NAB reports (Jan-Dec 1941)

Number of cases handled. — During the fiscal year the Commis¬ sion sent questionnaires to advertisers in 739 cases and to adver¬ tising agencies in 109 cases, and negotiated 190 stipulations, which were accepted and approved by the Commission. A total of S32 cases were disposed of by the various methods of procedure. Of this number, 188 cases were considered settled upon receipt of reports showing compliance wdth previously negotiated stipulations. The remaining 344 cases w'ere closed without prejudice to the right of the Commission to reopen if warranted by the facts: 333 of them for such reasons as no evi¬ dence of violation, lack of jurisdiction, and insufficient public interest ; 2 because the Post Office Department had issued fraud orders against the advertisers, and 9 because the Post Office Department had accepted from the parties concerned affidavits of discontinuance of business. In addition, the Commission, in 36 cases, ordered issuance of complaint: in 17 instances where advertisers failed to stipulate; in 1 case in which the advertiser was not given an opportunity to stipulate because of gross deception, and in 18 involving violation of the terms of existing stipulations previously accepted and ap¬ proved. In 41 cases field investigations were ordered, including 13 wherein it appeared that application for injunction or crimunal proceedings might be warranted. Also, 3 cases were referred to other governmental agencies as concerning matters more appropri¬ ately coming within their jurisdiction. Seven hundred forty-three radio and periodical cases were pending on July 1, 1939, and 979 were pending on June 30, 1940. Commission has access to scientific services. — Effective coopera¬ tion continued with other departments of the Government. The Commission has access to the laboratories, libraries, and other facilities of Federal Government agencies, including the National Bureau of Standards, United States Public Health Service, and the Food and Drug Administration, Bureau of Home Economics, and Bureau of Animal Industry of the Department of Agriculture, to any of w'hich it may refer a matter for scientific opinion. Since the passage of the Wheeler-Lea amendment to the Federal Trade Commission Act, the Commission has had the services of a medical staff under the supervision of an e.xperienced and highly qualified physician assigned to it by the United States Public Health Service, so that the therapeutic claims of advertisers can be competently and carefully examined. (See Medical Advisory Service, p. 145.) When necessary, the Commission obtains medical and other scientific information and opinions from nongovernmental hospi¬ tals, clinics, and laboratories. Such material and cooperation are often particularly helpful in enabling the Commission to reach sound and fair conclusions with respect to scientific and technical questions which come before it, and especially so in connection with much of the work of the Radio and Periodical Division. Procedure in advertising cases. — If it appears that a published or broadcast advertisement coming to the Commission’s attention may be misleading, a questionnaire is sent to the advertiser, and request is made for a sample of the product advertised, if this is practicable, and the quantitative formula, if the product is a compound. Copies of all advertisements published or commercial continuities broadcast during a specific period are also requested, together with copies of all booklets, folders, circulars, form letters, and other advertising literature used. Upon receipt of these data, the claims, sample, and formula are referred to the Commission’s Medical Advisory Division or to an appropriate technical agency of the Government for a scientific opinion. Upon receipt of the opinion, a list of such claims as then appear to be false or misleading is prepared and sent to the adver¬ tiser, along with pertinent portions of the opinion. The advertiser is extended the privilege of submitting such evidence as he may desire in support of his claims; he may answer by letter or. upon his request, may confer with the Commission’s Radio and Periodi¬ cal Division in person or through counsel. If, after a consideration of all available evidence at hand includ¬ ing that furnished by the advertiser, the questioned claims appear to be true, the division reports the matter to the Commission with the recommendation that the case be closed. If it appears from the weight of the evidence before it that the advertising is false or misleading, the division refers the matter to the Commission with recommendation either that complaint issue or the case be returned to the division for negotiation of a stipula¬ tion, provided it is one appropriate for stipulation procedure and the advertiser desires to dispose of it by such voluntary agreement to cease and desist from the use of the acts and practices involved. _ If the Commission so authorizes, the division prepares a stipula¬ tion and forwards it to the advertiser for execution. Should he object to any of its provisions, he may discuss them by mail or in person. If and when he agrees upon the terms of the stipulation and signs and returns it, the matter is again reported to the Com¬ mission with recommendation that the stipulation be accepted and the case closed without prejudice to the right of the Commission to reopen the matter at any time the facts so warrant. If the Commission accepts and approves the stipulation, the advertiser is required to submit within 60 days from the date of acceptance a report in writing showing the manner and form in which he has complied and is complying with the provisions of his agreement. Stipidation provides simplified methods. — The object of all Com¬ mission procedure is to prevent unfair methods of competition and unfair and deceptive acts and practices in commerce, and experi¬ ence has show'n that this can be accomplished not only by cease and desist orders, but by the stipulation method, which is effective and speedy as well as inexpensive for both Government and advertiser. RADIO LEGISLATION SLATE CLEAN AS CONGRESS ADJOURNS The first session of the 77th Congress convenes Friday. The third session of the 76th Congress has just adjourned, the longest session in history outlasting the 345-day ses¬ sion in the war days of 1917-1918. The third session of the 76th Congress convened on January 3, 1940. .A number of attempts were made to adjourn the last session but there were always enough members who insisted that Congress should stay in session during the present emergenejn Following is a complete list and status of bills of inter¬ est to the broadcasting industry when the last session adjourned. The slate is now clean as far as all pending bills and resolutions are concerned. All the old ones “die” when the session of Congress adjourns; SENATE BILLS S. 517 (Sen. Johnson, Colo.) LIQUOR ADVERTISING— Same as H. R. 251. Referred to Interstate Commerce Committee. Hearings held. Reported to Senate. S. 517 (Sen. Johnson, Colo.) LIQUOR ADVERTISING— Same as H. R. 251. .Amendment (in the nature of a substitute) to the committee amendment to the bill (S. 517) to amend the Communications Act of 1934 to prohibit the advertising of alcoholic beverages by radio. Ordered to lie on the table and to be printed. No action. S. 517 (Sen. Johnson, Colo.) LIQUOR ADVERTISING— Same as H. R. 251. Amendment (in the nature of a substitute) to the committee amendment to the bill (S. Sl7) to amend the Communications .Act of 1934 to prohibit the advertising of alcoholic beverages by radio. Ordered to lie on the table and to be printed. No action. S. 547 (Sen. Lodge, Mass.) COPYRIGHT — To create renewal rights in author of articles in periodicals, encyclopedias, etc., when such articles are not separately copyrighted but were included in copyright of periodical or other composite work. Referred to Patents Committee. Passed by Senate. Reported to House. S. 550 (Sen. Sheppard, Texas) COMMUNIC.\TIONS .ACT — To amend Section 303 by limiting the issuance of operators’ li¬ censes to citizens of the United States over the age of twenty-one, provided the Commission may waive the age limit with respect to amateur operators. Referred to Interstate Commerce Com¬ mittee. The bill as introduced refers to Section 303 (e), whereas the correct designation is 303 (1). .A corrected bill will be intro¬ duced. No action. S. 575 (Sen. C.apper, Kans.) LIQUOR ADVERTISING— Same as H. R. 924. Referred to Interstate Commerce Committee. No action. S. 594 (Sen. Reynolds, N. C.) GOVERNMENT R.ADIO STA¬ TIONS — To establish marine schools in each state and other pur¬ poses, including the construction and operation by each school of one or more stations on “a wave-length and power prescribed by the Maritime Commission.” Referred to Commerce Committee. No action. January 3, 1941 — 13