Special Message to the Congress: "To Protect the Consumer Interest.

To the Congress of the United States:

Speaking for every American, I present to the Congress my fourth Message on the American Consumer.

President Truman once observed that while some Americans have their interests protected in Washington by special lobbying groups, most of the people depend on the President of the United States to represent their interests.

In the case of consumer protection, however, the President--and the Congress-speak for every citizen.

A hundred years ago, consumer protection was largely unnecessary. We were a rural nation then: a nation of farms and small towns. Even in the growing cities, neighborhoods were closely knit.

Most products were locally produced and there was a personal relationship between the seller and the buyer. If the buyer had a complaint, he went straight to the miller, the blacksmith, the tailor, the corner grocer. Products were less complicated. It was easy to tell the excellent from the inferior.

Today all this is changed. A manufacturer may be thousands of miles away from his customer--and even further removed by distributors, wholesalers and retailers. His products may be so complicated that only an expert can pass judgment on their quality.

We are able to sustain this vast and impersonal system of commerce because of the ingenuity of our technology and the honesty of our businessmen.

But this same vast network of commerce, this same complexity, also presents opportunities for the unscrupulous and the negligent.

It is the government's role to protect the consumer--and the honest businessman alike--against fraud and indifference. Our goal must be to assure every American consumer a fair and honest exchange for his hard-earned dollar.

THE RECORD OF PROGRESS

Thanks to the work of the last two Congresses, we are now much closer to that goal than ever before. In three years, we have taken historic steps to protect the consumer against:

--Impure and unwholesome meat.

--Death and destruction on our highways.

--Misleading labels and packages.

--Clothing and blankets that are fire-prone, rather than fire-proof.

--Hazardous appliances and products around the house.

--Toys that endanger our children.

--Substandard clinical laboratories.

--Unsafe tires.

In addition to these, the first session of this Congress took important steps toward passage of other consumer proposals we recommended last year, including the Truth-in-Lending, Fire Safety and Pipeline Safety bills which passed the Senate, and the fraudulent land sales, mutual funds and electric power reliability measures.

This session of the Congress should complete action on these vitally needed proposals to protect the public. It has already begun to do so.

In passing the Truth-in-Lending Bill last week, the House of Representatives brought every American consumer another step closer to knowing the cost of money he borrows. I urge the House and Senate to resolve their differences promptly and to give the consumer a strong Truth-in-Lending law.

A NEW PROGRAM FOR 1968

But that record alone, as comprehensive as it is, will not complete our responsibility. The needs of the consumer change as our Society changes, and legislation must keep pace.

For 1968, I propose a new eight-point program to: --Crack down on fraud and deception in sales.

--Launch a major study of automobile insurance.

--Protect Americans against hazardous radiation from television sets and other electronic equipment.

--Close the gaps in our system of poultry inspection.

--Guard the consumer's health against unwholesome fish.

--Move now to prevent death and accidents on our waterways.

--Add new meaning to warranties and guarantees, and seek ways to improve repair work and servicing.

--Appoint a government lawyer to represent the consumer.

SALES RACKETS

Every Spring, when families turn their thoughts to household improvements, the shady operator goes to work.

His office may be a telephone booth, a briefcase which he carries from door to door, or a car which he drives from state to state. His sales brochure may be a catchy newspaper advertisement.

With false and deceptive offers of attractive home repairs or items that are more promise than product, he preys most of all on those who are least able to protect themselves: the poor, the elderly, the ignorant.

Too often--and too late--the victim discovers that he has been swindled: that he has paid too much, that he has received inferior work, and that he has mortgaged himself into long-term debt. Some even lose their homes. A recent Report of the National Better Business Bureau estimates that deceptive practices in the home improvement field alone cost the consumer between $500 million and $1 billion yearly.

Sales rackets are not limited to home improvements. And sales rackets of all types are on the increase.

As the law now stands, there is no effective way to stop these unscrupulous practices when they are discovered. The legal machinery may drag on for two or three years before the violator can be ordered to cease and desist. In the meantime, countless more Americans are cheated.

In matters so flagrantly deceptive, the consumer and the honest businessman deserve greater--and speedier--protection.

I recommend that the Congress enact the Deceptive Sales Act of 1968 to give new powers to the Federal Trade Commission.

Under this Act, the FTC would be able to obtain Federal court orders to stop fraudulent and deceptive practices immediately while the case is before the Commission or the courts.

With this measure we can complete the cycle of protection for the consumer in fraud cases--by adding Federal court injunctions to the administrative and criminal processes which now exist.

AUTOMOBILE INSURANCE

One area of major concern to the consumer is automobile insurance. Every motorist, every passenger, and every pedestrian is affected by it--yet the system is overburdened and unsatisfactory.

Premiums are rising--in some parts of the country they have increased by as much as 30 percent over the past six years.

Arbitrary coverage and policy cancellations are the cause of frequent complaint-particularly from the elderly, the young, the serviceman, and the Negro and Mexican-American.

A number of "high risk" insurance companies have gone into bankruptcy--leaving policyholders and accident victims unprotected and helpless.

Accident compensation is often unfair: Some victims get too much, some get too little, some get nothing at all.

Lawsuits have clogged our courts. The average claim takes about two and one-half years just to get to trial.

This is a national problem. It will become even more of a problem as we license more drivers, produce more automobiles and build more roads.

With more than 100 million drivers and 96 million motor vehicles in the United States, the insurance system is severely strained today.

While many proposals have been made to improve the system, many questions remain unanswered. The search for solutions must be pressed.

I propose legislation to authorize the Secretary of Transportation to conduct the first comprehensive study of the automobile insurance system. He will undertake this review with the full cooperation of the Federal Trade Commission and other appropriate agencies of the Executive Branch.

In recent months we have acted to make our cars and our highways safer. Now we must move to streamline the automobile insurance system--to make it fair, to make it simple, and to make it efficient.

HAZARDOUS RADIATION

It has been said that each civilization creates its Own hazards. Ours is no exception. While modern technology has enriched our daily lives, it has sometimes yielded unexpected and unfortunate side effects.

Recently it was discovered that certain color television sets emit radiation which exceeds accepted safety limits.

We also know that poorly designed X-ray equipment is unnecessarily exposing some patients to the danger of radiation.

Such defects have introduced a new element into the problem of radiation hazards.

Intensive research has already probed this area. But those efforts have dealt primarily with radiation from medical equipment, isotopes, and nuclear devices.

We have long known that large doses of radiation can be fatal. But we have much more to learn about the harmful effects of lesser doses--effects which may not show up for many years.

Now modern science must be put to work on these hazards--particularly the hazards which confront the consumer.

I recommend enactment of the Hazardous Radiation Act of 1968. This measure will give the Secretary of Health, Education, and Welfare authority to

--Conduct intensive studies of the hazards and set and enforce standards to control them.

--Require manufacturers to recall defective equipment and devices. The proposed legislation sets penalties for those who ignore the standards established by the Secretary of Health, Education, and Welfare.

WHOLESOME POULTRY

Last year, the Congress enacted the Wholesome Meat Act to insure the quality and safety of the food that American housewives put on their tables.

This year, the scope of that protection must be extended.

In 1967, Americans consumed over 12 billion pounds of poultry, most of it inspected under Federal law. But the 1.6 billion pounds which did not cross state lines received no Federal inspection. And State inspection is minimal at best. Thirty-one States have no poultry inspection laws. Of the remaining 19, only four have effective laws in operation.

The American consumer is paying for this neglect. He pays for it in poor quality, and in potential danger to his health.

In poultry processing plants that are Federally inspected, four percent---over 400 million pounds--of the poultry is rejected because it is diseased and contaminated. There is every reason to believe that the percentage of rejection would be even higher in uninspected plants.

There is no way of knowing how much unwholesome poultry is processed by these plants and passed on to the unsuspecting buyer. But we do know that:

--Conditions in many of these plants are poor and that quality control is far below Federal standards.

--Poultry can be seriously adulterated by impure water and unsanitary processing conditions.

--There is a practice among some poultry producers of sending to uninspected plants inferior poultry flocks which, under Federal inspection, would face rejection.

The housewife receives protection for the poultry that comes from a neighboring state. Why should she not receive the same protection when the poultry is processed and sold in the state where she lives?

I recommend the Wholesome Poultry Products Act of 1968.

This legislation follows the pattern of the Wholesome Meat Act. It will help the States develop their own programs and train inspectors.

At the end of two years, if the States do not have inspection programs at least equal to Federal standards, the Federal inspection requirements will prevail.

In the meantime, the Act will require those intrastate plants which pose a health hazard to clean up or close down.

WHOLESOME FISH

If poultry inspection is spotty today, fish inspection is virtually non-existent.

Each year, Americans consume about two billion pounds of fish--nearly 11 pounds per person. A common item in every family's diet, fish can also be an all-too common carrier of disease if improperly processed and shipped.

Last summer, the Senate Sub-committee on Consumer Affairs heard testimony which disclosed that a substantial amount of the fish sold in this country exposes the consumer to unknown and unnecessary dangers to his health.

It is impossible to show every link between contaminated fish and illness. Yet these links do exist: links to botulism, hepatitis, and other diseases. About 400 cases of food poisoning, reported on a single weekend in 1966, were traced to fish processed in dirty plants.

Despite these facts, the Nation has no adequate program for continuous fish inspection--either at the Federal or State level. Nor is there any systematic program for inspecting imported fish and fish products, which account for more than 50 percent of our annual consumption.

I propose the Wholesome Fish and Fishery Products Act of 1968.

The bill would authorize the Secretary of Health, Education, and Welfare to:

--Develop a comprehensive Federal program for consumer protection against the health hazards and mislabeling of fish, shellfish and seafood products.

--Set standards and develop continuous inspection and enforcement.

--Support research, training, and inspection programs.

--Help the states develop their own fish inspection programs.

--Assure that imported fish products are wholesome.

RECREATIONAL BOAT SAFETY

Until recently, boats were reserved for commerce, or were owned by the very wealthy. But in our changing pattern of leisure, more and more Americans are taking to the water.

Today, boating has become a major form of recreation, with more than eight million small boats now in operation. Everywhere we see them: on our shores, in our bays, in our lakes, and on our rivers.

In these waters, Americans find rest and relaxation. But some find unexpected tragedy as well.

Last year, boating accidents claimed more than 1,300 lives--about as many as were lost in aircraft accidents.

This problem, as tragic as it is, has not yet reached major national proportions. It has not yet reached the level of automobile accidents, which cost us 53,000 lives annually. But if the Nation had begun its highway safety campaign years ago, there is no way of knowing how many American lives could have been saved. That is all the more reason why we should start now.

I propose the Recreational Boat Safety Act of 1968:

--To help the states establish and improve their own boat safety programs. These programs could include the removal of hazardous debris from our lakes and rivers, boat operators education and licensing, safety patrols and inspections, testing of boats, and accident investigations.

--To authorize the Secretary of Transportation to set and enforce safety standards for boats and equipment.

This program would he directed by the Secretary of Transportation. But its ultimate success will depend on the cooperation of industry, State and local governments, and boat owners themselves.

REPAIRS, WARRANTIES AND GUARANTEES

"I wish I could buy an appliance that would last until I've finished paying for it."

That complaint, familiar to every American housewife, was recently passed on to my Special Assistant for Consumer Affairs. It is a complaint that cannot be ignored.

The products of American industry save us hours of work, and provide unmatched convenience and comfort.

But they can be a source of annoyance and frustration.

Consumers have no way of knowing how long these products are built to last.

Guarantees and warranties are often meaningless--written in vague and complex language.

Repair work is sometimes excellent, sometimes shoddy, and always a gamble.

These are not problems that can be solved by legislation at this time. But they are problems that need attention now.

The Special Assistant to the President for Consumer Affairs, the Chairman of the Federal Trade Commission, the Secretary of Commerce and the Secretary of Labor will begin work immediately with the industry to:

--Encourage improvements in the quality of service and repairs.

--Assure that warranties and guarantees say what they mean and mean what they say.

--Let the consumer know how long he may expect a product to last if properly used.

--Determine whether federal legislation is needed.

A CONSUMER'S LAWYER

Less than two months after assuming office, I reaffirmed these basic rights of the American consumer:

--The right to safety.

--The right to be fully informed.

--The right to choose.

--The right to be heard.

To give added meaning to these rights, the first Special Presidential Assistant on Consumer Affairs and a Presidential Committee on Consumer Interests were appointed.

I said at the time that the voice of the consumer must be "loud, clear, uncompromising, and effective" in the highest councils of Government.

Now it is time to move closer to that goal. It is time to appoint a lawyer for the consumers.

I plan to appoint a Consumer Counsel at the Justice Department to work directly under the Attorney General and to serve the Special Assistant to the President for Consumer Affairs.

But most important, he will act in the interest of every American consumer.

He will seek better representation for consumer interests before administrative agencies and courts. He will be concerned with the widest range of consumer matters--from quality standards to frauds.

TO PROTECT THE CONSUMER'S DOLLAR

One thing, above all, should be clear to us today. We can encourage safety and wholesomeness by law. We can curb abuses and fraud.

But all our actions will be in vain if we fail to protect the buying power of every American consumer.

The Nation is now in its 84th month of historic economic growth. More Americans are at work than ever before--earning more, and buying more.

But in the midst of prosperity there are signs of danger: clear and unmistakable signs. Prices are rising faster than they should. Interest rates are climbing--and indeed have passed their peaks of 1966.

A year ago, we asked the Congress for a modest but urgently needed tax increase to curb inflation. That request was repeated last August in a Special Message calling for an average tax of about a penny on a dollar of income.

This is a fair request. Your Government is asking for only about half of what it returned to the taxpayer in the tax reduction of 1964. A penny on the dollar tax now will be much less painful than the far more burdensome tax of accelerating inflation in the months ahead.

And so today--as part of this consumer message--I again call for action on the tax request.

Business and labor leaders, consumers all, must respond to this Nation's call for restraint and responsibility in their wage-price decisions.

TO ADVANCE THE CONSUMER INTEREST

For 1968, this message proposes eight new steps to advance the consumer interest.

This is not a partisan program or a business program or a labor program. It is a program for all of us--all 200 million Americans.

LYNDON B. JOHNSON

The White House

February 6, 1968