The effort is an amendment to get at the intrastate meat. In other words, they would not take over any Federal function and we would not take over any State function-unless they refused to exercise their responsibilities.

Senator ELLENDER. Well now, if the States pass laws that would comply with the Federal laws, why have two examining that? Why have you and the States-that is what I would like to know--because that would be a lot of duplication. Let us have one or the other. Mr. LEONARD. Could I ask the legal counsel ? Senator ELLENDER. Yes; I wish you would.

Mr. Bucy. I think the difference between the Montoya amendment and the Mondale bill is that the Montoya amendment provides for cost-sharing in bringing a State into compliance, and then provides that the Federal moves in if the State does not develop the program.

The Mondale bill, on the other hand, does not provide for this Federal asistance in developing, but does provide that the Federal becomes applicable subject to its being waived, if a State has or develops a State program that is equivalent to the Federal.

Senator ELLENDER. That affects only the meat that is produced in the State and consumed in the State, and slaughtered in the State? Mr. Bucy. Yes, sir.

Senator MONTOYA. Intrastate traffic.

Mr. Leonard, in your statement you suggested that the amendments to the Meat Inspection Act, titles I and II of the bill, alone, would not provide the guarantee of wholesomeness, which the consumer has a right to expect when consuming meat, either in the home or elsewhere; that neither bill S. 2147 or H.R. 12144, as passed by the House, provides such a complete guarantee. Is my understanding correct? Mr. LEONARD. That is correct, Senator.

Senator MONTOYA. Now, you further state that to provide this kind of guarantee or assurance, requires that the Federal and State meat. inspection programs which are provided be similar and closely coordinated.

What provision is made in S. 2147 and H.R. 12144 to give assurance that such a State program will be made effective in all States? Mr. LEONARD. There is no assurance. There is only, really, a hope. Senator MONTOYA. The incentive?

Mr. LEONARD. Yes, sir.

Senator MONTOYA. The Federal funding on the matching basis.
Mr. LEONARD. Yes, sir.

Senator MONTOYA. Then, the trigger device of my amendment? Mr. LEONARD. Now, of course, your amendment will change that. Senator MONTOYA. Yes. Which will be set off if the States do not have standards equivalent to Federal inspection.

Mr. LEONARD. Yes.

Senator MONTOYA. Now, in other words, under title III of these two bills, provision is made to encourage the States to develop and activate State inspection programs equivalent to those provided for wtih respect to products in interstate commerce, the Federal Government to offer to the extent of not more than 50 percent of the cost. However, there is no requirement that a State undertake independently or with Federal aid to develop such a program; is that correct?

S6-531-67- -6

Mr. LEONARD. That is correct.

Senator MONTOYA. Now, if the consuming public is to have the assurance it is entitled to receive with respect to the wholesomeness of meat and meat products, regardless of where it is produced, is it not in the public interest to provide the protection of a program such as the Federal program where a State fails to meet its responsibility in this regard, after a reasonable opportunity?

Mr. LEONARD. Yes, sir.

Senator MONTOYA. Isn't this what the clamor on the American scene is all about now?

Mr. LEONARD. Yes, sir.

Senator MONTOYA. Regardless of who does it, we must have meat inspection.

Mr. LEONARD. Yes, sir.

Senator MONTOYA. Have you given thought to the possible need for, and nature of, a provision for amending the bill H.R. 12144, as passed by the House, which would require Federal inspection after the State has had resonable opportunity to develop an effective program? I know you have testified to this heretofore, but what kind of thought, and thinking, have you given to this in arriving at your consensus that my amendment as submitted to the committee this morning would probably come nearer to doing the desired job that we have in mind? Mr. LEONARD. Well, we have approached this, really, from two considerations. One is that we have no desire to take over a State function. But we do recognize greatly the need to improve the level of meat inspection that is there. That is, we find no virtue in a Federal inspection versus State inspection, if it is comparable and provides equal level of service.

Senator MONTOYA. Isn't it true that even in those States which do have a similar adequate or comprehensive inspection law, that many of those States do not have the inspection facilities or the appropriate funding to carry on that type of work?

Mr. LEONARD. That is right. They lack adequate funds. They lack adequate staff.

Senator MONTOYA. And isn't it also true that, with respect to the intrastate area, which Federal inspection has not heretofore touched, that there have been many instances where diseased cattle have been slaughtered and sold out to the consuming public?

Mr. LEONARD. Yes, sir.

Senator MONTOYA. I happen to know that there are many pink-eyed cattle which have been taken to the cattle sales rings and sold for slaughter, and the same is true of cancerous cattle, cancerous infected cattle. Don't you find that true?

Mr. LEONARD. Yes, sir. We have found cases of that.

Senator MONTOYA. And isn't it also true that cattle which have been injured and gangrene has set in are also taken to the cattle sales rings and sold for slaughter, and the extent of the gangrene infection is not subject to any Federal inspection, and in many cases there is no local inspection, either ante mortem or post mortem.

Mr. LEONARD. Yes, sir; that is right.

Senator MONTOYA. And under this bill these things would be obviated, or prevented; would they not?

Mr. LEONARD. I think they would be greatly foreclosed. This is the only way we can get at these kinds of problems.

Senator MONTOYA. And there is also the injunctive procedure which is set out in the bill, as well as the cease and desist, similar to what we have under the Food and Drug Act, which will come into play, and these people will necessarily have to adhere to such procedures as will protect the continuity of their license privileges; isn't that also correct?

Mr. LEONARD. Yes, sir.

Senator MONTOYA. That is all, Mr. Chairman. Thank you.

Senator ELLENDER. To what extent would you have to call in other agencies of Government to enforce such rules and regulations as you may impose as to meat produced entirely in the State and for consumption in the State?

In other words, your present laws are based on the interstate commerce clause. I think it might be advisable to have your attorney at this point submit to us a short brief indicating the jurisdiction of the Federal Government, that is, the Department of Agriculture, from a legal standpoint.

Senator MONTOYA. I have such a brief here, if I may submit it at this point in the record.

Senator ELLENDER. Very well.

(The brief above referred to follows:)

AUTHORITY FOR PROVIDING FOR THE REGULATION OF INTRASTATE COMMERCE IN MEAT AND MEAT FOOD PRODUCTS

The Constitution of the United States of America in Article I, Section 8, enumerates the powers of the Congress by providing the Congress shall have certain enumerated powers including the power "to regulate Commerce with foreign Nations, and among the several States," it further provides that in connection with these enumerated powers the Congress shall have the power "to make all Laws which shall be necessary and proper for carrying into Execution the foregoing powers."

The courts have held that the foregoing quoted powers include authority to regulate not only commerce among the States but activities which burden and affect such commerce and further have held that where necessary to effectively carry out the regulating of commerce among the States it becomes necessary to make regulations applicable within States that this power is vested in the Congress under this Section of the Constitution.

The Congressional findings set forth in Section 2 on page 11 of S. 2147 include findings that unwholesome, adulterated and misbranded meat and meat food products: (1) impairs effective regulation of meat and meat food products in interstate and foreign commerce; and (2) are injurious to the public welfare and destroy markets for wholesome, not adulterated and properly labeled and packaged meat and meat food products.

These and other findings in this section are founded on the fact that 85 percent of the commercial slaughtering is conducted in Federally inspected houses engaging in interstate commerce and it follows that intrastate slaughtering and handling without inspection substantially affects meat in interstate commerce and regulation may be found to be necessary in order to effectively regulate the interstate commerce in meat.

The present Meat Inspection Act and Poultry Products Inspection Act require that all products produced in establishments subject to Federal inspection under these Acts be prepared in accordance with the requirements thereunder regardless of where such products are distributed whether within or without the State where produced. These requirements are based upon the aforementioned authorities.

Senator MONTOYA. I also have a study made by the Legislative Reference Service of the Library of Congress and I would like to also insert that in the record.

Senator ELLENDER. Without objection, it will be helpful. (The study above-referred to, follows:)

CONSTITUTIONALITY

III. Is it within the constitutional power of Congress to expand the scope of coverage of H.R. 1314 or the existing Federal Inspection Act (21 U.S.C. 7191) to the end that all meat packing plants, including those engaged in purely local, intrastate commerce, are made subject to the provisions of either?

Yes. As disclosed in the precedents hereinafter summarized, Congress has been deemed competent to subject local commercial activities to federal regulations of interstate commerce whenever it can be established that control of the former is essential to the effective enforcement of an otherwise permissible exercise of federal power over what is undeniably commerce between the states. Thus, it would be within the province of Congress to set forth in a preamble to either H.R. 1314 or to the existing Federal Meat Inspection Act findings to the effect that a substantial portion of the American population is engaged daily either in interstate travel or tourism or in vocations producing goods or services that enter directly into the channels of interstate and, foreign commerce or which contribute substantially to such interstate or foreign commercial movement; and that meat products constitute a major portion of the diet of American inhabitants participating in this contribution. The sustained good health of the American population engaged in such endeavors being essential to the continuity and maximum volume of their contributions affecting interstate and foreign commerce, the Congress accordingly has concluded that additional safeguards are necessary to insure the purity and quality of meat products consumed by the American populace. Considerations of health being deemed to be paramount for these aforementioned reasons, the Congress therefore finds it advisable to impose a set of regulations which will insure that the purity and quality of meat products supplied from whatever source conform to uniform federal standards.

To carry out this declaration of policy a revision or amplification of the substantive provisions of either H.R. 1314 or the existing Federal Meat Inspection Law would then become necessary.

Supporting precedents

In United States v. Wrightwood Dairy Co., 315 U.S. 110, 118-119 (1942) the Supreme Court sustained an order of the Secretary of Agriculture fixing the minimum prices to be paid to producers of milk in the Chicago marketing area. A dairy company demurred to the regulation on the ground of its applying to milk produced and sold intrastate. Sustaining the order the Court said: "Congress plainly has power to regulate the price of milk distributed through the medium of interstate commerce, . . . and it possesses every power needed to make that regulation effective. The commerce power is not confined in its exercise to the regulation of commerce among the States. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce The power of Congress over interstate commerce is plenary . It follows that no form of State activity can constitutionally thwart the regulatory power granted by the commerce clause to Congress. Hence the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power."

In Wickard v. Filburn, 317 U.S. 111, 120-129 (1942) a still deeper penetration by Congress into the field of local production was sustained. As amended by the act of 1941, the Agricultural Adjustment Act of 1938 (7 U.S.C. 612 c. 1281–1282 et seq.) regulates production even when not intended for commerce but wholly for consumption on the producer's farm. Sustaining the extension of the act, the Court pointed out that the effect of the statute was to support the market. "It hardly can be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions.

This may arise because being in marketable condition such [home-consumed] wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies the need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices".

Federal regulation of state railway rates-In the Shreveport case (Houston & Texas Railway v. United States, 234 U.S. 342 (1914)), the Interstate Commerce Commission ordered several Texas lines to increase certain of their rates between points in Texas until they should approximate rates already approved by the Commission to adjoining points in Louisiana. The latter rates, being interstate were admittedly subject to the Commission. The local rates were as clearly within the normal jurisdiction of the State, and had in fact been set by the Texas Railway Commission. The Supreme Court found that the Interstate Commerce Commission had not exceeded its statutory powers. As to the objection that "Congress is impotent to control the intrastate charges of an interstate carrier even to the extent necessary to prevent injurious discrimination against interstate traffic", the Court replied as follows. "Wherever the interstate and intrastate transactions of carriers are so related that government of one involves the control of the other, it is Congress, and not the State, that is entitled to prescribe the final and dominant rule, for otherwise Congress would be denied the exercise of its constitutional authority and the State, and not the Nation, would be supreme in the national field".

Senator ELLENDER. All right, Senator Mondale.

Senator MONDALE. Thank you, Mr. Chairman.

As I understand the distinction between interstate and intrastate, as embodied in the 1906 or 1907 law, it is a somewhat antiquated distinction. It is purely arbitrary and technical, and applies regardless of the volume of the plant. If they do not in fact market across a State border, as a physical fact, they are not subject to Federal inspection? Mr. Bucy. That is correct.

Senator MONDALE. If they market any portion, even the slightest portion, they are

Mr. BUCY. If they market even the slightest portion, the entire production of the plant is subject to the Federal Act, even though 90 percent of it was sold intrastate.

Senator MONDALE. So, unlike many of the later Federal attempts to control different parts of the economy, which dealt with a less mechanical rule; in other words, not alone whether it goes across State boundaries, but whether it affects interstate commerce, and many more other subtle rules, this is a purely mechanical rule?

Mr. Bucy. That is right.

Senator MONDALE. And you could have a huge operation in a State of heavy population, marketing substantial quantities of meats to the consumer, and yet it would still be beyond the reach of the Federal inspector?

Mr. BUCY. That is correct.

Senator MONDALE. Now, Mr. Leonard, as I understand it, there was a thorough review made of the condition of meat being slaughtered and processed in intrastate plants, conducted by the Federal Meat Inspection Service in 1962, and a followup study made in 1967. Is that correct?