This failure to give equal efficacy to Commission decisions results in an obvious dilution of Commission powers. Is that the purpose?

Has the Commssion been so maligned that now you are being told the only way to correct this thing is to dissolve or destroy the Commission? Is that it?

Well, there is an easier way to do this than that. Just abolish the agency.

This results in a weakening of the ability of the Commission to protect the public interest. The Commission, which has pioneered in this field, which has developed a body of law as to what is unfair and deceptive to consumers, would become a secondary protector of the consumer. There is no other way to describe it. I say this in all sincerity. Each consumer deceptive practice matter that came to the Commission's attention, each investigation that revealed a consumer fraud, in my opinion, if you really wanted to help the consumer and you pass this bill, a member of this Commission would be obligated in the best interest of consumers, to send the matter to the Department of Justice for action, since the Attorney General's successful prosecution of the matter would result in a decree that would constitute prima facie evidence in a consumer suit. This is a substantial consumer advantage which the Commission could not ignore.

Why are you asking who would get the complaint? It is like playing ring around the rosy. Send it right over there if you are really trying to protect the consumer.

Why should this anomaly exist? I see no substantial reason why the prima facie effect of a final decree should depend upon which governmental department happened to proceed in the first instance. There is no rhyme or reason for that kind of logic.

But permit me to go further. Although some of my best friends are at the Department of Justice, I see no necessity for establishing a Consumer Division at the Department. I see none whatsoever. I know it is going to cost money. But for 9 years I have been coming up here and asking for more money and I have not gotten any, Mr. Chairman. We have gotten a lot of hell put upon our backs. We have been razzed. We have been criticized-and some of it justifiably-but largely the Congress has not supported the Federal Trade Commission with adequate funds. And if you go creating a department over at Justice to duplicate the one over here, well, I do not know; it is going to cost money. It is going to cost money. Maybe that is the easy way to get money out of the establishment. I do not know. But I can see no necessity for it.

I perceive no logical reason for a diminution of the Commission's authority in this field. I do not see any. If this bill becomes law, I visualize not only a transfer of a substantial part of the Commission's authority in the consumer protection field to the Department, but also a substantial part of our budget as well. And it is thin enough. I am of the firm opinion that this transfer of function is not necessary, nor should it be done.

I am not just criticizing. I would propose instead that the Commission be given the injunctive authority provided in section 102 of this bill; that an "unfair or deceptive practice" be broadly defined as any act or practice which is unfair or deceptive to a consumer and which is prohibited by section 5 of the Federal Trade Commission Act; that consumers be given right of action based on any final Commission order enjoining a practice deceptive to a consumer; and,