Report No. E+325

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SUMMARY GF MAJOR FEDERAL CONSUMER PROTECTION LAWS, 1906-1968

BY

MMRIAN D. HALL
Analyst in Industrial Organization
and Corporation Finance
Economics Division

April 11, 1969

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The Congressional Research Service works exclusively for
the Congress, conducting research, analyzing legislation, and
providing information at the request of Committees, ».\'Iern-
bers and their staffs.

The Service makes such research available, without partisan
bias, in many forms including studies, reports, compilations,
digests, and background briefings. Upon request, the CRS
assists Committees in analyzing, legislative proposals and
issues, and in assessing the possible effects of these proposals
and their alternatives. The Service’s senior specialists and sub-
ject analysts are also available for personal consultations in
their respective fields of expertise.

SUMMARY OF MAJOR FEDERAL CONSUMER PROTECTION LAWS, 1906-1968

Table of Contents

Introducti°nOO.COOOOOOOO0-OOOO'OOO-OOOOOOQOOOC-CO0.0000000000000000

I.

II.~

 C

Food, Drugs, and Cosmetics

A.
B.
C.

DO
E.
F.
G.

Pure Food and Drugs Act of l906.......................
The Federal Food, Drug, and Cosmetic Act of 1938......
Drug Amendments of 1962 to Food, Drug, and Cosmetic
Act Of 1-938oooooocoooooooooooooooooooeooooooooococoa
Meat Inspection Act of l907...........................
Wholesome Meat Act of l967............................
Poultry Products Inspection Act of l957...............
Wholesome Poultry Act of 1968.........................

Truthful Disclosure

A. Federal Trade Commission Act of l9l4..................
B. Wheeler-Lea Act of 1938. Amendment to the Federal

Trade Commission Act of l9l4........................
C. Federal Cigarette Labeling and Advertising Act

Of. lgésooooooooooeooeooooooooooooooooooeooeooooococo
D. Wool Products Labeling Act of l939....................
E. The Fur Products Labeling Act of l95l.................
F. Textile Fiber Products Identification Act.of l958.....
G. Fair Packaging and Labeling Act of l966...............
5. Consumer Credit Protection Act of l968................
I. Interstate Land—Sales Full Disclosure.................

Safety

A. The Flammable Fabrics Act of l953.....................
B. Flammable Fabrics-Act of 1967.........................
C. Federal Hazardous Substances Labeling Act of l960.....
D. Child Protection Act of 1966..........................
E. National Commission on Product Safety - l967..........
P. Fire Research and Safety Act of l968..................

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Table of Contents (continued)

PageV

IV. Motor Vehicles

A. Automobile Information Disclosure Act of l958......... 13
8. National Traffic and Motor Vehicle Safety Act

of l966.00000000COOOOOOOOOO0000000000000000000000000 13

SUMMARY OF MAJOR FEDERAL.CONSUMER PROTECTION LAWS, 1906-1968

Introduction

This report provides a brief summary of the main provisions
of the-principal Federal consumer protection laws enacted from l906
to 1968, beginning with the Pure Food and Drugs Act of 1906, generally
considered the first significant Federal consumer protection law in
United States history.

The 23 laws whose provisions are summarized in this report
are divided into four categories: (I) food, drugs, and cosmetics;

(II) truthful disclosure; (III) safety; and (IV) automobiles.

I. Food, Drugs, and Cosmetics

A. Pure Food and Drugs Act of 1906 (34 Stat. 768)

The Pure Food and Drugs Act of l906 forbade adulteration and
misbranding of foods and drugs sold in interstate commerce.

Food was defined as adulterated if it contained decomposed
or putrid animal or vegetable substances or parts of diseased animals;
if it had been so mixed or colored as to conceal its inferiority; if

ingredients had been added that made it injurious to health; or if

LRS --2

valuable constituents had been-removed and others substituted or mixed
with it so as to impair its quality or strength.
Drugs were adulterated if they fell below the standards
laid down in the United States Pharmacopoeia or the National Formulary
or any other standards under which they were sold.
Food and drugs were declared to be misbranded if their 
packagesor labels bore statenents which were "false or misleading
in any particular," if one was sold under the name of another, if
the.contents of packages had been removed and others substituted, or
if the presence of certain narcotics or stimulants was not revealed.-
Food was also misbranded i£ its weight or measure was not

plainly shown; drugs, if their packages or labels bore false claims

of curative effects.

3. The Federal Food, Drug, and Cosmetic Act of 1938 (52 Stat. 1040)

|.

The Act of 1938 strengthened the earlier definitions of
adulteration and misbranding. Food was now defined as adulterated if
it contained any poisonous or deleterious substance, if it was colored
with coal tars not approved by the Food and Drug Administration, if
it was prepared under conditions that might result in contamination
with filth or injury to health, or if it was packed in containers
composed of substances that might make it injurious. Candy could no

longer contain metallic trinkets or other inedible materials. The

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wording that defined misbranding to cover statements that were "false
or misleading in any particular" was restored. Under an amendment
adopted in 1930, the Administration had been authorized to establish
standards of "quality, condition and/or fill of container" for canned
goods, and such goods were said to be misbranded if failures to meet
these standards were not disclosed. Now the Administration was
empowered to set up minimum standards of identity and fill for all
foodstuffs, and disclosure of failure to meet them was required. The
exemption formerly granted to foods sold under brand names was with-
drawn, and for foods, as for drugs, it was provided that the ingredients
of those departing from estahlished standards must be shown. Foods and
drugs were both defined as misbranded if their containers were so

made or filled as to mislead the purchaser. For drugs, moreover, the
law required inclusion on the label of directions for use and warning
against misuse.

The scope of the law was extended to cover cosmetics and
therapeutic devices. A cosmetic was declared to be adulterated if it
"is or may be injurious" under customary or prescribed conditions of
use, and to be misbranded——as with foods and drugs—-if its label bore
statements that were "false or misleading in any particular." Here,
again, deceptive containers were forbidden. But the rules for cosmetics
were less stringent than those for foods and drugs. Soaps were

exempted. In the case of hair dyes, the use of coal-tar colors was

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permitted.if their labels stated.that they might irritate the skin,

gave directions for making skin tests, and warned that use on eyebrows

and eyelashes could lead to blindness. In general, no provision was

made for the establishment of standards, and the disclosure of ingredients
was not required.

The law was strengthened, however, in other ways. The
government was authorized to inspect factories producing foods, drugs,
devices, and cosmetics. Where the processing of foodstuffs might
involve a risk of contamination so serious as to menace public health,
it.was empowered to license manufacturers and to establish standards
of sanitation as a condition for granting licenses. Drug concerns
developing new drugs were required to obtain approval from the Food
and Drug Administration before putting them on sale, and the Adminis-l
tration was authorized to deny approval to drugs that had not'been

tested.and to those that were found to be unsafe.

C. §53g_Amendments of 1962 to Food, Drug, and Cosmetic Act
of 1938 (76 Stat. 780) ‘

Under the resulting law: (1) All drug factories are to be
inspected at least biennially. (2) Drug manufacturers must maintain
quality by following good manufacturing practices, as defined bv the
FDA. (3) The Administration can forbid the testing Of drugs on humans

if it finds that clinical testing on animals has not been adequate.

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(4) A physician must get the consent of his patients before giving
them experimental drugs, unless he decides that this is not feasible
or not in a patient's interest. (5) All antibiotics must be tested,

batch by batch, for strength and purity. (6) A manufacturer applying

for approval of a drug must prove not only that it is safe but also that

it is effective. (7) No drug can be put on the market until it has
been specifically approved by the FDA. l(8) Drug manufacturers must
keep records on clinical experience with the use of drugs and report
on this experience upon request. (95 Drug labels and advertisements
must contain information on.injurious side effects. (10) They must
present the generic names of drugs in type at least half as large as
that used for their trade names. (ll) The FDA is authorized to review
all generic names and establish simpler ones where they are needed.
(12) The FDA may sunnarily remove a drug from the market if it has,

evidence that it carries an imminent threat to health.

D. Meat Inspection Act of 1907 (34 Stat. 1256) g

Under provisions of the Meat Inspection Act of 1907,
slaughtering, packing, and canning plants that ship meat across State
lines are inspected by veterinarians from the United States Department

of Agriculture.

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Animals are inspected before, and carcasses after slaughter;

diseased meat is destroyed; and pure meat is stamped "U. 8. Government

Inspected."

E. ‘Wholesome Meat Act of 1967 (81 Stat. 584)

This new law is an.amendment to the above 1907 statute.
It forces States to up-grade their inspection standards to match
those of the Federal government. If the States fail to act within
two years, the United States Department of Agriculture will step in

and imose Federal inspection.

F. Poultry Products Inspection Act of 1957 (71 Stat. 441)

The Department of Agriculture was empowered to inspect
poultry sold in interstate comerce, examining each lot before
slaughter and each bird afterward, and supervising»sanitation and

processing, as well. ‘

G. Wholesome Poultry Act of 1968 (P.L. 90-492)

This legislation follows the pattern of the Wholesome Meat
Ac: of 1967. It will provide for Federal aid to the States to develop
their own programs and train inspectors for inspection of poultry sold

in intrastate commerce.

LES - 7

At the end of two years, following passage of the law, if
the States do not have inspection programs at least equal.to Federal
standards, the Federal inspection requirements will prevail.

In the meantime, the Act will require those intrastate

plants which pose a health hazard to clean up or close down.

11. Iruthful Disclosure

A. Federal Trade Commission Act of 1914 (38 Stat. 717)

The heart of the Federal Trade Commission Act is Section 5,
which prohibits "unfair methods of competition" in interstate commerce.

In summary form, Section 5 states that "Unfair methods of comgetition 

in commerce are hereby declared unlawful. . . . Whenever the commis§ion 

shall have reason to believe that any such person, partnershio, or
corporation has been or is using any unfair methods of competition in
commerce, and if it shall appear to the comission that a oroceeding__
by it in resgect thereof would be to the interest of the oublic, it

shall issue and serve . . . a complaint."

ms -1 '3

B. Wheeler-Lea Act of 1938. Amendment to the Federal Trade
Commission Act of 1914 (52 Stat. 111)
p This law specifically prohibits "false advertising" which

was designed to induce purchases of foods, drugs, devices, or cosmetics.

C. Federal Cigarette Labeling and Advertisingggct of 1965 (79 Stat. 282)

This law requires cigarettes sold in commerce to be packaged
and labeled with the following warning, "Caution: Cigarette smoking

may be hazardous to your health."

D. Wool Products Labeling Act of 1939 (54 Stat. ll28)

This law provides that all products containing wool, except

carpets, rugs, mats, and uphnlsteries, must disclose on a label attached

to the merchandise the kind and percentage of each fiber contained in

the product, including the respective percentages of "wool," "reprocessed
wool," and "reused wool." The name of the manufacturer or distributor

must also appear on the label, and the label must remain on the merchandise

when it is delivered to the consumer.

E. The Fur Products Labeling Act of 1951 (65 Stat. 175)

This legislation is modeled after the Wool Products Labeling

Act of 1939. Its purpose is to protect consumers and industry members

mas-e 9

against the misbranding, false advertising, and false invoicing of

furs and fur products moving in interstate commerce. The widespread
use of deception and false advertising in the sale of furs, such as
use of the term "mink blended coney" for rabbit fur, gave rise to
demands within the industry for corrective legislation. Manufacturers
and distributors are now required to attach labels on garments showing
the name of the animal which produced the fur; country of origin; and
whether the fur is bleached or dyed, or composed of paws, tails,
bellies, or waste furs. Retailers may substitute their own labels, but

must.retain the information from the original labels for a period of

three-years.

F. Textile Fiber Products Identification Act of 1958 (72 Stat. 1712)

This law applies to yarns, fabrics, and household articles,
such as apparel, bedding, and draperies made from natural or synthetic
fibers other than wool. The law requires sellers of such products to
affix labels revealing the percentage by weight of each fiber they
contain. Thus, a fabric sold as 100-percent silk, will be 100-percent

silk and not part nylon or some other synthetic fiber.

G. Fair Packaging and Labeling Act of 1966 (80 Stat. 1296)

Briefly, this law contains both mandatory and discretionary
provisions which are designed to assure more accurate labeling and

informative packaging of most "kitchen and bathroom" consumer products.

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H. Consumer Credit Protection Act of l968 (P. L. 90-321)

Effective July 1, 1969, this law reunites disclosures of
credit, annual rates of finance charges on loans and installment
credit (in dollars and cents as well as percentages) and annual ash
well as periodic disclosure of charges on revolving credit accounts.
Loans in small amounts are exempted. The law requires meaningful
disclosure of information in advertisements for credit. It provides
for disclosure of interest on first mortgages and permits persons
to erempt themselves from fraudulent second mortgages within three
days of agreement. It restricts garnishment of wages by creditors.

It provides penalties for extortionate credit transactions (loan

sharking).

1. Interstate Land-fiales Full Disclosure

S. 3497, introduced into the Senate as an interstate land-
sales full disclosure bill, became Title XIV of the Housing and Urban
Development Act of 1968 (P. L. 90-448), which is summarized as follows:

Title XIV provides for the regulation of the sale of interests
in sub-divisions in commerce or through the mails. It requires a
statement to include: the name and address of each person having an
interest; the condition of the title to the land; the terms and con-

ditions of the proposed disposal of the land; the condition of access to

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utilities; any blanket encumbrances; a copy of articles of incorporation;
a copy of the deed; a copy of council or title insurance policy; copies
of forms of conveyance to be used in selling parcels; and other information

as may be deemed.necessary.

III. safegz

A.. The Flammable Fabrics Act of 1953 (67 Stat. lll)

By the terms of this legislation, prohibitions are placed
on.the manufacture for sale, the sale, the importation, or the trans-i

portation for sale of any wearing apparel which "is so highly flammable

as to be dangerous when worn by individuals."i

B.» Flammable Fabrics Act of 1967 (81 Stat. 568)_
The l953 law was amended in 1967 to include interior furnishings,
fabrics, and materials.
C. Federal Hazardous Substances Labeling_Act of 1960 (74 stat. 372;

This law became effective in 1962. If such household products

as cleaning agents, paint removers and polishes are found by the Food

‘LRS --12,

and Drug Administration to be hazardous, warnings must be printed on

their labels.

D. Child Protection Act of 1966 (80 Stat. 1303)

This act bans hazardous toys and articles intended for children.

E. National Commission on Product Safety - l967 T81 Stat. 466)

This law established a National Commission on Product Safety
composed of seven members whose duties are (1) to conduct a study of
the scope and adequacy of measures nofi used to protect consumers from
unreasonable risk of injuries which may be caused by hazardous house-
hold products, and (2) to submit such interim reports to the President
and Congress as the Committee deems advisable before its final renort'

which is due not later than January l, 1969.

F. Fire Research and Safety Act of 1968 (P, L. 90-259)

This law expresses the sense of Congress to cooperate with
and assist public and private agencies in fire research and safety
programs and in the reduction of death, personal injury, and property

damage caused by fire.

txs. .— 13

It authorizes the Secretary of Commerce to conduct.investi-
gations of fires, research causes of fires, institute educational.
programs on fire; and support by contracts or grants fire safety
curriculums or projects by States, local governments, other non-Federal
public agencies, and nonprofit institutions-

It establishes a National Commission on Fire Prevention and
Control to study the problem and submit a report to the President and

Congress within two~years from establishment.

IV. Motor Vehicles

A. Automobile Information Disclosure Act of 1958 (72 Stat. 325)

The puroose of this law is to prevent misrepresentation’by
dealers of the value of the cars they are selling and the trade-in

allowances they are giving.

B. National Traffic and Motor Vehicle Safety Act of 1966 (80 Stat. 718)

This law directed the Secretary of Transportation to issue
safety standards for new and used motor vehicles and for motor vehicle

equipment.

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Under the provisions of this law, temporary Federal safety .
standards for new 1968 automobiles were established by January 31,
1967. These incorporated standards already established by the General
Services Administration for any 1968 model automobile purchased.by .1
the Government. These GSA.standards include such features as an
impact-absorbing steering wheel and column, safety door latches and g
hinges, safety glass, dual braking system, impact resistant gasoline
tanks and connections.

In accordance with the 1966 law, additional standards have
been issued since January 31, l968, which include head rests for the
driver and right front-seated passenger.

Safety standards for used cars were proposed by the Department
of Transportation in November 1968 and comments from interested parties
were invited. Final issuance of these standards is still pending;

Manufacturers or dealers must equip vehicles with tires
meeting load standards for fully loaded vehicles including luggage.
Tires must be labeled with the name of the manufacturer or retreader,
and certain safety information including the maximum permissible load
for the tire. In accordance with the law, a uniform quality grading
system was established in 1968. The-requirement for passenger car
tires to meet "specific requirements for endurance and braking" was

effective July 31, 1967.

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CRS69—325ESpecSheet.txt
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