of the Food and Drugs Act and the regulations of the Bureau of Internal Revenue, as well as by numerous State laws designed to insure the honest sale of oleomargarine as oleomargarine. [Italics ours.] "The labeling provisions of the order under review have already been discussed. The product is required to be identified as oleomargarine, the label must disclose that the fat ingredient, constituting at least 80 percent of the product, is derived from animal or vegetable sources, and the presence of artificial coloring, sodium benzoate, vitamin A, or artificial flavoring, must be 'conspicuously' disclosed (R. 75–76). "The misbranding provisions of the Federal Food, Drug, and Cosmetic Act, of which 403 (c) is only one, contain additional safeguards against deception of consumers as to the true nature of oleomargarine, particularly when considered in connection with the Oleomargarine Tax Act which makes it impossible to sell oleomargarine except in labeled packages. The labeling of such packages would constitute misbranding under section 403 if 'false or misleading in any particular.' (sec. 403 (a)) or if the food was offered under any other name than its own (sec. 403 (b)), or if the package was 'so made, formed, or filled as to be misleading (sec. 403 (d)). [Italics ours.] "The Oleomargarine Tax Act, and the regulations of the Bureau of Internal Revenue under this Act, contain further meticulous safeguards for the honest sale of oleomargarine. The Internal Revenue Act provides that oleomargarine shall be marked, stamped, and branded as the Commissioners of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe. The regulation pursuant thereto with respect to manufacturers requires that the containers must be of a durable and substantial character and must completely cover the contents (U. S. Treasury Department, Bureau of Internal Revenue Regulations No. 9, art. 28). The statutory package may be subdivided into prints or rolls weighing not less than one-fourth of a pound and placed in cartons or wrappers properly branded (ibid. art. 28 (c)). Before removal from the factory the word 'oleomargarine' in bold-faced Gothic letters not less than three-fourths of an inch high, immediately followed by the factory number, district, State, and the gross tare and net weights in letters and figures not less than one-fourth-inch high, must be stenciled on one of the sides or top of each package of oleomargarine (ibid. art. 29 (a)). If the brand is placed upon the back or end of a container the word 'oleomargarine' in plain Gothic letters at least three-fourths of an inch high, must also be printed upon the front of the container so as to be plainly visible when ⚫ the package is on display (ibid., art. 29 (b)). Cartons containing the product must be branded with the word 'oleomargarine' on two of the principal display panels in plain Gothic letters of not less than twenty-point type, and the words shall measure at least three and one-eighth inches in length and shall be of a color in strong contrast with that of the carton (ibid., art. 29 (c)). When inside wrappers are used without carton wrappers, the word 'oleomargarine' shall be so placed on the wrapper that it will appear at the top and bottom of the print or roll when wrapped (ibid., art. 29 (f)). [Italics ours.] "The Treasury Deartment has also issued regulations pertaining to the branding by retailers. If the manufacturers' package is not subdivided into prints or rolls, the retail dealer must wrap oleomargarine at the time of sale in a new covering which shall be branded with his name and address, the word 'oleomargarine' and the net weight of the contents. The letters shall not be less than one-fourth of an inch square and printed in an ink which forms a strong contrast with the color of the covering. Marks which would obscure the brand shall not be made. The covering shall be so placed around the oleomargarine that the brand will be plainly visible (ibid., art. 54 (b)). [Italics ours.] "The Treasury regulations also prescribe that except to the extent required by State laws, there may not be used on packages of oleomargarine the words 'butter,' 'butterine, 'creamery' or 'dairy' or any other mark or phrase, the name of a breed of cattle, or a trade-mark, label, picture, design, or device which conveys the impression that the article is a product of the dairy. It is doubtful whether, under the Treasury Regulations, the words 'imitation butter,' could be printed upon the label, since the use of the word "butter" is prohibited (ibid., art. 29 (1)). This regulation was in effect when the Food, Drug, and Cosmetic Act was passed. [Italics ours.] * * * * "It is clear from the foregoing that oleomargarine cannot be passed off as butter and therefore does not come within the policy enunciated by Congress in section 403 (c) of the Federal Food, Drug, and Cosmetic Act." This quoted portion of the brief is under the answering contention made by the Administrator that "oleomargarine is not an imitation of butter." The Eighth Circuit Court of Appeals itself stressed these same internal revenue regulations in that part of its opinion which dealt with the question whether the Federal Security Administrator violated his "own" law in prescribing a definition and standard of identity for oleomargarine but wherein he failed to require oleomargarine to be labeled "imitation butter." The court stated (p. 659): 66* ** The respondent [Federal Security Administrator], we think, has convincingly demonstrated in his brief that, in view of Federal and State restrictions imposed upon the sale of oleomargarine, it is improbable that it could, as a practical matter, be successfully passed off as butter. * The foregoing serves to demonstrate that in the Administrator's defense of the validity of his regulation more than considerable reliance was placed on the Federal tax statute, an admission of weakness in the Federal Food, Drug and Cosmetic Act in respect to consumer protection. This same reliance on the Federal tax statute is inherent in the court's opinion. It is to be noted that there is nothing contained in the definition and standard of identity for oleomargarine issued by the Federal Security Administrator June 7, 1941, effective September 5, 1941, which establishes safeguards anything parallel to those prescribed by the Commissioner of Internal Revenue under the authority of Federal tax statute. It is true, of course, that the standard carries certain label requirements as to ingredients, but that is all. They are as follows: "Section 45.000 * * * "(b) When any ingredient named under one of the following specified subparagraphs of paragraph (a) is used, the label shall, except as hereinafter provided, bear the statement set forth below after the number of such subparagraph: "Subparagraph (1): 'Prepared from Animal Fat', or 'Made from Animal Fat.' "Subparagraph (2): "Vegetable,' or 'Prepared from Vegetable Fat,' or 'Made from Vegetable Fat.' "Subparagraph (3): 'Prepared from Animal and Vegetable Fats,' or 'Made from Animal and Vegetable Fats.' "Subparagraph (4): 'Prepared from Vegetable and Animal Fats,' or 'Made from Vegetable and Animal Fats.' "Subparagraph (5): 'Artificially Colored,' or 'Artificial Coloring Added,' or 'With Added Artificial Coloring.' "Subparagraph (6): 'Sodium Benzoate (or, as the case may be, "Benzoic Acid" or "Sodium Benzoate and Benzoic Acid") Added as a Preservative,' or 'With Added Sodium Benzoate (or, as the case may be, "Benzoic Acid" or "Sodium Benzoate and Benzoic Acid") as a Preservative.' "Subparagraph (7): 'Vitamin A Added,' or 'With Added Vitamin A.' "Subparagraph (8): 'Artificially Flavored,' or 'Artificial Flavoring Added,' or 'With Added Artificial Flavoring.' "Where oil is used, the word 'oil' may be substituted for 'fat' in the label statement. In lieu of the word 'animal' or 'vegetable' in any such statement, the common or usual name of the fat ingredient may be used. If two or more of the optional ingredients named in subparagraphs (5), (6), (7), and (8) are used, the words 'added' or 'with added' need appear only once, either at the beginning or end of the list of such ingredients declared. The declaration of Vitamin A may include the number of United States Pharmacopoeia units which have been added. "Whenever the name 'oleomargarine' appears on the label so conspicuously as to be easily seen under customary conditions of purchase, the words and statements herein prescribed showing ingredients used shall immediately and conspicuously precede or follow, or in part precede and in part follow, such name, without intervening written, printed, or other graphic matter." From this it is apparent that the oleomargarine definition and standard does not afford the broad protection of the Federal tax statute and the regulations issued thereunder by the Commissioner of Internal Revenue as set forth in regulations No. 9, United States Treasury Department, Bureau of Internal Revenue. Nor do the provisions of the Federal Food, Drug and Cosmetic Act, itself, appear to give the broad protection of the Federal tax statute. The prohibitions of the act relate solely to, and jurisdiction to prosecute for violations of the act can be acquired only through, the existence of interstate commerce. The prohibitions contained in section 301 of the act, enumerated above, indicate the limited jurisdiction of the Federal Security Administrator whether his enforcement activity be by way of prosecution, injunction, or seizure-the various methods of enforcement under the act. Of these enumerated prohibitions only subsection (k) purports, on its 92417-43-22 face, to grant jurisdiction to Federal enforcement authorities when interstate commerce seemingly has ended. This provision of the law was newly enacted in the 1938 act. It has yet to stand the scrutiny of the United States Supreme Court." No such test is apparent in the near future. As to this provision of the act, Toulmin," in his work, The Law of Foods, Drugs, and Cosmetics, at page 63, states: ་ "(7) The mutilation of labels while an article was held for sale after shipment was not specifically prohibited by the 1906 act, as it is in the 1938 act (sec. 301 (k), U. S. C. 21, #331 (k)). This provision is designed to prevent the manufacturer from changing his labels after shipment in interstate commerce, and to prevent the wholesaler or other dealer from doing the same, when the result is misbranding. Such alteration of labels which results in deception of the consumer and injury to competitors has been penalized under the common law of unfair competition. In the Prest-O-Lite cases the changing of the labels on gas containers, by pasting new labels over them, was enjoined (Prest-O-Lite v. Davis, 209 Fed. 917; affirmed [C. C. A. 6], 215 Fed. 349). The constitutionality of this section has yet to be tested. Doubtless the courts will uphold it, but will restrain the prosecution of individuals who have changed the labels on goods which have been shipped in interstate commerce once they have become mingled with the property within the State, and within State jurisdiction. [Italics ours.] In view of the fact that the constitutionality of this provision is as yet undecided and that there is no immediate prospects of a high court decision respecting the provision, and since the complete scope of Federal enforcement authority is yet unascertained by reason of such fact, there appears to be little basis for removing from the Federal statute books laws which do permit Federal enforcement authorities to pursue violations direct to the retail outlet, viz, the Federal tax statute. * * * Furthermore, in a situation where a supposed violation occurs after the product has reached the retail outlet, there would arise the troublesome factor of degree of proof to sustain either a criminal prosecution or a libel for condemnation proceeding by Federal authorities. This would be particularly true where the retailer procures the product both from intrastate as well as interstate suppliers. For example, the August 4, 1943, issue of the Dairy Record,' at page 10, carries a story concerning the indictment of a person alleged to have sold oleomargarine colored and misbranded "country butter." Rather sketchy information discloses that a considerable quanity of uncolored oleomargarine was purchased by the accused, was colored, printed into one-quarter pound sticks and placed in cartons labeled "country butter." The bogus butter was then sold at prevailing wholesale butter prices to retailers and in turn sold by them as butter for prevailing retail prices. Investigations of the fraud were conducted jointly by the Bureau of Food and Drugs of the State of Louisiana, wherein the violation occurred, and the Unite dStates Treasury Department. Both of these agencies preferred charges against the accused. Ostensibly, interstate commerce was not involved and Federal Food and Drug authorities were not concerned with the case. Query: Had there been no Federal tax statute, and lacking keen enforcement activity by State authorities, would any protection have been left to the consumers defrauded by the act of the accused? Such an inquiry is hardly frivolous in view of the fact that the pending bill H. R. 2400 would completely wipe off the statute books the Federal tax statute and the authority of the Treasury Department to take hold of such a case. Under the existing Federal tax statute, Federal authorities were in a position to instigate and follow through an investigation of the fraud which occurred in the Louisiana case and were at least jointly responsible for bringing to justice the accused who perpetrated this fraud upon the consumers of that State. 5 While the U. S. Supreme Court in McDermott v. Wisconsin (228 U. S. 115), citing Hipolite Egg Company v. U. S. (220 U. S. 45), stated that the 1906 act "was passed by Congress under its authority to exclude from interstate commerce impure and adulterated food and drugs and to prevent the facilities of such commerce being used to enable such articles to be transported throughout the country from their place of manufacture to the people who consume and use them, and it is in the light of the purpose and of the power exerted in its passage by Congress that this act must be considered and construed"-nevertheless, that case dealt with a factual situation different from that contemplated by subsec. (k) of sec. 301 of the act. The Hipolite case likewise involved a different factual situation in that the product seized in that case was contraband while moving in interstate commerce. It is true, of course, that the courts are inclined to give a liberal construction to food and drug laws. See recent case of United States v. Lee (131 F. (2d) 464 (C. C. A. 7th)), reversing 40 F. Supp. 801. The Law of Foods, Drugs, and Cosmetics, Harry Aubrey Toulmin, Jr., the W. H. Anderson Co., 1942. 'Published by the Dairy Record Publishing Co., Inc., St. Paul, Minn. As to the effectiveness of State enforcement, assuming the absence of the Federal tax statute, it need only be mentioned that not only do the several States have oleomargarine laws of varying degrees of regulation (ranging from only the levy of an excise tax on oleomargarine made from foreign fats and oils to the absolute prohibition of oleomargarine colored yellow to resemble butter), but have food and drug laws likewise of varying degrees of regulation. Whether these laws separately or in combination to the exclusion of Federal jurisdiction provide adequate protection to consumers is hardly a question to be resolved categorically by the abolition of the Federal tax statute. Yet, that is precisely what H. R. 2400 does. Without the Federal tax statute presumably the Federal authorities would have been helpless to act in the Louisiana case. II. THE DECISION OF THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT IN LAND O' LAKES CREAMERIES, INC. ET AL. V. PAUL V. MCNUTT, FEDERAL SECURITY ADMINISTRATOR (132 F. (2D) 653) This case was an action under the special review procedure established in the Federal Food, Drug, and Cosmetic Act for a review of the validity of the definition and standard of identity for oleomargarine issued by the Federal Security Administrator. The issues raised by the pleadings and pressed before the court primarily were three, as follows: (1) That the definition and standard, wherein it permits the use of artificial coloring, sodium benzoate, vitamin A and diacetyl (artificial butter flavor) as optional ingredients in the manufacture of oleomargarine, would not promote honesty and fair dealing in the interest of consumers as required by law and that there was no evidence to support the Administrator's contrary conclusion. (2) That oleomargarine containing these optional ingredients is "imitation butter" within the meaning of section 403 (c) of the act and that the definition and standard was void because it failed to require such oleomargarine to be labeled "imitation butter";s (3) That oleomargarine containing artificial coloring and artificial butter flavor would lead consumers to believe that such oleomargarine contains substantial quantities of butter and thus would make oleomargarine appear better or of greater value than it is, contrary to the provisions of section 402 (b) (4) of the act.9 The court, in deciding that the definition and standard was valid, found, among other matters, that the definition and standard did not violate the sections mentioned (1) for failure to require oleomargarine to be labeled "imitation butter" or (2) as being in contravention of the prohibitions of section 402 (b) (4) of the act. In addition, the court found that there was evidence to support the Administrator's conclusion that the definition and standard would promote honesty and fair dealing in the interest of consumers as required by section 401 of the act— the statutory authority for the promulgation of the definition and standard. It is important to note that the court's jurisdiction in this type of review procedure is limited in respect to its review of the evidence upon which the Administrator predicates his definition and standard of identity for the food involved. While the court is empowered "to affirm the order, or to set it aside in whole or in part * * *," nevertheless, the findings of the Administrator as to the facts if supported by substantial evidence adduced in the public hearing are conclusive on the court. Thus the court in its decision stated (p. 658): "The judgment or determination of the respondent that the order will promote honesty and fair dealing in the interest of consumers cannot, we think, be disturbed by this court. "His right to make the judgement is, of course, equivalent to a discretionary power to act, which cannot be judicially reviewed. (United States v. George S. Bush & Co., Inc., 310 U. S. 371, 380 60 S. Ct. 944, 84 L. Ed. 1259; Twin City Milk Producers Assn. v. McNutt, 8 Cir., 122 F. 2d 564, 566. Compare, Quaker Oats Co. v. Federal Security Administrator, 7 Cir., 129 F. 2d 76, 81 certiorari granted, 317 U. S. —, 63 S. Ct. 158, 87 L. Ed. —.) And, if the respondent's determination in that regard were subject to review by this court, we would still be of 8 "SEC. 403. A food shall be deemed to be misbranded-* * "(c) If it is an imitation of another food, unless its label bears, in type of uniform size and prominence, the word 'imitation' and, immediately thereafter, the name of the food imitated. * * *"" "SEC. 402. A food shall be deemed to be adulterated * "(b) * * * (4) If any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is. * * *19 the opinion that it would have to stand. We have already shown that the standard of identity adopted was substantially the standard of idenity proposed in the respondent's notice of hearing, with the exception of the optional ingredients diacetyl and benzoate of soda; that there was substantial evidence that the standard of identity proposed would promote honesty and fair dealing in the interest of consumers; and that the only real disagreement between the witnesses at the hearing was as to the propriety of the use of diacetyl as an optional ingredient. It was for the respondent to resolve this conflict in the evidence, and to determine whether diacetyl should be an optional ingredient and whether in his judgment the standard of identity with the inclusion of this ingredient would promote honesty and fair dealing in the interest of consumers. His conclusions in these regards are, we think, neither arbitrary nor capricious, and are, therefore, binding upon this court." Therefore, on the issue whether the definition and standard would promote honesty and fair dealing as required by law, the court was bound by the findings of the Administrator, since, as the court concluded, his findings were neither arbitrary or capricious and were based on substantial evidence. The court reiterated its position on this issue in the concluding words of its opinion as follows (p. 659) : 66* * * Upon the evidence adduced at the hearing, we are convinced that the respondent had the power to make the order which is challenged. Whether the order is right or wrong is no concern of this court, for it cannot substitute its judgment for that of the respondent [citing authorities]." On the issue as to whether the definition and standard of identity conflicted with section 403 (c) of the act, the court concluded that it did not, on the theory that section 401 of the act, under which the definition and standard was issued, and section 403 (c) of the act which deems misbranded a food that is an imitation of another food unless its label bears the word "imitation" and the name of the food imitated, were separate and independent and that the Federal Security Administrator still has the statutory duty of enforcing section 403 (c) irrespective of what may be the requirements of his definition and standard promulgated under section 401. * * * * * * * * * It is in connection with this technical issue that the court concluded that "there is nothing in the record that oleomargarine has been, or is likely to be, passed off as butter; that it is, or is likely to be, used as a deceptive imitation of butter; or that labeling requirements will not effectually protect consumers against fraud that, in view of Federal and State restrictions imposed upon the sale of oleomargarine, it is improbable that it could, as a practical matter, be successfully passed off as butter This is all that the court had to say with respect to whether oleomargarine containing artificial color and artificial butter flavor is an imitation butter. It did not decide whether such oleomargarine is in fact imitation butter, but simply decided that it was unlikely that such oleomargarine could be passed off as "a deceptive imitation of butter" and further decided that if the law requires such oleomargarine to be labeled "imitation butter," the definition and standard of identity of the Administrator does not alter or nullify his statutory duty in that regard. It is difficult to follow the logic of the court's reasoning, however, for who can believe that the Federal Security Administrator or the Department of Justice will take enforcement action against an oleomargarine manufacturer who manufactures his product in accordance with the definition and standard of identity, but who does not label his product “imitation butter." The answer is found in the fact that no such enforcement action has occurred, either since the issuance of the definition and standard which became effective on September 5, 1941, or since January 21, 1943, the date of the court's decision. On the third issue raised by the pleadings, namely, that the addition of artificial color, flavor, vitamin A, and the preservative, sodium benzoate, caused oleomargarine to appear better or greater value than it is, and that as a consequence that the definition and standard in permitting the addition of these ingredients conflicted with section 402 (b) (4) of the act, the court found no such conflict as is disclosed by the following quotation from the decision (p. 659): "Section 402 (b) (4) of the act * * * provides that a food shall be deemed to be adulterated 'if any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is.' In order to determine whether anything has been added to a food which makes it appear 'better or of greater value than it is' it is necessary to know first of all what |