Do you subscribe to the certification procedure and the penalty provisions which Chairman Weinberger recommended?

Mr. KIRKPATRICK. I think if I might, Senator, Chairman Weinberger proposed a pretest procedure rather than certification procedure. I certainly subscribe, very definitely and emphatically, to the objectives of that legislation. I do understand there have been subsequent hearings which raised technical questions. But the objectives of that legislation are beyond question in my mind.

Senator Moss. That is correct.

The CHAIRMAN. It is a strong bill and will give you plenty of authority down there to get at it.

Senator Moss. The pretesting by saying certification I perhaps neglected to say this was pretesting, and therefore certifying that the fabric had passed the test. Rather than the system that we have now of having goods all distributed and out and then making a discovery there is a flammable fabric and you probably can't recall all of the goods.

Mr. KIRKPATRICK. I am wholeheartedly in favor of this legislation, sir.

Senator Moss. Mr. Kirkpatrick, you are familiar with the automobile warranty report of the Federal Trade Commission?

Mr. KIRKPATRICK. I know that it exists. I have not studied it in detail, sir. I have not had an opportunity to do so. It is a rather voluminous report. I think I know in substance what its recommendations are.

Senator Moss. I would hope that you would support the recomendations of that report, particularly as they relate to prohibiting the disclaimer of implied warranties.

Our committee saw no reason why a written warranty should be used to limit the rights of the consumer, rights that he would have but for the written warranty. Do you agree with that?

Mr. KIRKPATRICK. I agree with that.

Senator Moss. Do you believe that all warranties should clearly and conspicuously disclose their terms to the consumer? Mr. KIRKPATRICK. I do.

Senator Moss. Do you believe that there should be some direct and simple means for consumers to identify warranties that are full and complete and that offer total protection against malfunction from those warranties for parts, but not for labor, or otherwise have only partial coverage?

Mr. KIRKPATRICK. I think that would be highly desirable. Senator Moss.

Senator Moss. The committee received a statement from Howard Frazier of the Consumer Federation of America. You are acquainted with that organization, I assume?

Mr. KIRKPATRICK. I had not been acquainted with it, sir. But Mr. Frazier was kind enough to send me a copy of that communication so that I have read that which you refer to.

Senator Moss. As I read it, the main point of the statement seemed to be that the consumers must be given a voice in the day-to-day operations of consumer protection agencies.

Mr. Posner claims there are no incentives to the agencies to be faithful to the consumer interests.

Commissioner Elman says the problem is due to the fact that there is no accountability to an identifiable constituency. There have been proposals that an independent consumer council be established within the Commission. I assume this means a council with power of intervention, such as was done in New York by the State Utilities Commission.

What do you think of that as a possible solution to this problem posed by Mr. Frazier?

Mr. KIRKPATRICK. I look upon the Commission as just such an agency, sir. We are committed to the protection of the consumer, and to have somebody in our midst who is just like we are would be, I would be a little nonplussed, I wouldn't know what to do with him I think.

Senator Moss. He is in effect the devil's advocate down there. Because of the allegation that the Commission was not fully oriented to protect the consumer, he is in there for just that purpose, to be a consumer man. You don't think that is a necessary addition?

Mr. KIRKPATRICK. I would like to give that-I really have not considered that, Senator Moss. I would like to give it consideration. My instant reaction is that I don't like it, sir, because the Commission is indeed committed and its purpose is the protection of the consumer. To have somebody whose avowed purpose is that of looking over our shoulder, being part of us, I say, I am confused as to what he would do. Because we are there to advocate and prosecute the interests of the consumers.

Senator Moss. What do you think of the suggestion that the Commission be shorn of its adjudicative responsibilities, it simply be an action, advocate agency?

Mr. KIRKPATRICK. Senator Moss, I am not critical of the Commission's functions, of the Federal Trade Commission and others. Criticism has been leveled at this for many years. It does pose difficulties, and my own conviction is, and I think it has been demonstrated under former Chairman Weinberger and I hope I and my colleagues and staff can continue to demonstrate that we can deal with that and be more effective because we do have both of those functions. I very much believe in the commission process. Indeed I don't think I would be here sitting before you today if I did not so believe.

Senator Moss. Those two sort of tie in, the Commission being required to sit in adjudication cannot carry out as fully its function as an advocate of the consumer, because of the necessity of sitting in judgment.

Isn't there a conflict there?

Mr. KIRKPATRICK. I think that we have-I have not gone into this in the detail I would expect to-I think there have been procedures devised at the Commission such that such separation as should in fact take place is assured. And that the process is a smoothly working one and that the criticism really is, I would hope it could be demonstrated, more an intellectual exercise than a realistic one in these circumstances. Senator Moss. Do you think consumers should have a voice in selecting their advocates in government?

Mr. KIRKPATRICK. Well, I am unable to identify, really-well, the answer is "Yes." But I am unable to identify who the consumer is, because we are all consumers.

Senator Moss. You are aware of course that consumers are showing an increased interest and in fact demanding their rights to participate in the regulatory process by which we are supposed to protect the environment and the quality of the marketplace and the old rules appear to no longer be in effect. We are concerned that the FTC as the major agency of consumer protection at the Federal level be fully responsive to the burgeoning insistence that the marketplace be improved. In that connection do you believe the FTC rules of practice should be amended to assure interested parties the right to participate in FTC proceedings?

Mr. KIRKPATRICK. I assume without knowing the answer that we already have procedures which permit intervention of interested parties. And I assume also the procedures would permit the appearance, the filing of briefs and the like. This is a complicated question with which the Commission has dealt in some detail in recent cases. I am not familiar with the detail of the matters and really cannot comment further than that at this time.

Senator Moss. The designation of the Bureau of Deceptive Practices has been changed to the Bureau of Consumer Protection. Other than the establishment of a Consumer Advisory Board and consumer protection committees in the field and the creation of a Consumer Education Office, what new steps have been taken in consumer protection? Mr. KIRKPATRICK. We have, as I understand it, a few groups of consumer representatives, I don't know that that is the exact title, that have been coming from the field offices, who have been taking training, if you like, and then going back to the field offices. That has been done, sir.

I think these consumer advisory and consumer protection committees are a great step forward. I think they will be the eyes and ears of the Commission in the matter of consumer protection, to develop what must be developed in this field.

May I say there is a great deal of talk and I am aware of that, about consumer protection. But there is to the best of my knowledge very little solid economic learning in this field. I would hope that these consumer protection agencies in the field and the consumer advisory groups, would develop a body of learning.

May I give you a further example?

I understand that the computerized program that the Commission established in Chicago has developed this interesting fact, that the most frequent complaint that has come to that consumer protection group is the failure to deliver goods upon an order of a consumer. That is a surprising fact. I would not have expected that. But that is the kind of thing I hope we develop, the kind of information, which is very important in this field.

Senator Moss. Do you intend to make increased use of public hearings and trade regulation rules?

Mr. KIRKPATRICK. We intend to it would certainly be my intention to do so.

Senator Moss. We covered that part earlier.

Senator Moss. Thank you very much, Mr. Kirkpatrick. I appreciate your answers,

As you can see, we have many things about which we have great concern, and on which we must turn to the Trade Commission for effective enforcement. We are anxious that you vigorously pursue these

consumer areas that we have been talking about in this series of questions.

Thank you very much.

Mr. KIRKPATRICK. Thank you, sir.

The CHAIRMAN. Thank you, Mr. Chairman.

Mr. Kirkpatrick, I have just one other question that was brought up on the cigarette bill. There is a new proposed rule of the Trade Commission to require tar and nicotine listing in the advertising of cigarettes. As you know, we have been working with the tobacco industry for a long time, and I must say there has been good cooperation with the industry, seeking a voluntary agreement by them to do just what the Trade Commission is suggesting in the proposed rulemaking. Mr. KIRKPATRICK. Yes, sir.

The CHAIRMAN. I wanted to ask you if this can be done by voluntary agreement, without the need of long, drawn out litigation or further legislation, would that be better than the rule?

Mr. KIRKPATRICK. In my judgment; yes, sir.

The CHAIRMAN. I hope that that can be pursued, because I must say they have been very cooperative and I think we might work out something along that line. We did that a long time ago in advertising with the hard liquor people. And for years it has been just an agreement between us and them that they don't go on television. And it has worked. And we have a sort of a loose agreement with the beer people that they don't drink beer on television.

Now if you stopped a man on the street and said, "Do you know that people don't drink beer on television?" He would say, "What do you mean? I just saw them drinking beer last night."

Mr. KIRKPATRICK. That is my impression.

The CHAIRMAN. Because the advertising gets right up to it. But it seems to me if there could be achieved a voluntary agreement on this tar and nicotine, which this committee has long pursued, or at least we have been talking about it, that that might be the better arrangement.

Mr. KIRKPATRICK. It would be a highly desirable arrangement, sir; indeed, yes.

The CHAIRMAN. All right.

Senator Hart?

Senator HART. I will yield to the Senator from Kentucky.

Senator Cook. May I say to the Senator and the chairman, after Senator Moss and the chairman get through with tobacco and whisky, there is not much left of the Commonwealth of Kentucky.

The CHAIRMAN. Well, there are a few things left, but we won't mention them today.

Senator Cook. For Senator Magnuson's benefit, we are getting a group of people to be anti-SST in the Commonwealth of Kentucky. Mr. Kirkpatrick, to be serious, I would hope from the start of questioning that your nomination wouldn't depend on your overall enthusiasm of S. 3201. As you well know I have strong objections to this bill and purely and simply because I believe that the Congress is about to extend to the Federal Trade Commission authority that it has to and should reserve to itself.

Let me ask you this: I was delighted to hear you say if the adjudicatory authority of the Commission were not in existence, probably

you would not be sitting here. I think this is fine. But you do agree there is a limit beyond which the adjudicatory authority of an agency should go before the Federal court system assumes its responsibility; do you not?

Mr. KIRKPATRICK. Well, there must be some limit, sir, yes. Exactly what you have in mind, of course I don't know. I don't mean to fence with you, but, yes.

Senator Cook. What I have in mind is at least my own legal interpretation of rule 23 of the Rules of Civil Procedure, in relation to S. 3201 and the authority that is to be vested in the Federal Trade Commission by this bill. And I merely had this in mind. I hope I will be able to expound on it at a later time.

The CHAIRMAN. Would the Senator yield a moment there? I must be excused, and I think Senator Cotton has to leave too.

Senator COTTON. Before leaving, I will say I didn't go into these matters, because I knew Senator Cook was going into them. However, I am very much interested in the questions I anticipate he will ask. Senator Cook, I wonder whether you have read to any great extent section 201, subsection 1 (p) of the present proposed act?

Mr. KIRKPATRICK. I have not studied it, I am aware of it. Senator Cook. As a matter of fact, in light of the criticisms that have been leveled against the FTC and as a matter of fact some of which are contained in your report, don't you think Congress should retain the power to define those unfair acts which may become a legal cause of action in a Federal district court? Or do you think that broad, all-expansive power should be delegated to the Federal Trade Commission?

Mr. KIRKPATRICK. I think in fairness, Senator, I have not come to grips with that in any way that permits me to give you an answer which is categorical. I do, however, appreciate the force of that which you are saying, and the force of your statement in the report and, indeed, it disturbs me.

On the other hand, I have not had the benefit of any thinking on the matter, any conferring with my colleagues or others. I would prefer to simply leave it that I recognize very much of the force of your remarks but I have not myself made up fully my mind.

Senator Cook. There is another question I have to ask you and I am sure your answer will be satisfactory in the record, but I hope that in this business of cigarette advertising, that you would not have any preconceived ideas or that you would not have any strong objectivity in regard to the attitude of some of the members of this committee.

Let me tell you why. During our discussions relative to the act that was passed in the spring, we had a hearing with the radio and television people and it was their desire, and I am sure this is public knowledge, it was their desire that they wished to be phased out in 3 years. It was the desire of this Senator that the advertising go off last September. It was their desire that they be phased out in 3 years because this represented 1212 to 14 percent of their entire income and they could not sustain such a loss.

I might even say to you part of the argument that made up the decision to go until after the bowl games of January 1 of next year, for their benefit, by many of the people on the committee who were

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