Lyndon B. Johnson photo

Special Message to the Congress on Consumer Interests.

March 21, 1966

To the Congress of the United States:

The consumer's interest is the American interest.

In guarding it, in promoting it, we improve the lives of every man, woman, and child in our nation.

Consumers are all the people--the worker, the farmer, the businessman, and their families.

Every domestic program of the Federal Government in a very real sense is directed toward the consumer. When we work to stem pollution, improve transportation, or rebuild our cities, we promote the welfare of the American consumer.

The consumer has a right to a dollar of stable purchasing power.

I pledge to defend that right with all the ability and determination at my command.

All Americans can take pride in the economic record of recent years.

We are in the 61st month of unparalleled prosperity--the longest in our peacetime history.

A year ago 5.0% of our workers were unemployed. Now only 3.7% are out of work.

Today, our programs to provide better training and wider educational opportunities are supplying thousands of trained workers for our expanding economy.

Our standard of living has never been higher. Real consumption per capita--the way the average standard of living is measured--has advanced nearly 10% in the past two years--as large a dollar gain as in the preceding 8 years combined. That record could not have been achieved if inflation had eroded the value of the dollar and undermined the foundation of our prosperity.

This Administration intends to maintain that record.

A new and progressive program is needed if we are to protect the American consumer's rights in the marketplace--his right to be informed, to choose, to be protected from unsafe products and to be heard in the councils of Government.

I recommend that the Congress enact comprehensive measures to secure these rights.

The American consumer has tremendous impact on the variety and quality of the goods and services available on the market.

The consumer buys what he wants. He cannot and should not be told what to buy. But he must be told what is available for purchase.

If the consumer is to be a wise sovereign in our progressive market economy, he must be fully informed. Free consumer choice-indeed, our free enterprise system--must rest on a firm foundation of reliable information on the costs and contents of the products we buy.

Today I renew my request that the Congress enact legislation to strengthen this foundation in two critical areas--lending and packaging.

I proposed legislation in these areas two years ago. President Kennedy made a similar recommendation four years ago. We have learned much from careful study of these proposals by the Congress and the public. Everything we have learned reaffirms my conviction that:

--We can have equitable and effective laws on lending and packaging,

--We can protect both the consumer and the overwhelming majority of honest businessmen from the minority of producers who would compete unfairly and infringe the rights of the consumer and their fellow businessmen,

--We need reform in the credit area and we should encourage States to enact legislation to correct abuses,

--We need such legislation urgently. We can now act wisely without further delay.

TRUTH IN LENDING

Every consumer and every business in America benefits from our system of consumer credit. Credit and the economy have grown together. Last year merchants, lending companies, and financial institutions extended about $75 billion in new installment

credit to consumers. Consumer credit:

--permits purchase of many of the goods and services which enrich the quality of American life--the homes, the automobiles, and household appliances we buy.

--finances the costs of higher education, travel, and other activities which broaden and develop the human spirit

--relieves suffering and distress by spreading major medical expenses over a period of time.

--enables our young families to acquire and furnish homes early in life when good housing is most needed and best enjoyed.

Over the years, this system has worked well. Lenders charge reasonable rates. Borrowers repay their debts promptly. But a minority of unscrupulous operators charge all that the traffic will bear. They wring from the unwary purchaser a price far higher than the credit market requires.

The right of the consumer to know the actual cost of his credit has been ignored for too long. Credit is a commodity. The consumer has just as much right to know the cost of borrowing money as to know the price of any other article he buys.

Credit charges are a key item in the consumer budget. They totaled $24 billion last year. It is important that consumers be able to plan their budgets wisely--and prudently-in this important area.

Yet, many consumers had no information on how these credit costs relate to the cost of the article being financed.

They were confused by statements of credit rates described in unusual or even misleading terms.

They unknowingly paid higher prices for credit than reputable lenders were charging.

We must protect and inform the consumer in his use of the consumer credit system. Our credit structure will be sounder when the consumer has this information.

I therefore renew my recommendation ]or legislation requiring lenders to state the full cost of credit, simply and clearly, and to state it before any credit contract is signed.

This legislation will help consumers:

--budget their incomes more intelligently, because they will know the price of credit in the same clear terms as the price of milk or gasoline.

--compare credit costs so they shop for the best combination of quality and price--including all of the charges involved.

--avoid unscrupulous lenders who use excessive credit charges and other sharp practices.

This legislation will also help the legitimate lender by offering protection against any competitor who seeks to gain business by misrepresenting credit costs. It will insure the fair and effective competition that legitimate lenders desire.

It will not regulate the cost of credit itself, or interfere with existing laws.

It will not reduce the volume of credit.

It will not dampen the vigor of consumer buying.

This legislation will right the balance of legal protection between lenders and borrowers.

I urge the Congress to act to insure that the American consumer is given a clear price tag when he shops for credit.

FAIR PACKAGING AND LABELING

Americans can choose among an unprecedented assortment of products when they go shopping.

In the average supermarket today, the housewife finds 8,000 items--more than five times the 1,500 items she found just 20 years ago. She also does an increasing amount of shopping in the "self-service" store--a product of efficiency in distribution. But with more products to choose from and fewer sales people to answer her questions, the housewife relies heavily on the package itself as her source of information in making a choice.

American industry has made enormous strides in providing attractive and informative packaging. American manufacturers maintain one of the highest standards of quality in the world. They know that packages which accurately and fully describe their wares are the best salesmen.

Nevertheless there are instances of deception in labeling and packaging. Practices have arisen that cause confusion and conceal information even when there is no deliberate intention to deceive. The housewife often needs a scale, a yardstick, and a slide rule to make a rational choice. She has enough to do without performing complicated mathematics in the stores.

It is not enough to hope that such practices will disappear by themselves. The Government must do its share to insure the shopper against deception, to remedy confusion and to eliminate questionable practices.

I urge the Congress to enact fair packaging and labeling legislation to: 1. Require that each package provide simple, direct, accurate and visible information as to the nature and quantity of its contents, including ingredients where this is important.

2. Keep off the shelves packages with deceptively shaped boxes, misleading pictures, confusing or meaningless adjectives, inappropriate size or quantity markings, and promotional gimmicks that promise nonexistent savings.

3. Provide for the establishment of reasonable and appropriate weight standards to facilitate comparative shopping.

This legislation will not make packaging less attractive or less efficient. It will not prevent economies of scale in packaging, nor will it impose costly restrictions.

An accurate and informative package and label need not add to the producer's cost. It will add to the welfare of the American consumer.

PROTECTION FROM DANGEROUS SUBSTANCES

The consumer must not only be informed. He must also be protected from dangerous drugs, foods, and other substances.

Our ability to conquer pain and disease has increased dramatically. But we must not allow the development of new drugs and nutrients to outstrip our capacity to test and certify them for safety and effectiveness.

I recommend three related items of legislation to reinforce consumer protection.

THE CHILD SAFETY ACT

Children must be our first concern. They are our hope and our future.

Too many children now become seriously ill--too many die--because of accidents that could be avoided by adequate labeling and packaging of dangerous substances. This is senseless and needless tragedy,

Most drug manufacturers have taken responsible action in providing appropriate warnings on drug labels. The Food and Drug Administration has accomplished much in reducing the incidence of these private tragedies. But both have been greatly handicapped by gaps in the laws dealing with hazardous substances and materials.

It is still true, for example, that present law nowhere provides for inspection of unpackaged toys and novelties that may be poisonous to children,

To extend legal protection for the safety of all our citizens, especially our children, I recommend legislation to:

--bring all hazardous substances, regardless of their wrapping, under the safe guards of the Federal Hazardous Substances Labeling Act;

--ban from commerce those household substances that are so hazardous that warning labels are not adequate safeguards;

--ban the sale of toys and other children's articles containing hazardous substances, regardless of their packaging;

--require labels to warn consumers against possible injury from drugs and cosmetics, and from food in pressurized containers;

--limit the amount of children's aspirin available in retail packages;

--require certain potent drugs attractive to children to have safety closure caps.

DRUG SAFETY ACT

Each year the Food and Drug Administration receives over 4,000 requests for study and approval of new drugs. Each new product is carefully analyzed and tested. This process is a basic consumer protection in which the United States leads the world.

But it is just as basic that the law require more accurate and detailed labeling of dangerous drugs--and that it deal specifically with drugs whose period of potency and purity is limited.

To make these improvements, and to protect the lives of all of our citizens, I recommend legislation to.

--authorize the Government to require records and reports of experience and to require labeling changes on any drug, whether old or new;

--require certification of all drugs whose potency and purity can mean life or death to a patient, thus extending the law which now applies to insulin and antibiotics; and

--control the unsolicited distribution of drug samples.

PROFESSIONAL TRAINING AND COOPERATION AMENDMENTS

The task of protecting the consumer cannot and should not be left solely to the Federal Government. The Government can and should provide creative Federal leadership to help States and local communities in their own constructive and determined efforts.

As a step forward, Federal assistance is needed to strengthen and enlarge State and local professional staffs in the food and drug areas.

To begin to meet our Federal responsibility, I recommend legislation authorizing expansion of the Food and Drug Administration's training programs for non-Federal officials. This will be the first in a series of measures to broaden Federal-State-local corporation in this vital field.

REVITALIZING THE FOOD AND DRUG ADMINISTRATION

In addition to these legislative proposals, I pledge continued efforts to revitalize the Food and Drug Administration. This process is already well underway.

This agency has performed notably in the past. Yet the scope of its responsibility has been considerably broadened in recent years. The public interest demands that it receive the additional support it needs to perform its many new functions.

I recently appointed a new Commissioner of Food and Drugs to give the agency new leadership and new direction. I have directed him to conduct a thorough review of the agency's roles and missions and to move purposefully toward a new structure fitted to the demands of the times. I have also asked him to recruit personnel with the most outstanding backgrounds in science and public service.

The responsibilities of the Food and Drug Administration are heavy. But they will be met.

To strengthen the Food and Drug Administration, I have proposed, in the Fiscal Year 1967 Budget, the largest single increase ever requested for this agency.

I believe that the interests of the Nation fully support this request. I urge the Congress to provide the necessary funds and enact the recommended legislation to enable this important agency to fulfill the needs of our people.

COSMETICS AND MEDICAL DEVICES

Assurance of the safety and effectiveness of the drugs we buy has the highest priority. But further action may be necessary to protect the consumer against harmful cosmetics and against medical devices that are neither safe nor effective.

I have asked the Secretary of Health, Education, and Welfare to begin a thorough analysis of the legislative authority now available and to recommend new steps that may be needed to close the gaps in the laws dealing with cosmetics and medical devices.

THE PROGRESS WE HAVE MADE

Since my Message on Consumer Interests in 1964, much has been accomplished.

--The Federal Trade Commission has launched an intensive program to protect consumers from unfair marketing practices. It has established a Consumer Complaints Bureau in the District of Columbia and is prepared to help the States develop such programs of their own.

--The Federal Power Commission's Natural Power Survey estimates that by 1980 as much as $11 billion per year can be saved in the cost of electricity for Americans. The Commission stemmed the rising cost of natural gas and retroactively reduced rates. As a result more than $650 million has been refunded and annual gas costs to consumers have been reduced by $130 million.

--The Department of Defense has issued an important directive designed to protect servicemen as consumers, with special emphasis upon full disclosure of credit charges.

--The Department of Agriculture has established a Consumer and Marketing Service to coordinate the Department's many and varied consumer services.

--The Department of Commerce has taken steps to assure a greater consumer voice in the development of product standards, and has adopted improved procedures for product standardization.

These are but a few actions of the many Federal agencies which protect the interests and serve the needs of the consumer.

TO HELP THE POOR FAMILY

I have instructed the Director of the Office of Economic Opportunity to give particular attention to the consumer needs of our poverty-stricken families. Studies have shown that they suffer most cruelly from lack of consumer protection and lack of buyer "know how." I consider this the most urgent challenge in the field of consumer information and education.

We must deal with the fact that today 34 million Americans--7 million families-must try to stretch poverty-level incomes to meet living costs. Studies show that these people are plagued by consumer problems unknown to the affluent majority.

They are unable to shop effectively for bargains or to buy in economical quantities.

They are often victimized by excessive costs of credit and merchandise.

They are subjected to countless fraudulent and deceptive marketing and financing practices.

Most of these problems are symptoms of the basic maladies which we are attacking in the War on Poverty. Programs of consumer information and protection cannot cure them--but such programs can lessen their impact.

The Office of Economic Opportunity has already made 56 grants, totaling almost $3,000,000, to support consumer education and related programs throughout the country. In the future, this Office will become a clearing-house for distribution of educational materials to the poor. It will be a powerful source of incentive and support to the poor in their efforts to achieve fair play in the marketplace.

I pledge the all-out effort of the Federal Government to help our poorest citizens to spend their limited funds more efficiently as we work to enhance their incomes.

Credit is a particular problem for the poor. Often it is available only at high interest rates, and its overextension can lead to the garnishment of wages and the loss of jobs. The situation is particularly severe because the poor are susceptible to emergencies that eliminate any limited financial reserves they may have.

Cooperative sources of low-cost credit, such as credit unions, combined with sound and impartial debt and financial counseling, and with legal services, can be of great benefit to the poor.

I am directing the Director of the Office of Economic Opportunity and my Committee on Consumer Interests to intensify their efforts to encourage the development of such services in Community Action Programs.

THE OUTLOOK FOR THE FUTURE

The measures I have recommended-truth in packaging, truth in lending, and the others--will help protect the consumer in the marketplace.

But beyond this there lies an even more important concern--that the consumer continue to have a dollar of stable purchasing power. Even the wisest consumer laws will not help the American public if their hard earned dollars and savings are eroded by inflation.

The rewards and challenges of prosperity are central to the consumer's interest today. For the past 5 years, the American consumer has participated in and contributed to an unparalleled and uninterrupted economic advance.

This has been the most inflation-free expansion in the history of our Nation. Apart from the improvements in quality and the benefits of new goods, the upward drift in prices has been only one-fourth as rapid as the growth in the real income of consumers. The healthy growth of consumer income has been built on

--rapid technical advances by business;

--productivity gains from the greater skill and diligence of labor;

--cooperation among labor, management, and Government;

--prudent fiscal policies;

--the careful efforts of consumers to get the most for their money.

The success of our efforts to bring full prosperity to the American economy has sharpened the challenge of maintaining price stability.

We are determined to have the benefits of both full employment and price stability-not one at the expense of the other.

That environment of stability is strengthened whenever responsible action is taken on prices and wages.

It is strengthened when we support a pay bill for Federal workers consistent with the Administration's wage-price guideposts.

It is strengthened when businessmen lower prices to share the benefits of lower costs and rapid productivity gains.

It is strengthened when unions bargaining for wage increases stay within the bounds of productivity gains, as they did in many industries last year.

On many occasions, I have asked management and labor to make their price and wage decisions with full regard to the interest of the entire Nation in price and cost stability. I renew that request today.

The consumer's interest is broad in scope. So are the efforts required to promote and protect that interest. The recommendations I have made will require action on many fronts by many groups.

The Congress holds the key to historic achievements in areas of consumer information and safety. This Administration will marshal its forces to promote consumer welfare in close cooperation with the States and local governments.

Yet the basic job of furthering the consumer cause lies in the hands of private citizens--the consumers themselves. With the full cooperation of all, we can look ahead toward an ever-rising standard of living for American consumers.

Together, we can achieve a free marketplace where better goods can be bought, where real incomes continue to increase, and where the dollar's purchasing power remains firm and stable.

LYNDON B. JOHNSON

The White House

March 21, 1966

Note: For the President's remarks upon signing related legislation, see Items 508, 576, 594.

Lyndon B. Johnson, Special Message to the Congress on Consumer Interests. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/239568

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