to establish some kind of priorities, Mr. Dixon. And the earlier questions which I pressed and which we continue to be interested in is how your particular agency, given the mandates which we have all talked of, reaches its priorities. I want to be sure the point that I have been trying to drive home is clear. Mr. DIXON. I want to tell you, sir, that I think we are striving everyday to accomplish that. After we sift out the things that we should not deal with, we are still left with a tremendous amount of problems that should have some attention. As of this moment, Senator, at the Federal Trade Commission we have not decided to do nothing about some of them because of a priority basis. We have tried to adopt means of giving them some kind of attention, if we decide that there is public interest. Now, when one speaks of devising simple priorities that would really solve our major problem beyond the point we are today under some kind of yardstick or measurement, we are going to have to say to people that even though your complaint has a cause of action and even though it would appear in the public interest, we simply do not have the manpower and we are not going to undertake it. We have not arrived at that stage yet and I am not for it, because I would rather try some other way of getting it, even a telephone call or something, something that I call voluntary help other than formal adjudicatory help. And until I am driven to the point of impossibility, I don't want to say no. And because of that I am a part of causing problems because the staff keeps putting more into the furnace then the furnace can absorb, and a time when things get old, we do dismiss numbers of them. Much is made of that here. I have seen this happen at the Federal Trade Commission for 30 years, not just for 8. Senator KENNEDY. Mr. Waters, do you have any questions? Mr. Waters is of the minority staff. CONFIDENTIALITY OF COMPLAINTS Mr. WATERS. Mr. Dixon, in connection with the confidentiality of complaints to which you adverted previously you started to touch on something which I felt perhaps you may want to carry out a little bit further. In many instances the mere fact that a complaint has been on file with your agency will result, will it not, in a credit rating which would be adverse to the individual concerned and it is entirely possible that at some later time this might develop to have been baseless? And is there some additional reason why you feel that those should be kept confidential, having in mind the fact that a man might be adversely affected? Mr. DIXON. Well, basically, the act refers to trade secrets and names of customers and things. But, by and large, the Federal Trade Commission's rules provide that we reserve as a body the right under our rules to make anything confidential if we feel it is in the public interest. But we require a good cause to be shown. Now, we are trying today under our rules to define things that are clearly understandable as to what falls in the confidential class. But we have differences of opinion. I think Mr. Elman feels stronglyI don't know whether he feels stronger about it than some of the other members, but I seem to have the impression that he feels stronger about it, that there is no reason to keep the name secret. No reason, after you close the file, not to let somebody read it. I don't feel that way, because my own impression is that we have got to look long range and think about the public interest, not about somebody's desire, some scholar or somebody who for some other reason says, "I demand that right.” Mr. WATERS. Thank you, Mr. Dixon. Mr. DIXON. You are welcome. Mr. WATERS. Thank you, Mr. Chairman. Senator KENNEDY. Thank you very much, Mr. Dixon. We appreciate your coming up here this morning. We appreciate your altering your schedule to be here with us. We want to thank you very much. Mr. DIXON. Mr. Chairman, thank you for your patience, and may I assure you that if there is anything you wish to know or have which would be helpful to you, I will see to it, to the best that I can, that you get it and understand it. Senator KENNEDY. Thank you very much. (The following was received for the record :) Hon. EDWARD M. KENNEDY, FEDERAL TRADE COMMISSION, Washington, D.C., September 24, 1969. Chairman, Subcommittee on Administrative Practice and Procedure, DEAR MR. CHAIRMAN: When testifying before your Subcommittee on Friday, September 12, 1969, you and Senator Mathias asked for certain information and I volunteered to submit other information relevant to questions posed. The information shown to be supplied in the transcript is set forth below and in several attachments. 1. On page 23 you asked me for the total man-hours spent looking into furs and textiles versus the man-hours that are spent looking into other deceptive practices. Attachment 1, in chart form, presents this information for calendar years 1965 through 1968. 2. On page 25 you requested the information as to the times I failed to get what I felt were the legitimate needs of the Commission in terms of funds. Attachment 2 presents for fiscal years 1961 through 1969 the appropriations requested of the Congress after action by the Bureau of the Budget and final Congressional appropriations. This attachment will show that in the years since I became Chairman of the Federal Trade Commission through fiscal year 1969, the Federal Trade Commission's appropriations were $17,106,750 less than it originally requested from the Bureau of the Budget to operate its programs. During this same period of time Congress only cut our requests to it by $2,805,250. As I mentioned in my testimony, the Federal Trade Commission itself determines which programs require additional funding and this is reflected in our initial presentation to the Bureau of the Budget. In cutting funds the Bureau of the Budget does not specify which programs are to be cut but reduces our request a dollar amount and then it is up to this Commission to determine how these cuts shall be apportioned when submitting its budget requests to the Congress. Having made initial program decisions it is only normal and natural for our cuts to be proportionate on the basis of the cuts in money applied to our budget request by the Bureau of the Budget. 3. On page 34 you asked me how long the position of Program Review Officer had been vacant. This position has been vacant since December 11, 1968. 4. On page 43 I volunteered to furnish you with letters of resignation submitted by young attorneys who left us. I am sorry that I cannot supply you with such letters of resignation. I am advised that they served as the official documentation of the personnel actions which had been taken and were incorporated into personnel folders which were sent to the Federal Records Center in St. Louis within a month after separation. To the best of my knowledge all of the letters were favorable and many of them expressed the sincere appreciation of the individuals in regard to the guidance they had received and praise of their work assignments at this Commission. 5. On page 48 you asked me how many rules and industry guides had been published last year. Attachment 3 gives the breakdown of the five guides and the two trade regulation rules passed last year. 6. On pages 59 and 60 Senator Mathias asked me to give him what in my best judgment the Commission needed to carry out its missions without regard to our budget request. When testifying before the Subcommittee on Executive Reorganization, Committee on Government Operations of the United States Senate on April 24, 1969, I was asked by the Subcommittee as to additional resources required to fully perform the Commission's responsibilities and I submitted a 10-page answer for inclusion in my testimony. I am enclosing this document in partial answer to Senator Mathias' question. (See Attachment 4.) On page 10 of this attachment I indicated that for fiscal year 1971 our budget should be doubled and increased to $40 million dollars. I still believe that this is a true statement of our needs but in view of insurmountable administrative problems of acquiring space, equipment, supplies and recruiting and training such an augmented force in such a short time, it seems necessary that I modify my initial impressions and suggest that this increase, although needed for 1971, should be spread over a five-year period and added to any other necessary increases required by new functions and increased activity that might develop in the next five years. If there is any other information that I can supply the Subcommittee for its consideration, I will be most happy to do so. INDUSTRY GUIDES AND TRADE REGULATION RULES ISSUED IN FISCAL YEAR 1969 Guides 1. Guides for the Beauty & Barber Equipment & Supplies Industry. 2. Guides for the Greeting Card Industry Relating to Discriminatory Practices. 3. Guides for the Dog & Cat Food Industry. 4. Guides for Advertising Allowances & Other Merchandising Payments & Services. 5. Guides for the Ladies' Handbag Industry. Trade Regulation Rules 1. Trade Regulation Rule Relating to Failure to Disclose the Lethal Effects of Inhaling Quick-Freeze Aerosol Spray Products Used for Frosting Cocktail Glasses. 2. Trade Regulation Rule Relating to Deceptive Advertising and Labeling as to Length of Extension Ladders. Attachment 4 In response to the Subcommittee request for ". . . additional resources required. to fully perform its [the Commission's] responsibilities. . .” in consumer affairs the following statement is submitted in answer to the request of the Subcommittee on Executive Reorganization of the Committee on Government Operations (re S. 860) during the hearings held on April 24, 1969. Clearly, the most obvious and challenging task that must be greatly expanded in the Federal Trade Commission is an effective program of consumer affairs. Resources and personnel must be obtained so that the Federal Trade Commission is able to speak to all consumer issues, be prepared to make recommendations as to solutions even if it appears that the remedy should be achieved elsewhere than in the Commission or at the Federal level. A wise Government must respond to the needs of consumers and achieve solutions to marketplace problems; effectively, fairly, and within the ambit of the free enterprise system. Government, be it at Federal, state, or local level, must achieve and then perpetuate a viable role in protecting the consumer. Today's plans which translate into tomorrow's actions are now necessary because of the demands of the times. Demands which carry a pervasive insistence that Government be responsive. Demands which assert that there has to be solutions to problems. Demands which if unmet, result in new directions, new laws, and new agencies to cope with problems unsolved by yesterday's machinery. The Federal Trade Commission in its enlarged role in consumer affairs is going to require additional expertise in consumer affairs and a concomitant knack of communicating and relating to the consumer. This will take manpower and money. Consumer problems are broad and complex. They range from intangible concerns such as the social and economic cost of inferior products and the definition of consumer environmental rights, to tangible difficulties such as inadequate information, imbalance of buyer/seller legal rights and ineffective enforcement procedures. Most of these problems are not of the consumers' own making, are not within his powers to solve, are not problems with the marketplace alone, but also involve government. The causes are numerous: A rapid transition in this century, particularly since World War II, from a simplistic to a complex marketplace, impersonalized and further aggravated by insufficient provisions for objective information; a plethora of new materials and products, often complex, with infinite differentiation; the growing specialization of the individual's own training and experience, hence his increasing inability to evaluate products and services; the rapid development of a sophisticated consumer credit industry producing radical changes in business practices; a growing centralization of business; and the prevalence at all governmental levels of a patchwork of laws passed in ad hoc fashion to meet specific problems. Manifestly, consumer problems also entail important implications for the nation's social well-being. Acute manifestations of consumer discontent, even anger, are evidence by the report of the National Advisory Commission on Civil Disorders that consumer frustrations were among the twelve most deeply held grievances which led to the disorders of American cities. The scattered housewives' boycotts and the rapid increase in the number of consumer organizations are also indications of consumer unrest. The individual complaints received by the Federal Trade Commission about the marketplace are growing. Since the Congress has discovered the consumer at the Federal level it is indeed timely that the Federal Trade Commission, an Arm of the Congress, be given the additional resources to do the job of consumer protection now evidently expected of it. The answers to consumer protection of course do not rest in any one area or any one agency of government. But the Federal Government's responsibility entails the guarantee of not only a sound economy, but the assurance of social well-being of the citizen. To construe government involvement with consumer problems as "anti-business" is to miss entirely the thrust of consumer economics. Elimination of marketplace malfunctions ultimately serves both consumers and 38-132-70-pt. 1- -3 producers by insuring stability and growth. Government responsibility for the financial well-being of the citizen by promotion of full employment and economic growth has been established policy since the passage of the landmark Employment Act of 1946. There is a reasonable corollary between government protection of consumer rights in the marketplace and its long accepted role as the protector of the ethical businessmen against those who compete unfairly. The Federal Trade Commission should be given the resource capability enabling it to supply recommendations on consumer policies; study and evaluate the adequacy of plans and programs affecting the consumer interest; act in a consultative capacity as requested by the states, local governments, or private groups for supplying comments or assistance concerning state consumer laws and city ordinances. Additionally, the Federal Trade Commission should be enabled to keep the public adequately informed as to the Commission's consumer activities through appropriate news releases and other informational media originating within the Federal Trade Commission. Included in this mission would be responsibility for planning, developing and implementing comprehensive public relations programs and campaigns to inform and educate the general public, the business community, and special interest groups, concerning the objectives of the consumer affairs programs of the Federal Trade Commission. The Federal Trade Commission should have the resource capability for pursuing courses of action leading to the enhancement of relations between producer and consumer by-focusing attention on the unmet consumer needs in the marketplace; providing the forum for constructive dialogue concerning practical consumer problems with the private sector of the economy; the sponsorship of research problems pertaining to both producer and consumer with institutions of higher learning and industry. The Federal Trade Commission in its consumer activities should maintain effec tive liaison with national and state organizations having consumer programs by Assisting and planning educational and legislative conferences or workshops; Assisting and identifying specific problems which can be resolved by effective actions on the part of organizations; Disseminating information regarding state level and city level consumer affairs; and, identifying consumer problem areas common to the states which appear to require legislation. The Federal Trade Commission should be given the resources to figure prominently in consumer education by― Providing leadership in identifying marketplace problems and techniques of buying by developing long range plans for nationwide programs, in coordinating with Federal and state educational authorities with the objective of developing and advancing consumer education for use both in and out of the conventional classroom, to include television and other communications media designed to meet the needs of both child and adult of differing income in environmental levels; Stimulating the development of experimental programs in conjunction with educators, administrators, and interested community, civic, and professional groups; Preparing reports, articles and other informative and evaluative materials on consumer education programs; and Maintaining liaison with appropriate Federal, state and local officials in educational associations. The Federal Trade Commission has accumulated a long history of marketplace problems of the consumer. Solutions lay, in part, in remedial legislationlegislation addressed to Federal or interstate problems, legislation for the states and legislation for local adoption. The Federal Trade Commission should be authorized a funded capability enabling the creation of a small but select staff to develop needed consumer legislation designed to achieve greater protection in the marketplace for the consideration of the Congress, the states, and the urban areas in particular. If equipped for extensive consultations with the states and cities, the Federal Trade Commission could become a reservoir of consumer plans and policies for the use and benefit of all concerned. Under an augmented staff capability some of the consumer legislative areas could include: Continuing review of anti-trust laws and enforcement to insure that they serve the consumer as well as competing business. Of all the measures considered |