To advertise, according to the law dictionary, is "to give notice to, inform, or notify, give public notice of, announce publicly." Another definition is "to call to public attention by any means whatsoever."
Philip Morris, according to the judge in a recent lawsuit, has been giving public notice that its "light" cigarettes contain less tar and nicotine, and this, judged the court, is untrue. The judicial determination was, apparently, that the cigarettes submitted by Philip Morris for testing had intentionally been designed with lower tar and nicotine levels. They were not representative of the cigarettes purchased by the public. Of course, one might wonder why the Federal Trade Commission, in testing cigarettes, didn’t simply go to the corner drugstore and buy a pack, but never mind. Philip Morris’s "public notice" was false, and thus the smokers of its cigarettes entitled to compensation.
This was good news for a couple of local smokers who hadn’t even been aware of a class-action lawsuit against Philip Morris until friends told them about it. According to news reports, they contacted the plaintiff’s law firm out of curiosity. It’s paid off: one of them will collect $17,800, and the other $11,400. Sharon Price, one of the litigants, expressed her dismay at the misleading advertising: "I was angry that a large corporation like this would market this product without being concerned about people’s health." Ms. Price admitted, however, that she still smoked the offensive Cambridge Lights, indicating, quixotically, that her concern about her own health is no greater than that she expects from Philip Morris. The other lucky litigant, Mike Fruth, expressed his indignation by switching to Camels.
Apparently, truth in advertising is to be taken seriously. According to the Federal Trade Commission Act, 1) advertising must be truthful and non-deceptive; 2) advertisers must have evidence to back up their claims, and 3) advertisements cannot be unfair. Moreover, an ad is "deceptive" if it contains a statement — or omits information — that 1) is likely to mislead consumers acting reasonably under the circumstances, and 2) is material — i.e., important to a consumer’s decision to buy or use the product. It occurs to us that what applies to cigarettes ought to apply equally to what is used to purchase them.
With these guidelines in mind, then, let’s see how our central bank advertises — gives public notice regarding — its product. Take out your billfold and look at one of them: we call them "money." Technically, they’re known as Federal Reserve Notes, and they are, by law, "obligations of the United States." Is there anything deceptive, or non-truthful, about them? Well, the very title, for one. They are not notes, by any stretch of the law, promising nothing in payment to anyone, anywhere, by anyone, at any time. Federal? The Federal Reserve System is quasi-public, but it would be more far more correct to term it private than public. And reserves? Is anything deposited anywhere, by anyone, to justify the issuance of the "note"? Nothing whatever. Are there some "reserves" available for the redemption of the "notes"? No. But even were there any "reserves," what good would they be if they were unavailable to the note-holders? Back in the hey-day of trading stamps, would you have continued to collect them if you knew the goods at the redemption store were not going to be paid out? In the case of Federal Reserve Notes, there isn’t even any redemption store.
Can the advertiser — the Federal Reserve System — back up its claims? Well, if the claim is that the "note" is, in fact, a note, no, it can’t. If the claim is that the bill IS ten, or twenty "dollars," no, it can’t. Obviously, a twenty-dollar bill isn’t twenty of anything. And it isn’t a claim upon twenty of anything. Does the advertisement omit information that is material — namely that the holder of the bill is entitled to nothing whatever from its issuer? You bet it does. Is the advertisement "unfair?" Well, it claims to be "legal tender," which means that it is an IOU that must be accepted if offered. Other firms can issue evidences of indebtedness, of course, but their obligations are NOT legal tender, even if good. Good, by the way, means "payable" in the Federal Reserve’s "obligations," which aren’t payable in anything. What is fair about that? Why are the "obligations" of a large solvent firm not money, while those of the Federal Reserve are? Is that equal protection of the laws? If you had to honor your IOUs with my IOUs, and I didn’t have to honor mine at all, would you think that fair, or a blatant rip-off?
Finally, are the statements of the advertiser misleading? Of course, that’s the whole point! The present scrip bears a remarkable resemblance to the bona-fide notes of a generation ago. Moreover, the notes bear the signature of the Treasurer of the United States, and the Secretary of the Treasury. Does this have any significance, other than to lend an air of respectability to the bills? Try sending one to either of the signers with a request that the "obligation" be honored, and you’ll find out how misled you’ve been!
What do you think the chances of success would be for a lawsuit charging the Federal Reserve System with unlawful and misleading advertising?