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b IBa-A33ob7 WALL STREET JO'JLNAL New York, New York June 25, 196+ Page 5 FTC Requires Cigaret Labels, Ads To Warn Smoking May Cause Death Label Ruling Effective Jau.1, Ad Deadline IsJuly ], 1965; Appeal Could Cause Delay Ing prescribes discloaure that "smoking Is danget'ous to health and may cause death fr^'n cancer and other dleea•-s." But wheresa i... prellmtnary draft would have required tbie precise wording or an equally severe alternate tarm In all ads and labels, the final version leaves It up to the clgaret makers and their advertising men to set the tenor of the mes- aage. Thus. It will be up to the PTC to sitt ad propoe6la on a company-by-compeny basis. Hmtlug that the commission may show eome tolerance. Mr. Dixon observed that "peo• ple in the advertising fadustry can say many thinge many ways and mean the same and he added that "we're mot an autoceaUc body. Two Ilfher Directives Dropped The tlnal regulatlons drop entirely two othei advertising directives that bad been propote.i last Jandary to govern what claims the tobec• co tnduetry could make for ite produots. One wonld have prohibited any implicatioij: that etgaret smoking "promotes good health or physical well•being." The other would have required comtaleaton approval for any c.latms that one brand of cigarets Is less harmful than another. Tobacco Industry creation of Ite own self- pollcing advertising code led to the deleuon of these two provieiona, the pTC ruling atated. "The Induetry has Indicated an intenUon of tt l t t ti i> t f bl d Another nppaj, -.i reason fVr ~Ile F'DC'1 hante I; • s its regulations out ha9 beet a challenge L -ts jurisdiction ftom the Ftiroc and Drug Administration. In earlirr Icsumon) before the House lbmmtttee. Surgetn (:eneral Luther Terry contended that the F'DA ts beltet equipped than the F7C to oversee cigarel labeling practices. Though conceding that ad. vertteing in the 89C's tfomatn, lie questioned the commiseion's authority to require a cigarel vrarntng statement without a new power gtant from t:ongt'ess. Chairman Harrls renewed the challenge S'esterday In queatlonlag Mr. Dixon. He oon' tended the FDC Is empowered to prevent mis' leading ad claims but not to compel "affirma• tme" disrlosttree. "The question I would like to dcvelop." he told the M chairman, "Is tin• exlent to which the commisssion can go in -hrecling an industry to engage in certain I-raeUces aRainst ite wlll." btr. Dl.on clearly failed to salixfy the .lrkansan vi ith his rejoinder that the FTC bas n duty to require affirmative warnings about a product .rhen their omissfon would be mis• leading. He cned Instanees where the com- mfasion bad compeLed Irnporters to etate the country of origin on a ptuduct as an aid to U.S. consumers who prefer domestically made goods. Sp a WA«Srasar JooaN.r. Srug Report# r {BASHING7ON - The Federal Trade Oom- misslon Issued a regulation requiring a warn- ing on all clgaret packages and advertise- meats that smoking is dangeroue to health aad may cause death. Under the terms of the FTC ruling. cigaret makera will have untU next Jan 1 to post the waming "•clearly and prominently" on all package and carton labels and untll July 1, 1odS. to ineert it In all ad material. The oear eertafnty of a court challenge by the tobacco Induatry, however, will probably delay ent torcement for some time. FrfC Chaistnan Paul Rand Dixon said the new regulatton would be held in abeyance while under court review. He estimated that it might take four yeara or longer for the issue to be resolved. 8en. Jordan (D., N.C.) safd the FTC t111e plll be challenged Immedletely tn Federal eotni He said he conferred with growers, wareb.ousemen and manufacturers who agreed to an Immediate court teaL He and his Dem• ocratto colleague t4om North Clanvllna, 8en Ervin, aald that If the court teat failed they vrould seek to revoke the ruling in Congress or through the Administration. "It Is a moat an• lair and unreasonable decision and I do aot think It will sland up," Mr. Jordan eald. Mr. Ervin called the ruttng "unjust and md'aft'.•' A tobacco Industry spokesman agreed that the clgaret companies probably will light the regulation in the courte. Spokesman for the companiiee said they were surprised and shocked by the FTC ruling. (tlee stor'y below.) Mr. Dixon ended months of speculation about the FTC'e Intentions during aa appear. ance yesterday before the House 17ommerce Committee. The panel te oateasibly pondering several bills that would accomplish through legislalton wha t the FTC intenda to do ad. tnlniettatively. But aharp questioning di• rected at Mr. Dixon ttom Chairman Harris ID., Ark.e and other members of the tialae paCel made it plain that one purpose of the oemmittee heatioge was to dissuade the FTC e'om acting. ginllaa Detalled to Panel tietatng the telttatlve, the 1?71C chairman tn• formed one hostile Interl'ogator, Rep. ltorne` gay (D., N.G.), that the commfsatam had el- leady put Its antismoking reguiations in final form. He then produced 25 coples o: the teG paga ruling tor dlstritwtlon to the lawmakera. "We had our printere work all night to get them ready in case you wanted one," he ob- served. 771e warning requirement promulguted yea• terday differs from a preliminary ver,don put forward by the M Itl January. foliowtng Ule teport to the 11.8. Burgean Oenecal concluslvely linking ciganet smoking with cancer. It sUq directs cigaret makers to alert the smoking public to potential baa2tds and in the harehest terma. The exaelt tanguage of the ttul- I cea ng vo ea ra e prac ae ua ar ,y o en um tn theae areas, and ahould the Induatry eur- TobUf•cn FirnfS Surprised ceed there wUl be no need for fot'ma/ com- missioa actlon,^ the commissioners concluded. AU four pT(: commiss.oners (a fifth sent on the panel in at present vacant) were ir accord on the need for requiring the industry to display a warning meesage. The Indus- try's code doesn't go tbls far and "no Indus• try representative has indleated that cigaret ntanulacturers are willing" to do so on their otvn, they noted. One PTC member, Everette Maclatyee, differed slightly wttb hia colleagues over what the waraiag should contain. He favored slightly mllder language to merely att+te that "cigaret smoking Is a health ha:• ard: • 11tr. Maeintyre would also have Biven the industry untR next July I to comply with the label[ng as well as the advertisfog ro, qulrement. IaduBlry Aegumewta Rejected The Fl'C rajected all the arguments that tobacco growers, clgaret makers and adver. tisinq men had ralaed against the disclosure requirement during formal Aeatirt$e earlier thta year. (7otttrary to their contention that publicity given the report to the Surgeon fien- eral has already put amnkerFS nn yvuard, the e'ommta;taue found that muKt people are still ont.q vaguely aware there's a controversy over emaktng's effect on health. To the argument tbat almllar warTdttge ahould be required to alert consumers to the har,aeda of automobilea, alcoholic beverages and rich toode, the pTC replied that the danger In theso products stems solely from Improper or excessive use. Lty eontnast, even "moderate" use of elgarets tnay be dangerous, the ruling stated. A 1r.u. Sraeei Jurn.w.:. ok a 8oredup Cigaret company spokesmen reacted with consideratue aueprL : emd wyr„e ;;huck to the amotmcement of the Federal Trade Cbmmis- akut's new ruling on :.:baret adverU,ing and labeling. The surprise atemmed largely from the fact that the question haa been raised in previous clgaret leglalattoa hearings before the House qommerce Committee of whether the PTC has authority to order a manufacturer to publish warnings of polertial dangers Irom a pnoduct. Prices of tobacco shares listed nn the New York Stock Exchvtge dropped }estctday aller the announcement of Ihe new FTC tulen. American Tobacco Co. closed at tts;.375. off $1.11111; R.J. Reynolds 7bbaecu Co., ia1. ,•If g45(t cents; Philip MorAs, lnc., 373. 01 l150: Ltggett 6 Myers Tobacco Co.. s: - . .. ,.~, .1k I so: atad P. LortUat+d Oo. >:f: C'.. a•u ., . .