Special Message to the Congress on Consumer Interests.

To the Congress of the United States:

America's economy centers on the consumer:

--the consumer buys in the marketplace nearly two-thirds of our Gross National Product--$380 billion out of an output of $600 billion;

--to meet consumer needs with an ever-widening range and quality of products is the prime object of American producers;

--to increase consumer well-being--both the quality and the comforts of life--is one of the highest purposes of private and public policy.

Yet, for far too long, the consumer has had too little voice and too little weight in government.

As a worker, as a businessman, as a farmer, as a lawyer or doctor, the citizen has been well represented. But as a consumer, he has had to take a back seat.

That situation is changing. The consumer is moving forward. We cannot rest content until he is in the front row,

--not displacing the interest of the producer,

--yet gaining equal rank and representation with that interest.

Federal action in the consumer interest is not new. To protect the consumer, we have federal laws and regulations

--to eliminate impure and harmful food, drugs, and cosmetics;

--to standardize weights and measures, and improve labeling;

--to prevent fraud, deception, and false advertising;

--to promote fair competition;

--to assure fair rates in transportation, power, fuel, communications, and the like;

--to avoid abuses in the sale of securities. What is new is the concern for the total interest of the consumer, the recognition of certain basic consumer rights:

--the right to safety

--the right to be informed

--he right to choose

--the right to be heard.

President Kennedy-in his historic consumer message of March 15, 1962--first set forth those rights.

I reaffirm those rights.

What is also new is active representation of the consumer--and a loud, clear-channel voice--at the topmost levels of government:

1. In July 1962, President Kennedy established the Consumer Advisory Council. In its landmark "first Report" of last October, the Council urged stronger and more effective representation at the Presidential level.

2. On January 3, I appointed a new Special Assistant for Consumer Affairs and established the Presidents Committee on Consumer Interests, composed of

--representatives of the federal departments and agencies most concerned with consumer affairs;

--members of the Consumer Advisory Council;

--the newly appointed Presidential Assistant, as Chairman.

My Special Assistant and the new Consumer Committee will lead an intensified campaign:

--To assure that the best practice of the great American marketplace--where free men and women buy, sell, and produce-becomes common practice.

--To fight, side-by-side with enlightened business leadership and consumer organizations, against the selfish minority who defraud and deceive consumers, charge unfair prices, or engage in other sharp practices.

--To identify the gaps in our system of consumer protection, information, and choice that still need to be filled.

RECENT ADVANCES

Since 1962, the consumer's position has been protected and strengthened in several important ways:

1. New drugs must now be approved for effectiveness as well as safety.

2. Beginning in May of this year, all television sets produced and sold in interstate commerce must be able to receive all channels, including the Ultra-High-frequency ranges. This will bring to millions of American homes a wider range of noncommercial educational TV, as well as more commercial programming.

3. During the past year, the federal Trade Commission has intensified its programs to protect consumers against:

--false advertising as to the safety and efficacy of nonprescription drug products;

--misrepresentation of savings in the purchase of food-freeze plans;

--deceptive television ratings and demonstrations;

--misbranding of clothing;

--bait-and-switch tactics in the sale of consumer products.

4- federal Power Commission orders gas rates have channeled millions of dollars of refunds of past overcharges to American families who use gas for cooking and heating.

5. Remedies have now been provided for air travelers who are victims of "overbooking."

The job ahead. But the road to consumer safety, accurate information, free choice, and an adequate hearing is never-ending. In modern society, the consumer is constantly exposed to the winds of change. Countless new products--and new forms of old products--vie for his attention and his dollar. Services take a larger and larger share of the consumer dollar. Yet they are often performed without established standards of safety or values.

The American housewife--the major American consumer--cannot help but feel confused, and too often unheard, as she seeks the best value for the hard-earned dollar she spends.

This Government is pledged to come to her aid with new legislation and new administrative actions.

RECOMMENDED LEGISLATION

Food, Drugs, Cosmetics, and Medical Devices

Too often, we await the spur of tragedy before strengthening the food, Drug and Cosmetic Act.

Too often, we discover dangers in foods and cosmetics only through serious injury to a consumer.

Testing and Inspection Powers. The food and Drug Administration now lacks the needed authority

--to inspect fully the factories in which food is produced;

--to require a showing that cosmetics are safe before they are offered to the public;

--to examine, for safety and effectiveness before they are marketed, medical devices for the diagnosis of symptoms and treatment of illnesses. The improper treatment with worthless devices can be the cruelest hoax of all.

Therefore:

(1) I recommend the enactment of new legislation to:

--Extend and clarify inspection authority-comparable to that which now governs prescription drugs--over foods, over-the-counter drugs, cosmetics, and therapeutic, diagnostic and prosthetic devices;

--Require that cosmetics be tested and proved safe before they are marketed; and

--Require therapeutic, diagnostic and prosthetic devices to be manufactured under conditions that will assure their reliability, and require proof of safety and effectiveness before they are marketed.

Warning labels. The container for the common household drug is a familiar--and often reassuring--sight in our medicine closets. Yet, unless properly marked with necessary warning against accidental injury, it can be as dangerous, and fatal, as a time bomb:

--Drugs that ease the pains of adults, for example, might kill a child--yet federal authority to require warning labels on such containers is far from clear.

--A pressurized container, improperly used or handled, can also be a lethal instrument-yet, existing law does not require that users be warned against these dangers. Therefore:

(2) I recommend that existing legislation be extended and clarified to require that labels include warnings against avoidable accidental injury from drugs and cosmetics, and pressurized containers.

(3) In addition, the Department of Health, Education and Welfare should be authorized to subpoena evidence in connection with administrative hearings under the federal food, Drug and Cosmetic Act. Other regulatory agencies have this indispensable power. Without it, effective regulation is extremely difficult.

Screening of pesticides. Equally important is the growing danger from the use of pesticides which have not been properly screened. We must not recklessly interfere with the harmony of nature. Yet, today the Department of Agriculture is required to register products that it cannot certify as safe--and these may be put to use. Therefore:

(4) I recommend that the Congress enact legislation--already passed by the Senate-to end the present practice by which pesticides may be registered by manufacturers "under protest" before the Department of Agriculture has passed upon their safety.

Meat and poultry inspection. The inspection of meat and poultry products moving in interstate commerce effectively insures safe and wholesome supplies of these foods, but this protection does not extend to products sold within a State. Therefore:

(5) I recommend legislation to insure that all meat and poultry sold in the United States--intrastate as well as interstate--is inspected for safety and wholesomeness, either by the Department of Agriculture or in cooperation with State authorities.

Unfair Trade Practices and Price Maintenance

There are serious defects in the federal shield against unfair practices and false advertising. Unlawful trade practices may continue during the time administrative hearings are pending. Often, the damage has been done by the time the decision is rendered. Therefore:

(6) I recommend legislation to grant the federal Trade Commission authority to issue temporary cease-and-desist orders at the outset of a proceeding, subject to court review, when the Commission has good reason to believe that the continuation of the practice would result in irreparable injury to the public.

Freedom of choice for consumers from our storehouse of goods, at the lowest possible prices, is the very cornerstone of American consumer policy. I believe strongly in this principle. Therefore, I oppose legislation which limits price competition, whether under the label of "quality stabilization" or any other name.

Truth-in-Packaging

We all like interesting packages, and we are attracted by them. In today's markets they are the silent salesmen for their products.

But salesmen should be both helpful and truthful.

When the American housewife comes face to face with one of these silent salesmen, she wants it to report to her the nature and quantity of its contents in a manner that is

--simple

--direct

--visible

--accurate.

All too often, she cannot find such labeling today. Hearings on the Hart-Celler bill to require "Truth in Packaging" have shown us that informed judgments are often made difficult or impossible by deceptive or confusing packaging and labeling.

The shopper ought to be able to tell at a glance what is in the package, how much of it there is, and how much it costs.

We do not seek monotonous conformity.

We do seek packages that are easily understood and compared with respect to:

--sizes,

--weights, and

--degrees of fill.

Many of our staples, like sugar and flour, have long been packaged in standard quantities. Much more can be done along these lines.

Packagers themselves should take the initiative in this effort. It is in the best interests of the manufacturer and the retailer as well as the consumer.

The Government has had, and has exercised, a responsibility towards the consumer in this field for a long time. But the case-by-case trail to which we are limited by existing law is a long and winding one.

More clear-cut regulations are needed to deal effectively with the problem of

--misleading adjectives;

--fractional variations in weight which are designed to confuse;

--illustrations which have no relationship to the contents of the package. Therefore,

(7) I recommend legislation to insure that the consumer has access to the information necessary to make a rational choice among competing packaged products.

Truth-in-Lending

The consumer credit system has helped the American economy to grow and prosper:

--Credit is used to finance the purchase of homes, cars, appliances, education and recreation.

--Consumer credit and mortgage debt on urban family homes together total over $250 billion.

The cost of such credit must be made as clear and unambiguous as possible, eliminating all possibility of abuse. The antiquated legal doctrine, "Let the buyer beware," should be superseded by the doctrine, "Let the seller make full disclosure." Therefore:

(8) I recommend enactment of legislation requiring all lenders and extenders of credit to disclose to borrowers in advance the actual amount of their commitment and the annual rate of interest they will be required to pay.

Truth-in-Securities

American consumers are also investors. Approximately 17 million persons hold stock in publicly held corporations.

Almost a generation ago, laws were passed to assure full disclosure of needed information to persons about to purchase securities listed on national securities exchanges.

But those who purchase "over-the-counter" securities have no similar protection. They need it.

Legislation broadening these disclosure provisions to include widely owned over-the-counter stocks has already passed the Senate and is pending before the Interstate and foreign Commerce Committee of the House. This measure will help complement the voluntary changes in rules and practices now being made by securities dealers and stock exchanges to afford greater protection to investors. Therefore:

(9) I recommend prompt enactment of this disclosure legislation for over-the-counter securities.

Better Housing

The purchase of a home is the largest investment most American families make. Housing costs, for owners and tenters, take 14 percent of the average city family's dollar every year.

Good housing should be within the reach of low and moderate income families--now and in the future. We must have orderly development with look-ahead planning for our sprawling cities. Therefore:

(10) I recommend enactment of the Administration's housing program (outlined in my recent Message on Housing) which is designed:

--To provide more housing for low-income families by acquiring and improving existing housing as well as by constructing new public housing.

--To help local governments and developers plan suburban developments which will include a proper balance of community facilities, recreation, transportation and business centers.

ADMINISTRATIVE IMPROVEMENTS

There are in addition, many steps that can--and will--be taken immediately to strengthen our present programs of consumer protection.

first, I am directing the President's Committee on Consumer Interests to undertake the following actions:

1. Under the auspices of its Chairman, the Special Assistant for Consumer Affairs, to begin a series of regional consumer conferences:

--Representatives of consumer groups, manufacturers, retailers, advertising agencies, government agencies, and others will discuss the problems of adequate consumer information at these meetings.

--The results will be reported to me, along with appropriate recommendations for action.

2. To develop as promptly as possible effective ways and means of reaching more homes and more families--particularly low-income families--with information to help them to get the most for their money:

--Most of the budget management and consumer publications now available are geared to middle-income families.

--They often do not penetrate to the lowest 20 percent of the Nation's income groups.

--Yet it is the poor who suffer most from sharp practices.

I am asking all federal agencies now engaged in consumer educational activities (a) to cooperate in this effort and (b) to explore fully such possibilities as the adapting of the extension service concept, so successful in rural areas, to an urban setting.

3. To examine the many programs for consumer education in our schools, to stimulate the development of curricula and training materials, and to encourage larger numbers of our young people to seek instruction in the fundamentals of budgeting, buying, and borrowing.

4. To develop means of keeping the public continuously informed of developments of importance in the consumer field.

Second, as I have emphasized in my Economic Report, we must make sure that any upward pressures on costs and prices that may develop as the economy expands do not get out of hand:

--Price stability is essential to an economic climate favorable to consumers.

--Price increases, without improvements in performance or quality, would erode dollar values.

Our record of over-all price stability in recent years has been excellent. But the trend of consumer spending for services has been constantly rising; and the safeguarding of the consumer's interest in the area of services is comparatively weak:

--Because of their personal and informal nature, services cannot be treated in the same way as foods and drugs.

--Yet, they are equally subject to the abuses of poor quality, high prices, and exaggerated claims.

I am asking the Committee to make recommendations for improvement of protection in this area; and we will also call upon the interested industries for their advice.

CONCLUSION

All these proposals for consumer protection would cost us as taxpayers only a small fraction of what they would save us as consumers. And there is no measure of what they would prevent in human suffering.

But in the last analysis, the remedy for errors of taste, poor judgment, and disorder in our economic life is not to be found in the legislatures or the courts but in the leadership of those who care:

--This is an individual matter.

--But it is also a matter for corporations and organizations dedicated to the public interest.

I know that the program outlined here to improve the safety and welfare of our consumers will help all Americans to pursue the excellent and reject the tawdry--in every phase and in every aspect of American life.

LYNDON B. JOHNSON.