corrective action taken in these matters involving furs. Cease and desist orders were issued in 31 cases. Correction was effected by formal stipulation agreements to cease and desist in 89 cases, and in 3,364 instances the correction was effected through informal daministrative action under the trade practices rules, to which I shall refer. In 1938, to effect a wider degree of correction of the situation, which under limitations of existing statutory law had become a pressing need, the Commission held a trade practice conference for the furproducts industry, and an outgrowth of that proceeding was the promulgation by the Commission of trade-practice rules for the industry, dated June 17, 1938. I have copies of these rules with me and will be glad to furnish them to the members of the committee. These rules of fair practices were worked out in joint undertaking by the industry and the Commission to utilize cooperative effort on the part of all concerned to eliminate and prevent unfair trade practices, particularly deceptive advertising and labeling. In these rules there has been defined and cataloged, for the information and guidance of merchants, distributors, manufacturers, and the public generally, various methods which are to be avoided in the merchandising of the products in order to eliminate and prevent the deception and unfair competitive methods. The rules have been a means of effecting very substantial improvement within the scope of their limitations. They have been utilized by advertisers, by better business bureaus, by merchants and manufacturers, to elevate the standards of fair practices in the industry, to eliminate deceptive or harmful methods insofar as possible. They have also enabled the Commission to promptly and eccnomically effect correction in several thousand cases largely by agreed or voluntary action. The extensive contact and experience which the Federal Trade Commission has had in the fur industry under these trade practice rules and in handling specific cases of alleged violation of the Federal Trade Commission Act related, in very large measure, to advertising and labeling, or more specifically to deceptive advertising and affirmative misbranding. Such work of the Commission therefore bears directly on the subject matter of the bill before the committee. Consequently, it may be helpful to the committee for me to take up the things which it appears are important to consider in framing legislation that will be reasonable and practicable, and will afford needed protection to business and the public. TRUE NAME OF FUR Our experience has quite clearly indicated that the most prolific source of deception and bad practices is in the failure to designate the fur by the true or real name of the animal from which it came. This point involves correction of the practice of using a fictitious animal from that which actually produced the fur, or the use of merely a trademark or meaningless designation and concealing the true name of the animal, particularly in respect to such furs the natural appearance of which has been altered and changed by dyeing and processing so as to be completely disguised and to simulate a higher priced fur coming from a different animal. Disclosing the true name of the animal which actually produced the fur is a basic necessity for closing the door on fraud and deception and for affording constructive, informative labeling of furs. 74903-48 To illustrate how bad the practice on this point was at one time, published reports show that rabbit fur, which lends itself to being dyed and processed to imitate almost any other kind of fur, has in the past been sold under more than 50 purported animal names, not one of which revealed the truth that the fur was in fact rabbit. I have here a list of different names under which rabbit has at one time or another been sold, according to available information. I shall be glad to offer that list for the record, if you so desire. The CHAIRMAN. We would like to have it placed in the record at this point. (The list above referred to is as follows:) FUR NAMES USED FOR DYED RABBIT, BUT NOT REVEALING THE FACT Arctic seal-Seal-dyed rabbit. French beaver Beaver-dyed rabbit. hare. French cony-Sheared white rabbit. Baltic black fox-Black-dyed rabbit. Baltic brown fox-Brown-dyed hare. Baltic leopard-Australian rabbit dyed and marked to resemble leopard. Baltic lion-Australian rabbit in natural | French seal-Sheared and seal-dyed color. rabbit. Baltic red fox-Natural red Australian Imitation ermine-White rabbit. rabbit. Baltic seal-Seal-dyed rabbit. Baltic tiger-Australian rabbit dyed and Baltic white fox-Natural white rabbit Chinchillette-Chinchilla-dyed rabbit. Cony-Another name for rabbit, par- Cony mole-Sheared and mole-dyed Near seal-Sheared and seal-dyed rabbit. Northern seal-Sheared and seal-dyed rabbit. Nutriette-Rabbit sheared and dyed to Polar seal-Seal-dyed rabbit. Sealine Sheared and seal-dyed Aus- Squirrelette Squirrel-dyed rabbit. Squirreling Squirrel-dyed rabbit. Mr. MILLER. These include the use of such terms for rabbit fur as: Arctic seal, Australian seal, beaverette, ermiline, lapin, Galland squirrel, muskratine, and marmotine, and so on and so forth. Skunk has been sold under such names as Alaska sable, black marten, civet cat, dipped marten. Our common opossum has been found to reach the market under the designation Australian chinchilla, Russian marten, Russian stone marten, and other similar designations covering up the fact that the product is opossum. For muskrat, the reports show these improper designations: Hudson seal, brook mink, river sable, water mink, hudsonia, and so forth. Manchurian dog has been called Manchurian fox, wolfox, Belgian lynx, Isabella fox, and so forth. Squirrel has been disguised under these names: Chinola, flying fox, sabeline, squirrel sable. Nutria has been given such names as Baltic seal, French beaver, natria seal, and cony mole. In further concealment of the true name of the fur, wholly fictitious animal names have been used, such as the following and many more which have been used for rabbit: leopardine, hudseal, castorette, chapchillas, minkony, nutriette, visonette, muskratine, moline, beaverette, and sealine. And I may say that those names that I have just read are wholly fictitious animals. There are no such animals as those names would indicate. The following are illustrations of some of the fictitious names used for other furs: "American wombat" for dyed lamb. "Belgium lynx" for black Manchurian dog. "Cony-leopard" for dyed and spotted rabbit. "Ercomine" for dyed kidskin. "Galopin" for dyed rabbit. "Hudsonia" for dyed muskrat. "Lacoon" for Mediterranean sheep. "Linette" for dyed ring-tail cat. "Loutrine" for dyed muskrat. "Mand-O-Coon" for dyed lamb. "Marcoon" for marmot dyed to imitate raccoon. There are no such fur-bearing animals as these names indicate. Names of this sort are wholly fictitious. The deception and exploitation of purchasers flowing therefrom would effectively be blocked were the true name required to be used. The true name made known would explode the myth arising from such fictitious designations. A falsehood cannot operate when the truth is known. The nature of the product in the fur industry, processed, dyed disguised, and its appearance altered, clearly points to the basic need, in correct informative labeling and advertising, of disclosure of the true name of the animal. Unless the consumer has means of knowing what she is buying, opportunity for deception, even fraud, will invariably characterize the transaction. DYED OR ARTIFICIALLY COLORED FURS Another point that experience has indicated is important to consider is the disclosure of the fact that the fur has been dyed or artifically colored when such is the case. While dyeing and processing with added or artificial coloring is desirable and unobjectionable as such, it nevertheless has an effect in the nature of disguising and concealing the true grade or type of fur. Moreover, the point of whether a particular fur is in the true color which nature has bestowed upon the animal, or whether it is artificially colored, is highly important to intelligent buying and nondeceptive marketing. Regardless of whether the dyed or artificial coloring has been applied for the purpose of concealing poor grade, off color, or the like, its effect is generally to alter or cover up natural appearance and cause the product to simulate or imitate higher grades or qualities of the same type of fur or to simulate or imitate furs of a different or more costly animal. Reputable merchants have long adhered to the practice in their advertising of disclosing the fact that a particular fur is dyed, thus revealing that the fur is not in its natural color. Unless true disclosure is made of the fact that the product has been dyed or artificially colored, the door can not be adequately closed to deception and unfair competition. Consequently, in the interest of business and the buying public, it is essential that the informative labeling include this disclosure of the fact that the product is dyed-thereby showing that the fur is not in the true color which nature had given the animal, and which is often so highly prized. Illustrations of designations which reveal the fact that the product is dyed, and which are found in advertising commonly employed in the industry or trade, are the following: Seal-dyed muskrat, minkdyed rabbit, sable-dyed Russian squirrel, mouton-dyed lamb, beaverdyed oppossum, mink-dyed marmot, and so on. I may say here that those phrases are used in the industry to indicate that the particular fur has been dyed to imitate the animal first mentioned. For example, seal-dyed muskrat is so used in the industry as to indicate that the muskrat has been dyed to indicate seal. Mink-dyed rabbit, that it has been dyed to indicate mink. The same principle against concealment should also be applied to the case where the fur has been disguised or altered by bleaching instead of dyeing, or through "pointing" which involves gluing hair from another animal into the pelt to increase the simulation. FUR GARMENTS MADE OF PIECES OR SCRAPS Small pieces or scraps of fur from the cutting tables of manufacturers are sewn together and thus made into coats, or fur garments, which have the appearance or are dyed and striped with color in a way which tends to disguise the fact that the garment is not made. of the main or full pelt of the animal, but is composed of scraps or pieces, such as ears, necks, cheeks, paws, skunk stripes, squirrel bellies, and so forth. These garments, made of pieces, are of course of lower quality and value in comparison with similar garments made of the full or main skin. Unless disclosed that the garment is made of pieces or scraps when such is the fact, deception and misunderstanding in the marketing of the product will invariably arise. Many reputable concerns follow the rule of disclosing in their designations the fact that their products are made of such pieces. For example, we will see in some advertisements such designations as the following: Greydyed Bombay lamb paw, mink-dyed pieced marmot, natural squirrel bellies, mink tails, and so forth. Informative labeling, to effectively prevent deception, requires clear disclosure of the truth that the garment is made of pieces and not of the main part of the pelt, when such is the fact. USE OF SECOND-HAND PELTS When the consumer buys garments from the ordinary fur store, or when a dealer buys from a fur manufacturer, it is understood that the products so purchased are made of new pelts and not in whole or in part of second-hand fur, or fur which has been reclaimed from used garments. Deception and even fraud is bound to occur when a manufacturer or a merchant offers fur coats in which he has introduced second-hand or used fur, unless there is clear and unmistakable disclosure of the fact that the garment contains such used fur or is not composed entirely of new pelts, as it otherwise purports to be. Reputable stores generally would not knowingly permit second-hand pelts to be used in the fur garments they sell, but they as well as the public are exposed to the unfair and deceptive competition in cases where trade rivals or fly-by-night elements are tempted to conceal the second-hand nature of the pelts used. This, then, is another point which honest informative labeling should embrace, namely, that when the garment has been made in whole or in part of used or second-hand furs, this fact shall be disclosed. The same principle should apply in the case where the manufacturer or seller knowingly conceals the presence in the garment of rotten or rotting, scorched, overheated, or otherwise materially damaged pelts. TRUTHFULNESS OF NONREQUIRED INFORMATION In labeling or advertising, the seller should of course, have the right to add or present such additional information as he may desire, when the trade does not object, and subject only to the limitation that it be truthful and nondeceptive. In this matter, however, consideration needs to be given to the question of how the truth or falsity of added information may be established in the event of a case of alleged misbranding or deceptive_advertising. Thus, for example, if one wishes to say his product is Labrador mink, or northern muskrat, or ranch mink, or Russian squirrel, or to use any geographical or other adjective representation of similar nature, it becomes a serious question as to who shall bear the burden of proof on the point of whether or not the mink was in fact Labrador mink, or the muskrat in fact was from the North instead of the South, or whether the mink is in fact ranch mink, and so forth. And as we had it this morning, whether in fact the mink was from a jungle. It is virtually impossible, when the fur has reached its finished state in which it is sold to the public, to determine, from the article itself, where it originated, whether the mink in fact came from Labrador-to use one of the illustrations given. There is, so far as I know, no effort to require one to use such adjective representations of the type to which I have referred. It would however, seem necessary to meet this difficulty of proof by providing that he who chooses to represent that his product is of a certain significant locality, breed, or type should be required to sustain the burden of proof that he really has the type of product he claims or represents he is offering for sale. In other words, it would appear reasonable to provide that no one should represent his mink to be Labrador mink, when he does not know, or does not have any prima facie information showing, that such mink was in fact the product of Labrador. Labrador mink has had wide public acceptance and sales |